T. Rowe Price, the Sage of Baltimore

In 1937, Thomas Rowe Price, Jr. founded an investment company in Baltimore that would become one of the most successful in the world. Today, The T. Rowe Price Group manages over one trillion dollars and services clients around the world. It is among the largest investment firms focused on managing mutual funds and pension accounts. Uniquely trusted and respected, the firm is considered the “gold standard” by many investment advisors.

In this book, Cornelius Bond tells the full story, for the first time, of how Price, a modest and ethical man, built the company bearing his name. From the private, unpublished personal and corporate records, you will get direct access to the creative process behind Price’s highly successful approach to investing.

• Personal insights based on Price’s own writings and the personal experience of the author who worked with him for many years.
• The Growth Stock philosophy as described in the words of the creator and master of this approach.
• Two fund managers who worked closely with Mr. Price reunite to consider the investment environment of the next five to ten years as Price himself might have viewed it.

This book will give you an insider’s access to the true story of Thomas Rowe Price, Jr.

CORNELIUS C. BOND joined T. Rowe Price as a technology analyst, rising quickly to become a member of the Investment Committee and an officer of the New Horizons Fund, which became the best performing mutual fund in the country. He spent almost ten years working directly with Thomas Rowe Price, Jr., and later became president of the T. Rowe Price Growth Stock Fund. He left to become the fourth general partner of New Enterprise Associates, which today is one of the largest venture capital firms in the country. Bond lives with his wife, Ann, and his standard poodle, Price, in San Francisco.

Foreword ix

Acknowledgments xiii

Part One The Beginning 1

One The House on Dover Road, 1898–1919 3

Two Lessons Learned, 1919–1925 19

Three Mackubin, Goodrich & Co., 1925–1927 29

Four The Great Bull Market and the Crash, 1927–1929 43

Five After the Crash, 1930–1937 53

Part Two His Own Boss 65

Six Birth of T. Rowe Price and Associates, 1937 67

Seven “Change: The Investor’s Only Certainty” 79

Eight The Firm’s Adolescence and World War II, 1938–1942 87

Nine The Growth Stock Philosophy 97

Ten Postwar Era, 1945–1950 109

Part Three The Sage of Baltimore 121

Eleven New Opportunities: Mutual Funds, Pension Plans, and the Launch of the Growth Stock Fund, 1950–1960 123

Twelve Transitions, 1960–1968 139

Thirteen The United States Enters a New Era, 1965–1971 151

Fourteen Dark New Era, 1971–1982 163

Fifteen The Grin Disappears, 1972–1983 175

Part Four Market Analyses 195

Sixteen Investing for the Decade, 2017–2027 197

Seventeen Weak Performance of the Growth Stock Fund, 1970s 207

Epilogue: The T. Rowe Price Today 213

Sources 233

Index 241