ADX: Take Some Chips Off The Table

Macrotips Trading
5.98K Followers

Summary

  • Adams Diversified Equity Fund (ADX) has performed well, returning over 27% since October. ADX paid a $1.15/share year-end special distribution, exceeding expectations.
  • The analogy to 1999/2000 appears to be playing out in real time, suggesting we are in the midst of a blow-off top in equities.
  • Due to its investment process, the ADX fund is heavily concentrated in high momentum growth stocks that could see a large drawdown should the bubble burst.
  • I recommend investors start to trim their high growth stock holdings like the ADX fund.

Casino chips with dramatic lighting and lens flares

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In October, I re-iterated my buy rating on the Adams Diversified Equity Fund (NYSE:ADX). In my opinion, ADX is one of the most impressive growth-oriented closed-end fund ("CEF") in the market, with a long track record of

This article was written by

5.98K Followers
Author of the Macro Trends & Inflection Points Newsletter. I spent 5 years as a co-founder and hedge fund CIO / manager. Before that, I was a hedge fund analyst/portfolio manager at a leading Canadian alternative asset manager. I write articles as part of my own due diligence on the stocks that I find interesting.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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