Douglas Albo's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.com/user/799235/comments http://seekingalpha.com/instablog/799235-douglas-albo/1876031-take-profits-in-grx?source=feed#comment-19091051 19091051
GRX is up 21.5% on its NAV YTD, one of the best of any CEF. This is a fund you want to stay long in this market environment but you can certainly trade around at times too!]]> Tue, 21 May 2013 17:34:00 -0400
GRX is up 21.5% on its NAV YTD, one of the best of any CEF. This is a fund you want to stay long in this market environment but you can certainly trade around at times too!]]> http://seekingalpha.com/instablog/799235-douglas-albo/1866161-gabelli-funds-vulnerable-here?source=feed#comment-18938691 18938691
Nonetheless, it is all but inevitable that Gabelli will have to cut GGN's distribution again with a 13.3% NAV yield. The question is when and what affect it may have on the fund. GGN is very volatile and certainly, it will bounce with gold prices, but it will also be a prime candidate for tax-loss selling at the end of this year. Keep an eye on its discount/premium for opportunities, which there will undoubtedly be.]]> Fri, 17 May 2013 09:10:07 -0400
Nonetheless, it is all but inevitable that Gabelli will have to cut GGN's distribution again with a 13.3% NAV yield. The question is when and what affect it may have on the fund. GGN is very volatile and certainly, it will bounce with gold prices, but it will also be a prime candidate for tax-loss selling at the end of this year. Keep an eye on its discount/premium for opportunities, which there will undoubtedly be.]]> http://seekingalpha.com/instablog/799235-douglas-albo/1866161-gabelli-funds-vulnerable-here?source=feed#comment-18919541 18919541 Thu, 16 May 2013 17:55:38 -0400 http://seekingalpha.com/instablog/799235-douglas-albo/1861551-equity-cefs-what-s-gotten-into-dpd?source=feed#comment-18890501 18890501 Thu, 16 May 2013 08:47:38 -0400 http://seekingalpha.com/article/1430621/comments?source=feed#comment-18848021 18848021 Wed, 15 May 2013 10:27:13 -0400 http://seekingalpha.com/article/1432691/comments?source=feed#comment-18846641 18846641
I'm guessing you think the DJIA is fully priced and gold is a good hedge now. If that's the case, I believe there are better ways to play that then selling DPO and holding GGN. ]]> Wed, 15 May 2013 10:03:40 -0400
I'm guessing you think the DJIA is fully priced and gold is a good hedge now. If that's the case, I believe there are better ways to play that then selling DPO and holding GGN. ]]> http://seekingalpha.com/article/1430621/comments?source=feed#comment-18846151 18846151 Wed, 15 May 2013 09:55:23 -0400 http://seekingalpha.com/instablog/799235-douglas-albo/1829251-if-the-dow-goes-up-eventually-dpo-goes-up-too?source=feed#comment-18513791 18513791 Mon, 06 May 2013 19:18:56 -0400 http://seekingalpha.com/instablog/799235-douglas-albo/1805621-back-up-the-truck-on-eoi?source=feed#comment-18486701 18486701
All of these funds have since reduced distributions so that they are back to their inception NAV yields. This has helped their NAV and market prices to perform better but they will still lag the leveraged funds and broader market averages during a bull market. These fund's are really designed for flat to trendless up and down markets and until we get back to that market environment, you have to expect them to underperform a bit. Think of them as the bond portion of your portfolio with much higher yields.]]> Mon, 06 May 2013 08:42:18 -0400
All of these funds have since reduced distributions so that they are back to their inception NAV yields. This has helped their NAV and market prices to perform better but they will still lag the leveraged funds and broader market averages during a bull market. These fund's are really designed for flat to trendless up and down markets and until we get back to that market environment, you have to expect them to underperform a bit. Think of them as the bond portion of your portfolio with much higher yields.]]> http://seekingalpha.com/instablog/799235-douglas-albo/1805621-back-up-the-truck-on-eoi?source=feed#comment-18460841 18460841
http://bit.ly/o4ngfR]]> Sun, 05 May 2013 11:06:44 -0400
http://bit.ly/o4ngfR]]> http://seekingalpha.com/instablog/799235-douglas-albo/1819411-opportunity-on-dpo?source=feed#comment-18381551 18381551 Thu, 02 May 2013 19:11:31 -0400 http://seekingalpha.com/instablog/799235-douglas-albo/1819411-opportunity-on-dpo?source=feed#comment-18381061 18381061 Thu, 02 May 2013 18:59:14 -0400 http://seekingalpha.com/article/1375661/comments?source=feed#comment-18275531 18275531
http://bit.ly/100GQaO

