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Will Bruce Berkowitz get the Last Laugh?

dryflower
in Fund Discussions
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?

Comments

  • dryflower
    edited July 2023
    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!
  • PRESSmUPPRESSmUP
    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.
  • yogibearbullyogibearbull
    edited July 2023
    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.
  • CharlesCharles
    edited July 2023
    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.
  • CharlesCharles
    FOCIX and FAAFX (finally) doing well this year too!
  • FD1000
    I used to own FAIRX in the glory years.
  • CharlesCharles
    edited July 2023
    Me too. Long-time holder. I suspect most of us did.
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