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Strategies & Market Trends : Value Investing
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To: Spekulatius who wrote (42082)3/31/2011 2:29:04 AM
From: Paul Senior  Read Replies (1) of 78667
 
I agree with your points about 3rd Ave.

Where 3rd Ave got hurt too was by their fundholders. As stocks everywhere fell in '08 - early '09, there were just too many fundholders who wanted out of the fund. So, whereas Mr. Whitman and staff I believe would've at least liked to have held on to stocks they favored, or maybe add to positions or start new positions, instead, they were forced to sell large amounts of stock to meet redemptions. They so stated this in one of their letters. And if the the fund held stocks that didn't have much of a public market (some of their Japanese stocks?), that likely added to the problem of exiting positions. A risk that had a fierce bite -- getting locked into a position but having fundholders demanding their money...and no banks or financial firms willing to lending money to backstop the fund.

I wonder if the fundholders exiting and forcing the buy/hold Whitman to sell, may have kept him from losing even more as the market fell.
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