Financial 15 Split Corp T.FTN

Fund Strategy

[primo105]

Can anyone comment on the strategy the fund has used in the past when there has been a market correction?  Specifically, does the fund continue to sell covered calls on its holdings if they are down 20% plus?  Or are they more strategic and hold onto positions until the price recovers even though it would result in less income in the short term?

 

[EdPaquette]

Primo105 I have been in theses splits for a few downturns. Don't worry about what quadravest does, you can only control what you do .  If the market drops like a stone, the splits drop like a leveraged stone. Everything is priced for perfection now, but the reality is stark.  You have a chance of gaining 1% or losing 50%. I'm in preferred shares, actually hoping for a crash. I

[mouserman]

My experience from watching these is that covered calls are a wash most times, dont add anything to the NAV when i am tracking it.

[flamingogold]

Ed, agree the splits are not for the faint of heart. What level of "crash" are you predicting before buying back in? Since you said you are "hoping for a crash", I'm assuming you will be buying in again.   A 10% market correction is due. A 20% correction is possible. But a crash? Are you expecting a black swan type event like 2008 and/or covid? These are impossible

[EdPaquette]

Yes I want back in. If you look at the S&P500 10 year chart Elliot wave 1 is from 2016 to 2020. Wave 2 was covid crash. Wave 3 20 to 22. Wave 4 all though 22. Wave 5 23 and 24. That's it.  Now waves A, B and C will take us to the peak of wave 1. About 3300 and that should take a year or more.

[flamingogold]

42% correction. Ok, so you are looking for a major market wipeout. Not impossible but lots of pants are going to have get stripped off to get there. If he wins, would be under Trump's reign too. As a contraian, I see that it as even more possible.

[flamingogold]

oops not correction... that's a 42% crash.

[primo105]

Hi Ed, Yes, I am in the preferreds right now as well but looking to get back into commons when there is a correction.  The reason I see my question as important is if the fund tries to time the market there are scenarios where they could do severe damage to the NAV which makes it hard to recover.  I am very comfortable with the preferreds of FFN/FTN, but I cannot figure out what happen