My read of the businesses they are buying is that they are discretionary purchase businesses that are hurting in this invironment but should recover..i.e. recreational vehicle parts,temporary employment agency,circuit boards etc..When the economy recovers..I am hoping for share price growth plus dividends..Yes, lets hope we have management expertise..
These are the good times for BDCs, MREITs and gold. The Fed has to keep rates low to accommodate the banks who are facing a foreclosure crisis. This of course is not what banks are meant to handle, so MREITs get discounts for assuming loans and management and BDCs profit from low rates. Gold of course loves the uncertainty and the fiat currency that is available at virtually no cost.
When this reverses, look elsewhere for safety. Right now this is a good time in these sectors but it could reverse so that growth stocks, CDs, and vanilla savings make a come back, albeit gradually.
But the first announcement of tightening will hurt these 3 sectors disproportionately so stay abreast of Fed actions and any solid evidence of economic growth that may permit tightening.
My bigger question is where is the all the buying support coming from for these daily new highs? Starting to look overbought technically with a full month of steady up days ... and this before the distribution announcement and ex-div date set? I'm guessing an MF or similar must be increasing its position because of the distribution.
Of course, I'm not complaining, but always start to "think" when one of my long term holdings starts to look like it might be priced to perfection. (Not, IMO, the case for CODI yet, but soon?)