In this episode, William Green chats with famed investor Bruce Berkowitz, whose Fairholme Fund has beaten the S&P 500 by 529 percentage points over 23 years. Bruce, who was named Morningstar’s Domestic Stock-Fund Manager of the Decade in 2009, talks here about the ups & downs of his volatile career, how he changed his investment strategy after three costly losses, why he likes cash as a kind of “financial valium,” & why 80% of his fund is riding on one stock.
IN THIS EPISODE, YOU’LL LEARN:
00:00 - Intro
04:44 - What Bruce Berkowitz learned about odds by working as a bookmaker.
06:26 - What his stint as a broker taught him about how not to invest.
34:18 - Why he makes huge bets on a tiny number of stocks.
41:53 - How he’s riding a multi-decade wave of migration to Florida.
48:57 - How he justifies betting 80% of his fund on one stock.
54:59 - How he’s playing long-term trends in the energy sector.
56:56 - Why he’s changed the way he invests.
59:08 - Why he’s acutely wary of bank stocks.
59:20 - What he learned from losing big on Sears, Fannie Mae, & Freddie Mac.
1:17:53 - Why he views cash as a valuable form of “financial valium.”
1:28:51 - How he assesses the investment threat of global warming.
1:33:50 - Why he operates as a lone wolf, not part of a team.
1:39:53 - What he’s tried to teach his three children.
1:45:31 - How he handles setbacks.
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Bruce Berkowitz’s investment firm, Fairholme Funds.
- Vaclav Smil’s book How the World Really Works.
- Vaclav Smil’s book Energy & Civilization.
- William Green’s book, “Richer, Wiser, Happier” – read the reviews of this book.
- Follow William Green on X (AKA Twitter).
- Check out all the books mentioned and discussed in our podcast episodes here.
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