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Douglas Albo  

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  • Equity CEFs: Funds To Buy And Sell Heading Into 2015 - Part II [View article]
    JLA is one of the most defensive CEFs you can buy and so it will not capture near the upside of the NASDAQ-100 or the S&P 500 in a strong up market environment, like from 2012. It has nothing to do with its portfolio, which is all NASDAQ-100 and S&P 500 stocks. It has everything to do with its option income strategy of selling index options slightly in-the-money to slightly-out-of-the money on 100% of the notional value of the portfolio.

    This is just not the right market for JLA. If the market had been flat or even down since the merger announcement with QQQX, the NAV ratio between the two funds would be more in JLA's favor at closer to 76% instead of the 71% that it is.

    Unfortunately, I can't do anything about shareholder vote delays or the fact that the NASDAQ-100 is back to a ramp up mode. If the merger had occurred when it was suppose to, we would all be owning QQQX shares and enjoying the ride up but now we have to wait until the merger is approved which makes it all the more difficult when the markets take off like this.

    I will hold JLA until the merger is approved and converted to QQQX shares, which hopefully will be in early 2015 now.
    Nov 3, 2014. 03:31 PM | Likes Like |Link to Comment
  • Equity CEFs: Funds To Buy And Sell Heading Into 2015 - Part II [View article]
    GRX is not material to this article so I don't have to include a disclosure. But yes, I am still very long GRX.
    Nov 3, 2014. 01:50 PM | Likes Like |Link to Comment
  • Equity CEFs: Funds To Buy And Sell Heading Into 2015 [View article]
    Exactly my point. Look, healthcare and biotech have had an incredible run and it may go on for all I know. But if it doesn't, GRX is 50% in consumer staples and in fact, foods is its largest sector exposure, not healthcare.

    I can feel comfortable taking a large position in GRX because its diversified in primarily two defensive sectors. Maybe you feel you can take a large position in PJP and if so, that's your prerogative.
    Oct 30, 2014. 08:28 AM | 3 Likes Like |Link to Comment
  • Equity CEFs: Funds To Buy And Sell Heading Into 2015 [View article]
    Then buy RXL if you want to load up on healthcare. It's blown away all of them. It's all about risk/reward and how big a position you're willing to take.
    Oct 29, 2014. 01:16 PM | Likes Like |Link to Comment
  • Equity CEFs: Funds To Buy And Sell Heading Into 2015 [View article]
    I like both but certainly UTF is going to be higher risk/higher reward as a leveraged fund vs. BUI as an option-income fund. They have some overlap in their portfolios but BUI is going to be more global utility, i.e. electric whereas UTF is more global infrastructure, i.e. towers.
    Oct 28, 2014. 11:07 AM | 2 Likes Like |Link to Comment
  • Equity CEFs: Funds To Buy And Sell Heading Into 2015 [View article]
    I own DPG, which is similar to DNP but at a much better valuation. DPG has exposure to MLPs as well as utilities so you have to take that into consideration. Both funds have done very well this year at the NAV level but DNP's valuation has hurt its market price since 2012 when it was at a 40% premium. Certainly better this year with its more reasonable valuation but I still prefer DPG.
    Oct 28, 2014. 09:08 AM | 2 Likes Like |Link to Comment
  • Equity CEFs: Funds To Buy And Sell Heading Into 2015 [View article]
    Yes, probably should have mentioned that there will probably be a capital gain distribution in December but I don't place a big precedence on that since again, the NAV and market price will just be reduced by the capital gain amount. So it's really awash in the long run.
    Oct 28, 2014. 09:00 AM | 2 Likes Like |Link to Comment
  • Equity CEFs: Funds To Buy And Sell Heading Into 2015 [View article]
    ETJ's NAV has improved from its risk-adjusted days when it bought put options as well as sold call options but ETJ is still the most defensive of the EV option-income funds so it is way down the list going back to 2012 when the market really ramped up.
    Oct 28, 2014. 08:57 AM | 1 Like Like |Link to Comment
  • Equity CEFs: Funds To Buy And Sell Heading Into 2015 [View article]
    GRX's NAV is up 8% YTD when you add back the $0.36 in distributions + $0.76 in NAV reduction due to the Rights offering. $1.1244 total to be exact.

    That compares favorably with XLP but XLV (GRX's two benchmarks) is just leaving every ETF in the dust, making new all-time highs everyday it seems. XLV, which is mostly large cap pharmas and healthcare services, is like a tech stock right now, up 18.9% YTD. GRX's largest sector is foods and though it owns many of the large cap healthcare names in XLV, just not that much.

    I like JCE. Would buy more on a dip.
    Oct 28, 2014. 08:51 AM | 3 Likes Like |Link to Comment
  • Equity CEFs: The Nuveen Equity Option CEF Restructuring/Mergers Delayed Again [View article]
    No real arbitrage opportunity since both JPZ and JSN are at similar valuations. BXMX will just be a much larger version of JPZ with its very defensive option strategy.

    JLA and DPO are really the only funds that change their strategies much.
    Oct 24, 2014. 10:24 AM | Likes Like |Link to Comment
  • Buy JLA [View instapost]
    The ultra defensive option strategy has actually been a liability the last few years for JSN, JPZ & JLA and even when the strategy outperformed in 2011, their discounts widened considerably along with all CEFs. In other words, they weren't rewarded for the more defensive strategy.

    I personally like the lower 55% overwrite since most of these option CEFs cut distributions a few years ago to get down to more attainable 7% to 8% NAV yields. So a 55% or so overwrite should be able to sustain the lower NAV yields. But if you want to continue with the 100% overwrite, the JSN and JPZ merger into BXMX will maintain it.
    Oct 23, 2014. 08:40 AM | Likes Like |Link to Comment
  • Equity CEFs: The Nuveen Equity Option CEF Restructuring/Mergers Delayed Again [View article]
    Go to this link and go to the Pricing Information tab...

    http://bit.ly/1pAnlTA

    I just updated the chart in the article as well.
    Oct 22, 2014. 09:02 AM | 1 Like Like |Link to Comment
  • Equity CEFs: The Nuveen Equity Option CEF Restructuring/Mergers Delayed Again [View article]
    The most serious drawback to JLA is that it is so defensive, selling index options against 100% of its all large cap US stock portfolio, it's NAV won't capture as much of the S&P 500 and NASDAQ-100 snap back as I would like.

    Still, with AAPL and most of the big tech and biotech names in its top holdings (and fortunately IBM is way down on the list), its a nice portfolio. If the merger goes through however, JLA will be absorbed and adhere to QQQX's investment and option strategy, which will be closer to a 55% overwrite strategy vs 100%.
    Oct 21, 2014. 05:37 PM | 2 Likes Like |Link to Comment
  • Equity CEFs: The Insanity Of CEF Investors [View instapost]
    Yes, thanks for relaying that info. I got an email from Nuveen stating the same.
    Oct 20, 2014. 04:52 PM | Likes Like |Link to Comment
  • 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
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