Iron ore price, page-15267

Big e, I do try to avoid talking to myself. It is usually nonsense. Which, to an extent, explains some of the current pricing. There are a range of legitimate concerns globally which we have all thrashed about, but ultimately, as you and others have said, there are large doses of luck and sentiment.

My feeling is that fundamentals will have less to play for some weeks to months, than broader sentiment. We may have a rise or fall alter in August depending on the dividend position at annual reporting (my pick is a <30 cps dividend) but a pretty key date may well be 1 September 2019, when Donald of the Orange Hair decides whether to carry through with increased tariffs.

Meanwhile, at least three brokers have called tops for IO, and that probably affects BHP, RIO and FMG, but also IO pricing more generally. The DCE has been reportedly subject to a fair bit of speculative trading.

Several UK and US analysts are advising to overweight cash, or at least take some money out of the market more generally. The US VIX is spiking and Mr Powell and Donald's wee stand-off does not help.

I think this means intraday trades will do very nicely in the short term, and longer term holders might be best having a beer away from a screen and returning to celebrate or at least feel relieved in 3 to 6 months.

The long term fundamentals look very good indeed. The P/E, even if IO drops to US$70 t, looks very pretty. As central banks reduce rates (NZ 1% today and it seems a further .25% to drop in US soon; and EU getting all gloomy) then dividend stocks will be looking very good.

FMG's issue of course is that it is seen as a one-trick pony, and that detracts from some dividend investor interest, but it is undertaking a pretty impressive diversification programme. If FMG achieves that it will introduce more income stability and thus new categories of investors, as well as making it a little less attractive for shorters.

Which means I must now pour a beer to nurse for a few months.

GLTAH.