Fairholme principles worth repeating:
 

  • While there is always a risk of loss, we seek to adhere to our cardinal rule of investing: Safety First.
     
  • Our second rule of investing is to seek to generate superior returns.
     
  • It's impossible to predict markets and events, so we must be prepared to react to whatever comes our way. Fairholme believes that maintaining a cash cushion may provide the peace of mind to ride out downturns. 
     
  • We continually challenge ourselves by asking, "What can go wrong?" with investments we own or consider owning. By playing mental war games against our best ideas we may gain or lose confidence in an initial thesis, or perhaps come to accept that a long-loved holding should be let go. We call this stress testing process "killing the company." 
     
  • Fairholme views market crashes, panics, and downturns as opportunities to buy more of the companies we love at fire sale prices. The only way to exploit these opportunities is to have cash on hand.
     
  • Fairholme's strategies are rooted in a school of thought called value investing. This longstanding investment paradigm is built upon ideas set forth by Benjamin Graham and David Dodd in their seminal 1934 text Security Analysis, and popularized by Warren Buffett.
     
  • Fairholme's research aims to determine a company's current intrinsic value, as opposed to a valuation that stems from hope, confidence, conjecture, or fear.
     
  • Fairholme enlists the help of outside experts and consultants to supplement the in-house research process.
     
  • We believe the investment decisions we make for you should be bound to the decisions we make for ourselves, so we at Fairholme put our money where our mouths are by staying personally and increasingly invested in our funds and ideas. We succeed when you do, and lose if you do. 
     
  • We fully expect that the securities in which we invest may suffer sharp declines at one point or another, and it's during these dips that we urge our shareholders to remain committed to Fairholme's tested value investing strategies. We see panics and depressed prices as opportunities for long-term investors, for it's during these periods that we may "average down" share prices.
     
  • We focus on the facts of an investment case and ignore the crowd.