To All, Happy Double Discount Week. Many Closed End funds now show what I call double discounts, with both the target of the fund's investments and the funds themselves selling at discounts. This is my favorite buying combo, so I am and will be buying a diversified list of CEFs. Here are some candidates and current holdings and a few words why:
1. H&Q Life and Health Sciences (HQL and HQL). Small cap medical stocks have been underwater while their large cap brethren have been golden. Makes no sense. Both funds are selling at 21 pct. discounts. Looks like a layup for the long term buyer, IMHO.
2. BGR Precious Metals (BPT.A). Canadian Gold stocks. Oh, yeah, those have been popular. Down, down, down. And a fund price selling at a 21 pct. discount. You need the nerves of a cat burglar and the gut strength of a taster at a Texas Chile cookoff, but I think that if most of these cos really exist, you will make some money. -g-
3. Asia Tigers and Asia Pacific, and Fidelity Emerging Asia (GRR, APB, and FAE). All are selling for 18 pct. discounts and I don't have to tell you that the market is treating Asian tigers like something they need to scrape off the bottom of their shoes. APB has a larger cap approach than the other two, and Fidelity has more of a "buy what went up yesterday" approach that has cost them some money. as it always does. But all three should do well with this mighty double discount. BTW, they all own lots of Thai, Indonesian, and Malaysian stocks while those countries' country funds are selling for premiums.
4. Scudder New Asia and Morgan Stanley Asia Pacific (SAF and APF) sell at discounts of 17 pct. and 21 pct, respectively. Unlike the funds in #3, these guys own a lot of Japan. Once again, the Japanese CEFs are selling for large premiums, so this is a way to get to the rising sun for a discount.
5. Morgan Stanley Emerging Markets, TCW Emerging, and GT Developing (MSF, EMO, and GTD). True, the emerging markets have been a mixed bag and both EMO and GTD have outperformed the premium Tmepleton Emerging Markets. EMO and GTD sell for 8-9 pct. discounts, whle MSF, which zigged when it should have zagged all last year, is selling for an 18 pct. discount. MSF has been so lousy the last year, after stomping Templeton and the other two in previous years, that I am willing to give them the benefit of the doubt at 82 cents on the dollar. -g-
6. Czech Republic Fund. Time to cash that Czech after a crappy year in Prague and an 18 pct. discount. I like the fund. CRF.
Good luck, MB |
