There was an article on Seeking Alpha this morning entitled “Sign of a Market Top? Closed-End Funds Trading at Premium to Net Asset Value“. The article states this is “a phenomenon almost without precedent” and quotes Barron’s columnist Randall Forsyth as saying this is happening for the “first time in my memory”. But as this chart from MarketGauge by DataView LLC indicates, there have been two incidences of this phenomenon since 1998. The closed-end funds traded at a premium for a good part of 2001, halfway through the bear market; and closed-end funds also traded at a premium for most of 2004. The S&P 500 index went on to gain more than 250 points from the end of 2004 to the end of 2006. Based on the data available, I don’t think this is a sign of a top. On the contrary, the limited data available in this chart suggests that the opposite may be true. The closed-end funds were selling at the largest discount to net asset value right at the market top in 2000.

Comments are an important issue that every blogger has to deal with. Since the beginning I have taken care to respond to every comment. You would like to be able to have intelligent discussions with your readers, but it takes a lot of time to keep up. There is a lot of spam, and the vast majority of valid comments are silly. They can even be insulting. I tried to filter the results by requiring that commenters must be registered users of wordpress.com who are logged in, but that did not help. Here are excerpts from a comment left by “poppy8sd” to my recent post on Whole Foods Market:

It is the stuff of a confused unschooled mind . . . You could benefit from self-education . . . you don’t know what you’re talking about . . . what you’re saying is irrelevant.”

This kind of comment can be irritating if you feel you need to respond to it! That one caused me to consider blocking all comments, but in the end I have decided to do the opposite. I am opening up the comments again so anyone can participate. However, I’m changing my policy about responding: Comments can now be posted freely by anyone, but I will not answer unless I find the topic interesting.