The dividend is paid out from the fund... effectively, you say, "here Cadence have $10k" and Cadence a month later says "here have $1k back as a dividend". That's how divvies work in the LIC sector, it can be construed as a sort of ponzi, but as per rules, they can only do it if they have an earnings reserve on the books.
Just went through the presentation, and what a laugh that was. Slide 10 and 11. So they hand pick stocks with no debt and cash on the books and trading at a PEG of 2+ as long positions? Hrmmm... none of their portfolio fits those criteria. They apparently short stocks with a PEG of less than 1... that's 90% of the stock market at the moment, but they only have a minor short in place on OZL (but has plenty of cash and no debt, so it doesn't really fit the short entry criteria). Ahh, they should be more frank with their investment style, which is what they think is building momentum (a few have fallen of a cliff since their last update, but some have maintained their upward momentum) with the occasional value purchase.
Ah the joys of watching the market skim money from the sheeple.
CDM Price at posting:
$1.42 Sentiment: ST Sell Disclosure: Not Held
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