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CEF Specialist

Shop Now: Nearly 10% Off on Precious Metals

This closed-end fund's portfolio is stocked with nothing but gold and silver.

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Usually, we don't get too excited about absolute (i.e. published) discounts or premiums. They are, after all, simply a measure of the relationship between a closed-end fund's share price and its net asset value.

A typical sign that someone is spouting myths about CEFs is when you are told that a discount amounts to "good value." In fact, in a recent Bloomberg article, Stewart Horejsi, the comanager of four equity-focused CEFs at Boulder Investment Advisers, errantly made a claim regarding his funds' large  Berkshire Hathaway (BRK.A) stakes and their large discounts: "If you can buy Berkshire at 80% of where it's trading, that's a better value."

Mike Taggart does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.