Heebner sold all his shares in both companies in the first quarter, according to a regulatory filing. He dumped other automotive stocks including Aurora, Ontario-based Magna International Inc. and BorgWarner Inc., which is based in Auburn Hills, Michigan.
Heebner ran the best-performing diversified U.S. stock fund over a 10-year period for 11 straight quarters before he was unseated in the first quarter of 2011 by Thomas Soviero, manager of the $4.2 billion Fidelity Advisor Leveraged Company Stock Fund.
Investors make a mistake when they judge stock pickers only on short-term performance, said Kinnel.
"Managers don't go from geniuses to idiots overnight," he said. "Some of the investments they have made may well pay off."
'Short-Term Adversity'
Berkowitz, 53, was named Morningstar's domestic stock manager of the decade in January 2010. His fund, which opened in December 1999, has beaten the S&P 500 Index every year but one, 2003, according to data compiled by Bloomberg.
"Berkowitz hasn't had a bad period of investment returns since the beginning," Steven Roge, a portfolio manager with Bohemia, New York-based R.W. Roge & Co., said in a telephone interview. "It will be interesting to see how he overcomes this short-term adversity."
Roge's firm, which manages $225 million, holds shares in Berkowitz's fund.
Ronald Sugameli, manager of the $126 million New Century Alternative Strategies Portfolio, a mutual fund that invests in other mutual funds, cut his stake in Berkowitz's fund over the past few months.
Pulling Money
"Berkowitz may be right, but I thought it was prudent to reduce our concentration in the distressed financial sector," Sugameli said in a telephone interview from Wellesley, Massachusetts.
Investors pulled $2.3 billion from Fairholme Fund in April and May, according to Denver-based Lipper. The fund attracted deposits of $11 billion in the four years ended Dec. 31.