Seeking Alpha

Panic-selling in income producers (I, II) infected the BDC's as well, notably Main Street (MAIN)...

Panic-selling in income producers (I, II) infected the BDC's as well, notably Main Street (MAIN) and Triangle (TCAP), both down more than 10%. Fed meddling seemingly can't hurt their returns, but most names in the popular sector trade well above their net asset values (MAIN is 57% above Sept. 30 NAV after today's decline, TCAP 47%), making them vulnerable to a change in sentiment even if business is doing fine.
Comments (19)
  • Doug Meeks
    , contributor
    Comments (1131) | Send Message
     
    Pain in MLP and equity REIT's as well. Time to buy quality names!
    14 Nov 2012, 05:54 PM Reply Like
  • tampat
    , contributor
    Comments (995) | Send Message
     
    Time to stand aside and wait for things to work themselves out and stabilize. To much fear of the unknown going on right now.
    14 Nov 2012, 06:20 PM Reply Like
  • Brian Bobbitt
    , contributor
    Comments (1890) | Send Message
     
    Yes, just about any dividend payer has taken it on the chin, and for sure some retired folks are not happy tonight. So, what to do? Some of them require dividends to eat on etc. So selling can be very painful at this time. I would not look at tax free stuff as the equity can be trashed quickly if interest rates rise, and where are they more likely to rise than from zero. NO munis for me.
    Dividend payers. Well, there is one thought for those who have sold before this terrible reaction to the election, and what Obama says he is going to do, is to buy the dividend payers now after the drop and your dividends are higher. HOWEVER, one should probably NOT get back into the ones they were in. For instance: Look at AGNC's long term chart. like 5 years should do it. Look at PSEC, and NMM for instance. ALL of these are in panic mode and for sure should not be bought during this melee.
    Look now for others who have NOT dropped, and perhaps some with smaller dividends, and maybe the holders of those may not be so quick to sell.
    If you really don't want to sell, and hold thru thick and thin as some retirees must do, [hoping the dividends don't get cut too], may look for very high quality stocks, with very little headwind, and switch to them.
    I, for now, have no advise except to get to quality or stand aside. I am trend hunting, and know I am not going to stick my neck out very far.

     

    Perhaps, now may be the time to buy PM's if the whole party is gonna get rained out.

     

    I dunno yet.
    Capt. Brian
    The Lost Navigator
    14 Nov 2012, 06:30 PM Reply Like
  • Tack
    , contributor
    Comments (12808) | Send Message
     
    Most BDC's and commercial REITs have been beating their estimates on both top and bottom lines and upping guidance, so let's have some hysteria and make things really attractive.
    14 Nov 2012, 06:31 PM Reply Like
  • jpm1jr
    , contributor
    Comments (50) | Send Message
     
    Tack, you've got that right. Great buying opportunity coming up..
    14 Nov 2012, 07:01 PM Reply Like
  • MashieNiblick
    , contributor
    Comments (33) | Send Message
     
    Nothing but doom and gloom, but not just because Obama won. We all knew that that was reasonably likely, or at least anyone who could read the news with an impartial eye could. All of the last week's value destruction can't be just the result of us finding out that the polls were right, so what is it?

     

    Consensus is building that it's a combination of three significant factors: 1) Germany's weakening economy threatens all of Europe's solvency, 2) the election confirms that we'll spend the next four years minmizing our chances of economic recovery from this most-anti business administration, and 3) less than thrilling earnings reports. Germany and the earnings take out tech, earnings and the negative tax implications disrupt MLPs and REITs.

     

    There will be pops when there is consensus on how to raise taxes ("if" was decided November 6th), and particularly if there's any agreement on managing entitlements. Increasing the federal debt limit and pushing back the fiscal cliff will help stabilize people's attitudes, but will it be enough? None of that will make Germany any stronger or improve next quarter's earnings reports, but at least settling one of the three factors should give us a fighting chance.

