Martin J. Whitman (September 30, 1924 – April 16, 2018) was an American investment adviser and a strong critic of the direction of recent changes in Generally Accepted Accounting Principles (GAAP) in the U.S. He was founder and Co-Chief Investment Officer of Third Avenue Management, and Portfolio Manager of the Third Avenue Value Fund.
Early life and education
Whitman was born to a Jewish family in the Bronx, New York. He served in the US Navy in the Pacific during World War II.
He argued, in particular, for the value of government-provided credit and of carefully crafted tax laws. Further, Whitman argued (explicitly against Hayek) that "a free market situation is probably also doomed to failure if there exist control persons who are not subject to external disciplines imposed by various forces over and above competition." The lack of these disciplines, said Whitman, lead to "1. Very exorbitant levels of executive compensation… 2. Poorly financed businesses with strong prospects for money defaults on credit instruments… 3. Speculative bubbles… 4. Tendency for industry competition to evolve into monopolies and oligopolies… 5. Corruption." For all of these he provides recent examples from the U.S. economy, which he considers to be in some respects under-regulated,
He believed that an apparently "free" relationship—that between a corporation and its investors and creditors—is actually a blend of "voluntary exchanges" and "coercion". For example, there are "voluntary activities, where each individual makes his or her own decision whether to buy, sell, or hold" but there are also what he defined as "[c]oercive activities, where each individual security holder is forced to go along…provided that a requisite majority of other security holders so vote…" His examples of the latter included proxy voting, most merger and acquisition transactions, certain cash tender offers, and reorganization or liquidation in bankruptcy. Whitman also states that "Corporate America would not work at all unless many activities continued to be coercive."
"I am one with Professor Friedman that, other things being equal, it is far preferable to conduct economic activities through voluntary exchange relying on free markets rather than through coercion. But Corporate America would not work at all unless many activities continued to be coercive."
Retirement
In February 2012, Whitman announced that he was retiring from active management of the $3.2 billion Third Avenue Value Fund. he will hand over responsibility to his longtime co-manager and protégé, Ian Lapey on March 1, 2012.
Philanthropy
In 2003, Whitman donated $23 million to Syracuse University which renamed its School of Management after Whitman, becoming the Martin J. Whitman School of Management. He was also an adjunct faculty member at Yale School of Management
Personal life
Whitman's wife, Lois Whitman, is an attorney and social worker. and six grandchildren. He died on April 16, 2018, at the age of 93 in New York City. His daughter is Tony Award-winning producer Barbara Whitman and his son Yale Law School professor James Whitman.
Works
- Whitman, Martin J. (1999). Value Investing: A Balanced Approach. New York: John Wiley & Sons. .
- Whitman, Martin J. & Shubik, Martin (2005). The Aggressive Conservative Investor (2nd ed.). Hoboken, NJ: John Wiley & Sons. .
- Whitman, Martin J. & Diz, Fernando (2009). Distress Investing: Principles And Technique. Hoboken, NJ: John Wiley & Sons. .
- Whitman, Martin J. & Diz, Fernando (2013). Modern Security Analysis: Understanding Wall Street Fundamentals. John Wiley & Sons. .