Interview with Tilson on how he got started

[Swizzled]

 

Came across the article linked below that was an interview with Tilson.

 

I like the guy, think he is smart and a good investor (T2 record proves that).

 

But I'm just shocked at how little experience he actually has, and especially what he had when he first started showing up as a main face of value investing.  I guess the same could be said of someone like Einhorn who really hasn't been at it for much more than a decade either.

 

http://valueinvestorcanada.blogspot.com/2010/11/tilson-interview-about-how-he-got.html

[stahleyp]

what's his performance on his hedge fund? i know his mutual funds are pretty decent.

[Swizzled]

 

The hedge fund is actually a lot better.  Up over 200% since 99 vs 7% for the market.

 

http://www.scribd.com/doc/34316183/T2-Partners-Presentation-7-13-10

[Myth465]

Thanks for the link. Looking forward to reading. Tilson has really grown on me over the year.

[twacowfca]

Glen Tongue rather than Whitney runs their major funds.  Whitney generally defers to him in the trading decisions, although he does have input.  They're partners.  Whitney is their "Mr. Outside".

[Carvel46]

Good article.

"Mr. Outside," I like that.

I tend to distrust a fund management that spends any time marketing.

Tilson's constant media appearances suggests an asset gathering mentality.

Does marketing help investment returns?

At big shops I suspect it hurts returns (a few big shops even have marketing bans).

At small shops maybe there's a small benefit to idea generation through networking.

 

[twacowfca]

Good article.

"Mr. Outside," I like that.

I tend to distrust a fund management that spends any time marketing.

Tilson's constant media appearances suggests an asset gathering mentality.

Does marketing help investment returns?

At big shops I suspect it hurts returns (a few big shops even have marketing bans).

At small shops maybe there's a small benefit to idea generation through networking.

 

 

Whitney is a journalist and teacher.  This is where his motivated abilities lie.  The profits from his events have carried the business in the past, although their funds management business may be more profitable now than in the early years.  T2 did make a bundle bankrolling Mark S. before he took his accumulated rake-off and closed his fund.

 

[Rabbitisrich]

I used to criticize Tilson for the seeming obnoxiousness of his public appearances, but I've since become more educated about the money management business. Performance doesn't exist in a bubble; he also must  keep his capital stable in the face of market volatility. Tilson's public appearances serve to manage expectations and to communicate T2's logic to current and future capital sources.

 

I bet that the money managers on this board can appreciate the value of a Tilson type.

 

 

[stahleyp]

Good article.

"Mr. Outside," I like that.

I tend to distrust a fund management that spends any time marketing.

Tilson's constant media appearances suggests an asset gathering mentality.

Does marketing help investment returns?

At big shops I suspect it hurts returns (a few big shops even have marketing bans).

At small shops maybe there's a small benefit to idea generation through networking.

 

 

Whitney is a journalist and teacher.  This is where his motivated abilities lie.  The profits from his events have carried the business in the past, although their funds management business may be more profitable now than in the early years.  T2 did make a bundle bankrolling Mark S. before he took his accumulated rake-off and closed his fund.

 

Who's Mark S?

 

 

 

[Swizzled]

 

Mark S is Mark Sellers.  He of the ridiculously concentrated portfolio (which was very successful).  Here is some detail

 

http://www.gurufocus.com/news.php?id=107859

 

http://www.gurufocus.com/news.php?id=106292

 

 

Tilson might be the outside man of T2, but he knows his positions.  Check out the video below from this month at UVA

 

http://valueinvestorcanada.blogspot.com/2010/11/tilson-value-investing-presentation.html

[Carvel46]

twacowfca, good points!

I have learned a lot from VII and Tilson's writings (although, more from this board with its diverse viewpoints).

The financial and teaching duel roles make me uncomfortable. It's hard to serve two masters!

I realize this a standard value investing thing--to practice and to teach.

Warren being the model for this...a kind of public apprenticeship.

 

 

 

[mpauls]

I'm not completely negative on Tilson.  He donates a lot of money and time to charitable causes and I think he is genuinely one of the "good guys", but I tend to think of Tilson as a bit of a poser. 

 

He prances around the country setting conferences and selling newsletters, beats Munger (especially Munger) and Buffett quotes to death while rarely having any original ideas of his own (his book on housing may be an exception).  But ultimately the level of his self promotion far exceeds his investment performance.  When you look at his holdings relative to his performance, you have to wonder if he's just picking off 13-F's.  The difference though is he appears to earn far less than others with similar holdings, if you "catch my drift".

[Parsad]

I'm not completely negative on Tilson.  He donates a lot of money and time to charitable causes and I think he is genuinely one of the "good guys"...

