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Cohen & Steers Quality Income R Message Board

  • npathfinder2000 npathfinder2000 May 23, 2008 5:05 PM Flag

    RQI has > 10% premium, don't buy

    As occasionally happens with closed-end funds, the stock price for RQI has become disconnected from the underlying value of the fund. As of 5/22, the net asset value (NAV) of RQI was only 16.38, while the stock price was $18.36. This means you are paying 12.1% too much for the fund. In fact, because the fees on the fund are over 1%, you should expect to pay less than the NAV to own RQI. Sadly, many people do not understand this about closed-end funds and end out losing money even when the underlying investments perform well. ETFconnect is a great site to get updated information on the fund's NAV.

    Please do your research on closed-end funds before buying this stock. Paying a premium for a fund that has high expense charges rarely works out in the long run. Good luck.

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    • If you find that info, I'd be interested.
      They recently did this:

      And I would think that if they were in trouble with the AMPs at this point, they would not be using the money for share repurchase, but would instead be using it to solve an impending AMPs problem.

      If you find anything of interest, please post it...


    • One thing to consider is that RQI has 454 million in AMPS and is dangerously close to having to liquidate to redeem them. The ratio at the end of 2007 was just 2.4 (2.0 required)and must have slipped since then. Could be the major reason they are buying their own shares. And, they are using borrowed money to pay the dividend. Look at the annual Report for 2007. Income must also be lower but I cannot find a quarterly report.

    • Nice of you to give me the the last word but somehow I don't think that will occur. I will "try" to keep it short and sweet since it is a msg board and not the library of Congress.

      1.) You need glasses more than I do. If you reread you will see that I defend the "Retail" investor after your comment "You're retail guys and most of you are not that bright". If you did read it correctly then it is a clever attempt to twist the facts.

      2.) Go back and read my screen name again and you will be convinced you need glasses. My name is not Jim, Jimmy, Jimbo or anything of the sort.

      3.) As for what an analyst does, I know first hand. Dealt with plenty on my company's proposed rollup and IPO. No, didn't bite on an exit strategy converting to a financing strategy. Exited later with a nice sum ,and, no I am not a retired Plumber but I do know one that does very well with his investments and trades. Plumbers are quite smart, so, find another analogy.

      4.) Uncle Sam can attest to the size of my "little day trading account" . I can't say I was happy paying 184K in cap gains last year but I'll live. Probably should have converted one account to Mark-to-Market.

      5.) I am confident to date in RQI and the mgmt of Cohen and Steers. Have been for the last 5 1/2 yrs. I didn't buy this on Ben Stein's recommendation. I do believe that Mortgage Defaults have pretty much peaked but that is not the focus of the fund's (RQI) holdings.
      Tried the valuation argument with the assessors office here and they aren't buying it in this neck of the woods, but I am still working on it ( the bastards raised my land value 153K for this yr).

      6.) Ben Stein has recommended RQI for a while, first time I remember was last Aug/Sept. and I wouldn't insinuate a "pump and dump" without hard facts. Especially a public figure. Is he talking his book, sure, but I'll bet most do. As for analysts, find me one that is correct and I'll show you two that are not.

      Well, that is all I have time for now. If you think I am cocky or boasted to a degree, fine, I worked hard to get what I and I deserve it. It is provable (on line too) but then you would know I am and I wouldn't give it out without knowing who you are. Maybe if we kiss and makeup.

    • "Markets do tend to over shoot in both directions in the short term"

      Genius analysis! However, RE has been declining for a year now and mortgage defaults are still climbing. A year is generally not considered "short term". If assets are trading at a new lower price, it doesn't necessarily mean they're undervalued. This is especially true of the NAV of CEFs like RQI. The portfolios mainly consist of companies which are liquid and trade millions of shares daily. Asserting that they are undervalued, you are implicitly saying that you know something that thousands of people - including mostly professional money managers with posses of stock analysts in their employ - don't know. I'm not saying you're wrong absolutely wrong -just that it should give pause to your overconfidence.

