ubs says sell fmg buy gbg, page-28

Moremoney2 said exactly what I would have said as a response to Major's thoughts on the JV.

I am well aware of the risks with GBG, however you need to accept the risks in order to make some real money.

Yes, GBG's margins are projected, its a significant risk. However we do know our ore is extremely high quality. FMG's ore is the dregs that BHP/RIO did not want, quite frankly its rubbish. Despite FMG's quality, China needs an alternative source of IO away from the Oligopoly of BHP/RIO/Vale. I think the $US5.5 to $6 billion proposal from China is simply a bullish signal for IO. Hence Major's doomsday posts are just bitterness from last year. Follow where the money is going with the Chinese IMO. GBG is one of the only stocks which trades below placement value - 85 cents. Also remember that this placement was down during the peak of the GFC when we were 40cents....I think it suggests significant long term value is here.

Re: Buying opportunities
If you have followed some of my posts Major you would have noticed I haven't purchased a single GBG since March. I've been buying coalies: CZA and AQA. I realised almost a 100% gain on CZA, and I'm up well over 100% on AQA(unrealised).
I personally believe a lot of the blue chips are now significantly overvalued.

The next 6 months will literally indicate whether GBG is a reality or not. It has a chance to be significantly rerated, I wouldn't want to miss out on this opportunity.