Whitney Tilson: Making Profits Effortlessly

INSIGHTS INTO THE MINDSET OF SUPER TRADERS – Part 15

“If you like reading biographies on successful people like I do, you’ll notice that they all share one driving force. That force drove each of them forward to overcome the obstacles that threatened to stop them in their tracks.” – Louise Bedford

Name: Whitney Tilson

Year of birth: 1966

Nationality: American

Occupation: Value investor, author and philanthropist

Career

Whitney Tilson spent his childhood in Nicaragua, Tanzania; and finally Kenya, where his parents have retired. He went to Bing Nursery School, Northfield Mt. Hermon School, and Harvard College. In 1994, he also earned an MBA with excellence from Harvard Business School. He was among the top 5% of his class.

Since his parents were both great educators, it’s no wonder that their child did well at school.

In the year 2004, he started Value Investing Congress with John Schwartz. Being highly influenced by great investors, he’s co-authored some books like “The Art of Value Investing: How the World's Best Investors Beat the Market (2013)” and “More Mortgage Meltdown: 6 Ways to Profit in These Bad Times (2009).” He’s been given copious recognition like one of 20 rising stars in the year 2007 by Institutional Investor, one of 5 investors in 2006 Power 30, by SmartMoney Magazine, etc.

Although he likes to buy very cheap, he sometimes sell short with a measure of conviction. Like every professional, Whitney isn’t always right. During Google IPO in 2004, he warned against the frenzied buying of the stock. Nevertheless, the stock made huge gains in the following years. 

Whitney is involved in various educational, philanthropic and political causes, activities and reforms. He lives in New York, USA.

Insights

1. Great investors aren’t always right. Sometimes they do well and sometimes they don’t. However, when they aren’t right, they just make sure the losses aren’t too much. Whitney went through a tough time in the years 2011 and 2012, but he was able to rebuild gradually and the last few years were good.

2. Because he’s familiar with extreme poverty conditions in Nicaragua, Tanzania, Kenya, Whitney is grateful for the fortune he enjoys. He’s a greater appreciation for the incredible good fortune he’s had in his life. What a good example from Whitney! Developed countries are full of ungrateful souls who complain about flimsy and ridiculous things You might deprecate your inability to get shoes until you see someone without legs. No matter your condition, there are others who’re worse off than you. You should be thankful for what you’ve, no matter what you don’t have.

3. Sometimes, one can make money by following a reputable analyst’s recommendation. When a market is overextended in a bearish territory owing to dismal fundamental data, it may pose a tempting offer for speculators. The best stock or trading instrument may sometimes become hopelessly weak and that’s a great opportunity to buy.

4. “The witches and wizards in my father’s household have succeeded in preventing me from succeeding in Forex,” one ignorant trader lamented. But the fact is that we make our decisions and are responsible for them. We needn’t blamed others for our bad trades.  Good trades aren’t a result of our wisdom, prescience, and skill; neither are bad trades a result of ill-luck. Just know the reason why your trades go bad, otherwise you learn very little. 

5. The only source of knowledge is experience. Though it’s great to look for ways to improve one’s timing, it’s more rational to respond smartly when timing isn’t so perfect

6. A good trader needs to cultivate independent thinking sometimes - that’s a necessity. For example, risk control would seem like fun because we’ll be able to sleep well, knowing full well that our risk is under control.

7. According to Whitney, the learning process for investors can often be complicated by human nature. Your ability to learn from both successes and failures is a key determinant of how successful an investor you’ll be.

8. When you’ve a trading stance that’s contrary to the expectation of the majority, you’ll need ongoing patience and conviction to stick to that.

9. Never stop learning: otherwise you’ll get passed by.

Conclusion: James Altucher says you shouldn’t be sad when you fail and be happy when you succeed. Both are going to happen again and again at every new level.  When your excessive worrying goes out of control, then you need to adjust your viewpoint. You need to get help from fellow traders and/or mental trading professionals. When you master your mindset and change your outlook on trading, you’ll begin to feel you’re in control of your fate in the markets, not that the markets are in control of you. Although there’ll be times when you find it challenging to remain calm, you’ll have a better sense of why markets behave the way they do, and you know how to control the risk. Sometimes, the best way out of painful negativity is through it, not around it. That’s when you’re able to look at open trades rationally, not emotionally.

This article is concluded with a quote from Whitney:

"Investors see nothing but sunny skies as far as the eye can see and therefore do not care one iota about risk. They are pursuing returns regardless of risk, and therefore the most speculative companies and investment classes are doing very well."

Source: www.tallinex.com

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