Berkowitz dumps Buffett, adds to broker-dealer

Fairholme Capital Management LLC sold off nearly all of its holdings of A shares of Berkshire Hathaway Inc. in the second quarter

Aug 22, 2012 @ 3:26 pm

By Jason Kephart

Bruce Berkowitz's faith in the world's richest man apparently is weakening.

During the second quarter, Mr. Berkowitz's Fairholme Capital Management LLC sold off nearly all of its holdings of A shares of Warren E. Buffett's Berkshire Hathaway Inc. (BRK.A) and reduced his holdings of the B shares by almost 17%, according to SNL Financial.

Fairholme held just six shares of Berkshire's A shares as of June 30, down from 1,573 at the end of March, and 803,705 shares of the B shares, down from 967,019, according to filings with the Securities and Exchange Commission.

The biggest difference between the two share classes is the price of a single share. As of Wednesday morning, A shares were trading at $128,529 a share; B-shares at $85 a share. Both classes have returned just over 11% year-to-date.

Mr. Berkowitz's spokeswoman Hedda Nadler declined to comment.

Mr. Berkowitz's biggest addition in the quarter was an increase in its stake in broker-dealer Jefferies Group Inc. (JEF) by 2.7 million shares, or 2%. Jefferies' stock fell 31% during the quarter, according to SNL.

Fairholme has been enjoying a bit of a renaissance this year after struggling mightily last year. The flagship Fairholme Fund (FAIRX) has returned 30% year-to-date, making it the top-performing large-cap-value fund over that time, according to Morningstar Inc.

This year's gains haven't been enough to wipe away the stink of 2011, when the fund lost 32% and was the worst-performing large-cap fund.

The fund's three-year annualized return of 5.89% still rank near dead last in the large-cap category.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Celebrity adviser David Bach: Here's what every adviser should be talking about with clients right now

New York Times best-selling author David Bach says every financial adviser should be talking to clients about how they are going to weather a market downturn.

Video Spotlight

Help Clients Be Prepared, Not Surprised

Sponsored by Prudential

Recommended Video

Path to growth

Latest news & opinion

RIAs struggle to keep clients grounded amid stock market euphoria

With equities at record levels, financial advisers are confronted with realities of greed and fear.

Regulators showing renewed interest in cracking down on investment fees

SEC, Finra targeting high-fee share classes, 12b-1 fees and failure to give sales load discounts and waivers to investors.

Tax update: Brady says sales tax deduction in final bill

Taxpayers will be able to deduct state income taxes or state sales taxes in addition to property levies — up to a $10,000 cap.

Complexity of new indexed annuities causing concern

Insurers are using 'hybrid' indices as a way to differentiate themselves, but critics contend the products are less transparent, more confusing and don't add financial benefit.

Critics say regulation hasn't curbed overly rosy projections for indexed universal life insurance

They say rule didn't go far enough and more stringent measures may be necessary.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print