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

We Study Billionaires - The Investor’s Podcast Network

Episode • Feb 18, 2024 • 1h 55m

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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