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Working World
Q & A with Portfolio Manager C. Kim Goodwin
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Most of us make personal or perhaps even corporate investment decisions, but what is like to manage billions of dollars for other people? We asked C. Kim Goodwin, who joined Kansas City-based American Century Investments in 1997 to help turn around their $7 billion American Century Growth Fund.
What is it like to be a Fund Manager?
It is fantastic. Twelve years ago it used to take a while to explain to people what I do for a living, but nowadays, people are so excited about taking responsibility for their own financial futures, I actually prefer not to tell people what I do for a living, since they're likely to ask for stock ideas. My first obligation is to the shareholders of my fund, so all of my best ideas are in American Century Growth.
What is it like to be responsible ultimately for a $7 billion-plus fund?
Many of my friends and relatives are invested in Growth (as I am). My goal is to help investors realize their own investment objectives, be they for early retirement, sending a child to college, or saving for a first home. It is a tremendous responsibility and one that my team and I take very seriously. American Century Growth has grown to over $7 billion, primarily because of 1998's performance where the fund was up 36.8 percent, well ahead of the broader stock market. We hope to continue to outperform the market and our competitors so that our shareholders continue to benefit.
What are some of your day-to-day duties and tasks?
Most of my tasks are centered around buying and selling stocks for the portfolio. Gathering information is a key component. In a given day I am on the phone talking with top managers of companies we own (or plan to own) in the fund, their competitors, their suppliers, and talking with other information suppliers such as industry analysts and brokerage firms. Our positions do best when we form an investment thesis that is different from the Wall Street consensus. We identify the key growth drivers and build positions sized to reflect our high confidence levels. Thus when other investors catch up to our thinking, we are already well-positioned. Sometimes the Street misses great new growth prospects because it fails to recognize improving trends.
What do you think would surprise people about your job?
My friends and family are often surprised at how all-encompassing it is. If you're a good investor you never stop gathering information in order to make better stock selection decisions. I question everyone -- employees at restaurants or retail stores, just to verify strong business trends. And it doesn't stop during vacations. I once convinced my husband go with me to a McDonald's when we were in China, just so I could look at the menus, product mix, and traffic.
Have there been surprises for you during your rise?
No real surprises. This business is often characterized as a meritocracy. So hard work pays off, eventually. Investment professionals that make poor decisions for their shareholders typically have fairly short careers.
How have you learned to do what you do? Mentors along the way? Heroes?
I learned the mechanics of the investment business in the MBA program at UT. But I always say there is an art and a science to it. You develop the art, or the instinct portion, with experience. And most good investors learn from their past mistakes. There have been few mentors, for whatever reason, but my mom is also a business woman. She is a manager with Coca-Cola Foods Division in Houston. Whenever I would get stuck on matters like corporate politics or career advancement, she was always ready with good advice.
To what do you credit your success?
Aside from having obtained a very good education and being a hard worker, I am incredibly stubborn (so the longhorn is an especially appropriate mascot). From an early age I was determined to be successful in my chosen career and simply refused to be discouraged. In the old days investing was an "old money" business requiring family connections, so people like me (with neither family money nor connections, just raw talent) were not encouraged to apply. My success is a good sign that the business is much more merit focused than it had been in the past.
What qualities make for a successful stock analyst, fund or portfolio manager?
Someone with good math and analytical skills, someone who is critical, someone who can make good decisions under pressure, who can analyze large amounts of detail and quickly draw two or three major conclusions, and who is biased toward action, maybe a bit of a risk taker. But one of the most important characteristics is passion -- the best investors are passionate about this business.
What are the challenges for you, working with a growth fund like American Century’s?
One primary challenge is to have a balanced life. As noted earlier the investment profession is all encompassing, requiring long hours and considerable travel. If not for my incredibly supportive husband, this job would be much more difficult. Also, in growth investing changes take place quickly. The very next news headline could have positive or negative implications for the portfolio. It requires a very high energy level to stay on top of everything in order to make rational and informed decisions.
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