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Prospect Capital Corporation Message Board

  • thewisejman thewisejman Mar 11, 2013 12:47 PM Flag

    You need to be very very careful

    with your money especially if you already retire or are counting on the dividends you will receive from your investment to pay for your daily living expenses. You do not want to invest in too many risky stocks just because they are paying very high dividends because sooner or later they will have to reduce the dividends, or issuing SPOs, or borrowing more money and make more risky investments for them to keep paying these high dividends. Just remember, there is no FREE lunch in this world. If somebody is willing to give you something free or GREAT, they will expect to get back something as equally great or more from you.

    Look at DCIX, a container shipping company stock that paid more than 20% dividends, attracted many investors who kept pushing its stock price to new highs and bingo, it could not continue to sustained its high dividends and it dropped like a rock lately.

    Please do not misunderstand me, I am not saying that PSEC is not a good stock to buy and hold long term. But the problem is no matter how great a stock is or how high their dividends are, when they become overpriced (you have to decide when that happens) you must sell it because sooner or later, it will drop.

    Right now, the whole BDC sector is almost overvalued or fairly priced and since most of them have gone up so much in 2012 and therefore any mishaps in the stock market will no doubt, IMHO, cause a major set back to the whole sector, how bad? Some said 5%, some said 10%. I absolutely have no ideas but I believe it would be quite bad especially if you paid too much for any of them. Therefore, be very very careful. J

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    • I'm with you thewisejman. Thas has been a loser for me since I bought this late October last year, great dividends but stock price slowly sinks, seems more like a losing shell game to me. I thought at least I could use it for a good savings account but I have been quite wrong.

      Sentiment: Strong Sell

      • 3 Replies to blues4you2
      • Buy PSEC on the dips to dollar cost average. I picked up more shares yesterday at 11.05, and if it drops more, I'll buy more. If it happens to drop below NAV, I'll back up the truck. With the monthly dividend, it is one of the best deals out there.

      • Drink more coffee dude.

        Since OCT you have been paid .53 the price per share is down 15 cents. YOU HAVE A POSITIVE RETURN SO FAR. Not only that you had a few chances to SIGNIFICANTLY lower your basis by BUYING those dips to 10.00.

        This is looking much better than your CLF.

        This is a rock solid company, steady returns for YEARS to come.

        You have a great savings account, it is holding despite paying out 5% to you. No savings account in this USA pays that

        Sentiment: Strong Buy

      • Late October the price was 11.40 or so.
        You have received at least 3 divys. They even raised it after you bought.

        You could sell and move on...what's the problem?

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