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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Debt Free who wrote (30196)3/1/2008 8:03:05 AM
From: Wallace Rivers  Respond to of 71263
Not quite what you are looking for, but I've owned in the past, and am currently looking at some floating rate closed ends again. FRA, FRB are the ones I've owned before, and I believe FRA was the one Bill Gross pounded the table on 1-2 years ago.
I also own a very small amount of VVR in an income oriented account.
There are a lot of these funds out there, they have very nice yields, and generally trade at a discount to NAV. Prices typically well off the highs. And, typically, the interest paid resets with the environment at the time, with some lag.
If this might be something of interest, you can perform DD on

To: Debt Free who wrote (30196)3/1/2008 10:39:13 AM
From: Paul Senior  Respond to of 71263
I've had Pimco's FRA and FRB upon Bill Gross's recommendations in Barron's. Lost money on both.

Holding now a decent-size position in similar PFN. Losing money on this one as well.

The penalty I guess for me for chasing yields/seeking safety/making wrong decisions.

These closed-end funds invest in floating-rate debt instruments.
The funds are diversified in their debt holdings, and the debt resets quickly. The idea is that a fund holder doesn't take on much default risk with the underlying securities. When general rates rise, the interest on the cef's debt holdings increase, and eventually the dividend paid to stockholders should too. That's how it works as I understand it. (And of course when interest rates come down, it goes the other way.)

Like many cef's, they use some leverage. That's bit them a bit with the recent failed auction of their Auction-Rate Preferred Shares (not significantly or substantially, Pimco(Alllianz Global) says).

To: Debt Free who wrote (30196)3/1/2008 10:56:25 AM
From: RockyBalboa  Read Replies (1) | Respond to of 71263
Value Investing: I put some fun money into a famous company - Beate Uhse (DE:USE). Stock heavily discounted trading at E1.30 to 1.35. The company might be in a crisis but its stuff will always be useful for a whole lot of folks. Currently a secondary with rights is placed which depresses the stock price (the price for the secondary is 1.10). Once the placement is finished the company is in much better shape. I think it could be worth more.