Quant Investor's Blog

Are junk bonds bottoming?

quantinvestor — Sat, 26 Nov 2011 03:53:32 +0000

After seven straight down days, the Merrill Lynch H0A0 high yield index finally had a small up day today. It looks like the junk bond index may be setting up for the usually strong high yield seasonal period in January.

Some recent articles published on Seeking Alpha:

- AGC looks pretty cheap (Nov. 21)

- Afraid of higher interest rates- Check out EVG (Nov. 17)

- Tax-loss selling opportunities in Option strategy CEFs (Nov. 14)

- Article on GAM (Nov. 9)

- Article on ARK High Yield fund (Oct. 31)

- Article on VVR Senior Loan Fund (Oct. 23)

- Article on JLS Mortgage Fund (Oct. 14)

Odds and ends

quantinvestor — Thu, 06 Oct 2011 03:19:52 +0000

Steve Jobs passed away tonight. If this had occurred a year ago while he was still the CEO, AAPL stock would have dropped sharply. But I think AAPL will likely hold its value, or the opposite may even occur now. Apple is getting a tremendous amount of positive attention on the media, and I even heard of some investors who plan to buy AAPL stock as a way of honoring Steve.

Some recent articles published on Seeking Alpha:

1) Aug. 16- Buffett’s Tax Proposal is Bullish for Municipal Bonds

2) Sept. 4 – VTA: Senior Loan CEF Currently on Sale

3) Sept. 20 – Tortoise Energy Capital: An Attractive CEF that owns MLPs

4) Oct. 5- INF: Recent IPO’d Infrastructure CEF is Crumbling

Second Quarter Window Dressing Approaches

quantinvestor — Tue, 21 Jun 2011 01:13:55 +0000

As we approach the end of the second quarter, mutual fund and hedge fund portfolio managers will be “window dressing” their portfolios for their second quarter reports. I just read that Paulsen & Co. dumped their entire stake in Sino-Forest for a loss of hundreds of millions of dollars. Many fund managers are also trying to get stocks like RIMM and NOK out of their portfolios before the end of the second quarter.

Aside from dumping individual stocks, many money managers appear to be using new cash to re-position their portfolios into more defensive sectors like health care and consumer staples which have been moving up in my relative strength models.

I recently published several new articles on Seeking Alpha:

NIE: Convertible Income Fund

TFC is Open- Ending

Pimco Closed-end Funds Under Pressure (over 6,000 page views so far).

I just submitted another article on a TIPS closed-end fund (WIW) which will probably be published tomorrow.

The Overall Stock Market is in a Sideways Pattern

quantinvestor — Sat, 21 May 2011 22:28:30 +0000

The market has been in a sideways pattern for the last two months, but there has been some changes in the relative strength models that I run. There has been shift out of energy and commodities toward more defensive sectors- REITs, biotech, health care, medical delivery etc. Small caps/Mid caps are still pretty high up in the rankings, but have dropped back a bit.

I recently wrote some more articles on Seeking Alpha covering a few different asset classes:

1) JTP: Preferred Stock CEF

2) ETY: Equity Covered Call CEF

3) What Happened to the Municipal Bond Defaults?

4) ACG: High Quality Investment Grade Bond Fund

5) TYG: Closed-End Fund holding MLP’s

Results of GDL Pfd B Rights Offering

quantinvestor — Sun, 24 Apr 2011 19:48:15 +0000

The GDL Pfd B shares were issued. For shareholders who owned GDL pfd A prior to the offering there was an opportunity to oversubscribe, but the oversubscription amounts were a bit of a disappointment.

In one account, I subscribed for 1000 shares and oversubscribed for another 2000 shares at $50. But I only received an extra 119 shares with the oversubscription request.

GDL Pfd B opened up around 51.75 and is currently trading a little above $52. Mario Gabelli owns about $31 million of this issue with his personal family money.

