NEW YORK ( TheStreet) -- For a fan of Warren Buffett, 48-year-old hedge-fund manager Whitney Tilson sure picked an odd way to get attention.
Buffett believes shorting stocks is too risky, but it is Tilson's short of Lumber Liquidators (LL) - Get Report that has everyone's attention on Monday. Tilson, who runs New York-based hedge fund Kase Capital, had been publicly short the stock since 2013.
On Sunday, however, 60 Minutesran an expose on the retailer, accusing it of exposing customers to cancer risks by selling Chinese-made hardwood floors that tested for high levels of formaldehyde. Shares were down more than 20% in afternoon trading on Monday.
"I'm glad that as part of my job I was able to help blow the whistle on them," Tilson said in an interview.
Lumber Liquidators told60 Minutes that its flooring is safe.
Tilson said shorting stocks is something of a side business for him.
"In the middle of October, I covered 80-plus percent of my short book, and I don't recommend shorting, and I have a very small short book today. It's a very difficult business. If I had a billion-dollar fund and a big team of analysts, I'd probably have an active short book, but as a one-person operation, I can only cover a half-dozen short positions and that's all I have," he said.
Tilson manages about $90 million and makes no bones about the fact that he'd like it to be more.
"After many good years, the business went through a very tough 2011 and 12, and we lost some of our assets, so I'm currently in rebuilding mode. The last couple of years have been good and so hopefully I will be managing quite a bit more money over time," he said.
The Harvard-educated Tilson had an unusual upbringing, spending three years each in Nicaragua and Tanzania during his childhood. His parents were in the Peace Corps, and they now live in Kenya, as does his sister. He visits them every other year.
Tilson said living in Third World countries and seeing extreme poverty "gave me a greater appreciation for the incredible good fortune I've had in my life."
He is one of the founders of Teach for America, and many of the people he considers role models are members of the education reform movement. They include Teach for America's best-known founder, Wendy Kopp, as well as attorney and former New York School Superintendent Joel Klein and KIPP charter schools co-founder Dave Levin.
As far as investing role models go, he said the influence of Buffett and Berkshire Hathaway( BRKA) Vice Chairman Charlie Munger is "so overwhelmingly prominent," he isn't sure anyone else comes close.
"I'd guess fewer than 5% of the investors in the market practice the teachings of Buffett and Munger. The reason is that as logical as sensible as it is to try and buy dollar bills for 50 cents, human beings I think are hard-wired to be very emotional when it comes to financial decisions -- to try and get rich quickly and to try and predict macro events like interest rates or whether a company's going to beat its quarterly numbers, its whisper number by a penny -- things like that. So it's simple in concept-value investing-but difficult in practice," Tilson said.
Eventually, he mentions Pershing Square Capital Management CEO Bill Ackman, whom Tilson said has been a friend since college.
"I've learned a lot about investing from him. I think he's one of the sharpest investors in the world," Tilson said.
Tilson takes special pride in admitting and learning from his mistakes.
At the time of Google's (GOOG) - Get Report IPO in 2004, for example, he argued the price being asked was wildly inflated. Shares have returned more than 900% since then. Tilson last year gave a presentation to Google's investing club entitled "A Google Skeptic Eats Crow." He says he never shorted Google, however.
"Google was the once a decade moonshot that proved me wrong, but in general hot IPOs trading at huge multiples like 20 times revenues are terrible terrible investments. I was wrong on Google, but I was not wrong on the probabilities," Tilson said.
When the stock later collapsed, he said he bought it and made eight to nine times his money in 18 months.
Similarly, he says he shorted General Growth Properties (GGP) from $40 to $1 as it went into bankruptcy. Then, realizing there might be enough assets left over for equity holders, he went long the stock at $1 and rode it all the way to $20.