Hi, you and Ahhaha are right: the real risk that exists in the investment is Africa. The latter held his fire and stuck to his answer and wasn't drawn out.
But Africa is also the reason to buy the stock
This is where you and I differ, (I'm not sure about Ahhaha):
You say:
It boils down to where one believes the best risk vs reward exists for a given time frame. ... Unfortunately IMO it will take much more time to realize gains than the 2 or 3 decades I have to invest....with the possible exception of South Africa.
In 3 decades I'll be damn near a hundred! My attention span is already short enough, and by then it'll be nanoseconds. I think I need a shorter investment horizon.
I'm not certain what the period may be when Africa is developed over all, as a reasonably prosperous place but from my investment point of view I think it's important that it is mostly NOT prosperous right now.
**I believe this for two reasons: if we start an enterprise from near ground zero in any field and make reasonable progress then gains are, relatively speaking, ENORMOUS and they happen FAST. (Examples: Google, Facebook, Henry Ford, Rowland, Rhodes, Microsoft, China). Tiny Rowland who built the predecessor company to Lonrho basically did it in ten years and yes, he did it in Africa.**
Chinese and Brazilians are going there in a very big way and they believe in development because it's done very good things for them. They are used to political risk and just deal with it. The Chinese particularly think they need what Africa might produce in the way of energy, minerals, food, and Chinese entrepreneurs see cheap labour, and some Europeans never left. All the multi-national oil companies are piling in. The continent has overall economic growth of around 5 – 6% mostly driven by agriculture and resources. Manufacturing has doubled in the last decade but is still only about 10% of the continent's economic activity. But still, doubling manufacturing output in a decade is impressive, and that 5 -6% growth is the average, which means some places are growing faster than China! It's becoming big FAST.
Is there room in all this for a company with good, continent-wide reputation that sells port services to oil companies, clean water and agricultural machinery to Africans, (lots of stuff can be sold from an ag equipment store), camp accommodation and food services to oil and mining companies, hotel rooms to businessmen, reliable payroll services, food products distribution straight into domestic and foreign supermarket chains, information services to African businesses....?
These guys have been at it about six years and revenues are starting to ramp up so the timing is about right. See asterisked paragraph, above.
Of course I don't know if this is going to come in big but it looks like they have a good shot at it.
There's risk in this kind of investment but in some ways it looks less risky than resource development in Canada's far North. LOTS can go wrong with that. Or, getting permission to build a pipeline from Alberta to Texas. The amount of capital, time and talent tied up by that is mind boggling and the shareholders aren't going to see any return on it for years.
As development companies go, it looks pretty good. The management are serious people and have attracted some good large shareholders who seem willing so far, to pony up when the company wants some more equity investment. The basic business plan allows for political contingencies. The part of the company that looks dubious to me is the airline but it looks like management is doing something about that. We'll see....
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