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Dan Plettner

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  • Here's a Third Way to Determine When You Have Enough to Retire [View article]
    You state "Much of the expense ratio of stuff like TYY and TYG reflects this double tax whammy"

    Such a statement is factually untrue. The roughly two-thirds proportional NAV participation in the performance of underlying constituents (before expenses) is generally reflected in the CEFs' corporate tax liability, not expenses.

    It may be useful to read the following by Chuck Epstein, editor of MutualFundReform:

    www.mutualfundreform.c...

    The harsh reality is that these are tremendously inefficient products for MLP investing. Same with the ETF (AMLP), and MLP focused mutual funds. That's not to say that I'd call the ETNs efficient either. I love CEFs, but the only way I own MLPs is directly.

    Its a unique MLP asset class phenomenon.

    Respectfully Yours
    Dan Plettner
    Dec 2 12:26 PM | 5 Likes Like |Link to Comment
  • Here's a Third Way to Determine When You Have Enough to Retire [View article]
    Dear Alex Trias

    I realize that what you are offering is a case study approach and that mentions of specific securities are secondary to your core message by design.

    But please know in mentioning what "Sandra finds" (about what you as an author own) that TYY and KYN have some highly significant inefficiencies as single security products for accessing MLP yields. These inefficiencies are common among competing single security MLP products, but unique from Closed-End Funds or ETFs for other (non-MLP) asset constituents.

    The issue is that if a wrapped up portfolio is more than 25% MLPs, it generally must account for tax liability as a C-Corporation, not a Registered Investment Company ("RIC"). In such cases, NAV performance is generally constrained to about two-thirds that of the underlying assets.

    Respectfully Yours,
    Dan Plettner
    Dec 2 10:16 AM | 5 Likes Like |Link to Comment
  • Short-Selling PIMCO Global Stocks Plus and Allianz's Inconsistent Distribution Policy [View article]
    Dear “Investsor RBL”

    .185 is a nominal amount. Not sure why you are calling a nominal amount a “policy”. By that logic, was the policy of NFJ and every other fund changed each time a distribution was altered?

    Data like Return of Capital (“ROC”) and Undistributed Net Investment Income (“UNII”) is useful within a context, but I frequently observe the data being cited out of context. For a dividend capture fund like AOD or AGD, the “NII” is effectively manufactured by the velocity of dividend capture rotation trading. The mechanism or classification of distribution didn’t make NAV any more or less sustainable when subjected to abnormally large distributions in my humble view.

    Without getting into Alpine issues, including the reported holdings of Alpine Woods and dividend capture rotation trading as an alternate mechanism of what effectively is self liquidation distribution governance, let me just try and clarify two things. First, your comments are always welcome (especially when negative) and you do not need to make any excuses for calling me silly or naïve. If your conclusions have merit, they will showcase accordingly. If not, it won’t. Second, effective self-liquidating distribution governance is not about NAV going to zero because of portfolio managers making bad investments or portfolio decisions, rather paying a distribution that dwarfs what NAV performance can keep up with on a normal basis. No need to focus on outliers in either direction. Take a peek at long term charts with or without the outlier periods.

    Short selling is roughly 1% of my overall investment picture, but if you think I’m less than perfectly objective here that is certainly your prerogative.

    Respectfully Yours,
    Dan Plettner
    Nov 29 11:41 PM | Likes Like |Link to Comment
  • Supply, Demand and Other Factual Observations of Neuberger Berman CEFs [View article]
    Of course, and distributions are but one of many factors relevant to Closed-End Fund investing. Also, distributions are not guaranteed in perpetuity. Ultimately, I think its important to do focused research not limited on just simple quantitative data that is free and readily available to all market participants who can read a newspaper.

    Your comments and critique are always welcome, whether we agree or disagree on any topic, point, or the contextual relevance of either.

