Invest in Greek stocks?

[DTEJD1997]

Hey all:

I'm a value investor with a contrarian edge...

I've been poking around Greek stocks, trying to figure out which are the best potential investments.

I've been thinking about "Greek Organization of Football Prognosticators". This is a Greek company that has a monopoly on certain forms of betting in Greece & Cypress. They have lottery type games and football "soccer" betting. They are also in the running to get internet gaming for Greece.

As a result of the financial crisis, they paid extra money to the Greek government to get their franchise extended until 2030. The Greek government owns about 30% of the company.

The company released earnings a few weeks ago and they are down about 18%.

They have ADR's traded on the pink sheets. The ticker is GOFPY.pk. Each US ADR is equivalent to 1/2 of a "regular" Greek share.

The company is making money hand over fist. The company reported earnings of a little OVER $1/ADR. This is well into their financial crisis.

I almost forgot. The dividend has been cut, but they claim they are going to pay it out in June. The dividend will be about $.45/ADR.

The price today is well under $3.

The main risk as I see it is that Greek collapses and becomes a lawless society, see "Mad Max". I really don't think that is in anyone's interest.

The other risk is that Greece nationalizes everything and takes this company. I don't think they will nationalize anything other than the banks. A lot of people would be VERY mad with the Greek government...

If Greece leaves the Euro, they will still want to bet. I also presume that they will be betting $1 or $2 equivalent bets too. Even if the new Drachma is devalued, Greeks will still be able to afford a few dollar bet....

Any thoughts?

[barrytrot]

Good idea except ONE KEY THING:

TIMING


As an example of this, let's say you believed that Apple was going to continue to rise despite the 2008 down turn which was mostly expected at the time.

So you buy it at the start of 2008. I think it was roughly 150 at that time.

Then, of course, it proceeded to go down by 50% despite being awesome. Now, of course it is up in the 500's for a triple bagger as they say.


So if you can pick the correct company(s) and wait for 3 to 5 years it sounds like a valid plan of attack. However, you may see WILD SWINGS in the mean time. As long as your investment plan considers and is able to handle those then go for it assuming your information is sound.

[Market Harmony]

What happened in Thailand around 1997? Expect the same with Greece

edit: for more info, then research "Asian Crisis"

[CtrlAltBernanke]

Now I am far from an expert so if anybody disagrees with me please feel free to call me ignorant, but wanting to invest in Greek stocks right now reminds me when I was deployed and everybody was talking about buying one million dollars in Iraqi dinar. I know it's two different things but the ends results sound about the same to me.

[barrytrot]

To parrot ctrlAlt somewhat:

This is one of those "get rich quick" type ideas. Thus far I've NEVER met someone that has gotten rich quick but know a couple dozen millionaires personally. All of them got rich slow!


This also has a key problem: When the government has issues they often just stick it to their citizens to solve their problems

[DTEJD1997]

How is this is a "get rich quick" scheme?

The stock is making money, solid money. They earned money for 2011, even through the downturn & crisis. I would also point out that this is not a small company. They earned a little over 500 million euro. That is like $700MM US.

Here is a clipping from a Greek website:

"Monopolist in the Greek gambling market - the public company OPAP announced the results for 2011, which remain positive despite the crisis. The net profit of the company is more than 537 million euro, although last year was one of the worst for the Greek economy and recession exceeded 7%. The decline in the company’s net profit is 6.7%"

The company is making money, paying a dividend and financially stable. The company operates in one of the most recession resistant industries there is.

The fundamentals of valuation are compelling.

The risk is that the situation in Greece goes haywire. You could have anarchy (Mad Max style), you could have nationalization of companies (ala communism), or you could have Greece leave the Euro and have the currency go haywire.

As to currency risk, you are buying a company, not the currency. If the Drachma is devalued (if Greece is even out of the Euro), they can charge 2,4,6,8 drachma or whatever is needed to keep a bet at the Drachma equivalent of 2 Euros. Thus the betting level remains relatively stable, it just takes more Drachma. I also believe that MOST of their bets are for UNDER 5 euro. Sort of like buying scratch off tickets at the local quicky mart.

The company could also be nationalized, but I just don't see that happening. A lot of countries when they nationalize industries, still pay something to the shareholders. It is a loss, but not a total loss.

I think if things work out you could EVENTUALLY make 3X or maybe 4X return OVER A PERIOD OF A FEW YEARS. You will also collect dividends. If things don't work out, I don't think you'll lose everything, maybe a 50 to 75% hit.

If you think this is too risky, that is fine. I just don't see it as a "get rich quick scheme" or something that is unfounded. It might work, it might not.

We'll see.

[Treetop]

I think its a valid idea, I think it would be really tricky to pick ONE stock that will rise out of this though. Id pick atleast a dozen if I was going to do something similar.

[Z00]

OK, I just bought 3000 shares at 2.65 in a fantasy market game. Let's see where it goes. LOL

Placed Action Qty Sym Type Price Act. Price Expires
10:40pm Buy 3,000 GOFPY Market -- -- May 22

[DTEJD1997]

OK:

Fair enough. I personally own 600 shares. Not a big deal. It is a gamble, but one I think there is good odds on.

Yes, I do have a portfolio of stocks, and this is one of my smaller positions.

If you think this is a prudent speculation, it might be worth putting 1% or so of your portfolio in it.

I was looking at largest refiner in Greece too. None of the banks.

I also looked Pan Hellenic Coca-Cola bottling, but this stock did not seem to be "on markdown". They also get MOST of their revenue outside of Greece.

I don't think the shipping companies will hold up.

