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Mutual Fund Manager - Martin Whitman, Third Avenue


As portfolio manager, Co-Chief Investment Officer, and the founder of the Third Avenue Value Fund, Martin Whitman is amongst the top mutual fund investors in the United States, if not the world.

 

Educated and a graduate of Syracuse University in 1949, Martin has been a part of the investment game for quite some time. In 2003, Whitman gave a generous gift to Syracuse University, resulting in them naming their School of Management after him.

 

Through Martin Whitman, Third Avenue has benefited from Whitman's controversial "free market concept." It turns out that Whitman is very critical of free markets. He argues that the free market may see its downfall, especially when those in control are not subject to outside regulation. He blames this lack of regulation for executives receiving high compensation, for monopolies, businesses with potential that are poorly financed, and corruption. He believes that it is the free relationship between a corporation, its creditors, and its investors that makes for a successful company and one that is worth investing in.

 

The overall strategy that Martin Whitman, Third Avenue, and the investors in the Third Avenue Value Fund have benefited from is Whitman's "buy and hold" strategy. He invests in financially secure companies with competent management and understandable business practices. The stock must also be low priced. In other words, he looks for undervalued companies. He then only sells the stock if there has been a significant change within the company to its structure or financial status. He may also sell if he feels the investment is overvalued.

 

Here are the annual return percentages that Third Avenue Value Fund has experienced. In 1999, the fund had a return of 12.92%. In 2003, the return for the year was 37.08%. In 2009, the return for the year was 44.5%. The only years between 1999 and 2009 that the fund saw a negative return was a 15.19% loss in 2002 and a 45.6% loss in 2008. However, although the fund's lifetime gain was -8.6% in 2008, the gain for 2009 was 18%.

 

Currently, Whitman serves as a faculty member at Yale School of Management.

 

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