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Douglas Albo  

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  • Equity CEFs: The Insanity Of CEF Investors - Part II [View article]
    Thanks for your note. The selection process of CEFs is an inexact science. Your best bet, depending on the size of your portfolio, is to have 10-20 funds spread among different income strategies and portfolios and then to add or reduce positions as opportunities allow.

    Short term NAV performance (1-year or less), longer term NAV performance, discount/premium, NAV/market yield all are important when selecting funds to own but probably the most important is just knowing how these funds act in different market environments. They can be like children really.

    I also own ETFs, both long and short, because you obviously get direct market correlation from ETFs whereas there's no such guarantee with CEFs.
    Apr 14, 2015. 08:51 AM | 5 Likes Like |Link to Comment
  • Equity CEFs: The Insanity Of CEF Investors - Part II [View article]
    ETJ is the only EV option income fund I haven't owned for years. Just never bought into the "risk-adjusted" buy Put option component. Historically, its been a huge expense for the fund that hardly ever pays off.

    If you're that bearish on the market, best to be in cash.
    Apr 13, 2015. 06:28 PM | 5 Likes Like |Link to Comment
  • Equity CEFs: The Insanity Of CEF Investors [View article]
    Excellent explanation. Thanks for the help...
    Apr 13, 2015. 10:16 AM | 1 Like Like |Link to Comment
  • Equity CEFs: The Insanity Of CEF Investors [View article]
    You seem to be bound and determined to prove a point or prove others wrong. Well, that's fine.

    First of all, GRX's 2011 performance was not 0% because you simply assumed their were no distributions that year. There were. Gabelli distributed $0.7225/share in April of 2011 so GRX's actual performance was more like 10.6%. Rights Offerings didn't begin until 2013.

    http://bit.ly/1ciOSsB

    And do you understand that it is the volatility of a CEF's market price...established by mostly unsophisticated investors...that gives YOU, the informed investor, an advantage over them? If you want to compare risk adjusted returns, sharpe ratios or the like, you would really have to compare GRX's NAV, not its market price, to other securities such as VGHAX, since its the NAV that is the true comparable. Unfortunately, I doubt anyone has that information because most historical price and distribution data for NAVs are either wrong or omitted.

    Look, if you want to buy and hold, VGHAX is a great choice. I prefer a little more excitement and I prefer to go up against mostly uninformed investors who will make mistakes in their trading. CEFs, and not just GRX, will give you many more opportunities for that.
    Apr 10, 2015. 02:01 PM | 4 Likes Like |Link to Comment
  • Equity CEFs: The Insanity Of CEF Investors [View article]
    Undistributed Net Investment Income does not include option income. It's purely portfolio dividends and interest minus fund expenses (gives you NII) and distributions (gives you UNII). All option income CEFs have negative UNII because their portfolio dividends and interest barely cover the funds expenses and certainly don't cover their distributions.
    Apr 9, 2015. 11:11 AM | 4 Likes Like |Link to Comment
  • Equity CEFs: The Insanity Of CEF Investors [View article]
    You are correct. It will happen, its just a question of when PIMCO bites the bullet and cuts the distribution. Something they should have done a long time ago.
    Apr 8, 2015. 09:39 AM | 1 Like Like |Link to Comment
  • Equity CEFs: The Insanity Of CEF Investors [View article]
    Risk adjusted is everything. IBB crushes both VGHAX and IYH but how big a position are you willing to take in a pure biotech fund? If you read my linked articles, you would see that GRX is diversified among a number of sectors besides healthcare and includes a number of defensive names, certainly more defensive than VGHAX and IYH. Yes, the leverage adds risk but GRX does not use a huge amount of leverage. Because of that diversification, a wide discount and an above average yield (though Gabelli should have raised GRX's distribution), I've said that GRX is a fund you can take a large position in.

