MBIA Inc. (MBI) Was Just Given a Beat Down by The Legendary Bruce Berkowitz

This just in, Bruce Berkowitz’s Fairholme sold off 11,069,600 shares of MBIA Inc. (NYSE:MBI) in a 13G filing with the SEC. Altogether, the fund’s position in MBIA is now worth close to $330.6 million, and on a share-basis, this represents a decrease of 26%. In investment circles, 13Gs indicate the intentions of passive fund managers. These mega-investors aren’t always exposed to the same amount of coverage as their activist peers, but passive hedgies must still be keyed on as well.

In layman’s terms, it’s extremely beneficial for retail investors to internalize Bruce Berkowitz’s new move out of part of his MBIA Inc. (NYSE:MBI) stake. Most shareholders keep a close eye on plenty of investing metrics, but there’s one that is particularly important: consensus hedge fund sentiment.

Empirical studies have demonstrated that those who ape the funds we track can out-jump Mr. Market by an average of 18 percentage points each year (see the details here).

Looking at MBIA Inc. (NYSE:MBI), it appears that 47 other hedge funds were long MBIA at the end of last quarter. More specifically, Steven Cohen’s SAC Capital Advisors, Cliff Asness’ AQR Capital Management, and Israel Englander’s Millenium Management all held shares of MBIA Inc. (NYSE:MBI), which is some of the best company any hedge fund can maintain.

Equally as important, we must mention some other stocks in Fairholme’s 13F portfolio, aside from MBIA. As follows, they include Bank of America Corp (NYSE:BAC), Sears Holdings Corporation (NASDAQ:SHLD), and American International Group Inc (NYSE:AIG), among others. Here’s his top ten positions:

Disclosure: none