Bob Rodriguez Interview

Robert (Bob) Rodriguez of First Pacific Advisors (FPA) is everything a good fiduciary of other people's money should be -- he worries about the Return OF Capital before the Return ON Capital. If his funds didn't have a load, I would seriously consider investing in them (although FPA Crescent managed by Steve Romnick, another excellent FPA manager, is no-load and worthy of consideration).

The following Fortune magazine profile of Bob is an excellent read: Bob Rodriguez: The man who sees another crash

Rodriguez is an anomaly in the sunny world of mutual funds, where the typical manager is perpetually optimistic and happy to welcome ever more investors. Indeed, he's almost an oxymoron: a buy-and-hold man with the stubborn, hard-boiled pessimism of a short-seller. While most money managers focus on attracting assets, Rodriguez closes his funds to new investors when he doesn't see opportunities -- which is often (including today)...

His resistance to investing vogues has paid off richly over the long run: His stock fund, FPA Capital (FPPTX), has returned 15% annually over the past 25 years, beating every single diversified equity fund, according to Lipper. His bond fund, FPA New Income (FPNIX), has never posted an annual loss

Bob isn't sanguine about the future: 

If we don't fix the budget – soon -- the economy faces disaster. "I believe that within two to five years we'll have a crisis of equal or greater magnitude of what we just went through," he says. "And it will emanate from the federal level."

""The financial system is held together with a very thin filament called confidence. When you clip that, all hell breaks loose"

His current investment stance:

FPA Capital now has 30% of its portfolio in cash and 38% in energy stocks because he believes the world's oil supply is declining. Still, even in that sector, he doesn't see many opportunities. He refuses to buy most bonds or long-term government debt.