|KH was late getting out of commodities and energy - hey, so was I - and he was early getting into financials. So what?|
I'm looking forward to riding with CGM again when the market starts trending upward.
Heebner and CGM Close Out a Harrowing Year
Thursday January 8, 9:26 am ET
By the tickerspy.com Staff
2008 is a year that once high-flying hedge fund manager Ken Heebner will likely want to forget. Though he is one of the most admired investors on Wall Street, Ken Heebner's primary fund, CGM Focus (Nasdaq: CGMFX - News), continued to struggle through Q4.
As the S&P 500 dipped by about -38% during 2008, CGM Focus slid about -49%. And during Q4, the S&P 500 fell about -23%, while CGM Focus dropped -38%. One of CGM's other funds, CGM Mutual (Nasdaq: LOMMX - News), fared better in Q4, down -18%.
At the end of Q2, Heebner's firm Capital Growth Management showed a strong energy and commodities bias among its top holdings across all its funds. Those sectors peaked just as Q3 was getting underway and so did CGM Focus. CGM's shift into financials sometime during Q3 looks to have been ill-timed as well.
Heebner is known to move in and out of positions fairly quickly, but judging by the performance of his mutual fund during Q4 and the performance of the financial stocks the fund reported holding at the end of Q3, it seems likely that Heebner maintained at least some of his bias towards the financial sector for much, if not all, of Q4. Heebner also shifted into some traditionally safer names, which offset the weakness in the financial names in the CGM portfolio.
Looking at CGM's top holdings from the start of Q3, one can see a whole lot of red. The worst of the bunch are large money sector banks Citigroup (NYSE: C - News), Bank of America (NYSE: BAC - News), insurance firm Prudential (NYSE: PRU - News), and Russian telecom firm Mobile Telesystems (NYSE: MBT - News).
None of CGM's top holdings from the end of Q3 is above breakeven, though Wal-Mart (NYSE: WMT - News), McDonald's (NYSE: MCD - News), and Abbott Laboratories (NYSE: ABT - News) were the closest. Investors will be curious to know whether Heebner is sticking with these safer names as 2009 gets underway.
Of course, investors won't be sure of where Heebner stands now until next month, when the deadline for Q4 filings hits.