I have previously posted about the Cornerstone Total Fund (ticker:CRF) which had maintained a very high premium over NAV for quite a long period, and was owned by the Renaissance Fund.

But there has been a sudden reversal in this fund, and it is actually a decent buy now. (Although I think there are even better values available today in the CEF market).

On July 31, 2008, the NAV was 6.33 and the NAV on Friday's close is 4.31.
This decline is pretty much in line with the market averages.

But the CRF market price has been absolutely massacred.
July 31, 2008 12.97
October 10, 2008 3.11

On July 31, the premium over NAV was 104.90 percent. CRF is now selling at a 27.84 percent discount to NAV. This is a swing of over 132 percent in less than three months.

This is certainly a strange market for closed end funds. On Friday, many of the REIT closed end funds fell sharply in price, even though their NAV's rose sharply. One example is SRQ, but there are many more. SRQ dropped 20 percent, but it's NAV XSRQX was up 23.75 percent.

Some leveraged closed end funds with leverage factors above 33.33 are being forced to liquidate some of their portfolio at fire sale prices.

The recent market action reminds me of the nuclear cow joke-

What do you get when you drop a nuclear bomb on a herd of cows?
Udder destruction.

The financial media has been blaming the market drop on the credit crisis, but I believe the stock market drop is mainly being caused by forced hedge fund liquidations. Some areas affected the most are:
1) Popular hedge fund stocks like MOS, POT, SD, ECA, AAPL, RIMM
2) Closed end funds- many hedge funds dabble in these. They are not that liquid, so even a moderate amount of forced selling can cause huge price drops.
3) Convertible bonds- Many hedge funds go long convertible bonds/preferreds and short common stock. But the short sale ban forced them to liquidate many of these convertibles.

Just today I was able to buy some RCC at a discount from NAV of over 20%. RCC is basically a Russell 2000 index fund that writes covered calls against their positions. The fund has a termination date of July 2010 whe the fund will be liquidated at NAV, so you pick up a nearly guaranteed 10% per year above the Russell 2000 market return.

I prefer just going long RCC. But for the risk averse, you can pair RCC with RWM (inverse Russell 2000 ETF). RCC has a beta of about 0.85, so your RWM position should be smaller than your RCC position.

The good news is that hedge fund liquidations are self correcting. Once the selling is over, I expect a strong year end rally because of the massive liquidity being pumped into the system by the world's central banks.

Full Disclosure: I am long RCC.

If anyone is looking for a new on-line broker, I would recommend taking a look at TradeKing. I wrote a review of the company on my beginnerinvesting101 blog.

TradeKing is offering a $50 incentive for the month of October to new accounts- click on the banner below.

Nokia Corp (ticker:NOK) is a global leader in cell phones and mobile devices. The company is based in Finland. It’s selling near its 52-week low at less than eight times next years earnings.

Here are some reasons I like Nokia, along with some potential short term negatives:
1) Nokia has a high A credit rating from S&P. They have a solid balance sheet with low debt, loads of cash and have been generating high operating cash flows.
2) Nokia’s most recent return on equity is 47%. Over the last eight years the annual ROE has ranged between 19% and 51%.
3) Dividend yield of 4.4% is quite attractive for a solid growth stock.
4) Nokia may be losing some market share in the US to high-end devices, but it is rapidly gaining traction in emerging market countries like India and China, because of Nokia’s very strong brand name and focus on entry-level devices.
5) The company is continually innovating and improving their products. Just recently, they announced an acquisition of OZ Communications to beef up their e-mail and instant messaging services. They will soon be releasing a new device code-named Tube, which is a cheaper IPhone alternative in the $200-$300 range. Visa recently signed a deal to give some Nokia users the ability to make "contactless" payments in stores just by flashing their phone at an electronic scanner.

