We Study Billionaires - The Investor’s Podcast Network

TIP529: Joel Tillinghast & Uncovering the Art of Outperformance

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Feb 28, 2023

Discover the investment philosophies of Joel Tillinghast, a legendary stock picker known for his conservative strategies and consistent outperformance. Learn why a certain level of speculation is essential in investing and why Tillinghast avoids gold. Delve into insights on acquisition-focused companies, Brown and Brown Insurance and Constellation Software, and understand the importance of company research. Explore the value of exceptional leadership in successful investing, particularly through the lens of Constellation Software's impressive performance.

57:18

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ANECDOTE

Familiarity Bias

Familiarity can bias investors, even in seemingly safe bets like Walmart or Apple.
Continually investing in the S&P 500's largest company yielded under 4% annually (1972-2016).

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ADVICE

Focus and Conviction

Focus on a few companies you understand deeply instead of analyzing thousands.
You don't need to analyze everything to succeed.

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INSIGHT

Gold's Value

Gold has no intrinsic value because it earns no income.
Its worth fluctuates drastically, driven by speculation and narratives.

Get the Snipd Podcast app to discover more snips from this episode

Mastering Value Investing

02:13 • 17min

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Navigating Investment Decisions and Financial Strategies

19:35 • 3min

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Navigating Investment Strategies

22:57 • 16min

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Evaluating Company Performance and Family Ownership Benefits

38:44 • 2min

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Navigating Investment Strategies and Resources

40:45 • 2min

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Leadership and Investment Wisdom

43:11 • 14min

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Exploring the Long-Term Success of Constellation Software

57:12 • 3min

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On today’s episode, Clay Finck reviews Joel Tillinghast’s book, Big Money Thinks Small, and does analysis on two companies built around acquisitions - Brown and Brown Insurance and Constellation Software.

Joel is an incredible long-term investor as he has consistently outperformed the market and currently manages around $70 billion at Fidelity. Peter Lynch, who hired Joel at Fidelity, has described Joel as “one of the greatest, most successful stock pickers of all time.”

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro

06:04 - Why some level of speculation is required in every investment.

08:07 - What speculations are acceptable in Joel Tillinghast’s conservative investment approach.

10:34 - What you need to understand about a company prior to investing.

13:02 - Why Tillinghast avoids investing in gold.

20:20 - Why investing in countries with the fastest GDP growth rate isn’t a wise investment strategy.

29:52 - Clay’s insights into two acquisition-focused companies - Brown and Brown Insurance and Constellation Software.

37:27 - Why Constellation Software may be worth further investigation for stock pickers interested in high quality businesses.

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members.
Joel Tillinghast’s book Big Money Thinks Small.
Newsletter: The Risks in Owning Chinese Equities.
Listen to Trey’s Interview with Josh Young Covering Oil, or watch the video.
Chris Mayer’s blog post on Constellation Software.
Check out Clay’s episode covering legendary British Investor Terry Smith. Watch the video here.
Don’t miss our review of Four Wide Moat Stocks for 2023. Watch the video here.
Follow Clay on Twitter.

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