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The CEF Guy  

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  • 7 CEFs Worth Buying [View article]
    Bob,
    Alpha, beta, sharpe matter for many investments as I'm sure "a few other things." Your aposiopesis betrays your ignorance.
    My question to you is: Did you actually read my article?
    I outlined a strategy for gauging appropriate CEF investments based upon metrics somewhat unique to CEFs: unii, +/-, roc, etc.
    CEFs and CEF strategy is complex, not for the faint of heart, and best used tactically in small positions. Standard buy/hold strategies do NOT apply with most CEFs as their primary objective is income, often at the long term expense to capital.
    Look at UNII, look at +/-, major investors entering/exiting the space, track funds and understand each history, know the patters, and invest accordingly.
    If you would like to apply your standard beta/sharpe, feel free (enter aposiopesis here)...
    Jun 9, 2014. 09:59 AM | Likes Like |Link to Comment
  • High Yield Closed-End Funds Trading At Discounts To NAV [View article]
    DHG is looking great right now. UNII levels and discounts are particularly attractive.
    Dec 21, 2012. 03:08 PM | Likes Like |Link to Comment
  • Despite Major Closed-End Funds Sell-Off, Values Are Out There [View article]
    Jeremy, Very common curiosity/question among CEF buyers, especially in the buy-write space. For a while, these funds were attractive because of the range-bound moderate uptrend that the market was giving us, and most would have hoped that whatever we were lacking in vix-related premium we could recoup through gradual appreciation. If you look at the case of ETV for instance, the NAV did especially well in the first half of the year with its tech exposure, supporting the idea that the fund should be bought. But what happened? ETV's NAV continually outpaced the market price, generating a continually deeper discount. The results are less than enticing. There are many cases just like ETV, so here are a few tips.

    1.) Buy funds that exhibited the historical NAV performance like ETV. But don't rely solely on what "should" work, you need to diversify within the space, focused on positive NAV, EPS, UNII, and only buy deeper than average discounts. There are many unsophisticated CEF investors out there, and these investors can wreck a positive CEF trend quite easily. And at the end of the day, market price matters more than NAV.

    2.) Buy a CEF that you believe will have substantial NAV growth in the next 6-9 months and is currently trading at a deep discount. An adequate example would be EXD. In early spring the fund's market price started falling to a near 10% discount, while the NAV held. Of course there was uncertainty in the muni-space at the time, but anyone in the muni market knew the concerns were less than material and the space was due for a turn-around. In March you see the market price and NAV then moving in lock step as some CEF savvy investors took notice. What happened from that point on was an upward trending NAV with the market price trending up at a quicker pace. The value had been spotted, the NAV confirmed, the market price followed. The NAV had run it's course, and now you see the lack of interest in the market price. The cycle is complete and the smart money got out in June. The is approach is a fairly short term approach, some cycles may be longer, the trick is finding the discounts on strategies that you believe can deliver true NAV results.

    3.) Simple but true: Billions of dollars have churned from the latest IPO to the next in the CEF space this year so less attention has been placed on supporting secondary CEFs, especially the equity CEFs. It's a minor detraction, but it is what it is.

    4.) Apply 1 and 2 to more than just one or two sectors. Pick a variety of equity and bond strategies based upon a set criteria and stick with the strategy. Combined, the funds will serve as an alpha-generation sleeve to compliment your overall portfolio. Some will zig while others zag, but you should be right more than half the time. There are too many factors that can disrupt any one fund, but if the same strategy is applied across many, the results should be attractive.

    5.) Last but not least, don't get married to one fund, and don't avoid a fund because of what it did years ago. Look at it today and how it is managed in the present. Some funds "should" do better, but for a multitude of reasons they underperformed. Always understand the funds you are buying, the history, management, and keep your buy list ready for action.

