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Douglas Albo
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Registered Investment Advisor. Prior experience includes 12-years as a Vice-President, Financial Advisor at Smith Barney and Morgan Stanley.
My company:
Capital Income Management, LLC
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  • Back Up The Truck On EOI 14 comments
    Apr 29, 2013 11:11 AM | about stocks: EOI

    Who in their right mind sells EOI now? EOI's NAV has been crushing it over the past year, barely trailing the S&P 500, which for a non-leveraged option-income fund, is very good. And with an NAV at over $13 ($13.11 actually) and a market price well below $12 ($11.72 at last trade), this is a steal!!

    I mean, EOI trades at a wider discount now (-10.5%) than EXG. That's unheard of! Then when I look at all of the ING option-income funds that trade at slight discounts to premiums even though most have barely positive NAV total return performances YTD, I can't believe that anyone would be selling a fund like EOI at a -10.5% discount. You also get a monthly pay fund vs. mostly quarterly pay funds with ING anyway!

    EOI should be at least at $12 and more like $12.50.

    Disclosure: I am long EOI.

    Stocks: EOI
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Comments (14)
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  • Jerbear
    , contributor
    Comments (1277) | Send Message
    Thanks again Doug
    We all appreciate your guidance.
    29 Apr 2013, 11:55 AM Reply Like
  • Tollsforthee
    , contributor
    Comments (443) | Send Message
    Much appreciated! I'm definitely going to go check this one out.
    29 Apr 2013, 12:14 PM Reply Like
  • Alan Young
    , contributor
    Comments (2421) | Send Message
    EOI is trading at the narrowest discount it's had in over a year. Why are you raving about it NOW instead of months ago when it was even cheaper?
    29 Apr 2013, 01:21 PM Reply Like
  • Left Banker
    , contributor
    Comments (3904) | Send Message
    Had a look and, I too wondered about the near-52 week-low discount. (Although, I will say it's rather churlish to take someone to task for not giving away advice earlier.) Do you anticipate further closing of the discount?


    I was reviewing some of my holdings over the weekend and see that several of your EV recommendations have seen big reductions in discount since you recommended them, all the while paying a nice monthly distribution. I'm wondering if it's time to take the profit on them. EOI might be a place to put those profits.
    29 Apr 2013, 03:55 PM Reply Like
  • Eddie Herring
    , contributor
    Comments (2125) | Send Message
    "Why are you raving about it NOW instead of months ago when it was even cheaper?"


    He did rave about it months ago. I bought it last year substantially lower than now because he WAS raving about it.
    30 Apr 2013, 10:09 AM Reply Like
  • Douglas Albo
    , contributor
    Comments (958) | Send Message
    Author’s reply » A lot of it has to do with relative valuations to other CEFs. EOI's valuation at a -10.5% discount with superior short term NAV performance makes it much more attractive than most any other equity CEF. And as another reader mentioned, I've been recommending EOI for some time now.
    30 Apr 2013, 11:22 AM Reply Like
  • 7of9
    , contributor
    Comments (515) | Send Message
    Go ahead fill up the truck with EOI. I going to wait until the discount reaches greater than the 52 week average of -12.61%.
    29 Apr 2013, 05:36 PM Reply Like
  • bigcraig79
    , contributor
    Comment (1) | Send Message
    Is there a good site or way for tracking the NAV's for CEF's?
    5 May 2013, 08:23 AM Reply Like
  • Douglas Albo
    , contributor
    Comments (958) | Send Message
    Author’s reply » Absolutely...

    5 May 2013, 11:06 AM Reply Like
  • caperdory
    , contributor
    Comments (492) | Send Message
    Doug...over on CEF Connect I was looking at a few of the CEF' particular EOI and ETY...I noticed in the performance area the "since inception" rate of return for both of these is in the 2-3% area...rather poor and alittle scarey...could you comment on this....thanks...
    6 May 2013, 07:40 AM Reply Like
  • Douglas Albo
    , contributor
    Comments (958) | Send Message
    Author’s reply » Don't use annual returns from inception on the fund's market price. No option-income fund will look good. First, they all started 5% higher than their NAVs and most are at discounts from their NAVs now. Second, they all lost a lot of NAV value during the financial crisis and maintained too high an NAV yield for too long afterward. This hurt both their NAV and market prices.


    All of these funds have since reduced distributions so that they are back to their inception NAV yields. This has helped their NAV and market prices to perform better but they will still lag the leveraged funds and broader market averages during a bull market. These fund's are really designed for flat to trendless up and down markets and until we get back to that market environment, you have to expect them to underperform a bit. Think of them as the bond portion of your portfolio with much higher yields.
    6 May 2013, 08:42 AM Reply Like
  • caperdory
    , contributor
    Comments (492) | Send Message
    Doug..thanks for your explantion...
    6 May 2013, 09:15 AM Reply Like
  • ianxponent
    , contributor
    Comments (749) | Send Message
    What are the implications, if any, of the fact that virtually all of the distributions for the last year have been ROC? Is such an investment suitable for an IRA?
    7 May 2013, 09:10 PM Reply Like
  • steinbergfs
    , contributor
    Comment (1) | Send Message
    Doug - I am relatively new to CEF investing. I have been reading some of your articles, but some of the details go over my head. Up until now I have invested in mutual funds, municipal bonds and some stocks. I am semi-retired, and more interested in those investments that would generate income and reasonable preservation of capitol. Appreciation would be a secondary concern. Are there some CEF's that might be better suited to this.
    30 May 2013, 05:25 PM Reply Like
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