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The Aggressive Conservative Investor (Wiley Investment Classics) |  | Authors: Martin J. Whitman, Martin Shubik
Publisher: Wiley
Category: Book
List Price: $19.95
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Rating:  13 reviews
Sales Rank: 61210
Media: Paperback
Edition: Updated
Pages: 480
Number Of Items: 1
Shipping Weight (lbs): 1.1
Dimensions (in): 8.3 x 5.5 x 1.3
ISBN: 0471768057
Dewey Decimal Number: 332.678
EAN: 9780471768050
ASIN: 0471768057
Publication Date: November 4, 2005
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Product Description
"The Aggressive Conservative Investor will never go out of date. Regulation, disclosure, and other things may change, but the general approach and mindset to successful investing are timeless. Read this book and you will learn the rudiments of 'safe and cheap' investing. An essential read for every amateur and professional investor."
--Stan Garstka, Deputy Dean & Professor in the Practice of Faculty & Management, Yale School of Management "Security analysis toward both better odds and higher long-term payoff: A readable, authoritative guide."
--Professor Bill Baumol, New York University "In reading this book, one is struck by the simplicity of the ideas and the dependence of the investor on his own understandings of reality as opposed to the myths on the street. The updated version of this 1979 classic incorporates all the modern financial engineering that has occurred as a product of the late 20th century, and the new methodologies refine your abilities to measure risk but don't change the fundamentals of value. The updated version of The Aggressive Conservative Investor is very much a value-added proposition."
--Sam Zell, Chairman, Equity Group Investment LLC "I concur with those people who regard Marty Whitman as the 'Dean of Value Investing.' This book is a must-read for everyone interested in understanding the art of investing."
--Melvin T. Stith, Dean, Whitman School of Management, Syracuse University This no-holds-barred presentation of one of the most successful investment strategies of all time -- value investing in distressed securities/companie -- shows you how to analyze and evaluate stocks just like controlling owners. Based on the assumption that stock price rarely reflects real value, authors Whitman and Shubik use numerous case studies to present risk-minimizing methods that also provide high rewards. Still relevant today, this classic work includes a new introduction discussing the dramatic changes that have taken place in the value investing world since its first publication in 1979.
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Showing reviews 1-5 of 13
 A masterpiece December 28, 2006
Ng Wai Yip
9 out of 9 found this review helpful
The most extraordinary part of The Aggressive Conservative Investor is that it tells the reader how minority investors can benefit by knowing and understanding how control investors make investment decisions.
If one is smart enough to realize how insiders and control investors made fortunes by taking advantage of the market cycles to do the arbitrage between private and public market, one will come to appreciate the beauty of the safe-and-cheap approach as detailed in this book.
I have come across a few negative comments on the book regarding the use of "out-dated" materials. This certainly does not take me by a surprise, as not everybody has 50 years of investment experience as Whitman does, so, naturally, not everybody can understand what "there is no new thing under the sun" means.
Great education for serious investors August 15, 2009
Mariusz Skonieczny (ClassicValueInvestors . com)
1 out of 1 found this review helpful
This is a very good book, but I have to warn readers that it is mainly for more advanced investors. In this book, the author lays the foundation for his investment philosophy and educates readers about analyzing individual securities. This book is an investment classic and will be read by investors for decades, because good investing is good investing.
The part that I particularly enjoyed was when the author described how different investors, specifically control investors, have different agendas and how it affects the company and other smaller investors. I enjoyed reading this book, and if you are a serious investor you should read it, too.
- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market
Book Review from the Aleph Blog January 23, 2010
David Merkel (Ellicott City, MD United States)
1 out of 1 found this review helpful
I am a fan of value investing in all of its different variations, and so when I run across a book on the topic, particularly from a skilled practitioner, I buy it. I'll do more book reviews on value investing, but one of the first that I wanted to do was Value Investing, by Marty Whitman.
So, I start looking around for my copy, and I can't find it. Arrrgh, I can guess what happened. I lent it out, I can't remember who I lent it to, but the borrower never gave it back to me. Annoyed at myself, I do notice a book that was just as good, The Aggressive Conservative Investor, by Marty Whitman and Martin Shubik. Even better, it is back in print, after being out of print for 20+ years.
