re: News: Generating returns without market r...
Fair dinkum gassin123, what a lot of nonsense!
Of course shorters add liquidity to the market. There is always a buyer and a seller! If a shorter closes their position higher than they originally opened the sale {which a lot of them have to because they are borrowing the money to short in the first place} then the share price has upward pressure on it!
The questions that really need to be asked are:
Did the weather affect AGO's production as much as it did MGX & FMG?
Was AGO able to partly compensate for the bad weather like FMG did with its large port inventories?
Did the AGO's trucking model fair better then FMG's rail model during the bad weather.
Instead of increasing production as forecast is there a good chance that AGO's production will have decreased dramatically?
How large was the capex during the last quarter?
Given the big fall in the IO price how far did AGO's cash position fall during the last quarter?
If shorters are to blame for a falling SP, how come last time AGO's SP went from .92 in January to 1.15 in February(up 25%), between 9 and 10% of the company was shorted?
Do you think that a short was a good position to open when the SP was at .92 in January or are most of the people who short just as idiotic as most of the people who go long?
Why has the company been talking up a near rail deal for years and not doing anything about it?
Why do dead lines for making a deal come and go and Share holders seem none the wiser?
The futures market is down again today, however it is looking strong for the Iron Ore price right up until September. This aside should we be worried short term about the large Iron Ore inventories in the Ports in China?
This is from the Dalian Commodities exchange web site:
China Tightens Financing for Iron Ore, Released Inventories Likely to Cause Price Collapse
Apr 17, 2014
The Chinese government’s moves in suppressing the bulk commodities-based financing behaviors are likely to make tens of millions of tons of iron ore dormant in domestic ports flood into the market suddenly, thus leading to a new wave of iron ore price plunge.
Analysts and traders warned that if the weak demand for iron and steel pushes down the iron ore price and prompts the banks to shrink the loans with the iron ore as collateral, the investors financing on the iron ore without hedging may be at risk.
Chinese government’ moves in tightening the credit have caused the buyers to break the contracts of soybean import worth US$ 300 million in recent weeks, and the worries that the copper financing agreements may no longer work helped to push the copper price down to a 3.5-year low in March.
With the steel prices diving, the iron ore price used to tumble by 8% in one day to hit a 17-month low in March; although the price has picked up ever since, the fragile outlook for China's consumption of steel as well as the huge iron ore inventories at ports means that the price is likely to suffer another round of significant frustration.
Last week, China's iron ore stocks at ports reached over 108 million tons, close to the record highs, which is enough to build nearly 1,200 New York Empire State Buildings.
AGO Price at posting:
97.0¢ Sentiment: ST Sell Disclosure: Not Held
