Phone call from PIO today, page-71

Wow - firstly I reckon you should take the public school stuff out of your argument. To my mind, it is neither here nor there where you went to school. I am surpised that you have tried to include that aspect in your post. Put simply - your background is not relevant to the issue being discussed.

I made my points around the current facts of PIO. It has a current SP of 3.4c The company is asking holders to take up an SPP that is offering shares at 3.6c with an attachment of options. There is no guarantee of options. Again - read page 1 of the SPP document.

Secondly, you ought not preempt the nature of a response by making up a trite line about having a "flame suit" on - that is entirely pointless. If you feel disposed to mock my use of the term 'respectfuly' then that is your choice. In my view, it lends no weight whatsoever to your points.

Thirdly, re-read your post and ask yourself how many 'ifs' are needed to be realised to make your points remotely relevant? Frankly, I would rather hold the $555.00 in my hand rather than spending it on something that may not happen. Have you ever heard the term, 'opportunity cost'?

http://www.investopedia.com/terms/o/opportunitycost.asp

Whilst I can see some merit in some of what you note - I also recognise that your figures rely on a SP for PIO of 6.6c. Forgive me for asking - but what exactly has lead you to believe that the SP will increase by ~100% any time soon? It seems that you have made your entire case based on a ~100% increase in the SP. Fair enough I suppose! However, the clear evidence is that the market is not buying that assumption at all. The SP of PIO is where it is today because the market is not seeing what you see. Ask yourself why would the market value the shares lower than the SPP? Why?

One important aspect of investing psychology is accepting the fact that human beings regularly over estimate their ability.

"One of the best documented of all psychological errors is the tendency to be overoptimistic. Excessive optimism occurs when people overestimate the frequency of favourable outcomes and underestimate the frequency of unfavourable outcomes (Shefrin, 2007). For example, individuals underrate the chance of getting divorced, being in a car accident of suffering from a major illness, while they expect to live longer than others, overestimate their success in the work force and believe that their children are especially talented (Sharot, 2011). Optimism is important for financial intermediation; it can affect corporate financial and accounting decisions; it can inflate security prices in the presence of short-sale constraints; and it can lead to over- and under reaction in stock returns. Puri and Robinson (2007) conclude that more optimistic people work harder, expect to retire later, invest more in individual stocks, and save more, however, extreme optimists display financial habits and behaviour that are generally not considered prudent"

source : https://www.griffith.edu.au/__data/...cal-biases-and-decision-making-in-finance.pdf

That document is worth a read. I would recommend it to all posters.

Post your cheque early next week if that is your decision. However, you ought to know why you are doing that and I think it should be a decision based on something other than an overly optimistic assumption of a future SP or a fit of pique based on thumbing a public school nose at the existing facts. In my case, I would never invest the resources of my family without, at the very least, being able to articulate a set of rational reasons as to why I chose one particular course of action over another. However, I can say that it would have nothing to do with where I went to school or any other irrelevant factoid.

I hope some of that proves helpful. I also hope that your investment strategy works out for you.

It is not one that I would choose. I will buy PIO again when the SP reaches ~3.0c or lower. If it does not reach those levels any time soon - then too bad for me. I will have missed out.

Still, one can always buy in when some of the risks have been removed. I do not mind paying 40c if I can see some value and future growth.

Lastly, my comment re 'emotional investing' refers to the habit of ignoring the facts and 'believing' in a company or stock. I invest according to rules, financial knowledge, business connections, risk profile and basic precepts like those noted above.

As an aside, and to prepare for successful investing, I completed a full psychological assessment. I needed to know where my weaknesses were and how much those biases influenced my behaviour. It has worked for me - rather well - at this stage Oh ... I still get stuff wrong and lose dollars on occasions. Nonetheless, I am in front by a long way at the moment. I bought a huge swag of TPM when they were $1.48. I spent a sizeable chunk of my SMSF on those TPM shares. Now they are valued at $11.85

Was it luck or preparation? No idea really! But I still stick to my rules. So who can say?