Berkowitz Goes All-In On Financials

Bruce Berkowitz has been a man in the news lately, but for all the wrong reasons. Named Morningstar’s U.S. Stock Manager of the Decade, Berkowitz’s Fairholme Group has delivered outsized returns for investors for some time, but in recent months Fairholme has struggled due to big bets on financial firms like American International Group (AIG), Citigroup (C) and Bank of America (BAC). As a result, Fairholme’s funds are badly lagging the broader market and investors are pulling money from the firm, including The Big Picture’s Barry Ritholtz announcing in April that he was “firing” Fairholme from his clients’ model portolio allocation.

Due to money outflows, Fairholme’s Q2 2011 13F-HR filing may reflect transactions of necessity rather than Berkowitz’s current investment outlook. Only 3 new and fairly small positions were added:

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