Mutual fund manager Bruce Berkowitz took plenty of flak for his ill-timed bet on financials this year. Shares of his top holdings like AIG and Bank of America fell more than 60% in 2011, while the broad KBW Bank Index shed nearly 30%. But Berkowitz wasn't alone -- plunging bank stocks spread pain across all of Wall Street. Hedge fund manager John Paulson also paid dearly for his bet on a banking recovery in 2011: his leveraged Paulson Advantage Plus fund fell 46% through November, according to Bloomberg.
This year the euro crisis changed the equation for big banks. Investors fled anything associated with risk, and hard-to-analyze banks fell into that category. Of course, misery loves company. Other notable hedge fund managers who fell for financials in 2011 include Michael Price, David Tepper, Lee Ainslie, Crispin Odey, and Michael Hintze.
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