T. Rowe Price

Chapter Seven“CHANGE: THE INVESTOR'S ONLY CERTAINTY”

Mr. Price's first article, “Change: The Investor's Only Certainty,” was written when he was still at Mackubin, Legg & Co. It was deemed “too liberal,” as he recorded in his journal, so the firm would not allow it to be published on their letterhead. This was another clear indication of the philosophical disagreement building between Mr. Price and many of the partners. The article was finally set into a pamphlet and privately published after he had launched his own firm. Having left Mackubin, Legg, he was free to have the work recognized as completely his own. It is indeed a remarkably perceptive and important discussion of the major long‐term trends at work in the world, and how they impact the investor. Most of its basic concepts are as true today as they were then.

When I asked Mr. Price much later how he managed to develop such an enduring long‐range forecast, he used a favorite water metaphor. To paraphrase his response:

It was easy. All you had to do was find a comfortable tree stump beside a creek that eventually flowed into the ocean. You might sit on the stump and observe the creek. You at first would notice the strong current that was flowing down the creek towards the ocean, as it had for thousands of years. If you sat long enough, you would observe that there was a tide at work that changed direction on a regular basis. Sometimes it enforced the current when it flowed with it; at other times, it would significantly ...