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Capital Southwest Corporation


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Does anybody follow Capital Southwest Corporation (CSWC)?


When I apply a 35% capital gains haircut to the shares held of publicly traded companies (including HLYS), apply a 10 multiple to RectorSeal, Whitmore, and Balco, add cash, mark down all other investments by 75%, and subtract liabilities, I get a NAV well above what CSWC is trading at.


For those of you who have followed the company, is it likely that they will use the cash proceeds from their Lifemark Group divestiture to buyback shares? 


Does the company always trade at such a large discount to NAV?


CSWC appears to be in the portfolios of LUK and Third Avenue, so that gives me comfort that this is not an Allied Capital-like situation. 

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They control Heelys which I own, I wish they would sell their position!


I looked at them once but felt there wasn't a tremendous amount of upside but truly don't know enough to comment.


I look for either sure things, or great risk/reward scenarios where the upside is clearly over 100% if it comes.

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I looked into them back at in the late 90s I believe. At that time they were also trading at a decent discount to the relitivly easily calculated assets that they held. they intrigued me then but never had a compelling reason to buy them and so I never did. I haven't kept up with them lately but they sound like I remember them being at that time.


Marty Whitman held them for a while in his mutual fund and so he would have a writeup on them in his letters a number of years ago if you would like to find it.



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