Seeking Alpha

Dan Plettner

 
View as an RSS Feed
View Dan Plettner's Comments BY TICKER:
Latest  |  Highest rated
  • Municipal Debt Funds: Are These Yields Unsustainable? [View article]
    There are "so many" funds because the business model for the Advisors is to increase Assets Under Management ("AUM"). Such a business interest (of the fund's sponsors, not shareholders) is served when each new deal is priced. Closed-End Fund IPO's are priced at premiums, and in many cases (ie: CEFs investing in MLPs are C-Corporations and share an awful long term upside NAV inefficiency with AMLP, the ETF) there are reasons the market should value many at a discount from day 1, even beyond the possibility that their Boards treat the AUM as captive.

    The marketplace for Closed-End Funds is tremendously inefficient in my humble view, and likely always will be. What got published here is sadly symptomatic of the level of what passes as "research". Truely researching Closed-End Funds requires more attention to detail and appreciation for various market dynamics than ETFs or open-ends. But often they find themselves owned by people, and worse covered by so called experts who apply the same simplistic vantage points.

    I'm not complaining. I love Closed-End Funds and I love the prospect of market inefficiencies. For the record, I have both long and short positions in Closed-End Muni Funds. It is also appropriate that I disclose my trading decisions are licensed as data to a Registered Investment Advisor, which I am not.

    Respectfully Yours
    Dan Plettner
    Nov 15, 2010. 01:47 PM | Likes Like |Link to Comment
  • Municipal Debt Funds: Are These Yields Unsustainable? [View article]
    As "das555" said, caution in aggregating all funds together is appropriate. The one of the funds Karl mentioned that interests me on either the long or short side as potentially inefficiently priced has data that is quite contrary to the author's implied conclusions. Of course, the names of all funds weren't even correct. Sadly, its hard for Seeking Alpha to really evaluate the quality of CEF content before publishing. More sadly, few experts display the tendency for calling out contributors on (de)merits of their "contributions".

    Respectfully Yours
    Dan Plettner
    Nov 14, 2010. 12:12 PM | 1 Like Like |Link to Comment
  • Municipal Debt Funds: Are These Yields Unsustainable? [View article]
    Hammer

    Essentially, I observed whether the author’s conclusion was or was not viably constructed in my view. Lots of people who are very smart market people have not taken the time to really appreciate some of the nuances of Closed-End Funds. Closed-End Funds are underappreciated and underfollowed. In short, there may be inefficiencies to exploit when you are seeing relevant details others aren’t seeing. If you think this piece observed more (and not less) of the relevant information about this group than average market participants are mindful of, then it would seem you have something actionable…

    Don't take this for more than it is but I agree with the author’s simple observation that the style has been in vogue and gone up.

    But, the piece does not discuss “why” beyond broad taste for the asset class. There is far more to the story. To understand the upside and downside risks it’s important to know a lot more than what the author here put on his plate.

    Respectfully Yours,
    Dan Plettner
    Nov 13, 2010. 03:25 PM | 1 Like Like |Link to Comment
  • Municipal Debt Funds: Are These Yields Unsustainable? [View article]
    Are the charts and seemingly implausible high yields data? Sure. Does the naked eye want to agree with you, Karl? Yes. But do some research. What your piece doesn’t do is look at the group and identify what has caused the upward move. If you don’t know why Muni CEFs went into favor, how can you evaluate whether the move is mature or otherwise.

    If you get into really evaluating the dynamics, you just may find that the naked eye doesn’t do an assessment of this group justice. You may find the rationality in the moves surprising, and not yet mature. Short term borrowing rates and more nominally attractive risk-free alternatives do not appear plausibly imminent as negative catalysts under current fiscal policy.

    You might consider to take a hard look at the whole group’s dynamics, then look at funds within the group individually. Poorly founded broad strokes rarely paint masterpieces.

    Personally I have an even stronger taste for other asset classes at present, but I think your bearish CEF munis call here is built on a very flimsy foundation.

