One-way ticket28
Politics, currency and demand are amongst the risk factors
‘The Russian oil company sounds incredibly risky.’
‘True. The big risk is political. A new government could come in
and nationalise the company you’ve bought. But think about the
product. All businesses need energy. And ask yourself, where is
the oil sold?’
‘Oil is sold all across the world.’
‘And in what currency?’
‘Dollars.’
‘Correct. We all know that the rouble is risky but the sales of this
company are all received in the most popular currency in the
world.’ (Chapter 14 will teach you more about currency.) ‘Selling
in dollars is great news for the investor because it will provide
some more stability.
‘I reckon you’ve got a very steady demand for the product for many
years to come, before a new technology takes over. But it’s still by
far the riskiest investment in our sample, so we have to rank it last.’
Government bond in your country Safest
Shares in a supermarket Low risk
Shares in a luxury holiday company Medium risk
Shares in a Russian oil company High risk
Day 1, 4.30pm – The German–French border
Anisa bought me a coffee from the trolley. An Apple iPhone and
a Moleskine notebook peeked out from her half-opened Mulberry
bag. She wore Nike trainers and Diesel jeans. Even her great
big holdall had a label. Brands are so vital for companies and
investors, so much more important than food and energy.
I returned to the mysterious research report on Cal-Pan. Was it
29Taking risks
accident or design that Uli had given it to me when I left Zurich?
The analyst recommended the shares as a very strong buy. The
company had a near-monopoly in a vital transport link. It was
strong in emerging markets and had the backing of numerous
governments. Earnings were forecast to grow massively over the
next decade and the shares were incredibly underpriced.
We’d stopped at a small country station only ten minutes away
from Strasbourg. Two men in dark suits stood together on the
solitary platform. The passenger doors didn’t open but I saw the
men climb into the driver’s cabin.
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