Bruce Berkowitz is founder of the Fairholme Fund (FAIRX, Financial) and has seen significant redemptions recently after a bad year due to overweighting in financials. In this interview with his fund, he answers investors’ questions and says he remains excited about his portfolio and being able to take advantage of the financial cycle. This year, he believes his contrarian investments will pay off, as they were improving in 2011 but the stock price did not reflect it. Specific stocks he discusses are AIG (AIG, Financial), Bank of America (BAC, Financial) and MBIA. The video is below:
“A lot of similarities between Sears and Berkshire Hathaway.” The journey is similar between Edward Lampert and Warren Buffett.
How about last year, would you do anything different if you knew what would happen: yes I would slow down selling healthcare companies, and bought a lot slower. Given the business trends for financials are turning positive, this is the kind of portfolio I would take forward for the next few years. These companies are dead center of my circle of confidence. I have seen this before.
Investment thesis with AIG? Government ownership should not be a concern to long term investors. We bought more at cheaper prices. The bottom today, the company has a tangible book value of $45, going to $55. Fixable problems are covered up.
“A lot of similarities between Sears and Berkshire Hathaway.” The journey is similar between Edward Lampert and Warren Buffett.
How about last year, would you do anything different if you knew what would happen: yes I would slow down selling healthcare companies, and bought a lot slower. Given the business trends for financials are turning positive, this is the kind of portfolio I would take forward for the next few years. These companies are dead center of my circle of confidence. I have seen this before.
Investment thesis with AIG? Government ownership should not be a concern to long term investors. We bought more at cheaper prices. The bottom today, the company has a tangible book value of $45, going to $55. Fixable problems are covered up.
