"With a wonderful business, you can figure out what will happen; you can't figure out when it will happen. You don't want to focus on when, you want to focus on what. If you're right about what, you don't have to worry about when" .
And of course, just run this in reverse for lousy businesses such as phk where you pay more than $1.50 for each dollar of assets--and pay mangement fees and expenses.
I am referring to cornerstone when it was selling at a 100% premium--not referring to investment or holding now at close to single digit premium, not criticizing it at current price/value.
Ditto for gut, dnp when they were selling at highest premiums. They were all horrible investments for buyers/holders at that time. And phk/pgp will prove the same for investors at approx 57 and 73% premiums.
Time will tell
The price is no longer $4, or havent you checked recently, and doubtful that you paid that much, it was approx $15 as a new issue. Please inform the cornerstone crowd, , the gabelli utility investors, the dnp investors, and Mr Gross himself how intelligent it is pay $2 for $1 in assets.
I am also not dreaming that whenever bill gross make a pick, he consistently pick closed-ends which trade at discounts or small premiums--he would never recommend this--obviously he must delusional.
todays barrons article
1-Most closed ends are NOT good places to park money because of high expense ratios.
2-But you can make money by taking advantage by buying them at a discount (below their average discount) and holding them until the discount narrows or disappears.
It looks like I could have written this, but I didnt.
Recommended closed ends in article--etx, fgb, edd, nvg. I had nvg recently (no longer) and had edd during the 40% plus discount era of approx 2008. Made lots of somolians with both.
I am still waiting for an article or any proof (barrons or this msj board) which shows that buying and holding the top premium closed-ends is a good strategy--
Maybe soon barrons will have another article focusing on the stupid strategy of buying $1 of assets for $2--ie premium closed ends and how stupid investors looking for "yield" by greed, or foolishness and ignorance pay through the nose for garbage--cornerstone would be exhibit #1.
As far as comparing phk to anything else--
It is so far above all that nothing in the world can compare to it--
keep dreaming--lol it will be paying 17% for ever and maybe even more than that--lol
cornerstone, when it was selling at 100% plus premium was considered to be the best of the best, sort of like phk and pgp==expensive but worth it because of the great management--lol
Ditto for gabelli utility at 50% premium two years ago, now 16%. ditto for dnp
And we all saw how that played out---lol, and phk paying out 17% plus in dividends (based on net value) will have the same end point--
The distribution is irrelevant--I hope it is increased!-regardless it is an arbitrary amount decided by management having no relationship to the growth of the fund assets-but as the asset value behind each share drops to zero, the fund will self-liquidate, unless it has found a safe magic money machine which spits out 17% interest in the current interest rate environment.
I mentioned cornerstone a lot on this msj board because, like phk cornerstone funds traded at 100% premiums and then the price and premium dropped to single digits. When it was selling at 100% premium, the argument for buying/holding was "expensive but worth it", same as the argument for phk and pgp today.
And in addition to cornerstone many other high premium funds collapsed (spain was 300% premium in 1980's), germany, and korea, and their investors (long) were left holding the bag. So what are the odds that phk will continue to consistently pay 17% distributions on its value without digging into principal--????
phk will have the same path as cornerstone to single digit premium--down
I dont care for cornerstone either. And their "distribution", which is fixed, far exceed their "earnings"
while pgp has bounce, phk now 13.34, down 19 cents today on heavy volume. Cornerstone, here we come.
Meanwhile, making lots on peo trading at discount.
And phk still paying out a whopping 17% on assets ($8.58) in pot. Any genius could easily get you 17% or more consistently on your investment in current interest rate environment--lol--
pgp down 7% today and its only 9:51--wha happened?? But of course we all know you got out and you will get out before the phk drop, and there will be plenty of warning, right??
Even though interest rates are substantially lower, phk is down today and pgp was down more than 2% yesterday and more than 2% today as of 937 am. phk currently 13.50, pci up at 23.56
I was wrong in prior phk-pgp prior bet, down about 15% "so far" UNTIL the stock tanked and I wound up with approx 15% profit. the operative words---so far
Go spend your distribution, pay taxes if it in in taxable account, and I hope you get the complete $ 8.60 distribution which is waiting for you in this stock and which you are entitled to upon liquidation. The rest, $5, eh, what me worry???
And Bill Gross opinion of phk???--oh, he is an idiot anyway--lol
Today, pgp so far is down substantially, phk "so far"...well cornerstone so far...
Bottom line--dont expect to make money paying $1.75 for $1 in assets plus management in the pot. Never have and never will. And the same management can be purchased at a much cheaper price.
In the cornerstone saga those holders/groupies were paying $2 for $1 assets and getting a "superior" management in the process--lol. Of course, as we all know, this time is different.
Are you saying that I should look at phk chart, compare it to NOTHING, and then come to a conclusion???
lol x 2
PS--i dont believe in charting as a predictor of the future, however, they do predict the past--lol..
And they would show how closed-ends trading at premiums all collapsed. The same fate awaits the two pimco funds trading at premium #1 and premium #2 in the closed-end universe
Every chartist always starts off...."if x (a price or event) happens (in the future) and if the price "holds" then y will probably happen, unless....", but they never tell you how to invest right now. What a crock.
Cornerstone is what phk and pgp will become. Even Bill Gross thinks phk is priced too high.
But cornerstone had even higher dividends, but is still a big loser. Paying dividends out of capital (phk capital reduced by approx 50% since inception) can only take you so far as cornerstone holders found out.