COcheesehead
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
There are a handful of very clear market timing measures which I won’t get into here for thread drift reasons, but people like to diminish and ignore them. So be it.
CEF Holdings --- June 2026
- Thread starter dickoncapecod
- Start date
richardsok
Recycles dryer sheets
CO: I've posted on technical indicators several times but I'd certainly like to read your views on the topic -- on this thread or on any other.
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PaulR888
Recycles dryer sheets
We don't really know what cards we are going to be dealt in life? I am single and have one beneficiary, my niece. I don't want to be a burden. That is why I plan to move into a retirement community that has assisted living and memory care if I need it. In today's dollars where I live, "all in" expenses for needing complete care is approaching $200K a year and likely to escalate 5%-7% annually. That is why I hired a FA to learn my investing style so he can take over for me. That is why I have a corporate successor trustee who after I am gone, will administer and settle my estate and transfer what's left to my niece. Do I have enough? I have no idea. What surprises will we be facing? Another GFC? A nuclear war? A dirty bomb? Another pandemic? We are in The Fourth Turning until about 2035. There is more chaos and turmoil coming. One's wealth can drop precipitously just when one's expenses sky rocket. I don't want to have to be selling anything to pay my bills so I want my portfolio to yield about 4%-5%, nowhere near $600K someone threw out.
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Steelpony
Full time employment: Posting here.
Well we have world peace for 60 days, yeah right. Maybe tomorrow, Monday, is a cash in day.
COcheesehead
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
They are scattered around the forum.
AG-YH
Dryer sheet aficionado
In my weekly note:
Taxable discounts continue to widen out and reached -6.7% this week, the highest since March during peak fear of the Iranian war. Prior to that, it was October 2023 the last time taxable discounts where this wide. Yes, two and a half years ago!
What is driving those discounts wider?
I believe it is primarily a rate-regime thesis, and not a credit/ default (recession) thesis. What does that mean?
We've seen a collision between a bear steepening long end and at the same time, a dramatic shift in the leverage cost relief that a lot (including me) in the bond CEF space had been counting on. In plain English, we are seeing discount re-rate for a new, higher leverage cost environment after expecting a lower leverage cost environment this year.
The average discount is now nearing -7% (it is over -7% if you include everything but I remove some funds including hybrids). The one year average discount is about -5% and the 3-year average is just over -5%. Over the last ten years, the average is about -6%.
So we are now back to a wider-than-average discount environment because of that shift in rate expectations.
The median z-stat is -1.30 with 45 of 122 funds sitting at a z-stat < -1.5 and 19 funds at a z-stat of < -2.0. The environment is now two standard deviations.
And that conforms with the last time taxable discounts were this wide, in October 2023, which was the last time the long end of the treasury curve looked like this.
The widening discounts are thus justly moving from a shift in the macro-environment, driven by combination of the bear-steepening long end and no leverage cost relief as was expected this year.
If the narrative doesn't change, I would expect WIDER discounts this fall from tax loss harvesting. Keep that in the back of your head as you allocate your capital.
I've started investing a bit more to individual bonds- with my screen really focused on the 7-15 years' time frame and investment grade / BB+ quality.
Taxable discounts continue to widen out and reached -6.7% this week, the highest since March during peak fear of the Iranian war. Prior to that, it was October 2023 the last time taxable discounts where this wide. Yes, two and a half years ago!
What is driving those discounts wider?
I believe it is primarily a rate-regime thesis, and not a credit/ default (recession) thesis. What does that mean?
We've seen a collision between a bear steepening long end and at the same time, a dramatic shift in the leverage cost relief that a lot (including me) in the bond CEF space had been counting on. In plain English, we are seeing discount re-rate for a new, higher leverage cost environment after expecting a lower leverage cost environment this year.
The average discount is now nearing -7% (it is over -7% if you include everything but I remove some funds including hybrids). The one year average discount is about -5% and the 3-year average is just over -5%. Over the last ten years, the average is about -6%.
So we are now back to a wider-than-average discount environment because of that shift in rate expectations.
The median z-stat is -1.30 with 45 of 122 funds sitting at a z-stat < -1.5 and 19 funds at a z-stat of < -2.0. The environment is now two standard deviations.
And that conforms with the last time taxable discounts were this wide, in October 2023, which was the last time the long end of the treasury curve looked like this.
The widening discounts are thus justly moving from a shift in the macro-environment, driven by combination of the bear-steepening long end and no leverage cost relief as was expected this year.
If the narrative doesn't change, I would expect WIDER discounts this fall from tax loss harvesting. Keep that in the back of your head as you allocate your capital.
