Re: re:closed end funds

[ROSSERJB@xxxxxxxxxxxxxxxx id <01HVW7B0JSAM90NM9W@xxxxxxxxxxxxxxxx> for pkt@xxxxxxxxxxxxxxxx; Sat, 30 Sep 1995 16:55:59 -0500 (EST)]

In response to Arnold Chu:
     Doug H. is right and you have provided the reason why.
We do not know what the proper capitalization rate is nor
do we know what the future stream of earnings of a stock will
be.  Therefore we do not know the "true" present value of a stock.
     But with a closed-end fund one can sell the fund and buy
the assets or vice versa, unless they are somehow restricted
like Korean stocks for foreign buyers.  Thus the net asset value
is the clear fundamental, corrected for the fees and tax costs of
buying and selling the fund and the assets.  Anyone buying a closed-
end fund whose price is far in excess of its NAV is either an idiot
or is doing so out of an expectation of further price increases in the
fund, that is engaging in speculative buying which we can clearly
identify as such.
Barkley Rosser
PS:  So much for the "Cone of Silence," I guess.