CUBA Stock

[Lsufan]

I know nothing about the stock market, but I thought I'd share this with you guys ...

In mid 2004 a friend had a hunch on the CUBA stock. At the time it was around $4.50 or so a share. Now, today it had up to $14.50, and now back down to $13.68. It is up +0.78 right now today.

I sure wish I would have grabbed this one, but I'm always at the airport when the ship comes in.

Anyone familiar with this stock???

[BettorsChat]

Fund's value rises when Castro ails

By John Waggoner, USA TODAY
Some stocks — and the mutual funds that own them — rise and fall in response to earnings or new-product announcements. Then there's the Herzfeld Caribbean Basin fund (ticker: CUBA). It tends to gain and drop according to the health of Cuban leader Fidel Castro.

On Tuesday, when Castro failed to make an appearance at May Day celebrations in Havana, the Herzfeld fund soared 11.8%. This closed-end fund, which trades on the Nasdaq exchange just as stocks do, invests in stocks that stand to gain once the USA lifts its trade embargo against Cuba.

The fund's share price has been tightly correlated with Castro's health for the past year, rising when news reports have indicated that the Cuban leader is gravely ill and falling when there are signs of his recovery. Castro temporarily stepped down as president on July 31 after emergency surgery, naming his brother, Raul, as acting president. The fund's share price leaped 12.8% the next day.

Castro met with President Hugo Chávez of Venezuela on Jan. 30. From that point until early this week, the fund plunged 21% on speculation that Castro had recovered.


Thomas Herzfeld, the fund's manager, started the fund in 1994, figuring that the U.S. trade embargo, which began in February 1962, would eventually end. "The vast majority of stocks we invest in should do well when trade resumes with Cuba," he says.

One example: Trailer Bridge (TRBR), which puts trucks on ships and delivers them from Florida to Puerto Rico. The company has shallow-draft vessels, which would work well in Cuba. Cuba has only three deep-water ports, Herzfeld says.

Another example: Florida East Coast Industries (FLA), a railroad company whose rail lines could enjoy substantially improved business if the Cuban trade embargo ended.

Of course, there are no guarantees that the U.S. trade embargo will end with Castro's death. His brother, Raul, the effective leader of the country, has made few changes. But some Cuba experts think Raul Castro would encourage a more open trade policy once Fidel Castro dies. Despite his illness, Fidel Castro's presence is still being felt, says Brian Latell, former Latin America analyst for the CIA and author of After Fidel.

"Raul is anxious to make substantial changes to the management of the Cuban economy but feels constrained to do that as long as Fidel is alive and aware," Latell says.

The USA will be looking for progress in several areas before it ends the embargo, Herzfeld says, including a restoration of human rights and, possibly, compensation to U.S. citizens for property seized by the Cuban government. "No one single event could more lead to the end of the embargo than the passing of Fidel Castro," Herzfeld says.

The Herzfeld Caribbean Basin fund has gained a sizzling 158% in the past three years, vs. 34% for the Standard & Poor's 500-stock index. But before you place any bets on Castro's death, be aware: This fund isn't cheap.

Closed-end funds issue a set number of shares. And their market price often doesn't reflect the current value of their portfolio. For example, the Herzfeld Caribbean fund's share price is now 26.2% higher than the value of the stocks it owns. In other words, it sells at a premium to its holdings. If the fund were to sell all its holdings and distribute them to shareholders, the shareholders would receive far less money per share than the current share price would indicate.

Most experts, including Herzfeld himself, advocate buying closed-end funds when their market value is less than the value of the securities they own, a situation that's called a discount. For example, the Mexico fund (MXF), which Herzfeld's fund owns, sells for a 13.6% discount to the value of its holdings. If that fund were to liquidate today, shareholders would receive an immediate profit.

[10DimeBry]

anything with cuba you like no doubt

[kbsooner21]

anything with cuba you like no doubt