It's just not justified.It can not be denied that this point in...

It's just not justified.

It can not be denied that this point in time is pretty much the best it can get for an iron ore stock in terms of profitability. Moving forward FMG is at least a no-growth investment (a bit of new production coming online, but not enormous) and at worse (and most likely) a negative growth investment.

Investors are going to require ~10% returns per year to justify an investment in FMG - the only place that can come from here on out is dividends and in the future those dividends are expected to be well south of 10% per a year.

Therefore, big dividends are needed today to support the share price in light of the drought to come. I suspect the share price will just continue to drop after dividends and just not substantially recover so a few years down the track the dividend yield isn't ~5%, its more toward 10% otherwise an investment in FMG just makes no sense.

It's been an amusing week to see the shear emotional relief over a moderate 1 day (deserved by the way) in a volatile stock and all the rosy "predictions" that have followed despite those same posters claiming the future isn't predictable!