Comments on CEF Analyzer's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/cef-analyzer/articles http://seekingalpha.com/article/88044-cornerstones-unauthorized-liquidation?source=feed#comment-683842 683842 Sun, 20 Sep 2009 07:45:03 -0400 http://seekingalpha.com/article/88044-cornerstones-unauthorized-liquidation?source=feed#comment-455284 455284 Tue, 07 Apr 2009 15:58:14 -0400 Just how shorted is CRF? See here:
shortsqueeze.com/?symb...

Feeling the squeeze yet?]]> http://seekingalpha.com/article/88044-cornerstones-unauthorized-liquidation?source=feed#comment-281199 281199 They clearly state that they return capital[1], investors know what > they're doing. I bet you can make a pretty penny by loaning shares > of CRF to someone who wants to short it. Perhaps that's what Renaissance > Technologies is doing with their large position. > > [1] http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080516005904&newsLang=en > ]]> Mon, 13 Oct 2008 09:39:56 -0400



On Jul 30 07:30 PM kylesch wrote:

> They clearly state that they return capital[1], investors know what
> they're doing. I bet you can make a pretty penny by loaning shares
> of CRF to someone who wants to short it. Perhaps that's what Renaissance
> Technologies is doing with their large position.
>
> [1] www.businesswire.com/p...
> ]]> http://seekingalpha.com/article/22139-dividend-cuts-coming-at-cornerstone-funds-will-the-cef-hold-up?source=feed#comment-260244 260244 Sat, 20 Sep 2008 17:40:34 -0400 http://seekingalpha.com/article/94315-cornerstone-s-monthly-dividend-payments-don-t-be-fooled?source=feed#comment-259531 259531 Fri, 19 Sep 2008 16:44:02 -0400 http://seekingalpha.com/article/94315-cornerstone-s-monthly-dividend-payments-don-t-be-fooled?source=feed#comment-254328 254328 Sun, 14 Sep 2008 17:47:46 -0400
Angry at the media ? Why because they haven't educated the public enough on the words Income or Ponzi ?

In the classical sense this isn't Ponzi because assets match liabilities. But at the same time one of the "Cornerstone's" of Ponzi schemes is the payment of an aggressively large distribution which is not "income" but rather return-of-capital. Greed then runs rampant. Of course in a true Ponzi scheme, that information isn't typically advertised to investors. This is the genius of this fund. Just go ahead and fully disclose all over the place that its return of capital, but investors will have enough greed to overlook that tiny fact....... So amazingly simple!

Interesting question from "Dividend Growth Investor" as to whether this fund is investing in il-liquid securities to have traded at such wild premiums and for so long. Amazing is yet again, right on! Pure S&P large cap vanilla holdings. For something with vanilla holdings to hang so inefficiently over the edge of the cliff for YEARS indicates either illegal manipulation/market relationships or just terrible design of the market and its regulations. That guys mad at the media and not the SEC for letting this sadness develop? Of course, again, the genius here is that all was fully disclosed, makes it hard for the SEC to care !!!!!!

Greedy songbirds will chirp to no end. And the songbird isn't the original poster, but anyone who ever suggested to a fellow citizen to buy this at a massive premium, selling them on this muck.

]]> http://seekingalpha.com/article/94315-cornerstone-s-monthly-dividend-payments-don-t-be-fooled?source=feed#comment-250752 250752 Wed, 10 Sep 2008 14:35:52 -0400 Is this CEF investing in non-liquid stocks?]]> http://seekingalpha.com/article/88044-cornerstones-unauthorized-liquidation?source=feed#comment-248903 248903 Mon, 08 Sep 2008 22:06:19 -0400 http://seekingalpha.com/article/94315-cornerstone-s-monthly-dividend-payments-don-t-be-fooled?source=feed#comment-248739 248739 Mon, 08 Sep 2008 17:02:00 -0400 http://seekingalpha.com/article/94315-cornerstone-s-monthly-dividend-payments-don-t-be-fooled?source=feed#comment-248695 248695 Mon, 08 Sep 2008 16:03:08 -0400 http://seekingalpha.com/article/94315-cornerstone-s-monthly-dividend-payments-don-t-be-fooled?source=feed#comment-248426 248426 Mon, 08 Sep 2008 12:00:06 -0400
Angry, yes, I am very tired of MEDIA manipulation of data for readership and advertising purposes. This Analysis is not to inform (that has been done numerous times over the last few years), but nothing more or less than Chicken Little seeking attention.

