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Fairholme Shutting Down - Bloomberg


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https://www.bloomberg.com/news/articles/2017-10-16/berkowitz-liquidates-hedge-fund-that-owned-sears-holdings-shares

Investor Bruce Berkowitz is shutting his hedge fund and distributing its holdings to investors, including a stake in Sears Holdings Corp.

Another active manager biting the dust?

 

Different then his mutual fund the Fairholme Fund. Hes just shutting down the Hedge fund he was running in addition.

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I think it would be best to rename this thread "Fairholme Partnership shutting down" to avoid confusion with the Fairholme funds.

 

 

https://www.bloomberg.com/news/articles/2017-10-16/berkowitz-liquidates-hedge-fund-that-owned-sears-holdings-shares

Investor Bruce Berkowitz is shutting his hedge fund and distributing its holdings to investors, including a stake in Sears Holdings Corp.

Another active manager biting the dust?

 

Different then his mutual fund the Fairholme Fund. Hes just shutting down the Hedge fund he was running in addition.

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It has lagged 99 percent of rivals over five years, according to data compiled by Bloomberg.

 

I know you shouldn't pick one moment in time to judge performance but c'mon...

 

This isn't like the late 1990s when staunch value guys were investing in forgotten but highly profitable businesses while the whole world was obsessed with DotCom and Telecom.

 

This is a man who passed over HUNDREDS of great businesses for YEARS to double and triple down on both a man who seemed to be doing the opposite of what was needed to fix a giant retailer (Lampert) and a conviction that the whole Federal Government would be brought to heel by its very own court system (Freddie and Fannie).

 

And then you have JOE which can not POSSIBLY be one of the top 10 businesses in the United States.

 

I think to lag behind 99% of the other funds you should at LEAST be long volatility (which I feel is deeply undervalued at the moment) because at least that would kind of make sense.

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Time is a friend of great business and is the enemy of poor business.

 

There may be value in the real estate of Sears or Joe. But, their poor businesses flush the value down to the drain over time. As time goes by, their value evaporates.

 

The lesson I have learned from this is that investing in great business at reasonable price is better than investing in poor business at cheap price. Time is on your side if you do.

 

 

It has lagged 99 percent of rivals over five years, according to data compiled by Bloomberg.

 

I know you shouldn't pick one moment in time to judge performance but c'mon...

 

This isn't like the late 1990s when staunch value guys were investing in forgotten but highly profitable businesses while the whole world was obsessed with DotCom and Telecom.

 

This is a man who passed over HUNDREDS of great businesses for YEARS to double and triple down on both a man who seemed to be doing the opposite of what was needed to fix a giant retailer (Lampert) and a conviction that the whole Federal Government would be brought to heel by its very own court system (Freddie and Fannie).

 

And then you have JOE which can not POSSIBLY be one of the top 10 businesses in the United States.

 

I think to lag behind 99% of the other funds you should at LEAST be long volatility (which I feel is deeply undervalued at the moment) because at least that would kind of make sense.

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Time is a friend of great business and is the enemy of poor business.

 

There may be value in the real estate of Sears or Joe. But, their poor businesses flush the value down to the drain over time. As time goes by, their value evaporates.

 

The lesson I have learned from this is that investing in great business at reasonable price is better than investing in poor business at cheap price. Time is on your side if you do.

In my opinion the whole real estate thing is a mirage and the possibly the next shoe to drop. These retailers occupy huge swaths of real estate. These retailers are going out. Plus they're going out at the same time. Who's gonna come in their place and absorb that huge supply? Definitely nobody that's gonna pay current market prices for it. The real estate's a dud.

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Time is a friend of great business and is the enemy of poor business.

 

There may be value in the real estate of Sears or Joe. But, their poor businesses flush the value down to the drain over time. As time goes by, their value evaporates.

 

The lesson I have learned from this is that investing in great business at reasonable price is better than investing in poor business at cheap price. Time is on your side if you do.

In my opinion the whole real estate thing is a mirage and the possibly the next shoe to drop. These retailers occupy huge swaths of real estate. These retailers are going out. Plus they're going out at the same time. Who's gonna come in their place and absorb that huge supply? Definitely nobody that's gonna pay current market prices for it. The real estate's a dud.

 

Depends on the real estate...Sears had already distributed their better quality properties into Seritage.  They were stuck with lesser quality properties...thus they had to sell their brands.

 

The problem wasn't that Lampert invested in Sears.  The problem was that he sold off assets at a snail's pace, until he had to sell off assets to stem huge losses at a business that he didn't want to put any more capital into and it was dying.  It was bad execution, not a bad idea.  Cheers!

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