The CGM Mutual Fund may be nearly 80 years old, but it's acting like a fund half its age, writes The Motley Fool.
Established on Nov. 6, 1929, the fund formerly known as the Loomis Sayles Mutual Fund had an impressive return of 38.5% in 2007, a five-year average return of 21% annually and a 10-year average of 7.5%, all well above the S&P 500.
The fund is now under the advisement of Capital Growth Mgt. Ltd. Partnership.
Ken Heebner, the fund's manager for more than 25 years, has made some savvy bets recently. Its top three stock holdings were in energy and machinery companies Petrobas, CNH Global and Schlumberger. The fund is also holding nearly 28% of its fixed-income assets in cash through Treasury bills. The fund takes concentrated positions and has a portfolio turnover in excess of 400% in each of the last two years, making it unsuitable for most tax accounts.
Cash Supremacy Continues
As the stock market continues to close as high as 300 points higher or lower in recent weeks, mutual fund portfolio managers are increasingly hoarding cash or liquid cash-equivalent investments. Even bellwether Oracle of Omaha Warren Buffet has 13% of his portfolio in cash.
But the unusually high levels of cash some mutual fund skippers are stockpiling, in some cases 40%, 50% of their portfolio, is "irking advisers," reports The Wall Street Journal.
Wachovia to Cut Full Third Of Its Fixed Income Staff
NEW YORK-Wachovia CEO Ken Thompson says the bank plans to cut one third of its fixed-income staff and make a 10% reduction in corporate and investment bank support staff. Thompson made the remarks at a conference here last week.
Earlier, the bank said it had cut 14% of its overall markets and investment banking staff during the first quarter of this year and that another 13% would be cut during this quarter.
A Wachovia spokeswoman said that Thompson was referring to cuts over a period of time beginning with the start of 2007 and ending by the end of June.
Like other banks, Wachovia has taken significant losses on subprime mortgage securities and other credit investments. Elton Vogel, the bank's co-head of leveraged finance, resigned in March.
Markets Return to Flush Mutual Fund Mondays'
Ubiquitous market commentator Jim "Mad Money" Cramer of TheStreet.com observes in a Rocky Mountain News column how irrationally the market is behaving of late, in light of rumblings of the bear market and a pronounced recession.
"Where'd that bear go?" Cramer asks. "Vanished. Last week, only oil moved up, and everything else was awful."
Characterizing the upward direction of the market like the heady days of the 1990s dull run when every Monday was "Mutual Fund Monday," with money pouring in, Cramer says investors' buy mode is "amazing" and "bizarre ... given that we had terrible numbers from FedEx and MBIA."
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