Bruce Berkowitz Stays In The Sunshine

Bruce Berkowitz must be disappointed that the current Olympic Games program doesn't include professional money management in the competition. If it did, the veteran stock picker's neck would be weighted down with gold right now.

Berkowitz is CEO of Fairholme Capital Management in Miami, which oversees about $9 billion, most of it in the value-oriented no-load Fairholme Fund (FAIRX), of which Berkowitz himself is lead manager.
The 50-year-old Berkowitz started Fairholme Fund in December 1999, and he's consistently crushed the competition. The five-star, large-blend fund has clinched the No. 1 spot in its Morningstar category for the one, three and five-year periods. Through Aug. 12, Fairholme's five-year annualized return of 16.51% bests its peers by 7.54 percentage points.

Forbes.com recently checked in with Berkowitz to talk about his take on the market, his strategy and his top stock picks.

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Betting Big, Winning Big: Interview With Bruce Berkowitz, CEO of Fairholme Capital Management

BRUCE BERKOWITZ, PRESIDENT OF FAIRHOLME FUND and CEO of Fairholme Capital Management in Miami, runs concentrated portfolios -- and keeps a lot of powder dry to pounce on opportunities as he looks for companies that throw off a lot of free cash. This approach has paid off nicely for the firm, which now oversees about $9 billion, the vast majority of it in the no-load Fairholme1 Fund (ticker: FAIRX), of which Berkowitz is president. Since its launch at the end of 1999, the fund has finished near the top of its Morningstar category, with an annual "since-inception" return of 16.27%, trouncing the S&P 500's performance of minus 0.03% over the same period. The fund also bests most of its peers based on one-, three- and five-year returns.

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Bruce Berkowitz : Berkshire Hathaway remains our largest single investment, and for good reason

Since inception, $10,000 invested in The Fairholme Fund with dividends reinvested has grown to $35,206 while $10,000 invested in the S&P 500 Index with dividends reinvested has grown to $11,613. In other words, the Fund has appreciated roughly 18.26% per annum compared to a gain of 2.01% per annum for the S&P 500.

The Fund continues to own a stable of terrific businesses with some of the most competent and honorable business jockeys in the world.

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A Legion of Disciples - Fund managers put their own spin on Buffett's strategy

Even though Warren Buffett has been influencing investors for decades, Legg Mason portfolio manager Robert Hagstrom had never heard of him until 1984 when he was 28 years old and training to be a stockbroker. Reading Berkshire Hathaway's annual reports "was one of those episodes in life where that which was mysterious became much clearer," says Hagstrom, who has since written several investing books, including The Warren Buffett Way. "What [Buffett] did was basically put flesh on stocks which previously to me were just ticker symbols and numbers."

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