# FMG - Fortescue Metals



## GreatPig (6 September 2005)

Sometimes the market can be so sadistic 

I bought this stock in early August for $3.06 then sold a week odd ago for $3.00, as it appeared to be dropping off.

Within a day or two of selling it started heading up again. I got another buy signal on it a couple of days ago, but by the time I could check it out yesterday, it was already up about 6%, so I didn't buy. Today it's up another 9.4%, just closed at $3.85.

I'm sure there's some little man sitting there in the stock exchange watching what I'm doing on my computer... :

Cheers,
GP


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## Joe Blow (6 September 2005)

GreatPig said:
			
		

> I'm sure there's some little man sitting there in the stock exchange watching what I'm doing on my computer... :




GP... Something tells me it may be this bloke. I think it's the same fella Chicken consults about the future price of SBM.


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## krisbarry (6 September 2005)

I bought this stock back in late August 2004 for 64 cents.  It dropped, I lost $1000 and sold out only to see it reach over $5.00, 6 months later....me a stupid fool!

FMG has a bright future ahead, I just cannot aford to re-buy back in.

Good luck to all FMG share holders.


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## porkpie324 (6 September 2005)

i used to buy stocks to on TA buy signals only to find the next day or week they had broken thru my stop,now i buy only stocks that i'm reasonably sure of and buy the dips sell when up made heaps more doing that, try mcr, igo, oxr,there proven producers. better luck next time.porkpie


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## andrew_c2o (28 September 2005)

*FMG your thoughts*

Has FMG hit it's peak, some opinions on this would be great!

The Directional System ADX indicator seems to indicate it has hit it's peak. Where as the On balance volume and MACD-Histogram seem to suggest the trend is ok. These are indicators I have read are good to use with trending shares.

Would love to hear other peoples thoughts on this one.


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## andrew_c2o (28 September 2005)

Also another thing I noticed the ATR has been around .2 for 5 and 10 days today it dropped .12 so it didn't really reach the ATR, I would take that as a good sign the trend is still ok , is this a good thing to look at though for trending stocks?


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## GreatPig (28 September 2005)

*Re: FMG your thoughts*



			
				andrew_c2o said:
			
		

> The Directional System ADX indicator seems to indicate it has hit it's peak



How does it appear to indicate that?

By my interpretation, ADX with +DI and -DI is showing a strong up-trend that is still getting stronger. In fact, none of the few indicators I look at show any weakness at the moment.

Which is not to say that it won't plummet tomorrow anyway 

GP


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## andrew_c2o (28 September 2005)

Well i can see back in mid march the ADX hit 64 then the price went to a down trend, now the ADX is at 62, so thats y i'm thinking it has peaked or getting closer to the peak.


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## Yippyio (29 September 2005)

Peaked ???, sometimes it's important to look beyond the charts and consider the fundamentals. :millhouse 

FMG are currently on a massive expansion plan to become the 3rd largest Iron Ore producer in OZ. They are close to securing equity partners (Chinese) to develop new infrastructure (Road & Port Facilities). 

Once infrastructure is in place FMG will have achieved their goal :bowser:

In addition to FMG fast becoming a major Iron Ore player UBS, last week revised there price on Iron Ore to factor in a minimum 10% price increase for 06.

Demand for Iron Ore from emerging super powers, China & India shows no signs of abating and is only getting stronger.

There is plenty of blue sky ahead for FMG - Peaked, I don't think so........


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## Yippyio (10 October 2005)

FYI - Recent News Article

Fortescue Metals pins hopes on upgrade
Source:	PERTH AAP
Date:	2005-Oct-07 05:28 PM
Iron ore developer Fortescue Metals Group Ltd hopes the latest resource upgrade at its $1.95 billion Pilbara project will silence concerns about the quality and amount of iron ore at the project.

Fortescue has increased the amount of resources in the indicated category by 70 per cent at the Cloud Break and Christmas Creek to 1.4 billion tonnes of iron ore.

Most of the increase came from the Cloud Break deposit, where 572 million tonnes is now considered indicated.

Total resources at the project, including indicated and the lower confidence category inferred, now total 2.4 billion tonnes.

Executive director Graham Rowley said he hoped the new resource statement would silence critics which had doubted the resources at the project.

"We have been criticised a little bit of late with people saying `FMG has only got inferred resources' and we kept saying `we have got good resources'," he said.

"We are now talking about on the record a very large orebody which we have always claimed to have. It is very exciting to affirm our own beliefs in ourselves."

The massive infrastructure and mining project is due for completion in 2007, initially producing 45 million tonnes of ore a year.

The resource upgrade also boosted the high-grade iron ore, which can be directly shipped without any beneficiary processing, by 80 per cent to 578 million tonnes.

Fortescue has planned to initially direct ship this ore for five years but Mr Rowley said he hoped to double that to ten years.

Drilling will continue with further upgrades expected at Christmas Creek and Cloud Break over the next two months.

Another point of contention with critics of the Pilbara project is the offtake agreements the company has with Chinese and Japanese steel mills.

"We still have the same level of contracts and memorandums of intent we have previously reported," Mr Rowley said.

"We are continuing to hold discussions with steel mills."

He said the recent agreement between Hancock Prospecting and Rio Tinto to develop the Hope Downs iron ore project in Western Australia had increased interest in Fortescue's own project.


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## MalteseBull (20 April 2006)

Hit $7!!


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## Bones69 (28 April 2006)

$8.70.......still more left in it?


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## krisbarry (1 May 2006)

FMG going from strength to strength


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## michael_selway (1 July 2006)

Stop_the_clock said:
			
		

> FMG going from strength to strength




this stock is crazy, its not even profitable yet (and wont be it appears for teh next 3 yrs) but it keeps getting higher and higher

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS -0.5 -0.3 -5.1 -7.1 
DPS -- 0.0 0.0 -- 






thx

MS


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## krisbarry (1 July 2006)

Plenty of stocks seem to be like this, I sometimes reckon its better to go by the story than to crunch over the numbers.

Its all about the China story and iron ore, need I say anymore


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## krisbarry (1 July 2006)

Forgot to mention that I was sold, on the China/Iron Ore deal back in Aug 04.  Bought in at 64 cents, it slid down to 58 cents, within a few weeks, I sold out, and now look at it!

Like I said its sometimes the stories that are better than the figures


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## michael_selway (1 July 2006)

Stop_the_clock said:
			
		

> Forgot to mention that I was sold, on the China/Iron Ore deal back in Aug 04.  Bought in at 64 cents, it slid down to 58 cents, within a few weeks, I sold out, and now look at it!
> 
> Like I said its sometimes the stories that are better than the figures




Hehe, yeah but i think the bulk of the earnings will come in 2009, 2010 and beyond? Thats what people are betting on i think, maybe they also have contracts in place and alot reserveres to supply in the future

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS -0.5 -0.3 -5.1 -7.1 
DPS -- 0.0 0.0 -- 

thx

MS


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## michael_selway (10 July 2006)

Man this stock keep sgetting higher and higher!

http://www.smh.com.au/news/BUSINESS...-equity-raising/2006/07/10/1152383654714.html

Fortescue confirms $360m equity raising
Email Print Normal font Large font July 10, 2006 - 11:44AM

Advertisement
AdvertisementIron ore developer Fortescue Metals Group Ltd has confirmed it is negotiating an equity placement worth more than $US270 million ($A360 million) with Noble Group Ltd.

Fortescue said Noble, a Hong Kong commodities trader, had made an offer for an equity placement of 10 per cent of the fully diluted shares in the company.

The aspiring iron ore miner said the pricing of the offer was between $US270 million ($A360 million) and $US300 million ($A400 million).

Fortescue said it was seeking strategic equity as part of a broader capital raising program and Noble was one of a number of potential partners it was negotiating with.

The deal with Noble would see the establishment of a joint venture marketing company, to be owned 51 per cent by Noble and 49 per cent by Fortescue, which would sell Fortescue's iron ore into China.

The West Australian company also said construction at its project in the state's remote north west remained on schedule and within budget.

The $US200 million facility set up in March had enabled it to start the long lead items required to keep the project on time, the company said.

Fortescue said a comprehensive financing package was expected to be in place within this quarter.

Shares in Fortescue were placed in voluntary suspension on Friday, ahead of the announcement of the equity raising.

They resumed trading after the announcement and at 1050 AEST had jumped $1.40 to $11.00.

http://www.smh.com.au/news/business/fortescuenoble-deal-expected/2006/07/06/1152175726147.html

thx

MS


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## NettAssets (14 August 2006)

Looks Like they are into serious money $2.7B Debt underwriting.

Haven't looked at the details the PDF was 778 pages!

I guess they will be trading again shortly

John


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## michael_selway (20 August 2006)

michael_selway said:
			
		

> Hehe, yeah but i think the bulk of the earnings will come in 2009, 2010 and beyond? Thats what people are betting on i think, maybe they also have contracts in place and alot reserveres to supply in the future
> 
> Earnings and Dividends Forecast (cents per share)
> 2005 2006 2007 2008
> ...




Omg 2009, earnings start to in pack in fast!

Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS -1.0 -42.5 20.3 137.2 
DPS -- 0.0 0.0 -- 

EPS(c) PE Growth 
Year Ending 30-06-07 -42.5 -- -- 
Year Ending 30-06-08 20.3 49.7 -- 

thx

MS


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## bvbfan (21 August 2006)

Never looked at FMG before but reading the article from Resource Stocks the earnings potential looks awesome as you say with your numbers for 2009


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## krisbarry (21 August 2006)

Yes FMG  has a very bright future, and a share price that has rocketed over the past 3 years


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## michael_selway (29 August 2006)

michael_selway said:
			
		

> Omg 2009, earnings start to in pack in fast!
> 
> Earnings and Dividends Forecast (cents per share)
> 2006 2007 2008 2009
> ...




Updated Forecasts, again 2009+ is the profitable year

Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS -1.0 -110.2 -38.9 154.5 
DPS -- 0.0 0.0 -- 

thx

MS


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## MiningGuru (27 October 2006)

What has hapenned with this stock lately?

Not much. The last post was in August.

The share price has moved up a bit from it's recent lows.

There is still going to be a massive demand for Iron Ore over the next decade or so from not only China, but India, Vietnam and a host of other countries.

I think that this stock will start moving in the run up to Xmas and the New Year to be above $12

What do others think?

MiningGuru


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## MiningGuru (31 October 2006)

Does anyone have anything to say about this stock?


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## MalteseBull (29 November 2006)

looks like they won the case 


whoo hoo!


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## MiningGuru (14 December 2006)

FMG has started to move now. The big funds and instos have started to take a position in this stock.

This will move higher strongly over the next couple of weeks IMO.


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## MiningGuru (15 December 2006)

The Australian
Speculation swirls as Fortescue shares surge
Kevin Andrusiak
December 15, 2006
SPECULATION is growing that overseas interests are continuing to bid up Fortescue Metals after the stock gained more than 7 per cent for a second consecutive day and turnover again topped 1 million shares.

Fortescue could not be contacted for comment yesterday, but market whispers have suggested either Russian or Chinese interests have taken a shine to the iron ore aspirant, which is creeping closer to production.

Fortescue wants to ship 45million tonnes of ore a year from its $3.7 billion Chichester Ranges project in the Pilbara in what would mark a break of the iron ore duopoly in the region of mining giants BHP Billiton and Rio Tinto.

Fortescue's share price, which has already made its visionary founder Andrew "Twiggy" Forrest a paper billionaire, rose 82c to a new record high of $12.27 yesterday. The shares started the week at $10.75.

Iron ore contract negotiations with Chinese and Japanese steel makers to set iron ore prices for 2007 have begun in earnest, with analysts tipping a 5-10 per cent price rise.

However, Fortescue's first shipment is not expected until 2008 and it has already locked in offtake arrangements.

BBY analyst John Veldhuizen, one of only two market analysts to cover the stock, has maintained a $16.80 recommendation for Fortescue.

"There was always going to be a staggered re-rating of the stock," Mr Veldhuizen said.

"But the merits and value are there and the project has scope to expand beyond the 45 million tonne capacity.

"There will always be hiccups along the way, but the project is shaping up nicely."

Meanwhile, industry sources said yesterday that Fortescue was being blocked from complete rail access to its port infrastructure by a rogue tenement holder who was refusing to sell a 70-square-kilometre parcel of land vital for the company's rail corridor.

Late last month, Fortescue reported it had been granted a Special Railway Licence by the West Australian Government allowing it to construct, operate and maintain its planned Pilbara railway.

However, the sources said a key tenement holder planned to challenge the decision in court.


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## MiningGuru (15 December 2006)

Continued its surge today.

It is now pushing $13. I wouldn't be surprised at all if it passes this level this afternoon.

This is a clear breakout!


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## michael_selway (16 December 2006)

MiningGuru said:
			
		

> Continued its surge today.
> 
> It is now pushing $13. I wouldn't be surprised at all if it passes this level this afternoon.
> 
> This is a clear breakout!




FMG has done better than PDN in the last 3 years!

thx

MS


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## MiningGuru (18 December 2006)

Trading Halt this morning Pending an announcement.

Must have something to do with the accumulation of shares and price rise last week.


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## MalteseBull (18 December 2006)

Looks like $20 will be in no time,

	Federal Court finds in favour of Fortescue ann


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## pacer (20 December 2006)

I owned these when they dropped to $2.80 on bad news and made a buck up to $3.50, but now I'm kicking mysef for not keeping the flamin' things!....


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## krisbarry (27 December 2006)

This baby has been flying of late


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## michael_selway (27 December 2006)

Stop_the_clock said:
			
		

> This baby has been flying of late




I wonder what 2010 forecast EPS is

Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS -1.0 -58.6 -56.4 84.5 
DPS 0.0 0.0 0.0 0.0 

thx

MS


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## MalteseBull (8 January 2007)

Iron ore investment

Chinese steelmakers are steaming ahead with their plans to build an iron ore project in the Pilbara in Western Australia.

Hong Kong conglomerate, CITIC Pacific, says it expects the $3.2 billion Cape Preston project to become China's single biggest direct investment in Australia's iron ore industry in a few years.

The move is part of the quest by Chinese steelmakers to escape their dependence on mining giants BHP Billiton, Rio Tinto and CVRD of Brazil.

It also holds options to mine up to 6 billion tonnes of the steel-making ingredient and says intensive drilling is under way to confirm reserves.


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## MalteseBull (11 January 2007)

Is it only me following this?

Huge buyers on open.

Something in the pipeline its going up everyday.


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## GreatPig (12 January 2007)

I can tell you why it's shooting up now: because I took profit on it a few days ago : (and a good profit it was, but nothing like selling out to kick-start another run!).

Cheers,
GP


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## MalteseBull (16 February 2007)

Far out 

this has come along way this my last post


$20 target price as tipped last year

edit: seller depth:

17.550	2,315	 	1
17.700	1,550	 	1
19.000	11,000	 	2
19.400	1,800	 	1


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## 2020hindsight (11 March 2007)

Cyclones George (and Jacob?) at Port Hedland have been particularly tough on FMG sites and constructions. Poor bugas in site sheds that blew over.  Surely FMG shares will slow down (if not go backwards) in the short term at least.    

http://news.ninemsn.com.au/article.aspx?id=253697


> A Queensland man has died in a Perth hospital to become the third victim of cyclone George.  ...Police spokeswoman Ros Weatherall said the man was an employee at the Fortescue Metals Group mining camp, where 47-year-old Perth mother of two Debra Till lost her life.



hopefully Jacob / Jake will weaken before it hits


> http://www.abc.net.au/news/newsitems/200703/s1868589.htm Jacob weakens but remains on track to hit WA coastline
> Tropical cyclone Jacob is continuing to track towards Western Australia's north-west coast.  The cyclone weakened overnight to a category two system, easing fears that it may repeat the damage caused by cyclone George which hit the Pilbara region two days ago.
> 
> That cyclone left 47-year-old Debra Till dead and 28 construction workers injured.  The Bureau of Meteorology says while cyclone Jacob has been downgraded it may still generate destructive winds of up to 145 kilometres an hour when it crosses the coast late tonight or early tomorrow morning.
> ...


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## Kauri (11 March 2007)

2020hindsight said:
			
		

> Cyclones George (and Jacob?) at Port Hedland have been particularly tough on FMG sites and constructions. Poor bugas in site sheds that blew over. Surely FMG shares will slow down (if not go backwards) in the short term at least.




   Theoretically it shouldn't affect them too much, the affected camps were rail construction camps, ...still a very sad day.... riding out cyclones in donga's is never a nice experience. Hope evacs for Jacob have been carried out!!!


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## Kauri (13 March 2007)

> Investigators arrive at devastated mining camp
> 
> 13th March 2007, 10:15 WST
> 
> ...




Might be a bit of bad publicity coming up... no matter how many investigators they send the (Fleetwood) dongas are built to withstand cyclones, I think the simple fact that they were just dropped on the deck as opposed to being anchored to slabs/ buried concrete blocks might be the problem in a 270kmh breeze. Interestingly enough I hear the office block was chained down to about 1 tonne of buried concrete!!!


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## 2020hindsight (13 March 2007)

some polly saying they were designed for  force 3 winds but not for force 4      I'm surprised he didnt say there were designed for force 3.9 but not 4   anyway earlier in the week I got out of FMG and got into ABY -, FMG down 2.7%, ABY down 4.7% lol.


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## Freeballinginawetsuit (15 March 2007)

Strong finish for FMG on the close today if you timed an exit, unfortunate for those that bailed days back. Touching all time highs ATM

Not sure what effect the cyclone publicity will have?, not much effect ATM though. A bit of a concern they can't anchor Donga's to skids......lets hope they can build a mine better .


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## michael_selway (15 March 2007)

Freeballinginawetsuit said:
			
		

> Strong finish for FMG on the close today if you timed an exit, unfortunate for those that bailed days back. Touching all time highs ATM
> 
> Not sure what effect the cyclone publicity will have?, not much effect ATM though. A bit of a concern they can't anchor Donga's to skids......lets hope they can build a mine better .




This one beats PDN's story imo!

thx

MS


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## Kimosabi (15 March 2007)

I can't believe the Share Price of this stock and they've hardly sold anything yet.


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## michael_selway (18 March 2007)

Kimosabi said:
			
		

> I can't believe the Share Price of this stock and they've hardly sold anything yet.




FMG is totally unbelivable!

even the recent correction didnt affect it!

*Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS -1.0 -40.8 -26.7 11,659.9 
DPS 0.0 0.0 0.0 0.0 * 

thx

MS


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## Kauri (18 March 2007)

Kimosabi said:
			
		

> I can't believe the Share Price of this stock and they've hardly sold anything yet.





   A peice of an article from the West Australian paper last week...



> Though it was yet to ship a single tonne of ore, Fortescue still offered “reasonably good value” when compared to the massive iron ore arms of BHP Billiton and Rio Tinto, he said. Fortescue was trading at $2.39 per tonne of resource, compared to $2.61 for Rio.
> 
> But Fortescue’s rapid increase and the potential for lengthy construction and commissioning delays after the cyclone are causing some concern.
> 
> “When you get coronial inquiries and so on . . . it can get messy, and what worries me is how they are going to retain all their people,” one east coast analyst said.


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## Freeballinginawetsuit (21 March 2007)

Kauri said:
			
		

> A peice of an article from the West Australian paper last week...




FMG's SP has appreciated another 10 percent since the West's article Kauri.

That brings the valuation of thier expected ore tonnages in line with peers and they haven't even mined yet...........whats the further upside?.

An amazing stock FMG, what a story for long term investors.


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## 2020hindsight (21 March 2007)

Kauri said:
			
		

> Theoretically it shouldn't affect them too much



Kauri, I'll never doubt your word again.   - I notice that "eastern state analyst" is still predicting some probs with "messy" coronial enquiries - but FMG just charges upwards - 33% this month.


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## Kauri (21 March 2007)

Freeballinginawetsuit said:
			
		

> FMG's SP has appreciated another 10 percent since the West's article Kauri.
> 
> That brings the valuation of thier expected ore tonnages in line with peers and they haven't even mined yet...........whats the further upside?.
> 
> *An amazing stock FMG, what a story for long term investors*.




  Everytime I see FMG I get that warm fuzzy feeling.... as I posted elsewhere my scalp trade on AMS...just before Forrest got involved and it was renamed FMG...
Now with that infallible indicator hindsight.....a $250 profit could now be.. ....... $680,000..  but just think of all the tax I saved!!!!


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## 2020hindsight (21 March 2007)

Kauri said:
			
		

> $250 profit could now be.. ....... $680,000..



lol - thanks - I feel better already   my $25 profit could have been $68 lol.  pleased to see you bludy gurus are human after all.  question is, - does one charge back in, or wait for the next correction (?) - which again, everyone seems to know about in hindsight


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## Freeballinginawetsuit (21 March 2007)

2020hindsight said:
			
		

> is, - does one charge back in, or wait for the next





In the case of FMG and a (host of former materials minnows), one dosen't charge at all, despite all the noise.........unless youre a scalper as Kauri pointed out. 

Much better to scalp an AFRO than a Crew Cut, especially when its a new barber shop and the barber wants steel scissors rather than bamboo ones.

Seems reasonable to sugest he may well aspire to future aspirations of stainless ones and car to get to work rather than a pushy.

But as you have said thats all hindsight.......and was never realistic, he should be more concerned with wordly economics!.....or possably wordly economics should be concerned with him


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## 2020hindsight (21 March 2007)

lol - k m8  I'll (probably) go looking for an afro to scalp.  :afro: (to be honest I'm watching from the sidelines for a day or so - my usual impeccable timing lol)


> Fortescue was trading at $2.39 per tonne of resource, compared to $2.61 for Rio.



  this would imply (I assume) that long term FMG will increase 10% more than RIO will.


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## Freeballinginawetsuit (21 March 2007)

LOL, even for those with afro's they still need to keep the hair off thier eyes, ears and neck. A good trim can be rewarding and make hair grow better

The barbers a busy man nowaday's, plenty of customers. Still I have a sneaky opinion he may well open in the evenings in the future.....with lights, a chair and even electric clippers.

Best to be the first customer then, or even a customer on the first day........and enjoy the fruits of a full service 'shampoo and all', I'll be having a full shave then..

Hopefully he is still open for business.


