Joel Tillinghast on Fidelity Investments

Masters in Business

PODCAST:Masters in Business
TITLE:Joel Tillinghast on Fidelity Investments
DATE:2023-12-08 00:00:00
URL:
MODEL:gpt-4


Summary of "Joel Tillinghast on Fidelity Investments" from Masters in Business Podcast

Host: Barry Ritholtz

Guest: Joel Tillinghast, Fidelity Low Price Stock Fund Manager

Main Topics Discussed:

  1. Joel Tillinghast's Background and Introduction to Investing:

    • Tillinghast shares his early love for investing, sparked by managing his grandmother's stock portfolio after his grandfather's death. His first stock purchases at age 10 were Beckman Instruments and Central Main Power. He still holds the Beckman Instruments stock to this day.

  2. Career Journey:

    • Tillinghast's career path led him from Value Line to Kellogg Northwestern, Drexel in Chicago, and eventually to Fidelity Investments. His transition to Fidelity was influenced by a cold call to Peter Lynch, leading to a hiring interview and subsequent job offer.

  3. Investment Philosophy and Strategy:

    • Tillinghast discusses his investment approach, which combines value investing with elements of growth investing. He emphasizes understanding one's own investment method, sticking to a circle of competence, and avoiding industries or companies that don't align with personal investment philosophy.

  4. Approach to Active Fund Management:

    • The conversation covers Tillinghast's approach to managing the Fidelity Low Price Stock Fund, which includes holding a large number of stocks (around 800) and concentrating on companies with high conviction of growth and reliability. He also discusses the importance of avoiding companies with poor management or ethical concerns.

  5. Handling Market Volatility and Mistakes:

    • Tillinghast reflects on how he copes with market volatility and the importance of learning from investment mistakes. He shares an example of a significant loss with HealthSouth Rehab and how it led to a shift in his analytical approach, emphasizing free cash flow over analyst-adjusted earnings.

  6. Thoughts on International Stocks:

    • Despite the underperformance of international stocks as an asset class, Tillinghast maintains a significant portion of his portfolio in international companies. He sees value in these stocks due to less competition in certain sectors and opportunities in markets like Japan.

  7. Active vs. Passive Investing and Retirement Plans:

    • Tillinghast discusses the dynamic of competing with Fidelity's own passive index funds and the importance of customer choice in offering both active and passive investment options. He also touches on his upcoming retirement and his role as a senior advisor, hoping to impart knowledge to the next generation of Fidelity fund managers.

Conclusion: Joel Tillinghast's extensive experience and successful track record in fund management provide insightful perspectives on investment strategies, market understanding, and the evolution of active fund management. His approach to balancing value and growth investing, learning from mistakes, and maintaining resilience in volatile markets offers valuable lessons for investors and fund managers alike.