Whitman, Nygren Take New Look at 'Value'

The stock-market crash has forced value-fund managers like Marty Whitman and Bill Nygren to tweak their strategies and, in some cases, redefine "value."

Whitman, founder and co-chief investment officer of Third Avenue Funds, is still troubled by the rush of redemptions his firm was forced to fill last fall, often selling at a loss to meet obligations. "I got so buffaloed by the market," he said at the Morningstar Investment Conference in Chicago last week. "It was so discouraging to be hammered day after day."

The sell-off had nothing to do with the underlying health of value stocks, he said. "Prices were driven by short sellers and day traders, market participants who focus on short-term earnings," Whitman said. "It's ludicrous to think those participants have any message for those who invest for value." ...