Contemporary Authors

• Big Money Thinks Small: Biases, Blind Spots, and Smarter Investing Columbia University Press (New York, NY), 2017

1. Big money thinks small : biases, blind spots, and smarter investing LCCN 2016048351 Type of material Book Personal name Tillinghast, Joel, author. Main title Big money thinks small : biases, blind spots, and smarter investing / Joel Tillinghast. Published/Produced New York : Columbia University Press, [2017] Projected pub date 1111 Description pages cm ISBN 9780231175708 (cloth : alk. paper) CALL NUMBER HG4515 .T55 2017 Request in Jefferson or Adams Building Reading Rooms CALL NUMBER HG4515 .T55 2017 Request in Jefferson or Adams Building Reading Rooms

• Bloomberg - https://www.bloomberg.com/research/stocks/private/person.asp?personId=28850290&privcapId=28180344

  Joel Tillinghast CFA
  Portfolio Manager, Fidelity Puritan Trust - Fidelity Low-Priced Stock Fund
  Age Total Calculated Compensation This person is connected to 0 Board Member in 0 organization across 9 different industries.

  -- --
  Background
  Mr. Joel Tillinghast, CFA serves as Vice President and Portfolio Manager at Fidelity Investments Canada ULC. Mr. Tillinghast serves as a Vice President and Portfolio Manager at Fidelity Investments and various funds in the Fidelity fund complex. He joined Fidelity Investments in 1986 as an Equity Analyst covering the tobacco, coal, natural gas, personal care products and appliance industries. Prior to this, Mr. Tillinghast spent four years as a Financial Futures Research ...
  Read Full Background
  Corporate Headquarters
  245 Summer Street
  Boston, Massachusetts 02210

  United States

  Phone: 617-563-7000
  Fax: 617-692-1784
  Board Members Memberships
  There is no Board Members Memberships data available.
  Education
  BA 1980
  Wesleyan University
  MBA 1981
  J.L. Kellogg School of Management, Northwestern University
  Other Affiliations
  Fidelity Investments
  Wesleyan University
  Fidelity Investments Canada ULC
  J.L. Kellogg School of Management, Northwestern University
  Fidelity Funds - Fidelity NorthStar Fund
  Fidelity Capital Structure Corp. - Fidelity NorthStar Class
  Fidelity Puritan Trust - Fidelity Series Intrinsic Opportunities Fund
  Fidelity Funds - Fidelity NorthStar Balanced Currency Neutral Fund
  Fidelity Funds - Fidelity NorthStar Balanced Fund
  Fidelity Capital Structure Corp. - Fidelity Global Intrinsic Value Class
  Fidelity Puritan Trust - Fidelity Flex Intrinsic Opportunities Fund
  Fidelity Puritan Trust - Fidelity Low-Priced Stock K6 Fund
  Annual Compensation
  There is no Annual Compensation data available.
  Stocks Options
  There is no Stock Options data available.
  Total Compensation
  There is no Total Compensation data available.
  Request Profile UpdateRequest Profile Update

• Investment News - http://www.investmentnews.com/article/20170309/FREE/170309908/fidelitys-joel-tillinghast-on-how-he-finds-good-cheap-small-cap

  Fidelity's Joel Tillinghast on how he finds good, cheap, small-cap stocks
  Manager of the Fidelity Low-Priced Stock Fund hunts for value and suggests looking to Japan

  Mar 9, 2017 @ 1:43 pm

  By John Waggoner

  0
  Shares
  Share
  Joel Tillinghast has powered the Fidelity Low-Priced Stock Fund (FLPSX) to a 13.7% average annual gain since its inception in December 1989, beating the Standard & Poor's 500 stock index by more than four percentage points a year. While the fund's performance has faltered in recent years — it has trailed the S&P 500 by 2.64 percentage points a year the past five years — Tillinghast remains an icon among those who look for value in unloved stocks. In a recent InvestmentNews interview, Mr. Tillinghast talked about how he picks stocks, what it's like to run a $39 billion fund, and why Japan offers so many compelling investment opportunities.

  InvestmentNews: What's the allure of low-priced stocks? You could have done quite well with some high-priced stocks, such as Apple, Google or Berkshire Hathaway.

