Saturday, July 4, 2009

Mr.Market Blog is off the blogger platform

If you've reached this site through a Google search please visit to read my new posts. This site will remain active as an archive for the old postings.

Sunday, June 14, 2009

Sunday Schloss #8

Another NYSSA dedication for him from October, 2006.

"Not every company worked out, but enough of them did, so we had a pretty good record."

"There was 15% per year for the partners, and we got 5%. When you start with $100,000 dollars and you make 20%, that isn't a great deal of money."

"The value investors I know are honest people. Value investing seems to be made up of a people who are willing to look at the facts and make judgments on them, and not willing to take advantage of others." -- I couldn't agree more.


Friday, June 12, 2009

Website Maintenance

This weekend I'm going to attempt to update Mr. Market Blog. Sunday Schloss and tomorrows post will still be made, but if the website should go down I will have it fixed as fast as possible. Thanks for all your patience!

Charlie Munger - October 2003

A classic Munger speech today.

"You would think it was the the Mad Hatter's Tea Party. And the false precision of these people is unbelievable. They make the worst economics professors look like gods."

"Well, that's the end. I'll take questions as long as people can endure me."

"People were taught that nobody could beat the market. Next the professor went to two sigmas, and three sigmas, and four sigmas, and when he finally got to six sigmas of luck, people were laughing so hard he stopped doing it."

Munger UCSB Speech

Sunday, June 7, 2009

Sunday Schloss #7

Today's Sunday Schloss comes from 1952 regarding liquidations.
(Hat tip to Graham and Doddsville for this one.)

Criteria for Liquidation - Schloss(2)

Saturday, June 6, 2009

Weekend Links

GM's "Wiped Out" Shares rise 21% Thursday via Todd Sullivan- "Proof insanity knows no limits"
Warning: Warren Buffett Isn't As Bullish As He Sounds via Warren Buffett Watch
The World Will Adjust via New York Magazine
Notes from HBSCNY Distressed Investing Roundtable via Distressed Debt Investing
Research and Analysis into the Demonstrated Efficiency of Benjamin Graham's Investment Methods via Farnam Street

Friday, June 5, 2009

Warren Buffett March 2008

In March of 2008 some MBA students from the Ivey School of Business were lucky enough to meet Warren in Omaha. Below is the transcript of the event.

Some classic Buffett (Excerpts):

"Only listen to what [Mr. Market] says in the context of: when this guy gets way out of line I am going to wack him."

"Capitalism does have a tidal wave of prosperity, but it gets interrupted when people do foolish things."

"[A Harvard MBA student] said he was thinking about getting a job in management consulting next, because that would be the perfect culmination of his resume. I asked him how old he was. He said 30. I said 30 and you already got all this stuff and you are still thinking about spending another couple years doing something you dont really want to do because it will make your resume be even better? I said that sounds a little to me like saving up sex for your old age."

Direct link to the article via Ivey School of Business: Warren Buffett March 31, 2008
Direct link to the Ivey School of Business Website: Ivey School of Business- Ben Graham Center for Value Investing

Or on Scrbid:
Buffett March 31 2008

Sunday, May 31, 2009

Sunday Schloss #6

This one comes from December 1965 and is a back and forth between Schloss and Charles Ellis-- I think this one should be sent to a few companies.

"My point is that if the assets are large enough, the stockholders benefit by repurchases at discounts from book value and the purchase of stocks above book value in times of prosperity can be later criticized if earnings decline through no fault of management but simply because of vicissitudes in the industry. "

"Earnings are much more likely to fluctuate than are book values, and therefore estimating longer term earnings than, say, the next year or so can be subject to serious error."


Saturday, May 30, 2009

Weekend Links

Enjoy the weekend--Sunday Schloss and Greenwald's book discussions tomorrow.

