Wednesday, May 11, 2011

Fairholme's 1Q 2011 Portfolio Update: Still Dominated by Financial Stocks

Fairholme's (FAIRX) Bruce Berkowitz has had an excellent decade or so of performance but a rough go of it lately.

In 2010 Fairholme won Morningstar's Domestic-Stock Fund Manager of the Decade.

Over the ten years preceding that award, Fairholme earned a 13.2% annualized total return in a period when the S&P 500 produced slightly negative annualized returns (a 14% per year outperformance).

The latest report of Fairholme's 1Q 2011 portfolio revealed a 75% weighting in financial stocks.

In the most recent quarter Berkowitz continued to add to positions in the financials.

Completely new positions: Brookfield Asset Management (BAM), China Pacific Insurance Group (CHPXF)

Reduced positions: Spirit Aerosystems (SPR), Winthrop Realty Trust (FUR)

Closed out these positions 100%: General Growth Properties (GGP), General Electric (GE), Banco Santander (STD), Wellcare (WCG), and Teva Pharmaceuticals (TEVA)

The full audio to the shareholder conference call is here.

Quite a contrast in approach to the fund management team at the Yacktman Funds (YAFFX, YACKX).

A team that has also produced very solid results over the past decade or so.

Yacktman on "Old Tech"

The Yacktman team's emphasis has been consumer staples, media, and what they call "old tech" with only one financial stock among the top 25 holdings (U.S. Bancorp: USB).


Long GE, and USB

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