Your thoughts are sound AverageJoe and yes, I have taken a hit on Maca and a worse hit here..
in the sector I also have Monadelphous - more successfully (although not nearly so many as I used to )....and have held Macmahon, Ausdrill, and some others
I agree the sector IS full of risk .
This is the August 2017 opinion of Jon Mills, of Invest Smart , on NRW - another sector company I hold :
“We no longer cover NRW and, while the mining services industry now appears to be on a cyclical upturn, it's still a lousy industry”..
https://www.investsmart.com.au/investment-news/nrw-holdings-gift-to-shareholders/139840
As to problems ahead?
As can be seen here, holders look set to lose everything.
PLUS
Downer is trying to sell its mining arm . BGC (
was valued at $2,5 billion in May
https://www.abc.net.au/news/2018-05...decide-to-sell-bgc-after-will-dispute/9796510) and has not found a buyer, Lendlease has written down $350 million dollars - mainly on its infrastructure boom projects , ACCIONA is suing NSW givernment for $1.1 billion, WorleyParsons is down , companies are going into administration left right and centre,
( here’s one;
https://thewest.com.au/business/inf...stacked-against-subcontractors-ng-b881013297z ).....
Oh and there are not enough workers.
...And the unions are like angry wasps.
It seems to me we are already in the middle of problems rather than having them still in front of us.
Anyway one of the reasons I hold so many companies in this sector is it keeps my antennae working - I generally do better research where I am invested.
Sadly three reasons I ended up over invested in RCR and, for that matter, Maca too, were fear and greed and opportunity.
In terms of diversification I genuinely have no idea about what sectors are truly moated against negative potential in the market .
A guaranteed 2.5% on a Westpac 36 month term deposit is probably not a bad investment strategy.
Previously when feeling conservative I bought SXL and WAM at lows and earned dividends and capital appreciation .( so much for that given this mess)
I am possibly both more and less diversified than I appear to be
And I thank you again for sharing your thoughts
Cheers
(20min delay)