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Templeton Emerging Markets Inco Message Board

  • wilson_01742 wilson_01742 Oct 7, 2008 6:01 PM Flag

    Time to buy?

    TEI closed today yielding 10.67%, which hasn't been seen for years. Since the fund invests largely in sovereign debt and the discount to NAV is 20%, isn't this a good opportunity? Aside from the general world financial situation, is there a TEI-specific risk that is depressing the share price? Thank for any thoughts.

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    • How do you see the NAV of closed end funds?

    • 10.67% percent yield? Are you nutz? Inflation will be double that within 12 months.

    • Today looks like the true panic day to buy, once again the people who piled into this on the way up are panicking because they don't really understand what they bought.

      • 1 Reply to chiquitbumbalabimbomba
      • "Today looks like the true panic day to buy, once again the people who piled into this on the way up are panicking because they don't really understand what they bought."

        No, it was capitulation in CEF space everywhere you look. They knew what they were doing: shorting Yen and buying bonds to clip the divies. It worked until it didn't, they they all tried to get out the door at once. Now the funds of funds want their balls back, at the bottom. Smart money my ass.

        Volume very high. ACG closed at all time low yesterday; that a high quality US govt bond fund. Seems some of the CEF's are deleveraging just as hedge funds are getting liquidations....both in the midst of a bear market capitulation. Perfect storm. Oil and gas midstream plays yesterday were pitched out the window. APU was off 30% at one point in the day before rallying. KMP had its stock down $6 after being down $3 the day before, and they didn't trade this low during Enron management in O%G midstream sector.

        Anything income producing got smashed. Preferreds hit new lows everywhere you looked.
        Final capitulation? WTF knows, but capitularory none the less.

        Go to ETF Connect and check the discount/nav screener. It's off the chain on the discount side. Quality stuff too.

        TEI is no anomaly. Some may believe we are in for hyperinflation because of rate cuts. I see deflation. Buying TEI and other quality bond and bond funds at these levels seems a no brainer. It was in 1997 during the Long Term Capital Crisis; I got some at $7 that fall. This crisis is a hedge fund capitulation too, on a global level.

        Smokem if you got em.

    • I doubt this will V-bottom and go straight up from here, as it's done many times on the past. I just don't see where the buying is gonna come from.

      So I'm only buying at even cheaper prices, though I'm not selling what I already have. If it bounces 10 or 15% may lighten up in preparation for another drop.

      For a while there I thought we had bottomed but I think there's still a lot of people out there who are gonna panic and sell at any price in the coming weeks and months.

      I think in this environment yield is irrelevant, getting it at a price that will eventually generate large capital gains is more important.

      And why buy this only hoping for 20% cap gains + the yield when you can probably buy emerging market stocks that may generate 100% capital gains in the next few years.

10.54-0.01(-0.09%)Apr 29 4:02 PMEDT