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"The Aggressive Conservative Investor will never go out of date.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

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.



Section One: The Approach.

1.An Overview.

2.The Financial-Integrity Approach to Equity Investing.

Section Two: The Uses and Limitations of Fundamental Analysis and Technical Analysis.

3.The Significance of Market Performance.

4.Modern Capital Theory.

5.Risk and Uncertainty.

Section Three: Disclosures and Information.

6.Following the Paper Trail.

7.Financial Accounting.

8.Generally Accepted Accounting Principles.

Section Four: The Financial and Investment Environment.

9.Tax Shelter (TS), Other People’s Money (OPM), Accounting Fudge Factor (AFF) and Something off the Top (SOTT).

10.Securities Analysis and Securities Markets.

11.Finance and Business.

Section Five: Tools of Securities Analysis.

12.Net Asset Values.


14.Roles of Cash Dividends in Securities Analysis and Portfolio Management.

15.Shareholder Distributions, Primarily from the Company Point of View.

16.Losses and Loss Companies.

17.A Short Primer on Asset-Conversion Investing: Prearbitrage and Postarbitrage.

Section Six: Appendixes—Case Studies.

Introduction to Appendixes I and II.

I. The Use of Creative Finance to Benefit Controlling Stockholders—Schaefer Corporation.

II. Creative Finance Applied to a Corporate Takeover—Leasco Data Processing Company.

III. A Guide to SEC Corporate Filings—What They Are/What They Tell You (Reprinted Courtesy of Disclosure Incorporated).

IV. Examples of Variables Using the Financial-Integrity Approach—Pro and Con.