The memoirs of walter j. schloss
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Kingswell
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Of all Benjamin Graham’s many acolytes, one in particular stuck to his mentor’s methods more than most. Walter J. Schloss learned his trade at the Graham-Newman investment firm (even sharing an office with Warren Buffett at one point), before striking out on his own in 1955.
Schloss, like Graham, played a completely different game than most of his contemporaries. He hunted for “cigar butt” stocks, named for their resemblance to discarded cigar butts that nevertheless still had one last puff of smoke in them. These could often be had at rock-bottom prices, with Schloss hoping to catch any run-up in price before flipping them for a profit.
Buffett started out in the same style, but eventually transitioned to buying excellent companies at fair prices with a preferred holding period of forever.
Schloss, though, never budged.
He excelled at this purely quantitative game of arbitrage — with little to no concern over the quality of a given company — and unloaded his positions as soon as the price imbalance corrected its
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Base Hit Investing
I was going to say there is good news and bad news, but like the wise turtle from Kung Fu Panda says, “there is just news, there is no good or bad”. This post has my thoughts on how I see current market conditions and the opportunities it’s creating (which is the good news part).
With the S&P 500 trading north of 25 P/E and many of the world’s great companies trading at 40 P/E or higher (Costco is now at 55 P/E!), I think we could be at valuation levels that might lead to disappointing results for these stocks over the next 5-10 years, even if the businesses continue to do well (which I expect many of them to do).
A cut from 40 P/E to a more normal 20 P/E is difficult to overcome over even a long period — a stock that grows earnings at 12% annually for a decade would lead to just a 4% annualized return in the stock if the multiple fell by half over that time. Most of the world’s best businesses today will not grow at 12% annually over the next decade (though a very select few might). It’s far more rare than people realize, especially for companies that
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Walter Schloss
American Investor, fund manager, and philanthropist (1916–2012)
This article is about the American investor and fund manager. For the American composer and computer engineer named Walter Andrew Schloss, see Andrew Schloss.
Walter Jerome Schloss | |
|---|---|
| Born | August 28, 1916 Manhattan, New York City |
| Died | February 19, 2012(2012-02-19) (aged 95) New York, New York, U.S. |
| Nationality | American |
| Occupation(s) | Investor, fund manager, and philanthropist |
| Known for | Working for Benjamin Graham Investment record of annualized 15% gains Founding Walter & Edwin Schloss Associates |
| Website | www.walterschloss.com |
Walter Jerome Schloss (August 28, 1916 – February 19, 2012) was an American investor, fund manager, and philanthropist. He was a well-regarded value investor as well as a notable disciple of the Benjamin Graham school of investing. He died of leukemia at the age of 95.[1]
Biography
Schloss did not attend college. In 1934 at the age of 18, he started work as a runner on Wall Street. Schloss took inv
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