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.
Support MFO
Donate through PayPal
Fairholme Fund: Fund’s Successful Bet On AIG Triggers A Big Tax Bill For Investors
FAIRX was down 2.72% in 2014 (compared to +13% for the S&P 500), and just a bit more than flat this year (compared to +2% for S&P). So folks who bought into FAIRX during the last two years are probably not feeling all that "successful" with the tax bill.
I sold FAIRX in the beginning of 2012. I was going to kick myself for missing out on some big gains with FAIRX -- but just checked the chart, and FAIRX is actually still significantly below the S&P 500 since I sold. Looks like the second half of 2014 really took the steam out its recovery.
Of course, when I sold FAIRX, I didn't put the money into an S&P 500 index fund either. I'd say that's where the real mistake was.
Fairholme says it accrued $2-billion in gains from AIG, and 99% of the distribution was taxable at long-term rates, but I wonder what the real/actual return was for shareholders.
Mr. Berkowitz also sold about 60% of his Bank of America holdings.
After watching his Fannie Mae & Freddie Mac play, it seemed to have intellectual merit, but fighting the government is akin to spitting in the wind.
If my memory serves, he began accumulating Sears at over $100 a share 10 years ago. SHLD is around $20, now. That's alot of opportunity lost.
Lately, his filings show he picked up Canadian Natural Resources, because of depressed oil and gas prices. And always into financials, Berkowitz has returned to a favorite of his, Citigroup. He also recently bought IBM.
Despite his critics, few can argue that Bruce has followed his ("ignore the crowd) convictions, and Ben Graham's words of wisdom.:
"You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right."
*** Now, his once $20 billion FAIRX is under $5-billion. It will be interesting to see if he regains his footing as a value investor, rather than a gunslinger.
The one problem I have is he not doing tax loss harvesting with shld. I as a rule do not reinvest distributions. I also have hsgfx losses so I will take fairs gains
Comments
I sold FAIRX in the beginning of 2012. I was going to kick myself for missing out on some big gains with FAIRX -- but just checked the chart, and FAIRX is actually still significantly below the S&P 500 since I sold. Looks like the second half of 2014 really took the steam out its recovery.
Of course, when I sold FAIRX, I didn't put the money into an S&P 500 index fund either. I'd say that's where the real mistake was.
Mr. Berkowitz also sold about 60% of his Bank of America holdings.
After watching his Fannie Mae & Freddie Mac play, it seemed to have intellectual merit, but fighting the government is akin to spitting in the wind.
If my memory serves, he began accumulating Sears at over $100 a share 10 years ago. SHLD is around $20, now. That's alot of opportunity lost.
Lately, his filings show he picked up Canadian Natural Resources, because of depressed oil and gas prices. And always into financials, Berkowitz has returned to a favorite of his, Citigroup. He also recently bought IBM.
Despite his critics, few can argue that Bruce has followed his ("ignore the crowd) convictions, and Ben Graham's words of wisdom.:
"You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right."
***
Now, his once $20 billion FAIRX is under $5-billion. It will be interesting to see if he regains his footing as a value investor, rather than a gunslinger.