Tilson Mutual Funds – Getting bigger and gaining accolades

I am not a rich man – yet. For years, however, I followed the investment writings and newsletters of Whitney Tilson, a noted value investor running a hedge fund for accredited investors. I had even emailed him at one point to see if there was a way he could take my money. As someone that did not qualify as an accredited investor, I was quite excited when he sent me an email and told me that he was going to be launching a couple mutual funds. When those funds launched, I bought in right away, even though they had no ticker symbols and I could not hold them in my Ameriprise brokerage account. I just knew I wanted this guy’s thoughts and updates being sent to me as frequently as possible (and the updates from the fund company are indeed great).

Whitney Tilson

The good news is that these funds have really been performing quite well. In fact, they finally reached enough assets to get their own ticker symbols (TILFX – Tilson Focus Fund and TILDX – Tilson Dividend Fund).

And then, to top it all off, the Wall Street Journal’s Quarterly Mutual Fund supplement rated the Focus Fund #1 out of 883 entries in the Multicap Core Funds category with a one -year return of 19.98%! Yowzah!

I strongly recommend <a href=http://tilsonmutualfunds.com>both of the funds</a> for long-term buy and hold investors who want their money managed professionally and ethically. Here’s to hoping that staying in for the long haul someday helps me acheive “accredited investor” status.

What to do, what to do?

I received an email this morning from one of my trading services saying that they have sold out of one of my stock positions – Tidewater (TDW). Generally, I wouldn’t bat an eye about somebody selling a position that I hold but this service is what caused me to buy the holding in the first place. I hate losing the ongoing insight that comes from their continued research into the stock. The other kicker is this – I’m underwater on the stock by about 8% and haven’t held it very long. So even though this service bought the stock and was able to make a profit (triggering a sale only on the trailing stop), I haven’t yet made money on it.

I think I’m going to hold it a bit longer and watch another quarter or two of earnings. Opinions?

I ask for a financial blog and I get one called SocialPicks. Not bad…

After requesting a financial blog about a week and a half ago, I found one that meets a lot of my needs and seems that it might become a compelling site over time – SocialPicks. First off, let's just address that this site is really new and, as such, is a bit of a ghost town. After sign up, you land on a page where the most recent postings may be hours old. Whatever. That'll change.

The basic idea at SocialPicks is to form a community which debates stock picks and posts research on stocks. You can post your "pick list," "sell list," and "watch list." You accumulate "friends," "favorite experts," and "followers" (which sounds a touch cultish but if I find anyone that can me 6 bazillion dollars on this site, I'll be happy to count myself one of their "followers"). There are also ways of responding to other people's research and cheering them on. It's a place to learn from the community and hopefully improve your own stock-picking. Right now, it's a touch too soon to see if the community will really pan out. I am a little disheartened at the level of research I have seen on some of the picks so far (i.e. Yahoo and eBay signed a deal today, therefore I am recommending Yahoo and eBay…). One line comments do not really constitute research people. Do something useful.

There are early tools in the system intended to help you identify the most successful pickers at any given time. Sooo, if you think you're a savvy stock-picker, now might be the time to jump on board and put yourself in a position to benefit from new users as they sign-up (I've found that being early in these things can put you in a nice reinforcing cycle).

The site is not currently open for public sign-up, but you can put in your name on the homepage and, if you're as lucky as I apparently am, the people running the site will send you an invite token within a day or two.

If you do make it on to the site, feel free to befriend me under my "mrefranklin" moniker. I'll be happy to share whatever investing expertise I decide to put there. Of course, this blog will still be my primary vehicle for sharing that information…

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Business Idea: Financial Blog

Recently, I started thinking about a new service that I would like to see in the marketplace. I believe a blog-site which focuses on the tracking of portfolio movements, performance, and posts regarding the trading moves in the portfolio would be extremely valuable to a lot of people learning about investing or wanting to show their skills.

The idea came about because I've realized that there is no site which lets you publicly manage a portfolio and explain to people why you are making certain moves within it. 

Some ideas on whatthis product could include:

- Users configure their initial portfolio and then publicly update their portfolio over time.

- Users could sign up for a pay service which audits their performance and enters them into competition against others. 

- Any portfolio should be public by default but can also be made to just be invitation only (this way investment clubs can monitor their club performance on any given day).

- Popular public portfolios would receive some level of editorial oversite and be featured on receive editorial placement when the portfolio managers are doing something right, publishing good lessons, etc.

The closest thing to this out there right now is marketocracy.com. That site, however, is all about competition between you and other "virtual mutual fund" managers. You have to run your portfolio within the guidelines of a standard mutual fund and this means holding a wide variety of positions, re-balancing frequently, etc. 

I realize I'm a bit of a data wonk but I could see this being a really valuable service. What do you guys think?

Calculating percentage increase and decrease

How do you calculate a percentage increase or decrease for one of your holdings (without using portfolio software you cheaters)? For some reason, I always have to look this one up. Apparently grade school math can fade a bit over time.

Something else that changes over time – the teachers get cuter. I dated a teacher recently and it was pretty strange to think about. Lecherous old man-dom here I come.

OK, back to the task at hand.

Let's use the example of needing to calculate the percentage increase of 11 to 21.

1. The first step is to find the difference between the two numbers: 21 – 11 = 10
2. Take the result of that and divide it by the original number: 10 / 11 = .90909091
3. Multiply this last number by 100. Voila! Your increase from 11 to 21 is 91%!

Personal Sell: Paychex Inc (PAYX): $40.07: 20060428

As much as it pained me to do so, I had to sell out of my shares in Paychex for reasons related to taxes. Basically, I had to pay the government before a refund check was scheduled to arrive and my only funds available were in my trading portfolio. I got pinched and I hate it. Shut up. I know I should keep a better reserve pile so I don't have to do this (it's just that I've always liked having as much money as possible really working for me at any given time).

This stock was the only stock left in my portfolio that I could sell and get long term capital gains treatment. Paychex was a good run for me, however, as my shares were purchased at $31.06 on February 25, 2005. This means I had a percentage increase of 29% in 14 months or so. Booyakasha.

The Sayings of Chairman Buffett

If I had as much money as I wanted, I'd subscribe to Whitney Tilson's "Value Investor Insight." From the snippets I have seen, it looks like a really high quality newsletter (I'm on the Tilson mailing list and get little excerpts of the product from time to time). Alas, I already own a couple other investment newsletter subscriptions which are paying off very nicely and I don't feel like switching out of yet.

If you click the heading on this post, however, you'll be able to look at a section of this month's edition of "Value Investor Insight" which is a great recap of some of the best sayings of Warren Buffett.

One of my favorites is the following:

"A friend of mine spent twenty years looking for the perfect woman; unfortunately, when he found her he discovered that she was looking for the perfect man." – meeting with Dartmouth Students


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