    Respectfully Yours,
    Dan Plettner
    Nov 11, 2010. 08:56 PM | 3 Likes Like |Link to Comment
  • Alerian MLP ETF Has Higher Fee Structure Than Hedge Funds [View article]
    Their claim may be a partial truth. What Ron has observed here is not an issue is not of the taxation of AMLPs distributions, it’s the fact that the C-Corporation is inefficient for MLP asset class allocations in a rising market. Ron Rowland has done a tremendous job of covering AMLP in my view. While I differ from Ron in regard to his substitute view of the ETN, he deserves a ton of credit to stand up and say what marketing materials don’t.

    Whether it’s the ETF or the ETNs, the MLP single security diversification vehicles are doing a great marketing job of highlighting the bits and pieces of what they do offer. However, they may be do a horrendous job of disclosing the extent of the inefficiencies in contrast to direct investment in MLP units. Sadly, Truth leaves room for omission.

    Respectfully Yours,
    Dan Plettner
    Nov 9, 2010. 11:10 AM | 2 Likes Like |Link to Comment
  • Attractive Entry Points for Closed-End Funds FMO and ETJ [View article]
    3 Questions:

    1) Are ETJ and FMO really “one metric only” or haven't you essentially applied a qualitative screen on top of the quantitative screen for regression to the mean trading candidates.

    2) Have you read Ron Rowland’s observations about the C-Corporation Structure for Closed-End Fund investing vehicles, and if so does FMO survive your application of a qualitative screen?

    3) What does your portrayal of ETJ as an actionable regression to the mean candidate add to Seeking Alpha’s previously published investment view on ETJ?

    - Dan Plettner, a fellow SA contributor in the Closed-End Fund space
    Nov 9, 2010. 10:58 AM | Likes Like |Link to Comment
  • Alerian MLP ETF Has Higher Fee Structure Than Hedge Funds [View article]
    Ron

    I got a chance to earlier "recommend" this article but was distracted and time-constrained so as to delay comment. Among those with large followings on Seeking Alpha, you not only speak eloquently, but habitually offer relevant messages. I applaud you.

    I share your observations on the C-Corporation structure with aggregated MLP investing vehicles. Shall you desire more data on similarly constrained C-Corporations holding MLP constituents where historical financial reporting allows for data you don't have to back into, contact me anytime. The data doesn't say anything different, rather backs up your stern perspective.

    Respectfully Yours,
    Dan Plettner
    Nov 8, 2010. 01:33 PM | 2 Likes Like |Link to Comment
  • Observing Claymore's Dividend & Income Fund Among Narrow Closed-End Fund Calls [View article]
    Dear Guwestu

    Although I'm unsure what two SA community members quickly ranked your comment as being "poor", I have a pretty good idea why... there are some people who for reasons unrelated to the subject of this story seek to discredit me. Those who speak in defense of me individually are likely to have their comments marked as being poor. So if that matters to anyone, beware of positive personal reflection.

    Guwestu, whether we agree on DCS or not, nice to occasionally hear from those who notice the time spent thinking. I care very little about the number of "followers" because they can arrive from eloquent portrayals of fluff. But a comment like yours reassures that true observers know what I am, and am not.

    Respectfully Yours,
    Dan Plettner
    Nov 8, 2010. 01:18 PM | Likes Like |Link to Comment
  • Observing Claymore's Dividend & Income Fund Among Narrow Closed-End Fund Calls [View article]
    Dear Gruber

    Your entire comment history is essentially composed of making unspecific personal attacks on me. Interestingly, you “follow” one and only one person... other SA contributors have asked me whether I think you are one in the same. It is interesting that when a party begins to deflect from the merits of a debate certain people show up regularly and comments get ranked in groups….

    Personally, I neither know, nor care who you are (or aren’t). I would enjoy calling you "Hans" in tribute to the Die Hard character given your over the top comments. Its funny how a neural network creates impressions when trying to comprehend certain anonymous folks. The intellect depicted in the words of comments and contributions speaks for itself.

