Marty Whitman's commentary in Third Avenue Fund's quarterly letter to shareholders is a must read, especially if you are wired as a value investor. Marty, who is now in his 80's, does not disappoint with the latest edition.
Here's just a sampling of Marty's wisdom:
A directory of those in the financial community who build great fortunes by avoiding risk:
1. Corporate executives who receive stock options or restricted stock
2. Members of the Plaintiffs' Bar who bring class action lawsuits in order to earn contingeny fees
3. Initial Public Offering ("IPO") underwriters and sales personnel
4. Bankruptcy Professionals: Lawyers and Investment Bankers
5. Money Managers, Mutual Fund Managers, Private Equity and Hedge Fund Managers
6. Venture Capitalists
7. Real Estate Entrepreneurs especially investment builders
Marty goes on to describe each category in greater detail, but in his typical direct and unapologetic fashion, hits the nail squarely on the head.
He goes on to describe how Third Avenue avoids investment risk:
1. Buy Cheap
2. Buy Equity Interests Only in Highg Quality Companies
3. Operate on a low cost basis for shareholders
4. Ignore Market Risk
5. Buy growth but don't pay for it
6. Buy and Hold
7. Don't borrow money, invest without financial leverage
We'd urge investors to read the Marty Whitman's entire Second Quarter Commentary, it is well worth the time.
**The author has a position in the Third Avenue Small-Cap Value Fund. This is neither a recommendation to buy or sell this security. All information provided believed to be reliable and presented for information purposes only.