PLUS: 1) High Interest Rate (approx. 9.7%) 2) Good diverse holdings of approx 70 stocks, incl. much preferred stock 3) low fees (approx 1.1%) for a closed end fund 4) large discount (approx 8%) to underlying stocks. MINUS: 1) bad chart due to poor momentum 2) money managers may have to keep dumping this until the end of the year to show a winning portfolio 3) European holdings undesirable due to crisis. 4) currency exchange issues due to strong dollar. CONCLUSION: Although a value now, the outlook for rest of 2011 is bad. If early 2012, this could be a buy if 2 things occur: 1) interest rates remain low 2) its chart improves, e.g. 26 week moving average changes from concave downward to inflection (straightens out). HOLD for rest of 2011; Reinspect in early 2012 for possible BUY.
Why would selling part of the securities reduce the discount to portfolio NAV. If the sold assets were held in cash it would do so but once they are paid out as a dividend any narrowing of the diacount would be reversed. GLTA:
Keep in mind that the 14% yield is actually about 10% interest. The other 4% comes from selling part of the holdings themselves each quarter. Most Closed-End funds do this to help minimize the discount to underlying securities. The huge discount you mentioned make this a great value. However, sometimes value stocks still drop, as is the case here. The European holdings are crushing the price of EOD. It probably won't recover until Europe recovers.
MINUS 5: EOD can sell call options on there holdings. If they sell calls at a very low price, e.g. EOD less than $8.00/share, this could devastate the price if the called stock has to be sold. Thus, rather than seeing a good increase in the price of EOD, the called stock is sold and EOD's price stays low. VERY BAD.