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

We Study Billionaires - The Investor’s Podcast Network

Stig Brodersen

Education, Investing, Business

4.6 • 3.6K Ratings

🗓️ 18 February 2024

⏱️ 119 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

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. NEW TO THE SHOW? Follow our official social media accounts: X (Twitter) | LinkedIn | | Instagram | Facebook | TikTok. Browse through all our episodes (complete with transcripts) here. Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool. Enjoy exclusive perks from our favorite Apps and Services. Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: River Toyota Linkedin Marketing Solutions Fidelity Efani Shopify NDTCO Fundrise Wise NetSuite TurboTax Vacasa NerdWallet Babbel HELP US OUT! Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

Click on a timestamp to play from that location

0:00.0	You're listening to TIP.
0:02.0	Hi there, welcome back to the Richard Weiser-Wiser-Happier podcast.
0:06.0	We have a real treat for you today.
0:08.0	Our guest is a legendary investor named Bruce Berkowitz.
0:12.0	He's the chief investment officer and chairman of
0:15.3	Fairhome Funds, which is based in Miami, Florida. Bruce is best known as the manager of the
0:21.2	Fairhome Fund, which has crashed the market since he launched it at the end of 1999.
0:27.0	By the start of 2024, the fund had returned a total of 942%, beating the S&P 500 by 529 percentage points.
0:37.0	That's a huge margin of outperformance in a business where it's extremely difficult to beat
0:41.8	the indexes over long periods of time.
0:45.1	To put it another way, if you'd invested a million dollars in Bruce's fund at the start and
0:49.5	had stuck with him through thick and thin over 23 years, your $1 million would have ballooned into more than
0:55.9	10 million. Like all of the great investors I've interviewed, Rous has the courage and conviction
1:01.9	to go his own way and defy conventional wisdom.
1:06.4	In fact, the motto of his investment firm is ignore the crowd.
1:11.3	As I wrote in my book, Richard,, Why's a happier, the only way to beat the market
1:15.3	is to diverge from the market. That's a task best suited to people who are, quite literally,
1:21.0	extraordinary, both intellectually and temperamentally.
1:25.1	Bruce suddenly fits that mold.
1:27.0	He's a true outlier with a remarkable willingness to make hugely aggressive, ultra bets on a tiny number of stocks that are often deeply out of favor.
1:38.0	Personally, I love the fact that the best investors tend to be these free-thinking mavericks who care more about
1:45.1	being right and winning the game than about earning public approval. But the truth
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from Stig Brodersen, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of Stig Brodersen and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.