I’m Pat Rosenheim, a.k.a. the PandA Trader.
I had an interesting discussion on StockTwits today about $PSEC, and I wanted to share what I learned.
First, Prospect Capital is a BDC that you either love or you hate, there is no middle ground. The “buzz” is that they will shortly announce a(nother) dividend cut. Judging by the self-aggrandizing mail pieces they’ve sent out of late one would think they’re a wonderful company and wouldn’t dream of cutting the dividend.
Several analysts would beg to differ, and if you were to dig around and have a look at things like earnings, you would see that they simply haven’t been, aren’t currently, and probably won’t in the immediate future even come close to covering the 12%+ dividend.
There are some mitigating circumstances to be sure, but that’s not the point of this post. Besides, I’m not smart enough to proselytize about financials, etc. That’s why God created analysts.
They have cut the dividend before. The first cut was when they went from a quarterly dividend of $0.41 in 1Q2010 to a monthly dividend of $0.10 in 3Q2010. It vacillated a little and then slowly rose from $0.10 to $0.111 in 1Q2015 when it was cut to $0.08333 where it is currently floundering.
Quite a few people are upset about exorbitant management fees but John Barry doesn’t seem likely to cut into his robber baron income and there is really very little shareholders can do about it, short of abandoning their positions.
But, let’s get back to the discussion were were having on StockTwits;
It all started innocently enough with this;
Followed by these comments;
@dennismccain look at the first half of your chart…oversold for a long period with improving fundamentals…with deteriorating situation?
— svb64 (@svb64) Aug. 16 at 10:02 PM
@dennismccain this will remain oversold for an extended period.
— svb64 (@svb64) Aug. 16 at 10:04 PM
— PandA Trader (Pat Rosenheim) (@panda317) Aug. 16 at 11:26 PM
— svb64 (@svb64) Aug. 16 at 11:33 PM
And then I went into “Coulda, Woulda, Shoulda” mode;
Followed by these replies;
— Dennis McCain (@dennismccain) Aug. 17 at 07:13 AM
— Dennis McCain (@dennismccain) Aug. 17 at 07:17 AM
But, I wasn’t done yet!
Then came these 3 comments;
— PandA Trader (Pat Rosenheim) (@panda317) Aug. 17 at 07:21 AM
— Dennis McCain (@dennismccain) Aug. 17 at 07:24 AM
— Dennis McCain (@dennismccain) Aug. 17 at 07:27 AM
And then since AGNC and “the Gladstone Cos.” were mentioned, I threw this up;
Here’s the link to that chart, please click here (it will open in a new tab/window)
And then I posted this;
— PandA Trader (Pat Rosenheim) (@panda317) Aug. 17 at 07:34 AM
So, I want you to do exactly that on the chart that opened in a new tab or window. Right click on the chart, and select “Lock the Y axis”, and then right click again on the chart and select “Animate”. Voila! Stock p0rn!
The conversation went on for a bit, and I also posted this;
and remember what I just said about losses, and also remember BTFD, and buy low, sell high. BTW, nice movie. stock p0rn
If you notice the lows of PSEC followed a few months after the dividend cuts, and were the *almost* perfect time to buy.
But, watch the movie a few times and see how things change over time. Notice how the different companies behave in relation to each other, and how some are disconnected at times from the rest. Notice also that some are almost in “lock step” with each other. It makes you think, and it makes you wonder. And, if it does that then you might benefit. Learn from the past, plan for the future.
That’s why I post this stuff.
PLEASE TAKE NOTE AND REMEMBER THIS!
I’m not telling anyone to buy anything or giving anyone any advice, because that’s illegal. You see, I have no letters after my name, like RIA, CFA, etc. I SIMPLY DO NOT GIVE ADVICE. I only tell (and show!) what I do. You, like me, are all alone in this.
And remember, always do your own due diligence!