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Tilson Interview: Investing in Undervalue Value Stocks
From DerailedCapitalism.com
Whitney Tilson, founder and Managing Partner of T2 Partners LLC and the Tilson Mutual Funds, was recently interviewed by The Wall Street Transcript. He applies the "timeless principles of Graham and Dodd, practiced today most notably by Warren Buffett and Charlie Munger" and discusses some of his most recent trades, including BP at $27. The fund has begun to focus on defensive investments, purchasing the "kind of companies that even in a lousy economic environment, even in an inflationary environment or deflationary environment, have pricing power."
It's tough to discredit someone as successful as Whitney Tilson who has only trailed the S&P 500 two years in the past twelve, tripling investor's capital during that timespan.
"Sometimes the cheapest situations are the ones that everyone agrees are cheap, but there's no catalyst. We think cheapness is its own catalyst and if you can be patient, sometimes for a year or two, you'll be rewarded. Our patience and the investor base we built that allows us to be patient is a big advantage."
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Value stocks will be even more of a value as time passes. Don't buy yet, since they will be an even greater value in 2-3 years!
AOB .. .4x book value and 5x-6x earnings. That's my value stock. I have 2 years..5 or even 10 years. But knowing how markets work, will get out next time it gets to 4x book.
"Great point Rocky. If you have a stock or bond, you have to read the financial statements, talk to management, use th Uh...the product, and listen to conference calls to completely understand the value."
Now I am really going to blow your mind...there is no spoon Neo...
Yea buy cheap stocks and watch you're money go away to money heaven
Thanks but no thanks. Ideas for buying stocks? Did that and found that it's a career.
Not my cup o' tea. Might consider going back in when PMs top out. That's a market that is easy to follow since I get sellers calling all week. When buyers outnumber the sellers I'll have an accurate gauge of when to start selling PMs and go elsewhere. Then I'll look at stocks. There is too much possibility that stocks could get pumped up like the Hulk and distort values.
Smartest hedge fund managers are starting to buy: MPAA, AOI, PMUG.OB. All very cheap, and high free cash flow margins.... Great deep value investments.
Those would be very small size smartest hedge funds then, given the mkt caps of those stocks are $95m, $327m and $66m respectively. Hey some days Primus trades as much as $1.5m!...but most days more like $20k. To be fair, if you wanted to be all of the volume in Alliance one on a daily basis you could maybe get a $1.5m position....
Wow... all I can say is: "Abandon shiiip!"
Great point Rocky. If you have a stock or bond, you have to read the financial statements, talk to management, use the product, and listen to conference calls to completely understand the value.
Meanwhile, if you take delivery of PM's, you don't have to study any of that. All you have to do is read the top line of the currency - "Federal Reserve Note." You can have faith that Republicans and Democrats will deficit spend, while also lying about the scale of the financial ruin. You can also be a contrarian Precious Metal investor. By this, I mean that pension funds, IRAs, 401k's, the banking system and the Military Industrial Complex have close to 0% of their assets moved to gold and silver.