What do you think?
Rate this book
Big Money Thinks Small: Biases, Blind Spots, and Smarter Investing
Market mistakes to “Written for investors at all levels…[a] practical, no-nonsense guide.”—Publishers Weekly One of Money Week’s Five Best Books of the Year Investors are tempted daily by misleading or incomplete information. They may make a lucky bet, realize a sizable profit, and find themselves full of confidence. Their next high-stakes gamble might backfire, not only hitting them in the balance sheet but also taking a mental and emotional toll. Even veteran investors can be caught off a news item may suddenly cause havoc for an industry they’ve invested in; crowd mentality among fellow investors may skew the market; a CEO may turn out to be unprepared to effectively guide a company. How can one stay focused in such a volatile world? If you can’t trust your past successes to plan and predict, how can you avoid risky situations in the future? Patience and methodical planning will pay far greater dividends than flashy investments. In Big Money Thinks Small, veteran fund manager Joel Tillinghast shows investors how to avoid making these mistakes. He offers a set of simple but crucial steps to successful investing, · Know yourself, how you arrive at decisions, and how you might be susceptible to self-deception · Make decisions based on your own expertise, and do not invest in what you don’t understand · Select only trustworthy and capable colleagues and collaborators · Learn how to identify and avoid investments with inherent flaws · Always search for bargains, and never forget that the first responsibility of an investor is to identify mispriced stocks
391 pages, Kindle Edition
Published August 15, 2017
296 people are currently reading
1088 people want to read
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 30 of 44 reviews
June 13, 2019
About 2/3 of the way through listening to this audiobook, I thought about what I had learned. The author talks about evaluating companies and their stocks, generally using a great deal of research and spreadsheet work. As you listen to the “case studies” of the companies that he has evaluated and how he architected the evaluations, you are left with the feeling that it takes a special person to do this, one that is single-mindedly dedicated to tracing down the numbers behind the numbers, the forecasts that the company uses but don’t repeat to analysts, and information from sometimes obscure sources. While I originally assumed this was a how-to book, it is far from it. It was more a “here’s why you leave this to professionals” book that is pretending to be a how-to book. I also noticed, about 2/3 of the way through the book, that this would be a perfect book to explain why active fund management could be beneficial compared to index funds in raising return or lowering risk. And then, the author flips a switch and calls this out in the remainder of the book. As a defense of active fund investing, this does a good job. The author writes in a friendly way, and you understand that through his focus he’s able to tell stories about stocks and companies based on evaluation of numbers that are enlightening. What he doesn’t do is give you the belief that you can do these evaluations yourself without a lot of experience. Well written.
November 23, 2017
I think any investor would benefit from reading this book but you'll get the most from it if you already have some basic understanding of corporate financial statements. There is a lot of good information but there are some long sections of war stories that drag on. One of the main takeaways is that if you are trying to estimate the value of a stock, you need to have a stable company whose earnings are fairly predictable. Otherwise, you might as well throw darts. And even then, you have to realize that you're basically using a crystal ball. The book might stop you from investing in the next Enron, though.
December 23, 2025
Its strength is practitioner detail, not theory, though survivorship bias clouds the examples.
It separates really knowing a company from recognizing its name. On management, it advises on character, not strategy because strategy is adaptable but character doesn't (i.e. Microsoft under Ballmer and Nadella).
He gives a practical framework for fraud detection (pressure of unrealistic expectations, opportunity of self-audit and complexity, rationalization of temporary losses, etc. with red flags of frequent auditor changes, distressed tiny auditors, board without equity, frequent rollups, etc.).
His global view, fast GDP growth delivers mediocre stock returns, is unintuitive at first but clear with the importance of rule of law (US, UK), language and profit culture (Japan as lack of).
There are significant gaps though. No position sizing, no exit strategy, no hedging, no quantitative fraud detection. Macro, commodities, and tech are dismissed too quickly, betraying a pre-HFT, pre-AI perspective. A solid primer on what to buy for its time, but silent on how much, when to sell, and how to stay safe. Hard pass for anyone who's already read Buffett.
It separates really knowing a company from recognizing its name. On management, it advises on character, not strategy because strategy is adaptable but character doesn't (i.e. Microsoft under Ballmer and Nadella).
He gives a practical framework for fraud detection (pressure of unrealistic expectations, opportunity of self-audit and complexity, rationalization of temporary losses, etc. with red flags of frequent auditor changes, distressed tiny auditors, board without equity, frequent rollups, etc.).
