I like Whitney Tilson and the research he puts out. His housing work is some of the best and thorough research I have seen on the subject. Whitney and I also agree on another topic (along with others such as Berkowitz and Pabrai) – that following the best minds in investing is a great way to increase your “idea farm”, or where you get stock ideas. Obviously we take it a bit further with AlphaClone and basically outsource entire portfolios to managers like Tepper and Klarman. A few quotes from this recent Kiplinger’s article:
“Successful investors prospect for new ideas in a wide variety of ways. They scour databases for undervalued companies. They tap industry contacts for early signs that things are getting better for a company or a sector. They read voraciously and draw from deep experience to see patterns and opportunities that others are missing. For some savvy practitioners, a fertile source of investing ideas is to look at what other smart investors are doing….But a review of the data can provide insights into where opportunities may reside. As Bruce Berkowitz, manager of Fairholme Fund, a member of the Kiplinger 25, says, “Why wouldn’t you look at what other great investors have found?”…We’d never suggest blindly following what any one person does. But it’s certainly worth exploring…”
What sparked my interest is this post over on Barbarian Capital. He examines Tilson’s portfolio by holding and makes a good case for Tilson running somewhat of a “clone portfolio” himself with a few exceptions sprinkled in. Why pay 2% and 20% for a best ideas FOF when you can just clone the managers themselves?
If you’re headed to LA for Tilson’s upcoming Value Investing Congress drop me a line I’m in the neighborhood!