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## krisbarry (22 March 2007)

Ohhh...this is really starting to hurt now, seeing the share price continue to rise.  64 cents was my buy price.... I would be worth almost $350,000 if i had held for just under 3 years.

I better ring my psych and make another appointment


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## Kauri (23 March 2007)

From todays West Australian paper.... 
*Russian talk drives FMG through $6b *


_23rd March 2007, 7:15 WST_



Fortescue Metals Group has cracked the $6 billion market barrier after its surging shares hit a fresh record close yesterday amid speculation Russian steel interests are again casting their eyes over the budding Pilbara iron ore producer. 






The group fanned the flames that it had drawn the attention of prospective foreign investors yesterday after being prodded into an explanation for rampant buying which has sent the stock flying since cyclone George tore through one of its Pilbara construction camps early this month. 

The stock, which touched $23.35 on Wednesday, closed 30 ¢ up at $22.70 to value the company at just over $6 billion. 

Since George hit on March 10, Fortescue’s shares have surged almost 30 per cent ”” in the process making chief executive Andrew Forrest WA’s second multi-billionaire with a personal stake now valued at $2.3 billion. 

In its statement yesterday, Fortescue said it “continues its practice to negotiate with various partners in regard to its normal course of stated business objectives”. 

If concluded, such negotiations “may lead to agreements which would have a material impact” on the company, though they currently remained “incomplete and confidential”. 

Several industry sources said there had been evidence that Russian interests were taking another look at Fortescue after missing out on a cornerstone stake last year. 

The sources named Metalloinvest iron and steel billionaire Alisher Usmanov, already the biggest shareholder in Mt Gibson Iron, and fellow metals oligarch Viktor Vekselberg as possible investors. 

Mr Vekselberg was an early supporter of Brian Gilbertson’s Pallinghurst Resources private equity vehicle which is now offering $320 million for control of WA nickel and manganese miner Consolidated Minerals. 

Fortescue executive director Graeme Rowley would neither confirm nor deny yesterday that Fortescue was negotiating with Russian interests. 

“I’ve had that question asked a couple of times today,” he said. 

However, it would be inappropriate and premature to expand upon the company’s formal statement, he said. 

In its statement, Fortescue noted that a number of analysts had just upgraded their iron ore price forecasts for next year and that Fortescue had been added to the FTSE All World Index in London, underpinning interest in the stock. 

It also said its stock was being rerated as work progressed at its $3.7 billion Pilbara iron ore project. 

Though Fortescue has admitted that it will no longer be able to ship first ore in March next year due to the impact of cyclone George, it still expects to start iron ore exports from Port Hedland by mid-2008. 

The project is slated to ship about 30 million tonnes of ore in its first year, rising to 45 million tonnes a year within 18 months. 

JOHN PHACEAS


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## happytown (23 March 2007)

interesting kauri,

here's today's smh take on it,

"Fortescue booming

Fortescue Metals' recent share price run has been nothing short of astonishing, especially given unknown delays to the project after two of its workers were killed in a cyclone. 
The company yesterday found fit to list a few possible reasons it shares have broken the $20 barrier, which is well above founder Andrew "Twiggy" Forrest's 8c a share entry price, to say the least.

Fortescue said the rise could be linked to increased iron ore price forecasts along with fund buying linked to its recent addition to the mid-cap FTSE World Index.

But true to form, the company couldn't resist adding a final paragraph which could incite takeover speculation.

"Fortescue continues its practice to negotiate with various parties in regard to its normal course of stated business objectives," the company said. "If such negotiations are from time to time concluded, they may lead to agreements which would have a material impact on the company and therefore need to be disclosed to the market. At this stage none of the negotiations are concluded and they remain incomplete and confidential."

*But it's understood the negotiations refer to offtake agreements with steelmakers and the company's plans to increase production beyond 45 million tonnes a year rather than interest from a corporate buyer.*

Fortescue shares closed 30c higher at $22.70 yesterday."

in the end so long as the price goes up

cheers


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## Kauri (23 March 2007)

happytown
                  Twiggy has proved he is a master at playing the market time after time     Can still remember his early foray into importing Lama's where eventually the investors as well as the Lama's were spitting.   
                  As trajic as the deaths in Cyclone George are, the general consensus around town was that they were not going to meet their March shipment deadline, George seems to have given them the reason they needed to put it back initially by 3 months. 
                  Regardless, it is onwards and upwards..  barely pausing to catch breath.


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## Kimosabi (23 March 2007)

hhhhmmmmm, Trading Halt, this could be interesting...


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## happytown (23 March 2007)

Kauri said:
			
		

> Can still remember his early foray into importing Lama's where eventually the investors as well as the Lama's were spitting.




   

glad to have missed the brief llama bubble




			
				Kauri said:
			
		

> Regardless, it is onwards and upwards




great ride particularly lately

incidentally abc midday news (for what its worth) spoke briefly as to the trading halt and alluded to the inability to complete regular assessment update due to cyclone damage and expect the halt to run its full length, ie till tuesday (with no mention of either west aust or smh thoughts)

i tend to agree with your comments re shipping deadline

cheers


----------



## Kauri (24 March 2007)

From todays West Australian... they seem to have covered all the bases...  

Iron ore hopeful Fortescue Metals Group has gone into a trading halt amid speculation it may be the subject of a takeover bid. 






Fortescue further fuelled rumours of an imminent deal yesterday by calling a trading halt ahead of an announcement on Monday. 

The halt comes after it confirmed on Thursday that negotiations with unnamed parties could lead to a material agreement if concluded. 

Though Fortescue is expected to sign another incremental off take deal with Chinese buyers next week, analysts yesterday said that alone was unlikely to warrant a trading halt. 

But Daiwa Securities analyst Mark Pervan said Fortescue might be negotiating new contracts sufficient for an accelerated expansion program. 

Industry sources have also suggested Russian and Chinese steel interests may be again eyeing a strategic interest in the company after missing out on a cornerstone stake last year. 

It was also suggested that Fortescue might be negotiating a new equity injection to counter delays and cost blow-outs at its $3.7 billion Pilbara iron ore project in the wake of cyclone George.


----------



## 2020hindsight (24 March 2007)

Kauri said:
			
		

> fuelled rumours of an imminent deal yesterday by calling a trading halt ahead of an announcement on Monday.
> 
> ......It was also suggested that Fortescue might be negotiating a new equity injection to counter delays and cost blow-outs at its $3.7 billion Pilbara iron ore project in the wake of cyclone George.



New Equity injection - would that usually mean drop in share price? (with options to compensate?).  Of course takeover would more than compensate no doubt (?)

Thought for the day ..If there's a takeover, would it be fair to say "it's an ill wind that blows no good" ?


----------



## Kauri (25 March 2007)

2020hindsight said:


> New Equity injection - would that usually mean drop in share price? (with options to compensate?). Of course takeover would more than compensate no doubt (?)
> 
> Thought for the day ..If there's a takeover, would it be fair to say "it's an ill wind that blows no good" ?





   This comes in under the rumour banner I know but I hope it gets past the mods!!!      Just had brekkie at the local village and got around to talking about FMG. A couple of blokes who work in the city suggested that I might not be seeing the Forrest for the trees. Suggested I look at MOL. Apart from the fact that their price and vol has been very similar over the past few days and the fact that Twiggy holds around 25% of MOL via .20c options issued when MOL listed (also approx 25%?? of FMG via .08c options ) I don't see any other similarities..


----------



## Little1 (3 April 2007)

Did anyone notice the seller with 11700 and the buyer for the same quantity with a 40c spread betwwen them today? Can anyone tell me what that was about?

I don't know if it was the same person with $200k trying to manipulate the market, but I'm awfully suspicious.


----------



## Kauri (4 April 2007)

May correct back for a C leg yet, or possibly has already started into the 5th leg. Whichever, still looks positive for a while yet??


----------



## Kauri (4 May 2007)

Have added to my ongoing long position.. possibly the start of the 5th leg?? (is this post 100 characters long, it must be now).


----------



## michael_selway (4 May 2007)

Kauri said:


> Have added to my ongoing long position.. possibly the start of the 5th leg?? (is this post 100 characters long, it must be now).




Hi Not Bad

*Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS -1.0 -48.4 -51.5 149.3 
DPS 0.0 0.0 0.0 0.0 *

thx

MS


----------



## astroboydivx (5 May 2007)

Have any of you guys read the Eureka Report article (subscribers only) by Charlie Aitken about Fortescue Metals?

In it he says this:

"Let’s assume Fortescue decides to go straight to production of 120 million tonnes a year. That decision needs to be made by August this year. That would require bond holder approval, which I suspect would occur. Fortescue keeps all the contractors on site, and they go for it. The 120mtpa scenario sees four berths, three shiploaders, 10 million tonnes of stockpiles at the port, a double train loop with 1x2 car unloader, and 1x4 car unloader. It's all additions to what will be existing infrastructure, and I think it's unrealistic to consider Fortescue producing 45 million tonnes a year. Under the expanded production scenario, it would be producing 120 million tonnes in 2011-12.

At a margin of $40 a tonne, 120mtpa means EBIT of $4.8 billion a year. Interest costs will be about $300 million assuming stage two is debt-funded. Deducting corporate tax of 30% leaves NPAT of $3.15 billion, earnings per share on the current capital base (264 million shares) of $11.90 a share.

No, that is not a typo. The scenario above sees Fortescue with 2011-12 earnings per share of $11.90, which puts the stock on a prospective 2011-12 price/earnings multiple today of 1.87 times. The stock will have a tonne of free cashflow, and should be able to maintain a 50% payout ratio. The dividend yield is potentially extremely attractive. "

Source: www.eurekareport.com.au

Thoughts?


----------



## Kauri (8 May 2007)

Kauri said:


> Have added to my ongoing long position.. possibly the start of the 5th leg?? (is this post 100 characters long, it must be now).




   Have taken 2R profit on the short term portion of trade (too gappy to set and let it hit a decent stop) , now have original and 2 pyramid longer term trades on with stop at low of recent W4 .


----------



## Kauri (10 May 2007)

And away from the hype of the BHP-RIO sideshow FMG has quietly gone about adding 20% since its breakout from the W4 triangle over the last week.... thats 200% *on the margin* for a 10% deposit DMA CFD... or 400% *on the margin* for a 5% deposit GSL DMA CFD ...


----------



## Kauri (11 May 2007)

I hope that no-one tells this mob that the XMJ is down the best part of 2% so far today....... (how do you count 100 characters??)


----------



## Kauri (12 May 2007)

Not to mention his holdings in MOL and the large chunk of NIA that he will end up with... 73, 76, 79, 82, 85, 88, 91, 94, 97,100.. 



> Iron ore baron Andrew Forrest became the State’s first triple billionaire yesterday, two months to the day after cyclone George tore through the Pilbara, killing two workers at a construction camp run by his company, Fortescue Metals Group.
> 
> The maverick mining entrepreneur achieved the milestone when shares in Fortescue touched a record $29.56, valuing his 102.3 million shares at a neat $3.02 billion, less than four years after he acquired them at just 8 ¢ each.
> 
> ...


----------



## Miner (13 May 2007)

This is my first entry in this forum.
First call is on FMG. What is the secret with Twiggy? Whatever he touches sees gold. FMG has not produced yet but see the share price: wow. It is reaching BHP share price with so much publicity against him. Has any one read about Charlie Atkinson's report? He predicted the price is $100 to be in one year's time.
Some one recommended it at $2 price I did not believe him. Then it goes up and up and I never had the guts to put money on it.

Look at NIA and Twiggy just touched it. Price has gone up.
Will it be a bubble or just a too hot pick? Your thoughts please.

Regards
Miner
13 May 07


----------



## michael_selway (14 May 2007)

astroboydivx said:


> Have any of you guys read the Eureka Report article (subscribers only) by Charlie Aitken about Fortescue Metals?
> 
> In it he says this:
> 
> ...




EPS of $12, so fwd PE of 10 = fair value, imo its worth $120 potentially

What risks does thsi compnay and the industry its in have?

thx

MS


----------



## reece55 (17 May 2007)

Kauri
You still on this one in your long term hold position??? If you are mate, you have nerves of steel, cause I think I would have cashed in today if I had been on it.

What a gap up today.... In 10 trading sessions, the stock has $14.65 and the 52 week low is $6.00, which is more than a 1/6th of where we are now. All bow down to Twiggy!!!! This has easily got to be the most parabolic share in the ASX 200, it's just incredible........

In saying this however, how much longer can the FMG machine keep going up? If it retraces from this high today, based on Fibs we could see some very volatile times???

Look at NIA however, it's worth 8x what it was before Twiggy announced he would be stepping on the board! The power that one man yeilds in this market is astonishing.....

Cheers


----------



## bigdog (17 May 2007)

There are 10 more trading days in May!!!

Fortescue's shares soar 68% in May
17-May-07 by AAP
http://www.wabusinessnews.com.au/en-story.php?/1/52393/Fortescue-s-shares-soar-68-in-May/dba

The share price of Fortescue Metals Group Ltd had another strong run today, following the announcement of a revised iron ore off-take agreement taking its total share price gains for May to an extraordinary 68 per cent.

Today's off-take agreement, with China's third largest steel mill, Tangshan Iron and Steel Group, help the price surge, with shares jumping 11.6 per cent. 

Shares in the company closed at $37.40 today, compared with the May 1 share price of $22.25.

The deal with Tangshan, China's third largest steel mill, could be notionally worth up $12.14 billion to Fortescue and mirrors a similar deal with China's largest steel mill, Baosteel.

The 10-year offtake agreement covers a first-phase quantity of five million tonnes a year of Fortescue's initial 45 million tonne-per-annum output from its Chichester Range iron ore mine in the Pilbara region of Western Australia.

Tangshan has committed to purchase a further minimum of 15 million tonnes annually of Fortescue's planned expanded production.

The pact replaces and expands an existing offtake agreement between the parties, allowing for an increase in volume and an adjustment to the type of ore to be sold.

Fortescue executive director Graeme Rowley said the offtake agreement signed with Baosteel in March gave the company credibility in the eyes of other steel mills.

"The moment Baosteel agreed, that obviously had a domino affect, which is enormously satisfying to us," Mr Rowley told AAP.

"It gave us credibility that the largest steel mill in China said we are going to go to the tune of 20 million (tonnes per annum) and everyone else said `we'd better get on this bandwagon'."

The Baosteel deal has been estimated by Fortescue as worth about $1.21 billion a year.

Fortescue's is expected to ship the first ore from its $3.7 billion Chichester Range project in mid-May 2008.

The company is slated to export about 25 million tonnes of iron ore in the first year from the mine, about 260 kilometres south-east of Port Hedland, before ramping up production to 45 million tonnes a year.

The company has plans to increase output to 60 million tonnes annually before further increasing output to 110 million tonnes per annum.

Mr Rowley said Fortescue had agreements with about 15 different parties and that there was continuing interest from Chinese mills, along with steel mills outside of China.


----------



## reece55 (17 May 2007)

bigdog said:


> There are 10 more trading days in May!!!




Review your price data Big Dog.....

Close on 3 May = 22.75
Close today (16 May)= 37.40
Difference = 14.65
10 trading days

Struggle to see what was wrong with my comment mate.........


----------



## krisbarry (17 May 2007)

This hurts so damn badly...I would now be worth over $600,000 if I kept my orginal purchase from Aug 2004 at 64 cents.


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## Kauri (18 May 2007)

reece55 said:


> Kauri
> You still on this one in your long term hold position??? If you are mate, you have nerves of steel, cause I think I would have cashed in today if I had been on it.
> 
> 
> Cheers




  Hi Reece,
              Sold out 50% of my original and 2 pyramid longer-term trades as the rise has been too steep for mine, *and can't find a logical place to set a stop*... on the other hand if this turns into an overdue correction I am not convinced that it won't move on up further ..    ..


----------



## Kauri (29 May 2007)

Still can't work out where I am at with this one. The last peak was big enough to be a W5, hence I took 50% of long term holdings off the table... have left the remaining in case this is an _extended extended_ fractal W5..   I think Twiggy has a lot more up his sleeve yet...


----------



## michael_selway (29 May 2007)

Kauri said:


> Still can't work out where I am at with this one. The last peak was big enough to be a W5, hence I took 50% of long term holdings off the table... have left the remaining in case this is an _extended extended_ fractal W5..   I think Twiggy has a lot more up his sleeve yet...




FMG's run is better than PDN's imo

Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS -1.0 -8.8 -36.8 92.9 
DPS 0.0 0.0 0.0 0.0


----------



## ideaforlife (29 May 2007)

Michael, what do you mean by "FMG's run is better than PDN"? It seems PDN has gone up 20% today and still on the way up. Also it's price is not even over a dollar. 

Thanks for explaining.


----------



## Miner (29 May 2007)

After listening Peter Quinn's lecture on Monday at Perth where he suggested that Chinese Government has allocated some $200 B( I hope not to hear mistake) to Chinese Investment organisation and they are empowered to take over big companies. He suggested that in 2009-10 China could take over rio / bhpb. Though he refused to say about FMG - I thought with a lot of Chinese clientele (or only Chinese Clientele) FMG will be a sure take over company by Chinese investors - big bonus for ANdrew Twiggy for his billions .


----------



## Kauri (1 June 2007)

Placing a stop without possibly giving back too much is geting difficult.... the W1?? is long enough in itself to be the final W5..


----------



## michael_selway (1 June 2007)

ideaforlife said:


> Michael, what do you mean by "FMG's run is better than PDN"? It seems PDN has gone up 20% today and still on the way up. Also it's price is not even over a dollar.
> 
> Thanks for explaining.




Hi i meant "run" since 2003, both were below the 10c range in 2003?

thx

MS

*Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS -1.0 -8.8 -36.8 92.9 
DPS 0.0 0.0 0.0 0.0*


----------



## Mousie (1 June 2007)

michael_selway said:


> Hi i meant "run" since 2003, both were below the 10c range in 2003?
> 
> thx
> 
> MS




Depends on the price you bought in at. Not sure at what price FMG began to run, but PDN started @ circa 2c. I only noticed FMG when it was @60c. At what point did you notice FMG Michael?


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## Sean K (1 June 2007)

This is insane. This is the type of stock that most people dream about getting on board early, recognise the potential, have trust in their analysis, and add to their position as they go instead of taking profits. What a dream! This would have made a few people very, very wealthy. Poor me.


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## Kimosabi (1 June 2007)

kennas said:


> This is insane. This is the type of stock that most people dream about getting on board early, recognise the potential, have trust in their analysis, and add to their position as they go instead of taking profits. What a dream! This would have made a few people very, very wealthy. Poor me.




Is it just me, or does this look like the Chinese Composite Index????????????


----------



## The Barbarian Investor (2 June 2007)

Its turned "Twiggy" into a triple Billionaire..and nothings been dug out of the ground yet; look at BHP then FMG, whats the story

On a side note, companies like Roche, Worsley Parson etc must be doing very wellouta this boom servicing these Mining Groups


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## michael_selway (2 June 2007)

The Barbarian Investor said:


> Its turned "Twiggy" into a triple Billionaire..and nothings been dug out of the ground yet; look at BHP then FMG, whats the story
> 
> On a side note, companies like Roche, Worsley Parson etc must be doing very wellouta this boom servicing these Mining Groups




Is ROCHE listed on the ASX? MND, LEI has been doing well like WOR

PS: npt sure actually but I "heard" someone say about 10c

thx

MS

*MND - Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS 35.2 64.7 69.2 73.7 
DPS 33.0 56.5 61.3 65.0*


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## nizar (2 June 2007)

kennas said:


> This is insane. This is the type of stock that most people dream about getting on board early, recognise the potential, have trust in their analysis, and add to their position as they go instead of taking profits. What a dream! This would have made a few people very, very wealthy. Poor me.




I dont know what you define is early.
When it gets to $100, $38 will seem pretty early yes??

I got the big signal on the first big volume up day into blue skies at around $12.
Of course, i ignored it, and bought something else


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## Kauri (2 June 2007)

I can remember..(in another forum) about a year back, the doom and gloom surrounding FMG when after a 100%+ rise in about 2 months the price in a matter of a few days rapidly dropped something like 40%.... 

 When viewed in context of the past year not many people would even notice that blip now!!!!

 I would *guess* that FMG is currently well advanced with expansion plans and informal offtake agreements, and whilst they wont be released to the market anytime soon, I wouldn't be surprised if they officially come out even before the first shipment of this current construction cycle.


----------



## Kauri (4 June 2007)

Well, it took a while..   .. am using the 13 pd ma as a stop for remaining holdings... don't feel so dizzy now!!! With the range of the bars not much of a chance to pyramid in..


----------



## Miner (6 June 2007)

michael_selway said:


> Is ROCHE listed on the ASX? MND, LEI has been doing well like WOR
> 
> PS: npt sure actually but I "heard" someone say about 10c
> 
> ...




Michael

Roche Mining is part of DOwner EDI now. Roche  is not listed but Downer EDI is listed. It used to be Roche Bros but EDI bought it about four (?) years back. Robert Logan used to be chairman of Roche Mining and now I believe he has resigned .
Roche got mining contract for FMG.

Regards

Miner


----------



## barney (7 June 2007)

Kauri said:


> Well, it took a while..   .. am using the 13 pd ma as a stop for remaining holdings... don't feel so dizzy now!!! With the range of the bars not much of a chance to pyramid in..





Hi Kauri, looks like you might have played this one to perfection .... Well done.

I don't know EW, but the correction on FMG was a little steeper this time (probably general market sentiment included in the sums??) ...............  My guess is that, if it follows the previous pattern, it might have a little further to drop/consolidate, but if it bounces back strongly off the low $36.00 area, it may just head north again .............. How are you interpreting todays action (higher volume, low range etc) based on EW ? .............. 

For the Fundamentalists???  ............. I'm not great on fundamentals, but is there any foundation in the "talk" that this stock could/will eventually reach $100 ......... there are certainly not a lot of shares on offer, and the company is predominantly owned by major shareholders, so they wont be selling untill full value is reached I guess ?? .............. certainly been an amazing stock over the last few months.


