Two Votes for Third Avenue

09/19/2003 12:00 am EST

Focus:

Janet Brown

Editor, NoLoad Fund*X

When it comes to selecting mutual funds, few compare to the successful long-term record of Janet Brown. When it comes to successful, conservative and value-oriented stock selection, few can compete with Richard Young. When both place the same fund group among their favorite holdings, we should take notice.

"Martin Whitman, manager of the highly-ranked Third Avenue Value Fund (TAVFX), is a legendary value investor," says Janet Brown, editor of No Load Fund*X.  "Whitman has 50 years of investment experience and a well-known independent streak. At times, he calls himself a vulture investor; he’ll pick up stocks and bonds that others consider road kill. Potential investments must be cheap and safe. Whitman defines cheap as a stock trading at 50% of private market value, while safety comes in the form of an ironclad balance sheet. Whitman specializes in distressed companies, but he won’t invest if the balance sheet is shaky, the management isn’t competent or if he simply doesn’t understand the business. The portfolio also includes more stable financial companies. Real estate is the largest concentration with 14.7% of assets. Whitman doesn’t follow market trends. He looks at a company’s resources and its long-term business prospects, rather than short-term earnings potential. When he sees opportunity, he’s a true long-term investor. Turnover  is very low at 9%. "

Richard Young, editor of Investing Intelligence, adds, "Third Avenue Real Estate Value Fund (TAREX ) is one of my largest personal holdings. It has been my most recent purchase, and I will continue to add it to my family holdings. I invest in this fund to benefit from its heavy concentration on real estate operating companies. Its five largest holdings - which account for 40% of the total portfolio are all real estate operating companies - are Forest City, LNR Property, St. Joe, Brookfield Properties and Catellus. The fund also has stakes in great REITs such as Prologis, Vornado and Public Storage. In my view, Third Ave Real Estate Value is unique. It is an off-the-beaten-path investment vehicle, with its distinctive assemblage of quality real estate assets. For value purists, it's clearly my #1 choice for current investment."

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