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MCG Capital Corporation Message Board

  • beefstu57 beefstu57 Mar 2, 2007 3:51 PM Flag

    Down 11%..

    from inter-day high set just last week. The pounding continues next week. For all of you dreamers, MAYBE now you will realize your blue skies are now filled with dark clouds which are going to be around for SOME time.

    Have a great weekend and curb the spending.

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    • Well...if we encounter a real bear market, then anybody who said sell-sell-sell will look like a genius. There's always systemic risk in the markets. There are lots of places to put money other than stocks if one doesn't want to be exposed to that risk. The question is, once you've decided to play the market, where to put the money? I believe the BDCs, while not "perfect", are sound vehicles for generating returns far in excess of the risk-free rate. As they say, you can't restate a dividend. I've been collecting 8 to 13 percent cash returns per year on some of these BDCs for so long that, in some cases, they could just about go to zero and I'd still be in the green from a total-return perspective. The imperfection in BDCs is, I believe, that despite the market's fascination with them nowadays and all the chit-chat about "private equity" they have a lot in common with junk bond funds, and are subject to the same credit spread widening that junk bond funds could suffer if the economy moves more in the direction of recession. It'll get reflected in lower prices, just like with junk bond funds.

      The bear market is coming. There's no question about that. It's only about "when", and about where do you want your money to be when it happens. I'd much rather have MCGC than some non-dividend paying growth stock that has no intrinsic value whatsoever. Just my view. There's value in a cash-producing asset even if no one else wants it. I had a condo I rented for $1,200 a month through the real estate downturn in the 90's. Even though nobody wanted my condo, it still had real cash value to me. So I waited, and eventually sold it for twice what I paid. MCGC is more akin to that kind of asset than a typical growth stock.

      The blip of the past two weeks is not the bear market IMHO. When the bear is ready, we'll all know it. Even on the most brutal down days in March, there was a strong bid and a rally attempt virtually every hour or two. This is not the time to bail, even if someone wants to bail. When it's time to bail, it'll be obvious. I don't exactly know where all the new money is coming from these days, but it's undeniable that there are huge hordes of cash flooding into equities, whether the market goes up, down or sideways. That'll eventually turn, of course, but until it does, the market doesn't look particularly risky to me. There's just too many people who want "in". God only knows where all that money is coming from that's keeping the bid under stock prices at the moment.

    • Not sure why MCGC is not rated higher. Announced great earnings, great increase in dividend and down it goes. Not sure if the Investors, Traders are doing any DD but I bought a bundle more. 2k divvy coming in April and many more after that. Like Kansas used to say "Just watching my cows and the Divvies rolling in" from my rocking chair!

    • Thanks Grandpa.. I always wanted to be a bully.

      Another day, another loss (sigh)

    • I am a retired stockbroker and That guy beef stew or whatever he wants to be called has a point if we hit a real bear market. Do any of you remember when Exxon had a yield of 11 percent, and most utilities were priced with returns of 12 to 13 percent. It can happen again. Just like the summer of 1982. Interest rates were high, until Kaufmann forcasted the down turn in rates. I am not saying this is going to happen again, but when money disappears from the market it comes from all sectors. The NASDAQ is always the worst hit. I think MCGC is a keeper and he is just a bully, picking on our fears.

      The main thing is to buy good companies, that pay respectable dividends so that when the entire market takes a tumble at least you are getting the dividends.

      If you are attuned to analizing a 10-K properly I suggest you contact the company get their 10-K and read it. Start from the last page and go to the first. The real meat of it is at the end.

      From what I can tell the company seems to be improving but it is not a upper tier stock in it sector.

      Young Grandpa

      Young Grandpa

    • What makes it even better is having this in my IRA and accumulating through DRIP totally tax deferred...and being perfectly willing to cost average my way for the next 8 years before I start moving towards more fixed income. Same with ACAS which has been even kinder.

    • Marc.. I totally agree..thanks for that intelligent input.

    • Everyone,.... do yourselves a favor, and IGNORE this "person". People like him that call others off color names, and such over stock investments, are plain and simple "bashers". They have their own lame purpose, but all you do is waste your time, and sink to their level by responding to their childish insults. None of US can affect the price of MCGC, nor can he,...........quit playing his game, and get on with planning your next buy!

    • You've nailed it! I have GTC limit buy orders at outrageously low prices across the BDCs. These stocks have occasional sharp drops even w/o a market selloff and those GTC limit orders can really scoop up a bargain now and then. I just noticed that my ridiculous GTC lowball offer for AINV at $18 picked up 100 shares this morning, now there's free money if ever there was such a thing.

    • What beefstupid doesn't understand is that GTC orders for BDCs are the best way to catch the sharp dips. Being a dip himself, I don't think he can comprehend this. I nailed down 500 shares of ALD at 26.60 which is .01 above the lowest point of 26.59 with a precharted buy order. If you can read a chart you can do this kind of thing and be richly rewarded.

      Now get on with your bashing and shorting of MCGC beefstupid. I enjoy taking your money.

    • Smart man mega

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