A guy on "Your Money, Your Call" this afternoon said that the high level of borrowings in FMG means that a $10 change in the price of iron ore means a $1 change in their FMG valuation. ie, it is highly geared to the price of iron ore. They were saying that you don't want to be in FMG when the price is falling!
As AGO has no borrowings, the effect of changes in the price of IO are not as dramatic as for FMG.
This maybe one explanation for the different ways the two stocks have been behaving (plus the FMG takeover talk).
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