Tilson & Heins on Staying Disciplined

Warren Buffett has said that investing is simple, but it’s not easy, and in their latest Kiplinger’s column, value investors Whitney Tilson and John Heins explore that subject. “In The Little Book That Beats the Market, published in 2005, star money manager Joel Greenblatt describes a ‘magic formula’ for success that ranks stocks based on only two factors: share price relative to a firm’s earnings and return on capital,” Tilson and Heins write. “After reading his book, we asked Greenblatt if widespread adoption of his simple plan might undermine its effectiveness. He was unconcerned: ‘Value investing strategies have worked for […]

Tilson & Heins on “Lottery” Picks

While they are value investors, Whitney Tilson and John Heins say that it’s okay to swing for the fences on riskier stocks. “Overpaying for stocks is always a bad idea,” the duo writes in their latest Forbes column. “But there are times when the market offers what we consider mispriced options on success. We will happily make an investment even when we know there’s a decent chance we’ll lose most or all of our money, as long as the upside is great enough to offset the risk. If we’re investing $100 in something that has a 70% chance of being […]

Tilson, Heins Like Money Managers

In their latest column for Kiplinger’s magazine, Whitney Tilson and John Heins say they are high on an unloved area of the market: money management firms that specialize in stock funds. In the article (not yet available on Kiplinger’s web site), Tilson and Heins write that money management is a fairly simple and very profitable type of business. “One of the beauties of the business is that costs don’t march in lock step with revenues,” they say. “If a fund grows from $1 billion to $2 billion, you don’t need twice as many people to manage it. You may not […]

Why The “Dissonant” Market Is Great News

In their latest column for Kiplinger’s, Whitney Tilson and John Heins say the current investment climate is among the most dissonant as they’ve ever seen — and that the contradictory stances investors have toward stocks are making for a myriad of opportunities. Tilson and Heins say investors are “torn between wanting safety and craving yield”, and are piling into Treasury bonds while at the same time pumping cash into emerging markets and junk bonds. In the stock market, the duo says, investors are “torn between their disgust at the lousy returns of blue chips over the past ten years and […]

Tilson & Heins on Circles of Competence

In their latest column for Kiplinger’s, Whitney Tilson and John Heins discuss the importance of investing within — while trying to expand — your “circle of confidence”. “Staying within your circle of competence is a central tenet of value investing,” Tilson and Heins write. “It’s clear that you’re more likely to succeed by investing in situations, companies and industries you know well rather than by dabbling in the unfamiliar.” Over the years, they say, they’ve seen many examples of investors “swing[ing] at pitches outside of their investing strike zone,” often leading to trouble. You can, however, widen your circle of […]