Your friend 60 years of mining experience is valuable for...

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8horse

34,332 Posts.

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28/01/15

19:58

Post #: 14655317
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Originally posted by Bris Vegas ↑

I think someone with nearly 60 years at the forefront of mining has a LOT more knowledge of the commodities business than an economist from Goldman Sachs or the average stockmarket punter. He was in the industry when oil was $2/barrel, 90% of geologists were unemployed and coking coal was shipped to Japan at a considerable loss. He has seen multiple booms and busts and thousands of Australian resources companies (big and small) go to the wall or be taken over.

The harsh reality is that the last 10 years have been a supercycle with once in a lifetime returns. This has resulted in extreme over-investment and a huge surplus in capacity. It will take decades for the excess capacity to be removed as existing mines are gradually closed. Only then will prices have a chance to rise above historical levels.

IMHO Alan Gray has made a catastrophic decision to buy into ARI and other resources companies. They have spent the last few days frantically trying to talk up ARI but none of the other big funds are buying into their BS,

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Your friend 60 years of mining experience is valuable for mining, but might not for share trading or investing.

At least I recently made 2 calls on ARI,
One was buy call made late December when sp was 19c
Then I sold in 30c on 8 Jan, said few times, would be a good buy after "ugly" December quarterly report.

So far I was right about short term price movements.
I believe iron ore spot price will rise next month as Chinese mills coming back from big Chinese New Year holiday, that is quite common.

I am not long term holder of ARI, but only holding for short term as more predictable.

Last edited by 8horse: 28/01/15

ARI Price at posting: 19.5¢ Sentiment: Hold Disclosure: Held
3 Upvote

0 Great analysis

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