“More money has been lost reaching for yield than at the point of a gun.” — Raymond Devoe
With financial repression in full gear, investors desperate for yield are paying up for assets with no regard for risk.
Pay 178 dollars for 100 dollars in bonds (78% premium to NAV) and you are going to lose money. Pay 178 dollars for 100 dollars in LEVERAGED bond portfolio and you are going to get killed. As many closed end fund investors have learned over the past three days, as the premiums to NAV have collapsed from the high 70’s to the high 30’s.