There Are No Stock-Picking Geniuses
I shake my head when someone writes about managed funds or picking individual stocks as a preferred way of investing. For every lucky home run investor or fund manager genius of the day, there is a genius has-been.
So what has genius Ken done for his fund investors lately?
The $3 billion CGM Focus Fund, which Heebner runs from Boston, is the only domestic stock fund to trail at least 96 percent of peers in 2008, 2009 and again this year, according to research firm Morningstar Inc. The fund has lost 54 percent since June 30, 2008, compared with the 8.7 percent decline by the Standard & Poor’s 500 Index, a proxy for the U.S. stock market and the fund’s benchmark.
Was Ken ill or evil? No. According to one commenter, Heebner was just in all of the wrong sectors at the wrong times. How could that happen? We thought he was smarter than the rest of us. Now index investors are doing better.
Heebner’s fund has done remarkably well over the past decade, for which he is to be commended. The problem is that ordinary investors tend to look at a hot performer like Heebner’s fund, buy-in, then expect the upward run to continue. Then things turn south and they become big losers. They sell and move on to the next hot fund. Folks, perceived investing genius doesn’t last. Heck, the stock market doesn’t last, does it?
Here is the link to the full article: Once Americas hottest investor, CMGs Heebner on a cold streak