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AllianzGI Convertible & Income Message Board

  • divineflatus divineflatus May 29, 2013 11:47 AM Flag

    Why the big drop today?

    Any ideas?

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    • bond yield going up (ie. treasury bonds), existing bonds going down. NAV drops as a result of bond sales prices going down, this CEf and all others with bonds are getting hit hard.

    • tim93 May 30, 2013 2:57 AM Flag

      The NAV price only went 0.54% down.

    • Wish I knew. Lots of my dividend holdings took a hit today, but not as bad as NCV. If I had any dry powder left I would be a buyer today. Good Luck & Fortune.

      Sentiment: Hold

      • 1 Reply to mayberrygooddad
      • It looks to me like Hi Yield CEF's have been impacted by the general fear of the FED ending it's rampant treasury bond buying spree. This seems to be causing Hi Yield stocks to sell off which in turn has spilled over to the Hi Yield bond market. To me it's a clear case of monkey see, monkey do. Nothing has changed except the lemmings have been stampeded yet again. There is really no correlation between the Ten year note (TNX) and the price of Hi Yield corporate Closed End Bond Funds and anyone who thinks there is, is well, an idiot.
        If you look at some historic data you'll find that 5 years ago the TNX was at 4.05. At that time NCV was at $13.30. Today the TNX is at 2.12 and NCV is at $9.54. By the logic of the lemmings driving the market over the cliff if the TNX went to 4.05 again NCV should be priced at about a buck a share. That aint happening. The problem is there are just too many followers in the market today and it's a case of musical chairs and nobody wants to be the last man standing when the music stops. They have no idea why things happen the way they do they only react to what the other guy is doing and they do the same.
        I've been buying like crazy for about the last year dumping garbage that is just sitting there making nothing even if it's in the red just so I have some capital to put into something that pays a nice monthly dividend. Call me crazy if you like but a year from now you'll say "I wish I did what he did."

    • Wish I did

6.76-0.01(-0.15%)12:07 PMEDT