
Jake Andarius
Andarius Trading Corp.
21
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Posted - 2012.03.23 22:07:00 -
[1] - Quote
Kara Roideater wrote:A suspicious mind might wonder whether the idea of being able to say 'Look! I have done 5 trouble free bonds!' without flagging up the fact that one had, in fact, only been involved in the investment market for 5 weeks might not be rather attractive to someone with nefarious goals. It provides a low effort way to build a 'history' of trustworthiness. In addition, the same suspicious mind might wonder whether very rapidly turning over bonds might allow someone to get away with increasing their bond size much more quickly than would be possible with the traditional 4-8 week length bonds. Further, if that suspicious mind went to sleep and another one came along our second suspicious mind might note that the branding of the bonds by reference to missile names appears to have been determined from the start, possibly suggesting that the bond issuer has always had the fixed intention of running a series of rapidly growing bonds. These possibilities might be thought all the more likely by a third suspicious mind who took into account the uneconomical interest rates being used to sell the bonds.
I could not agree more with you. Moreover, it was extremely well articulated.
Instead of just repeating what you said, I would like to offer a possible explanation for why David thought to offer his bonds this way. At the lower amounts of 3 billion, it is relatively easy to make a 25% return in a week. So even quoting a 10% weekly interest rate offers you a nice 15% profit. Without really looking around to see if what you are doing is the standard, it might be easy to just start operating this way, because you are in fact making a good profit.
That said, Kara is completely right. Offering your bonds on a monthly basis at 5% - 10% is standard. Giving investors around 10% for a week is extraordinarily nice of you, but it is actually overly gracious, perhaps suspiciously so. Investors love 10% a month on a safe investment when they would not have done anything with the money anyway. You should take advantage of that and try to milk as much return on the ISK as you can during the time (i.e. a month) while you are borrowing it. Andarius Trading Corp. |