Spoke Fund ®

Cale Smith

A good tidbit from Morningstar on 2009 mutual fund manager of the year, Bruce Berkowitz:

Bruce Berkowitz at Fairholme… has 140 times more money invested in his funds than Harry Lange has in Fidelity Magellan. We know this because Magellan’s latest filing showed Lange with between $500,000 and $1 million in his fund. Meanwhile, the management company overseeing the funds has $148 million in his two funds. While it has two employees, Berkowitz had been the sole employee when the funds listed $139 million invested in them.

Is there a link between performance and how much a portfolio manager has invested in his own fund? That’s a subject for another post. In the meantime, though, I’d like to think Bruce sets a great example and underscores the whole point behind Spoke Funds®: he eats his own cooking.

Back in January I’d highlighted a direct quote from Bruce that I thought was pretty telling, too, in this post on my blog:

I’ve had a lot of fun and continue to enjoy myself. We expand our circle of competence – slowly. We hopefully get better and wiser and don’t make the same mistake twice. After about 30 years I’ve made my fair share of mistakes.

I have a trick I use: I put all of my family’s money into the fund.

I’m using every device I know of to make sure we maintain a level playing field and put ourselves in the shoes of our shareholders. The only way to do that is to become as large a shareholder as possible.

That’s what I’m talkin’ ’bout.