Heebner’s Trading for CGM Focus Fund Almost Tripled in 2008
By Miles Weiss
May 6 (Bloomberg)
(excerpt)
“What happened in ‘08 was Ken got whipsawed,” said A. Michael Lipper, the managing member of LSF Capital Advisors LLC, a Summit, New Jersey, firm that invests in financial-services companies. “With his very good long-term record, money came in and some of that money was hot money that was very sensitive to short-term performance.”
CGM Focus is the best-performing diversified U.S. stock fund in the 10 years ended March 31, with an average annual return of 16.7 percent, according to Morningstar.
Known as “Bigfoot” for his large movements in and out of stocks, Heebner sold CGM Focus’s stakes in oil and metals companies in the third quarter of 2008, incurring “major losses,” according to the fund’s annual report.
CGM Focus invested in financial-services companies during the quarter, only to get hit with more losses when those stocks slumped. By the end of the year, it held stock in insurers, drugmakers, and metals and mining companies.
Turnover Rate
The fund had a portfolio turnover rate of 504 percent last year, according to the annual report filed with the SEC on Feb. 27.
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