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Posted by Igor Chudov on June 2, 2009, 9:42 am
After a while of looking, reading, etc I recalled Bruce Berkowitz from
Fairholme Fund (FAIRX). I think that Bruce is a bright guy, with the
right way of thinking about risk, with the investing approach I like
and a person who likes what he is doing. I have read quite a bit of
what he said, and while I do not agree with everything, I agree with
most of what he is saying.
He very substantially outperformed S&P 500 over the last 10 years,
which is something that I do not consider to be a purely random
phenomenon. He also outperformed my own returns. He likes to
concentrate his holdings a lot more than a typical mutual fund, which
is a correct approach to decision making. This way, first, decisions
matter, and second, he can act on his best 15 ideas instead of best
100 ideas.
I will read some more, but I think that I will move some IRA assets to
his fund.
i
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Posted by Douglas Johnson on June 2, 2009, 1:31 pm
>After a while of looking, reading, etc I recalled Bruce Berkowitz from
>Fairholme Fund (FAIRX).
[...]
>I will read some more, but I think that I will move some IRA assets to
>his fund.
Morningstar gives it 5 stars (their top rating) and it's a analysts pick.
The summary from their analyst research:
"We have full confidence in this fund. It will hit potholes but strong
stock-picking gives it an edge that will accrue over time: It has returned an
average of 9.1% annually since inception, while its typical peer has lost 4.7%
per year in that stretch."
The only downside I see is that, at 1.01%, the expenses are a bit higher than I
would like, but that is not a deal breaker to me. It is pretty tax efficient,
you may want to consider using taxable funds instead of IRA.
-- Doug
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Posted by Igor Chudov on June 2, 2009, 2:49 pm
> Morningstar gives it 5 stars (their top rating) and it's a analysts pick.
> The summary from their analyst research:
>
> "We have full confidence in this fund. It will hit potholes but strong
> stock-picking gives it an edge that will accrue over time: It has returned an
> average of 9.1% annually since inception, while its typical peer has lost 4.7%
> per year in that stretch."
>
> The only downside I see is that, at 1.01%, the expenses are a bit higher than I
> would like, but that is not a deal breaker to me. It is pretty tax efficient,
> you may want to consider using taxable funds instead of IRA.
Doug, I agree with you to some extent. I think that FAIRX is a good
candidate for IRAs and an even better one for taxable money.
I spent quite a bit of time reading various interviews by Bruce, such
as the 36 pages one given to Oustanding Investor Digest, and am now
very convinced that I should move quite a bit of different sorts of
accounts to that fund to manage.
My current problem is that many things that I own in my taxable
accounts, are very cheap relative to their value range, so I am very
reluctant to sell them, even to give the proceeds to such an
outstanding guy as Bruce, to manage.
Nevertheless, I will open a taxable account at Fairholme, as well, and
will start moving money there.
At 6 billions in assets, it will not take that many successful years
for him to become too big, but by that time I can find some other use
of money.
i
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