Three days a week, Irving Kahn takes a taxi from his Manhattan flat to the offices of his investment firm, Kahn Brothers. “Nothing surprising about that, you might think,” says The Daily Telegraph. Except that Kahn is 108 years old, and the world’s oldest investment manager.
To say he has seen it all, as The Wall Street Journal notes, “feels like an understatement”. Kahn’s career began before the 1929 crash.
He has traded through the Great Depression, World War II, the Cold War and, recently, the 2008 crash – as well as numerous less severe crises. He has also seen two of his sons retire from the family firm in their mid-70s. He, of course, keeps on going.
Kahn vividly remembers his first trade, in “the feverish summer of 1929”, says The Daily Telegraph. Convinced that prices had hit “unreasonable levels”, he decided to short sell a miner, Magma Copper (ie, he bet the price would fall).
“I borrowed money from an in-law who was certain I would lose it, but was still kind enough to lend it. He said only a fool would bet against the bull market.”
By the time the crash took hold in the autumn, Kahn had nearly doubled his money. Yet he subsequently changed tack, replacing speculation with a conservative, analytical approach (see below). The catalyst? His collaboration in the 1930s with Benjamin Graham, the father of “value investing”.
Graham was teaching at Columbia University in New York and Kahn became his first teaching assistant, helping him with his 1934 classic, Security Analysis. “They’d take the subway together to Columbia,” says third son Tom Kahn, who also works for the family firm. Among their later disciples was a young Warren Buffett.
“Small and gnomish”, Kahn counsels patience in hard times, said The Daily Beast in 2011. “The depths of the Depression turned out to be a useful time to learn that lesson”: life for a banker was “markedly frugal by current standards”.
Kahn and his wife, Ruth, lived in public housing on the Lower East Side. He’d walk home for lunch to save money on restaurants. But he considered himself remarkably fortunate, given the breadlines and homeless families surrounding them in New York, says Der Spiegel. “My salary was reduced to $60 a week. I remember my boss asking me: ‘Why do you look so happy?’ And I replied: ‘I thought you were going to fire me.’”
He later prospered, but his habits have remained modest. For years he ate the same dish – chopped steak, rare – at the same time-worn French restaurant.
In recent years, Kahn’s longevity has been the subject of scientific inquiry. It might be just be a “genetic gift”, says The Daily Beast: all three of his siblings lived to over 100, though he is now the last one surviving.
But Kahn himself seems convinced that watching the gyrations of markets might have something to do with it. “I get a kick out of seeing who’s going to come out ahead in this race.”
‘A value investor must be willing to wait’
In October 2008, when it felt like the whole financial system might topple, journalists beat a path to Irving Kahn’s door in search of wisdom and reassurance.
“This is not new to me,” he told Financial Week’s Hilary Johnson. “It’s like the same play, or plot, with different characters.” He was confident that Kahn Brothers’ value-investing principles would see it through.
“Wall Street has always been a very poor judge of value,” Kahn told The Daily Beast. Making a priority of finding it was “an investment strategy born of the beating that Ben Graham had taken in 1929”.
Said Kahn: “I stopped wasting time on what other people claimed a stock was worth and started looking at the numbers… There were a large number of valuable buys during the Depression.”
Then, as in the recent crisis, the smart money was on companies with sound fundamentals – what Kahn calls “legitimate businesses”, producing food, clothes and other essentials. “Everybody still wanted a clean shirt.”
One key lesson Kahn learned from Graham was to “study financial statements to find stocks that were a ‘dollar selling for 50 cents’”, says Richard Evans in The Daily Telegraph. He uses the same approach now.
“There are always good companies that are overpriced,” he says. A “value investor must be willing to wait”.
Like Buffett, he reads constantly. But with the S&P 500 hitting record highs, bargains are hard to find. “That is usually a sign of widespread speculation.” No one knows when the tide will turn. But when it does, “those who are leveraged, trade short term and have bought at high prices will be exposed to permanent loss of capital”.
Value-seekers like Kahn seem to have “remarkable” staying power, says Spencer Jakab in the FT. Philip Carret and Philip Fisher (two of Buffett’s other influences) died at 101 and 96 respectively, and legendary investor Sir John Templeton remained active until his death aged 95.
Shareholders of Berkshire Hathaway, contemplating that relative stripling Buffett, “have cause for cheer”.