Author: Dan Plettner
Covestor models: Pure Short Opportunistic, MLP Direct Ownership, Taxable Income, Well-Intentioned Activism, Long/Short Opportunistic, Core
As February gives way to March, I continue to feel very positive about the broad market’s prospects. I am not overly focused on whether we’ll soon see the so-called dip that some market experts have been predicting.
Whether stock market prices are 5-10% higher or 5-10% lower, my observations of market, economic, policy, and even cultural factors lead me to believe we are in the early stages of what might be a historically significant bull market. Being “cute” with market timing would be particularly unwise now in my humble view. More important in my thinking than my macro perspective is the strong thesis and timing convictions for numerous long positions.
To name a few, I anticipate relevant shareholder votes or liquidity announcements to be catalysts for the Morgan Stanley Closed End Thai (TTF) and Eastern European (RNE) funds, in addition to several others like the New Ireland fund (IRL). The Alpine Global Premier Properties fund (AWP) has recently announced what I hope will be a first step to a buy back. These particular US traded securities are also accessing international markets through their underlying holdings — which I strongly desire.
My biggest individual position (a holding in multiple models) is the Boulder Growth & Income Fund (BIF). A lawsuit over derivatives between the fund and numerous fiduciaries has been settled, pending court approval, according a filing with the Securities and Exchange Commission. The market price of the fund does not appear to reflect the various outcomes, including the court approval I expect based on my research.
I strive to temper my expectations with modesty and I continue to have a long and short strategy in addition to my four long-only models (Core, Well Intentioned CEF Activism Profile, Taxable Income, MLP Direct Ownership). In the Long Short Opportunistic model I’ve further increased net exposure to long ideas and recently decreased my exposure to shorts to merely three positions. They are the Pimco High Income Fund (PHK), the Cushing MLP Total Return funds (SRV) and the Eaton Vance Municipal Income Trust Fund (EVN). All three are trading at enormous premiums to net asset value.
