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Hola Cuba

By Dian Vujovich

It was fictional character Ricky Ricardo who introduced me to the also fictional Tropicana nightclub in the television series I Love Lucy. Ricardo’s real name was Desi Arnaz. He was born in Cuba and who knows what his feelings would be regarding President Obama’s move restoring our diplomatic relations with that communist country. Or, how it all will play out. But a couple of things are certain: More tourists will be visiting the island, more Cuban cigars will be making their way to America and investing opportunities in that region are likely to grow.Nothing fictional about that.

Re travel, Peter Greenberg, travel pro and a CBS News regular, wrote in today’s email newsletter that although the “ long-standing travel ban has not yet been lifted” it won’t be long before the travel industry will find ways of getting us to Cuba by air and sea.

Today, Discovery Tours by Gage 1 announced substantial price cuts in their people-to-people tour packages for travel to Cuba in 2015, according to Travelzoo.com.

Clearly, we all will be hearing about more travel opportunities to this the largest island in the Caribbean that sits only 90 miles from our shores.

But there’s more to Cuba than travel opps.

Thomas Herzfeld created the Herzfeld Caribbean Basin Fund, (CUBA), 20 years ago. It was the first-ever publicly traded closed-end fund and its investment objective is long-term capital appreciation. Like most closed-end funds. performance has had ups and downs throughout the years… but more about that in a moment.

The inspiration for this fund that invests primarily in equities came from Herzfeld’s daughter, Brigitta. While growing up in Miami, she made a number of Cuban friends at school and one day suggested to her dad that he consider investing in that region of the world. Dad listened. And the rest, as they say, is history.

As for performance, CUBA closed at $9.42 a share today, Dec. 18, 2014, up 4.78 percent. Over the past 52-weeks its per share price has ranged from a low of $6.38 and high of $10.04. Its current yield is 12.98 percent.

In an email to Herzfeld, I asked him a couple of questions. One was if he shared the same negative feelings as Senator Rubio has expressed about America’s and Cuba’s new relationship.

“Interestingly, I used to feel the same as he (Senator Rubio) does, “ said Herzfeld, president of Thomas J. Herzfeld Advisors in Miami. “Recently however, as with many Cuba watchers, I have moderated my views.”

With respect to the Caribbean Basin Fund, he and his son are now the fund’s largest shareholders.He shared this advice to interested investors: “When people look at our fund, don’t just notice our top holdings which are obvious. Dig deeper into the lesser known highly speculative ones; some are pure Cuba plays.”


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