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Strategies & Market Trends : Bosco & Crossy's stock picks,talk area -- Ignore unavailable to you. Want to Upgrade?

To: Crossy who wrote (37336)	1/26/2013 1:11:55 PM
From: orchid25	2 Recommendations Respond to of 37387

I saw some PIMCO managed leveraged CEFs are trading at real big premiums. Additionally, Guggenheim fund NYSE :FFC (flaherty & Crumrine) is already showing a NAV premium in excess of 5% ============================================================================ For a number of years I stayed away from the "PIMCO Squad" of CEF's until I realized that many of them have been selling at Premium for many years. PKO for example has been at some kind of Premium for the 5 years of history noted at CEFConnect, PCM, PFL, PFN etc. have all been in the Premium area for more or less that period of time. Evidently the word and deed of PIMCO and have caused many to feel that Pimco CEF's deserve a Premium. In recent years with so many of us seeking yield Premiums have risen on many of the fixed income CEF's whether Pimco or others including stocks like FFC, FLC. But in a time when you have so many chasing yield we find that Preferreds are often selling over Par and CEF's are selling at a Premium. So what to do. My solution, for better or worse, has been to play the game and pay the Premium if necessary to gain the yield. I offer my often repeated suggestion that when it comes to CEF's one needs to watch the NAV with much frequency and try to move in and out of CEF's as one feels that a bottom has been reached or a top has been found. FFC and FLC did see a small drop in NAV with the last report, noting that they only report weekly. But a review of their NAV history suggests pretty strong general upward movement. My most recent CEF Preferred purchases have been in JPI. Only 6 months old it is still just below NAV in price and the last report would suggest they are very close to earning their distribution. I have also been buying Pimco's PDI which remains under Par and appears to be over earning its distribution. The late Winston Churchill once described the former Soviet Union as "a riddle wrapped in a mystery and inside an enigma". To some extent CEF's can appear to be the same. But there are not a lot of opportunities to find yields of 6% to 8% and MLP's, some BDC's and CEF's along with Preferreds seem to be the games one has to play to find that kind of income. So I play the game and hopefully do so with caution and care. Most of the time. Regards to you from Orchid - Jerry