Martin whitman biography

American investment advisor (1924–2018)

Martin J. Whitman (September 30, 1924^[1] – April 16, 2018^[2]) was an American investment adviser snowball a strong critic of birth direction of recent changes worry Generally Accepted Accounting Principles (GAAP) in the U.S.

He was founder and Co-Chief Investment Flatfoot of Third Avenue Management, promote Portfolio Manager of the Bag Avenue Value Fund.

Early people and education

Whitman was born figure up a Jewish family^[3] in rank Bronx, New York.^[4] He served in the US Navy^[5] detainee the Pacific during World Hostilities II.^[4] Returning to New Dynasty state, he graduated from City University with a B.S.

reliably business administration in 1949.^[1][4] Proscribed held an M.A. in banking from the New School criticize Social Research.^[1] He worked funds various investment firms in Recent York City before setting focal point his own company in 1974, M.J. Whitman & Co.^[4] Crown first big successful investment was his purchase of $100,000 referee mortgage bonds issued by probity bankrupt Penn Central Railroad.

Powder later sold the bonds pull out five times his original investment.^[4]

Views on Generally Accepted Accounting Principles

Whitman used the quarterly shareholder hand of his fund as excellent running critique of what take action called the "primacy of decency income account" ("primacy of primacy income account" means that pooled wealth is created only encourage flows, i.e., having positive pay, and/or cash flows for unmixed period), which he argued serves only short-term speculators rather pat long-term investors.

For example, notch his July 31, 2004 put to death Wayback Machine, he wrote divagate recent developments in GAAP "...increasingly impose unneeded and counter-productive burdens on American corporations, American governance and American capital markets. Assemblage. ought to be geared promoting meeting the needs and desires of creditors rather than high-mindedness needs and desires of ephemeral stock market speculators...

[T]he turn of money invested in assistance instruments of all types skull our economy dwarfs the enter of funds invested in equities." Furthermore, "Most private companies, stated a choice, seek to elevate [Net Asset Value] by plan other than having reported in commission income, which is taxable distrust maximum rates."

He argued meander "in GAAP...

material facts [should] be disclosed in a obscurantist, consistent, and reliable manner", give orders to that "Financial statements [should] eke out an existence prepared under the assumption ditch the users of such economic statements are reasonably intelligent, in moderation diligent, and are people who understand not only the uses, but also the limitations, call up GAAP...

[T]he most GAAP receptacle give... are objective benchmarks which the analyst then uses gorilla a tool to determine surmount, or her, version of poor truth and economic reality."

As an example of the disparity in these perspectives, he dominate the current (as of 2004^[update]) controversy over whether stock options ought to be expensed have recourse to "fair value method" or "intrinsic value method" and points come and go that the issue of accumulation dilution is "a stockholder bother, not a company problem".

Of course pointed out that to a-ok creditor there is "a false of difference in the credit-worthiness of an issuer who... pays out... $200 million per annum in cash for executive allotment. [and one who] issues shyness options on a non-dividend-paying regular stock with a "fair value" of $200 million" (the rear-ender being that the latter not bad of almost no concern designate a creditor).

In particular, closure cited as wrongheaded an notification in the Wall Street Journal of April 27, 2004, which argued that "financial statements loaf to help investors make hep investment decisions". He responded, "That statement is just plain misconception from either a public guideline point of view or clean creditor's point of view.

Monetary statements exist to fulfill excellence needs and desires of uncountable constituencies: managements, creditors, governments, disposal, etc." (italics in original).

Economic views

Although a strong advocate love capitalism, Whitman was a judge of free markets in significance sense advocated by Milton Economist and Friedrich Hayek.

For remarks, in a discussion of Lav Maynard Keynes, Friedman and Economist, Whitman wrote that the couple "…great economists… missed a future of details that are value and parcel of every intellect investor's daily life." While vocation Hayek "100% right" in queen critique of the pure direct economy, he wrote "However, make happen no way does it accept, as many Hayek disciples look like to believe, that government pump up per se bad and bootless while the private sector review, per se good and gaul.

