Schloss, Klarman, Kahn and Glickenhaus

No, that's not the name of a law firm. But four investors worth reading -- or re-reading -- because they're among the best in history. And because they keep low profiles making their thoughts something to be cherished when we come across them.

Earlier this week Sivaram of the Can Turtles Fly? blog linked to old interviews with Walter Schloss and Seth Klarman through a blog he's come across. Both are great, and even though Schloss' is with Barron's from 1985, it remains well worth your time.

Sivaram's posting jogged my memory of an article from WSJ.com last week I meant to mention but forgot. It's about three investors who endured the Great Depression and are around today. They are 103-year-old Irving Kahn, and Walter Schloss and Seth Glickenhaus, both in their 90s.

Here's a bit from Schloss:

While he understands investors' hesitation today, Schloss doesn't think our current situation compares with the Depression. Back then, he says, the economy was dependent on only a handful of businesses, like banks, railroads, utilities and oil companies. Today economic growth comes from a much broader array of industries, many of them fueled by the huge gains in technological development we've seen over the past eight decades — including communications, biotechnology and the Internet. Sure, General Electric is still a powerhouse, but so are Google and Amgen. That means a much wider array of job possibilities — and more engines of growth for our economy. If investors today "were a little less emotional, they would see that this could be a good opportunity, so long as they move carefully and keep an eye on balance sheets," he says.

The article reports Schloss likes International Paper.

Comments

[Troy]

Yea...lets see, Walter Schloss states that International Paper does not have a lot of debt, which is why he likes it.... because its not good to buy companies that owe too much.

At last report, IP had $12Bln in debt vs. $1Bln in cash. Its market cap was a mere $4Bln (less than 1/3rd of debt outstanding) and tangible book value was a mere $2Bln ( less than 1/6th of debt outstanding). IP debt trades at significant discount to par, reflecting the junk credit quality.

As a highly speculative, toxic-equity play goes, maybe IP is a good buy, but that interview is complete BS. obviously Schloss is NOT reading balance sheets these days... maybe too old?

[John]

Troy, I actually think the article as a whole is excellent. Regarding IP specifically, I've never researched it.