I guess I discussed this topic endless times. But I want to know your ideas where they get the money to pay your 30% + dividend?
My answer is return of capital. Any new ideas?
i can't believe i'm here again but i couldn't resist.
you are a fundamental guy but don't understand the fundamentals of this fund (you claim NAV is going to zero).
you believe in facts but you don't believe mgmt when they state that the div payout is 100% covered by divs recvd (you claim 2/3rds is return of capital).
you don't believe words but you lean on one ANALyst's claim that NAV is going to zero (hopefully that ANALyst did some homework on the fundamentals of the fund after the recent call).
you are clearly not a cheerleader and i hope no one sees me as one. i'm not here selling this fund, just trying to explain the fundamentals at work here. the main one being asset values can go down while income remains steady. that is why the div yield seems so incredibly high.
what is really interesting at this point is the move up in the market. i don't know how long it will last but those that say the div capture strategy only works in an up market should be thinking about buying now. positioning for the recovery in six to nine months.
again, i'm not buying AGD or AOD. generally i'm maxed out on what i want in exposure. but those that say the div capture strategy only works in an up market should be more positive on the stock now. downside risk may be gone in six months. if you avg in over that time, you might be in good shape. and when the market has clearly bottomed, all the NAV to zero theory folks will be blown out.
Well I am fundamentals guy, not a cheerleader. I don’t believe words, I believe facts and actions. I think it is good time to stop here and see what happen next year. Thanks for expressing yourself.
that does seem a bit odd. i think we'll have to wait until the next conf call to get an answer. i'm sure one of the analyst's will ask the question.
there is a poster on the AOD board that wrote a letter to the company about buying the stock back. he posted the letter awhile back. don't think that is the sole reason that they began the program but i'm glad the letter was sent.
i own both agd and aod. but do not own awp.
Thanks for response. Good discussion. As you may know alpine have 3 closed-end funds: AGD, AOD, and AWP. Alpine managers buying back shares of AOD and AWP:
Why don’t they buy AGD (Don't eat their own cooking)?
rhino, let me try and help you out here. it does seem out of whack, a 25% to 30% div payout. i previously explained how this can happen. let me try a different approach.
did you believe that the 15% payout awhile back was dividend income and not return of capital ?
if that answer is yes. then the answer to the 30% number is very simple. the share price has been cut in half so the yield has doubled.
the underlying stocks that pay the dividend to AGD have not reduced their payouts. now that might not be exactly correct as i haven't reviewed all their holdings and all the dividends but generally speaking, not many companies have cut dividends YET. they will, but they haven't yet. so the income to AGD hasn't really changed and the income to us investors hasn't really changed. the asset value has changed but not the income.
i'm trying to be as nice as possible here but you keep talking about return of capital and NAV to zero. return of capital is not happening now and the NAV will never, ever go to zero.
do you hold a position in the stock ? i know you post alot but i haven't seen a disclosure on whether you own the stock.
as i've stated many times, i hold the stock and do not recommend people buy here.
1.>did you believe that the 15% payout awhile back was dividend income and not return of capital? Never believed this, my max is 8%
2. SNP just announced 10% dividend cut.
3. >“i'm trying to be as nice as possible here” Yes I am too. And I am “keep talking about return of capital” because this is happening now.
4. Yes, I do have a long position in one of Alpine closed end funds.