I've started investing a bit more to individual bonds- with my screen really focused on the 7-15 years' time frame and investment grade / BB+ quality.
COcheesehead
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Keep in mind GOF and JFR went ex today. So that pop is real.
PlayinwithFIRE
Recycles dryer sheets
- Joined
- Oct 9, 2022
- Messages
- 349
I'm with COcheese on this. Assuming something like PDI at 15% dividend per year, you can cost average down a reasonable chunk if you are patient and price stays below your original purchase. For me this has been true since I began in Sept/Oct.
Nominally accumulating (lower price) shares at a rate of 1.25% per month. Not including any further discount applied by the brokerage.
Of course, you can move the needle much faster if you have a chunk of cash laying in wait to pounce on a particularly low price.
Relative to the speed I do things, Dick is a high frequency trader
Hitting those timings can have a great multiplicative effect compared to the slower approach I have, but you gotta be tuned in to do it well.I'm not !
pwf
OP
OP
dickoncapecod
Thinks s/he gets paid by the post
Okay....just for grins and to shake memories....
In the week before hostilities began, PDI traded around 18.50 with a 11% premium.
Friday's close by contrast was 16.30 and +3%.
There is a lot of room to the upside.
Regards, Dick
In the week before hostilities began, PDI traded around 18.50 with a 11% premium.
Friday's close by contrast was 16.30 and +3%.
There is a lot of room to the upside.
Regards, Dick
richardsok
Recycles dryer sheets
Dick -- but aren't you concerned that as the PDI premium has shrunk there will be less opportunity to collect secondary sources of income to supplement the NII? I'm holding my PDI -- all recently purchased -- but I do want to see a rally begin before I add more. ( And a NAV recovery would be a confidence booster as well) PDI hasn't been a losing investment by any means but the "buy on dips" tactic hasn't been optimal either. I don't care about squeezing the bottom pennies out of a super low buy price -- but I do want to see those indicators serve upward.
Flieger
Thinks s/he gets paid by the post
- Joined
- May 27, 2023
- Messages
- 2,496
Flieger
Thinks s/he gets paid by the post
- Joined
- May 27, 2023
- Messages
- 2,496
Out of GOF. Will pick back up after pullback.
Flieger
Flieger
OP
OP
dickoncapecod
Thinks s/he gets paid by the post
Consider it appears your chart is not corrected for distributions. Last week, PDIs NAV was UP 18c and it's. market price was down 49c. AND, although you may not wish to consider fundamentals, the price of energy is crashing, and PDI yielded 16.23% at Friday's close vs a POSSIBLE Fed policy hike to 3 (THREE). 8%.
FWIW, Dick
Bill Me Later
Dryer sheet aficionado
I agree there is a lot of upside. BUT... I just listened to this podcast on Youtube "Gundlach Unlocked: Positioning for Higher Rates and Persistent Inflation". Causes me to pause before pressing the buy botton.
OP
OP
dickoncapecod
Thinks s/he gets paid by the post
Jeff also predicted 2 years ago that the 10yr was going straight to 6%. Consider: what might be a good defensive purchase if rates are going higher ---- how about a BBB portfolio that yields over 16%.....? Last time PDI was here, Fed funds were 5,4%.
Regards, Dick
I stopped listening to Gundlach years ago.
The Gundlach Hall of Shame.
FEB 2022([www.cnbc.com/2022/02/11/jeffrey-gundlach-says-the-fed-is-obviously-behind-the-curve-will-raise-rates-more-than-expected.html)
"Gundlach sees the 10-year Treasury yield...to exceed 2.5% this year. He also said, “It’s possible the 10-year takes a peek at 3%.”
Reality: the 10 year peeked at 4.2%
====================
MAR 16 2022 (www.cnbc.com/video/2022/03/16/the-fed-is-way-behind-says-doubleline-ceo.html)
G: stocks will go higher from here
Reality: The SP500 fell about 17% by 07/2022.
==================
August 26, 2021(www.nasdaq.com/articles/bond-king-sees-gold-pushing-higher-from-its-current-price-2021-08-26) "The dollar going down"
Reality: the Dollar went up from 08/2021 to 09/2022 by about 25%, which is a huge move.
==================
Gundlach predictions for 2019 (www.fa-mag.com/news/how-jeffrey-gundlach-s-predictions-for-2019-turned-out-53478.html)
EM should outperform. Reality: EM underperformed
Stocks are a value trap. Reality: 2019 was a great year for stocks, the SP500 made over 28%.
