Monday, July 13, 2009

Heebner Having Another Tough Year

Interesting piece out at Bloomberg about CGM's Ken Heebner trailing the market again for a 2nd year in a row after a huge 80% return in 2007:

  • Kenneth Heebner’s CGM Focus Fund is at the bottom of the heap for the second consecutive year after investments in insurers such as Hartford Financial Group Inc. and retailer Wal-Mart Stores Inc. went awry.
  • CGM Focus, with $3.6 billion in assets, trailed 96 percent of similarly managed funds in 2008 and 99 percent this year through July 9, according to data compiled by Morningstar Inc. Heebner, co-founder of Boston-based Capital Growth Management LP, had the only fund in the group with $100 million or more that ranked in the bottom 5 percent in both years, the Chicago- based research firm said.
  • CGM Focus was the top U.S. equity fund in 2007 as commodity-stock gains fueled an 80 percent return. Since then, the manager known as “Bigfoot” for his rapid movements in and out of stocks has lost 55 percent, including 13 percent this year. The Standard & Poor’s 500 dropped 0.87 percent, including reinvested dividends, this year through July 9.
If anyone remembers, assets poured into Heebner's funds after 2007, only to get decimated in 2008 and so far in 2009. Consistency is incredibly tough in this game. My point here isn't to specifically say much about Heebner, as he is a good fund manager, but rather about how quickly things can change, and that no one is immune (forever).

Commodities moving lower again this morning. Diamond Offshore (DO) is back on my radar, and this is a stock I'd love to be back into, but only at the right price, of course!

Lots of economic data upcoming, but earnings should dominate the next couple of weeks.

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