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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Grommit who wrote (29688)	1/12/2008 11:01:02 AM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78462

I agree with Grommit, but would like to emphasize that you have to be comfortable with BDC management to invest in such companies. Perhaps more than with other companies. :) You can also look at the history of the company and see if it had some issues in the past. Although there is never a guarantee that management did not become greedy or stupid in the most recent past.

To: Grommit who wrote (29688)	1/15/2008 5:01:38 PM
From: MCsweet	Read Replies (1) \| Respond to of 78462

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