The peaks and valleys that define the chart of the Fairholme Fund (Trades, Portfolio)’s performance jutted to a new summit in 2016, proclaiming to investors that a mere $10 laid in the hands of Bruce Berkowitz (Trades, Portfolio) in 2000 would be worth $62.21 today. Far below, at base camp, investors entrusting the same amount to the comparatively plodding and oxygen-starved S&P 500, after clocking another year in its hike, get $20.84 back.
Such was the year of fresh wind not just for Berkowitz, but another popular value fund, Mason Hawkins' (Trades, Portfolio) Longleaf Partners. Most of their returns are owed to stock picking. A generally verdant environment for underpriced equities offered a dose of help, too, as U.S. large cap equity value funds raised the average bar to 15.1% in returns, as measured by Morningstar, year to date. Fairholme topped it with a 26.7% return and Longleaf with 21.62%. Their performance placed them among the best 10 large-cap stock funds of 2016, according to Kiplinger. Continue Reading »