    Let me respond to the merits of your comment, which seems to echo the point of Mark Perilman. I haven’t “missed” any possible impact of management. It’s a factual input to NAV performance. The 2.35% expense ratio observed even by the Barrons piece provides a pretty high bogey for the manager in DCS’ asset class.

    The same expense ratio can be looked at as a margin for error in my eyes when choosing to be short on the expectation of discount widening.

    At the end of the day, buying a discount or shorting a premium is only beneficial if the spread moves toward parity. Simplistic minds like to assume such happens. A deeper look here suggests the opposite far more likely, IMHO

    With respect to most of the Seeking Alpha Community,
    Dan Plettner
    Nov 8, 2010. 12:57 PM | Likes Like |Link to Comment
  • Observing Claymore's Dividend & Income Fund Among Narrow Closed-End Fund Calls [View article]
    Dear Mark Perilman

    Thanks for your comment. I respect your perspective, and should you be right as to managerial acumen perhaps NAV performance will reflect that over time. But I believe discount will in time reflect the natural supply and demand for its governance because there is no surviving prospect for near or intermediate term Activism. It is pretty tough in Closed-End Funds to explain premiums/discounts by the choice of manager. The reality is that because Closed-End Fund Assets Under Management (“AUM”) are generally stagnant in size little marketing is done on the manager’s behalf… all starts with a different business model in the asset management business in relation to traditional mutual funds.

    I see the large cap market as reasonably efficient. With so much research talent in the space, the alpha opportunities for managers are reasonably narrow. I’m most focused in my large cap class CEF choices of shorts and longs on what the relative valuation mis-pricings are. Discounts aren’t random, and there is a price for everything. I thing the buying force Barron’s induced was both unnatural and lacking in cognizance of all relevant fund specific information.

    In Closed-End Funds, I believe details and unheralded observations matter.

    Respectfully Yours
    Dan Plettner
    Nov 7, 2010. 12:36 PM | 1 Like Like |Link to Comment
  • Eaton Vance Risk Managed Diversified Fund: A Deep Look at a Recently Discounted Market Price [View article]
    Dear Gruber

    If ever I battle an ego, I’ll make sure to read your comment history…. each of which attacks me. Regardless the (lack of) merits to your comments, the personal nature of your attacks will help me to forever retain my humility.

    George’s article made observations which overlap with my “incoherent ramblings”. To be clear to those such as yourself who either don’t actually read an authors work, or merely skim it for the simple things they are trying to hear, I cited and linked to George’s article in this product of my own research. My research began weeks prior to George’s piece and I actually asked the individual who initially stimulated my research on ETJ whether they wanted their own citation. You see, I don't think there is a need for talent to attempt to withhold credit from their peers.

    There are certain differences in scope, data, and risk-tolerance between the perspectives of George and myself, but there is overlap as well. There is also common dignity between two people with a shared passion. A citation in context was both desirable to, and well deserved by George. Please see paragraph 1 under the section “Why Now?”

    I am a believer in ethical professionalism and am happy to see the achievements of fellow contributors. Beyond George, there is another author “Gwailo” who contributes extraordinary content in the Closed-End space. More people should read them both. I’ve today indicated on Seeking Alpha that I “follow” George. To the extent it serves as an additional sign of respect to George as a peer, that pleases me. George seems a good, ethical, retrospect man who shares my enthusiasm for Closed-End Funds. In contrast, "Gruber", I'm amazed at the audacity of your login. For those who prefer to scan regular simplistic, empty dialogue, I think a login related to "Gruber" is exactly what they are looking for.

    With respect to the Seeking Alpha audience,
    Dan Plettner
    Nov 4, 2010. 09:27 PM | 2 Likes Like |Link to Comment
  • Eaton Vance Risk Managed Diversified Fund: A Deep Look at a Recently Discounted Market Price [View article]
    Dear Jordan

    I share your perspective on the Bush Tax cuts, and I think this may explain some of the apparent quantitative value apparent in dividend stocks today. Hence, my interest in positions of tax-efficient, covered call CEFs at attractive valuations: ETJ and IDE. IDE’s discount was caused by variant circumstances from ETJ and its distribution appears among the very safest. I hope to find time to discuss it someday.

