mavericks

PHK: In Search of the Premium

Monthly pay CEF's are tough to short unless you're pretty sure there's going to be a dividend cut. Over-valuation has not stopped CEF's going to ALL TIME high premiums this year. Fixed income CEF's are even tougher because, as you point out, its difficult to pinpoint the the exact NAV value.

There are some equity CEF's that are at insane premiums too where there is no doubt what the NAV value is. Still, small retail investors looking for yield in this difficult economic environment have pushed pushed many of the buy/write funds and dividend harvest funds to ridiculous premiums. I have a feeling this will not end well.