Comments on: An Idea on How to Invest in Cuba http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/ Peering into the Cauldron of the Gods... Wed, 28 Sep 2011 10:20:57 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Jason G. http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/comment-page-1/#comment-466 Jason G. Wed, 02 Jan 2008 17:55:05 +0000 http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/#comment-466 By the way, the premium on CUBA (the fund) is back down to zero... just in case you were considering it as an investment still. http://www.etfconnect.com/select/fundpages/global.asp?MFID=10353 By the way, the premium on CUBA (the fund) is back down to zero… just in case you were considering it as an investment still.

http://www.etfconnect.com/select/fundpages/global.asp?MFID=10353

]]> By: Jason G. http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/comment-page-1/#comment-249 Jason G. Wed, 06 Dec 2006 21:55:55 +0000 http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/#comment-249 I just saw the format over at closed-endfunds.com and it's pretty swanky too... http://www.closed-endfunds.com/FundSelector/FundDetail.fs?ID=4842 According to that site, CUBA is now trading at a <b>70% premium</b> to NAV! I just saw the format over at closed-endfunds.com and it’s pretty swanky too…

http://www.closed-endfunds.com/FundSelector/FundDetail.fs?ID=4842

According to that site, CUBA is now trading at a 70% premium to NAV!

]]> By: Jason G. http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/comment-page-1/#comment-248 Jason G. Wed, 06 Dec 2006 06:02:47 +0000 http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/#comment-248 The portfolio is listed on Morningstar as well as a few other places... http://quicktake.morningstar.com/CEFNET/Holdings.aspx?Country=USA&Symbol=CUBA&fdtab=portfolio Morningstar's site has a few shortcomings... for example, they didn't recognize Florida East Coast Industries as FLA, though the other publicly traded positions are properly linked... A quick search will usually uncover such shortcomings. The portfolio is listed on Morningstar as well as a few other places… http://quicktake.morningstar.com/CEFNET/Holdings.aspx?Country=USA&Symbol=CUBA&fdtab=portfolio

Morningstar’s site has a few shortcomings… for example, they didn’t recognize Florida East Coast Industries as FLA, though the other publicly traded positions are properly linked… A quick search will usually uncover such shortcomings.

]]> By: John http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/comment-page-1/#comment-245 John Tue, 05 Dec 2006 18:45:24 +0000 http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/#comment-245 CUBA is up quite strongly today (over 13% on the day at the moment!). Just an interesting side note... I'm with you on the core idea that CUBA as a fund is not appealing due to the costs, tax implications and NAV issues. I'm all about letting someone else pay the premium to invest directly in the idea and just check in regularly to see how the holdings are shifting and changing out. Where did you go to get the list of top 25 holdings? And, how often is this list updated? CUBA is up quite strongly today (over 13% on the day at the moment!). Just an interesting side note…

I’m with you on the core idea that CUBA as a fund is not appealing due to the costs, tax implications and NAV issues. I’m all about letting someone else pay the premium to invest directly in the idea and just check in regularly to see how the holdings are shifting and changing out.

Where did you go to get the list of top 25 holdings? And, how often is this list updated?

]]> By: Jason G. http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/comment-page-1/#comment-243 Jason G. Tue, 05 Dec 2006 17:46:43 +0000 http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/#comment-243 Interesting point... if the fund is up 50%, but the premium to NAV is at 40%... how much of the performance result is from the underlying investments, and how much is due to inflation of the premium? Looking at the ETFConnect chart, it looks like CUBA was trading at a slight discount up until September, which means that the recent price gains are almost all due to premium inflation. Mix in the 40% turnover (which will hurt at tax time) and the 3.3% fees (which hurts all the time), and CUBA <i>as a fund</i> is looking less and less appealing to me. The core idea still has a lot merit though... Interesting point… if the fund is up 50%, but the premium to NAV is at 40%… how much of the performance result is from the underlying investments, and how much is due to inflation of the premium?

Looking at the ETFConnect chart, it looks like CUBA was trading at a slight discount up until September, which means that the recent price gains are almost all due to premium inflation.

Mix in the 40% turnover (which will hurt at tax time) and the 3.3% fees (which hurts all the time), and CUBA as a fund is looking less and less appealing to me. The core idea still has a lot merit though…

]]> By: John http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/comment-page-1/#comment-242 John Tue, 05 Dec 2006 13:18:28 +0000 http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/#comment-242 A good investment study technique could be to use Herzfeld or any star money manager as an indirect investment guide. If I had more time, I'd like to reverse engineer each of the top picks as an intellectual exercise. Why is FLA his top pick? What criteria did he probably use to select them? What risks does each company carry if Cuba doesn't normalize relations with the US? Thank you for this info Jason--see the article above has been corrected responding to your comments. A good investment study technique could be to use Herzfeld or any star money manager as an indirect investment guide. If I had more time, I’d like to reverse engineer each of the top picks as an intellectual exercise. Why is FLA his top pick? What criteria did he probably use to select them? What risks does each company carry if Cuba doesn’t normalize relations with the US?

Thank you for this info Jason–see the article above has been corrected responding to your comments.

]]> By: Jason G. http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/comment-page-1/#comment-241 Jason G. Tue, 05 Dec 2006 02:35:06 +0000 http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/#comment-241 In fact, if you really want to invest in CUBA (the fund) without the premium, take a look at the <a href="http://quicktake.morningstar.com/CEFNET/Holdings.aspx?Country=USA&Symbol=CUBA&fdtab=portfolio" rel="nofollow">25 largest holdings in the fund</a>. 19% of the fund is invested in Florida East Coast Industries (<a href="http://stockcharts.com/h-sc/ui?s=fla&p=D&yr=1&mn=0&dy=0&id=p62562975394" rel="nofollow">FLA</a>). 50% of the funds holdings are in the top 6 positions. In fact, if you really want to invest in CUBA (the fund) without the premium, take a look at the 25 largest holdings in the fund.

19% of the fund is invested in Florida East Coast Industries (FLA). 50% of the funds holdings are in the top 6 positions.

]]> By: Jason G. http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/comment-page-1/#comment-240 Jason G. Tue, 05 Dec 2006 02:23:03 +0000 http://www.tasgall.com/2006/12/04/an-idea-on-how-to-invest-in-cuba/#comment-240 I'm not sure if you have your terminology right... closed-end funds are open to the public and trade like ETFs... and I just checked, and CUBA is available for trading through Schwab. You probably can't buy CUBA in certain automatic investment plans (or 401ks), but it should be open for buying in a traditional brokerage account. The catch with a closed-end fund (as previously detailed <a href="http://www.tasgall.com/2006/08/06/closed-end-funds/" rel="nofollow">here</a>) is that they can trade at a premium or discount to NAV (net asset value). CUBA happens to be trading at a <a href="http://www.etfconnect.com/select/fundpages/global.asp?MFID=10353" rel="nofollow">38% premium to NAV</a>, which means you'll pay $1.35 in the market for $1.00 in fund assets/holdings. Wait for this one to cool down before considering putting any money into it... I’m not sure if you have your terminology right… closed-end funds are open to the public and trade like ETFs… and I just checked, and CUBA is available for trading through Schwab. You probably can’t buy CUBA in certain automatic investment plans (or 401ks), but it should be open for buying in a traditional brokerage account.

The catch with a closed-end fund (as previously detailed here) is that they can trade at a premium or discount to NAV (net asset value). CUBA happens to be trading at a 38% premium to NAV, which means you’ll pay $1.35 in the market for $1.00 in fund assets/holdings. Wait for this one to cool down before considering putting any money into it…

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