Comments on: “Safe 21% Income Fund Goes Ex-Dividend: Buy Now”

By: spreadtrader

spreadtrader — Sat, 19 Sep 2009 14:13:20 +0000

Like everything else you have to know how to buy low and sell high. We bought AOD in the late fall when: a) nobody was buying stock; b) the fund was at an all-time low; c) the discount was well over 10%; and d) the fund was buying back its own shares. Our yield is over 25% and we do get a fat check every month.

Importantly, we would NOT be buyers of AOD now, even though it still has a double digit (15.75%) yield……because it also has a 28.5% premium. It is also at key Fibonacci resistance and may retrace to 7.25 (where we would also probably not buy it). It is a long term core holding and we will definitely be buyers again, but we’re reasonably certain we’ll also be selling it sometime, possibly within the next six months.

The fact is, there is little in the equity markets we would be buying right now UNLESS the position is strictly protected with either puts or stops….if you get to the party late, you just may have to stay and help clean up. Think about it.

By: treblig

treblig — Sat, 19 Sep 2009 05:45:12 +0000

OOps! – I meant Bryan Perry. I got him confused with Chuck Hughes. My comment, though, was abour Bryan Perry.

By: treblig

treblig — Sat, 19 Sep 2009 05:38:36 +0000

I bought Chuck Perry’s book “25% Machine” and subscribed to his service. That nasty experience cost me abour 25,000 bucks. I don’t listen to him anymore.

By: Susan

Susan — Sat, 19 Sep 2009 04:19:52 +0000

Hi, I have been a subscriber to Bryan Perry’s Cash Machine for almost 3 months, and so far I am pleased. He explains the background for his suggestions, and then I pick and choose those I like after doing further research on them.
I could not have found the list of picks such as his on my own.

By: james wedel

james wedel — Sat, 19 Sep 2009 04:00:36 +0000

I too love generating my own “dividends” by selling covered calls. But I think the folks at AOD may be better equipped (and certainly have a larger pool of funds to spread their risks) so I am happy to have them in my portfolio—-other CEFs that I like are IID, HTY, BOE—-and for only the risky investors CFP which pays a 25% dividend—but it is currently trading at a huge premium to NAV.