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BlackRock Capital Investment Co Message Board

  • dbtunr dbtunr Apr 29, 2013 3:16 PM Flag

    is beefstu57 the kiss of death?

    he shorts stocks that pay 12% dividends that go up. He buys other stocks that go down. Can this guy find his way home at night?

    I hear his HS coach gave him the name of beefstu too. Fat little SOB

    Fat and stupid is no way to go through life.

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    • Please understand that beef and I used to be nemesis and I do not believe he owns any stocks but mainly derived his sole pleasure from making fun of others. However, in the case of BKCC, I may have to reluctantly agree with him in that you should NEVER never buy and hold a stock just because of its yields because just because it has a very high yield does not mean its net annual return will be guaranteed high if you do not buy it at the right price. The biggest problem with BKCC right now is Virginia Retirement System who continues to dump BKCC into the market to raise more money for those baby boomers who start their retirements. Also, the overall market especially the BDC sector is ripe for a correction, nobody knows when or how bad, but it will happen and I believe probably (I said probably) between July to November, 2013. The later any meaningful correction happens, the more severe it will be. Therefore, despite BKCC's high yield, around 10.48% today, if you just bought it today and it drops 8%, your net annual return will only be about 2.48% and if there if a major market correction of 15% or more, you return will be in the negative territory. You will be better off buying VLCT, a bond fund which gives you a 4.31% annual return and more stability (of course it can drop if interest rate goes up) or XLU, an utilities fund which gives you a 3.52%. Many utilities funds had gone up a lot lately, then may show you that many investors have started taking defensive positions. The trading volumes of many blue chip stocks such as JNJ had gone up lately while indexes kept making new high? What did that tell you? Of course, I can be wrong and the market rally will continue just like any pyramid schemes if more new investors start entering the market, but sooner or later somebody will get hurt.

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