Fresh of his manager of the decade knighting by Morningstar, Bruce Berkowitz has started to catch the attention of the masses. We've been fans for a while despite diametric opposite approaches. [Feb 3, 2009: Fairholme Funds 2008 Report] Always one to invest different than the herd, Berkowitz's recent purchases are very interesting because they are so financially oriented, and (let's be blunt) so government backstopped - namely Citigroup (C) and a massive position in AIG (AIG). The Citigroup position is not so surprising - in a world where so much of the world's assets are going into fewer and fewer hands the mega hedge funds have fewer options of the type of stocks they can buy that can move the needle. [Mar 29, 2010: Are John Paulson's Hedge Funds Now Too Big to Outperform] Hence, many of Queen Elizabeth sized hedgies [Mar 8, 2010: List of Largest Global Hedge Funds] have piled into Citigroup, content the downside risk is limited because the U.S. government stands behind it (oops, officially they do not stand behind Citigroup but wink wink they do) [Feb 17, 2009: Hedge Funds Pile into Citigroup; as does Bruce Berkowitz of Fairholme Funds] The AIG investment however, while along the same lines, is a path far less traveled by fellow investors. Whatever the eventual resolution, another thing that puts Berkowitz in the minority is his holding periods. In a market that has turned 'long term' into meaning 'next week', Berkowitz seems to have been delivered from the 1970s with his very long term time frames.
Below is a video with Berkowitz with Consuelo Mack of WealthTrack; email readers will need to come to site to view.
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hat tip to Investment Postcards