The Heilbrunn Center for Graham and Dodd Investing and the Columbia Investment Management Association are proud to present the fifth edition of the Graham & Doddsville newsletter: Interview with Bruce Berkowitz.
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Mr. Berkowitz, you’ve said that you manage the portfolio as if shareholders have 100% of their money in your fund, which is unique in a world in which professional investors increasingly aim for specific style boxes. How did you develop and refine the approach to investing you employ at Fairholme Capital?
BB: Well, there are many elements. If you are going to manage other people’s money and do it well, you have to put yourself on the same level, the same playing field as your investors. î‚Še only way to do that is by being one of your own investors. In order to make as few mistakes as possible, I assume that investors have entrustedmewith all of theirmoney, and then I try to understand the implications of that. Essentially, it means we can’t lose.î‚Še only way to fully understand that is forme to put as much of my own money as I possibly can in the fund. So, we are trying to create level playing fields. I am constantly trying to put myself in the shoes of our shareholders and our investors. So, “don’t lose” is always going to be rule number one because no one wants go back and start again. And again, that is easy to say and easy to think about, but until you put yourself in the situation where if you did lose, you would have to start all over again, then you can’t fully comprehend it.
Read the complete interview
Also check out:
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Mr. Berkowitz, you’ve said that you manage the portfolio as if shareholders have 100% of their money in your fund, which is unique in a world in which professional investors increasingly aim for specific style boxes. How did you develop and refine the approach to investing you employ at Fairholme Capital?
BB: Well, there are many elements. If you are going to manage other people’s money and do it well, you have to put yourself on the same level, the same playing field as your investors. î‚Še only way to do that is by being one of your own investors. In order to make as few mistakes as possible, I assume that investors have entrustedmewith all of theirmoney, and then I try to understand the implications of that. Essentially, it means we can’t lose.î‚Še only way to fully understand that is forme to put as much of my own money as I possibly can in the fund. So, we are trying to create level playing fields. I am constantly trying to put myself in the shoes of our shareholders and our investors. So, “don’t lose” is always going to be rule number one because no one wants go back and start again. And again, that is easy to say and easy to think about, but until you put yourself in the situation where if you did lose, you would have to start all over again, then you can’t fully comprehend it.
Read the complete interview
Also check out:
