These were amazing returns. Unfortunately he lost a lot of credibility in 2008 and 2009 when he returned -48% and 10.5% respectively. His 2010 performance isn’t enough to recover his 2008 losses. His portfolio gained only 16% in 2010. We like Ken Heebner because he isn’t afraid of betting against the market when most fund managers are secret index huggers.
At the end of December, Ken Heebner was most bullish about the following stocks and he had at least $75 Million in each name:
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| Unfortunately Heebner’s top positions significantly underperformed the market since the end of December. The weighted average return of these 30 stocks is 4.9% vs. nearly 9% return for the S&P 500 index. If Heebner had an equally weighted portfolio of these 30 stocks, he would have marginally outperformed the market. His top three picks had negative returns this year and significantly hurt his overall returns. He had nearly $700 Million in Ford at the end of December. Leon Cooperman’s Omega Advisors and Bill Miller’s Legg Mason Capital Management had around $100-$150 in Ford as well. Automotive stocks didn’t perform well so far in 2011. Leon Cooperman’s big GM bet went south as well. Ken Heebner’s best performing stock picks were Priceline and CBG. Priceline returned 36.9% this year. Chris Shumway, Chase Coleman, and Michael Karsch were other hedge fund managers with large investments in PCLN. Ken Heebner had the second largest position in PCLN. CBG is also very popular among prominent hedge fund managers. Richard Blum had more than $550 Million in CBG and John Paulson had more than $275 Million invested in CBG at the end of December. The stock gained 30.4%. We like to imitate Ken Heebner’s positions when there are other hedge fund managers with high conviction purchases in the same stocks. These people may pick the wrong stocks some of the time, but we believe we can reduce these errors by verifying their picks before making any trades. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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