Conference nyoss1::market_investing

      First,  you  evaluate  a  closed-end  mutual fund exactly like you
      would evaluate an open end fund.  I think it is  important  to  do
      this  first.   If  you  don't  think the fund will give you a good
      return, there is no point in considering it further, regardless of
      its open- or closed-end structure.
      
      Next you consider the following two differences:
      
      => The shares of closed-end funds are NOT sold and redeemed by the
      fund  itself,  as  is  the  case  with  open-end  funds.   Rather,
      closed-end  shares  are  bought  and sold on the open market, just
      like shares of GM, AT&T  or  DEC.   This  means  that  you  pay  a
      commission  when  you  buy  and sell; you must take that cost into
      account.
      
      => Closed-end fund shares are priced by the market. The market may
      decide that the shares are worth more than their NAV (premium)  or
      less (discount).  You must take this into account, too.  
          
          o  If  the  average yield of a the underlying securities is x%
          and the stock is selling at a discount of y%,  then  then  you
          have  positive  leverage -- the return on the fund is about y%
          higher than the return on the underlying securities.   If  the
          fund sells at a premium its return is similarly lower that the
          underlying securities.
          
          o There have been some historical studies that suggest you can
          get a reasonable return by  blindly  buying  closed-end  funds
          when they have a relatively large discount -- >10% -- and then
          selling when the discount drops to a relatively low  value  ==
          <5%.  NOTE >10% and <5% are approximations; the actual studies
          suggest more precise values!

      BTW,  for reasons I never have understood and probably never will,
      closed end funds most often sell at a discount.  This  gives  them
      leverage which is a definite plus compared to open-end funds.  But
      don't forget that the commission charges are a definite  negative,
      at least compared to no-load, open-end funds.

    You can find closed end funds (at least some of them) described in
    Value Line in the same manner as stocks are described.
    
    Dave

    Charlie's got most of it already.
    
    > Both open- and closed-end funds have management fees; be sure to take
      a look at those.
    
    > I think the "it's cheap, buy" point is about a 15% discount.  That is
      for typical funds; some of the oddball funds (e.g., junk, South Africa)
      may have a different point, reflecting the difficulty of getting an
      accurate valuation of the underlying securities.
    
    > With exchange-traded closed-end funds you can set limit-buy/sell and
      stop-loss orders and thus get in-and-out intraday, instead of waiting
      for the NAV at the close of the day.
    
    > Options on closed-end funds are possible, but not many exist today.
      ASA is the only one that comes to mind.  Also, you can sell them
      short, but that's often an unwise idea since there are so few shares
      floating (remember the Spain Fund short squeeze of a couple years ago?)
    
    > Closed-end funds often are the only way to play smaller markets,
      e.g., Thailand, where too much investment would skew price/value ratios.
      That's why there are so few open-ended `country' funds.
    
    > The key service in this field is the Herzfeld Closed-End monitor.
      Probably too expensive to subscribe to, but maybe you can locate a
      copy somewhere or hear Herzfeld on NBR, WSW, ...  Also, Value Line
      has a section or two for closed-end funds ("Investment Company").
    
        John

    The reasons for a discount include (in my guess of high-to-low
    order of impact):
    
    o	Compensation for the stream of management fees;
    
    o	Compensation for possible managment mistakes above and beyond
    	the base equity risks;
    
    o	Compensation for the fact that this is a package deal and
    	can't be tweaked to fit your particular desires the way a
    	portfolio of the underlying stocks could be.
    
    Reasons for a premium include:
    
    o	Closed-end fund has access to an otherwise closed market
    	(e.g. Korea);
    
    o	Economies of scale;
    
    o	Fee for apparent managment talent.
    
    I own some shares in the Turkish Fund, which is closed-end.  It
    hasn't done well, but it's my main emerging markets play at the
    moment, so I'm holding on to it.
    
    		-John Bishop

Frank Capiello's Closed-end Fund Digest is another newsletter covering these
funds which may be cheaper than Herzfeld.  The Closed-end Fund Digest has 
four portfolios fo around $50K each.  They had total returns averaging close
to 7% for the first quarter of this year.  

    Hi,
    
    re. .5  What funds does Frank recommend in his model portfolio??
    
    This is good discussion now how about some names:
    
    A few come to mind:
    
    GSO Trust managed by value investor Charles Almond
    Gabelli  "   " growth investor Mario Gabelli
    Gemini II  " managed by value investor of Windsor Fund (I think)
    Zweig   ""  by timer Martin Zweig
    
    These certainly are some good names but I find the field difficult to
    get information on.  There is another newsletter advertised in Barrons
    for this field called I think the "Scott Report".
    
    One of the interesting things not mentioned so far is the date when the
    fund converts to open end and the discount disappears.  This provides
    opportunity to make money if the discount is large and the date is
    relatively near.  You get that kick plus whatever the fund manager can
    make.
    
    JD

In the business section of today's Gobe there is an article
by Brendon Boyd which discusses Mr. Cappiello's choices in
Closed-end Mutuals.

Among those he seems high on are:
Global Funds - 		Morgan Stanley Emerging Markets Fund

Latin American Funds - 	Latin American Equity Fund
			Mexican Equity and Income Fund

Asian Funds -		Asia Pacific Fund

European Funds -	Europe Fund
			Swiss Helvetia Fund
			France Growth Fund
			United Kingdom Fund

US Funds -		Morgan Greenfell Small Cap
			Saloman Bros.
			Counselors Tandem


In addition, the article included information about 

"Frank Cappiello's Cosed-End Fund Digest"
1280 Coast Village Circle, Suite C
Santa Barbara, CA  93108

$200 annually

"Frank Cappiello's Cosed-End Fund Digest" likes Junk bonds.  I just opened
a 3-month subscription and his April issue asks, "Should You Be a 'Junkie'?"
After a strong caveat, he goes on to predict that in the next 12 to 18 months
junk bond funds should be just the ticket for those willing to take some risk.

