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.
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.
Nov 23, 2021 · Walter Schloss is not nearly as well known as other investors such as Warren Buffett but Schloss has gained a reputation as one of the best value investors ever.
Jun 18, 2020 · Walter Schloss was born in 1916. He began working on Wall Street at aged 18, while the stock market was still recovering from the Great Crash. Schloss took investing classes from Benjamin Graham, who also taught Warren Buffett. He went on to work for Graham’s fund (where he met Buffett) before setting up his own partnership in 1955. Schloss was an excellent investor:
Walter Schloss, a legendary value investor who learned directly from Benjamin Graham, the father of value investing, never graduated from college and was hired as a runner on Wall Street in 1934, at the age of 18. Schloss enrolled in the New York Stock Exchange Institute, where he took courses from Benjamin Graham on how to value businesses, find value stocks, and manage money.
- The Schloss Investing Approach – Quick Summary
- Walter Schloss on His Investment Philosophy
- Walter Schloss on Buying Stocks
- Walter Schloss on Selling Stocks
- Walter Schloss Library of Links
Philosophy and Style Investors are best served using a Benjamin Graham value approach, looking for stocks that are hitting new lows and those trading at a price lower than their book value per share. Universe of Stocks Stocks are selected from among well-known “Campbell Soup” companies. Exclude foreign stocks and those in industries with which the investor is unfamiliar. Criteria for Initial Consideration 1. Ten-year track record 2. No long-term debt 3. A low price-to-book-value ratio 4. A stock at or near its 52-week low price 5. High insider ownership Portfolio Construction 1. Limit holding of one stock to no more than 20% of entire portfolio 2. Well-diversified portfolio of up to 100 stocks 3. Holdings weighted based on their perceived values, putting less money in positions the investor is less sure about 4. Use limit orders to purchase stocks Stock Monitoring and When to Sell In general, try for a 50% profit from any holding before selling. If a stock’s price is falling and the...
Keep things clear and simple. There’s no need to chase complicated stocks or situations if you don’t understand it. He goes on further about the way he approaches building a portfolio and protecting his capital. Before we go on with Walter Schloss, click the image to get the best free investment checklist and make it easier on yourself.
Walter Schloss ran with the idea of buying cheap stocks and taking a more quantitative approach. Instead of following every stock he owned, he heavily focused on valuation and buying at a discount to his intrinsic value. You don’t have to perform complex valuations either. At old school value, I’ve provided guides of simple stuff like a net net balance sheet calculation as well as more complicated Earnings Power Value models which you can see from the list of best stock valuation methods. The key however, is to know how to value stocks. I’ve even put together an ebook on all the valuation methodsthat I use in detail. Don’t take my word for it though. Listen to what Walter has to say.
Walter subscribed to the idea of selling at what he believed to be intrinsic value and didn’t focus so much on what the stock did 2-3 years later. Don’t we all get in the habit of looking at past stocks, and if is 2x after you sold, you kick yourself and say you should have kept it? Walter is no different but he moves on and focuses on the next stock. Selling stocks is hard. But it’s a lot easier when you know what a stock is worth. When you try to sell a car, you wouldn’t blindly list the car without knowing what it’s worth. You would do your research, look up comparables, look at the quality of your car and price it accordingly at fair value. Nothing different with stocks.
I’m not the only one that admires Schloss. To learn more about the legendary Walter Schloss, check out these awesome links. 1. Comprehensive guide on Walter Schloss(Valuewalk) 2. Barrons Article – The Right Stuff 3. Guide to Walter Schloss Investing(net net hunter) 4. Gurufocus article on Schloss(Gurufocus) 5. An overview of Walter Schloss and links( Basehitinvesting) 6. Walter Schloss on Ben Graham and Security Analysis PDF(csinvesting) 7. Walter Schloss interview with Outstanding Investor Digest PDF 8. The Walter Schloss approach to investing PDF(AAII) 9. Walter Schloss speech “65 Years on Wall Street” PDF 10. Dozen things learned from Phil Fisher and Walter Schloss 11. Walter Schloss – Keep it simple and cheap(Hurricane Capital)
Walter Schloss focused on finding net nets, but moved on to the next best classic value stocks available using simple criteria. In the November 1965 issue of the Harvard Business Review, Walter Schloss mentioned that,