Fairholme Fund Shifts Gears

Fairholme Fund manager Bruce Berkowitz discussed shifting the fund from defense to offense during an interview with Morningstar last week.

Asked about recent changes to the fund's holdings, Berkowitz replied: "The big sales were Pfizer, defense related, Boeing, Northrop. At Fairholme we continue to sell that which is cheap to buy that which is cheaper. When we went into the drug industry and the defense business, it was defensive, we saw a storm coming. And we were right; these companies have maintained reasonably good earnings.

"But to some extent we were mistaken, because we found that when you are in a tremendous crisis, everything is correlated. And we were hoping that the companies would protect us more than they did. But we did all right.

"But now that we are through this financial earthquake, even though we expect maybe a few more aftershocks, we do expect a more normal environment. So we are shifting from defense to offense, and we need the cash, so we have moved on to some new positions. We are absolutely sure companies we have sold will do quite well. But I think we can do a bit better as our optimism about the future grows."

You can watch the video or read the transcript of the interview by clicking here.

An even easier way to track your spending than Quicken!

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Fed Funds Rate - a historical perspective

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Research Backs LendingClub Investor Behavior

Researchers at Columbia University's Business School recently found that peer-to-peer investors appear to exhibit rational decision-making behavior when they forego outside investment opportunities and replace them with peer-to-peer lending opportunities.

The report, "Risk Aversion and Wealth: Evidence from Person-to-Person Lending Portfolios, used a sample of 2,168 investors participating on the LendingClub platform.

LendingClub.com is an online financial community that makes peer-to-peer loans. The alternative to banks offers good rates to both investors and borrowers.

To learn more, read the report by clicking here.

Morningstar Lauds Funds in Bradway Portfolio

The managers of several of the funds in the Bradway portfolio garnered Manager of the Year and Manager of the Decade awards from Morningstar, the mutual fund research and ratings firm.

Bruce Berkowitz, manager of The Fairholme Fund, was named Domestic Equity Manager of the Decade and Domestic Equity Manager of the Year, Morningstar announced this month. The Fairholme Fund gained 13.2 percent over the decade, compared to the domestic stock fund average of 0.01 percent.

Bill Gross, who manages several PIMCO bond funds, was named Fixed Income Manager of the Decade. His PIMCO Total Return fund generated returns of 7.7 percent for the decade vs. 5.5 percent at the average bond fund.

David Herro, manager of Oakmark International, was named Foreign Equity Manager of the Decade for his stewardship of Oakmark International. We currently use a newer, more focused fund managed by Herro, Oakmark Global Select.

Jean-Marie Eveillard of First Eagle Global was a finalist for Foreign Equity Manager of the Decade.

Bruce Berkowitz on the Keys to Success for the Fairholme Fund

Bruce Berkowitz is the founder and manager of the $11 billion Miami-based Fairholme Fund, which just celebrated its tenth anniversary. Along with Charles Fernandez, he runs the fund’s portfolio management team. Last week, Mr. Berkowitz was named Morningstar’s US stock-fund manager of the year for 2009.

Bruce Berkowitz on the Keys to Success for the Fairholme Fund

Commercial Real Estate: The Next Bubble?

Commercial Real Estate: The Next Bubble?