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Fairholme/Sears

scott
edited February 2013 in Fund Discussions
1:01 PM The minds of retail analysts are spinning after ESL Partners discloses (13G) a sizable 14.32M stake in Gap (GPS +6%) and helps fuel speculative buying of the retailer. With Eddie Lampert already squeezing value out of the assets of Sears Holdings (SHLD +0.4%), the unanswered question is what does Eddie have up his sleeve that might add value to Gap, Sears, and Kmart all the same time? [Consumer, On the Move] Comment!

http://seekingalpha.com/currents/all

I'll refer to this article from 2011 where it was discussed that Lampert was interested in the Gap. Article still fits.

http://finance.fortune.cnn.com/2011/05/12/eddie-lampert-dementor/

Berkowitz increased his holdings in SHLD last quarter.

Comments

  • CharlesCharles
    Thanks Scott. I see GAP up 5% today on heavy volume. I did not realize it has a $15B market value! Down day for Fairholme family though...and my house with it. All holdings down today but MAINX and RNSIX.

    image
  • MikeMMikeM
    Reply to @Charles:

    Hi Charles. Really enjoy your posts and data. I'm curious. I know you hold FAAFX, as I do. I think I remember you mentioning a while ago that you were contemplating selling. What are you thinking now? I told myself when I bought into FAAFX that it was a long term hold, because I believed I was buying one of the best, if not the best managers out there. The early days were tough to watch. Obviously Berkowitz was early on many of his picks, but they are coming through now, MBIA, BofA, St.Joes, Sears...

    I'm still a believer for long term. What are your thoughts?
  • CharlesCharles
    edited February 2013
    Thanks man.

    I first went into FAAFX pretty big on 25 July 2011 and added the following month. Totaling about 50% of portfolio. Like you, I just felt Mr. Berkowitz made perfect sense to me. And, thanks to being FAIRX heavy through the credit crisis, I trusted his shop. Back then anyway, I liked holding just 3-4 funds.

    I modulated a bit through 2012, added a separate BAC holding, but cut FAAFX to under 10% last September with decision to retire at year end. Wanting to reel-in portfolio volatility.

    With recent announcement to close Fairholme to new investors and me getting better handle on retirement finances, I upped our stake. I also got back into FAIRX and bought FOCIX. Mr. Berkowitz now manages a quarter of our portfolio.

    He is a money manager I have come to appreciate through good times and bad. And when I ask myself the question: Will he make us money over the next three years? I believe he will. So, we're in.

    Hopefully I am right. And hopefully we investors continue to have opportunity to stay with Fairholme.
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