Ken Heebner

Ken Heebner managed the CGM Focus Fund to extraordinary returns through extreme concentration and very high portfolio turnover. For the decade ending 2007, CGM Focus was the best-performing US diversified equity mutual fund. However, his approach also produced dramatic drawdowns when his concentrated bets moved against him — the fund lost approximately 48% in 2008. His story became a famous case study in investor behavior research: despite the fund's excellent long-term returns, the average investor in the fund lost money because they bought after performance periods and sold after losses. This phenomenon became known as the "behavior gap" — the difference between fund returns and investor returns due to poor timing. Heebner's career illustrates the tension between a genuinely talented investment manager and the behavioral tendencies of retail investors chasing past performance, a lesson that became a cornerstone of modern investor education curricula.