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Fairholme/Berkowitz


rjstc

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It could just be to not have to sell as much holdings as the fund meets redemption requests. Not everybody likes such large concentrations in harry names.  I think the large positions in the likes of mbia, sears, and prefs have worried even the most loyal of his shareholder base that believe he is taking on too much risk these days

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Does anyone think its significant that FAIRX is opening at this point, after having been closed for only a short period of time?

 

My initial thought was he has a massive new investment idea and would appreciate the capital to make a large investment. It may be  the FNMA/FMCC prefs, or perhaps even something else.

 

Any thoughts?

 

I'd certainly like to know the answer to that, being a FAIRX holder.  It seems highly unusual that he would close the fund in Feb and

re-open 6 months later unless he saw large investment opportunities. But others raised a good point about redemptions and nervous

FAIRX holders. I have several people invested in FAIRX, and after 2011 - I get lots of questioning - why does he own SHLD, etc???

 

Personally, I like his style of concentration - but it's definitely not for everyone.

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Does anyone think its significant that FAIRX is opening at this point, after having been closed for only a short period of time?

 

My initial thought was he has a massive new investment idea and would appreciate the capital to make a large investment. It may be  the FNMA/FMCC prefs, or perhaps even something else.

 

Any thoughts?

 

I'd certainly like to know the answer to that, being a FAIRX holder.  It seems highly unusual that he would close the fund in Feb and

re-open 6 months later unless he saw large investment opportunities. But others raised a good point about redemptions and nervous

FAIRX holders. I have several people invested in FAIRX, and after 2011 - I get lots of questioning - why does he own SHLD, etc???

 

Personally, I like his style of concentration - but it's definitely not for everyone.

 

very true. I personally added some money to FAIRX in my IRA. Go Bruce!

 

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I'd certainly like to know the answer to that, being a FAIRX holder.  It seems highly unusual that he would close the fund in Feb and

re-open 6 months later unless he saw large investment opportunities. But others raised a good point about redemptions and nervous

FAIRX holders. I have several people invested in FAIRX, and after 2011 - I get lots of questioning - why does he own SHLD, etc???

 

Personally, I like his style of concentration - but it's definitely not for everyone.

 

What's safe to assume?  I think:

 

1) He wants more cash than he has

2) He doesn't want to trigger capital gains by selling existing holdings

 

#1 could be a result of seeing opportunity or redemptions squeezing the existing cash cushion.

 

I know that's pretty basic, but just laying it out.

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It could just be to not have to sell as much holdings as the fund meets redemption requests. Not everybody likes such large concentrations in harry names.  I think the large positions in the likes of mbia, sears, and prefs have worried even the most loyal of his shareholder base that believe he is taking on too much risk these days

 

That may be the case, but certainly if you had lost faith in Berkowitz you probably would've sold a while back...

 

Also, I don't understand all the fuss about his concentration. From an overall portfolio standpoint you probably would not be 100% FAIRX and if you were, you had better believe that he knows what he's doing, and that he can do it far better than you can.

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I don't understand the nervousness re: his heavy concentration.

 

Why not sell your shares in Fairholme then buy the individual holdings divided in concentrations you are most comfortable with.

 

The turnover is so slow that one could easily mimic the fund.

 

Agree with this. Plus if you were nervous about a manager's style -- and this has been his style all along -- why invest with him in the first place?

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dataroma had an update on Bruce: http://www.dataroma.com/m/holdings.php?m=fairx

 

He's out of CHK, Sears Canada, MBIA, and Fannie/Freddie common

I believe dataroma only lists his equity securities

 

The full filing is here: http://www.sec.gov/Archives/edgar/data/1096344/000119312513413006/d553329dnq.htm

 

Dataroma seems to be just wrong a lot lately.

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http://www.nasdaq.com/article/bruce-berkowitzs-only-new-stock-a-miner-cm329336

 

Being so deep into this bet, Berkowitz has shown little interest in U.S. corporate stocks, where he formerly concentrated. He did, however, buy shares of one new company in the fourth quarter: Imperial Metals Corp. ( III ).

 

Berkowitz's new position is sized at 2,705,300 shares, making up 0.44% of his portfolio, and valued around $36.3 million. The company's shares cost around $14 on average during the quarter.

 

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http://www.bizjournals.com/southflorida/news/2014/04/14/investment-fund-star-berkowitz-fairholme-seeks-to.html

 

On March 25, it applied with the Florida Office of Financial Regulation to form a non-depository trust company with $3.5 million in capital. This would serve a group of 180 clients at Fairholme Capital Management who have combined assets under management of $1.3 billion, according to the application.

 

“Many of these clients have been with FCM since its inception, their assets under management have grown considerable, and now they are facing the need to plan their wealth growth and retention for coming generations,” the company said in its application. “It is these FCM clients that Fairholme Trust Co. would integrate into its business over the next three years.”

 

The trust company would then offer investment choices outside the selected ones offered by FCM, which is an investment advisor with over $11 billion in assets under management, the application said. Many of its clients are international, mostly from Europe.

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