“The mother of all bubbles” is fixed income securities today – Robert Sanborn

Hedge fund industry publication Opalesque has a really interesting interview with Robert Sanborn, co-founder of Chicago based long-short hedge fund Sanborn Kilcollin. Sanborn was previously a mutual fund manager – he ran The Oakmark Fund from 1991-2000.

In the interview, available by clicking through below, Sanborn describes three things very well: the difference between running a mutual fund versus a hedge fund (it’s about the fickleness of your investors), his investment philosophy (“long Pepsi, short Facebook”), and the current state of the fixed income market – his take:

The desperate reach for yield today has made all income producing vehicles highly suspect… anyone who wants to lend money to the US government at 3.2% for 30 years is really crazy… I really believe the mother of all bubbles is in fixed income securities – and the only way out is inflation… that’s the main thing investors should protect themselves against.