Comments on Fund My Mutual Fund: Ken Heebner's Fourth Quarter 2008 Moves - CGM Focu...

Have they ever had a conference call? I don't reca...

2009-03-31T11:12:00.000-04:00

Have they ever had a conference call? I don't recall mutual funds doing that sort of thing.

Does anyone know when CGMF will be having an inves...

2009-03-31T00:09:00.000-04:00

Does anyone know when CGMF will be having an investor conference call? I sure would like to have better visability on what Ken's invested in. Since he has the ability to move quickly why in the world did it take him so long to make a move before he lost over 60% of investors' money? Makes no sense.

Just want to point out that CGMFX is down in exces...

2009-02-19T00:58:00.000-05:00

Just want to point out that CGMFX is down in excess of 61%, and that I agree with gregor. Not blaming him. I suspect he does better in a bull market and was blind-sided by the market drop. It appears to me that he has pieced together a 'safe' fund that is early cycle as noted above. I'm just not sure that financials will lead the way this time. Too much govt. intervention and too many style changes.

jegan

I just re-read page 1 of the prospectus.
Thanks...

2009-02-18T22:28:00.000-05:00

I just re-read page 1 of the prospectus.
Thanks for enlightening me on my out of sight, out of mind complacency.
Let's hope he comes up with some deep hard facts if he is to ever use some of the "whole kit and caboodle" prospectus arsenal here, in the middle of a recession. He has just put two bad quarters behind him and investors complain enough when things go well.
The short story list usually comes out about 10 days after the SEC release, I will mail any off to you when I get my hard copy.

There is no SEC limit Keith. A quick look at the f...

2009-02-18T20:40:00.000-05:00

There is no SEC limit Keith. A quick look at the first pages of the prospectus shows a nearly unlimited ability to do anything he wants :) As long as you disclose in prospectus you can do a lot of things in a mutual fund. The industry is staid so thats why people assume they are so limited. The only limitation is leverage really.

He even allows himself to currency trade - which again is way out of the norm for mutual funds.

(also he can buy debt if he chooses)

I'd take a read of his prospectus and compare it to say a typical growth fund and contrast and compare... Ken has a ton of latitude. I don't think there is a reason to defend or attack him; I think if you asked him he would say he was not up to par this year.

My point above was he indeed has FAR MORE flexibility than t99%+ of growth mutual funds, so he had more chance to offset part of this. So its ironic he was at the bottom of the category with that ability.

Still beating the category my a good amount due to great 2007. And I care more about long term records, versus most who flip in and out of funds based on trailing 6 months or 1 year. But anyone who got in, in 2008 is suffering and it will take a long while just to get back to even.

p.s. agree on healthcare; that and defense (govt revenue) were 2 areas I thought would do ok in 2009 ... he seems to have left defense completely.

I also disagree with the 1-2% cash situation but that is more of an industry thing; they find cash to be an evil thing. I do not.

"Now his focus is on insurers."
Maybe it still...

2009-02-18T20:27:00.000-05:00

"Now his focus is on insurers."
Maybe it still is but there was a 21% insurance and 20% exposure to health care/biotechnology, and I would not doubt when we get our quarterlies the mix may be pretty even for CGMFX. I like his biotech/health care posturing and think it is now a "co-focused" fund, a necessity used to mitigate risk.
Health care is usually an early bull, but has found to be a decent refuge for many these days. Financials are the late bear stocks and when banks didn't fit the bill, he chose insurance, which must have seemed to him like a watered down less risky option.
5 of the top 100 Investor's Business Daily stocks this past weekend were holdings that showed Ken Heebner had in recent SEC reporting period. That leads me to infer that sector rotation may be slowing/idling and looking for a sector leader, but also that Ken Heebner had quite a large amount of them in his 3 month old quarterly report. They were Capella and DeVry two educations stocks, and Genzyme, Gilead, and Cephalon. His list may even have more in the top 100 since then. Sadly in a recession
As for the short exposure, he had 4 on, is there not a limit by the SEC as to the percentile amount he can implement?
What more would you have him do?
In a recession growth stock mutual fund portfolios are monolithic beasts. Managers cannot gain, they live quarter to quarter and shareholders want results, thus cash is kept to 1-2% and everything else is thrown into equities. They all buy roughly the same stocks at the same time in the same quantities, per the algo models that they pay so much money to.
I am hoping Dr. Hui will come out this week with another article where he reverse engineered CGMFX and can shed some light on the fund.
Perhaps last year's hedge fund incursion thoughts were based on an understanding what he was up against - he is unable to use almost all of the tools such as short selling, currency plays, options, leverage, and derivatives that they get to in their investing universe.
Thanks for the article.

I have started a small (fortunately) investment wi...

2009-02-18T17:48:00.000-05:00

I have started a small (fortunately) investment with him after the fund was down last March. His run-up until summer was nice, but since then I have been wondering. I feel the fund is moving more or less with the market if not underperforming it. I have no idea why he did not go more into gold and his choice of insurance. This is one of the times when I actually want to know what I own. Given his age I am not sure we will see the fund recover in time.

Hi Gregor, good to see you - I have some readers w...

2009-02-18T16:16:00.000-05:00

Hi Gregor, good to see you - I have some readers who send me your stuff from time to time.

Yes, I thought he was in for a rough time based on what he was saying in spring to early summer 2008 (far too bullish on US)

Again my main beef is just a lack of using his shorting ability. Very few mutual funds allow it and he has the opportunity and did not use it much.

It is too soon to tell so I let's not put him in the Bill Miller camp but we'll see a year from now where things stand. As I look at his portfolio now I am scratching my head (again) at the direction.

What I realized about Ken is that his avowed disin...

2009-02-18T16:04:00.000-05:00

What I realized about Ken is that his avowed disinterest in macro was his strength for a long time, and now of course it's a huge weakness. I thought he was making a terrible mistake in buying the financials. Though I didn't think they would crash again so soon.

I think Ken frankly has no idea what to do.