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Not sure if I'm interpreting this correctly, but it looks like BB took his losses and ran. Is Fairholme now out of Fannie May and Freddie Mac? I don't know what else "sold out" could mean, but it seems like it would be headline news considering all the controversy his investment had engendered. http://www.gurufocus.com/StockBuy.php?GuruName=Bruce Berkowitz
As Ted posted earlier, it appears that BB dropped common stock, but not the preferred shares, which do not require disclosure. I will be interested in BB's motivation for this move.
I noted about a year or so ago, that even with the AIG and Sears wheeling and dealing, BB's near term legacy will largely be defined by how the Fannie and Freddie saga unfolds. I continue to believe that.
Frankly, I am optimistic in regards to the legal maneuverings here. I maintain FAIRX as one of my largest holdings.
It swings for the fences and quite often circles the bases. There are, what feel like, long stretches of strikeout seasons as well. To buy this fund during these long stretches of under performance take a certain type of discipline or trust.
I fully understand the love/hate relationship...it's actually more of a comfortable/uncomfortable dynamic for me and I have to remind myself that it will all work out over the long term.
A 15 year view with my "best fit" high and low trend lines:
I think this may be incorrect reporting by Bloomberg. There is some discussion on the FNMA Yahoo Group about this. It may be that Berkowitz is just not reporting on the ownership of common stock in FNMA.
I have owned it for 3 years and am trying to decide if I should fold it into another fund. I am consolidating and was considering putting it into PRWCX (T Rowe Price Capital Appreciation) , or FPACX(FPA Crescent). I currently already own all three funds.
One of my concerns with RNCOX is the costs of owning it. The expense ratio is 2.22%
According to an earlier Bloomberg link posted by Ted, Berkowitz exited his Fannie and Freddie "common" holdings and will no longer report his preferred holdings of same because he is not required to do so.
As Mark noted, he's out of the common and still holds pfd, but is not going to be reporting pfd. I'd guess either Berkowitz wants to sell or substantially increase the position. Otherwise, I'm not sure why he would want to hide the position details.
I'm guessing that after the recent loss in court, even though there's a lot of other leagal action ahead, he's moving to a slightly more conservative stance: there are scenarios where the preferred shares would have value and the common shares wouldn't.
Bloomberg corrects its statement that Berkowitz sold his common shares...
(Corrects headline and first sentence of story published Nov. 14 to remove reference to Fairholme selling Fannie Mae and Freddie Mac common securities.)
Bruce Berkowitz’s Fairholme Capital Management LLC limited disclosures about the firm’s common and preferred stakes in Fannie Mae and Freddie Mac.
The investment firm opted to stop disclosing its holdings in the companies because U.S. Securities and Exchange Commission rules don’t require them to be listed, the firm said in today’s Form 13F filing.
Comments
As Ted posted earlier, it appears that BB dropped common stock, but not the preferred shares, which do not require disclosure. I will be interested in BB's motivation for this move.
I noted about a year or so ago, that even with the AIG and Sears wheeling and dealing, BB's near term legacy will largely be defined by how the Fannie and Freddie saga unfolds. I continue to believe that.
Frankly, I am optimistic in regards to the legal maneuverings here. I maintain FAIRX as one of my largest holdings.
It swings for the fences and quite often circles the bases. There are, what feel like, long stretches of strikeout seasons as well. To buy this fund during these long stretches of under performance take a certain type of discipline or trust.
I fully understand the love/hate relationship...it's actually more of a comfortable/uncomfortable dynamic for me and I have to remind myself that it will all work out over the long term.
A 15 year view with my "best fit" high and low trend lines:
http://investcorrectly.com/20141114/story-fairholme-funds-missing-federal-home-loan-mortgage-corp-otcbbfmcc-federal-national-mortgage-assctn-fnni-otcbbfnma-stakes/
I have owned it for 3 years and am trying to decide if I should fold it into another fund. I am consolidating and was considering putting it into PRWCX (T Rowe Price Capital Appreciation) , or FPACX(FPA Crescent). I currently already own all three funds.
One of my concerns with RNCOX is the costs of owning it. The expense ratio is 2.22%
Nice.
(Corrects headline and first sentence of story published Nov. 14 to remove reference to Fairholme selling Fannie Mae and Freddie Mac common securities.)
Bruce Berkowitz’s Fairholme Capital Management LLC limited disclosures about the firm’s common and preferred stakes in Fannie Mae and Freddie Mac.
The investment firm opted to stop disclosing its holdings in the companies because U.S. Securities and Exchange Commission rules don’t require them to be listed, the firm said in today’s Form 13F filing.
http://www.bloomberg.com/news/2014-11-14/fairholme-exits-fannie-freddie-common-limits-disclosures.html
The preferreds were up around 5%