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Pimco High Income Fund Pimco Hi Message Board

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  • mcrmgg2004 mcrmgg2004 May 3, 2009 4:14 PM Flag

    Hmmmm, the resident short is trying

    the reality is if phk maintains the dividend with bonds in its portfolio remaining about the same - the yield if we give 15% on its portfoio would give a .60 per annual dividend which means NAV would theorically drop .85 per year. so at end of 1 year Nav would be about 3.25 and in about 3 years it would be worthless.

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    • Providing they’re not buying some real gems here. Unless you were alive in the 1930's. This is one of the best times in my life time to be high yield shopping. Step back...look at the big picture!

      • 1 Reply to dvd_dbr
      • I agree with you re HY opportunities (even though the last 8 weeks rally has gotten me more cautious now- there is bound to be a nice correction before we resume the rise to more significantly higher levels longer term) - and HY has been one of my fav. asset classes for the past 20 years BUT (and this is a big BUT):
        How can one justify paying 1.70 for a HY bond that is worth just 100..
        Imagine an AIG bond that PHK owns, its market price is 30, it can be freely be bought and sold at that level (this is very liquid, as are GMAC, CIT, C, you name them)- but PHK's market price values this bond at 51 not at 30 (7-% premium) - why? any reason?
        Hence my assumption that over the long term (or maybe short term too - bubbles pop unpredictably, as you should know) PHK will lag miserably bot in up or down HY markets , hope you see my point.

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