     

    Until those things come to pass and the impact on the markets is clear, I agree with tampat - stay away for now, let this baby settle. It could be another 2-3 months of steady declines.
    14 Nov 2012, 06:34 PM Reply Like
  • go-4-it
    , contributor
    Comments (463) | Send Message
     
    took it on the chin today on my TCAP, thank god I sold 400 shares about 2 weeks ago, from my original 800. Still up from where i bought in at, but, not by much. Just have to hold on for now, and cross my fingers. Also, sold out my AGNC position of a tad over 500 shares at $32.10, for a nice profit for a year and a half, so don't feel as bad on that one.

     

    Cut half my holdings in EPD, for a huge profit, and also dumped my LINE a couple of days ago, for another profit. Jumped into LNCO too early it looks like, but, it's a long term holding, so will have to be patient. I agree with tampat, and just stay in a holding pattern now, and buy back in, when we have some clarity on the future.

     

    Thank goodness I have some Kona layovers coming up, so I can r & r in paradise, and try to take my mind off of all this mess. Looking at my bids for next month, and a nice 52 hour layover in Maui around the end of the year. Hopefully by then, there will be some nice aloha coming my way. Time to act Hawaiian, and HANGLOOSE!
    14 Nov 2012, 07:11 PM Reply Like
  • McGonicle
    , contributor
    Comments (1283) | Send Message
     
    starting with goog and then nasdaq and then apple, the market has heard the call and charges elsewhere. Selloffs today in the fast growing names and high value dividend names (dow @ 28) are a sign that we are probably going down more.

     

    bounces have been exceptionally weak an dfor the last 2-2.5 years the pattern (in the 4-10 weeks scale) has always been to buy the dips and rocket back north...the fact that's not happening is very significant
    14 Nov 2012, 08:43 PM Reply Like
  • Gent60
    , contributor
    Comments (11) | Send Message
     
    Does anyone think this is a good time to be buying PSEC? It looks like it is still paying good dividends and I hope they will continue for another one or two years from now.
    14 Nov 2012, 09:42 PM Reply Like
  • Shanteuse
    , contributor
    Comments (4) | Send Message
     
    PSEC is trading at a discount to its value now, and paying a 12.34% dividend. Maybe people will keep panicking and drive it down even more, but the dollar amount of the dividend is going to remain the same, and if the company continues to be well-managed and prudent, eventually the stock price should rise again. I have seen this thing swing wildly in the past.
    15 Nov 2012, 01:19 AM Reply Like
  • Shanteuse
    , contributor
    Comments (4) | Send Message
     
    Yes, PSEC is trading at a discount to NAV now. People who bought it at higher levels have a discouraging sight when they look at their account balance, but they are still going to be getting the same dollar amount dividend. Hopefully when people stop panicking the stock price will recover. In the meantime, if you had bought it at the closing price you're be getting a 12.34% dividend which appears to be sustainable.
    15 Nov 2012, 01:19 AM Reply Like
  • royk01
    , contributor
    Comments (139) | Send Message
     
    Why is this value destruction happening across the board, and pointedly against dividend paying stocks? My opinion:
    1. hedge funds smell blood in the water ---very similar to 2008 broad collapse.
    2. panic by investors looking at higher taxes and more deadlock that might facilitate fiscal cliff, coupled with
    3. worldwide macroeconomic problems calling for time to take money off the table
    4. early tax selling and profit taking

     

    This is a very broad downturn. We dividend investors at least have the benefit of collecting dividends while we wait this out.

     

    Yes, I have a flair for the obvious .A fruitful aside: I am a Univ. of Texas fan, whose arch enemy is Texas A&M. I congratulate the Aggies and its fantastic freshman quarterback for defeating the Number One team.

     

    Happy Thanksgiving.
    15 Nov 2012, 01:52 AM Reply Like
  • liverson
    , contributor
    Comments (32) | Send Message
     
    Fortunately, dividends are based on earnings - not stock price and so getting 5-7% is still not a bad deal. Besides, worst case, all of the dividends that we earn over the next 6 weeks are still taxed at the lower rate.

