Strategy Session Discounted closed end funds

James Pope |

“Whether socks or stocks, I like buying quality merchandise when it is marked down.”
Warren Buffett


All right we are going to get a little geeky. We can here the responses now, “Aren’t you always?” In this report, we will explain one of several investment strategies DIS blends together in constructing a client’s portfolio.

In our May 2012 DIS and DAT (seen here), we outlined our Investment Philosophy and broke down the investment portion of one’s portfolio into 3 general categories: Timed Event, Non-specific event and long term value extraction. We define the Non-specific event category as strategy involving an underpriced asset yet an unknown future event will likely be necessary to provide liquidity of the position. The event could be brought about by management decisions internally to liquidate assets, or it may involve an outside event.

In this category, one of the tools we use is Closed-End Funds (CEF). We will describe what a Closed-End Fund is, the characteristics we look for, the risks associated, and how it may fit in one’s portfolio.