The Story of Marty Whitman===

Marty Whitman was a pioneer in the world of value investing, a strategy that focuses on buying stocks that are undervalued by the market. Over the course of his career, he founded one of the most successful investment firms of all time, Third Avenue Management, and left an indelible mark on the industry.

Whitman’s journey was not without challenges, and his willingness to take risks and think outside the box was key to his success. In this article, we’ll explore the evolution of Marty Whitman, from his early years as a value investor to the creation of Third Avenue Funds, and examine the lessons that investors can learn from his life and career.

Early Years: The Formative Years of a Value Investor

Whitman was born in 1924 in New York City and grew up during the Great Depression. His parents were immigrants from Eastern Europe and ran a small grocery store in the Bronx. It was during this time that Whitman developed an appreciation for the value of money and the importance of hard work.

As a teenager, Whitman became interested in the stock market and began reading books on investing. He was particularly drawn to the writings of Benjamin Graham and David Dodd, who were pioneers in the field of value investing. Whitman would later credit their work for shaping his investment philosophy.

The Start of a Career: Whitman at the Start of his Investment Journey

After serving in the Army during World War II, Whitman attended college on the G.I. Bill and earned a degree in business administration from Syracuse University. He then went on to work as a security analyst for several brokerage firms, honing his skills as a value investor.

In 1955, Whitman joined the New York investment firm Shearson, Hammill & Co., where he was tasked with managing a small portfolio of undervalued stocks. This was the beginning of what would become a long and successful career as an investor.

Investing Philosophy: The Principles that Shaped Whitman’s Career

Whitman’s investment philosophy was based on the principles of value investing, which he learned from Graham and Dodd. He believed that the key to successful investing was to buy stocks that were trading at a significant discount to their intrinsic value, and to hold onto them for the long term.

Whitman was also a contrarian investor, meaning that he often went against the herd and bought stocks that were unpopular or out of favor with the market. He believed that this approach allowed him to find bargains that other investors were overlooking.

Partnership with Tweedy, Browne: Whitman’s First Major Investment Move

In the 1960s, Whitman teamed up with the investment firm Tweedy, Browne to create a series of investment partnerships. These partnerships were designed to invest in undervalued stocks and were highly successful, earning returns of over 20% annually.

Whitman’s partnership with Tweedy, Browne cemented his reputation as a successful value investor and set the stage for his future endeavors.

The Birth of Third Avenue Funds: Whitman’s Legendary Investment Company

In 1986, Whitman founded Third Avenue Funds, a mutual fund company specializing in value investing. The company quickly gained a reputation for its unique approach to investing, which focused on finding undervalued stocks with strong balance sheets and a margin of safety.

Under Whitman’s leadership, Third Avenue Funds became one of the most successful mutual fund companies of all time, with assets under management reaching over $25 billion at its peak.

Whitman’s Investment Strategy: A Unique Approach to Value Investing

Whitman’s investment strategy was unique in several ways. He believed in buying stocks with a “margin of safety,” meaning that they were trading at a significant discount to their intrinsic value. He also placed a strong emphasis on balance sheet analysis, preferring to invest in companies with strong financials and low debt.

Whitman was also known for his willingness to hold onto stocks for the long term, preferring to buy and hold rather than trade frequently. This allowed him to take advantage of compounding returns and avoid the high costs of frequent trading.

The Financial Crisis of 2008: How Whitman Navigated the Storm

The financial crisis of 2008 was a challenging time for investors, but Whitman was able to navigate the storm with skill and expertise. He saw the crisis as an opportunity to buy undervalued stocks at a discount and pushed his fund managers to take advantage of the market dislocation.

Whitman’s contrarian approach paid off, and Third Avenue Funds was able to generate strong returns coming out of the crisis.

Philanthropy: Whitman’s Contributions to Education and the Arts

Throughout his life, Whitman was a generous philanthropist, supporting a variety of causes related to education and the arts. He was particularly committed to supporting education for underprivileged students and donated millions of dollars to scholarship programs.

Whitman was also a passionate collector of art and left a significant portion of his collection to the Whitney Museum of American Art in New York City.

Legacy: The Enduring Impact of Marty Whitman’s Work

Marty Whitman’s legacy is one of innovation, creativity, and a commitment to value investing. He pioneered a unique approach to investing that focused on finding undervalued stocks with strong financials and a margin of safety, and his success inspired a generation of investors.

Whitman’s impact on the industry can still be felt today, and his investment philosophy continues to be studied and emulated by investors around the world.

Lessons Learned: What Investors Can Learn from Whitman’s Journey

The story of Marty Whitman offers several key lessons for investors. First, it’s important to have a clear investment philosophy and stick to it, even in the face of market turbulence. Second, investors should be willing to take risks and think outside the box, as Whitman did when he pioneered his unique approach to value investing.

Finally, investors should remember the importance of discipline and patience. Whitman was a long-term investor who believed in the power of compounding returns, and his success was built on a foundation of careful research and analysis.

Conclusion: The Evolution of Marty Whitman and the Future of Value Investing

Marty Whitman was a true pioneer in the world of value investing, and his legacy continues to influence investors today. His unique approach to investing, his commitment to discipline and patience, and his willingness to take risks and think outside the box have all left an indelible mark on the industry.

As we look to the future of value investing, we can learn a great deal from Whitman’s journey. By staying true to our investment philosophy, taking calculated risks, and remaining patient and disciplined, we can build successful portfolios that stand the test of time.