At these prices, the company APPEARS a strong buy.
What no-one knows is how long this downturn will last.
At the moment the All Ords is down around 38% on the November 2007 highs.
In 1987 we went just under 50% down.
In 1974, we fell around 60% on the then highs.
In 1929-30 the market fell around 70% on its then highs.
The average bear market I heard the other day sees around a 33% fall.
Many are saying that this is the worst financial crisis they have seen in their lifetimes: worse than 1987.
That said, it will at some point turn again as Kwaidan noted earlier today.
The difficult question to know is when.
It can't hurt to sit on some cash IMO, until there is a degree of clarity on where the bottom is.
There will be a lot of good buying around at that time regardless: even if this opportunity does pass (eg, via a TO).
There will be many others here that disagree with this view, and having said the above, I agree with Fingers' earlier post that this and AGO are probably the two best Pilbara junior IO stocks going around.
Not wishing to pull apart Bungy's post, because I respect what he has to say, tonight's futures should be disregarded if you are making a long-term investment decision IMO.
The question is do you believe this company will be here for the long term and an above sector performer in the long term?
If the answer is yes, then the entry timing is really a judgment call.
My personal belief, and I have no basis other than historical precedent to go on, and the views of some of the old timers, is that we could see our index fall somewhere between fifty and sixty percent from its November 2007 highs, which would mean we still have quite a way to fall.
That said, no-one really knows.
When the oil price shock hit in 1974 we came out of a similar period of growth as we've seen here, though then it may have been slightly more sustained: from 1965 to 1974.
BUSH
UMC Price at posting:
70.0¢ Sentiment: Hold Disclosure: Held
