Harvard Endowment falls from grace

The Harvard Endowment, which holds funds for one of the nation’s most elite colleges, was a shining star earlier this year when it was reported it had earned 7 percent to 9 percent on its holdings as of the first half of the year.

That news was the envy of many professional fund managers who have mostly measured their successes this year by losing the least. Out of about 9,100 U.S. mutual funds, only about five have been profitable this year, Fortune has reported.

Well, now Harvard Endowment has joined the ranks of the multitudes.

The Wall Street Journal reported last week that the endowment had shed at least 22 percent — about $8 billion — from July 1 to Oct. 31.

The endowment could lose as much as 30 percent by year’s end, the article stated.

That would make for the worst loss by the Harvard Endowment since 1974. Then, it only lost 12.2 percent, according to the article.

Another fund that had earned a gold star is now posting some dismal returns.

The CGM Focus Fund, which is run by fund manager Kenneth Heebner and was the No. 1 U.S. diversified stock mutual fund last year, is currently off by 52 percent, the Journal reports.

But Heebner doesn’t expect that performance to continue.

Heebner had earlier stoked his fund’s returns by shorting, or betting against, financial stocks, is now taking large positions in financials like Citigroup (C), Bank of America (BAC) and Brazilian Banks Banco Bradesco SA (BBD) and Banco Itau Holding Financeiera SA (ITU), saying they are beyond cheap at the moment.

Heebner told the Journal that he believes such financials will rebound in the next year because of efforts by the U.S. Treasury and Federal Reserve to free up lending.

Looking for dividends?

If you’re looking for some stability in the form of dividends, here are six stocks that offer yield more than 6 percent, courtesy of the Wall Street Journal:
Altria Group (MO), tobacco company, 8.4 percent yield; Autoliv (ALV), auto parts, 9.4 percent yield; Consolidated Edison (ED), utilities,
6.1 percent yield; Eli Lilly (LLY), drug company, 6 percent yield; General Electric (GE), conglomerates, 8 percent yield; Oshkosh (OSK), trucks, 6.9 percent yield.

Just remember, great dividends can be cut by companies facing challenges in a dismal economy.
And dividends won’t offset a stock price that continues to fall.

It pays to check price stability over a long period of time, say five or 10 years, for a particular stock.

This can easily be done by going to Google Finance or Yahoo Finance and using historical price or chart features to see how a high-yielder’s share price has held up over the years.

It’s the economy, stupid

Last week’s non-farm payrolls report showing that the economy shed 533,000 jobs in November, the worst losses since 1974, is not likely to bring any quick relief to the stock market.

Housing also continues to be stuck in a rut, creating a double-whammy.

With only a little more than a month until President-elect Barack Obama takes office, all eyes are on him to see what he will do to put the economy on the right track.

Some pin hopes on an economic stimulus plan that send a new wave of checks to consumers.

Hopefully, if approved, that would be enough to get things moving again.

Brian