Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (26970)	5/31/2007 2:32:58 AM
From: a128	Respond to of 78750

I have another closed end fund...JQC that I bought when the discount was over 10%. A few months after I bought they upped their dividend a little and did the managed distribution thing. Based on 8.5% I think. Anyway the discount all but when away until recently when they told us they were going away from the monthly dividends and instead making them quarterly. Supposedly, the SEC is making such funds notify everyone in writing every month that managed distributions could be a return of capital. Seems a bit silly. I would prefer monthly because they get reinvested monthly rather than quarterly. I have it in my IRA. ZTR also does the 10% managed distribution policy and its premium has all but disappeared because of a rights offering where they sold shares at a slight discount to NAV and a 5% discount to the 5 day average before the rights offering closed. I bought more because I didnt want to be diluted but If I was smart, I would have sold when the premium was over 15%. It got to like 19% at one point. I had a sell order in at $5.99 and when it got close, I changed it to $6.24. Now its $5.15. Pennywise and pound foolish ! Im pretty comfortable with FSP, CBF & FUR as long term holdings. Im dividend reinvesting on all of them too. As for CBFs troubles, Im not concerned because of all the insider buying. And the dividend yield. The $31.8 million in a nonperforming asset is dwarfed by their $1.37 billion well diversified portfolio. Both regionally and by property type. Plus, their deal pipeline from CB Richard Ellis has to be an invaluable asset. And the market isnt giving it ANY value seeing as the stocks trading around book value. Regarding FSP, did you notice that the CEO turned down both his bonus and his stock options voluntarily ? Says its because the stock price is ultimately his responsibility and it didnt do anything for the year. Thats kind of refreshing. You dont see that too often. Im hoping that FSP takes off later this year as they sell more properties at gains and reinvest in others. Still, I think he is fighting a losing battle trying to convince the market that FSP is an "investment company" as opposed to a REIT. It might even be better for them to leverage themselves modestly. But, its less risky than others because of the lack of debt.

To: Paul Senior who wrote (26970)	5/31/2007 2:33:00 AM
From: Carl Worth	Respond to of 78750

the underperforming assets are discussed in CBF's Q1 report: During the quarter, the Company funded an additional $4.4 million to its $31.8 million non-performing asset to cure the default on the senior loan, pay real estate taxes and pay for attorney and appraisal services relative to the loan. At March 31, 2007, the balance of this non-performing asset was $36.2 million representing 2.1 percent of total assets. In addition, in April 2007 the Company funded an additional $0.8 million on the senior loan to further protect its investment. The Company believes, and third party appraisals support, that there is collateral value in excess of the book value for this asset. In addition, during the quarter the Company funded an additional $1.7 million to cure the default on the senior loan, pay real estate taxes and pay for attorney and appraisal services relative to the loan and recognized $0.4 million of income on its $19.7 million watch list asset. At March 31, 2007, the balance of this watch list asset was $21.8 million representing 1.2 percent of total assets. In addition, in April 2007 the Company funded an additional $0.3 million on the senior loan to further protect its investment. On May 4, 2007, the Company foreclosed on the underlying asset and subject to an estimated 30-60 day judicial ratification process, the Company will own the asset and control the exit strategy. The Company believes, and third party appraisals support, that there is collateral value in excess of the book value for this asset. sounds to me that any additional impact would be minimal, and perhaps there will even be some recovery they also sold a CMBS that they thought had potential trouble seems to me that they are doing a good job of staying on top of things JMHO of course