Hi TF, Re: NRO NAV......................
The NAV has been tracking with the Price/Share pretty closely for a long time. The discount is there, but it's not a big one. It's as though the assets are declining in value at about the same pace as the share price. In theory "efficient" markets should reduce the discrepancy to zero, but we know that rarely happens with closed end funds.
Usually there's a premium or discount because of psychological aspects of the market participants. Right now they're not willing to pay as much for the assets as the NAV suggests. With price leading the decline, it indicates poor investor sentiment. This is similar to when the NAV leads the Price upward. That also indicates investors are less than enthusiastic about the rise in asset value.
When NAV leads the Price downward it indicates investors are optimistic about the outcome. This is similar to when the Price leads the NAV upward.
What may be a telling indicator is when the NAV starts to stabilize. Other market forces will determine that. Then, how investors react to that will determine the future Premium/Discount.
Best regards, Tom
Port Washington, WI 53074
