Seeking Alpha
View as an RSS Feed

Douglas Albo  

View Douglas Albo's Comments BY TICKER:
Latest  |  Highest rated
  • 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
  • Equity CEFs: Global CEFs For A QE Europe [View article]
    Like ROC, its too simplistic to say that negative UNII is a bad omen.

    You have to understand where UNII comes from and most investors use CEF Connect to find out that info. But what you really need to ask is where does CEF Connect get that info? Well, it comes from the fund's latest annual or semi-annual report. So if we know where it comes from then all we have to do is see how they calculate it.

    If you go to a fund sponsor's webpage or SEC filings, just look for the latest report and go down to the statement of operations. Its not difficult to find a fund's Net Investment Income (NII) after expenses and compare that to what the fund paid out in distributions. Quite often, they'll even have a line item for UNII. Then just divide by the number of shares outstanding and voila, there's your UNII per share shown on CEF Connect.

    Just remember though, NII does NOT include options, so any income from a fund's option-writing is not even included in NII. Since most option-income funds rely on their option-writing and not portfolio dividends or interest, UNII is almost always negative.

    Also keep in mind that most leveraged CEFs don't cover their distributions with dividends and interest either, though certainly they rely more on this. Most leveraged CEFs also need portfolio appreciation to cover their distributions and this is why leveraged CEFs are better bull market funds than option funds. But this is why UNII, like ROC, is not necessarily a good indicator for how a fund is performing. You have to dig deeper.
    Jan 31, 2015. 12:44 PM | 3 Likes Like |Link to Comment
  • Equity CEFs: Global CEFs For A QE Europe [View article]
    I would pay less attention to ROC and more attention to the direction of a fund's NAV. A fund can still be claiming partial ROC in their distributions even while their NAV is growing (ETG for example). ROC in itself, is actually a good thing because it is tax-deferred, but when it results in continued NAV loss over time, then its called destructive ROC and that's not good.

    AGD and AOD never actually showed any ROC when they relied on a dividend capture strategy because it was all earned income (portfolio dividends). That's why they rose to such extreme premiums. Everyone thought they were brilliant offering tax-advantaged income with no resulting ROC.

    But what was happening was that they were devastating their NAV in the process so they should have called it "Return of NAV" instead of ROC and as a result, their market prices eventually collapsed.

    But that's all history now and as long as AGD and AOD can cover their NAV yield (6.8%) with their new and improved income strategy, then no NAV loss and no ROC (doesn't mean they can't still claim ROC in their distributions from past realized losses).
    Jan 28, 2015. 07:26 AM | 1 Like Like |Link to Comment
  • Equity CEFs: Will 2015 Be The Year Of The Rotation? [View article]
    RA - I have NO control over comments and have NEVER asked Seeking Alpha to remove or alter comments. None of this is as big of a deal to me as you seem to think it is.
    Jan 28, 2015. 06:52 AM | 2 Likes Like |Link to Comment
  • Equity CEFs: Global CEFs For A QE Europe [View article]
    FEZ and IEV are very similar and roughly the same size in ETF assets. You could use either one but IEV is more diversified with 350 stocks spread among the European markets vs. FEZ with only 50. So I would consider IEV more comparable to an S&P 500.
    Jan 27, 2015. 08:07 AM | Likes Like |Link to Comment
COMMENTS STATS
700 Comments
619 Likes