Herzfeld Caribbean Basin Fund, Inc. (The) (CUBA)

All Comments on CUBA

  • commenter
    SeekingAlpha
    Editors
    Apr 06 05:19 AM
    My Website
    General Discussion on CUBA
    Is this a buy or a sell? Reply
  • commenter
    A.S.D.
    Jan 22 12:42 PM
    ETF Trends & Observations: Gold, Oil, Banks, India, China, Energy & More [view article]
    Thanks for the article. Look into junior golds if you still want to play this field. A Canadian junior will become the next aquisition target and you can't short it. Reply
  • commenter
    oldman
    Aug 31 01:52 PM
    Fear, Greed, Discounts, Premiums and the World of CEFs [view article]
    I think it is mistake to own FOF. Good for C&S. The NAV of the fund is the market price of the funds it holds. and the expense ratio is above the expense of the underlying funds. I'm not sure what
    its benchmark should be, do you? It seems to me that you could make up
    a list of a few funds to hold and have your own fund of funds. If the
    discount were more like -15% I might consider for a trade.     Reply
  • commenter
    bmkem
    Aug 30 12:31 PM
    Fear, Greed, Discounts, Premiums and the World of CEFs [view article]
    Mebane - You mentioned that etfconnect has great tool for discount/premium sorting but cefa.com has an even better one that allows to resort after you get results. Also, it is the only site where you get two yield figures -- one for the published "distribution&quo... yield and one for the "income-only"... yield. That gives you an idea if you are getting real income or a return of capital. Reply
  • commenter
    Asif
    Feb 12 03:04 PM
    My Website
    CEF Long-Short Pair Trade: Premiums vs. Discounts [view article]
    Ankit, I have never given much thought to technical trading patterns but in this scenario I can see how it can be useful. You are right about APF and ETF trading at discounts over a period of many years but their discounts are consistently less than 10%. Moreover in the case of CUBA, the fund was trading at a small discount over the last few years and then all of a sudden shot up to a premium of about 100%.

    Thanks for taking the time to write down some of Stephane Reverre's explanations. I will add "The complete Arbitrage Textbook" to my long list of books to read.

    I have enjoyed this exchange and if you would like to stay in touch, you can reach me through the Contact Us form on SINLetter.com

    www.sinletter.com/cont...     Reply
  • commenter
    Ankit Gadi
    Feb 12 01:49 AM
    CEF Long-Short Pair Trade: Premiums vs. Discounts [view article]
    Sorry I forgot to answers why they trade at premiums or dis. I mean there have been many reasons put forward to why this happens but quite surprisingly no one really has found an exact reason that explains all. Stephane Reverre explains some of the reasons why in his book "The complete Arbitrage Textbook":

    Unrealized capital appreciation (-): Investor face built in capital gains tax liability from substantial amount of unrealized gain.

    Restricted, or letter, stock (-): Stocks in the fund carry restrictive clauses and cannot be sold before the end of a stated holding period.

    Holdings of foreign stock (+/-): Holdings of foreign stocks in countries with different tax treatments or legal environments maybe be partially attractive or unattractive, especially if individuals are unable to replicate the same portfolio on their own.

    Performance (+/-): A fund can trade at prem/dis based on the perspective ability of its management team to deliver outstanding results.

    Turnover (-) Transaction costs in the form of brokerage fees or bad execution in the market drive a fund's performance down.

    Market Sentiment (+/-): In case of country funds. He mentions a hypothesis that suggest U.S investors in aggregate price the systematic risk attached to a country differently than they price the U.S. market risk.     Reply
  • commenter
    Ankit Gadi
    Feb 11 09:38 PM
    CEF Long-Short Pair Trade: Premiums vs. Discounts [view article]
    I just had a quick look and found 2 funds that normally always trade at dis/prem. They are APF and ETF but still you can find long/short opportunities in these funds by forming bollinger bands. You are probably safe using the fund sorter tool and looking at the funds trading at extreme dis/prem as they are probably trading at extreme bands but I wouldn't make it a habit. Also, by looking at the MAV you can also find opportunities in the funds which wouldn't necessarily show up from the fund sorter tool ( at they might seem to be only trading at a slight premium or discount but could be a whole different story when compared to its MAV). Have a quick look by forming bollinger bands. You will see a mean reverting pattern. Reply
  • commenter
    Asif
    Feb 09 12:38 PM
    My Website
    CEF Long-Short Pair Trade: Premiums vs. Discounts [view article]
    Don, I did mention this difficulty in borrowing these CEFs with real high premiums in the article and hence did not add these trades to the SINLetter model portfolio.

    Thats an interesting thought Ankit. Any idea why some of them always trade at a premium? The premium for CUBA has been narrowing over the last few weeks, especially after its manager Thomas Herzfeld sold 18,800 shares in late December. The strategy is pretty old school but I figured it would be a good idea to share it with my subscriber base, which is mostly retail investors.     Reply
  • commenter
    Ankit Gadi
    Feb 09 04:29 AM
    CEF Long-Short Pair Trade: Premiums vs. Discounts [view article]
    This strategy is pretty old school but still works. You are right in saying that the funds mentioned are trading at extreme discount and premiums but that alone should not be a reason to long/short them. You should make a premium/discount bollinger bands of 1.5 stand dev and see whether they are trading at one of the extreme bands. If they are, then maybe yes there is an opportunity. It is becuase few of the CEF are always trading at high discount or premiums. Its when they make an extreme move from their moving average you have the chance to take in profits. Reply
  • commenter
    don riley
    Feb 09 12:48 AM
    CEF Long-Short Pair Trade: Premiums vs. Discounts [view article]
    The big problem with the pairs strategy is most of the ETF's with real high premuims are very difficult or immpossible to borrow. So you can't short. I have been trying to borrow CRF forever from one of the biggest brokerage on the street and cant get a share. Even a lot of the etf's are often hard to borrow. I often short the IYR (REIT Holder) and it is always hard to borrow. Reply
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