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American Capital, Ltd. Message Board

  • Brennus01 Brennus01 Aug 19, 2004 8:16 AM Flag

    A word on ACAS & Shorts

    I bought my first ACAS in the middle of July of 2002. If you look at historical prices, the price was favorable but not stellar. I bought most of my stake in the last weeks of September of that year, but I've always kept a special spreadsheet to track the yield of that initial july purchase.

    As I check it today, that purchase has an annualized return of a little more than 20%. In that same time frame, the S&P500 returned about 8.5% annualized. So even a poorly timed purchase of ACAS beat the S&P500 by a little less than 12%.

    This stock can be extremely forgiving to an untimely long.

    But the real point is, pretty much 100% of the time I've owned this company, there has been one or several idiot longs popping off about how it was such a great short. Every single one of them doesn't know their posterior from a hole in the ground, folks. Because just as this company is extremely forgiving of an untimely long, it will punish a short at any time...and it will absolutely destroy an untimely short.

    Recent shorts fall into the latter category.

    I can't bear to watch the slaughter.

    Vae Victus!


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