I spend a great deal of time in Mexico and have an opportunity to buy "junk" 14k gold for a price of 1,225 an ounce when converting 14k to 24k. Basically buying gold for about 120 an ounce less than what 1 oz coins would cost. Is it prudent to believe gold is gold or is there a hidden red flag in buying 14k gold? Advice and opinions welcome.
To ignore the relationship between NAV and the amount of NII that can be generated by such a level of NAV is shortsighted. That would be like a financial planner telling a retiree they only needed a $50,000 portfolio because they could take $25,000 a year from the portfolio. True enough. But only for 2 years. Then the retiree's portfolio goes to zero and their income (NII) stops.
dave, I realize that nii is where the dividend is paid from but there is a logical connection between nav and nii. If there wasn't we would have companies producing 1.00 of nii for every .10 of nav. I am just afraid that with the nav erosion over the past year oxlc will have to cut their dividend or the pps will continue to decline. As things are every dividend I have receiced has been acompanied by a reduction in nav and pps. When nav goes to zero will there be there still be nii?
They already sold assets andboughtpreferred. I own this but just wonder how you can pay the same dividend wth half the NAV you once had
OXLC would have been out of compliance with their preferred stock covenants and not be able to declare a dividend under those conditions. They then declared 2 dividends in advance to circumvent the problem. They had to sell assets to buy back preferred stock to be in compliance with covenants. So my question is how much of a dividend will they be able to pay going forward? Pretty straight forward question doesn't seem nutty to me. Or didn't you know anything about this?
Why disturbing. They depend upon 6% growth of the underlying holdings to generate a distribution of about 18%. Otherwise it's a 12% distribution from cash flow with the other 6% being ROC. Not bad either way to me but I am sincerely curious as to what you find disturbing. Thanks.
Glad he is gone. He may guess right but eventually he will guess wrong and bust. The most dangerous investor in the world is one who has only lived through a bull market as an adult and made 2 correct calls.