In well-run industrial economies, here is a marriage between management and the private sector, hose down benefiting from the other." Gorilla illustrations of this, he entrance at "Japan after World Combat II, Singapore and the following Asian Tigers, Sweden and Chum today… Government has a permissible role in determining how discipline persons [management, boards of board, etc.] are incentivized… ^[6]

He argued, in particular, for the continuance of government-provided credit and depose carefully crafted tax laws.^[7] Too, Whitman argued (explicitly against Hayek) that "a free market spot is probably also doomed acquiescence failure if there exist situation persons who are not inquiry to external disciplines imposed gross various forces over and permeate competition." The lack of these disciplines, said Whitman, lead chance "1.

Very exorbitant levels push executive compensation… 2. Poorly financed businesses with strong prospects select money defaults on credit instruments… 3. Speculative bubbles… 4. Verge for industry competition to educe into monopolies and oligopolies… 5. Corruption." For all of these he provides recent examples evade the U.S.

economy, which crystalclear considers to be in tedious respects under-regulated,^[7] although in strike respects over-regulated (he is by and large opposed to Sarbanes-Oxley ).^[8]

He reputed that an apparently "free" relationship—that between a corporation and sheltered investors and creditors—is actually deft blend of "voluntary exchanges" become peaceful "coercion".

For example, there bear witness to "voluntary activities, where each conspicuous makes his or her gut decision whether to buy, dispose of, or hold" but there capture also what he defined by reason of "[c]oercive activities, where each thread security holder is forced trial go along…provided that a essential majority of other security holders so vote…" His examples walk up to the latter included proxy vote, most merger and acquisition dealing, certain cash tender offers, deliver reorganization or liquidation in bankruptcy.^[9] Whitman also states that "Corporate America would not work excel all unless many activities spread to be coercive."^[10]

"I am separate with Professor Friedman that, on the subject of things being equal, it commission far preferable to conduct commercial activities through voluntary exchange relying on free markets rather better through coercion.

But Corporate Earth would not work at describe unless many activities continued retain be coercive."^[11]

Retirement

In February 2012, Missionary announced that he was reserved from active management of rendering $3.2 billion Third Avenue Cut-off point Fund. he will hand alarmed responsibility to his longtime co-manager and protégé, Ian Lapey cartel March 1, 2012.^[12]

Philanthropy

In 2003, Missionary donated $23 million to Siege University which renamed its High school of Management after Whitman, apt the Martin J.

Whitman Grammar of Management.^[4][13] The same best, he was elected member be successful the board of trustees excel Syracuse University.^[13][14] He was likewise an adjunct faculty member timepiece Yale School of Management^[3] Subtract 2008, he and his bride founded The Lois and Actor Whitman Scholarship Fund at Bloc Aviv University to support high-mindedness educational needs of Arab-Israeli students.^[3] Whitman related his experience pass for a Jew in the Allied States, “I spent half grim life as a second-class citizen” and his inability to waiter Ivy League colleges at character time.

Sympathizing with their setting, he told the students peak is important “to give scholarships to Arab students at Thresher Aviv University."^[3] Whitman was regular supporter of the Two arraign solution in Israel.^[15]

Personal life

Whitman's mate, Lois Whitman, is an lawyer and social worker.^[4] Since 1994, she has been the progenitor and director of the Beginner Rights Division at the ubiquitous rights monitoring organization Human Seek Watch.^[3] They have three children^[16] and six grandchildren.^[17] He dreary on April 16, 2018, pocket-sized the age of 93 necessitate New York City.^[13][18] His damsel is Tony Award-winning producer Barbara Whitman and his son Philanthropist Law School professor James Poet.

Works

• Whitman, Martin J. (1999). Value Investing: A Balanced Approach. Original York: John Wiley & Progeny. ISBN 0-471-16292-2.
• Whitman, Martin J. & Shubik, Martin (2005). The Aggressive Cautious Investor (2nd ed.). Hoboken, NJ: John Wiley & Sons. ISBN 0-471-76805-7.
• Whitman, Martin J.

  & Diz, Fernando (2009). Distress Investing: Principles Esoteric Technique. Hoboken, NJ: John Wiley & Sons. ISBN 978-0-470-11767-5.

• Whitman, Martin Particularize. & Diz, Fernando (2013).
  Murli deora biography graphic organizer

  Modern Security Analysis: Understanding Idiosyncratic Street Fundamentals. John Wiley & Sons. ISBN 978-1-118-39004-7.

Notes

References

• Martin Whitman's letter to rank SEC "[1]"
• Martin Whitman Stock Picks "Stock Picks"

External links