Notes – Walter Schloss 1989 Interview With OID (#valueinvesting)

A couple weeks ago I found the 1989 Outstanding Investor’s Digest interview with Walter and Edwin Schloss on Scribd and took a few notes as I read, which I reproduce below for later reference:

  • In The Merchant Bankers, the story is told of the Warburg family giving up their fortune to flee Nazi Germany, providing two lessons: be contrarian; and a family should lose its wealth every 3rd generation to ensure descendants don’t become lazy and entitled
  • When father and son can get along in a business venture, they can benefit from “compound interest” of accumulated knowledge and technique within the family
  • During the “first ten years you get acquainted with what you’re doing” so don’t expect to smash it out of the park the moment you set out in a new concentration
  • Companies will avoid LBO takeovers by levering up and acquiring other businesses (such as competitors) themselves
  • “Lot’s of times when you buy a cheap stock for one reason, that reason doesn’t pan out, but another one does because it’s a cheap stock.”
  • “Sometimes you have to sue just to keep your self-respect.”
  • “It’s easier to know when something’s cheap than when it’s overvalued.”
  • “Concentrate on what you know and forget about everything else.”
  • According to Buffett, “If you’re not disciplined in the little things, you can’t be disciplined in the big things.”
  • “Partners, it seems to me, should have somewhat the same point of view” Schloss says about the value of corporate culture
  • Focus on working capital stocks, then 50% of BV stocks, then 66% of BV stocks and then 1x BV stocks w/ franchises or special situations
  • Look out for managers in it for themselves, even when the stock is cheap