Good Morning *Assuming Ian posts this in the morning. As you've no doubt guessed, this isn't Ian this morning: I've compiled this and emailed it to Ian after some silly questions from idiots emailing me about Rurelec. Silly because they're rather immaterial and treated with some sarcasm...
Question: When will the settlement be paid?
Answer: It doesn't matter, stop worrying about what is really unnecessary as the Market will price the award in and then its time to sell and move on. If the market doesn't price the award in, then continue buying as per previous arrangements, don't get greedy! That's what I'll be doing...but you don't have to! After all it's your money not mine!
Question: What if Bolivia don't pay?
Answer: Not one country has gone against the Arbitration Ruling and not paid. It's a huge big sign around a Country's neck about Bond Prices, confidence to do business/invest and latterly any assets outside the country can be seized. This makes trading very difficult default unlike government bonds.
Question: What about other information we don't know? Such as the amount?
Answer: Well work on a worst case scenario and price that in per share and if it offers 100% upside or more then it's viable as a risk/reward.
Further commentary includes...but I've waited ages? Can I wait until the end result to buy and what happens if it fails.
They're all simple...all investments take time unless you're chasing a ponzi type scheme. You may be able to wait until the award is announced (ruling) but the risks of paying are a higher price for having more known variables are not always worth it. Finally, if it fails, the company becomes a shell company and you've pretty much lost what you've put in. Simple due diligence reduces the likelihood of this though...and trading the stock before proceedings are finalised is useful. They're rarely settled by compromise agreement...there's a possibility on CHL though!
I was reading the post as well, its good to see people paying an interest in this type of investment.
Personally I've been buying and selling RUR over the time frame because it was clearly not in Bolivia's vested interest to settle early. Why would they, it's clear they nationalised the business (more certainties than CHL) it's clear they have to pay, the only 'risk' is the amount of the award (in my view). So work on the basics and it's really simple...unless of course you want to make it complex by looking for questions and statements that HAVE NO BEARING ON A CASE. For me, I'll explain...I personally believe that RUR is worth around £95M post settlement. On the news I dare say if it spikes I'll take some and then if it goes stupid, I'll sell all. I wont have regrets at making stupid amounts of returns over the 3 years.
Remember, anything you read here is NOT an offer or invitation to buy, it's sad that I/Others have to put the Dumb Dumb statements on, but all the same it's important buyers/sellers take responsibility for their own purchases and sales. Likewise, challenge what is being said, research it, do your own so to speak. Don't forget prices go down more than they go up! Likewise, this is my opinion which is based on my own reading and isn't to be taken as a guarantee.
Atb Fraser
Stocks referred to are LSE: RUR (Rurelec) & LSE: CHL (Churchill Mining)
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