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Bruce Berkowitz Extended Bloomberg Interview – Touches on Bank of America, St. Joe and Fairholme’s Recent Performance

February 13, 2012 | About:


Summary of Berkowitz's comments:

- The math and numbers show that the financials are improving, the market just hasn’t believed it to date.

- He believes recapitalized institutions will at some point have the ability to earn 10% on shareholder equity. If you buy them at half of book value, then you are earning 20%.

- There is even a larger margin of safety because of the tax losses these companies are carrying.

- He wants to be judged on long-term performance, not short-term. This is for both good and bad performance. There is nothing especially meaningful about one calendar year and Fairholme is in this for many years.

- In extreme cycles to survive is to win. Investing in the banking sector survivors will work out well.

- He feels most comfortable with Bank of America (BAC), likes the CEO; he sees it as similar to his Wells Fargo (WFC) position in the early '90s.

- The recent settlement is good in that it removes uncertainty which investors hate.

- He likes Berkshire (BRK.A)(BRK.B) and Leucadia (LUK) because leopards don’t change their spots, they have done well in the past and will in the future

- St. Joe (JOE) was never as large a position for the fund. It is about real estate. Right now the real estate is worth very little; at some point demand will increase and the value of that real estate will move quickly. It is the last sparse spot in Florida.

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