    Finally, you can't rely on simple graphs to make performance comparisons. In the case of CEFs, there are often other factors going on. Mutual funds and ETFs are rarely as complicated and hardly ever use rights offerings. In the last 5 years, GRX has had almost exactly $5 of distributions, capital gains and other distributions like rights offerings. 5-years ago, GRX was at $7. Do the math and I think you'll find GRX's performance is comparable to VGHAX.
    Apr 8, 2015. 08:55 AM | 2 Likes Like |Link to Comment
  • Equity CEFs: The Insanity Of CEF Investors [View article]
    Both of you need to plug back in distributions, capital gains and rights offerings. Once you do that, you will find that GRX is comparable to outperforming. Also, GRX is not a pure healthcare fund. 50% of its portfolio is in consumer staple stocks, mostly foods.
    Apr 7, 2015. 08:28 PM | 4 Likes Like |Link to Comment
  • Equity CEFs: The Insanity Of CEF Investors [View article]
    The new BXMX is very defensive and yields 7.8%. After a short spike up, has settled back down to a nice discount. Fund is the result of the merger between JSN and JPZ. Sells S&P 500 index options against 100% of its large cap US stock portfolio so the NAV won't move up or down too much. Should be a core holding for defensive minded investors.
    Apr 6, 2015. 04:58 PM | 4 Likes Like |Link to Comment
  • Equity CEFs: How To Play Sector Rotations By Investing In CEFs [View article]
    Really? The first four columns in the tables identify the fund's income strategy, i.e. light blue, orange, olive green and purple. The green and red you'll find in the rest of the columns and those relate to a fund's performance and other statistical attributes.
    Feb 21, 2015. 09:28 AM | Likes Like |Link to Comment
  • Equity CEFs: How To Play Sector Rotations By Investing In CEFs [View article]
    CEFs that sell individual stock options will require more oversight and will generally be more likely to either outperform or underperform their benchmarks by a greater degree I have found. What hurts these funds is if there is a wide variance in performance of their top holdings.

    CEFs that sell index options are more predictable and as long as their top holdings are keeping pace or outperforming their benchmarks, then they should do well.

    I generally like the index option approach as it requires less management. The difference in yields or tax efficiency seems to be negligible or probably just not enough of a factor.
    Feb 19, 2015. 08:56 AM | 1 Like Like |Link to Comment
  • Equity CEFs: Global CEFs For A QE Europe [View article]
    None of these leveraged funds have enough net income to cover their distributions, particularly ETO with its increased distribution yield now. But ETO has been cashing in long term gains so it isn't showing any ROC. ETO had a $0.917/share capital gain distribution last year, whereas ETG and EVT have taken none. So in my opinion, ETG and EVT are much more attractive than ETO if the markets continue their uptrend.
    Feb 14, 2015. 10:23 AM | 1 Like Like |Link to Comment
  • GAMCO Global Gold, Natural Resources & Income Trust And GAMCO Natural Resources, Gold & Income Trust: Is It Time To Sell? [View article]
    I've been writing on CEFs since 2011 and have been following these and other funds for much longer than that. I wrote about GGN and GNT right at the end of last year noting their tendency to reverse course at the beginning of the year...

    http://seekingalpha.co...
    Feb 7, 2015. 10:55 AM | Likes Like |Link to Comment
  • Equity CEFs: Global CEFs For A QE Europe [View article]
    Absolutely it should. I have asked, no...begged, Gabelli to give us some updates on the fund but to no avail. The fund should be fully invested by now and we should hear something in late February about any initial distribution declaration for the 1st qtr, but for the most part, Gabelli leaves you wondering what is going on.

    For a small/mid cap fund, the NAV hardly budges though it is a global value fund so perhaps its just not going to have the NAV upside as a US based small/mid cap fund. I'm waiting for Gabelli to come out with some more color on the fund before I decide what to do with it. Overall, I have not been impressed.
    Feb 7, 2015. 08:16 AM | Likes Like |Link to Comment
  • Equity CEFs: Will 2015 Be The Year Of The Rotation? Part II [View article]
    If you read my December 29th article, you would have known that it was EXACTLY because of the overshoot that I recommended both GGN & GNT, regardless of how gold & commodities performed.

    I'll take a 14.9% total return for GGN and a 9.2% total return for GNT (both also paid a $0.07 distribution) in a little over a month any day compared to a down market!
    Feb 3, 2015. 06:55 AM | 4 Likes Like |Link to Comment
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