Some potential negatives:
- Fidelity Magellan Fund is the largest Nokia holder. Magellan has been struggling lately and if the fund experiences significant redemptions, it may be forced to sell some Nokia stock. Of course, that would make the stock an even better buy longer term.
- Several legal disputes with Qualcomm.
- Lower handset margins in the high end of the market.

Given recent market conditions, I would use a dollar cost average approach to acquire a full position in Nokia. If the stock price were to go up 15% from these levels (currently trading around 18.5), I would consider writing out of the money covered calls against the position to take advantage of the recent high implied volatility in options.

Full Disclosure: I am long a starter position in Nokia.

There are some amazing values now in closed end funds. The discounts to NAV have widened dramatically across the board. It appears that one or more large institutions with extensive closed end fund holdings are being forced to liquidate them. I noticed that Wachovia is a big holder in many of the funds that have been getting hammered.

Typically, the sellers are in trouble because of something unrelated to what they sell. They can't sell the securities that got them in trouble (there is no market), so they sell whatever they can. This is a variation of Gresham’s Law (bad money drives out good money).

But the effects of these forced sales are usually temporary and I expect a sharp snapback rally shortly. There are many tremendous buys now. I would look to buy issues where the discount has widened dramatically, there are large distributions, and where there are catalysts to narrow the discount.

For example, yesterday I picked up some AOD. It traditionally has sold for a premium, but closed yesterday at a 24% discount to NAV. AOD pays large distributions (27 per cent a year)which allow you to recover this discount. The fund is run by Alpine who also runs open end funds. There is a chance they could roll AOD into an open end fund like ADVDX.

Many closed end fund market are trading at above average discounts now. One of the best bargains for a vulture investor right now may be the RMK Advantage Income Fund (ticker:RMA). Last week I started buying into this fund at prices in the 1.10 range. RMA is not very liquid, so it may be best to use smaller limit orders when you buy it.

RMA invested in many complex mortgage backed securities. Its market price has been absolutely obliterated over the past year (down about 80%). On July 29, 2008, there was a change in fund management. Hyperion Brookfield Asset Management was appointed Investment Advisor replacing Morgan Asset Management, Inc. who is facing many lawsuits from irate investors.

I listened to a conference call from the new fund management. Their strategy going forward can be summed up as follows:

1) Dividend payouts have been drastically reduced to stabilize the fund NAV which had dropped precipitously. At the previously higher payouts, the NAV was rapidly shrinking toward zero, and management would soon be out of a job! But the reduced payout of $0.015 per month is still equivalent to a distribution yield of about 15%.

2) Hyperion has broken down the fund assets into three categories:
a) Bonds trading above 70- these are the best quality issues with some appreciation potential.
b) Bonds trading from 20-70: These are probably the riskiest issues, since they have lost a lot of value, but still have more value to lose.
c) Bonds trading below 20: These are bonds that have already lost most of their value, so ironically they are less risky. If you look at the portfolio as of June 30, you will find many bonds have been marked down to 0.01% of par value. This is equivalent to 10 cents per $1000 in par value. Not much downside risk left! A lot of these bonds are income only issues that have most likely finished paying out, but there is always a remote chance they could start paying again.

Between July and August, Hyperion reduced the holdings of bonds trading in the 20-70 price range, and increased holdings in the >70 range. This means that the portfolio is much less risky now than it was earlier in the year, and is more oriented toward more liquid high yield securities rather than mortgage backed products.

Price Category Breakdown

	07/31/2008	08/29/2008
Price > 70	29%	54%
Price- 20 to 70	54%	32%
Price		15%	13%
Equities	2%	1%

3) When Hyperion took over the fund, there were sharp drops in the fund’s NAV. It is clear that they marked-to-market the portfolio down in price. In cases where the bonds traded, they are using a bid price. In other cases they seem to be using highly conservative models which produce low ball values.

4) Many early investors in RMA have been selling in droves for a tax loss. Financial advisers are also dumping RMA to get it out of their client’s portfolio before they have to meet with them for the next portfolio review. This has caused the discount to NAV to increase dramatically.

