Fairholme FAIRX
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average rating: 3.85 / 56 ratings
DESCRIPTION:
Date updated:10-26-2008
As of 6-30-08 filing.
New positions: PFE, UNH, FRX, HLF, JEF
Fairholme is run by value investment guru Bruce Berkowitz. They take an extremely focused approach. The Fund's objective is long-term growth of capital. The Fund invests in companies that exhibit growth potential over the long term and which can be purchased at a significant discount to their perceived value. It normally invests at least 75% of its total assets in US common stocks without regard to market capitalization. The fund enjoys a 5 star rating from Morningstar.
From Barron's 5-7-07
Fairholme Fund (ticker: FAIRX), a $4.6 billion multi-cap growth fund poised to outperform even in difficult markets. "We are very focused on not losing money," says Berkowitz, 48, who was named runner-up in 2006 as Morningstar's domestic stock-fund manager of the year. Though Fairholme is performing in line with the market this year, the fund has trumped the Standard & Poor's 500 stock index over three and five years. It returned 19.21% in the three-year span ended May 3, versus the S&P's 12.42%, and 15.5% in the five-year period, against the S&P's 8.91%. Over the longer stretch, Fairholme has trounced 92% of its peers. Pitkowsky became co-manager in 2002, and Trauner is chief financial officer and treasurer.
From a BusinessWeek interview of Berkowitz in 2000:
I think our philosophy makes a lot of sense. We're doing nothing more than what the wealthiest individuals in the world have done. We act like owners. We focus on very few companies. We try and know what you can know. We try and only buy a few companies which we believe have been built to last in all environments. We recognize that you only need a few good ideas in a lifetime to be fabulously wealthy.... We're always trying to wonder what can go wrong. We're very focused on the downside.
Q: Certainly you must have made some mistakes. What do you figure your biggest was?
A: I've never had a big mistake. I've had some tiny ones, but, no, we've never had a big mistake.
Q: What was the one that had you kicking yourself the most?
A: The big kicks have been the errors of omission.
Q: Such as?
A: In the mid-1980s, I was one of the largest owners of a company, well, it's called White Mountains Insurance ( WTM ) now. It used to be Fireman's Fund. And the guy running it is Jack Byrne and he is just everything you'd want. The guy is an owner-manager. He puts his money where his mouth is. Most of his family's net worth is invested in the company. He's made close to 30% per annum in various companies he has run. He was the one who resuscitated GEICO and then he went on to resuscitate Fireman's Fund. He did a great job, and then, in the mid-'90s, I sold the position after making a lot of money. But it was a huge mistake on my part. I sold it in the 80s after buying it in the 30s, and today it's 250.
Q: Ouch.
A: That was a huge mistake that cost clients of Fairholme a lot of money. But there has been no position that cost clients. You have to understand, there were some years when we only had two positions.
Current Returns:
1 yr: 13.62%
3 yr: 13.29%
5 yr: 20.20%
-
PFE
Pfizer Inc - $14.98
- 0.00%
- $14.98
% of portfolio: 14.6%
-
BRK-A
Berkshire Hathawa - $91976.00
- 0.00%
- $91600.00
% of portfolio: 11.3%
-
SHLD
Sears Holdings Co - $67.35
- +8.93%
- $61.01
% of portfolio: 10.3%
-
WLP
Wellpoint Inc - $48.56
- +2.30%
- $47.41
% of portfolio: 6.6%
-
LUK
Leucadia National - $21.89
- 0.00%
- $21.82
% of portfolio: 6.0%
-
CNQ
Canadian Natural - $61.57
- 0.00%
- $62.10
% of portfolio: 5.4%
-
MHK
Mohawk Industries - $40.96
- 0.00%
- $40.23
% of portfolio: 5.2%
-
UNH
Unitedhealth Grou - $28.10
- 0.00%
- $27.72
% of portfolio: 5.0%
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05/09/2007 23:03 PM CDT Asked by mock portfolio
Ever notice taht all the major value funds hold SHLD?
05/09/2007 23:01 PM CDT Asked by mock portfolio
Interesting that he'd have years where he only had 2 positions, and now he has a lot. What does this say? Is he diversifying because of fear? Or bullishness?