Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Jul 31, 2022 23:09:23 GMT
Is it too late to buy PDO and PDI?
|
|
|
Post by retiredat48 on Jul 31, 2022 23:21:34 GMT
IMO...NO...not too late.
Look at chart. You will be getting shares at prices way below what others (including me) have paid.
Yes, these CEFs hav had a good rebound. Yes, they could go back and test the bottom. But these are fixed income funds with yields above 10%. They are contractual instruments...not like stocks that can go bankrupt.
They can experience defaults...but like take PDI with the ownership of mortgages. How many will be defaulted, with home prices at new all-time highs?
Disclosure...I'm now buying, adding to my brother's portfolio who is converting from a growth to a retiree allocation.
R48
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Jul 31, 2022 23:24:59 GMT
Yield in taxable accounts - ordinary income I take it? Any advantage of one over the other? I took a small position in UTG in my Roth. Happy so far.
PDI is above NAV and PDO below?
|
|
|
Post by ECE Prof on Jul 31, 2022 23:42:53 GMT
Sara Two questions: 1. How tolerant are you about leveraged investments, leverage ratios, and deep losses, like 30% loss? 2. Taxable or ROTH (IRA) accounts? Tax efficiency is also important. My own situation on question (1): I never worry about the first because I keep minting cash every month, no matter what the actual asset value is. I let FD worry about such things (Just joking). It has rebounded, and I am not happy because I will only able to buy fewer shares with reinvestment. (2) I have them in our ROTH accounts. So, I never worry about taxes. If I need cash, I just take it.
Add/Edit: I am not going to upgrade my Yellowtail Merlot.
|
|
|
Post by yogibearbull on Jul 31, 2022 23:59:44 GMT
PDI is a regular CEF but the newer PDO and even newer PAXS have term-structures (so, their discounts will disappear one day). All have similar objectives and share Ivascyn + Murata among managers. Current distributions differ. Buy the one(s) with largest current discount. LINKMore on term-structure CEFs ybbpersonalfinance.proboards.com/post/436/thread
|
|
bf22
Commander
Posts: 135
|
Post by bf22 on Aug 1, 2022 0:17:02 GMT
PDI/PDO regular income. UTG's distribution is typically about 60-65% long term gains. If you have room in the 12% tax bracket, this may be an advantage.
One reason why I use NZF/NEA in taxable accounts. Obviously, munis are a different class of bonds, thus this depends on personal situation.
Otherwise, what YBB said as usual..
|
|
|
Post by Fearchar on Aug 1, 2022 0:41:29 GMT
Currently, 30 year mortgages are 5.33%.
Before 2007, that type of rate could be sustained for an extended period. However, our economy has changed since then and my guesstimate is that some where between 4.0 to 4.5% is a more realistic sustainable level. As long as 30 year mortgages are above that range, it should be good to load up. When mortgages reach that range, these funds should have appreciated as well.
One might make the case that 3.6% to 4.0% is sustainable level for mortgages, but until we get back to the 4.0 to 4.5% range, I feel that's too speculative.
Of course since they are leveraged and people can default on mortgages, there is risk of sustained high leveraging costs or eventual default rates chipping away at the distribution and NAVs.
So, I don't consider CEF's a buy and forget type of investment. Instead, it's a trade/speculation on mortgage rates.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Aug 1, 2022 0:41:34 GMT
PDI is a regular CEF but the newer PDO and even newer PAXS have term-structures (so, their discounts will disappear one day). All have similar objectives and share Ivascyn + Murata among managers. Current distributions differ. Buy the one(s) with largest current discount. LINKMore on term-structure CEFs ybbpersonalfinance.proboards.com/post/436/threadThanks YBB- don't mean to sound unintelligent, but that would be PDO per your chart. Correct?
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Aug 1, 2022 0:46:08 GMT
PDI/PDO regular income. UTG's distribution is typically about 60-65% long term gains. If you have room in the 12% tax bracket, this may be an advantage.
One reason why I use NZF/NEA in taxable accounts. Obviously, munis are a different class of bonds, thus this depends on personal situation.
Otherwise, what YBB said as usual..