Spend your analysis time and energy on things that could benefit your readers for a change. ]]> http://seekingalpha.com/article/88044-cornerstones-unauthorized-liquidation?source=feed#comment-220537 220537 Fri, 01 Aug 2008 15:26:01 -0400 http://seekingalpha.com/article/88044-cornerstones-unauthorized-liquidation?source=feed#comment-219772 219772 Thu, 31 Jul 2008 20:47:28 -0400 etfconnect and look them up yourself to get the real truth for a more educated view.]]> http://seekingalpha.com/article/88044-cornerstones-unauthorized-liquidation?source=feed#comment-219769 219769 Thu, 31 Jul 2008 20:44:04 -0400
CRF has traded and paid consistently since 1981. In 2001 is when they started paying monthly payments.

For someone to assume that the company is soon to go under would be downright foolish if not stupid. I would add that if one would like to see the facts plain and simple go to etfconnect.com and see for yourself the relevant information that professionals know when they purchase those high amounts of shares. Besides after the Army let me out I needed something to suppliment my income and have used it consistently since 2001 myself without a hiccup. So in a word... I endorse CRF and CLM.]]> http://seekingalpha.com/article/88044-cornerstones-unauthorized-liquidation?source=feed#comment-218864 218864 Wed, 30 Jul 2008 19:30:01 -0400
[1] www.businesswire.com/p...
]]> http://seekingalpha.com/article/88044-cornerstones-unauthorized-liquidation?source=feed#comment-218741 218741 Wed, 30 Jul 2008 16:58:37 -0400 http://seekingalpha.com/article/38086-the-cornerstone-funds-are-sucker-bets?source=feed#comment-89898 89898 Thu, 28 Jun 2007 11:14:16 -0400
There is certainly a supply demand aspect to it. But there is so much disparity I have to wonder if there is any regulation and/or structure to it.

For a stock like "Travelzoo" lets say where there is a high negative rebate fee and an extremely large short position I imagine the mechanics would be that there are several hedge funds and market specialists competing to offer their long positions to various discount brokerages for a fee they feel would be likely to place their long stock and earn the income from that fee.

But what about these even more thinly traded stocks such as the Cornerstone closed-ends. If rather than many hedge funds and market specialists owning, rather one hedge fund corners the market supply on that stock, a stock which will be in great demand to short due to a crazy premium for a vanilla basket of large cap stocks, can they essentially dictate a charge to the brokerages to be passed on to the customer that shorts? Or might they be well connected to an entity that does set that fee? I know people prefer demand and supply market forces over SEC regulation, but I'd be interested from someone knowing a little bit more about the mechanics here. Is the structure here conducive to supply demand market fundamentals? Any SEC regulations in place for "charges" to lend out stocks?]]> http://seekingalpha.com/article/38086-the-cornerstone-funds-are-sucker-bets?source=feed#comment-88878 88878 Mon, 18 Jun 2007 00:17:45 -0400 http://seekingalpha.com/article/38086-the-cornerstone-funds-are-sucker-bets?source=feed#comment-88679 88679 Fri, 15 Jun 2007 07:22:57 -0400
I wrote: "The "sucker" buying in at a 75% premium and holding forever will realize an ongoing return of about 5.1% (9%/1.75=5.1%).

Actually, the math is more complicated, and a 75% premium level is just too high. If the portfolio total return is 9% after expenses, a 23% premium will provide a long term, tax advantaged return of 5.1% . Paying a 75% premium and holding forever results in a 0.0% net long-term return, not 5.1%.]]> http://seekingalpha.com/article/38086-the-cornerstone-funds-are-sucker-bets?source=feed#comment-88480 88480 Wed, 13 Jun 2007 16:07:08 -0400
The party has to end starting in October when the dividend gets cut. I guess the hedge funds have this on a hair trigger stop loss , and when the end comes , the damage will happen practically overnight. In the meantime, everyone is enjoying the party.]]> http://seekingalpha.com/article/38086-the-cornerstone-funds-are-sucker-bets?source=feed#comment-88470 88470 Wed, 13 Jun 2007 14:49:23 -0400
Perhaps they have figured out how to make continued high returns on the long side of these two funds, due to the high "negative rebate fee". I wonder what the implications are for the premium to maintain its high levels. If Cornerstone resets the distribution every year at 21% of NAV, and the market continues to price these funds at a "yield" to market price of 12%, perhaps the indicated 75% premium level (21%/12%-1=75%) will go on forever!

