Kenneth Heebner

Kenneth Heebner’s CGM Focus Fund is at the bottom of the heap for the second consecutive year after investments in insurers such as Hartford Financial Group Inc. and retailer Wal-Mart Stores Inc. went awry.   Heebner, 68, bought insurance stocks, including Hartford Financial Services, based in Hartford, Connecticut, and Newark, New Jersey-based Prudential Financial Inc.

Some of the nation’s best and most famous investors -- Warren Buffett, David Dreman, Ken Heebner and William Miller -- had hideous years in the bear market of 2008.
 
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Kenneth Heebner’sCGM Focus Fund, the industry’s top performer in 2007, dropped 48 percent last year as the worst market for stocks in seven decades humbled the best- known managers. Heebner’s fund gained 80 percent in 2007 to beat all peers, largely by buying energy stocks. He was hurt in 2008 after oil prices fell almost three-fourths from a record in July. Known for his rapid movements in and out of stocks, Heebner reversed course in the third quarter by selling energy shares and snapping up bank stocks such as Citigroup Inc. and Bank of America Corp.

After making a fortune betting against financial stocks until this summer, mutual-fund manager Kenneth Heebner is turning bullish on the sector. Mr. Heebner, who runs one of last year's best-performing mutual funds, is sure banks and insurers will recover next year, thanks to Treasury Department and Federal Reserve efforts to bolster lending.

"A year from now, credit will be available because of the government's actions," said Mr. Heebner, who works at CGM Funds in Boston

Kenneth Heebner, the top-ranked U.S. stock fund manager, said grain and steel shares will be among the biggest gainers in 2008 as a weaker economy makes investing more challenging.

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Ken Heebner played the market like a fiddle in 2007. His CGM Focus fund gained nearly 70% to November 12, crushing the S&P 500 by 65 percentage points. 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. Heebner thinks it's important to view investing globally: "You have to look at the entire world. Up until the past year or two, the U.S.