More Old Masters See a Buying Opportunity

We are now deep into one of my favorite seasons of the year. The deadline is fast approaching for filing 13HFR reports that show investment managers' holdings, and the reports are coming in fast and furious.

For investors who are looking for ideas, seeing what some of the very best investors have been doing with their money is like having Christmas every quarter. These are indeed difficult times, and the outlook is bleak. In my opinion, it is worth knowing what investors who have been around a long time with a record of success are doing with their money right now.

One of the reports I look forward to the most every three months is the one from Kahn Brothers. This is a firm whose principals have truly been there and done that. Irving Kahn still goes to work every day at the young age of 102. He got his start in 1930 while serving as Ben Graham's teaching assistant. His son Thomas is a relative newcomer with a mere 40 years of experience in the business.

In a recent interview with the Financial Times, Irving said that he has indeed seen this before. He described the current market as the same old play with different characters. The Kahns describe themselves as classic Graham-and-Dodd investors who eat their own cooking.

What are the youngsters doing with their money and client accounts these days? Not much, according to their latest filing. Consistent with Thomas' remark that investors should avoid panic by turning off their television and taking a drive up the Hudson to enjoy the fall colors, the Kahns are sitting pat for the most part.

They added to a few positions such as Schering Plough (SGP - commentary - Cramer's Take) and New York Times Co. (NYT - commentary - Cramer's Take). They bought more Flushing Financial (FFIC - commentary - Cramer's Take) and First Niagara (FNFG - commentary - Cramer's Take). The Kahns added a little to two of my favorite insurance stocks, New York Magic (NYM - commentary - Cramer's Take) and American National Insurance (ANAT - commentary - Cramer's Take).

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At the time of publication, Melvin was long APL and HTH, although positions may change at any time.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider FFIC, NYM, APL, AHD, HTH and MPG to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

Tim Melvin is a writer from Stevensville, Maryland, who spent 20 years a stockbroker, the last 15 as a Vice President of Investments with a regional firm in the Mid Atlantic area. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Melvin appreciates your feedback; click here to send him an email.