basic economics and foresight, page-4

Hi Moneymaker

Why is it that a lot of FMG posters a "persecution" complex?
Our in house expert leads the directors adoration fan club and no one can say anything contrary.

I agree with your sentiments about analysts, see my previous post. However, you destroy your own argument. With the exception of 1 that I know of, all other analysts have FMG as a buy. Irrespective of what they are forecasting with prices they still have FMG a "buy". so why do you think they sre persecuting you? How they come up with a buy when FMG will trade at a loss if their price scenario will come about is a mystery to me.

As for what Directors had the foresight to do:

1)cut debt aggressively - why does everybody keep repeating this? They were never in a position to cut debt until the capital expenditure was completed. The received payments in advance of shipments and used this to pay debt. We still have a liability to deliver future shipments for free.
2)Cut costs aggressively-very true. But by definition if you can cut costs then you were incurring costs unnecessarily in the first place. And don't forget the over run in capital expenditure of $1.2 Billions.
3) Increase production - This was a foresight?
4) Switch much of their operations to gas - agree. This will also benefit tax payers as we don't have to fork out fuel subsidies.

The only foresight these Directors have had was to re-negotiate some of the debt from 2016 to 2019.

You and I have different expectations of Directors.

If prices drop to expected levels, there are no levers to pull. We will be in serious trouble. We are price takers.

Regards


Pear