The Aggressive Conservative Investor (Wiley Investment Classics) [Paperback]

Martin J. Whitman (Author), Martin Shubik (Author), Gene Isenberg (Foreword)

Book Description

Publication Date: November 4, 2005 | Series: Wiley Investment Classics (Book 30)

"The Aggressive Conservative Investor will never go out of date.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.

Editorial Reviews

From the Back Cover

THE AGGRESSIVE CONSERVATIVE INVESTOR

"The Aggressive Conservative Investor will never go out of date.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

About the Author

Martin J. Whitman (New York, NY) is chairman, chief executive officer, and co-chief investment officer of Third Avenue Management LLC, and also manages the Third Avenue Value Fund. Mr. Whitman is chairman and CEO of M.J. Whitman, Inc., a New York-based full-service broker-dealer and serves as CEO of Danielson Holding Corporation, a Chicago-based insurance holding and trust company.  Mr. Whitman received a bachelor of science from the School of Management and a master's degree in economics from the New School for Social Research. He is a chartered financial analyst. 

Martin Shubik (Branford, CT) is the Seymour H. Knox Professor of Mathematical Institutional Economics at Yale University. He received his B.A. and M.S. degrees in Mathematics and Political Economy from the University of Toronto, and his Ph.D. in Economics from Princeton University.

Product Details

• Paperback: 486 pages
• Publisher: Wiley; 1 edition (November 4, 2005)
• Language: English
• ISBN-10: 0471768057
• ISBN-13: 978-0471768050
• Product Dimensions: 5.5 x 1.3 x 8.5 inches
• Shipping Weight: 1.1 pounds (View shipping rates and policies)
• Average Customer Review: 3.6 out of 5 stars  See all reviews (17 customer reviews)
• Amazon Best Sellers Rank: #249,731 in Books (See Top 100 in Books)

Most Helpful Customer Reviews

41 of 45 people found the following review helpful

4.0 out of 5 stars A great book June 18, 2006

By Befragt VINE™ VOICE

Format:Paperback|Amazon Verified Purchase

This book accomplishes two quite different things, both of which should be of use to the committed investor. First of all, it sets forth an investment philosophy in great detail. Second, it shows investors how to analyze securities themselves. In both those respects, it is on a par with "Securities Analysis" by Graham and Dodd (also highly recommended - I have also reviewed that book), although it is a much easier read.

In setting forth an investment philosophy, the book compares well with "Common Stocks and Uncommon Profits" by Phil Fisher and "The Intelligent Investor" by Benjamen Graham (both recommended). Whereas Fisher emphasized growth companies and management analysis and Graham emphasized earnings, Whitman and Shubik emphasize low price/book ratios. They support their position quite ably with examples and , where available, studies.

The Aggressive Conservative Investor also contains a good bit of information about securities analysis. While it is not as in-depth as "Security Analysis" (the Graham and Dodd classic), the chapters on financial accounting and GAAP are a must read, particularly since the book convincingly demonstrates that the utility of financial statements will differ depending upon the position of the person reviewing them.

Whitman and Shubik are most certainly value investors who focus on analyzing a particular company (as compared to the market as a whole, interest rate trends, etc.), although they also cover "asset conversion investing," which may involve investing in distressed companies. They make an excellent argument that, in many cases, companies with unencumbered assets may make excellent investments. They also freely take exception to accounting conventions that emphasize earnings, and they repeatedly demonstrate how earnings may be affected by accounting policies that are beyond the control (and arguably the understanding) of most investors, including me.

Another interesting thing about this book is that it covers different corporate constituancies (banks, bondholders, management, insurance companies, passive outside shareholders, etc.) and how their involvement affects and is affected by corporate activities in great detail. The book notes that even investors in common stock may have different objectives, and it discusses how these perspectives may affect the company over time.

The book also has an excellent discussion of sources of corporate disclosure, in order to take advantage of the company's public communications to understand it better. While I am generally aware of many of these sources, the book does a commendable job of explaining them in greater detail.

The Aggressive Conservative Investor does contain some numeric analysis that may be hard to follow, and it can't be called an "easy read," although it certainly is not as hard to read as "Security Analysis." Moreover, some of the information contained in the book is now outdated due to changes in the tax code. These are minor concerns to me, however, and I would highly recommend this book to anyone who is serious about investing.

13 of 13 people found the following review helpful

4.0 out of 5 stars The Financial-Integrity Approach (Safe & Cheap) June 5, 2007

By James East VINE™ VOICE

Format:Paperback

After reading this book years ago, I was interested in reading it again for the new release. Though it is not really an updated main text version, it does have a new forward by Eugene Isenberg (current Chairman of Nabors Industries) and new introduction by the original authors of Martin Whitman and Martin Shubik. Irrespective, it was still an enlightening experience to go over the material again. Since the original printed edition, I believe Mr. Whitman's record speaks for itself, in that the "safe and cheap" methods espoused originally in The Aggressive Conservative Investor are good foundations to start, or extend, your investment education in what the authors call "the outside passive investor".

However, as some other reviewers have pointed out, this book is not your average investor book structured for easy reading with quick formulas. The book is for the more serious investor as its authors clearly state. For example, "In presenting our position, considerable space is devoted to describing the real world faced by both outsiders and insiders." Their point is that in understanding the viewpoints of both the insider, whether corporate management, the banker and/or financier, the directors, or the short-term trader, or that of the outside passive investor will help you along your way in understanding what may be happening in the market and why. Why? - because of the interested parties perspectives as they may temporarily have leverage over the other.

Though the book is a little more rough sailing because of this background perspective - to assist the future reader - (after reading the introduction) one may first want to start in Section 5 <Tools of Security Analysis>, then go back to the beginning and dig in a little more. This should help one read this book more like a traditional investment book. The two (2) case studies in the Appendix sum up the book with narratives of why some insiders (and outsiders) may act as they do.

As for the safe and cheap method, considerable time is spent with emphasis on the importance of the financial position of the security under consideration. This Financial-Integrity approach is detailed and viewed from all the players perspectives in the transaction of a security purchase (or seller) to emphasize the concept of the "guaranty". In addition, even though the authors do state their differences with the Graham & Dodd methods, I feel that in the end they are more connected at the hip than their stated differences may imply, or indicate.

All in, if you are willing to spend the time and do the work, whether reading annuals, 10-Ks, 10-Qs, then reading this book will assist you in becoming a better investor in your investing activities, but the trip is not recommend for the casual weekend reader.

43 of 51 people found the following review helpful

5.0 out of 5 stars "safe and cheap" in the master's own words July 13, 1998

By A Customer

Format:Hardcover

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!