CNBC: S&P Head on Downgrades.
Alternative title: Dylan Ratigan Goes Postal!
Dylan Ratigan lets a guy from ratings company Standard & Poor's have it in this first video, and justifiably so. The ratings agencies overrated (**way** overrated, judging by the crisis) debt instruments, and then, in a pure "There's gambling going on in here!" moment, pulled the rug out from companies that dealt and/or now hold them with downgrades based on the toxicity of these instruments. While many people are to blame here, the ratings agencies were supposed to stand above it all as impartial judges, an obligation they completely abrogated.
The quote of the year: "The ratings agencies were directly complicit in the creation of the securities that you now are, like a two year old with a bazooka, blowing people's heads off with."
CNBC: Making Sense of the Market.
Alternative title: Kenneth Heebner Goes Financial!
Perhaps even wilder than the first video, Kenneth Heebner reveals he's got an over 30% allocation to financials (mainly strong banks) in his CGM Focus Fund. And while it sounds nuts, Heebner has a knack for sector calls. I don't know if he's right or early (or WAY early), but gut wise, I like this call.
Links:
http://www.cnbc.com/id/15840232?video=859038023
http://www.cnbc.com/id/15840232?video=860916353
Showing posts with label Kenneth Heebner. Show all posts
Showing posts with label Kenneth Heebner. Show all posts
Saturday, September 20, 2008
Wednesday, June 18, 2008
Ken Heebner hearts Petrobras.
Ken Heebner is a mutual fund manager at CGM Funds and was recently dubbed "America's Hottest Investor" by Fortune Magazine.
Quotes:
"How do you explain genius?" muses Douglas Pratt, a former Invesco fund manager who was an analyst at Loomis. "Ken just sees things others don't."
A league of his own
Spend some time with Heebner, and it becomes clear why. His brain is wired differently. His ideas come faster, his focus is more intense, and his ability to sift through massive quantities of information and zero in on what matters is downright spooky. Pity the Salieris of the investing world who have to compete with this guy.
CNBC: Market Outlook Part 2.
Quotes:
I like companies that are benefiting from an environment where there is a short supply of key commodities, and the big one is energy. I think that, whether it's oil stocks or gas stocks or oil service stocks or coal stocks, they're all benefiting from the fact that demand for energy is growing faster than our ability to find it and deliver it to the marketplace.
....
I think in a world where the oil price is in an uptrend, this company, Petrobras, which has 12 billion barrels of reserves today, the discoveries that they're developing in the pre-salt, deep offshore Brazil are gonna add between 30 and 100 billion barrels to their reserve base, and five years from now we're gonna be looking at a company 5 to 10 times the size the company is today.
P.S. The ticker is PBR.
Quotes:
"How do you explain genius?" muses Douglas Pratt, a former Invesco fund manager who was an analyst at Loomis. "Ken just sees things others don't."
A league of his own
Spend some time with Heebner, and it becomes clear why. His brain is wired differently. His ideas come faster, his focus is more intense, and his ability to sift through massive quantities of information and zero in on what matters is downright spooky. Pity the Salieris of the investing world who have to compete with this guy.
CNBC: Market Outlook Part 2.
Quotes:
I like companies that are benefiting from an environment where there is a short supply of key commodities, and the big one is energy. I think that, whether it's oil stocks or gas stocks or oil service stocks or coal stocks, they're all benefiting from the fact that demand for energy is growing faster than our ability to find it and deliver it to the marketplace.
....
I think in a world where the oil price is in an uptrend, this company, Petrobras, which has 12 billion barrels of reserves today, the discoveries that they're developing in the pre-salt, deep offshore Brazil are gonna add between 30 and 100 billion barrels to their reserve base, and five years from now we're gonna be looking at a company 5 to 10 times the size the company is today.
P.S. The ticker is PBR.
Friday, December 28, 2007
Heebner: I'm Cuckoo for Petrobras.
Kenneth Heebner of CGM Funds apparently really likes Brazilian oil producer Petrobras (PBR), and he's bullish on the economy of Brazil in general. The Fortune article I highlighted earlier mentioned Heebner is a fanatical researcher, that's on display in these videos.
Note: I believe there is an error in the CNBC video. CNBC displays the chart of PZE, which subsequently rose 15% today. But PZE is a subsidiary of Petrobras, and I believe it is focused on Petrobras' Argentina properties. PBR is the right symbol for Petrobras, and it is the symbol that Bloomberg uses.
CNBC: Focusing on Return$.
Bloomberg: Kenneth Heebner.
P.S. As mentioned before, I own Petrobras.