At the end of Sept, 2007, RMA actually sold at a premium over NAV of 13.58%. Last Friday it sold at a discount to NAV of 34.10% (and even higher on an intra-day basis). This is a swing of over 47%. Ironically, the NAV now is much more conservatively priced than a year ago, so you get to buy RMA at a 34% discount to a low ball NAV.

This is clearly not an investment for widows and orphans, but RMA seems like a very attractive way for an IRA investor to bet on an eventual return to some normalcy in the financial debt markets in the next few years. But it may be safer to dollar cost average into the position in case the credit crisis deteriorates even further before the eventual recovery. There may also be further tax loss selling between now and year end.

Full Disclosure: I am long shares of RMA.

Lehman Brothers is on the brink of bankruptcy, and the S&P futures are trading down about 3 percent.

Here is a link to a Forbes article from May 9, 2003 (The Great Derivatives Smackdown).

Buffett has won the debate, and Greenspan's legacy has fallen almost as low as Lehman's stock price.

Off topic- How many meanings of pitch can you think of?
Hint: There are over 20.

Today I purchased some shares of the Morgan Stanley Emerging Market Domestic Debt Fund (ticker:EDD) at 14.06. EDD is a closed end fund that primarily invests in emerging market domestic debt or debt obligations of issuers located in emerging market countries that issue debt in their local currency. Some of their top holdings are in Brazil, South Africa, Hungary, Egypt, Turkey and Mexico. This was the top 10 country breakdown as of June 30, 2008-

Brazil	27.02%
Hungary	18.07%
Mexico	17.49%
South Africa	12.45%
Indonesia	11.17%
Turkey	10.33%
Thailand	9.25%
Colombia	6.68%
Egypt	6.55%
Russia	3.38%

Here are some reasons I like EDD now:

1) At Friday’s close, the discount to NAV was 15.50% which is at the higher end of its range. I suspect the discount may widen further at today’s close.
2) The fund is relatively new. It was issued in April, 2007 at $20 a share. I believe tax loss selling by initial investors is causing much of the recent widening of the discount. But generally this selling is often met by bargain hunters when the discount to NAV goes much higher than 15%.
3) EDD uses modest leverage of about 21% which adds to the yield. In their last report, the borrowing cost was about 4%.
4) The current distribution rate is over 14%. This is attractive when the discount is high, if you own EDD in a tax deferred account.
5) After today’s FNM/FRE news, I have become longer term bearish on the US dollar. EDD’s bond holdings are denominated in local emerging market currencies, so it will benefit from a weak dollar.
6) The discount is wide enough that the fund could easily attract activist investors who will try to open-end it or significantly narrow the discount to NAV.

Full Disclosure: I am long shares of EDD.

About 18 months ago, I posted on a high risk liquidation play- ECC Capital (ticker: ECRO.PK).
The company paid out a distribution of $0.07 per share last year shortly after my post, but things looked pretty bad going into 2008.

Fortunately, ECRO management has reduced expenses dramatically and things have improved somewhat in 2008. ECRO paid out another $0.10 per share on March 21, and recently declared a $0.16 distribution to be paid on Sept. 23. It is interesting that right before the $0.16 distribution was announced, ECRO was only selling for $0.10 a share. If you bought it at that price, you would have had a quick double.

It is not clear how much more will be distributed going forward. It will largely depend on the future performance of ECRO's securitization trust investments. Management is considering several strategies to maximize remaining shareholder value. The company has acquired expertise in servicing oversight and has developed several tools and programs that are valuable in the servicing oversight process. They will be offering these services, tools and programs to third parties which may allow them to recover some prior costs of servicing or even generate revenue in the future.

Full Disclosure: I am long shares of ECRO.

Yet another hedge fund, Ospraie Management LP, is shutting down after losing 38.6% year to date. The fund manages about $2.8 billion down from over $4 billion at the peak. But there is no mention of returning prior years incentive fees. The fund earned about 15% a year since inception- large incentive fees have been paid out to management over the last nine years.

