Tuesday, February 21, 2012

Walter Schloss (value investor) RIP

Walter Schloss has died.   From 1955 to 2002, his investments returned 16 percent annually compared with 10 percent for the Standard & Poor’s 500 Index. This kind of streak is very unlikely in an efficient market.

Value investors make money by buying a stock when it is below its intrinsic value. The hard part, of course, is measuring value. Schloss measured value by looking at the balance sheet.
Can they buy the company for less than the value of the assets, net of all debt? If so, the stock is a candidate for purchase.”

A competing value measure is Schiller's P/E ratio.

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