CGM Focus Fund entered 2009 with substantial holdings in insurance and economically defensive stocks. The insurance stocks were sold with major losses in the first quarter of the year. In fact, losses in investments in the insurance companies The Hartford Financial Service Group, Inc., MetLife, Inc., AFLAC Incorporated and Prudential Financial, Inc. were the Fund’s largest losses in 2009 and collectively were the most significant factor in the Fund’s underperformance for the year.
The economically defensive holdings were replaced with stocks that we believed would benefit from economic recovery as the year progressed, but delay in executing these transactions after the market low in early March diminished the Fund’s overall performance. Ford Motor Company delivered the largest gain for the Fund; other major contributors to performance were The Goldman Sachs Group, Inc., Freeport- McMoRan Copper & Gold Inc., Google Inc. and Amazon.com, Inc. Continue Reading »