Bloomberg News, in the course of an article on money manager Bruce Berkowitz of the Fairholme Fund and his decision to invest heavily in financial-services stocks, quotes a manager at "the $1.1 billion FPA Capital Fund," which "returned 15 percent a year for the 25 years ended March 31, best among U.S. diversified mutual funds, according to Morningstar":
The fund has avoided banks because the prospect of changes in financial regulation has created too much risk.
"When we don't understand what the rules are going to be, we don't want to invest our clients' capital," said Bryan.
As I said yesterday, "there's a case for just passing the darn thing and getting it over with to reduce uncertainty over what the rules will be -- the old, 'I can make money under any set of rules, as long as I know what they are.'" That's the case -- it's not a position I am advocating, because I think a lot of what is in the draft legislation is problematic. In addition, once it's passed, the regulators and the congressmen will first begin to rewrite it and change the rules some more, as they are doing for health care.