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Fortune Magazine article on Bruce Berkowitz


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Excellent article from Fortune Magazine talking about Bruce Berkowitz's success. One trait I've noticed with the following successful investors (Berkowitz, Biglari, and Bruce Flatt) is that they have no hobbies. They really love their jobs and the investment process.

 

http://finance.fortune.cnn.com/2010/12/10/bruce-berkowitz-the-megamind-of-miami/

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Am I the only one who gets a little nervous when you see BB in a long, personal piece like this?

 

I trust his instincts but I rather like the "away from the spotlight, researching ideas alone in a room full of dusty Value Line binders" image of a fund manager.

 

I get a "Bill Miller-ish vibe" when I see these sorts of stories about a manager with whom I've invested.

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I'm interested in seeing the new smaller opportunity fund open soon. Though, given their reputation, I have a feeling it won't be all that small. Interesting to think that his favorite idea at the moment is bond insurer, MBIA (or so he said in a recent interview). At odds with Greenlight Capital's opinion.

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Am I the only one who gets a little nervous when you see BB in a long, personal piece like this?

 

I dont have any money with Bruce but would have my entire 401k with him if my company offered his fund. Miller always seemed to prefer the fame to the game. Bruce B and Bruce Flatt really appear to have no other hobbies, and Bruce seems to hate the camera.

 

I wouldnt worry much.

 

Also I would have a wiener dog though he would not be able to reach the desk. Bruce doesnt seem to really care about what others think (I mean with a dog like that you cant really care about what people think). I have had one in the past and love those the personality. The contrast though would be funny as hell too. I would get a chocolate one.

 

http://www.google.com/imgres?imgurl=http://www.wqed.org/tv/daves/blog/wp-content/weiner-dog2.jpg&imgrefurl=http://shoponline2011.com/p~p-1892077614~b-14010600~Fisher-Price-Loving-Family-Dollhouse-Furniture-Set---Kids-Bedroom.aspx&usg=__kry7YEdydi4fOaqkl38LLo-ypws=&h=2304&w=3072&sz=6208&hl=en&start=77&sig2=eOoZcQdXNI7IKJ8BJ5nqng&zoom=1&tbnid=-WaCoHf1QMNN8M:&tbnh=163&tbnw=209&ei=sJsCTajBEMvhnQfgxpHlDQ&prev=/images%3Fq%3Dchocolate%2Bwiener%2Bdog%26um%3D1%26hl%3Den%26client%3Dfirefox-a%26sa%3DN%26rls%3Dorg.mozilla:en-US:official%26biw%3D1920%26bih%3D838%26tbs%3Disch:10%2C1482&um=1&itbs=1&iact=rc&dur=505&oei=oJsCTcyzFYKClAe58fjYCQ&esq=3&page=3&ndsp=34&ved=1t:429,r:24,s:77&tx=84&ty=73&biw=1920&bih=838

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To Clarify:

 

I'm not about to pull my capital from his fund.

 

Its just that I remember "The Streak" and the fawning over Miller that he never exactly ran away from.

 

http://www.bloomberg.com/apps/news?pid=newsarchive&refer=columnist_currier&sid=aoE7_MxijLFk

 

Miller and Berkowitz are obviously two different mangers with different styles but the simularity of media adulation is flashing "CONTRARIAN INDICATOR" to my Spidey senses...

 

I'm a strong believer in the "Mass Media Contrarian Indicator":  ;D

 

http://www.nytimes.com/2004/09/26/realestate/26NATI.html?pagewanted=all&position=

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I hear you but this is no where near the love fest Miller had. He was an investment God who could do no wrong. A decade plus streak will do that to you I guess. I still think Berkowitz is that smart quite guy in the corner no one really pays much attention to him. He rarely does interviews, and is very selective. I have really only seen him on Wealthtrack and a few other value focused mediums.

 

Best of all I sense a bit of uncomfortableness when he is interviewed. I get the vibe he doesnt enjoy it but does it to keep his investors in the loop and for marketing. Miller seemed like he was born to do it, and really enjoyed it.

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I hear you but this is no where near the love fest Miller had. He was an investment God who could do no wrong. A decade plus streak will do that to you I guess. I still think Berkowitz is that smart quite guy in the corner no one really pays much attention to him. He rarely does interviews, and is very selective. I have really only seen him on Wealthtrack and a few other value focused mediums.

 

Best of all I sense a bit of uncomfortableness when he is interviewed. I get the vibe he doesnt enjoy it but does it to keep his investors in the loop and for marketing. Miller seemed like he was born to do it, and really enjoyed it.

 

he is on Morningstar quite a bit, too.

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Excellent article from Fortune Magazine talking about Bruce Berkowitz's success. One trait I've noticed with the following successful investors (Berkowitz, Biglari, and Bruce Flatt) is that they have no hobbies. They really love their jobs and the investment process.

