Bruce Berkowitz’s Fairholme fund got some bad news recently after a court ruling hit Fannie Mae and Freddie Mac hard. But over the long term, Berkowitz’s track record is impeccable, and in a recent interview with WealthTrack, he talked about the process that led him to go big into financial stocks amid the 2008-2009 financial crisis.
Berkowitz in particular talks about what led him to take big stakes in Bank of America and AIG when other investors were avoiding them like the plague. He says that he’s now having to unload some AIG shares –reluctantly — because the stock has gained so much that it now makes up close to half of his portfolio. Berkowitz talks about why he thinks AIG, Bank of America, and Fannie and Freddie are all still very good bets going forward. He also discusses how he’s able to withstand significant volatility in his concentrated portfolio.