Steve Forbes Interview: Whitney Tilson, Hedge Fund Manager, Part 1?

Whitney Tilson is the founder of T2 Partners and Chairman of the Value Investing Congress. Recently, he sat down with Steve Forbes to talk about value investing, Warren Buffett and how to get out of an investment hole. Video and a transcript of the first half of their conversation follows.

Steve Forbes: Whitney, good to have you here again.

Whitney Tilson: My pleasure.

Forbes: For our viewers, can you describe how you approach investing, how you pick stocks, how you pick your shorts? Even though you’re a value investor, how do you describe yourself?

Tilson: Well, as you mentioned, we’re value investors. We call ourselves “opportunistic value investors.”  There are a lot of different styles and flavors. But at the end of the day we’re just trying to buy 50 cent dollars and short $5 dollars, I’d say. We like to say we pray in the church of Graham, Dodd, Buffett and Munger.

If Charlie Munger, and Warren Buffett, who are our sort of investment heroes, were running a couple hundred million dollars like we are, what would they be doing? I think they’d be poking around the nooks and crannies of the market. But also, when you see sort of obvious things among big-cap well known stocks, playing there as well.

I’m not sure if they’d be shorting, but we run a hedge fund and a mutual fund. In the hedge fund we do short some stocks, as well. And we took a lot of pain on that for a while. But recently some of our shorts have been working very well.

Buffett and Berkshire

Forbes: Tell me about Warren Buffett. Do you feel that he’s losing his mojo or long term he always comes through?

Tilson: We monitor it carefully, because Berkshire Hathaway‘s our largest position in our funds.

Forbes: Right.

Tilson: One of the greatest risk factors is that Buffett suddenly starts losing it and destroying value by allocating capital poorly. So we watch him very, very closely. And so far anyway, it’s remarkable; I’m not sure I’ve ever seen an 81-year-old person as nimble and spry, mentally. And seemingly getting better with age. In the past five years he’s made a number of investments that he has never made in the previous 50 years – going outside the United States, investing in PetroChina, making eight times his money there, buying the Israeli company ISCAR.

suorce: forbes.com

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