Financial History 139 (Fall 2021) - Page 28

The Buffett Group , 1995 . Left to right : Warren Buffett , Tom Knapp , Charles Munger , Roy Tolles , Sandy Gottesman , Bill Scott , Marshall Weinberg , Walter Schloss , Ed Anderson and Bill Ruane .
In 1955 , Graham decided to retire and move to Los Angeles . Schloss remarked , “ I think he was kind of bored . I said , ‘ If he ’ s going to retire , I might as well go into business for myself .’ So , I got myself 19 partners and they each put up $ 5,000 . One guy put up $ 10,000 . The people had confidence in me , so we started . And really , it kind of built up from there .” His wife , Louise , was very supportive of his decision , which was fraught with uncertainty .
Walter J . Schloss Associates ( 1955 – 2001 )
“ I don ’ t like to lose money ,” Schloss often said in published articles and recorded speeches . This conservatism and frugality reflected both his personality and his family ’ s financial experience before and during the Depression .
One way he minimized expenses was by using a small working space at Tweedy , Browne Company , a dealer specializing in closely held and inactively traded securities . Tweedy was Graham ’ s lead brokerage company in executing orders for Graham- Newman . To facilitate trading , Tweedy ’ s office was located on the same floor as Graham-Newman at 52 Wall Street . They moved to 67 Wall Street and 52 Vanderbilt Avenue in later years .
Schloss arrived at work each day in a suit with suspenders and a brightly colored tie , but he immediately removed his coat and replaced it with a blue cotton working jacket like those worn by the floor traders on the New York Stock Exchange . He was very high energy and could be impatient , running from his desk to the trading room to place orders to buy stocks . He recalled , “ When Howard Browne let me have a desk in his office , he never thought I ’ d still be there 40 years later .” In 1993 , his office expense was only $ 11,000 and fixed assets were carried at only $ 2,605 , as compared to a net income of the fund of $ 19 million .
Buffett commented on Schloss ’ s conservative style in his lecture , “ The Superinvestors of Graham-and-Doddsville ”: “ Walter has diversified enormously , owning well over 100 stocks . 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 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 again .”
In 1994 , Schloss outlined 16 factors needed to make money in the stock market on a one-page memo typed on his oldfashioned manual typewriter . Among the most salient were :
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