Hedge Funds use OPM to speculate in derivatives, which are high-risk financial instruments. The recent failure of a growing number of Hedge Funds underscores high-risk nature of their speculations. Insurance companies use actuaries to ensure a mathematical bias in favor of company. Pension funds often take too many risks or are badly structured. The U.S. Social Security Program is a textbook example of a mathematically impossible retirement plan.

Beowulf Investments Approach to OPM

Our working rule that is company(s) in which we invest must be publicly traded in United States. The reason is that this gives Beowulf Investments access to OPM. We can sell our shares to public.

We are significantly different than other private placement merchant banks. We will only sell sufficient shares to recover our risk capital. We are willing to defer profits for years, since we can't lose our money and see sale of public company in a M&A as best way to maximize our profits. Our risk is zero. Our reward is about sixty-fold our initial investment. It's a winning bet. The Risk Reward Ratio is 0/66.

The VCP Program goes further. It advises investors supplying OPM to follow our example. Sell some of their shares to recover their risk capital and keep balance until public company is sold, which will maximize their profit. The GVIC (Global Village Investment Club) & ISI (International Stock Investors Newsletter) investment risk is zero after sixty days. Their potential profit at time of M&A acquisition is about twenty-two fold. The Risk Reward Ratio is 0/22. As for last buyers of a VCP stock, our discount benefits program should save them cost of their 100-share investment every year. After first year, their Risk Reward Ratio should be 0/2.

To my way of thinking, ONLY wise gamble is a Risk/Reward ratio where reward is greater than risk, greater better. Too many entrepreneurs and business owners think that folks with OPM should accept a negative Risk/Reward ratio. In fact, too many people with money failed to take statistics and probability courses in college.

Consistent Winners

The OPM winners are people who always want number on right of Risk/Reward ratio to be far larger than number on left of Risk/Reward ratio. If you are going to design an investment to attract OPM, you should ensure that Reward is a multiple of risk. There's still no guarantee that folks with OPM will win. However, odds will be greatly in their favor.

To contact author: Visit Beowulf Investments website: [http://home.earthlink.net/~beowulfinvestments/] Or, visit Global Village Investment Club Website: [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]

At time of acquisition of your company by an industry giant, all private company sellers who have sold their companies to our public company client, will benefit enormously by sale.

At time of acquisition of our public company client, private company owners used in our example and acquired before our client had US$20 million in revenues should see value of their 300,000 shares double to US$40/share and be worth US$12,000,000. For a private cash-producing asset valued at US$4,000,000, owners selling to our public company client will be effectively paid US$13,000,000 for something that was actually worth US$4,000,000

At time of acquisition of our public company client, private company owners who were acquired after our public company client had US$20 million in assets will see their shares double in value. Thus, any private company selling to our public company client will make more money than selling to a local private buyer.

Client Profits Should Be Source of Cash for Acquisitions

The reason that our clients are buying cash-producing assets is to use those profits to buy still more cash-producing assets, following successful CISCO system.

You must invest your profits to grow your company. The fact you can use your shares to leverage your profits doesn't reduce or eliminate need for profits.

It's a fact that companies make less profit in high tax countries rather than low tax countries. It's equally a fact that profits earned in any restricted currency have little demand outside country printing that currency. Thus, logic for tax planning that results in an after-tax 20% profit in any free-trading currency. And a key reason for non-US companies to take their companies public using US system.

The Multinational Advantage

As noted in my article Invest in Multinational Corporations, foreign investors in most countries receive massive incentives that offset at least 50% of costs of building local factories for exported products. For some of our clients, these incentive programs are worth tens of millions of dollars. If you wish to succeed powerfully in today's world, you must take advantage of multinational markets.

If You Have Money, You Don't Need Money

There is a saying in America that banks only lend money to businesses which don't need it. If you consider proposed balance sheet of your company once you pass US$20 million in revenues mark, you will find it easy to borrow money in Western countries. Borrowing money, to increase revenues well beyond cost of that money, makes sense.

There is never a shortage of investment capital. There is always a shortage of sensible Risk/Reward investments for that money. Any proposal that doesn't heavily rely upon risk capital is always more attractive to investors than one that is little more than a gamble with odds against investors.

To contact author: Visit Beowulf Investments website: [http://home.earthlink.net/~beowulfinvestments/] Or, visit Global Village Investment Club Website: [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]