RWH041: Ignore the Crowd w/ Super-investor Bruce Berkowitz

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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