In Bruce Berkowitz of the Fairholme Fund put 18% of his portfolio into AIG. Investors should have been paying attention as it subsequently. FORTUNE — With AIG stock cratering nearly 50% this year, all eyes have turned to investor Bruce Berkowitz, AIG’s largest private shareholder. Bruce Berkowitz (Trades, Portfolio): As we have written in all of our letters, we bought AIG at substantial discount to tangible book value.

Author: Tesho Durisar
Country: Zambia
Language: English (Spanish)
Genre: Politics
Published (Last): 8 June 2005
Pages: 326
PDF File Size: 16.6 Mb
ePub File Size: 18.41 Mb
ISBN: 692-5-59997-562-4
Downloads: 71978
Price: Free* [*Free Regsitration Required]
Uploader: Nizragore

By October he had stepped down from the board and became highly critical of the company. For the best Barrons.

Essentially, he looks for free cashflows that he can buy very cheaply. Shorts, cash positions, foreign investments and other assets are not included. In he set up Fairholme Funds, which managed three mutual funds and acted as an investment advisor to long-only institutional funds. If the marketplace understands that the Treasury is not going to be forced to sell akg position at a poor price, then the value of the company will start to be judged based upon its intrinsic value rather than a constant focus on the berkowits overhang.

Subscribe to ValueWalk Newsletter. All Rights Reserved This copy is for your personal, non-commercial use only. And secondly, many value investors have struggled in a market fuelled by easy money which has favored momentum and growth stocks. But the plan fizzled.

SHLD for many years, having first invested in He built a large position in when the US Treasury owned 92 percent of the company. He expected the Treasury stake to be sold at book value, but it was ultimately sold back to the market at a deep discount.


Berkowitz graduated from the University of Massachusetts Amherst in Over the past 15 years, it’s on the top one percentile of all large-cap growth funds, according to Morningstar.

Capital gains are generated inside a fund when a manager sells winning positions. The government had a pretty good record selling its shares in Citi without hurting the stock price.

He moved to London in to join Merrill Lynch. He also uses relatively high cash holdings to limit volatility. Bruce Berkowitz is the founder aug president of Fairholme Funds and a well-known value investor. Why he turned out to be wrong on the U.

Not Just Sears Holdings Corp (SHLD) – The Rise And Fall Of Bruce Berkowitz’s Fairholme Capital

By Scott Cendrowski May 10, This copy is for your personal, non-commercial use only. The year-old fund manager looked especially berkowutz last year while amassing 40 million shares of the insurance giant. He often sticks with specific stocks for very long periods, something that has also hurt performance.

Berkowitz was a senior portfolio manager at Lehman Brothers. Berkowitz is a contrarian investor and invests in companies with reliable cashflows that are trading at attractive levels relative to those cashflows. Instead of the U.

Berkowitz’s AIG Sale To Result In Huge Taxable Distribution – Barron’s

He then joined consulting firm Strategic Planning Institute. Check out our H2 hedge fund letters here. He is a strong believer in business cyclesand looks for companies that are out of favor due to the current business cycle.

The list value of stock holdings is down The Ideas section of finbox.

How Bruce Berkowitz stumbled with AIG | Fortune

However, since his fortunes have not faired as well, and he has suffered long periods of underperformance. Thank you This article has been sent to.

For non-personal use or to order multiple copies, please contact Dow Jones Reprints at or visit www. Previous interviews with Fortune indicate as much. We respect your privacy no spam ever.


The American International Group Berkowihz.

Bruce Berkowitz Comments on AIG

Firstly, he has avoided the technology sector which is where most of the index gains have accrued. The five positions above represent Berkowitz was mum on AIG AIG this year until yesterday, when the Wall Street Journal first reported that he took his lumps and told his investors in a conference call that he had made a critical error. He, therefore, tends to hold highly concentrated portfolios — in his positions in Fannie Mae and Freddie Mac made up 36 percent of the fund.

He founded Fairholme Capital in to manage a hedge fund. It became apparent last year that the government would begin unloading its stake in the first half of This strategy worked well in the mid s when he held outsize positions in energy stocks, but has hurt performance since then. Never Miss A Story! The stock had been the fund’s largest holding, and, at times in recent years, comprised nearly half of the fund’s portfolio.

We determined that it was an opportune time to realize the gain and began to reduce the position in AIG common stock. In he moved to Lehman Brothers and then relocated back to New York with the same firm. While his performance between and was lauded, he, along with other value investors have also struggled since then. Sears Holdings Corporation Nasdaq: Send me ocassional third party offers Yes No.