Slapped in the Face by the Invisible Hand: Banking and the Panic of 2007
via Simoleon Sense
Charlie Munger's Talk at Cal Tech via Corner of BRK & FFH/ Simoleon Sense
The Curse of Triple A-David Einhorn's Speech Presented at Ira Sohn Conference via Lincoln Minor/ Siomleon Sense
Buffett Aide Sokol Says Housing, Econony Aren't Near Recovery via Value Investing World
If You Think The Worse is Over Take Ben Graham's Advice via Value Huntr/ WSJ

Thursday, May 28, 2009

The Yield Effect

I've been browsing around the online archives of Columbia lately, and I ran into a video lecture with Christopher Browne from 07'. The video itself isn't great quality, but the audio is pretty amusing. Browne jokes around that the hardest part of value investing is fooling people into thinking its actually difficult.

Throughout the video you'll hear Browne talking about these high dividend stocks and the returns they have been producing over 20 years or so- turns out he has also written a paper about it.


"The ability to pay cash dividends is a positive factor in assessing the underlying health of a company and the quality of its earnings. This is particularly pertinent in light of the complexity of corporate accounting and numerous recent examples of earnings management"

"In Tweedy, Browne's experience highy dividend yields are often associated with stocks selling at low prices in relation to earnings, book value, and specific appraisals of the value that shareholders would receive in a sale of the entire company...."

"Over the last 100 plus years, an investment in a market-oriented portfolio that included, most importantly, reinvested dividends would have produced 85 times the wealth of the same portfolio soley relying on capital gains"

Direct link to the Columbia video (Opens in Realplayer): Spring 07 Lecture
Direct link to Tweedy, Browne's paper: The High Divdend Yield Return Advantage

or on Scribd:
Highdiv Research

Sunday, May 24, 2009

Sunday Schloss #5

This weeks Sunday Schloss comes from the NYSAA's dedication to him on February 4th 2008:
On investing:
"I dont like debt (emphasis added)."
"What I usually did was get companies that were having troubles, and the stock market doesn't like trouble."
"Buy assets rather than earnings."
"[Walter] urged the audience to avoid debt at least four times."
"The volatility of assets is much lower than that of earnings providing Mr. Schloss with stability in valuation"
"[I] also prefer that management of the company owned a decent amount of stock."

On his partnership:
"He relies extensively on Value Line"
"His average turnover is 25% implying a holding period of four years."
"[Walter] only provided investors with quarterly statements, an audit, and a letter to partners.
"[Walter] ran his partnership on ultra low expenses"

NYSAA Website

Schloss-2.408 Schloss-2.408 Mark February 4th 2008

Saturday, May 23, 2009

Weekend Links

In case you missed it this week:

Mohnish Pabrai Lecture via University of Columbia
Distressed Debt Research- Blockbuster via Distressed Debt Investing
Visual Analysis of Bank's Financial Health via Simoleon Sense
Michael Lewis on Warren Buffett via Warren Buffett Watch
Buffett, Munger, Gates Video via Value Investing World
Wit and Wisdom of Charlie Munger @ Wesco's Annual Meeting via Zenway
Seth Klarman Interview via Outstanding Investors Digest
Greenlight Q1 Letter (Volkswagen IRR=Bad) via Todd Sullivan

Tuesday, May 19, 2009

Count on the Margin of Safety

Another good one straight from the Columbia archives website:

"Embrace the ugly, not the beautiful. Life the disgraced and disregarded. And it works!"

"True value investors are not worried about looking foolish as long as they're certain they haven't acted foolishly."

"Value investors are balance-sheet analysts and regular market analysts are P&L analysts."

Columbia Archives Link: Count on the Margin of Safety

Or on Scribd:
Count on the Margin 01 Count on the Margin 01 ekramcal

Sunday, May 17, 2009

Sunday Schloss #4

Today's Schloss comes from 1974. Schloss writes in response to an article from the Financial Analysts Journal and basically calls the comparable company valuation method worthless. I love it.


Wednesday, May 13, 2009

Warren Wednesday

I can't recall where I found this article or who put it together, but it's a great read. Its a transcript from a Q&A session between Warren and students from UT Austin/Emory University.

Some classic Buffett:

"If it's your game, diversification doesn't make sense. It's crazy to put money into your 20th choice rather than your 1st choice. "

"I spend my time thinking about the future, not the past"

"The (value investing) philosophy either takes immediately or it doesn't at all. The reason gets down to temperament. People want to make money fast, but it doesn't happen that way."

