Morningstar domestic stock fund manager of the year Bruce Berkowitz is standing by his big bet on beaten-down financials, and recently explained why on Consuelo Mack’s WealthTrack. Berkowitz says that, having been incredibly scrutinized in recent years, financials now have strong balance sheets and excellent earnings power — and are trading at extremely cheap valuations. He says enough time has passed since the financial crisis that many bad loans are coming off the books, and banks have now had two years of making very good, profitable loans. Berkowitz also says he’s about two-thirds invested in equities, and has billions to spend should further stresses create new opportunities.