  Mr. Tillinghast: "Low price" has two meanings. One is share price, which, at the start of the fund was under $15. Now it's under $35, which is less than the median stock price on the New York Stock Exchange. The other meaning is "low valued," which means a stock is selling for less than its intrinsic value. Low-Priced Stock tries to buy those that are low-priced by both ratings. Research coverage of stocks that have low prices is spottier, and there's an opportunity of market inefficiencies. For the undervalued part, there's lots of statistical evidence that stocks that are statistically cheap outperform. Research still adds value.

  I've had companies tell me, "We don't want our stock to be in the hands of a bunch of value investors." The best way for them to do that is improve profits and help shareholder value. If they go out there and do that, I'm happy for them, and they can escape being a low-priced stock.

  InvestmentNews: Low-priced stocks are usually priced low for a reason. What do you have to be most mindful of when buying low-priced stocks?

  Mr. Tillinghast: It's a combination of things: You don't precisely get at the investments' risks that security analysts pay attention to. One of those is making sure that it's an industry you understand. Some industries are just baffling to me, like unprofitable biotech stocks — I don't know how to value them, since the science can take any direction. If you're doing it at home, unless you're a doctor, stay away from unprofitable biotech.

  It's also about working with good people. You don't want fraudulent companies, where management are idiots who build a white elephant that will lose a lot of money. It's like in detective stories, where you are suspecting a lot more people than who are doing something bad. And the balance sheet is something that really trips up a lot of people. If the balance sheet is bad and prices start collapsing, there's really no floor until they're playing taps.

  InvestmentNews: One reason low-priced stocks are low-priced is bad management. What's the best indicator for management performance?

  Mr. Tillinghast: Sometimes there are occasions when you get value from site visits. I can think of one mobile home company that had a badly laid out factory floor with inventory in corners. It eventually got bought out by one with better manufacturing practices. But a lot of the time site visits are like looking at Potemkin villages. You have to look at the numbers or ask a competitor. No one is going to say, "Yes, we're crooks here."

  InvestmentNews: Given the U.S. market's run-up, is it harder to find worthwhile stocks that sell for $35 or less? Is that why your cash level is above normal?

  Mr. Tillinghast: The cash level is down to about 9%, but it is still kind of high. The perfect stock would be one that has great management, honest and capable, in an industry I understand. It's resilient and growing, has a good balance sheet, and it's selling at a low price-to-earnings ratio. In the current market, you have to trade off: How vile a management will I take if PE is attractive and it's not a bad business? You're settling for two or three out of your checklist. It's not my favorite way to invest — avoiding losing, always being a bit defensive. I hate it when it's entirely a defensive game.

  InvestmentNews: You lagged your Morningstar category fairly significantly last year. What do you chalk that up to, and do you generally agree with the category that Morningstar puts you into?

  Mr. Tillinghast: The cash position and foreign currency exposure, especially post-Trump. The American market was one of the strongest in the world, and we had a lot of British stocks. The U.K. pound went from $1.50 to $1.20, so that's a 20% loss on valuations. Some British companies had a margin squeeze because they were buying in dollars or euros and selling in pounds. They had to suffer a margin squeeze or raise prices, which they did, so sales were pretty slow. I didn't have enough in banks, and had gotten too stuck in the view that rates would stay low and that the regulatory burden was here to say. I underweighted them and that was a mistake: The world changed in a positive black-swan way for the banking industry.

  InvestmentNews: The fund is about 63% in the U.S., with the rest abroad. Your biggest overseas allocation seems to be Japan. What draws you to the Japanese market?

  Mr. Tillinghast: Japanese companies have the strongest balance sheet of any nation in the developed world: 50% have cash that exceeds debt. That's incredibly strong and much lower than in the U.S. and around the world. In small caps, the price-to-earnings ratios can be low: There are still lots of companies with PEs of 8, 10, 12. Interestingly, Japan hasn't had the exit of small companies from the public market that the U.S. has had. There are nearly as many small-cap companies in Japan as there are in the U.S. The U.S. has suffered a steady exodus of small-cap companies, and Japan has many more undervalued small caps with great balance sheets.

  InvestmentNews: The fund is $37 billion. Is that becoming more difficult to manage?

