1. Greatest Investors: Introduction
  2. The Greatest Investors: John (Jack) Bogle
  3. The Greatest Investors: Warren Buffett
  4. The Greatest Investors: David Einhorn
  5. The Greatest Investors: Stanley Druckenmiller
  6. The Greatest Investors: David Dreman
  7. The Greatest Investors: Philip Fisher
  8. The Greatest Investors: Benjamin Graham
  9. The Greatest Investors: William H. Gross
  10. The Greatest Investors: Carl Icahn
  11. The Greatest Investors: Jesse L. Livermore
  12. The Greatest Investors: Peter Lynch
  13. The Greatest Investors: Bill Miller
  14. The Greatest Investors: John Neff
  15. The Greatest Investors: William J. O'Neil
  16. The Greatest Investors: Julian Robertson
  17. The Greatest Investors: Thomas Rowe Price, Jr.
  18. The Greatest Investors: James D. Slater
  19. The Greatest Investors: George Soros
  20. The Greatest Investors: Michael Steinhardt
  21. The Greatest Investors: John Templeton
  22. The Greatest Investors: Ralph Wanger

Born: 1898 (Linwood, Maryland)

Died: 1983

Key Positions: Mackubin Goodrich & Co.

T. Rowe Price Associates, Inc.

Personal History:
Thomas Rowe Price is known as the “father of growth investing.” His early years placed him in the middle of the Great Depression, but rather than shy away from stock investments he decided to embrace them. He felt that financial markets operated on cycles, and that inspired his investment strategy, which focused on buying into good companies for long term investments. At the time that Price was operating, this was an unusual mode of investment to say the least.

Price studied chemistry at Swarthmore College, graduating in 1919. He quickly discovered that he enjoyed numbers and finances more than chemistry, though, and began his investment career with the Baltimore-based brokerage firm Mackubin Goodirch, now known as Legg Mason. Eventually, Price was named chief investment officer of the firm.

Due to disagreements over Price’s view of growth stocks, Price left to found T. Rowe Price Associates in 1937. Always a forward thinker, Price went against convention when he decided to charge fees based on the investments that clients had in his firm, not based on commission. Price was committed to the principle of “putting the client’s interests first,” believing that happy clients would result in a successful business.

Price entered the mutual fund world with the T. Rowe Price Growth Stock Fund in 1950, where he served as CEO until his retirement in the 1960s. He sold the company in the 1970s, although the company has retained its name and remains one of the nation’s leading global asset management firms.

Investment Philosophy:
Price believed that investors needed to focus more on individual stock-picking over the long term. This could be facilitated by discipline, consistently in the stock picking process, and thorough, fundamental research.

Price was a pioneer in the strategy of growth investing, a process by which investors search out companies with excellent growth potential whose earnings and dividends are expected to grow at faster rates than inflation and those of the general economy. John Train, author of "The Money Masters", says that Price looked for these characteristics in growth companies:

  • Superior research to develop products and markets.
  • A lack of cutthroat competition.
  • A comparative immunity from government regulation.
  • Low total labor costs, but well-paid employees.
  • At least a 10% return on invested capital, sustained high profit margins, and a superior growth of earnings per share.

Price spent the large majority of his career advocating for the growth model, although by the end of his career he began to question the industry’s widespread enthusiasm for this methodology. It was at this time that he began to sell off his interests in his firm. It turns out that Price was accurate in his assessment, as the early 1970s saw growth stocks tumble considerably. Unfortunately, his namesake company only barely managed to survive, although he had retired and was no longer in control of the investment decisions.

Quotes:

"It is better to be early than too late in recognizing the passing of one era, the waning of old investment favorites and the advent of a new era affording new opportunities for the investor."

"If we do well for the client, we'll be taken care of."

"Change is the investor's only certainty."

"No one can see ahead three years, let alone five or ten. Competition, new inventions - all kinds of things - can change the situation in twelve months."


The Greatest Investors: James D. Slater
Related Articles
  1. Investing

    Thomas Rowe Price: Always Right

    This great investor mastered a new type of investing with every new market he faced.
  2. Retirement

    Is T. Rowe Price Right for Your Retirement (TROW)?

    If you’re thinking about placing your retirement assets with T. Rowe Price brokerage, in business since 1937, here’s what you need to know.
  3. Retirement

    Top 3 T. Rowe Funds for Retirement Diversification in 2016

    Find out which T. Rowe Price funds to use to create a diversified retirement income portfolio for current income, income growth and capital preservation.
  4. Investing

    3 T. Rowe Price Funds for Value Investing

    Read analyses of the top three T. Rowe Price value funds open to new investors, and learn about their investment objectives and historical performances.
  5. Investing

    T Rowe Price Capital Appreciation Fund Performance Case Study (PRWCX)

    Check out an overview of T. Rowe Price Capital Appreciation Fund as well as its financial performance and historical trends over the past five years.
  6. Investing

    Top 5 All-Time Best Mutual Fund Managers

    The best managers produced long-term, market-beating returns and helped investors build big nest eggs. Find out who made the cut.
  7. Investing

    Overview of T. Rowe Price Health Sciences Fund (PRHSX)

    Learn about the health care sector's performance in 2016 and how T. Rowe Price's funds have fared. Discover an overview of the T. Rowe Price Health Sciences Fund.
  8. Investing

    PRHSX, FDGRX, PRDSX: Comparing Top Rated Mutual Funds

    Learn which mutual funds are the top rated, and compare each fund based on performance, ownership expenses, diversification of holdings and minimum investment.
  9. Investing

    Experienced Investors: Older And Wiser, Or Just Older?

    Find out how these famous investors have fared as they've aged.
  10. Retirement

    T. Rowe Price vs. Fidelity: Comparing Small Business 401(k) Providers

    Read about two reputable 401(k) providers offering plans for small businesses, and learn more about which services and features each company offers.
Frequently Asked Questions
  1. How Many Times has Warren Buffett Been Married?

    Warren Buffett has been married twice in his life, but the circumstances surrounding the marriages were unconventional.
  2. What's the smallest number of shares of stock that I can buy?

    Many people would say the smallest number of shares an investor can purchase is one, but the real answer is not as straightforward. ...
  3. What is an economic moat?

    An economic moat refers to a company's ability to maintain competitive advantages to protect its long-term profits and market ...
  4. What's the most expensive stock of all time?

    The most expensive publicly traded stock of all time is Warren Buffett’s Berkshire Hathaway.
Trading Center