Bruce Berkowitz of Fairhome Fund (FAIRX) wins again. His overweight of AIG (AIG) is another winner ... the stock is up some 50% in 3 months. (Then again, what isn't in the teflon market?)
(Click chart to expand)
From last week:
- Treasury, which invested more than $49 billion to prop up AIG, plans to convert its preferred stake into common stock by March 15 and will sell the shares to private investors. The U.S. may need one to two years, depending on market conditions, to sell all of its AIG shares, which will be more than 90 percent of the stock in the New York-based insurer, Miller said.
Unfortunately it appears Bruce pared back his holdings of AIG from a >10% weight to "only" 7%... but FAIRX is still up 6% for the month. The next great battle stock is St Joe Corp (JOE) where Berkowitz is pitted against hedge fund honcho David Einhorn - talk about a showdown. Thus far Einhorn's revelation he shorted JOE has crushed the stock, but Berkowitz just joined the board of directors in the past week or so - and I am sure he has been adding stock at a rapid clip as the price goes down (last disclosure was a sub 4% stake). In the end I would expect both men to 'win' as they have different time frames....
The bigger picture learned from this seat (for next crisis) is to learn to think more like a citizen of the USSR circa 1975: don't bet against anything the U.S. government will bring all its horses (and men) to defend. Even AIG, which was a hull of a corporation and in any form of free market would have been destroyed in 2008 is a 'winner'. Speaking of which, Berkowitz is heavy into Citigroup (C), and Bank of America (BAC). Maybe in the next disclosure statement, he will have added General Motors (GM) as well.
Free market capitalism corporate socialism is a fine thing, indeed!
Disclosure: No positions