Joel Tillinghast has picked his share of winning stocks.
The legendary mutual fund manager has run Fidelity Low-Priced Stock since its launch in December 1989. Since then, the fund has posted an annualized total return of about 13%, trouncing the S&P 500’s 10% return over the same time period.
Unsurprisingly, after more than three decades in the market, he’s picked some losers too. For Tillinghast, it’s all part of a process that made him a better investor.
“The fun thing about investing is you’re constantly learning — sometimes by losing money, sometimes by making money when you didn’t expect to,” he tells CNBC Make It. “The ones where you lose money tend to stick with you.”
When asked for examples of investments that he learned from, Tillinghast shared two of his best stock picks and one of his worst. One winner, adjusting for times when stocks split (which affects the share price), is worth more than 100 times what Tillinghast paid for it. The loser surrendered 99% of its value before Tillinghast sold.
Tillinghast will be the first to tell you that picking stocks isn’t for everyone. Like many investing pros, he says amateur investors may be better off gravitating toward index mutual funds and exchange-traded funds.
And for those looking to emulate Tillinghast’s stock-picking prowess, remember: These aren’t stock picks. They’re examples to illustrate what a legendary manager has learned from his successes and failures.
Winner: Ansys
Tillinghast bought shares of Ansys in early 2001 when they traded — adjusting for splits — for less than $3 a share. As of market close on Friday, they’re worth about $319 a share.
Tillinghast says the company, which creates software that assists in product design and testing, is a prime example of a type of stock he typically looks for — “tech stocks that aren’t as prone to destruction,” he says.
In other words, he seeks out companies that can expand their businesses without being usurped by rival technologies. Ansys specializes in…
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