As PHK goes down I see great buying opportunities in the upcoming days. Yes, for the past ten years PHK has paid an annual dividend of $ 1.46 a share even when the stock price got down to the high six dollar range and in fact most if not all of PIMCO’s closed end funds continued to pay out the same monthly dividends.
The real interesting thing is that there’s not much of a buy OR sale imbalance that is normal when the stock price decreases as PHK did. It’s almost as if there is a financial institution or a company buying PHK stock as the price decreases so they can have a high return or show a large cash flow (WHO SAID THE STOCK WAS AT A 70% premium) and DO THEY HAVE AN interest in having PHK decrease in price. (MAYBE?)
After all, what’s better then selling off a stock, having someone putting out a “discouraging” report a few days or weeks later and then buying back the stock at a lower price knowing that PIMCO will continue to pay out the same dividend?
Now I’m not saying something like this as really occurring BUT am I the only person out there that thinks the timing is a bit strange? OR there’s not a very large trade imbalance? AND why didn’t the person or the company release any reports when the stock price was at 30 percent, or 40, or 50 percent over book value?
Call me a conspiracy theorist if you want to but the timing is most odd and I almost forgot to mention that MAYBE it’s the governments doing as they can look at the stock markets an say private investors can’t handle their money so we have to take it from them and pay it out to them over time (the affordable health care act lets them do that)
ALL reply’s welcome and thank you for your time and GOD BLESS THE UNITED STATES OF AMERICA.
It's a conspiracy, all right. The people who understand math have finally begun to gang up on this stock. And this huge conspiratorial company lurking in the background will not be paying $150 for a bunch of bonds they can get elsewhere for $100.
It gets worse. If you look at the SEC filings this company is full of premium bonds, i. e. those carrying interest rates way above average. But those bonds pay off only at face. So the market price decline will be fed by the inherent ongoing decline of these bonds to face value.
Also, the fund has a huge concentration of its holdings in bonds of financial companies. They are much more speculative than industrial bonds. If you look where this fund went to in 2008 and 2009, its potential for mischief should be a warning. They were leveraged then and leveraged now.
Sentiment: Strong Sell
The exact same thing happens periodicly here. We get some hit piece written. Shreading alalfa runs a series of the same tired arguement.
dannyboy (and related yahoo ids) regales us with the same predictions THAT HAVE BEEN WRONG for 4 years. (really laugh at his signature "this time will be different" bunk).
Massive waves of selling.
This time will not be different.
The price spikes. The distribution remains the same.
dannyboy, and company, will be proven wrong again.
Those buying the dip will see a hefty short term gain (to hold or sell for profit)....
Rinse, and repeat.
Of course this is market manipulation. Pure and simple. Why would anyone spend time and effort to write an article to drive the stock price down if they have no holdings in it? They need to be investigated by the FTC. How can one man opinion became a headline news?
There are lots of analysts who issue opinions day in and day out. That is what they are paid to do. And on most large company, there are "opinions" raging from strong buy to strong sell. But a sell on a closed end fund, priced at $1.70 for $1 (which is not a unique product) is something of a no-brainer.
Ultimately price will match value ($8.30) Usually in closed-end environment price will be below value because of the mangement cut of fees in exchange for its "services" --the value of the services is usually at best ZERO and does not make up for its fees. Unless of course, "this time is different".
As soon as the price rises or drops to market, there is no longer an "imbalance" at that point in time
The distributions (which some call dividends) on any closed end fund is based on whatever management decides for whatever reason. The fund does not have to "earn" its distribution, and the principal can drop, and if you keep your losses and sell your winnings, you can credit the distributions from "earnings" even though in this fund since creation 9 years ago has LOST approx $7 in asset value.
In looking at a closed end fund, the distributions are arbitrary and irrelevant--look for the return of your money, not just the return on your money--in this case $7 of your money has been lost since the start, in an era when holding bonds in a time of declining interest rates should have been hugely profitable.
See cornerstone for the possible outcome of this fund--The manager of cornerstone, according to his anonymous fans on the message boards, was a hugely successful investor who deserved 100% or more premium.
Time will tell.