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Aristides Capital
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Founded in 2008, we are the general partner of two private investment vehicles (closed to new investors) with a total of $83 million in assets under management. We are not an investment adviser; please do not contact us regarding investment advisory services. If you are an institutional investor... More
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  • PHK Is A Roach Motel 4 comments
    Oct 9, 2012 3:29 PM | about stocks: PHK

    PHK... day 2 of the long-overdue slaughter of the longs, following a Barron's article that stated the obvious. Would you buy this at a now 53% premium to NAV? I would--but only to cover part of a short position! Odds look good for an 11-handle tomorrow or Thursday. Mr. Bill Gross' recent sale of shares is looking like a good one!

    Disclosure: I am short PHK.

    Additional disclosure: I hold no positions individually, but am the Managing Member of the General Partner of a fund that is short PHK.

    Stocks: PHK
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Comments (4)
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  • NYer1
    , contributor
    Comments (2740) | Send Message
    Way to go!
    I have been short PHK and long a few other high yield CEF's since summer of 2011 and have written a few Instablog posts about the huge premium of PHK.
    this is a disaster waiting to happen and people close their eyes and think that if PHK has always paid the current dividend rate they can never be hurt.
    Bubbles ALWAYS burst and if you noticed, 10 out of the last 11 distributions (save April 2012) included return of capital (average of 23.37% over those 10 monthly distributions).
    9 Oct 2012, 05:35 PM Reply Like
  • Fibonacci Sequence
    , contributor
    Comments (605) | Send Message
    You must have sent a nice Xmas present to your prime broker's sec lending guy to get PHK borrow authorized.
    9 Oct 2012, 11:05 PM Reply Like
  • NYer1
    , contributor
    Comments (2740) | Send Message
    No problem whatsoever to get a borrow on PHK, though it can get expensive at times.
    Well worth it and it will be even better in the future..PHK is a disaster waiting to happen.
    It can't earn its distribution rate, trades at unsustainable premiums to NAV and returns capital routinely over the past year or so...Yes, it pays a high yield but why pay 160% to get 10% when you can get almost 9% with no or little premium from other funds who actually EARN their full distributions!
    10 Oct 2012, 06:54 AM Reply Like
  • Aristides Capital
    , contributor
    Comments (514) | Send Message
    Author’s reply » Finished covering our PGP and PHK. PHK's premium is down to 40%. No way I'd be long it here in a million years, but don't have the big brass ones needed to stay short after catching such a nice move.
    10 Oct 2012, 12:40 PM Reply Like
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