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  • Markel: A Compounding Machine At A Cheap Price [View article]
    If you value financials based off PE rather PB you end up systematically tilting towards those which do riskier business activities. Not inherently wrong, but just understand the biases that different kind of metrics cause....
    Aug 18 02:09 PM | 1 Like Like |Link to Comment
  • DoubleLine Income Solutions Fund: Access Jeff Gundlach At A 9.3% Discount And 8.7% Distribution [View article]
    I don't know about the leverage. Despite his flamboyant personality, his portfolio management style is restrained, and risk aware, so it's probably well balanced risks vs. rewards. I don't know about DBL; its portfolio is more focused on one segment, and that doesn't lend itself well to the accounting framework they use. To wit: I don't know if paydowns/prepays etc. all count as NII.

    They have a lot of their assets proportionately in CEF vehicles (6% or so) so they will be careful in how they treat them. These are not throwaway vehicles for the team; senior mgmt. cares about them. This can not be said at all the other giant money mgmt. firms.
    Aug 18 02:07 PM | Likes Like |Link to Comment
  • DoubleLine Income Solutions Fund: Access Jeff Gundlach At A 9.3% Discount And 8.7% Distribution [View article]
    Those who have carefully parsed the Q&A on Doubleline's quarterly calls may have noted that Gundlach has stated the DSL distribution is now covered. That information does not show up in the financials, suggesting they were over distributing in the past. But when something crosses over the tipping point from being NAV reductive to accretive, it can sometimes be ok/safe for a dividend. I think the bigger risk here is EM worries; the vehicle has heavy exposure to that sector.
    Aug 17 09:53 PM | Likes Like |Link to Comment
  • Calling All Activist Investors: Liquidate This Fund [View article]
    Ugly Duckling - There is a lot of commentary on the internet about this fund (and her sisters) and what the H. family has done over the years that effectively always further their interests before those of minority shareholders. It's not difficult to dig those up and review them. The problem with deep discounted value plays, is that sometimes the discount is warranted, because mgmt. is aligned in ways that are contrary to the vehicles outsiders have to use.

    I view this cluster of funds sort of like the Dell Computer / Michael S. Dell situation from a while back. Outsiders thought it was good that mgmt. owned so much of the company, when in the end, it turned out to be a mechanism for a take under, where the time value of an equity call option, was blown away, when mgmt. decided to keep that for themselves.

    At some point when mgmt. affiliated entities have 50+% control at BTF, I would not be surprised by a de-listing of the shares. If people were vexed with the current discount, wait til they see what a pink sheet offering looks like. Ask yourself, what incentive is there for mgmt. to maintain the standards needed for an exchange listing? Do they want liquidity? Do they plan on raising more AUM? Or are they more interested in buying more assets on the cheap, by cutting divs / boosting ER / reducing the trading activity of the name?

    It's true that Goldstein has a toe hold position, but its been there for a long time, and I'm not sure what even he could do if the above was to pan out.
    Aug 17 09:34 PM | Likes Like |Link to Comment
  • Calling All Activist Investors: Liquidate This Fund [View article]
    If you're going to write articles about this fund, or any in the family, you need to read the litigation / regulatory history of the vehicle, and its prior forms, going back for at least a decade. It's hard to believe that someone with a PE background would not have done a rudimentary stakeholder incentive assessment.
    Aug 17 03:20 PM | Likes Like |Link to Comment
  • NexPoint Credit Strategies - Down 6% From All-Time High, Time To Buy? [View article]
    According to the new fund card, AAL exposure is a bit smaller now. They've been adding Argentine bonds, and of course to their captive, and murky, sub vehicle - Freedom REIT. I'm looking forward to some disclosure about that. For those with PRO subscriptions, they can look under my prior articles to see a long NHF note.
    Aug 7 07:05 PM | 2 Likes Like |Link to Comment
  • Winthrop Realty Waves The White Flag - So Should Investors [View article]
    Equity liquidations don't come along often....how many are you seeing a year in US markets?
    Aug 7 06:58 PM | Likes Like |Link to Comment
  • PIMCO High Income Fund's Top Institutional Owners Are Buying More Shares Even On A 49% Premium [View article]
    The increase in VIX has been creating a few more opportunities in FI CEF land, while pummeling those rare few with premiums. Punch up poor HNW vs. her NAV. A small downtick in the underlying portfolio has had massive market impact. Just like when a growth stock misses earnings.....
    Aug 7 06:56 PM | Likes Like |Link to Comment
  • Building A Diversified Hedged Closed-End Fund Portfolio [View article]
    Those aren't reliable sources. Lots of bad info, no real data scrubbing.

    Take a look at https://cefanalyzer.com
    Aug 5 03:27 PM | 1 Like Like |Link to Comment
  • Closing The EXG-ETW Pairs Trade [View article]
    How much volatility did you absorb to get that 260 bps? That's the right way to look at these kinds of ideas....
    Aug 5 03:02 PM | Likes Like |Link to Comment
  • Winthrop Realty Waves The White Flag - So Should Investors [View article]
    FUR behaves differently than normal REITs because mgmt. owns huge amounts of the company themselves, so they are aligned more with common shareholders than the typical AUM fee hungry firm, like the triple net sector.
    Aug 5 12:11 PM | 2 Likes Like |Link to Comment
  • Building A Diversified Hedged Closed-End Fund Portfolio [View article]
    It isn't easy to write the code that can provide a proper backtest of a mechanical strategy. If it was, the HFT firms would not be paying 500k for developer/mathematicians who can do this. For those who have access to them, FactSet and Bloomberg can do some equity strategy backtesting. FDS is better than BB's offering, but its harder to use, and most of the time one will still need their FDS consultant to help. Neither service is cheap though. For those who want to do more complex testing, and have the skills / databases, MatLab and R are useful as well. Those are hard(er) to run, and if one is a not a dedicated quant analyst, those aren't going to be happening. R is free, but you need a returns data base to work with, and that usually entails licensing costs.
    Aug 5 12:05 PM | 1 Like Like |Link to Comment
  • Building A Diversified Hedged Closed-End Fund Portfolio [View article]
    What systems have you used for your backtests?
    Aug 3 11:19 PM | 1 Like Like |Link to Comment
  • With A Yield Over 9%, The Credit Suisse High Yield Bond Fund Is A Strong Buy [View article]
    You'd be hard pressed to find a bond fund anywhere which hasn't had to reduce divs due to yield compression over this last rates cycle.
    Aug 3 11:16 PM | 1 Like Like |Link to Comment
  • With A Yield Over 9%, The Credit Suisse High Yield Bond Fund Is A Strong Buy [View article]
    I dug into the last DHY earnings statement upon release last month -- the distribution is NOT covered. So that 9% referred to in the title is NOT accurately described as 'yield', some of it is simply the investors own money being returned to them. Mgmt here has been clever, using the occasional blips of market prices trading north of NAV to issue more shares. That's accretive for shareholders but something to keep an eye on -- it means that any premium will eventually accrue mostly to management, and not the end risk owner. PIMCO CEF's almost never do secondaries (PFN sisters did re-equitize after the crunch, and the offer was supported by Gross himself, but it was a bit of an exception) so in those cases the end investor can 'enjoy' the premium for himself, by occasionally selling into the froth.
    Aug 3 11:14 PM | 1 Like Like |Link to Comment
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