T. Rowe Price
Thomas Rowe Price was born in Lynwood Maryland in 1898 and passed away in 1983.
When he was at his prime during the Great Depression, he didn’t do well because he misjudged the need of holding the stocks, as he thought he wouldn’t need them in such turbulent times, so he sold them. He was known as the one who doesn’t go with the crowd and the one who invested in only good companies that were long-term investments. He didn’t believe in short term investing. He would do detailed analyze of one stock at the time and take it in consideration for the long term. His success was a result of thorough research, patience and consistency in work.
Even though he gained his wealth and fame as an investor, he studied chemistry at the Swarthmore College. After graduating in 1919, he got a job at a broker company in Baltimore, whose owner was Mackubin Goodrich. T. R. Price grew in the company and rose to the position of head investment officer.
Price was the man who gave the definition of growth stocks, but the company he had worked for did not fully understand it, so as a result, in 1937, he left the Mackubin Goodrich to found his own company; T. Rose Price Associates. He had a theory that by putting the clients’ interest first would make benefits to the company as well. Therefore, instead of commissions, he charged fees on investments of the clients.
He founded his first mutual fund in 1950, the T. Rowe Price Growth Fund that he was the CEO of for ten years. After retiring, he sold the company. The company is still one of the biggest investment companies and it still operates under his name.
Price is the father of growth investing, as his investing methods include thorough analyses, lots of patience and discipline. Concentrating on good companies that had stocks whose value would grow faster than the economy in whole were the keys to his success.
T. Rowe Price trading style:
When he would choose a company to invest in, he would want to find a company that did good research of the market, that is the company whose managers knew exactly what to do and how to participate successfully in the market. Price did not want to bother with the companies that had heavy competition and too much dependence on the legal regulation. He believed that a good company with good managers would find any way to power the costs and have god wages for its employers.
Using the method of the growth stock, Price saw his firm gaining a huge success in the stock market.
When everybody saw how well he did, prior to his retirement, he saw that the market was probably fed with everybody using growth stock methods; he thought that investors should change their method. When he was the one who was fed, he started selling his company.
Books about T. Row Price :
“The Money Masters” by John Train (1994), shows investment philosophy of T. Rowe Price
T. Rowe Price Quotes:
“If we do well for the client, we’ll be taken care of.”
“Even the amateur investor who lacks training and time to devote to managing his investments can be reasonably successful by selecting the best-managed companies in fertile fields of growth, buying their shares and retaining them until it becomes obvious that they no longer meet the definition of a growth stock.”
“Buy stocks of growing businesses, managed by people of vision, who understand significant social and economic trends and who are preparing for the future through intelligent R&D.”