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Berkshire Hathaway Inc. Message Board

  • hjclasvegas6969 hjclasvegas6969 Jan 22, 2014 9:54 AM Flag

    closed end muni bond funds, sharing an email to friends,

    in 30 days this space is up 8-11 % its crazy, there is no value here at all now. barrons, the wall st j, gundlach and several seeking alpha guys have touted the space as well, at this point unless you think the 10 year is going to stay around 2.8ish, the RISK to reward is now terrible, imo. No leverage closed end munis now yield about 4.75 % with leverage yield about 6.5 %, the discounts were at record highs 30 days ago due in large part to tax selling and panic over detroit and puerto rico , now most discounts are below historic norms, I sold them all the past 2 days. IF the 10 year moves back toward 3 % these funds can lose 2 years interest in less than 60 days, crazy risk, tho cash is brutal losing 10-15 % fast is much worse.

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    • Hi H, cash is brutal but at this point, I think you've got to take some $ off the table. I'm not ready to short anything yet, but it is hard to justify putting new $ in almost any traditional investment vehicle today. On an operating basis, BRK looks ok but the stock portfolio is anything but undervalued so there is no compelling reason to buy the stock, though I trade around a position in the B shares in a tax-deferred account. Options premiums seldom justify the risk, so short puts are not particularly viable either. I long for the days when you could maintain a hefty cash position, earn 4-5% MM yield on your cash, and sell puts to generate decent overall returns.

      • 1 Reply to beachlawyer2003
      • 75.207--Bought some more WMT in IRA #1 today because, with respect to selling put option-the well has gone dry. Perhaps we'll have a correction in the next six months and options premiums will normalize-until then I'll just continue buying companies that are reasonably priced.

        With this purchase WMT makes up just under 2% of this account's net-worth and cash is down to about 35%.

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