I have for me what is real money in ACAS--$15k bought at just over $28. I bought it for the dividend and can live with some up and down in a reasonable range since I am dripping in an IRA with ACAS. Consequently there are no immediate tax consequences on the divy. when it goes down and the dividend purchases I feel good about the discount and when the share value goes up I feel good with how it looks in my portfolio. Around 5 years from now the share value price will become a lot more important to me. If it shold drop down to $28ish I will be tempted to buy a bit more, in the meantime holding and collecting is just fine.
I am reading this thread with the hope of garnering real information. It is disturbing that this thread has degenerated into so much name calling. Can we all try being just a bit more civil and stay on topic with real content. Thanks.
Have been looking for a reentry point on american for a while after selling at my last target price. took advantage of the $29.65 price when some fund dumped 148k shares a few minutes ago.
Have a longer term target price of 34 twelve months out. meanwhile its back to collecting a 10% yield on my money.
If you have owned ACAS for any amount of time you know that this happens periodically. It is a big target of the hedge funds and Cramer and his cohorts. The stock has a large short interest and any pullback can be seen as a buying opportunity.
One more tidbit. If you really want to understand how ACAS works, go back to about message number 200 or so, and invest several hours reading the next few hundred messages by JJR1998, OTE and a few others. Best instruction you will ever get, and it is free.
Best of luck.
"If they do a good job the company will continue to grow and prosper as will the share holders. If they don't, major problems happen. "
Hardly unique to ACAS. AT&T and Kodak come to mind as "rock solid" companies where management drifted off course or ignored reality and growth & prosperity became history.
The answer to your question lies in the fact that ACAS is a Regulated Investment Company. Their holdings are not very transparent and subject to varying evaluations. Also, they have a varied and uncertain income streams.
Every thoughtful new investor (including me) asks a similar question and the board is generally very patient in explaining their business model.
The other question a thoughtful new investor usually asks is how they can pay dividends that are consistently greater than their earnings. In simple terms, they distribute some capital gains (on top of earnings) as the businesses in which they invest do well.
I am no expert here but that is what I thought the board explained when I showed up here. If I am wrong, I trust those better informed than I will correct the mistakes.
I am very comfortable with ACAS, their dividends and business model.