According to pimco letter March 23, 2015, it stated that "ironsides is a short-term activist that is not acting in the long-term interest of all shareholders"
I will vote for ironsides for the following reasons
1-As a famous economist has stated--in the long term we are all dead.
2-PCI is a fund of stocks, bonds, and derivatives--no one in the " low or middle income working class" will lose their job if the fund is liquidated completely or partially by tender offer. Its NOT like you would be shutting down the factory or shipping job abroad
3.Accordingly, I dont feel loyalty to the company, so that I would have a reason to stick around and wait for pie in the sky in the long term.
4. I could easily take my short term gain if any and principal and reinvest it elsewhere--for me there would be no tax consequences. Those outside of pension in losing position would be able to deduct losses.
(All my shares are in ira fund so I dont have to worry about tax treatment of distributions, sales, liqudations or tender offers)
regarding the questions about ironsides--I dont think it specifically said how it would close gap between nav and market value, currently trading at a 10% discount, but either partial tender or complete liquidation would be a possibility imo. And this would be a good thing imo.
In the long run...
I invest for the here and now, pimco in my ira's, and an immediate rise coupled with liquidation would be my preferred outcome. I dont look backwards at past loss or gain.
I am voting with ironsides--hopefully they at least will buy back some shares with tender offer at close to nav and, if they lose, encourage current mamagement to do the same.
I am not a "dividend" investor--Cornerstone was fine example of a fund with paid 20% or so dividends, but you lost your shirt on principal.
I always look at total return, and if there is no dividend, selling some shares (if necessary for those fully invested) does the trick and in a taxable account, the taxes on long term share sales gains are much less than non-qualified dividends that are paid out by bond funds such as pimco bond funds.
The only charts I look at in the closed-end are comparing premium funds to their competitors--see cornerstone. And this has been going on since at least 1980's when some funds reached premiums of up to 300%!!! and then crashed. And funds selling at discounts at times were open ended (japan fund for example which is now a regular mutual fund) and their prices rose to eliminate the discount when the open-end plan was announced. Usually I sold at slight discount rather than wait for tender to go through.
And sometimes discount funds (example vietnam fund) offer partial tenders at close to nav which many investors did not take advantage of so I got more than the partial % expected.
These days the discounts are really small, especially compared to the early days of the "great recession) when probably half of the funds were trading at discount of 30% and my investment strategy was to sell deeply discounted funds to buy funds at even better discounts--but those days are gone for now. And all this should be done if possible in ira accounts or pension accts so that short term gains, wash sales, return of capital, qualified divs etc. are all irrelevant issues.
are there any other funds with the SAME management where you pay only 90 cents for each dollar of assets???--lol
Is PCI one of those???--pci current discount is 10%.
Hey gman--ignore it all---ignore the premium 72%, and ignore the price drop to current 22.21, and ignore the fact that this bond fund is declinining as interest rates are dropping and bond prices are rising in the recent past, and ignore the fact that this is dropping on low volumes and no bargain buyers. Over the long term (with bullish interludes) the direction is south (compared to its peers), unless you believe in magic bonds in the portfolio which only pgp knows about and can buy at bargain prices--lol
I plan to go with ironsides--better fast 10% stock rise than waiting for possible pie in the sky. Bought more today at 20.38,--pretty sure these new stocks cant be voted, older holdings can. But since most shareholders are brain dead or vote with management, management will probably win big.
at $22.16 share, on 3/20 I am ahead approx 20cents/share on short AFTER paying out distributions, but at close yesterday pgp was at a 77% premium. The premium is still large signalling to me the potential of a large drop. Dont plan to close at these prices.
money in the pot 7.52, distributions/year $1.46 payout on money in fund, 19.4% payout, if expenses are 1% of $12 or 12 cents, it would be distributing or using up $1.58/share each year, or more than 20%.
pgp 22.11, phk 12.12, current price 3/17 ,--ouch for pgp longs,--- and between the both of them including divs owed--- I am well ahead, although still behind on phk alone
Not saying that phk does this, but if you sell your winners and hang on to your losers, you will show "earnings" even though your losers, and the entire fund itself, may be in the toilet--earnings are realized income (ie income from closing of position by sale) only in most cases.
Barrons has a column comparing etfs to DISCOUNT closed-ends. Mentions PHK in that, as a fund selling at a premium, the price dropped 11% when gross left.
More importantly they cite study that using DISCOUNT closed-ends, from Feb 1998 to March 2011, your return would be 20% compounded compared to sp at 9.7 with the same volatility. Of course I knew that all the time. They did not cite any study using premium funds, but I know what the answer would be. Overall, as a group because of their high expenses, the closed-end group would probably underperform their comparable indexes.
The people who buy and post here, and think this is a real stock of a real company with real potential and real profits and real dividends based on real profits--are they delusional, or are they typical investors of phk who pay $1.60 for $1 worth of stock?
and then cry boo-hoo when they find out that you cant get even average performance when you overpay by 60% (or 80% in case of pgp) for your assets.
When the facts change (phk and pgp are dropping like a rock) do you change your opinion beach??--are you still long and cheering on this dog???
at last closing price, premium is 62%. My break-even on short is 12.00 (after divi payments)--still behind but not so much. Ditto for pgh. Hope all you smart traders sold or shorted at 12.73 last thurs and missed the 12 cents dividend.
And this price drop is without the help of a Barrons article--lol
price down 50cents today AFTER dividend adjustment. Again, I dont know exact price timing, but I like to invest with odds which tell me that this is still very much overpriced. last friday (march 6) two days ago the price hit 23.65 (you can subtract 18cents from this for dividend). But still, a large drop in two days.
And while I never know exactly when the price will drop to meet the value, the history of closed-ends has shown very poor performance (losses) of funds trading at highest premiums, especially when there are alternatives that are selling at discounts.
great--Sounds great, especially the proposal to let shareholders exit their position at full value which is today 23.01, compared to price which is 20.75, I would take the money and run, and I would vote for these guys, but that is just my opinion.
I invest with the odds, can pgp premium go even higher than 80%--sure. Is it likely? I believe it is very unlikely.
I dont rely on morningstar ratings, but I believe the non-rated ones may have too short history--some are a couple of years old. And I dont believe that even morningstar or any of its supporters even showed or proved that higher rated funds have better future return than others--if they did, then morningstar would certainly exploit that advantage in its marketing.
But if you look in the history of closed-ends, cornerstone is one example among many, you will see what typically happens to funds trading at a premium. I dont believe anyone can tell the exact time or amount, but I believe a fund cant continue earn 22% (before expenses) on its nav to pay out distribution of 20% of its nav. Ultimately, the principal will be depleted or the distributions will be diminished or new shares will be issued.