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I'm Buying the Panic. Not the Problem.
Published about 2 months ago • 3 min read
Here's your weekly helping of interesting investing information and insights.
Opinion
If you've been watching BDCs lately, you saw the chaos last week. Blue Owl halted redemptions on one of their funds, basically telling retail investors "you're not getting your money back on a quarterly basis anymore." Why? Too many people wanted out at once and they couldn't keep up. So they sold $1.4 billion in loans to raise cash and pay investors back. The important part — they got 99.7 cents on the dollar. The underlying loans were fine. It was a structure problem, not a credit problem.
But the market didn't care. It dragged everything down — Ares Capital (ARCC), Apollo, KKR, Blackstone, Carlyle. All of it.
Here's where I think they got it wrong.
Blue Owl's mess is specific to non-traded BDCs. Think of it like a private investment where your money gets locked up — when too many people want out at once, there's no easy exit. ARCC isn't that. It trades on the stock exchange like any normal stock. Anyone who wants out just sells their shares. No lockup, no drama.
Different structure, different problem. So I bought the panic.
And very recently the CEO of Ares just dropped $239k of his own money buying shares at $19.13, below the fund's book value of $19.94. When insiders buy below book value with their own money, I pay attention.
CEO-Buys.com
What I'm Reading
Everything you need to know and more about Warren Buffett's last quarter as CEO of Berkshire Hathaway (BRK.B)... and it's a FREE weekly newsletter too! [Link to article]
Quote I'm Thinking About
"Always be a first-rate version of yourself, instead of a second-rate version of somebody else." -Judy Garland
Brian Bollinger from SimplySafeDividends.com shares five companies that are primed for a dividend cut, and a few days later one of them happened! I challenge you to watch this video and not learn something new...
Fund manager Terry Smith is one of my favorites and he was recently on the Behind The Balance Sheet podcast. One interesting takeaway was how he tries to invest in things with a degree of certainty and in his opinion AI isn't very predictable and it's not for him... right now. But when a dominant market player emerges, then that might be his sign to invest in AI.
Disclaimer: This is not investment advice. Do your own research before making any investment decisions.
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Each week you'll learn how to be a better dividend investor and follow the journey of a welder with a passion for passive income to $1,000,000 and beyond.
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