Business Day has an article featuring Martin Whitman entitled It will take more than a 45% loss to subdue this 85-year-old man.
Of course,the number 45% refers to the amount Martin Whitman's Third Avenue Value Fund lost last year. YTD in 2009, the fund is up 42%.
I found these rules of thumb that Whitman has developed to valuate companies interesting:
Read the complete article in the BusinessDay.
Of course,the number 45% refers to the amount Martin Whitman's Third Avenue Value Fund lost last year. YTD in 2009, the fund is up 42%.
I found these rules of thumb that Whitman has developed to valuate companies interesting:
- Financial services: book value.
- Small banks: 80% of book value.
- Insurance: adjusted book value.
- Real estate: independent appraisal value.
- Operating companies: 10 times peak earnings or less than net asset value.
- Tech companies: twice book value, less than 10 times peak earnings, twice revenue and more cash than liabilities.
Read the complete article in the BusinessDay.