Okay - NZF/NEA are trading at a discount (I think). 5% or so after-tax (I assume) yield. What's the risk of purchasing them now? What's the upside?
|
|
|
Post by yogibearbull on Aug 1, 2022 1:08:16 GMT
PDI is a regular CEF but the newer PDO and even newer PAXS have term-structures (so, their discounts will disappear one day). All have similar objectives and share Ivascyn + Murata among managers. Current distributions differ. Buy the one(s) with largest current discount. LINKMore on term-structure CEFs ybbpersonalfinance.proboards.com/post/436/threadThanks YBB- don't mean to sound unintelligent, but that would be PDO per your chart. Correct? Those charts are for adjusted-prices. PAXS didn't exist for the entire period. CEFConnect (& M*) show Premium/Discount: PDI +8.18%, PDO -1.65%, PAXS -3.70%.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Aug 1, 2022 1:21:25 GMT
Great - I ldid look at CEFConnect, so wanted to make sure. I will look at your link. Thanks so much.
|
|
bf22
Commander
Posts: 135
|
Post by bf22 on Aug 1, 2022 1:23:40 GMT
Currently, 30 year mortgages are 5.33%. Before 2007, that type of rate could be sustained for an extended period. However, our economy has changed since then and my guesstimate is that some where between 4.0 to 4.5% is a more realistic sustainable level. As long as 30 year mortgages are above that range, it should be good to load up. When mortgages reach that range, these funds should have appreciated as well. One might make the case that 3.6% to 4.0% is sustainable level for mortgages, but until we get back to the 4.0 to 4.5% range, I feel that's too speculative. Of course since they are leveraged and people can default on mortgages, there is risk of sustained high leveraging costs or eventual default rates chipping away at the distribution and NAVs. So, I don't consider CEF's a buy and forget type of investment. Instead, it's a trade/speculation on mortgage rates. This is correct. But PDO for example does not just hold mortgages.
|
|
|
Post by ECE Prof on Aug 1, 2022 1:55:49 GMT
"So, I don't consider CEF's a buy and forget type of investment."
I buy, and when the prices go down, I buy more. Never sell. I sometimes sell PDI shares and buy something else, when I feel there is a better opportunity. Then, I refill these shares with new income. I keep minting money every month, with a growing income every month.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Aug 1, 2022 2:17:12 GMT
|
|
|
Post by ECE Prof on Aug 1, 2022 3:12:42 GMT
I would also recommend CEFdata.com. I like the details provided by CEFdata.com.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Aug 1, 2022 21:47:19 GMT
Richardsok - can I ask what went into your decision process to buy PDI today?
|
|
|
Post by ECE Prof on Aug 1, 2022 23:35:26 GMT
@slooow, Look at the charts. People are pouring money, as the cash-flow index shows. stockcharts.com/freecharts/gallery.html?PDIAlso, look at point and figure chart at the bottom, it broke through the redline, just like SPY.
|
|
|
Post by FD1000 on Aug 1, 2022 23:49:19 GMT
( link) using easy T/A to trade CEFs. The last sell for PDI was June 2021, the last buy for PDI was on July 25 2022(last week). If you did that, you saved about 20%.
|
|
|
Post by ECE Prof on Aug 2, 2022 0:11:05 GMT
( link) using easy T/A to trade CEFs. The last sell for PDI was June 2021, the last buy for PDI was on July 25 2022(last week). If you did that, you saved about 20%. Yes, FD. I seem to be in agreement with you several times these days. Something wrong with me! I hope not. In fact, it is getting closer to the next higher red line. If it penetrates that line, guess what? My portfolio value of PDI will be back to the cost basis. All my loses will be gone, but income of 12%+ is my gain for this year. How about that? That is why I never worry about those charts too much on PDI.
People are looking for a lot of investment ideas, but I keep chucking along the same lane forever. Here is an interesting thing that happened back in May, when I was driving back home alone from a Chicago suburb. There are many speed limits in different sections along the way. So, I set to 60 miles speed limit all the way to Cookeville in the right lane. I had to pass somebody only once. I took a break for lunch and gas only once. Guess what? It took me almost 40 minutes less time than the usual time, in spite of the fact that I had to drive another 34 miles from the NW suburb. I was home early and went to get milk and bread in Kroger. On top of that, my gas mileage was more.
Do not change anything, unless you are forced to.
|
|
|
Post by shridog on Aug 2, 2022 13:40:10 GMT
The weekly MACD is one of the main charts that Capecod uses for his trading of Pimco CEFs.
|
|
|
Post by ECE Prof on Aug 2, 2022 13:55:49 GMT
The weekly MACD also ticked up this week. The price is ok for now, and it was up earlier today. I noticed it in my FIDO account, and in spite of red on equities, I had overall green because of PDI. The next upper resistance is at $22.12. It seems that the price could break it this week. The ex-div date is August 10 (next week). So, in all probability, it is likely to break that resistance and move up. It does not matter for me, because my monthly distribution will remain the same.
