johnale wrote:
Method - you obviously know your stuff - and your analysis is logical.
thanks for sharing. Despite your condescension.
I said to you before - I agree with you in part. as a long investor - sure. I could see investing in both at some ratio to take advantage of different scenarios.
But you are basing a lot of these risk mitigation investing decisions on a buisness from the past 6mths. Especially Brent who is just a perma bear who actually doesn't care.
when the reality is a far different buisness over the next 6 months.
Production tripling, costs reduced, additional products, new management with cpg experience, with accelerating demand, where competitors are falling by the wayside.
visionary? I didn't predict this - these are just the facts of the current buisness - industry.
If John Doe had 10 bucks to invest right now with a 4 month horizon in a risky industry the equity provides a compelling investment. the equity offers liquidity and ability to have massive gains as the buisness turns around - especially with anectodal evidence that demand has been excellent.
the debenture may go up too - maybe even equal
in value - or more - but more difficult to trade for sure.
If in 4 month from now we are in the same position - with minimal or no growth - then I wouldn't invest in fire at all - never mind the debt.
you have 4 months to see 2 quarters and really evaluate where the buisness is going.
then from there - the maturity of the debenture becomes a more pressing matter and one must make a decision where to allocate funds.
But if the buisness trends in a positive direction and the company can use debt to pay the debenture - the equity may give you a far greater return.