June 9 (Bloomberg) -- Bruce Berkowitz, chief investment officer at Fairholme Capital Management LLC, said financial services companies are “stronger and better than they have been in a very long time.”
Bank of America Corp. Chief Executive Officer Brian T. Moynihan is “doing a good job,” Berkowitz said today in an interview on Bloomberg Television from the Morningstar Inc. investor conference in Chicago. Bank of America, which is among Fairholme’s biggest holdings, is “making all the right moves.”
Fairholme’s largest stakes include American International Group Inc., Morgan Stanley, Goldman Sachs Group Inc. and Citigroup Inc. The portfolio, 30 percent of which is bank securities, has fallen 13 percent so far this year. Berkowitz was named Morningstar’s domestic stock-fund manager of the decade last year.
“The trends are getting better,” Berkowitz said of the financial-services industry. “The problem from 2007 still has a ways to burn through, but I would say we are more than half way through the problem now. Now we just have to get rid of the uncertainty in the environment and get people confidence to move forward.”
Bank of America’s stock price reflects an “extreme pessimism” that New York-based JPMorgan Chase & Co.’s shares don’t have, Berkowitz said. The Charlotte, North Carolina-based bank’s balance sheet and acquisitions of Merrill Lynch & Co. and Countrywide Financial Corp. are why the lender will continue to perform, he said.
“They are being killed, being patriotic taking over Countrywide,” Berkowitz said. “One day it will serve the purpose of making loans.”
--Editor: William Ahearn, Steve Dickson
To contact the reporters on this story: Laura Marcinek in New York at email@example.com; Erik Schatzker in New York at firstname.lastname@example.org.
To contact the editor responsible for this story: David Scheer at email@example.com.