----------



## Kauri (7 June 2007)

barney said:


> Hi Kauri, looks like you might have played this one to perfection .... Well done.
> 
> I don't know EW, but the correction on FMG was a little steeper this time (probably general market sentiment included in the sums??) ............... My guess is that, if it follows the previous pattern, it might have a little further to drop/consolidate, but if it bounces back strongly off the low $36.00 area, it may just head north again .............. How are you interpreting todays action (higher volume, low range etc) based on EW ? ..............
> 
> For the Fundamentalists??? ............. I'm not great on fundamentals, but is there any foundation in the "talk" that this stock could/will eventually reach $100 ......... there are certainly not a lot of shares on offer, and the company is predominantly owned by major shareholders, so they wont be selling untill full value is reached I guess ?? .............. certainly been an amazing stock over the last few months.




  Hi Barney,
                The recent moves have had me baffled but I have tentatively labelled it as I think it may be playing out. My stop is now by co-incidence 1 cent below todays close so if it closes below that tomorrow I am out. As I have added two pyramid trades to my original Jan trade I realise I may be getting out too soon but I have too much on the table to let it slide... ( still have work to do on my psychology!!).
                Although todays traded range is relatively small I tend to look at the range from yesterdays close to todays close which would give us a drop of something in the order of 41/2-5%... on increased volume and closing on the days low... not a good sign for mine. ( Having said that watch me pick the low  ). 
               The above should be taken in context to the fact that I have only been trading E/W and vol for a short time, there are others here with far more experience and knowledge that can interpret it differently..
         As an aside there was a little bit of quiet bad press for FMG floating around the other day, from the cyclone victims who were publically promised by Twiggy that they would be looked after promptly, but now it is out of the medias eye they are told it will be at least two years before anything happens. I don't think it made it into the mainstream media, if it did the reaction is far too severe I think.


----------



## barney (8 June 2007)

Kauri said:


> Hi Barney,
> The recent moves have had me baffled but I have tentatively labelled it as I think it may be playing out. My stop is now by co-incidence 1 cent below todays close so if it closes below that tomorrow I am out. As I have added two pyramid trades to my original Jan trade I realise I may be getting out too soon but I have too much on the table to let it slide... ( still have work to do on my psychology!!).
> Although todays traded range is relatively small I tend to look at the range from yesterdays close to todays close which would give us a drop of something in the order of 41/2-5%... on increased volume and closing on the days low... not a good sign for mine. ( Having said that watch me pick the low  ).
> The above should be taken in context to the fact that I have only been trading E/W and vol for a short time, there are others here with far more experience and knowledge that can interpret it differently..
> As an aside there was a little bit of quiet bad press for FMG floating around the other day, from the cyclone victims who were publically promised by Twiggy that they would be looked after promptly, but now it is out of the medias eye they are told it will be at least two years before anything happens. I don't think it made it into the mainstream media, if it did the reaction is far too severe I think.





Nothing wrong with your EW ............. at last I can understand your analysis  ............. It would be good if the support held at $36.50 tomorrow, but that might be asking a bit too much after today .......... $36 is probably more likely ........... then again with this one who knows ..... Cheers.


----------



## It's Snake Pliskin (8 June 2007)

Kauri said:


> Hi Barney,
> The recent moves have had me baffled but I have tentatively labelled it as I think it may be playing out. My stop is now by co-incidence 1 cent below todays close so if it closes below that tomorrow I am out. As I have added two pyramid trades to my original Jan trade I realise I may be getting out too soon but I have too much on the table to let it slide... ( still have work to do on my psychology!!).
> Although todays traded range is relatively small I tend to look at the range from yesterdays close to todays close which would give us a drop of something in the order of 41/2-5%... on increased volume and closing on the days low... not a good sign for mine. ( Having said that watch me pick the low  ).
> The above should be taken in context to the fact that I have only been trading E/W and vol for a short time, there are others here with far more experience and knowledge that can interpret it differently..
> As an aside there was a little bit of quiet bad press for FMG floating around the other day, from the cyclone victims who were publically promised by Twiggy that they would be looked after promptly, but now it is out of the medias eye they are told it will be at least two years before anything happens. I don't think it made it into the mainstream media, if it did the reaction is far too severe I think.




Kauri,

If you can't see a count do you play it out anyway using other tactics, or are you strictly using EW?

I see it as in and out then sideways or down for a while. I may be wrong. 

Hello Barney,

Good to see you still going at it.
Regards
Snake


----------



## Kauri (8 June 2007)

It's Snake Pliskin said:


> Kauri,
> 
> If you can't see a count do you play it out anyway using other tactics, or are you strictly using EW?
> 
> ...




  Hi Snake,
              I try to time all the trades with my E/W counts where-ever  possible, alongside vol and bar shape characteristics. On the weekly it has exceeded the max W*(3)* in price, although the Miner DT time component is way out..( pink rectangle).. and is starting to retrace into a W *(4)*??.. and as on the daily I am having trouble fitting a count to the parabolic advance I am using a basic MA exit. If I was trading very long-term I possibly would ride out any W*(4)*  and leg it into a W*(5*), always assuming of course that my count is correct...
               Cheers
                       Kauri


----------



## It's Snake Pliskin (8 June 2007)

Kauri,
Thanks.
It just goes to show the degree of the rise that took it to the highs. Yes,  that time element is way off the mark.

snake


----------



## Kauri (8 June 2007)

It's Snake Pliskin said:


> Kauri,
> Thanks.
> It just goes to show the degree of the rise that took it to the highs. Yes, that time element is way off the mark.
> 
> snake




  Snake,
           Just to muddy the waters a tad this is the alternative E/W weekly count I am looking at... am hoping that any retracement will clear it up for me..   .. as Gann would say..  in the fullness of time...


----------



## Kauri (9 June 2007)

Exited all FMG long positions on close as it was definitely going to close below my stop, was tempted to wait and see if it opened above the stop when the markets re-open and let it run, but that would break my trading plan and set a precedent that would cost me in the long-term. Undoubtably I will have exited on the bottom of this swing..   ..  such is the life of plan-based trader...


----------



## barney (9 June 2007)

It's Snake Pliskin said:


> Kauri,
> 
> If you can't see a count do you play it out anyway using other tactics, or are you strictly using EW?
> 
> ...




Howdy Snake, I agree re the price action .......

I only understand very basic EW, but I am working on a plan based on patterns with Momentum and Volatility (both short term) ........... The larger cap shares with high turnover like FMG are fit nicely into the theory so far ........... Looking at the price action on Friday, FMG finished off very strongly even though it was well down on the day ............ Short term volatility is still rising while momentum may be just bottoming out If the sp gaps open next week and moves up, previous patterns show that it should have a reasonable rise ($3 back to around $39 ish), but then probably a medium consolidation period bouncing around between $38-$40 ............ The theory is very basic, but so far reliable............... always at the mercy of the market in general sentiment though 

Of course if the sp gaps down, all bets are off  lol 

Kauri, with your EW analysis, what would be the catalyst for your next entry point (if any) ..... Cheers.

PS Just posted after you did Kauri, so you have kind of already answered my question b4 I asked it ........... Are you psychic lol ............. still interested in your re-entry criteria though.


----------



## Kauri (9 June 2007)

barney said:


> Kauri, with your EW analysis, what would be the catalyst for your next entry point (if any) ..... Cheers.
> 
> PS Just posted after you did Kauri, so you have kind of already answered my question b4 I asked it ........... Are you psychic lol ............. still interested in your re-entry criteria though.




   Hi Barney,
                To re-enter I will be looking for what *I see* as a low risk E/W setup, coupled with volume indications, and I just love triangles and/or ledges.. 
          Have attached a chart of the (in this trade cycle) original and two pyramid trades... probably explains it better than I can. 
                I generally place two trades at each entry point, one shorter-term and one longer-term... the shorter-term is mainly for my psychology, I find the stress and temptation to exit early on the main longer-term trade during normal market swings is reduced if I have already locked in profit on the trade.  ..
                      For my FX etc trades I use much the same criteria apart from replacing vol with a momentum based indicator.
                            Cheers.
                                    Kauri...


----------



## barney (10 June 2007)

Kauri said:


> Hi Barney,
> To re-enter I will be looking for what *I see* as a low risk E/W setup, coupled with volume indications, and I just love triangles and/or ledges..
> Have attached a chart of the (in this trade cycle) original and two pyramid trades... probably explains it better than I can.
> I generally place two trades at each entry point, one shorter-term and one longer-term... the shorter-term is mainly for my psychology, I find the stress and temptation to exit early on the main longer-term trade during normal market swings is reduced if I have already locked in profit on the trade.  ..
> ...





Thanks for the insights ...... Its always interesting to see others plans in action .............. Keep us posted for any future trades on this one ........... Glad to see this trade was a good one for you .......... Cheers.


----------



## nizar (10 June 2007)

I cant believe this was 80c in October 2004.
Gotta love long-term uptrends.... 

This stock is really a winner.


----------



## michael_selway (10 June 2007)

nizar said:


> I cant believe this was 80c in October 2004.
> Gotta love long-term uptrends....
> 
> This stock is really a winner.





Hi yep 

But would you buy it at current prices though?

Why and why not?

thx

MS

*Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS -1.0 -8.8 -36.8 92.9 
DPS 0.0 0.0 0.0 0.0 *


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## nizar (10 June 2007)

michael_selway said:


> Hi yep
> 
> But would you buy it at current prices though?
> 
> ...




MS, are you still holding ZFX that darling of yours from back in the days?
I hope not - it looks sideways at best.

I saw this at $12 in November, a mate messaged me to get in on the breakout. I didnt 

But thats why you should never right off blue sky stocks.
And never think that because a stock has run so much, it cant run higher.


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## michael_selway (11 June 2007)

nizar said:


> MS, are you still holding ZFX that darling of yours from back in the days?
> I hope not - it looks sideways at best.
> 
> I saw this at $12 in November, a mate messaged me to get in on the breakout. I didnt
> ...




nizar, ZFX going sideways atm, but as you said "you should never right off blue sky high stocks", this might be one soon!

yes stocks can go higher and higher and higher, but you have to look at the risk and return, more so than the chart alone at any given point in time, esp when its at an "all time high" etc

thx

MS


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## adobee (15 June 2007)

FMG in trading halt.. 

Financial review front page says that they will be capital raising to expand further however some people think this is to cover increased labour costs.


----------



## Kauri (16 June 2007)

In The West Australian today......   
*Analysts doubt wisdom of Fortescue’s fresh debt push 
*

_16th June 2007, 8:00 WST_

_Analysts fear Fortescue Metals Group will be under even greater pressure to meet already tight production deadlines as the total cost of its Pilbara iron ore project passes $5 billion. 

Fortescue called a trading halt yesterday amid efforts by its lead banker, Citi, to finalise another massive funding campaign to raise more than $1 billion in fresh debt and equity. 

Citi is reportedly seeking to raise up to $300 million in fresh equity in the Andrew Forrest-controlled company and up to $1 billion more in highinterest convertible notes. 

The planned raising comes less than a year after Fortescue secured the outstanding funds needed to proceed with its $3.7 billion project, via a high-cost $3.2 billion equity raising and bond issue. 

Under the original package, US fund Leucadia National stands to net more than $1 billion in repayments over 13 years on a cornerstone $535 million placement and loan deal. At the same time, Fortescue is paying up to 10.6 per cent a year in interest on a $2.7 billion bond issue to foreign institutions. 

Fortescue declined to comment yesterday, but maintains that its existing overrun facilities are sufficient to cover all likely cost increases. Last month it boosted its overrun budget to $304 million in the wake of three devastating cyclones. 

Fortescue’s project is initially slated to produce 45 million tonnes a year from May next year, but Fortescue has been aggressively touting plans to boost output to 60 million tonnes immediately and again to 120 million tonnes by early next decade. 

But analysts said yesterday they believed Fortescue should focus on getting the project into production before placing it under greater pressure by weighing it down with fresh debt. 

“The thing that worries me is the pace (of Fortescue’s expansion plans) and management’s time being directed away from getting this first stage happening, ” BBY analyst John Veldhuizen said. 

Mr Veldhuizen said another $1 billion in debt would put Fortescue under significantly more pressure to generate cash flow on schedule. 

“Of course it does, though they are obviously pretty comfortable with it,” he said. “But the key concern for me is whether they’re moving too quickly.” 

Others wondered whether the funding was really needed to cover significant cost increases. 

“The word already was that their (initial) $2.6 billion capex estimate was more likely to be $4 billion,” said one analyst. “But you’d expect that for a project of that size costs would be significantly higher in the current environment.” 

Another analyst said the equity component would be needed just to cover the extra interest charges associated with the note issue. 

One veteran mining boss said loading up with extra debt was a concern. 

“At the end of the day, the project will be working for the bondholders, and all the money will end up with them,â he said. 
JOHN PHACEAS 


_


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## barney (4 July 2007)

Looks like the buying interest might be coming back to FMG over the last few days. Nice rise today on solid volume. If it follows up with a couple more days of confirmation and breaks above $37.50, may be headed back to all time highs.............


How are you reading it from an EW pov. Kauri??    Would you consider the last few days as the possible start of a new Wave 1?? If so, would you wait for Wave 2 to eventuate, and look for an entry on start of Wave 3, or are you happy to jump on early? ......... Cheers.


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## Craze0123 (13 July 2007)

Trading Halt - I think its to raise some funds...

http://www.asx.com.au/asxpdf/20070713/pdf/313fbrd4sqthkw.pdf


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## barney (7 August 2007)

Not sure of how much importance this may or may not be, but FMG, even though down again yesterday (monday), traded on increased volume with strong accumulation orders being placed all afternoon at around $29.50 .......... Looks to me like the first sign of "intelligent" money nibbling back in ......... certainly too early to call a bottom, but definitely a positive sign imo ............  Chart shows just how "obvious" the buying was ....


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## tigerboi (20 September 2007)

fmg hit a new high of $43.44 today trading around $42.75 looking to break out beyond $45, anyone still following been a while since last post?


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## vishalt (20 September 2007)

I should've bought this gem as it slipped to $30, my god at its speed, and it hasn't produce a single piece of ore yet lol D:, hate speculators so much!

Oh well there's still the Uranium kids down south at Summit & Paladin!


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## Prospector (20 September 2007)

I have been steadily accumulating FMG especially around the $28 mark.  Even as late as yesterday.  For what its worth, I dont think it is too late to get in.


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## Ken (20 September 2007)

Look back at GreatPig! The first poster of FMG at $3.00.

August 2006.

GreatPig, did you buy back in? Have you made a killing?

I feel for you....

$10,000 would be worth $140,000

Who is to know?!


----------



## Miner (20 September 2007)

*Re: FMG - Fortescue Metals and POSEIDON Nickel*

Folks

More news on FMG though not a surprise from Twiggy.
He has sold off a substantial stake from FMG as attached.
He also exercised his option on Poseidon Nickel.
It was expected as you could see the share price was jumping.
Net result will be in FMG a good Chinese investor will come.  Don't forget FMG has already placed heavy orders for its steel equipment etc from China. Probably it will be a barter for iron ore vs equipment purchase . 

Twiggy will be still the major shareholder. But that will keep the company to incorporate a higher level of flexibility and so for share prices to go up.
With POS hovering the half of price for some times mean the share price will jump with visible sign of Twiggy's interest. Please visit www.asx.com.au and see on the same day POS options exercise and sale of FMG shares by Andrew John Forrest. Nickel price has just shot up 10% and surely Twiggy has a Midas touch. Time to buy POS probably.

One ticklish question however to ask who has seen the ore body result since last 6 months from Christmas Creek ? It woudl be nice to see some one to post some news on that - real geological analysis posted in ASX.
Game has really started.
Ironically Twiggy has not put any money so far in MOL yet.


REgards

Miner


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## michael_selway (20 September 2007)

Ken said:


> Look back at GreatPig! The first poster of FMG at $3.00.
> 
> August 2006.
> 
> ...





Absolutely crazy, does anyoen know the mine life of thsi stock?

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS -26.2 -51.4 174.2 398.0 
DPS 0.0 0.0 0.0 60.1 *

thx

MS


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## Miner (20 September 2007)

folks
I sent two attachments for you to read.
Looks like they have blocked by the administrator.
Any way please visit 

http://asx.com.au/asx/statistics/an...rchByCode&releasedDuringCode=W&issuerCode=FMG to see Andrew Forrest has sold more than million shares and invested back on Poseidon Nickel POS

http://asx.com.au/asx/statistics/an...rchByCode&releasedDuringCode=W&issuerCode=POS

Dear Joe : could you please release my mail with attachments if not done already while I am posting this for people to read and comment back.

Regards

Miner
20 Sept 07


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## tigerboi (20 September 2007)

i got in at mid 30's,as i believe with its resource it has & possible takeovers once it starts shipping next year,it is a genuine $100 stock, ive not listened to the doomsayers talk of late shipments due to setbacks as a result of cyclone george last year,it has access to bhp's railway if needed so if the upgrade to 55mt is too much to handle then it will go up bhp's line,its a pure iron ore play unlike bhp & rio,it has 1bt to ship of its own plus others it will surely takeover,me personally i think any shares under $45 is a bargain & as a result of getting into fmg i decided to buy huge cullen resources who have 2 jv's with fmg & 2 with bhp, yes started out as a speccie buy but the fmg connection to me was too good to pass up CUL still small cap now but fmg has proven in no time at all the market will sit up and take notice CUL'S aggressive approach to buying tenements close to fmg & bhp will start to show its benefits,it now has 10 jv's,reckon at under 10 cents is a bargain for those prepared to wait.


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## Miner (21 September 2007)

Dear Tiger Boi
Great observation and interesting hopes.
When did  you  or any one read a drilling result from FMG and aware how much actually its railways progressed ? No rail no ore goes to ship.
They sacked BGC and got into some 'friendly' dispute for $12 M  with Mr Buckridge as reported in press.
Now NRW is the contractor who is a reputed one.
However it is a far call to get FOOS first ore will be on ship in May 08.

Probably it will be a ritual to get the first ship gone and a big shut thereafter.
No doubt Mr Forrest is an icon in Australia and really brave. However one more summer is to go before the ore gets into rail and ship.
Let us think positive however because the profit margin is bloody good in this project.

Regards


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## Lyn (22 September 2007)

FMG have been my favourite stock to watch.  I purchased back when it was $17 and have just sold when it reached its all time high.  FMG have the biggest tenament in the Pilbara, so they have a lot going for them, if they manage to get production occuring.

I think they will have a lot more hurdles with BHP rail access.  Based on the traffic currently occuring on the rail line into Port Hedland I cannot see how sharing the line is going to work efficiently and I'm sure BHP can ealisy break the size of trains down to increase traffic flow even further.  I do agree with other comments that they are prime for a take over by one of the giants.

What I know about FMG is that their stock is over priced given they are not producing anything and they have dramatic highs and lows. They are very volatile to impact from other markets.  I will be buying back in but I think we will see another dramatic drop in price before the year is out.


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## Prospector (24 September 2007)

OK, so people generally dont seem to be selling this for profit; some think it is over valued, so are others still holding or buying in?  I am holding still and have no plans to sell; a long term hold for me


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## KIWIKARLOS (24 September 2007)

For sure unfortunately I dont have enough cash for this baby im stocked up on BHP and you need big dollars to get real value out of these big mining stocks.
That said I think FMG has a huge potential for growth in the next 12 months, their operations are only going to expand. Still feel that they may be a tad overvalued now for what they are currently producing but the upside could be putting a good premium on the SP.


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## tigerboi (25 September 2007)

Prospector said:


> OK, so people generally dont seem to be selling this for profit; some think it is over valued, so are others still holding or buying in?  I am holding still and have no plans to sell; a long term hold for me




hang onto it for dear life its a real long termer that will pay tremendous dividends literally.todays construction report was a timely boost


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## michael_selway (25 September 2007)

tigerboi said:


> hang onto it for dear life its a real long termer that will pay tremendous dividends literally.todays construction report was a timely boost




It does have great numbers goign forward

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS -26.2 -51.4 201.7 472.8 
DPS 0.0 0.0 0.0 60.1 *

thx

MS


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## KIWIKARLOS (25 September 2007)

yeah except for the next two years where your actually loosing money on your investment  I think its overvalued now because of that, alot can happen in two years. They have also been going over budget in their construction works. I want to get in but there is no way im paying 47 now if it dips below 40 ill buy in for future prospects but realistically if you can't wait 2 years its not that good atm.


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## tigerboi (25 September 2007)

KIWIKARLOS said:


> yeah except for the next two years where your actually loosing money on your investment  I think its overvalued now because of that, alot can happen in two years. They have also been going over budget in their construction works. I want to get in but there is no way im paying 47 now if it dips below 40 ill buy in for future prospects but realistically if you can't wait 2 years its not that good atm.




you missed a good opportunity recently when it was down to $25.04,now on its way to double that possibly in 1-2 days


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## KIWIKARLOS (25 September 2007)

You're right I did miss the opportunity but it could just as easily go down to $30 again if they hit any snags in the construction or any other hiccup. From what I understand they have already signed agreements to sell their ore and BHP and RIO are in the stages of negotiating price increase for their ore this is something FMG cant do while they are tied into their contracts. With negative earnings per share for the next two years there is still more risk with these guys than the other two big boys especially considering they only have iron ore in their portfolio. I do believe they grow dramatically but I still think there will be a better entry price.


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## Ken (26 September 2007)

I would be going short at 49.99 if it reaches that.  Funny some stocks just retrace when they hit significant numbers..

I can't short sell.

But from a traders perspective I think people are thinking the way I would be...

It has risen so much, it cant keep going. Its going to go down... lets go short on it...

You cant fight this performer of the year.

Has been a phenomenon.


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## vishalt (26 September 2007)

Yeah seriously unbelievable share lol. 

FMG & IPL have had meteoric rises in their share price, and the fundamentals aren't even strong... speculative brokers never cease to amaze me.

Maybe ERA, PDN & SMM will have their turns again too? Who knows, I only stick with big, deep & liquid assets.


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## Lyn (26 September 2007)

Kiwikarlos - from a local perspective.  A snag is just around the corner.  Word is that FMG have no hope of meeting their target of shipping in March.  Recent announcements made by FMG that they are on target expect for rail construction is correct.  FMG are optimistic that they can still reach their target date, however I have a source that tells me it will not be possible  (I won't go into explanation why). There is also the legal wrangling occuring with BGC.  I still think we will see a price drop once these issues start to impact, so hold in there for buying opportunities.


