Congenial Congress considering Cuba: This may be your easiest way to play Castrophilia
Today's Financial News - Posted February 12, 2009
A bill in Congress aims at lifting the travel embargo to Cuba… good news for our old friend, the Herzfeld Caribbean Basin Fund (NASDAQ:CUBA)!
by J. Christoph Amberger
Baltimore—TFN: They say there ain’t a left-wing dictator in the world that Western liberals don’t mind cozying up to.
With all eyes diverted to watch the stimulus bill, Rep. William Delahunt, D-Mass., has just introduced a bill that would allow Americans unrestricted travel from the U.S. to Cuba.
This new legislation would also prohibit the President from putting restrictions on travel to the island nation… unless a “serious threat” arose. President Barack Obama has been on record favoring the easing of the long-established travel ban when he campaigned for the presidency.
While bills like this have been introduced and dismissed in the passed, Congress has never been so pro-Castro in my lifetime. I give this bill a decent chance at becoming law… allowing Americans to subsidize the ailing Communist regime with their travel dollars.
On its legislative path, this bill will bring the word CUBA into the headlines a good dozen times. Good news for the perennial Cuba optimist, the Herzfeld Caribbean Basin Fund (NASDAQ:CUBA). This fund comprises a bunch of companies that conventional wisdom speculates will profit from a lifting of the embargo. It’s not really a good investment, given that it typically trades at a premium to its components.
But at $4.61 a share, this may be a cheap-enough vehicle to play speculative momentum as the bill makes its way through Congress. Given the lack of travel dollars spent by Americans and the bargains offered by competing Caribbean vacation destinations, there are decades and huge fluctuations in share price ahead of us until Cuba throws off a genuine profit to investors.
But traders may be content with one or two speculative breakouts.
Next Article: Mortgage subsidies: Homes for everybody
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