 

http://finance.fortune.cnn.com/2010/12/10/bruce-berkowitz-the-megamind-of-miami/

 

Buffett and bridge?

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This is interesting:

 

While he may not employ a full-time team of analysts, Berkowitz often hires experts to challenge his ideas. When researching defense stocks a few years ago, he hired a retired two-star general and a retired admiral to advise him. More recently he's used a Washington lobbyist to help him track changes in financial-reform legislation.

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This is interesting:

 

While he may not employ a full-time team of analysts, Berkowitz often hires experts to challenge his ideas. When researching defense stocks a few years ago, he hired a retired two-star general and a retired admiral to advise him. More recently he's used a Washington lobbyist to help him track changes in financial-reform legislation.

 

I read somewhere else that BB likes to keep Fairholme small to avoid bloat (probably group think as well), so he will hire people on a contract basis to help him out. It makes sense to me. Keep your company payroll small, but take advantage of expertise that will help you when you need it.

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I think Berkowitz and Miller are completely different.  Berkowitz is continuously focused on the downside.  I mean he has like 2/3 in equities, and the rest in cash and bonds?  He does special deals like GGP, and ACF.  Miller loved taking risks.  I remember the interview with Bruce about his manager of the decade award.  He basically said 'yeah that's nice, but it doesn't matter if I don't perform going forward so whatever".  He basically took it in stride as if it barely mattered.  Bill Miller's foray into the financials after the first shoe dropped also showed me the clear difference between the two.  Miller's reasoning if I remember it, was basically that 'yeah this happens and it's a buying opportunity, and I bought into financials the last time this happened and made a bundle' (at least that's the gist of what I remember reading, contrarian but not focused on the downside).  Bruce stayed the heck away, way away until everything cleared out.  Or mostly cleared out.  Anyway, the only thing that makes me uncomfortable about the article is the lavishness of his house, but I guess if you manage 10+ billion you can afford luxuries like that, and hey not everyone can be like Buffet :-)  Oh and of course the 10+ billion and his statement that he things 25 billion is a good size for the fund..  Doubt he'll be able to outperform much with that but who knows?  The other thing I liked was his daily speed walk and workouts with a personal trainer.  Just finished the book "Brain Rules" and the whole "exercise is scientifically proven to improve executive function" kind of struck a cord with that article. :-)

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Bill Miller's Least Favorite Interview (August 24, 2007):

 

http://www.kiplinger.com/features/archives/2007/08/miller.html

 

So what's Miller buying? He says financials are the most attractive stocks because they're trading at cheap multiples to earnings and cash flow -- and because the yield curve is steepening, meaning that longer-term bonds are finally paying higher yields than shorter-term bonds. The "big guys" -- Citigroup ©, J.P. Morgan Chase (JPM), Bear Stearns (BSC), Lehman Brothers (LEH), Goldman Sachs (GS) -- trade at "spectacularly low multiples of current earnings." While "earnings may not rise that much, they're not going to drop that much either."

 

Meanwhile...Here's Bruce! (August 14, 2008):

 

http://www.forbes.com/2008/08/14/berkowitz-fairx-pfe-pf-ii-in_jl_0814adviserqa_inl_2.html

 

You've avoided most banks and brokers. Not much interest in bottom fishing here?

 

Well, we didn't know how to. It is impossible to know what they own and who they owed. Let me give you an example: a collateralized debt obligation squared. In order to understand that one security, you would have to read hundreds of thousands of pages of documents to get at the underlying assets. These products that have been made are so complex, they are impossible to understand. I almost think they were done so you could not understand them. Then, when you are doing swaps and derivatives with counter-parties, you don't know who you are dealing with anymore. Maybe you think you are dealing with the best. But you don't know who the best has been dealing with in terms of their counter party risk. That really gets to the point of JPMorgan and Bear Stearns.

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  • 5 years later...

Yes, I know that this isn't the main "Fairholme/Berkowitz" thread but I just wanted to add this new Bloomberg article to THIS discussion because some of us worried that the splashy layout in the 2010 Fortune article may have been signaling a top in the "Berkowitz Bubble".

 

http://www.bloomberg.com/news/articles/2016-02-04/is-bruce-berkowitz-early-or-wrong-with-his-wager-on-st-joe

 

Fairholme Fund investors pulled $2.6 billion since end of 2014

 

Manager's mutual fund trails 99% of peers over 5 years

 

Money mangers like to say they aren’t wrong, just early. But is there a statute of limitations on making such a claim?

 

Consider the case of Bruce Berkowitz’s investment in St. Joe Company, a real estate firm in northwest Florida. Berkowitz, manager of the $2.8 billion Fairholme Fund, acquired most of his stake in the business between the fourth quarter of 2007 and the end of 2009, when the stock sold for an average of about $30 a share.

 

St. Joe today sells for about $15 a share. The Standard & Poor’s 500 Index, including reinvested dividends, has almost doubled in value since the end of 2009.

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