His global view, fast GDP growth delivers mediocre stock returns, is unintuitive at first but clear with the importance of rule of law (US, UK), language and profit culture (Japan as lack of).
There are significant gaps though. No position sizing, no exit strategy, no hedging, no quantitative fraud detection. Macro, commodities, and tech are dismissed too quickly, betraying a pre-HFT, pre-AI perspective. A solid primer on what to buy for its time, but silent on how much, when to sell, and how to stay safe. Hard pass for anyone who's already read Buffett.
May 7, 2020
Okay, but not adding much to other books about value investing, etc.
February 29, 2020
3/5 might be a bit harsh, but I've read a lot of investment books now and I don't just want to give 4/5 by default. I think loss aversion plays a role in these book ratings: You've invested quite a few hours reading this book, so now you don't want to regret the time (and money) gone, so you tell yourself it was worth it :)
The author knows what he's talking about, but I just didn't find much content I can add to my framework (I'm saying I'm smart and well-read, hehehe).
You won't find much at all as to how to value a company, but the author does state that Warren Buffett accepts the Discounted Cash Flow as the correct approach. You can look-up how to do a DCF elsewhere anyway and I certainly don't want every investment book to demonstrate!
The book lacks a bit of structure, nothing jarring though. I did notice, that the author relied on Warren Buffett too much. More variety in his examples would've been nice.
Here is a good quote, which is a sentence worth reading:
"Wall Street is a magnet for alpha males and people born on third base who think they’ve hit a triple."
The author knows what he's talking about, but I just didn't find much content I can add to my framework (I'm saying I'm smart and well-read, hehehe).
You won't find much at all as to how to value a company, but the author does state that Warren Buffett accepts the Discounted Cash Flow as the correct approach. You can look-up how to do a DCF elsewhere anyway and I certainly don't want every investment book to demonstrate!
The book lacks a bit of structure, nothing jarring though. I did notice, that the author relied on Warren Buffett too much. More variety in his examples would've been nice.
Here is a good quote, which is a sentence worth reading:
"Wall Street is a magnet for alpha males and people born on third base who think they’ve hit a triple."
December 4, 2019
An outstanding book I'd like to own for a deeper dive and reference. Alas, this was a library borrow which came due prior to my finishing several chapters. Even so I'm breaking my own rule to mark it as read in order to capture the essence of it's quality and to remind myself to review my notes and reacquire the book later.
The book contains much practical and specific advise. I highly recommend this book to anyone interested in personal finances as an investment in educating themselves.
The book contains much practical and specific advise. I highly recommend this book to anyone interested in personal finances as an investment in educating themselves.
March 20, 2022
I think this is quite a good book, especially if you are not a complete beginner.
This is not a “how to” recipe book. This is more like here are my reflections/wisdom after my long years in the industry…
This is not a “how to” recipe book. This is more like here are my reflections/wisdom after my long years in the industry…
October 23, 2017
A lot of great insights and investment models embedded in a well written book by a well regarded stock picker. (Kindle).
July 29, 2018
Good advice for value investors. Solid explanations.
July 2, 2020
Reviewing Big Money Thinks Small: Biases, Blind Spots and Smarter Investing is difficult. Obviously Joel Tillinghast is a brilliant investor and money manager. Hugely successful. However, writing books is not his forte. I found myself struggling to complete the book. The main obstacle for me was the lack of new insights or information. I have read hundreds of books on finance and investing....all the best and all the classics. Big Money Thinks Small offered little in the way of new thinking, new ideas, new concepts or new skills. If I were decades younger and just beginning my study of the subject matter, I might think differently about this books value.
November 16, 2018
Top 3 investing books I’ve read. Can be great for all levels of understanding, the last part of the book gets much more technical which requires a decent background in investing to understand. First 14 or so chapters are gold for everyone
September 26, 2021
Had a hard time getting into this book and while I agree with some of his investing philosophy I scimmed over much of book but last couple of chapters were pretty good
September 2, 2020
This is a good book to read from the fundamental/value school of investing. There are a couple of issues I have not with the content, but the tone the author takes with respect to growth-stocks, especially growth stocks from technology. However, these are mostly minor points, and I was pleased with the content of this book. The two books I’ve read previously in this area that “Big Money Thinks Small” reminds me of most are “What’s Behind the Numbers” and “Financial Shenanigans”. Both of these books are focused on using basic forensic accounting techniques to valuing companies.
