Securities:

Define objectives.
Diversify for risk reduction.
Evaluate risk
Assess reasonableness of projected events.
Determine likely need for additional investment to achieve success.
Understand what can go wrong adversely impacting projections.
Beware of that which is too good to be true.
Compare achievement of projected returns with less risky alternatives.
Investigate exit possibilities.
Accept success as good fortune and learn from failure.

 

Royalties:

Are less risky and volatile than equity.
It is easier to project revenue trends than per share profits and valuations.
Risk reduction can be further achieved by portfolio diversification
Are protected from the damage of equity dilution.
Should be structured to provide Increasing levels of return.
Obtain answers to “what if?” questions when considering the investment.
Should only be purchased if projected results are reasonable.
Consider penalties for the issuer if the projections are significantly wrong.
Projected results can be cumulatively assured.
May be sold or redeemed.

 

Arthur Lipper, Chairman
British Far East Holdings Ltd
chairman@REXRoyalties.com
858 793 7100

 

 

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