Then compare with your website's NAV "total return." See the difference?]]> Tue, 30 Apr 2013 12:51:13 -0400
http://bit.ly/100GQaO

Then compare with your website's NAV "total return." See the difference?]]> http://seekingalpha.com/article/1375661/comments?source=feed#comment-18275181 18275181
This reason why this works is because even if the DJIA drops 10% and the discount widens to -12% or more, you may be underperforming for a period of time but you will recover a lot faster when the markets come back and I have NEVER seen an equity CEF not come back with the markets, especially a fund like DPO which is so tied to the performance of the DJIA. Of course, if we go into a bear market, than all bets are off but I can think of a lot worse funds to own than DPO in such a scenario.]]> Tue, 30 Apr 2013 12:44:28 -0400
This reason why this works is because even if the DJIA drops 10% and the discount widens to -12% or more, you may be underperforming for a period of time but you will recover a lot faster when the markets come back and I have NEVER seen an equity CEF not come back with the markets, especially a fund like DPO which is so tied to the performance of the DJIA. Of course, if we go into a bear market, than all bets are off but I can think of a lot worse funds to own than DPO in such a scenario.]]> http://seekingalpha.com/instablog/799235-douglas-albo/1805621-back-up-the-truck-on-eoi?source=feed#comment-18271201 18271201 Tue, 30 Apr 2013 11:22:12 -0400 http://seekingalpha.com/article/1375661/comments?source=feed#comment-18220011 18220011 DPO) & NAV (XDPOX) of ANY CEF are reduced by each distribution, its the NAV total returns are significantly understated!

The reason why I am so focused on the NAV is because THAT is your true financial interest in the fund. I could care less about the market price of DPO except in its relationship to its NAV. The market price is determined by mostly unsophisticated investors so I don't give it a lot of credibility. But it is where you get your opportunities to buy.]]> Mon, 29 Apr 2013 09:36:08 -0400 DPO) & NAV (XDPOX) of ANY CEF are reduced by each distribution, its the NAV total returns are significantly understated!

The reason why I am so focused on the NAV is because THAT is your true financial interest in the fund. I could care less about the market price of DPO except in its relationship to its NAV. The market price is determined by mostly unsophisticated investors so I don't give it a lot of credibility. But it is where you get your opportunities to buy.]]> http://seekingalpha.com/article/1375661/comments?source=feed#comment-18201271 18201271 Sun, 28 Apr 2013 17:53:50 -0400 http://seekingalpha.com/article/1375661/comments?source=feed#comment-18194361 18194361 Sun, 28 Apr 2013 14:01:34 -0400 http://seekingalpha.com/article/1375661/comments?source=feed#comment-18190651 18190651
DPO is up 108% ($11.84 current price + $4.57 total distributions - $7.90 price on 3/31/09 divided by $7.90) vs. DIA up 109% (146.88 + $11.87 total dividends - 75.84 price on 3/31/09 divided by 75.84). All distributions are simply added back. If you reinvested dividends, DPO actually beats DIA from the 1st qtr '09 to today.]]> Sun, 28 Apr 2013 11:29:21 -0400
DPO is up 108% ($11.84 current price + $4.57 total distributions - $7.90 price on 3/31/09 divided by $7.90) vs. DIA up 109% (146.88 + $11.87 total dividends - 75.84 price on 3/31/09 divided by 75.84). All distributions are simply added back. If you reinvested dividends, DPO actually beats DIA from the 1st qtr '09 to today.]]> http://seekingalpha.com/article/1375661/comments?source=feed#comment-18186991 18186991 Sun, 28 Apr 2013 09:27:52 -0400 http://seekingalpha.com/article/1375661/comments?source=feed#comment-18186601 18186601
Your website DOESN'T include total distributions for DPO's NAV or DPD's NAV or any other CEF's NAV for that matter and let me tell you why. Because it uses the same data source as Yahoo! Finance and many other financial websites. Go to Yahoo! Finance, plug in DPO or any other CEF. Go to Historical Prices and hit Dividends Only. There you'll see all the distributions listed for the stated period of time. Now put in XDPOX or any other CEF's NAV and you'll see none (actually just started to include them for 2013 but the adjusted close will be more and more understating performance the farther you go back). So you really don't know how DPO's or DPD's NAV has performed against DIA on a total return basis except from inception now do you? Would you be surprised to learn that DPO's NAV has essentially matched if not beaten DIA on a 1-year, 3-year and from the market lows since March 2009?