"Getting turned down by (Harvard Business School) HBS was one of the best things that could have happened to me, bad luck can turn out to be good."


Sunday, May 10, 2009

Sunday Schloss #3

Today's Sunday Schloss is a lecture given on November 17th 1993 at Columbia. Some of my favorite quotes:

"I must say, I NEVER have put in a stop loss order because if you like a stock and buy it and it goes down, then you should buy more"

"I agree with Warren to keep it simple and not use higher mathematics in your analysis. I'm always amused when I see a stock go from say 25 to 20 in 1 day when the quarterly earnings come out because the company earned 31 cents instead of 35 cents."

"The key, in my opinion, to successful investing is to relate value to price today. Instead of present value many investment managers are relating future value to present price. Since I cant do that I will let others do it and stick to what has worked for us."

Hat tip to Value Huntr

Schloss Lecture

Sunday, May 3, 2009

Sunday Schloss #2

In the spirit of the Berkshire meeting this weekend these letters come from Warren himself back in 1975 and 1994. This letter contains the incredible performance Walter Schloss was able to obtain from 1955-1994. The letter contains some great humor as well:

"....a sub-lease on a portion of a closet at Tweedy, Browne and a group of partners whose names were straight from a roll call at Ellis Island, Walter strode forth to do a battle with the S&P."

"Please note that Walter's total office expense is about $11,000 compared to net income of $19 million."

Hat tip to reader Vishnu who sent me this article last week.

Buffett Letters on Walter Schloss

Friday, May 1, 2009

Ben Grahams Heirs

Today we'll be looking at an article from Barrons Magazine that interviewed the gentleman over at Tweede Brown. The article covers a wide variety of value topics.

"Browne: This one is what we call a no-brainer. One of Graham's principles was that if you can buy an underleveraged company at two-thirds of net current assets, you just buy it.

Spears: You don't sit there and try to make projections on the future of specialty roll steel mills."

"We have been buying non-US stock since the early 1980's and they represent anywhere from 5% to 15% in our portfolios. We really did it in terms of trying to find more investment opportunities and the rest of the world is pretty developed now...."

Ben Graham Heirs

Wednesday, April 29, 2009


If it hasn't been made obvious in the last week or so that I admire Walter Schloss I think this post will drive the point home. Back in the beginning of 2008 Walter Schloss did a speech at the Ben Graham Center for Value Investing and also did an interview with Forbes. I'm sure most have seen this, but if you haven't I promise you'll enjoy this.

I find the video of Schloss answering questions absolutely hilarious at times. Especially when the students will ask some question and Schloss only responds, "I have no idea what your talking about but buy companies with low book and NO DEBT." In fact their is a running joke around here where the response to any investment question is just to simply yell, "NO DEBT!"

The video is a bit long and at times I admit Schloss does get a bit off topic--particullary in the beginning so I have included my notes I PDF'd after watching this video.

Forbes article Schloss refers to in the video: Experience- Forbes

The video:

My brief notes from the video:

Tuesday, April 28, 2009

Distressed Debt Investing-Common Stock Due Diligence

I have to say I really enjoy reading the posts up over at Distressed Debt Investing. Today their is a great post on common stock due diligence. The author goes through and outlines his basic process for researching equities. He also mentions the next book I will probably profile "The Art of Short Selling" by Kathryn Staley. Hopefully I can get through and post a review up by mid-May.

Link: Anatomy of Common Stock Due Diligence @ Distressed Debt Investing.

Monday, April 27, 2009

Value investors....boring and rich!

This article interviews Christopher Browne from Tweedy Browne back in 1999. The last couple lines are hilarious.

"Most value people end up rich -- tbey do. They end up rich."

"....Keeps you away when the police raid the party. You're outside watching. You missed all the fun but you also missed going to jail."

Absolutely classic.


