Not just because his superb investment return of 11.31% per annum over the past 10 years, leaving the S&P 500 index eating dust.
Not just because of his concentrated and long-held portfolio so individual investors can mimic him, if they do not want to pay the 1.01% expenses each year – I think it well worth it.
Not just because of his super sized Asset Under Management (AUM). Fairholme Fund has $16.99 billion as of January 6, 2011, per Morningstar.
Alright, I like Berkowitz because of a combination of this factor, or rather, the implication of these factors. The concentrated and long-held nature and super size of his portfolio creates situations in which Berkowitz had to report in addition to quarterly mandatory disclosure – at GuruFocus, we call such disclosures “Real Time Picks”. It is just SEC rule. And hopefully his excellent past performance will translate into future winners. I don’t know about you, when I spot a potential winner, I want to buy as soon as possible.
Since the September 30, 2010, for which Berkowitz did a wholesale disclosure of his positions, he filed the following entries of real time picks.
Each line is a separate entry, even though some are for the same stock:
|Current Price||Change from Average||Comment||Current Shares|
|AIG||2010-12-10||$44.04||$ 60.45||37%||Add 3.88%||44,294,324|
|AIG||2010-12-08||$42.22||$ 60.45||43%||Add 1.64%||42,638,659|
|AIG||2010-12-06||$42.5||$ 60.45||42%||Add 1.31%||41,895,206|
|AIG||2010-12-02||$41.24||$ 60.45||47%||Add 0.02%||41,353,565|
|AIG||2010-11-30||$41.28||$ 60.45||46%||Add 0.52%||41,345,849|
|JOE||2010-11-30||$17.6||$ 23.06||31%||Add 0.19%||26,937,620|
|AIG||2010-11-26||$41.47||$ 60.45||46%||Add 0.25%||41,129,949|
|AIG||2010-11-23||$41.98||$ 60.45||44%||Add 1.23%||41,026,749|
|AIG||2010-11-17||$41.78||$ 60.45||45%||Add 1.35%||40,530,249|
|AIG||2010-11-16||$41.98||$ 60.45||44%||Add 2.75%||40,024,549|
|AIG||2010-11-12||$43.59||$ 60.45||39%||Add 1.68%||38,951,449|
|AIG||2010-11-05||$41.76||$ 60.45||45%||Add 0.13%||38,308,849|
|MBI||2010-10-31||$11.21||$ 12.55||12%||Add 45.29%||33,032,600|
|WCG||2010-10-31||$27.78||$ 31.39||13%||Reduce -32.19%||5,047,518|
|TAL||2010-10-31||$28.02||$ 30.12||7%||Reduce -100%||0|
|FUR||2010-10-31||$13.6||$ 12.27||-10%||Reduce -22.33%||2,926,279|
|AIG||2010-10-28||$41.63||$ 60.45||45%||Add 1.82%||38,258,649|
|AIG||2010-10-26||$42.03||$ 60.45||44%||Add 2.51%||37,575,849|
|JOE||2010-10-13||$22.16||$ 23.06||4%||Add 0.35%||26,891,820|
|AIG||2010-10-08||$40.91||$ 60.45||48%||Add 11.39%||36,657,34|
It does not take a rocket scientist to figure out that AIG is Berkowitz’s conviction purchase during the quarter. He bought from early October all the way to December. During which time, AIG stayed between $41 to $$44. Today it closed at around $60.45. Not bad a 40% return if you followed him and purchased the shares.
Else, Berkowitz purchased The St. Joe Company (JOE) for $17.6 on November 30 and $22.16 on October 13, today it closes at $23.04. Based on his holding history (see chart below), it looks like Berkowitz has not broken even yet on this stock yet for he purchased a good portion of his JOE holding at prices near $40 per share. People familiar with the story know that Berkowitz got the stock and David Einhorn got proceedings from the short selling. Sooner or later, Einhorn needs to buy back and cover the short. I am certain he will not be able to buy Berkowitz’s shares.
On October 31, he purchased MBIA Inc (MBA) at around $11.21 per share. He added 45.2% to his original stake and now he owns 33 million shares now. The stock has gone up 12%.
On the Sell side, he sold Well Care Health Plans (NYSE:WCG), TAL International Group (TAL), and WINTHROP REALTY Trust (NYSE:FUR). His success on the selling side is mixed: two stocks (WCG and TAL) went up and FURN went down after his sell.
Fairholme Fund NAV went from 32.76 to $36.13, up a little over 10%. Much of that thanks to AIG, a stock Berkowitz accumulated 44.2 million shares.
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Check out Berkowitz’s complete portfolio by click on here.