Follow Up To This Morning

I Wanted to follow up to this morning's post. I had the following very insightful comment from a reader.

MGB is now selling at a 51.7% premium to NAV. The clueless writer of that article doesn't realize the only reason it has hit a new high everyday since January 11 is its on the SHO threshold list and a naked short squeeze is in progress. If and when the shorts cover expect that stock to drop like a rock back to the premiums its peer group has. I would short it myself but then I would be caught in the squeeze.

http://www.nyse.com/Frameset.html?displayPage=/threshold/

If the reader's comment turns out be correct about what will move MGB the most; not only did the writer miss it but so did Mr. Tepper, and me for that matter. The reason I posted the excerpt was to illustrate some of the potentially sophisticated uses of CEFs not to tout shorting MGB. Personally I have no interest in shorting a CEF on a discount/premium arb but the idea is interesting.

I'll also add that while I don't worry too much about discounts and premiums I would not buy anything with a premium anywhere close to 50%.