Is This 29% CEF Discount a Deal or a Trap?

The Contrary Investing Report

Investing and Trading News, with a Contrarian, Sarcastic Twist!

Is This 29% CEF Discount a Deal or a Trap?

One of the most expensive mistakes CEF investors make? Chasing a fund’s discount.

That would be the discount to net asset value (NAV).

A big discount has a lot of appeal because it essentially means we can buy a CEF’s assets—stocks, bonds, REITs, utility stocks, you name it—for less than we could if we bought them ourselves on the open market.

So it makes sense that we should always go for the CEF with the biggest discount, right? After all, CEFs pay dividends north of 8%, on average—with the portfolio of my CEF Insider service paying even more: 9.3% as I write this.… Read more

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Five Dividends Up to 15% the “Smart Money” Can’t Stand

I hadn’t seen my boy in years. He wasted no time laying into my career decisions.

“Why are you messing around with the finance stuff? The blogging? No future in it.”

Well, good to see you too, buddy.

“You have real value in the software thing you’re doing. Stick with that.”

His advice was to leave Wall Street to him. He worked for a big-name firm. At the time of our run in, we were five or so years out of undergrad.

In true contrarian form, I ignored him. And it’s a good thing! Here we are talking stocks together and the software startup he wanted me to focus 100% on?… Read more

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This 8.2% Dividend Is a Smart Play on “AI Panic 2.0”

Suddenly, investors think AI is bad for software companies.

The truth? This whole story is a red herring. The real tale here is one of gains—and dividends—not losses. And we can nicely tap in with a fund sporting unique “downside insulation” and an 8% dividend, too.

Why the Software Selloff Is Overdone

Truth is, the premise of this whole argument is wrong, especially from an investment standpoint, and the reason why has a lot to do with timing: This bear market in software that’s shown up in less than a month and on news that’s, frankly, flimsy.

To wit, the selloff began because of a new product by Anthropic.… Read more

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Why My AI Scouting Report for 5th Grade Basketball is Bullish for Bonds

I took a glance around the gym from my courtside seat on the baseline.

Yup, I was definitely the only person in attendance without a kid playing in the game. My face was the giveaway. I wasn’t emotionally invested. I was detached. Analytical. Calculating.

I was a scout.

That’s right, your investment strategist—who coached the previous game—waved farewell “for a few minutes” to his wife and kids in the parking lot to watch the “beginning” of the next contest.

Forty minutes later, I was excitedly texting my assistant coaches with my findings. No reply, however, because they were likely having dinner with their families like normal people.… Read more

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AI Rocked Software Stocks. These 7.5% Divvies Are Cashing In

A major AI upgrade just crushed software stocks. We’re going to cash in with two “volatility-loving” dividends paying 7.5%+.

Just days ago, new AI tools were rolled out that let bots make entire apps by themselves. It’s not a big leap from there to the question a lot of people are asking now:

“Why would anyone buy software from a Microsoft (MSFT) or a Salesforce (CRM) if AI can just build for free?” 

It’s legit, and it sent these stocks tumbling. It’s frankly hard to know which breakthrough will come next, though financials and office REITs have been pressured in the last couple days.… Read more

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Two 9% Dividends on Sale (Up to 17% Off). Thank the Software Selloff.

The recent plunge in software stocks is another reminder that AI is rattling through the economy, setting off rapid change and disruption wherever it goes.

Investors sold software stocks on fears that new AI tools will make it easier for individuals to create their own apps, potentially taking business from software developers.

This is a big change—and here’s some news that might surprise you: For income investors, it sets up another way to tap AI’s growth for dividends. We welcome that; in the early days of AI, the only real ways to get in were through low- (or no-) payers like NVIDIA (NVDA).… Read more

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4 Yields Up to 9.2%: Hidden Gems or Value Traps?

The broader market is expensive right now. Price-to-earnings (P/E) ratios in the 20s and even 30s and higher are the current “norm.”

No thanks—we’ll take a look in the bargain bin.

Today we’ll discuss a four-pack of dirt-cheap dividend payers dishing between 4% and 9.2%. They are much cheaper than their peers. Check it out:

  • The S&P 500’s forward P/E (22.2) has only been this high twice in the past 40 years: the COVID bottom and recovery, and the dot-com bubble and burst.
  • The small-cap Russell 2000’s forward P/E (26.5) isn’t in as rarefied air, but it’s still near the top of its historic long-term range.

… Read more

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“Crypto Winter” Makes This 28% Dividend Even More Dangerous

We need to talk about this bitcoin plunge.

I know. We’re income investors, so you may be wondering why we need to talk about crypto at all, right?

Two reasons.

First, there are bitcoin-driven income ETFs out there. And I’m concerned this latest drop might convince some people that these funds are a good value now. (Hint: They’re not.)

Second, I’m concerned the cryptocurrency’s latest drop might ward investors off of income-focused closed-end funds (CEFs) that focus on the technology sector as a whole. That would be a mistake. The truth is, bitcoin’s struggles have given us an opening on these high-yield funds.… Read more

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2 REITs with “Mafioso” Economics Yielding Up to 5.2%

Real estate investment trusts (REITs) tend to shine when there is a lid on interest rates. And that rate top is secure, for reasons we’ll review shortly.

Net lease REITs, in particular, are compelling here. They are the boring landlords of the real economy. (Yawn? Love that reaction from vanilla income investors!)

The net lease landlords own the pharmacies down the street, the big-box retailers at the busy intersections, and the warehouses and distribution hubs we pass on the highway. These REITs sit back and collect rent checks while the tenants pay their own way.

Here’s how the business model works:

  1. The REIT buys the property and builds (or renovates) the facility to rent out.

… Read more

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Forget Kevin Warsh. Here’s Who Really Controls Rates (and an 11% Dividend to Profit)

This administration is set on cutting interest rates—and they have the tools to do it.

The last thing we contrarian income investors want to do is fight Uncle Sam. Instead, we’re going to front-run his moves with an 11% payer that’s set up nicely for what’s coming.

The reason behind the lower-rate push is pretty obvious: 2026 is an election year, and the administration wants lower borrowing costs heading into the vote.

Bessent, Not Powell (Or Warsh) Is the One to Watch Here

Most people think Jay Powell, or newly nominated Fed chief Kevin Warsh, are the lynchpins here. But when it comes to rates, the real power lies with Treasury Secretary Scott Bessent.… Read more

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