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FAIRX - blast from the past

I doubt anyone owns this fund or cares. I stuck with Mr. Berkowitz and have been suffering for a while. He owned Sears of course and rode it to ~0. Not sure if he also owned other stinkers. He no longer gives interviews and his reports are very brief. The past two years he has been on fire still lagging overall (i am pretty sure S&P not sure about value index). He stuck to his guns and lowered fees recently. In 2019 fund was up 32.06% and this year so far 50%. St. joe is killing it this year along with imperial metals (tiny position). He still owns Fannie preferred and i guess his last hope is Supreme Court. I briefly owned CGM focus. I also owned third avenue value and that ride was miserable; i finally sold a long while ago. I never owned Bill Miller funds. I also owned and finally sold Royce small cap value. George whitney was killing it a long while ago but then performance turned south and he either left Royce or was let go. Jay Kaplan took over and the ride has been miserable. Morningstar turned sour on Berkowitz a long while ago and gave FAIRX a negative rating. Now they are dropping coverage on the fund. TIMES HAVE CHANGED.
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Comments

  • Hear you pain , at one point I owned TAVFX,FAIRX and Bill Miller’s LMOPX. I rode LMOPX all the way down and TAVFX much of the way down. Still can’t believe what happened to Marty Whitman because I read one of his books and all of his investment letters.
  • edited December 2020
    It strikes me as cowardly of Morningstar to quietly drop coverage on Fairholme.

    Morningstar was able to give it the kiss of death with its singular FUND OF THE DECADE award, and then with a rare NEGATIVE rating, the kiss of life!

    Has the Fund of the Decade award been quietly dropped as well?
  • AbrahamLincoln marty stopped running the fund and it was almost a revolving doors of managers. I think that assets under management are in the $200 million now and that is after merging with their international fund. Very sad.

    Dryflower i think that morningstar drops coverage of funds below $1 billion which fairx was at before recent bout of outperformance. Fairx reached $18 billions in assets under management at some point followed by scary level and pace of outflows.

    I also owned third avenue credit after it started to struggle thinking that turnaround is in the cards. That was a mistake.

    A lot of people in the past bailed on all these value funds. People like me where left to hold the bag.

    I think that there is a lesson here.

    Ted before his passing mentioned unfortunately that mfo is not what fund alarm was. I disagree with him. God rest his soul. I am not trying to be mean. I think that now the cat is out of the bag and people started to believe facts that index funds are way to go and active management is a loser game (charlie ellis words not mine). I think that people no longer view a site about mutual fund as important maybe.

    I do follow mfo and i am grateful to David and all the mfo team members. I also still only own active funds. Someday i will learn my lesson.

    Stay safe.
  • May I join this commiseration? Maurice, long gone MFO poster, was also a Third Ave and Acorn (Ralph Wagner) suffering soul. I owned Fairholme from its very early days in NJ, along with Third Ave when Marty was running it. Great returns for both, reports made for good reading, portfolio themes and holdings made perfect sense.

    Then Berkowitz became seduced and infatuated with the abyss - Sears - along with his relative Charlie Fernandez (another story for those two characters) and his modern art collection. Bruce went native in Miami, rather he went gaga, man o man!

    I kept swearing I would dump Fairholme after visiting Sears morgues - oops, meant stores. Several years ago I bailed but still follow his anemic portfolio and skimpy reports and shrinkage of AUM. Third Ave was a mess once Marty retired, including the debacle at TA Credit and contentious President who left it deep in the dirt and illiquid. Revolving door of TAVFX managers were inversely related to the worsening results and holdings that were the total opposite of what Whitman taught, preached and built the Fund to achieve. Last in the clown car for me was Chip Rowley, with no discernible record, who's purchases were dumped by the Fund after he left. Waiter, check please.

    I also dumped Acorn at the same time as TAVFX but that track record was better though bloated and mediocre.

    My philosophy has been to invest with an honest, competent and insightful manager. But that has gone into the crypt. Better to invest in a team who have a strong record and can counter the impulses and obsessions of a single manager. Once the barrel goes over the cliff, we shareholders suffer. The creaming of management fees off the top remains.
  • PRPFX looked great a while back. WWNPX (Kinetics Pardigm). Greenspring Fund (GRSPX). PAUDX (Pimco All Asset all Authority). CGMFX.
  • I have spent a great deal of time thru the years analyzing FAIRX. The only real conclusion I have drawn is that it is just too hard.
  • Come on, people, no fair! Just look at FAIRX --- and CGMFX --- since the end of April! Or since Halloween!
  • edited December 2020
    I haven't heard much about Ken Heebner in years.
    He was a real "cowboy" investment manager back in the day.
    The trailing returns for the CGM Focus Fund occupy the bottom percentile (100) in the Large Blend category for the 1,3,5,10, and 15 year periods ending 12-18-2020.
    The fund's standard deviation is also considerably higher than that of its category peers.
  • I forget if it was exactly a 10-bagger, am thinking more, but I invested with him through his heyday and it was the single best financial decision I ever made, and then I got out

    Not perfect timing, not even timing exactly, a lot of it is fear and postfacto instinct and of course luck
  • edited December 2020

    I forget if it was exactly a 10-bagger, am thinking more, but I invested with him through his heyday and it was the single best financial decision I ever made, and then I got out

    Nice!
    CGMFX was too volatile for me so I never considered purchasing the fund.