    Respectfully Yours
    Dan Plettner
    Nov 29 01:55 PM | Likes Like |Link to Comment
  • Supply, Demand and Other Factual Observations of Neuberger Berman CEFs [View article]
    Buying discounts in that neighborhood usually (not always) require wearing some blinders, or lacking the savvy to recognize problems.

    At present, such a discount is available in EQS, but my observations lead me to pass because the discount may well be justified. For those who share your interest in perpetual holding of CEFs irregardless to whether the discounts are justified and/or perpetual, they can see the type of observations that may justify expert avoidance at extraordinary discounts here:

    seekingalpha.com/artic...

    Neither EQS, nor any of the Neuberger Berman funds are among Closed-Ends that I have any financial interest in. Also, I'm not suggesting that EQS or the Neuberger Berman funds are direct comparables. To be succinct, I think "there is a price for everything," a quote which in relation to Closed-End Funds I credit Phil Goldstein.

    Respectfully Yours;
    Dan Plettner
    Nov 29 01:51 PM | Likes Like |Link to Comment
  • Supply, Demand and Other Factual Observations of Neuberger Berman CEFs [View article]
    Dear “Chamois16”

    To the extent you are trying to point out what is not mathematically without any relevance at all, I think your critique is merited. But, if you are trying to argue more than an academic point, for comparative relevance over the chance in discount (technically, the relative valuation’s “delta”) I think you may be missing overall context.

    To use an analogy, I think you are suggesting with a $1000 bill in one’s back pocket they lean over and pick up a penny off the ground. Not wise for those whose familiarity of the Closed-End Fund arena informs their caution.

    But, again, technically you are correct about a mathematical relevance. So, as long as you are lucky in doing so, you will still have your $1000. And a penny too. I’m going to focus on what I think is dramatically more significant. I respect your right to focus on anything you like.

    Critique is always welcomed. I would encourage you not to sensationalize the relevance of the trivial at expense to what is most relevant.

    Respectfully Yours,
    Dan Plettner
    Nov 29 01:41 PM | Likes Like |Link to Comment
  • Short-Selling PIMCO Global Stocks Plus and Allianz's Inconsistent Distribution Policy [View article]
    Dear “Guest 1”

    Your overall perspective appears to be one of “survival of the fittest” or “buyer beware”, which although not addressing disclosure issues (answer 6) is otherwise consistent with a expert, competitive, market mentality. Obviously, you have chosen not to concern yourself with the hazards those who are not expert enough to evaluate for themselves are exposed to.

    I would point to your words in answering question 4 to highlight where you stand on sustainability… “PGP will fizzle before NFJ without change to the distribution governanace of each........thus distribution governanace is highly revelant.......”

    Your other observations appears deeper than your perspective offered on point 1, where I think you may be focused on mechanics to such an extent that you omit your own opinion as to the long term sustainability of NAV, even with those mechanics.

    Respectfully Yours,
    Dan Plettner
    Nov 29 01:25 PM | Likes Like |Link to Comment
  • Short-Selling PIMCO Global Stocks Plus and Allianz's Inconsistent Distribution Policy [View article]
    Nothing is above critique, certainly not my written observations, or myself. I believe discussion on the topics brought up by “Investstor RBL” is appropriate. I appreciate critique. Different perspectives make for good discussion, especially when focused on merits.

    After stripping away comments purporting my own naivety (at times with sensational flare), I count several topics worthy of discussion:

    Timing: “Investstor RBL” asserts my piece would have been more timely “in late 2008 (or) early 2009 when the value of PGP was falling like a rock and it looked as if it was going to self liquidate.”

    In response, I assert that betting against PGP at any time throughout that window would have been deemed reckless by Mr. Market, and punished. Fundamentally, we would appear from this “Investstor RBL” comment alone to have a completely different perspective of what constitutes effective self-liquidation in distribution governance.

    Further, I am focused on what is occurring under governance control with somewhat normal environmental conditions, not the one time effect of outlier periods that cause all assets to be dramatically revalued lower (’08 and early ‘09) or dramatically revalued higher (late ’09). In contrast, the “Investstor RBL” appears focused on outlier periods.