In order to return to the high water mark, the Ospraie Fund would have to gain 63% from this point. By closing the fund, current investors are being deprived of the next 63% in profits completely free of incentive fees.

I would love to see this point emphasized more in the mainstream media. If hedge funds have a free put option to bail out when things get tough, what is the point of having high water marks?

A few friends and relatives asked me to start another mini-blog for beginner investors. The Quant Investor is targeted toward more experienced investors. Based on the blog comments and e-mails I've received, quite a few of you work for hedge funds, and/or are highly sophisticated investors - the top 1%.

Most of the articles in the new blog are pretty basic. It discusses how to allocate assets, describes some simple yet effective investment strategies, give tips on how to choose a broker and avoid common investment mistakes. There will be product reviews for investing books, online brokerage firms, mutual fund companies and other financial service products.

The new blog is called beginnerinvestor101. I added a blog post a few days ago that may be of interest to you. It describes a lazy portfolio based on the ideas of David Swensen who runs the Yale Endowment fund. Feel free to read it and give me your comments on the new blog- both positive and negative. Keep in mind it is designed for beginner investors.

On Friday, I purchased Dividend Capital Realty Income Allocation Fund (ticker: DCA) at $6.00 a share. DCA is a closed-end fund that invests in common stock, preferred stock and debt securities of real estate companies.

DCA has traditionally traded at a premium to NAV, but last week management announced a dividend cut from $0.11 to $0.05 and a reduction in leverage deployed. This caused the market price to plummet. DCA has traditionally traded at a premium over NAV. Here are its monthly year to date figures for discount/premium over NAV:
January 31, 2008: +10.85%
February 2,2008: +5.62%
March 31, 2008: +6.38%
April 30, 2008: +8.92%
May 31, 2008: +8.64%
June 13, 2008: -12.88% (over 20% move in less than 2 weeks!)

Management seems to be doing the right thing. Even after the distribution cut, the dividend yield is still about 10%. The previous distribution of nearly 20% was unsustainable and much of it was simply return of capital. The current $0.05 dividend is sustainable, and the company might easily raise the dividend again in the future if lending conditions improve and the yield curve steepens.

One negative feature of DCA is a high expense ratio over 2%. But I see this as more of a swing trade than a long term investment. I wouldn't be surprised to see the discount from NAV shrink, or a premium to reoccur, which would lead to high total returns.

Full Disclosure: I am long DCA.

I recently purchased a position in Nuveen Multi-Strategy Income and Growth Fund (ticker:JQC). This is a closed end fund that invests in preferred securities, convertible securities and related instruments, common stocks, and debt instruments, including high yield debt and senior loans. The fund uses leverage currently at 39%. I own JQC in an IRA account because of the high distribution rate.

Here are some things I like about JQC:
1) Discount to NAV on Friday= -14.19% which is at the high end of its discount range. Over the last year, the average discount is around -12%. There is a good chance the discount will revert to the mean.
2) The fund borrows at very attractive interest rates. Over the last three days, the reported borrowing rates were 3.03%, 3.07%, 2.92%. As a retail investor, if you tried to replicate this fund in a margin account, your borrowing rate would be much higher than 3%.
3) Expense ratio of 0.78% is well below average.
4) The fund has been paying quarterly distributions of 0.285 or 12.17% annualized. These distributions allow you to recover a good portion of the NAV discount each year.

Full Disclosure: I am long JQC

I recently purchased a longer term position in the Swiss Helvetica Fund (ticker: SWZ). SWZ is a non-diversified, closed-end fund that invests in equity and equity-linked securities of Swiss companies. Here are some reasons I like SWZ-

1) Discount to NAV yesterday was 12.9%. The annual expense ratio is 1.10%. A discount/expense ratio of 10 times or more is generally attractive.