    I don’t think the Closed-End Funds marketplace generally reflects the risks to some and upside to other strategies and related yield profiles at present. Closed-End Fund pricing tends to lag favor/out of favor on such thematic issues because the big “smart” thematic money neither has have sufficient liquidity in most CEFs, nor the ability to hedge alternate discount trends if they were to place early bets and wait. Simply put, it’s hard for pros to use Closed-End Funds to isolate a macro thesis and thus the big picture thematic pros have tended to place their bets and added liquidity to markets of other instruments instead. Wish I’m fully content with…

    Respectfully Yours,
    Dan Plettner
    Oct 28, 2010. 01:27 PM | 1 Like Like |Link to Comment
  • Eaton Vance Risk Managed Diversified Fund: A Deep Look at a Recently Discounted Market Price [View article]
    Dear “Guardian3981”

    Are you treating the return of capital designation from a covered call fund similarly to return of capital from a fund having no tax advantaged strategy? Is that not the classification of distribution one wants from a covered-call fund? Readily available quantitative data on Closed-End Funds means different things for different types of funds.

    Regarding moving averages, I think what you are observing is the quantitative reflection of the impetus. Point is, understand what is causing that data, and know what it reflects. Evaluate whether the market is right, or inefficient in any particular instance.

    Although I wonder in reading your comment whether you read the full piece, I thank you for your comment. Different opinions make for markets and I think your perspective is the prevailing market understanding on ETJ at present. It is appreciated to know the underlying understandings of those who hold a different view to my own. If everybody agrees on any security, the market price is either efficient or dramatically in error.

    Respectfully Yours,
    Dan Plettner
    Oct 28, 2010. 12:07 PM | 3 Likes Like |Link to Comment
  • A Closed-End Investor's Thesis on Distribution Variances and Allianz's Funds [View article]
    Dear "Tuxy"

    In my view, the (recent) distribution cut. Not only might the distribution cut have an effect on the demand curve for MTS, but in my view a disciplined institutional holder has to look at what the cut signals. More specifically, the extent and circumstances of the cut are useful observations to evaluate the governance care (or lack thereof) for keeping the fund competitive, yield-wise. For better or worse, yield is typically relevant to market demand for Closed-End Funds, and every Board is well aware of that.

    Problem the large shareholders have is that they can’t quickly unwind their positions without having a dramatic impact. Thus, “my thesis calls for a long slow bleed in MTS relative valuation” (paragraph 8).

    Thanks for the counter-argument. To understand the validity of application of your observation and argument, you may want to consider whether large shareholders were building those monster positions while anticipating this cut. If so, why?

    I very much like that you are contesting logic. Its a smart thing to do because not every thesis published here is created equal. Everybody who reads anything on Seeking Alpha would be wise to do the same thing.

    Respectfully Yours,
    Dan Plettner
    Oct 26, 2010. 09:16 PM | Likes Like |Link to Comment
  • The Advantages of Tax Free Bond Closed-End Funds Yielding Over 5% [View article]
    The most important fact about Closed-End Funds is that they trade on supply and demand. Each possesses some simple traits including those the author has observed like leverage, yield (from earnings or otherwise), and discounts or premiums. There are also more distinguished traits (ie: UNII, governance, shareholder base, distribution changes, rights offerings, tender offers, asset markings, etc) which are also relevant to the aggregate “data” on any particular Closed-End Fund. Different market participants can have variant assessments (or in some cases ignore) much of that data.

    I love the Closed-End Fund instrument, but are novice Closed-End Fund investors (for whom this piece appears written) cognizant of an important risk or prospective disadvantage… that they choose to be the dumb money (the least researched side of any particular transaction) in an inefficient marketplace?

    Novice Closed-End Fund investors think they are smart if they are simply buying at a discount. Buying at a discount is only good if discounts narrow.

    Respectfully Yours,
    Dan Plettner
    Oct 22, 2010. 11:48 AM | 3 Likes Like |Link to Comment
COMMENTS STATS
316 Comments
310 Likes