IWS-206 : A Dollar for Fifty Cents

Description

The Hidden Market Anomaly That Regularly Beats the S&P 500—How Smart Investors Buy a Dollar for Fifty Cents

For over a century, a peculiar and powerful anomaly has existed in the stock market—one that has allowed savvy investors to buy $1 worth of assets for just 50 cents. This isn’t a gimmick. It’s not a speculative trick. It’s a documented, persistent market inefficiency that professional traders, fund managers, and even Warren Buffett himself have quietly leveraged to outperform the market for decades.

Yet most investors remain completely unaware of it.

This anomaly exists in closed-end funds (CEFs)—one of the stock market’s most misunderstood and overlooked asset classes. Unlike traditional mutual funds and ETFs, CEFs trade at deep discounts to the net asset value (NAV) of their holdings, creating unique opportunities for those who understand how to capitalize on them.

Now, in A Dollar for Fifty Cents, veteran investor and portfolio manager Michael Joseph, CFA, unveils the hidden power of CEFs, showing investors how to profit from mispricings, avoid common pitfalls, and build a smarter, more profitable portfolio. Whether you’re an individual investor, a financial advisor, or a portfolio manager, this book will transform the way you think about value investing and market inefficiencies.

Why Closed-End Funds? The Hidden Opportunity in an Overcrowded Market

The world of investing has changed. Traditional stock-picking has become more difficult than ever, with algorithmic trading, passive indexing, and hedge fund dominance making it harder for individual investors to gain an edge. But closed-end funds remain one of the last bastions of market inefficiency—an area where professional investors can still find undervalued assets that offer superior risk-adjusted returns.

Unlike mutual funds and ETFs, which are priced at their exact net asset value, CEFs can trade at significant discounts—sometimes 10%, 20%, or even 30% below the value of their holdings. These pricing gaps create exceptional opportunities for those who know how to exploit them.

Yet CEFs remain widely ignored by the financial media, underutilized by fund managers, and misunderstood by the investing public. Why?

• They don’t receive the marketing push that mutual funds and ETFs do.
• Most financial advisors aren’t trained to understand them.
• Wall Street makes little money from them, so they’re rarely promoted.

That’s precisely why the opportunity exists—and why investors who understand CEFs can gain an edge over the broader market.

Inside the Book: What You’ll Learn

1. The Mechanics of Closed-End Funds

• What makes closed-end funds different from ETFs and mutual funds—and why this difference is critical to their value.
• The history of CEFs and how they have persisted as an inefficiency for over a century.
• How fund structures, NAV calculations, and pricing mechanics create opportunities for investors.

2. Why CEFs Trade at a Discount—And How to Profit from It

• The closed-end fund puzzle—why these funds trade at discounts to their true value, and what it means for investors.
• The psychological and structural factors that cause pricing discrepancies.
• A breakdown of historical studies and market data proving that CEFs offer long-term excess returns.

3. The Five Key Metrics That Separate Winning CEFs from Losing Ones

Not all CEFs are good investments. Some remain cheap for a reason. This book breaks down the five essential criteriato determine whether a closed-end fund is a value play or a trap:

• NAV Discount Trends – How to spot persistent vs. temporary discounts.
• Distribution Sustainability – Identifying income traps vs. true high-yield opportunities.
• Expense & Leverage Analysis – Understanding when leverage is an advantage or a red flag.
• Management Quality & Activist Influence – The role of fund managers and activist investors in unlocking value.
• Market Sentiment Cycles – How investor psychology affects CEF pricing.

4. Activist Investors and CEFs: How to Ride the Wave of Market-Moving Events

• Why activist hedge funds target CEFs—and how this creates forced profit opportunities for individual investors.
• A breakdown of historical activist campaigns and their impact on fund pricing.
• How to identify takeover targets before Wall Street does.

5. Common Mistakes to Avoid with CEFs

• The #1 trap that new CEF investors fall into—and how to avoid it.
• How to distinguish between attractive high yields and unsustainable dividend traps.
• When not to buy a CEF, even at a steep discount.

6. The Future of CEFs: Why This Opportunity Won’t Last Forever

• How market forces are changing the CEF landscape—and why some of today’s discounts may disappear.
• How regulatory changes and fund closures could impact pricing inefficiencies.
• The long-term role of CEFs in professional and retail portfolios.

Who Said What?

“We should all have closed-end funds as part of our portfolios. Michael Joseph makes a convincing case using history and facts for this under-appreciated investment, providing investors with actionable advice. Take his advice seriously and do your research. Value is there for the taking.”

Ben Fredlake, CFP®
Senior Portfolio Manager
Mission Management & Trust Co.

“Michael Joseph uncovers the hidden potential of closed-end funds, blending history and practical guidance. Everyone from beginners to seasoned analysts will find the insights and tools needed to help navigate one of the most inefficient corners of the market. This book will help you find value where others overlook it.”

James Falbe, CFA
Managing Principal and Portfolio Manager
Saguaro Capital Management

“Closed-end funds exhibit one of the most persistent anomalies in the world of finance: They consistently trade at a discount to their net asset value, tempting investors to buy a dollar of assets for often as little as $.90 or $.80. But not all discounts are alike, and in his excellent book, A Dollar for Fifty Cents, Michael Joseph details the research and guidance from academics and practitioners that you will need to profit from this under-appreciated asset class. No one should invest in closed-end funds without reading this book first.“

Robert Huebscher
Founder and CEO
Advisor Perspectives (2007-2024)

Who Should Read This Book?

This book is for investors who refuse to settle for mediocre returns and are always looking for an edge. Whether you’re a seasoned professional or a retail investor eager to improve your portfolio, A Dollar for Fifty Cents will help you find hidden value in a market where most investors only see noise.

It’s particularly valuable for:

✅ Value Investors – If you believe in buying assets below their intrinsic worth, CEFs offer a consistent way to do just that.
✅ Financial Advisors – Learn how to incorporate CEFs into client portfolios to generate better risk-adjusted returns.
✅ Income Investors & Retirees – CEFs provide some of the highest yields on Wall Street—but you need to know which ones are sustainable.
✅ DIY Investors & Traders – If you enjoy finding under-the-radar investment opportunities, CEFs provide a way to beat passive indexing strategies.

About the Author

Michael Joseph, CFA, is a portfolio manager and deputy chief investment officer at Stansberry Asset Management. He serves on the CFA Institute’s Practice Analysis Working Body and the advisory board of the Arizona Council on Economic Education. His investment insights have been featured in Fortune, Kiplinger, and Advisor Perspectives. Learn more at MichaelJosephCFA.com.

Stop Overpaying for Investments—Start Buying a Dollar for Fifty Cents

Market inefficiencies don’t last forever. The best investors recognize them early, act decisively, and build wealth while others remain unaware.

With A Dollar for Fifty Cents, you’ll have the knowledge, strategies, and confidence to exploit one of the stock market’s last remaining hidden opportunities.

Don’t let another discount pass you by. Get your copy today and start profiting from closed-end funds.