Chamois16

Comparing China's Two Oil Giants

The commentary implies that PTR and SNP are similar oil companies, which can be compared statistically. This is not true. PTR is an integrated oil and gas company with dominant E&P in both natural gas and oil, plus ownership of the infrastructure pipelines. SNP, on the other hand is a refiner and retailer which must purchase the majority of its crude.

SNP, because it is squeezed by price controls on retail sales of refined products and higher crude prices, currently receives a subsidy from the central government. PTR does not.

PTR's NG production is expanding rapidly, and the PRC is pushing for transition from coal to NG for environmental reasons. PTR, which also retails petrol(gasoline) and gasoil (diesel) and has a near monopoly on land based exploration, not only in China but in Kazakhstan and Uzbekistan, would seem to have the higher growth potential. Both are good companies, as is CNOOC (CEO) as well, but they are not all apples for comparative purposes.

H&Q Life Science: Hold On, Its Time Is Coming

HQL may or not be a good investment in the future; it has been a very poor one this past year. I haven't heard or read any credible, persuasive rationale for why biotech or healthcare will, on a net basis, dramatically improve as a profitable business; there will be technological winners and losers, particularly in HQL, which is sort of a VC endeavor with more risk. Increased emphasis on R&D, as is often alleged, is apt to be offset by proposed reductions in patent protection and allowable prices charged, plus increases in corporate taxes. The net consequence is a great unknown.

More importantly, the Fink article fuzzes some issues of importance. The 8% yield is lauded, for example, even when it comes totally at the expense of capital appreciation. Iow, the fund must sell its winners to pay the distribution with proceeds from realized capital gains. If there is to be a resurgence in biotech and the investor wants to take full measure of that growth, truncating it for taxable current "income" doesn't make a lot of sense. Far better would be a fund which allows the winners to appreciate unharvested, at the expense of much lower payouts.

CEF like HQL cater to income oriented investors who, as has been mentioned earlier, subordinate total return opportunity to currrent gratification or need. This is particularly true on an after tax basis. They need to be valued in that context

A Long/Short ETF Portfolio For Emerging Markets

IF one wanted to do this, there are closed-end funds for India, Indonesia and Turkey that are as good and perhaps better vehicles than index funds, were such available. Going short in any of these places is very risky. I certainly would not attempt it on the basis of current account deficits

Alpine Global Dynamic Dividend Fund: Solid Low-Risk Strategy

The distribution and distribution yield are net of management fees. All closed-end funds initially trade at a premium to NAV because of the offering concession to underwriters. Most equity based funds eventually trade at a discount to offset management fees; ETG and ETO, which also exploit dividend capture strategies, are examples.

Experienced CEF investors wait until the market price has stabilized at a lower level relative to NAV, usually 120-200 days after IPO. The Haas Business School at UCBerkeley has a study explaining why this discount is normal, how it is computed and how long it takes to stabilize: faculty.haas.berkeley....

Further Thoughts On Call-Writing Closed-end Funds (BEP, FFA, IGD, JPZ, JSN, MCN, NFJ)

I'm not an options expert, but believe some of the basic premises in the argument are false. Options do not need to be priced inefficiently to "earn" a total return above the distributions; one does not need to rebuy the original stocks called away, and many CEF deal in index options, which are settled in cash when exercised, rather than by the exchange of shares. Strike prices, as has been mentioned, can be set to reflect targets.

The options writing CEF I follow have done as well as, or better than, expected, with NAV total returns well in excess of total distributions. NAI, for example, about twice as well in NAV total return with an NAV gain of over 10% net of distributions.

To debate whether the distributions are true dividends, if I understand the comment, is somewhat moot, since they are not dividends as defined by the ICA 1940, the SEC or GAAP, when portions include capital gains a/o other return of capital. Only in tax terminology can distributions be considered dividends and then not always.

I believe that whether a CEF makes sense or not as a concept depends largely on management. In this case, it probably depends more on the options advisor than on the stockpicker, usually separate teams.

Shifting Away From the U.S. and Into Asia: An ETF Play

The chinese yuan is not pegged to the US$; it was floated commencing 21 July 2005 and has risen slowly since. The Hong Kong Dollar is more closely tied to the US dollar

The writer seems to ignore arguably the best ETF to play a rising yuan (FXI) which consists mainly of robust mainland China companies (25 in all) whose earnngs and dividends are initially denominated in renminbi, rather than HK$, thus likely to pass along to HK and US ADR holders greater benefit than HK and other Asian shares.

The Equities/Bond Balance In Perspective

I agree. It is foolhardy to comment on anyone's asset allocation plan without knowing the person's circumstances. One third in bonds may well be too much. The real issue is whether those three ETF provide adequate diversification, not only among asset cleasses, but among stocks within each class.

For someone who wants to buy and forget, it might not be a bad portfolio, recognizing the need to rebalance from time to time. I might pick EFA instead of EFV, but that's debatable as well

The Case for Bonds, and the Problem With Bond ETFs

Why are these two funds(MBDFX and HABDX) ~70% in cash rather than bonds?

Assessing Closed-end Call Writing Funds (CEF: MCN)

I believe the assumption about mandatory erosion of NAV is wrong. Call options are written on only a percentage of portfolio assets (usually 35-60%) and not all are exercised. While NAV growth in rising markets is truncated by the strategy, it is not eliminated.

OEF had a problem with this strategy, because it was not professionally done using institutionally-traded OTC options, which have higher premiums. I think the better CEF in this category, which also use puts to alleviate downside risk, are showing, at least to date, to be a different breed of product. We won't know for sure until yearend when distributions are recharacterized.