Legend of Value Investing

How would you like $10,000 to turn into $5,388,000 over a 45 year span. If you had invested in famed value investor Walter Schloss's partnership from 1955 until 2000 when the partnership ended that is the type of results you would have been looking at. A disciple of the Ben Graham school of value investing, Walter Schloss fund had an average compounded return of 15.5 % a year vs the 10% return of the S&P. Walter Schloss is often overlooked but Warren Buffett has acknowledged the greatness of his fellow Ben Graham disciple and friend.

Here is an excerpt from an essay written by Mr. Buffett:

Walter has diversified enormously, owning well over 100 stocks currently. 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 doesn’t worry about whether it it’s January, he doesn’t worry about whether it’s Monday, he doesn’t worry about whether it’s an election year. He simply says, if a business is worth a dollar and I can buy it for 40 cents, something good may happen to me. And he does it over and over and over again.

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’s one of his strengths; no one has much influence on him.