Bull Sessions (4/25/2023)

Matt Spielman continues with Part III of our book discussion on Annie Duke's (Winning In Bets)decision pods, analytical methods and a legacy of success in long-term investing via Joel Tillinghast, the Fidelity Low Priced Stock Fund (FLPSX) and his book, Big Money Thinks Small.

In this April 25, 2023 Bull Sessions webinar, Mark Robertson, Ken Kavula, and Matt Spielman discussed the current market environment and investment philosophy through the lens of two influential books: "Thinking in Bets" by Annie Duke and "Big Money Thinks Small" by Joel Tillinghast. The speakers emphasized that the market is currently near historical averages with a 12.5% projected annual return (close to the 11.6% long-term average), suggesting stocks are reasonably priced after the recent correction from pandemic-era valuations. They highlighted Tillinghast's long-term investment success managing the Fidelity Low-Priced Stock Fund, noting the importance of collaborative decision-making and thorough fundamental research in overcoming investor biases.

The discussion touched on macroeconomic concerns, particularly the discrepancies between reported CPI figures and real household experiences with shelter costs and inflation. The speakers noted unusual dispersal in return forecasts across the Value Line universe, with many companies showing either negative or unrealistically high projections—creating what Robertson described as a "shrugging emoji" distribution rather than the typical bell curve. They reinforced the investment club methodology's focus on quality companies at reasonable prices and the principle of buying and holding "for as long as it makes sense to do so," which aligns with both Duke's and Tillinghast's investment philosophies.

The webinar also provided market updates on small-cap companies like Portillo's and MP Materials, which had been appearing in screening results. The speakers emphasized the value of studying Tillinghast's approach, particularly his use of Value Line and reliance on fundamental analysis similar to legendary investor Walter Schloss, as part of the broader modern investment club movement promoted by Manifest Investing and Better Investing.