high yield does have its risks, but buying high yield assets at double their market price (pgp) or 50% above market risk is a horrible risk. Time will tell, dvd, so far ahead on all closed short position in closed-end funds, behind so far in pgp which is still open. But more than made up for that in profits from closed pgp short positions.
still holding my short position, will close in the $13 range.
For other closed-ends with 100% premium, see cornerstone and others and look how well they turned out--for the shorts, that is!
I would short at 60% premium, if it ever gets that high-imo. Currently it is 46%.
I was wondering why the premium continues, and I believe that barrons never publishes the premium in its closed-end list because this fund probably reports on Friday after barrons deadline. I suppose some of the sheeple who own this are unaware what they own, and ditto for pgp (more than $20) which is now close to 100% premium. I suppose sometime, when there is space, barrons will again write about their premiums with the usual result.
check out returns plus divs, on rif, bif, asa, especially asa up 20%, since post--I had bought them at much lower prices before post date. calling me a liar dvd, makes me cry all the way to the bank--boo-hoo!!!!
All the previous short positions (approx 10) in closed-ends turned out very well, how is phk doing down 5% so far in past year (after including distributions). Hope you like paying taxes on those wonderful distributions in taxable account.
just look at legit closed-ends (larger funds with reasonable expenses) trading at 20% plus discount, which I own, and still short pgp close to 100% premium now, but if a dumpster wins all bets are off.
a stop loss can also be a stop profit--for ever buyer there is a seller. When executed, whether you were right of wrong, you may still owe taxes and pay for commissions/spread, compared to the do nothing strategy.
For stock with active put options, buying a put stops your loss, but does not stop your profit and defers a tax on sale of winner--fwiw
I have closed all my many short position in pgp and phk at large profits--pgp is currently open, and I believe since it is currently at 92% premium, that it will crash tremendously, and follow the cornerstone trail- In the meantime, my investments in bif and rif are doing extremely well overall and I closed asa at a tremendous profit few days ago.
buying "high yield" assets on margin (in this case margin at 6% over money market rate) is the surest way to the poor house!!!
Those who did this for the past year (or five) have had negative returns.--HUGE!!!!!
the snowball is rolling down hill, $3 loss ($2 after distributions) approx in past year, and reinvesting distributions, at higher average prices, over a period of declining prices, makes your losses even greater.
No one can call exact tops and bottoms, but buying a bond fund paying out 20% of assets each year, and buying $1 of assets for $1.50 is not a winning strategy.
hungry, I think you are holding up the sign "mission accomplished"--and time will tell.
Paying out 20% of nav (current $6.34)plus expenses is not a sustainable policy for a junk bond fund.
asa is but one example of a closed-end fund that was trading at a substantial discount, can you show any closed-end trading at a substantial premium which has done the same over periods of time???
was I ever wrong on asa, it is up to 12.45 today, but gold mining index up 6% today. Sold all today, at around $12-- discount, which is calculated weekly, today is approx 10%, waiting for a better point to enter.
In the meantime, pgp still close to 100% premium. and phk over 40% premium today.
are you saying silver, that three days were winners--and 362 days were losers--nice odds there for the loooosers.??? Most stocks heading into bankruptcy have bounces along the way, but the last bounce usually land with wipeout!! Ask donald, he knows a lot about bankruptcy from personal experience.
I should have read the news releases in which management proposes liquidation. But, with illiquid assets and liquidation expenses, and time required to implement plan, I dont feel there is much potential at closing price today of 1.13 with nav (as of week ago of 1.22), discount of 7.3%, not much room for profit after expenses, unless illiquid assets can be sold for more than management calculates.
go back three years with phk, you still made approx zero, and if taxable account paid a lot of taxes on the distributions which are non-qualified, taxed as ordinary income.