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There is no definitive "A-list"
roster of superstar value investors. But
if there were, you'd undoubtedly see
names such as Warren Buffett, Bruce
Berkowitz, Bill Nygren, Charlie Dreifus,
and Mario Gabelli. But there are lots of
other starts in the sky. For example,
which of these fund managers has
delivered a cumulative +150% gain since
the inception of his fund 9 years ago,
compared to a -28% return for the S&P
500?
A.) Abe Froman
B.)
Bruce Berkowitz
C.) Steven Cohen
D.) David Tepper
E.) Edward Lampert |
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Published:
April 29, 2009
The
correct answer is
(B.) Bruce Berkowitz
Bruce Berkowitz is the lead
manager of the Fairholme Fund, which
has delivered a cumulative gain of
+150% since inception 9 years ago.
By comparison, the S&P 500 has
backtracked -28% over the same time
frame.
When asked recently to name the one
key metric that he uses to evaluate
investments, Berkowitz didn't
hesitate to say "it's all about the
amount of cash a company generates
that can be passed to owners in
relationship to the price."
Lately, he has plowed more than 50%
of his fund's assets into
health-care (particularly big pharma),
aerospace and defense. His rationale
is that there is ultimately nothing
more important than the health and
well-being of our families, and
defense and health-care spending eat
up a large percentage of the federal
budget.
His largest portfolio holding is
Pfizer (NYSE: PFE), and recent buys
include Boeing (NYSE: BA), General
Dynamics (NYSE: GD), and Northrop
Grumman (NYSE: NOC).
Golf has Tiger Woods, novelists have
Tom Clancy, and the investment
community has these celebrities --
they are at the pinnacle of their
craft. And not surprisingly, some
money managers have amassed
prodigious gains over the years for
their shareholders. Thanks to
regulatory filings, interviews and
shareholder reports, we can look
over their shoulders and see where
these elite investors are currently
finding the most promising
opportunities.
Of course, any list must begin with
Warren Buffett. But in his latest
issue of the Half-Priced Stocks
newsletter, StreetAuthority editor
Nathan Slaughter profiles four money
managers who have used their own
methodologies and insights to
produce double-digit returns in an
age when other investors are losing
their shirts. Not only does Nathan
explain what makes these managers
tick, he provides a list of their
favorite picks. To learn the names
of these managers (and their
favorite stocks), and to learn more
about Half-Priced Stocks,
please visit this link.
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