Did He Really Write That?

Rule No. 21: Be a TV Critic Cramer has an amusing article up about the agenda of money managers on TV. I laughed out loud as I read his skepticism about the folks that get interviewed. Hello? Maybe it’s just me. Oh by the way, I am scheduled in my usual slot in the first half hour of Asian Market Watch...

There Is A Stock Market There?

Iceland. Yes, Iceland has a stock market. I stumbled across this article at the Index Universe site. Apparently the ICEX-15 has been on fire for the last two years. They recently created an ETF based on the ICEX-15 that appear to only be available in Iceland. In fact I can’t find any way for Americans to easily access that market. I looked through the listings of companies (the information is available in English for those of you that are not fluent in Icelandic) and two types of companies seem to dominate the roster; financials and companies one way or another associated with the fishing industry. Iceland had GDP growth in 2004 of 5.2%, prices rose by 4.7% over the trailing twelve months (TTM), incomes rose by 6.7% TTM, unemployment is running at 2.5%, the value of fish caught rose by 11% (no joke this is in the stats). The other thing that caught my eye is that they have a very small trade deficit. The reason I think this is noteworthy is other than fish what else do they have? Either more than I think or they are selling a lot of fish, whatever the case there is demand for their goods which may mean good things can continue to happen economically which may domino to good things for the ICEX-15. As you look at the five year chart posted above it seems to me that Iceland has a low correlation to the US, if I am right I think it is because the economy of Iceland is basically one giant food stock with little controversy. Food stocks are...

This Was A Bad Quarter

I have one client in particular whom I expect will call me soon to complain about the bad quarter we are closing today. I imagine I will agree with him it was a bad quarter. Then I will tell him we are going to have quarters like these. I will remind him that the stock market has a down year 28% of the time, according to the Stock Trader’s Almanac. I will further remind him that when I first started managing money for him I promised him there would be down quarters and down years and this is what they feel like. Then he will pick out one name that he thinks is down a lot and ask if we should sell it. Whatever name he picks will be down in a similar fashion to its competitors and I will ask him if we sell that one what should we do? Buy a substitute that I don’t think is as good of a company? Next he will ask if we should have more money in preferred stocks, we already have a lot given his conservative allocation, he will ask what’s wrong with getting 6% on the whole thing? I will remind him that the market goes up a lot only so often and we don’t want to miss too much of it, like we did in 2003. He was afraid of stocks at precisely the wrong time. The next time we have an up quarter he will question why we are not exposed to more technology. I am not making this up. While I doubt too many of you...

Global Covered Call fund

ING Raises $1.7 Billion in IPO for Global Equity Dividend Fund With Option Overlay Strategy The name of the fund is a mouthful but the ticker is IGD. The fund owns foreign stocks as well as US names that tend to have high dividends and the managers will sell calls against the holdings. I did not see if the fund will sell any index call options or any puts on either the common or an index. The impression I get from the article is covered calls only. The global aspect interests me. I think this is now the 97th CEF that uses options (97 is a humor attempt). Usually newly issued CEFs have, for lack of a better description, an embedded sales charge that needs to be worked off in the market place. In this case the fund was priced at $20, perhaps $0.50 per share went to the sales force that sold the shares thus making the NAV $19.50 not $20, $0.50 is an example only I do not know what the sales concession is for this one. I am not positive how long it takes to work this out but if you have any interest in buying this with out a premium to NAV it might make sense to wait a few...