2) Solid portfolio holdings. The top four stock holdings are Nestle, Roche, Syngenta and Novartis. I have recently been adding to my health care exposure and this fund fits the bill. The top three industry breakdown is:
Pharmaceuticals- 17.21%
Fodd and beverages- 14.88%
Biotechnology- 9.72%

3) Good long term performance. The five year NAV performance is about 17% a year.

4) Hedge for US dollar- The Fund’s equity investments are denominated in Swiss francs. The cash and short-term investments are also held in Swiss francs. The investment policy of the Fund is not to hedge the exposure to the Swiss Franc. So investors are fully exposed to fluctuations in the value of the Swiss franc relative to the U.S. dollar.

5) Sponsorship- Karpus Investment Management has a fairly big position in the fund. Karpus is known as an activist investor, and may push to reduce the NAV discount at some point.

Full Disclosure: I am long shares of SWZ.

Liberty All-Star Equity Fund (ticker: USA) is a closed end fund that uses a multi-management strategy- assets are allocated to five different managers with different investment styles. But unlike a fund-of-fund arrangement, you only pay one management fee. Vanguard has also used this arrangement with some of their larger funds.

The five asset managers currently used are:
-Matrix Asset Advisors, Inc. Value David A. Katz, CFA
-Pzena Investment Management, LLC Value Antonio DeSpirito III
-Schneider Capital Management Value Arnold C. Schneider III, CFA
-Chase Investment Counsel Corp. Growth David B. Scott, CFA, CIC
-TCW Investment Management Company Growth Craig C. Blum, CFA

Each manager runs about 20% of the fund assets. Here is a July update of their portfolio-


Here is a quick summary of why I like USA-
1) Fairly low management fee- 0.98%
2) Discount to NAV on August 13 was 11.65% which is higher than normal. The discount is more than 10 times the management fee, which is a benchmark I like to see.
3) Distribution Policy: USA has a policy of paying distributions on its common shares totaling approximately 10 percent of its net asset value per year. This helps to recover some of the discount to NAV. Because of this policy, I hold USA shares in an IRA account.

Full Disclosure: I am long shares of USA.

Adams Express (ticker: ADX) is a closed end fund that can be used a good substitute for an S&P 500 Index fund. It seems very attractive at $12 or less. Here are some good features of ADX:
1) Low expense ratio: The annual expense ratio of 0.44% is one of the lowest for a closed end fund.
2) Low turnover: The ADX management does very little trading (low turnover ratio) which means that the "hidden" trading costs are also very low.
3) Good long term performance: Since inception in 1979, the fund has averaged about 12% per year.
4) High discount to NAV: ADX has been trading at a 14% discount to NAV which is at the higher end of its discount range. About 8% of the ADX portfolio is invested in PEO, which is another low expense closed end fund that trades at a discount of 12%. So on the PEO holding you actually get to buy it at a "double discount".
5) Solid portfolio holdings- Their top stock holdings are: Schlumberger (SLB), General Electric (GE), Microsoft (MSFT), Conoco Phillips (COP) and Oracle (ORCL).

Full Disclosure; I am long shares of ADX.

I recently purchased a starter position in the Nuveen Floating Rate Income Fund (ticker: JFR). The fund invests 65% of its assets in adjustable rate senior loans secured by specific collateral and at least 80% in secured and unsecured adjustable rate senior loans. The top three industries it owns are media, hotels/leisure and health care.

Here are some of the reasons I like JFR at the $10.00 price level.

1) Senior loans rank higher than bonds in the pecking order. Check out my previous blog post on vulture investing.
2) I think inflation (and overall interest rates) will be increasing over the next year, especially after the election. JFR owns adjustable rate securities which will not be hurt by higher rates. In fact, the discount to NAV will likely shrink as fixed income investors exchange their fixed rate debt for floating rate debt.
3) The discount to NAV is 14.3% which at an all time high. The expense ratio is 0.84% not including interest for leverage. The discount/expense ratio of 17 is quite attractive.
4) JFR is distributing 8.93% per year. JFR uses leverage of 44%, but given the current shape of the yield curve, the leverage adds significantly to the annual payout since the recent borrowing rate is only 3.68%.
5) Nuveen has announced a share repurchase of 4.7 million shares which should help to shrink the discount to NAV.

