Bruce Berkowitz Quotes
105 Bruce Berkowitz Quotes
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[January 2009] We’ve been buying companies at prices that even when I was in my most pessimistic mood, I didn’t think we would see so quickly.
Bruce Berkowitz
[January 2009] We are selling that which is cheap to buy that which is cheaper, in order to make more money in the future and to help manage taxes for our shareholders.
Bruce Berkowitz
Some of the stocks we hold are so cheap that we fear the companies will be taken over at too cheap a price.
Bruce Berkowitz
We don’t mind owning bonds that are yielding 15%, 16%, 17%.
Bruce Berkowitz
[In 2009] Eighteen years ago, I was a big buyer of Wells Fargo, Freddie Mac and MBIA. They were simple businesses then – and they were cheap and understandable.
Bruce Berkowitz
We look at companies, count the cash, and then try to kill the company… We spend a lot of time thinking about what could go wrong with a company… We try every which way to kill our best ideas. If we can’t kill it, maybe we’re on to something.
Bruce Berkowitz
If you go with companies that are prepared for difficult times, especially if they’re linked to managers who are engineered for difficult times, then you almost want those times because they plant the seeds of greatness.
Bruce Berkowitz
I look at free-cash-flow yield.
Bruce Berkowitz
[On free-cash-flow yield] The free cash a company generates divided by its market capitalization.
Bruce Berkowitz
When it comes to chocolate, people don’t put an unbranded piece of chocolate in their mouth. But you’re okay ingesting a generic drug whose formula may differ from the real thing that you used to use?
Bruce Berkowitz
I’m not interested in meeting management today… I’m more interested in finding out how a person has behaved in the past.
Bruce Berkowitz
If I can listen to a few of the CEO’s speeches and read the transcripts of earnings calls, that is more important than talking to him.
Bruce Berkowitz
A smart, dishonest person can fool you, especially when he’s talking about his own business.
Bruce Berkowitz
We spend a lot of time on mistakes and asking why we make them. It’s great for the investment process.
Bruce Berkowitz
[On his biggest mistake – Investing in IDT a telecommunications company] I’ve met IDT’s CEO, Howard Jonas. I thought he did some very creative, smart things, but the investment just turned out to be a value trap.
Bruce Berkowitz
After I had started working in the investment business, I began reading the annual reports written by Berkshire Hathaway chairman Warren Buffett, which led me to the works of Benjamin Graham and David Dodd.
Bruce Berkowitz
The fundamental problem of equity investing is how to value a company.
Bruce Berkowitz
Most assets deteriorate over time, and we have to account for that.
Bruce Berkowitz
When now-defunct Enron entered into a long-term trading or supply arrangement, the company very optimistically estimated the net present value of future profits from the deal and put that into the current year’s earnings even though no cash was received. Enron is gone, but not the practice.
Bruce Berkowitz
Investors who search for companies with good free cash flow often find them in mature industries, such as the flooring business.
Bruce Berkowitz
Some companies produce plentiful cash flow, but their corporate structures mask it.
Bruce Berkowitz
If you invest in a company such as Leucadia or Berkshire Hathaway, you are banking on management’s ability to identify investments with high free cash flow.
Bruce Berkowitz
If the company buys back undervalued stock, selling shareholders suffer while long-term shareholders benefit. If the company buys it stock at inflated prices, sellers benefit and long-term holders lose out. Value investors, having a long-term orientation, generally look for companies that consistently repurchase their stocks during periods of undervaluation.
Bruce Berkowitz
Management must decide when to return cash to shareholders and when to invest it. Earnings intelligently invested will generate higher future levels of free cash flow. On the other hand, poorly invested earnings destroy value.
Bruce Berkowitz
Some managements, especially those in struggling industries, would benefit their investors by returning capital to them rather than reinvesting in the business at low rates of return.
Bruce Berkowitz
[In 2008] Companies under stress, such as General Motors or Citigroup have been, are almost always late to cut their dividends. In such cases investors who buy stocks with unusually rich dividend yields and deteriorating fundamentals are asking for trouble. These dividends are likely to be sliced.
Bruce Berkowitz
Identifying a company with a big cash stash and the ability to generate more is a great start. But the cash doesn’t do the shareholder any good unless management makes smart investments with it, or returns it to its owners via dividends or share buybacks.
Bruce Berkowitz
If there’s enough money in the cash register, somebody will find a way to get it out.
[On investing too early] Premature accumulation.
Bruce Berkowitz
[On Mohawk industries in July 2008] Buffet would love to buy Mohawk but most likely couldn’t because of antitrust concerns.
Bruce Berkowitz
To value a business you must follow the cash. What else counts?
Bruce Berkowitz
[Successfully invests by] Ignoring the crowd and going to stressed areas many people are running from.
Bruce Berkowitz
We make our judgements based upon the cash that securities generate.
Bruce Berkowitz
We tend to go towards areas where there’s a great amount of fear. And we get a bit greedy.
Bruce Berkowitz
We keep it simple.
Bruce Berkowitz
We count cash. We see the cash that the security can generate for it’s owners and if it’s good in relation to the price we have to pay we buy.
Bruce Berkowitz
[In Jan 2010] We always have a lot of cash. Cash becomes extremely valuable when few have it and cash in some ways is a financial valium. It allows us to deal with extremely stressful times, it allows us to take advantage of cheap prices without having to sell anything. It gives our shareholders liquidity, so we always have a lot of cash and thankfully we have great, great shareholders who have stayed the course with us.
Bruce Berkowitz
Our job is basically just to improve peoples wealth.
Bruce Berkowitz
[In August 2009 on having $100 million of his own family money invested in the Fairholme Funds] To make a level playing field. It’s real important that we feel the pain and joy of our shareholders.
Bruce Berkowitz
We’re non diversified. We focus. Why not buy more of your best idea rather than your 60th best idea?
Bruce Berkowitz
[On being focused rather than diversified] You can’t date all the girls.
Bruce Berkowitz
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