Bob Rodriguez manages the (closed) small cap value fund, FPA Capital (FPPTX), and bond fund FPA New Income (FPNIX). He has been hoarding a large cash stake for quite some time, which hasn't been such a smart move in general for stocks, but considering this year's crummy small cap stock returns has helped him stay competitive with other similar funds.
Morningstar noticed Rodriguez's recent move to the even more dour camp of PIMCO's Bill Gross when it comes to America's future:
...[Rodriguez] recently announced he put a halt to purchases of stocks and high-yield bonds at both portfolios on Dec. 14. His decision is a reaction to the subprime mortgage-induced credit crunch, which he expects to worsen in coming months. Rodriguez says he'll review his actions weekly, but he doesn't anticipate any change in course until February or March 2008.
Rodriguez's move is virtually unprecedented. Many investors, including Rodriguez himself, aren't shy retreating to cash when they're nervous. But few money managers have ever publicly foresworn stocks and bonds altogether."
When your smarter fund managers are starting to sound this pessimistic, it may be time to reassess your expectations for stocks and bonds in 2008.
Some Top Fund Managers Sour On Economy
Bob Rodriguez manages the (closed) small cap value fund, FPA Capital (FPPTX), and bond fund FPA New Income (FPNIX). He has been hoarding a large cash stake for quite some time, which hasn't been such a smart move in general for stocks, but considering this year's crummy small cap stock returns has helped him stay competitive with other similar funds.
Morningstar noticed Rodriguez's recent move to the even more dour camp of PIMCO's Bill Gross when it comes to America's future:
...[Rodriguez] recently announced he put a halt to purchases of stocks and high-yield bonds at both portfolios on Dec. 14. His decision is a reaction to the subprime mortgage-induced credit crunch, which he expects to worsen in coming months. Rodriguez says he'll review his actions weekly, but he doesn't anticipate any change in course until February or March 2008.
Rodriguez's move is virtually unprecedented. Many investors, including Rodriguez himself, aren't shy retreating to cash when they're nervous. But few money managers have ever publicly foresworn stocks and bonds altogether."
When your smarter fund managers are starting to sound this pessimistic, it may be time to reassess your expectations for stocks and bonds in 2008.
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