The trades are in and its time to take a look at Bruce Berkowitz recent moved in the Fairholme Fund. As explained in an earlier post, I follow Bruce Berkowiitz and every once in a while will follow him into a position. Anyway, these reports come around about every 3 quarters and some people follow so called super-investors blindly into positions. For example, people look forward to the day Berkshire Hathaway’s positions come out and will make an investment on the pure basis that Warren Buffett invested into “ABC” company. Wrong on a couple of fronts. First, Warren Buffett has a special deal with the SEC in which he can report his trades a bit later than when he initially established his position. As such, you might be paying a higher price than Warren Buffett and might not mirror his results. Secondly, who said Warren Buffett made Berkshire’s position (s). Lets not forget Berkshire is a conglomerate and there are managers inside the Berkshire umbrella making investments such as GEICO investment officer Lou Simpson.
Fairholme Fund Transactions
Buy: BNI, FUR, C, RRR
Added: BRK-A, BRK-B, HTZ, HUM, JOE, SPR, WLP,
Reduced: PFE, URI,
Sold Out: BA, NOC, UNH
Some quick comments….
His reduction in Pfeizer (PFE) is interesting as its his top holdings. hish cost basis is about $16 so no one really knows why he reduced. My guess is he is raising cash but it;s pure speculation.
Citigroup (C) is ineteresting as its one of those financials that were hit hard during the current? credit crisis. I have no idea what lies in there balance sheet but his investment in Wells Fargo comes to mind.
RRR- very similar to his investment in United Rentals. I was looking for some old video footages/.pdf file in which he goes into detail of United Rentals but couldn’t find it. I rmemeber something about accounting for rental companies being very favorable due to tax and stimulus incentives.
FUR- the one that has y attention mainly due its balance sheet. Bruce Berkowitz does mention its management but I like to stick to pure financials as I have been burned by management comments in the past. Also, the contrarian in me cannot think of another sector in which being a contrarian might pay off in the future. Real Estate has seemed to bottomed. It might not be the exact bottom, but we are definitely not at the peak in my opinion.
Related posts:
Tue, Feb 2, 2010
Bruce Berkowitz, Value Investing