    I hope that helps. If I can help w/something more specific let me know.
    Aug 13, 2011. 04:25 PM | Likes Like |Link to Comment
  • Despite Major Closed-End Funds Sell-Off, Values Are Out There [View article]
    1.) Do you know what HMH's IPO price was? Also, thin volume.
    2.) IGD and AOD are completely different funds with entirely different strategies. Apples and oranges.
    3.) PHK is a great fund with a stellar manager. Nothing wrong with that fund, but I can find a 12% dividend at a discount and not at a 50% premium.
    Aug 12, 2011. 08:29 AM | Likes Like |Link to Comment
  • Despite Major Closed-End Funds Sell-Off, Values Are Out There [View article]
    Rhianni32, I always appreciate questions/comments, but your comment adds no value. If you understood the history behind the fund, the trading patterns, and the overall CEF market I doubt you would have even made a comment. AOD is not the same fund that it once was. If you have something of value to contribute today, please do.
    Aug 11, 2011. 09:51 AM | Likes Like |Link to Comment
  • 7 CEFs Worth Buying [View article]
    Great call GMaster. MFD has a great manager too. Infrastructure is a volitile long term story, but you should be fine holding MFD as a long term position.
    Aug 10, 2011. 09:28 AM | Likes Like |Link to Comment
  • Despite Major Closed-End Funds Sell-Off, Values Are Out There [View article]
    Jeremy,
    Interesting observation. Many muni CEFs have held up reasonably well in the state-specific peer-group, where we primarily saw the weakness was in the national muni or high yield muni space. Holders of the national and high yield funds make up a broader base of investors more inclined towards panic selling, unlike many state muni holders. You can see the broader picture by looking at the volume and the many varied investment products that hold the national and high yield funds.

    The recent turn-around is encouraging AND expected. The market is cyclical, and CEFs are no different.
    Aug 10, 2011. 09:18 AM | Likes Like |Link to Comment
  • Despite Major Closed-End Funds Sell-Off, Values Are Out There [View article]
    Good question, sligoo, but a tad assumptive. As a retiree, I am sure that the income is useful for you, and with prudent management over the years your CEF investments should grow in value. I manage my money to target risk/return numbers, using CEFs to add alpha when possible but also to generate cash flow for further investment. I trade fairly actively so I do not list my holdings. The funds that I do speak about are all funds that I have historically owned, just not presently or in the immediate past/future, and are very similar to the funds I presently hold. I see no unusual risk inherent in CEFs, and with prudent management CEFs can work in any investment portfolio.
    Aug 10, 2011. 08:57 AM | Likes Like |Link to Comment
  • Despite Major Closed-End Funds Sell-Off, Values Are Out There [View article]
    The CEF tide is starting to turn. It is likely that many of these discounts will narrow over the next few weeks as the global market VIX calms.
    Aug 9, 2011. 09:06 AM | Likes Like |Link to Comment
  • Global Convertibles: A Good Time to Buy [View article]
    Very true. I would look to buy in later this week. NAV is outpacing MP, and with the VIX at these levels, option premium will be rich.
    Aug 8, 2011. 01:30 PM | Likes Like |Link to Comment
  • CEFs: When Return of Capital Doesn't Matter [View article]
    I would look at ETV if we are looking at a tightly rangebound market, or maybe ETB if we are looking at a significant domestic upturn.
    Aug 6, 2011. 03:23 PM | Likes Like |Link to Comment
  • 5 Global CEFs Paying Monthly Dividends [View article]
    Tough day for Alpine yesterday, thoughts on the slide?
    Aug 5, 2011. 08:22 AM | Likes Like |Link to Comment
  • 7 CEFs Worth Buying [View article]
    Joe, or Frank...

    Just for clarification, do you want me to "provide the list" ticker by ticker, or show you "where the other CEFs" are at?

    I hope you can understand my use of hyperbole, it would be so good for us all to know that you can.

    But yes, you are right, there are by my count 636 listed by one resource, 655 from another source, and before some shuttered and/or were absorbed/open-ended there were closer to 700, etc etc...

    So would you like to bring some value to the table with a real comment, or are you just up to your old tricks being a curmudgeon and nit-picking articles?
    Aug 5, 2011. 08:17 AM | Likes Like |Link to Comment
  • 7 CEFs Worth Buying [View article]
    UPDATE:

    In lieu of the present market uncertainty, do not be surprised if your CEFs lose significant value in the short term, but be ready for buying opportunities when they present themselves. A wise man once said "The markets are cyclical," and they are. Buy low, and buy lower.
    Aug 4, 2011. 01:54 PM | Likes Like |Link to Comment
  • 7 CEFs Worth Buying [View article]
    Doug- I agree to some extent, but not completely. ETJ has suffered significant cap erosion due to it's largely out of favor option strategy, but for the near term it's a great tactical position. With the present market downturn, it has outperformed ETV and EXG and ETV on market price and in a few weeks I would not be surprised if it's NAV performance outperforms as well. All in all though, this market gives a great opportunity for CEF investors to buy in again at lower prices.
    Aug 4, 2011. 01:50 PM | Likes Like |Link to Comment
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