To All, closed end funds, Part Two. Foreign Funds. Picking foreign funds with a contrarian bent of mind is like shooting fish in a barrel this year. Nearly every foreign fund was down for the past 52 weeks. I am happy to say that one I liked this time last year, Swiss Helvetia, was one of the exceptions. I'm not so happy to say that its less than 8% return for the past year is what I refer to as a "kiss your sister" win. Ditto for the Canadian funds, which I owned for part of the year. And I am extremely sad to say that I passed on the best performing country fund of the year, The Italy Fund. I was flat out wrong on that one. I was wondering how Italy would handle the New Pair of Dimes while I was buying Dolce & Gabbanna cologne, Zegna ties, Gianluca Isaia suits, and Giovanni Vasta shirts. And while dotcom temporary multi-millionaires were buying Ferraris and Lamborghinis. I always say to connect the dots, but this time I couldn't diagnose the measles on the freckled kid. <g>
That being said, there are huge opportunities out there this year. I divide them into conservative picks and hold your nose and buy picks. In general, a conservative cef tends to go to a full position very quickly while the hold your nose type I enter in cautious thirds. So, here's the names of the picks for glory next year:
1. Europe. Ah, it is a grand old continent. For the conservative who wants low maintenance, The Europe Fund is as cheap as it has been since late 1998. It is fairly well managed, though they do tend to load up on last year's winning countries. But a 14% discount helps me to accept that bit of heresy.
I still like Germany Fund, though I would like a better than 6% discount. New Germany has similar performance and a whopping 19% discount, so it would probably be my first choice in Uber Alles. I also still like Swiss Helvetia and some day it may stop boring me to death.
On the hold your nose side, I like the Irish Investment Fund at a 31% discount. It is at the lowest price I've seen it in a long time. Portugal is very similar. It is unloved and has a deep discount. Beautiful country and maybe they'll get some of those Italian investments now that opera land has gotten pricey. Yes, there is still a smidgen of swastika in Austria, but there is more to the country than that. And it is still well-positioned to make a lot of money if the former Eastern bloc awakens. I would rather make that play with OST than more directly with Central European Fund or Morgan Stink-Up Eastern Europe. Russian had an up year in 2000 and I am avoiding it when I only get a 6% discount. |
