It is really up to you whether you want to think that way or not but I will not spend my time convincing you to invest in it. If you think it is a scam then it is a scam. To me it is not, that's it.

You can do your due diligence and at the end of the day it is you who pay for it so you can have your opinion that's fair.

If you read the link that I provided, you can find the answer there. For the benefits of all, I will tell you why. The scheme is more than 1 year because there is more than 1 project or oil rigs. It will continue to go on as long as there is new oil rigs.

The mis-conception of the promised ROI is that it is base on lock down period of two years. After the expiry of two years the rate of return might change. I am not financial expert like you all but simple layman and every opportunity do come with risk. If we are looking for almost zero risk investment you can invest in FD.

If you feel that this is risky just put small portion of your wealth in it and see how it goes. People also say investing in gold is highly rewardable but if you bought the gold at the $1,800 per ounce, you must be cursing. In investment it is all about timing, risk ratio and off-course gut feeling. If your gut feeling is not good, I would not waster my time even to consider it. One good example is Forex trading because to me i think you cannot beat the big shark unless you are extremely good....

I have read the link many times but it does not explain why they resort to capital market instead of leveraging. There are many other projects/business that last >1 year and FYI there are also many debt instruments that cater to the needs of various types of project/business of different time line. There must be some reasons/constraints/purpose they are willing to pay 12%-15% instead of getting cheaper funding via leveraging. We are talking about extra ~10% pa here. If they borrow US$100m, then that is extra US$10m cost per year

Ask yourself. If you have a viable business which needs funding. Will you go to the 1 bank that charge you 5% or will you go to find thousands of investors who you need to pay them 12%-15% ?

Anyway, good luck in your investment

This post has been edited by Showtime747: Dec 27 2013, 11:08 AM

I think what you are talking about is conventional investment or asset class. This is alternative investment class. I have to agree with you that it does not make sense (base on conventional thinking) that why not borrow from bank. You can find out the answer from the company who sell this scheme or you can just ignore it thinking that it is another Geneva. Well nobody will know until things happen.

There are a lot of alternative investment around lately and have you heard of bird nest scheme? This scheme is approved by the government but again a lot of skeptic who doubt the return and the picking up rate is not as fast as I would thought.

Most human are skeptics and will go for the safe investment like FD, unit trust, bonds, etc but slowly for sure I think this scenario will change.

I remember Conrad once said that unit trust investment is rubbish as you paid a lot of fees and the best class of investment is still buying stocks - well everyone know why he said that. In every business there are tricks involved so they will not tell you everything - so the reasons they are not telling is either it is scam or it is trade secret. It depends how you see it and those who succeeded deemed as innovator and those who failed a fool.

I remember reading Uncle Lim's biography about his vision dream of building a casino on a hill. i think most people doubt it can be done and plenty said that it will fail but viola!!

Sorry gone out of topic but it is good that someone has open some questions that if I have opportunity will ask next time but not sure they will answer. Is like my friends many time asked me you want to jump or not and no time to tell you why just do it!!

There is no such thing as conventional or unconventional investment. Whatever fancy name the promoter may call the investment, be it alternative investment, new era investment, hybrid investment etc, eventually it is all about dollar and cent. Changing a name does not alter the objective of any business, which is "making profits". If the business is capable of borrowing at 5.0%, they won't borrow at 5.1%

It is all about level of risk. As said, if the banks don't want to take up the risk, there are many others like you who are willing to. There are always people who are willing to tolerate more risk than a bank. The business just need to raise the returns high enough to lure investors in. In this case, it is 12%

I have to agree with you on this. If the bank cannot tolerate the risk does not mean that it is a scam. There might be other reasons that you and me do not know. It is just like one bank willing to offer loan to a borrower vs another bank who is not willing, so can you say that the borrower is fishy and the bank that do not offer the loan make a wise decision?

It is all about your evaluation and your risk appetite and there is no right or wrong just whether at the end of the day who make the money. It is not about how right or wrong are you but how much you can take risk to achieve something bigger.

Yes, if 1 bank refuse, but the other bank willing to offer loan to a borrower, then I don't think the borrower is fishy.