Similar in style (and coverage) to those books, but perhaps less centered on forensic accounting, and more on discussing insights from the fundamentals viewpoint with respect to building one’s portfolio, and checking one’s self with respect to those decisions, while trying not to be too tethered to one style. So really in this sense, this is a standard “psychology of decision making” approach that many other investment books/guides cover, and the author unabashedly leverages notions from the Buffet and Graham-Doddsville, especially with his discussion knowing one’s “circle of competence” and sticking to what one knows.
Yet, for a newer investor, say a millennial or younger, who probably tend to know technology more than “traditional’ companies, say retailers, commodity brokers, or manufacturing, the focus more on those industries, and the associated analysis of their books with respect to inventory, contracts, sales etc. vs. the modern technology firms may seem a bit old-fashioned. Especially as we now see that effectively every company that survives Covid-19 and going forward, will have to be a “technology” company of one sort or the other. Not to say understanding the flows of inventory is not important, it absolutely is, and I hope to find a book dedicated exactly to these warehousing and supply chain issues from an investors purview in the future. Yet, with respect to growth and expanding one’s portfolio with respect to value, the consistent winner in the past 2 decades have been technology, and growth in general, so there are definitely going to be some frustrations for readers looking to learn investing from an author who fundamentally doesn’t really believe the value-proposition of these class of firms.
Still, the skeptical approach to companies the author does teach, to “learn the little stuff” as he puts it, is valuable, whatever the vertical of the underlying firm you are studying, and this is something that should be hammered into the mind of the investor over and over, which I think this book does well. I bought both the kindle and audible and felt double reading with both helped make some of the principles/knowledge stick. Though if I had one complaint, it was there should be more figures/tables to help visualize points the author makes. Not that these were missing, but in general I believe it helps incentivize purchasing the kindle of this element is present in the text. Recommend for intro/mid-level retail/amatuer investors who need to reinforce their decision system.
Similar in style (and coverage) to those books, but perhaps less centered on forensic accounting, and more on discussing insights from the fundamentals viewpoint with respect to building one’s portfolio, and checking one’s self with respect to those decisions, while trying not to be too tethered to one style. So really in this sense, this is a standard “psychology of decision making” approach that many other investment books/guides cover, and the author unabashedly leverages notions from the Buffet and Graham-Doddsville, especially with his discussion knowing one’s “circle of competence” and sticking to what one knows.
Yet, for a newer investor, say a millennial or younger, who probably tend to know technology more than “traditional’ companies, say retailers, commodity brokers, or manufacturing, the focus more on those industries, and the associated analysis of their books with respect to inventory, contracts, sales etc. vs. the modern technology firms may seem a bit old-fashioned. Especially as we now see that effectively every company that survives Covid-19 and going forward, will have to be a “technology” company of one sort or the other. Not to say understanding the flows of inventory is not important, it absolutely is, and I hope to find a book dedicated exactly to these warehousing and supply chain issues from an investors purview in the future. Yet, with respect to growth and expanding one’s portfolio with respect to value, the consistent winner in the past 2 decades have been technology, and growth in general, so there are definitely going to be some frustrations for readers looking to learn investing from an author who fundamentally doesn’t really believe the value-proposition of these class of firms.
Still, the skeptical approach to companies the author does teach, to “learn the little stuff” as he puts it, is valuable, whatever the vertical of the underlying firm you are studying, and this is something that should be hammered into the mind of the investor over and over, which I think this book does well. I bought both the kindle and audible and felt double reading with both helped make some of the principles/knowledge stick. Though if I had one complaint, it was there should be more figures/tables to help visualize points the author makes. Not that these were missing, but in general I believe it helps incentivize purchasing the kindle of this element is present in the text. Recommend for intro/mid-level retail/amatuer investors who need to reinforce their decision system.
October 2, 2023
Here is a very interesting quote from some stock analysis (on a popular bank) mentioning this book
Financial Strength Breakdown
KeyCorp's financial strength indicators present some concerning insights about the company's balance sheet health.
The company's low cash-to-debt ratio at 0.03 indicates a struggle in handling existing debt levels.
The company's debt-to-equity ratio is 2.1, which is worse than 84.82% of 1331 companies in the Banks industry.
A high debt-to-equity ratio suggests over-reliance on borrowing and vulnerability to market fluctuations.
Additionally, the company's debt-to-Ebitda ratio is 4.23, which is above Joel Tillinghast's warning level of 4 and is worse than 75.86% of 1313 companies in the Banks industry.
