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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (23740)	4/13/2006 11:12:34 AM
From: E_K_S	Read Replies (2) of 78717

Thank you for your answer. One concern I have is as rates rise does not the potential for a loan "default" increase with the deals these companies structure? MVC Capital Inc. (MVC) looks interesting as they have several deals that are outside the U.S. with exposure to European markets. I like the potential return these companies can achieve when they structure financing for these very small undercapitalized and very profitable companies. What bothers me is if management makes deals that are marginal just to meet their growth targets. In rising rates, more of these marginal deals can turn sour. I have been watching ALD for sometime and have always been concerned with how they structured many of their deals, floating more shares to finance these deals while continuing to pay such large quarterly dividends. I sold my position in ALD early last year but I guess I was wrong as ALD has hit new highs. I will watch the stocks that both you and Carl Worth have posted and perhaps nibble at a few shares when rates have stabilized. EKS

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