      "As for the asset values, maybe people are looking at the cash flows"

      Ok, Sparky. You may be stupid but that doesn't make it appropriate for me to dictate what you should and shouldn't be long in your portfolio (and neither is it appropriate for Ben, BTW) since I don't know anything about you. But if you're looking for dividend yield, I'm pointing out that RQI's stock price is so bid up relative to it's NAV, it's yield has declined to less than 10%. In other words, you're paying a lot to get that cash flow. In contrast, RNP's (another Cohen & Steers) dividend yield is nearing 12% and it's trading at a discount today. Not saying you should buy RNP instead. That's not for me to say. Just asking why people aren't trading in the most expensive RE CEF for some other less expensive one with higher dividend yield. On its face, it doesn't make a lot of sense to me.

      "that the new accounting stds implemented have undermined the real value."

      ones that actually force fund managers to account for the real value of the assets in their portfolio and not inflate (read: lie) about the value of the assets? That's just a terrible rule! That’s a pretty dumb thing to say, Sparky. Incidentally, these "new accounting standards" are a.) not new b.)only apply to illiquid assets. The vast majority of RQI's underlying portfolio is liquid, easy to price and there are no new accounting standards for you to worry about.

      "Perhaps you should try asking instead of headlining a don't buy"

      Again, Jimmy, do attempt to understand the written word. Notice the questions in my posts. Also, please show me where I'm actually telling you not to buy RQI? Where is all this "headlining"?

      "You cockiness smacks of someone that is still wet behind the ears."

      My cockiness is in direct response to your BS about analysts as market manipulators and the assertion that I couldn't possibly be a good analyst otherwise-why-would-I-stoop-so-low-to-talk-to-you, sparky. Your aversion to my "cockiness" is just the old man version of crying to mommy when some of their own medicine is served up to them. You can dish it but you can’t take it, eh?

      Anyway, Jimmy, it's been fun. However, by the end of this post, I got bored thinking about you. The smart guys will read what I wrote, consider it and make their own decisions - as they do with all posters. The dumbasses will do what you did. I'm off to the beach.

      Feel free to have the last word! And....good luck. I'm very serious about that, as I really don't want you to lose money in your old age and for that, you're clearly going to need luck.

    • Jimmy, One more time (because I have hope for you yet, possum!): I'm a FORMER analyst (you know what "former" means, right?). Now, if you weren't so proud of displaying your ignorance, you'd know that analysts who cover very illiquid stocks actually visit yahoo boards all the time because very small stocks tend to be retail driven...and for amusement. However, they can't post for legal and other reasons.

      I now post because I a.)can and b.)while you are proof that there are many idiots, there are lots of retail folks here who are actually very smart and I enjoy both debating and chatting with them. In fact, some of them are just fantastic.

      "Certainly "bright" enough to know that if you were worth your salt as an Analyst you wouldn't be posting here."

      We can all see how bright you are. Especially since your statement implies that you think ALL retail folk are so worthless that they aren't worth a professional analyst's time. I said that some of you (even most) are dumb - not all. You think you're all too useless. Sad.

      "You assume too much."

      Kinda rich coming from you, huh, Sparky? What with you coming at me with nothing but assumptions firmly anchored in complete ignorance of both me and my profession in your first post to me.

      Since you're too thick to catch it the first time: Benny bought RQI. Now, he's talking it up on TV so that hot "traders" like you will bid it up. Go ahead, prove me wrong in a court of law. I'm a poopyhead, but Ben Stein has YOUR best interests at heart, not his at the expense of yours. I shudder to think how fast you'd run out to buy Angelina Jolie's stocks!

      "I have seen my fair share in 36 yrs of investing and 11 yrs of trading."

      Oh, I'm sure you think you have. You're a "trader" are you? So if I said "20 at 22 10,000 up" you'd absolutely know what I'm talking about? Go look it up on the internet or something. You're a "trader" like a retired plumber who gets a day trading account to "play" the stock market. Here's a spot of advice, Sparky: be who you are. Don't pretend to know more than you do. It won't end well.

      "And I am confident that you have no clue of what assets foreign wealth funds will buy next.."

      So am I, genius. I don't have a clue what people will buy next because, unlike you, I'm smart enough to know I don't know the future. But then, I'm not the one who is so confident that the Japanese are going to run in and start loading up on US real estate, placing "a bid under" your assets - you're the one who confidently asserted that.

      I think this will probably exceed the message length, so I'll go ahead and open another post.

    • You assume too much. Before you call anyone "Son" you should find out if that person is old enough to be your father. I have seen my fair share in 36 yrs of investing and 11 yrs of trading.

      Certainly enough that your assertion that Ben Stein is talking his book for the purpose of personal gain better be backed by a fat wallet if you keep making the claim in public w/o proof.

