Value investing in tech boom 2.0 (GOOG; MSFT)

From Fortune's Term Sheet blog:

Larry Pitkowsky and Keith Trauner sat out the first bubble. Now the value investors justify why Google is a top holding and Microsoft is more exciting now than a decade ago.

FORTUNE -- Some splits in the mutual fund world are acrimonious, some aren't. This one fell somewhere in the middle. Larry Pitkowsky and Keith Trauner were happy working with Bruce Berkowitz at the Fairholme Fund. The fund's record was enviable through 2007, and it was attracting more and more new money by the day. If they continued picking winners and spotting trouble ahead -- Fairholme's annual reports fretted early about toxic bank holdings leading to a market shock -- Pitkowsky and Trauner might also be honored, as Berkowitz later was, as Morningstar's U.S. stock manager of the decade.

But a few years back Berkowitz took Fairholme in a new direction, one emphasizing private deals -- a recent example was Fairholme's deal with hedge fund manager Bill Ackman last year to pull General Growth Properties out of bankruptcy. Berkowitz hired an M&A whiz to help him, and he slowly phased out Pitkowsky and Trauner's work. The two sides agreed not to criticize each other and went separate ways.
Now Pitkowsky, 46, and Trauner, 54, are back. Their new mutual fund named GoodHaven opened for business in April. In a recent government filing, they disclosed $45 million in assets. Their stock picks reflect some of Fairholme's historical strategy, but what really stands out is that the managers were hoarding more than 50% of assets in cash, as of the filing. It's fallen some since then, the managers say, but it's still high.
"The Fed is pushing people to do what they don't want to do," Trauner says, referring as an example to older investors who might buy riskier stocks and bonds to compensate for zero percent interest rates. Stocks might not be overly expensive, he says, but because GoodHaven isn't finding the screaming buys of late 2008, the two are content to wait for possibilities. He deadpans, "We're really skeptical that zero percent interest rates will last forever."

It's one of the few macroeconomic predictions you can get out of them, if you can even call it that. Pitkowsky and Trauner are more likely to read 10-Ks over the weekend than pontificate about global economic themes....MORE