     

    I expect a great deal more panic before the end of the year. As go-4-it says, its time for a vacation until the new year for those who don't have the stomach for free fall. I switched 15% of my portfolio from growth stocks to preferred last month since preferreds are not as volatile as common stock. Once all the drama about the fiscal cliff is over, I will move a lot of the preferreds back to common.
    15 Nov 2012, 02:10 AM Reply Like
  • AyrlainPrenna
    , contributor
    Comments (12) | Send Message
     
    All because of no fiscal responsibility worldwide. And make no mistake about it, we were the ring leader of the collapse...People in this world MUST act for themselves, and realize that government entitlements, as wonderful as they are to receive today, are going to be the daggar in the hearts of our children and their children....The world over is in turmoil because everyone wants something that they either don't have, or something that they do have is being threatened in some way...Now that our country has ignorantly re-elected the USA Destroyers for a second term, there are two things which are evident...The Annointed One's clan of dependents will grow immensely for four more years, and everyone else will have to work more and produce more than before to say afloat....There is always an undiscovered niche in society to earn another income stream...Good Luck....
    15 Nov 2012, 02:15 AM Reply Like
  • Buyholdnomore
    , contributor
    Comments (2) | Send Message
     
    You really drink the kool aid, wow. The way you buy the media line without looking deeper at the data is would make anyone distrust you analysis.
    15 Nov 2012, 01:45 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8176) | Send Message
     
    Thank goodness (AINV) is a shelter in the storm. Also (CLCT) is EXCELLENT for income!
    15 Nov 2012, 05:03 AM Reply Like
  • Polishqueue
    , contributor
    Comments (9) | Send Message
     
    The fiscal cliff is real... sort of.

     

    The solution will include maintaining tax cuts for the under-$250,000 crowd (which includes me and the rest of the "47%"), but the richies will likely make us suffer by selling off a lot of their equities...

     

    ...Which they should. After all, none of us really want to "stick it to" those who have been successful; we just want them to contribute a larger share in support of Americans who are less fortunate.
    So how does that affect PSEC and others like it?
    It means bad news for banks. Especially banks that are publicly traded and lend mostly to large, publicly-held businesses. That's the argument presented by those who agree with Ryan, Trump, et al. It's a good argument and I believe that will, indeed, be the result, and that investors in such institutions will suffer, at least in the short term.
    For lenders whose customers are mostly private businesses, the REAL American Small Business Owner for whom economic recovery is targeted, the so-called "fiscal cliff" is not only irrelevant, it's likely to be a boon.
    Prospect Capital has, probably, the best d@#m management of anything out there in this particular field. The trade-value of its stock is quite volatile because most investors don't understand how companies like this operate. PSEC stands to make money hand over fist as the federal government begins to increase its attention on developing new, small business, and it's their PROFIT that provides our dividends. Who (except day-traders, who should avoid PSEC at all costs) cares what the current stock price is, other than to pick up more when it's "on sale"?
    15 Nov 2012, 04:17 PM Reply Like
  • aristd
    , contributor
    Comments (15) | Send Message
     
    It's a simple rule of thumb. All things being equal, buy yield. I raised a bunch of cash on the way up buy locking in capital gains this calendar year and I am buying every couple of percent drop all the way down. I figure in a few years I'll have a huge income stream and some very nice capital gains to boot. I've only committed about 25% of my cash to this point but I am staying the course.
    15 Nov 2012, 08:56 PM Reply Like
  • coolsoupy
    , contributor
    Comments (218) | Send Message
     
    PSEC is a great buying opportunity.
    Sell and move to quality stocks that pay no dividend and have little chance of grpwth? Good way to get whipsawed by a novice investor!
    The only reason to sell if your reason for buying has changed!!!!!
    19 Nov 2012, 05:47 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|