Bruce Berkowitz has invested over 50% of his Fairholme Fund in pharmaceuticals, HMOs, aerospace and defense. The famed value investor says these companies produce a lot of cash flow, and "Uncle Sam is by far their biggest customer, a customer that pays."

Also, at the bottom of page seven, there's a great explanation of why Berkowitz still likes and owns Sears Holdings (SHLD). He believes the company is trading well below its liquidation value.

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