Interview with Walter Schloss - Legendary Value Investor

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Walter Schloss Interview
Source: Richard Ivey School of Business

Walter Schloss is a legendary value investor. He worked alongside Warren Buffett for Benjamin Graham at Graham & Newman Co. in the 1950s. The man sincerely believes that it is not necessary to do in depth research into a company before making an investment. He has earned an average 16% annual return over his long career. His strategy is extremely simple, as one can tell from this interview. A few ideas keep re-occurring:

1. Buy companies at a substantial discount to book value
2. Little to no debt in the capital structure
3. Management ownership (you can find this information in annual or proxy reports)

Thats about it! (Note how he puts absolutely no emphasis on the earning power of the company!)...Funny how the market works...

SG