----------



## tigerboi (26 September 2007)

Lyn said:


> Kiwikarlos - from a local perspective.  A snag is just around the corner.  Word is that FMG have no hope of meeting their target of shipping in March.  Recent announcements made by FMG that they are on target expect for rail construction is correct.  FMG are optimistic that they can still reach their target date, however I have a source that tells me it will not be possible  (I won't go into explanation why). There is also the legal wrangling occuring with BGC.  I still think we will see a price drop once these issues start to impact, so hold in there for buying opportunities.




firstly fmg has access to bhp's rail line,the federal court has ruled so.2nd & last all the unfounded rumours has had the opposite effect on the sp,so keep them coming.


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## michael_selway (27 September 2007)

vishalt said:


> Yeah seriously unbelievable share lol.
> 
> FMG & IPL have had meteoric rises in their share price, and the fundamentals aren't even strong... speculative brokers never cease to amaze me.
> 
> Maybe ERA, PDN & SMM will have their turns again too? Who knows, I only stick with big, deep & liquid assets.




Hi what do you mean by fundamentals not being strong?

*IPL - Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS 146.5 397.3 456.2 438.5 
DPS 103.0 280.0 328.0 301.0 *

*FMG - Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS -26.2 -51.4 201.7 472.8 
DPS 0.0 0.0 0.0 60.1 *

thx

MS


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## Miner (27 September 2007)

My little birdi advised that FMG has already accounted that BHPB rail would not be available before 2010. That includes legal dispute and delays. My birdie also advises that every week they receive a construction progress report and by the time it comes in public domain : Aug construction report in third week of Sept as an example by when  much water has passed under the bridge.

Keep hoping like lotto win that FMG will be a full producing company even @45million tonnes per annum before mid 2009.  By May 2008 you would be lucky to see that iron ore is produced even at 35 MTPA rate. If they produce 45 MTPA rate by May 2008 call me by any name.

But do not worry for that - we are not here producing iron ore but to make money. So  make the money as a trader without bothering for intrinsic growth, balance sheet, EPS, EBIT, NPV, IRR,  etc etc . 

Let us face it FMG is not BHP or Rio and never will be. Andrew Forrest is not Chip Goodyear or Sam Walsh (Iron Ore chief of Rio Tinto Iron ORe). 

But who cares : Late Kerry Packer never dealt with mines and was the richest Australian. So was Bill Gates never touched a mineral. 

Dollar is dollar so long you can count them in your favour.


----------



## Mazrox (5 October 2007)

SMH report today:

"BHP Billiton may have to open its railway lines in the Pilbara region of Western Australia to third party users following a Federal Court of Australia ruling today....

The full bench of the Federal Court today dismissed BHP Billiton's appeal, but it is not expected to be the end of the matter with BHP planning an appeal to the High Court."

Check smh.com.au for full story.

A step in the right direction for FMG...

Maz
(I don't hold)


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## vishalt (5 October 2007)

michael_selway said:


> Hi what do you mean by fundamentals not being strong?
> 
> *IPL - Earnings and Dividends Forecast (cents per share)
> 2006 2007 2008 2009
> ...




umm ... fortescue hasn't produced a SINGLE bit of iron ore yet, this is all hype and fund managers/speculators are cheating their way to make money, what if it delays shipments yet again? What if collapses to a corporate scandal? Andrew "Twiggy" Forest is the only known name in that company and I saw on Lateline Business grill him on his past failures.

I retract my IPL comment as I haven't done enough research to accuse it of having bad fundamentals.


----------



## Miner (7 October 2007)

Folks
It is a great news for FMG supporters that the company has won all three court cases against BHP regarding rail access. It is a great moral victory and snub for both Rio and BHPB.
In my very early post probably I have mentioned how it was an arrogant step by Mr Ian Ashby of BHPB Iron Ore and one of the MD of Rio group in Global Iron Conference stating they fight tooth and nail not to release any part of the railway. I personally feed for those multi million salary earners. If they woudl have read the National Competition Policy then the silk ties need not to argue in court. But any way that is a minor observation.

Question is what FMG will gain with this? 
On a short term - little excepting its share price will balloon up again and BHPB will get the snub. As the appeal process will continue over the time FMG is slated its FOOS on ship . Due date officially is May 08 and for the execution team it is  Mar 08.
Medium to long term FMG will gain a lot. It will be sell its own railway to Atlas Iron and other iron ore producers. It will help to spin off its infrastructure company as was inferrred by the market.
However the point is if you refer to FMG project progress :


OUT OF 282 KM  Rail Corridor until 29 Sept only 20 km has been constructed. It will be a far cry to get this railway to be finished by even May 08. The silver lining is if BHP loses the appeal before May 08 then FMG share will probably shoot around $75 as predicted by Charles Atkin  the only Australian broker bullish about FMG (Souther Cross Eq) in his report published after he visited the site some months back.
However current commitment 45 MTPA rate will be achieved not by May 08. Probably it will be at 35 MTPA and still a good milestone .
The real 45 MTPA will be achieved by end of 2008.
Next is 55 MPTA by May 08 as claimed in FMG dossier for fund raising  available from ASX site. It is again a wish list. There is no demonstrated  plan seen in market by  FMG to achieve this .
200 MTPA achievement is a current dream (share hype) as there was no drill result released since 6 months and probably there will be none by Feb 08. 

Recently they advertised for Exploration Geologist.  So just showing the big tenement will not demonstrate the feasibility of achieving 200 MTPA.

Good luck


----------



## vishalt (7 October 2007)

What I want to know is if it is going to $100 w00t!?

Pretty interesting which one will be the next to cross the line eh, IPL/COH are hot on the trails of Macquarie to reach it!


----------



## Miner (7 October 2007)

Vishalt
What a pretty question. If any one would know when it will hit $100 then they would have made millions and buy them at right price.
We all have to use our own research, speculation and cocktail it with bit of wisdom and 'luck'.
Keep with a good hope.

Regards
Miner


----------



## krisbarry (8 October 2007)

vishalt said:


> What I want to know is if it is going to $100 w00t!?
> 
> Pretty interesting which one will be the next to cross the line eh, IPL/COH are hot on the trails of Macquarie to reach it!





I suggest it will not be much longer, as BHP and Rio Tinto start to negotiate new contract prices for Iron ore, later this year.  The talk of the town is a rise of between 30 to 50% for 2008.  If this occurs then all Iron Ore related stock will rise.


----------



## vishalt (8 October 2007)

Holy cow an 8 per cent surge today, what's happening with Fortescue lol?

I'd love to put money in it but that'd just go against my big-cap/security discipline BUT MAN, FROM $2 LAST JAN TO $53 this thing has gone ballistic, is there any stop D:!?


----------



## Prospector (8 October 2007)

vishalt said:


> is there any stop D:!?




I really, really hope not!  Because of its growth in recent, days it is now my heaviest share in my super fund.  Which is a pain really because the Investment plans says I can only have up to 10% of one share in the portfolio. Especially a speculative one.  It was only 4% six months ago.  It is way more than that now but I dont want to sell any just yet.


----------



## GreatPig (8 October 2007)

Just heading off again after a small sideways consolidation which got it nearly back to the recent trend line. Perhaps just building up the steam to concisively break the $50 mark. 

I originally bought in at around $9 a year ago, but then sold not long afterwards on a dip for around $13 thinking I'd made a good profit (which I had, just not as good as it could have been... ).

Cheers,
GP


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## mayk (9 October 2007)

Hi Folks,

Well I am interested in FMG, but I think I might have missed the train on this one. Can someone do some fundamental anlysis of the share price now  and if it will be worth buying this share at this stage ( considering if it will ever hits $100).

I am sure $ 100 is a speculation, just like $50 mark was  . Some comments regarding this will be appreciated.

Thanks


----------



## Plasmapark (9 October 2007)

Hey GP....join the club mate.
I started playing with FMG when it was $2.00....held 10k until it hit $8.00 last April when I offloaded, also thinking I'd done okay.
I'm still black and blue from the kicking I've given myself....such is life....nature of the beast etc.


----------



## brilliantmichael (9 October 2007)

_I wonder how many millionaires have actually been made out of this stock_? 

In hindsight, it's pretty obvious anybody could have done it if they'd bought in at $1 and grew their money *50 fold* in less than 3 years.

But there's the catch, FMG is like 1 out of 2000 stocks, and something like 1 out of 500 resource stocks, so who could ever have picked it out to be special back then? How many people can claim Andrew Forrest to be their buddy, and have known his character, and the company's plans well enough to have known how big the buzz would become on this stock? (Even well before his 'fund raising' campaigns)

And even though we tend to think all the original investors stuck around, they probably didn't (all the little investors), except the big insiders and their mates up the top. All the little guys jumped out when their money multiplied 3, maybe 4 times. So maybe they jumped back in again, and then maybe out again. In... out... in... out...

I doubt many, let alone anyone other than insiders, have actually risked enough of their capital to make them millionaires out of this stock.  And I doubt any non-insiders stuck around to reap the benefit of this anomaly-of-fortune. It was just a hidden lottery ticket with a lttle more clues lying around it - that's all. But it's important to remember it was always only just that: a lottery ticket with small odds.

And ask yourself, who can really place a definitive future value on this stock? Now I know the old saying: '_You don't need to know how fat somebody is to know they're fat._' (i.o.w. you don't need to have a definitive valuation on a stock to know it's good value), but iron ore that hasn't even started production? Who knows how valuable or not FMG's processing capacity is? "A what the heck I'll buy _in case_ it's worth $80, why not $100 a share!"

The price has been rising because the market firmly believes there's something "really special" about this stock (namely that it's price has a lot more to rocket)


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## Miner (10 October 2007)

The rocket is no more rocket. It was a hype (even the SP is so high) and then it was changed to SV special value.
Basically it was a low grade high silica iron ore gettng treated to increase some iron percent. This process will generate a lot of dirt which is yet to be ascertained where to dump.
200 MT is far off but must be something lady luck on Andrew's future with very convincing share price.
People have enough money to speculate as no one is asking for what level of production and how far really it is behind the schedule. Plus also no one in market is asking about the assay result from Christmas Creek.
It is too hot and I am keeping it off from my target.

Let our mini horses run on FMG

Regards


----------



## renim (15 October 2007)

wild ass guess at fmg value
if BHP's iron ore was 110Mtpa last year
and BHP's iron ore was 15% of the group's earnings
and a possible 30% price rise would've made bhp's iron ore 24% of its profit.
then for a $150B BHP, 24% is $36b
110Mtpa  ~  36b  gives $0.32b per Mtpa

so 45Mtpa  ~  14.7b
55Mtpa   ~  18b
100Mtpa   ~  32b
200Mtpa    ~   64b

I'll leave it to the reader to decide if this is under or overvalued with all the other subtleties of FMG to consider and other possible metrics.

My BHP summary is very cursory, and quite possibly inaccurate,  if there is better data out there, please correct this post!


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## Miner (15 October 2007)

Hi 
May I add that in the calculated regime of 15% hike in 2008 FMG will just begin to produce in May 2008 (see my earlier comments on railways). In the financial year end 07-08 it will hardly make one month's production of 35 MTPA production (please note 45 MTPA is not going to achieve in 2008 and I am on the money here). So the profit will really be realised in 2009and that will be in full form.
Expansion to 55 or 100 MTPA will not be before 2010 if at all teh BFS starts in this year.

Nevertheless encash the profit now and do not worry on company's production etc. That is why directors  like Rowley and Twiggy are there to worry for and earn their  lion's share of profit through options.

Regards


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## michael_selway (8 November 2007)

renim said:


> wild ass guess at fmg value
> if BHP's iron ore was 110Mtpa last year
> and BHP's iron ore was 15% of the group's earnings
> and a possible 30% price rise would've made bhp's iron ore 24% of its profit.
> ...




Hi FMG, new numbers

*Earnings and Dividends Forecast (cents per share) 
 2007 2008 2009 2010 
EPS -26.2 -54.3 308.2 528.6 
DPS 0.0 0.0 0.0 69.4* 

thx

MS


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## BigJohnny (9 November 2007)

FMG to increase liquidity thru a 10 for 1 split, will end up with around 2.7 billion shares on issue. An extraordinary meeting will be announced to mkt.

http://abc.net.au/news/stories/2007/11/08/2085879.htm?section=business


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## lbradman (13 November 2007)

Plasmapark said:


> Hey GP....join the club mate.
> I started playing with FMG when it was $2.00....held 10k until it hit $8.00 last April when I offloaded, also thinking I'd done okay.
> I'm still black and blue from the kicking I've given myself....such is life....nature of the beast etc.




OMG talk about greed. Most people would be stoked with the $60,000 you made from this one trade. If your punishing yourself for not holding on longer then your a fool. That stock could have just as easily nosedived after you had sold so who's to say it would rise as high as it did. Everything is easy to say in hindsight but if you arent satisfied with this win then next time you hold onto a similar stock are you going to go the extra distance in the hope this time round it would go all the way? Especially on a speccy stock like this it would more than likely turn you into a pauper faster the next time round.

I can already tell with the boom and using stocks like this as an example their would already be a flurry of new books hitting the shelves with titles like 'How I turned a thousand dollars to a million' just to feed into the greed mentality. And I'm sure they'll all be touting how they bought FMG at its low and rode it all the way to the top ...yeah right. Then again thats how losing traders make money by writing crap books like this that they know people love to believe.


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## Sean K (15 November 2007)

Holy Cow. 



> 15 November 2007
> The Companies Officer
> Australian Stock Exchange Ltd
> Exchange Plaza
> ...




How much more do they need? 

Stock breaks $60, up 17% ish.

Incredible.


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## Prospector (15 November 2007)

My God I just bought some more on Monday!     Bad luck Miner.:

I had to pay a tax bill today of $9000; I just made that in 1 minute on FMG!  I looked 30 minutes ago and it hadnt moved - refreshed the page and up by $10!

Now, stay there for a bit!


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## GreatPig (15 November 2007)

Lucky you... I just sold it late last week for $45.87 - the day before it jumped up 13% odd. 

Talk about royally screwed... and meanwhile, the "better prospect" I still hold continues to fall 

GP


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## Prospector (15 November 2007)

Oh  GP, doesnt that just suck when that happens.  But I am sure you made a tidy profit anyway   I have found a sure way to raise the price of a share is to sell it; and conversely, when I buy in it falls.

It seems to be settling a little now - maybe I should sell too!


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## GreatPig (15 November 2007)

You know what they say... life's a bitch and then you die 

What makes it more annoying is that there was no technical reason to sell it when I did, as it was sitting pretty much on a support level and my sell point was below that, but I just wanted to lighten the portfolio a bit and did an eenie-meenie-minie-moe kind of thing to pick one to sell - and FMG got the short straw (partly because it was the most volatile one I was holding, and I wanted to avoid a similar size drop down).

Another fairly common thing that seems to happen is getting a nice jump up, selling with say 30% profit, and then watching it double or triple in price over the next few weeks or months (hmmm... FMG again!). Alternatively, if I decide to hold in anticipation of that, the next day or so drops back 25% or more until all those gains have evaporated. The only thing that seems to determine which happens is whether I sell or hold. 

Oh well, time to follow the wife's lead: when feeling annoyed, go out and buy something expensive. 

GP


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## nizar (15 November 2007)

GreatPig said:


> You know what they say... life's a bitch and then you die
> 
> What makes it more annoying is that there was no technical reason to sell it when I did, as it was sitting pretty much on a support level and my sell point was below that, but I just wanted to lighten the portfolio a bit and did an eenie-meenie-minie-moe kind of thing to pick one to sell - and FMG got the short straw (partly because it was the most volatile one I was holding, and I wanted to avoid a similar size drop down).
> 
> ...




Hahahahahahahahahahaha. LOL
Its so true what you say. 
Happens to even the best of us.
Well its happened to me plenty.


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## tony montana (15 November 2007)

pretty nice timing.....just grab a heap of fmg monday morning......made back what i lost on sdl.....got to wonder where they will stop.....when is there first ship leaving ?


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## grace (16 November 2007)

FMG have gone into trading halt with Twiggy about to do a media announcement at 1330.  In trading halt until Tuesday.  Speculation that Chinese buying in.


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## Prospector (16 November 2007)

I think that it relates to an announcement re the railway line.  Chinese buy in would be nice though!


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## Miner (17 November 2007)

http://www.eurekareport.com.au/iis/iis.nsf/pages/AE505788C6D1C09FCA257394007EC693?OpenDocument 
Not sure if the above link will work for you or not. It is from Charlie Aitken's report in Eureka Report. If you recall Southern Equity Director was the lone person (Broker) predicting FMG's future to be $100 when it was at $30. He can take the credit certainly. (HOpe he woudl take the credit as well for recommending SDL and its boom, clarification by SDL director to the ASX and now slower trend in SDL). By the way I have asked Peter Q from Bell about FMG in the past and he refused to say any comment. I hope he is regretting . 

Primarily it is for the war against railway line. While slowly the railway line of its own is progressing and talking to one of the senior fellows in FMG the other day in a casual drink party I understand they are putting every effort to make its own line to be operational. Billion dollar at stake.
I also have attached the ASX announcement today on railway.
I agree that it is only less than 12 months FMG will be acquired by CHinese. Who knows what role CYU will play here.

*Extract from Eureka Report by Charlie Aitken*

[I]The way this will work is the "new BHP" will be a $400 billion-plus market cap monster representing almost 15% of the benchmark ASX200 index depending on the structure of the final deal. The question is: who will emerge to fill the monstrous market cap gap ($A63billion) that Rio leaves in Australia? 

The answer is clearly Fortescue Metals Group (FMG). 

The existence of FMG and its potential to be a major iron ore producer is a double-edged positive sword. Not only does the existence of FMG allow BHP to take over Rio, but the merger of BHP and Rio improves the FMG investment case dramatically. The merger underwrites FMG's long-term success as the only large scale independent iron ore producer in the world. The biggest winner outside of BHP and Rio shareholders from this deal is clearly Fortescue. The Chinese must secure diversity of iron ore supply. They will be buying and attempting to fund every ounce of iron ore FMG produces. 

This is a dream scenario for FMG and you can rest assured that FMG boss Andrew Forrest and his experienced leadership team will capture the monstrous opportunity this presents them. 

I did spend a little time with Andrew Forrest last weekend and I can assure you he is aware of the opportunity. He is enthusiastic at the best of times but he was like a man possessed at the weekend, champing at the bit to maximise the opportunity for FMG and its shareholders. 

I stand by what I wrote after my initial visit to FMG's assets in May this year (FMG $21.00, click here). FMG will be a $100 stock and will grow to be a $30 billion market cap company with the "currency" to further rationalise and grow. FMG is the stock that will take Rio's place in the index. FMG will be a producer by May 2008 and in sharemarket terms that is the short-term. If you think this BHP/Rio deal will go ahead as I do, then the first stock you should be buying is FMG. Buying FMG ahead of the 10:1 share split being approved is clearly a good plan. [/I]""


Disclaimer : I do not hold FMG shares (I wish now to hold them)


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## Prospector (17 November 2007)

Gosh Miner, your thoughts have changed considerably.  For what is is worth, I cannot imagine that either the state or Federal Governments are going to let the $$$ in FMG disappear because of a dispute about the railway line.

I see that Australia, because of the negatives (the drought), and the positives (minerals discoveries coupled with the resources boom), is in a stage of moving from an agricultural base to a resource base economy. Lucky we have a lot of land still to explore.


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## ba229 (19 December 2007)

Anyone know whats going on with the stock quote with FMG today?

I thought I heard something about giving 10 shares for every one. Is this whats happened and has the code changed?


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## Prospector (19 December 2007)

Try FMGDA.  It is around $6.10.  Everything will be back to 'normal' on January 4.  And now, trying to add to 100 letters!


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## agro (21 December 2007)

FMG successfully made a new 52 week high of 6.60 today this comes after announcing a further 700mt of iron ore on wednesday with further results and drilling expected in January.

stay tuned for FOS in may 2008. 

as far as the skeptics are concerned with the debt - it was mentioned in the AFR this week that Twiggy has already set up loans with Chinese investment banks hence why he wasn't present at the AGM.


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## BrownHornet (21 December 2007)

Yes I do own this!. Just finished reading Joseph de la Vega's book 'Extraordinary popular delusions and the madness of crowds'. Talks of the south sea bubble, mississippi scheme and tulipomania. the moral of the story is that many always believe it can't/won't happen again. Hang on I say. Too much of the book rings very true and close to our times. Worth a read and makes me realise FMG is a gamble at very best. Sceptic hmm


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## Miner (22 December 2007)

Me Laggard
Bought FMGDA at 6 and on a day it rose to 6.40.
I have a strong convinction that some serious underground talk is already there for a large Chinese Buy out. 
That will give Rio and BHP in a better level playing. Chinese dragon strategically acquiring and in the process of acquiring peripheral miners so that can have political leverage , financial leverage and people consumption leverage.

I would wait and see


----------



## barnz2k (22 December 2007)

had been thinking about FMG recently, and when I first looked at the days chart, for a split second, I thought It had dropped an incredible amount and was  a great buy haha. 10 for 1 does not = drop!! 

Will be watching though..


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## Miner (26 December 2007)

Hi All
Hope you are still calculating to tax cut for the Chrisy present money you spent.
I have read this note on steel producers from Indian Financial Express. It says that all steel producers in India have hiked the steel price in anticipation of the hike in iron ore, coke (affected in Australia on a positive side will be Rio, BHP, FMG and few other real iron ore producers and coal producers like RMA, Rio, Wesfarmers,  etc .


