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Ken Heebner buying inflation too

April 16, 2010
David Merkel

Cam Hui

3 followers
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:

CGM+Materials.JPG

...and Energy:

CGM+Energy.JPG

By contrast, he is underweight in Utilities:

CGM+Utilities.JPG

...and has an implicit short position in the US long bond:

CGM+LongBond.JPG

Long commodities, short bonds and interest sensitives - that sounds like a commodity inflation bet to me.

Cam Hui

http://humblestudentofthemarkets.blogspot.com/

About the author:

Cam Hui
David J. Merkel, FSA, CFA, is the Chief Economist and Director of Research of Finacorp Securities. His specialty is looking at the interlinkages in the markets in order to understand individual markets better. He holds bachelor’s and master’s degrees from Johns Hopkins University. In his spare time, he takes care of his eight children with his wonderful wife Ruth.

Rating: 3.9/5 (12 votes)

Comments

bradford ryland
Bradford ryland - 4 years ago
if one tracks the progress of gold from 2000 until today ken hebner`s track record while excellent is beaten...ken worked with my brother neal ryland @ new england investment company and so I know first hand how brillant he is, but it is a sign of the times how bad inflation is,in that a person of ken`s

caliber must work so hard to stay even....by the way I have been buying gold since 2000 if hebner wishes to talk call me @my home in spain 34 971701197,,,,thanks bradford ryland

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