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Douglas Albo

 
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  • Equity CEFs: New Kids On The Block [View article]
    If it is, it will be for all CEFs, not just ETY and ETV.
    Jul 27 10:23 AM | Likes Like |Link to Comment
  • Equity CEFs: New Kids On The Block [View article]
    I've seen it work both ways. Sometimes I think I get some institutional investor upset and I see the market price sell off after I write a positive piece or vice versa! I do try and time my articles at inflection points so no matter what knee jerk reaction might result in the days following releases, I'm pretty confident that over time I will be proven right.
    Jul 26 11:20 AM | Likes Like |Link to Comment
  • Equity CEFs: New Kids On The Block [View article]
    Thank you for your kind note...
    Jul 21 01:56 PM | Likes Like |Link to Comment
  • Equity CEFs: New Kids On The Block [View article]
    Oh, they usually trade at high single digit to low double-digit discounts. There's not too many of them. RVT and its spin-off RGT are probably the most well-known.

    But I like Gabelli as a stock picker. That's their specialty and though they use leverage and the funds have to be considered aggressive, I feel good about the prospects of GGZ with the current sell-off in small cap and the large discount.
    Jul 21 01:28 PM | 2 Likes Like |Link to Comment
  • Equity CEFs: New Kids On The Block [View article]
    GGT will see its NAV go down when the Rights convert, just like what happened to GRX. So the current discount is really closer to -5% to -6%. I suggested buying the Rights when they were about $0.16 to $0.17/share a couple weeks ago in this article...

    http://seekingalpha.co...

    So even though GGT's market price keeps going down and is currently at $9.55, you would still be up a little with a current Rights valuation of $9.51 ($.017 * 3 shares + $9 exercise price). It's been brutal for GGT however.
    Jul 21 01:00 PM | 1 Like Like |Link to Comment
  • Comparing Dividend CEFs With ETFs: Which Are Better? [View article]
    Stellar? Improved maybe, but hardly stellar.
    Jul 20 10:46 AM | Likes Like |Link to Comment
  • Equity CEFs: The Rights Way To Play CEFs [View article]
    Yes, that's true and I make mention of that in the article. Which is why buying the Rights at a discount can offset that to a degree. Last week, GRX-RI was trading at about $0.30/share or an implied $9.90 for GRX after a conversion. So even with the NAV reduction down to $11.20 or so post conversion, your basis is right back to a -13.1% discount.
    Jul 1 04:12 PM | 1 Like Like |Link to Comment
  • Equity CEFs: The Rights Way To Play CEFs [View article]
    Yes, you have to include the Rights offering. From Gabelli...

    http://bit.ly/1z5bOmf

    Hopefully, the link works but if not, you can go to Dividend/Tax Info tab for GRX. Gabelli has $0.7548 for the Rights NAV reduction back on July 24, 2013. But for shareholders, it's essentially a distribution that they get back.
    Jul 1 11:39 AM | Likes Like |Link to Comment
  • Equity CEFs: The Rights Way To Play CEFs [View article]
    If you owned GRX before the record date of June 3rd, you're entitled to put in for the over-allotment. You'll need to contact your broker or brokerage and exercise your Primary Rights first and if you want to put in for the over-allotment, specify the additional number of shares you would like to submit. Neither the Primary Rights exercise or the over-allotment privilege is done automatically so you need to call it in. And you will also need to have $9/share available as well.
    Jul 1 10:24 AM | Likes Like |Link to Comment
  • Equity CEFs: Funds Benefiting From The Weakness In Technology And Small Cap Sectors [View article]
    Not much opportunity with the discount valuations so similar between the three funds. BHK, as the surviving fund, would have to go up in valuation compared to BKT and BNA.

    JLA/QQQX is still the best arbitrage play but both go ex-dividend tomorrow so I wouldn't do anything until then.

    http://seekingalpha.co...
    Jun 10 02:02 PM | Likes Like |Link to Comment
  • Equity CEFs: QQQX And JLA Merger Opportunity [View instapost]
    I wish! That would make JLA shares even more valuable at around $16.25 based on a combined NAV and combined # of shares. But no, the consolidation is intended to be non-dillutive and non-taxable so it will be based on the NAV ratio of the two funds. JLA shareholders will actually get LESS shares than they currently own but at QQQX's market price. QQQX shareholders will be unaffected all the way around.

