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PIMCO Income Strategy Fund II Message Board

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  • up1.down2 up1.down2 Aug 6, 2012 10:42 AM Flag

    Dividend CUT,..see CEF.com

    This always amazes me. Whenever negative events are developing with publicly traded equity and someone reveals it’s always ‘basher’, ‘agenda’ or ‘scare tactics’. Nobody made this stuff up. It’s happening whether you wish, pray and hope it isn’t.

    More befuddling is why folks think paying over NAV is a good thing in any way shape or form. Would you go to your bank and pay $11,000 for a $10,000 CD even if it had a 9% interest rate ? More than likely not ! And that would be for a investment vehicle that has a guaranteed capital return and a guaranteed rate of return. In the case of a CEF there is no guarantee of return rate OR capital return. Go figure ?

    Just because the current yield is an annual 9% folks are willing to give up 9% or more of their capital in far less time. Anyone that bought at Thursday’s high already lost ~2% by Friday’s close. That’s 20% of the advertised (not guaranteed) yield in just two days ! If Allianz wasn’t filing SEC documents they would call this a Ponzi scheme. Just the latest derivative shuffle with a new name and face.

    Nobody is trying to ‘scare’ anyone. This is simple straight forward math. As the name implies CEF’s are Closed and therefore don’t have the same open ability to expand cash flow and equity to drive higher PPS like a standard issue. Any rise in PPS on a CEF is purely artificial. Those that ignore it end up boo-hooing in the end. Never fails.

    Quite frankly if anything is occurring here it’s that some are trying to convince others to be the bagholders.

    Btw… your share counts are for two totally different classes. A relative comparison is pointless. If you want to make a dollar comparison it might have validity.

    Gross & Family = $10.7M
    Brigade = $40.75M

 
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