Joel Tillinghast, manager of the Fidelity Low-Priced Stock mutual fund, has achieved a remarkable track record of outperformance over the past three decades. Since the fund’s launch in 1989, Tillinghast has generated an annualized total return of about 13%, significantly higher than the benchmark Russell 2000 index’s return of approximately 9%. Tillinghast’s strategy focuses on investing in undervalued small and mid-cap stocks that trade at a discount to their intrinsic value. Despite the changing investment landscape and the rise of index funds, Tillinghast believes that active investors can still add value beyond the index by identifying special opportunities and thinking long-term.
Tillinghast’s success can be attributed to his approach of seeking out hidden, undervalued stocks that are often overlooked by the mainstream media. By investing in small and mid-cap stocks domestically and globally, he has been able to identify companies with strong earnings potential that can deliver substantial long-term returns. Furthermore, Tillinghast’s fund has a long tail of mid-cap stocks and also includes international small caps, giving it a unique edge compared to other small-company stock funds. He emphasizes the importance of conducting thorough research and understanding the business quality of potential investments.
Tillinghast believes that patience and a focus on the long-term are crucial for investment success. He advises young investors to consider their own character and investment style, and to invest in opportunities with a truly fantastic long-term story that are undervalued. Tillinghast’s track record serves as a testament to the potential benefits of active investing and the value of finding skilled fund managers who have a clearly articulated strategy. Overall, his success highlights the importance of diligent research and a long-term perspective in achieving superior investment performance.