One of our biggest holdings, MAIN (Main Street Capital), has taken a hit this year — down roughly 15-17% year-to-date.

Does it scare us? Not really.

MAIN is a Business Development Company (BDC) that primarily lends to small and medium-sized American companies. These businesses are highly sensitive to the economic cycle, and MAIN has always moved in clear cycles.

Right now we’re in a weak phase: high interest rates, increased loan losses, and general concern in the private credit market. MAIN reported weak Q1 numbers in early May and missed estimates, which didn’t help.

This is classic cyclical behavior for MAIN. Strong periods come when the economy is booming and rates are low. Weak periods hit when rates are high and credit risks rise — exactly where we are now.

Importantly, it’s not just MAIN. The entire BDC sector is under pressure. This is an environmental issue, not a company-specific disaster.

So for now, we keep calm and carry on.

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This is a new post on the new dewlar.me blog.
You can find the old blog here:https://mrsdewlar.blogspot.com

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