Tilson Angry At NY Times For Calling Buffett ‘Ordinary’; Confirms ATHN Short

Tilson Angry At NY Times For Calling Buffett ‘Ordinary’; Confirms ATHN Short

by Jacob WolinskyMay 12, 2014, 2:03 pm

The following is from an email which Whitney Tilson sent to ValueWalk. He attacks the NY Times for stating that Buffett was ordinary. He also confirms that he is short ATHN and briefly mentions his FNMA long, which we first reported.

The Ira Sohn Conference has posted the slides that David Einhorn and Larry Robbins presented a week ago herewww.sohnconference.org/events/new-york. I thought Einhorn’s takedown of athenahealth, Inc (NASDAQ:ATHN) was epic – the video clips alone were classic! (I am short ATHN.)

In addition, Bill Ackman gave a brilliant presentation on Fannie Mae and Freddie Mac. I think his analysis is spot on – and captures why I’m long Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA).

Whitney Tilson on Buffett being “ordinary”

There was a dopey article (www.nytimes.com/2014/04/06/business/the-oracle-of-omaha-lately-looking-a-bit-ordinary.html) in the NY Times last month about a new study showing that Buffett has become “ordinary”. Ha! I could have told you in three seconds, without “an elaborate spreadsheet filled with more than 30 pages of data and formulas”, that of course a cash-rich, conservatively managed business like Berkshire is going to underperform during one of the greatest bull markets in history – but that doesn’t mean Buffett’s lost his touch.

When was the last time you read an article in a major publication about Buffett being “ordinary”? Try 1999, which also happens to be the last time that silly companies trading at a zillion times revenues were leading the market – and we all know how that ended…

A friend of mine added:

That article was indeed REALLY stupid. Although Berkshire’s book value didn’t go up as much during 2009-2013 as the S&P 500 stock index (Buffett’s yardstick), Berkshire’s book value growth of 65.5% during that period outperformed the book value growth of the S&P 500 companies. (I don’t have the exact figure, but I believe it’s about 45%.) And, of course, if one looks at the 2008-2013 period, Berkshire outperformed the S&P 500 (INDEXSP:.INX) by Buffett’s yardstick: 61.79% growth for Berkshire versus 43.8% for the S&P.

And while Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B)’s stock has slightly trailed the S&P 500 since 1/1/09, as this chart shows:

It’s handily outpaced the S&P since the prior market peak on 10/11/07, as this chart shows:

7) I asked a question at the meeting: I said that I was reading and really enjoying the book, Dream Big (www.amazon.com/exec/obidos/ASIN/B00JUWYGDQ/tilsoncapitalpar) (which was just translated into English from Portuguese; it’s been a best-seller in Brazil since it was published last year), about the Brazilian guys they partnered with to buy Heinz. I said they were incredibly impressive and I hoped they would bag many more elephants together.

At that point, Buffett interrupted me to say what a great book it was, and I added that it’s only available on Kindle except for the few copies being sold there at the meeting.

I continued by asking Buffett and Munger what their secret sauce is? Here are Peter Boodell’s notes on their reply:

Buffett: …they are very smart, very focused, hard-working, determined, never satisfied. As I said earlier, when you make a deal, they don’t overreach, they don’t overpromise.

If you read the book, you’ll learn a lot more.

We want to be a good partner as it attracts good partners. Takes a lot of other people behaving in way to make people want to join and trust us.

Munger: The way to get a good spouse is to deserve one. It is same on partners. Still works in modern times. Behave correctly, amazing how well it works.

WB: What can we learn from 3G?

CM: Can’t skirt the fact that they are very good at removing unnecessary costs. I don’t consider that immoral, it is a service to civilization. It should be done with some mercy…

WB: and sensitivity.

CM: But our system should not have make-work.

WB: We are learning from them…

CM: Some reluctantly.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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