Irving Kahn is a centenarian and a Wall Street institution in his own right. Few investors can lay claim to have witnessed the vicissitudes of the markets as he has – he was right there in the thick of the 1929 crash – bearing witness to the folly, greed and fear of investors as the Great Depression struck.

Irving Kahn: "Great Enthusiasm In A Company Is A Sign Of Great Risk"

In a study of contrasting investor behavior, in 1929, Irving Kahn went against the herd and shorted a copper company, whereas his father loaded up on AT&T Inc. (NYSE:T) stock with his life savings of $2,500.

Greed and fear – they never change

In about four months, Irving Kahn’s $300 bet doubled in value. His father? “It was about 18 years before he got his money back,” recalls Kahn.

“The plot of the play is always the same, it’s just the characters that are different,” said Irving Kahn in a 2004 interview. “People are greedy. And very often greed is stronger than fear.”

In 1929, the market was run up by speculative fervor to unreasonable heights and that included Irving Kahn’s short mark – Magma Copper; “a good example of how great enthusiasm in a company or industry is usually a sign of great risk,” says Kahn.

He recalls the grim outcome of the 1929 crash in that interview: “We had no securities laws. While everyone knows the system was flawed before the recent crash, at least there were some protections in place. In the Twenties we had nothing. And when the Depression hit, there were bread lines and families homeless in Central Park with nowhere to go.”

Irving Kahn: Investing pedigree

Irving Kahn is known as a true blue value investor. He should be – he learnt the trade at the knee of the master – Benjamin Graham – at Columbia University, as the latter’s teaching assistant. In fact, Warren Buffett used to attend those same classes, and Kahn’s approach is very similar to Buffett’s, both drawing inspiration from Graham.

“In the Thirties Ben Graham and others developed security analysis and the concept of value investing, which has been the focus of my life ever since,” says Kahn in the Telegraph interview. “Value investing was the blueprint for analytical investing, as opposed to speculation.”

An abhorrence of leverage, a love of a ‘margin of safety,’ patience to wait for the right price and a modest life style are other traits that Irving Kahn and Buffett have in common.

The ‘long-term investment’ is another: “Our goal has always been to seek reasonable returns over a very long period of time,” says Kahn of the investing philosophy at his firm Kahn Brothers, which has assets under management of about $1 billion. “I don’t know why anyone would look at a short time horizon. In my life, I invested over decades. Looking for short-term gains doesn’t aid this process.”

Preservation of capital is another priority for Irving Kahn. “Investors must remember that their first job is to preserve their capital. After they’ve dealt with that, they can approach the second job, seeking a return on that capital,” he says. Buffett echoes this with his memorable quote: “Rule No 1 – don’t lose money; Rule No 2 – don’t forget Rule 1.”

Markets today

It is not surprising that Irving Kahnis sceptical of value in today’s stock markets which are touching new highs every day. According to Kahn the markets are rife with speculation and very few instances of value prevail. “Those who are leveraged, trade short-term and have bought at a high prices will be exposed to permanent loss of capital,” he warns.

What is he investing in?

A peek into his latest 13F filing for Q2 reveals that he made a new investment of 912,085 shares worth about $16.1 million in Navient Corp (NASDAQ:NAVI), a company that offers loan management, servicing and asset recovery services. Kahn also bought 3,774,517 shares in Nam Tai Property Inc (NYSE:NTP), an electronics manufacturing and design services provider. In another notable investment, Kahn boosted his stake in troubled smartphone maker BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) by 271% to 1.67 million shares.

Want to learn more? Check out this rare interview with Irving Kahn