Here is the January 1994 shareholder letter of the Third Avenue Fund Inc. by Martin Whitman.
(1) "...TAVF tries to guard against investment risk by buying cheap; and if the Fund can buy cheap, there is no thing such as a symmetrical risk/reward ratio. Buying cheap mean reducing risk, while simultaneously enhancing reward..."
(2) "...insofar the word 'aggressive' implies that TAVF takes positions in unpopular companies, frequently buys into thin market situations, does not restricts its investments to large cap companies or dividend paying common stocks, and does not pay any attention to general stock market or economic conditions, then the Fund is most assuredly 'aggressive'..."
(3) "...For the Fund, the premier growth opportunities exist when reasonably well-managed companies have high quality resources relative to price (quality cannot be measured by book value) and a large quantity of resources relative to price (quantity of resources sometimes can be measured by book value - say in the case of depository institutions - and sometimes cannot be - say in the case of real estate investment builder)..."
(1) Readers who have followed my Classic Guru Shareholder Letters Review thus far will no doubt spot this recurring theme of how and why buying cheap reduces risk.
(2) Be aggressive in the context of not being afraid to buy unpopular companies and small-cap illiquid stocks.
(3) Value investing is a mesh of both quantitative and qualitative analysis. I always remind myself to start with the screen, but not end with the screen, in my search for investment ideas.
Readers interested in applying Martin Whitman's value investing philosophy though a quantitative screen can read my article "The Martin Whitman Stock Screen - Nov. 6, 2012."