After struggling in 2011, Morningstar Fund Manager of the Decade Bruce Berkowitz is rebounding strong in 2012, with his Fairholme fund in the top 1% of funds in its category year-to-date, according to Morningstar.com. And at a recent Columbia Investment Management Association conference, Berkowitz laid out his checklist for analyzing a company and its stock, and Market Folly offered a summary:

1. Can you kill it? Is there adult supervision at the company?
2. Is the company essential? Does it depend upon the kindness of strangers?
3. What can the company make? Profitability for owners.
4. Management – honest in past and present?
5. Catalysts – Buybacks? Misunderstood? Is enterprise having a big problem that is fixable? Everyone’s been burned by the stock so afraid to buy it.

Berkowitz also offered the top lessons he wished he learned long ago. Among them:

• You always have to have cash, especially when no one else has it.
• You only see reality under extreme stress
• Volatility is not risk!
• Always assume you will have bad luck.
• If you have to use more than 6th grade math, you’re in trouble.

Market Folly also notes that Berkowitz says he is now 100% in financials. He says AIG, Bank of America, and CIT Group are misunderstood, and he likes holding companies like Berkshire Hathaway and Sears Holdings. He has plenty of interest in the U.S., but no interest in European investments.