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Prospect Capital Corporation Message Board

  • jadelover8888 jadelover8888 Nov 1, 2010 12:37 PM Flag

    Trick or Treat?


    Halloween just passed and recently the marekt looks almost like Halloween: went up one day and went down the next. It has become almost more and more scary everyday for one to have an accurate feel of how the market may behave for the next few months. It is Trick and Treat time.

    I voted NO for issuing more PSEC shares but I have a feeling that our NO votes may be futile and the company will end up issuing more shares below NAV after all. Since their recent NAV is 10.29, therefore if they issue the new shares at a 5% discount, it will be around $ 9.78, therefore as soon as we will hear the confirmation of the secondary offering, it is almost inevitable that the price of PSEC will drop. How much it may drop will be another matter. However, in long term, I believe its price will bounce back, just like all other BDCs. The problem is I am not real sure if it can maintain its current dividend payout or if its dividend will be actually a return of capital instead of real profit.

    Therefore, today I had just sold all my PSEC shares at $ 9.99 (did not catch it at 10.02). I am getting a little bit uncomofortable about the overall stock market in general and try to increase my CASH position again. I believe the next few months will be TRICK or TREAT time for the market and BUYERS beware.

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    • This kind of childish drivel of silly, meaningless thinking is nonsense. Why don't you 3 look at some factual information instead of making comments like how "scary" the market is or how you "feel" about it. There was a clear buy signal in September for PSEC as the 13 day exponential moving average crossed the 50 day EMA. This was reaffirmed in the last week. This is not idle speculation but fact. This is a solid uptrend which I will ride until there is a trend crossover in the other direction and this trend ends. Then, upon confirmation I may short. Personally, I see this trending to continue with a target of 12 and I remain bullish.

      • 3 Replies to danman9262
      • For the record, I am bullish here. And I am bullish on many other dividend plays (NRF-PB, RSO, CIM, etc.)

        What I'm saying is that I think there is a good possibility that we see some market reversal. As such, I am holding onto some cash to allow me to take advantage of any dips -- i.e. buying opportunities.

        Elections today will give Republican control of the House, and that will mean gridlock; good for Wall Street. FED will likely buy bonds; how much is the question. But the important thing is Jobs, and these will remain weak. As such, any number of things can trigger a market reversal -- govt. debts, poor economic numbers, international conflict... Within the next 3-6 months, it a d*mn good bet that we will see some reversal; how severe is unknown.

        And you call this: "childish drivel of silly, meaningless thinking is nonsense"?

        Good luck,


      • Childish drivel Eh?

        If you really think that then buy a 100,000 shares of PSEC!

        And if you happen to loose your gonads on PSEC just remember
        we told ya so.

        At the end of the day just check how much psec has gone up or down against the Nasdaq's percentage.

        Right now I have PSEC up .28% and the Dow up .54% and Nasdaq up .76%

        I guess PSEC is a sleeper because it has not even matched the Dow's rise for years, let alone Nasdaq's.

        Personally I have better places to put my money right now. When PSEC's Management throws the stockholders another curve ball and it once again heads for the trash can I just might buy it once again.

    • >> I believe the next few months will be TRICK or TREAT time for the market and BUYERS beware. <<

      I have to agree. The bull market we've had for the past 8 weeks could see a pull back any time. Then again, elections tomorrow, FED's FOMC decision Wednesday and monthly job numbers Friday. These could easily keep the "bull run" going for some time, or trigger a reversal.

      As for PSEC: I gotta go with them as a long-term hold. Forget about trying to time the market; collect the dividends and reinvest where ever you think is best.

      Disclosure: I am holding 10% of my portfolio in cash right now; that will build up by December to about 15%. I'm not too worried about what happens in the next 8 weeks; it's what happens next February that worries me.


    • Jade ... I could not agree with you more on this one.

      Prospect management needs to show much better earning than they have lately before I would consider it a good stock at it's current price.

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