What If One of the World’s Best Investors Leaves His Fund?

by Tom Taulli | July 21, 2011 11:09 am

While Fidelity’s Joel Tillinghast might not be a household name, he is nonetheless one of the world’s top investors. He is the manager of the Fidelity Low-Priced Stock (MUTF:FLPSX[1]), which has $35.7 billion under management. Since 1989, he has generated an average annual return of 14.5%. Amazing, huh?

However, Tillinghast will take a leave of absence beginning in September. He wants to do some traveling and even write a book about investing (I definitely want to read it).

But don’t worry – he will be back in January.

In today’s investment world, it is – unfortunately – fairly common for portfolio managers to generate subpar returns. There certainly are many reasons for this, such as restrictive investment charters. But then again, the fact is it’s incredibly difficult to beat the market – especially in the long haul.

Yet there are a rare number of portfolio managers that have the unique abilities to stand out. No doubt, they have little trouble raising money. Often, they will turn down capital. In the case of FLPSX, it has shut its doors to investors on several occasions because of spikes in inflow of capital.

All in all, Tillinghast takes a value approach to investing. Interestingly enough, this is a common theme for many world-class investors, like Berkshire-Hathaway‘s (NYSE:BRK.A[2]) Warren Buffett, Mario Gabelli and Donald Yachtman. This often means buying companies that are out of favor but still have lots of potential. If done right, the returns can be substantial.

Actually, Tillinghast’s mentor is Peter Lynch, another legendary investor. And yes, he used a value approach when he managed the Fidelity Magellan Fund.

So might Tillinghast wind up leaving permanently and enjoy a life of leisure? It’s possible. But there is no indication this will be the case. Besides, a sabbatical can be extremely helpful in terms of refocusing and getting perspective on things.

What’s more, Tillinghast is only 53. So if Buffett can continue to be a top investor at 80, then Tillinghast has a long time to continue to make his shareholders happy.

Tom Taulli’s latest book is “All About Short Selling”[3] and he has an upcoming book called “All About Commodities.”[4] You can find him at Twitter account @ttaulli[5]. He does not own a position in any of the stocks named here.

Source URL: https://investorplace.com/2011/07/fidelity-tillinghast-flpsx-manager/

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