baby boomers have started retiring and there is an almost infinite supply (by comparison to the supply of US citizens) of foreigners who want to come here and work. the big corporations lobby hard to get more H1-B visas so they can bring these people over. They don't want to compete for workers. My opinion is that you can always find the expertise, if you are willing to pay enough. Very few jobs go unfilled because the people don't exist, they go unfilled because the employer doesn't want to pay enough. Well paid jobs always have many qualified applicants. Look at professional athletes, no problem finding qualified players.
less people working more hours with better computers and smart phones - big companies determined to cut costs. Much less costly to get someone to work 60 hrs a week than have 2 people working 40 hrs a week. Even if the company pays the worker for 80 hrs a week, benefits don't cost any more, so there is large savings.
Of course they can. They just can't pay it back in what you (and I) consider to be a reasonable time. 100 years from now they might be thriving and able to pay back borrowing without much trouble. Who knows? I do know that one should never say never, because never is a very long time.
Not for BDC's. They are required by law to pay out 90% of their taxable income. And their dividends are taxed as ordinary income, just like bank interest. Do you have any idea what you are talking about. It is very difficult for a BDC to increase their NAV in any substantial way (writing up the value of their equity kickers increases NAV, but given that equity is a very small part of the asset value, this really doesn't make much difference).
very good post. I think management is playing the game.
I do disagree with the statement that conserving dividend income for growth capital increases NAV -this is only true in the short term. They are required by law to distribute 90% of taxable income. They cannot retain earnings, they have to distribute them. The growth from 10% of taxable income being retained is so minor that it gets lost in the roundoff.
NAV is not really the best metric. Valuing loans is pretty subjective, which your post has pointed out. I follow the dividends, when they lower the dividend they are not doing well. Of course, they may pay a large special dividend at the end of the year. I would rather they adjust dividends every qtr, not play games to make themselves look good.
Well, here we are with no dividend declaration. I guess they push back the date of record or go with the shortest time between declaration and dividend record date I have ever seen (of course mutual funds and ETFs don't have two weeks between declaration and record date so I will get over it).
yes, although I don't know anything about banking in Switzerland.
I think Treasury bills traded at negative interest rates in the US during WWII for a short period.
Cannot believe that FSC continues to fall. Thought buying shares at 8.08 was a good deal, should yield over 10% for quite some time. Someone is anticipating an apocalypse or they know something I don't.
Your welcome. And thank you. This message board has a lot of interesting ideas. Not all for me. Quite happy with FSC now. Even with a reduced dividend, can't go wrong at 10 plus percent yield.
no, sold it last fall when it was still NGPC and took the loss. The new strategy (not energy related) will take years to turn around. A particular concern now is that one of their largest positions is a limited term royalty interest in ATP. ATP went bankrupt and was liquidated. The limited term royalty interest is a real property interest but is being contested in court by the buyer of the ATP assets. Even if they win the suit, the security is oil at the bottom of the Gulf of Mexico which is worth less each day and totally dependent on keeping the platforms in production. NGPC always had volatile net asset values. Tread carefully.
The insider buying is from the management company. NGP sold the management rights to the BDC. As a provision of the sale, the new management is buying $4 million (?? did not check this, just from memory) of stock in the open market. Evidently it is being bought in the name of the Chairman of the management company.
I was an owner of NGPC for many years. It was an excellent proxy on the price of oil. Their deals typically included royalties as an equity kicker. When the price of oil went up, they made a lot of money. When the price of oil went down, their investments defaulted. Their track record in the oil patch was actually pretty good, but they always trying to invest in other energy related companies. They invested in two ethanol plants, they both busted. They made coal mining investments, both defaulted (although they ended up owning a coal company that they eventually sold to come close to breaking even).
Anyone remember that Nick Schorsch pulled the same trick with ARCP that he did with AFR years ago. You pump up AFFO and pay a high dividend. Eventually it all unravels. Learned to watch FFO and GAAP earnings. Those are a little harder to manipulate.
Also learned to be very suspicious of European investments for REITs. AFR took the entire staff to London to investigate European investments. GPT actually bought something in Europe, but still a little bit of a boondoggle. Executives are always looking for free trips to Europe.
just bought some more FCS - trying to catch the falling knife. Even when the dividend is reduced (assuming it falls less than 20%), my yield is well over 10%. I expect dividends from BDC's to fluctuate and I expect a few of their investments will fail. Hopefully a long term income generator. Not terribly concerned about net asset value because that is such a subjective number.
money market fund yields were in double digits all year (1982), I had one that peaked at 17%. Did not put much into stocks then, Double digits on cash was enough.