Gross: "My last pick, which I have recommended before, is Pimco Corporate & Income Opportunity [PTY]. I challenge any of you, without researching it, to tell me about another fund or stock that has paid more in dividends in the past five years than you could have bought it for five years ago, and, at the same time, has doubled its book value or net asset value. In the past five years, this fund has paid $12 in dividends. It sold for about $12 in December 2007. Now it trades around $20.
Witmer: That is excellent, but I can think of a lot of stocks that are up that much or more from their 2009 bottom.
Gross: PTY had a 12% yield last year, including regular and special dividends. It will yield about 8% in the future, and probably more if the board authorizes more special dividends. I recommend the fund as a yield substitute, with a greater degree of safety than BlackRock Build America."
I am interested in this investment, having read the Round Table discussion, but I am waiting for the "Barrons Effect" to wear off. That phenomenon usually only takes a few days, but for PTY it has persisted for a week now. Just yesterday (2/12) it finally started easing. I'll pick up a few shares when it gets down to about 20.50.
Closed end share prices have an established trend. Share prices trend down in the October to the first part of December time period or until the special year end dividends are announced. They trend upward for the first four or five months of the year. If you get lucky you may see some softness in PTY share prices before June or July. For the last two quarters PTY NII has not been as high as the prior three years. High level of NII is what allows PTY pay the sizable year end special dividend. If it looks as if that dividend will be lower at the end of this year the share price my decline to under $20. That is the time to buy.
He's talking about 10 to 30 year issues, which the Fed can not anchor with their ZIRP. They can, and do, influence the long end via QE-#X, but Bill has been talking "take down your duration" for more than a while now. What I read there was not news. In most of the funds he runs, you will find durations in the 4 to 6 range. I'm more interested the the 4 range.
He's also talked about this being a "market of bonds" and not just a "bond market."
When you are the biggest guy out there, you get to see a lot of stuff and if you can pick off three basis points a day on astute trading, it adds up over time.. Count me still in, regardless of the shameless Gundlach shill who likes to lurk here.................Dave