“When you buy a depressed company, it’s not going to go up right after you buy it, believe me” – Walter Schloss
Short term thinking that the day traders and the “trade stocks and shares for five minutes a day” brigade makes people less inclined to think of the stock market as a place for long term wealth creation and more like a casino.
The actions of banks and the erosion of the value of pension funds has not helped either.
Who Is Walter Schloss?
You may or may not have heard of Walter Schloss.
What I like about Schloss’ style of investing was the simplicity of the approach. This is perfect for me because it fits in with my duties as a husband, father, breadwinner, mature student and blogger.
Most of all, it is not gambling. It is based on a clear assessment of each company on a case by case basis.
You can learn from Schloss’ style of investing when analysing companies for your own portfolio.
For example, the below image shows you what Schloss’ thought processes were during the analysis process:
- ‘proxies’ or proxy (US), refers to the document about a company that discloses the pay and qualifications of management, the agenda for the AGM and provides information about a companies’ largest shareholders. In the UK, this information forms part of the annual report.
- Valueline is a stock market data service provider.
- ‘Quarterlies’ refers to the reports produced every quarter (three months) by US companies. UK companies publish their financial data every six months.
I hope you find some value from looking at the strategy of one of the world’s best investors.
One thing I have taken away from the above document and incorporated into my own analysis process is comparing a company with its competition; I simply did not do this before.
Looking at competitors can often give you clues about how well or not a company is dealing with issues affecting all companies within the same industry.
Another aspect of Schloss’ style I have appropriated 🙂 is not worrying about the future and to concentrate analysis on past and current performance in an effort to relate value to price.
Are there any aspects of Walter Schloss’ or Ben Graham’s investing strategy that you find useful? If so, let me know in the comments section below.
Thank you for reading The Shares and Stock Markets Blog and good luck with all of your investments.
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