I recently pointed out
that real-time indicators are showing that the economy is rebounding. As the markets have rallied from the reflation trade, my inflation-deflation timer model
moved from a "neutral" reading to an "inflation" reading last week, which would move the model portfolio from equities to a basket of commodities (see report here
Ken Heebner buying inflation too
The model appears to be in good company as I see that Ken Heebner
has also put on an inflation bet in his portfolio. Heebner is a portfolio manager with a terrific long term record (though he has struggled in the last couple of years). He has a "swing for the fences" style and tends to make big top-down bets.
I reverse engineered his macro bets and my analysis shows that Heebner has positioned his CGM Focus Fund portfolio for a commodity inflation environment. He is at an overweight position in Materials:
By contrast, he is underweight in Utilities:
...and has an implicit short position in the US long bond:
Long commodities, short bonds and interest sensitives - that sounds like a commodity inflation bet to me.
About the author:
Cam HuiMr. Hui has been involved in the equity markets since 1980, both on the buy side and the sell side. He is currently semi-retired and living in Vancouver, Canada with his family. He maintains his interests in the markets and advises hedge funds and other clients as a consultant. He is a CFA Charterholder. Check out his investment blog at http://humblestudentofthemarkets.blogspot.com/
Visit Cam Hui's Website