    This is similar to how the NIE/NGZ merger went last year. In that case, I was long the surviving fund, NIE, and short NGZ, just the opposite of this one where QQQX will be the surviving fund. I wrote an instablog on that as well...

    http://bit.ly/1idhLTi
    Jun 8 09:20 AM | 1 Like Like |Link to Comment
  • Nuveen To Consolidate Its Equity Option Income Funds: What Does It Mean? [View article]
    Not likely. The NGZ/NIE merger had an even bigger discount/premium spread when the deal was announced and it was approved. Ultimately, institutional investors call the shots and they will go along with the merger because of the economies of scale. Most individual investors won't even vote which also means a yes vote.
    May 6 12:00 PM | Likes Like |Link to Comment
  • Nuveen To Consolidate Its Equity Option Income Funds: What Does It Mean? [View article]
    I also think there is more and more institutional interest in these funds not just because of a rotation from growth to value and higher yielding securities this year but also because of newer funds like CEFL, which invest in CEFs.

    There's no limit to how much money can go into a fund like CEFL (unlike CEFs) and with an 18% yield, there's probably a ton of money rotating in and eventually, it has to be put to work in CEFs. This is good for CEF valuations but will also make them more volatile if investors ever start pulling money out of funds like CEFL.
    May 2 01:22 PM | 1 Like Like |Link to Comment
  • Nuveen To Consolidate Its Equity Option Income Funds: What Does It Mean? [View article]
    If this merger goes anything like the NIE/NGZ merger, it took months before the valuations reflected the conversion. But NIE, which was at a -13% discount at the time, was going to be the surviving fund, not like JLA in this case. What was a surprise, was that initially, NGZ went UP to a par valuation and stayed there for the better part of the term. It wasn't until a few weeks before the merger that NGZ's market price started to drop to reflect NIE's discount, since ultimately that's what NGZ's shareholders were going to receive. NIE never did reduce its discount much but as the acquiring fund with the surviving investment/income strategy, it was more NGZ shareholders to lose rather than NIE shareholders to gain.

    In this case, JLA is going away and QQQX will survive along with its investment & option income strategy. Even if QQQX dropped to a -5% discount, say $17.35, over $1 from here, that would still put JLA's value at $13.36 but all of this will be contingent on the conversion ratio and more importantly, how the NASDAQ-100 performs from now until the merger.

    The conversion ratio probably won't change too much and might actually improve for JLA shareholders if the NASDAQ-100 continues to recover. Not sure why QQQX's market price went up so much other than that valuations for most equity CEFs have improved a lot since the beginning of the year. For more index oriented funds like QQQX, DPO and DPD (Dow 30 funds), they seemed to get even better valuations.
    May 2 11:10 AM | 1 Like Like |Link to Comment
  • Nuveen To Consolidate Its Equity Option Income Funds: What Does It Mean? [View article]
    Beat me to the punch Left Banker. So JLA is worth $14.50 if QQQX's market price stays the same (77% of $18.81). The other positive is that if the NASDAQ-100 continues to recover, JLA shareholders have essentially taken on QQQX's option strategy right now too. Since JLA is very defensive and sells index options on 100% of the notional value of its portfolio whereas QQQX sells only about 50%, that could actually be beneficial too IF the NASDAQ-100 does well. Don't forget, you will get 1 and maybe 2 more distributions at an 8% market yield for JLA compared to 7.2% for QQQX before the merger is complete. In either case, JLA is now tied to QQQX's NAV and market price performance until the merger is approved and complete.

    The only possible negative for JLA shareholders is if the NASDAQ-100 performs poorly from here and QQQX goes from a premium to a heftier discount by the merger date. This is why an arbitrage would be very opportunistic since QQQX would have a lot further to fall. I was actually short QQQX before yesterday already and I have been buying ALOT of JLA shares this morning.
    May 2 10:06 AM | 2 Likes Like |Link to Comment
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