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Strategies & Market Trends : BAK - Investing
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To: DoggyDogWorld who wrote (3044)7/6/2012 11:45:18 AM
From: thatsnotluck   of 3249
 
Re: fxby - winmill Re: Third point hedge fund at a 19% discount:

<<I struggle with CEF discounts. If a fund just owns the SP500, which should return 6% over the long term, and management costs 2%/year in fees and other expenses with no hope of regime change or open-ending, isn't the proper discount 33% of NAV? How could it be otherwise? Yet few funds ever trade at such extreme discounts. Why not? And is it exploitable?>>

interesting.

i see your point. of course if they traded at a 33% discount they why would someone not buy them up and liquidate?

but then, if economically they should have a 33% discount as going concern and little or none as a liquidation, can these things even exist in an economically rational world?
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