In a totally messed up article yesterday, the Wall Street Journal reports that Heebner, manager of among other things the CGM Focus Fund, has called the bottom in financials.
Even though it was Saturday, I'm not sure where the editor was on this one. Heebner's Fund, "which for years has posted a string of market-beating returns, this year is lagging behind the Standard & Poor's 500-stock index by 11 percentage points. For only the second time in his 11-year tenure, he is in the red, off 52%." He is getting pounded this year. The Fund was up 80% in 2007 and has one of the best 10-year records in the business so some form of leniency may be warranted, but not to this extent.
"This fall, Mr. Heebner built a more than $1 billion combined position in Citigroup Inc. and Bank of America Corp. He has put $780 million in two Brazilian banks, Banco Bradesco SA and Banco Itau Holding Financiera SA, counting on U.S. actions to help lending abroad. CGM Focus's biggest holding through September was $552 million in Wells Fargo & Co.
About 40% of his $4.3 billion CGM Focus was in financial stocks as of Sept. 30, according to its portfolio report."
Huh? Sometime between July 1 and September 30 Heebner loaded up on financials.
- That is ancient history for a PM with high turnover.
- That could be the reason he is underperforming this year but it isn't mentioned. The financials are down huge since the summer.
Instead of calling him early and wrong, the WSJ lauds his moves as potentially super terrific.
1 comment:
Did you bother to check his 9/30 holdings? It's fair to say Ken is often early and sometimes late to exit but rarely just wrong.
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