By Brett Arends
It wasn't all bad. Although stock markets collapsed around the world, investors in a select number of mutual funds actually managed to turn a profit during the first half.
Among them: Ken Heebner's CGM Focus /zigman2/quotes/203752257/realtime CGMFX -2.52% , who continues his extraordinary run. His fund has gained about 16% so far this year, after an astounding 80% in 2007.
Full disclosure: I'm an investor in CGM Focus. I will confess it makes me nervous.
Others near the top of this very select group include Jerry Jordan at Jordan Opportunity, and Brian Barish, whose recently-launched Cambiar Aggressive Value /zigman2/quotes/200981064/realtime CAMAX -1.89% gained 6.5%.
This column does not pay enormous attention to short-term performance figures. No one should jump onto a bandwagon or get excited about so-called "hot hands" and the like.
But we're always interested to see what's been working, especially in times of turmoil.
Among the intriguing points right now is that this is not a stockpickers' market, any more than it has been a passive investors' market.
The winners aren't winning because they found the right retail stock or the right shoe manufacturer. They're winning because they owned a lot of energy and commodity stocks, and didn't own financials.
Jerry Jordan of Jordan Opportunity, for example, currently has 40% or more of the fund in energy and commodity stock, with big stakes in oil services companies Schlumberger /zigman2/quotes/201012972/composite SLB -1.86% , Weatherford International and National Oilwell Varco /zigman2/quotes/208758290/composite NOV -3.98% , steel companies US Steel /zigman2/quotes/200069642/composite X -9.62% and Nucor /zigman2/quotes/201889722/composite NUE -7.27% . He also holds power plant equipment maker ABB /zigman2/quotes/209404356/composite ABB -1.57% , because, he says,"power plant production's going to be vertical for the next ten years." Jordan sold his last financial stocks in early November last year.
It's a similar picture for Brian Barish at Cambiar: lots of energy and commodities, no financials.
He's been taking profits in some service companies and natural gas stocks and moving money into Big Oil – the big, well-known, integrated oil companies that most investors seem to be shunning during this alleged bubble.
Barish believes big oil has a long way to go to catch up with oil prices at $135 a barrel. "Integrated oil company valuations across the board imply oil prices of $50 to $80," he says. "They are really, really cheap." Picks include Britain's BP /zigman2/quotes/207305210/composite BP -2.07% , which is cheaper than it was two years ago, and France's Total Fina Elf. True, BP has had its troubles, but Barish calls it a "rediculous" value at its current price – eight times forward earnings, yielding 4.2%.
(I made a similar argument here recently. Only time will tell if it's right)
Barish is among those who think high energy prices are here to stay. He's trying to work out what that's going to mean for individual stocks. Among his more entertaining ideas? Italy's Piaggio… maker of Vespa scooters.
These get about 70 miles to the gallon. Recent sales were down Europe, but they jumped sharply in Asia and other parts of the world. Is the Vespa Italian scooter an energy crisis and emerging markets play? We'll see.
The shares have been anything but zippy since an overhyped IPO a couple of years ago: They're now about 9 times earnings, yielding 4.5%. To Barish's eyes, that looks good value. One to watch.
Write to Brett Arends at email@example.com