Posted by Davy on July 15th, 2008 in Enlightened-American Portfolio, Stock Research
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While the name has changed, the stock price decline remains the same. American Capital (ex-Strategies) has just seen the share price decimated over the last week and I can’t find any information as to why.

I know many “value investors” wrap themselves in a cloak of confidence and view these drops as buying opportunities. That only holds if you are right! And while markets are not totally efficient, it is dangerous to myopically assume that the market is wrong and you are always right.  So I’m reviewing my information on ACAS to see if I may have missed something.

Personally, It’s scary to watch a stock drop nearly 50% in such a short time span (value investor or not), especially with so little new information. It is natural to wonder if someone out there knows something that you don’t know and is selling the hell out of the stock. I’m also reaching the limits of how big a position I’d like to allocate to AmCap so any further drops may not be advantageous to averaging down.

I’ve got a call in to ACAS investor relations. I’m sure they’re quite busy these days. I’ll inform readers of what I find out.