Dan, any opinion on PCM? I'm thinking of selling my position on PGP and reinvesting it in PCM for the eventual fed increase.
I read a seeking alpha article just now that promotes you're position on PGP, "Equity CEFs: The Insanity Of CEF Investors"
Dan, I hope it works out for you but that's against the positions I'm in. I have never used shorting, I try to be a optimist in my investing. I dislike betting on a turndown, to me it's like investing in life settlement.
one fundamental flaw in your argument is, if the NAV increases, the premium can drop and not affect the stock price.
A bad jobs report indicates no Fed. rate increase for months. Let the bond funds continue to roll. PGP 9.5%
Brent, play Svengali and predict when this will drop because of the rate increase so I'll know when to exit.
FYI, Dan, I'm sure you might already know but I wasn't for sure, I did a chart for 2007 to 2015 of the 2 year treasury rates and placed the PGP selling price above nav over it for the same period, it's a good fit. it shows that when the fed rates dropped, that's when PGP went premium. I have been trying to find a correlation for fed rates and PGP.
Thank you for the reply. As a individual trying to manage my own retirement savings, I am grateful for any insight passed on by others more informed. I did look up all the other Pimco closed end funds and found several selling at a discount. PCI, PDI, PKO, PFN, PNF, and PCM, all pay monthly and are over 7%. PGP, for what it's worth, is morning star rated 5 stars, non of the others are and some are not rated at all, I have know idea what this means. Good luck on your short.
Since you brought up the premium. PGP has been sold at a premium since 02/19/2008, it reached a high of 88% on 11/29/2011 and has not sold any lower than 50% in the last 6 months. How long can you short a fund?
Final regulations for phasing out older freight-rail tank cars carrying crude oil and ethanol will be released May 12 instead of March 31 as originally planned, according to the U.S. Department of Transportation. Oil trains threaten the safety of an estimated 25 million Americans “who live in the blast zone." The NTSB lists rail tank-car safety among its “top 10’’ most wanted transportation improvements in 2015.
inception date 05/31/2005
Fund’s manager Dan Ivascyn Morningstar’s 2013 U.S. Fixed-Income Fund
Manager of the Year.
Morningstar 5 star rated
year average return on market price 14.33%
last distribution 02/10/2015 9.6%
I suppose you've gone to Pimco's site and looked at the history of PGP and it's premium rate/ nav over the last 5 years? Since the global interest rate is turning negative, this fund paying what it pays for a dividend, has people investing in it for that alone. They are willing to accept the high premium and fees for the dividend. I wouldn't short it, with all the turmoil in the world right now, there's no predicting how high the premium may go with people chasing that monthly dividend.
Search for this phrase on pimco's site, ( PIMCO Global StocksPLUS & Income Fund (PGP) ) and set the history search at their site for the parameters you want to search. I did it for 5 years, it lists the nav and premium or discount for all 5 years. It's interesting if you own this stock.
Right after he died I believe the Saudi's announced they were not going to keep supplying oil at the same rate at this price, in affect, they blinked. The price of oil started coming back up.