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Investor Psychology

Compelling New Voices

Two new columnists bring their value-investing insights to Kiplinger's.

Five years ago, our columnist James Glassman (then writing for the Washington Post) chided hedge-fund manager Whitney Tilson for predicting the bursting of another technology-stock bubble and for selling a certain tech stock too soon. Whitney fired back, and the two agreed to bet a dinner over whether Berkshire Hathaway (Whitney's choice) or Nasdaq 100 Trust Shares, an exchange-traded fund (Jim's choice), would do better by the end of 2003.

Whitney won, by a hair. The two men met at a greasy spoon way uptown in Manhattan and hit it off. Glassman later wrote a second column fulsome with praise for his victorious antagonist, calling him a "value geek...who insists on buying stocks with '50-cent dollars.'"

A reader of Glassman's column, America Online personal-finance editor John Heins, said to himself, This Tilson fellow thinks just like me. John got in touch with Whitney. That led to the two becoming business partners and co-editors of the online publications ValueInvestor Insight and SuperInvestor Insight. Now, starting this month, they'll be sharing their insights into value investing with in Kiplinger's Personal Finance magazine and

Whitney co-manages three mutual funds and a hedge fund. In addition to working with John on the two online publications, he deluges his friends with e-mails and commentaries on investment stories he finds compelling, plus his take on reforming public schools, Barack Obama's campaign, politics and Africa (the last is a bow to his parents, who've spent their adult lives on that continent working on economic development). You can learn more about Whitney at


What I like about Whitney and John's writing is that it describes value investing in practical ways you don't often see anywhere else. You tend to think of undervalued stocks simply as those whose prices have been beaten into the earth, for reasons good or bad. Whitney and John are adept at discerning how a stock, beaten to earth or not, could be worth far more than it currently fetches (now that is a good definition of an undervalued stock). Read how they describe the possibilities of Target and Borders Group for two examples of this approach.

Up to old tricks

Here at the magazine, I've been concerned lately about my column -- that it has lost its edge, that you as readers aren't paying it as much attention as you used to. So in our May issue, to test whether you're nodding off while reading "From the Editor," I cleverly inserted an obviously inaccurate statement. Speaking of a looming shortage of oil, I wrote: "Within a couple of years, demand would fall far short of supply. Bidding wars would be horrific." The two sentences are plainly contradictory. It should have read that supply would fall far short of demand. Would anyone notice?

If you read that column and recall being stopped in your tracks by those sentences, congratulations -- you are perceptive. If you wrote me to say gotcha, you are both perceptive and action-oriented. And if you were among the first five to holler gotcha, you plainly exhibit leadership qualities and deserve a reward. I'm sending handsome T-shirts with the Kiplinger logo on the front and "Born Leader" on the back to Jack Alleman, Peter Kent, Krishna Mohan, Todd Pinkerton and a guy named Kiplinger. And thanks to all the rest of you who noticed and passed my little test.