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Robert Kirby, 80; Helped Analyze 1987 Market Crash for Reagan

April 20, 2005|Myrna Oliver | Times Staff Writer

Robert Kirby, a veteran investment manager who served on President Reagan's five-man Brady Commission investigating the causes behind the October 1987 stock market crash, has died. He was 80.

Kirby died April 13 en route to the hospital after he was stricken while working in his downtown Los Angeles office. No cause of death was given.

He had spent 40 years as a top executive of The Capital Group Cos. Inc. and helped found and head its Capital Guardian Trust Co., managing billions of dollars in tax-exempt retirement and other institutional funds.

Kirby was the only West Coast member of the Presidential Task Force on Market Mechanisms, nicknamed the Brady Commission for its chairman, Nicholas F. Brady. The commission was charged with examining a massive sell-off and 508-point drop of the Dow Jones average Oct. 19, 1987.

The commission recommended that the Federal Reserve Board become a "supercop" overseeing financial market regulation and coordinating "circuit breakers" such as trading halts on stock and price limits on futures.

"The Fed is in the best position to understand the credit relationships and to understand the international institutions," Kirby told The Times in response to criticism that the recommendation could politicize the Federal Reserve. "They understand the intermarket mechanisms. The SEC knows stocks and the CFTC knows futures, but no one knows a great deal about the other's bailiwick."

Kirby said the most crucial of the commission's recommendations was greater disclosure of the buyers and sellers in securities trades. Prior to the crash, he said, finding out who was buying or selling required "James Bond to get the job done."

He said if the few big institutions whose massive selling precipitated the crash "had known in advance their actions would be known to the public, the vast majority wouldn't have done it. Their activities would have looked socially irresponsible."

Somewhat conservative in his investing philosophy, Kirby advised clients to buy stock as if they were buying the company and to hold the stock over many years. He preferred investment in solid, staid companies rather than flashy high-tech upstarts.

Outside the office, however, he was never averse to risk. He was a passionate skier and even more passionate racer of sports cars. 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. He drove the Le Mans four times, among other high-profile races.

A native of Los Angeles, Kirby was a graduate of Stanford University and Harvard Graduate School of Business Administration. In 1951, he began working for the Scudder, Stevens & Clark Inc. stock brokerage in Los Angeles. But he spent most of his half-century-plus career with The Capital Group Cos., helping build the business of investing retirement and other tax-exempt funds.

After joining Capital in 1965, he helped found Capital Guardian Trust Co. in 1968, became its president in 1972 and chairman of the board in 1978. After passing the administrative torch to younger executives in 1991, he concentrated on managing investment portfolios until his death.

He was a trustee of the College Retirement Equity Board and Harvey Mudd College in Claremont, a member of the board of governors of the Pacific Stock Exchange, and a director of Lockheed Corp.

With his wife, Marvel, who survives, he established the Robert and Marvel Kirby Fellowship for graduate students in Stanford's earth sciences program.

In addition to his wife, Kirby is survived by eight children and 13 grandchildren.

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