Wow, you've gone a long way back, over 7 years, to find a...

Wow, you've gone a long way back, over 7 years, to find a bad call of mine. My view on fmg has changed significantly since then, a long time ago. At that point the price of iron ore got down to around US$50, their historical production costs for fmg were above that price, and they had a multi billion debt. What happened? The price of iron ore rose quickly, and Neville did a fantastic job in reducing costs so that they became competitive, he did a better job than I expected I'll admit. As soon as the price of iron ore sustainably rose above their reduced production costs I changed my view on it. At the same time I invested in RIO at $38 as I knew they would come out of the downturn intact with their stronger balance sheet and higher quality ore, which I still have a core holding of. FMG was a high risk play at the time (not now).

If you've gone that far back through my posts, you will have noted that I warned about rfg several times at $4+, it has since fallen almost 99%. I also warned about dsh, which subsequently went bankrupt (so a 100% loss of capital for holders). The common thing that occurred when I made these warnings was for posters to arc up and attack my posts on hotcopper. I still remember one of my warnings that dsh was at risk of insolvency was censored after a complaint by a poster. Less than two months later dsh went insolvent.

I do however actually agree with you that the market often gets it wrong (giving rise to potential outsized returns), at the same time it often gets it approximately right on stocks. I regained some interest in looking at rfg when sol patts made an investment, as I do respect them. I have learned however to make my own decisions as several times I've followed very smart investors that have gotten it wrong (as even the best do). For me at the moment I'm roughly neutral on rfg, it's a mediocre business priced accordingly. If they have a few things go their way and it's well run going forward there is potential so I can understand why investors would consider investing at current prices, just not an investment for me.