Bob Rodriguez: New Great Recession Coming in Three Years
Fund manager rails against the Fed, Dodd-Frank and the Affordable Care act and tells what he’s investing in now
Legendary fund manager Bob Rodriguez, who forecast the global financial crisis, sees money managers and advisors in peril. They will be victims of their own heedlessness, he says.
The day of reckoning will come within three years in a financial crisis at least as big and pernicious as The Great Recession, he told ThinkAdvisor in a recent, exclusive interview. The country is treading a tenuous path toward another disaster of massive proportions, according to Rodriguez.
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Today, the investor’s stance is ever-cautious, as evidenced by his personal portfolio, which he discusses in the interview, as well as his five-prong formula for investing success and the essential research he relies upon.
Bob Rodriguez continues to identify the horsefly in the ointment as the federal government’s ineffective monetary and fiscal policies, as he calls them, and the failure to attack critical structural issues.
For years now, he has warned of a looming crisis, even as the financial services industry has ignored, he argues, the enormously changed landscape since the global meltdown.
The outspoken CEO-managing partner of Los Angeles-based First Pacific Advisors (FPA), which has $33 billion in assets under management, is the firm’s strategic advisor. In 2011 he turned over day-to-day management of key funds to his partners, as planned, following a year-long sabbatical.
The FPA Capital Fund boasts a compounded rate of return from July 1984 through Sept. 30, 2014, of 14.65%. The FPA New Income Fund has not had a negative year in three decades.
Seeing all too clearly the handwriting on the wall, Rodriguez, in 2007, moved FPA to a cash level nearly twelve times that of the industry.
This month, he spoke with ThinkAdvisor from his Lake Tahoe, Nevada, base during a violent wind storm and power outage there. It was on Oct. 15, the day the Dow plunged 460 points before rallying somewhat to end down 173.
“We’re having a little bit of a blow in the marketplace and a little bit of blow in Lake Tahoe,” he quipped. Here are highlights of the conversation:
THINKADVISOR: What’s your take on the market and the economy?
Bob Rodriguez: We’re living on borrowed time. When this market breaks, you’re going to see so many money managers and others washed out to sea who will never see land again. It will happen between now and 2018.
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