Great interview with Bruce Berkowitz of Fairholme Capital Management. Berkowitz was named Mutual Fund Manager of the Decade and has some interesting long term views on the market. Interesting that he shares some of the same stock picks as our more aggressive Opportunistic models.
Both Sears Holdings (SHLD) and Regions Financial (RF) appear in his top 10 holdings. His fund has suffered this year and with his voice suffering in the interview he made possibly the quote of the day "suffering from premature accumulation". Any portfolio manager knows that being early is the same as being wrong. Even if you eventually end up long term, being a year or two early can significantly hurt performance.
Berkowitz does seem too bullish on financials for us. Typically a market leader over one decade becomes a laggard the next. Similar to how the tech sector soared in the 90s, then struggled after the internet bust. Stone Fox remains bullish on financials such as Hartford Financial (HIG) and Lincoln National (LNC) trading at 60% of book value without the regulatory issues of Goldman Sachs (GS) and Bank of America (BAC).
Video is worth watching. Great interview.
Disclosure: Long SHLD, RF, HIG, LNC in both client and personal accounts. Please review the disclaimer page for more details.