Dear Shareholder
Wiley catalogue record only; no evidence the book actually reached print.
Summary
The reference has not verified this book in detail; the summary states only what the title, author and subject establish.
This volume collects the shareholder letters Martin Whitman wrote for Third Avenue Value Fund, presenting his views on markets, securities analysis and specific positions as they were written over a period of years.
The reference has not verified the full contents or the exact date range covered. What the collection establishes is access to Whitman's thinking in its original form: his safe and cheap criteria, meaning strong financial position and a large discount to readily ascertainable net asset value; his insistence that balance sheet analysis matters more than earnings analysis; his distinction between the outside passive minority investor and the control investor; and his treatment of resource conversion events, meaning takeovers, restructurings, liquidations and reorganisations, as normal outcomes rather than exceptions.
Shareholder letters as a form give the reasoning at the time rather than in retrospect, including positions that did not work, which is their main value over a book stating a method.
Whitman's own books, particularly Value Investing: A Balanced Approach and The Aggressive Conservative Investor, set out the framework more systematically. This collection suits readers who already know the framework and want to see it applied to particular securities and market conditions. Whitman's approach performed poorly in the years after the financial crisis, when asset-heavy companies trading below net asset value stayed there.
Key takeaways 6
- Whitman's purchase criteria required strong financial position and a substantial discount to net asset value that could be readily determined.
- Balance sheet analysis and asset values guided his decisions more than projected earnings did.
- Corporate events including takeovers, recapitalisations and reorganisations are normal ways value is realised rather than exceptions.
- An investor must know whether they are analysing as a passive minority holder or as a potential control party.
- Shareholder letters written contemporaneously preserve the reasoning behind positions that later failed, which retrospective accounts remove.
- Whitman argued that most academic finance models the passive minority investor and therefore misses how value is actually realised.
Who should read it
Investors already familiar with Whitman's framework who want to see it applied to specific securities in the conditions of the time.
About Martin J. Whitman
Founder and Chairman, Third Avenue Management; portfolio manager, Third Avenue Value Fund 1990-2012
Four books plus three decades of unusually didactic shareholder letters built out safe-and-cheap and distress investing as a distinct branch of the value tradition.
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Where it sits in the reference 3
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