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Subject:  Re: Closed End Bond Funds Date:  5/1/2000  12:14 PM
Author:  pauleckler Number:  609 of 36218

Closed end bond funds that have a given pay out date sound like a unique situation. Discounts from NAV for many closed end funds is a fact of life. Unfortunately this is a perpetual situation. So there is no guarantee the discount will ever go away.

While its great strategy to buy discounted shares and force management to liquidate, I think this takes significant capital to accomplish successfully. I am aware of one closed end stock fund, Baker Fentress, which Warren Buffet was able to force into liquidation due to low asset value. (In essence, when closed end funds sell at a discount, that is a vote of no confidence in the skills of management and their ability to generate future value.) But few individuals have the clout to force liquidation. Some pension funds do.

There may be some legal requirements for SEC filings if you make the attempt. Presumably you get a list of shareholders, read the companys by-laws on what is required to get issues on the agenda of the shareholders meetings and vote on them. Then you figure out how to get support of other shareholders for your liquidation proposal. I think you are suggesting a proxy fight. Its an interesting idea. Perhaps individuals have more power than most suspect.

Good luck with the idea. I would be willing to co-operate if someone can come up with details of how to do this.
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