CHALLENGING CONVENTIONAL THINKING

M.J. Whitman views the risk-reward relationship quite differently from conventional investors. The common belief is that there is an elementary trade-off: An investor must take risks in order to obtain rewards, and the degree of risk assumed in a particular situation is directly related to the anticipated reward.

In M.J. Whitman’s view, there is no such trade-off. It is our belief that the lower the price an investor pays for a particular security, the less the risk and the greater the potential reward. This value investing posture is commensurate with our belief that investment risk should be based on the underlying performance of a business and its resources, and not determined by the market price at which a company’s securities might trade.