But if all banks also not willing to offer loans to a borrower, and the borrower has to find investors and pay them 12%, will you say the borrower is fishy now ?

yes, veri fishy.

moni is moni - if got viable biz plan sure bank will do risk anaylsis n then decide base on it.

so if bank decline - def got reason.

anyway, we all talkin as if c.a.g when 2 bank & apply 4 loan & got rejekted... mayb/prob got do nuthin like that in the first place as it is a scam & r waitin 4 ppl 2 'invest' b4 ciow... who know?

each time got good qustion ask ere - get sum 'dunno, dun care, dun wanna disclose, secret secret' answer here... how da hell wan 2 invest if atutude like that... mana transparensi?... wan 2 take my money, but dun wanna answer my kwestion ah?

Can anybody provide any details about this?

they hv a seminar which intrested ppl boleh attend...

It is very simple why some companies, choose to use private investors to fund their projects instead of banks.

Most of the time, there are 3 ways, in which the company can raise capital.

1) Debt financing (bonds, loans from bank etc)
2) Equity financing (stocks)
3) Private Investments

Borrowing from banks belongs to the first category which is debt financing. You must first understand that in order for banks to loan you the money, the waiting period is usually up to 6 months. Furthermore, even if you have Fixed Assets (such as land) to offer to the company as collaterals, usually the LTV ( Loan to value) for such investments is not as high. Usually around 40%. Which means even if you have a collateral which is valued at 10 million, banks would only loan 4 million to you. The bank interest rates for such investments, is also slightly higher at 5-7%.

Given these circumstances, it is easy to see why some companies turn to private investors such as this for capital. 1) The time period for approval in which they can actually get the funds or capital is significantly faster than the bank. Secondly they are able to offer their collateral to investors for value to value, which means that if that if the collateral is valued at 10 million, they can raise up to the amount. '

Thus, even if they have to pay a higher rate of returns back to the investor, they can get the money to invest faster, and in higher amounts, than compared to what they can get from the banks

Obviously you have no experience with big corporate loans. If all information is available for bank's consideration, 3 months duration is possible. And what collateral you want for US$100m corporate loans ? Banks look at the viability of the business, more than collateral. If your business is viable, even if there is no collateral, the bank will provide loans. If you business is not viable, even if you have 100% collateral, banks will ask you to fly kite.

BTW, LTV is a term for consumer property loan. For corporate loans, we dont use such term

1. Look at the time needed for CAG needed to raise financing. Until today they are still taking money from "investors". How many YEARS has it been raising capital ? As compare to bank's MONTHS ?

2. What collateral did CAG offer to investors ? None That could be the reason why bank REFUSED to loan because the risk is too high even for 12% the company willing to pay. Bear in mind banks' other loan is offered only at around 5%



The bottom line is CAG's business is so risky that it failed to get loans from banks, have to pay >12% interest to lure in "investors", and has to take ages to raise financing (what a pity until today they still need to do "marketing" on the forum)

great reply.

manyak informative.

so how... any more cag rep here wanna dare answer back?

open forum... let ppl know. nuthin 2 b afraid if good product mah

1) Okay... First of all, I am sure you do not have experience with corporate loans. Irregardless of whatever business model they are using or how viable it is, banks will ONLY loan you a puny amount of money. Furthermore, banks DO NOT look at future potential when they decide a loan. They will only consider factors, such as current earnings, liabilities, fixed assets etc, and in return you get a puny amount of loan, with high interest rates. Therefore, CAG or the company they are representing , COC, will never be able to raise as much as they can from the private investors. The company they are representing, which is COC, is not a huge multibillion company, it is just a SME producing oil, therefore, it is impossible to get anywhere near what you mentioned in your post. Simply raising funds through private investors, allow them to raise a significantly larger amount, and allows them to expand their business.

2) COC, actually pledged a separate producing oil field as a collateral to CAG. Furthermore they are only allowed to raise the amount of funds to the value of the oil field itself. Lets say the oil field is valued at 10 million, they are only allowed to raise up to 10 million, in which the project will be considered closed, and a new one will begin. Thus in the event of a default the trustee company holding the land, will come in auction off the piece of land, and the investors will have first charge to it. Thus in a way your capital is somewhat secured.

i can explain why genneva failed tho. Although it is not really a scam.

