in the market, everything is anticipated already, however, by investing in any asset, the investor feels that asset price has over or under reacted to anticipated future events, and is therefore undervalued or overvalued. --investing 101
the way for pci to reward its shareholders would be to liquidate or have tender offer at or close to nav. The challengers to management would have done that, the current management said it would reward shareholders in the long term and we are still waiting--so far the shareholders have gotten coal in their stockings-and holes in their pockets where money is lost---and current management won because of the wisdom (or ignorance) of the shareholders who voted.
mr blue--regarding my gloom and doom in January, phk was about $12, and it stayed at approx that number till June. And despite your "you only lose money when you sell" mantra, you and others who felt this was a bargain selling at a then 50-60% premium got your negative rewards--but the fund performance as reflected by nav was down only slightly during this period--or nav was unchanged if you add back in distributions. At open today, phk was at 20% premium, still too high, but not extreme enough to short.
And my pgp short is still under water, but only by very small amount.--
from my post Oct 18
"According to pimco, preferred are listed at face. nav total is 858 million, preferred are 292 million, if preferreds are all redeemed, they will be redeemed for total of 240 million, resulting in a 5.8% rise in nav before expenses. To raise the 240 million, i guess, they will deleverage---ie sell assets to raise cash-- or have already deleveraged. Less." oct 18
update 11/23--since only 65% of shares were tendered, instead of a 5.8% rise, the rise because of that would be approx 4% (before expenses). And today rise in nav was 3.65%
Anyone notice nav up 3% today, and thats because the debt ( some of the preferred shares) was tendered and paid at a discount of 83 cents on the dollar, but was probably listed at face value in the capital structure.. This was not unexpected, imo.
I guess management which was re-elected on a promise to increase shareholder value for the long term, has decreased shareholder value since their re-election. I voted for challengers/ Current price is 18.23 and discount is near the high. A bargain price at current level, imo, but I would have preferred the challengers open ending the fund for an instant profit of over 10% at that time, and then I would move on to my choice #2, jgh.
My posts are not the intra day lows, but the real time quote at time of posting--fyi.
And regardless, phk is still overvalued.
And can you or anyone else point out any fund trading at a premium which even matched its peers?? There are many, cuba being just the latest, which soared on news to 70% premium and is now trading 2% discount--all in the past year and price dropped from 14 high to current 6.65 (although there was 60 cent dividend). And of course, one cant forget cornerstone (I know, phk is different--lol--and deserves a substantial premium--lol --like the 70% it had not to long ago).
For premium collapse look at cuba fund over past year or so.
For currently best bond closed-end (imo) is jgh current price 14.48.
Still looking for a substantial premium fund that outperformed its peers, I guess I could as easily looked for an honest man, or woman, as did diogenes.
No one knows when or by how much this stock price will drop, but if you buy at a premium you can expect to lose money. I am not long or short this stock since I believe it is not at extreme value.
But doing well with my pgp short, although still behind a few pennies on my average price--pgp currently 17.64 and premium at close was 57.
in the investment world, patience and dollar cost averaging down is not necessarily a virtue., that is it may work 50% of the time--50% of time it gives above average results.
wrong tamdur--the price of phk has declined about 10% in past few days, but the VALUE, ie the price of energy and other bonds in the portfolio--has remained steady.
hey smith, how about taking your numbers a few months earlier.
And smith, how about showing a fund trading at substantial premium which actually did well or even average????? Hint Cuba fund is not one of them.
price check 8.40
dont have to rely on cornerstone as an example of what happens to high premium funds, how about that cuba fund, down 50% since pop (and 71% premium) when us announced re-opening embassy--now current 4% premium. CUBA, a small fund with a high expense ratio (3.63%) deserves a substantial discount. And phk also deserves a discount similar to other pimco discounted funds, although its expenses are much less.
brown--I guess the fact that neither you nor anyone else has ever shown any fund trading at a premium to even match its peers over time--I suppose the fact that such a fund has never existed is, in your words, a lot of drivel. And of course they are many high premium funds, of which cornerstone is just one, in which the price collapsed.
And the fact that I am looking for relatively EXTREME valuations to either buy or short this stock is beyond the comprehension of those who see the world in black and white with no shades of grey. The human experience is not a binary one in most instances.
I bought some also at 18.40 today, had sold a lot last month at close to and over 19.00.
PHK currently 8.54. --Did those phk geniuses ever point out to any closed-end with high premium that performed well??? I must have been missed it --lol.
low for the day was 8.56.
Still waiting for all the fans of phk to point out even ONE fund that traded at highest premium that outperformed its category.
PHK could go to ridiculous high premiums as it was recently at 70% premium, with rise in stock price, but the odds are against it. And if it does the usual amen chorus would write how wrong I was to criticize this wonderful fund.
Why do people buy these premium funds--I guess you would have to ask pt barnum, the buyers may feel that a greater fool will bail them out--but sometimes the greatest fool is looking back at them in the mirror, and their hoped for egress is blocked.
I am not using its historical high--I am just starting with day ONE when the fund started--and the nav was approx 15 then and is much less now. The price was $15 then and is 8 something now, and maybe $18 of "dividends" were distributed from day one. Thus your $15 investment 12 years or so ago would now be worth $26 give or take (less if you reinvested or paid taxes on distributions), in a period of extraordinary drop in bond rates, and rise in bond prices. The value of the fund is approx $2 less than that.
I have made lots of money on closed ends, buying and trading funds with a discount, and rarely lost--have made lots more than buying an index. I have stated many times that funds trading at premiums are losers--those that ignored that advice, well they bought or held phk at $12 a few months ago. Seasonally, special dividend or capital distribution capture in december and jan has been a winning game.
cornerstone isnt the only high premium fund that collapsed. It is just the most recent, and yahoo and others delete stock data from their historical records when the stock symbol is eliminated .
there are many others, dnp, gabelli utility, pgp, phk, and in the 20th century, spain, germany,and korea funds etc, etc.--some were trading at very high premiums 100%-300% premiums
So brown and others, can you name even ONE closed-end fund selling at a premium which outperformed--EVEN ONE????? I can name many closed-ends selling at discounts that outperformed and some that were closed at full market value such as japan fund, vietnam fund, ireland fund, new germany, templeton dragon, etc. Some may be at premium or small discount today.
Closed end funds (and regular mutual funds) have net asset value. Woolworth, target, texaco and exxon or were operating companies, and determining "value" is not as easy--eg, what is the value of good will (or franchise value to use a more modern term). Trump values himself as a brand at very high $$#.