paprika "AGO was spitting out cash while in a 2 year down trend. And all the while many here were tearing their hair out. Why was the price falling so greatly in this period?"
ER6N AGO was "losing money" during that two year down trend!
AGO went from a company that under promised and dramatically over delivered to a company that never delivers on it's promises! That's what happened, pure and simple!
That combined with the dramatic fall in the IO price in 2012 followed by just about every analyst predicting the same for 2013. Tom Price from UBS had a prediction of $70/dmt by September 2013 and he was quoted about 100 times on this forum!
It's my belief if management wasn't always over promising the share price would be different. Because right now AGO really is spitting out the cash! Iron Ore is still fetching AUD $147/dmt today!
AGO has gone from producing 1mt/a to over 10mt/a in two years! They are getting more for their Iron Ore now than when Gillard went to the election with companies like Atlas in her sights hoping to cash in on the high commodity prices during the mining boom.
The point is there was a very good reason why the AGO SP collapsed and didn't recover where as companies like RIO collapsed and almost completely recovered over the same period!
As for now it's pretty hard to be bullish on IO stocks when the IO prices is going down and the news out of China keeps getting worse! I'll be waiting for that news to change. The PBOC have a habit of changing their position on easing very dramatically as soon as they become uncomfortable with the direction their in!
I emailed some of the people on this forum last Friday and mentioned that this Chinese Credit crunch would IMO send the AGO SP down to $1 in the near future. IMO once they start easing again and we get a bounce in the IO price AGO will move beyond $1.30.
As for now I wouldn't buy, I wouldn't short and I am not holding!
AGO Price at posting:
$1.01 Sentiment: None Disclosure: Not Held