Note: I believe there is an error in the CNBC video. CNBC displays the chart of PZE, which subsequently rose 15% today. But PZE is a subsidiary of Petrobras, and I believe it is focused on Petrobras' Argentina properties. PBR is the right symbol for Petrobras, and it is the symbol that Bloomberg uses.
CNBC: Focusing on Return$.
Bloomberg: Kenneth Heebner.
P.S. As mentioned before, I own Petrobras.
Tuesday, December 25, 2007
Wolves in mutual fund manager's clothing.
Both Kenneth Heebner of CGM Funds and Robert Rodriguez of FPA Funds run mutual funds, but they are both by nature hedge fund managers; highly intelligent with strong opinions, they are not afraid of going against the grain (or tides) by concentrating their bets in certain areas or avoiding certain areas entirely, and neither one toes the 'I must remain diversified" line.
There are differences; Heebner is a growth oriented manager, with an 'anticipate and ride the momentum' style, while Rodriguez is value oriented and generally more conservative. Both have participated in the energy sector over the past few years, Heebner with a mix of production and service, Rodriguez a little more tilted to service. Both also managed to avoid the housing/financial debt crisis, Heebner by riding and then shorting the homebuilders, Rodriguez by dumping his mortgage bond related investments before the slaughter.
Of the two, Heebner has the super hot hand right now, up 60%+ this year, and up a Warren Buffet like 24% over the past 10 years. Rodriguez is having a bad year this year, but has a solid long term record.
It's interesting to note how different their calls on 2008 are. Heebner believes the economy will escape recession in 2008, and continues to be bullish on global growth and the energy sector in particular. His favorite energy stock right now is Petrobras, but note that Heebner can and does change his mind on a dime. Rodriguez, on the other hand, believes a recession in 2008 is likely a certainty.
Personally, I am leaning more towards Robert Rodriguez's outlook, but I will let the market guide me in my positions. Disclosure: I also own Petrobras.
Kiplinger.com: Heebner's World View.
Quotes:
Ken Heebner played the market like a fiddle in 2007. His CGM Focus fund (symbol CGMFX) gained nearly 70% to November 12 (when the January issue went to print), crushing the S&P 500 by 65 percentage points. As of December 17, the fund was up 66%. We visited Heebner at his office, high above Boston Harbor, to get his take on the current environment.
Although the U.S. housing market is mired in a depression, says Heebner, he thinks the economy will still escape recession in 2008. "It really takes a sledgehammer blow to turn this economy down, and I don't think the housing market itself is that blow," he says.
....
His favorite sectors -- energy, industrial raw materials, infrastructure builders and agribusiness -- satisfy the voracious appetites of fast-growing emerging markets. For instance, he recently had 30% of his fund's assets in oil-production and oil-services companies. "As people go from bicycles to motorcycles to cars, there is a big increase in fuel consumption," he says.
Heebner is bullish on Petrobras, an oil giant half-owned by the Brazilian government. He reckons that Petrobras will be able to raise production significantly over the next five years, based on deep-water offshore discoveries. It announced recently that one of its deep-water sites may contain up to eight billion barrels of oil and natural-gas equivalents. Heebner also likes oil-services outfits, such as Baker Hughes and Schlumberger, that are able to sell globally to national oil companies, such as Saudi Aramco. "The oil-services company has really replaced the international oil company as the Western face of oil production," he says.
Fortune: The best stocks for 2008.
Quotes:
Petrobras
We're on record as saying that $95 a barrel is not a sustainable price for oil. Yet The Hottest Fund Manager in America - a.k.a. CGM's Ken Heebner- now has us hedging our bets.
For those unfamiliar with Heebner, understand that his stock picking over the past eight years has been genius (as it has been for much of his 30-year career). He made a bundle short-selling tech and telecom stocks in 2000. He bet big on homebuilders in 2001 only to get out just before they crashed. He plowed his homebuilder profits into energy stocks in 2005 and eventually doubled down on commodities with a big bet on copper.
The result: His CGM Focus fund was up 66% through early December - while juicing his returns with short positions on Indymac and Countrywide Financial, mortgage lenders whose stocks have been circling the drain.
With that kind of track record, we listened when Heebner laid out an argument that $100 oil is not only coming but will be here to stay. "There is still strong growth in Latin America, China, India, and a host of smaller countries like Poland and Thailand," he says.
That means a need for some 1.5 million more barrels of oil a day. The problem, Heebner explains, isn't just finding another 1.5 million barrels; it's finding them even as some of the most productive oil fields in the world are declining.
Heebner, who is a fanatical researcher, questions the conventional view that OPEC has enough spare capacity to fill much of that void. Heebner cites one Saudi Arabian source whom he declines to name who asserts that output at Ghawa r- a legendary Saudi field that produces about 6% of the world's oil - is declining at 9% a year. (The Saudi authorities vociferously dispute this.)
