Berkowitz Still Thinks Big Financials Will Get Their Due

Bruce Berkowitz, one of Morningstar’s Fund Managers of the Decade for the 2000s, is sticking by his conviction that AIG and other financial stocks are undervalued and will make big gains. “Our inclination remains to run from the popular and embrace the hated where prices tend to reflect such mistrust,” Berkowitz wrote in a report to investors, according to Bloomberg. “Often, we are ahead of the crowd, too early, and appear wrong for a time.” In addition to AIG, Berkowitz says he still thinks banks like Bank of America and Citigroup will prove wary investors wrong. “Financials with enormous cash […]

Berkowitz on Ignoring the Crowd

In a wide-ranging three-part interview with Morningstar’s Don Phillips, top value investor Bruce Berkowitz discusses several aspects of his investment approach, including the willingness to go against the crowd and the decision to run a focused portfolio smaller than those of many other mutual funds. “At the end of the day, investing is about one person has to take the responsibility of pulling the trigger, and group-think always dummies down to the lowest common denominator, and so, you ignore the crowd,” Berkowitz says. “It’s still painful, but it’s worked.” As for portfolio size, he adds, “Given the nature of companies […]

Berkowitz Still Confident in Financials

Bruce Berkowitz remains high on financial stocks, and says his conviction about his financial holdings has only grown stronger. “I’ve been able to see their earnings for the past few quarters, the trends are getting better, the balance sheets are building, tangible book value is growing,” Berkowitz tells Bloomberg from the Morningstar Investment Conference. “The problems from 2007, 2008, still have a ways to burn through, but we’re more than, I would say more than halfway through the problem now.” [youtube=]  

Top Managers Shun Bank Stocks

While it’s now more than two-and-a-half years since the collapse of Lehman Brothers and the worst of the financial crisis, several top investors are still avoiding bank stocks. “We find it hard to believe the banks have cured all their bad asset problems, and they aren’t transparent enough for us to understand the risks,” Clyde McGregor, whose Oakmark Equity and Income Fund has beaten 99% of peers over the past decade, tells Bloomberg. “Can you still make money in banks? Maybe. But we can build a portfolio that doesn’t demand owning them.” McGregor says a big part of the problem […]

Berkowitz Talks Financials, Europe, and His Mistakes

In a lengthy joint interview with Advisor Perspectives and, Morningstar Fund Manager of the Decade Bruce Berkowitz offers his take on the market and several of his main holdings. Berkowitz, who went heavy into financial stocks after the financial crisis, says he remains confident in his financial holdings. “Loans created and underwritten since 2009, or even at the very tail end of 2008, are good loans, well documented, with better credit quality, better yields, and better fees,” he explains. “You have this digestive period of bad loans, and at the same time you have the ingestion of good loans. […]