Additional information
by Martin J. Whitman (Author), Fernando Diz (Author)
A legendary value investor on security analysis for a modern era
This book outlines Whitman's approach to business and security analysis that departs from most conventional security analysts. This approach has more in common with corporate finance than it does with the conventional approach. The key factors in appraising a company and its securities: 1) Credit worthiness, 2) Flows--both cash and earnings, 3) Long-term outlook, 4) Salable assets which can be disposed of without compromising the going concern, dynamics, 5) Resource conversions such as changes in control, mergers and acquisitions, going private, and major changes in assets or in liabilities, and 6) Access to capital.
- Offers the security analysis value approach Martin Whitman has used successfully since 1986
- Details Whitman's unconventional approach to security analysis and offers information on the six key factors for appraising a company
- Contains the three most overemphasized factors used in conventional securities investing
Written by Martin J. Whitman and Fernando Diz, Modern Security Analysis meets the challenge of today's marketplace by taking into account changes to regulation, market structures, instruments, and the speed and volume of trading.
Front Jacket
With the crash of 2008 still ringing in the market's collective ears, the value investing philosophy has never seemed more relevant or sound. But in the eighty years since Benjamin Graham and David Dodd's Security Analysis took the investing world by storm, much has changed in the investing environment.
Working from the simple guiding principle that "safe and cheap" is the most reliable way to minimize investment risk while maximizing long-term returns, Whitman, over the course of his more than fifty years as an investor and fund manager, has developed an investing approach that has made fortunes for his many clients--and himself--in all economic climates.
A book that is sure to become an investing classic, Modern Security Analysis reveals the details of Whitman's approach to analyzing businesses and the securities they issue.
While conventional approaches to investing, including Graham and Dodd fundamentalism and academic finance, take a top-down approach to analyzing securities and businesses, the bottom-up approach you'll discover here looks at companies not merely as aggregates of operational cash flows and earnings--their pure going concern attributes--but also as entities actively involved in wealth-creating "resource conversion" activities. In essence, that entails identifying a company's potential for generating wealth in many different ways, in addition to flows from operations, including mergers and acquisitions, spinoffs, recapitalizations, liquidations, changes of control, having attractive access to capital markets, and more.
Clearly accessible with the help of numerous examples and several case studies, Martin Whitman and co-author Professor Fernando Diz describe proven methods for:
- Developing a thorough understanding of many companies' business and wealth generating attributes
- Appraising business managers not only as operators but also as dealmakers, investors, and financiers
- Understanding the importance of credit worthiness for any economic entity
- Understanding the important differences between control and passive investing
- Appraising and avoiding investment risk
- Choosing the right amount of diversification or the level of portfolio concentration
- Buying growth without paying for it
- Avoiding the many pitfalls of following conventional wisdom
- Understanding the significance of resource conversion activities in the generation of business value
- Understanding what value investing is relative to other forms of investing
Offering a unique opportunity to learn a proven, time-tested alternative to conventional security analysis from an investing legend, this book is must-reading for finance professionals, including security analysts, money managers, institutional investors, finance academics, and economists as well as anyone seeking to invest with a large margin of safety.
Back Jacket
With the crash of 2008 still ringing in the market's collective ears, the value investing philosophy has never seemed more relevant or sound. But in the eighty years since Benjamin Graham and David Dodd's Security Analysis took the investing world by storm, much has changed in the investing environment.
Working from the simple guiding principle that "safe and cheap" is the most reliable way to minimize investment risk while maximizing long-term returns, Whitman, over the course of his more than fifty years as an investor and fund manager, has developed an investing approach that has made fortunes for his many clients--and himself--in all economic climates.
A book that is sure to become an investing classic, Modern Security Analysis reveals the details of Whitman's approach to analyzing businesses and the securities they issue.
While conventional approaches to investing, including Graham and Dodd fundamentalism and academic finance, take a top-down approach to analyzing securities and businesses, the bottom-up approach you'll discover here looks at companies not merely as aggregates of operational cash flows and earnings--their pure going concern attributes--but also as entities actively involved in wealth-creating "resource conversion" activities. In essence, that entails identifying a company's potential for generating wealth in many different ways, in addition to flows from operations, including mergers and acquisitions, spinoffs, recapitalizations, liquidations, changes of control, having attractive access to capital markets, and more.
Clearly accessible with the help of numerous examples and several case studies, Martin Whitman and co-author Professor Fernando Diz describe proven methods for:
- Developing a thorough understanding of many companies' business and wealth generating attributes
- Appraising business managers not only as operators but also as dealmakers, investors, and financiers
- Understanding the importance of credit worthiness for any economic entity
- Understanding the important differences between control and passive investing
- Appraising and avoiding investment risk
- Choosing the right amount of diversification or the level of portfolio concentration
- Buying growth without paying for it
- Avoiding the many pitfalls of following conventional wisdom
- Understanding the significance of resource conversion activities in the generation of business value
- Understanding what value investing is relative to other forms of investing
Offering a unique opportunity to learn a proven, time-tested alternative to conventional security analysis from an investing legend, this book is must-reading for finance professionals, including security analysts, money managers, institutional investors, finance academics, and economists as well as anyone seeking to invest with a large margin of safety.
Author Biography
MARTIN J. WHITMAN is Chairman of the Third Avenue Funds and founder of Third Avenue Management, an investment adviser to private and institutional clients. Mr. Whitman has proven for more than fifty years that active, opportunistic investors can find under-priced securities in companies with strong balance sheets. He is also an adept control investor who was an important participant in the rehabilitation of Nabors Industries and Covanta Energy, among others. He was Third Avenue's Chief Investment Officer from its founding through January 2010.
For over thirty years, Mr. Whitman was a Distinguished Management Fellow at the Yale School of Management. He is also an honorary trustee at Syracuse University which is also home to the Whitman School of Management. He is a frequent speaker and commentator within the financial services community.
FERNANDO DIZ is the Managing Director of the Orange Value Fund, LLC, the Martin J. Whitman Professor of Finance and the Director of the Ballentine Investment Institute at Syracuse University. He teaches classes in value, control and distress investing and created and directs the two-year Orange Value Fund program. He is the co-author with Martin J. Whitman of Distress Investing: Principles and Technique. Professor Diz received his MSc and PhD degrees from Cornell University.
