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Joe Eqcome
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Joe Eqcome is the pen name of Robert A. Frank, CFA, a Wall Street executive who has spent over 30 years as an investment professional. Mr. Frank is the founder of GrowthIncome Research & Management, LLC. GrowthIncome Research & Management, LLC’s business mission is focused on generating... More
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  • Updated CEF Charts for Dec 9th
    The following charts are the replacement chart for CEF Week of 12/9/11: Who Let the Dogs Out?

    This is the CEF Fund Type Chart.

    Here is the ETF Comparison Chart. Again,

    I apologize for the error.

    Joe Eqcome

    Dec 11 11:09 AM | Link | Comment!
  • Eqcome CEF Index Declines 1.5% in November

    The Eqcome CEF Index declined 1.5% in November while its related NAV declined a further 2.0% causing the Index discount to narrow to 4.4% from 4.9% the previous month. 

    On sector basis, equity CEF discounts expand while Fixed-Income and Other sectors contracted. Muni CEFs flipped to a premium after having sunk to a discount earlier in the year.

    The following chart is a comparison the the Eqcome CEFBig10 Index which includes representatives ten of the major CEF fund types versus the share price of the PowerShares CEF Income Composite ETF (PCEF) which is an ETF that invests in tax-exempt fixed income CEFs through an index called the "S-Network Composite Closed End Fund Index".

    Additional charts are available at the "CEF Index" tab under the "Research" menu under the green banner. 

    Joe Eqcome

    Disclosure: I am long PCEF.

    Additional disclosure: I am also long the GrowthIncome CEFBig10 Portfolio and the CEFMuni10 portfolio
    Dec 03 12:31 PM | Link | Comment!
  • Adams Express' New Distribution Policy Well Intentioned but Poorly Executed

    As Winston Churchill remarked, "The Americans will always do the right thing... after they've exhausted all the alternatives.

    Apparently, The Adams Express Company's (NYSE:ADX)  Board hasn’t exhausted all its possibilities.

    Its current commitment to target a distribution of 6% of the trailing month-end stock price as of October 31 through the use of a special year-end distribution is a silly piece of logistics.

    Apparently, ADX will continue to make quarterly distributions at its current rate of $0.05 per share and for its annual year-end distribution it will distribute the balance to fulfill its 6% commitment. 

    So, if I’m interpreting this correctly—and I hope I’m not, this is no different than its current distribution schedule with the exception of targeting a 6% total distribution to the average trailing 12 month end stock price--which is only slightly higher than the 5.2% total distribution the past two years from net investment income and capital gains.

    Now, all the Board has accomplished is “gaming” the stock price for the year-end special distribution. 

    Why wouldn’t the Board consider a managed/level distribution program that would incorporate the CEFs long-term capital gains history into the quarterly distributions? They certainly have enough history to come-up with this calculation. This would have a tendency to maintain a higher stock price year long as quarterly distributions would be level. 

    If the Board’s goal is to narrow the discount, they probably accomplished this objective around the special year-end distribution period. Then after the ex-dividend date the stock will go back to its one of the CEFs market segments highest discounts.

    The Board needs to establish a level quarterly distribution policy if it wants to accomplish its goal of permanently narrowing the discount.

    This new policy is well-intended but poorly executed.

    Joe Eqcome 
    Tags: ADX
    Sep 10 12:45 PM | Link | 3 Comments
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