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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.
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Capital Income Management, LLC
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  • Gabelli Funds Vulnerable Here 6 comments
    May 16, 2013 4:19 PM | about stocks: GAB, GGT

    A couple of the Gabelli leveraged funds I believe are vulnerable to any kind of a sell-off in the equity markets now. The Gabelli fund (NYSE:GAB) and the Gabelli Global Media Trust (NYSE:GGT) are pure stock based funds which use quite a bit of leverage meaning they have no fixed income to cushion any equity market sell-off. Both funds have done incredibly well due to that leverage with GAB's NAV up 22.1% YTD and GGT's NAV up 22.3% and their total return market prices have done even better which has brought both to the high end of their premium/discount range.

    Now I'm not saying the markets are going to sell-off here but after the run we've had, I wouldn't be surprised to see some kind of a backtrack. Both funds are up 1% heading into a soft market close and with both funds at 4-year highs and premium valuations, I would be careful.

    They're still a month off from going ex-dividend in mid June and a lot can happen before then.

    Disclosure: I am short GAB.

    Stocks: GAB, GGT
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Comments (6)
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  • gman1253
    , contributor
    Comments (342) | Send Message
     
    Doug - I just wanted to thank for your articles on CEFs. You are one of the few sources of info on CEFs and some of your articles have helped me make a few extra bucks.

     

    I am bit worried about the market with this run and keeping some cash handy in case of a downturn so I can go defenesive (bear etfs) without having to sell a huge chunk of my dividend producing positions.

     

    Thanks again -
    16 May 2013, 04:37 PM Reply Like
  • Douglas Albo
    , contributor
    Comments (919) | Send Message
     
    Author’s reply » Thank you for your comment. Good to know there are people out there who appreciate what I do.
    16 May 2013, 05:55 PM Reply Like
  • tom007
    , contributor
    Comments (117) | Send Message
     
    "Good to know there are people out there who appreciate what I do."

     

    Know it Douglas.

     

    Sue and I are trying to put about 366,000 $ in mid yielding places for the duration till the next scheduled market debacle comes along and get a better return than our USAA MM funds gives and have been considering your EOI and EVT etc. suggestions.

     

    So be sure more than a few folks are very glad to have to have your intelligent insights into the market, esp. with the ROC questions.

     

    Do have some questions concerning the expenses that I would like to address at a better point in time - watching the tornados right now.

     

    Thanks Douglas

     

    20 May 2013, 10:59 PM Reply Like
  • riggle99
    , contributor
    Comments (301) | Send Message
     
    Thanks for another good article on CEFs. I have been considering selling my GAB as it does appear to be near a top to me.

     

    What's your opinion of GGN--seems like it should go up if gold recovers (perhaps a big IF).
    16 May 2013, 10:11 PM Reply Like
  • Douglas Albo
    , contributor
    Comments (919) | Send Message
     
    Author’s reply » GGN's NAV is down -13.9% YTD, worst of all equity CEFs I follow, though that is better than the ETF fund GLD which is down -17.3%.

     

    Nonetheless, it is all but inevitable that Gabelli will have to cut GGN's distribution again with a 13.3% NAV yield. The question is when and what affect it may have on the fund. GGN is very volatile and certainly, it will bounce with gold prices, but it will also be a prime candidate for tax-loss selling at the end of this year. Keep an eye on its discount/premium for opportunities, which there will undoubtedly be.
    17 May 2013, 09:10 AM Reply Like
  • JamesAStob
    , contributor
    Comments (2) | Send Message
     
    The most intelligent and helpful author on Seeking Alpha.

     

    Thanks for what you do.
    17 May 2013, 06:43 PM Reply Like
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