There are not too many Greek ADR's that are easily available to American investors.

If anyone else knows of Greek stocks that Americans can easily buy, let me know.

Thanks!

[barrytrot]

Which company did you buy? It would be interesting to me to watch the results.

BTW: If you say your motivation is "not to get rich quick" that is enough for me. Naturally I cannot know your motivations by reading a couple forum posts. I would still recommend against this action simply because I never invest in something I think has any chance of destroying my initial capital.

[DTEJD1997]

Barry:

I actually have purchased GOFPY.pk. It is one stock in my portfolio and a rather small position. I actually eat my cooking.

Not to try and pick an argument with you, but if you never in anything that you think has any chance of destroying your capital, how could you do anything?

Everything has some amount risk, even cash, bank deposits, Treasury bonds, AAA corporate, precious metals, etc.

Some things have more risk than others, but nothing is risk free.

I think the way to do it is to look at the possibility of a positive outcome vs. a negative outcome. Does the reward exceed the risk?

My family has done VERY well by investing in smaller, sometimes obscure, and frequently contrarian investments over the last 20 years...

We'll see if it continues...

I wish everyone good luck!

[barrytrot]

It's quite easy to invest in things with zero logical chance of destruction.

Destruction of the entire United States or economy means I'm dead anyway, so I don't worry about that since that's "end game".

Everything other than "end game" can be accounted for pretty easily.

Take Walmart for example. Perfect business model, well run business. It was simple to predict they would still be thriving in 10 years back in 2002. Microsoft as well. Several others.

NOTE: I never invested a dime in Walmart. They are just my example of a company that you know is going to be there as long as the United States is standing.

NOTE: If the United States is standing I'm boned regardless so I don't need to worry about that

[Z00]

If you want to try a real gamble, AAMRQ is under .50
Do you think American Airlines will survive? Buy a 1000 share lottery ticket.

[barrytrot]

That's a good example of a company that is 100% definitely going away. Either by being bought out or just disintegrating.

Can you make money on the stock? Yes. Some may make millions in fact!

Is the company destined to be here in 5 years? Definitely not.

That's why I'm one of the few here that think facebook will be a solid investment. They aren't going away for 5 years. After that? Possibly, but they have engrained themselves in society like no other company EVER so I'm actually on the side of them staying for a minimum of 10 years.

[Z00]

True they may well last but 38.00 was an unrealistic price. MayBe 10.00 would be more realistic.

[Treetop]

I dont know about facebook barry. Im not on any of those sites, but all I heard about for awhile was myspace... then facebook took over. Someone could outdo them, or be the new fad. the younger generation ebraces etc... I wouldnt assume they definitely have 10 years at the top.

there was a time AOL was basically the internet. they are a faint shadow now. In fact I know a guy who got in on the bottom with AOL, literally could have cashed out his 40k for somewhere in the millions Im told. He thought they would be a giant forever, and rode the stock back down to his 40k being worth about 50k.

[barrytrot]

Facebook is far different than any you mentioned.

They are engrained. Will they always be? Probably not. But are they so deep they are going to take multiple years to excise? Yes.

Myspace, aol, and others didn't have the vision to become a part of society that facebook clearly has and has accomplished.

[Treetop]

I looked up some AOL stats... at one point 40% of AL CDs produced were the AOL CDs. At one point they had over 60% of the entire market share of the internet, and I found any articles from that era wondering if any other provider could ever compete, because AOL had locked them in. We know now of course AOL is second or third rate.

Now if you said google Id have to agree it will be here and at the top in 10 years. Facebook Im not convinced of that at all. Actually google is one of the only internet companies I personally would bet on to retain their market share or close for 10 years out.

Not that this matters to much, but there was indeed a time AOL was king of the net, with many thinking they would be there forever, and that is long gone.

[barrytrot]

AOL was not in any other part of society other than it's own usage. The fact that 40% of all CD's were AOL is neat, but doesn't speak to the penetration BEYOND it's own market that Facebook has.

AOL was a giant internet provider. But that's what it did.

Facebook stretches beyond it's own walls into virtually every major site on the net.


Anyway, you don't need to agree with me And, more than likely I won't pick up any facebook as it won't go as cheaply as I think is fair value. But if I do, I"ll be willing to be a "fiver" with anyone here that I make money on the deal

[Treetop]

I wouldnt bet you 5 bucks on whether or not you will make money on the deal. I would however make a bet as to whether or not facebook retains its current position out to 10 years.

[Treetop]

If you liked the AOL CD stat, another one is for several weeks when they had a big promotion to set up for ALL CDs produced on the planet were apparently AOL CDs for several weeks.

[Treetop]

http://www.dreamgrow.com/top-10-social- ... arch-2012/

i guess Im just derailing the thread here. sorry, but heres a chart with social media and current market shares... It seems currently facebook had somewhere around the percentage of social media market share as AOL did as an internet provider..

[Treetop]

Also on that chart you will see myspace USED to have nearly that market share and they are dropping like a stone. Things move fast on the net...

[barrytrot]

I wouldnt bet you 5 bucks on whether or not you will make money on the deal. I would however make a bet as to whether or not facebook retains its current position out to 10 years.

I'll take that bet if you are serious.

[barrytrot]

Also on that chart you will see myspace USED to have nearly that market share and they are dropping like a stone. Things move fast on the net...

Again, market share is neat, but not what I'm talking about.

I'm talking about how it is engrained. Go to most sites on the net that have a traffic over 1k/month and you will see "Facebook like". That's engrained.

Myspace, AOL, whatever were all CONTAINED.

Facebook has migrated and taken a foot hold in completely separate businesses.