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Book Review: More Mortgage Meltdown by Whitney Tilson

I have been doing a series of book reviews on the financial crisis. To see my six previous reviews click here. My latest book is More Mortgage Meltdown by Whitney Tilson and Glenn Tongue. Whitney Tilson helped author Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger

, a book about Charlie Munger. In addition to being an author, Tilson is a financial columnist for several publicans including the Financial Times. He also manages several value mutual funds. Tilson is the CEO of Value Insight, a value investment newsletter and chairman of the Value Investing Congress.

I have no idea how Whitney Tilson found the time to write More Mortgage Meltdown, but he did a good job. The book is really two books in one.

The first part of the book describes the mess we are on and how we got there. Tilson published the book in early 2009; however he was bearish on real estate far before the book was published. Tilson provides extensive data on the housing bubble and demonstrates how the trend was clearly unsustainable. The author also does a good job explaining the differences between Subprime, Alt-A, Prime, option ARM loans. Tilson is very bearish in March 2009 he estimated $3.8 trillion in total losses to the worldwide financial system. This is even more than Dr Doom Nouriel Roubini who estimated $3.5 trillion in early 2009.

The second part of the book starts with a short introduction to value investing. Tilson then provides an in depth analysis of six different investments of his. The six investments are three stocks the author was long, two stocks short and a pool of distressed mortgages. The three stocks the author was long are Berkshire Hathaway, American Express (Tilson seems to be a fan of Buffett), and Resource America ( a small cap stock). The two stocks he was short are MBIA and Wells Fargo.

Tilson writes that several weeks before the book was published he reversed his short on Wells Fargo, and went long. This tells me something very important about the author. When someone is bearish on the economy as Tilson clearly is, many times they will not buy stocks regardless of price. Tilson was bearish on Wells Fargo but realized at a certain price even a distressed company can be a good buy. This is one of Benjamin Graham’s most important “although there are good and bad companies, there is no such thing as a good stock; there are only good stock prices, which come and go." When I realized Tilson was following in the footsteps of Graham, I knew I could trust his advice.

To purchase the book on amazon.com click on the following linkMore Mortgage Meltdown: 6 Ways to Profit in These Bad Times


Disclosure: New FTC guidelines require me to disclose I have a material connection because I received a free copy of the book to review.

For anyone following my series of book reviews on the financial crisis my next book reviews will be Too Big to Succeed by Robert Pozen, and This Time is Different by Kenneth Rogoff and Carmen Reinhart.

About the author:

Jacob Wolinsky
My investment ideas have been inspired by many of value investors including Benjamin Graham, Charles Royce, John Neff, Joel Greenblatt, Peter Lynch, Seth Klarman,Martin Whitman and Bruce Greenwald. .I live with my wife and daughter in Monsey, NY. I can be contacted jacobwolinsky(AT)gmail.com and my blog is www.valuewalk.com

Visit Jacob Wolinsky's Website


Rating: 3.4/5 (15 votes)

Comments

Amit Chokshi
Amit Chokshi - 4 years ago
Tilson found the time to write the book because he saw it as a money making opportunity and because he hardly does any real idea generation at T2. Have you checked out how his 13Fs stack up to Einhorn and Ackman's? He does that pump my book article in Kiplinger and just about every pick was out of Einhorn and Ackman's book. His MBIA short was Ackman 100%. Ackman had been short them since 2002, Tilson just copied the trade. BRK, AXP, PFE...please...and then the more midcap plays like DPS or WEN or MCD were Einhorn and Ackman. Tilson took a nice bath on BKS, BGP, and TGT following Pershing Square into that. Nice that these independent minded value investors are like lemmings so often.
yswolinsky
Yswolinsky - 4 years ago
Actually, I believe he wrote that he had a position in MBIA before he read Ackman or Einhorn's analysis
yswolinsky
Yswolinsky - 4 years ago
You dont like Bruce Greenwald and Whitney Tilson anyone else?
Amit Chokshi
Amit Chokshi - 4 years ago
I wouldn't say I don't like Greenwald, I just found it amusing that when he invested he was a complete gambler/speculator that was losing $ left and right. So it's just funny to me this distinguished professor at Columbia is an awful investor in his own right because he can't control the gambling side of human emotions.

Tilson is just a pretender. This link

http://www.gurufocus.com/forum/read.php?2,43380 discusses him. I lay out why I don't care for him and think he's a hack.

I like Lampert, Einhorn, Lee Ainslie, Greenblatt, WEB as well (old school, not BRK of the past 10 years).

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