Editors note: This is the third of four articles reviewing the third quarter in mutual funds and the outlook for the fourth quarter. You can read the first two stories here and here .
You've probably never heard of Jerry Jordan. After all, his ( JORDX) Jordan Opportunity (JORDX) fund is tiny, with less than $30 million in assets, and it's been available to the general public for less than two years. But he's making quite a debut. Jordan Opportunity has rocketed 7.4% in the third quarter and a thumping 25.7% so far this year, after beating the Street with a 9.2% result in 2006. And that's a continuation of earlier successes. Jordan ran the fund as a private investment partnership before opening it to the public, and it beat the Standard & Poor's 500 index over the past five and 10 years. Jordan Opportunity is a concentrated, flexible, growth-oriented mutual fund. And despite this summer's shakeout, the manager is charging into the fourth quarter in a very bullish mood. "We believe it's a bull market," he insists, saying, "The Fed cutting rates always works." (Except in 2001, he adds.) One big bet he's making right now: Wall Street banks. "We've got Goldman Sachs ( GS), Merrill Lynch ( MER) and Morgan Stanley ( MS)," he says. "We didn't buy them until the big blowout in February. We bought more in the selloff in July." He was tempted to ramp up even more during the August panic, but admits, "We got scared about buying more."