  Mr. Tillinghast: Since there has been a steady flow of redemptions, the fund has contracted by several billions. The steady flow of redemptions is one reason for the cash. It's become more difficult to manage in that I have to manage selling stocks and decide which ones I like the least constantly without become so defensive that I'm missing new opportunities. I have six people on the team — Team Joel — who manage slices of the fund, about 6% of it. If something bad happened to me, the obvious plan would be that they would step in. I'm very careful when I get to a bus crossing, especially in Boston, because they drive like maniacs. Beyond that, I have the small-cap team at Fidelity for research, which has a dozen or more analysts. And as the largest user of small-cap stocks, I have a disproportionate call on their time.

  InvestmentNews: What's your sell discipline?

  Mr. Tillinghast: It's the opposite to the buy criteria. Do I realize I don't understand as much as I thought I did? Do I realize that management is not as skillful or honest as I thought, or that the business is more ephemeral or less competitive than I thought? Do I think the stock is selling for more than intrinsic value? If I can check those, it's a candidate for sale.

  InvestmentNews: Given the market's recent gains, do you think it's due for a correction?

  Mr. Tillinghast: It's not anything anyone can time. Investors have to think about what sort of returns they can make on the market. I'd suggest [looking at] the earnings yield, which is the inverse of the PE, which would suggest a 5% to 6% return, which is pretty mediocre by historical standards. But the alternative is bonds that pay nothing in Europe, or U.S. bonds that pay 2.5%.

  (More: Outlook for 2017: Strategists from Vanguard, Fidelity, Franklin Templeton, Ameriprise, BlackRock and others weigh in)

  GMO talked about this in terms of hell versus purgatory. Hell is the idea that we've reached a permanently lower level of market retunrs: Bonds yield nothing and stocks are capitalized at current PEs and margins we have today. It would signal a world of low returns. Purgatory is worse in the short-to-intermediate term, meaning we have to revert to the mean, which means a shellacking correction at some point and negative returns across the investment universe. I don't know which one to believe. If it's hell, it means a 5% return on equities, a 0-2% return on bonds, and that won't meet pension fund obligations that are based on an 8% return. If it's purgatory, it will culminate in a terrible bear market someday.

• The Wall Street Journal - https://www.wsj.com/articles/veteran-of-low-priced-stocks-will-expand-his-list-1509937740

  Link copied…
  MARKETS YOUR MONEY JOURNAL REPORTS: FUNDS & ETFS Q&A
  Veteran of ‘Low Priced’ Stocks Will Expand His List
  Joel Tillinghast of Fidelity Low-Priced Stock Fund talks about one of his biggest hits and one of his biggest misses
  JOEL TILLINGHAST | ‘The fund’s definition of low-priced is changing.’
  JOEL TILLINGHAST | ‘The fund’s definition of low-priced is changing.’ PHOTO: DAVID SALAFIA/GETTY IMAGES
  By Silvia Ascarelli
  Nov. 5, 2017 10:09 p.m. ET
  1 COMMENTS
  For Joel Tillinghast, investing is as much about avoiding mistakes as picking winners.

  In 28 years of running the $38 billion Fidelity Low-Priced Stock Fund (FLPSX), he has done plenty of both.

  His proudest pick: Monster Beverage , MNST -1.34% known as Hansen Naturals when he came across it 16 years ago. He bought shares around $4 and after many splits they now trade above $57. One of his worst picks: HealthSouth , which fell 99% over the time he held it.

  JOURNAL REPORT
  Insights from The Experts
  Read more at WSJ.com/FundsETFs
  MORE IN INVESTING IN FUNDS & ETFS
  College-Savings Imbalance: Sons vs. Daughters
  Jeremy Grantham Waits for the Bear
  The Artificial-Intelligent Investor: AI Funds Beckon
  U.S.-Stock Funds up 14.4% for 2017
  College Finance Q&A
  The value-focused fund is up 15.1% through Oct. 31 including dividends, handily beating the Russell 2000’s 11.9%. But while it has beaten the benchmark over the life of the fund, average annual total returns have lagged behind for the latest one-year, three-year and five-year periods. Mr. Tillinghast attributes this to factors such as the strong showing by stocks of loss-making companies, which the fund avoids.

