I agree with the mispriced terminal assumption. I don't...

I agree with the mispriced terminal assumption. I don't understand where economists are thinking the future will require less steel.

The lower PEs in my opinion are often tied to DCF valuations that are using wild assumptions of iron ore price long term. Plenty of articles out there on it and to me it looks highly selective in the way information is presented. Look at the below:


Makes it look like the expectation is justified based on some sort of loose analysis of the graph. Why start the graph at 2017 though. Why not take more data?

Does that look like a long run average of 70 to you? Unfortunately this thinking is locked into psyche so that the valuations adjust very slowly. In the meantime holding the iron ore miners pays out the holders in cash while the doubters stay on the sidelines and point to some sort of imaginary long term price. Works for me. FMG has the additional benefit of being relatively volatile so can boost the already good yield selling options.