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Fund manager for the ages
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July 27, 2000: 11:29 a.m. ET
Since 1958, from gold stocks to tech, Robert Brody has mined for growth
By Staff Writer Jake Ulick
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NEW YORK (CNNfn) - When the stock market crashed in 1987, many of today's money managers were too young to trade. Robert Brody, the nation's longest-serving mutual fund manager, wasn't one of them.
"A lot of people before that thought the market could only go up," Brody recalled.
But Brody wasn't talking about Oct. 19, 1987, when the Dow Jones industrial average fell more than 22 percent -- its biggest one-day percentage loss in history.
He was referring to 1974, when the Dow tumbled more 28 percent in a year, its worst annual loss since 1937.
"That forced a lot of people out of the business," he said.
 Not Brody. By all accounts, Brody, who manages the $89 million American Growth Fund, has been at the helm of a single fund for longer than anyone: 42 years.
In a time when some money managers change jobs as quickly as the latest investing fad, Brody, 74, has held steady through bull and bear markets since 1958.
From obscure to common
The money management business has been transformed since the Eisenhower administration when, Brody says, a newspaper's business section contained quotes for about 50 or 60 mutual funds. These days investors can pick from more than 7,000 managed baskets of securities that total nearly $7 trillion in value.
Through it all, Brody insists his approach to stock picking has never wavered.
"My philosophy has not changed," he said from his Denver office the other day. "It's to be in the industry with the biggest growth in earnings and to pick the leaders."
Brody watches the economy and business cycles and looks for so-called category killers poised for stronger growth. That approach led him to gold stocks in the 1960s and regional banks in the 1980s. He had a stint with retailers as well.
"We made a lot of money for our shareholders with E.J. Korvette's," Brody said of the retailer that ultimately went bankrupt.
These days, his portfolio is heavily laced with technology companies, which he likes for their ability to grow earnings at a pace faster than other sectors.
The fund owns Compaq Computer (CPQ: Research, Estimates), EMC (EMC: Research, Estimates), Cisco Systems (CSCO: Research, Estimates), Intel (INTC: Research, Estimates), Motorola (MOT: Research, Estimates) and Amgen (AMGN: Research, Estimates), the biotechnology firm. By mutual fund standards, he runs a small basket of stocks -- about 30 to 40, most of them large-capitalization names.
The fund is down 5.5 percent year-to-date, a performance that mirrors that of the major U.S. stock indexes. Citing 1999 data, Morningstar, the fund tracker, said the American Growth Fund (AMRGX: Research, Estimates) owned Lucent (LU: Research, Estimates) and Procter & Gamble (PG: Research, Estimates), two stocks punished this year after the companies issued multiple earnings warnings.
 But Brody points to the long-term performance. A sum of $10,000 invested in 1958 would be worth $700,000 today, he said.
The fund is up 10 percent annualized over the last ten years, roughly matching the stock market's historic return.
"I'm pleased that over the life of the fund, someone who got in early has seen their money grow immensely," he said.
And yes, some shareholders are original. But none of the stocks is. Given, the technology bent of the portfolio, few of Brody's tech picks were around in 1958.
Wall St. to Main St.
As he looks at the market today, Brody marvels at the staggering availability of financial data and the speed at which it's delivered. In the last few years, the markets have become more transparent, with the Internet helping democratize a club once open mostly to the rich.
Time has compressed as well. The Nasdaq composite index fell nearly 2,000 points during a 10-week period this spring and then recovered by 1,000 points by summer - losses and gains that once took years.
When Brody began business in the late 1950s, the stock market crash of 1929 lingered in many Americans' memories. Wounds from fortunes wiped away made the Depression generation wary of stocks and warm to the relative safety of government bonds.
"Years ago, there weren't that many people in the stock market," Brody said.
Brody, born in 1925, doesn't remember the crash of 1929. But he's seen plenty of market history.
Brody predates the creation of the Nasdaq market in 1971. Of the nations' four largest companies in market value, only one, General Electric, was around when he started managing money.
Brody's career was 14 years old when in Nov. 14, 1972, the Dow first closed above 1,000. He then waited 11 years for the index to close above 1,200. With all the major U.S. stock gauges down for the year, memories like that may still be worth something.
"I'm aware of that," Brody said when asked about the numerous down cycles he has lived through. "I look at the market going up and I take precautions against a decline."
He may very well see another one. Brody has no plans to retire. 
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