He (or rather "they", whoever it is really making the decisions) likes the
High Yield Advantage Trusts I,II, and III.  Also, there is a special one in
the Multi-Sector group, Kemper Multi Market, that they like.

The first quarter performance of a portfolio of five Income (Taxable) funds 
is +8.44% with a current yield of 10.30%.   Will these results hold up over
the next 12 to 18 months????   

Mardy

I like the French Growth Fund (FRF) and the Irish Investment Fund (IRL).
Both around %20 discount and pay dividends.

	Rikki

re: .9

Just because the discount is high doesn't mean there'll be any movement in
the price of the fund.   The Closed-End Digest likes Growth Fund of Spain
because they feel, in addition to the good discount of the fund, that there
is a good chance of appreciation in view of conditions in Spain, particularly
the summer olympics.

Mardy

	One of the top performers on NYSE for 1Q92 was India Growth Fund (IGF),
	which is also a closed-end single country mutual fund. 

	Most of the rise on the Bombay Stock Exchange came about because of
	massive fiscal liberalization on part of the Indian govt. There were
	also some speculative bull operators who were responsible for the 
	rise. IGF has fallen though in the last 2-3 weeks, due to the problem
	one of these operators had with his banks. 

	FWIW, IGF is currently between 20 and 21, with 52-week high and low
	of 26 and 9 3/4 resp. I think it is discounted about 20%.

	I don't hold any of IGF, although I do hold stocks in India (some of 
	which I have held for 20 years); my returns have been excellent.

Several prior notes were entered almost 17 months ago, in particular .8
mentions some funds and wonders how they will perform between way back 
then and now.  Here is my compilation of results from early May 1992
through September 24, 1993.

Rank  Fund, discussed in note     May    Sep.  dividends   %Total
			         1992    1993  pd.(17mo.)  Return
-----------------------------------------------------------------
 1  Gemini II Capital, .12       13 1/4  19 1/4  0.11       46.1
 2  France Growth Fund, .9        9 1/4  12 1/2  0.06       35.8
 3  High Income Adv Tr III,.8     6 3/4   7 3/8  1.02       24.4
 4  High Income Adv Trust, .8     5 5/8   6 1/8  0.85       24.0
 5  High Income Adv Tr II, .8     6 1/8   6 5/8  0.89       22.7
 6  Irish Investment Fund, .9     7 5/8   8 5/8  0.33       17.4
 7  Kemper Multi Market, .8	 10 3/4  11 1/4  1.53       11.4 
 8  Dow Jones Industrial Average  3336    3543   2.5%e/yr*   9.7  * yearly,
 9  India Growth Fund, .11       20 5/8  18 3/8  3.21        4.7  estimated
10  Growth Fund of Spain, .10     9 3/4   9 5/8   0         -1.3

Gemini II is summarized below; this fund pays no dividend except for interest 
on uninvested cash, and in exchange it gets leveraged price appreciation.  
A good fund to be in when the market is rising.

#2 FRF has done stunningly well for a sector supposedly in recession
these past few years.  Even coupled with #6 IRF the combined return is
over 25%.  What now, Rikki?  Hold the same shares, or rebalance $ by
selling some FRF and buying more IRF?

Cappiello's junk recommendations did pretty well, better than I expected.
Junk must be awfully tempting to those who live only off interest payments.
Then again, Cappiello also recommended the "dud" on the list, the Growth
Fund of Spain.

But that's not why I wrote this note.  What I -really- wanted to write about
was the role of closed-end funds in a bear market.  Closed-end funds provide
a unique bear market opportunity in that they can be sold short.  Some of the
smaller "country" funds should not be sold short because of their thin float,
but there are many larger, more general funds.  Some examples are:

Adams Express ......... ADX 18 1/2      Gemini II Capital ..... GMI 19 1/4 
Baker Fentress ........ BKF 19          Liberty All-Star ...... USA 11 1/4 
Blue Chip Value ....... BLU  8 1/4      Salomon SBF ........... SBF 13 3/4 
Charles Allmon Trust .. GSO 10          Tri-Continental ....... TY  24 7/8 
Gabelli Equity Trust .. GAB 11 5/8      Zweig Fund ............ ZF  13     

We'll revisit these prices in another year or so.  When selling short a
closed-end fund you gain the benefits of a diversified portfolio so you're
not exposed to sudden good news, such as takeovers or dividend hikes.
(I hope no reader was short Paramount!)  Plus for exchange-traded funds 
(including all the above) you can enter stop orders to protect profits.

Just as it was a good fund to buy in a bull market, GMI is a good fund to
sell in a bear market.  Because it's leveraged GMI will tend to drop more
than most funds, and since it pays no dividends the short-seller will not
be responsible for meeting dividend obligations.  Currently GMI is priced
at a ~20% discount but there is NO CHANCE the fund will convert to open-ended
because it is paired with GMIpf, an Income fund that sells at a 30% premium
and -still- yields over 13%.

  John

    re. -1.  John,  Besides GMI which other two are good short candidates?
    
    Also would you care to speculate on entry date, stop point, and 
    possibly exit crietria on those funds.

>    re. -1.  John,  Besides GMI which other two are good short candidates?
    
    Who said there were two others?
    
    In any event, Liberty All-Star would be my second choice.
    
      John