*[COLOR="Red"]Steel producers to hike prices on rising costs[/COLOR]*_
Rishi Raj (Reporter) 
"http://publication.samachar.com/pub_article.php?id=935767&navname=Business%20&moreurl=http://publication.samachar.com/financialexpress/business/business.php&homeurl=http://business.samachar.com

*Posted online: Tuesday , December 25, 2007 at 0117 hrs IST  Financial Express*

New Delhi, Dec 24 In a move that will impact a slew of sectors, integrated steel producers like Steel Authority of India Ltd, Tata Steel, JSW, Essar Steel and Ispat Industries are likely to hike their prices next month to offset the rising prices of key raw materials like iron ore and coking coal. 
Industry sources said these Companies would take a final decision on the price hike by the end of the week. The sources said the hike in the price of hot-rolled (HR) coils””the base product””would be 
INR  800-1,000 a tonne (1 A$ = 33 INR ) . At present, HR coils are priced in the domestic market at INR  28,000-29,000 a tonne. Globally, HR coil prices rule in the region of US $650 a tonne. 
Sources said the 15-20% hike in the price of iron ore and coking coal mandates an upward revision in steel prices. While iron ore prices are at around $150 a tonne, coking coal is at around US $135 a tonne. For both raw materials, most domestic steel Companies depend on imports. With steel production rising, the supply of these raw materials has tightened considerably in recent months. 
Between January and December this year, steel Companies hiked prices thrice, with the last revision in October, when prices were increased by around INR  500 a tonne. 
An increase in steel prices will impact a wide range of industries, from automobiles to white goods. Automobile Companies have already announced that they would be increasing the sticker price on passenger cars from January due to rising input costs. However, a price hike is not expected in long products, which are mostly used in the construction sector, since prices are already ruling high here. 
Though the government does not usually interfere in such price revisions, the steel ministry constituted a committee earlier this year under a joint secretary with industry members to monitor the price situation. 
Industry sources said that since no prior permission from the government is required to raise prices, they do not apprehend any problem. _"


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## moneytalks (27 December 2007)

SP up to $7.25 today - fantastic news for holders.

Any comments on where the Share price will be just before production in May 2008?


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## dastrix (27 December 2007)

I'm darn happy, paid $5.95! Just wish I brought more than what I did. I cant wait for May!

FMGDA the best in my line up so far


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## enigmatic (27 December 2007)

I was just wondering how much effect the lateness to deliever Iron ore would have on the SP. It is quiet common in this industry to be a little behind schedule and being the fact that FMG stock price is currently riding on "the project", do you think this would have a serious dent to the sp or not even be noticed.


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## moneytalks (28 December 2007)

enigmatic,

Yes, delays would have an effect on the sp.  HOWEVER they are on time for May 08 and in fact have an internal target of March 08 which they are apparently determined to meet.  Hopefully they can make this and if they do, being earlly will knock the socks off all the investment gurus.

SP increase today to $8 means somethings up IMO - either a takeover rumour or someone big buying in.


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## grace (28 December 2007)

moneytalks said:


> enigmatic,
> 
> Yes, delays would have an effect on the sp.  HOWEVER they are on time for May 08 and in fact have an internal target of March 08 which they are apparently determined to meet.  Hopefully they can make this and if they do, being earlly will knock the socks off all the investment gurus.
> 
> SP increase today to $8 means somethings up IMO - either a takeover rumour or someone big buying in.




Is it because Chinese have just taken close to 10% in SA iron ore company???  Got the rumour mill going......


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## enigmatic (28 December 2007)

March 08, has always been the target for the Mine. that is to get it up and running May 08 is to get Ore on ship. which means the Port, railway need to be ready and they will need to have enough Ore mined. Yeah i have heard they are extremely determined to reach March 08 deadline. Not 100% convinced there on target though. Will see early Feb i guess when its more clear what needs to be done


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## Go Nuke (28 December 2007)

WOW!

I jumped on this moring with little research into FMG (the name speaks for itself these days with all their recent media coverage) and am blown away to look at it now at $8.70!!

ok I'm spewing i didn't jump on at $6.60 the other day, but hey better late than never right?


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## wildmanchris (28 December 2007)

Someone must be buying up on FMG - cause the share price jump over the last few days makes no sense on no news.  I thought about jumping on yesterday, but how does one know when the boat has left......

:bowser:


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## agro (28 December 2007)

i honestly beleive it is institutions finally (i quote finally) getting on board the success of FMG

why i beleive this - the whole idea of the share split was to attract retail investors and at the investor tour alot of top instos and steel companies were present..

thats my opinion .. take over is far from present as twiggy holds 36% stake

edit - also have a look at the small number of accumulation parcels (e.g. under 10) being processed continually


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## Go Nuke (28 December 2007)

agro said:


> i honestly beleive it is institutions finally (i quote finally) getting on board the success of FMG
> 
> why i beleive this - the whole idea of the share split was to attract retail investors and at the investor tour alot of top instos and steel companies were present..
> 
> ...




Well what I saw in the split share was the ability to buy into FMG at a lower share price.
I think it would be easier to say get a 10% return on a $5-$6 share than a 10% return on $50 share.
Well, thats my logic anyway and its paid off for today


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## chewy (28 December 2007)

thats kind of bizarre - cause if the market cap is the same then it is costing exactly the same amount for your share of the company. - or am I missing something?


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## reece55 (28 December 2007)

chewy said:


> thats kind of bizarre - cause if the market cap is the same then it is costing exactly the same amount for your share of the company. - or am I missing something?




No Chewy, your right on the money.... it doesn't impact on the value of the shares at all, just splits them into 10 smaller parcels..... But empirical evidence in the US suggests that splits have a positive implication on a Company's share price, although FMG's 45% increase in the last little while I think has more to do with the fact that these guys will be in production in the coming months...

Personally, I would be extremely wary of buying in at the moment into FMG........ It's market cap is now up to 23.5 Billion, has anyone got any actual cash flow estimates to actually support this ridiculous valuation. I mean, I know they found an extra billion tonnes, but i just question this rampant speculation as this is a typical run up of a share price before a new year..........

However, no one can question the incredible run.............

Cheers


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## ba229 (28 December 2007)

When it was $30 I thought it too expensive.

So being the intellect I am I bought in at $50 lol.

That was on the 1st of Nov.

It is now up 67% in just short of 2 mths.

Wish I had put the house on it (not really)

Keep thinking of taking profits but see it rising further on no news.

Been a funny stock alright.


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## 2020hindsight (29 December 2007)

just for the record 
here's FMG for the last 2 years (High Low Close) + averages 
Also FMG vs XAO for last 12 months (candlestix) + ditto (percent indicates relative preformance campared to datum of XAO)

PS I plan to do this to a few stocks - please feel free to either 
a) help out an divvy the job up between a few of us
b) suggest amendments to graphs
c) request some stocks you'd like me to post (maybe PM me)
d) tell me it's not necessary lol (or too wasteful of memory maybe?)


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## agro (29 December 2007)

Anyone else notice the media contingency are only giving Fortescue its deserved exposure to the public now after a significant rise in SP? 

At the same time, the negativity surrounding Anaconda is still being mentioned?


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## reece55 (29 December 2007)

Well, I see we have a few Twiggy lowers in the room, still if you have just been on the FMG train, can't say I blame you. I prefer to refer to him as the entrepreneur who could sell sand to the Arabs....... I am sure he would take the comment as a compliment!

Well, after racking my brain at the seemingly endless run on this stock, I thought I would do a bit of NPV analysis on the thing. Surprisingly, it is sensitive to production output and price achieved per tonne (HAHAHA.... yeah right).  Please, I am by no means a mining specialist here, valuations for me normally entail profitable retail/commercial businesses, not mining operations. So if you think what I am putting up here is stupid, let me know. 

So, in the attached I have 3 different scenarios for the group, all based that we have about 2.2 Bil tonnes of Iron Ore here that the group can sell. All of them don't factoring in any additional capital works to the mine, apart from an expansion to ramp up production. Now, NPV wise, we have (not surprisingly) a huge variation in fair value. My underlying point however would be that she's fairly overvalued at present, worth maybe 6.50 a share if it all goes right. Now, the kicker is that if they can achieve 200 MTPA and China keeps on steam, the stock could be worth more than double what it is now. Bare in mind that BHP and Rio have both been doing this for years, have mature mines with infrastructure and rail that has been available for a long time, and even they can only manage at max about 100 Mil per annum. I would also say that none of these have an assumption that the 45 Mil in the first year is missed - which could well be the case, have a look at Paladin.

What I will say however is why the heck didn't I do this 7 months back - the answer would have been this stock was worth accumulating! Never mind, hindsight is a wonderful thing.

Cheers


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## Miner (29 December 2007)

Friends
It is the time that we  must not forget to treat every one no matter high flyer or not so high flyer with dignity and respect.
We all have short comings but let us not abuse personalities for that. This forum is a good forum but it is good so long we try to make it better. So no point to ask any one to sign or not to sign an email rather condone their lack of wisdom . I am neither supporting the harsh comments some one (Rainmaker)  has made against Twiggy. I personally believe those comments were bit naive and unfortunate (sheer jealousy?) .
Twiggy  is a smart person (He is from West and not a wise man from East ) and probably thinks ahead of many smart people sitting iin BHPB and Rio Board. Please forgive me and I am not paid by FMG or Andrew. I have seen very senior people from FMG (incluing Andrew himself and his team), Rio and BHPB. Andrew has the real gutts and takes the responsibility on himself  for decisions made right or wrong. He is a risk and decision taker and has been rewarded for that. FMG decisions are taken at 87 Adelaide Terrace Perth and not in London office of Rio or 300 Bourke Street Melbourne ! 
I am almost convinced there are few senior people from his company who read this site regularly as well . I am not great fan of Andrew Forest or FMG. However  can not ignore the fundamental that he knows how to run a business or make money . In this Forum we are not to win an election campaign by developing relationship but to make MONEY within ethical guidelines and ASIC rules !!!. It will not be right to compare Andrew  with James Packer or any one else for that matter. What Andrew created for him and HIS TEAM , James has done nothing near to that. Credit for James P's success ( since he inherited the business empire) should go to Late KP more than him. But that is not the point for discussion here.

Bottom line is probably there are Chinese whisper / helping hands behind the share price rocketing up in FMG. But that is not a crime or a lone factor. Rio is doing the same thing to outsmart BHPB . 
As a small investor we all are trying to make money so what is wrong with Andrew ? Time has come now where the impossible things going to be possible : FOOS at FMG is going to be earlier than May 08 with a serious catching up in railways progress . Iron ore price is going to increase by 30% in 2008 (read Andrew's website what he presented before institutional investors  and we know that  prices of steel have started to increase ). 
Information shows  FMG is not going to produce @55MTPA but more of @35 MTPA in May 08. Lump Circuit and Desanding module is not coming before Sep 08. Employees/contractors at FMG office read the work in progress weekly construction report for Nov 07 in the first week of Dec 07 whereas market probably reads it in third week of Dec 07 . But even 35 MTPA is good enough to fetch fantastic bottom line upgrade for FMG.
There are some laggard brokers probably buying FMG in their portfolio too. 
So enjoy and try to make some money. Once again PLEASE DO NOT START PERSONAL MUD SLUGGING EXERCISE in this Forum. 

I (ironically me saying so) think the FMGDA price will reach probably $9 or higher  by mid Jan 08 and will reach $10 by April 08 (Do I sound copying Charlie Atkins of Soutehrn Equity ? But it is a late realisation for me about the short term strength of this scrip as I was personally very synically few months back about FMG).

Regards

Miner


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## Rainmaker2000 (30 December 2007)

Wow, good to see some energetic discussion.......Miner, you pretty much sum it up......I retract my personal references, as you and Agro make the good point, they are highly inappropriate in a public forum of this nature...I kind of let myself off the leash, as I consider these forums to be quite lite but not all see it that way..and the more I consider, its probably not appropriate that I start citing evidence from the various sources as I doubt its possible for me to paint an accurate picture...other institutions are more appropriate for these matters........no one can argue with the share price run and I genuinely hope for those on board that you all make a motsa....as you can tell, I like a glass half empty approach to an investing scenario like this..........


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## agro (30 December 2007)

How many in here are honest and happy to share genuine knowledge with others?  Very Few.

Day traders not to be trusted as they push the share in direction they want it to go.

Everything has its Positive and Negatives. 

Take your pick, ,Australian -  TALL POPPY SYNDROME, OR follow the CHINESE and international companies who invested heavy in FMG.   

Side with the majority of these companies who no doubt did their homework    OR   the small minority of Wanabies Day Traders.


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## prawn_86 (30 December 2007)

Agro,

One must remember that those other companies that have invested in FMG probably did so at a much lower price than it is currently.

When was the last increase in substantial holding statement? Im not sure as i dont follow the stock too much


----------



## treefrog (30 December 2007)

agro said:


> How many in here are honest and happy to share genuine knowledge with others?  Very Few.
> 
> Day traders not to be trusted as they push the share in direction they want it to go.
> 
> ...




argo,
respect your views as I do the short term traders who also have valid and quite honest views
the most difficult thing in trading/investing on a forum such as this is firstly to decipher over what term (or what language) the poster has in mind when they post - it may be intraday (a few minutes or hours) day (a few days) medium or long term which I guess is your timeframe
because of the differences some see "oposing or contrary" comments as deliberately misleading when mostly they are not
it would be great if we all posted our timeframes along with the post but alas, just doesn't happen and we need to learn to decode the timeframe and ignore those we are not interested in
cheerz


----------



## robjb5 (30 December 2007)

Miner said:


> Friends
> It is the time that we  must not forget to treat every one no matter high flyer or not so high flyer with dignity and respect.
> We all have short comings but let us not abuse personalities for that. This forum is a good forum but it is good so long we try to make it better. So no point to ask any one to sign or not to sign an email rather condone their lack of wisdom . I am neither supporting the harsh comments some one (Rainmaker)  has made against Twiggy. I personally believe those comments were bit naive and unfortunate (sheer jealousy?) .
> Twiggy  is a smart person (He is from West and not a wise man from East ) and probably thinks ahead of many smart people sitting iin BHPB and Rio Board. Please forgive me and I am not paid by FMG or Andrew. I have seen very senior people from FMG (incluing Andrew himself and his team), Rio and BHPB. Andrew has the real gutts and takes the responsibility on himself  for decisions made right or wrong. He is a risk and decision taker and has been rewarded for that. FMG decisions are taken at 87 Adelaide Terrace Perth and not in London office of Rio or 300 Bourke Street Melbourne !
> ...




Grammatically adventurous, Miner, but essentially correct and representative of what I personally believe to be the situation regarding FMG and Andrew F.
  The current shareprice is indicative of the combination of greed and lack of understanding on the part of the punters, plus the ever present optmism of all those who wish Andrew F. well in his current adventure..A mixture of positives and negatives..
  If an objective analysis is made of all of FMG's achievements to date, the Company's forecasts, projections, determination to succeed and the demonstrable progress towards FOOS in May '08, then it will be very obvious that todays shareprice is only the beginning...stronger for longer..


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## Prospector (30 December 2007)

Miner said:


> I (ironically me saying so) think the FMGDA price will reach probably $9 or higher  by mid Jan 08 and will reach $10 by April 08 (Do I sound copying Charlie Atkins of Soutehrn Equity ? But it is a late realisation for me about the short term strength of this scrip as I was personally very synically few months back about FMG).




Hey Miner
As I said in an earlier post, you certainly have changed tack on the FMG story - glad I didnt listen to you earlier:

So what, exactly, other than the rising share price, has caused you to change your mind about FMG?


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## agro (30 December 2007)

prawn_86 said:


> Agro,
> 
> One must remember that those other companies that have invested in FMG probably did so at a much lower price than it is currently.
> 
> When was the last increase in substantial holding statement? Im not sure as i dont follow the stock too much




I don't think there was any changes in substantial holdings this year because everyone is holding put.

I do however recall the Russians wanting a 15% stake in the company which had to goto Costello to get approval so I was told but don't know what the final outcome was..
*
read:*

Gift for a Russian who has everything?
Kevin Andrusiak | September 06, 2007

WHAT else could you ask for apart from a personal fortune of $9.3 billion, an Order For Merits To The Motherland Of The IV Degree and the presidency of your own ice hockey franchise?

Maybe a 15 per cent-plus stake in aspiring iron ore miner Fortescue Metals Group? 

http://www.theaustralian.news.com.au/story/0,25197,22369936-5005200,00.html


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## The Barbarian Investor (30 December 2007)

I'm on board the FMG train, but almost had two lumps in my throat when being away for a while I logged on and saw that FMG had dropped 90% (but then remembered they had planned a 10 for 1 split some time back).

My question is my Comsec Account Position Summary still shows as FMG (and is -100% with a value of $0)

Do I now OR am i able to change this to FMGDA or wait till Jan4th?

Whats the go?

What if I want to sell?

What if I want to set up a Trigger?


----------



## Prospector (30 December 2007)

If you want to sell FMGDA before Jan 4 then you need to do this over the phone.  FMG is one of my major parcels, and it shows up as $zero at the moment


----------



## agro (30 December 2007)

Prospector said:


> If you want to sell FMGDA before Jan 4 then you need to do this over the phone.  FMG is one of my major parcels, and it shows up as $zero at the moment






The Barbarian Investor said:


> I'm on board the FMG train, but almost had two lumps in my throat when being away for a while I logged on and saw that FMG had dropped 90% (but then remembered they had planned a 10 for 1 split some time back).
> 
> My question is my Comsec Account Position Summary still shows as FMG (and is -100% with a value of $0)
> 
> ...




Well mine has changed to FMGDA.

I do know however that ComSec Position Summary every weekend is not correct for some reason.


----------



## Dextrum (31 December 2007)

What has to be remembered here is that FMG is the consummate good news market play. 

It is clear that FMG have a strategy of timing the release of potentially price sensitive market or media announcements to give fillips to the stock price, not least of which is the announcements of MOUs with Chinese steel producers at regular intervals to ramp up the price. This coupled with announcements of revised estimates of proven reserves at regular intervals is enough to provide basis support to the share price. Its a double whammy, as you only have to put the word "china" in a resource company's press and market releases and the market goes orgasmic. Perhaps a study of the number of times the reference to china in a FMG market or media release would be revealing in itself.  

I am not sure whether Miner has undertaken a study of the share price history but it would not surprise me if the release of announcements (media or to the market) largely coincides with the jump in share prices. If so then this is a classic case of intended market manipulation through utilisation of the media channels. 

It would not also surprise me if the PR department of FMG has the most staff on its payroll. 

If this ever dawns on the mug share punter, it will be first out not last in who will be rubbing their hands together.


----------



## agro (10 January 2008)

Since the last couple of correction days, FMG has dropped a fair bit 10%+ possibly due to panic selling or stop losses often seen in a bear market

going by history (if thats any indicator) you will find that there is a large retraction before a retrace to fresh highs..look at the chart

another thing to note is that the large couple of sellers that were present at 6.50 have now retracted their offers possibly due to the market having a green day today and noting that the worst is over (10% fall is classed as a correction)..

lastly,  all major corrections be it 1987, 9/11, gulf war have seen the market come back stronger through a rally..

my  anticipating the first shipment in march,

like to hear others thoughts.


----------



## enigmatic (10 January 2008)

Dont want to disappoint you but the first shipment is definitely not happening March. 
Assuming the project is even on time, the Nov construction announcement on the ASX states that the Train Unloader will be commissioned in March 
with the Shiploader,Stacker and Stockpiles being commissioned in April with first Ore on ship in May. Once again if on schedule so you will have to wait an extra 2 months (Min).


----------



## Nellyneil (10 January 2008)

First shipment won't be til atleast june and thats if all goes to plan and no cyclones etc hold anything up.


----------



## robjb5 (10 January 2008)

enigmatic said:


> Dont want to disappoint you but the first shipment is definitely not happening March.
> Assuming the project is even on time, the Nov construction announcement on the ASX states that the Train Unloader will be commissioned in March
> with the Shiploader,Stacker and Stockpiles being commissioned in April with first Ore on ship in May. Once again if on schedule so you will have to wait an extra 2 months (Min).




Not certain, but I guess it would run something like this..Using stockpile bedding ore to commission the Train Unloader and the Stacker, Once that is done then shipping ore to build stockpile then commission Reclaimer and Shiploader with first shipping ore..??? Any comments??


----------



## barnz2k (10 January 2008)

its been hammered recently, but after the recent high of 8.47, and US up over 1% last night, very tempting buy in time. But it may well continue down, or be a bounce and go back again in a few days..

Anyone buying in on this slump? good work anyone who sold at >$8


----------



## rustyheela (11 January 2008)

Still falling on much higher daily average volume indicating lots of sellers still. id like to see selling volume drop off  before i was a buyer.The momentum seems to be all down at the moment. even when the dow does rise still heads south!!


----------



## agro (11 January 2008)

Nellyneil said:


> First shipment won't be til atleast june and thats if all goes to plan and no cyclones etc hold anything up.




people who are selling are either *uneducated, misinformed, panicking or exercising stop losses*

*DJ Fortescue Metals: Confident Of Meeting Project Start Date

(MORE TO FOLLOW) Dow Jones Newswires
January 10, 2008 19:28 ET (00:28 GMT)
*DJ Fortescue: Could Beat May Target For First Ore Shipment

(MORE TO FOLLOW) Dow Jones Newswires
January 10, 2008 19:28 ET (00:28 GMT)
*DJ Fortescue: Rail Construction Progressing Well

(MORE TO FOLLOW) Dow Jones Newswires
January 10, 2008 19:30 ET (00:30 GMT)
*DJ Fortescue Shares Recover, Latest Down 3.1% At A$6.00

(MORE TO FOLLOW) Dow Jones Newswires
January 10, 2008 19:31 ET (00:31 GMT)
DJ Fortescue Confident Of Meeting Project Start Date

MELBOURNE (Dow Jones)--Fortescue Metals Group Ltd. (FMG.AU) said Friday it remains on
track to meet its target of shipping the first ore from its iron ore project in Western
Australia in mid-May.
Fortescue Executive Director Graeme Rowley dismissed speculation the company is falling
behind its targeted start date.
"I am very very confident about May and in fact I am confident of beating it, but
by how much is really dependent on what happens with the weather in the next couple of
months," he told Dow Jones Newswires.
While mining and port construction has progressed well, work on the railways had fallen
behind schedule, but Rowley said rail construction is now progressing well.
"We are putting down rail at rate of just over two kilometers a day so I am really
very confident that the rail will be fine," he said.
Rowley said rail construction can be slowed by heavy rains, but the company has built
in some leeway for weather impact.
Labour in the Pilbara region of Western Australia remains tight, but Fortescue is
"suffering no worse than anyone else and better than most", Rowley said.
Mining has already started and Rowley said the surface miners that the company is using
continue to perform better than expected, working at rate of more than 1,000 metric tons
an hour and in some cases as high as 1,400 tons, compared to the original mine plan of
750 tons an hour.

-By Alex Wilson, Dow Jones Newswires; 61-3-9671-4313; alex.wilson@dowjones.com

(END) Dow Jones Newswires
January 10, 2008 19:49 ET (00:49 GMT)
Copyright (c) 2008 Dow Jones & Company, Inc.

