Berkowitz dumps Buffett, adds to broker-dealer

Is Bruce Berkowitz down on Warren Buffett? Could be, seeing how Fairholme Capital unloaded nearly all of its Berkshire Hathaway A shares in the second quarter.
AUG 22, 2012
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.

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