Hi @Londoner - I think you are talking about the Industrial Minerals graphite sector analysis some months back. I’ve analysed it in more detail earlier if you are interested. As can be seen TON got an exceptional rating by IM, and I’ve shown how we could have gotten an even better rating
http://hotcopper.com.au/threads/ass...-credentials.2560732/page-26?post_id=15709668
And a few words on IM’s previous analysis (Dec 2014). Compare this with the new one on top to see how much progress TON has made over the year
http://hotcopper.com.au/threads/ass...-credentials.2560732/page-56?post_id=15715171
So I don't expect any issues with resource/DFS etc.
Hi @Penergetic – Too many reasons to mention but I believe this is an obvious and serious risk for all graphite companies and indeed all companies.
Some major bubbles due to burst IMO in time to come - possible shale bubble, Aussie property bubble, financial institutions/bank share price bubble, global property bubble, tech bubble, start - up bubble, education bubble, overall broader equity bubbles, emerging market bubbles, bond bubble, junk bond bubble, USD bubble, derivatives bubble, etc. among others. Bursting of any of these can trigger a deep global crisis.
I’ve commented on general issues, iron, oil, property and gold on HC where I’ve explained much more if you want to have a look. Check the macro risks section (C-1) of TON overview, where I’ve explained in depth and oil in my comment history on oil forum.
http://hotcopper.com.au/threads/ton-overview-aug-21.2577980/?post_id=15853778
TON’s fall IMO is to some extent also a part of the broader graphite weakness which is part of broader commodity weakness.
If you really want to go deep into the economic side of things, then I’ve explained in my property analysis. Many things I’ve mentioned there last year like job losses in 2015, increasing stagflation (stagnant wages with rising prices), possibility of recession, etc. are already fast happening.
So, yes, I have very strong reasons to believe that an eventual crisis is inevitable. Keep in mind though that I cannot predict the time. I thought the fundamentals (or rather the lack of it) were in place 2 years back but 2 years have already passed. But maybe a crisis has already happened in terms of bursting of iron and oil bubbles, and overall complete decimation of commodities of which graphite is obviously a part of.
As was the case with the last crisis in 2008, I think there is a very good chance that financial institutions will again be among the worst hit, and it could lead to lending completely frozen as was the case last time around.
Also I expect the years to come will see the world alternating between recession/depression, stagflation and hyperinflation or at least 2 of the 3. How central banks respond to the crisis will determine which of them come about.
As @jowahsen says, IMO too, there will be currency wars moving to trade wars moving to actual wars and global debt.
Miracles can happen and other bubbles might not burst but I really find it hard to believe that so many bubbles can avoid bursting, and thus we can have multiple triggers. Some major safeguards /positives for companies in a crisis would be an adequate cash buffer for contingencies, low costs, manageable debt, good management, good mine life for mining companies, peer undervaluation, sector with good growth potential, transition from explorer to producer (growing company), etc.
TON scores on all these grounds except cash and hence I’ve mentioned that TON needs to focus on cash management. This does not mean that TON is immune but in the event of a deep crisis, IMO overvalued companies will obviously be sold off very badly compared to a company which is already very undervalued.
Cheers![]()
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