Think about it. If the market appreciates 10% a year, the portfolios of CRF and CLM will appreciate about 9% a year after expenses but before distributions. This means their NAV will decline about 12% a year after distributions. Because of the reset, this can be repeated every year indefinitely. All that is required is for the Funds to do reverse stock splits every few years to keep stock price respectable, and to merge in new assets from other captured closed-end funds every few years to keep the Fund sizes and expense ratios reasonable. This has already been done once with the merger of MGC into CLM a couple of years ago.

The "sucker" buying in at the 75% premium and holding forever will realize an ongoing total return of about 5.1% (9%/1.75=5.1%). Since the distributions are dependable and monthly, and classified as either tax deferred return of capital or long term gains, this isn't really terrible in today's world in comparison with fully taxable CD rates. Besides, this "investment illiterate sucker" can kid himself into thinking that he is getting 12% mostly tax free (wrong, but a good cocktail brag!). In reality, this is all just an "annuity" which doesn't compare all that badly with what the insurance industry offers.

Just some food for thought....]]> http://seekingalpha.com/article/38086-the-cornerstone-funds-are-sucker-bets?source=feed#comment-88424 88424 Wed, 13 Jun 2007 08:40:25 -0400
not because anything of what the author is wrong, he's head on. But to short this you could be charged a massive "negative rebate fee" by your broker to hold it. Also consider that its in great demand from hedge funds as a short. And the supply of less-liquid desirable shorting shares creates a situation where the big player can trounce the small player because of under-regulation by the SEC. Whenever you short shares they fall under the margin agreement you have signed with the broker. Which means he can call them anytime due to "supply" reasons. So a hedgefund or investment banking arm which is likely a LARGE customer of the brokerage, knowing they can borrow these shares out at 25% per year goes to the brokerage house and says we'd like your supply of CRF and we'll pay you $2 per share more than current market value (which they are happy to since they'll make $5 per share loaning it out over the year). Now the broker calls the little customer on the phone Tuesday and says due to "supply" constraints we are calling your shares by Friday. You'll need to close the position yourself over the next few days or we might do a forced close on Friday. Again, this is not due to insufficient funds in the small guy's account, just a supply call. And the small guy shorted the stock a year ago, paid 12% in dividends along the way, CRF has gone up to a yet larger crazy premium where the small guy has lost more than even the 12% dividends. I've had it happen to me.

This thing has sat up this high for years now, and the large hedge fund holding this long and loaning it out has high confidence they'll keep this thing floating long enough to risk paying the $9 per share premium since they make about $7 per year between the 25% loan-out collect and the dividend collect of $2 per year from the shorter. Not sure how they have this confidence, "special" relationships with other large market participants? Not saying I have any evidence of that. All speculation, because although I don't subscribe to the efficient market theory, this type of imbalance creates heavy curiousity in my mind.

It doesn't seem like the type of "market" the SEC would want... where the little guy this extreme of a disadvantage to the big guy in this playing field. But I guess they might focus on how market mechanics ensure a level playing field on shares held long. The short holding stockholder is perhaps not a great concern, but I do think that is wrong, created by the ability of short "supply" to be bounced around without regulation of free-market price.]]> http://seekingalpha.com/article/38086-the-cornerstone-funds-are-sucker-bets?source=feed#comment-88399 88399 Tue, 12 Jun 2007 21:31:51 -0400 http://seekingalpha.com/article/38086-the-cornerstone-funds-are-sucker-bets?source=feed#comment-88368 88368 Tue, 12 Jun 2007 14:23:32 -0400
You are nasty]]> http://seekingalpha.com/article/38086-the-cornerstone-funds-are-sucker-bets?source=feed#comment-88366 88366 Tue, 12 Jun 2007 14:04:23 -0400 http://seekingalpha.com/article/38086-the-cornerstone-funds-are-sucker-bets?source=feed#comment-88359 88359 Tue, 12 Jun 2007 13:41:55 -0400 http://seekingalpha.com/article/22139-dividend-cuts-coming-at-cornerstone-funds-will-the-cef-hold-up?source=feed#comment-79000 79000 Tue, 12 Dec 2006 11:04:08 -0500