Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Sergio H who wrote (47905)	5/10/2012 11:18:36 PM
From: Spekulatius	2 Recommendations Read Replies (1) \| Respond to of 78673

I think your response is a little bit disingenuous, claiming that you can't respond because my response does not make sense. I don't claim to be an expert on these things, but I have followed Allied Capital fairly closely and even owned the exchange traded senior debt for a while, These guys where indeed getting whacked for all the reasons I cited - breaching the leverage limit, financing fell apart, loans going bad etc. etc. I have seen everything I posted happen to either Allied or other BDC's. Risk is inherent in any investment but in some cases the odds are stacked against you. I believe that BDC are such a case, because the management incentives are not in increase profits, they are geared towards increasing assets, which by itself is a recipe for disaster. Apparently you know BDC only during bullish credit market - if so, you are about to learn a lesson sooner or later about the risks that you claim you understand and I don't.