PSEC has gone downhill for 16 months now, and as for the other fish, DOW has 30, S&P 500 has 500, and the nasdaq composite has 5000.
The left wing party in Greece just won the election, the 64 million dollar question would be whether they would get 151 votes to form a majority government. Many had already started talking about a Grexit ("Gr eek e uro e xit") and actually a lot of European nations would like to see Greece's exit. Tomorrow would be a very interesting day for the market, we may see a drop of 200+ points in DOW earlier in the morning, only see it rebounds afterwards.
If for some reasons there would be indeed a possible large market drop tomorrow which would spill over to the BDC sector and cause PSEC to drop 2% or more, it would be another great buying opportunity to add more PSEC, IMHO. (I don't believe it would drop that much unless oil drops badly)
ECB's 1.1 trillion euro buying of their sovereign debts in months to come (till Sept. 2016) would certainly help pushing up the European stock markets, and may result in the rally of our market. The only major negative factor would be the continued drop of crude oil price and judging by the current global demands and supplies, I believe crude will continue to fall below $40 but I do not know where the bottom would be.
Therefore, the overall US stock market, IMHO, would become more volatile and the BDC sector especially those BDCs that contain large oil/energy related holdings would experience continued volatility. However, the risk of buying and holding good BDCs for the long term (1-2 years) is now very acceptable especially many of them have sustainable yields that are greater than 10% and are selling with huge discounts. I would be adding a lot of them if there is another minor correction. I like MAIN at under 27; PSEC at 8 or lower; FSC at 8 or lower; GARS at 14 or lower, GAIN at 7 or lower. There are so many good BDC buys right now, every one would be a winner in about 1-2 years. Now of course I can be wrong.
If you are risk adverse and can be happy with little yield and little risk buy a bank CD. The main thing is to enjoy your life and live in emotional comfort..
Rocks2sea: Listen to slick and you'll surely lose your money. In all cases,market players don't have the knowledge or trading acumen to be as successful as he is. Just bide your time and as some said, I'd average in over a period of time. We can't all have a 100% succesful trading record, as does slick. Traders like him come once in 100 years while successful traders are all around you.
What list? I prefer a rally of this STK pps also, but think the management needs to provide some positive info to make it happen. The good rate of return alone is not doing it.
Your remarks seem totally wrong to me. PSEC has performed exceptionally well over the years. If you are referring to their recent divy decrease, well pretty much the whole BDC sector has done that so why would you think PSEC should be different. And to the point that "There are thousands of other fish in the sea," really? Who are the thousands?
PSEC is just one fish in the sea, and as as bottom feeder it has not done well because it is full of parasites and feeds on other distressed companies that often become more distressed.. Basically, it's business model is flawed, maybe that will change, but who knows? There are thousands of other fish in the sea. While waitng for psec to sink to your buy point look arround. You might catch a sailfish or a whale....others do it every day.
I waited for that big correction for years, it will be a good time to add. Perhaps you should start small and add on downturns as you get comfortable .
I think that using the term "small business" sounds a little misleading ... at least to me. These companies often get $20M to $120M from PSEC which doesn't sound that small. Didn't want people to think these were Mom and Pop stores.
Also, research shows that people who make their investment all at once do better on average than people who average in. It appears to me that PSEC has bottomed, and that this is a good time to jump in.
Yes, quarterly earnings may help the pps. Except for dividend payment amount and announcement of the 25 million dollar loan information from management is kind of vague right now.
@rocks2sea All guesses, but still some well thought out replies to your to initial request. I think we still need more info about how these spin offs are going to work before we know the direction of this company or some positive news from management. Good luck to all longs.
A 5% - 10% portfolio allocation is probably prudent. But, I succumbed to that devil may care attitude and threw discipline to the wind when the price dropped below $8.20 -- I'm now floating around 15% - 20% and looking forward to a high quality problem -- deciding how much is too much as the pps increases.
Tax loss sellers getting back in isn't quite over yet, but probably only worth a few more cents to the upside. We should see an announcement next week for the scheduling of the quarterly conference call in early February.
My take on all BDC's is that they are like shale oil companies, and are on a treadmill. In the case of BDC,s, issue more shares, grow income but NBV remains fairly static and div is a static %. Shale oil, has to keep drilling to maintain production. I own PSEC, and am using it as a holding position until a better opportunity is available .must only invest in BDC,s with price less than NBV , and limited exposure to upstream oil..
If you've decided to allocate some capital to PSEC, given your concerns, maybe you should consider averaging in on a quarterly basis. There are risks to any approach, but averaging in tends to at least keep your mind at ease while you are buying. Who knows, though, the correction could come in a year after you've already completed your allocation - or you could get lucky and get a correction early on and double or triple your buy at that point. Once you have decided on any one investment, I think its best to just get going and either place the entire allocation or average in on a fixed plan. Waiting to place the first dollar on market timing is probably the least effective approach.
Investors like you often wait to buy until it is too late and then they never do. My advice is to keep PSEC in perspective. Not a trading stock, but a sound high income BDC that is HIGHLY DIVERSIFIED. I have 75,000 shares and is a very long term hold for me. I sleep overly well at night.
Sentiment: Strong Buy