    Distribution Policy: “Investstor RBL” asserts “PGP is continuing to pay .185 because that is their distribution policy. PGP bets its future that they can earn the monthly distribution through transaction gains of all types.”

    I assert such a simplified statement is naïve, although inconsistent with the source. As “Investstor RBL” once acutely implied an understanding of in commenting (seekingalpha.com/user/...) to someone who failed to understand the effective self-liquidation of alternate securities AOD and AGD (while those were technically “earning” their distributions), the governance choice of paying more than NAV performance can keep up with over time can prove unsustainable, in practice, it constitutes what effectively is a self-liquidation distribution policy.

    I think it can be argued that PGP continuing to pay .185 for PGP constitutes a significant variance in the hazards inherent in Allianz’ distribution governance. While there have been many comments offering many perspectives, I don’t recall seeing a comment that disagrees in premise without essentially just arguing “buyer beware” on PGP.

    Rationale for Owning PGP: “Investstor RBL” asserts “It is obvious that the people who hold PGP believe in the ability of the manager to achieve those gains”

    I assert “Investstor RBL” inherently demonstrates in using the word “gains” the hazard that owners assume PGPs asset base (not just income) can be sustained with the current nominal distribution amount maintained. Going back to the peer disclosure example in the article, Cornerstone discusses what their policy is, and isn’t. I would ask “Investstor RBL” whether Pimco is holding itself to a lower standard of protecting its investors from hazardous faith in what history suggests impractical.

    As to whether experts think the rationale (or faith) itself is merited, one might look at PGP’s shareholder base which has either bought or not sold. A rather lonely significant institutional holder earns fees for Unit Investment Trusts (“UITs”), which are not actively managed.

    Even without placing any judgment on why Allianz/Pimco’s distribution governance is (in)consistent, I would ask “Investstor RBL” whether the variances between companies of standards of disclosure. Those who are not institutional investors who assume much of Allianz or Pimco’s brands for meeting a higher standard (rather than a lower standard) may in practice be subject to particular hazards with PGPs market valuation. Of course, such is only my opinion.

    Respectfully Yours
    Dan Plettner
    Nov 29 01:11 PM | Likes Like |Link to Comment
  • Supply, Demand and Other Factual Observations of Neuberger Berman CEFs [View article]
    There are plenty of details to evaluate relevance from a technical perspective for mathematical significance of a theoretically static discount. (ie: Expenses in contrast to size of discount, distributions being paid purely in cash versus some distributions being paid in NAV performance destructive newly issued shares at market discounts, etc.)

    I could have been more verbose and specified relevance “by my standards”, as opposed to the highly technical reading of “Chamois16” assuming I was arguing total mathematical insignificance (which was not my intent).

    Any writing risks being too verbose (and not getting to the point), and being not verbose enough (and risk a general statement being taken out of the intended context as would appear to be the case from “Chamois16’s” comment).
    Nov 27 02:52 PM | 1 Like Like |Link to Comment
  • Morningstar CEF Ratings: Good Inverse Share Price Performance Predictor [View article]
    I wish you very well in enjoying the content that you understand on this venue. Your standards and opinions are your own and I will make no effort to request censorship of your voice, whether grounded in merited or not. Voices generally display merits or lack thereof very well.

    With respect, I’ve substantively agreed with the premise of Joe Ecqome’s piece here. I’ve also withheld any particular opinions as to possible irony. Such is hardly consistent with being a pundit, although I will acknowledge having a history of standards of merit that are alternate to those displayed by your comment.

