Mish has listed some good reasons for why there is no cause for inflation fears. If a global slowdown is awaiting us in the future, this of course would mean that commodities and materials would continue their fall in prices.
However, at the moment, its difficult to see what appears to be great opportunities in the energy-related sectors. One stock that I’ve been eying is closed-end fund Tortoise North American Energy Corporation (TYN).
Recently, TYN has been trading at a steep discount to its NAV. For the past couple of weeks TYN has traded at 15-20% discount. I’m fairly certain the large increase of the discount to NAV is due to the large commodities correction: people simply wanted out of TYN. Also, TYN’s price has visited an all-time low and it has a very good distribution rate of 8.14%.
I believe TYN would be a good target for an activist like Bulldog Investors or Western Investment for the simple reason that TYN has traded at a steep discount since its inception in 2005. If an activist investor were to become interested in closing this large discount, I think hedging would be relatively easy.
