Robert Rodriguez and Dennis Bryan’s (FPA) Value Investor Insight Interview

Found via ValueWalk.

RR: For the most part we’ll go wherever the value is, but what will make something that passes our initial screens uninteresting is a chronically bad business. To give an example, gold-mining companies are showing up as quite cheap right now, but over my career I’ve watched mining companies snatch defeat from the jaws of victory with great regularity. That’s not to say we’ll never buy one, but it’s typically been a good area to avoid.

We have in recent times not been active in financials – to the detriment of our relative performance – because we perceive the risk elements to have changed. The regulatory environment is extremely fluid, to the point where there are questions about the sustainability of financial-company profits and what constitutes “normal.” That’s particularly an issue when we have such blatant manipulation of the financial thermometer called interest rates. Our concern is that unintended consequences from such manipulation can get buried into balance sheets for extended periods and will only surface at the worst possible times.