Seeking Alpha

Douglas Albo

 
View as an RSS Feed
View Douglas Albo's Comments BY TICKER:
Latest  |  Highest rated
  • Equity CEFs: Demystifying Return Of Capital Distributions By Eaton Vance [View article]
    There's not many option-income funds that have outperformed ETB either on a total return market price basis and especially on a total return NAV basis, particularly considering how defensive it is. However, for an up market, leveraged option-income funds like INB and DPO will outperform.
    Oct 30, 2012. 10:37 AM | Likes Like |Link to Comment
  • Equity CEFs: Demystifying Return Of Capital Distributions By Eaton Vance [View article]
    Thanks for your comment. You always keep me in check and I appreciate that. I suppose if everyone knew as much about ROC and CEFs as you and I did, then I wouldn't have to keep emphasizing the same points over and over again but I believe a lot of investors still don't understand the basics of CEFs, let alone more complex issues. How many investors do you think buy a CEF thinking that it's an ETF w/ the assumption that it has no other basis of valuation other than it's market price? For most individual investors and even brokers, I think the percentage is still pretty high.

    The only fund family that I know of that puts out their option overlay each month is for Nuveen's JSN, JLA, JPZ & JPG but that's because its the same % each month. They just adjust the in-the-money vs out-of-the-money based on where the market is each rotation.

    I own all the Eaton Vance CEFs, including their leveraged ones, except for ETJ. ETJ has no upside in an up market and its NAV total return is only 2% YTD. Surprisingly, EXG now has the best YTD NAV performance up about 11%, but as I've said in past articles, EXG is the most risky while ETJ has the least upside and downside. The question is can it continue to pay a 9.5% NAV yield w/ that limited up or downside? I'm not sure it can.
    Oct 30, 2012. 10:23 AM | Likes Like |Link to Comment
  • Equity CEFs: The High Cost Of High Distributions, Part II [View article]
    Not an easy answer since a lot of it will have to do with the market environment. A strong ramp-up market favors the leveraged funds and my favorites w/ above average yields and strong NAV performance are CHW, UTF & EVT though they tend to be more volatile and its best to buy on weakness. A flat to even slightly down market favors the option-income funds and ETV, JLA & ETW have very generous yields and are very defensive. Other option-income funds with a bit more NAV umph for an up market and have above average yields include INB & EXG. Of these funds, only ETV and JLA are pure US stock based. The others are global (US and Intl) so it will also depend on how the US vs. the International markets perform.
    Oct 19, 2012. 09:10 AM | 3 Likes Like |Link to Comment
  • Equity CEFs: The High Cost Of High Distributions, Part II [View article]
    Thank you. Good to hear my articles are making a difference. Didn't always seem that way!
    Oct 19, 2012. 08:46 AM | 1 Like Like |Link to Comment
  • Equity CEFs: The High Cost Of High Distributions, Part II [View article]
    Used to be 1,000%.
    Oct 18, 2012. 07:24 PM | Likes Like |Link to Comment
  • Equity CEFs: The High Cost Of High Distributions, Part II [View article]
    Well, if you're happy with what you are receiving on your investment then congratulations.
    Oct 18, 2012. 12:52 PM | Likes Like |Link to Comment
  • Equity CEFs: The High Cost Of High Distributions, Part II [View article]
    Thank you...
    Oct 18, 2012. 12:48 PM | Likes Like |Link to Comment
  • Equity CEFs: YTD Top Performers Through 3rd Quarter 2012 [View article]
    Morningstar and I are in agreement on the vast majority of equity CEFs but not on the Eaton Vance option funds. Their favorite for years was ETJ, which is the only one I didn't like! Part of Morningstar's problem is that they run CEFs through the same old analysis models as they do mutual funds and sometimes the results don't come out they way they should. CEFs can be a bit more complex than that. So yes, their size and traditional methodology can hurt their analysis on CEFs I believe.

