Country Risk - A Game-Changer?

By: Ian Campbell | Thu, Oct 20, 2011
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If you invest in publicly traded equities in general, and more specifically publicly traded resource equities, I think Country Risk as ever more important in what I see to be the an increasingly fragile current world and country specific economic condition.

I believe Country Risk will become increasingly important as both developed and developing country populations become more and more demanding on their governments through protests and disruptive activities. Clearly, or so it seems, technology and the internet are leading to more 'have-nots' learning what the 'haves' have, becoming more resentful of the widening differences in those two positions, and being able to effectively organize using cell phones and other internet communication devices.

Because of my belief in likely prospective Country Risk escalation, and because many publicly traded Canadian Mining and Oil & Gas Companies have their principal operations in a large number of developing and developed countries, we soon will be introducing a Country Risk research capability to Subscribers of To put the 'Country Diversification' in perspective, the approximate 1,550 companies for whom we currently offer research data collectively operate in over 90% of the world's just over 190 countries.

Two recent articles to some degree highlight Country Risk issues:

The principal reasons I see Country Risk and Country Risk 'markers' as important things to watch for and think about if you invest or trade in mining or oil & gas equities are:

I suggest that if you invest or trade in mining or oil & gas equities that you start to think about, and focus on, Country Risk in a big way. This is almost certainly an area that you will have to research for yourself and reach your own conclusions on. This is because, at least as I see things, neither Investment Bankers or Company Managements typically will tend to will discount or understate Country Risk in their analysis and pronouncements until it hits them square over the head.



Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
Business Transition Simplified

Through his website and his Business Transition & Valuation Review newsletter Ian R. Campbell shares his perspectives on business transition, business valuation and world economic and financial markets influences on those two topics. A recognized business valuation and transition authority, he founded Toronto based Campbell Valuation Partners Limited (1976). He currently is working to bring his business valuation and transition experience to both business owners and their advisors in our new economic, business and financial markets normal.

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