Friday, February 15, 2008

Heebner's Take on the Markets & Economy

Top-ranked fund manager Ken Heebner joined us on last night's Kudlow & Company. His 5-star Morningstar rated CGM Focus Fund was up a spectacular 79.9 percent last year. His 3-year and 5-year track record are similarly remarkable -- 31.7 percent and 38.4 percent respectively. Here are some of his thoughts from last night's show.

Mr. Heebner: "I think the U.S. economy is slowing down. It may or may not enter a slight recession. The global economy is growing strongly. And there’s a lot of opportunity in industrial raw materials which are being heavily demanded by these growing, emerging economies and where supply bottlenecks have emerged. Price moves to the upside are significant and will continue. And those commodities are coal, iron ore, steel, copper and aluminum. And the companies that produce these products, I think, are inexpensive and the earnings are going to surprise as the price of the underlying commodities continues to move to the upside.

There’s another part of the story. American companies – nobody says this – are formidable competitors. We are still the global leader in business. There are many businesses where we are the absolute leader. Our technology lead has not been diminished at all. And in commodities like coal, and the agricultural [sector], we are a growing and major leading exporter. The [agricultural/commodities sector] is having the greatest boom in history…The consumer is a little bit soft, housing is terrible, but other sectors are moving to the upside aggressively. So to paint an overall negative picture I think is an unbalanced view."