not your typical value investor

Marty Whitman

Whitman performed the astonishing feat of beating the stock market by a wide margin over at least 20 years.

The academic B.S. is that the present value of any common stock is the future dividends. Baloney. The present value is what kind of wealth a company can build.” The value of dividends, he said, was that it gave companies better access to capital markets: In other words, it made it easier for them to borrow when they needed.

Companies are not dividend or short-term earnings machines: They are wealth-creation machines.
Indeed, he said, there are ways of creating value that have nothing to do with positive cash flow at all.

For example, “possibly much more important, is…creating wealth while consuming cash.”

Didn’t know that about dividends. Tax law makes dividends look bad compared to capital gains, so they are out of fashion today. I don’t want them because it hurts a stock price too much if they have to reduce them to pay debt.


I’ve read about him before. It would be interesting to see some examples of his investing decisions.