Talking to a bear at a market peak

FPA's Steven Romick

First Pacific advisors sometimes seems like the black cloud marring the perfect blue sky of a bull market. Its mutual fund managers, such as Steven Romick and Bob Rodriguez (who is now CEO of the company), provoked scorn -- and then renown -- for anticipating both the millennial tech crash and the financial crisis. FPA's funds earned a reputation for protecting capital while delivering nifty results. Romick's $11 billion Crescent Fund has averaged 10.4% annual returns over the past decade (vs. 8.7% for the S&P 500), even as he keeps a hefty 25% of its assets in cash to limit risk. Romick, who is 49 and has been running his fund since 1993, isn't predicting disaster. But he's circumspect, as the Dow Jones industrial average racks up a series of record highs. He spoke to Fortune about staying sober in a time of increased expectations.