    Happy Holidays,
    Dan Plettner
    Nov 26 12:56 PM | 1 Like Like |Link to Comment
  • Morningstar CEF Ratings: Good Inverse Share Price Performance Predictor [View article]
    I believe detailed assessments of qualitative nuances are absolutely essential to the prospect of an efficient Closed-End Fund investing process.
    Nov 25 03:16 PM | 1 Like Like |Link to Comment
  • The Kayne Anderson Midstream / Energy Fund IPO: A Marketing Achievement? [View article]
    There is a recently published piece on FEN here on Seeking Alpha as an "Investment View":

    seekingalpha.com/artic...

    The linked document from FEN's secondary quotes "From time to time, the Fund will modify its estimates and/or assumptions regarding its deferred tax liability as new information becomes available."To the extent the Fund modifies its estimates and/or assumptions, the NAV of the Fund will likely fluctuate." Actual Portfolio Differences and the extent to which MLPs are used may be worthy of observation.

    As "Iowadawg81" noted fund allocation could be relevant, at least in comparison.of the extent to which MLPs with tax advantaged distributions characteristics are used as portfolio constituents.

    FEN factually is treated as a C-Corporation, whereas such treatment is intended to be avoided by KMF. The construct of KMFs prospectus makes reference to the prospect of adverse tax treatment as a risk.

    It may be inappropriate to believe that either of these products can be easily assessed.... especially by novice's who might lack clear explanations from the Fund Company's and/or the brokers who place shares.

    So, waiting to look at deployment is something that might benefit from an attention to contextual relevance as to what is being looked at, in each.

    Respectfully Yours,
    Dan Plettner
    Nov 25 09:51 AM | 1 Like Like |Link to Comment
  • The Kayne Anderson Midstream / Energy Fund IPO: A Marketing Achievement? [View article]
    In respect to executives at Kayne Anderson who are surely well entitled to speak their mind, I want to go out of my way to make clear what are my opinions, in relation to what their "intent" and "risks" are as described in their prospectus, to which I've linked, and will again provide here:

    www.sec.gov/Archives/e...

    To be clear, KYE and KMF intend to be treated as Registered Investment Companies ("RICs") unlike AMLP and MLP focused mutual funds or Closed-End Funds "generally". Their own assessments of the risks to that intention are disclosed in the prospectus of each. My perspective is that if such single security funds prove to be truly focused on the current hotbed of MLPs into which they appear to have been marketed, they are likely to account for a tax burden just like AMLP and Closed-End Funds that do not claim to intend to avoid being treated as C-Corporations.

    I think it would be very helpful to the public for Kayne Anderson to press release a detailed discussion of structural (in)efficiencies and various possibilities. Such may address a challenging balancing act with the demand into which the fund appears to have been marketed, and risks involved in the fund's intentions.

    Please know my assessments of "likely" and "general" here in the section which begins "Apparent" are my opinions and although I believe my assessment of "general" may be widely held by peers, none of these opinions are conclusory statements of fact.
    Nov 24 08:29 PM | 2 Likes Like |Link to Comment
  • Energy Income and Growth Fund: Long Term Qualitative Observations of C-Corporation MLP Vehicle Suggests 'Dip' Perception Is Illusory [View article]
    Please be aware that the disclosure section was edited by Seeking Alpha editorial. The editorial decision should not be interpreted to convey that I felt that no author disclosure was appropriate. Likewise, this comment should not be interpreted to convey any judgment of Seeking Alpha editorial. Editorial decisions are not mine to make, nor do I desire to have the editor's numerous roles or responsibilities. Other portions of my voice were also edited by the editor.
    Nov 24 12:31 PM | Likes Like |Link to Comment
  • The Kayne Anderson Midstream / Energy Fund IPO: A Marketing Achievement? [View article]
    Please be aware that the disclosure section was edited by Seeking Alpha editorial. The editorial decision should not be interpreted to convey that I felt that no author disclosure was appropriate. Likewise, this comment should not be interpreted to convey any judgment of Seeking Alpha editorial. Editorial decisions are not mine to make, nor do I desire to have the editor's numerous roles or responsibilities.
    Nov 24 12:27 PM | Likes Like |Link to Comment
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