  Now the fund is expanding its universe; as of November 2017, it will change its definition of “low priced” and seek opportunities in what it perceives as undervalued small-cap and midcap stocks of high-quality companies.

  What You Need to Know About Bitcoin Funds

  Price swings in the digital currency led to explosions in trading volume, assets under management and volatility at Bitcoin Investment Trust.

  CLICK TO READ STORY

  A ‘Shark Tank’ Panelist Talks About His Best and Worst Investments

  Best Bet/Worst Bet: Daymond John offers the lessons he has learned from both winning and losing in apparel ventures.

  CLICK TO READ STORY

  What to Consider Before You Dash Into Cash

  In this bull market, many investors wonder if it’s time to take money off the table—and where to put it.

  CLICK TO READ STORY

  College-Savings Imbalance: Parents Put Aside More for Sons Than Daughters

  Two studies find a gender divide in saving for college. Is it bias? Or do parents have more confidence in their daughters’ abilities?

  CLICK TO READ STORY

  5 Tips to Remember When Buying Foreign Stocks

  Non-U.S. stock funds are outperforming their American rivals, and it isn’t too late to jump in. Here’s how to do it right.

  CLICK TO READ STORY

  Jeremy Grantham Predicted Two Previous Bubbles. And Now?

  The investor thinks stock valuations are high. But so are profit margins, he says.

  CLICK TO READ STORY

  INVESTING IN FUNDS

  Here are edited excerpts from a recent interview.

  A changing definition
  WSJ: How do you define “low price”? What’s magical about $35 a share or less, the fund’s traditional definition?

  MR. TILLINGHAST: The fund’s definition of low-priced is changing in November, from a price at time of purchase of under $35, to either a price under $35 or a higher-than-index earnings yield (that is, a low P/E). The original price test was meant to include small-cap stocks, but also larger companies that were temporarily depressed and turning around. The newer test is looking for low-priced relative to intrinsic value, which is how I have always run the fund.

  WSJ: You write that you like being paid for boredom, and that stable, low-volatility stocks historically have done better, while exciting stocks have done worse. Can you sum up your checklist for finding your investments and finding value?

  MR. TILLINGHAST: Markets change. With many investors desperately hunting for income, I’m not sure that boring, low-volatility stocks are undervalued today, but they have often been undervalued in the past. My checklist is if you have the right attitude and knowledge; if the company has the right management/people; is in the right business; and has the right price, relative to value.

  Perfection is unattainable, so most of us are best off minimizing regrets with a negative checklist. Avoid a stock if you have the wrong attitude (irrational, short-term gambling); and wrong knowledge—industries, economic statistics or countries that you don’t understand well enough to make a valid forecast. Also if the company has the wrong management (crooks and idiots); wrong businesses (ruined over time by obsolescence or commoditization); and wrong price, where future cash flows aren’t sufficient or visible.

  WSJ: And then when to sell?

  MR. TILLINGHAST: I’m not very good at selling, but it always has to be in the context of your other opportunities and how well you know them. In the rare cases where you can find a company that you understand better, with better stewardship, in a more resilient business, which is more undervalued—make the trade.

  The hard way
  WSJ: What is the stock-picking lesson people find hardest to learn, whether they are investing pros or novices?

  MR. TILLINGHAST: People who have had success in other parts of their lives have difficulty accepting how much failure there is in the stock market. Just because the result was bad (or good) doesn’t mean you did it the wrong (or right) way.

  WSJ: How has your approach to stock picking, and investing generally, changed over the years?

  MR. TILLINGHAST: In the past, I bought a lot of statistically cheap terrible businesses with mediocre managements. Over time, I realized that value depends on future cash flows, and that depends on management and the quality of the business.

  WSJ: You say that a big part of investing success is avoiding mistakes. What’s one where you got it wrong and it still hurts?

  MR. TILLINGHAST: I made three mistakes with HealthSouth. I bought the stock, thinking it was undervalued on adjusted earnings, while GAAP [generally accepted accounting principles] earnings and free cash flows told another story. The company had a very charismatic leader, Jim Scrushy. Lots of bad news came out, including an accounting restatement and allegations of overbilling. I panicked and sold near the lows. The company survived and recovered, but I couldn’t bring myself to come back to the stock.

  WSJ: What adjectives would you use to describe the overall U.S. market now?

