for informational purposes only
Born in August 1916, Walter Schloss was a legend of Wall Street and a notable proponent of the Benjamin Graham School of Value Investing. He did not attend college and was hired as a runner on Wall Street at the age of 18. He took investment courses taught by Benjamin Graham at the New York Stock Exchange Institute and eventually went to work for Mr Graham in the Graham-Newman Partnership, where he met Warren Buffett. In 1955, Walter Schloss started his own fund and, over the next four and a half decades, delivered his investors (which numbered 92 at their peak) annualised returns of 15.3% versus 10% for the S&P 500, an achievement matched by few other investors. In 1984, he was named by Warren Buffett as one of the Superinvestors of Graham-and-Doddsville in an article published in the 1984 issue of Hermes, Columbia Business School’s magazine, where Mr Buffett sought to disprove the academic position that the market is efficient, and that beating the S&P 500 was “pure chance”. Warren Buffett had this to say about Walters Schloss: “He knows how to identify securities that sell at considerably less than their value to a private owner; And that’s all he does ... He owns many more stocks than I do and is far less interested in the underlying nature of the business; I don't seem to have very much influence on Walter. That is one of his strengths; No one has much influence on him.” Walter Schloss closed his fund in 2000 and stopped actively managing other people’s money in 2003. He passed away at the age of 95 in February 2015 and left a history of writing/s that we can all learn from today. Although we never had the privilege of meeting Walter Schloss we have created this archive because the articles and writings still remain relevant for investors today.
Walter Schloss, the money manager who earned accolades from Warren Buffett for the steady returns he achieved by applying lessons learned directly from the father of value investing, Benjamin Graham, has died. He was 95.
Walter Schloss, 57, is kind of a junk collector among stock market players. He is not much interested in earnings growth or in management or in other things that concern most analysts. He's only interested in cheap stocks.
Walter Schloss is a legend in the value investing world. He went to work for Benjamin Graham at Graham-Newman in 1946. He left in 1955 to form Walter J. Schloss and Associates, which he ran from a small room inside Tweedy, Browne’s offices. He compounded money at 16% per annum for the next forty nine years.
The first 60 securities were owned prior to 1990. I don't have a record of them. The rest are stocks owned in the 1990's. Stocks were owned by Walter & Edwin Schloss Associates.
- Penn Central Bankruptcy Securities
- Pittsburgh, Ft. Wayne and Chicago
Let me end this section by telling you about one of the good guys of Wall Street, my long-time friend Walter Schloss, who last year turned 90. From 1956 to 2002, Walter managed a remarkably successful investment partnership, from which he took not a dime unless his investors made money.
— Walter Schloss
Welcome to 'Profiles in Investing', bought to you by The Bottom Line and The Heilbrunn Center for Graham & Doss Investing. Every week we will profile a leading investor and get an inside look into their investment philosophy.
Up next, Walter and Edwin Schloss.
A friend of mine who is a therapist at a mental facility in the New York area, asked me as a favor if I would give a lecture at his facility. He said that there were many intelligent patients there who had emotional problems, but he thought my speech would be helpful to them.
It's tough following Warren but we both had a unique experience of working for Ben and seeing how his mind worked. Bem was a modest man but very bright. I think he would be very pleased with this gathering honoring him and the book by Janet Lowe.
Before I begin to talk about the subject at hand, I'd like to tell you a little about myself so that you can see where I am coming from and perhapes from this you will understand why I am doing what I and my son, Edwin are doing. I have been around a long time and Wall Street has changed a lot so here goes.
Walter (& Edwin Schloss) interview with Outstanding Investor Digest (OID) - 6 March 1989 Edition
— Walter Schloss
Why Walter Schloss is such a great investor. Walter J. Schloss doesn't set any store by pretense, or office politics, or frenetic trading, or tape watching, for that matter. The efficient market theory? Yiu've got to be kidding. Ben Graham's another matter entirely.
I note in your Editor's Comment in your September / October issue, you quote Sidney Cottle as saying: ''Security analysis is the discipline of comparative selection.'' Since stocks are only under- or over-priced with respect to each other, the process of comparison is going to identity over- and under-priced stocks with roughly the same frequency in good markets and bad.
Normally, when you get a letter from the wife, partner or secretary of Joe Glutz saying, ''Of course, Joe is too modest to tell you about this himself, but I know you would want to hear that...'', it means that Joe is standing over the writer with a gun at his head, telling him not to look up from the xerox machine until the mailing has been completed.
With the Dow Jones Industrial Average selling over 500 and new highs being made every day, it is interesting to see where some of our better known stocks are selling in relation to other stocks and to their own previous prices.
Because the Dow Jones is the most widely used average, it carries more weight and prestige than it should be entitled to on the basis of accuracy. As Harry Comer has indicated the Standard & Poor's index is a much more accurate one than the Dow Jones.
It seems to me that Dr. Neil Carothers in his letter to the editor, published in the Chronicle of Dec. 10, regarding the evils of stock dividends over-simplifies a complicated situation. No one, I believe, has said that paying cash dividends is worse than paying stock dividends, although sometimes payment of large cash dividends may jeopardize a corporation's expansion program.
— Walter Schloss
1. Percent profit should be minimum 15-20% per annum based on estimate of time and payments to be made.
2. Should be a few points spread between market and estimated work-out despite percentage gain.
That excellent compendium of reflecctive thinking known as The Practical Cogitator -from which our own pseudonym may have been filched - contains an interesting account by L.J Henderson of the method of Hippocrates, ''the most famous of physicians.''