LIC NTA discount question

Question in regards to buying LIC's at a discount..........
Taking a look at the latest WHF report:
https://www.google.com/url?sa=t&rct...45:latestnta&usg=AOvVaw3ckXeWFkNgh9xOWqMgUUGt

The pre-tax NTA is $5.23 and post tax is $4.77. Assuming the current price is $4.85 and you buy at this price, are you buying at a discount? ie, do you consider the Pre tax or post tax price to calculate if you are buying at a discount?

 

Your question is answered in Listed Investment Companies (LIC) 2019 thread on pages 79 & 80 if you scroll through these pages re: WHF.

 

LIC discount is not a free kick. NTA analysis is very widely available and published.

You can make a case for buying at a larger discount than is the norm due to say recent poor performance (with a view to mean regression) however NTA discount by itself doesnt tell you much.

 

Thanks I've read this and I'm still confused. There is an argument for both pre and post. If you base it on post tax NTA then I guess you are paying 2.3% to much. On the other hand, if you base the calc on pre tax NTA then you are getting the shares at a 6.7% discount?

Help!

 

Most people use Pre tax. This is the ongoing values of yer portfolio.

Post tax is what is left if the LIC was to theoretically sell everything immediately.

So Pre tax tends to be more useful for most here. But as @The Falcon said it’s not totally free money, you’re effectively just getting a slightly higher yield than if the portfolio traded at NTA.

 

Would you argue the opposite on paying a premium?

 

Yes. Can’t get my head around buying LICs above NTA.