  MR. TILLINGHAST: Discounting low future returns.

  WSJ: Nearly 40% of your holdings are in international equities. Is that a lot for you? What are you finding abroad that you aren’t in the U.S.?

  MR. TILLINGHAST: International holdings are currently maxed out because valuations are lower overseas. Also, brokerage research coverage is less abroad, so Fidelity’s research team is more able to find undiscovered gems with growing earnings, strong management and, especially in Japan, better balance sheets.

  Ms. Ascarelli is an editor at MarketWatch. Email her at sascarelli@marketwatch.com.

  Appeared in the November 6, 2017, print edition as 'Veteran of ‘Low-Priced’ Stocks Will Expand His List.'

• Investopedia - https://www.investopedia.com/articles/financial-advisors/011316/fidelity-portfolio-manager-spotlight-joel-tillinghast.asp

  Fidelity Portfolio Manager Spotlight - Joel Tillinghast By J.B. Maverick | January 13, 2016 — 9:55 AM EST
  SHARE

  Joel Tillinghast is one of the most successful portfolio managers for Fidelity Investments over the past 25 years and one of the most successful fund managers working for any mutual fund company. From having an early affinity for math and numbers, Tillinghast eventually garnered a reputation as one of the great stock pickers of all times.

  Mutual Fund Management
  As of 2015, Tillinghast has managed the Fidelity Low-Priced Stock Fund from 1989 up to the present. Over that time span, he has regularly outperformed both the S&P 500 Index and the Russell 2000 Index by a good 5 to 6 percentage points in terms of annualized average returns. While the value-focused fund occasionally lagged a bit behind more growth-oriented funds during part of the 1990s, it has an outstanding 25-year track record. Even during the two bear market years when the fund declined in value, it still fared better than the S&P 500.

  Since its inception in late 2012, Tillinghast has also been the fund manager for the Fidelity Series Intrinsic Opportunities Fund, which has grown in value from just over $10 a share to over $14 a share in the span of just three years. The current chorus of market analysts touting the line that actively managed funds don't outperform index funds usually avoid mentioning Tillinghast when they're making their cases.

  Background
  After majoring in economics at Wesleyan, Tillinghast was hired by Fidelity in 1986. It's reported that his hiring came about following a phone call he made to Peter Lynch, then manager of the Magellan Fund at Fidelity, to inquire about a stock he was evaluating for Value Line, Tillinghast's employer at the time. The story goes that after talking on the phone with Tillinghast for well over an hour, upon hanging up, Lynch immediately turned to a colleague and said, "We have to hire that guy." After being hired as a stock analyst and mentored largely by Lynch, Tillinghast became a fund manager himself within three years.

  Tillinghast is known for his remarkable ability with numbers and his prodigious recall of nearly every investment he's ever made. While he denies having a photographic memory, it's a well-known fact around the Fidelity offices that Tillinghast walks around with his head filled with an amazing amount of knowledge about each of the nearly 900 companies in which the Fidelity Low-Priced Stock Fund is invested. He's also nearly as well-versed on any company that he ever even considered investing in over the course of the fund's 25-year history, along with the companies that he's currently considering for future investment.

  Value Investing
  Tillinghast has followed value investing principles from the beginning. The portfolio of the Low-Priced Stock fund has been constructed by identifying stocks that Tillinghast considers undervalued in terms of book value, earnings and cash flow, and that return profits to investors in the form of generous dividends. He carefully evaluates a company's management team before deciding to invest, and also takes into consideration general macroeconomic and industry-specific trends.

  One of the fund rules, rarely broken or even bent, is that the fund only invests in stocks priced below $35 a share. In the beginning, the line was drawn at $15 a share, but Tillinghast has made the necessary adjustment to generally higher stock prices. Beyond that, he casts a wide net, investing in a large variety of companies from virtually every market sector, based domestically and internationally.

  One of the keys to the fund's success has been mitigating portfolio risk through a broad diversification of holdings. The fund's nearly 900 holdings are the most for any actively managed Fidelity fund. By comparison, most equity fund portfolios hold fewer than 200 different stocks. Despite its extremely high number of holdings, the fund has an extremely low annual portfolio turnover ratio, especially for an actively managed fund, of only 9%.

