Junk Bagholders

Pimco High Income Fund Pimco Message Board

stockgangster • Sep 30, 2014 3:09 PM

buy phk on margin!!!

dividend will pay off both principle and margin interest rate. No brainier! I don't believe they will cut dividend after Gross just left.

In "principle", it's a no brainer to borrow money to buy junk.

stockgangster • Sep 30, 2014 5:12 PM

Ok I agree the game is not for everyone but for sophisticated traders. Use margin to buy at 11 makes perfect sense. Just do a little math and you will figure this out. Just don't use full margin of 40-50% and use about 10% so you can sustain a bit more downward move and you should be fine. Unless the game changes like the dividend cut or bond market crushes, this would be a high probability of wining trade. It's little too late now.

For sophisticated traders, it makes perfect sense. Just do a little math.

Hindsight PHK Math

Adjusted close on 9/30/14: $10.39
Adjusted close on 9/2/15: $8.57
Net loss: 18%

The adjusted close includes the hefty dividends. In hindsight, borrowing money to chase the "sure thing" non-investment grade junk yield was a horrible plan.

Northwest Territorial Mint: 90% Silver Coins

Commonly referred to as junk silver bags...

BAG 90% U.S. SILVER QUARTERS $1000 FACE

Sell price: $15,193.75
Buy price: $10,346.05
Round trip net loss: 32%

That's a hefty premium for junk. When I bought physical junk silver in 2004 and sold in 2006, it cost me roughly 6% to make the round trip. Surely there must be better ways to invest in silver for those who must have it. I bought "junk" because it was the cheapest. Now investors are paying a huge premium for it. Go figure.

Other than to say that there's a sucker born every minute, this is not investment advice.

Quotes of the Day

September 1, 2015
CNBC: Stock selloff: Nobody panic—this is just a re-test

Corrections, by their nature, are short, sharp and scary. Bear markets are long in the making and start with a whimper, not a bang.

Out of curiosity, what would one call six months of whimpering followed by a bang? Because from where I sit, the stock market produced six months of nothing burger followed by an ongoing panic.

August 19, 2015
USA Today: Why the stock market is going nowhere fast

The big question is whether the sideways action will end with a breakout to the upside or downside.

To the upside? That dog don't hunt.

An Oxymoron's Guide to Chinese Central Planning

September 1, 2015
CNBC: What's with China's mixed policy messages?

Beijing's micromanagement of the turmoil in equity markets is only worsening confidence in the world's second largest economy as a series of contradictory policy measures creates further confusion.

Emphasis added. That's a whole lotta cons.

"It seems like they're turning to more sustainable intervention, compared to their earlier intervention methods of direct share purchases."

Still, all this has only exacerbated volatility, drawn international criticism and scared investors away...

Does the contradiction that more sustainable intervention has only exacerbated volatility confuse you and reduce your confidence? There is no need for that to be the case. Let me explain using oxymoron technology.

I  am hopelessly optimistic that, given the exact estimates of their shrinking growth in GDP, the Chinese economy will continue to be awfully good. There will be no crash landing and they can avoid a minor disaster. Good grief, a preemptive intervention isn't the only choice they have left.

I look forward to their next tentative decision. It will no doubt be a wicked good one. China's leaders know where the truth lies. Years from now we will all look back and laugh at this comedic tragedy, that is, if we're not engaged in currency war games.

So, cheer up! Think of it as a slumber party! If you don't invest now, you may end up being a retired worker for the rest of your life. You snooze, you lose! Be all the greater clever fool that you can be! That misplaced trust? It was found missing!!

The Sarcasm Report v.239

September 1, 2015
What Does A Big Drop On The First Day Of September Mean?

The same thing it would mean if the big drop happened on the first day of any month that ends in "ber", that day falls on Tuesday, in years divisible by 5 like 2015, we're still stuck in ZIRP, the moon is in the Waning Gibbous Phase, and we have moved beyond the The Age of Reason to The Age of Sarcasm?

It's just a crazy theory of mine. May need several more centuries of data to support it and several more million years of data for the theory to be widely accepted though. Hard to say.

Data mining without a theory to back it up, baby. That's what I'm talking about.

First World Problem of the Day

What? Food and liquids go in one end and must come out the other? And you can't just let the baby use the bathroom in the backyard like you would a puppy?

Holy s%^t! No wonder birth rates are falling in the developed countries, lol. Sigh.

The Majestic Crystal "Meth" Serenity

December 28, 2007
Forbes: Best 25 Stock Picks for 2008

On last month’s 12th FORBES cruise for investors–aboard the majestic Crystal Serenity, which sailed from the Pacific to the Caribbean through the Panama Canal–guests got these 2008 stock picks from our expert panel.

Ken Fisher is the founder and CEO of Fisher Investments, which manages $46 billion across 20,000-plus private accounts. Fisher said: “Most see a global recession or slowdown in 2008. I don’t, not with strong earnings yields relative to low Treasury yields around the world today. Before others figure out the good news..."

Meth. How else would you describe what Fisher and the investors on that ship were smoking?

That said, we should learn from Ken Fisher's wisdom. What was true in December of 2007 is just as true today. With strong earnings yields relative to low Treasury yields around the world, any talk of a recession is both foolhardy and preposterous. Before others figure out the good news, we should commit our entire retirement nest eggs to risk assets. Can't lose. Sure thing.

Do you want to know what else is a sure thing? At least on this blog? Sarcasm! Can't lose! ;)

CNN Shows Up Late to the Green Day Party!

September 1, 2015
CNN: Dow nosedives 470 points on more China fears

It's an ominous start to September, which is historically the worst month for stocks. (Investors may be singing "Wake Me Up When September Ends" by Green Day if this keeps up.)

August 8, 2015
Illusion of Prosperity: The Fed Is Attempting to Use Green Day Playbook Again (Musical Tribute)

Wake me up when September ends. Let's hope it goes better than the last time the Fed used the Green Day playbook. We certainly do not want to see another boulevard of broken dreams fiasco.

Good News for Global Stock Market Investors (Musical Tribute)

It may look scary, but it doesn't have to sound scary. Sit back, relax, and enjoy the soothing sounds of volatility.