MARTY WHITMAN

Whitman was born in 1924 in the Bronx. He served in the US Navy during World War II before earning his degree from Syracuse University in 1949.

He spent the next three decades on Wall Street doing the work most finance people avoided: analyzing distressed companies, advising firms in bankruptcy, and digging through the kinds of balance sheets that other analysts skipped over. He absorbed Ben Graham's teachings and developed his own version of them.

In 1979, he played an advisory role in the Chrysler bankruptcy — one of the largest corporate restructurings in American history at the time. That experience sharpened his understanding of asset valuation in crisis situations.

In 1986, at age 62, he founded Third Avenue Management. Four years later he launched the Third Avenue Value Fund with a focus on financially distressed companies and deeply undervalued assets.

Through the 1990s and early 2000s the fund returned exceptional results, buying cheap Asian stocks during the financial crisis, distressed real estate companies, and financially troubled businesses that more polished investors wouldn't touch. He famously avoided tech stocks during the dot-com bubble — looking wrong in 1998 and 1999, and very right by 2001.

He kept running the fund into his late eighties. The Valeant Pharmaceuticals collapse that hurt Third Avenue later was not his call — he had stepped back from day-to-day management by then.

He died in April 2018 at 93.

Third Avenue Management LLC is the New York-based investment firm Whitman founded in 1986. The flagship Third Avenue Value Fund launched in November 1990.

At its peak, Third Avenue managed roughly $23 billion across multiple vehicles, including a Real Estate Value Fund and a Small-Cap Value Fund. Whitman also served on the boards of companies undergoing turnarounds — including Weyerhaeuser and CompUSA — which gave him operational insight that most fund managers lack.

He was an analyst first and always.

Whitman called his approach 'safe and cheap.' Safe meant he only bought companies with strong balance sheets — lots of assets, low debt, no accounting gimmicks. Cheap meant he only bought when the price was well below what those assets were actually worth.

He almost completely ignored earnings per share. His logic: earnings can be manipulated six ways from Sunday, but hard assets — real estate, factories, securities, cash — are harder to fake.

He was also one of the first mainstream US fund managers to load up on cheap Asian stocks in the late 1990s, buying South Korean companies during the financial crisis when prices were absurdly low.

One of Whitman's best calls was loading up on South Korean stocks during the 1997-98 Asian financial crisis, when the Korean market had crashed over 75%. He bought companies with massive asset bases at prices that were essentially absurd — then watched them recover and multiply over the following years.

The Third Avenue Value Fund was a consistent top performer through the early 2000s largely because of those contrarian bets, while most of his peers were nursing dot-com losses.

The move that hurt Third Avenue most was the heavy concentration in Valeant Pharmaceuticals — though this happened after Whitman had stepped back from day-to-day management. The fund lost hundreds of millions when Valeant collapsed from $260 per share to under $15 between 2015 and 2016.

A firm built on the principle of buying solid balance sheets ended up dangerously exposed to a pharmaceutical rollup that borrowed heavily to acquire other companies. It was, in hindsight, everything Whitman had spent decades teaching against.

Whitman believed income statements lie, but balance sheets don't. He thought the investing world made a fundamental error by obsessing over quarterly earnings.

What mattered was the quality and value of assets — what would the company be worth if you broke it up and sold the pieces? He loved finding companies where the stock traded below net asset value per share.

He also believed in buying businesses, not renting stocks — which meant holding for years, not quarters. 'Safe and cheap' was not just a slogan for him.

It was the entire framework.

Whitman was married and had children. He was known as an intensely devoted teacher and mentor to the analysts and employees at Third Avenue, many of whom stayed with the firm for their entire careers.

His intellectual generosity was a defining personal quality — unusual in an industry that often rewards secrecy. He remained engaged in investing and writing well into his eighties.

Whitman studied at Syracuse University, graduating in 1949, and later earned an MBA from New York University. The more important education, by his own account, was the one he built himself: reading every corporate balance sheet he could find over four decades of practice.

As an Amazon Associate, Netfigo earns from qualifying purchases. Book links above may be affiliate links.