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We report here a compact diode-pumped fiber laser that represents a promising route to designing a portable and rugged picosecond light source. The laser presented in this paper is based on a high-contrast semiconductor saturable absorber mirror (SESAM) and targets reliable picosecond-range sources. The cavity is simple since no dispersion compensators are used, and the SESAM-based mode locking mechanism is robust and self-starting, resulting in low-maintenance turn-key operation. We investigated pulse formation in a short-length fiber cavity and found that nonlinear effects in a near-resonant SESAM in combination with large-cavity dispersion provide the predominant mechanism that causes pulse shaping. The role of a resonant high-contrast SESAM in preventing low-frequency Q-switching instability has been elucidated. The effect of the recovery time of the SESAM on the stretched pulse width and spectrum for resonant-type absorber mirrors was also studied.