    And you're right...the #'s don't lie, however distribution cuts and ROC can be net/net positives when your analysis points that direction. But even then, all those statistics are secondary to what should matter most to investors...how has the fund performed? Would you agree then that the most important number is total return market performance?

    And if that's the case, then please go over my articles and see how I have done. Take the date of the article, my picks and/or pans from the article and run them through a total return chart like from http://ycharts.com

    I haven't done it, but I'm pretty confident that the vast majority of my picks and pans on equity CEFs would have worked out pretty well for investors and that should be the final say on the quality of my research.
    Oct 5, 2012. 03:07 PM | 1 Like Like |Link to Comment
  • Equity CEFs: YTD Top Performers Through 3rd Quarter 2012 [View article]
    M* actually has EXG as a 4-star fund based on its benchmark performance though Cara Esser has not been very kind to any of the Eaton Vance funds (nor has she been very right). I don't want to appear cocky, but my research has been far superior. M* downgraded one of my favorite equity CEFs, UTF, to a 1-star fund a week before it went ex-dividend because they have it categorized as a utility fund! I'll let you decide whether you think that was very smart or not.
    Oct 4, 2012. 04:04 PM | Likes Like |Link to Comment
  • Equity CEFs: YTD Top Performers Through 3rd Quarter 2012 [View article]
    I would take a pass on IGD. NAV performance has been underwhelming so far this year.
    Oct 3, 2012. 05:57 PM | Likes Like |Link to Comment
  • Equity CEFs: YTD Top Performers Through 3rd Quarter 2012 [View article]
    Well, of course I like EXG. GPM is starting to look attractive again but I would wait on it. I think the market is going to give you better opportunities later in October.
    Oct 3, 2012. 02:40 PM | Likes Like |Link to Comment
  • Equity CEFs: YTD Top Performers Through 3rd Quarter 2012 [View article]
    Yeah, I should include those as well.
    Oct 3, 2012. 02:37 PM | Likes Like |Link to Comment
  • Covered Calls For Income Can Cost Dearly In Long-Term Gains [View article]
    INTC has not dropped 40% from last May. $29 to $23 is more like 20%...$6 divided by $29.
    Sep 28, 2012. 10:39 AM | 2 Likes Like |Link to Comment
  • Equity CEFs: The First Cut Is The Deepest (Part II) [View article]
    Both of you need to step back and understand how these funds work. CEFs are yield oriented investments. You need to add back the distributions to see what the total return has been. In many cases, the total return for these funds is much better than their correlated indexes.

    You also need to differentiate between the market price performance and the NAV performance. The NAV performance is the true apples-to-apples comparison with a fund's benchmark. In EXG's case the total return NAV performance from inception in 2007 has been -0.05% ($10.31 current NAV + $8.66 total distributions - $19.06 inception NAV divided by $19.06). That is significantly better than EFA and IEV two of the most popular international ETFs down around -20% over the same period though the S&P 500 is up 9.2%. Blended together and EXG's NAV has outperformed.

    On a market price basis, EXG doesn't look as good, as I point out in the article, but THAT is where the opportunity is. On a market price basis, EXG is down -12.9% ($8.76 current price + $8.66 total distributions - $20 inception price divided by $20), still much better than EFA and IEV. But the whole point of the article is to show how an outperforming fund at the NAV level gives an opportunity for investors to pick up a fund at over a -15% discount ($10.31 NAV vs. $8.76 market price) and an 11.1% yield. Does that make more sense?
    Sep 26, 2012. 09:28 AM | 1 Like Like |Link to Comment
  • Equity CEFs: The First Cut Is The Deepest (Part II) [View article]
    You're welcome. Sounds like you've learned an important lesson in investing in CEFs. Buy at large discounts when no one else wants them and sell at premiums when they get overextended.
    Sep 25, 2012. 11:29 AM | Likes Like |Link to Comment
COMMENTS STATS
660 Comments
489 Likes