Whitney Tilson: A Successful Value Investor Knows When To Be Arrogant And When To Be HumbleVW Staff
He didn’t go and listen to Warren Buffett when he spoke at Harvard Business School where he was a student. That is how clueless he was about investing. His friend, noted hedge fund manager Bill Ackman of Pershing Square, was instrumental in the 47-year- old Whitney Tilson becoming an investor. Ackman advised Whitney Tilson to read all of Buffett’s annual letters since that was the only thing he needed to learn about investing. Tilson, deeply impressed by the Sage of Omaha, also read up on other noted investors, right from Philip Fisher to Charlie Munger and Peter Lynch. Whitney Tilson kickstarted his investment career in 1999 by co-founding T2 Partners and Tilson Mutual Funds. In 2012, he and co-founder Glenn Tongue began investing separately under Kase Capital and Deerhaven Fund, respectively. Kase has a concentrated long position in a particular conglomerate.
Warren Buffett has been a big influence on you as an investor. Are there any Buffett principles that have you found difficult to imbibe?
The concept of intrinsic valuation and margin of safety is core to my investment philosophy. Though I haven’t followed it, Buffett’s philosophy relating to the analogy of a punch card with just 20 punches is an interesting intellectual framework. I try and make one good investment a month. So that’s 12 in a year, but multiplied over many years, it’s more than 20 in a lifetime. But then Buffett, too, has made thousands of investments over the years. So, it’s more of an intellectual framework rather than a hard and fast rule. But there are plenty of people who only made one investment decision in their lifetime and are worth an awful lot today. They bought Berkshire Hathaway stock and did nothing else. Outside of investing, Buffett’s phrase — I don’t know whether he coined it originally — goes as follows, “The chains of habit are too light to be felt until they are too heavy to be broken.” It’s all the little things, the habits every day over time that make who you are. That is what I mean when I say Buffett has been a role model and influenced my life far beyond investing. He has helped me think about being a better person and that has made me happier and more successful outside of the world of investing.