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7/31/2019 071012-FairholmeStaysTheCourse
1/13
Ignore the crowd.Fairholme
FAIRHOLMEIgnore the crowd.
7/31/2019 071012-FairholmeStaysTheCourse
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Ignore the crowd.Fairholme
THE FAIRHOLME FUND (FAIRX)AverageAnnualTotalReturnsasof06/30/2012:
1Year 5Year 10Year
FairholmeFund 6.96% 1.18% 9.01%
S&P500 5.45% .22% 5.33%
30DaySECYield 0.69%
ExpenseRatio 1.02%*
*Includesacquiredfundfeesof.02%.AcquiredfundfeesandexpensesarethoseexpensesincurredindirectlybytheFairholmeFundasaresultof
investmentsinsecuritiesissuedbyoneormoreinvestmentcompanies.
CumulativeReturnsasof06/30/2012:
1Year 5Year 10Year
FairholmeFund 6.96% 6.02% 136.95%
S&P500 5.45% 1.09% 68.13%
Performance information quoted above represents past performance and does not guarantee future results. The investment return and
principal value of an investment will fluctuate so that an investors shares, when redeemed, may be worth more or less than their original cost.
Current performance may be higher or lower than the performance quoted herein. The Fairholme Fund imposes a 2.00% redemption fee on
shares held less than 60 days. Performance data does not reflect the redemption fee. If reflected, total returns would be reduced. Fairholme
performance numbers assume reinvestment of dividends and capital gains and include all expenses, including acquired fund fees and expenses
incurred indirectly by the Fairholme Fund in securities issued by investment companies. While the Fairholme Fund has no front or back loads, or
12b1 fees, management fees and other expenses still apply. Any questions you may have, including most recent month end performance, can
be answered by calling Shareholder Services at 1866
202
2263.
The S&P 500 Index is a broad based measurement of changes in the stock market, is used for comparative purposes only, and is not meant to
be indicative of the Funds performance, asset composition or volatility. Given the wide scope of securities held by S&P 500, it should be
inherently less volatile. Our results may differ markedly from those of the S&P 500 in either up or down market trends. The performance of
the S&P 500 is shown with all dividends reinvested into the index and does not reflect any reduction in performance for the effects of
transaction costs or management fees. Investors cannot invest directly in an index.
Additional supplementary information can be found at the end of the presentation.
FAIRHOLME
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Ignore the crowd.Fairholme
GUIDING PRINCIPLES
ShareholdersFirst
DontLose
Focuson
Value
LongTermPerformance
IgnoreThe
Crowd
FAIRHOLME
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Ignore the crowd.Fairholme
Ourperformancesince
inceptionhas
been
quite
good
Past
performance
is
no
guarantee
of
future
results.
*BasedontotalreturnsinceFAIRXinceptionon12/29/1999.
Seelastpageforsupplementaryinformation.FAIRHOLME
$
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
Performanceo
fa$10,0
00Investment*
FAIRX S&P500
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Ignore the crowd.Fairholme
And,weve
even
kept
pace
with
our
heroes.
FAIRHOLME
Pastperformanceisnoguaranteeoffutureresults.
Berkshire
Hathaway
and
Leucadia are
holding
companies
whose
returns
are
affected
by
regulations
thatdifferfromthoseofamutualfund.Seelastpageforfurtherexplanation.
*BasedontotalreturnsinceFAIRXinceptionon12/29/1999.
Seelastpageforsupplementaryinformation.
$
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
Performanceo
fa$10,0
00Investment*
FAIRX Leucadia BerkshireHathaway S&P500
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Ignore the crowd.Fairholme
Perception
vs.
RealityWhilenegativemarketsentimentreducedtheFAIRXNAVby10%*overthelasttwelvemonths,ourportfoliosbookvaluegrewby2%.
Bookvalueisthenetassetvalueofacompany,calculatedbysubtractingtotalliabilitiesfromtotalassets.
*
Fairholme performancenumbers
assume
reinvestment
of
dividends
and
capital
gains
and
include
all
expenses.
** FAIRXNAVasof6/30/2011;Estimated BookValuederivedfromQ2201110Qs.
*** FAIRXNAVasof6/30/2012;EstimatedBookValuederivedfromQ1201210Qs.FAIRHOLME
$
$5
$10
$15
$20
$25
$30
$35
$40
$45
FAIRXEstimatedBookValue FAIRXNetAssetValue
2011** 2012***
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Ignore the crowd.Fairholme
$
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975
P
erformanceofa$10,0
00Investment
*
MungerPartnership DowJonesIndustrialAverage
ValueinvestingisalongtermstrategyevenCharlieMungers private
partnership(pre
Berkshire
Hathaway)
had
tough
investment
periods.
TheMunger PartnershipwasaprivateinvestmentpartnershipmanagedbyCharlesMunger,whocurrentlyservesasViceChairmanofBerkshireHathaway.
*Pastperformanceisnoguaranteeoffutureresults.Seelastpageforsupplementaryinformation.FAIRHOLME
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Ignore the crowd.Fairholme
1,000
1,050
1,100
1,150
1,200
1,250
1,300
1,350
1,400
1,450
0%
5%
10%
15%
20%
25%
S&P
500Index
FAI
RXCash%
FAIRXCash% S&P500
Greedywhenothersarefearful,
andfearful
when
others
are
greedy.
Wheninvestorsarefearfuland
pricesare
low,
we
buy.
Whenpricesarehighandinvestors
aregreedy,weraisecash.
FAIRHOLME
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Ignore the crowd.Fairholme
Valueinvestorsdonotequatecurrentvolatility
withrisk
over
the
long
term
Wethinkofriskasthepotentialforpermanentlossofcapital.
Risk:[rsk]Risk:[rsk]
MerriamWebsterDictionary
Thechancethatan
investmentwilllosevalue.
MerriamWebsterDictionary
Thechancethatan
investmentwilllosevalue.
MerriamWebsterDictionary
Characterizedbyorsubjectto
rapidorunexpectedchange.
MerriamWebsterDictionary
Characterizedbyorsubjectto
rapidorunexpectedchange.
Volatility:[voluhtilitee]Volatility:[voluhtilitee]
FAIRHOLME
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Ignore the crowd.Fairholme
Valueis not quite enough. Buying low is a
startbut you need the patience, discipline andgrit to buy lower and still lower if the
opportunity presents itself, shutting out the
extraneous noise coming from within the market
and over the airwaves.
SethA.Klarman
President,TheBaupost Group
April8,2011
Patience,Discipline
and
Grit
FAIRHOLME
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Ignore the crowd.Fairholme
Periodsofvolatilityandstress
sometimesallowwhatwebuy
cheap
to
become
cheaper,
creating
unusualopportunity. Fairholme's
historyincludesmanyinstancesof
shorttermembarrassment
leadingtolongtermvictory.
BruceR.
Berkowitz
LettertoClients
October2006
*Thisposterwasinitiallyproducedin1939bytheUnitedKingdom
MinistryofInformation,andwasintendedtostrengthenmoraleatthe
beginningof
the
Second
World
War.
FAIRHOLME
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