I have added a few new features to the blog-
1) A poll on where you think the S&P 500 will be at year end. (near the bottom)
2) Made it easier to subscribe to posts. (near the top on left hand side)
3) Added a "Followers" gadget for people who regularly follow this blog.

Full disclosure: I am long shares of JFR.

After two months of waiting, I found out that I passed CFA Level 2. (I took CFA Level 1 in December 2007 and CFA Level 2 in June, 2008).

I promised my wife that I would try to sell the CFA study material from Levels 1 and 2 in order to make room for the new Level 3 material that I need for 2009.

I've been using the CFA Sharp Seminars in New York for my exam preparation, and so far I've been lucky and gone two for two.

Sharp CFA offers comprehensive lecture/workshops and they have excellent review material and practice exams. The review material is only available as books (no pdf files), and they do not sell the review material separately. You can only get the material directly by taking their CFA lecture/workshops which run around $1600 including the practice tests.

If any of my blog readers are considering taking CFA Level 1 in December or next June, you may be interested in purchasing some of the CFA Sharp material. Even if you plan to use another company (like Schweser or Stalla) for your exam preparation, I would particularly recommend the Sharp practice exams which are excellent. The curriculum has changed somewhat from 2007 to 2008, but the material is still useful as a backup source.

Some of you are probably curious about the CFA exam, and may be interested in purchasing some of this low cost material to learn more about what the exam is like, or just for your financial education.

This is the material I have for sale:
1) CFA Level I 2007 SharpNotes- 10 books (easy to read summary of the essential CFA Level I material) $60 (SOLD)
Some of you are probably curious about the CFA exam, and may be interested in purchasing this material just to learn more about what the exam is like, or for your financial education. I stacked up the ten books (paperbacks in spiral binders) and it measured about 8 inches thick (well over 1000 pages of material).
- SharpNotes #1- Quant
- SharpNotes #2- Economics
- SharpNotes #3- Accounting
- SharpNotes #4- Corp Fin
- SharpNotes #5- Valuation:Equity
- SharpNotes #6- Valuation:Fixed Income
- SharpNotes #7- Portfolio
- SharpNotes #8- Derivatives
- SharpNotes #9- Ethics
- SharpNotes #10-Valuation:Alternative Investments
There are about 3,000 multiple choice self-testing exercises (with answers) included in the SharpNotes books.

2) Sharp seminar Weekly Quizzes $15 (SOLD)
These are 14 quizzes (20 minutes each) handed out at each class to review the material.

3) CFA Level I 2007- Sharp Seminars Mock Exams and Practice Exam $40
These are valuable to anyone taking CFA Level I in December even if you use Schweser or Stalla. The Mock Exam book contains two 3-hour exams of 120 questions each. It also has some great tips on final exam preparation, calculator short cuts, and common study errors to be avoided. Also included is the three hour (120 question) practice exam with worked out answers that we all took "real time" as Sharp CFA students.

