Replies to post #613 on Cornerstone Strategic Value Fund (CLM)

[bar1080]

Could one hide this week anywhere in equities? Amazed to see major declines even among blue chip utilities. SPDR XLU was off 3.3% yesterday. You'd think plummeting interest rates alone would prevent that. Gold fell too.

I'm not selling anything because my portfolio is always well balanced between stocks and fixed income. One panicking thing I did was to go to a bank yesterday and withdraw a stack of currency. In tough times the whole world runs on American C-Notes. Already, as you noted, blue chip stock yields are starting look damn good compared to alternatives.

I'm especially interested in the performance of index funds since they haven't been tested in a decade. Of course they're falling... but no more than most things.

As for CLM, it continues to under-perform as its premium disappears. Its portfolio quality is of little importance because its ludicrous DISTRIBUTION doesn't come primarily from underlying yield. CLM may well go to a NAV discount soon.

[bar1080]

SA: "The Coronavirus And Closed-End Funds"

"The coronavirus has caused a tremendous selloff in all markets, and CEFs have not been immune. But since many CEFs invest in assets that are very tangentially related to coronavirus risks as they currently appear, this means there are many income opportunities for investors who act fast.

Perhaps most astounding is just how sharply discounts turned. The average CEF discount was 2.8% on the close of trading February 21st, and that average discount fell to 7.5% as of the close of trading February 28th. Since the long-term average discount for CEFs is more around the 4% range, we can say that funds went from overbought to oversold very quickly when looking at the aggregate numbers - although this is exacerbated by some extreme cases."

https://seekingalpha.com/article/4328663-coronavirus-and-closed-end-funds