Walter Schloss Debate With Charles Ellis On Stock Buybacks

Walter Schloss was one of Benjamin Graham’s most successful students. From 1955 through 2002, Schloss returned 16% per annum, according to his own figures, successfully using Benjamin Graham’s net-nets strategy to outperform the market for five decades.

Walter Schloss didn’t give many interviews over his career, but he did write a number of memos and letters to various publications over the years.

Walter Schloss: Heated exchange

Below is an example of one such letter, or series of letters. This was an exchange between Schloss and Charles D. Ellis, Financial Analyst for Rockefeller Brothers, Inc.

Schloss disagreed with Charles D. Ellis’s view on buybacks, arguing that if a company’s shares were trading below net asset value, then it's perfectly acceptable...