WE'RE NUMBER 1! WE'RE NUMBER 1!

I believe they used to call Ken Heebner "the Mad Bomber" on Wall Street because he concentrates his positions so much and has a tendency to blow them out in one shot. They don't seem to call him that anymore, or maybe the guys who gave him that name sank in the Internet bubble and went away.

Ken's been doing pretty well lately, and he leads the pack this quarter with his CGM Focus fund that has a big bet on energy stocks.

Quotes from MarketWatch article linked above:

Last year, Heebner started building positions in the energy sector -- at a time when few investors anticipated that oil prices would spike. But he decided that investors were underestimating how demand from rapidly emerging markets like China would overwhelm limited supply and push energy sector stocks as well as oil prices higher.

On that basis, he determined that oil and gas stocks were bargains. As of Dec. 31, the most recent data available, energy-related shares represented 35% of the Focus fund, according to Morningstar.

"In order to take this position, I've had to be willing to discredit the conventional wisdom," Heebner explained. "When I took my position in energy, no one agreed with me. When I bought the homebuilders, everyone thought it was strange."

Now that homebuilding stocks are more popular, Heebner is less interested. Not so for energy stocks. Using a $50 per barrel estimate for oil, Heebner said he believes that oil company shares are trading at a 40% discount to the Standard & Poor's 500 Index (SPX: news, chart, profile) multiple.

"I see no evidence at this point that high energy prices are going to fade," he noted. "This is a very significant opportunity."