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Fairholme's moves



February 07, 2008 – Comments (0) | RELATED TICKERS: MMC , WCG

I previously noted that Fairholme opened a small position in Marsh and McLennan. I'm not sure when, but they've completely eliminated it as of September 2007. I remain bullish on MMC as they renew their focus on risk management - always their bread and butter. I saw an article recently (I think on Smartmoney) that insurance company mutual funds tend not to perform well, because they tend to be afterthoughts. MMC sold Putnam investments.

Fairholme did have a 2.5% stake in Wellcare, which has allegations of fraud. the stock took a dive (from $120 to about $20). M*'s coverage has been disappointingly spotty - probably not enough analysts to go around. I will guess that Fairholme isn't going to be in Wellcare for the long haul. sole reliance on government programs for business isn't the foundation of an economic moat. Medicare payment schemes change frequently, and there are sometimes cycles of overpayment followed by stringent cost cutting. and Medicaid doesn't even have the overpayment cycles.

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