“Reflections and Outrage” by Robert Rodriguez: Strongly Recommended Reading
Posted by Larry Doyle on June 1, 2009 5:00 AM |
Bob Rodriguez, Partner and Chief Executive Officer of First Pacific Advisors, delivered the keynote address the end of last week at the Morningstar Investment Management Conference.
Mr. Rodriguez is a 35 year veteran in the financial industry and a Morningstar Manager of the Year three times. In my humble opinion, there are none better in the industry today. As I referenced on NQR’s Sense on Cents with Larry Doyle last evening, I totally concur and feel strongly about Mr. Rodriguez’s powerful pearls of wisdom. I beseech you to read this address, save it, read it again, and share it with your colleagues!
Allow me to comment and highlight Mr. Rodriguez’s major focal points. Mr. Rodriguez addresses every major issue in our financial world today. He layers those issues on top of the potential social impact our country faces. Mr. Rodriguez is not bashful in highlighting that our day of reckoning is upon us. I have read this piece three different times. I am more impressed and in greater agreement with his assertions after each reading.
Rodriguez addresses the following:
1. the need for personal and professional discipline and integrity
2. he recounts an experience in which he was solicited to “pay to play” by his biggest account . . . he passed and never regretted it
3. he castigates the financial industry for its performance over the last few years (be mindful he delivered this speech to an audience of financial managers!!)
4. he talks about how and why he has made a major shift into energy stocks within his fund!!
5. the changing nature of the markets and the global economies.
6. he rails on Alan Greenspan
7. Rodriguez offers, “my trust has been severely shaken in the Federal Reserve, the Treasury, the Congress, and the Executive Branch of government…”
8. “the regulatory agencies and federal government were complicit in laying the groundwork that allowed many of these credit excesses to develop prior to this economic crisis.”
9. he addresses the horrendous business practices being promoted by GMAC.
10. the positive economic impact of the Stimulus will be offset by ongoing reduction in consumer spending.
11. “we have to be careful about what is meant by sacrifice . . . a democratic government is the only one in which those who vote for a tax can escape the obligation to pay for it.”
12. Rodriguez’s outlook on the market:
— we are currently experiencing a bear market rally
— corporate earnings will disappoint
— the stock market overall will be price constrained for TEN YEARS
— “I view the Treasury market as being in a bubble territory with foolish leaders at the helm.”
— the bulk of the economy’s credit problems are still to come as charge-offs on trillions of dollars in loans remain to be recognized.
Reflections and Outrage
by Mr. Robert Rodriguez
Partner and Chief Executive Officer First Pacific Advisors