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4 Tidbits from Third Avenue Value Fund's Q3 Letter

Third Ave Funds are likely to continue to be poor performers. From a macro perspective U.S. real estate is going nowhere any time soon, due primarily to the ongoing credit crisis. I don't have an opinion about Hong Kong or Japan but the weightings in cash and troubled U.S. stocks portend underperformance and continued redemptions. If this fund group has to start selling core positions, e.g. the large stakes in relatively small companies, the positive feedback loop will move in a negative direction. (Positive feedback loops amplify or accelerate trends, negative feedback loops dampen or decelerate trends). The managers of this fund have fallen in love with some stocks that are facing tremendous headwinds from macroeconomic conditions. Don't make the same mistakes fund management is making and fall in love with the fund because it has done well in the past. It will be of no consolation when your investment in this fund underperforms, that Mr. Whitman's investment also underperformed.