YouSaid · the spoken record

Joel Tillinghast

lines on the record: 76
first: 2022-11-27
most recent: 2022-11-27
sittings or episodes: 1
sources: podcast

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“To withstand those kind of shocks, and sometimes they can have worse positions, and that's what I want from analysts, since the fund has a bunch of British stocks and has two home builders. It's a relevant question to sort of, are they cheap because they're selling for less than their stated net asset value, or will this be too devastating for housing for them to make a decent profit in the next year or two?”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“If the house is burning down, you can't focus on the architectural qualities. But I do not ignore current events, but usually it isn't conclusive about what I'm doing. I do have macro opinions, but mostly I want analysts to help me imagine different scenarios. What if British interest rates go up another hundred basis points and mortgage rates follow? What will that do to affordability of homes in the UK? What will that do for consumer spending? And how catastrophic is that for the companies that we're talking about? And it might be not at all, or it could be very big impact. And sometimes companies can have more competitive position and be better placed.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“I think if you spend all your time trying to do it like George Soros, that you can do that, but it's beyond my skill set. And I think it's very difficult generally. Right now we have an impending profit recession and analysts come to me saying, are you interested in buying the home builders? Are you interested in buying meta, the old Facebook, and figuring out what's discounted even in a fairly specific case is really difficult, figuring out what the moving pieces are for a whole economy and for aggregated statistics, it's a really tough game and you've got to be amazing like George Soros is to be able to do that well.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“Do anything with borrowed money unless the thing you're borrowing against is giving you an income stream that can cover it. You never, ever want to be, of course, seller. Why would stocks sell for less than their worth? There's a whole bunch of behavioral reasons, but one of them is people get forced out of their holdings. And it happens every financial crisis that something gets sold at an absurd price because they had to. And so no margin for me. I think it's not so much conservatism, but a recognition that interest rates lots of people know about this GDP, lots of people know about this. Do I have a really good edge? Probably not as much as I might. With a smallish public listed company where management and know what they're thinking.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, if it was all equity and rates were going in that direction, in your direction, then say that's great. But it was all borrowed money. And so over a couple of weeks, I basically lost back all of the 40 grand and in a agreed thing. I don't know if they shut down my account or just said, you know, I think it would be a good idea to take a holiday from this for a while and it was hurting so much from losing back the $40,000 because it felt so smart. Like, wow, this is great. Like, let's annualize that. That's $10,000 a month that I was making.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“Yes. And so where I'm going is with 40,000 inequity, I had something like 25 million dollars worth of notional exposure, which was really disproportionate to anything else for me as a counterparty.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“Maybe you are a direct employee, it went really, really well for about four months. I'd say it started in January as I was heading to my last year of business school and I managed to make about $40,000. Which then my income and lack of net worth at the time was truly fantastic was thinking I could pay off my student loans which were I guess less burdensome than it seems like some students today are stuck with but then in early May as I was heading towards graduation the market also changed and my lucky streak I guess there's a temptation to pyramid and keep adding to the positions if you're winning You want to press your bets and say, that's not a bad thing to do, but it comes with a lot of caveats. If you're doing it with borrowed money, it's a terrible idea. But if it's all mad money, say push a winning bet as far as you can”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“The other statistics while can I trade this to make money? And I did this. It started with one contract, I think, and a futures contract on T-bills, I think, was a million dollars, but you could buy one by putting up margin of $1,000 or $1,500. The problem was you had to put out the variance margin. So if the price went down by $3,000, you had to cough up the loss or lose your deposit and get sold out of the position and probably get your account closed if you were not a”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“Point two percent who are 0.4%, and there are some tricks because some of the statistics use bits and pieces of other statistics that have already been released. So if you have the industrial production number, you know something about the GDP. If you reading indicators were then got much more focus, but some of the components had already been released, like S&P prices, well, you knew that. jobless claims and other things so you could come up with a better estimate and it wasn't then completely in the market the problem lots of people around me who were making much more money than I was and thought wow can't I was moderately good at it forecasting PPI and GDP”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“For part of it, I was still that time, I was still in business school and had lots of student loans and a tight budget, even though I was working. And so didn't have that money to trade and brought my job at Drexel was as a research economist. Part of that is putting together hedging packages for customers that wanted to hedge their interest rate risk. But a lot of the volume of a brokerage business was within active traders. A lot of them traded around the economic statistics. So if employment was looking robust as it may have recently, then they'll say bearish for bonds. And my job was to forecast, will producer prices be up zero.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, the idea of value line that if you have a fixed multiple of 10, then the earnings go up by 50 cents, then the fair value is up $5, which is obviously oversimplified, but directionally correct.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“Value line has got its name because they have what they call a value line, the multiply earnings or cash flow times average multiple and say this is the fair value of the stock and so it's undervalued or overvalued and it's an oversimplified version of value investing, but it is value investing and I think that influenced me a lot and they also have what they call a timeliness rank which is more a is this a good short-term trade or trade over the next year and it's a bunch of things that go into the timeliness rank are the earnings rising fast is the stock price rising but going back to the value line itself it's Reiteration of Will's mantra stocks and earnings go together, or at least the value of it does.