Can Bruce Berkowitz Bounce Back?

The longtime star manager of Fairholme fund has stumbled badly this year after loading up on financials prematurely.

Just how badly has Bruce Berkowitz stumbled? Year to date through July 18, his once storied Fairholme Fund (symbol FAIRX) lost 13.7%. That trails Standard & Poor's 500-stock index by an astounding 18.6 percentage points and is stinky enough to place the fund next-to-last among large-company value funds, reports Morningstar. Over the past 12 months, Fairholme gained 4.4%, lagging the S&P 500 by 20.6 points.

According to fund tracker Lipper, investors have yanked $2.8 billion this year out of Fairholme, which now holds less than $15 billion. To make matters worse, the Securities & Exchange Commission has launched an investigation into St. Joe Co. (JOE), a Fairholme holding at which Berkowitz had himself installed as chairman.

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Steven Goldberg
Contributing Columnist,
Steve has been writing for Kiplinger's for more than 25 years. As an associate editor and then senior associate editor, he covered mutual funds for Kiplinger's Personal Finance magazine from 1994-2006. He also authored a book, But Which Mutual Funds? In 2006 he joined with Jerry Tweddell, one of his best sources on investing, to form Tweddell Goldberg Investment Management to manage money for individual investors. Steve continues to write a regular column for and enjoys hearing investing questions from readers. You can contact Steve at 301.650.6567 or