Friday 11 January 2008 11:49:26:120 AEST

News Story: FMG - DJ Fortescue Confident Of Meeting Project Start Date

*10+ FOS*


----------



## thevadd (11 January 2008)

Agro: Could you please clarify why FMG is cheaper at $5.90 (equivalent to $59 before split ) . Before the shares split this was strugling to go above $60 and at that time $45-50 was a reasonable value.  This is how I interpret the share at current price.

Thanks


----------



## prawn_86 (11 January 2008)

I still maintain my opinion that this stock is way overpriced.

There are plenty of other companies out there with solid business models and revenue streams operating at about PE 2 simply because they are unrecognised by the market.

FMG has not even recieved any cash and has only spent money so far. Theoretically this is still a spec stock, although with 'near term producer' status.

The only thing it has going for it imo, is it has been very well marketed.


----------



## treefrog (11 January 2008)

agro said:


> people who are selling are either *uneducated, misinformed, panicking or exercising stop losses*
> 
> *10+ FOS*




ohhhhhhhw - I would never call anyone bailing after an excellent bull run any of those things

maybe they believe it will do what most stocks that move from the spec to production and then to the earnings phases do - drop way back until they prove the production and then show the actual earnings

Maybe they have ridden it most of the way up and need some cash and can't wait 8 years for a 4% divvy


----------



## agro (11 January 2008)

prawn_86 said:


> I still maintain my opinion that this stock is way overpriced.
> 
> There are plenty of other companies out there with solid business models and revenue streams operating at about PE 2 simply because they are unrecognised by the market.
> 
> ...




ok, i like to draw an analogy.. 

if a shop has a product in demand to sell, is it not true that they have to build the actual shop from the ground up before they can sell their product to the customers?

same deal with FMG, there was enough funding for the production of the port, rail network etc, (i doubt Packer would have backed a dud, this isno OneTel) and it is not a spec stock as JORC and 1b tonnes of iron ore has been identified.

If it was a spec stock, i doubt the top 10 steel companies in China along with Citigroup would be on board along with a 37% stake held by the man himself twiggy.


----------



## prawn_86 (11 January 2008)

No, im saying that its status is probably still 'spec'. Officialy it is:


> Business Description
> Fortescue Metals Group Limited (FMG, formerly Allied Mining & Processing Limited) is a minerals exploration and development company with interests primarily in iron ore in Western Australia




So it looks as though it hasnt been upgraded to "producer" status yet. Although this should happen when the first shipment is made.

I know it has plenty of JORC, but my main 'point' is the fact that there are heaps of other companis out there, in the resource sector, with JORC'd reserves and are producing, that are still on very low PE's due to lack of market recognition. Whereas FMG is virtually increasing just because of its name.



> .......Curr 2008 2009 2010
> EPS -2.6 -5.1 31.2 52.9




So looking at this is it at a 2010 forward PE of 10 already. And a 2009 forward PE of approx 25.


My point is, there are current producers, on *current* PE's of just 2.


----------



## Maliq (11 January 2008)

prawn_86 said:


> I still maintain my opinion that this stock is way overpriced.
> 
> There are plenty of other companies out there with solid business models and revenue streams operating at about PE 2 simply because they are unrecognised by the market.
> 
> ...




Hey Prawn love to know some of these producers that u say are trading at PE of 2. And please don't come back with Centro and Rams.

Got in today at $5.82 on early morning intra-day resistance around 5.80. Surprised it took off the way it did near close.


----------



## prawn_86 (11 January 2008)

Maliq said:


> Hey Prawn love to know some of these producers that u say are trading at PE of 2. And please don't come back with Centro and Rams.
> 
> Got in today at $5.82 on early morning intra-day resistance around 5.80. Surprised it took off the way it did near close.




They are out there Maliq. It just takes a bit of research. And no im not talking about RAMS etc, im talking about mining companies. But for the record there are a lot of others outside the mining industry also.

Perhaps you should run a search for my posts and see what comes up...


----------



## barnz2k (12 January 2008)

Maliq said:


> Got in today at $5.82 on early morning intra-day resistance around 5.80. Surprised it took off the way it did near close.




(potentially) great buy! seems it was the lowest point of the day! So ur already up 10%! That last couple hours is hardest for me to watch cause its 3-5am here lol. Im still scared to put any more money into the market yet though 
Will see if US has another up tonight.


----------



## wildmanchris (12 January 2008)

This company may well produce alot of iron and do very well in the future, but I got to agree with Prawn.  I just cant be on with a company worth that many billion that hasnt shipped a thing.

Twiggy PR will be a share I will be looking to buy in the future.


----------



## agro (12 January 2008)

wildmanchris said:


> This company may well produce alot of iron and do very well in the future, but I got to agree with Prawn.  I just cant be on with a company worth that * many billion* that *hasnt shipped a thing.*
> 
> Twiggy PR will be a share I will be looking to buy in the future.




quote "hasnt shipped a thing" should read "is *yet* to ship a thing"

come March (if it beats initial expectations) or May (if it doesn't) when Fortescue makes their first iron ore shipment, and ramps up production each consecutive year would your opinion of the company change?

I do understand it is early stages in the process but BHP and RIO had to crawl before they walked.. 

It always enlightens me to read the views of skeptics.


----------



## prawn_86 (12 January 2008)

agro said:


> quote "hasnt shipped a thing" should read "is *yet* to ship a thing"
> 
> come March (if it beats initial expectations) or May (if it doesn't) when Fortescue makes their first iron ore shipment, and ramps up production each consecutive year would your opinion of the company change?
> 
> ...




Again agro,

Its not that i think it wont make shipments, or increase production etc etc

It is the fact that the co is already valued at a forward 2009 PE of 25, which considering the average current PE throughout the entire market is about 16 and for miners about 20 (off the top of my head) it shows to me that it is overpriced, at the moment.

If they expand production way beyond intial plans, which isnt likely in a tight labour market etc, then the figures would change and i would need to re-evaluate.

Here is one scenario which i think has a fair chance of playing out, especially in current overall market conditions:
1. First shipment a month or 2 late (most mining projects are delayed at least a  little)
2. SP stays around where it is currently mainly due to the DOW (another big drop last night)
3. Once production does happen SP spikes (typical amongst any firm which moves from explorer to producer)
4. Once financial/profit reports come out SP drops/levels to around $3 - $4 (which would be in line with PEs and consistent with people realising that production growth takes time)

Purely fiction at this stage, but its my take on things


----------



## treefrog (12 January 2008)

Maliq said:


> Hey Prawn love to know some of these producers that u say are trading at PE of 2. And please don't come back with Centro and Rams.
> 
> Got in today at $5.82 on early morning intra-day resistance around 5.80. Surprised it took off the way it did near close.




a start - no idea how much of producers they 

ASX Code  
  Company Name  
  P/E Ratio  
  Market Cap  

  CER   Centro Retail Group   2.29   1,337,543,663 

  PMV   Premier Investments Limited   1.19   766,593,427 
  CNP   Centro Properties Group   1.80   726,799,732 
  TSO   Tishman Speyer Office Fund   3.17   490,518,218 

  TWR   Tower Limited   2.69   376,892,772 
  LRF   LinQ Resources Fund   2.10   365,808,010 
  WOTCA   Westpac Office Trust   3.78   279,044,444 
  AAH   Arana Therapeutics Limited   1.43   260,834,501 
  RRT   Record Realty   2.83   245,546,874 
  CTN   Contango Microcap Limited   2.26   198,223,709 
  IEF   ING Real Estate Entertainment Fund   3.31   196,221,595 
  HAP   HFA Accelerator Plus Limited   3.26   189,060,671 
  MAFCA   Multiplex Prime Property Fund   2.95   180,329,521 
  WAM   WAM Capital Limited   3.76   177,013,465 
  FPG   Forest Place Group Limited   3.10   136,254,539 
  CPK   CP1 Limited   2.89   121,917,633 

  MFI   Mariner Financial Limited   3.02   103,424,712 
  RHG   RAMS Home Loans Group Limited   2.24   99,076,807 
  SLF   SPDR S&P/ASX 200 Listed Property Fund   3.87   83,856,017 
  ALF   Australian Leaders Fund Limited   3.92   82,502,979 
  FGE   Forge Group Limited   0.99   78,462,040 
  DES   Destra Corporation Limited   2.74   77,460,246 

  PNN   PepinNini Minerals Limited   3.42   72,667,873 
  HWG   Hostworks Group Limited   1.59   65,920,110 
  NAM   Namoi Cotton Co-Operative Limited   3.87   49,830,205 
  KAT   Katana Capital Limited   3.99   47,520,672 
  LIC   Lifestyle Communities Limited   1.62   46,555,981 
  GLE   GLG Corp Ltd   3.59   34,086,000 
  CDM   Cadence Capital Limited   3.16   29,144,731 
  OEQ   Orion Equities Limited   2.18   21,911,698 
  AHC   AHC Limited   3.01   21,817,653 
  TAG   Tag Pacific Limited   3.30   21,377,518 
  TWT   TWT Group Limited   3.70   20,599,691 
  SCB   Scarborough Equities Limited   2.87   18,356,243 
  FTD   Fig Tree Developments Ltd   0.27   16,228,281 
  GUL   Gullewa Limited   2.98   15,741,443 
  EPY   E-pay Asia Limited   1.84   15,066,488 
  MPJ   Mining Projects Group Limited   1.74   14,668,351 
  TDI   Tidewater Investments Limited   2.63   12,608,401 
  TTH   Tooth & Company Limited   3.33   12,444,402 
  LCE   London City Equities Limited   1.58   12,393,125 
  TVN   TVN Corporation Limited   0.42   10,316,846


----------



## austek (12 January 2008)

Twiggy has never acheived a target date in 8 years, so add me to the skeptics.  My former FP raved about him before he ran Anconda Nickel into the ground thru poor mngmnt skills.

Gotta admit he has done extremely well with U.S. money for FMG and myself too.

But target dates...forget it.  He still does not know what they mean, and he admitted in a recent interview that he sets impossible dates for employees to just see what they can do


----------



## SM Junkie (12 January 2008)

I must be behind the times with Fortescue, I thought they were trying for a shipping target of May 2008.  Oops guess they now hope for May 2009.

So now after many months it has finally been announced that their rail line is behind schedule.  FMG knew this back in September 2007 when they were informed that some of the rail track would need to be laid by hand.  Ironically this was just before their share price started to have a dramatic rise.  I do take my hat off to the spin doctors at FMG.

Sadly, I just heard that there has been a death at their Cloud Break site yesterday. I'm sure more information will be released soon.  If work place related they may close the site pending an investigation. Waiting to hear more.


----------



## The Barbarian Investor (12 January 2008)

Be interesting to see what happens to the price Monday with the latest bad news as reported on the radio last night


----------



## SM Junkie (13 January 2008)

Posted recently on the ABC Radio site:

The CFMEU wants access to a Western Australian mine it says has major safety issues, after a 26-year-old man was crushed to death.

Fortescue Metals Group and construction company United Group Resources have launched a joint inquiry into the death.

CFMEU spokesman Joe McDonald says workers raised 82 safety issues about the Cloudbreak mine near Newman two months ago, but union officials are not allowed on to the site to inspect it because of the AWAs signed by the workers. 

"If he's got nothing to hide then he should open up the gates and he should welcome us in there and we should work together to make sure workers go home safely at night," he said. 

Chamber of Minerals and Energy spokeswoman Nicole Roocke says the incident has highlighted that safety on mine sites must be a priority. 

"Companies needs a risk management system to help them identify where things can go wrong and what they need to do to fix those," she said. 

WorkSafe is also investigating the death.


----------



## reece55 (13 January 2008)

SM Junkie said:


> Posted recently on the ABC Radio site:
> 
> The CFMEU wants access to a Western Australian mine it says has major safety issues, after a 26-year-old man was crushed to death.
> 
> ...




Courtesy of ABC News : Link

*************************
The Fortescue Metals Group has expressed sympathy to the family of a 26-year-old Mindarie man who died at one of the company's mine sites.

The rigger died yesterday afternoon at Fortescue Metals' Cloud Break Mine, 150 kilometres north of Newman.

It is understood the man died after he became jammed between the boom lift he was operating and the steel structure he was working on.

The man was working as a rigger for the United Group which is contracted to carry out works on the Pilbara mine.

Worksafe spokesman Nina Lyhne says a report will be prepared on the matter.

"Our primary concern is to find out what caused the incident and do whatever we can to make sure it doesn't happen in the future," she said.

"Our Inspector has been there and inspected the cherry picker that was involved in the incident and we are obviously going to be pursuing that further."

*************************

Not exactly building a good reputation for caring for employees/contractors are they?

Cheers
Reece


----------



## Scuba (13 January 2008)

From: Newlywed killed at Fortescue mine site
The West 12th January 2008, 9:15 WST
_Edits from the story, follow the link above to read in full..._
"A 23-year-old man who was married a week ago has been killed in a workplace accident on a Pilbara mine site..."
"...Mr Reynolds said the man was in a boom lift with another worker about 40m in the air when his head became stuck between the building being erected and the controls in the cage. 

“He got wedged there and the other worker could not get to the controls to take the boom down to release him,” Mr Reynolds said. 

“His head hit the top of the building and pushed him over the controls so the other worker could not get to the controls.” 

Mr Reynolds said that there was an override switch on the ground but that the three men on the ground, who he said were from Thailand and did not speak English, were not able to operate the switch. 

Mr Reynolds said it was more than half an hour before the man was taken to the ground but by that stage he had died..."

_(Copied from post in General forum "457 visas, the "Big Australian" and the true costs...")_

Sad to hear about this, as Twiggy/FMG has had a good reputation so far for "looking after employees and inhabitants"...


----------



## wildmanchris (13 January 2008)

austek said:


> Twiggy has never acheived a target date in 8 years, so add me to the skeptics.  My former FP raved about him before he ran Anconda Nickel into the ground thru poor mngmnt skills.




I was gonna add this to my point before - but thought I wouldnt.

I was also gonna add that its the same area that Poseidon Mine was - but I thought lightning never hits the same place twice so left that off too......


----------



## shinobi346 (13 January 2008)

Things starting to not look so good for FMG:
http://www.news.com.au/couriermail/story/0,20797,23045833-5003402,00.html?from=public_rss


----------



## sharemadder (13 January 2008)

> Mr Reynolds said that there was an override switch on the ground but that the three men on the ground, who he said were from Thailand and did not speak English, were not able to operate the switch.




Thats why at my mining workplace we recently introduced a rule that a ticketed operator had to be at the ground controls as back up in case of a accident reoccuring similar to this one.  Happened to us not long ago but thank goodness a ticketed operator pulling cable was able to get the fella down even though he was hospitalised for sometime (near death but now back at work).


----------



## Miner (14 January 2008)

Folks
I hate to comment tonight due to the tragic death of the young fellow at FMG mines. It is sad to see this time Mr Forrest has not come with a bold statement of taking responsibility of this death like he came during cyclone.
The safety induction process of FMG is pretty ordinary and considering they have not produced any ore makes the training a bit desk top than practical on site one.
It is double whammy for FMG with an apparent announcement of rail delay. 
I wished to have relied on my own posting made some months back here on rail delay .
Probably the share price of FMG will go down to $4 with a culminating effect of miner death, possible labour unrest and stop work, delay of rail, and DJ sliding effect. 
Overall it is a sad story for investors too as FMG is part of ASX 200 now and only hope the situation in safety and mines upgrade part gets improved in next few months


----------



## Kauri (14 January 2008)

Just rifling through my old files and found thie Fortescue timetable revision, the one before the last one, I guess also the one two before the next one..  
Cheers
........Kauri


----------



## Go Nuke (14 January 2008)

Scuba said:


> From: Newlywed killed at Fortescue mine site
> The West 12th January 2008, 9:15 WST
> _Edits from the story, follow the link above to read in full..._
> "A 23-year-old man who was married a week ago has been killed in a workplace accident on a Pilbara mine site..."
> ...




Sad to hear about anyone dying, but I guess thats why they taught me as an apprentice to NEVER place yourself between a load (or any other solid structure) where you could be crushed.

As for the non english speaking guys operating the controls...well a good reason NOT to bring migrants in to do the job *especially* if they cant speak English. What a joke!

Sad, but accidents don't happen unfortunately..they are caused.

I hate Unions but I hope an investigation is done throughout Fortescue metals.
As for the sp, FMG is trading under the 20 Day Average, but I think alot of that can be contributed to the DOW.
Though I wouldn't be suprised to see a short term drop in metal prices when (if any ) confidence returns to the U.S.


----------



## barnz2k (15 January 2008)

well, I bought a small amount Today. 500 shares. I was too slow to buy on the dip, and got in at 6.5, i should have setup the buy earlier! (i know the day's not over yet. but im going to sleep lol)

News about plant building stopping until death enquiry, but also they are spending more to meet the deadline.

will be an interesting one.


----------



## treefrog (22 January 2008)

no white knights to rescue the >20% fall today, as there has been for recent dips..........................................


----------



## agro (25 January 2008)

*december construction report is out*

everything is up to scratch and on time.


The scheduled FOOS date remains at mid May 2008.


----------



## agro (25 January 2008)

Pilbara ore shipment on track: Fortescue

January 25, 2008 - 9:15AM

Fortescue Metals Group Ltd said its planned first shipment of iron ore from its Pilbara iron ore and infrastructure project remains on schedule for mid May with overall project completion at 82 per cent.

Fortescue said the project final forecast cost is $2.699 billion, which is an increase of $17 million from last period.

During the month there was also a draw on contingency of $22 million, Fortescue said.

The combined increase of $39 million came from scope changes at Port Hedland worth $24.5 million, additional costs of $10 million and $4 million for port power supply costs.

The miner said port works at the project were 87 per cent advanced, mine sight works were 75 per cent complete, and rail works were 79 per cent complete.

"There are no material delays to the project this month," Fortescue said.

"The scheduled first ore on ship date remains at mid May 2008."

At the company's annual general meeting in November, chief executive Andrew Forrest tipped cost overrun at the mammoth project of two to three per cent.


----------



## Prospector (25 January 2008)

So if we can maintain a period free from Cyclones and disruptions (nearing the end of the season now) if there was going to be delay, it should be very apparent by now.  The cost over-runs were dealt with last year, so unless Mr Forrest is absolutely misleading the market (and he would not want to be doing that!) then this is excellent news.


----------



## agro (4 February 2008)

HONG KONG (Dow Jones)--China Investment Corp., China's sovereign-wealth fund, and coal miner China Shenhua Group have been in informal talks to buy a 15.85% stake in Australian iron-ore miner Fortescue Metals Ltd. (FMG.AU) in a deal worth US$2 billion, the South China Morning Post reported Monday, citing unnamed sources. 

The Fortescue deal "is really early so let's see if a memorandum of understanding materializes" one of the sources was cited as saying. 

If the sales proceeds, Harbinger Capital Partners, a U.S.-based investment unit of Harbert Management Corp., would sell its 15.85% stake in the Australian company to the Chinese fund and coal miner, the report said. 

Harbinger is the second-largest shareholder in Fortescue after the company's founder, John Andrew Forrest, with a 35.97% stake, the report said. 


Newspaper Web site: http://www.scmp.com


----------



## barnz2k (4 February 2008)

going gangbusters on that news! high of 7.44! nice.
too bad I didnt have more cash when I bought in.


----------



## SM Junkie (5 February 2008)

Published - Australian
04/02/2008
Page: 32
Business News

*Fortescue Metals* JPMorgan
Underweight recommendation
Price target of $4.50.
Last traded at $6.50.

THERE was a time when decent research on
Fortescue was very thin on the ground.
However the JPMorgan Metals & Mining
team took the bull by the horns and started
covering the stock when many others
refused to. So they should know the deal
quite well by now, despite Fortescue being a
tricky miner to analyse given that it is not
in production yet and there are real doubts
as to when it will be, despite Fortescue being
adamant that it is still on track to deliver its
first shipment by mid-May. On JPMorgan's
calculations, Fortescue shares should be
worth $4.50 each by December, based on
estimates of the company producing 100
million tonnes of iron ore a year by 2012.
Based on predictions that Fortescue's initial
ramp-up is to 55 million tonnes and
factoring in current iron ore prices
JPMorgan estimates that the shares should
be worth $2.74 apiece. Our valuation would
increase to $7.50 if we were to assume the
company reaches production of 200 million
tonnes per annum by 2012."

Worth considering?


----------



## prawn_86 (5 February 2008)

Good to see 'experts' also agreeing with my view that they are way overpriced at the mo.

Although that doesnt mean you cant make money off them...


----------



## doctorj (5 February 2008)

I've always been very skeptical over the coverage of FMG.   For the longest time, they simply refused to cover it and now that they are, they're doing it almost begrudgingly.  They still don't believe the story and don't believe that FMG can make it happen.

As for what the valuation is, I wouldn't have the foggiest, but I do think the value for FMG is in the fact that there is finally a 3rd player in the Pilbara.  When you consider the proportion of market cap the Pilbara contributes to both RIO and BHP and then you compare the relative sizes of their tenement holdings to FMG, I can't help but believe the story.

As for a former Anaconda shareholder, maybe I'm just a Twiggy tragic? Or a sucker for fairy tales.


----------



## Miner (5 February 2008)

doctorj said:


> I've always been very skeptical over the coverage of FMG.   For the longest time, they simply refused to cover it and now that they are, they're doing it almost begrudgingly.  They still don't believe the story and don't believe that FMG can make it happen.
> 
> As for what the valuation is, I wouldn't have the foggiest, but I do think the value for FMG is in the fact that there is finally a 3rd player in the Pilbara.  When you consider the proportion of market cap the Pilbara contributes to both RIO and BHP and then you compare the relative sizes of their tenement holdings to FMG, I can't help but believe the story.
> 
> As for a former Anaconda shareholder, maybe I'm just a Twiggy tragic? Or a sucker for fairy tales.




