No Credit Check Payday Loans

The Jewish Businessman Who Beats Warren Buffet At His Own Game

Sunday July 19, 2009 12:00 PM - 2 Comments

bruce-berkowitzA little-known Miami-based finance guru, who 10 years ago set up a mutual fund to mimic the value investing style of his hero, Warren Buffett, had outperformed the Oracle of Omaha over the decade — and by a wide margin. Bruce Berkowitz, who owns and runs the $8.6 billion Fairholme Fund has averaged a whopping 12 percent annual return since he opened its doors Dec. 29, 1999. Buffett, who invests through his Berkshire Hathaway conglomerate, has posted an average annual return of 23 percent over a 30-year period ending in the 1990s, but has returned just 3 percent annual returns over the last decade.

By comparison, the S&P 500 index has averaged a 2 percent annual decline over the last 10 years.

How has Berkowitz, a longtime financial professional with little or none of Buffett’s love of the spotlight, bested his hero?

Well, for starters, he cashed in on highly profitable sectors — like financial and energy stocks — and knew when to bolt.

“He got into financials [early in this decade], made a lot of money and then got out before they blew up,” said Michael Breen, an analyst with Morningstar. “He did the same with energy stocks in early 2002, then got out before they had problems.”.

By contrast, Buffett stayed too long at the financials and energy party and was burned.

Citing Buffett’s refusal to own technology stocks in the 1990s, Berkowitz says he ran away from a lot of financials for the same reason: “I couldn’t understand them. I couldn’t understand the assets. I couldn’t even understand if some of them belonged to the government or not,” he said.

Buffett, said analysts, has also done something else Berkowitz has avoided: Berkshire Hathaway has become an investment behemoth and that has compromised its nimbleness.

That means it has lost some of its ability to buy bargains quietly. Indeed, Berkowitz says size is why he is doing better than Berkshire Hathaway.

Married, with three kids, Berkowitz has no desire to become the next Warren Buffett media darling.

“I do not enjoy doing television,” he said, trying to explain how someone can post such a stellar record compared to the renowned Oracle of Omaha but not get that much face time on TV. “I do as little as possible.”

“You mean no one has offered $1.6 million to have lunch with you?” he was asked, a reference to the most recent annual have- lunch-with-Warren auction’s winning bid.

“Why would anyone offer me a thousand dollars for that?” he asked.

{NY Post/Matzav.com Newscenter}

Email This Post Email This Post Print This Post Print This Post


Top Of Page

2 Responses to “The Jewish Businessman Who Beats Warren Buffet At His Own Game”

1. Comment from large family
Time July 19, 2009 at 2:28 PM

o.k. whats his Tel Number

2. Comment from egg
Time July 19, 2009 at 7:57 PM

MADOFF WAS ALSO GIVING 12 PERCENT I WOULD STAY A HUNDRED MILES AWAY

Leave a Comment