Wave Theory for Alternative Investments

I love alternative investments. They can be much more exciting than stocks and bonds. Venture capital, private equity, hedge funds, commodities, and precious metals make up the investment arena of 'alternatives'.

Wave Theory For Alternative Investments: Riding The Wave with Hedge Funds, Commodities, and Venture Capital by Stephen Todd Walker is the most complete book on alternative investments I have ever read. It is filled with numerous tables, charts, and graphs to make for easy reading.

Chapter 3 is probably the most important as it covers the advantages and disadvantages of all types of alternatives, and even more important, the section called Top 25 Alternative Surfing Maneuvers.

Here's a bit of trivia from the book. Did you know that back in 1999, the CIA (yes the US government's Central Intelligence Agency) set up its own venture capital fund? The fund, called In-Q-Tel, has invested in over 100 companies. It even invested in the technology that is now known as Google Earth.

Chapter 9 is my favorite section of the book, called Venture Capital Investment Vehicles. It covers what to invest in, how to invest, and the top twenty questions you should be asking before committing your money.

One great feature of the book is that Walker provides plenty of suggested web sites and other books.

If you have ever been interested in investing in alternative investments, or have started to dig your foot in the alternative water, or even if you have already been investing for a while, you should read Wave Theory For Alternative Investments.

Venture Capital Investment with a 7.2% Yield

Private equity companies take large positions in private companies, and sometimes own the entire companies. Often, these companies are referred to as venture capital firms. Sometimes, the only way to invest in a 'hot' company is through a private equity company. As an example, many years ago, I invested in a company called the Nautilus Fund, which happened to own an equity position in some small privately owned technology company with the odd name of Apple (AAPL).

At the time, I was using an Apple II computer with the Visicalc spreadsheet program. I couldn't believe that calculations could be done so easily on a small machine and then printed out. I was working for an investment firm at the time and wanted to invest in this little Apple company, but unfortunately, it wasn't publicly traded. Fortunately, I read in a Forbes article that a publicly traded venture capital company called the Nautilus Fund, had an equity interest in Apple. So to make a long story short, I bought some Nautilus for myself and some relatives, Apple went public, and Apple shares were spun off to the Nautilus shareholders.

Of course, investing in private equity can be very risky, which is why most private private equity firms are private. The few publicly traded ones gives smaller investors an opportunity to participate in this potentially very lucrative investment arena. To cut down on risk, many investors seek out the ones that invest in debt of private companies in addition to equity, so that income can be generated for the shareholders.

An example is Gladstone Capital Corporation (GLAD), which is structured as a closed-end management investment company. The company diversifies its portfolio by investing in both equity and debt securities, and allocating funds towards both small and medium-sized private companies. Gladstone, which has paid monthly dividends for many years, generates a yield of 7.2%. The stock trades at 12.8 times forward earnings and sells for about 3.5% below book value.

Gladstone provides financing for a very diverse portfolio of companies across many industries, including Country Club Enterprises which is the sole distributor of Club Car and E-Z-Go golf carts in the northeast U.S., Legend Communications of Wyoming which is the largest radio operator in their region, Reliable Biopharmaceutical which is a manufacturer of high value advanced pharmaceutical and biochemical products for the generic injectable pharmaceutical industry, Cavert Wire which is the largest supplier of non-galvanized bailing wire in the country, Newhall Laboratories which markets La Bella™, Golden Sun™, and Rebound™ personal care products, B-Dry which is the oldest basement waterproofer in the U.S., Access Television Network which distributes infomercials and other paid programming through about 300 cable television systems, and Westlake Hardware which is the largest member of the ACE Hardware Corporation buying cooperative.

Gladstone's earning announcement will be held November 22.

If you like high yield stocks, such as REITs, utilities, and ETFs, check out the free downloadable lists at WallStreetNewsNetwork.com.

Disclosure: Author owns AAPL at the time the article is written.

By Stockerblog.com