Thursday, February 19, 2009

Bookkeeping: Position Started in PIMCO Strategic Global Government Fund (RCS)

I had two positions in the old fund in that I had yet to bring over to the new fund since they had run up so much - Linn Energy (LINE) and PIMCO Strategic Global Government Fund (RCS). My nearly month long limit order @ $9.05 finally hit for the latter today - only a 0.9% stake. The chart is poor but generally this has been trading in a range of $9 to $10 the past two months. In panic periods it usually falls to $8s.

I won't recreate the wheel in this post; the original thesis for purchase lies in detail here [Oct 31: Bookkeeping: New Position in PIMCO Strategic Global Government Fund] At this point this is Ginnie Mae and Freddie Mac debt - basically a way to get some yield (currently north of 8%) that is "government guaranteed". The only way this would (in theory) "lose" in the long run is if people abandon their faith in the U.S. government. So it should be safe for another few months at least ;) Obviously something in the government's/Federal Reserve's moves has people wary the past 48 hours (or the premium on the fund got too rich)... not exactly sure since I heard nothing new - just formalization of a lot of bad plans.

So I'm "restarting" a position I suppose. The premium as of yesterday on this fund is a whopping 25%! so I hope that drops to 15% or below and I can pick some up in the low to mid $8s. Not sure how well technical analysis works for such a closed end fund but the chart is below.

p.s. Linn Energy (LINE) has a gap at $12 which I'd be thrilled to pick some up at (currently $15) might be a pipe dream.

Long PIMCO Strategy Government Fund in fund; no personal position

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