Sunday, April 26, 2009

Sunday Schloss

Its Sunday that means its time for Walter Schloss. This profile was done in April 2003:


Friday, April 24, 2009

Graham and Doddsville Winter 2009

The Helibrunn center for Graham and Dodd investing at Columbia Business School has some great articles on its website. More importantly it has a quarterly newsletter that every value investor should be aware of and read. This quarter’s newsletter was particularly good as the writers included 50% more content then usual. This issue contains an interview with Bruce Berkowitz, The Pershing Square Challenge, Highlights from the Graham & Dodd breakfast, Bruce Greenwald’s thoughts, and an Interview with Legg Masons Chief Investment Strategist Michael Mauboussin.

The interview with Berkowitz is great and includes topics such as:

  • -Working as a bookie when he was young
  • -His thoughts on Eddie Lampert and Sears
  • -How he goes about killing his companies
  • -Why he’s gotten himself into the healthcare sector

At the Graham and Dodd breakfast they managed to track down Seth Klarman and a few interesting comments were made by him. The first being that Klarman mentioned he really hadn’t been interested in the US equity markets for the last 15 years, and that now was, “….A great time to be a value investor.”

Ill leave you to read the rest, but its well worth your time today to spend a few minutes reading the entire newsletter.

Graham and Doddsville Winter 2009

Thursday, April 23, 2009

More Seth Klarman

Not much time today, but wanted to redirect people over to a great link posted up by Distressed Debt Investing. The link redirects over to the SEC Edgar database for one of Seth Klarman's funds. The reports date from mid 1990's to the early 2000's. Their is a wealth of knowledge contained in these reports I hope you enjoy!

If you have time I also recommend you browse around the other posts as well the author has done a great job.

Distressed Debt Investing Link

Wednesday, April 22, 2009

Buffett's Four Market Calls

For those that haven't seen it:
4BuffettMarketCalls 4BuffettMarketCalls Boost944 Warren Buffett's four market calls.

Sunday, April 19, 2009

Book Coverage: Value Investing: From Graham to Buffett and Beyond

In 2004 Bruce Greenwald, a professor at Columbia, wrote this wonderful book on value investing. The book does a great job of going over valuation techniques as well as profiling some of the more well known modern value investors. In the coming weeks I'll be re-reading the book and will be going over my notes here on the blog. Coverage on Chapter 1 will begin on Saturday the 25th.

If you would like to purchase to the book, its quite cheap at $13.57, here is the link to it on Value Investing From Graham to Buffett and Beyond

Saturday, April 18, 2009

Seth Klarman June 1990 Article

Fortune article profiling Seth Klarman and what he was currently investing in.


Updated Web Address

Friday, April 17, 2009

Why I love Net-Net's

-From the Intelligent Investor

Walter Schloss Remembers Ben Graham

I love anything Schloss writes. He has such a no nonsense simple way of going about everything. Its amazing to keep in mind Schloss never went to college or had any formal training. He simply read Security Analysis and stuck to its principals. In this article Schloss shows his tremendous admiration for Graham, and reflects on his time at Graham Newman Corp. Enjoy!

0471244724 0471244724 Boost944 Walter Schloss remembers Ben Graham.

Charlie's Check List

Charlie Munger, Chairman of Wesco Financal, wrote a great book a few years ago called Poor Charlies Almanack. Charlie discussed his life, investing, and ideals. One of his keys to success was to make checklists. In this article you'll see Charlies checklist regarding investing.

If you want to buy the book, I recommend you do, you can only buy it from Charlies website. Charlie donates all the money he receives from the book to charity. Link:

Hat tip to Joe Koster over at Value Investing World who put this article together from his notes. (The original PDF source can be found here. )

Munger-An Investing Principles Checklist Munger-An Investing Principles Checklist Boost944 From Poor Charlies Almanack.

Friday, April 10, 2009

Walter Schloss 1985 Article

Anyone who's involved with value investing knows about Walter Schloss. Not only did he achieve amazing returns over a 50 year period, but he did it by using basic value techniques. Despite his success Schloss appears to have never wrote that much about the subject or his work is hard to track down. However every now and then I'm able to find a great article by him.

This interview with Schloss is from Barrons in 1985. Schloss covers his strategy and talks about a couple of stocks he was buying at the time. Enjoy!

Walter Schloss - Barrons 1985