CFP is a closed end fund(CEF) which means it trades shares within its own basket. IOW, no spo's. They invest the funds from the initial IPO, and the PPS fluctuates by the buying and selling of this basket of fixed shares. Who cares? Exactly.
This model that Jess has improved upon with an entry price of 3.5% less than the previous close from X-1, produces some pretty nice historical returns. If not in by X+3, take initial position on this close and go forward daily with 3.5% less on the next day. It is a monthly CEF presently returning almost 18% annually. A little misleading because it is mainly ROC(return of capital). Who cares?
We are just after capturing about .35-.50/month or more(could you run this Jess?)and letting the accountants figure out the rest. Yes, you get those muddy K-1s. Who cares? On a $5.71 stock .35-.50/month is a 73%-105%annual return...Exactly!!
You are a great stock picker! Thanks again for being so generous in sharing your experience and work.
I've run CFP since Nov 2007 to present (63 periods). It beats your .average $0.50 requirement, but has lengthy down periods. Winning periods are half the total, but they average 3.85 gain per period. Details below:
Total trade days tested = 1200
Total periods = 63, total net gain = 69.68, average gain of all periods = 1.11.
Nr of gaining periods = 31. Total gains = 119.33, Average of gaining periods = 3.85.
Nr of losing periods = 9, Total losses = 49.65, Average loss of losing periods= -5.52
Nr of zero periods (no trades) = 23
Longest consecutive time with no gains = 8 periods (2 periods losing, 6 zero trades).
Including a term to limit losses in any one period would increase gains, because losses tended to be in bunches. I intend to tinker with this a little. It looks like using a stop trade for a period of 2 or 3 consecutive losses might improve things.
Thank you for the info! I neglected to note in my opening post that I went back through CFP using the GLAD together with the 3% Rules, and as I showed in another post got better results:
"1) Employ full GLAD rules beginning on X+4(do not enter a trade before the EX+4th day). The reason..too much volatility during the first 3 days post EX.
2)Once/If trade begun following GLAD criteria, follow 3% Rule(not 3.5%)."
Is this the method you used on the run back to 2007?
I am so jazzed by this 3% method added to the GLAD rules on X+4...as I explained for this CFP stock, that I applied it to PSEC since its monthly dividends in June of 2010. Exit on close of EX-1.
Results 31 periods. Buy and hold had 1.56 gain in CA and 2.94 in dividends for 4.50 total gain or 17.8% annually(9.76 starting PPS).
GLAD/3% Method had 7.67 profit, or 30.4% annually, for a 170+% advantage over buy and hold. Worth consideration for all Long PSEC investors.
I was thinking of mentioning CFP to you because of it's high yield monthly divy. One word of caution. In.the last few years they actually did a (not secondary, but...) a rights offering to current shareholders. This has come in May for the last 2 years. Look at the dips in April/May to see how much the price can drop when their version of a secondary pops up. CFP's two sister stocks did a rights offering the last quarter of 2012. It's almost guaranteed to be CFP's turn to do what has been historical. I may lighten up on my long term CFP in three different accounts in anticipation of the rights offering dip.
Do a CFP quote on Yahoo and then click on the headlines dated June 25 (2012) to read about the announced close of their last rights offering. It explains how they derived the PPS for the offering, compared with what they were expecting to get. If some big player shorted 2 1/2 mil shares in May and then bought back by June 25, they made a boat load of $$$.and divy.
This should be interesting to see how things unfold. Just be cautious for any rights offering announcements.