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  • blackbeered blackbeered Oct 1, 2011 9:25 AM Flag

    BGY v JQC

    Well, FredKane3947, it's me again ... as promised.

    For those who hadn't been following the conversation, we're trying to discredit each other. It goes back to the beginning of the year when I suggested BGY was in a "self-liquidating" mode by making consistent and large [as % of NAV] ROC [return-of-capital] payments to its investors. Further, I suggested that, for the foreseeable future, JQC would outperform BGY.

    Fred said that, even after 50+ years, I didn't understand investing.

    Unfortunately for Fred, the facts have been, and continue to be, on my side.

    So here's the latest Quarterly update .... for the Quarter, Total Return: BGY -21%, JQC -12%.

    Fred seems to think BGY's $0.34 payout is superior to JQC's $0.20 payout.

    Fact ... $10,000 invested in BGY and JQC on July 1st would today be worth $7,862 and $8,761, respectively.

    Need more confirmation? All you need do is look at the NAVs of these two [XBGYX and XJQCX].

    Let's hope FredKane3947 has disappeared from these Message Boards. But if he hasn't, you would do well to ignore his posts ... no matter how articulate he may be, he's not very smart and I might even suggest he's out to further his personal agenda at your expense.

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    • What a clever way to promote another ticker without it being labeled as "SSPAM".

      Listen. We are living in crazy market times right now. BGY definitely has a high beta and remains volatile to market direction. In good times this will perhaps benefit BGY between the two, in bad perhaps JQC. I don't know what the markets have in store relating to the ongoing European debt crisis and its potential impact on BGY's share price and/or dividend distribution rate, but I do find it somewhat heartening that BGY insiders were putting their own money on the line and purchasing shares in recent months.

      For the such insider buying activity was recorded in JQC in the past 2 years. And perhaps a much longer time frame than that, for I have not reviewed JQC for insider activity beyond the last the 2 years.

      Lastly, BGY's book value is $10.84 a share, a significant discount to where it trades today.

      Read into this comment what you will. Just my 2 cents plus applicable interest.

    • From Blackrock ... "The Fund has distributed more than its income and capital gains in the current fiscal year; therefore, a portion of your distribution is a Return of Capital [ROC]" .... which is when "some or all of the shareholders investment is paid back to the shareholder". "ROC distributions should not be confused with yield or income."

      • 2 Replies to blackbeered
      • The following is a comment to the Seeking Alpha piece:

        >Kerry in Chicagoland, USAComment (1)
        "I don't know how BlackRock can reasonably expect these funds to be able to maintain these distribution levels in a defensive market environment without continued NAV erosion."

        Periodically I see statements as per the above: "I don't know how BlackRock can reasonably expect these funds to be able to maintain these distribution levels in a defensive market environment without continued NAV erosion."
        Yes, in a falling market the NAV will decrease but, the income INCREASES when selling calls in a falling market. Frankly, I look forward to the opposite this year.I see a year end BONUS dividend this year and will be disappointed if the boards do not approve one. . In a rising market selling calls makes little income if not generating losses. That's why we saw distribution cuts last year. In a falling
        market selling calls make the money. In a rising market one can sell puts to generate income. But only a few funds use puts, unfortunately.
        The use of the term "Return of Capital" is very misleading to us non- accounts. It sounds very bad: "Their returning the money we invested' is a common observation. But it is "our" money. It is the profit made from selling calls in a falling market. Currently, when CEF holders
        panic in a falling market and sell their shares it increase percentage value on the unchanged dividend. Always remember the primary source off funds to generate income for distributions is the premiums received from selling calls. I was a big buyer last week!<

        I think Kerry from Chicagoland makes a compelling case.

      • ....Mr. Seekingalpha puts togather some very good points as to why he feels that CII is a far better investment vs BGY and BOE. All three have ROC components in their distributions so that is a saw off to a degree.

        ....Going one step further, the following is the return on invested dollars on todays closing prices.I have invested $50,000 in each Fund!
        Fund - NAV - Yield - Shares - Income
        CII - 13.74 - 11.54 - 4009 - $5,772.00
        BOE - 15.73 - 15.46 - 3399 - $7,732.00
        BGY - 8.57 - 17.32 - 6369 - $8,152.00
        ....Investing in BGY or BOE has a much greater return on invested dollars!

        *Disclosure Long; CII, BOE, BGY

5.83-0.02(-0.34%)Jul 22 4:02 PMEDT