Saturday, November 22, 2014

ARCP discussion in the Week in Review Podcast at Sharpe Trade

The first of many "Week in review" podcasts is now up on Sharpe Trade.

Some of you also follow Dan Shy from NoNonsenseTrading and might be familiar with his Week in Review podcast he puts out. That is something we wanted to continue on with Sharpe Trade and so far its been well received. I think we really did did a good job for our first podcast. But of course I am biased. What did you think of it?

I discussed quite a bit of my thoughts on ARCP but time restraints kept me from speaking everything I wanted to say. A lot of investors got into ARCP and are still in it. As I mentioned, I was it in it for awhile and sold on Oct 11. I didn't mention it at the time and don't want to be accused of making up history so here is the trade confirmation.

I see a lot of people discuss that out there that nobody could have seen the accounting scandal coming ahead of time and could have prevented avoiding the loss. I disagree strongly. While you could not know the accounting scandal specifically was going to happen, an investor could know that at some point something was going to happen due to management making poor decisions.

As I mention in the podcast, ARCP was a series of bad choices by management that were in their favor not shareholders. The board of directors is supposed to be looking out for us but they were along for the ride.

It isn't only retail that missed a lot of warning signs with ARCP. Goldman Sacs has a top 50 favorite stocks researched from 775 hedge funds and they looked at the top 10 holdings of these funds. ARCP is in the list as being a favorite.. of the professionals... who charge money for their picks and have teams of researches working for them. If you missed the warning signs then don't feel bad at all.

If you are a fellow blogger who is still in ARCP please note I am not "calling out" anyone or trying to point at others losing investments. Lord knows I have been in many myself and will once again in the future. I've been burned by this exact thing, poor management,.What happened to ARCP is a great learning experience if one can get past the denial game of "nobody could see it coming" and dig into the public data that was always available.

Disclaimer: The investments and trades discussed are not recommendations for others. I am not a financial planner, financial adviser, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.


  1. You sold at the most opportune of times, PMU! It's hard to say if shareholders should have seen this coming, but you're right about the questionnable management decisions. That's what kept me from jumping in too, even though the dividend yield is so attractive.

    Best wishes,

    1. I've seen many a dividend investor succumb to "the yield is too good to pass up". gets a person in trouble too often.