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Douglas Albo  

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  • Buy JLA [View instapost]
    Merger is going to still need to be approved. My thinking is that if a majority is reached, that's 50% of the outstanding shares (not just shares voted) of both funds, there's a good chance it will be approved. Typically, the big institutional holders will vote for the merger so its a matter of getting enough smaller investors to vote for it. They just need to get to that 50%, which they didn't have a month ago.

    Either way, I don't think its a major issue for either fund if it is not approved but it certainly makes JLA more valuable if it is.
    Oct 18, 2014. 11:20 AM | Likes Like |Link to Comment
  • Buy JLA [View instapost]
    Though EXG is most similar to ETY in terms of its option strategy, EXG is very large ($3 billion) and much more global. As a result, EXG's NAV hasn't kept up with ETY though trades at a narrower discount. I would stick with ETY.
    Oct 18, 2014. 11:11 AM | Likes Like |Link to Comment
  • Equity CEFs: Time To Buy Some Of The Eaton Vance Option Income Funds [View instapost]
    The Blackrock option CEFs have been really poor performers at the NAV level even after their distribution cuts. That's really a surprise since usually you would see their NAVs do much better 2 years after their last round of cuts (they do pay monthly now however).

    BDJ and CII, 2 of their US stock based option funds, still have negative total return NAV performances YTD and BGY and BOE, 2 of their international (BGY) and global (BOE) option funds are down like -12% and -8% at the NAV level. Really, really bad. The only BlackRock option CEF I like now is BUI.

    I definitely prefer the Eaton Vance option CEFs over the BlackRock option CEFs.
    Oct 17, 2014. 10:58 AM | 2 Likes Like |Link to Comment
  • Buy JLA [View instapost]
    All of the proposed mergers/reorganizations just need a simple majority of outstanding shares to vote "For" or "Against" the proposal. Abstentions or Broker non-votes are considered against the proposal so that does make it a bit more complicated.

    Nuveen didn't have a majority before but every subsequent shareholder meeting gets them that much closer since the votes carryover. I think we'll get a decision one way or another on Monday. Typically, institutional shareholders like Morgan Stanley, UBS, Bank of America, etc. own these funds across the board so if they vote "For" for one, they will probably vote "For" for all.
    Oct 16, 2014. 03:05 PM | Likes Like |Link to Comment
  • Buy JLA [View instapost]
    Yes, for every 1000 shares of JLA you own, you would get 740 shares of QQQX but at QQQX's current $18.25 price (which could change until the merger date). So...

    1000 X $12.25 = $12,250
    740 X $18.25 = $13,505 or a 10.2% valuation bump.

    And the merger has no impact on QQQX shareholders, i.e. its non-dilutive. They just become a bigger fund.
    Oct 15, 2014. 09:09 PM | Likes Like |Link to Comment
  • Equity CEFs: Time To Buy Some Of The Eaton Vance Option Income Funds [View instapost]
    That's actually one of the bonuses of the more defensive option-income CEFs like ETB, ETW, ETV, JLA, JSN & JPZ. Their market prices can be volatile but not necessarily their NAVs.

    That's what makes it a lot easier for me to buy and hold onto these funds knowing that their NAVs will hold up a lot better than their benchmarks.

    Yes, they can be scary volatile at times but as that discount grows, so does the yield and so does the better valuation. I just keep adding in small chunks. Eventually they will come back with the market.
    Oct 15, 2014. 03:07 PM | Likes Like |Link to Comment
  • Buy JLA [View instapost]
    The October rotation options are worthless at this point, and if the November or later rotations are in place, then they are seriously depleted as well. JLA will keep most if not all that option premium which is why JLA's NAV is outperforming right now, i.e. holding up better.

    But at some point, all of those options become pretty worthless and JLA's portfolio is exposed to further downside until the next overlay is in place. On the other hand, if the market rallies from here, then JLA's portfolio should capture virtually all of the upside.
    Oct 15, 2014. 01:18 PM | 1 Like Like |Link to Comment
  • Buy JLA [View instapost]
    I sincerely doubt "the market" really knows. In any event, JLA should be holding up A LOT better than QQQX in this market anyway. QQQX will still at a premium valuation after today.

    Besides, I don't think Nuveen will abandon the merger even if they don't get the votes this go around. I think they'll come back later.
    Oct 15, 2014. 01:07 PM | 1 Like Like |Link to Comment
  • Equity CEFs: Time To Buy Some Of The Eaton Vance Option Income Funds [View instapost]
    The Eaton Vance option-income CEFs have performed much better at the NAV level since cutting distributions a couple years ago. Then add the 10% buyback, which is still in place, plus the move to monthly pay from quarterly pay.

    All told, I think the EV option-income CEFs deserve much higher valuations today than they did a couple years ago.
    Oct 14, 2014. 09:04 AM | 1 Like Like |Link to Comment
  • Equity CEFs: Funds With Strong NAVs And Weak Market Prices [View article]
    DSE is turning out to be a lot more volatile (both at NAV and market price) than I expected, even for a leveraged MLP fund. It made a nice recovery up and over $18 earlier in the week and I confess, I sold quite a bit there because I'm just not comfortable with that level of volatility.

    Certainly, the weekly drop looks bad from the $18 level, but the fund was below $17 the week before when it appeared investors were in liquidation mode. This latest drop to its new $16.57 low seems to have more to do with the weakness in the energy MLPs it invests in.
    Oct 11, 2014. 01:18 PM | Likes Like |Link to Comment
  • Equity CEFs: A September To Forget [View article]
    You give Mr. Market WAY too much credibility. How about a 35% increase in NIE's distribution a few weeks ago as a reason that the discount should be reduced substantially? Most CEFs are valued by their yield anyway.

    NIE completed its merger with NGZ (see link below) earlier this year when NGZ was paying a 7.5% yield and traded at only a slight discount. NIE is now at a 7.7% yield and a -12% discount.

    If there was any rationality to NIE's valuation, it would be trading closer to $21, which would still be a -7% discount and a 7.2% yield.
    Oct 1, 2014. 11:23 AM | 2 Likes Like |Link to Comment
  • Equity CEFs: A September To Forget [View article]
    The Eaton Vance option funds have had a great run but if the market rolls over, they will be vulnerable too. I like ETY, EOS, EOI, ETW & ETB. ETV is a bit pricey and EXG I don't own anymore since I'm concerned about it maintaining that distribution.
    Sep 30, 2014. 09:22 PM | 2 Likes Like |Link to Comment
  • Equity CEFs: A September To Forget [View article]
    Not really. Investors like to think that premiums/discounts make sense and there's a reason why a fund trades at a perpetual premium or discount. I think that's BS. Most investors are pretty clueless in these funds so I don't give the valuations much credibility.
    Sep 30, 2014. 09:11 PM | 2 Likes Like |Link to Comment
  • Equity CEFs: A September To Forget [View article]
    I can usually find shares to short but not always. The larger funds tend to be easier to find shares but you might have 10,000 to short one day and zero the next. And then sometimes you'll have to buy them back before you'd like if your B/D loses their marginable shares.
    Sep 30, 2014. 09:04 PM | Likes Like |Link to Comment
  • CEF Strategies: The PIMCO CEFs - Opportunity Or Warning Shot? [View article]
    I thought he would retire but I didn't think it would have that large an impact on their funds.
    Sep 29, 2014. 10:39 PM | 1 Like Like |Link to Comment