Good afternoon and thank you for this privilege to speak with you today. I’m CEO of First Pacific Advisors, an $11-billion investment management company located in Los Angeles. I’ve been in the investment business for 36 years and I’ve managed FPA Capital and FPA New Income funds for 23 years. I’ve deployed a classic absolute value equity investment style along with a contrarian investment philosophy. This methodology also applies to my fixed income management process as well. FPA Capital Fund has a very respectable performance track record for 23 years, with an average portfolio turnover ratio of less than 20%. FPA New Income is a high-quality intermediate investment-grade bond fund that can and does invest in high-yield securities. The fund has not had a down year in 30 years and has had positive total returns in every bond bear market.

My talk today, Absence of Fear, is a follow up and expansion of the Special Commentary section that appeared in my March 31, 2007 shareholder reports. It will focus on the concept of RISK since there appears to be little concern about risk in the financial markets currently. My goal is not to scare or sensationalize, but to get investors to consider various risks and ask the basic question, “Am I being sufficiently compensated for these apparent risks?”

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Source: Lincoln Minor