Graham And Doddsville

Bruce Berkowitz, founder of the Fairholme Fund, is one of my favorite investors.  I heard him speak several times as a student at Columbia.  Berkowitz has recently been making rounds in the media.  Berkowitz and his team arrive at intrinsic value by “counting the cash.”  He does this by adjusting financial statements to come up with an estimate of owner earnings.  I am working on a post about owner earnings, which should be posted shortly.  Once Berkowitz determines a company’s owner earnings yield, he then tries to “kill” the business.  Killing the business means trying to imagine every worse case scenario, and testing how that scenario will affect the company.  He looks to buy companies with a double digit owner earnings yield and solid management, that he can’t kill.

To learn from SuperInvestor Bruce Berkowitz, see below:

Interview on Bloomberg TV (12/9/2008)

“A Bargain Hunter Stands Tall” (Kiplinger.com)

An older Interview with Investment News from December 2007.

Michael Hirsch wrote an interesting article in Newsweek about one person who is missing from President-elect Obama’s economic team – Nobel Prize winning economist and Columbia Professor Joseph Stiglitz.  It is an interesting critique given Professor Stiglitz’s background and experience, as described by Hirsch.  The article also quotes colleague Bruce Greenwald.

Read the article here.

Columbia Professor Bruce Greenwald and Judd Kahn have released their newest joint-venture:  “globalization: n. the irrational fear that someone in China will take your job.”  I spent as much time as possible in classes with Professor Greenwald (even before I was eligible to enroll for them), and can vividly hear him exclaiming the title.  I have not yet read the book, but hope to pick it up this week.  Here is a brief excerpt of the press release:

To its critics, globalization is a terrible development that makes almost everybody worse off and threatens the survival of the planet. They blame it for everything from mass poverty in Africa and Latin America to the falling living standards for workers in Europe and North America. In contrast, globalization’s advocates argue that it is the greatest force for good in human history, a powerful institution for improving the quality of life around the world. The underlying problem with both of these positions, says Bruce Greenwald and Judd Kahn, authors of Globalization: n. the irrational fear that someone in China will take your job, is that they are based on certain accepted truths that are either highly questionable or largely false.

You can read the press release from Wiley here.

Listen to Professor Greenwald defending his thesis on the Biz Radio Network here.

For more on Professor Greenwald, see the recent blog entries (here, here, here, and here) on the Columbia Business School Blog: Public Offering.

David Winters, founder of The Wintergreen Fund, was recently interviewed on Fox Business. I was fortunate to hear Mr. Winters speak several times at Columbia.  David Winters is the protege of legendary value investor Michael Price.  Winters spoke about buying excellent businesses at cheap valuations due to the current environment of indiscriminate selling.

To read more about David Winters, check out the Summer 2007 issue of Columbia Business School’s Graham and Doddsville

Prem Watsa, of Fairfax Holdings, speaks about Ben Graham and his philosophy.

Thanks to Gurufocus.com for posting the video.

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Here is a short article from the Miami Herald about Professor Greenwald’s new book:  globalization: n. the irrational fear that someone in China will take your job.

Bruce Berkowitz, manager of The Fairholme Fund, recently held a great, candid call with shareholders.  It is a must-listen here.