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Top Fund Manager - Bruce Berkowitz, Fairholme Fund


Bruce Berkowitz, Fairholme Fund founder, is also the managing member of the fund. He has found much success throughout the years in the financial world. Not only was he a Smith Barney managing director from 1993 to 1997, but he has also been senior portfolio manager at Lehman Brothers Holdings at one time. Berkowitz also has his hands in the loan and insurance industries. Since 2004, he has been the White Mountain Insurance Group director. He is also the director of AmeriCredit, an auto loan company that works through lenders to provide those with sub-prime credit with auto loans, and TAL.

 

In regards to the Fiarhole Fund performance, between 1999 and 2007 he managed a return that averaged 17.40% annually as opposed to the S&P 500's average annual return of 1.71%.

 

Through the unique strategies of Bruce Berkowitz, Fairholme Fund returns have brought the fund's investors many happy days. Berkowitz focuses on a small number of companies rather than a wide range. He also feels that a heavily diversified portfolio will have average performance.

 

Berkowitz focuses on managers that are great and whose stocks are deeply undervalued. He focuses on those companies that generate free cash, are excellently managed, and are cheap. You will never see him pay high price for a stock. He will also go as far as investing in a mediocre company whose stock is trading at a steep discount. However, he will only do this if there is an evident catalyst that suggests that the gap between the intrinsic value and the market price will narrow. It is through this narrowing that the price of the stock will go up and the return on the investment will grow for the investors.

 

It is because of the strategies that Bruce Berkowitz that many investors in the Fairholme Fund have benefited. This is, perhaps, why he was named Morningstar, Inc.'s Stock Manager of 2009.

 

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