My thoughts are FMG is seriously wooing for investor. The directors have gone again worldwide for an investor friend. 
FOOS is right on May 08 even that means at an additional cost until the railway is done totally fool proof.
FMG is expected to go at $10 by June. Chance of another cyclone is now gone.
Please refer to my earlier posting on FMG where I did say that FMG will be snared by China. It matches with what I said in March 07 in the global iron conference in Perth about the high possibilities of china acquiring large chunk of share in iron producing companies in Australia. Since then MGX, CYU, RIO, are only happening. FMG is next bid.
Having said that why I did not make money - I needed couple of mini million as extra cash to invest and leave there with no page unturned at night. I did not have the courage or bank balance excepting to get my paper calculation to be right. 
BTW I am not a fan of Andrew but just seeing the reality . Once bitten twice shy. Just consider that he is more clever than many of the top guns in our mining world to be where he is today. He hires hard  and top notched experts who works almost 14 horus a day and he rewards them with options. The whole staff work long hours as they contribute to their options and annual bonus much better than one expects from top heavy BHPB or RIo staff.
So baby just wait and see .


----------



## thedave (6 February 2008)

Bit of a washout on opening this morning, which confirms the daytrader interest in it.

Cant help but wonder about the disbelievers myself.  Billions spent on infrastructure developmen; its on time, on target; the resources estimates are massive and exceed BHP and RIO in the Pilbara, and the controlled prospective tenements are multiples of the current ground; the iron ore price will rise dramatically this year adding more value; there is no abatement in interest from China, who are looking for protective buy-in to major suppliers; the company is wide open to scrutiny, and the informed reports are favourable.

But the cyclone season is far from over, most cyclones happening in February-March in the NW. Nonetheless having lived there for many years I chuckle at the way the East Coast media over-rates cyclones.  Unless they land on top of you at Cat 4 or 5, then its a day inside watching DVDs and a couple days cleaning up the trees and back to business.


----------



## agro (6 February 2008)

As a loyal FMG holder i am starting to ignore the media coverage on the company let alone the number of skeptics among the stock related forums ..

it's all but negative with Twiggy continually defying the odds

forget the overpriced nonsense prawn 86 - its making me sick,,, RIO is over $100 ? is that overpriced for an iron ore producer?

my 

edit - twiggy got the infrastructure set up in 2 years , BHP took them 12 years, what does that say?


----------



## prawn_86 (6 February 2008)

agro said:


> forget the overpriced nonsense prawn 86 - its making me sick,,, RIO is over $100 ? is that overpriced for an iron ore producer?
> 
> my
> 
> edit - twiggy got the infrastructure set up in 2 years , BHP took them 12 years, what does that say?




As i have said, its all about market cap, not the share price.

I just feel that a 17 (or however much it is now) billion dollar market cap for a company which isnt even running at a profit yet, is a bit over the top.

I have said it many times, and i have also said that there could still be money to be made, but personally i wouldn't buy into a co that is overpriced imo.


----------



## thedave (6 February 2008)

The question is will it make a profit and the answer to that is absolutely yes.  This is not some tech share conjured up in mum's kitchen with one good idea behind it.  FMG has huge resources, anything up to 10x what they have proven to date (and what they have proven to date is what the estimates are based on), the infrastructure investment and development is massive.  Nope, no shake and bake, this is a real company with real assets and it will generate real profits, and its too big and too far down the track for the outcome to be significantly affected.


----------



## agro (8 February 2008)

why does the small bloke get it hard all the time:

http://www.theaustralian.news.com.au/story/0,25197,23177283-643,00.html

RESOURCES and Energy Minister Martin Ferguson has flagged changes to the Trade Practices Act that would protect BHP Billiton and Rio Tinto from having to allow upstart iron ore rival Fortescue Metals Group use of their rail lines in the Pilbara.


----------



## agro (9 February 2008)

*Shenhua insider: Chinese firms to invest in Australian mine company


www.chinaview.cn 2008-02-08 14:14:13 Print*

BEIJING, Feb. 8 (Xinhua) -- China Shenhua Energy and China Investment Corp have talked with Australia's third largest iron ore mine company to buy its stake worth 2 billion U.S. dollars, an insider with China Shenhua was quoted as saying.

The plan to buy 15.85 percent of Australia's Fortescue Metals (FMG) was still at an early stage, the anonymous source from China's largest coal producer told Shanghai-based Oriental Morning Post.

The FMG will use the capital for mine exploitation, said the source.

Harbinger Capital, FMG's second-largest shareholder, may sell its stake to China investment and Shenhua, according to an earlier report by the South China Morning Post. Fortescue founder John Andrew Forrest is the biggest owner of the company, with 35.97 percent.

The FMG is the world's fourth largest iron ore producer.

The likely bid for Fortescue came after Friday's announcement by another state-owned resources company, Chinalco (Aluminium Corporation of China Ltd.), the country's largest aluminum company, which acquired a 12-percent stake in British mining giant Rio Tinto PLC along with U.S. Alcoa Inc.


----------



## enigmatic (9 February 2008)

how do they actually call FMG the 4th largest Iron Producer in the world does that mean there is only 3 Iron producers in the world. because Im pretty sure FMG havent actual produced Iron ore yet. I think it should be, soon to become the 4th largest Iron Producer in the world.


----------



## agro (9 February 2008)

enigmatic said:


> how do they actually call FMG the 4th largest Iron Producer in the world does that mean there is only 3 Iron producers in the world. because Im pretty sure FMG havent actual produced Iron ore yet. I think it should be, soon to become the 4th largest Iron Producer in the world.




i think they might be referring to scale?

Vale, BHP, RIO, FMG

nevertheless, it is good what the chinese are doing


----------



## meganut (9 February 2008)

agro said:


> RIO is over $100 ? is that overpriced for an iron ore producer?




RIO Is not just an Iron Ore producer, when I used to work for them they had 26 different business units under them, more now that they have acquired Ranger Uranium (who I also used to work for) and Robe River Iron.

But they have to have one of the smartest management teams I have ever had the pleasure to work for, way better than BHP's before the Billiton meger.


----------



## Fed23 (11 February 2008)

What happened to this stock today to go from positive to negative (down 7.7%)? No announcements either.


----------



## agro (11 February 2008)

Fed23 said:


> What happened to this stock today to go from positive to negative (down 7.7%)? No announcements either.




well considering the all ordinaries finished down, the stock needed a breather..

once more most quality iron and resource stocks were down..


----------



## agro (12 February 2008)

just for those interested, there was two presentations conducted today to investors,

one was done at the BBY Australia Resources Conference and another at the Indian Steel confrence.

Both can be found on their website:
http://www.fmgl.com.au/IRM/content/invest_asx.htm

i just found out they hold more land than BHP and RIO put together - fair dinkum


----------



## Kimosabi (12 February 2008)

enigmatic said:


> how do they actually call FMG the 4th largest Iron Producer in the world does that mean there is only 3 Iron producers in the world. because Im pretty sure FMG havent actual produced Iron ore yet. I think it should be, soon to become the 4th largest Iron Producer in the world.



Twiggy did take a lump of Iron Ore with him in his suit case the last time he went to China, so maybe this qualifies FMG as a Iron Ore producer...


----------



## meganut (12 February 2008)

agro said:


> i just found out they hold more land than BHP and RIO put together - fair dinkum




Yep, they have about 40,000 sq/km of tenements in the pilbara! Which will hopefully put them in a good position down the track.


----------



## Fed23 (12 February 2008)

It was a pretty PDF they got on their website. I'll hold my breathe until mid may when they load the first ship


----------



## imaginator (13 February 2008)

*FMG - Fortesque Metal*

What's happening to FMG these days?

Yesterday it went down to 6.77 I bought some at 6.79. Today its up to 7.24, then market weakness after opening forced it down to 7.07.

I'm curious what made FMG go down so much yesterday?


----------



## Fed23 (13 February 2008)

There's a cyclone near the area you to keep in mind.

Other factors the market is unpredictable atm.


----------



## agro (13 February 2008)

Fed23 said:


> There's a cyclone near the area you to keep in mind.
> 
> Other factors the market is unpredictable atm.




previous announcements state that they have worked overtime in consideration of the cyclone so no dramas there


----------



## meganut (13 February 2008)

Cyclones don't really have much of an effect on a mine site, even at Karratha it is just lock everything down, send everyone home and in a couple of days fire it all back up. They have everything stockpiled and ready to go, trust me dealing with cyclones is high on their list to minimize production losses.

The only time I could ever imagine a cyclone impacting on a share price is if a cyclone was to hit a site such as Pannawanica did with cyclone Olivia in the mid 90's.


----------



## Frankhalo (13 February 2008)

Banking sector dragged the market down this afternon, CBA lost $3.20 per share, other banks tanked a little too, basically kills the mood a little accross the board. Regardless has been a good run lately for FMG with resource upgrade due March, Chinese interests in buying in (15% + ) and first shipment in May, its all dam good times ahead.


----------



## Miner (14 February 2008)

WorleyParsons currently have immediate opportunities to join the expansion of the Fortescue Metals Group (FMG) Pilbara Iron Ore and Infrastructure  project consisting of 260km of rail, mine operations and port facilities.FMG is the first company to develop a major iron ore start up project in Australia in decades.It is on track for the first iron ore shipment to depart Port Hedland in May 2008.

*After setting an initial target of 45mpta the project is now entering the FEED stage for 100 mtpa and is set to begin feasibility of a further expansion to 200mtpa.*

No Comments excepting the fact that Worley Parsons would not advertise like this: Opportunities to build up portfolio in WOR and FMG. I do not have any of them however (waiting for saturday's lotto winfall to recover the losses I have made in recent market turmoil to pay off my margin)


----------



## agro (18 February 2008)

*good news for FMG and other iron ore producers namely RIO, BHP, MMX, MGX*

http://uk.reuters.com/article/oilRpt/idUKL176439220080217

UPDATE 1-Nippon Steel agrees to 65 pct iron ore price rise

 BEIJING, Feb 17 (Reuters) - Japan's Nippon Steel (5401.T: Quote, Profile, Research) has agreed to a 65 percent rise in the price it will pay for iron ore under term contracts, effective April 1, industry sources and a Chinese steel industry website said on Sunday.

Term iron ore prices had been widely expected to rise by 50 percent or more, after spot prices soared to record highs in 2007 and Chinese steel mills' demand showed no signs of abating.

The rise could squeeze margins for the steel industry, which is already facing rising costs for coke, coal, and shipping.

"An international steel mill has concluded 2008 iron ore negotiations. The 2008 iron ore price will rise by 65 percent," steel industry website Umetal said late on Sunday.

Industry sources said Nippon Steel had concluded the deal. That company could not be reached on Sunday evening.

Traditionally, all steel mills accept whatever price is first settled by any steel mill and one of the three top miners, Brazil's Vale (VALE5.SA: Quote, Profile, Research) or Australia's Rio Tinto (RIO.L: Quote, Profile, Research)(RIO.AX: Quote, Profile, Research) and BHP Billiton (BHP.AX: Quote, Profile, Research)(BLT.L: Quote, Profile, Research).

Li Xinchuang, vice president of the China Metallurgical Industry Planning and Research Institute, confirmed a price had been set but did not confirm which companies nor what price level.

A deal would be announced this week, Chen Xianwen, deputy general director of the China Iron and Steel Association, said on Sunday, while also declining to confirm the price or parties to the deal.


----------



## enigmatic (18 February 2008)

Don't FMG have contracts with the chinese at a fixed price for the next few years. Please correct me if I'm wrong. Although I must admit this increase in Iron Ore prices will help all Iron ore Miners. Including the new force in Iron ore


----------



## agro (18 February 2008)

enigmatic said:


> Don't FMG have contracts with the chinese at a fixed price for the next few years. Please correct me if I'm wrong. Although I must admit this increase in Iron Ore prices will help all Iron ore Miners. Including the new force in Iron ore




yeah i am certain they have contracts lined up already

but think of the future contracts and potential of iron ore prices


----------



## agro (19 February 2008)

*January construction report out:
*

- The First Ore On Ship (FOOS) date remains at mid May 2008 with overall project completion at 86% measured by value of work.

- Port works are 90% advanced with a major milestone achieved being the arrival and assembly of the pre-commissioned ship loader which was lifted into place over January 23 - 25.

- The mine site was 80% complete as at end January with continuing progress on the crushing and screening plants and the product load out vaults.

-Rail works were 85% complete at end January with the automated track laying complete to chainage 110 and a total of 4 manual track laying teams deployed along the rail line.

- Project Final Forecast Cost is $2,765 million which is an increase of $66 million from last period. The adjustment was primarily due to an increase in the estimated EPCM costs to WorleyParsons of $61.6m.


----------



## enigmatic (19 February 2008)

seems to be costing more each month. just means it will be another month or so before there in the green. Looks like there roughly on schedule though that first ore is to be on train on March 15th not long to go so we should be hearing some good news soon like that they are stockpiling the Ore.


----------



## Miner (21 February 2008)

Should I call it deliberate or printer's devil.
Reading the text of presenation by FMG to BBY business it says (my comments are within brackets)  :

Existing Project –60mtpa (Figure is inconsistence. FMG started at 45 MTPA for which Worley Parsons was commissioned. THe original plan which is going to achieve by May (?) 2008 is actually 35 MTPA. Adding lump circuit the project will aim to deliver 55 MTPA). 

*First Ore on Ship   March 2008* (_This is interesting. Throughout the advertisement campaign etc FMG says the FOOS will be May 2008. Internal target howver is April 08. Now suddenly different story to Bombay investor is March 08) _2 Loading Berths; 
1 Ship loader; 3.2mt stockpile;  Single loop; 1 x 2 car train
unloader; Lump circuit (this is to catch up the short fall betwween 35 and 55 MTPA)

55 to 100mtpa – target 2009/2010 (this is a moving target. It is only recently Worley Parsons started recruiting people for 55 to 100 MTPA. So actual completion of 100 MTPA if at all will be not before mid to late 2010. I will strike my name out if FMG can achieve even 80 MTPA by 2009. 
No criticism but do understand marketing hype. No matter what once, the production starts FMG share will rocketed up and only Chinese investor to come with additional fund. Why not if RIo can ask Chinese to rescue them what is wrong with Andrew?).


----------



## agro (21 February 2008)

*AEGIS Weekly Focus*

Fortescue Metals (FMG): Not out of the forrest but upside remains
FMG is the owner of significant iron ore resources and is scheduled to commence
shipping iron ore to customers in 4Q08. We have a 12-month price target of $8.03
on the stock.

Source: Proview / Aegis Equities
Company Risk: Share Price Risk: Ethical Rating:
What to do (Investors): *BUY*

China has embarked on a phase of rapid economic industrialisation, including an unprecedented
level of infrastructure development. We do not see any dramatic change in iron-ore demand, with
forward estimates suggesting that fixed investment in China will remain strong for the foreseeable
future. The current shortfall is being filled by high-cost domestic production.

What to do (Trader): Medium-Term BUY, target $8.75 FMG remains in a long-term uptrend, it remains above the August 2007 lows, and it has just generated another medium-term Buy signal. These point to the stock�s resilience over the past six
months. There are few stocks that have managed to stay above their long-term uptrends. The chart below disguises the magnitude of the price swings in the stock - it has actually risen 50% from the January lows. Given this we would not be surprised to see some profit taking in the short-term; but the longer-term outlook remains favourable. 
*
Short-term HOLD / ACCUMULATE.*


----------



## kerosam (21 February 2008)

phew... glad this baby moved north today. i have been wondering why it didn;t get the same reception as MGX in the past few days...


----------



## Go Nuke (25 February 2008)

Wow the close of the market really amazes me.

Right now, there are 3 orders to buy FMG at $15.00+
In fact all 10 orders to buy that I see on Commsec are above $8.

I don't know if they will go through today, be withdrawn or go through as a cross trade (do cross trades show on depth list?)
Probably some people trying to get inh at the last minute?

Anyway I'm happy to see FMG close up today


----------



## agro (25 February 2008)

Go Nuke said:


> *Right now, there are 3 orders to buy FMG at $15.00+*
> *In fact all 10 orders to buy that I see on Commsec are above $8.*




doesn't that say something about the quality and demand for this stock in the short and longer terms? 

RIO wants their 71% cut but China not happy chappy

FMG will benefit


----------



## Go Nuke (25 February 2008)

Yes and with the highly likely ann about to come out tomorrow about the Chinese investing in Cape lambert Iron which is also in the Pilbara, this might have a reflection on FMG's share price also.

Should be a good day tomorrow, though some resistance to get through at $8.


----------



## Fed23 (26 February 2008)

Go Nuke said:


> though some resistance to get through at $8.




It shot through the $8. Make me wish I hadn't sold out of it back at $7.10

Will it ever stop climbing up is my next question?


----------



## tony montana (26 February 2008)

it might stop climbing when the world knows how much money they are going to make each year.....but until then.


----------



## Go Nuke (26 February 2008)

Fed23 said:


> It shot through the $8. Make me wish I hadn't sold out of it back at $7.10
> 
> Will it ever stop climbing up is my next question?




Well i got in at $7.70, the same day it hit those $8+ highs and was kicking myself for not grabing a quick 10%....so Ive been waiting ever since for it to get back to these levels

I'm thinking of using FMG to practice trading with.
I'd be happy to get 10% from week to week and build my money up re investing each time.


----------



## michael_selway (26 February 2008)

Go Nuke said:


> Well i got in at $7.70, the same day it hit those $8+ highs and was kicking myself for not grabing a quick 10%....so Ive been waiting ever since for it to get back to these levels
> 
> I'm thinking of using FMG to practice trading with.
> I'd be happy to get 10% from week to week and build my money up re investing each time.




Hm do u think its getting a it expensive?

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS -2.6 -4.2 30.1 59.7 
DPS 0.0 0.0 0.0 0.0 *



> Date: 20/2/2008
> Author: Kevin Andrusiak
> Source: The Australian --- Page: 22
> Fortescue Metals Group (FMG) remains on target to deliver the first iron orefrom its Chichester Ranges project in Western Australia by mid-May 2008. Thegroup is nearing completion of its 270km railway to Port Hedland, although ithas disclosed the cost of the project has risen by $A66m as project partnerWorleyParsons increased its estimated cost for the completed line by almost$A62m. FMG shares closed $A0.07 lower at $A7.45 on 19 February 2008
> ...


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## agro (27 February 2008)

looks as though it will continue to rise today as the Chinese eye of iron ore companies in light of RIO's 71% ask for the bulk commodity. 

Can someone elaborate to me their thoughts because if i mention takeover speculation i will get a warning from prawn_86 for mild ramping. 

thanks


----------



## agro (3 March 2008)

fancy a green stock today!

people saying news leaked out but i think its only anticipation of construction report


----------



## michael_selway (3 March 2008)

agro said:


> fancy a green stock today!
> 
> people saying news leaked out but i think its only anticipation of construction report




Hi just wondering, does FMG have a lot of debt?

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS -2.6 -4.2 30.1 64.0 
DPS 0.0 0.0 0.0 0.0 *



> Date: 20/2/2008
> Author: Kevin Andrusiak
> Source: The Australian --- Page: 22
> Fortescue Metals Group (FMG) remains on target to deliver the first iron orefrom its Chichester Ranges project in Western Australia by mid-May 2008. Thegroup is nearing completion of its 270km railway to Port Hedland, although ithas disclosed the cost of the project has risen by $A66m as project partnerWorleyParsons increased its estimated cost for the completed line by almost$A62m. FMG shares closed $A0.07 lower at $A7.45 on 19 February 2008




thanks

MS


----------



## Miner (6 March 2008)

Extract from Citi:
I must confess that I do not hold FMG now even if  I have put my punt as FMG in stock competition. 
Ironically I have seen some of the executive directors has been very friendly with Charles Aitken (Souther Equities) and Citi. Southern Equities is still a strong supporter of FMG but why Citi changed heart ? 

Or are they trying to get a sell signal so that they can start buying ? Some project guys  suggested  that actual production could start from April even market posting is May 08.

No comments further and here goes the report as appeared in FN Arena :

*FMG - FORTESCUE METALS GROUP LTD *

*Citi rates FMG as Initiation of coverage - Sell, High Risk - Despite being iron ore bulls, the broker has initiated coverage of this company with a Sell rating*. 

The broker has noted that in five short years, the company has come a long way from an iron ore hopeful to being on the cusp of production. Ramp-up to 45mt, optimisation to 55mt and expansion plans to 100+mt are very aggressive, but given the commissioning risks still to be faced, Citi considers the shares have run beyond fair value. 

The target price has been set at $7 and has been derived from a 75/25 weighting of net present value and price earnings multiple. 

*Target price is $7.00 Current Price is $7.63 Difference$0.63) - (brackets indicate current price is over target). If *FMG meets the Citi target it will return approximately - 8% (excluding dividends, fees and charges - negative figures indicate an expected loss). 

The company's fiscal year ends in June. *Citi forecasts a full year FY08 dividend of 0.00 cents and EPS of -3.40 cents . At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is -224.41. *

Market Sentiment: -1.0


----------



## snabbu (6 March 2008)

Miner said:


> Extract from Citi:
> <snip>
> 
> No comments further and here goes the report as appeared in FN Arena :
> ...



Macquarie  is even worse
Quote:
Macquarie rates FMG as Underperform - The result doesn't mean a lot, given Fortescue hasn't sold anything yet. The broker notes management has revalued its obligations, and executed a sale-and-lease-back deal with banks on its rail & port facilities, providing cash to continue the hell-for-leather ramp up.
All this shows an aggresive attitude towards getting production up as fast as posible, and the broker thinks this is all a risk. It has also assumed higher costs and A$, offset by a higher iron ore price. Earnings fall 22% and 9% in FY09-10.

Target price is $4.10 Current Price is $7.70 Difference$3.60) - (brackets indicate current price is over target). If FMG meets the Macquarie target it will return approximately - 47% (


----------



## Prospector (6 March 2008)

In NAB Investment section the target price is $8.03 and based on 5 brokers, a Buy.  So who do you believe?  None of them, do your own research.  They all have their own agendas.


----------



## Fed23 (6 March 2008)

Finished up 8%. I should of held onto mine. I can see this going to higher as it gets closer to it's first shipment.


----------



## prawn_86 (6 March 2008)

Fed23 said:


> I can see this going to higher as it gets closer to it's first shipment.




I can see this going considerably lower once the market realises exactly how much they will be earning.

Unless Twiggy sells out to the Chinese...


----------



## agro (6 March 2008)

prawn_86 said:


> I can see this going considerably lower once the market realises exactly how much they will be earning.
> 
> Unless Twiggy sells out to the Chinese...




tell me what you just mentioned isn't considered 'down ramping' seeing though you are the moderator?


----------



## prawn_86 (6 March 2008)

I was merely posting a contarian view to that of another member.