Tillinghast said in his book “Big Money Think's Small: Biases, Blind Spots, and Smarter Investing” that a high debt-to-Ebitda ratio can be a red flag unless tangible assets cover the debt.
......
KeyBank, the primary subsidiary of KeyCorp, is an American regional bank headquartered in Cleveland, Ohio, and is the only major bank based in Cleveland.
KeyBank is one of the largest banks in the United States.
History
KeyBank is the primary subsidiary of KeyCorp, which was formed in 1994 through the merger of Society Corporation of Cleveland, Ohio (Society Bank) and KeyCorp (Old KeyCorp) of Albany, New York.
The merger briefly made Key the 10th largest US bank.
Its roots trace back to Commercial Bank of Albany, New York in 1825 and Cleveland's Society for Savings, founded in 1849.
Headquarters - Key Tower, Cleveland, Ohio
March 22, 2018
Risken när man läser många övergripande finansböcker är att informationen lätt blir klyschig och utdragen. Ofta utgår författarna från budskapen "förstå vad du köper", "hitta bolag med konkurrensfördelar" och "köp aldrig när du inte har en Margin of Safety". Denna boken var från början inget undantag, det tog ett bra tag innan jag verkligen fann den läsvärd och säregen gentemot andra finansböcker. Han inleder boken med att fastställa hans 5 grundregler:
1. Make decisions rationally
2. Invest in what you know
3. Work with honest and trustworthy managers
4. Avoid businesses prone to obsolescence and financial ruin
5. Value stocks correctly
Det jag verkligen uppskattade var när han gick på djupet i financial scams likt Enron och Valeant, och hur företagen lätt kan koka sina böcker för att lura investerarkollektivet. Det krävs en otrolig känsla för detaljer för att upptäcka bedrägerierna, men Tillinghast menar att om man ser något skumt bör man lägga investeringen i sin "too hard"-pile och gå vidare till nästa.
Kassaflödet är A&O. Hänger inte kassaflödet med EPS-tillväxten så bör man bli skeptisk och undersöka det närmare. Tillinghast ogillar att komplicera sina analyser utan använder sig av enkla nyckeltal som earnings yield, Schillers PE och CAPE.
Även de bästa och mest framgångsrika investerarna har fel relativt regelbundet. Det viktigaste är att erkänna sina fel och inse att det räcker att ha rätt i 55% av fallen. Livslängden för en investerare kokas oftast ner till de som kan omfamna misslyckanden och lära sig av sina misstag.
1. Make decisions rationally
2. Invest in what you know
3. Work with honest and trustworthy managers
4. Avoid businesses prone to obsolescence and financial ruin
5. Value stocks correctly
Det jag verkligen uppskattade var när han gick på djupet i financial scams likt Enron och Valeant, och hur företagen lätt kan koka sina böcker för att lura investerarkollektivet. Det krävs en otrolig känsla för detaljer för att upptäcka bedrägerierna, men Tillinghast menar att om man ser något skumt bör man lägga investeringen i sin "too hard"-pile och gå vidare till nästa.
Kassaflödet är A&O. Hänger inte kassaflödet med EPS-tillväxten så bör man bli skeptisk och undersöka det närmare. Tillinghast ogillar att komplicera sina analyser utan använder sig av enkla nyckeltal som earnings yield, Schillers PE och CAPE.
Även de bästa och mest framgångsrika investerarna har fel relativt regelbundet. Det viktigaste är att erkänna sina fel och inse att det räcker att ha rätt i 55% av fallen. Livslängden för en investerare kokas oftast ner till de som kan omfamna misslyckanden och lära sig av sina misstag.
April 6, 2024
“Big Money Thinks Small” is a fantastic choice for aspiring value investors, though perhaps too ambitious for my current skill level. While Tillinghast dissects the more technical aspects of his processes in Part V “What’s it Worth”, the other parts tend to be more qualitative and general. His key point: invest in companies that have high earnings yields (low P/Es), enjoy a competitive moat that can earn super-profits on its growth opportunities, maintain protection from obsolescence, have little debt, and have stable and predictable cash flows. I thoroughly enjoyed Tillinghast’s historical perspectives, as well.
