More Peeks Inside Portfolios: Berkowitz, Pabrai, Bob Rodriguez

From recent 2008 Q1 13F-HR filings by Fairholme, Monish Pabrai, and Robert Rodriguez

Bruce Berkowitz and his team at Fairholme have been keeping busy with several new additions. Quick thoughts:

• I am not sure if my scripts are handling the options correctly but since the options have the same CUSPID as the underlying stock, it is hard to tell which options the manager(s) are holding. Berkowitz has call options on Sears (SHLD) at 80, Canadian Natural Resources (CNQ) @ 50 and Wellpoint (WLP) @ 40.
• Fairholme opened up a substantial position in Wellpoint this past quarter in addition to the call option. He joins Berkshire Hathaway and Seth Klarman in owning WLP.
• Berkowitz also bought Glaxo (GSK), which I must admit is a stock I've been watching [and waiting for it to hit $40 per ADR].
• Major stake-raising in St. Joe's (JOE), increasing shares held by over 250%.
• And on a personal note, sold out of 97% of his position in Penn West Energy (PWE).

After some disastrous investments in financial companies, Mohnish Pabrai seems like he's been trying to get back on track by piggybacking off of Berkowitz's picks. Last quarter, he added SHLD (and added SHLD options this quarter). For Q1, he picked up Wellcare (WCG) after seeing that Fairholme bought in in Q4 2007. Other notes:

• Raised his CompuCredit (CCRT) stake nearly 500%.
• Added some call options on Pinnacle Airlines (PNCL).
• Mostly a quiet quarter for Pabrai.

Robert Rodriguez's holdings are a little tougher to deciper as the FPA filing includes multiple funds in addition to the flagship fund managed by Rodriguez.

• The only stock with substantial stakes raised was Omnicare (OCR).
• Reduced positions looks like a consequence of fund withdrawal and/or money raising, with stakes evenly reduced across the board.

Gory details below:

• Fairholme Capital Q1 2008 13F-HR Breakdown
• Mohnish Pabrai Q1 2008 13F-HR Breakdown
• FPA Q1 2008 13F-HR Breakdown

Disclosure: Long PWE

Comments

[BxCapricorn]

Mohnish Pabrai, from what I understand is a value investor, and his performance over the past eight months is unbelievable. I don't know why you would focus on his buys and sells. If you look at his SEC Form 4 (www.secform4.com/insid...), you'll see that he bought Delta Financial (DFC was a Florida Mortgage Company, it was later de-listed), only to watch that entire investment disappear. He followed that buy with an airline, Pinnacle (PNCL), which may have looked like a bargain, but was again a falling knife. Crypologic (CRYP) at $19-20 is certainly being helped by his recent buying, but their past week looks ominous. Harvest Natural (HNR) just bounced, and is one of the few energy stocks to go sideways over the past year. I follow a lot of gurus, and MP is not worth your while. Stick with T. Boone Pickens, Jeff Gendell (Tontine) and Ken "Hitman" Heebner.

[Chungst]

I read Mohnish Pabrai's book "The Dhandho Investor," where he talks about heads he wins big and tails he loses a little. However, in a recent interview with Smart Money magazine, his explanation about the fund's loss in Delta Financial clearly contradicts the investment style laid out in the book. Clearly, he didn't lose a little, he lost a lot.

For Pabrai to piggyback off another investor calls into question his role as a PM. I know a lot of value investor-PMs (for example, just read some of the posts on Vestopia.com) look at what other value investor-PMs are doing, but such behavior is simply not acceptable because I could do the same piggy-backing myself without having to pay the huge investment management fees.

Only time will tell if Pabrai has past his zenith similiar to Bill Miller of Legg Mason. The secret of Buffett's success is his "master mind" (a Napoleon Hill concept) relationship with Munger. Pabrai should find his "Munger."

[Lisa]

Georealist, I think you're unjustifiably critical of this article and its author.

Most smart investors watch and learn from what other smart investors are doing. At the very least, you can use this as an initial screen for ideas.

[jjason]

Bruce Berkowitz sold 97% of his PWE. I wonder why?

I sold 100% of my PWE yesterday. After reading the 1Q 2008 report and the news that PWE is paying an 18 percent premium for another O&G company, I decided to take my profits.

Oh..PWE also has 1.3 billion in goodwill from the CNE purchase. Too much goodwill for me to digest.

[User 35132]

I think they sold pwe to soon. It is a great company. The banks are paying 2.6%, where can you put your money and get PWE return.?? Unless you are runing a fund need to boost it?

[Georealist]

Almost indecipherable....to say the least. Of course, on your hysterical analysis those who sold PWE lost nothing but money. Either you don't understand Peak Oil or Safe Haven oil/gas supply or are simply too lazy to catch a clue! Please inform..if possible.

[Georealist]

For those who didn't check out Mr. Bui's holdings..one of them is CEF...this is a closed end fund that holds gold and silver...it is possibly the worst possible way to invest in these metals...as of May 23, 2008 CEF charges MORE THAN A 7% PREMIUM TO INVEST WHAT IS EASILY..AND MUCH LESS CHEAPLY mirrored by either GLD or SLV. Congrats Bui!!! Pretension knows no bounds....