As important as technology and drill results are…
Jurisdictional risk is one of the most important factors to watch in your stock portfolio.
I have discussed this in detail with the +SWAP Line vs. -SWAP Line Nation concept.
Few analysts truly account for it in their models. Why?
Most of the time they are trying to “please” the company and institutional salesmen with favorable write-ups rather than buying stock personally.
For example, do you think a North American publicly listed company with an asset in Russia or Turkey has the same discount rate as an asset in Nevada?
Well, believe it or not, that is the case…
With almost every published analyst from the big banks applying the same 5% discount rate for a project in Russia or Turkey as in Nevada.
Flat out—that’s just insane.
You don’t need an advanced degree in math to know that analysis is wrong.
Having traveled around the globe, worn bulletproof vests, rode in armored cars, and most importantly invest my own money at the same time and price as my research…
I can assure you I take jurisdictional risk more seriously than any other analyst or banker.