Will Bruce Berkowitz get the Last Laugh?

dryflower

Steller earnings at St. Joe yesterday propelled the Fairholme Fund to a gain of 15.01%. That may be the largest single day advance for a mutual fund I have ever seen. This on top of a YTD gain of either 33.3% (Morningstar) OR 34.34% (Yahoo).

There are always a lot of "Yeah, but"s when talking about Fairholme's performance, but from inception it has done just fine, especially after this year, and especially after yesterday. One has to go cherry picking to choose time periods which cast it in a bad light.

"Sure it's done great this year, for the past year, for the past 3 years, the past 5 years and the past 20 years, and it's done okay for the past 15 years --- but what about that 10 year number???"

I think what Bruce Berkowitz has always talked about delivering was good but quite lumpy returns. Is that what we're now seeing?

And by the way, what about this discrepancy between Morningstar and Yahoo? Does this happen often? Which is correct?

dryflower

I will answer my own question here. Based on a final value of $24.75 and Tuesday's close of $33.25, Yahoo is correct and Morningstar is wrong.

(update - Morningstar has corrected their number)

rforno

Notable, sure ---- but how long did he have to hold the position to see that gain? IIRC that's been a dog stock for well over a decade and I suspect he's been underwater for most of it as their largest shareholder.

dryflower

Well, that's one of those "Yeah buts" I was talking about

Annualized return for St. Joe over the past decade is 11.53%

rforno

dryflower said:

Well, that's one of those "Yeah buts" I was talking about

Annualized return for St. Joe over the past decade is 11.53%

I'll just plead ignorance - I really haven't thought of that stock since the mid-00s!

PRESSmUP

rforno said:

Notable, sure ---- but how long did he have to hold the position to see that gain? IIRC that's been a dog stock for well over a decade and I suspect he's been underwater for most of it as their largest shareholder.

Given the fact that it's now almost 80% of the FAIRX portfolio, what does Bruce do now? If he pats himself on the back and moves on, can you imagine the year-end Capital Gain distribution to look forward to? He'll probably sell it and buy FNMA, and then sit back and wait a few years.

yogibearbull

Berkowitz gets to play boss at St Joe, and has seat at the table for his other big holdings, both big ego boosters, all on his shareholders' dime. What do the shareholders get?

FAIRX holds 4 stocks. It is non-diversified in extreme.

msf

rforno said:

Notable, sure ---- but how long did he have to hold the position to see that gain? IIRC that's been a dog stock for well over a decade and I suspect he's been underwater for most of it as their largest shareholder.

As a result of these promising developments [in 2021], Berkowitz commented that Charlie Munger (Trades, Portfolio) was correct when he said, “The big money is not in the buying or the selling, but in the waiting.”

https://www.forbes.com/sites/gurufocus/2021/08/02/berkowitzs-fairholme-fund-takes-a-spade-to-largest-holding-st-joe/

The fund has landed in the top 5% or the bottom 5% every year in the past nine. It seems not so much a matter of having to wait a decade for a big pop as it is a matter of having more losing years than winning ones.

Charles

When it came to fame, the 1st decade of century, FAIRX was a much more docile fund ... relatively low vol. That changed in 2nd decade. Good to see the fund and its long-time believers rewarded.

Charles

FOCIX and FAAFX (finally) doing well this year too!

FD1000

I used to own FAIRX in the glory years.

Charles

Me too. Long-time holder. I suspect most of us did.