Here is a seeking alpha artice I wrote on GDL pfdB- http://seekingalpha.com/article/262025-gdl-fund-preferred-b-good-investment-for-the-risk-averse

Another recent article on Seeking Alpha on JTP, a preferred share CEF:

http://seekingalpha.com/article/263821-jtp-worthwhile-preferred-closed-end-fund-which-may-soon-raise-its-dividend

I’m on Seeking Alpha Home Page

quantinvestor — Sat, 02 Apr 2011 20:22:28 +0000

This weekend, Seeking Alpha selected me for their “Spotlight on SA Authors”. http://seekingalpha.com/

I recently added an article on MSD, an Emerging market closed-end fund:

http://seekingalpha.com/article/260590-msd-a-cheap-way-to-join-pimco-in-emerging-market-bonds

Recently there have been several rights offerings by Gabelli:

GDLXR: Rights offering for new Gabelli Deal Fund preferred stock at $50.00

GRXRT: Roghts offering for new shares of GRX at $6.50

GGTRT: Rights offering for new shares of GGT at $7.00

Rights are Trading for Two Gabelli Rights Offerings

quantinvestor — Mon, 21 Mar 2011 02:12:46 +0000

Rights for two Gabelli offerings are trading now:

GDLXR: Rights to buy the GDL fund Preferred B.

GRXRT: Rights to buy the GRX closed-end fund at $6.50.

Recent Articles on Seeking Alpha

How to Use a CEF to Buy an Open-end Mutual Fund at a Discount

Blackrock MuniHoldings Investment Quality Fund: A Solid Core Muni Bond Holding

Helios Strategic Income CEF: Good for Tax deferred Retirement Accounts

NXR: A Good, Unlevereged Muni Bond CEF

Are Investors Overpaying for the Japan Smaller Capitalization Fund?

Two Rights Offerings from Gabelli

quantinvestor — Sun, 06 Mar 2011 04:08:58 +0000

Last week there were two rights offering that went “ex-rights”. :

- Gabelli Health Care &Wellness (ticker: GRX): Three rights will enable you to buy one share at $6.50 which is considerably below the last closing price of 7.44.

- GDL Fund Preferred B shares: The owners of the existing A preferred shares will receive rights to purchase the new B shares at $50.

I am participating in both of these rights offerings.

I recently published some more articles in Seeking Alpha:

1) Article on the EXD closed-end fund which uses an interesting multi-strategy approach. I think EXD could be a good buy if the VIX ever goes over 30 again.

http://seekingalpha.com/article/254003-a-muni-bond-cef-with-a-unique-multi-strategy-approach

2) article on DDF, a conservative income play available at a decent discount to NAV:

http://seekingalpha.com/article/255803-delaware-s-dividend-and-income-fund-a-balanced-closed-end-fund-available-at-a-discount

Two more articles on Munis on Seeking Alpha

quantinvestor — Mon, 14 Feb 2011 23:39:43 +0000

I added a Seeking Alpha article with a detailed analysis of NBB which invests in “Build America Bonds”- good for IRA’s. A bill has been introduced to reinstate the Build America program, but the chance of passing seems pretty low.

I wonder about the politics here. Many retired senior citizens are large municipal bond holders and are Republicans, but the Republican party seems more concerned about the Tea Party wing. But a high percentage of seniors vote. If the muni bond holders vote their wallets, they may switch to the Democrats.

http://seekingalpha.com/article/251093-nuveen-build-america-bond-fund-a-good-ira-holding

There is another article discussing whether stories on Jamie Dimon and Vanguard may have signalled a bottom in municipal bond prices.

http://seekingalpha.com/article/252600-did-vanguard-and-dimon-ring-a-bell-to-buy-municipal-bonds

Mid Caps Continue their Outstanding Performance

quantinvestor — Sun, 13 Feb 2011 17:38:57 +0000

At one time, I used the S&P500 as a quick ”default” investment when I needed to invest some cash into equities. But in recent years, I have started using midcap stocks.

The S&P Mid Cap 400 Index continues reaching new all time historical highs. Unlike the S&P 500, it has surpassed the highs of October, 2007. I took a look at the market performance of three liquid ETFs from the highest closing date of the S&P 500 (October 9, 2007) until today using dividend adjusted price data from Yahoo Finance:

Ticker Type 10/9/2007 01/26/2011 %change

SPY Large-Cap 146.30 133.11 -9.0%

IJH Mid-Cap 88.21 96.86 +9.8%

IWM Small-Cap 80.96 82.07 +1.4%