From last week:
- Treasury, which invested more than $49 billion to prop up AIG, plans to convert its preferred stake into common stock by March 15 and will sell the shares to private investors. The U.S. may need one to two years, depending on market conditions, to sell all of its AIG shares, which will be more than 90 percent of the stock in the New York-based insurer, Miller said.
Unfortunately it appears Bruce pared back his holdings of AIG from a >10% weight to "only" 7%... but FAIRX is still up 6% for the month. The next great battle stock is St Joe Corp (JOE) where Berkowitz is pitted against hedge fund honcho David Einhorn - talk about a showdown. Thus far Einhorn's revelation he shorted JOE has crushed the stock, but Berkowitz just joined the board of directors in the past week or so - and I am sure he has been adding stock at a rapid clip as the price goes down. (last disclosure was a sub 4% stake) In the end I would expect both men to 'win' as they have different time frames....
Bigger picture learned from this seat (for next crisis) is to learn to think more like a citizen of the USSR circa 1975: don't bet against anything the U.S. government will bring all its horses (and men) to defend. Even AIG which was a hull of a corporation and in any form of free market would have been destroyed in 2008 is a 'winner'. Speaking of which, Berkowitz is heavy into Citigroup (C), and Bank of America (BAC). (Maybe in the next disclosure statement, he will have added General Motors as well) Free market capitalism corporate socialism is a fine thing, indeed!
[Dec 10, 2010: Bruce Berkowtiz of Fairholme Funds - the Megamind of Miami]
[Aug 30, 2010: Bruce Berkowitz of Fairholme Fund Interviewed on Consuelo Mack WealthTrack]
[Jan 31, 2010: Bruce Berkowitz of Fairholme Funds Slashes Pfizer Stake, Exits Boeing and Northrop Grumman; Add to Berkshire Hathaway]
[Feb 17, 2009: Hedge Funds Pile into Citigroup; as does Bruce Berkowitz of Fairholme Funds]
[Feb 3, 2009: Fairholme Funds (FAIRX) 2008 Report]
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About the author:
My name is Ben C. and I am 2nd year MBA candidate at the Anderson School of Business at the University of California- Los Angeles. I have a BS in Economics from the Wharton School of Business at the University of Pennsylvania. Before coming to Anderson I worked as a generalist equity research analyst for Right Wall Capital, a long-short equity hedge fund located in New York City. Prior to working at Right Wall I worked as an analyst at Blue Ram Capital, another long-short equity hedge fund located in Rye Brook, NY. This past summer, I worked for West Coast Asset Management as a research analyst. West Coast, which was co-founded by Kinko’s founder Paul Orfalea, is run by well-known value investors Lance Helfert and Atticus Lowe.