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Douglas Albo

 
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  • Equity CEFs: The High Cost Of High Distributions [View article]
    Good point. Let's take a look at Undistributed Net Investment Income (UNII). Though for option-income funds, UNII is generally not applicable since most of their income comes from options and not portfolio dividends and interest...still NAI has one of the worst UNII's I've ever seen. According to http://bit.ly/NmGadx NAI's UNII was -$0.4433 per share as of its semi-annual report dated 8/31/2011.

    And I'm sure things haven't improved much from a year ago either as NAI's NAV was around $12 and now its $9.52 after paying $1.60 in distributions over the past year.
    Jun 8 11:16 AM | Likes Like |Link to Comment
  • Equity CEFs: The High Cost Of High Distributions [View article]
    It is frankly incredible to me that some institutional investor or market maker would step into a fund like this and not see the potential downside. It really makes me wonder how much manipulation goes on with these funds since there is no justification for NAI to be even close to $11 with an NAV so depressed at $9.52. Could be a short covering as well but these funds have become so counter-intuitive that I don't think 99% of investors even bother to look at the NAV.
    Jun 8 10:51 AM | Likes Like |Link to Comment
  • Equity CEFs: A New Utility CEF At An Attractive Discount [View article]
    My tables and analysis always lists management fees and I always take them into account. BUI is just too new to show them yet. When a semi-annual or annual report comes out, then we'll know what their expense ratio is. One thing is for sure, the total expense ratio for BUI will be alot less than the leveraged utility funds. Probably around 1%,
    May 29 07:54 PM | Likes Like |Link to Comment
  • Equity CEFs: A New Utility CEF At An Attractive Discount [View article]
    Thanks for your comment. I look at PDT as more fixed-income oriented than BUI with 58% of its portfolio in preferreds. That 33% leverage is going to make PDT more risky than you think and more interest rate sensitive as well.
    May 29 12:27 PM | Likes Like |Link to Comment
  • China: Crashing Economic Data Creates Great Investment Opportunity [View article]
    And this is coming from someone named gaseseses? I actually liked the article very much and I think the author is right on. Grammar is second to content in my opinion.
    May 25 10:32 AM | 7 Likes Like |Link to Comment
  • ADX Vs. GUT: Fundamental Analysis Isn't Ideal For CEF Share Price Valuation [View article]
    Good article, Joe. We can point out the valuation differences until we're blue in the face but until there are major distribution cuts in these funds (and there will be eventually), investors won't realize the bloated funds they are invested in.

    Most of my analysis centers on NAV total return performance and NAV yields. Those are the pillars of fund sustainability in my opinion and often times its the funds with the strongest pillars that trade at the widest discounts. I don't even try to analyze market price performances because its nothing but a popularity contest.
    May 25 09:00 AM | 1 Like Like |Link to Comment
  • Equity Closed-End Funds: When Opportunity Pounds On The Door [View article]
    Several of the Gabelli funds have NAV distribution policies where the fund will distribute up to 10% of the NAV each year. None of the funds are earning close to that percentage in dividends/interest so obviously, the funds have to make it up via appreciation of their leveraged portfolios. That's the risk you take with these funds and that's why I said these are bull market funds. If GRX ever came out with a 8%-10% distribution policy, it would shoot up. Of course, the minute I write about it, it drops like a rock!
    May 23 04:27 PM | 1 Like Like |Link to Comment
  • Equity Closed-End Funds: When Opportunity Pounds On The Door [View article]
    Well thank you for your analysis. You seem focused on the portfolio holdings, the conflicts of interest Mr. Gabelli and GAMCO may have and the preferred share debt. I'm not going to comment on the first two since I don't believe Mr. Gabelli or the funds that bear his name would have prospered for so long if he had ulterior motives or didn't look out for shareholder interests. This is from GRX's recent Annual Report...

