Bruce Berkowitz Says I’m Investing In That Which Is Hated Or Deemed To Fail And That’s Where I Like To Be

Bruce Berkowitz fairholme capital management

Here’s a great interview on Bloomberg with Bruce Berkowitz.

In terms of being a contrarian Berkowitz says, “The markets are not cheap, the markets are being driven by a handful of companies. As usual I’m investing in that which is hated or deemed to fail and that’s where I like to be.”

On his investing strategy he says, “I’ve always been value based and I’ve always been a balance sheet buyer. I’ve always bought assets at a significant discount to I believe the value and usually you can only do that when companies have issues but you have to determine if those issues are fixable. Then you have a situation where you have a price and you have a value and you know that over time either the price is going to go to the value or the value is going to come down to the price or most likely they meet somewhere in the middle. And, if your’re really good at what you do the value will increase as the price catches up with the value. But currently I don’t think many people think I have that ability.”

 

https://youtu.be/jPaxIztRRCA

This article originally appeared on The Acquirer’s Multiple – Stock Screener.

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The Acquirer's Multiple
The Acquirer’s Multiple® is the valuation ratio used to find attractive takeover candidates. It examines several financial statement items that other multiples like the price-to-earnings ratio do not, including debt, preferred stock, and minority interests; and interest, tax, depreciation, amortization. The Acquirer’s Multiple® is calculated as follows: Enterprise Value / Operating Earnings* It is based on the investment strategy described in the book Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations, written by Tobias Carlisle, founder of acquirersmultiple.com. The Acquirer’s Multiple® differs from The Magic Formula® Earnings Yield because The Acquirer’s Multiple® uses operating earnings in place of EBIT. Operating earnings is constructed from the top of the income statement down, where EBIT is constructed from the bottom up. Calculating operating earnings from the top down standardizes the metric, making a comparison across companies, industries and sectors possible, and, by excluding special items–earnings that a company does not expect to recur in future years–ensures that these earnings are related only to operations. Similarly, The Acquirer’s Multiple® differs from the ordinary enterprise multiple because it uses operating earnings in place of EBITDA, which is also constructed from the bottom up. Tobias Carlisle is also the Chief Investment Officer of Carbon Beach Asset Management LLC. He's best known as the author of the well regarded Deep Value website Greenbackd, the book Deep Value: Why Activists Investors and Other Contrarians Battle for Control of Losing Corporations (2014, Wiley Finance), and Quantitative Value: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors (2012, Wiley Finance). He has extensive experience in investment management, business valuation, public company corporate governance, and corporate law. Articles written for Seeking Alpha are provided by the team of analysts at acquirersmultiple.com, home of The Acquirer's Multiple Deep Value Stock Screener. All metrics use trailing twelve month or most recent quarter data. * The screener uses the CRSP/Compustat merged database “OIADP” line item defined as “Operating Income After Depreciation.”

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