A Visit with Charlie DreifusSubmitted by Karstens Investments on September 25th, 2017
By Corey Voorman, AIF
The Karstens team had the special honor of having Charlie Dreifus, tenured manager of Royce Funds, stop by the of ce for an hour of face-to-face dialogue. This event was seconded by the team’s attendance at the Eighth Annual Value Investing Dinner at the Marriott of Omaha at which Charlie spoke and was preceded by Nebraska Governor Pete Ricketts.
Charlie Dreifus was born the son of immigrants to a New York working class family. Or as Charlie said, “The sort of folks who never owned a single stock.” Belying his upbringing, Charlie recounted the story of once being caught by a school coun- selor calling in stock purchases from the pay phone located in the hallway of his elementary school. This indiscretion was of course remedied by providing the incensed counselor with a list of his recent purchases. Charlie continued his upward trajectory by earning his bachelor’s degree from City College of New York/Baruch School and master’s degree of business administration from Baruch College. Dreifus continued on to study under the renowned forensic accountant Harold Kansus.
In his discussion with the Karstens team, Charlie expressed his dismay of the deviation of modern accountants and CFOs from the Generally Accepted Accounting Principles. He argued that moving to lenient and subjective accounting principles has prompted the in ated and false valuation of companies across the board. In this environment Charlie has had to rely exclusively on his upbringing, especially his study under Harold Kansus. Charlie recounted the awe and respect of the accounting departments of the com- panies he studies as he and his team at Royce uncovered inconsistencies in the ledgers that had gone unnoticed by other analysts for years.
Charlie was noted as saying, “We don’t need more accounting principles. We need more accountants with principles.” This statement remains a standard to value in- vestors in a time where the true value of what a company produces remains largely discounted. Where obscure accounting principles and market euphoria drive the prices of many companies, Charlie and his team’s attentive accounting methods continue to provide increased value to their clients.