Consuelo Mack WealthTrack “Fairholme Turnaround?” premiering nationwide beginning tomorrow Friday, September 30 at 7:30 p.m. ET on public television (check local listings**) and on wealthtrack.com, features an exclusive interview with a deep value investor whose outstanding long-term track record has been seriously tested in recent years, Fairholme Fund’s Bruce Berkowitz.
Berkowitz explains to WealthTrack Anchor and Executive Producer Consuelo Mack why he is taking on the federal government to collect dividends on his preferred stock positions in Fannie Mae and Freddie Mac. With the two mortgage giants currently comprising more than 20% of his flagship Fairholme Fund’s portfolio, the stakes are high both financially and legally.
Bruce Berkowitz Exclusive On Fannie Mae & Freddie Mac
Value Partners Asia ex-Japan Equity Fund has delivered a 60.7% return since its inception three years ago. In comparison, the MSCI All Counties Asia (ex-Japan) index has returned just 34% over the same period. The fund, which targets what it calls the best-in-class companies in "growth-like" areas of the market, such as information technology and Read More
In this interview excerpt, Bruce Berkowitz explains, “The issue is people invested their hard-earned money into these companies. I invested my shareholders into…the preferred stock of Fannie Mae and Freddie Mac, and if Fannie and Freddie can pay the United States government $250 billion for their preferred stock, then I think they should at least the pay the dividend, start paying the dividends again on my shareholders’ preferred stock. We’re just saying a rule’s a rule. The law is the law. No one should be above it, and the contract should be honored. That’s it. It’s as simple as that. We’re asking for the same result that Bank of America received, that AIG received….Fannie Mae and Freddie Mac should have worked out exactly the way AIG worked out. That’s it. We’re not arguing about the past. We’re just saying these are two companies. They make $15 billion a year. They are more than capable of paying the preferred shareholders dividends….The companies are very profitable. Whoever heard of two companies making $15 billion a year under conservatorship? It just defies common sense. So the wheels of justice move slowly.”