Closed-End Fund Craziness

Comments (4)

  1. Frederic says:

    Thank you, Alan, for that article.
    Based on your thoughts and demonstration, a 15% premium on a CEF is already an extremely strong selling sign. So shouldn’t we short CEFs currently valued at extremely high premiums listed in your article?


    Alan Gula

    Alan Gula Reply:

    Hi Frederic,

    Thanks for the comment.

    I think it’s enough to simply avoid those CEFs trading at high premiums.

    Keep in mind that when you are short a security, you have to pay the distributions. So, if a CEF yields 10%, it would cost you 10% per annum to be short it. That makes it a lot tougher to profit from short selling because time is not on your side.




  2. Russ says:

    I came across your article when I was searching for a reason the PIMCO funds were trading at such a high premium. I understand the law of supply and demand but these numbers are ridiculous. Are advisors pushing these funds that hard to customers?


  3. David says:

    Thanks for this article. Couple thoughts;

    “Herding” of individual investors is a practice that gives many of us a queasy feeling when we have a discussion with someone we might consider entrusting our life savings.

    I’ve been fortunate in my two experiences in CEF investing … first in spotting the undervalued situation and then having the cash to act.


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