Two legendary fund managers who continue to bet on a U.S. recovery suffered some of the largest losses on Wall Street on Monday.
Bruce Berkowitz (left) and Bill Miller saw returns evaporate for financial stocks at the greatest rate so far in 2011, according to Bloomberg, which added to steep losses both managers were already facing on the year.
“Berkowitz’s $14.7 billion Fairholme Fund and Miller’s $1.2 billion Legg Mason Capital Management Opportunity Trust fell 8.8% and 11%, respectively,” according to Bloomberg. “The funds lost 28% and 36% this year through yesterday, compared with a drop of 10% for the S&P 500, including reinvested dividends.”
At Morningstar’s Investment Conference in June, Berkowitz said he didn’t know if he was ”sane or insane” for having such a large exposure to the financial sector.
Discussing Bank of America, one of his largest holdings, Berkowitz said the company is currently hated by the general public and thought to be solely responsible for the real estate decline. The reality, he said, is that everyone pushed universal home ownership as something good “until it was not.” He noted Bank of America was the first bank to lower its fees. Referring to the real estate crisis in particular, he said the bank has 30,000 extra people working on the issue.