So, what's so great about the book? (Most of this applies to both books.) Marty Whitman has a strong "What can go wrong" approach. He realizes that he, and most other investors, will be outside passive minority investors. We only ride on the bus. The inside active control investors drive the bus, and if we are going to make money with reasonable safety, we have to understand the motives of those that control the companies. They benefit somewhat disproportionately from control. They receive wages and benefits that other shareholders do not receive, can gain cheap outside financing, and limit tax exposures, in addition to other benefits.
Like me, Whitman doesn't care much for modern portfolio theory. More notable for a value investor, he has a few criticisms for the traditional "Graham-and-Dodd" type of value investing.
* Typically, it works best for "going concern" situations, and not situations where activism could be necessary to unlock value. (Though, Graham did do things like that in his career; he just didn't try to teach amateurs about it.)
* He doesn't always stick to high quality companies, if enough information can be obtained about the target. Information allows for more risk to be taken.
There are four things that he insists on in equity investments:
1. Strong financial position
2. Honest management that is creditor-aware and shareholder-oriented
3. Adequate disclosure of information relevant to the success of the company
4. The stock can be bought for less than the net asset value (adjusted book value) of the firm.
If you have these items in place, you won't lose much, and if the management team makes value enhancing decisions, one can make a lot of money on the stock.
Whitman places a lot of stress on reading through the documents filed with the SEC. They may not be perfect, but managements know that they need to provide adequate disclosure of material information, or they could be sued. A lot gets revealed in SEC filings, and not every investor sees that.
He also places great stress on understanding the limitations of the accounting, whether under GAAP, Tax, or any other basis. Comparing the various accounting bases can sometimes illuminate the true financial well-being of a company. (Note: this is what killed me on Scottish Re. I should have questioned the GAAP profitability, when they never paid taxes.) He lists the underlying assumptions behind GAAP accounting, and explains how they can distort the estimation of economic value. Honestly, it is worse today in some ways than when he wrote the First Edition in 1979. GAAP accounting is more flexible, and less comparable across companies today.
Marty Whitman looks for situations where resources in a company can be used in a better manner, creating value in the process.
* Is the company too conservatively financed? Perhaps borrowing money to buy back stock, or issuing a special dividend could unlock value.
* Are there divisions that are undermanaged, or would fit better in another company?
* Are management incentives properly aligned with shareholders?
* Would the company be better off going private?
* Is government regulation a help or a hindrance? (Barriers to entry)
* Analyzing corporate structures for where the value is.
Beyond that, he explains how to calculate net asset values, as distinct from book values. He describes the problems with earnings as a value metric. He explains the value of dividends and other distributions. He also explains when it can make sense to own companies that are losing money. (Underlying values are growing in a way that the tax accounting basis does not catch.)
It's a good book. Together with Value Investing, it gives you a full picture of how Marty Whitman thinks about value investing. He is one of the leading value investors of our time, but he has spent more time than most on the underlying theory. For those who want to think more deeply about value investing, Marty Whitman is a highly recommended read.
"safe and cheap" in the master's own words July 14, 1998
Marty Whitman is a master value investor who has been successful for 3 decades, though recently becoming known to the masses through his Third Avenue family of mutual funds. Anyone who has read some of his shareholder letters will recognize some of the concepts in the book, but they are presented in detail. This book teaches you to understand how "control" investors think, and to then learn how to evaluate annual and quarterly statements in a new light. Whitman is more than a value investor, of course, he is a vulture investor and proud of it. Though this book is as fresh today as it was in 1979, we await his new book eagerly for more wisdom from the master. Marty Whitman's approach is as different from Ben graham's as the Rolling Stones were from the Beatles! Both early rock bands from England, but clearly touched responsive chords in very different ways...If you can find this book, BUY IT!
Martin J Whitman paid for my home December 8, 2005
William E. Mitchell (Orange County, CA USA)
23 out of 39 found this review helpful
The author of this book, Martin J Whitman, runs Third Avenue Value Fund, one of the only mutual funds in the world to beat the S&P 500, after fees, over the 20-some years it has been running.
This book helps explain how Whitman did it. Not an easy read, but a worthwhile one.
Showing reviews 1-5 of 13
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