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Strategies & Market Trends : Value Investing
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To: Elroy who wrote (54707)1/4/2015 1:31:51 AM
From: Jurgis Bekepuris  Read Replies (1) of 78627
 
Actually, I disagree that being big is good for their shareholders. It's good for the management, since they can probably take bigger salaries from all the fees. However, for the shareholders BDC is similar to a mutual fund. It's better for you if your mutual fund is small and its manager invests your money in small set of great ideas (haha this is what we were just talking about). Same with BDC. If it's small, they can pick better loans, they don't need to spread out thin and possibly write bad loans. Sure, you can argue that a bigger BDC can write big loans that small BDC cannot. But big loans mean big companies which have access to much more possible sources of capital: banks, bond markets, etc. So the competition is harder.

Anyway, you still might be right that PSEC is a good investment. I won't buy though. :)
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