PIMCO High Income Fund Message Board

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  • chiquitbumbalabimbomba chiquitbumbalabimbomba • Oct 11, 2012 1:23 PM Flag

    Ponzi scheme--NOT!, but 13% return is based on ???

    Agreed w Dan on everything, but you still have to be careful when you short though, there's always liquidity to buy, you never know when you might be able to short more shares at higher prices..

    Tax consequences of being short the dividends may be asymmetrical too, ie you only have 45 days to use the basis for in lieu of dividend payments, after that you have to itemize (or elect as a trader) to get any benefit from the investment interest deduction

    So it's not a level playing field, you need to short at slightly higher prices just to get back to break even.

    Sentiment: Strong Sell

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    • dan86droon dan86droon • Oct 11, 2012 1:38 PM Flag

      Thanks

      I know most of the disadvantages of shorting, thanks for informing others, but I only try to short where there is a MAJOR overvaluation . It is not a level playing field with longs. Cant short in ira's. And several times I was forced to close short position within a few days after borrowed shares became unavailable to broker. 99% of the time I am long in closed ends--usually in ira's. Today I bought pml at 12.92 (at open, below my bid actually) and sold at 13.01 for example, and still have shares of pml bought earlier.

 
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