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In a previous thread I reported that I told everyone in my vicinity from 2003-2007 that we were in the middle of an epic credit bubble driven by an unprecedented housing bubble. I also reported that Buffett didn't appear to see it and Martin Whitman definitely didn't see it. Most of the investors that I respected seemed to have no idea what was happening. (I thus learned that I should expect to be blindsided from time to time in the future. No one sees everything.)
Bob Rodriguez was one of the investors that I respected who not only saw the tidal wave building, but was very outspoken about it long before the crisis occurred. He likewise sidestepped the late 90s tech bubble (and like Grantham, lost many clients due to his prudence).
He is retired now, but managing his own portfolio. He gave this recent interview: https://www.advisorperspectives.com/articles/2017/06/27/bob-rodriguez-we-are-witnessing-the-development-of-a-perfect-storm.
He reports that he has less than 1% of his portfolio in equities, and that if he was still managing his mutual fund that he would be holding 60% cash, more than the 45% cash he held in the run-up to the Great Recession.
I know most of you are indexers and EMH believers and don't care. I'm not trying to convince you otherwise. There is nothing to see here. Please go on about your day.
However, there are a few value investors among us. This is for you, fellow value investors. No one is correct about everything, including Rodriguez, but you may be interested in his opinions.
Like Rodriguez I have < 1% of my portfolio in US equities. Unlike Rodriguez I have almost 25% in foreign equities (whereas he owns some unspecified tangible assets).
Rodriguez expects QE on steroids during the next downturn. I agree, but he appears to believe this will lead to inflation. I think that will be incorrect unless the government embarks on massive deficit spending (at levels similar to WWII). In the absence of that, I think Lacy Hunt will be correct (Rodriguez alludes to Hunt in the article), and that's why I hold a significant but fairly small LT treasury bond position (unlike Rodriguez).
Bob Rodriguez was one of the investors that I respected who not only saw the tidal wave building, but was very outspoken about it long before the crisis occurred. He likewise sidestepped the late 90s tech bubble (and like Grantham, lost many clients due to his prudence).
He is retired now, but managing his own portfolio. He gave this recent interview: https://www.advisorperspectives.com/articles/2017/06/27/bob-rodriguez-we-are-witnessing-the-development-of-a-perfect-storm.
He reports that he has less than 1% of his portfolio in equities, and that if he was still managing his mutual fund that he would be holding 60% cash, more than the 45% cash he held in the run-up to the Great Recession.
I know most of you are indexers and EMH believers and don't care. I'm not trying to convince you otherwise. There is nothing to see here. Please go on about your day.
However, there are a few value investors among us. This is for you, fellow value investors. No one is correct about everything, including Rodriguez, but you may be interested in his opinions.
Like Rodriguez I have < 1% of my portfolio in US equities. Unlike Rodriguez I have almost 25% in foreign equities (whereas he owns some unspecified tangible assets).
Rodriguez expects QE on steroids during the next downturn. I agree, but he appears to believe this will lead to inflation. I think that will be incorrect unless the government embarks on massive deficit spending (at levels similar to WWII). In the absence of that, I think Lacy Hunt will be correct (Rodriguez alludes to Hunt in the article), and that's why I hold a significant but fairly small LT treasury bond position (unlike Rodriguez).
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