RE:RE:UpdateExperienced: You are correct about the Premium to the NAV fluctuating. Based upon looking at the overlapping charts of ENS and ENB, it appears that the Premium as a percentage of the NAV falls in a couple of different scenarios.
1) When the underlying security (ENB) falls, some ENS investors sell because they get worried about whether the divi will get paid or not which drives down the Premium.
2) When the underlying security (ENB) goes up, it appears that the Premium drops. The reason for that happening is that the leverage of owning ENS vs owning ENB goes down. Investors tend to pay more Premium for more leverage much like option buyers.
I bought another 5,000 this afternoon at $12.22. I sold some bank stuff today to pay for the two purchases as I'm not looking to invest more into the market at this time.
I feel really comfortable owning ENB going forward. If we do end up in a recession in the early part of 2024, all equities will drop of course but ENB has a beta of 0.91 and is very resilient to downturns as the company is now about 50% utilitity and 50% midstream of which 98% of revenues are contracted.
I can't pick the tops or the bottoms with any consistency but I do have a comfort zone with ENB. It would take ENB trading down to about $32 and staying there before the ENS divi would be in peril.
In the darkest days of Covid, ENS did dip down below $33 but it was back up over $35 in a day or two. I don't see another worldwide shutdown in the foreseeable future like we saw in March 2020 so I'm pretty confident that the $0.13 divi will keep hitting my trading account on the 15th of every month.
But hey, if I had a crystal ball that actually worked, I wouldn't be spending time on this board.