March of Some Favorite Mentors

A favorite from March 2012, celebrating the usefulness of Value Line and honoring a couple of legends — Chuck Allmon and Walter Schloss.

My responsibilities at Better Investing included the opportunity and privilege to correspond and spend time with some of the most exceptional investors in stock market history. From Peter Lynch to John Bogle and the likes of John Neff, the moments were treasured and the mission was a continuous focus/emphasis on deriving lessons that could be applied to our long-term perspective. The objective is simple. Discover wisdom and lean on experience in an effort to maximize the relative returns of everybody all around us.

Current day favorites include many of you, Jeremy Grantham, Brad Perry and until a few days ago … one of the denizens of Graham-and-Doddsville, Walter Schloss. More on Mr. Schloss in a minute. Another long-time is a favorite for many of you, Charles Allmon of Growth Stock Outlook legend and one of the best stock pickers that any of us could (or will) ever meet. We dubbed Chuck Allmon one of our favorite dancing bears — because the financial media often referred to him as a “permabear.”

We ran across this excerpt (a post on our Forum by Dan Hess) from November 2008 that honored Mr. Allmon’s lifetime achievements but also shared (12) stocks with the market clearly clenched in the teeth of a formidable — and very real bear — at the time. In Dan’s words at the time:

Many will recall Charles Allmon as a contributor to Better Investing for many years and also being a newsletter watched closely by the astute investor Joe Smith. After [a mere] 44 years of issuing the newsletter he will give this up in December. But being only 87 he is not retiring but taking on a new career in a venture capital start up. 🙂

You can read the Forbes Article at How to Pick a Growth Stock.

The article shows 12 stocks Allmon is highlighting in his most recent GSO newsletter. I note that Stryker (SYK) and FactSet (FDS) recently discussed here are on his list as well as a half dozen of stocks with green PARS.

Although Allmon has been a bear for many years it is interesting to see he expects P/E Ratios to fall further back toward the levels in the early 1970’s bear market.

It is sad to see Charles Allmon give up his newsletter but at 87 he plans to continue to his managed funds and start a new career but first he is going to take a well earned vacation at his Hawaii home.

Fast forward 3.3 years …

The Dancing Bear (Charles Allmon) achieved a relative return of +15.7% with this group of (12) favorites from November 2008 — some 3.3 years ago.

The collective return is 33.0% (yes, annualized) and 8-of-12 have outperformed the Wilshire 5000 since then for an accuracy rating of 66.7%.

Dance, Mr. Allmon, dance. Thanks, Dan!

A Few Moments to Honor A Legend …

We lost a great one during February, Walter Schloss — one of Warren Buffett’s SuperInvestors of Graham-and-Doddville.

http://www.bloomberg.com/news/2012-02-20/walter-schloss-superinvestor-who-earned-buffett-s-praise-dies-at-95.html

From recent posts on Walter …

The heart of our Tin Cup demonstration portfolio could be described as “Schlossian.”

Value Line is good enough for Warren Buffett, who wrote about the achievements of Walter Schloss with admiration in his work, The SuperInvestors of Graham and Doddsville. Schloss relied extensively on Value Line.

Over 39 years of investing had delivered annualized returns of slightly over 20% to the clients of Walter Schloss. He worked entirely from a few publications like Value Line.

In Buffett’s words, “Schloss practices investing in a way that any ordinary investor can.”

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