Brian Grosso
Deep Value

Capital Southwest: A BDC To Believe In?

I recently read (most of) Modern Security Analysis by billionaire investor Martin Whitman. The book was published in 2013 after Whitman retired from active management of the Third Avenue Value Fund a year earlier. In the book, Whitman makes several mentions of Capital Southwest (NASDAQ:CSWC), using it as an example of various ideal qualities of investments in his 'safe & cheap' approach. The CSWC position has since been disposed of in early 2013, but I was curious enough to take a look at the stock anyway.


Capital Southwest is a publicly-traded BDC/investment company/closed-end fund. The company maintains an extremely concentrated portfolio of very long-term investments in private companies. As a BDC, it does not pay corporate-level...

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