  • ...it was the single best financial decision I ever made...I got out

    Not perfect timing, not even timing exactly, a lot of it is fear and postfacto instinct and of course luck

    I rewrote the single best thing you did...always feels lucky. Here's to lucky decisions going forward...please share just before you make them.
  • haha, I have so many loser decisions, this single lucky one sure stands out
  • edited December 2020
    Fell for both CGMFX and FAIRX. Did okay on CGMFX; got out of FAIRX too late to have realized net gains beyond what a decent bond fund would have given me over the same period.

    Kick myself a bit on FAIRX because I knew I wasn't comfortable with the way Bruce was getting waaaay too overexposed, as well as some of his bizarre personnel decisions. He was spending a bit too much time drinking his own bathwater, and I ultimately got too nervous and XFER'd out.

    Now, as a rule, I never let such "moonshot" active funds be more than 7.5% of my total portfolio.
  • I believe that he was drinking or taking something much different than bathwater. Otherwise I bailed before the crash because like you I too became uncomfortable with his overexposure and decisions. I wanted to stick around because I thought he was on the right side of his case regarding the Fannie Mae preferred's he held but I wasn't confidant enough.
  • This entertaining to say the least. Didn't Bruce also tank on Wash Mutual? As I remember he lost millions but refused to concede.

    Joins a long list of mangers who start believing themselves to be omnificent and won't listen to reason or sensible portfolio management principles
    Add to the list of star funds that crash SEQUX and valaent pharm

    LLPFX Disappointing for years. Now top position good old Century Link "These results call to mind other cases in which the fund's highest-conviction holdings have not worked out, such as with Dell DELL and Chesapeake Energy CHK." M*

    The bottom line is beware concentrated portfolios, especially when all the stocks are in the same general sector or type of security.

    I would be very careful of any fund with a single position larger than 3 to 5%

    FAIRX has three stocks now

    Why do you need an ER of 1 plus % and dozens of analysts to track 15 positions?
  • That is how these money managers own many yachts. M* sticked with Bruce B. for many years up till 2008. The flip side is to own index funds instead or pay diligent on active managed funds.
  • I dont mind staying diligent. I also have a "bling" index... When articles appear talking about your managers coin collection ( Michael Price mutual series I think) real estate private jet, or his pictures show him well tanned in the winter with gold jewelry and an obvious botox job, or his third younger wife... Time to Go!
  • Sma3 Washington mutual mistake was bill Nygren oakmark fund
  • part of the reason I stuck w heebner, aside from his spectacular press and success, was that a plutocrat friend knew him and would describe his brainiac-nerd approach, visiting companies and poring over balance sheets days and nights and weekends

    (quite like his neighbor tillinghast, actually)
  • edited December 2020
    Vanity Fair (or, someone) had a long piece on Bruce that was pretty eye opening. I think he brought on a former radio station magnate as research lead, then bought him a house next to his own or something like that -- before falling out.

    The irony with Bruce is that part of his early magic was that as a youngun' growing up in and around the streets of Boston running book for his dad or uncle or whomever, Bruce learned the psychology of money, risk, and greed and used that to stress test positions.

    And, yeah, Bruce has 3 stock holdings right now.

    Heebner by all accounts is a very intense, bright guy. He might also be an adreneleine addict. He also had his big-media blush period, when he seemed to be on every retail money show, chatting up his funds and positions, and saying that the 2008 recession would be short lived and a steep V. All of that was a red flag. Plus the mammoth short position he held in Treasuries at one time, that never panned out, over and over again. And he's getting a bit long in the tooth to be running what appears to be largely a one man show, IMHO.
  • I guess I'll be the guy to point out that this "blast from the past" is up 60% ytd, and its overall numbers now don't look bad at all.

    I do recognize ahead of time that responses to this will probably start off with "Yeah, but..."
  • Adding fuel to the fire, let us not forget Sequoia. I had such fund envy of it for a long time; in retrospect I am thankful it was closed to new investors.
  • What could go wrong? Half the FAIRX portfolio, St Joe, bought almost 13y ago and up >140% ytd, is

    ... one of Florida's largest landowners, with about 573,000 owned acres, of which 70% is located within 15 miles of the Gulf of Mexico. Holdings are concentrated in Walton, Bay, Gulf, Franklin, and countries, in the northwest corner of the state. It also owns a few thousand acres in other counties. It has secured entitlement for development on roughly 30,600 of these acres, to include about 16,300 residential units and 10.3 million square feet of commercial space. Several thousand of its entitled acres won't be developed for decades.
  • Your comment, @davidmoran, reminds me of the Herzfeld CEF, CUBA. It’s original concept was to reap the rewards of Cuba opening up to capitalism. One of the big holdings was St. Joe. Somehow the concept proved a cropper.
  • cool to know, like the hyman roth plans for investment under batista

    I was thinking more about warming and sea levels
  • Just when you thought FAIRX was back...JOE is DOWN TODAY OVER -10%
  • Does anyone know what is driving these moves in JOE?

    I could never find any news to explain its strong moves recently on the upside(Up 147% year-to-yesterday). And I see no news to explain its 12% loss in the first hour this morning. What is going on?
  • edited December 2020
    I held FAIRX with 2 other funds (OAKBX,SGENX) for about 8-9 years from 2000 to 2010. I held FAIRX for about 8 years and OAKBX,SGENX about 9 years. It's part of my system of finding good risk/reward funds until they don't keep up and sell them.
    Similar case to PIMIX, held it from 2011 to 01/2018 and since then maybe just a for a short trade but not for moths. PIMIX is a still a good fund but not the way I do it. See my bond thread(link)
  • Coming into today, FAIRX had a ytd gain of 61.17%. After today's 8.79% decline, the ytd gain is now 47.00%.

    That's impressive.
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