  Team Joel
  When Tillinghast recently took a four-month leave of absence to work on a book about investing, he worked with Fidelity to create "Team Joel" to manage the funds in his absence. Just as he was mentored by Peter Lynch, Tillinghast has mentored a number of the analysts that work under him. Since his return, he has allowed the team to continue managing a portion of fund investments. Meanwhile, Fidelity management is no doubt happy that Joel is only in his mid-50s and will hopefully be picking stocks for many years to come.

  Compare Popular Online Brokers
  Provider
  Name
  Description

  Read more: Fidelity Portfolio Manager Spotlight - Joel Tillinghast | Investopedia https://www.investopedia.com/articles/financial-advisors/011316/fidelity-portfolio-manager-spotlight-joel-tillinghast.asp#ixzz57ht6GIif
  Follow us: Investopedia on Facebook

• Kellogg - http://www.kellogg.northwestern.edu/kwo/spr08/alumni/tillinghast.htm

  Alumni Profile: Joel Tillinghast '83

  Joel Tillinghast '83: Decade's best stock picker

  By Matt Golosinski

  For nearly two decades, Kellogg MBA Joel Tillinghast's intensive research and value perspective have enabled him to outperform investment gurus like Warren Buffett while positively crushing the S&P 500. A dollar entrusted to Tillinghast's Low-Priced Stock Fund in December 1989, when he launched the portfolio at Fidelity Investments, grew to nearly $16 by December 2006. That's about $4 more than Buffett's financial wizardry produced over the same time and $12 more than the S&P index.

  Tillinghast's advice for would-be market mavens? Understand a business before studying its numbers, since doing so helps determine why a company should be profitable and can "separate luck and temporary success from lasting success factors." Tillinghast '83 recommends digging deep for research in addition to reading the annual report before meeting top management.

  "Does management directly address tough issues or identify growth opportunities? If they're not forthcoming in the report, that may be how they present themselves [in person]," he says. Too many photos of the management team could indicate executives who are "egomaniacs." Conversely, no real indication of leadership could mean the firm is "a faceless company," which presents its own set of problems.

  Meeting with management before making an investment is critical, says the Kellogg graduate, who began his finance career in 1980 as an equity analyst with Value Line Investment Survey before going to Drexel Burnham Lambert from 1982 to 1986 when he joined Fidelity.

  A disciple of Peter Lynch, legendary former manager of Fidelity's Magellan Fund, Tillinghast prefers a low-turnover approach to his portfolio, which is composed almost entirely of stocks priced at $35 or under. This strategy requires him to select investments carefully and be prepared to hold them for years.

  "I would lose my mind if I had to move investments as frequently as some people do," says Tillinghast. "I tend to ease in and ease out."

  Morningstar, the investment research company, has called Tillinghast "a diligent, bottom-up stock picker [who] pays little attention to market indices or macroeconomic trends," but who nevertheless knows how to find undervalued equities that often can increase earnings even during inclement economic weather. Such qualities earned the Kellogg alumnus MarketWatch's "Stockpicker of the Decade" honor in 2007.

  Among the insights Tillinghast shared with Kellogg students during a February visit were:

  Friends, nonfinancial publications, plant and store visits and compulsive curiosity bring insights you don't get from a CFO;
  React to trends not yet reflected in analytical models;
  Focus on companies that have very high returns on equity for decades;
  Look for barriers to entry that keep returns high;
  Seek out information that is not obvious or already priced into the stock.
  Deliberative and soft-spoken, Tillinghast grows animated when the topic of questionable accounting practices or inadequate banking transparency arise. "I'm not a fan of present-value accounting, taking a gain on a security that you've not yet sold and converted to cash," he says.

  The finance major recalls some memorable Kellogg experiences: marketing classes with Professor Philip Kotler; an investment banking class taught by Professor John Roberson; a course on business and its environment with Professor Lawrence Lavengood.

  "Investment ties together a lot of business aspects," says Tillinghast. "You shouldn't just do finance, though that's obviously helpful."

  Kellogg Finance Professor Robert Korajczyk calls Tillinghast's track record "amazing."

  "His approach is very Kellogg-like," says Korajczyk, "in the sense that he believes good portfolio managers need to understand the whole business and competitive environment of the firm — strategy, marketing, managerial culture, in addition to being able to dissect the financial statements."

