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

To: Jurgis Bekepuris who wrote (52634)	10/29/2013 9:19:36 PM
From: Elroy	Read Replies (2) \| Respond to of 78774

BDCs had really bad performance in last crash and there is no assurance that this won't repeat in the next crash. Overall, I think that BDCs are much more risky than the current sunny climate implies. Curious, what happened that caused the shares to underperform during the crash? Did they keey paying dividends? I have to admit, I don't know how a company like PSEC makes lots of loans that yield 12% and none of them go on non-accrual. It's sort of like a black box to me. But it has been working fairly well for the 2-3 years that I have been paying attention to them. How does the BDC sector go belly up? I would guess the borrowers all default en masse somehow, not sure what would cause that other than a flat out miserable economy, but it seems feasible. On the other hand, it seems like their would be some warnings, like a few loans each Q go on non-accrual.