One-time investing legend on his fund's abysmal performance this decade: 'Life is not smooth'

Key Points
  • Fairholme Funds has $2.2 billion in assets, down from its 2011 apex of $20 billion, the Wall Street Journal reported.
  • Fairholme Founder Bruce Berkowitz is now betting on Sears, Fannie Mae and Freddie Mac.
  • Sears stock has fallen nearly 96 percent since 2007.
Bruce Berkowitz
Source: CNBC

The top mutual-fund manager of the 2000s has lost billions in assets this decade, and is now betting big on Sears to spark his comeback, one of the hardest-hit stocks of the 2010s, the Wall Street Journal reported Thursday.

Bruce Berkowitz's Fairholme Fund has lost 89 percent of its assets since its $20 billion peak in 2011, the Wall Street Journal reported. In an interview with the Journal, Berkowitz said he was never coy about the high volatility and concentration of his bets.

"The people who had the smoothest ride were those in Bernie Madoff. Life is not smooth," Berkowitz said.

Thirty-eight percent of Fairholme Fund is invested in preferred shares of government-backed mortgage financiers Fannie Mae and Freddie Mac, which Berkowitz predicts could bring him higher returns in the next six months, according to the Journal.

Sears' stock has fallen nearly 96 percent to $8.01 per share since its height of $191.93 in April 2007.

Sears' long decline

Morningstar named Berkowitz U.S. stock fund manager of the decade in 2010 after his fund returned more than 13 percent annually the previous 10 years.

Read more about Berkowitz's comeback plan in the Wall Street Journal's report.