ReverseSignals

Robert Rodriguez is one of the few who warned investors about the upcoming financial crisis a few years earlier. He has been managing the FPA Capital Fund (FPPTX) and the FPA New Income Fund since 1984. During that time, and as of 9/30/2007, he has achieved a 16.91% return whereas S&P 500's return for the same period has been 13.17% annually.

Rodriguez's investment strategy is primarily to invest in the stocks of smaller companies. He selects stocks based on specific fundamental criteria: strong balance sheets, free cash flow, a successful and understandable business strategy, capable management, unique business characteristics. Rodriguez looks for companies with long history and a track record of high returns on equity. He sells stocks when the basis for an investment has been revised; when the stock is selling at a significant premium P/E to the market; when profitability recovery has been attained; when a management disappointment has occurred without expectation for recovery; or when a superior alternative value has presented itself. His portfolio holds between 25 and 45 equities and his investment outlook is 3 to 5 years, not afraid to sit on the sidelines and wait for the right opportunity.

On the Treasury debt, Rodriguez comments that its predicted growth to between $14.6 trillion and $16.6 trillion by the end of 2011 is “outrageous and fiscally irresponsible”, and adds that “it  is not right and is morally reprehensible that one generation would do this to another.”