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“Than the market, it's hard for people to value that. And I think that's part of what Will does so well. But I am trying to do that with more caution because some of the businesses that I have are more commodity-like. And you can't look so far. I tend to shy away from the super commodity businesses, as does will, which means something like energy is somewhat tough for us because they don't have as much control over their destiny. There are better managers. There are worse managers. There are better positioning. There's worse positioning. But you don't have companies able to set their own agenda and will gravitate to companies that are setting their own agenda where no focus group said, gosh, we need... Amazon World Services, but now it's the biggest contributor to Profit at Amazon.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“But she's also trying to do it in the area where things change the fastest. Things are the most path dependent. And there's little history to tell you what to do. And if you're defending her, say she may not know much, but she knows a whole lot more than anybody else about where the industry she's talking about will be in 10 years. And I think Will does that with ingredients or assumptions that I can trust. He does look at track record mostly. Businesses are run by human beings. And so saying, this is a really amazing manager in Elon Musk or Jeff Bezos or whoever gives you confidence in the outlook and more confidence.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think stocks will follow earnings. And skeptical of people's ability to look too far out into the future. Kathy Wood, do you love her or do you hate her? What I admire is she is trying to look into the distant future, which I think not enough people.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“It takes big barriers to entry. It takes domain expertise, a focused and brilliant leader sometimes will get obsessive about this and pushes it as bet with billionaires. Will Jeff Bezos make the right decision? Well, the track record says yes. Will Mark Zuckerberg, well, the track record is mostly positive, but I have my concerns that that's part of what we're evaluating.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“It's by having companies that grow earnings and probably the rest of their business at above average rates further into the future than people are imagining with higher visibility than people think. And I think this works because people's attentions are scattered and they're distracted by what's happening now. Wow, it's getting so much better. But I think what Will is fantastic at is thinking about will this business be much, much bigger five or ten years from now? And is it the best in class? He doesn't want to have the number three in anything that said a cheaper multiple. He wants the best in class. He wants the business winner where you can confidently talk about where they'll be in five years or ten years.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“Over value is the present value of dividends from here to eternity and retrospectively unless you had a very high dividend discount rate, they realized dividends on Beckman instruments have said it was really pretty undervalued even at 40 times earnings, but that's a rare stock. And I think there are big constituencies in the market. You can model the market as having three or four different types of agents. One agent says, give me something that's getting much better right now in a very visible and public way. So nobody's going to say anything bad about it. Will is good at this. I'm terrible at that. The second set of agents says, how can you beat the market?”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“It was sort of amazing to me, obviously, in three months. I could do a lot more lawns than dividend checks from Armstrong Rubber. But yeah, it was kind of amazing to see that you could earn money without having to physically exert yourself.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I guess if you have the greatest companies like Amazon looking backwards has not really mattered what price you paid. But for really quite excellent but human companies like Beckman Instruments, yeah, the price matters a fair bit because markets slow innovative companies lose their edge. Things change and so not overpaying is really important, but I guess I lucked out in having a really superb company with Beckman Instruments and not so much with central main power, which paid a dividend but really didn't do a whole lot for me”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“Until they got bought by a drug company, Smith Klein, which merged with Beacham, and they later decided that drug companies really shouldn't be in the healthcare instrument research business, and they spun it back out. So I got some of what eventually became Glaxo-SmithKlein when they bought it out, but also some Beckman instruments, which later got bought out by Ganaher. But I still have the Glaxo SmithKline shares and the dividends every quarter or something like two or three times the initial purchase price of the stock.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“Over the next four or five years, not very well. The earnings of the company kept going up. The starting PE had been something like 40, and that compressed and kept falling and kept falling. So by mid by 1974, it was probably down to about an 8 PE. So it was kind of disappointing, although market relative, it probably was all right in absolute dollars. It was very disappointing. But he held on to it. And the earnings kept growing. And in fact, they kept growing at a double digit rate because Bac men kept turning out more innovative instruments that sold well. And they kept doing well”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“Had saved money from selling guides to both door to door, mowing lawns, gifts, gath out was about $104 for the two shares of Beckman instruments. The commissions were huge.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“That allowed him to do tests with chromatography where you drip the proteins out and you can tell what's in there and did it with much greater speed. Arnold Beckman, who had founded the company, was sort of a tech genius, beloved of biologists and healthcare people because these instruments really did save time and allowed them to do things that they weren't able to do before. So one of my first two purchases, along with central main power, was two shares of an instruments.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“Because they like to save money and weren't trading that much. But it was curious about them because they were interested in them. There were lots of numbers. And as a kid, I was fascinated with numbers and enjoyed working out things that if you divide or if you multiply one, two, three, four, five, six, seven, eight, nine by eight, you get something like 9876 by 4321. Not very precisely, but yeah, I like numbers and there were lots of them and tried to understand what the numbers went and liked seeing growth progressions. And a company called Beckman Instruments had very strong earnings progression. And my dad was a biologist. He was excited about a piece of lab equipment.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT
“My mother subscribed to a publication called The Value Line Investment Survey. And my grandfather had passed away and had left a few stocks. And they wanted to make sure that they were doing the right thing with them, although they also concluded that Grandpa had made a lot of good decisions and just stuck with them, but they wanted to be sure that they were holding the right stocks to track them. And value lining was one thing that they subscribed. And value line runs on a 13 week cycle. And they would offer these teaser subscriptions for a cheaper price, you would get about 13 weeks for a reduced price. They would get those. And every two years or so, they'd get another teaser subscription.”
2022-11-27 · We Study Billionaires · RWH017: Fidelity Legend Joel Tillinghast · IDENTIFIED FROM THE TRANSCRIPT