 

I think you are probably correct.  But I think a small portion of Tilson's network (Chanos, Herb Greenberg, etc) left a bit of a bad taste in the mouthes of some observers...yours truly included.  Whether that taste also arises from being a Fairfax shareholder, his public persona, or past experiences, can always be debated...but it exists nonetheless and there are unfortunately quite a few people who feel the same way.  A shame considering the terrific results the T2 hedge fund has produced over the past ten years.  

 

I can attest that Glenn Tongue is definitely one of the good guys, and I have nothing but respect for him and Tilson's partner in the Value Investing Congress, Dr. John Schwartz.  Cheers!

[twacowfca]

I'm not completely negative on Tilson.  He donates a lot of money and time to charitable causes and I think he is genuinely one of the "good guys", but I tend to think of Tilson as a bit of a poser.  

 

He prances around the country setting conferences and selling newsletters, beats Munger (especially Munger) and Buffett quotes to death while rarely having any original ideas of his own (his book on housing may be an exception).  But ultimately the level of his self promotion far exceeds his investment performance.  When you look at his holdings relative to his performance, you have to wonder if he's just picking off 13-F's.  The difference though is he appears to earn far less than others with similar holdings, if you "catch my drift".

 

Yup.  Quite a few tag along buys and shorts.

[Swizzled]

"Yup.  Quite a few tag along buys.  "

 

I see this criticism all the time.  But who cares ?  If the best way to make money for his fund is to cheery pick the best ideas from a group of highly successful investors then I say go for it.

 

There are no style points in my book.  The only important thing is growing wealth as safely as possible.  He has done an excellent job of that.

[NumquamPerdo]

+1 Sanjeev's statement.

 

I think most people who are around from the bear raid days have a negative association with Tilson. Maybe he was new in the business and a little naive with whom he surrounded himself? He certainly did piggyback some pretty nefarious (imo) guys. Chanos as a key speaker at the VIC? Seriously?

[twacowfca]

"Yup.  Quite a few tag along buys.  "

 

I see this criticism all the time.  But who cares ?  If the best way to make money for his fund is to cheery pick the best ideas from a group of highly successful investors then I say go for it.

 

There are no style points in my book.  The only important thing is growing wealth as safely as possible.  He has done an excellent job of that.

 

No criticism intended.  We like to get ideas from other people too.  This works better for us when we wait for the one in a thousand fat pitch.  Good ideas may get better when we wait for a great price.

[Myth465]

"Yup.  Quite a few tag along buys.  "

 

I see this criticism all the time.  But who cares ?  If the best way to make money for his fund is to cheery pick the best ideas from a group of highly successful investors then I say go for it.

 

There are no style points in my book.  The only important thing is growing wealth as safely as possible.  He has done an excellent job of that.

 

Swizzed we need more guys like you on the board. I like the no style points comment, I may have to "borrow" that one.

Speaking of stealing ideas, Twacowfca thanks again for LRE.

[twacowfca]

"Yup.  Quite a few tag along buys.  "

 

I see this criticism all the time.  But who cares ?  If the best way to make money for his fund is to cheery pick the best ideas from a group of highly successful investors then I say go for it.

 

There are no style points in my book.  The only important thing is growing wealth as safely as possible.  He has done an excellent job of that.

 

Swizzed we need more guys like you on the board. I like the no style points comment, I may have to "borrow" that one.

Speaking of stealing ideas, Twacowfca thanks again for LRE.

 

Blessings.  :)

[Rabbitisrich]

Are you guys seriously implying that it's okay to be unoriginal when you are investing in secondary markets?

[Myth465]

Are you guys seriously implying that it's okay to be unoriginal when you are investing in secondary markets?

 

Yes. As long as you do your homework who cares if you copy. That doesnt make much sense but you know what I mean.

 

As Lynch would say, It all spends the same.

 

The real question is do you have any ideas worth stealing?

[Rabbitisrich]

Just poking fun at the notion of secondary market participants demanding originality.

[twacowfca]

Are you guys seriously implying that it's okay to be unoriginal when you are investing in secondary markets?

 

Yes. As long as you do your homework who cares if you copy. That doesnt make much sense but you know what I mean.

 

As Lynch would say, It all spends the same.

 

The real question is do you have any ideas worth stealing?

 

"As long as you do your homework, who cares if you copy?"

 

I love it!  That's classic, Myth.  Yogi Berra probably wishes he thought of that one first! :D

 

As mere ideas are free and on this board plentiful, when you steal, steal smart!

[Myth465]

Just poking fun at the notion of secondary market participants demanding originality.

 

Aw Rabbit, in the interest of saying something witty, I completely missed your point. It too was quite witty also.

 

twacowfca, it sounds like something Bronco would say, he has had quite a few one liners, and you are correct. Stealing is tough, its hard to pick the good ones. Many stole Wamu and AIG from prominent value investors and were left holding the bag.