Berkowhathappened?

Barron's had a feature on the recent goings on at the Fairholme Fund (FAIRX) which is primarily managed by Bruce Berkowitz but the fund has always been pitched as a team effort. Assuming Barron's has it right I can only conclude that this is and has been a truly bizarre situation.

Read the article but there were odd implications surrounding giving giving a seat at the table to his cousin's husband which seemed to have contributed to the departure of Larry Pitkowsky and Keith Trauner who went on to start the Good Haven Fund (GOODX) and it seems like the magic may have left with them.

There were lawsuits from ex-employees and really it just creates a very odd picture. The article also lays out a theory about how difficult it would be for the fund to unwind it's positions, if it had to, based on average volume of the stocks and a sort of unwritten rule of not wanting to exceed 20% of the day's volume, apparently the fund is more concentrated than most concentrated funds.

I've picked on this fund quite a few times along the lines of how I have picked on the Bill Miller funds, everyone gets things wrong and no one beats the market forever or under all market conditions but the risk in making not just huge bets but more like career makers (or breakers) time and again creates a consequence that probably can't be recovered from when the bets become breakers.

I suppose there is an argument to be made for an investment pool to take these kinds of outsized risks but probably not one that is available to unaccredited individual investors who bought a mutual fund because it was on the cover of some magazine as a hold forever fund because of a great ten year track record.

The article leans more eccentric than egoist but perhaps ego has been a component here? Certainly that would not be a surprise anyway. Learning from someone else's downfall is no doubt opportunistic but it is also helpful.

Congratulations to the All Blacks from New Zealand on winning the Rugby World Cup. They made easy work of most of the tournament but France, whom the beat in the final, has always been difficult for them as was the case in the final but when I saw the French's first reaction to the Haka was to hold hands (not lock elbows but hold hands) I felt good about the kiwi's chances. While I know how the scoring in rugby works, I don't get the rest of it.