Bruce Berkowitz is the founder and the Managing Member of the Fairholme Fund. Prior to forming Fairholme Capital Management, Mr. Berkowitz was a Managing Director of Smith Barney, Inc. from December of 1993 to October of 1997. Since inception in 1999 through the end of 2007, his Fairholme Fund has returned 17.40% annually on average. During the same period, the S&P 500 averaged only 1.71%.
Investing Philosophy:
Bruce Berkowitz concentrates his investments in a relatively small number of companies. He thinks that the more diversified the portfolio, the more likely the performance will be average. He likes companies with great managers, and deeply undervalued stocks. Benjamin Graham’s “The Intelligent Investor?serves as the inspiration for Berkowitz?investment strategy. He focuses investments on companies that have exceptional management, that generate free cash, and that are cheaply priced. Berkowitz will also invest in mediocre companies that are trading at a significant discount to intrinsic value where there exists a catalyst ?an event that makes it likely the gap between market price and intrinsic value will narrow in a reasonable amount of time.
(GuruFocus, November 16, 2009) Rather than providing an introduction to Bruce Berkowitz’s latest thinking, why don’t we let you watch the following video with Bruce Berkowitz recently appeared on Consuelo Mack WealthTrack. More...
(GuruFocus, November 3, 2009) Today's big story is Berkshire Hathaway's proposed acquisition of Burlington Northern Santa Fe (BNI). The media has been full of commentators who are eager to give their opinions. More...
We review securities from bank debt to common stock of companies, when their respective market prices have fallen; sometimes, fallen over the proverbial cliff. And by "review," I mean we count cash. In the case of common stock, we count the amount of cash that's left for owners after all the bills are paid to maintain a company's business. And we usethe company's income statements, cash flow statements, balance sheets to compute the numbers in as many different ways as possible. At Fairholme, we treat common stock as the most junior bond in a company's capital structure, where the true earnings, the free cash flow of a company, are akin to a coupon without a maturity date. We get really excited when we can find more senior and secure bonds that yield better than average equity-like returns. We then compare market prices to our estimates of free cash flows, to determine an expected return on investment. Price matters, and buying right is half the battle. Getting a reasonable estimate of expected free cash flow is the other half.More...
(GuruFocus, October 12, 2009)According to GuruFocus Data, Investment Guru Bruce Berkowitz continued to reduce shares held for his Fairholme Fund. GuruFocus data shows that he recently reduced 29.06% of his previous holding of 10.07 million shares to the current holding of 7.14 million shares, at a price of around $10.3 per shares. Berkowitz’s holding is at 11.88%, below the 15% set by the management.More...
Bruce Berkowitz of the Fairholme Fund has had outstanding returns since the inception of his Fund in 1999. In his most recent semi-annual letter, he penned, “At this time, healthcare and defense remain significant sectors for the Fund. We believe many companies in these sectors are undervalued as they offer essential services and products, have few if any substitutes and have strong cash flows. What’s more, their margins are high enough to assure a steady stream of profits but not so high as to draw in competitors. We believe they are in the sweet spot.” Fairholme has an uncanny ability to think outside the box and runs a concentrated portfolio. In that letter, the Fund showed a whopping 14.3% position in Pfizer (PFE). Why would Berkowitz make such an outsized bet? More...
In a conference call this afternoon, Bruce Berkowitz answered a number of shareholder questions regarding The Fairholme Fund, the state of the overall stock market, and prospects for health care reform. Mr. Berkowitz’s record at The Fairholme Fund since its inception on December 29, 1999 has been nothing short of extraordinary. Based on the fund’s semi-annual report dated June 30, 2009, annualized performance since inception has been a gain of over 12% annualized compared to a loss of over 3% annualized for the S&P 500. More...
(GuruFocus, September 29, 2009) Fortune has an article today on Bruce Berkowitz. His Fairholme Fund is up 28% YTD. The article reviewed several of his key holdings: American Express, Americredit, Pfizer, Hertz, Jefferies, and Berkshire Hathaway. More...
(GuruFocus, September 28, 2009) Strange thing is happening in Bruce Berkowitz’s portfolio. As of June 30, 2009, his Fairholme Fund has 41% of assets in Health Care! More...
(GuruFocus, September 24, 2009) These are companies that are owned by Investment Guru Bruce Berkowitz and that are paying the highest percentage of dividends: More...
(GuruFocus, September 23, 2009) Great minds think alike. I am talking about Investment Gurus Warren Buffett and Bruce Berkowitz. Everyone knows who Buffett is. Bruce Berkowitz enjoy less fame than the former, nonetheless he is probably not less achieving, considering his age. Berkowitz manages Fairholme Fund, a mutual fund he started in 1999 and by the last time he reported he had about $8.125 billion under management. The following is his fund’s performance for the past ten years. Look how he outperformed S&P 500 most of the time by a large margin at this page . Pretty cool, isn’t he? More...
(GuruFocus, August 24, 2009) Forbes.com has released the complete video in which Steve Forbes interviewed Bruce Berkowitz. Berkowitz talked extensively about his holdings. Aside from his outstanding track record, at GuruFocus we also appreciate single-minded pursuit for cash-flow yield in stock selection, his concentration in positions and his openness in discussing these positions. More...
Forbes has a brief video clip in which Steve Forbes interviewed Bruce Berkowitz. Berkowitz explained why he thinks American Express is unique among the financials. More...
Berkowitz thinks many of his investments are still undervalued despite of the recent run-up. Specifically, he thinks Healthcare and Defense industries are the sweet spot. He believes that many companies in these sectors are undervalued as they offer essential services and products, have few if any substitutes and have strong cash flows. In the first half of 2009, Fairholme Funds had total returns of 16.21%, vs. S&P 500's 3.16%. Fairholme has appreciated about 12.06% a year since its inception. Meanwhile, the S&P 500 lost about 3.06% per year. This is the Q2 Portfolio update of Fairholme Capital. More...
(GuruFocus, August 5, 2009)Bruce Berkowitz recently released his latest semi-annual report. He disclosed during the first six months of the fiscal year (ended on May 31, 2009), the Fund materially disposed of holdings in the following investments: Canadian Natural Resources Ltd., Mueller Water Products, Inc., DISH Network Corp. Jefferies Group, Inc., and EchoStar Corp. More...
(GuruFocus, July 15, 2009) These is a good article in www.kiplinger.com about Bruce Berkowitz entitled “ 4 Cheap Stocks to Buy Now”, written by Steven T. Goldberg . The article mentioned four stocks that are owned by Berkowitz, but the author recommend invest buy the Fairholme Fund directly insead of piggybacking on the fund. The four stocks mentioned are: Pfizer (PFE), WellPoint ( WLP), Northrop Grumman ( NOC), and General Dynamics ( GD) More...
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