Berkowitz dumps Berkshire, adds to stake in broker-dealer

Bruce Berkowitz's faith in the Oracle of Omaha apparently is weakening. During the second quarter, Mr. Berkowitz's Fairholme Capital Management LLC sold off nearly all its holdings of A shares of Warren E. Buffett's Berkshire Hathaway Inc. (BRK.A) and reduced his holdings of the B shares (BRK.B) by almost 17%, according to SNL Financial LC. Fairholme held just six Berkshire A shares as of June 30, down from 1,573 at the end of March, and 803,705 of the B shares, down from 967,019, according to filings with the Securities and Exchange Commission. The biggest difference between the two stock classes is the price of a single share. A shares were trading at $128,529 and B shares at $85 last Wednesday. Both classes had returned just over 11% year-to-date as of Friday. Mr. Berkowitz's spokeswoman, Hedda Nadler, declined to comment. Mr. Berkowitz's biggest addition in the second quarter was an increase in his stake in broker-dealer Jefferies Group Inc. (JEF) by 2.7 million shares, or 2%. Jefferies' stock fell 31% during the quarter, according to SNL.

BETTER YEAR

Fairholme has been enjoying a bit of a renaissance this year after struggling mightily last year. The flagship Fairholme Fund (FAIRX) has returned 30% year-to-date through Thursday, making it the top-performing large-cap-value fund over that time, according to Morningstar Inc. This year's gains haven't been enough to wipe away the stink of 2011, when the fund lost 32% and was the worst-performing large-cap fund. The fund's three-year annualized return of 5.89% still ranks it near dead last in the large-cap category jkephart@investmentnews.com Twitter: @jasonkephart