Wednesday, May 13, 2009

Violent Portfolio: Adding PSEC, 1 month update

Well, PSEC will not perform that well for the remainder of their fiscal year. 4Q earnings guidance is .30-.40/share. Nevertheless, the investment thesis remains intact for one of the best managed publicly traded private equity/mezzanine debt firms, with the cushion of rising energy prices on their side. Couple that with $40 million in cash on the books now, our dividend will still be safe.

With the recent market volatility you can lock in June 2009 strike 10 puts at $1.00 (use limit orders and someone is likely to bite), and I would be happy to do that, effectively being priced extremely close to recent insider purchases (effective buy in price is $9).

Updated portfolio - note some options (BCO) will be expiring this week. Also current portfolio is in the positive at $373 using market prices. Net investment is now $4972 and a 7.5% return on net investment. Off the $100k investment, it is a .004% return. Paltry right now, but as we add a greater # of investments we should reach a 1-3% monthly return!

When BCO options expire I will adjust it to a long position with the price of $30, and credit my cash with $320.

strategy security price Units Cost Net
Sell Short BCOQF 1.6 -200 1 319
Buy PBKS 7.95 1000 5 -7955
Sell Short MTB 48.23 -170 5 8194.1
Buy FMCN 7 1000 5 -7005
Sell Short SINA 27.5 -365 5 10032.5
Buy Put FUOVA 1 1000 1 -999
Buy JAVA 9.15 1000 5 -9155
Short Call SUQJB 0.05 -1000 1 49
Short Put SUQVA 0.35 -1000 1 349
Short Put WHRFU 4 -200 1 799
Short Put PQSRB 1 -400 1 399

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