Hi G, Re: NRO..........................
A month ago I called and talked to their people. They had been purchased by the new owners and he said, "No one has been let go, no one has changed positions. It's business as usual." Since then there have been some changes to the Portfolio management. Dividends had been announced through the end of December.
If you take a look at most of the REIT funds including the Spyders and other larger, broad based funds from Nuveen and others you'll find they are all being abused. Concerted shorting seems to be taking place on the level of the Funds that can be shorted and also on the companies that those funds hold. To quote an article written before the UpTick rule on shorting vanished, "They've opened Pandora's box. There's nothing in the way of groups shorting a stock all the way to zero."
Interesting that the assets aren't evaporating, just being priced very low compared to book value. We used to beg for the opportunity to buy a company's stock near or below book value. My guess is there's now an abundance of them around.
When I was making my calls last month, I also heard from several of the funds that a significant portion of their distributions came from their "leverage" positions. Those positions are now drying up in many of the funds. Calamos has already cut many of their fund dividends by about 1/3 and they had told me that about 1/4 to 1/3 of the distributions were from their leverage. They were honest and said this would happen.
We can anticipate this happening in other fund families for the same reason.
In NRO's case, the bizarre circumstance of having the annual distribution be more than the stock's price/share is rather an interesting proposition. Note that their NAV is still higher than the share price. If one looks at some of the publicly traded components one finds blood in the streets, also. So, what they own is being hammered along with the fund stock itself.
Does this make it a "deal" or a disaster? It's certainly a disaster for those of us who've owned it for a while! During a panic, it's hard to tell a LooLoo from a Lemon! In the mean time, I've decided to average down whenever there's available cash. Each dividend I'm now using to add shares to the position. Should the price/share and dividend remain the same for a year, I'll have doubled my position! Crazy!
I'll let you know in a year whether it was a "good idea."
:-)
Best regards, Tom
News 
Market Data 
Discover 
