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Friday 30 March 2012

Guru Speak: Lessons from Bruce Berkowitz

Here is a list (highlights are from me) from Bruce Berkowitz, a very prominent value investor and owner of Fairholme Capital and judged as the best fund manager of the decade in 2010 by Morningstar.
  • You always have to have cash, especially when no one else has it. 
  • No free lunch- it’s not free, or it’s not lunch.
  • You can’t change people! You can change yourself, but not others.
  • You only see reality under extreme stress- you want to get to know someone, you need to see them under extreme stress.
  • Volatility is not risk!
  • Always assume you will have bad luck.
  • Few variables to win. Once you have to think about more than 3 variables, your odds of winning are low.
  • If you have to use more than 6th grade math, you’re in trouble.

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