• Choose a category
• All
• Classic-Fiction

By Root 3446 0

ended, Warren approached Schloss and they began to talk. He found him a man after his own heart, a believer that wealth is hard to accumulate and easy to lose. Schloss’s grandfather had dallied away his hours in New York City at the Harmonie Club, leaving his apparel company in the charge of a bookkeeper who—as custodian of the money and the records—applied himself to using the latter to embezzle the former. Next, his father had set up a radio factory with a partner. The warehouse burned down under suspicious circumstances before a single radio was sold. Then, when Walter was thirteen, his mother lost her inheritance in the crash of 1929.

The Schloss family got by through perspiration and determination. Walter’s father got a job as a factory manager, then sold stamps. Fresh out of high school in 1934, Walter worked as a Wall Street runner—a member of the Pony Express of the brokerage firms—carrying messages up and down the street. Next, working in the company’s “cage” handling securities, he had asked his boss if he could analyze stocks. The answer was no—but, he was told, “There’s a fellow named Ben Graham who’s just written a book called Security Analysis. Read that book and you won’t need anything else.”16

Schloss read Graham’s book cover to cover and wanted more. Two nights a week from five to seven, he started going to the New York Institute of Finance, where Graham taught investing. Graham had begun these seminars in 1927 as trial runs for a college course he was thinking of teaching at Columbia. At the time, the public couldn’t get enough of stocks, and the class was packed. “Although I warned my students that any stocks mentioned were for illustration only and under no circumstances were to be taken as recommendations to buy, it did happen that some of the issues I discussed as undervalued subsequently enjoyed substantial advances,” he said, in something of an understatement.17

When Graham mentioned names of stocks he was currently buying, people like Gustave Levy, the head trader at Goldman Sachs, scurried back to act on these ideas and make their firms and themselves rich. Schloss was so captivated that he wound up as one of a couple of employees working for his idol, Ben Graham, and his partner, Jerry Newman. Warren found himself instinctively drawn to Walter, not just for his enviable job but also because of the story of his gritty, disadvantaged background. At the Marshall-Wells meeting, Warren also recognized another shareholder by his barrel-shouldered, cigar-smoking profile. This was Louis Green, a well-known investor who was a partner in a small but respected securities firm, Stryker & Brown, and an ally of Ben Graham’s.18 Together, Green, Graham, and Jerry Newman hunted for companies whose stock was cheaper than a warehouse full of stale Barbecubes dog biscuits. They tried to buy enough stock to get elected to the board of directors and thus influence management.

Warren was mightily impressed by Lou Green and wanted to make a good impression, so he struck up a conversation with him, and he and Stanback and Green rode back together on the train from New Jersey. Green offered to take the two young men to lunch.

That was like hitting the jackpot. Warren discovered Green was tightfisted, a man after his own heart. “This guy was enormously wealthy, and we went to some cafeteria or something like that.”

At lunch Green began explaining what it was like to be pursued by women who were after his money. As he was somewhat past middle age, his technique for dealing with this was to confront the woman’s motives directly: “You like these false teeth? How about my bald head? Or the pot belly?” Warren was enjoying the conversation, until Green suddenly changed the subject and put him on the spot.

“He said to me, ‘Why did you buy Marshall-Wells?’

“And I said, ‘Because Ben Graham bought it.’”

True, Graham was already his hero, even though the two had never met. And since the inspiration for buying Marshall-Wells had indeed come from Security Analysis, Warren may have felt he had to be scrupulous about how he had