April 27, 2025
This book is harmful to everyone who’s not a fund manager. Statistically, individual investors and even fund managers are not going to beat the market. The info isn’t bad, but it’s not practical for most. I wouldn’t mind the read if it had good disclaimers. Theres no mention of who the target audience is of this book, how to allocate your personal portfolio, ect. So the average person picking up this book is going to try to pick stocks with most of their money, and lose. Stock picking is gambling and this book doesn’t preach the importance of not investing more than 10% of your money on gambling. Reading this book is a colossal waste of time.
March 26, 2019
I think the author outlined a lot of very basic theories about investing. It is a bit too simple for professionals. One of the biggest key takeaways is the author prefers companies with a superior product rather than cost competitiveness. The other is the importance of ROCE over ROE as ROCE measures the return of total equity. The author is not a fan of dividends nor share buybacks because he noticed companies tend to buy back shares when they feel flush, not when the share price is at a discount to intrinsic value.
February 13, 2023
The author is the Fidelity fund manager for the Low-Priced Stock Fund. The fund has held up pretty well given the stock market turmoil of 2022. This book provides you insights into how the author approaches stocks, which I find useful. Yes, it is value investing with an emphasis on small cap stocks. I enjoyed his stories of some of his failures and successes.
Bottom line, you have to do a LOT of research!
Recommended for investing.
Bottom line, you have to do a LOT of research!
Recommended for investing.
November 30, 2023
Having slugged through WAY too many financial planning books over the years, Tillinghast's Big Money stands out. I recommend this for the above average investor who has some experience under their belt, but is honest enough to realize that there is always more to learn. Joel draws from his experiences in an honest, clear manner, and very page of this book has value. This is one to buy for the bookshelf!
December 5, 2023
This book belongs to every value investor's bookshelf. The most important lesson I learned (among many others) is the concept of the lifespan of a company ("terminal value"). It gives one the big picture that a lot of companies don't last more than 16 years on average nowadays, and that 100+ years lifespan is quite unusual for companies (at least in the US). Therefore, evaluating a company should start with an end (or exit) in mind.
December 27, 2024
I have written this book recently only because of how well some of the chapters have been explained.
While quite a few of the chapters are extremely general , there are two or three chapters which go into really good debts with a lot of anecdotes and examples.
I enjoyed all the case histories of companies ranging from Enron to aol, petrobras, yukos, valeant, and an entire chapter dedicated to how he analysed united health.
Good book, good examples, needs to be surfed through in parts.
While quite a few of the chapters are extremely general , there are two or three chapters which go into really good debts with a lot of anecdotes and examples.
I enjoyed all the case histories of companies ranging from Enron to aol, petrobras, yukos, valeant, and an entire chapter dedicated to how he analysed united health.
Good book, good examples, needs to be surfed through in parts.
October 21, 2025
As someone who has consumed a fair amount of value investing literature out over the past 2 years, I was hoping this book would give me some additional insight into how Joel discovers/identifies these "niche" opportunities that Peter Lynch wrote about in his foreword.
While the general guidelines in this book are good, it added nothing to my investment framework, and I think anyone with 2+ years of exposure to it would feel the same way.
While the general guidelines in this book are good, it added nothing to my investment framework, and I think anyone with 2+ years of exposure to it would feel the same way.
February 1, 2023
I am not a highly knowledgeable investor so some of the concepts were too in depth for me. I did glean different ways of calculating the value of a company. This book also pointed out how challenging it is to value a stock accurately. The main take away point is to know what you are good at evaluating and invest in areas where you can use your knowledge and limit risk.
September 4, 2017
Overall the book was mixed. It seemed a tad directionless and parts of it made me wonder why he wrote the book. His strengths come when he discusses investments and that appears to be his interest and passion.
December 11, 2021
It’s an average book considering that it is coming from a legendary investor in the Fidelity lineage of Peter Lynch. Lot of ideas, words crystalized from different value investors and applied to Tillinghast’s own investing style. The summary on the last page is useful.
October 4, 2024
Pequeño cajón de sastre en el que el autor vuelca todas sus ideas recopiladas de sus años como gestor de fondos. Escrito en base a líneas cortas y directas, abarca muchos temas, a veces de manera sencilla y otras solo para expertos.
Siempre se puede aprender algo.
Siempre se puede aprender algo.
June 4, 2019
Very good coverage of value investing for small stocks. Good writing and analysis. Unfortunately, value investing hasn't done as well as growth investing for the last few years.
June 17, 2019
Pretty solid general investing book. There is something for those just get starting as well as if you've already read a couple dozen investment books.
December 22, 2019
My best book in 2019. Such a great encounter to have this book.
Displaying 1 - 30 of 44 reviews