Berkowitz Loaded Up on Financials

After disclosing that his Fairholme fund opened or increased its stakes in two much-maligned insurers — AIG and MBIA — Bruce Berkowitz now has well over half of his portfolio in financial or insurance companies.

According to Alex Garcia of, Berkowitz, who was recently named one of Morningstar’s fund managers of the decade, now has about 70% of the Fairholme portfolio in insurers or financial firms — just the types of companies he wisely avoided in the 2008 meltdown.

“It appears Berkowitz now has an idea of what financial and insurance companies have on their books,” Garcia writes. “In addition, some of financial and insurance companies are backed by the government so there exist a backstop in case another financial storm hits the markets.”

Garcia lists several financials (besides AIG and MBIA) in which Fairholme has sizable positions. Among them: Bank of America, Regions Financial, Leucadia National Corp., and Humana, Inc.

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