The link that I'm posting here is Jim Rogers talking about the future and fundamentals for commodities. Please excuse the Youtube video title, it doesn't totally reflect the content of the interview. I found Jim's opinions to be well rounded, sensible and clear. Simple talk with a longer view in mind. I agree with what Jim is saying particularly with commodities and I feel that eventually things will eventuate close to as Jim forecasts. Certainly one of the better interviews I've seen.
http://www.youtube.com/watch?v=w84EiCt0Lqk
In regards to PAN, this is about fundamentals. Here we've got a relatively low cost nickel producer, still profitable at current commodity prices. Not to mention the lovely position of no 'sovereign risk.' It's share price been smacked from a peak of $6.14 right through to as low $0.75. On top of that, the balance sheet is strong with low debt, the hedge book is a 'get outta jail free card' and the industry it is participating in is losing competitors everyday. The main reasons for them being cash flow problems and the other being simply companies that have deposits that are now uneconomical.
Personally I'm still bearish on to where this market is heading for 2009, but for now there is evidence to suggest that with all the stimulus packages, moving forward this market may have a second rally. I'm not convinced that stimulus is the solution as yet, but the market seems to think so and that'll determine where we go for at least now which is up for a little while.( The first rally after October last year was the Obama election rally and the first rally this year will be the stimulus rally). I'm holding PAN and I think it's going up for a while again, then I'll wait and see what the market does and possibly trade out, take a profit and return to PAN again on another day. In this market, when you can get profits, you tend to take them. The short term the risk is certainly still there, however for at least now the downward pressure on commodities I think might just ease off a little bit.
Say the situation gets worse. Commodity demand slumps further. The AUD falls away that's certain for one. Chances the are the RBA will be cutting rates again, knocks the AUD down even further. The AUD could end up at <50c again and that's good news for PAN to some extent.
The big thing is inevitably there will be a recovery, it's just a matter of when. I wouldn't suggest as to when it's going to be. It could be now (I doubt it), it may not be for another few years. Simply if the fundamentals for PAN hold long enough through this storm and they can get through on their solid foundations, then a position in PAN (and some others) come the true economic recovery is going to be as valuable as an intact bridge over the Rhine River was in 1944-45.
Anyone who sees PAN in a different light, I'd love to hear from you.
Good luck to all!
PAN Price at posting:
83.5¢ Sentiment: Buy Disclosure: Held
(20min delay)