Basically, a short summary is this. You invest money to buy physical gold, and they give you a 3% rate of return per month. At the end of your term of contract, you have 3 options. Either you 1)Keep the gold 2) sell the gold back to genneva 3) reinvest your money

Basically, the idea is that they are speculating on gold prices to remain or keep going up, and people reinvesting their money. Basically if gold prices remain the same or keep rising, everything is good and all, and there is no problem at all.

However, if gold prices drop, investors will lose their money. This is because genneva could no longer afford the payout they agreed on. But wait, you have the gold you buy as a collateral in the event of a default! However, this is far away from the truth, as their is a clause in the contract that says that genneva has no obligations to buy back the gold, thus the investor is forced to either keep the gold, or sell the gold in the primary market at a much lower price. Thus either way, they lose their money.

I was in corporate banking line for many years and my job was to arrange corporate loans for companies. I even arrange syndicated loans (if you have heard of it before) involving many banks (yes, banks do spread their risk among themselves too) to the tunes of hundreds of millions. I guess that is "a puny amount" to you

Banks don't look at the future potential ? It just showed that you have only encountered consumer property loans and credit cards. You are right for consumer banking though. But in corporate loans, future earnings are the primary concern. Banks assess the risk of a business by looking at how viable the business is. In business, past experience, although important as a gauge, does not guarantee that the business will be as profitable in the future. It is therefore important for the bank to assess the future earnings because it is where the borrowers get the money to pay interest to the banks

As opposed to consumer loans like property and credit cards, your current salary is the most important gauge of your future earning potential. If you have a job now that pays a salary of $5k, that means it is most likely you can earn the equivalent or more in the future. Even if you lose your job now, you can most probably find another job from other companies. But in business, if it fails, the income stops and there is no "other employers" that you can earn your money from. So, consumer banking and corporate banking is very different. I can see why you believe they are the same because you have only dealt with your own property and credit cards loans and assume it is the same way in corporate banking. No, it is not.

I am alarmed you said CAG is a "SME" when you are talking about tens or even hundreds of millions. Even if it is a SME, banks will still extend loans. In fact, SME accounts for a significant part of banks' corporate business. And there is no such thing as bank extend only a portion of loans applied. If it is the case, then SME can never grow.

Please do not blindly accept what CAG throw at you. Think logically and critically why a company doesn't resort to a cheap loan instead of paying 12+% interest. It is all about risk transfer. High risk high return. Low risk low return. There is no free lunch in this world. Except from your parents

Wow ! The fact that you think Genneva is not really a scam shows that you are just another greedy "investor" that can't think logically. Blinded by the attractive returns and willing to spread unfounded lies to justify your own investment decision. Now I understand why you think CAG is a good investment

Irregardless, the bottom line is that banks will never loan out as much as the private investors do. Somewhere down there is that they believe that getting more money from private investors and paying a higher interest rate, or rate of return, offsets the benefits of a corporate loan by a bank, which is simply lower interest rates, which is not that low in the first place. If you are really in the corporate banking line, you must understand that this is the natural energy business, which doesnt really fit the portfolio of business from banks in the first place. And if you are saying that the bank is willing to take the risk and loan up to the value of the company itself, then I have nothing to say. I have never heard of banks loaning that much, syndicate or not.

In the league of big oil companys, the company CAG is representing, COC, is really not that big at all. It is somewhat around the top 20 small-medium size oil companies in canada.

Please, understand more about the structure and the organizations involved, before you make a valued judgement on the benefits of a bank loan vs raising capital from investors.

First, genneva is NOT a ponzi scheme. They are simply speculating on gold prices, in which the gold is used as a collateral in the case of a default. I dont see why it is a scam, if investors in the business understand their business model, and decide that they are willing to speculate that gold prices will continue rising, and understand the risk and loss of capital that they are undertaking when gold prices fall.

I feel like talking to a brick wall

Anyway, it is your money. If you feel the "investment" is worth while, just like you feel "Genneva is not a scam", then by all means go ahead and "invest" more. I am not your father and you will be responsible for your own action.

Likewise, the readers who seek info about CAG here will judge for themselves and decide whether CAG is a worthwhile "investment"

Good luck to you