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Cornerstone Strategic Value Fun Message Board

  • so1dieroffortune so1dieroffortune Aug 6, 2007 11:00 PM Flag

    CRF first, CLM to follow.

    CRF has dropped 21% in the last couple of months (most of it in the last couple of days). I believe that CRF will crash before CLM does. It's just a bummer that I can't borrow CRF shares to short ;(

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    • Look, this is silly. It really doesn't matter. CRF and CLM are both listed as US equity funds in Barron's and the Wall Street Journal. They hold essentially the same stocks and both NAVs move in tandem with the S&P500 index. Their stated objectives are the same, and they are managed by the same Portfolio manager.

      You think that just because Yahoo makes a mistake and puts one of them in the wrong sector and mistakenly calls it a debt-based fund, that the rest of the world is going to treat it like a debt based fund?

      Well, you are welcome to your wrong opinion. Let's move on.

    • Your not listening.
      I am not debating teh contents of teh funds, I am only trying to tell you that CLM is bunched with a different set of funds than CRF in the financial world. Yahoo only lists the info it gets.
      If you look at the listings for closed end funds-debt sector, you will see a completely different list of participants than when you do the same for closed end funds-equity. It may not be right, but that is how the financial communit perceives them and that is how they behave as the sectors move in tandem or in opposition.
      So CRF will trade differently than CLM more often than not when one of the sectors is getting hammered or is in high favor. Right now, the debt market and the equity market are both in the downward trend.

    • Say what you will, but the stocks in the two portfolios are almost the same, the NAV moves directly in parallel for the two funds, and the distributions are the same 21% of NAV.

      CRF and CLM are both diversified US equity funds, and neither one of them is "debt based".

    • CRF is a debt based fund and gets caught up in the debt worries in the market.
      CLM is an equity based fund and does not have much exposure to the debt market.
      But these high yield funds are often lumped together as debt related (mistakenly) and will run parallel to each other.
      Buying on dips can put a lot of cash in your pocket as the price swings of yesterday have shown...

    • In this case, I think that it is just that the seller had a big block of both CRF and CLM. The CLM was easier to sell because of wider following. It's just taking longer to sell their CRF shares.

    • It is interesting that in the past, CRF has almost always traded at about a 20% extra premium to CLM, in spite of the fact the CLM has tended to do a bit better on their NAV returns. CRF is a smaller fund, and is harder to short.

      Yesterday, both CRF and CLM declined dramatically along with most high distribution closed-end funds, but CLM recoverd most of its drop later in the day and CRF did not.

      It will be interesting to see CRF's action relative to CLM's over the next day or to as CRF, with its lesser liquidity, is given a chance to catch up.

      I have always felt CLM is the better of the two, largely because it is a larger fund and easier to trade, with smaller bid/ask spreads. We shall see.

      • 1 Reply to farht4512002
      • farht... I agree with your post. :) I too thought it very interesting that there was finally a crossover on the two funds. Likewise, I thought it was invariable that CRF would always have the higher premium for the simple reason you suggested, its small and less liquid and therefore harder to short and requires fewer fools to keep the greater fool theory chugging along/thus keeping it propped up better.

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