Robert_A

GM: Are We in Looneyland?

is a worthless GM worth something as a tax loss?

Deflation Is Worse Than the CPI Indicates

Does deflation often accompany recessions? If so, how does the magnitude of current trends compare with previous recessions -- and with the Depression of the 1930s? What can the average person do to help survive deflationary periods --
besides the obvious -- defer spending, reduce debt? I have a fair amount in muni bond (funds), is that a good strategy?

I believe that historically over about two hundred years, inflation in the US has averaged only 2-3 percent, so the idea that 6 percent is "normal" is only because of our recent (post-wwII) experience. As I get closer to retirement, my biggest fear is that all the money being printed will ultimately cause huge inflation. A little controlled deflation should encourage people to save more and reduce debt. If it did not ruin the economy, that would be a good thing

CEF Muni Price Relationship with Muni Spread Highlights Current Wide Divergence

All sorts, some funds only hold insured or high-rated issues, some hold riskier higher yielding or unrated issues -- your choice. etfconnect.com lists the top holdings of many CEFs along with premium/discount history, and lots of other useful info. Also check the Morningstar ratings for risk-adjusted return. One thing I find intriguing is that typically a fund will have a high percentage (as much as 35-40 %) of its holdings in just a dozen issues. Looking at their long term history, now seems like a very good time to buy, but of course many states/municipalities are or will be affected by the current crisis. You can trade these funds on their fluctuations or as buy and hold for the bond income. BTW, a few funds (CEV, NCL for example) have rebounded as much as 50% since their lows October 10 (an extremely unusual day for all equities). I'm sorry I didn't double up then, although I did increase my beaten up holdings. Looking forward, the discounts have narrowed significantly but I think there are still some good values in this sector for the longer term.


On Nov 08 05:15 PM bsharvy wrote:

> What kind of munis do the CEFs hold? General oblifgation, insured,
> etc.?

Largest Bond ETF Now Trading At a Massive Discount

ahh, I knew there was a catch, there's always a catch. Now I know why closed end fund discounts get so extreme -- the fund managers aren't working for the shareholders, only for themselves.

Largest Bond ETF Now Trading At a Massive Discount

It seems this situation is a danger for ETFs (of all sorts) when they are very large. It could take very deep pockets for management to deal with extreme unbalances on either the buy or sell side. It sort of assumes a well-behaved market of the underlying assets.

Largest Bond ETF Now Trading At a Massive Discount

Yes, I understand you have to pay short interest, closed end fund management fees, the shorted funds dividends. But when/if the discount difference narrows, you could begin to close out your position. Meanwhile perhaps the "profit" you make up front will be put to good use. And if the discount difference increases? Well we all make mistakes. How high can the discount go? At some point the closed end fund manager should figure out a way to buy up shares.

Largest Bond ETF Now Trading At a Massive Discount

Even though its at a "massive" discount, why couldn't you short this fund and buy an equivalent amount (based on NAV) of discounted closed-end funds (assuming you could approximate the same bond holdings). There are many closed-end bond funds selling at a similarly "massive" historic discount of 40-50% of NAV. So you would be market neutral, but get the difference in the discounts up front. This seems like an instant 35%-40% profit -- Am I missing something?