Investing legend Irving Kahn’s stock holdings

Khan’s value picks include Canada’s own BlackBerry

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Value investor Irving Kahn is known for shorting the 1929 market crash (New York Daily News Archive / Contributor)

Value investor Irving Kahn is known for shorting the 1929 market crash (New York Daily News Archive / Contributor)

Value investors were saddened last week by news of the passing of Irving Kahn at the ripe old age of 109.

Kahn went to work on Wall Street just before the crash of 1929 where he made money by shorting stocks as the economy sank into the great depression.

But it was another famous investor from the era, Benjamin Graham, who most influenced his approach to investing. Kahn became Graham’s teaching assistant and helped with his book The Intelligent Investor, which can still be found in bookstores today.

Kahn eventually set up his own money management firm and worked there, with his son and grandson, until just before his death this year. While he slowed down a touch in recent times, he was still giving interviews and talking about value stocks last summer.

As a result, I was curious to see what the firm’s portfolio looked like. Its top 10 holdings, from the end of December, are shown below.


Company Weight
Citigroup (C) 10.09%
Merck & Co. (MRK) 9.78%
New York Times (NYT) 9.27%
New York Community Bancorp (NYCB) 8.93%
Hologic (HOLX) 7.36%
Seaboard (SEB) 6.31%
BP Plc (BP) 5.68%
Old Republic International (ORI) 4.73%
BlackBerry (BB) 3.23%
Pfizer (PFE) 10.38%

As you can see, it’s an interesting mix of companies. I happen to own a few shares of Old Republic myself. I’m also quite familiar with Seaboard, which I’ve followed for years. Canadian investors will note the BlackBerry position, which has also been a favourite of Fairfax Financial’s Prem Wasta.

I don’t know how the stocks will fare in the future, but I hope we all lead healthy and happy lives like Kahn did.

Safer Canadian Dogs

Investors following the Dogs of the Dow strategy want to buy the 10 highest yielding stocks in the Dow Jones Industrial Average (DJIA), hold them for a year, and then move into the new list of top yielders.

The Dogs of the TSX works the same way but swaps the DJIA for the S&P/TSX 60, which contains 60 of the largest stocks in Canada.

My safer variant of the Dogs of the TSX tracks the 10 stocks in the index with the highest dividend yields provided they also pass a series of safety tests, such as having positive earnings. The idea is to weed out companies that might cut their dividends in the near term. Just be warned, it’s a task that’s easier said than done.

Here’s the updated Safer Dogs of the TSX, representing the top yielders as of March 2. The list is a good starting point for those who want to put some money to work this week. Just keep in mind, the idea is to hold the stocks for at least a year after purchase—barring some calamity.


Name Price P/B P/E Earnings Yield Dividend Yield
BCE (BCE) $54.75 4.2 18.37 5.44% 4.75%
CIBC (CM) $95.50 2.08 13.15 7.60% 4.44%
Rogers (RCI.B) $44.11 4.14 16.9 5.92% 4.35%
Husky Energy (HSE) $27.95 1.37 22.18 4.51% 4.29%
Potash Corp (POT) $45.06 3.66 22.28 4.49% 4.22%
Bank of Montreal (BMO) $77.15 1.46 12.19 8.20% 4.15%
National Bank (NA) $48.40 1.84 11.08 9.03% 4.13%
Shaw (SJR.B) $28.90 2.93 16.15 6.19% 4.10%
Bank of Nova Scotia (BNS) $66.93 1.81 11.76 8.50% 3.94%
Royal Bank (RY) $78.22 2.2 12.44 8.04% 3.94%

Notes:

Source: Bloomberg, March 2, 2015

Price: Closing price per share

P/B: Price to Book Value Ratio

P/E: Price to Earnings Ratio

Earnings Yield: Earnings divided by Price, expressed as a percentage

Dividend Yield: Expected-Annual-Dividend divided by Price, expressed as a percentage

As always, do your due diligence before buying any stock, including those featured here. Make sure its situation hasn’t changed in some important way, read the latest press releases and regulatory filings and take special care with stocks that trade infrequently. Remember, stocks can be risky. So, be careful out there. (Norm may own shares of some, or all, of the stocks mentioned here.)

New & Noteworthy

Warren Buffett’s Annual Letter to Shareholders

In one choice quote, Warren says, “Investors, of course, can, by their own behavior, make stock ownership highly risky. And many do. Active trading, attempts to ‘time’ market movements, inadequate diversification, the payment of high and unnecessary fees to managers and advisors, and the use of borrowed money can destroy the decent returns that a life-long owner of equities would otherwise enjoy. Indeed, borrowed money has no place in the investor’s tool kit: Anything can happen anytime in markets. And no advisor, economist, or TV commentator – and definitely not Charlie nor I – can tell you when chaos will occur. Market forecasters will fill your ear but will never fill your wallet.”

Just For Fun

And now for something almost completely different…a comedic take on the Greek debt crisis by Dara Ó Briain & Friends.

 

One comment on “Investing legend Irving Kahn’s stock holdings

  1. Benjamin Graham was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.

    To quote a line from last week’s Bloomberg article on Kahn’s passing:
    “In 2012, at 106, Kahn told Bloomberg Businessweek that Graham’s principles, though relevant as ever, were increasingly being drowned out by noise.”

    Warren Buffett once wrote a lengthy article explaining how Graham’s principles are everlasting, and how Graham’s record of creating exceptional investors (such as Buffett himself) is unquestionable. The article is called “The Superinvestors of Graham-and-Doddsville”.

    Buffett describes Graham’s book – The Intelligent Investor – as “by far the best book about investing ever written” (in its preface, which Buffett wrote). In The Intelligent Investor, Graham recommended various categories of stocks and specified precise qualitative and quantitative rules for each category.

    Serenity Stocks shows how one can assess 5000+ NYSE and NASDAQ stocks by a complete 17-point Benjamin Graham assessment, with no adjustments other than those for inflation.

    Reply

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