For the umpteenth (and hopefully last time for me).
IF the NAV is artificially depressed, this is true for all funds (since they are all priced in the same general way) including JNK and others which are selling at market or discounts, while this is 40% premium.
Do your own due diligence.
I'm betting, with my money, that there are bonds in this portfolio that are mispriced, and that a knowledgeable investor can liquidate these bonds at a higher price than current mark-to-market. I feel that Pimco can do this. You may disagree. History, since March, has shown that mark-to-market pricing can be flawed. Based on your post you disagree. It's your money, take the other side of the trade.
At some point the premium to NAV may become uncomfortable. It became uncomfortable for me with PGP and I sold. It's not to that point at PHK, at least for me.
Artificially depressed NAV? Are you aware where the bonds are marked? How can a bond at 90-95 be artificially depressed? You're either fooling yourself, or you're trying to fool others.
While you have absolutely no idea what you're talking about when it comes to substance, somehow you think that you know what my position is and that i'm being "squeezed". This you couldn't know even if you were the smartest person in the world because you don't see my brokerage statements.
On top of it, even if I was being squeezed, it would be completely irrelevant in the discussion of what the fair price of PHK is.
1. No you were not stupid for buying at 3, 3.5 but you took on immense amount of risk and it paid off for you. Good for you. Congrats on that trade.
2. Which bond can you buy today at 85 that matures in a year? Give me a specific example today and I'll analyze the bond for you. Just so we're talking about something specific. But just so you know - that hypothetical bond you described has 30-40% of going bankrupt before the debt matures... if it didn't - it wouldn't be trading at 85.
3. IF Bill Gross is able to constantly buy bonds at 85, that pay good yield and mature at 100 and constantly grow NAV, how come none of the funds that he managed for the last 10-20 years show NAV growth? After paying the coupon, the price on most of them is flat to down over long time periods. PHK included (XPHKX - even though this one doesn't have a long history). How come?
Very well said. However, the shortstain of the board who continually uses new aka's to try to hide his stupidity, will never understand.
He is literally stuck on stupid, he has been for almost a year now and he will never "get it."
And of course, your world begins with MARCH 2009.
Nothing happened before then of course, and what did happen should be ignored, in your view, because THIS time is different.
While money managers can buy and sell the assets, most managers, including this one have results close to index buy and hold.
Do your own due diligence
That's it. Everyone thinks these are magic bonds, but most investors I bet dont even know that it is a FUND, probably believe that it is a operating company, and are just looking for something that will pay the highest "dividends". Again, the management can pay out whatever they want as a distribution.
And the argument for buying the fund, is hey, they pay a good dividend, the price has been going up, 300% from low, so What, me worry?? Everyone knows the past (the past 10 months that is) will be repeated exactly and endlessly into the future!!
By the way, the chart of CRF shows almost full recovery from big drop, before even larger fall, and of course every stock is different.
Do your own due diligence
To so1dieroffo: Great...you've traded bonds (so you are an expert) and there is an active market for bonds (which I believe is far less efficient than for equities...no point in arguing with me...you won't convince me otherwise). Using a very simplistic example, if there is a bond in the portfolio that trades at 85 today, and if the it matures in one year, and I don't sell until maturity...my NAV at maturity is 100...wow...my NAV increased.
Some of us bought this fund at $3.50-$5.00 and I'm sure even then there was a premium to NAV. Were we stupid???
NAV is a GUIDELINE...it is imperfect and should be used as a valuation tool, not a "be all end all".