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Anyone Holding BDCs?
Old 09-21-2014, 10:05 AM   #1
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Anyone Holding BDCs?

Anyone holding Business Development Companies. I am curious about them.

Business Development Company - Wikipedia, the free encyclopedia
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Old 09-21-2014, 11:31 AM   #2
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I owned ACAS and ALD just before the Great Recession. I still have loss carry-forward from ALD.

I have owned BKCC since buying in big back in 2009. Having traded in and out my current cost basis, not including dividends over the years, is near $0 on a pretty big position.

Recently (over last few weeks) have bought big in PSEC, a medium size stake in BDC-L, and a small stake in GLAD (said GLAD position being a pure trading move, I'll be out if it gets close to $9).
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Old 09-22-2014, 10:37 AM   #3
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Thanks for posting.

Movements are strongly correlated to the US small cap?
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Old 09-22-2014, 05:30 PM   #4
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I own a few shares of PSEC too. I think BDCL is the easiest way to buy BDCs. Some of the price movement of BDC earlier in year is that they were kicked out of some of the small/mid cap indexes because they were classified like mutual funds vs regular stocks by the SEC.
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Old 09-23-2014, 05:34 PM   #5
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More info on BDCs from Yahoo.

http://finance.yahoo.com/news/bdc-et...133025596.html
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Old 09-23-2014, 07:36 PM   #6
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I like MAIN as they are invested in many texas companies which are doing well due to oil/gas boom.
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Old 09-24-2014, 11:12 AM   #7
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As an aside, those not familiar should keep in mind that BDCL is a 2x leveraged version of BDCS.

I have never really focused on any correlation of BDC's to any other asset class. My view of BDC's is probably different than most whereby I use them as a trading vehicle and focus on price history and base fundamentals with little regard to the dividend yield (ACAS and ALD cured me of being a buy and hold investor with these high risk positions). With such a large retail ownership focused on yield, I think there are often overlooked bargains (with regard to great P/E and NII) albeit they are small cap and high risk. My strategy is basically to buy the good BDC's when they are cheap. Volatility and getting paid to wait do make for attractive trading vehicles. If a trade is successful, and over the past few years most if not all have been, I frequently leave my profits invested so I'm playing with the house's money and my capital gains are somewhat limited. Had I sold out of my positions completely over the past few years I would have long since made up my prior mentioned (prior post ACAS and ALD) losses. Dividends on top of "free" shares are gravy to me at this point.
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Old 09-25-2014, 01:37 PM   #8
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Because of my desire to diversify myself, I have a relatively large number of BDC companies (about 20-25), with a target of approximately equal weightings in each. So, name one and I likely have a position in it. They are part of my overall diversified portfolio, but if I had to define them as an asset class, they don't constitute a huge part of my overall portfolio (maybe 5%, +/-?)

I also have a few 'baby bonds'/preferred issues of the BDCs, and many of those are defined maturity issues with about 2-8 years remaining until maturity (as opposed to 'perpetual' ones like many companies issue). With some of the debt/preferreds from the BDCs, you can get yields of about 6%-7% for just a 5 to 8 year bond. There is some risk as with any other, but I'm willing to take a little of that for the asset coverage.
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