'This credit crunch is worse than a divorce. I've lost half my net worth and I still have a wife.' Anonymous
It's all about the confidence! Cheer up... Yes, it's been a rough ride and a lot of net worth has been lost over the last few weeks but, for example, I personally made my best investing decisions only after a healthy doze of humor... I feel there might be another good idea coming up this weekend after reading all the jokes below. Enjoy!
Top 10 credit crunch jokes to have you laughing all the way to the bank
I went to the ATM this morning and it said "insufficient funds".. I'm wondering is it them or me?
- With the current market turmoil, what's the easiest way to make a small fortune? Start off with a large one.
-What's the difference between an investment banker and a large pizza? A large pizza can still feed a family of four
-How do you define optimism? A banker who irons five shirts on a Sunday
-George Bush was asked today "what did he think of the Credit Crunch?" He replied: "It was his favourite Candy Bar."
-What's the capital of Iceland? About £3.50
-What do you say to a hedge fund manager who can't sell anything? A Quarter-pounder with fries, please.
-You know it's a credit crunch when...• The cashpoint asks if you can spare any change.
• There's a 'buy one, get one free' offer - on banks.
• The Inland Revenue is offering a 25 per cent discount for cash-payers.
• Gordon Brown has stopped chewing his nails and started sucking his thumb.
• Your builder asks to be paid in Zimbabwean dollars rather than sterling.
• Highgrove has been repossessed.
• Victoria Beckham is pictured shopping in Primark.
• Alistair Darling's eyebrows have turned white.
"Be greedy when others are fearful!"
P.S. By the way, it is entirely possible that Monday/Tuesday will still be down days ...Option expiration days like today are definitely quite tricky and did in the past lead to some heavy down days afterwards... Look for the financial sector to continue being spooked by Lehman's auction on Tuesday and other "negative economic news"...
P.S.S. Cramer has said "it's time to buy" now, so did two or three other "experts"- that's starting to worry me a bit and for now justifies my inclination to go long only with high yielding assets like preffs and covered call writing ETFs... :(
Archive Comments (6)
Vad, You bought EEF and ECV in your strategy lab portfolio today. Why did you not just buy CII since they are all about to merge into CII? Is it because they are selling at a higher discount than CII? What would you expect the return potential to be on the lowering of the discount to the norm for these funds when these markets stablize and the fear contracts? labczar
Posted by labczar October 21, 2008 12:09 PM
Correct :)
Because the merger will be completed based on NAVs and not trading prices- this a great arbitrage opportunity in my opinion allowing for about 10% alpha...
Normal discount for these funds should be in low single digits...
Posted by dishwasher October 21, 2008 10:32 PM
could you explain the 10% alpha "thingy". Just the average layman here. Does it mean you could get a 10% bump up in the value of your shares at the merger due to the discrepancy in the discounts between CII and the other two funds when you bought them? lz
Posted by labczar October 22, 2008 1:03 AM
Looking at Morningstar data on the three Blackrock CEF's, it shows me why the CEF world is so confusing to the average guy.
While the two that you bought have normally had very low discounts or even small premiums in price, and that alone makes for some attractiveness if they were not about to disappear, but CII in the total returns data shows a normally high discount price, with the '05 & '06 average over 13%! It currently shows the discount at under 9% which is quite normal for this fund.
What's up w/ all that, considering that they appear to be very similar type common stock funds from the same investment house?
Also, it quotes the current yield at over 14%! How does a common stock fund have a yield like that, especially if it is trading at a normal discount for that fund? The two that you bought show high current yields, too, but I thought that was because of the steep discount compared to the normal average. Is that not the case?
Either Morningstar's data is not good, or I just don't understand how to interpret it.
Can you shed some light on my confusion? Thanks, lz
Posted by labczar October 22, 2008 9:26 AM
The more exact answer would be- because the discount to NAV on CII is single digits and ECV, EEF are in high double digits, the spread in my opinion is likely to narrow prior to the merger, which in turn should provide a 10% or so of relative income in the short run ( so if NAV declines by 10% or so the alpha will serve as a cushion)
Posted by dishwasher October 22, 2008 9:29 AM
hello Vad!
thks for the jokes, some of which are hilarious; some comments more to the point would also be welcome.
Posted by georic October 23, 2008 4:40 AM