    "Mr. Gabelli’s incentive based, variable compensation structure and dollar amount have been fully disclosed each year since April of 2000 in the annual proxy statement for GAMCO Investors, Inc. (NYSE:GBL). Mr. Gabelli receives no base salary, no annual bonus, and no stock options. As founder and portfolio manager of The Gabelli Healthcare & WellnessRx Trust, Mr. Gabelli received $48,786 in calendar year 2010. For the Fund’s first twelve months of operation starting in June 2007, Mr. Gabelli received less than $45,000. Mario J. Gabelli and various entities he is deemed to control owned 178,027 common shares of the Fund with a total value of $1,271,111, as of December 31, 2011. Mr. Gabelli may not have one hundred percent pecuniary interest in some of the entities he is deemed to control."

    Now I do agree that the preferred share debt that most of the Gabelli funds use is not the most effective form of financing and is worth looking into more. Thanks for bringing that up!
    May 23 08:56 AM | 1 Like Like |Link to Comment
  • Equity CEFs: Is This 2011 All Over Again? [View article]
    Thank you! I believe your statement deserves repeating!
    May 22 09:26 AM | Likes Like |Link to Comment
  • 3 Undervalued Gold Related Dividend Picks [View article]
    I'm not going to comment on the daily moves of CEFs, which can be like trying to rationalize the irrational. My point had to do with the relative valuations of GGN and GDV. Just because GGN had been slammed for two weeks prior to your article did not, in my opinion, make it "undervalued" when it was still trading at a 10% premium. GDV at a -11%, now -12% discount, seemed to be more "undervalued" though as you infer, a large discount for a leveraged fund won't help much in a down market.
    May 17 07:35 PM | Likes Like |Link to Comment
  • 3 Undervalued Gold Related Dividend Picks [View article]
    GGN undervalued? That's a new one! I like the Gabelli funds but GGN is one of the most overvalued of their funds (GUT being the other). You'd be alot smarter to buy a similar ETF like GLD, XME or XLE and sell your own call options against it.

    BTW, you can buy another Gabelli fund, GDV right now down 2.3% at around an -11% discount. GDV is on the same monthly dividend cycle as GGN too.
    May 16 03:42 PM | Likes Like |Link to Comment
  • Rating The Global Equity Option-Income CEFs [View article]
    Excellent points. Re-investment of the distributions not only allows you to buy the funds at a discount but also at a windfall yield. Then, of course, funds that have high ROC are not taxed on that portion of the distribution. As long as you don't sell your position, which would require the cost basis to be lowered by the ROC amount(s), you're in a win-win-win situation. And yet most investors are completely oblivious to this!
    May 16 12:56 PM | Likes Like |Link to Comment
  • Rating The Global Equity Option-Income CEFs [View article]
    I'm generally in agreement with most of Morningstar's ratings but I am highly suspect on their analysis of the Eaton Vance funds. For quite awhile, their favorite fund in the space was ETJ, which was the one fund I didn't like.

    On one hand, Morningstar has some of the Eaton Vance funds highly rated at 4 stars (ETW, ETV & ETB), but on the other, they don't really say anything positive about them. The destructive ROC comments are particularly annoying since there are so many other funds that actually DO have destructive ROC that they don't even comment about. If they applied the same analysis to the BlackRock or ING funds for example, they would see that many of the Eaton Vance funds have outperformed their peers.
    May 16 09:07 AM | Likes Like |Link to Comment
  • Nuveen's Buy/Write Funds Do Work [View article]
    Because they take the loss on their options and hold their unrealized gains on their stocks! This is not a difficult concept to understand.

    When the markets are going up, option-income funds will buy back their open index options at a loss and then re-establish at higher strike prices further out. The end result is losses which they can apply to quarterly distributions as ROC.
    May 9 11:54 AM | 1 Like Like |Link to Comment
  • Equity CEFs: Is The BlackRock Global Opportunities Equity Trust A Buy? [View article]
    Yes, but most fund managers would close out their option positions before letting positions get called away, especially index options. Many funds are "Tax-Managed" to hold their equity positions and take a loss on their options in a rising market. This is also how many option-income are able to show high Return of Capital (ROC) in their distributions even with a rising market.

    BGY only sells options on 53% of the notional value of its portfolio, not 100%.
    May 8 08:19 AM | Likes Like |Link to Comment
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