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.