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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Joe Stocks who wrote (85301)	8/18/2007 6:04:52 PM
From: patron_anejo_por_favor	Respond to of 110194

Actually, it makes me happy they've lost principle. Since it's a CEF and the price has fallen faster than the underlying issues, the discount has widened (to the largest in the funds history). Since they're a CEF, the fund is not forced to sell, and if weak-kneed holders wanna liquidate their fractional, fixed holdings of the bonds to me at a low price, well, who am I to object? Keep in mind there's a significant difference between closed and open-endedness in that regard. If a liquidation run begins on an open ended fund, then the bonds get dumped (and the fund shareholders are sold out at the bottom). Not so with CEF's.... And yes, of course you can lose in a bond fund (open or closed). No reward without risk.....Muni spreads were opening up pretty good last week, but the Fed has opened the chopper doors, and they're already coming in....