"So I'm connecting all the dots," Heebner says. "It's a tight situation to start with, but add to that a loss of a million barrels a day for the Saudis, and suddenly it gets very interesting on the upside for the price of oil."
That brings us to Petrobras (PBR), Brazil's largest oil company and the stock Heebner thinks is the best way to play oil right now. With petroleum prices so high, a big risk for oil companies is that host countries will demand a bigger and bigger share of the profits in the form of taxes or royalties. "One way you can avoid this," says Heebner, "is if the government owns half the company you've invested in. That's Petrobras."
Petrobras is cheap enough, at 16 times earnings, that it can be a winning investment even if Heebner is proven wrong about $100 oil. The company just announced a huge find offshore from Rio de Janeiro, a field said to have up to eight billion barrels of recoverable oil. (See correction.)
Morningstar: Top Value Manager Even Gloomier on 2008.
Quotes:
Just when you thought Bob Rodriguez couldn't get any gloomier, the highly regarded value investor has become even more downbeat.
Rodriguez, the hugely successful manager of FPA Capital, recently announced he put a halt to purchases of stocks and high-yield bonds at both portfolios on Dec. 14. His decision is a reaction to the subprime mortgage-induced credit crunch, which he expects to worsen in coming months. Rodriguez says he'll review his actions weekly, but he doesn't anticipate any change in course until February or March 2008.
Rodriguez's move is virtually unprecedented. Many investors, including Rodriguez himself, aren't shy retreating to cash when they're nervous. But few money managers have ever publicly foresworn stocks and bonds altogether.
....
As a result, Rodriguez's prognosis for the economy in 2008 is grim. In his September 2007 letter to FPA Capital shareholders, he wrote that the odds of a recession were 50% or greater. But in a conversation with Morningstar, he noted that as recently as a month ago, he would have placed the odds at 70%. Now he says the odds are closer to 100%.
There are differences; Heebner is a growth oriented manager, with an 'anticipate and ride the momentum' style, while Rodriguez is value oriented and generally more conservative. Both have participated in the energy sector over the past few years, Heebner with a mix of production and service, Rodriguez a little more tilted to service. Both also managed to avoid the housing/financial debt crisis, Heebner by riding and then shorting the homebuilders, Rodriguez by dumping his mortgage bond related investments before the slaughter.
Of the two, Heebner has the super hot hand right now, up 60%+ this year, and up a Warren Buffet like 24% over the past 10 years. Rodriguez is having a bad year this year, but has a solid long term record.
It's interesting to note how different their calls on 2008 are. Heebner believes the economy will escape recession in 2008, and continues to be bullish on global growth and the energy sector in particular. His favorite energy stock right now is Petrobras, but note that Heebner can and does change his mind on a dime. Rodriguez, on the other hand, believes a recession in 2008 is likely a certainty.
Personally, I am leaning more towards Robert Rodriguez's outlook, but I will let the market guide me in my positions. Disclosure: I also own Petrobras.
Kiplinger.com: Heebner's World View.
Quotes:
Ken Heebner played the market like a fiddle in 2007. His CGM Focus fund (symbol CGMFX) gained nearly 70% to November 12 (when the January issue went to print), crushing the S&P 500 by 65 percentage points. As of December 17, the fund was up 66%. We visited Heebner at his office, high above Boston Harbor, to get his take on the current environment.
Although the U.S. housing market is mired in a depression, says Heebner, he thinks the economy will still escape recession in 2008. "It really takes a sledgehammer blow to turn this economy down, and I don't think the housing market itself is that blow," he says.
....
His favorite sectors -- energy, industrial raw materials, infrastructure builders and agribusiness -- satisfy the voracious appetites of fast-growing emerging markets. For instance, he recently had 30% of his fund's assets in oil-production and oil-services companies. "As people go from bicycles to motorcycles to cars, there is a big increase in fuel consumption," he says.
Heebner is bullish on Petrobras, an oil giant half-owned by the Brazilian government. He reckons that Petrobras will be able to raise production significantly over the next five years, based on deep-water offshore discoveries. It announced recently that one of its deep-water sites may contain up to eight billion barrels of oil and natural-gas equivalents. Heebner also likes oil-services outfits, such as Baker Hughes and Schlumberger, that are able to sell globally to national oil companies, such as Saudi Aramco. "The oil-services company has really replaced the international oil company as the Western face of oil production," he says.
Fortune: The best stocks for 2008.
