Whitney Tilson on Financial Stocks
Whitney Tilson hasn’t just increased his fund’s position in financial stocks, he quadrupled it. Of the change in portfolio allocation, Tilson says, ““[W]e added a new position in Goldman Sachs, added to JPMorgan, a new position in Citigroup in size. So, you know, we’ve taken our financial stock weighting in our portfolio maybe from 5% to probably 20% today,” reports ReutersInsiderHedgeWorld. Tilson says he is a “long term value investor” so he plans to stay in bed with the financials for a while and reap the returns over the long term. Berkshire Hathaway is is favorite and the only stock he has held for the entire 13 years he has has his fund.
Tilson is Actually Bullish on the Market in General, but Cautious
Tilson sees much more opportunity now. “The more turmoil there is in the world , the more investors are worried and panicking about sort of macro factors, the cheaper stocks tend to get,” he said. “We’re nowhere as cheaper as we were in late 2008 early 2009 but then again we’d argue the world isn’t going off a cliff either. So, on a risk adjusted basis this may well be a more attractive time to be buying stocks than even back then.” Tilson thinks that investors have to be careful though. There are lots of stocks that are trading at single digits to their multiples, like Dell (DELL) trading at 6 times or Microsoft (MSFT) trading around 8 times, but there are also stocks that are ridiculously priced, trading at many times their earnings. Those are the ones Tilson will short, like Green Mountain Coffee (GMCR).