Cornelius Bond

Cornelius Bond: Lessons On Learned From Working With T. Rowe Price

ValueWalk's Raul Panganiban interviews Cornelius Bond, author of "T. Rowe Price The Man, The Company, and the Investment Philosophy."

Q1 hedge fund letters, conference, scoops etc

Transcript

Good morning, podcast listeners, today is a very special episode, I am joined with Cornelius Bond.  He’s the author of T. Rowe Price, the Man, the Company and the Investment Philosophy.  He’s a graduate of Princeton with a BS in Electrical Engineering.  He joined T. Rowe Price back in 1960 as a technology analyst.  He was also invited to join the Investment Committee of the New Horizons Fund in 1961.  In today’s episode we discuss his book, T. Rowe Price and we also discuss the growth philosophy.  I want to welcome all our listeners to a very special episode and I want to welcome Cornelius to the show.

Welcome to ValuTalk with Raul.

Alright, if you can just tell me about your background and what led you to finance and investing.

Yes.  I graduated from Princeton with a Bachelor of Science in Electrical Engineering, worked with [inaudible] and actually like Mr. Price, coincidentally, became bored with the engineering part and got more interested in the companies that technology was beginning to develop back in the 50s.  And so I started reading the Wall Street Journal and Barron’s and Business Week and Fortune and not reading the various technical publications that I probably should have been reading.  And I took a night course at Johns Hopkins and it took … the course that I took was called Investment Finance and it was taught by a gentleman named Mr. Walter Kidd and Walter Kidd was the Vice President of Research at T. Rowe Price at that time.  And after class we would have lengthy conversations about business and about the stock market and I’d get home late, these were night courses.  But gradually I think seditiously he worked on me a little bit, I got increasingly interested in not just the market and stocks and companies that could be built by the stock market and investing, but by T. Rowe Price also.

And I think it was reciprocal, he became interested in me over time and there was a final exam that he wanted, I think, check me out and I think did pretty well in the final exam and he offered me the job at T. Rowe Price, which I accepted.  And it certainly changed my whole life and I think made it a much more productive life.  And I joined T. Rowe Price as you pointed out as an analyst following the technology companies.  I replaced a 60 year old gentleman who refused to fly on airplanes to go to the West Coast where of course most of the action was at that point in time.  So he took a train out to the West Coast and I think the firm was very happy to replace him or augment him, I guess, with my efforts.  I was willing to fly out and get the information quickly back to the firm.  That put me into contact directly with Mr. Price early in the game because as I said, I was getting the information directly and the other analyst really wasn’t.  And I found myself working with him on the New Horizons Fund which he had just started at that point in time, it wasn’t public yet but the fund itself had begun.  And I helped out on the portfolio and I was fortunate enough to be named Vice President and put on the Investment Committee and the fund of course went on to become the best performing mutual fund in the country for its first 10 years.  And actually the Growth Stock Fund which preceded it had been the best performing fund in its category for the first 10 years.  Its category being the bigger companies, bigger growth companies, the New Horizons focused on the small companies.  So anyway I got quickly into growth fund management and also in a close proximity to Mr. Price.

Yeah, that’s completely amazing too and also just taking night courses with one of his associates.  And I just wonder, what were the most important lessons you learned from Mr. Price?

Well, I guess the most important lesson was his growth stock philosophy and I’d be happy to talk about that at length if you’d like at some point in time.  He also believed in hard work, he went to Quaker schools, graduated from Swarthmore which began as a Quaker school.  So he believed in hard work, he believed in modesty, he was extremely ethical and he was certainly among the first, locally and perhaps nationally, to hire women and pay them the same as men for an equivalent job.  He believed in, as I say, in work, he would get up at four o’clock in the morning and read until he came to the office at nine.  And of course he expected all of us to have read the Wall Street Journal by the time we got to the office and woe be to the analysts or the councilor that had not read the Wall Street Journal.  And he was pretty quick to criticize if criticism was called for; on the other hand he was very fair.  The firm was small when I joined; I think it probably managed $100 million or so at that time.

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