Capital Guardian’s Kirby Named to Stock Probe Panel

Robert G. Kirby, appointed Wednesday by President Reagan to the Presidential Task Force on Market Mechanisms, a commission charged with investigating last month’s stock market crash, likes fast cars and stocks with inherently strong values.

In 1979, his racing team finished ninth in the 24 Hours of Le Mans, and, in 1984, he won the national championship of the Sports Car Club of America. But as chairman of Los Angeles-based Capital Guardian Trust Co., which manages $15 billion in institutional funds, his investment philosophy is far less flashy.

“As I keep telling our clients, I do all my risk taking on Saturday and Sunday, when the market is closed,” Kirby, 62, said Wednesday.

An Oceanside resident who commutes to his Los Angeles office by train, Kirby has been a money manager for 36 years, the last 22 with the Capital Group companies. He describes himself as a “value investor,” one who invests his pension fund clients’ money for the longer haul in firms with fundamental strength.

Kirby’s precept is that investors should buy stocks as if they were buying the entire company--a philosophy that has taken him to the top of polls taken among his peers and one that helped his portfolios outperform the market by about 5% in the market crash.

He believes that an unremitting pressure to perform has driven the investment world to undue risk taking--a phenomenon to which he attributes the downfall of his close friend, Los Angeles securities trader Boyd Jeffries, who pleaded guilty in March to federal charges tied to the Wall Street insider trading scandal.

“The investment management business has gotten really frothy in the last five years with people trying to do the impossible,” Kirby said. “Everyone felt like he could stand closer to the edge of the cliff than he really could, and it didn’t work.”

Kirby, a Republican who has not been politically active, said Wednesday that he shares what he termed the prevailing “free-market orientation” of the presidential task force. He said it was possible that the four-member panel will conclude that no federal action is needed in the wake of the market collapse.

“The people are perfectly willing to arrive at the conclusion that there was nothing wrong except an overpriced market going in, though it’s hard to believe the problem wasn’t greater than that when you take the awesome extent of the decline and the huge volume involved,” Kirby said.

“We’re going to try to determine who were the sellers, who were the buyers and whether it was just an inevitable part of a free-market society, or whether it’s socially desirable that something be done to moderate volatility of this sort,” he added.