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PDI / PCI and other PIMCO bond CEFs

Anyone have an educated guess as to whether this is good buying opportunity, or if their formula of mixing leverage & high yield debt is now simply toxic sludge squared?


  • Hi Expatsp,

    Not sure anyone can give you a straight answer here. Here is what Gundlach mentioned yesterday in his webcast: some CEFs are trading at low prices/wide discounts, BUT if they own energy then they DESERVE those valuations/discounts. Not sure what PDI and PCI own. I bought some CEFs two days ago (most had 0 leverage) and they are all down 10-20% today. So not sure when the pain will end for CEFs. According to Gundlach (again), there is a liquidity problem.

    from his tweet: As if we needed more evidence of a liquidity squeeze crushing asset prices, today I received panic offers of blue chip (though not at all trophy) art at slashed prices.

    What I can say is that people where crazy to pay a +30% premium on some CEFs a few months ago. Now they are cheaper. But as with everything they can become even more cheaper.

    Good luck to all of us.
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