4) CFA Level I 2007 Sharp Seminars Sample Questions $60
These were great to use during "crunch time" which is the last six weeks before the exam. There are 1,600 sample questions with detailed easy to understand answers and worked-out solutions. There are one or more sample questions covering each of the CFA 2007 Level 1 Learning Outcome Statements.
-Study Session #1- Ethical and Professional Standards
-Study Session #2- Quantitative Methods #1
-Study Session #3- Quantitative Methods #2
-Study Session #4- Economics #1: Microeconomic Analysis
-Study Session #5- Economics #2: Macroeconomic Analysis
-Study Session #6- Economics #3: Global Economic Analysis
-Study Session #7- Financial Statement Analysis #1: Basic Concepts
-Study Session #8- Financial Statement Analysis #2: Financial Ratios and EPS
-Study Session #9- Financial Statement Analysis #3: Assets
-Study Session #10- Financial Statement Analysis #4: Liabilities
-Study Session #11- Corporate Finance
-Study Session #12- Portfolio Management
-Study Session #13- Asset Valuation Equity #1: Securities Markets
-Study Session #14- Asset Valuation Equity #2: Industry and Company Analysis
-Study Session #15- Asset Valuation Debt #1: Debt Instruments Basic Concepts
-Study Session #16- Asset Valuation Debt #2: Debt Instruments Analysis and Valuation
-Study Session #17- Asset Valuation Derivatives & Alt #1: Derivative Investments
-Study Session #18- Asset Valuation Derivatives & Alt #2: Alternative Investments

5) Box of Schweser Flashcards for Level I- 2007 $20
These are opened and very lightly used. They are convenient when you are traveling or out of the house. You can grab a stack of flash cards for quick reviews.

Since the above material is quite bulky, I would rather not get involved with shipping, and would prefer to sell the stuff locally to someone who lives in the NYC metro area. We can meet at a convenient location.

I will describe the CFA Level 2 material in a future blog post.

Owens-Illinois (ticker:OI) looks attractive now, either as a direct purchase or part of a covered call strategy. Covered call writing works well with companies that have relatively low downside risk and moderate (but not explosive) upside potential.

Owens-Illinois is the world’s largest supplier of glass containers. It operates in 22 countries and has acquired 17 glass container companies since 1990. About 70% of its sales are outside North America.

On July 31, 2007, the company sold its plastic packaging business, in order to focus on its glass container business. Glass is more eco-friendly than other materials, which should cause demand to rise as more consumers become environmentally conscious.

Here are some recent stats on OI:
Forward P/E ratio= 8.4
Return on Equity= 27.31%
Strong Operating cash flow (731 MM)
PEG ratio (5 year)= 0.96

The company has been pre-funding cash asbestos claim. As of June 30, 2008, asbestos-related lawsuits and claims pending were 13,000, down from 19,000 at year end 2006.
Free cash flow is expected to rise over the next three years once the pre-finding is completed. Annual free cash flow generation could exceed $1 billion in three years.


The stock has pretty good sponsorship and is owned by the following mutual funds-
Janus Contrarian Fund- (David Decker) >5%
Vanguard Windsor Fund
Fidelity Value Fund

Full Disclosure: I am long a starter position in Owens Illinois.

Alan Greenspan retired in January, 2006 and had a pretty good reputation at the time. But recent events are rapidly lowering his stature in history. A big part of the problem is that Greenspan continues making things difficult for Ben Bernanke by continually second guessing him and making harmful comments.

I remember reading this article by Bill Fleckenstein in 2006, and thought it was too harsh at the time, but Fleckenstein has pretty much been proven correct.

Greenspan has been employed by John Paulson's hedge fund since January, 2008. His recent comment recommending the wiping out of all shareholder value for FNM/FRE was a real eye opener (I do not directly own shares of either company directly, although I can't be sure about all mutual funds I own).

Compare this to Paul Volcker who was a true gentleman and had the decency to drop out of the public arena after his term was complete. He never second guessed Alan Greenspan who replaced him.

These are my rankings of the six Fed chairmen since 1950. If I had done this ranking three years ago, I would have probably ranked Alan Greenspan in third place, but more recent events move him down to last.

#1- Paul A. Volcker (August 6, 1979 – August 11, 1987)

#2- William McChesney Martin, Jr. (April 2, 1951 – February 1, 1970)

#3- Ben Bernanke (February 1, 2006 – )

#4- G. William Miller (March 8, 1978 – August 6, 1979)

#5- Arthur F. Burns (February 1, 1970 – January 31, 1978)

#6- Alan Greenspan (August 11, 1987 – January 31, 2006)