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  • Equity CEFs: QQQX And JLA Merger Opportunity [View instapost]
    This is a relatively straight forward calculation. Nuveen has stated the merger will be based on the relative NAV values of JLA and QQQX while the financial impact to the JLA holder will be dependent upon the relative Market Values of JLA and QQQX.
    For simplicity sake, assume JLA and QQQX each had the same NAV value $10 - then at the merger, for each share of JLA you would receive one share of QQQX. But if at the merger the Market Value of JLA was say $9 (a discount to NAV value) while the Market Value of QQQX was $11 (a premium to NAV Value) the holder of a share of JLA would exchange his JLA share (worth $9) for a share of QQQX (worth $11). Merger based on NAV Value, financial impact based on Market Value - allowing the nimble investor to potentially exploit the difference. In an efficient market, one would expect as the merger approaches, the JLA share to sell up from $9 to at least it's NAV of $10 and the QQQX share perhaps to sell down to its NAV of $10 thereby eliminating the arbitrage opportunity. The market however is not always efficient and CEFs in particular are often poorly understood - giving rise to the current opportunity pointed out by Mr. Albo. Currently JLA is selling at a 5.05% discount to NAV while QQQX is selling at a 1.21% premium to NAV - the only way this doesn't work out well for the JLA purchaser is if QQQX sells down from it's current premium to a 5.05% or greater discount (which I view as unlikely).
    Jun 8, 2014. 10:44 AM | 3 Likes Like |Link to Comment
  • Equity CEFs: QQQX And JLA Merger Opportunity [View instapost]
    I see it the same way and have been a steady buyer of JLA.
    Jun 6, 2014. 10:19 AM | Likes Like |Link to Comment
  • Cramer's Lightning Round - Linn Energy Has Lost Its Way (5/29/14) [View article]
    Cramer's calls can possibly be used as a good contrarian indicator as they are made generally on the basis of widely perceived sentiment and with a superficial knowledge at best. I strongly suspect in this instance he was/is not even aware of the recent Permian swap raising LINE's DCF 30 to 40 million dollars per annum making his "earnings" growth comment egregiously in error. A "fast gunner" who shoots from the hip and while making a lot of noise, most often misses.
    May 30, 2014. 10:57 AM | 3 Likes Like |Link to Comment
  • Time To Sell Enterprise Products [View article]
    Best to you Bob.
    May 25, 2014. 05:54 PM | Likes Like |Link to Comment
  • Time To Sell Enterprise Products [View article]
    My MLPs are purchased in general as life long holdings for tax advantaged income - only to be sold if the business model appears broken to the point of threatening distributions. This point of view is encouraged by a large tax liability incurred upon sale versus no tax liability upon being passed on in an estate.
    For new money I would not purchase EPD currently as I believe EPD's valuation is currently too high - would rather consider MWE or Crestwood family as attractive new money choices. Having said that, I believe EPD is here to stay and I regard their distribution as quite safe and will continue to hold.
    May 25, 2014. 01:10 PM | 9 Likes Like |Link to Comment
  • Linn Energy: The Best Value In The Upstream MLP Sector? [View article]
    Why own just one?
    May 21, 2014. 04:52 PM | 5 Likes Like |Link to Comment
  • Goldman answers pushback on Kinder Morgan upgrade, reiterates bullish view [View news story]
    GS hurt the shorts...
    May 19, 2014. 05:09 PM | 7 Likes Like |Link to Comment
  • 9.6%-Yielding Memorial Production Partners Enters Enhanced Oil Recovery [View article]
    Yes, but as they made a firm point of in the conference call they don't guide for DCF on a quarterly basis as there are quarterly variables (cap ex, maintenance, weather, etc) that can impact DCF unduly in this short term. Management felt very comfortable in guiding DCF on an annual basis in the 1.1 - 1.2 range and stated they were being conservative.
    May 8, 2014. 01:15 PM | 2 Likes Like |Link to Comment
  • Nuveen To Consolidate Its Equity Option Income Funds: What Does It Mean? [View article]
    QQQX provides a tax advantaged yield - last dividend (which was raised) was 81% ROC.
    May 4, 2014. 09:57 AM | 1 Like Like |Link to Comment
  • Equity CEFs: Funds Benefiting From The Weakness In Technology And Small Cap Sectors [View article]
    Yup. As CEFs seem to generally be so poorly understood it will be interesting to see how the market reacts to these funds. One would expect the premium of QQQX to sell down and the discount of JLA decrease - but we shall see.
    May 1, 2014. 11:31 PM | 1 Like Like |Link to Comment
  • Equity CEFs: Funds Benefiting From The Weakness In Technology And Small Cap Sectors [View article]
    My bad - market value of JLA today 12.95 therefore the JLA holder will receive .77 * market value of QQQX (18.81) = 14.48 which calculates to a bonus of 1.53 or 11.8%. Of course these market values can and likely will change - but current holders of JLA should be OK.
    May 1, 2014. 07:37 PM | Likes Like |Link to Comment
  • Equity CEFs: Funds Benefiting From The Weakness In Technology And Small Cap Sectors [View article]
    A quick take: QQQX will be the surviving fund and will absorb JLA at a rate of share exchange based on NAV value (not market value) - if this occurred today then a holder of JLA would presumably receive .77 shares of the surviving fund (QQQX) for each share of JLA (14.02 NAV JLA/18.19 NAV QQQX). As QQQX is trading at a market premium today to its NAV 18.81 while JLA is trading at a market discount to NAV 12.95 the net result is a positive for the JLA holder today with now .77 shares of QQQX at a market value of 18.81 = 14.48 versus his today market value of a share of JLA of 14.02 (about 3.2%). The new fund QQQX however will likely not be as defensive, as JLA's mandate was 100% option coverage while QQQX will be "dynamic" 35-75% option coverage (target 55%).
    May 1, 2014. 05:57 PM | Likes Like |Link to Comment
  • Equity CEFs: Funds Benefiting From The Weakness In Technology And Small Cap Sectors [View article]
    Nuveen's proposed changes appear to be substantial ( and I suspect will be sufficient to merit an article by our guru Mr. Albo.
    May 1, 2014. 05:21 PM | Likes Like |Link to Comment
  • Kinder Morgan Energy Partners: Why Not Consider This Outstanding Wealth Building Machine? [View article]
    Has been and is an excellent holding. All holdings have risks, but a comfort level with that risk can be achieved when there is such a good track record. Part of the higher than industry standard yield can be attributed to the "hatchet job" applied to KMP by an aspiring young hedge fund employee and his friends at Barrons which targeted the weaker hands of the dependent retail investor thus driving the price down (and yield up) - the "reverse Robin Hood": take from the weak and give to the crafty strong. Who is next?
    Apr 18, 2014. 10:55 AM | 2 Likes Like |Link to Comment
  • Kinder Morgan profits drop, but points to growing natural gas demand [View news story]
    SA still doen't get it - EPS is not the important metric for an MLP - look at distributable cash flow (which was good).;
    Apr 16, 2014. 07:45 PM | 13 Likes Like |Link to Comment