Wednesday, April 5, 2017

Irving Kahn on Safety

There were two key questions I asked Irving [Kahn] via his grandson. One was, “If you could share a single piece of financial advice that you’ve learned over your life that is absolutely invaluable, what would it be?” [Irving] came back via his grandson. He did an extraordinary job, interviewed him over days about these things. Came back and said, “Safety.” He said, “The #1 thing is paying attention to the downside.” He said, “There are all these people. It’s like they’re on a horse and they can gallop very fast, but do they know what direction they’re going in?” It was kind of this fascinating insight that sounds really banal and prosaic in some ways, but this is coming from a guy of 108 who managed to survive the crash of 1929, World War II, Vietnam, any number of crises and crashes. When I started to think about that, this is one of those ideas that if you truly internalize it, it actually has an enormous impact on you.

He said, for example, “You’ll find that if you make reasonable gains and avoid disastrous losses, you’ll outperform all of your gambler friends.”
Qtd in The Manual of Ideas, March 2017.


whydibuy said...

What nonsense gibberish.
No risk is a bank cd or a money market and no one has ever gotten wealthy in either. Without action nothing can happen. Life is short. I've found that its worth the risk to go for it on select occasions. Those that hide in safety will never enjoy the feeling or wealth generation of a good score. Just staying long in the U.S. is a winning score as history shows, as Buffett shows and still has full faith in.
This is just a self explanation article to types like CP who hide in economic bomb bunkers continuously and need to sell themselves that their bad move ( which has lost out on a great bull market and the wealth it entails ) was a right one. See, this Irving guy says so.

Anonymous said...

Where does Kahn say you can't take any risk?

MrPalladium said...

Makes sense to lessen your stock exposure when the market is at levels which historically have produced flat to negative returns over the next 10 years.

BTW, my account with Trondheim (CP's fund) is up 49% since 2011. The fund is concentrated in credit related special situations (typically long bonds priced for BK if stock is overpriced - and shorted) and does not typically go naked long common stocks.

CP is very good at this and his fund diversifies my holdings.