Bruce Berkowitz – The Right Time to Invest is Always
Interview with Berkowitz from the Investment Newsletter of Columbia Business School.
BB: The management factor is important, but the ability of a company to intrinsically generate cash is probably more important. It is always nice to own a company that your idiot relative could run. Great managers have failed at lousy businesses, so really the nature of the business and its ability to generate reasonable amounts of free cash flow—even in stressful environments—in relationship to the price that you paid is the most important factor. Bad management or a bad person can really screwup a good company so the management factor has become more and more a part of how to kill a business. Once you ascertain the free cash flow of a company, one of the ways that you can try to kill a business is through poor capital allocation.
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