FYI: (I will link intereview as soon as it becomes available for free, generally early Sat. morning)
Regards,
Ted
September 30, 2016
Dear WEALTHTRACK Subscriber,
Few money managers have the conviction, wherewithal, stamina and independence to stick with positions that remain unpopular and unprofitable for years before paying off. This week’s guest is one of the few! We’ll be joined by Bruce Berkowitz, a deep value, long-term investor who rarely gives interviews. I have been interviewing him on WEALTHTRACK since 2007 and he has always generated a great deal of interest.
Berkowitz is Founder and Portfolio Manager of the three Fairholme funds - his Flagship Fairholme fund, launched in late 1999, the Fairholme Focused Income fund started in 2009, and the Fairholme Allocation fund begun in late 2010.
The Fairholme fund, for which he was given Morningstar’s Domestic Stock Fund Manager of the Decade Award in 2010 has delivered 10% annualized returns with dividends and distributions reinvested since inception, nearly triple the market’s total return.
However, the last decade has been much more difficult. The fund has badly lagged the market over the past 10, 5 and 3 year periods despite having several stellar years including 2012 and 2013 when it crushed the market and led its Morningstar Large Value category, gains that were offset by a big decline in 2011 and then another subpar performance in 2014, hurting its track record. The fund, which once had over $20 billion in assets, is now a fraction of that.
Berkowitz is famous for taking big positions in a handful of companies that are generally shunned and panned by Wall Street when he is accumulating them. He has made a fortune over the years in concentrated stakes in health care, energy and financial services. He has also poured a fortune in recent years into companies such as Florida real estate company The St. Joe Company and retailer Sears, as well as financial firms such as Fannie Mae and Freddie Mac, which have yet to pay off.
There’s a well-known saying “Don’t fight city hall”… but Berkowitz is taking on the entire U.S. federal government. Fairholme is engaged in a multi-year lawsuit against the U.S. government over its handling of the conservatorship of the two mortgage giants, which although hugely profitable, are still under government control and paying enormous dividends to the government - but not to preferred shareholders like Fairholme. I began the interview by asking him why he is so committed to fighting this battle.
If you are unable to join us for the show on television, you can watch it on our website, WealthTrack.com, starting over the weekend. If you’d like to see it earlier, it is available to our PREMIUM subscribers right now. We also have an EXTRA interview with Berkowitz about his views on the presidential candidates. He says it is more about the team than the candidate.
Thank you for watching. Have a great weekend and make the week ahead a profitable and productive one.
Best Regards,
Consuelo
Comments
I've held on to my shares but I haven't added to FAIRX in years. EOY will make decision whether to sell or add.
Berky baby, keep quiet and focus on investing. You are supposed to get older and wiser, not vain-er. I sometimes wonder if fund managers get mid life crisis. Remember Bill Miller buying $70 MM yacht. Would sure love to know what BB bought. If I learn he bought a Maserati or something, I'm out.