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Fairholme/Berkowitz


rjstc

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Yes, I agree I think it would be win-win.  For BAC it is a drop in the bucket and gets litigation behind them...more clarity for markets.  For MBIA it is survival...nuff said!  Cheers!

 

This is what puzzles me. BAC has already proved, through words and deeds, that they are very willing to settle outstanding litigation. Then why are they fighting MBIA so hard? I can think of a couple of possibilities:

 

1) BAC thinks they have a good case, contrary to general opinion.

 

2) The consequences of settling on MBIA's terms are much worse than we think.

 

There is also the third possibility that BAC is just being idiotic about this whole matter, but I think that is very unlikely.

 

Btw, I am not all that concerned about #2 as I think there is enough margin of safety in the BAC stock price.

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  • 1 month later...

http://www.boston.com/business/personal-finance/2013/01/03/top-mutual-funds-rebound-from-poor/6VGHp3omc3B17BSUyWblnI/story.html

 

Bill Miller beats Bruce Berkowitz in 2012

 

Bill Miller has a reputation to live up to. He became famous for beating the S&P 500 for 15 straight years through 2005.

...

 

The fund posted a 39.6 percent return last year. That’s the top result among diversified U.S. stock funds with at least $100 million in assets, according to Morningstar.

 

Bruce Berkowitz’ Fairholme Fund (FAIRX) rose 35.8 percent, the top result among all large-cap value stock funds.

 

In other news...

 

http://pymnts.com/news/businesswire-feed/2013/january/03/fairholme-announces-appointment-of-fred-fraenkel-as-president-20130103006489

 

Fairholme announced today that Fred Fraenkel will now serve as President of the Firm. Mr. Fraenkel will continue to serve in his current role as Chief Research Officer of Fairholme Capital Management, where he oversees all of the Firm’s research activities.

 

“Fred’s role as President is an exciting development for Fairholme,” said Bruce Berkowitz, Chief Investment Officer and Managing Member of Fairholme. “Fred’s extensive experience in the mutual fund and hedge fund space has proved invaluable to the Firm. This is just a formal announcement of what has already been the reality, and it allows me to focus on what I do best – investing.”

 

“I am excited to help lead Fairholme as we continue to ignore the crowd by seeking out undervalued opportunities,” said Fraenkel.

 

Prior to joining Fairholme in 2011, he was the Vice Chairman of Beacon Trust Company where he ran the investment process and published investment strategy. Mr. Fraenkel has over 30 years of investing experience including membership in Barron’s year-end roundtable from 1982-1985 and heading global research at Lehman Brothers in the 1990’s. He was formerly the Chairman of Millennium 3 Capital, a venture firm specializing in early stage companies. Before founding Millennium 3 Capital in 2000, Mr. Fraenkel served as Vice Chairman of ING Barings Furman Selz and Chief Operating Officer of Furman Selz.

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  • 4 weeks later...

Berkowitz Expects Watershed 2013 as Fund Wagers on MBIA, Sears

 

http://www.bloomberg.com/news/2013-02-01/berkowitz-expects-watershed-2013-as-fund-wagers-on-mbia-sears.html

 

Bruce Berkowitz expects a “watershed” 2013 for Fairholme Capital Management LLC’s Focused Income Fund as he stakes the majority of its assets on junk-rated Sears Holdings Corp. (SHLD) and MBIA Inc. (MBI)

 

More than 55 percent of the fund’s assets are concentrated on the debt of Sears and MBIA, Berkowitz said in a letter to shareholders and directors posted on its website today. MBIA debt comprises more than 38 percent and Sears almost 17 percent, with almost 40 percent in cash and Treasury bills.

 

...

 

 

 

conviction.

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Berkowitz Expects Watershed 2013 as Fund Wagers on MBIA, Sears

 

http://www.bloomberg.com/news/2013-02-01/berkowitz-expects-watershed-2013-as-fund-wagers-on-mbia-sears.html

 

Bruce Berkowitz expects a “watershed” 2013 for Fairholme Capital Management LLC’s Focused Income Fund as he stakes the majority of its assets on junk-rated Sears Holdings Corp. (SHLD) and MBIA Inc. (MBI)

 

More than 55 percent of the fund’s assets are concentrated on the debt of Sears and MBIA, Berkowitz said in a letter to shareholders and directors posted on its website today. MBIA debt comprises more than 38 percent and Sears almost 17 percent, with almost 40 percent in cash and Treasury bills.

 

...

 

 

 

conviction.

 

Err...does that imply he completely sold out of AIG & BAC?

 

Edit: NVM, this was from Fairholme's Fixed Income Fund. Apologies for any confusion I may have caused!

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I guess they are planning for minimal climate change related cat payouts.

 

Or they are better prepared for it than competitors and think it can lead to a harder market over time? More than one way to make it work.

 

I know next to nothing about any of this, really, but the worry keeps my exposure to AIG limited. 

 

Surprisingly, there seems to be plenty of appetite for cat risk:

http://www.artemis.bm/blog/2013/01/31/while-2012-catastrophe-bond-issuance-was-high-it-still-didnt-satisfy-investor-demand-willis/

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Transcript for those who prefer to read:

 

Hey guys, in case you only read it, you may want to go back to the video for these priceless moments:

 

(1) Berkowitz cheeky smile when explaining how investors leaving increased the BAC position to 10% despite the 5% mutual fund restriction..

 

(2) Interviewer rolling his eyes saying that of course there was no another AIG (and cheeky smile again) ... while trying to push him on other possible great ideas.

 

(3) The forced laugh when it was pointed out to him that there was not much more SHLD that he could own.

 

 

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http://www.bloomberg.com/news/2013-02-04/berkowitz-seeking-patient-capital-sours-on-mutual-funds.html

 

Berkowitz Seeking Patient Capital Sours on Mutual Funds

 

 

Mutual funds are great vehicles,” said Berkowitz, 54, who heads Miami-based Fairholme Capital Management LLC. “They’re transparent. They give investors daily liquidity. They’re highly regulated. But there are also constraints that go along with that.”

 

As a result, Berkowitz said he’s considering alternatives that would tie up investors’ capital for longer and free him to buy as much of a stock as he wants. He’s also closing existing funds to new investors as of the end of this month to prevent an influx of capital that could dilute performance.

 

 

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did see this posted yet, but maybe I just missed it:

 

"Berkowitz is raising money for a partnership that takes minimum investments of $1 million, according to a January regulatory filing. He declined to elaborate when asked whether the new entity was meant to attract more patient capital."

 

kind of sucks for smaller investors but I guess he has the mutual funds for that..

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  • 3 months later...

Any idea if Canadians can buy his funds? I have this impression in my mind that Canadians can't buy US mutual funds ... which really sucks if true as it precludes them from investing with some really great investors such as Berkowitz and Yatchman, etc.

 

 

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Any idea if Canadians can buy his funds? I have this impression in my mind that Canadians can't buy US mutual funds ... which really sucks if true as it precludes them from investing with some really great investors such as Berkowitz and Yatchman, etc.

No, I don't think so.

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http://news.morningstar.com/articlenet/article.aspx?id=596434&pgid=rss

 

Those investments were rewarded early this week as news of the settlement lifted the prices both of MBIA's stock and its bonds. The result? Fairholme Focused Income surged 11% in one day and a total of 15% across a three-day period, while the flagship Fairholme fund also enjoyed a more modest 3% lift from the MBIA news.

 

Has an "income style mutual fund" EVER moved up 11% in one day?  :o

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