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The cef PDI has been at a nice premium for some time now, uniquely so, almost, and certainly the first time in years. I have sold some. Significant rise and decline just today's trading.
This guy thinks its future will probably not be as bright as its past:
I intend to hold them but I am not adding to them. The premium's on PCM & RCS are too far out of whack for me to consider them at this time. My other holds are PTY, PFN and PFL. PTY seems like a contradictory hold (premium/discount wise) until you examine it's history.
FWIW there are some very sharp minds who contribute to the CEF discussion forum and I highly recommend checking in.
If you mean the article you linked I did but it read like just his opinion, offered with little in the way of basis, but in the end he'd let you in on all the secrets if you subscribe to his service. In other words I felt there was little if any substance to justify his claim.
I agree with Mark that the M* CEF discussion board is a great resource. CEF Connect is a decent (but not perfect) source of stats on CEFs you want to keep track of.
There are different schools of thought on absolute premium/discount vs. relative premium/discount. Pimco's been on fire hitting the duration adjustment button and increasing NAV, so the relative school would say their funds are worth some level of premium. Look at PTY and RCS - they've been at premium almost their entire existence.
Your questions: I'm holding PDI and PCI. They've continued to shine on building NAV, and their earnings stats are fine. However, I've got a very low allocation to equities, so I can take on more credit risk.
PCM's had a rush up in price just recently; I sold mine a week-plus ago. Good fund, great yield, good earnings coverage, all that ... but I've got it in the "buy some on weakness" category.
RCS is one I'd avoid. Compared to the others, the distribution coverage isn't so hot, and the premium's way up there historically.
Others I keep tabs on and would consider on weakness: PKO, PFL, PFN, PTY, and with quite a bit less enthusiasm, PCN. Don't forget Pimco's got three good muni CEFs too, none of them exactly a bargain, although PMF took a huge hit when they cut the distribution in March, but has come back off the bottom and is still cheap on a relative basis.
Overall: one of the really skookum M* posters put FI CEF risk now this way: with the p/d's elevated as they are, there's a decent chance that if there's an equity selloff, the high prices of the ones with credit risk could lead to those funds taking on a lot more correlation with equities than we're used to.
Savvy, tnx. I knew it was a paid teaser / solicitation; I just meant his sense of premium, risk and rarity, which concurred with mine re PDI historically; I have been in it for a long time. I shall investigate further per your guidances. Yes, equity correlation is not something I am seeking. The opposite. May just stick w PONDX, which I sold out of to a half extent.
Comments
https://seekingalpha.com/article/4074037-closed-end-funds-expensive-cash-substitutes-open-end-fund-alternatives
And a M* discussion from the M* Closed-End Fund discussion forum:
http://socialize.morningstar.com/NewSocialize/forums/p/374174/3843011.aspx#3843011
Disclosure - I own PDI & PCI among others.
Are you going to keep on w PDI and PCI? Do you have thoughts about RCS and PCM?
FWIW there are some very sharp minds who contribute to the CEF discussion forum and I highly recommend checking in.
did you read Foster's writeup?
I agree with Mark that the M* CEF discussion board is a great resource. CEF Connect is a decent (but not perfect) source of stats on CEFs you want to keep track of.
There are different schools of thought on absolute premium/discount vs. relative premium/discount. Pimco's been on fire hitting the duration adjustment button and increasing NAV, so the relative school would say their funds are worth some level of premium. Look at PTY and RCS - they've been at premium almost their entire existence.
Your questions: I'm holding PDI and PCI. They've continued to shine on building NAV, and their earnings stats are fine. However, I've got a very low allocation to equities, so I can take on more credit risk.
PCM's had a rush up in price just recently; I sold mine a week-plus ago. Good fund, great yield, good earnings coverage, all that ... but I've got it in the "buy some on weakness" category.
RCS is one I'd avoid. Compared to the others, the distribution coverage isn't so hot, and the premium's way up there historically.
Others I keep tabs on and would consider on weakness: PKO, PFL, PFN, PTY, and with quite a bit less enthusiasm, PCN. Don't forget Pimco's got three good muni CEFs too, none of them exactly a bargain, although PMF took a huge hit when they cut the distribution in March, but has come back off the bottom and is still cheap on a relative basis.
Overall: one of the really skookum M* posters put FI CEF risk now this way: with the p/d's elevated as they are, there's a decent chance that if there's an equity selloff, the high prices of the ones with credit risk could lead to those funds taking on a lot more correlation with equities than we're used to.
Blah-blah. Cheers, AJ
I knew it was a paid teaser / solicitation; I just meant his sense of premium, risk and rarity, which concurred with mine re PDI historically; I have been in it for a long time.
I shall investigate further per your guidances. Yes, equity correlation is not something I am seeking. The opposite. May just stick w PONDX, which I sold out of to a half extent.