Spoke Fund ®

Cale Smith

More from Bruce Berkowitz on the same philosophy behind Spoke Funds® in this article (emphasis mine):

The advice I give to most investors is that…investing is not your profession. That at the end of the day, you’re going to have to trust someone. So there are four, five simple rules that we use, that Fairholme uses when evaluating companies’ managements I think investors should use.

You have to study the paper trail. So if you were looking at a mutual fund, you want to study the paper trail of the fund, especially during stressful periods. Don’t read what the fund is talking about now. Go back to before 1990, go back to 2006, ‘07, read what the fund had to say before a difficult period. See how the fund behaved during a very stressful period.

Now, talk is cheap. But when times get very tough, you see the true person. You see. It all comes out in tough times.

And also you want to make sure that whoever is managing your money has most of their family net worth in the same investments because if it’s going to be good enough for you, it better be good enough for them.

Read the entire interview here.