Richard Croft Premium Income Corp. (A) PIC.A-T TRADE Aug 03, 2005

Think of it as a call on the 5 Canadian banks. 14% payout but it won’t continue, runs to 2017. A cheap way to play it. Put into a TFSA and enjoy next Christmas.

He would much rather be doing a covered call strategy through ETFs to save money. Also, they are a lot more liquid.

BMO Covered Call Cdn Banks (ZWB-T) or Premium Income Corp (PIC.A-T)? If you want to be in the banks for the next few years, ZWB is probably the better holding. Doesn’t know much about this one, but it would appear that it uses a significant amount of leverage. With this one, when it is bad like in January or February, it is really bad, probably because of the leverage. Leverage is high risk. 7 years into a Bull cycle is not the time you want to play leverage and high risk.

This fund has 5 banks, and they split the capital shares, and the preferreds represent the dividends. A very good income producing pick, because it is about a 6% yield. If you think banks are going to continue to go up, which he does, you will continue to get a high dividend.