I agree with you and Eddie that averaging down as just a cost-basis reduction exercise is inefficient, but there comes a time when market anticipation needs to be factored into the risk equation. Without it, the sell-down would seldom stop.

I was thinking that maybe the larger issue looking ahead is the erosion of paper money vis-a-vis the value of hard assets such as natural resources, commodities and infrastructure.  Thoughts always appreciated, including ways to play the idea if valid. Bill

Hi All,

Maybe BCF should be put into the same boat....really clobbered hard asset fund...distribution rate of about 15% and Discount around 25%.  Painful, but I think I'll hang on as sooner or later real assets are going to be worth real money.  BTW this fund is also not leveraged.

Phrog

Hello,

 I believe  that commodity CEFs and other similar products could be a good

 opportunity. The dollar could loose value, the USA treasury borrows 3.5

Billion dollars a day, and if the these countries will have less appetite

for US treasuries, the $ will fall.

Interesting that in the last three weeks the Dollar gain around 10% vs the Euro.

Are investors looking at  treasuries as safe haven, or they were betting

on a  reduction in interest rate  from the ECB. 

Even without the dollar loosing value, sooner or later the relation between supply and

demand will be tight. 

Just My opinion 

Thomas

Good Morning Bill....

 I am currently using a investing philosophy [sharing for the msg board] that basically is:

1...What ever I have committed to the market [investment wise] stays there [in entering bear type markets]. We currently show a 25% investment status into the current mkt [+25% more dependent on our individual "RISK" factors] cashmarker. Our cashmarker changes are dependent on mkt conditions each week. The cashmarker went down from 50% to 25% this past week because of the meltdown [I am still at 50% because of "Lessons Learned" from a lot of previous bear type mkt's where a lot of us got out too late and missed the turn of the mkt]. This meltdown is a lot more serious this timeframe and I often recheck my analysis data....

2...When ever I "sell" a CEF during a bear type environment, the CEF is immediately replaced with a "BETTER BUY OPPORTUNITY" equivalent [by analysis] for the "Long Term" [being a long term player]. One hundred percent of the time, I always am following a CEF [or two] that has my attention and I then sell one in my portfolio [of 50 ...(sixteen securities required of equal value/dollars for Statistical analysis protection against extensive losses in our portfolio's)] that is not performing to analysis standards and is consistently below our cashmarker. Maintaining my invested percentage in the mkt [by dollar value of course] is a must as we "never" know where the mkt turnaround is and when specifically it will occur....

3...Near ROM [rough order magnitude] estimation of bottoms, a lot of us try to find acceptable CEF's tied to the NAV [for distributions]. What I mean by this, is that those CEF's tied to paying their distributions to the NAV [rising and falling NAV's in a "RISING" market] become a better paying opportunity over those that normally pay a fixed distribution/dividend]. In rising markets, we receive increasing distributions on a consistent basis. In converse, these are the first to go when "entering" a bear type environment]....

4...I use 2-cube theory [a form of dollar cost averaging as well as selling point analysis/directive] only for those CEF's believed undervalued [and below my initial buy ...phase#1 of 3] and is low in mktprc only because of declining bear mkt conditions [like currently]. I seldom hold any one CEF above our allowable percentage to that of total portfolio allowed by 2-cube theory as a protection against "RISK"....

5...We use a mainframe computer for a lot of the analysis work but it does have its limitations. Finding good CEF's to add to our current inventory is always a challenge but some of the message boards do give us some potential CEF's for study [like AWF that was added to our weekly analysis inventory with this board's msg comments]. Deleting CEF's is difficult is some cases as some CEF's will totally collapse in bear type environments while others will not. In bull mkt environments, some CEF's will not perform as well as those that collapsed. Finding the "range" of acceptability for our investments is always the challenge IMHO....

 Long term investment doesn't mean sitting on our hands but being a active participant. Since CEF's are "professionally managed" [some with multiple managers], Our participation is in the pick/choose window [of CEF's and Managers] as our opportunity and our long term satisfaction/performance IMHO....

 Of course, different strokes for different folks. Many different approaches to the market exists and we need to use those approaches that work best for us individually [through many years of all of our "lessons learned"] IMHO.

 "Bill" ... In a more direct answer to your question, I was invested in a few natural resource CEF's, and infastructure CEF's but sold them all [back when] when their R72's dropped substantially because of their mktprc runup. We dropped two of them from our listing but still carry a few [none currently a buying opportunity]....

 I wish us all well this week....

Best Regards/Eddie....