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10-10-10 An Investment-Transforming Idea

|Includes: AGC, BTZ, CWF, JFP, NOX, OLA, Adams Natural Resources Fund, Inc. (PEO), PSY, ZF

Many of you have heard of the book 10-10-10, a Life-Transforming Idea, Here's our take on it.

10-10-10 An Investment-Transforming Idea

10 Ideas, 10% Discounts, 10% yield.

Closed-End Funds present investors with an opportunity to take advantage of an inefficient market. By this we mean buying assets at a discount to their Net Asset Value (NYSE:NAV). Obviously one must consider what the underlying assets of the fund are, but in general purchasing assets at a discount can give you many advantages including:

Increased yield benefi
t - If you buy an asset at a 10% discount that yields 10%, you attain a 1% yield benefit.

Potential narrowing of discount
- If you buy an asset at a 10% discount and the discount narrows to 5% you pocket the difference.

Activism and conversion to Open-End Fund
- The potential for activism or open ending can narrow a funds discount, however, investors should not buy a fund solely on this criteria.

Institutional borrowing rate
s - A funds borrowing costs are less than yours. i.e., If you are looking to margin 20% of your holdings your best bet is to find a fund with 20% leverage as their costs to borrow would be significantly lower than yours.The screen below is our first 10-10-10. (Click on it to enlarge)

We would not just buy these based solely on this criteria, but it's a good place to start to find value.
You can do your own screens for ETFs and CEFs at Happy Hunting.

Disclosure: Disclosure: No Positions