Now, you do make one good point indirectly. These are not necessarily funds you want to buy and hold, and certainly not from inception. You have to wait until the discount widens during pullbacks and sell during uptrends when and if they get to premiums. If you had bought DPO in the fall of 2008 when it was at a -15% discount and sold a year later when it was at a 30% premium, you would have had a total return FAR greater than DIA while being paid a 20% annualized yield at the time. Granted, such a situation may never occur again but you need to realize that DPO, and even DPD, will be more volatile than DIA and give you more opportunities. On the other hand, their NAV's and especially DPD's NAV will be LESS volatile than DIA and will hold up better than DIA in a down market. Even DPD's market price shows you that in your website.]]> Sun, 28 Apr 2013 09:11:18 -0400
Your website DOESN'T include total distributions for DPO's NAV or DPD's NAV or any other CEF's NAV for that matter and let me tell you why. Because it uses the same data source as Yahoo! Finance and many other financial websites. Go to Yahoo! Finance, plug in DPO or any other CEF. Go to Historical Prices and hit Dividends Only. There you'll see all the distributions listed for the stated period of time. Now put in XDPOX or any other CEF's NAV and you'll see none (actually just started to include them for 2013 but the adjusted close will be more and more understating performance the farther you go back). So you really don't know how DPO's or DPD's NAV has performed against DIA on a total return basis except from inception now do you? Would you be surprised to learn that DPO's NAV has essentially matched if not beaten DIA on a 1-year, 3-year and from the market lows since March 2009?

Now, you do make one good point indirectly. These are not necessarily funds you want to buy and hold, and certainly not from inception. You have to wait until the discount widens during pullbacks and sell during uptrends when and if they get to premiums. If you had bought DPO in the fall of 2008 when it was at a -15% discount and sold a year later when it was at a 30% premium, you would have had a total return FAR greater than DIA while being paid a 20% annualized yield at the time. Granted, such a situation may never occur again but you need to realize that DPO, and even DPD, will be more volatile than DIA and give you more opportunities. On the other hand, their NAV's and especially DPD's NAV will be LESS volatile than DIA and will hold up better than DIA in a down market. Even DPD's market price shows you that in your website.]]> http://seekingalpha.com/article/1375661/comments?source=feed#comment-18169571 18169571
DPO is slightly leveraged whereas DPD is not. Otherwise, they are the same. M* probably has DPO at 4-stars because of that leverage and the higher volatility compared to its benchmark. BTW, as a non-leveraged option-income fund, DPD will hold up far better than DIA in a bear market. Go ahead and plug DPD into the link below from mjs_28s during the bear market of Sep '07-Mar '09.]]> Sat, 27 Apr 2013 11:04:41 -0400
DPO is slightly leveraged whereas DPD is not. Otherwise, they are the same. M* probably has DPO at 4-stars because of that leverage and the higher volatility compared to its benchmark. BTW, as a non-leveraged option-income fund, DPD will hold up far better than DIA in a bear market. Go ahead and plug DPD into the link below from mjs_28s during the bear market of Sep '07-Mar '09.]]> http://seekingalpha.com/article/1375661/comments?source=feed#comment-18169141 18169141
Second, you're using the market price of the fund, NOT the NAV. When a fund goes public, its market price starts 5% over the NAV anyway. I would never recommend anyone buy a CEF at an IPO price because it immediately drops to the NAV price and usually doesn't stop there. If you want to compare the true apples to apples performance, use the NAV of DPO & DPD compared to DIA, but your link won't include distributions for the NAV prices so it doesn't work. I, however, do include distributions so I know how they have performed. BTW, the whole reason you buy CEFs at discounts is because their market prices may not reflect the value or performance of their NAVs. Plus, you get a windfall yield buying a CEF at a discount.

Third, I am well aware of distribution cuts for all the option-income funds. They all had overly generous NAV yields of 12% or higher (DPO's was 20%!) after the bear market and the ensuing bull market did not allow their NAVs to recover nearly as quickly. Thus, they all cut distributions to get their NAV yields down to more manageable 7% to 9% NAV yields and since then, their NAVs have done much better. All of this I have written many times in articles over the past couple years if you care to read.]]> Sat, 27 Apr 2013 10:44:59 -0400
Second, you're using the market price of the fund, NOT the NAV. When a fund goes public, its market price starts 5% over the NAV anyway. I would never recommend anyone buy a CEF at an IPO price because it immediately drops to the NAV price and usually doesn't stop there. If you want to compare the true apples to apples performance, use the NAV of DPO & DPD compared to DIA, but your link won't include distributions for the NAV prices so it doesn't work. I, however, do include distributions so I know how they have performed. BTW, the whole reason you buy CEFs at discounts is because their market prices may not reflect the value or performance of their NAVs. Plus, you get a windfall yield buying a CEF at a discount.

