Whitman’s Last Walk Down the Avenue

“April is the cruelest month”, said one of the greatest poets, and it’s also the month in which we saw Martin J. Whitman, a veteran value investor, go into history at the age of 93.

Martin Whitman was an exceptional man for several reasons. As Barron’s informs us, he was mainly known as the founder of Third Avenue Management. Whitman set up the company with a very intriguing approach to the whole investing process. Namely, they were looking for “cheap and safe” stocks rather than new, risky and appealing stocks which are commonly identified with investments. His original approach relied on watching the balance sheets more than anything else, and valuing proper management. You can read more about his famous work philosophy at Value Walk to fully understand his words of wisdom.

His eccentricity didn’t reflect only in his attitude towards finances. His daily routine involved coming to work by subway, even to his last days. Curiously, or perhaps somewhat expectedly for Whitman, he was still working and had no plans of fully retiring. Since his heirs opted for other careers, Whitman decided to sell 60% of his share in 2002 to ease the whole process for the day which eventually came this April. However, even though he was no longer managing the value fund, he still continued to work hard in the company.

Whitman was very well renowned as a teacher and a lecturer, too. As an author of several books, he gave lectures at Syracuse University’s Whitman School of Management, Columbia University Business School and Yale School of Management. Amit Wadhwaney highly praises Whitman’s “Aggressive Conservative Investor” for providing him with advice he’s been following to this day.

As you can see, Whitman’s biography is rich with success, but he still remained to be grounded enough, which is a quality of truly great men. Nevertheless, no one is perfect, and neither was Whitman. It seems odd that such an expert could see his company’s assets plummet from $26 billion in 2006 to less than $4 billion at the moment. Even Whitman himself admitted defeat in an interview with Barron’s. 2015 was the year of Focused Credit fund liquidation and the company was struggling. Due to similar reasons, the company had already hired Chip Rewey to reconstruct the company and eliminate the “cult of Marty” from its strategies. However, Rewey left in 2017 without accomplishing much of the task he had been given.

Even though one would think that after so many losses Third Avenue Management would turn to new techniques and risky ventures, that fails to happen. Actually, in their announcement regarding Whitman’s recent death, they state that the principles the company was founded on are essentially the most reliable to follow nowadays, and they will continue to implement them in the years to come. They expressed deep gratitude for Whitman’s “deep-value approach to investing” and hope to continue his steps considering investment and philanthropy.

Finally, Whitman can be seen as a shiny example of a man who succeeded in his life on multiple levels. While his methods may have proven less successful at times, perhaps the time is yet to come when his investment approach is going to deliver the greatest results imaginable.

 

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