Big Money Thinks Small: Biases, Blind Spots, and Smarter Investing - Joel Tillinghast

[Saluki]

I'm halfway through this book and I'm really enjoying it.  It was released a few years ago and didn't get much attention.  I was going to skip it because I've got investing books to fill a small library, but when I saw that Seth Klarman and Bill Miller gave it a good blurb and that Peter Lynch wrote the forward, I decided to give it a go. 

 

There aren't really any specific formulas or criteria in the book that are helpful.  It's like when Buffett says that you should buy good companies at reasonable prices and doesn't give much guidance beyond that.  But it is very good at pointing out things to look out and things to avoid.  It reminds me a lot of the Howard Marks' book, The Most Important Thing, but with some Charlie Munger "invert, always invert" thrown in. 

 

The only thing I can't square is the number of positions Tillinghast has.  His fund had over 800 positions.  It's easy to outperform (or underperform) the SP500 if you have few positions, and as the number of positions goes up it gets almost impossible to beat (or even match after fees) the SP500, so if he was able to beat it, even a small amount (and apparently with less volatility) with so many positions is impressive.  But he, like Buffett and many others, says that you make the real money when you get a no-brainer and concentrate in it.  He was Lynch's protege so maybe the army of analysts and all the positions is just how he learned to invest at a fund, but the advice for individuals is different? Still a worthwhile read though. 

[Saluki]

I'm almost finished with this book now and I'd highly recommend it for anyone to add to their collection.  Just enough anecdotes and charts and post mortems on investments to get the point across, but no fluff whatsoever.  No one is as pithy as Peter Lynch, but this guy has a very readable style.  Whereas One Up on Wall Street got many people interested in investing that otherwise had no clue, this is a definitely not a beginner's book because it assumes you already know terms like enterprise value and EBITDA, so I think this forum is the target audience. 

 

I had several bookshelves full of investment books and have made a deal with my better half that I only buy a new one if I get rid of five old ones.  I usually put them in the little free library near my house. There are some that I can't imagine ever getting rid of because I re-read them occasionally (Greenblatt, Peter Lynch, Charlie Munger, Ben Graham's Security Analysis), I think this one will make the permanent collection.