Third, I am well aware of distribution cuts for all the option-income funds. They all had overly generous NAV yields of 12% or higher (DPO's was 20%!) after the bear market and the ensuing bull market did not allow their NAVs to recover nearly as quickly. Thus, they all cut distributions to get their NAV yields down to more manageable 7% to 9% NAV yields and since then, their NAVs have done much better. All of this I have written many times in articles over the past couple years if you care to read.]]> http://seekingalpha.com/article/1375661/comments?source=feed#comment-18138841 18138841 Fri, 26 Apr 2013 12:56:37 -0400 http://seekingalpha.com/article/1339911/comments?source=feed#comment-17646751 17646751
PGP is also a Closed-End fund and has the highest premium valuation of ANY CEF. For a fund that has NEVER cut its distribution and will have one of the most volatile NAVs because of its high use of leverage and its S&P futures contracts, I suppose a 54% market price premium over its NAV should not be unexpected considering PIMCO's prowess at fixed-income investing. Allianz does not manage PGP even though PGP is under the AGIC sponsor name.

Nontheless, investors need to realize PGP has to support a 15.3% NAV yield to receive only a 10% market yield. A 15.3% NAV yield is a huge red flag and it will be not be easy for PGP to maintain that going forward. All you have to do is realize that PGP is paying the same $2.20/share annual distribution with a $14.35 NAV as it did when it went public with a $23.83 NAV.

As long as the S&P and bond markets keep going up, PGP can maintain its distribution but frankly, there are much better risk/reward CEFs that are at wide discounts and pay even higher monthly yields.]]> Mon, 15 Apr 2013 11:56:52 -0400
PGP is also a Closed-End fund and has the highest premium valuation of ANY CEF. For a fund that has NEVER cut its distribution and will have one of the most volatile NAVs because of its high use of leverage and its S&P futures contracts, I suppose a 54% market price premium over its NAV should not be unexpected considering PIMCO's prowess at fixed-income investing. Allianz does not manage PGP even though PGP is under the AGIC sponsor name.

Nontheless, investors need to realize PGP has to support a 15.3% NAV yield to receive only a 10% market yield. A 15.3% NAV yield is a huge red flag and it will be not be easy for PGP to maintain that going forward. All you have to do is realize that PGP is paying the same $2.20/share annual distribution with a $14.35 NAV as it did when it went public with a $23.83 NAV.

As long as the S&P and bond markets keep going up, PGP can maintain its distribution but frankly, there are much better risk/reward CEFs that are at wide discounts and pay even higher monthly yields.]]> http://seekingalpha.com/article/1320781/comments?source=feed#comment-17472801 17472801 $13.24 EOI's current NAV
$12.35 EOI's NAV end of 2012
$11.93 EOI's NAV end of 2011

Looks to me as though EOI has been growing its NAV more recently, and that's including deductions for distributions. Yes, go back further and virtually all option-income funds were losing NAV after paying distributions, the true definition of destructive ROC. Much of that was due to the fund's having NAV yields much higher than they could support, some 12%+. I wrote many articles on the subject pointing out that distribution cuts were the proper course of action and in the long run, would help the funds grow their NAVs. Eaton Vance and Nuveen in fact, were the first to get their fund's NAV yields down to more manageable 7% to 9% NAV yields starting in early 2010, while ING and BlackRock have been doing it more recently.

EOI's NAV yield is now a much more manageable 7.8% but because of its wide discount, investors can pick up almost a 9% market yield. EOI's performance has dramatically improved too, both at NAV and market price, up 22% and 28% respectively since 2011.]]> Wed, 10 Apr 2013 19:38:08 -0400 $13.24 EOI's current NAV
$12.35 EOI's NAV end of 2012
$11.93 EOI's NAV end of 2011

Looks to me as though EOI has been growing its NAV more recently, and that's including deductions for distributions. Yes, go back further and virtually all option-income funds were losing NAV after paying distributions, the true definition of destructive ROC. Much of that was due to the fund's having NAV yields much higher than they could support, some 12%+. I wrote many articles on the subject pointing out that distribution cuts were the proper course of action and in the long run, would help the funds grow their NAVs. Eaton Vance and Nuveen in fact, were the first to get their fund's NAV yields down to more manageable 7% to 9% NAV yields starting in early 2010, while ING and BlackRock have been doing it more recently.

