Allan Gray eying oil and iron stocks, page-2

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kpkg

4,149 Posts.

28/01/15

06:32

Post #: 14649466
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Originally posted by Sojourner ↑

I think a future price spike to $200USD a barrel is a bit extreme. But then again, I thought a 50%+ in the oil price over a couple of months was a bit extreme too.

http://www.copyright link/p/markets/allan_gray_simon_mawhinney_eyes_aP07P7hRPeBOzObzkhwDgL

BIANCA HARTGE-HAZELMAN
Allan Gray portfolio manager Simon Mawhinney, who fielded calls from investors questioning his strategy to buy Newcrest in 2013 when the gold price was falling, thinks now is the time to be selectively investing in oil and iron ore companies as prices plunge, bankruptcies loom and a weaker Australian dollar offers little support.
Mr Mawhinney, who is joint portfolio manager of the Australian equity fund and a contrarian investor who seeks to make money by going against the grain, thinks that now is one of the best times in many years to be buying good quality energy companies.
“We are just coming out of the bull market and we are now a couple of years, at best, into the weakness,” he said, adding that iron ore and oil prices are at the lower point of the cycle in much the same way as gold and aluminium have been in the past.
“Cycles run for a lot longer than people expect. Most commodity producers are struggling at the moment. If oil prices remain at these levels, bankruptcies will certainly follow. It’s a necessary part of the cycle.

"Separately in a report overnight from London, OPEC secretary general Abdulla al-Badri said he thinks prices at current levels may have reached a floor and could move higher very soon. He also warned of a risk of a future price spike to $US200 a barrel if investment in new supply capacity were too low."

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$44.22 set on the 13/1 held after getting down to as low as $44.34 in the last few days. Back up to over $46.00 which is a nice recovery. Had to laugh at the General's comments.... Now that they have smashed all the weaker players they are already sowing the seed of where they want prices in the future.
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