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Investment Insights. Stay Ahead.

Do You Understand the Country Risk?

BIO: Anthony Milewski is an investing veteran and Chairman of Nickel 28 – a battery metals-focused investment company focusing on metal streaming and royalty agreements.

STORY: Anthony and a friend partnered to drill oil in Indonesia. They pooled $10 million and hit the ground running. After facing one disaster after another, the partners gave up on the venture, having spent all the money, and not a single well was dug.

LEARNING: Understand the context of the foreign country you’re investing in—research both the expected return and expected risk.

“Why are you investing? Do you need to do this? What’s the alternative?”

Anthony Milewski

Guest profile

Anthony Milewski is an investing veteran and Chairman of Nickel 28 – a battery metals-focused investment company with a focus on metal streaming and royalty agreements. The company trades on the Toronto stock exchange.

Anthony has been active in the battery metals industry, including investing in cobalt and actively trading physical cobalt. Previously, he was a member of the investment team at Pala Investments Limited, a leading venture capital firm.

Worst investment ever

A former partner and friend in Australia shared an idea with Anthony about these oil drilling blocks coming up for auction in Indonesia. Anthony figured it was a good idea, and so the two partnered and raised roughly $10 million. They were awarded a block.

The two partners thought they were to drill a couple of wells and become oilmen. It never happened.

They faced one disaster after another, from corruption locally to landowners fighting them to the inability to mobilize because they were being held to ransom by locals. Ultimately, they spent all the money they had raised but never drilled a well.

The partners’ undoing was their naivety to how complicated it would be to do an oil and gas deal with local landowners without a strong local partner.

Lessons learned

  • Understand the context of the foreign country you’re investing in.
  • If a return feels out of whack, even if experts are right, always make sure that you understand the risk.
  • When you see a return that looks like an outsize return, ask why? Then identify what the why is because that is the risk.

Andrew’s takeaways

  • Split your research between the expected return and expected risk.
  • Reducing risk reduces the expected return.
  • Understand your investment environment.

Actionable advice

Be thoughtful when investing in places where you don’t know anything about. Work with a management team that has an edge in that place. And if you don’t trust that investment, buy something else.

Disclaimer

The Oregon Group has full editorial control over all content published on this website and the author has not been compensated or remunerated by any person to provide content for The Oregon Group, and all statements and expressions herein are the sole opinion of The Oregon Group. However, from time to time, The Oregon Group and its directors, officers, partners, employees, authors, or members of their families, as well as persons who are interviewed for articles on this website, may have a long or short position in securities or commodities mentioned and may make purchases and/or sales of those securities or commodities in the open market or otherwise. By accessing and using this website, readers are cautioned to assume that each of the foregoing persons may have a financial interest in all companies and sectors mentioned on this website. Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable., and any such statements are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur.  Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities or commodities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and The Oregon Group undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material. The information provided on this website is for informational purposes only and is not, directly or indirectly, an offer, solicitation of an offer and/or a recommendation to buy or sell any security or commodity, and the information provided on this website should not be construed as any advice or an opinion as to the price at which the securities of any company or commodity may trade at any time. The Oregon Group is a publisher of financial information, not an investment advisor.  We do not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient, and the information provided on this website is not and should not be construed as personal, financial, investment or professional advice. Readers are cautioned to always do their own research and review of publicly available information and to consult their professional and registered advisors before purchasing or selling any securities or commodities and should not rely on the information contained herein. Neither The Oregon Group nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein. By using the Site or any affiliated social media account, you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.

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about the author

Anthony Milewski

Anthony Milewski

Anthony Milewski has spent his entire career in the capital markets, including as company CEO, board director, advisor, founder and investor, with a focus on the energy transition and commodities.

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