Print Marked Items
Big Money Thinks Small: Biases, Blind
Spots, and Smarter Investing
Publishers Weekly.
264.22 (May 29, 2017): p55+.
COPYRIGHT 2017 PWxyz, LLC
http://www.publishersweekly.com/
Full Text: 
Big Money Thinks Small: Biases, Blind Spots, and Smarter Investing
Joel Tillinghast. Columbia Business School, $29.95 (320p) ISBN 978-0-2311-7570-8
Tillinghast, longtime manager of the Fidelity Low-Priced Stock Fund, gives sage advice on successful stock
market investing in this informative manual. He acknowledges that investing is inherently unpredictable, but
does have tips for avoiding common mistakes and increasing the odds in your favor. Some advice is fairly
basic, such as his discussion of selecting reliable, ethical money managers, while other pointers are more
complicated, such as the information he provides on learning to value stocks properly. Tillinghast addresses
pertinent questions including how to anticipate and prepare for changes in a market. He also explores the
fallibility of human judgment, later offering as contrast an inventory of the psychological traits of successful
investors. One of the most cogent tips he offers is to only invest in businesses that you understand. By
understand, Tillinghast means knowing what every segment of an industry does and how each one makes
money. Written for investors at all levels, this practical, no-nonsense guide doesn't provide specifics on
where to invest but does empower readers to generate their own informed decisions. (Aug.)
Source Citation   (MLA 8th
Edition)
"Big Money Thinks Small: Biases, Blind Spots, and Smarter Investing." Publishers Weekly, 29 May 2017,
p. 55+. General OneFile, http://link.galegroup.com/apps/doc/A494500744/ITOF?
u=schlager&sid=ITOF&xid=61e70385. Accessed 29 Jan. 2018.
Gale Document Number: GALE|A494500744

"Big Money Thinks Small: Biases, Blind Spots, and Smarter Investing." Publishers Weekly, 29 May 2017, p. 55+. General OneFile, http://link.galegroup.com/apps/doc/A494500744/ITOF? u=schlager&sid=ITOF. Accessed 29 Jan. 2018.

• Seeking Alpha
  https://seekingalpha.com/article/4111562-book-review-joel-tillinghasts-big-money-thinks-small
  Word count: 345

  Book Review: Joel Tillinghast's Big Money Thinks Small
  Oct. 4, 2017 7:00 AM ET
  Charles Lewis Sizemore, CFA
  Charles Lewis Sizemore, CFA
  Dividend investing, long only, CFA, registered investment advisor
  Sizemore Insights
  (3,426 followers)

  Originally published on September 8, 2017

  Joel Tillinghast is not a household name, even among active investors.

  He should be.

  Tillinghast is the manager of the Fidelity Low-Priced Stock Fund, and he's beaten both the S&P 500 and the Russell 2000 by 4% per year since 1989. And while 4% might now sound like a large number, it makes an enormous difference compounded over time. A dollar invested with Tillinghast in 1989 would have grown to $32 over the past 27 years, whereas that same dollar invested in an index fund would have grown to $12.

  So, Tillinghast is a manager you should take seriously. And in Big Money Thinks Small: Biases, Blind Spots, and Smarter Investing, Tillinghast shares some of the tricks of the trade he's used over the past three decades.

  Tillinghast breaks the investment process down into five basic principles:

  Make decisions rationally
  Invest in what you know
  Work with honest and trustworthy managers
  Avoid businesses prone to obsolescence and financial ruin
  Value stocks correctly
  Making decisions rationally sounds obvious, but it can be exceedingly difficult in the stock market. As Tillinghast puts it, "… the folklore of stock exchanges has depicted them as crowded, anonymous carnivals of mass delusion and mayhem, with a whiff of sin. In a venue where avarice and envy are constants, no one expects decisions to be morally ideal."

  That's not exactly an ideal environment for thoughtful, detailed stock research… which is why so few investors succeed.

  Tillinghast walks us through some of the psychological minefields first explored by Daniel Kahneman and Amos Tversy, who are considered to be the pioneers in behavioral finance. But he stops short of throwing human active managers completely under the bus and using purely mechanical investing strategies. As he puts it,

Word Count