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you can't make it up....Tilson, again.......


bmichaud
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(http://www.gurufocus.com/news/146094/whitney-tilson-getting-fatigued-with-microsoft)

 

Not sure if it's already been discussed here, but around minute 4 in the above video, the Fast Money host asks Tilson if he is long the Hong Kong dollar since Ackman put on the trade. Without hesitation, Tilson answers "yes" and goes on to discuss the trade almost as if it was his own....

 

Come on dude, have some pride. Doesn't at least a tiny part of him want to do something original? Don't most board members here have that competitive drive to come up with your own ideas and strategy within the framework demonstrated by Graham/Buffett/Watsa? Don't get me wrong I am all for sharing ideas and ESPECIALLY analyses (I have learned so, so much since joining this board even though I rarely actually use the ideas), but my competitive streak leads me to at least attempt to come up with original ideas, themes, analyses, and strategies. Do others here feel the same?

 

Sorry for the rant - I just can't take Tilson's obsession with being an "authoritative" voice within the investment community. I'd be embarrassed to show up on CNBC with $200MM AUM after 12 years in the business. You couldn't pay me enough to show up there.

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Haha, I've had similar conversations about this recently, and I've seen people on twitter and message boards making similar points.

 

I don't put too much stock in originality. The only originality I respect from a secondary market player is that conviction is developed through independent and unbiased analysis. Tilson's portfolio similarities to "gurus" with much larger AUMs raises the suspicion that he may need authoritative validation before placing large bets. Who knows? If he simply cherry-picked bets from his buddies and other respected managers, then some weighted average of their returns represents an appropriate benchmark.

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One of the things that I've internalized about investing is that there are not bonus points for originality. Best idea wins, doesn't matter who came up with it.

 

Trying to be original for originality's sake is just as bad as blindly copying everybody else, IMO.

 

I'm not saying that's what you suggested. Just stating my own general guidelines.

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There's nothing wrong with unoriginal ideas per se.  I also think it's a little hard to define what an "original idea" is when it comes to investing.

 

It's the (a) magnitude of the security mispricing and (b) one's ability to hold the security until the mispricing corrects that generates your returns.  But related to this, there is a risk with having an unoriginal idea: you may not develop sufficient conviction to see the mispricing through, if you haven't personally foraged for the idea and developed the thesis yourself.

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One of the things that I've internalized about investing is that there are not bonus points for originality. Best idea wins, doesn't matter who came up with it.

 

Trying to be original for originality's sake is just as bad as blindly copying everybody else, IMO.

 

I'm not saying that's what you suggested. Just stating my own general guidelines.

 

No I agree. And in today's day and age of technology we're all going to be drawn to the same things at the same time so it is difficult to truly be original (unless of course you walk on water like the Harry Longs of the world). But part of me likes trying to be the first one into (or out of) a situation before the idea comes through the 13Fs, then once other dudes are in or out of the idea it's good validation. So not necessarily a completely original idea, but at least trying to formulate one independent thought as oppose to blindly following Ackman into JCP or the HKD. For example, SD and LVLT have been covered extensively here on the board - they are very interesting ideas that have become a lot more interesting lately. I'm working on coming up with an independent conclusion and formulate my own thinking as to why they are both great ideas as oppose to simply taking Carl at his word on LVLT (as much as I am probably 100% safe following him!!). And honestly, looking at what other great investors are doing is a great screen, if you will, that allows you to whittle down the investment universe into an analyzable set of opportunities. I just don't like to follow someone the second they announce a position haha.

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(http://www.gurufocus.com/news/146094/whitney-tilson-getting-fatigued-with-microsoft)

 

Doesn't at least a tiny part of him want to do something original? Don't most board members here have that competitive drive to come up with your own ideas and strategy within the framework demonstrated by Graham/Buffett/Watsa?

 

The name of the game is making money...there are not style points for originality, artistic interpretation or (using a diving reference) minimal spash upon re-entering the water. As long as one has an above-average return and has done so legally, ethically and morally, then they are doing well or are "winning the game". Frankly, my best ideas have been ripped off from many places, this board included. The art is listening to the right people, throwing your own filters on to make sure the idea works, and then executing. There's a lot of ideas out there to pilfer, but determing what is to be pilfered is quite difficult, and is the key to success.

 

However...

 

I do agree that it would be really difficult to go on television and tout myself as some sort of investing authority without giving credit where credit is due. The value investor is typically self-effacing (look at Buffett, Watsa, Pabrai and members of this board for examples). Tilson is less investor and more marketer. He's not as successful a marketer if he states "Yeah, I heard Ackman talking about the HKD and it made sense to me, so I..." as the audience would not want to listen to him, they would go to Ackman. Yes, Tilson is successful, but he is more concerned with marketing himself than he is making outstanding returns on his invested capital. Cramer is like this as well, only to a substantially louder and more annoying level.

 

-Crip

 

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200M AUM is a heck a lot of money to me...

 

He explains his ideas well, yes they often lack originality but almost all my positions lack originality, so I have no room to talk. Also if I was going to be on tv, I would only blab about my best idea: irrelevant of it's origination. Notwithstanding, I would never be on tv because I am not pretty enough/have the needed qualification. Tilson is an attractive guy who boasts strong connections and who is a HBS Baker scholar...the kind of person you would want to guest on your financial network.

 

Side note on the hong kong dollar. If I believed in the trade I would be yapping about it too. The more people who sell their US dollars to buy hong kong dollars put pressure on the currency peg (government would have to step in if the exchange mechanism gets out of hand...similar to the soros break the bank of England trade)

 

Anyways I hope we have Tilson yapping for a long time. I'd rather my aunts, uncles and cousins listening to him then 95% of the memers of the financial media.

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I've discussed this before with others, I think Tilson's strength is he has no problem borrowing, er stealing, ideas from others and using them. He often borrows the best ideas from Ackman, Einhorn, Buffett, etc... And other than the last 12 months it has worked very well. His biggest problem is he keeps shorting momentum stocks. That's a good way to go broke.

 

He's not full of completely unoriginal ideas. Remember just 15 months ago he nailed BP before Klarman, Einhorn, Berkowitz etc... Got in and he made a killing. He was even on the opposite side of the trade with Ackman as Bill was buying BP CDS's.

 

But a strategy of borrowing the best ideas from the best half dozen investors... I can think of worse ways to invest.

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1. 200M AUM is a heck a lot of money to me...

 

Anyways I hope we have Tilson yapping for a long time. I'd rather my aunts, uncles and cousins listening to him then 95% of the memers of the financial media.

 

1. I think that is just one fund. I'm not certain but I thought he managed much more than that (like $500-$600 million) when you add together all his different hedge and mutual funds.

 

2. That's a good point, all those who complain about Tilson being a media whore (which he is), would you rather have the time filled with the usual short term/macro BS that fills CNBC?

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