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  • Better Than High-Yield Bonds: Corporate Loan Closed-End Funds [View article]
    We've owned JFR, BHL and PPR in the past, though not in any of them at present. It's an attractive sector at times - six months ago when there was some possibility of a Fed tightening before year-end we also liked the short duration of these funds since their coupons would reset. Regrettably no such tightening is on the horizon. CEFs also face this risk asymmetry whereby falling equity markets draw selling, which makes fixed income funds a little harder to use in portfolio construction since they don't react the way their underlying assets do. Bank debt is more credit sensitive though so equity sensitivity is more acceptable. We'll be back in that sector at some point in the future. We've chatted with the PMs of all three funds mentioned above, think they're all competently run.
    Oct 6, 2010. 10:52 AM | 2 Likes Like |Link to Comment
  • An Investment Strategy for Stocks, Bonds and the U.S. Dollar [View article]
    Plan B Economics, I simply think that equities such as those I listed represent a more attractive investment than bonds. I wouldn't go as far as to forecast a secular bull market - obviously it wouldn't hurt, but it's not part of the thesis.
    Oct 4, 2010. 04:26 PM | Likes Like |Link to Comment
  • Some Outstanding Picks for Value Investors [View article]
    Very thoughtful article.
    Oct 4, 2010. 11:42 AM | 1 Like Like |Link to Comment
  • 3 Reasons to Like Natural Gas Companies [View article]
    Yes Alan, you induced us to take a look at it. Good suggestion.
    Sep 22, 2010. 04:26 PM | Likes Like |Link to Comment
  • The Problem With Investing in Hedge Funds [View article]
    The same piece that referred to Rick Sopher in the FT pointed out that investors in aggregate haven't done very well. On a $ weighted basis there's research to show that hedge fund investors as a group have earned approximately the risk free rate. The managers Rick highlighted are amongst those that have done a good job. Far more have failed to.
    Sep 17, 2010. 11:31 AM | Likes Like |Link to Comment
  • The Quiet Bear Market in Municipal Bonds [View article]
    I think that's true to a degree, clearly higher tax rates would favor munis. However, the current premium to NAV of many closed end funds makes little sense.
    Sep 16, 2010. 08:51 AM | Likes Like |Link to Comment
  • The Case for Equities [View article]
    arthur_bishop1972, I think you're perhaps confusing nominal with real GDP. 1.5% inflation and 1.5% real GDP growth (i.e. 3% nominal GDP) would be regarded by most as pretty anemic.
    Sep 14, 2010. 08:42 AM | Likes Like |Link to Comment
  • Increase in Muni Bond CEF Dividends [View article]
    Yes, you're certainly right that money's flowing in. We're probably early getting out, just became steadily less comfortable with the valuations.
    Sep 13, 2010. 01:18 PM | 2 Likes Like |Link to Comment
  • Why Some Hedge Funds Appear to Be Fudging Valuations [View article]
    Rick Sopher's research highlights the difference between inception to date returns versus IRR, and the fact that the average $ invested in hedge funds has done significantly worse than conventionally reported industry returns would suggest.
    Sep 13, 2010. 10:44 AM | 1 Like Like |Link to Comment
  • Increase in Muni Bond CEF Dividends [View article]
    George, we've wondered if part of the strength is driven by 2011 tax planning? Presumably higher marginal rates should help all tax-advantaged investments. Having said that, we've owned a portfolio of muni CEFs for most of the year but with average discounts where they are as you point out we've been exiting and now only own a couple (NIO, NQM). I don't think they're good value - NAV premium, interest rates are drifting higher and the looming credit risk make the returns too low for the risk.
    Sep 13, 2010. 09:26 AM | 2 Likes Like |Link to Comment
  • Why Some Hedge Funds Appear to Be Fudging Valuations [View article]
    That's an interesting piece. I has always thought fixed income strategies were more susceptible to misvaluation since other than treasuries and highly liquid issues there's more room for judgment. Research has been done illustrating that convertible arbitrage funds have higher negative serial correlation than the underlying securities, indicating some P&L smoothing.

    The FT ran an interesting piece highlighting that most of the profits earned by hedge fund investors have been generated by a few managers, and points to the large difference between IRR-based calculations versus inception-to-date (which I also wrote about a couple of months back).

    FT article (subscription needed):

    My article on Seeking Alpha:
    Sep 13, 2010. 09:14 AM | 1 Like Like |Link to Comment
  • Why Greece Won't Turn Itself Around [View article]
    I always find Michael Lewis worth reading, so Felix thanks for pointing out this article.
    Sep 11, 2010. 09:04 AM | 1 Like Like |Link to Comment
  • For Natural Gas, Range Resources Offers Margin of Safety [View article]
    Thank you all for your comments. Alan Brochstein, I'll have to check my notes but I think we passed on CRK simply because we were looking for pure gas plays. I think RRC trades at a higher P/TBV because almost all of its reserves are unproven and so of course not yet carried on their BS.

    Jarco, the catalyst is of course not apparent. I imagine if it was prices the opportunity would look quite different, but we may also be in for a long wait before things turn. We've mitigated that through the names we've selected as much as possible, but could be early (or very early).

    Davidbc, APL is an MLP so quite a different business model, Great sector though, I have a separate personal portfolio of MLPs and have spent quite a but of time researching them. I seeded Alerian's offshore hedge fund several years ago. We don't manage MLP portfolios for clients though.

    Best regards to everybody and thanks again for your thoughtful comments.
    Sep 5, 2010. 08:06 PM | Likes Like |Link to Comment
  • Can Silver Break $20 in September? [View article]
    Matthew, how does the seasonal pattern for September compare with the other months? Is that the strongest seasonal?
    Sep 3, 2010. 07:25 AM | 2 Likes Like |Link to Comment
  • Homeowners’ Rebellion: Could 62 Million Homes Be Foreclosure-Proof? [View article]
    Ellen that is a very thoughtful article. But what do you think of the scenario where the break in the title trail becomes so pervasive that it starts to have a meaningful impact on the financial sector? Wouldn't you expect the Federal govt to step in and pass legislation or come up with some other mechanism to restore the link between homeowner and mortgage holder?
    Aug 20, 2010. 09:05 AM | 5 Likes Like |Link to Comment