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August 19, 2018

Irving Kahn – passing of a great value investor



(https://www.youtube.com/watch?v=P4CPj6aiD7g)

The value investing world  has lost a great member  –  American businessman and investor  Irving Kahn (December 19, 1905 – February 24, 2015),  who was the oldest living active investment professional.  Wikipedia says he was an early disciple of Benjamin Graham, the creator of the value investing methodology. Kahn began his career in 1928 and continued to work until his death. He was chairman of Kahn Brothers Group, Inc., the privately owned investment advisory and broker-dealer firm that he founded with his sons, Thomas and Alan, in 1978.

Irving Kahn was the oldest active money manager on Wall Street.  He made his first trade—a short sale of a copper mining company—in the summer of 1929, months before the infamous market crash in October of that year.

Educated at the City College of New York, Irving Kahn served as the second teaching assistant to Benjamin Graham at Columbia Business School. At the time, other notable students and/or teaching assistants to Graham included future Berkshire Hathaway chairman Warren Buffett and future value investors William J. Ruane, Walter J. Schloss, and Charles Brandes, among others. Graham had such an enormous influence on his students that both Irving Kahn and Warren Buffett named their sons after him. Kahn named his third son, born in 1942, Thomas Graham, and Buffett, his first son, born in 1954, Howard Graham.

Kahn was a Chartered Financial Analyst and among the first round of applicants to take the CFA exam. He was a founding member of the New York Society of Security Analysts and the Financial Analysts’ Journal.

A February 28, 2015,  post (Irving Kahn’s Legacy To Investors: Style Is Everything) in Forbes by contributor John S. Tobey says:

“Irving Kahn’s particular value approach was to identify stocks that were selling at a deep discount (i.e., an attractive “value”) and that were generally ignored or disliked by others (i.e., “contrarian”). On the positive side, he required strong financials (i.e., little or no debt), management commitment (i.e., a stake in the business), and the potential for growth (i.e., a fundamental driver that could push the stock price up and create investor interest).

“From this approach, he sought to produce superior long-term returns while avoiding risk of significant loss. He often described the key ingredient necessary for success as “patience” – the ability to wait for the tide to turn.”

A Bloobberg report dated February 26, 2015  ( Irving Kahn, Investor Who Profited in ’29 Crash, Dies at 109) said:  “Among the memories he filed away was his work with Benjamin Graham, the stock picker and Columbia Business School professor whose belief in value investing influenced a generation of traders including Warren Buffett. Graham, who died in 1976, distinguished between investors, to whom he addressed his advice, with mere “speculators.”

“Kahn assisted Graham and his co-author, David Dodd, in the research for “Security Analysis,” their seminal work on finding undervalued stocks and bonds, which was first published in 1934. In the book’s second edition, published in 1940, the authors credited Kahn for guiding a study on the significance of a stock’s relative price and earnings.”

 

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