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Strategies & Market Trends : Value Investing
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To: Grommit who wrote (29688)1/15/2008 5:01:38 PM
From: MCsweet  Read Replies (1) of 78464
 
Grommit,

As far as income and unrealized gains and losses, I agree ACAS does what BDCs normally do --- no scandal there.

However, is artficially marking up an investment that is publicly traded way above its traded market price standard BDC accounting? Control premium doesn't mean much to me unless they intend to use the control premium to disadvantage the ECAS shareholders for the benefit of the ACAS shareholders. Otherwise, the same cash flows accrue to minority shareholders as the majority shareholders.

That marking methodology is about as aggressive as you can get IMO, particularly when you convince new investors to invest and buy in public offerings and such based off of those numbers.

The management is smart, but can you trust them and their extremely credit sensitive portfolio? ACAS is cheap here. I just would rather go with a management that I trust in this kind of environment. I think the stock could make a lot of money or it could implode --- don't know which.

MC
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