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Fairholme/Berkowitz


rjstc

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"Fairholme Bubble"?

 

I don't know if "Megamind of Miami" is appropriate anymore as a nickname for this guy.

 

I like Berkowitz but I'm not a fan of the nickname...or this building.

 

Anyone remember this one?

 

http://fortune.com/2010/12/10/bruce-berkowitz-the-megamind-of-miami/

 

The next year was...ehhhh, yeah, let's not talk about that one! :P

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  • 2 weeks later...

Uh oh...

 

http://www.miamiherald.com/news/local/community/miami-dade/midtown/article2684594.html

 

Both works were acquired for the site, a vacant block at Biscayne and Northeast 26th Street in the Edgewater neighborhood, by Bruce Berkowitz, founder of Miami-based Fairholme Capital Management. Berkowitz, dubbed “the megamind of Miami” by Fortune magazine for his market-beating proficiency at contrarian investing, has been quietly assembling land since last year to build a new headquarters for his company and foundation that would also incorporate a public showcase for art.

 

Berkowitz said he chose Edgewater because of the National YoungArts Foundation’s move in 2012 into the historically and architecturally iconic former Bacardi headquarters five blocks to the south on Biscayne Boulevard. He had been contemplating the idea of a building that could combine his business and art interests in one location when he found out “by accident” that the Turrell and Serra works were available, Berkowitz said.

 

We wanted to create a unique space that combined both work and play — business and arts and education,” Berkowitz said. “We thought about the idea of how to mix that all together, and there was an opportunity to purchase the works, and then we started to think about the building in relationship to the works.

 

Maybe Berkowitz should spend more time figuring out how he is going to somehow get above water in Sears Holdings.

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Uh oh...

 

http://www.miamiherald.com/news/local/community/miami-dade/midtown/article2684594.html

 

Both works were acquired for the site, a vacant block at Biscayne and Northeast 26th Street in the Edgewater neighborhood, by Bruce Berkowitz, founder of Miami-based Fairholme Capital Management. Berkowitz, dubbed “the megamind of Miami” by Fortune magazine for his market-beating proficiency at contrarian investing, has been quietly assembling land since last year to build a new headquarters for his company and foundation that would also incorporate a public showcase for art.

 

Berkowitz said he chose Edgewater because of the National YoungArts Foundation’s move in 2012 into the historically and architecturally iconic former Bacardi headquarters five blocks to the south on Biscayne Boulevard. He had been contemplating the idea of a building that could combine his business and art interests in one location when he found out “by accident” that the Turrell and Serra works were available, Berkowitz said.

 

We wanted to create a unique space that combined both work and play — business and arts and education,” Berkowitz said. “We thought about the idea of how to mix that all together, and there was an opportunity to purchase the works, and then we started to think about the building in relationship to the works.

 

Maybe Berkowitz should spend more time figuring out how he is going to somehow get above water in Sears Holdings.

 

The whole monument to himself thing strikes me as odd especially since I believe he said he prefers to work from home. I remember a picture of him in his home office with a lap dog or something.

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Berkowitz has barely beaten the market over the last 10 years...

 

He's beaten it by about .75% annually over the past decade (which is top 9% of his peers according to morningstar). That includes terrible years like 2011 and this year. Since inception, his fund has destroyed the S&P 500. A $10,000 invest in FAIRX at inception would now be almost $49,000 vs about $17,300 for the S&P 500.

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Berkowitz has barely beaten the market over the last 10 years...

 

He's beaten it by about .75% annually over the past decade (which is top 9% of his peers according to morningstar). That includes terrible years like 2011 and this year. Since inception, his fund has destroyed the S&P 500. A $10,000 invest in FAIRX at inception would now be almost $49,000 vs about $17,300 for the S&P 500.

 

I think the 10-year ranking speaks more towards the general poor quality of most mutual funds and the difficulty for funds in the Large Value category (which is where morningstar places FAIRX) to distinguish themselves.

 

Most of Fairholme's outperformance came in its earlier years when it was much smaller and Berkowitz wasn't a media whore. See the attached 5-year rolling returns. Since rolling periods starting around 2007, it has been worse than the index.

FAIRX_5-year_rolling.thumb.png.8819fd9457dda7a721abf3591a3da1ac.png

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