Much has been written and said about Fairholme's (FAIRX) epic fall in 2011. It's not without cause; the fund has dropped more than 27% this year and trails the S&P 500 Index by nearly 29 percentage points. Rattled shareholders have left the fund in droves. Investors have pulled an estimated $6.5 billion from the fund over the past eight months--which, along with market depreciation, has cut assets by more than 50% since its $20 billion February peak. Along the way, many have questioned manager Bruce Berkowitz's so-far disastrous move into financials stocks, which he built throughout 2010. More recently, critics point to former comanager Charlie Fernandez's Oct. 17 departure and the embarrassing Barron's expose that followed as evidence of further chaos.

While there are plenty of legitimate concerns about Fairholme, in some cases the public-opinion pendulum has swung too far to the other side. After being hailed as a genius just last year, some now wonder whether Berkowitz was ever that good in the first place. Other critics accuse Berkowitz of changing his approach, believing that he had not previously made such a large investment in financials. With judgments flying fast and furious, now may be a good time to take stock, reviewing how the fund got here and what may lie ahead.