Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
I believe Berkowitz is a top notch fund manager. So for that reason I would hold the fund. I don't own FAIRX, but I do own FAAFX. It's been just as volatile as FAIRX.
What's important in my opinion is how much this fund or other aggressive funds you may own affect your overall portfolio's volatility. In my case, FAAFX is 6% of my 401k portfolio. It's volatile by itself, but I still keep the overall standard deviation of my portfolio as a whole to less then or equal to my bench mark, TRRAX (TRP 2010 retirement fund).
So I guess IMO, I would hold on to a Berkowitz fund but at a percentage you are comfortable with. FAIRX and FAAFX are focused funds that make big sector bets. That makes for inherent volatility. But I believe this manager and fund will be a winner over market cycles.
Yes, keeper. Heathbob and MikeM are spot-on. Hard to think of a better stock picker than Mr. Berkowitz available to us mere mortals. I appreciate his rationale for buying a stock, his case studies defending them, his willingness to be independent and concentrated, be it a sector or even in cash at times, his substantial personal investment in Fairholme Funds, and the reasonable fees. But allocate consistent with your time horizon and risk tolerance, like MikeM points out. Note that his Fairholme Focused Income Fund FOCIX has a much lower volatility than either FAIRX or FAAFX, but is still more aggressive and concentrated than the typical income option. It's done well the past year, while yielding 10% dividend since inception.
I think Fairholme is a top-rate, focused, deep-value investment shop started by a gifted money manager. Click here for latest very frank interview with Berkowitz on Consuelo Mack's WealthTrack.
Comments
What's important in my opinion is how much this fund or other aggressive funds you may own affect your overall portfolio's volatility. In my case, FAAFX is 6% of my 401k portfolio. It's volatile by itself, but I still keep the overall standard deviation of my portfolio as a whole to less then or equal to my bench mark, TRRAX (TRP 2010 retirement fund).
So I guess IMO, I would hold on to a Berkowitz fund but at a percentage you are comfortable with. FAIRX and FAAFX are focused funds that make big sector bets. That makes for inherent volatility. But I believe this manager and fund will be a winner over market cycles.
Yes, keeper. Heathbob and MikeM are spot-on. Hard to think of a better stock picker than Mr. Berkowitz available to us mere mortals. I appreciate his rationale for buying a stock, his case studies defending them, his willingness to be independent and concentrated, be it a sector or even in cash at times, his substantial personal investment in Fairholme Funds, and the reasonable fees. But allocate consistent with your time horizon and risk tolerance, like MikeM points out. Note that his Fairholme Focused Income Fund FOCIX has a much lower volatility than either FAIRX or FAAFX, but is still more aggressive and concentrated than the typical income option. It's done well the past year, while yielding 10% dividend since inception.
I think Fairholme is a top-rate, focused, deep-value investment shop started by a gifted money manager. Click here for latest very frank interview with Berkowitz on Consuelo Mack's WealthTrack.