Bruce Berkowitz, recently notorious for taking the other side of David Einhorn's St Joe short position, but also with long positions in such governmental recovery cases of bankrupt basket case firms such as AIG and MBIA, released his thank you letter, after generating a 25.5% return. His two top receipients of gratitude: the government and Goldman Sachs. Pretty much explains everything about whom to thank when you want to outperform the market. It should also explain which particular centrally planned regime and fixed income monopoly one must never raise their voice against, if one doesn't want to be 'GM senior bondholdered.'
In 2010, The Fairholme Fund earned 25.5% versus a gain of 15.1% for the S&P 500 Index. Since inception on December 29, 1999 and through December 31, 2010, The Fairholme Fund earned 342.9% versus a 5.0% gain for the S&P 500 Index. At last year’s end, The Fairholme Fund’s respective 5 and 10-year annualized returns are 10.0% and 11.5% versus 2.3% and 1.4% for the S&P 500 Index.
Since inception on December 31, 2009, The Fairholme Focused Income Fund (NASDAQ:FOCIX - News) earned 11.2% for the calendar 2010 year versus a 6.5% gain for the Barclays Capital U.S. Aggregate Bond Index.
The Fairholme Asset Allocation Fund (NASDAQ:FAAFX - News) started on January 3, 2011.
Over the past few years, Fairholme’s performance is due in large part to thousands of patriots in civil service who rescued the global financial system with much intelligence and hard work, demonstrating government at its best during a time of national crisis. On behalf of nearly 500,000 shareholders and clients, Semper Fi.
Charlie Fernandez and I remain grateful for the many professionals that directly and indirectly worked for our shareholders, with special thanks to the U.S. Treasury for equitable treatment at AIG, to Goldman Sachs for outstanding advice in Asia and to Brookfield Asset Management and Pershing Square for all stakeholders fully recovering in the restructure of General Growth Properties.
Government is doing its job. We’ll continue to do ours, looking forward to further potential recovery at AIG, MBIA and others, while helping to remove the financial roadblocks to our country’s economic growth.
Bruce R. Berkowitz
We can only hope the tongue in cheek factor of this letter is well over 100%.