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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.

Walter Schloss and the triumph of book value originally appeared on BloggingStocks on Tue, 29 Jan 2008 17:43:00 EST. Please see our terms for use of feeds.

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