Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?
This is your opportunity to ask questions. No question too simple or too silly.
Culture war topics are accepted, and proposals for a better intro post are appreciated.
Jump in the discussion.
No email address required.
Notes -
$PBR-A. Trades at an extremely low valuation due to perceived political risk. $PBR-A shares trade at a discount to $PBR, and are first in line to receive dividends, which are mandated by Brazilian law. People are worried about Lula being a socialist, but $PBR stock thrived under his previous presidency. Also the government owns half the company and relies on the dividends to pay for education.
So there are two scenarios.
Base case: Business as usual. A $10 investment in $PBR-A will earn perhaps $3 in dividends per year from now until oil stops being a thing (aka post 2050).
Bear case: Brazil ignores its laws and constitution and penalizes foreign investors somehow, in which case $PBR is probably fairly valued (10% odds)
But yeah, index fund or treasuries paying 5% will be better for most people.
More options
Context Copy link