As right as that sounds, experience has shown that with bond CEFs it is not a hard and fast rule. The key is the yield and its sustainability and whether the premium has been long lasting. If there is a premium for a long time and the yield is good, things can easily stay that way. An example is PTY. It yields close to 10%, despite something like a 12% premium. It has consistently paid .1375 a month with no reductions. If there were no premium, the yield would be about 12%. With its good performance and outstanding Pimco management, investors are happy with the current yield, even with the premium. There are funds that move between discounts and premiums in a volatile fashion. There, I completely agree. Wait for a discount. Also, never buy a CEF in an IPO and immediately lose 7 or 8%.