Berkowitz dumps Berkshire, adds to stake in broker-dealer

AUG 26, 2012
Bruce Berkowitz's faith in the Oracle of Omaha apparently is weakening. During the second quarter, Mr. Berkowitz's Fairholme Capital Management LLC sold off nearly all its holdings of A shares of Warren E. Buffett's Berkshire Hathaway Inc. (BRK.A) and reduced his holdings of the B shares (BRK.B) by almost 17%, according to SNL Financial LC. Fairholme held just six Berkshire A shares as of June 30, down from 1,573 at the end of March, and 803,705 of the B shares, down from 967,019, according to filings with the Securities and Exchange Commission. The biggest difference between the two stock classes is the price of a single share. A shares were trading at $128,529 and B shares at $85 last Wednesday. Both classes had returned just over 11% year-to-date as of Friday. Mr. Berkowitz's spokeswoman, Hedda Nadler, declined to comment. Mr. Berkowitz's biggest addition in the second quarter was an increase in his 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.

BETTER YEAR

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 through Thursday, 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 ranks it near dead last in the large-cap category [email protected] Twitter: @jasonkephart

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