The Investor Who Made Millions by Doing the Opposite of Everyone Else

Dean LeBaron, a Boston investor who built his fortune by going against the crowd, died on July 14 in Sarasota, Florida. He was 92 years old. LeBaron founded Batterymarch Financial Management in Boston in 1969 and turned it into one of the most creative investment firms in the world. He became known for making bold decisions that most other investors were afraid to try.

LeBaron grew up in Plymouth, Massachusetts, during the Great Depression — a time when many families had very little money. Most people who lived through those hard times learned to play it safe. But LeBaron took the opposite lesson. Even as a young child, he believed in doing things his own way. His childhood motto was a phrase that roughly meant 'by myself.'

At Harvard Business School, LeBaron graduated in the top 5 percent of his class. After working as an investment researcher for about nine years, he had an idea: use findings from academic research to decide how to invest money. His employer said no, so LeBaron went out and started his own company.

At Batterymarch, LeBaron used computers to manage investments at a time when most Wall Street firms relied on human gut feelings. He also created what are called 'index funds' — a type of investment that tries to match the performance of the whole stock market instead of trying to beat it. Index funds are less expensive to run, which saves money for investors. He did this four years before Jack Bogle launched a similar product for everyday people.

By the mid-1980s, Batterymarch's roughly 40 employees were managing a share of the US stock market that would equal about $1.4 trillion today. That is an enormous amount of money for such a small team. LeBaron's strategy of following academic research instead of hunches was paying off in a big way.

When index funds became common and less profitable, LeBaron looked overseas for new opportunities. He invested in Brazil and other Latin American countries, where markets sometimes grew by 100 percent or more in a single year. He was one of the first major investors to explore these 'emerging markets,' which are countries whose economies are still growing and developing.

LeBaron's adventurous spirit also took him to the Soviet Union in 1989. The Soviet government invited him to help turn its defense companies into private businesses, and he even carried a letter from Soviet leader Mikhail Gorbachev. But when the Soviet Union broke apart, the new Russian government asked LeBaron for bribes — illegal payments — to let him keep working. LeBaron refused and walked away.

Around the age of 60, LeBaron decided it was time to hand control of Batterymarch to someone else. He sold the firm to Legg Mason, a company based in Baltimore. 'Selling Batterymarch was the right thing to do and I'm glad I did it,' he said in a 2001 interview. Batterymarch was later combined with other firms and eventually became part of the company that runs the Franklin Templeton funds.

LeBaron once explained his contrarian way of thinking in a 2001 interview. He said that going against the crowd helps an investor avoid common mistakes and spot ideas that others miss. He believed truly great investment ideas only come along once every five years or so — but when they do, they can be enormous. Dean LeBaron is survived by his wife, Donna Carpenter LeBaron, his children Stacy and Blake LeBaron, and five grandchildren.