Walter Schloss and the triumph of book value

It seems that every column with stock picks mentions P/Es, ROEs, and ROICs. But one of the most overlooked metrics is the P/B: the price to book value ratio.

It was a favorite of Warren Buffet's, especially early in his life when he posted some of the best returns of his career with an investment regimen inspired by Benjamin Graham. Price/book is also the first metric that I use when I screen for cheap stocks.

Happily, the latest issue of Forbes pays tribute to this forgotten barometer of value in an interview with 91-year old Walter Schloss, a man whom Warren Buffett called a "superinvestor."

Still going strong roughly 70 years since he started on Wall Street as a runner, Schloss' wisdom should be read by every value investor: Without a computer or visits to companies, Schloss has produced a track record that would leave most hotshot hedge fund managers salivating.

After reading the interview with Schloss, try screening for low price/book stocks on your own using AOL Money & Finance's new stock screener. But remember: finding low price-book stocks is just the beginning of a successful investment. A lot of cheap stocks are garbage. But if you can find a company with solid prospects trading near or below book value, you just might be onto something.