As time goes on, most value investors will imitate someone else’s strategy and then work around that strategy to fit there needs. The obvious example is Warren Buffett, who is followed by thousands, if not millions of individuals around the globe. One a personal level, I originally started off as a strict low P/E guy. Dozens of studies have proven that purchasing stocks with low P/E’s outperform the market over the long-haul. I then moved on to the magic formula and then to a Bruce Berkowitz type of investor which focuses on free cash flow yield and quality management. Well if Warren Buffett believes hes “85% Gragham and 15% Fisher“, then I’m “85% Greenblatt and 15 % Berkowitz.” Bruce Berkowitz is the founder and the Managing Member of the Fairholme Fund (FAIRX). Morningstar recently named him domestic fund manager of the year.
Bruce Berkowitz Investment Strategy
Bruce Berkowitz basic investment strategy relies around the idea of counting the cash and ignoring the crowd. In addition, while he has 20 or so stock holdings, the majority of his money is in his best ideas. More importantly, he keeps in mind the idea of not losing money for his shareholders. As a backup plan he keeps cash at 10-20% levels.
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Wed, Jan 27, 2010
Bruce Berkowitz, Value Investing