ago - $2, page-41

The spot price should be down about $3/t... and it's not about something that happened Friday overnight. Bids coming into the spot market around Friday noon (our time) were about $3/t lower... so the market should've rerated iron ore poducers accordingly by Friday close. I get my pricing data drip-fed by 3pm on the day, and the market makers do too... you'll get your pants ripped off if you're REACTING to pricing news hours after the event.

What does it mean? absolutely nothing... as I showed (statistically) in a post several months ago... stock prices are set according to long term price predictions. So if we look at Friday's data on iron ore prices, the short end of the forward curve fell by $2-$3... the middle end was down $0-$1... and the long end was actually UP about $0-$1.

On current io prices, the market is trading AGO shares at an annualised 2.5x EBITDA, which is ridiculously cheap. On projected io prices of $80/t to $100/t, AGO is trading at a fair range.

The commetary on the import/export data is just craaap. January was unexpectedly higher than analyst predictions... and February was unexpectedly lower than analyst predictions. What does this tell you? It tells me to ignore analyst consensus! For February exports ranged from -8% to +15%, with the median from 45 analysts coming in at +7%. How anyone can take a bunch of retards throwing darts in the dark, with each dart hitting a different spot on dartboard, seriously is beyond me. It's better to look at the complete data for January plus February... and that IS NORMAL. The holiday fell in February this year, but was in January last year... so it does seem that analysts don't know how to modify/account for holiday influenced data.