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  • Tax Free Income From Municipal Bond Closed End Funds [View article]
    This is where an investor has to trust management to be competent and maneuver to avoid a destructive margin call. Such destructive margin calls were not prevalent in MUNI CEFs during the last rate rising environment and are, in my view, not likely in the current rate rising environment, which I suspect will be characterized by very slow increases when initiated.
    Sep 22, 2015. 10:03 AM | 1 Like Like |Link to Comment
  • Tax Free Income From Municipal Bond Closed End Funds [View article]
    Between June 2004 and June 2006 the US Federal Reserve raised the benchmark interest rate by 425 basis points to 5.25 percent. During that period the average Muni CEF category fund sustained an increase in NAV of 6+% and an increase in market price of an average of 8%. Looking at two of my specific Muni CEF holdings during that period shows no distribution reduction for VGM and a very small reduction for EIM. Accordingly, market history, as opposed to speculation, suggests these funds hold up well even in a fairly strongly increasing rate environment.
    In the 2008 market sell off these funds were hit hard as were all equity classes with a Muni CEF category price reduction of 22% and a NAV value reduction of 20%. However, this fund class showed its resiliency with a price recovery of 44% and a NAV value increase of 32% in the following year, 2009.
    As a tax advantaged income vehicle this combined data would seem to recommend the Muni CEF category as reasonably durable in the long term.
    Sep 18, 2015. 09:19 PM | Likes Like |Link to Comment
  • CEF Strategies: Municipal Bond CEFs Back On Sale [View article]
    A common error is to consider Muni CEFs as the same as all "Bond Funds". Muni CEFs for the most part differ from other bond funds in that they do not engage in bond trading but rather their income flow (and your dividend) depends on the levered yield of their bond holdings. Consequently, with a rise in interest rates the NAV, reflecting value of bonds held if traded, may decrease but the income stream (your dividend) remains secure as the bonds are not traded but held until call or expiration. The rise in interest rates may increase cost of leverage but this is offset by the higher bond yields secured in this environment with the acquisition of replacement bonds. As many investors do not understand this difference and aggregate all bond funds as the same, a sell off of Muni CEFs with an interest rate rise is likely a good buying opportunity. The "discount" both protects the investor in the event of a fund liquidation and increases the market yield received.
    Sep 15, 2015. 11:35 AM | 1 Like Like |Link to Comment
  • Goldman rate-hike plays: Favor balance sheet quality, avoid floating rate debt [View news story]
    I guess AAPL is the epitome of "approach avoidance" by these criteria...
    Sep 14, 2015. 11:23 AM | 9 Likes Like |Link to Comment
  • Equity CEFs: Your Best Market Moves In Closed-End Funds [View article]
    ETB does however have the highest ROC (87% thus far this year) with roughly the same NAV erosion (only noted in August, coincident with the weak general market) as ETY (55%ROC) and EOS (9% ROC); making ETB the most tax efficient.
    Sep 8, 2015. 05:12 PM | 1 Like Like |Link to Comment
  • Report: Energy Transfer to bid for Magnum Hunter's stake in Eureka pipeline [View news story]
    Why? - I thought we were not going to use fossil fuels any longer...
    Aug 24, 2015. 01:00 PM | 4 Likes Like |Link to Comment
  • Rebuilding The Wall Of Worry [View article]
    Timely and accurate. Reason over emotion will succeed.
    Aug 21, 2015. 09:37 AM | 1 Like Like |Link to Comment
  • Tax Free Income From Municipal Bond Closed End Funds [View article]
    Interest rate risk in these funds should pertain primarily to the cost of the fund's leverage. Unlike ETFs which must sell to cover redemptions which often occur in an enhanced interest rate environment, or bond funds that actively trade their holdings, Closed End Funds do not have to sell their holdings when they may be at a depressed price due to an increased interest rate environment and they usually hold their bonds until called or maturation making their bond holdings income flow (and thus their distributions to CEF holders) stable.
    Additionally, when their holdings are called or mature in a higher interest rate environment the "new" bonds then acquired would likely be providing a higher yield.
    Aug 20, 2015. 02:08 PM | 4 Likes Like |Link to Comment
  • 3 Shipping Stocks With High Yields And A Positive Outlook [View article]
    From the conference call:

    Shawn Collins - Bank of America/Merrill Lynch
    Okay, great. That’s helpful Jerry. Just my last question and I know you and I have touched upon this offline before, but I just wanted to touch upon the Greek volatility and the social and political situation there. I just wanted to ask, is this having any operational impact on your business and if you can just comment on that please?

    Jerry Kalogiratos - Chief Executive Officer, Chief Financial Officer
    Sure. As you know capital products is an international Maritime MLP and its registered under the laws of Marshall Islands and as such is not subject to Greek corporate tax. It controls vessels that sail under the Liberian or the Marshall Islands flag and they operate worldwide.

    Little exposure to Greek taxation.
    Aug 20, 2015. 09:51 AM | 1 Like Like |Link to Comment
  • 3 Shipping Stocks With High Yields And A Positive Outlook [View article]
    GLOP had a nice quarter and management reports good visibility to distribution growth.
    Aug 18, 2015. 07:39 PM | 1 Like Like |Link to Comment
  • 2015 Exposes Shaky MLP Fundamentals [View article]
    Scoots: Well thought out comment. Thanks.
    Aug 15, 2015. 08:44 AM | 4 Likes Like |Link to Comment
  • After Hours Gainers / Losers [View news story]
    EPD at 6:01PM + .01%.
    Aug 14, 2015. 06:26 PM | 7 Likes Like |Link to Comment
  • 2015 Exposes Shaky MLP Fundamentals [View article]
    This industry, like all others, requires selective and specific investment based on a per company evaluation. This is one reason I avoid MLP ETFs and choose specific companies (EPD, ETP, MMP, SEP, KMI).
    Aug 14, 2015. 04:27 PM | 5 Likes Like |Link to Comment
  • 4 Reasons Why Oil Will Not Trade Much Below $40 [View article]
    All depends on your time line - "lower for longer" is the current mantra: but what is longer? If you accept that the world's population is expanding and that energy needs are congruently increasing and that profit motive is still extant then oil price will eventually rise. Next month, next year, in five years? Who knows the timing; but if you are not a short term trader and are in truth a long term investor then the energy space currently is a fertile ground.
    Aug 10, 2015. 10:01 AM | 1 Like Like |Link to Comment
  • Retired Investors Don't Buy Bonds Until? [View article]
    One may also recall that not all bonds (and bond funds) are the same. Municipal bonds of high quality (or funds such as CEF Munis that don't trade bonds but hold until call or expiration) have tax implications that may well make them and their real "spendable yield" attractive to certain high bracket retirees.
    Jul 29, 2015. 12:02 PM | 1 Like Like |Link to Comment