      Certainly "bright" enough to know that if you were worth your salt as an Analyst you wouldn't be posting here.

      "wondering why people are willing to pay up".

      Perhaps you should try asking instead of headlining a don't buy.
      As for the asset values, maybe people are looking at the cash flows instead and believe that the new accounting stds implemented have undermined the real value. Markets do tend to over shoot in both directions in the short term and perhaps the buyers here have a longer term time horizon out side of a few weeks.

      "You're retail guys and most of you are not that bright"

      I doubt very much you are looking out for the interests of the so called "not so bright retailers" as you put it. You cockiness smacks of someone that is still wet behind the ears.

      And I am confident that you have no clue of what assets foreign wealth funds will buy next or the not so "bright" foreign retail investor.

    • Son, you wouldn't know a market manipulator if he bit you in the ass. I'm pretty sure you don't even know what an analyst does. I'm sure that they are the biggest market manipulators you've ever seen, but you clearly haven't seen much in your life. A pump and dump is staring you in the face and you can't even see it. Pathetic.

      What brings me here? I just noticed this thing at a giant premium, sticking out like a sore thumb, and wondered why people are willing to pay up. Then, I got my answer. Ben Stein. The classic pump and dump ('s not the only guy who does this - a lot of money managers do). You're retail guys and most of you are not that bright.

      "more money will flow in to US equities particularly from Japan. So I would expect a bid under REIT stocks and High yield"

      Let's assume that's true. A.) they won't be buying closed end funds. B.) They'll be buying the assets that you now own in the closed end fund at a 16% discount to what you're paying (remember, you're paying a premium of over 16% for the same assets right now). Since the discussion isn't about the value of the underlying assets but the curious propensity for you lot to overpay for them, your point is irrelevant. If you have an opinion about where REITS are going, why not buy ICF, which trades at basically NAV, a REIT CEF that trades at a discount or at least a C&S REIT fund that trades at a smaller premium so that you have more upside? Oh that's right! Ben Stein wants you to jack up the price of his stock so that he can sell it to you and like a good dog, you're jumping at the opportunity to take it off his hands! Gotta love the pavlovian response of retail guys. No wonder Wall Street has such easy ripping your faces off.

      Anyway, good luck!

    • Are you suggesting that Gentle Ben is crooked? Certainly he can't be as crooked as an Analyst. They are the biggest market manipulators I have ever seen.

      I don't know, I'd be careful about how you answer that. Oh that's right you said you used to be an Analyst. Sorry.

      So now I have to ask. Of all the Financial Gin joints in the world, what brings you here?

      I believe what Techwreck(hmm doesn't sound like he had a pleasant time yrs ago) is that although the NAV is adjusted the amount of the div. , a reit sector rally will bring the premium/discount level closer in line.

      Based on recent Bernanke comments and the USD rally against "most" currencies more money will flow in to US equities particularly from Japan. So I would expect a bid under REIT stocks and High yield.

    • I don't know him. Nor do I know anything about a group that went short in December.

      I'm not congratulating the shorts. I'm being facetious. The people who are going or staying long this overvalued stock based on the blathering of Ben at a historically high premium to NAV "it's so cheap they're giving it away" Stein are falling for the oldest legal pump and dump scheme in the book.

      I'm not telling anyone to short anything. I'm just saying that the NAV has taken an 8% hit in the last two days. As of today, RQI is trading at the highest premium of any real estate CEF. At this point you have to take into consideration if you actually have any upside. I'm not "talking the fund to zero". But longs should just be cautious and not fall into Ben Stein's trap. The fact is that RQI now trades at the highest premium of ANY real estate CEF. If a bloodbath starts (and there already was one in DCW, DCA, IGR, RWF), RQI will have the farthest to fall - especially considering that it usually trades at a discount.

      "Don't worry the spread will tighten after ex-div and a small rally in the REITS"

      The NAV goes down by the amount of the dividend. Assuming no change in price, the discount tightens if the fund is trading at a discount. However, if the fund is trading at a premium, the premium increases if the price remains the same (lower NAV, price the same = bigger premium). So, since RQI trades at a premium, it'll do the opposite of what you said after the dividend. The premium will be higher and it will be even more over-valued.

      Just be careful.

    • Buy ECV, BCF and BTZ instead they are trading at discount to the market..

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