Gordo,
Thanks for the response. It certainly clears up most of the questions I had.
I have to say though I worry over any company funded by Canadian investors that operates solely in a foreign land. It is not I worry because TOM is solely operating in China. I would be equally concerned if a group of Canadians formerly from England were to raise capital in Canada and operate a business solely and uniquely in England.
If I were an investor of such a company, I would be concerned simply because the success of my investment will depend too much on the good faith of management.
Operating in a foreign land makes it especially difficult to verify the validity of the financial numbers. We have already seen how hard enough for auditors to verify the numbers of businesses in Canada (read Philip Services, and YBM.)
An investor is overly exposed to many more risks in this kind of an arrangement, and these inherent risks will limit the increase in the stock price. Risks such as: non-arms length associations with local companies to siphon profits away and the ease of prinicipals to abandon the company and "return to homeland".
In buying a stock, I like the added assurance that the main principals befind the company have houses, families, friends, and business associates with deep roots in Canada. This way, if they screw up the business, or if there are improprieties in the business, the resulting consequences may be that they lose their friends, their families will be ashamed of them, they lose the credentials of doing further business in Canada, they can't proudly attend their high school re-unions, restaurants won't continue to reserve the corner tables for them, and perhaps they will even need to escape and live the rest of their lives in a foreign land, like Felderhoff of the famed BreX.
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