The dollar would probably weaken. It was flat
==================
Gundlach, the king (without clothes) of bonds, predicted in 2016 that the 10 year treasury would be 6% by 2021, see (www.barrons.com/articles/gundlach-bond-yields-could-hit-6-in-five-years-1478929496) and again in 2018(www.cnbc.com/2018/09/20/doublelines-gundlach-warns-us-treasury-yields-are-headed-higher.html).
Reality: On 12-31-2021 it was at about 1.5%.
The Gundlach Hall of Shame.
FEB 2022([www.cnbc.com/2022/02/11/jeffrey-gundlach-says-the-fed-is-obviously-behind-the-curve-will-raise-rates-more-than-expected.html)
"Gundlach sees the 10-year Treasury yield...to exceed 2.5% this year. He also said, “It’s possible the 10-year takes a peek at 3%.”
Reality: the 10 year peeked at 4.2%
====================
MAR 16 2022 (www.cnbc.com/video/2022/03/16/the-fed-is-way-behind-says-doubleline-ceo.html)
G: stocks will go higher from here
Reality: The SP500 fell about 17% by 07/2022.
==================
August 26, 2021(www.nasdaq.com/articles/bond-king-sees-gold-pushing-higher-from-its-current-price-2021-08-26) "The dollar going down"
Reality: the Dollar went up from 08/2021 to 09/2022 by about 25%, which is a huge move.
==================
Gundlach predictions for 2019 (www.fa-mag.com/news/how-jeffrey-gundlach-s-predictions-for-2019-turned-out-53478.html)
EM should outperform. Reality: EM underperformed
Stocks are a value trap. Reality: 2019 was a great year for stocks, the SP500 made over 28%.
The dollar would probably weaken. It was flat
==================
Gundlach, the king (without clothes) of bonds, predicted in 2016 that the 10 year treasury would be 6% by 2021, see (www.barrons.com/articles/gundlach-bond-yields-could-hit-6-in-five-years-1478929496) and again in 2018(www.cnbc.com/2018/09/20/doublelines-gundlach-warns-us-treasury-yields-are-headed-higher.html).
Reality: On 12-31-2021 it was at about 1.5%.
aja8888
Moderator Emeritus
He’s almost as bad as Cramer…..
Bill Me Later
Dryer sheet aficionado
OK, forget Gundlach. I'll try be real specific. What will happen to the price of PDI IF we see Higher Rates and Persistent Inflation? Will the price go up or down?
Rates going up isn't a good thing in general.
OP
OP
dickoncapecod
Thinks s/he gets paid by the post
Hi, Bill. This is not a rude or dismissive response. To provide even a good guess, we need to know how much higher inflation? Which rates are higher? And at what level and for how long is the inflation persistent?
Regards, Dick
PaulR888
Recycles dryer sheets
Jeffrey Gundlach admits he is wrong 1/3 of the time. Assumptions drive predictions. When assumptions are off, so will be predictions. Can you name any household-name bond PMs who have 40 years experience and who are sought by media like CNBC. I will name Jeffrey Gundlach and Rick Rieder. Can you name another one? Just 1.
Edit: Dan Ivascyn is another good one, on Pimco webcasts but I've never seen on CNBC.
Bill Me Later
Dryer sheet aficionado
Your right. My Magic8 Ball stopped working so I can't give you those numbers today.
I was pretty sure from your weekly posts that when the Fed raises rates it's not good for our income CEF's and when they lower the prices tends to go up. My question was just confirming the fact. I own PDI, PDO, TEI and WDI. All total <10% of my portfolio.
I too had a buy order in on PDI at 16.25 on Friday but didn't get filled. My guess is you got those... LOL. I didn't chase it. I'm always looking for a good entry to add. Well there's a little voice in the back of my head saying, PDI price has dropped over $2.20 (10 months of divys) since last September. AND this is the lowest price in over 12 months and you know what they say "Never try and catch a falling knife."
At the same time, I also have my finger on the sell button too.
OP
OP
dickoncapecod
Thinks s/he gets paid by the post
Yes. Dan Ivacyn manages portfolios, supervises the shop and participates in presentations that state PIMCOs views / assessments and effectively describes what they are doing in response. He apparently has no interest in making marketing appearances on TV.
Regards, Dick
The number of CNBC appearances is not a good predictor of investment success.
As I have said before, I stopped paying attention to him years ago because I found his forecasts to be consistently poor. In particular, his predictions about bonds and interest rates were often wrong, at least from my perspective as someone who has spent many years investing in bonds.
Of course, that's just my opinion.
One interesting observation: some of the most successful investors rarely appear on financial television. For example, David Tepper of Appaloosa Management has made relatively few CNBC appearances compared with the amount of attention given to many market commentators.
Dan Ivacyn is in the same boat.
I suggest you just B&H.
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