|
|
|
Post by uncleharley on Aug 2, 2022 14:02:50 GMT
No, It is not too late.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Aug 2, 2022 14:36:40 GMT
UH - can you tell me YOUR reasoning? I watched PDO bounce around - mainly up - yesterday and be as a slight discount to NAV. I think UTG is slightly above now. How do you decide a good time to purchase?
|
|
|
Post by ECE Prof on Aug 2, 2022 14:52:28 GMT
PDI broke the next upper resistance level. I expected to happen before next week, but it happened a few minutes ago. People must be pouring cash into PDI. There are some other loan CEFs that are going down today. Things go up and down. It does not matter to me. You can read my comment on the Alpha Seeking story elsewhere. armchairinvesting.freeforums.net/thread/3478/new-shiny-pimco-cef-pdo
|
|
|
Post by richardsok on Aug 2, 2022 15:13:26 GMT
Hi Sara --
Just saw yr post. R48 says it's not too late, Harley says it is. Pick yer poison. Me -- I don't have a clue. I'd been writing about PDO & PDI so much I thought people might be getting sick of it so I cooled my jets a bit. This spring I posted more than once I could not believe why they were dropping and dropping while their UNII numbers were steadily climbing. It looked to me like the slam-dunk trade of the year, almost as if no one was watching those 200+ % coverage stats. Anyway, no one was chattering about them. I started buying in that false mini rally in May and really backed up the truck in June. Any new trades I make in August are just tiny sprinkles on the cake. I'm WAY over-allocated with about 50% of my entire worth in PDI PDO and PAXS. Where my first impulses back then were the value and income/UNII numbers, now I'm just following the upward trekking monthly charts with mini adds.
Since I have no clue on mkt direction, the best I can give you is to watch their P-SAR on one-month charts. The UNII numbers come out in about two weeks. If coverage shows signs of collapse, or technicals weaken, then hit the silk. Of course there's ECE's argument; mostly a silly one, but he has a point. IF COVERAGE CONTINUES SUPER STRONG (big "IF" ! ! ) you might be relatively indifferent to price swings b/c there's another special dividend in your future. 10% in a IRA + a Xmas bonus. Dummies like me have done worse.
Personally, I have a number in mind. Call it X. If these ponies reach it, I'm buying that trout fishing cabin in western Carolina.
Good luck.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Aug 2, 2022 15:48:12 GMT
Thanks Richard - I will look at the P-SAR and UNII numbers to see if I can make sense of them. UH doesn't think it is too late. I really don't know why yet, but, I am also one who likes to have a number in mind. Thank you so much! I might not be in time for this round, but maybe next!
|
|
|
Post by richardsok on Aug 2, 2022 15:49:57 GMT
Thanks Richard - I will look at the P-SAR and UNII numbers to see if I can make sense of them. UH doesn't think it is too late. I really don't know why yet, but, I am also one who likes to have a number in mind. Thank you so much! I might not be in time for this round, but maybe next! Sorry! I misinterpreted UH post. (another senior brain fog?) He agrees w/ R48 -- not too late.
|
|
|
Post by racqueteer on Aug 2, 2022 16:15:34 GMT
There's probably still a trade to be had here, all things remaining constant, but I think you have to be prepared to hit the ripcord if the market returns to risk-off status. I suspect a lot of the recent gains have been due to the recent MARKET gain. In general, my limited experience has been that these vehicles tend to move with the market.
|
|
|
Post by ECE Prof on Aug 2, 2022 16:21:11 GMT
"Of course there's ECE's argument; mostly a silly one, but he has a point."
I am sorry that you feel that way. It does not matter to me. Because, I never cashed PCI in 2020, even when I was down 40%, and in fact, I started buying when it started rebounding at deep discounts. The current portfolio value will not reflect that because of the merger. So, my personal yield is above the current rate. That is not silly because I (Steelpony10 too) am minting hard cash every month. PIMCO never lowered its payment any month, even when the coverage ratio went to 87% in late 2020. But, I bought more and more (a few thousand more shares) knowing that PIMCO will come back. That is not silly either because cash was flowing in every month. In fact, I had 13th payments in December back in 2017, 2018, and a big one in 2019. If the same UNII continues, PDI must have an extra payment in December of this year also because, by law, PIMCO cannot keep more than 10% of the earnings.
Add/Edit: Big risks pay off big, always.
|
|
|
Post by uncleharley on Aug 2, 2022 16:29:37 GMT
Sara, I am working with a borrowed laptop so I cannot do a definitive response, but I follow trends and the trend is up for PDO and PDI, both price and nav. o
|
|