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Closed-end_Trader

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  • This Fund Offers Berkshire Hathaway At A Discount, But With A Catch [View article]
    George, just another thought regarding your statement “If management can narrow the discount by 10%” The investment manager is buying back shares in other controlled funds, It is to his advantage to keep the discount as wide as possible as they accumulate shares as they can arbitrage the market price to the NAV. It is essentially taking company private at a huge discount. Then they are in full control of whatever time they want to realize NAV by a corporate action. It may be a long wait as they have an annuity of management fees to collect from other shareholders.
    Aug 25, 2012. 02:17 AM | Likes Like |Link to Comment
  • This Fund Offers Berkshire Hathaway At A Discount, But With A Catch [View article]
    What is the catalyst for the discount to narrow? Horejsi owns more than a third of the shares. There is no chance of another activist or institution gaining control. Buyback or self-tender is doubtful as it will reduce his management fee. Capital loss carry forwards so no likelihood of large capital gain distribution with return of capital at NAV. Currently there are many funds that KARPUS, Bulldog and Western have stakes in that stand a much better chance of discount narrowing in my opinion. I have no position in BIF.
    Aug 24, 2012. 01:43 AM | Likes Like |Link to Comment
  • Mid-Year Review Of The Muni Bond CEF Landscape [View article]
    Outstanding review. Full of useful information and concise.
    Jul 27, 2012. 09:53 PM | Likes Like |Link to Comment
  • Reaves Utility Income - Great Fund Now On Sale At $1 Off [View article]
    From 2005 to 2009 this fund traded at a double digit discount and over 20% during the crisis. Only recently to a premium. Buying shares at a 5% discount is no screaming bargain unless you’re short term oriented. Please clarify 36c to achieve $1.26. Don’t you have to adjust ~40c to account for the dilution to the NAV by selling shares at a discount.
    Jul 26, 2012. 10:36 PM | Likes Like |Link to Comment
  • Firsthand Technology Value Fund: Priced Like A Stolen Laptop [View article]
    Its not unusual for an equity BDC to trade at a 30% discount to NAV especially if there is no managed distribution whereas you get some capital back at NAV. Keep in mind you’re paying a 2% management fee for your cash that’s probably earning a few basis points in a money market. This fund has a mandate to invest in clean energy. Given the low price of natural gas, these are poor investments in my opinion. I may take another look at year end if there is further selling due to tax loss harvesting.
    Jul 20, 2012. 02:04 AM | Likes Like |Link to Comment
  • Bill Gross Is Bullish on Municipal Bonds [View article]
    PCK has traded up and closed at $8.39 a price higher than Bill Gross’ basis. Despite a continued sell off in the municipal closed end fund space. PCK trades at a 21.07% premium to NAV probably due to it high distribution rate of 9.2%. It has distributed 18.75 cents but earned only 18 cents in past 3 months. It has a negative UNII. History tells me that when a fund is not earning its dividend and has no reserve UNII, there is a significant risk of a distribution reduction. If this occurs, a fund trading at a premium usually gets hit hard on price.

    As an alternative consider IIC at a 9.63% discount to NAV. It recently, less than 2 months ago, traded at less than 3% discount. It earns 6.85 cents per month but distributes only 6.25 cents. It has accumulated a whopping 29 cents of UNII. A distribution raise would be appropriate in my opinion.

    Note: I have no position in PCK. I am long IIC.

    I’ve regard Bill Gross the best bond trader in the business. Obviously I missing something.
    Dec 15, 2010. 02:35 AM | 2 Likes Like |Link to Comment
  • FGF, FGI Latest Funds to Commence In-Kind Tenders [View article]
    I find your articles extremely insightful. Your obviously much more brilliant than your picture would suggest. Please clarify: Your article suggests that the in-kind tender favors the institution over the retail investor.

    “This is no problem for the major activists, since they can turn around and sell any securities they receive with relative ease. But smaller shareholders would receive a grab bag of odd lots, awkward to hold and expensive to sell, which makes it impractical for them to participate. Result: the activists are out and the small shareholders remain locked in indefinitely.”

    But then you state ownership of FGI: Bulldog 17.6%, Karpus 14.8%, Lazard 10.9% = 43.3%

    “no member of the group currently holds 5% or more of the outstanding shares of the issuer or is an affiliated person of the issuer." [Note: "Affiliated persons" of a fund -- which includes anyone holding >5% voting power -- can't take part in in-kind tender offers, under §17(a) of the Investment Company Act.]

    From this statement it seems the retail investor is at the advantage. He can tender and likely not get prorated. The institutions, unless thay dramatically reduce their positions in the next few weeks, How are the activists getting out? Please clarify for me.
    Oct 21, 2010. 10:24 PM | 1 Like Like |Link to Comment
  • Choosing an Emerging Market Bond ETF [View article]
    Good analysis. Another factor not included is the ability to trade EMB commission free at Fidelity. This may be an advantage to some readers as one can place many small limit orders to buy at the bid thus transaction costs are markedly reduced. This should offset the slightly higher expense ratio and bid ask spread. Disclosure: I've traded EMB in the past but currently have no position.


    As an alternative, consider LBF an emerging market bond closed-end fund. It has the highest discount to NAV of the 9 funds in this space. Its distribution rate of 6.6% is higher than the two ETF's. Its 12.4% discount to NAV is favorable compared to its 12 month average. In addition, Recent SEC filings in the last month shows Arthur Lipson of Western Investments increasing his stake in the fund to 7.6%. Note: Its board at DWS has been the subject of discussion previously on this blog on 6/8/2010. Disclosure: I currently hold a long position in LBF.
    Jul 18, 2010. 10:35 PM | Likes Like |Link to Comment
  • Why You Should Keep an Eye on the Special Opportunities Fund [View article]
    Very good analysis. Glad to see you posting again after a hiatus. This fund is like an IPO at a discount rather than at the usual premium. Although there seems to be a modest amount of insider buying, there is no new N-Q report so I am totally clueless what is in the portfolio at this time. Sometimes the NAV is not precise if there is a significant amount of level 3 priced securities. Perhaps after this report in June. I will reconsider taking a small position. Its is not unusual for CEFs without a distribution to have a discount in the teens rather than the single digit discount now. Maybe there will be some tax loss selling in November and the discount will increase. Since this months sell off, compelling alternative funds are not hard to find although its like catching a falling knife. Note: I have no position in SPE.
    May 20, 2010. 10:52 PM | Likes Like |Link to Comment
  • Buffett Takes a Page from the Monopoly Playbook [View article]
    I much appreciate the effort of your blog. I lost track about a year ago. I'm glad to see you back.
    Nov 5, 2009. 10:56 PM | Likes Like |Link to Comment
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