The best time to invest in Ken Heebner
’s CGM Funds is not when he just finished a year beating the market by more than 70% and appeared on the cover of Fortune Magazine. It is probably a better time to invest in his fund when he underperforms.
This is one of the times. After beating the market by 74% in 2007, CGM Fund now ranks at the bottom of the mutual funds, although he still averaged more than 15% for the last decade, when the market was negative. He continues his poor performance this year. According to the latest shareholder letter of the fund
, CGM Mutual Fund declined -13.3% during the second quarter of 2010 compared to the Standard and Poor’s 500 Index which lost -11.4% and the Merrill Lynch U.S. Corporate, Government and Mortgage Bond Index which increased 3.5% over the same period. For the first six months of the year, CGM Mutual Fund returned -10.8%, the Standard and Poor’s 500 Index, -6.7%. Continue Reading »