EOI's NAV yield is now a much more manageable 7.8% but because of its wide discount, investors can pick up almost a 9% market yield. EOI's performance has dramatically improved too, both at NAV and market price, up 22% and 28% respectively since 2011.]]> http://seekingalpha.com/article/1327371/comments?source=feed#comment-17371351 17371351
Second, I have a question regarding the risk/reward measure of these funds and whether you are using the market prices or NAV prices in your analysis? I believe you are using the market prices since NFJ would not be that highly rated over the past 3-years if you were using its NAV. NFJ raised its distribution substantially in late 2010 which is why its market price has done so well but its NAV has been nothing special over the past 3-years.

So if you're using the market prices to compare risk adjusted returns, then that is not really apples to apples with the S&P 500. If you performed a risk adjusted analysis with the NAVs of these funds, not only will that show much less volatility compared to their market prices but I believe they will show a much better risk/reward when compared to the S&P 500. Of course, you can't buy the NAV like you can an ETF but then you can't buy an ETF at a double digit discount either!]]> Mon, 08 Apr 2013 16:21:01 -0400
Second, I have a question regarding the risk/reward measure of these funds and whether you are using the market prices or NAV prices in your analysis? I believe you are using the market prices since NFJ would not be that highly rated over the past 3-years if you were using its NAV. NFJ raised its distribution substantially in late 2010 which is why its market price has done so well but its NAV has been nothing special over the past 3-years.

So if you're using the market prices to compare risk adjusted returns, then that is not really apples to apples with the S&P 500. If you performed a risk adjusted analysis with the NAVs of these funds, not only will that show much less volatility compared to their market prices but I believe they will show a much better risk/reward when compared to the S&P 500. Of course, you can't buy the NAV like you can an ETF but then you can't buy an ETF at a double digit discount either!]]> http://seekingalpha.com/article/1320781/comments?source=feed#comment-17292211 17292211
What's most important if we go into a flat to down market period, which is what I am suggesting, is if ETV's option premium can cover its distributions. At 96% coverage and up to 2% or so out-of the-money options, ETV easily accomplishes that if all the option premium were realized. That won't happen, since some months the fund will lose on its options, but the fact that ETV can easily cover its distributions with its option premium is all I'm concerned with. ETV is very defensive and as you can see, will barely cover its distribution in a strong up market. Its designed for a flat to volatile up and down market and I believe that is what we are going into. But even if I'm wrong and the bull market continues, ETV will still be fine.]]> Fri, 05 Apr 2013 22:24:00 -0400
What's most important if we go into a flat to down market period, which is what I am suggesting, is if ETV's option premium can cover its distributions. At 96% coverage and up to 2% or so out-of the-money options, ETV easily accomplishes that if all the option premium were realized. That won't happen, since some months the fund will lose on its options, but the fact that ETV can easily cover its distributions with its option premium is all I'm concerned with. ETV is very defensive and as you can see, will barely cover its distribution in a strong up market. Its designed for a flat to volatile up and down market and I believe that is what we are going into. But even if I'm wrong and the bull market continues, ETV will still be fine.]]> http://seekingalpha.com/article/1320781/comments?source=feed#comment-17288241 17288241 Fri, 05 Apr 2013 19:10:33 -0400 http://seekingalpha.com/article/1320781/comments?source=feed#comment-17280181 17280181
http://bit.ly/10AFA0g

...saying how behind the curve they were on these funds. Frankly, my research has been much more accurate and investors who follow me know that. Nothing against Morningstar, its just that they have a lot more funds to cover and I believe my analysis is more proactive and I am able to see things before they do.

BTW, you're confusing ETV's market price with its NAV. The fund doesn't pay the 10%+ market yield, it pays the 9.4% NAV yield.]]> Fri, 05 Apr 2013 15:33:51 -0400
http://bit.ly/10AFA0g

...saying how behind the curve they were on these funds. Frankly, my research has been much more accurate and investors who follow me know that. Nothing against Morningstar, its just that they have a lot more funds to cover and I believe my analysis is more proactive and I am able to see things before they do.

BTW, you're confusing ETV's market price with its NAV. The fund doesn't pay the 10%+ market yield, it pays the 9.4% NAV yield.]]>