Quotes:
Petrobras
We're on record as saying that $95 a barrel is not a sustainable price for oil. Yet The Hottest Fund Manager in America - a.k.a. CGM's Ken Heebner- now has us hedging our bets.
For those unfamiliar with Heebner, understand that his stock picking over the past eight years has been genius (as it has been for much of his 30-year career). He made a bundle short-selling tech and telecom stocks in 2000. He bet big on homebuilders in 2001 only to get out just before they crashed. He plowed his homebuilder profits into energy stocks in 2005 and eventually doubled down on commodities with a big bet on copper.
The result: His CGM Focus fund was up 66% through early December - while juicing his returns with short positions on Indymac and Countrywide Financial, mortgage lenders whose stocks have been circling the drain.
With that kind of track record, we listened when Heebner laid out an argument that $100 oil is not only coming but will be here to stay. "There is still strong growth in Latin America, China, India, and a host of smaller countries like Poland and Thailand," he says.
That means a need for some 1.5 million more barrels of oil a day. The problem, Heebner explains, isn't just finding another 1.5 million barrels; it's finding them even as some of the most productive oil fields in the world are declining.
Heebner, who is a fanatical researcher, questions the conventional view that OPEC has enough spare capacity to fill much of that void. Heebner cites one Saudi Arabian source whom he declines to name who asserts that output at Ghawa r- a legendary Saudi field that produces about 6% of the world's oil - is declining at 9% a year. (The Saudi authorities vociferously dispute this.)
"So I'm connecting all the dots," Heebner says. "It's a tight situation to start with, but add to that a loss of a million barrels a day for the Saudis, and suddenly it gets very interesting on the upside for the price of oil."
That brings us to Petrobras (PBR), Brazil's largest oil company and the stock Heebner thinks is the best way to play oil right now. With petroleum prices so high, a big risk for oil companies is that host countries will demand a bigger and bigger share of the profits in the form of taxes or royalties. "One way you can avoid this," says Heebner, "is if the government owns half the company you've invested in. That's Petrobras."
Petrobras is cheap enough, at 16 times earnings, that it can be a winning investment even if Heebner is proven wrong about $100 oil. The company just announced a huge find offshore from Rio de Janeiro, a field said to have up to eight billion barrels of recoverable oil. (See correction.)
Morningstar: Top Value Manager Even Gloomier on 2008.
Quotes:
Just when you thought Bob Rodriguez couldn't get any gloomier, the highly regarded value investor has become even more downbeat.
Rodriguez, the hugely successful manager of FPA Capital, recently announced he put a halt to purchases of stocks and high-yield bonds at both portfolios on Dec. 14. His decision is a reaction to the subprime mortgage-induced credit crunch, which he expects to worsen in coming months. Rodriguez says he'll review his actions weekly, but he doesn't anticipate any change in course until February or March 2008.
Rodriguez's move is virtually unprecedented. Many investors, including Rodriguez himself, aren't shy retreating to cash when they're nervous. But few money managers have ever publicly foresworn stocks and bonds altogether.
....
As a result, Rodriguez's prognosis for the economy in 2008 is grim. In his September 2007 letter to FPA Capital shareholders, he wrote that the odds of a recession were 50% or greater. But in a conversation with Morningstar, he noted that as recently as a month ago, he would have placed the odds at 70%. Now he says the odds are closer to 100%.
Friday, August 03, 2007
What's the frequency, Kenneth?
CNBC Video: Mortgage Mess.
Kenneth Heebner, manager of the CGM funds, is up 30% this year in his Focus Fund, and believes that the mortgage mess in the US is isolated, and that it, combined with other factors, might end up being bullish for the economy. His reasoning: mortgage losses are contained in hedge funds and pension funds (gee, great), the ensuing mess might park the Fed in neutral or force it to reverse, and the global economy continues to do well. [Note: He says if he hears that large financial players are under stress his position would change, but so far there are no major financial players who appear to be in trouble.]
He's bullish on oil service, selective oil companies, infrastructure plays, and global mining; i.e. companies benefiting from the global boom and the tightness in supply of various commodities.
Kenneth Heebner, manager of the CGM funds, is up 30% this year in his Focus Fund, and believes that the mortgage mess in the US is isolated, and that it, combined with other factors, might end up being bullish for the economy. His reasoning: mortgage losses are contained in hedge funds and pension funds (gee, great), the ensuing mess might park the Fed in neutral or force it to reverse, and the global economy continues to do well. [Note: He says if he hears that large financial players are under stress his position would change, but so far there are no major financial players who appear to be in trouble.]
He's bullish on oil service, selective oil companies, infrastructure plays, and global mining; i.e. companies benefiting from the global boom and the tightness in supply of various commodities.
Subscribe to:
Posts (Atom)