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Bruce Berkowitz Debates with Real Money, Buying More St. Joe Company and AIG

October 14, 2010 | About:

guruek

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Before presenting his bearish case to VIC, David Einhorn called Bruce Berkowitz and offered to debate over the investment merits of the St. Joe Company (JOE). Until the news hit the wire, Einhorn was still waiting for Berkowitz’s call.

St. Joe Company stock decline about 10% after Einhorn’s presentation from over $24 to around $22 yesterday. At the time of this writing, the stock declined another 9% to a little over $20 per share.

Einhorn’s prophet appears to be self fulfilling.

In the mean while, Premium members of GuruFocus should have noticed that Berkowitz’s added to his position yesterday. According to GuruFocus data, Berkowitz added 0.35% to his position at the price of $22.16 per share. Currently he owns 26,891,820 shares exactly, making the stock accounts for 5.71% of his total stock portfolio. Currently he owns 29.1% of total shares outstanding.

Apparently, instead trading words with super-investor Einhorn, Berkowitz debated with real money.

Our record also shows that on Oct.8, 2010, Berkowitz added 11.39%to his American International Group (AIG), bringing the total to 36,657,349 shares or 15.01% of his stock portfolio. This is the second time that Berkowitz added to his position in the largest recipient of government bailout money.

These is the kind of information our premium member are enjoying. Curious what is behind the curtain? Click here to sign up for a 7-day try-out.

The following video by Morningstar is a few months old. We are not sure if Berkowitz will ever respond to Einhorn, but this short essay represented his point of view less than five months ago:




Rating: 4.6/5 (18 votes)

Comments

Evgeny Garanin
Evgeny Garanin - 3 years ago
go to www.sec.gov and get same information for free

paulwitt
Paulwitt premium member - 3 years ago
Why would Bruce Berkowitz want to call David Einhorn?

yswolinsky
Yswolinsky - 3 years ago
it is much easier to track it on gurufocus
Hester1
Hester1 - 3 years ago


That is probably why Bruce Berkowitz didn't want to debate or talk to Einhorn! If he was right there pointing out the bullish case, the stock probably would not have cratered like it has, and he wouldn't get to pick up shares on the cheap.
buffetteer17
Buffetteer17 premium member - 3 years ago
Maybe the difference of opinion is based on different time frames. It seems logical that JOE's properties would not fare will in the wake of the great recession. However, as the recovery slowly crawls along, the land is still there. In an economic recovery, with all the new government debt, I think we can expect asset price appreciation and inflation in the second half of this decade.

Berkowitz would hold for 5-10 years. I get the impression that Einhorn is in more of a hurry to profit from this. It may be that both are correct, given their investing time horizon. What would be ironic is to see Einhorn switch from short to long in a couple of years at a price of around $15.
augustabound
Augustabound - 3 years ago


it is much easier to track it on gurufocus
I think Evgeny's point is the same as my thought, you need to go directly to the source for the info. Gurofocus is a great resource, but a secondary one like morningstar or msn.

And the sec info is free. :)

paulwitt
Paulwitt premium member - 3 years ago
What a bad day.....one of my stocks Sharps Compliance (SMED) is down 22% today on 10 times normal volume....

madbulk
Madbulk - 3 years ago
what does increased by 0.35% mean?

it was a 6% position and now it's a 6.35% position?
superguru
Superguru - 3 years ago
yes, buffetteer has good point that - Time horizon and price at which you buy makes the difference.

JOE could be Short at $20 as Einhorn says but a buy at $10 per share.

Also 10-20 years down the road that land which JOE owns could be really valuable as Berkowitz says. I cannot predict future 10-20 years away so for me understanding Berkowitz logic is hard. But that is my shortcoming not stock's.

Anyway I own enough JOE through my holding in FAIRX.

JOE goes into too difficult pile till price is around $10, if it ever does. Meanwhile, Let me go rummaging through the "for profit education" carnage and check out COCO which Batbeer suggested.

batbeer2
Batbeer2 premium member - 3 years ago
@Paulwitt

1) That is not bad.... that is great if you really like that stock.

2) SMED is one of the few stocks I track as a short. I don't short, mind you, but I track one now and then to test my analytical skills.

SMED generated < $1m of EBIT for years. The company IMO has no barriers to entry. They provide sturdy envelopes and packages to physicians. They act as a middle man between doctors and waste disposal companies. This is NOT stericycle. Till 2009 the performance of the company was mediocre.

In 2009, they announce a government contract; a massive spike in earnings. This appears to be a contract to buy supplies in case of a disaster event (small pox or anthrax); nonrecurring. The spike is now in the past and EBIT is on its way back to < $1m. 18m of cash plus 10x1m of EBIT is say.... 30m.

Hence my vote of $2.5. I'm a pessimist. On a short, I invert :o)

Then again, for the first time in a long while, there is an insider buying.

Not trying to kill your day here, just sharing my thoughts.
paulwitt
Paulwitt premium member - 3 years ago
Superguru, check out ITT Educational (ESI). It is down today 14% on 3 times normal volume. Richard Blum has 18% of his 1.7 billion$ portfolio in this stock.

Education is not going away IMO :)

Disclosure: I am long ESI
paulwitt
Paulwitt premium member - 3 years ago
@Batbeer2,

That's ok Batbeer2, I'm a grownup. I appreciate your thoughts on the stock because I try to learn as much as I can.

As for SMED, my thesis is this. I am buying it as a potential high growth business after looking at Stericycle and actually hearing the CEO of Waste Management talk about "sharps". I think SMED could have a niche, and be a low cost operator...

superguru
Superguru - 3 years ago
I will look up ESI.

On Richard Blum and 18% in ESI, remember, Gurufocus tracks only US stocks and ADRs portion of portfolio so percentages can be quite misleading when gurus invest in other instruments as well. I do not know if that is the case for sure for Richard Blum.
madbulk
Madbulk - 3 years ago
I wasn't being snide. I really wasn't sure about the expression "increased by .35." If I have 100k in something and I increase my stake by .35 that's uh.... ummm...

well, it's different than increasing my position from 1% of holdings to 1.35% of holdings, I KNOW THAT MUCH. :)

So I'm asking what it means so I don't have to go back and find out how many shares he had before yesterday.

AND I suppose I'm asking if it was a token gesture, albeit significant dollars to us. A token gesture seems to me not a completely crazy move on his part if it were the case.

madbulk
Madbulk - 3 years ago
And ESI didn't exactly go down in a vacuum today.

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