CRF Meets Rationality (Gravity)

My large stance on Cornerstone Total Return Fund (CRF) finally paid off. I covered all of my shares after weeks of panic brought the absurd premium to its knees. I wasn't at all surprised at the recent results, but more the speed with which the spread closed. I had imagined an end-game scenario where they were forced to cut their "dividend" and everyone sold off. With their massive distribution rate, I figured they had another 2-3 years max before this charade was over. It just happened to be fortuitous timing that this came at a time in the market when opportunities are beginning to present themselves. I find myself getting more greedy, day by day.

I originally shorted shares March 8th for 18.75 and covered today for 10.65. I also had to pay off a few of the monthly dividends as well as buy a SPY call to hedge against the NAV. Altogether, this trade resulted in a 38.6% return in the span of 5 months. Annualized, that comes out to about 114%. I can definitely retire on that. My cover price represents a roughly 20% premium to my estimated 8.90 NAV. To some degree, you could argue that I left some money on the table. But I was more worried that irrationality would hit and the premium would climb back to 90% again. Now that I'm covered, I'm hoping that the premium does again climb to ridiculous levels so I can ride it back down again.