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The $13.4 billion Fairholme Fund ( FAIRX) is synonymous with manager Bruce Berkowitz and his against-the-tide bets on stocks and sectors that, in the past, paid off spectacularly. His fund has a 10-year average annual return of 8.4%.

Now he's living up to his firm's slogan of "ignore the crowd" with huge bets on the financial-services industry and, in particular, a 17% bet on bailed-out insurer American International Group ( AIG).

The result, in a word, is "ouch." AIG's shares have plunged 48% this year. He also has a 5.8% portfolio bet on Bank of America ( BAC), which is down 37% this year.

Boston-based Ken Heebner is another well-known manager who's off to a poor year. Known as Big Foot for his outsized bets on particular stocks, the mutual fund manager oversees Capital Growth Management's $2.5 billion CGM Focus Fund ( CGMFX).

Heebner's clients have been sent on a rollercoaster ride. The fund has sunk almost 20% this year. Even so, the CGM Focus Fund rocketed 80% in 2007 and 67% in 2003, contributing to a 10-year annualized return of 9%.

The fund's top holding now is online travel service ( PCLN), at 6.6% of assets. Its shares are up 26% this year, prompting Heebner to sell part of his stake earlier in the year.

Heebner has been trading at a furiously fast pace, which is typical for him, as his portfolio turnover rate during the first half of the year was the equivalent of a startling 554% on an annualized basis. That would mean the holdings turn over a total of six times in a year.

But he has a huge bet on the consumer-cyclicals sector, and the fund's latest big addition is Herbalife ( HLF), at 6%. The nutritional and household products firm's shares are up 64% this year.

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