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Mutual Funds

A Busted Merger Costs FBR Focus Dearly

Chuck Akre attributes half of FBR Focus's 19% loss in the first seven and a half months of 2008 to a big stake in Penn National Gaming. The stock ran up after an acquisition bid was announced more than a year ago. But the deal fell through in July, and the stock, which accounted for 13.5% of Focus's assets as of June 30, collapsed.

Akre invests in businesses he believes will compound capital at more than 15% a year over long stretches and then holds the stocks for equally lengthy periods. His fund's average annual turnover is a micro-scopic 5%. So Akre is holding on to Penn and most of his other stocks. "I don't know where the bottom of the market is, but we know how to value businesses," he says.

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