Kenneth S. Battye, stockbroker, dies

High school dropout later became a cornerstone of Legg Mason

  • Kenneth S. Battye
Kenneth S. Battye (Amy Davis, Baltimore Sun…)
November 24, 2010|By Frederick N. Rasmussen, The Baltimore Sun

Kenneth S. Battye, a retired Baltimore stockbroker and a lifelong proponent of the "value theory" of investing who had a career at Legg Mason that spanned 55 years, died Nov. 16 of complications from dementia at his Lutherville home.

He was 97.

Mr. Battye, who was the son of a stockbroker and a homemaker and raised in Huddersfield, Yorkshire, England, learned a lasting lesson about the value of earning and saving money at an early age.

He was about 10 years old when he and his life savings — a pocketful of change that had taken him six months to save — quickly vanished. Several card-playing farmers lured the boy into their game, and within an hour, his savings were gone.

"They skinned me and laughed at me," Mr. Battye told the Sunday Sun Magazine in 1986. "That only happened once."

In 1928, when he was 14, he decided to drop out of Huddersfield College to become an office boy with his father's firm, Stanley Battye & Co.

Mr. Battye said he never regretted dropping out of school because in between running errands he gained valuable experience studying bookkeeping and the intricacies of the investment business.

"But if I had gone to college, I wouldn't have had all that experience during the Depression. I saw bad markets and good markets. A lot comes from experience," he told The Baltimore Sun in a 1986 interview.

"A lot comes from using your ability, from not being emotional about it, not being over-optimistic or over-pessimistic. You've got to have patience, have faith in yourself, look ahead quite a way," he said. "One of our partners used to say I would look around corners."

By 1934, Mr. Battye was a partner in his father's firm and a member of the local stock exchange, and was already being described as a "savvy businessman."

"I was always thrifty, I always tried to save. I was serious-minded," Mr. Battye said in the 1986 interview.

After Huddersfield, a textile-making town, was hit by the Depression, as was his father's firm, Mr. Battye and six other family members decided in 1938 to leave Yorkshire and come to America.

The plan was to settle in Florida, but while visiting a cousin in Baltimore, Mr. Battye's wife — the former Evelyn Rose Anne "Dot" Jones, whom he had married in the early 1930s — fell ill.

After renting an apartment on Gwynn Oak Avenue in order for his wife to recuperate from surgery, the decision was made to scrap the Florida plans and make Baltimore the family's new home.

Mr. Battye and his father purchased a Belair Road gas station and a small repair shop next door in 1940, and then a house on Plainfield Avenue.

Early during World War II, Mr. Battye worked as an accountant for the British Consulate in Baltimore and as a signals officer and trouble-shooter for British Overseas Airways Corp. at the old Harbor Field in Dundalk.

Mr. Battye's wife died in 1942. Three years later, he became an American citizen.

In 1947, he joined Mackubin, Legg & Co., a small Baltimore brokerage that was one of the predecessors of Legg Mason, as a trainee. Eventually he became a salesman.

In those early years with Mackubin, Legg & Co., Mr. Battye began to apply his value theory of investment, which he had formulated during his days in England.

In 1948, he began mailing mimeographed letters to prospective investors outlining his theory.

"The value theory expounded by Mr. Battye for nearly three decades favors the careful selection of equities that sell at a low price-earnings multiple relative to the general market and a substantial discount to book value," The Baltimore Sun said in 1986.

He honed his skills with voracious reading, not only in financial matters but the classics as well, and he quoted Marcus Aurelius, the Roman philosopher, in one of his early investment letters to clients: "Preconceived notions and prejudices are harmful and detrimental to the interests of the security holder."

In order to become clients, customers had to agree to let Mr. Battye have full control of the selection of stocks, be proponents and believers in his theory, andunderstand that he eschewed high-risk investments.

"I have an investment business," he told The Baltimore Sun. "I don't have a speculative business, a trading business or a margin business."

In 1956, Mr. Battye became a partner at John C. Legg & Co., the venerable Baltimore brokerage that was established in 1899.

Mr. Battye resigned his partnership in 1969, becoming an associate in the company and focusing entirely on his customers.

The company merged in 1970 with Mason & Co., which had been established in 1962 in Newport News, Va., by Raymond A. "Chip" Mason. The company would go on to become today's Legg Mason. In 1973, the company acquired Wood Walker & Co.

As the new company struggled, the Dow dove 577.60 points in 1974. Mr. Battye and another colleague, Standish McCleary, who both had wide influence in the company, turned to Mr. Mason to run the new firm.

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