i really need some advice on this

[john kane]

hi guys,

a friend of mine who invests a lot (we are both 21 but his dad has made his $$$ via investments) and is telling me that some private investment to find gas via drilling is worth investing in. he says i could invest $5,000 and if they hit it will return hundreds of thousands of $$$, if not a million. Obviously it looks good but is this really possible?
also, he says if it misses the gas i could claim 90% back of it in tax breaks (he says he can as he is a US citizen, i am a UK citizen but he says i still can. i.e only risking $500

basically wondering on your thoughts,

also, if anyone knows about the canadian market in reagrds to an oil-related company, he has given me a 'good' tip on that, so if i could pm someone who i could ask about that furthur.

id much appreciate replies. i know i am not knowledgable on investment and was hoping someone could tell me if the above sounds legit or dodgy.

thanks

[Sniper]

I hear an investment in the brooklyn bridge is a great investment too! /images/graemlins/wink.gif

[Peter666]

The Canadian market is one of those places where it is possible to invest in one of those oil drilling, precious metals etc. startup companies and make a 1000 time profit. Every year a few companies do that on the Toronto stock exchange. However,there are many many more companies that simply go bust and you can kiss your money bye bye. Possible does not mean probable. It is extremely risky and usually not worth the effort and expense.

If you really trust your friend, put $1000 into the investment, and the other $4000 in your poker bankroll. Then tell us the results.

[DesertCat]

[ QUOTE ]


id much appreciate replies. i know i am not knowledgable on investment and was hoping someone could tell me if the above sounds legit or dodgy.

thanks

[/ QUOTE ]

My vote so far is dodgy. My gut feel is always "what is the catch?". If the investment was so great, they'd keep it in the family. Instead they are trying to offload risk on others. I wouldn't be surprised if the father is getting a portion of your investment either as a management fee or commission. That's how many "rich investors" get rich.

But the biggest thing setting off my alarm bells is this. I'm actually meeting with some lawyers tomorrow to discuss starting an investment fund. They are going to tell me in order to minimize my liabilities, I should only accept investments from "accredited investors" (i.e. rich people so that a court will view them as "knowledgable" and won't be so quick to believe I mislead them in any way) in minimum increments of $100k. The fact that your buddies would actually ask a 21 year old kid for $5k is extremely dodgey, in the U.S. it opens them up to all sorts of potential legal liabilities. That is if they were actually on the up and up.

But don't listen to me. Do your own research. Ask for the offering prospectus, it's a legal document that describes the uses of the money and the risks involved. Read it from begin to end. Feel free to call the people involved, the managers, and ask them questions. Research their backgrounds. Call references, including the law firm they use.

If you get any "push back" at all, that's a huge clue that it's a scam. I.e. if they don't have a prospectus, or don't like answering your questions, or any of the "team" is way too inexperienced or has had prior involvement in possible scams or crimes.

[DesertCat]

Oh, and the reason you ask for large increments when you raise money is that it's an expensive process. You have to pay tens of thousands in legal fees just to get going, and much more in ongoing reporting and auditing. Asking someone for $5k just doesn't make much sense.

[NobodysFreak]

If you got the same package in the mail I did, then I think you're talking about the drilling about to take place in Nevada and Utah. I really don't know much about investing, but apparantly the stock has shot up quite a bit (I'm sure this 10 page color pamphlet had something to do with it). It was around 5 bucks when I checked it out. I'm curious if anyone else knows anything else about this. The company's called Eden Energy. Anyone know anything relevant about them?

[Sniper]

[ QUOTE ]
If you got the same package in the mail I did,

[/ QUOTE ]

I get a package like that for different companies every week... and emails several times a day!