where are the eternal optimists now???, page-23

Personally, I take two separate views on and positions in FMG - one based on a long term investment horizon and one for short term trading.

Short term trading considerations aside, my view on FMG for the long term based on recent performance is as follows:

I must confess I've been a "fan" of FMG for a while, and still am, but I must say I am concerned about their recent track record. What attracted me to the company is not Twiggy's charm but the fact they were delivering on their promises by meeting their operational targets during the constuction and start-up phase. In the last 2 quarters the targets have started to slip or be missed, so the recent track record is something that shouldnt be ignored.

Market conditions are outside the company's control. FMG has and continues to demonstrate a very good deal-making capability to capitalise on market conditions. This is therefore not the area of concern for me. For me the risk to the business is its operations and the company's ability to deliver on what has been promised - so it must get its operations under control.

Now one or two quarters of underperformance does not necessarily cast the entire future of a company into doubt, but if it continues to underperform operationally it will certainly downgrade the company's investment outlook/potential. For me then the key will be another quarterly report, and I would expect to see improvement in its operational performance by then or I will be re-rating my view of and therefore investment (for the long term) in FMG until or if it demonstrates signs of improvement in its operations.