During his recent interview on The Business Brew Podcast, Bruce Berkowitz emphasizes the importance of evaluating both the numbers and the people involved in an investment.
Initially, he focused on the financials but later recognized the significance of assessing the management, culture, and ownership of a business. He stresses that a good deal cannot be made with a bad person, as negative traits like ego or envy can derail success, even in seemingly clear opportunities.
Berkowitz also notes his increased caution towards banking and financial services, acknowledging that while there are good businesses in the sector, they are rare.
Here’s an excerpt from the interview:
Berkowitz: In the past more so on the numbers and then I swung over to very heavy on the manager and culture and ownership. And now it’s both. I mean basically you can’t do a good deal with a bad person.
I mean you may get lucky but I’ve learned that you just should not do a deal with a bad person. And whatever bad may define at the time. So even if it’s an obvious pathway to success, ego, envy, whatever the case may be can get in the way.
So it’s both. It’s you really want a good business and a good person, or good people, and banking isn’t necessarily a good business, especially what’s going on today.
So I’ve become more cautious on banking and financial services, even challenges in the banking sector though there are exceptions, and there are good businesses run by good people out there, but I believe they’re few and far between.
You can watch the entire interview here:
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