Isnt it funny how all those who are long are never normally happy to hear an opposite opinion.

EDIT - The forawrd PE of this co is huge, which is the reason why i think it will fall. A view which is backed up by some (but not all) analysts


----------



## agro (6 March 2008)

prawn_86 said:


> I was merely posting a contarian view to that of another member.
> 
> Isnt it funny how all those who are long are never normally happy to hear an opposite opinion.
> 
> EDIT - The forawrd PE of this co is huge, which is the reason why i think it will fall. A view which is backed up by some (but not all) analysts




yeh but why do you even bother commenting about a stock you don't hold considering you have JMS and IRL both of which are down?

you consider yourself contarian,,, do you feel irritating people by unsubstantiated posts is a good idea?

you have no basis for what you are saying. 

even going by your posts if the chinese are so keen to get into FMG then i trust them before i trust the australians who never backed FMG in the first place

the chinese don't invest unless they are 101% sure of getting good returns for their money


----------



## Prospector (6 March 2008)

agro said:


> tell me what you just mentioned isn't considered 'down ramping' seeing though you are the moderator?




Prawn isn't a moderator agro, he just has that as part of his by-line.  Nothing more than that - he hasnt been on the forum all that long and doesnt have a large number of posts.  Kennas is a mod, Dr (um ???) is a mod, and of course, Joe B.  Must be a couple of others too but cant think of them right now.

Doctorj - sorry about that!  I did try to find the last after I posted to get your name right, but couldnt find it!

Ah, prawn 86 is a mod - that explains the confusion because I thought initially that Prawn was a mod too!  Like the guy who has 'banned' as his by-line


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## doctorj (6 March 2008)

You can always find a list of mods at this link - https://www.aussiestockforums.com/forums/showgroups.php

It's accessible down the bottom of the forum page under the "Forum Leaders" link.


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## prawn_86 (6 March 2008)

agro said:


> yeh but why do you even bother commenting about a stock you don't hold considering you have JMS and IRL both of which are down?
> 
> you consider yourself contarian,,, do you feel irritating people by unsubstantiated posts is a good idea?
> 
> you have no basis for what you are saying.




I happily admit that the shares I am holding are down, however I consider what I hold to be undervalued fundamentally, based on my own analysis. Hence I believe they will reach fair value at some stage or another.

Really, if you are happy with your investment then a contrarian view should not be irritating.

I have basis, check back a couple pages, I have already told you why I think they are overvalued. Huge forwards PE for someone yet to be cashflow positive, heavy publicity (which can be, and obviously is a good thing) but you very rarely here negatives from the co, etc.

Next time you question my post please address an issue I have raised previously rather than as a personal attack.


----------



## prawn_86 (6 March 2008)

prawn_86 said:


> No, im saying that its status is probably still 'spec'. Officialy it is:
> 
> 
> 
> ...




Just a bump of my main point for Agro if he wishes to respond 

Also remember that these PE ratios would be off now as the price has risen since then. 

I have also never said that you cannot make money being long, just that it is overpriced in my fundamental opinion.


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## Frankhalo (6 March 2008)

Citigroup and Macqaurie bank....LOL
Citigroup in the 4th quater minus $18 bil, this quater minus $15 bil, Mac Bank current SP = . When these clowns say sell I do the opposite, Mac bank had a sell 3 weeks ago when FMG was at $7, look at it now $8 plus. I'm tipping they want you to panic, sell cheaply and they come in and swoop, not the first time boys and girls, trust your research.


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## agro (7 March 2008)

Fortescue Wants to Sell Stake in Rail, Port Unit (Update1)

By Rebecca Keenan

March 7 (Bloomberg) -- Fortescue Metals Group Ltd., building an iron ore mine that will make it Australia's third-largest producer, wants to sell a 49 percent stake in the rail and port unit for the A$2.8 billion ($2.6 billion) Pilbara project.

``We always created The Pilbara Infrastructure Pty as a separate company because we saw that as being an entity that might be attractive to a different group of investors,'' Graeme Rowley, executive director of Perth-based Fortescue, said in an interview.

Fortescue, controlled by Andrew Forrest, Australia's richest man, is scheduled to ship its first ore to China in May after signing supply accords with mills including Baosteel Group Corp. Bringing in a joint venture partner would help fund a proposed A$10 billion expansion of the project, Rowley said.

``With the way capital costs for mining projects are going, this is another way to raise money, by flogging off the infrastructure,'' Gavin Wendt, a senior resources analyst at Fat Prophets Funds Management in Sydney, said by phone. ``It's the only way now they can raise cash without sending out alarm bells.''

Fortescue has risen more than fourfold in the past year and is the second-best performer on the Australian benchmark index. It fell 11 cents, or 1.3 percent, to A$8.17 and at the 4:10 p.m. Sydney time close on the Australian Stock Exchange.

``Invariably the people that are interested are your customers,'' Rowley said. ``We may want to hang onto the value side of the business, the iron ore, ourselves.''

The mine, in the Pilbara region in the north of Western Australia state, is targeting an initial production rate of 55 million metric tons a year and the company is looking to increase that to 200 million tons a year through the expansion, Rowley said.

Forrest is Australia's richest man with a net worth of $6.5 billion, according to Forbes magazine.

To contact the reporter on this story: Rebecca Keenan in Melbourne at rkeenan5@bloomberg.net


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## urgalzmine (8 March 2008)

Hey guys 

I am new to these forums but i have been reading what people have been saying and I agree with prawn_86 to be careful about this stock. Please keep in mind that BHP and RIO own this sector. These companies had geologists running around Australia picking the best mining sites 30 yrs ago. 

For instance has anyone thought of how FMG are going to transport the materials ? Do you think BHP and RIo are going to say " yes FMG you can use our   railways free of charge? " 

I think this is why BHP is trying to buy RIo, to work as a synergy to block competition like FMG. If FMG get their way, goodbye RIO. I dont think RIO will sit there and do nothing.

I dunno just my  

Cheers


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## Miner (8 March 2008)

Folks
I am not holding any FMG share or paid by Twiggy. I have been always a bit shaky about FMG. However analysing the fundamentals and project progress as released to its own working employees / contractors FMG project is at least fortnight ahead than the projected target. It will nto be 45 mtpa however. The lump circuit will make it to 45 by Sep and rememner desanding is an important part for making the 45 mpta. 
Regrding the rail query - they have been behind but now all the contractors are working too hard to get it going. Rail will be ready in May. As an interim they are most likely using road transport just to prove the point.
FMG has already taken plan B for railways so even bhp case goes until 2010 it means their 200 mtpa plan will be benefitted if they win at that time.

You might have  read that FMG is selling its railway and infrastructure to China. Big money and that will provide the dollars for next phase. Worley Parsons has already started recruitment for phase 2. 

Resource base wise FMG has more iron ore than BHP and Rio combined.

Just another month and please see your self what happens.

Good luck


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## Prospector (8 March 2008)

Miner, given your past concerns about FMG, your discussions are very meaningful and encouraging.  Their idea about selling infrastructure has to be more positive than going in to further debt.


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## urgalzmine (9 March 2008)

Prospector said:


> Miner, given your past concerns about FMG, your discussions are very meaningful and encouraging.  Their idea about selling infrastructure has to be more positive than going in to further debt.




I am still skeptical in the short term. FMG need to build the railway in australia first. If BHP and RIO are successful in their merger, their alliance reduce their cost price for a tonne lower than FMG.  

I understand FMG has the biggest reserves and high quality but they havent produced yet. If FMG are successful in what they are doing their SP will be much higher than RIO's

Long term, if all goes will this stock will be HUGE..., but until then I am little skeptical


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## agro (9 March 2008)

I agree, it will be HUGE


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## spectrumchaser (9 March 2008)

"FMG need to build the railway first"

The FMG railway was 85% completed as of the end of January.
Anyone interested may like to look at photos for the March
update 
http://www.fmgl.com.au/IRM/Company/ShowPage.aspx?CPID=1484&PageName=March Update


Perhaps the sceptics will claim that these photos are 
computer generated forgeries !


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## urgalzmine (9 March 2008)

spectrumchaser said:


> "FMG need to build the railway first"
> 
> The FMG railway was 85% completed as of the end of January.
> Anyone interested may like to look at photos for the March
> ...




hmm so thats what you get for $2.7billion
ok I am sold,  I think i am the only person in this forum that was skeptical. I will follow the herd.. Mooo

let me have a slice of the pie


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## enigmatic (9 March 2008)

> Miner Re: FMG - Fortescue Metals
> 
> --------------------------------------------------------------------------------
> Folks
> I am not holding any FMG share or paid by Twiggy. I have been always a bit shaky about FMG. However analysing the fundamentals and project progress as released to its own working employees / contractors FMG project is at least fortnight ahead than the projected target. It will nto be 45 mtpa however. The lump circuit will make it to 45 by Sep and rememner desanding is an important part for making the 45 mpta.




I was just reading the company March Update, and I believe they have only stated that screening has been powered up and that crushing as yet to be complete, it also looked like from the picture that the train loader wasnt completed but thats a seperate issue. 

I was wondering were are you getting the fortnight ahead of schedule from, as I'm sure that it was scheduled for First Ore on Train to be as of the date 15th of March. assuming they are a fortnight a head of schedule would this not mean that the screening and crushing has been completed and possibly trainloading. so if possible miner i was wondering if you could share some light on how you are coming up with a fortnight a head of schedule as I do not see this in there public announcement for March.


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## Miner (9 March 2008)

Public announcement is FOOS on May 08. FOOS is important and FOOT (First ore on Train). WHen it is FOOT then the ore will be dumped in port stockpile to be taken in ship. So the slack activity between FOOT and FOOS will be real meaningful. 

FMG has an internal target which says that FOOS will be end of April. This is not really a secret. Any one working in team 45 (= 45 mtop) or a contractor like Rourke , BYL, etc will get the same weekly progress target. ASX gets monthly report that too modified after few weeks after release.

Crushing stations are for secondary screening. FMG I understand organising for some mobile crushers to be deployed .

Please one thing rememner that no matter how much tonnes are put into ship in first ship load, FMG is determined to prove that they are on time. Then there could some time buy out opportunity to get it full swing. 

The time of commitment is crucial for Twiggy to get share price jumped.

PS : once again I do not work for FMG or Andrew neither I hold any FMG shares.


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## ans25 (9 March 2008)

Hi there,
I have also read that only power is up in Screening so how in the world woudl they achieve First Ore on Ship by that date is beyond me?
Does anyone have any other info?

This one is on my watch list... do you guys think sp of FMG will go down a bit somewhat if deadline is not achieved?


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## Miner (9 March 2008)

ans25 said:


> Hi there,
> I have also read that only power is up in Screening so how in the world woudl they achieve First Ore on Ship by that date is beyond me?
> Does anyone have any other info?
> 
> This one is on my watch list... do you guys think sp of FMG will go down a bit somewhat if deadline is not achieved?




Great Pig

My personal belief is  FMG having not produced any ore, the share price will zoom down if the dead line is not met. There are so much hype and expectation that Graeme Rowley or Russell of FMG just can not afford to get Andrew loose hundreds of millions from this shocking price down. on a flick of bad news Twiggy will not be the richest person at that juncture. If you know Andrew is very much media focused person and will not let this happen. This is his life more than any one other investor who might have invested only hundreds of thousands. 

Ironically BHP escalated project cost by more than $100 M no one raises a finger because they have already proved to be a production company. But FMG is on paper - not yet a production company.

So in short if I punt or apply my own scope then share price will go down around 10% if the target date gets escalated by one week.


----------



## ans25 (9 March 2008)

Interesting point mate, Im guessing then there will be no announcements then made by FMG... no news is good news then huh?


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## Miner (11 March 2008)

Interesting news today as posted in ABC Webpage.
Financially $600K will not matter for people like Andrew which is much less than a fluctuation of 50 cents of his share holding. However for a publicity focused person this will give food for his critics, bad publicity  and media.


*ASIC begins legal action against FMG
Posted 25 minutes ago * 11 MARCH 08 

The Australian Securities and Investment Commission (ASIC) alleges FMG failed to comply with continuous disclosure obligations in 2004. (ABC TV)

Map: Perth 6000
 The corporate watchdog says it will produce three witnesses in its Federal Court case against Australia's richest man, Andrew Forrest, and his company Fortescue Metals Group (FMG).

*The Australian Securities and Investment Commission (ASIC) alleges FMG and Mr Forrest failed to comply with continuous disclosure obligations when announcing contracts with two Chinese companies in 2004*.

At the time the company was trying to secure funding for its multi billion dollar iron ore project in the Pilbara.

In the Federal Court in Perth today, Stephen Robb, QC, said ASIC has evidence from three expert witnesses, one of whose statements is 90 pages long.

*ASIC is pursuing FMG for civil damages of $3 million and Mr Forrest for $600,000.*


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## spectrumchaser (11 March 2008)

Nothing like a bit of scandel to add some interest to the Ausi share market.

This case unfortunately doesn't look half as interesting as other Iron ore "mega wealthies" inquest over Lang Hancock complete with hitmen, adultery and black magic!

8% fall for FMG today seems like a lot but BHP and Rio are both down by about 5%  as well.

Seems like a long time to put a case together for wrong doings in 2004.


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## Miner (14 March 2008)

REPORT FROM SHAW BROKER// F N ARENA

Further to that there is a press report in West Australian about Russian Interest to buy 20% of FMG when the price is right (who will tell that value)?
Funny as recently CITI said SELL to FMG (Am I right to recollect ?)

Any way here u go
*The Iron Ore Surge Continues
14/03/2008 By: FN Arena*

Fortescue Metals ((FMG)) will not wait for its railway line form the Pilbara to Port Hedland to be completed. Completion was originally slated for May or earlier,* but inevitable delays have set this target back. *Instead, Fortescue intends to truck its iron ore to port from the end of the line as it creeps closer. There is no time to lose. (_Hey Forum Guys please read my post few days back. I am an idiot and no brainer but did say the same on my own observation . But why I then @#$@ lost so much in recent share market ?) _ 


There is no time to lose because the iron ore price is running amok, and if Twiggy Forest wants to be able to crystallise his status as Australia's richest man then he needs to start selling into this market as soon as possible. Analysts have now moved ahead to forecast prices for the 2009, 10 and 11 Japanese financial years, expecting further increases in the first two before the iron ore price levels out.

We now know that Brazil's Vale - the world's largest individual producer of iron ore - has settled with the Japanese and Koreans on price increases for Itabira fines of 65%, and of 71% for the higher grade Carajas fines. While these are significant increases, Merrill Lynch analysts are surprised Vale didn't twist arms further. China is currently being forced to buy in lower grade Indian ore at spot for as much as US$216/t. The new Carajas price represents only US$146/t. Chinese buyers will expect to pay the same as their neighbours.

The answer probably lies in the speed with which Vale settled with the Japanese and Koreans, the analysts suggest. Vale is presently attempting to merge with Swiss mining giant Xstrata and needs to settle a deal with Swiss-based metal trader Glencore (Marc Rich's creation) which owns 34.6% of Xstrata. So it was better to sort out the iron ore price with expedience.

Analysts agree that its fair to thus assume BHP Billiton ((BHP)) and Rio Tinto ((RIO)) will negotiate a 65-71% price increase as well. It is understood the two Aussies will be pushing for more, given the Brazil-Australia freight differential. Australia currently receives US$37/t less for its iron ore than Brazil because of an antiquated agreement based on the fact it's a lot further to Asia from Brazil. The differential is no longer justified, so the Aussies are expected to push for a price rise of up to 100%. However, the Asians are likely to stand firm and despite world iron ore supply constraint they can now wave a potential US recession - and a subsequent drop in steel demand - in BHP's and Rio's faces. Negotiations are still underway.

As are negotiations between BHP and Rio, as the former tries to swallow the latter. A BHP Tinto would then become a bigger iron ore producer than Vale and thus in a better position to dictate terms. But that's not going to happen before negotiations are over for the year, if at all.

So analysts believe the two will have to settle on an equivalent price increase this year, but not yet an equivalent price. What happens thereafter will depend on two factors - the supply/demand balance, and the possible introduction of an iron ore index.

It is China driving demand. In 2007, China represented 80% of the growth of iron ore exports from Brazil/Australia, or 46% of the total. Imports were 384mt in 2007, up 17.6% from 2006. Merrill Lynch is forecasting 446mt of imports in 2008. ABN Amro notes Chinese steel production is forecast to maintain its current growth trend, as new capacity additions are only replacing the closure of smaller, inefficient mills. The analysts also suggest the higher costs of both iron ore and coal should be able to be passed on into steel prices, meaning there won't suddenly be a big drop in demand at that end.

On the supply side of the equation, constraint of supply has nothing to do with a lack of ore and everything to do with insufficient infrastructure and spiralling costs. All of Vale, BHP and Rio are planning capacity expansions from next year, with Vale hoping to go from 296Mtpa to 450Mtpa by 2013, BHP from 135Mtpa to 235Mtpa, and Rio from 180Mtpa to 350Mtpa (and don't forget Fortescue's targeted 100Mtpa or greater). But it all requires more equipment, labour, rail and port expansion, and new processing plants. Merrills notes Vale's last expansion cost US$112/t - twice as much as the company's previous expansion.

*But another bombshell may soon hit the seaborne iron ore market. Merrills coyly suggests BHP is coercing Chinese steel giant Baosteel to support and help develop a global traded iron ore index. Apparently BHP is no longer writing new individual benchmark contracts and will only renew at an "agreed annual market price". *This is seen as a precursor to the index. Iron ore is the only major commodity left without an index.

What this means is that producers and consumers will be able to agree on contract prices across a forward curve. What it also means is that speculators could then enter the market for paper-traded iron ore. To date, an investor wishing to "play" the iron ore market has had to be content with investment in shares of iron ore producers. Create an index, and the next thing you will have is derivatives. The prices of all commodities have surged recently ahead of consumer demand because of the growing popularity of investment in ETFs and other products.

With the JFY08 Australian price increase expected to be 71%, Merrills is now forecasting another 20% price increase in JFY09. The analysts suggest this forecast is "at the top end of consensus", with the current average suggested at 14%. However, GSJB Were is also expecting 20% and Citi recently shifted to as high as 30%. Merrills does, however, suggest its forecast is conservative.

Thereafter, Merrills sees another 10% increase in JFY10 (consensus minus 4%), a flat price in JFY11 (consensus minus 20%), and then falls of 25%, 20% and 20% respectively in JFY12-14. At this point, increased production should see iron ore move into surplus.

The good news is that Merrills believes the share prices of Australian iron ore producers are not yet reflecting such near term increases. Macquarie chimes in by suggesting that despite general global equity market weakness, certain sections of the resources sector continue to offer a safe haven.

(Who are Merrills ? They lost billions and now saying others to learn from them - joke) 

This article was kindly supplied by FN Arena. As such, it may not represent the views of egoli or SHAW Stockbroking. egoli and SHAW Stockbroking do not warrant the accuracy of the article and take no responsibility for the views expressed in the article.


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## Frankhalo (15 March 2008)

Good post miner, Andrew Forrest last week said he will shovel the stuff into the ships to meet the May first shippment, thats the kind of attitude I want to hear from any Iron ore company I invest in. Yearly output now eyeing 55mtpa, thats a major target for any iron ore company in Australia, looking at how far FMG has come I believe its a target that can be meet. As for Citigroup, Macquaire Bank etc with their sell, sell BS.....I say no thanks, look at their current SP, billion dollar quarterly loses, Graphs, then look at FMG upward strides, I believe they have missed the boat and have their own agendas when they tag it with a sell, bunch of clowns IMO, I take no notice and trust research and why I got into FMG in the first place....period.

BTW Resource sector is the strongest performing in the old ASX at the moment.


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## The Barbarian Investor (16 March 2008)

I'm sure I read this somewhere, but, weren't they selling the Railway line, Part of the Port, Cloudbreak Campsite etc?

I'm presuming they are ramping up for the next stages


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## Duckman#72 (16 March 2008)

Miner said:


> REPORT FROM SHAW BROKER// F N ARENA
> 
> Further to that there is a press report in West Australian about Russian Interest to buy 20% of FMG when the price is right (who will tell that value)?
> Funny as recently CITI said SELL to FMG (Am I right to recollect ?)
> ...



_

Hi all

There was a very comprehensive article in the Eureka Report on Friday written by Charlie Aitken from Southern Cross Equities. Admittedly Charlie is an out and out convert to Fortescue, (and openly admits this), however he backs his stories with evidence and has been recommending Fortescue as a buy since they were $1.80 (or is that 18c in the new terminology?).

He writes:"......the rail has now moved past the mine infrastructure, giving absolute confidence that the project will be delivered on time" ..........."There has been some scepticism in the market that there may be some double-handling of ore to meet the May deadline - that trucks would be used to take ore from the rail head to the port. Clearly this will not the the case and it will be on trains all the way!"............... "The debate about Fortescue is now not whether it will work but what it will earn and what the market will pay for those earnings.".........."The production figure of 55mtpa is a given for Fortescue and is mostly priced into the stock." 

And finally..."In my view, when the market comes around to focusing on Fortescue as a 100mtpa producer(2009-10), the stock will trade between $12.40 and $15 assuming it hasn't paid any dividends, which it is likely they will do."

I read Charlie's analysis in April last year, when he predicted that Fortescue would be a $100 share (when they just hit $20) and believe that he has a very strong understanding of this stock.

I'll leave you with one of his final statements...."Fortescue is the biggest story in Australian resources and very few Australian institutions own it (yet)." 

Duckman_


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## agro (16 March 2008)

Duckman#72 said:


> Hi all
> 
> There was a very comprehensive article in the Eureka Report on Friday written by Charlie Aitken from Southern Cross Equities. Admittedly Charlie is an out and out convert to Fortescue, (and openly admits this), however he backs his stories with evidence and has been recommending Fortescue as a buy since they were $1.80 (or is that 18c in the new terminology?).
> 
> ...




i read that too !!

you will find that the instos and probably skeptic public will only get on board when the shipment is made!

at the moment they expect the shipment to be made without the construction time it takes to build the rail network etc!! come on twiggy did this in 2 years - it took BHP and others 10 years +

also in the report it mentioned dividends in the future when earnings are reported..

and for those who say FMG has a 900 million debt - well with tax you can claim it as a loss


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## 2020hindsight (16 March 2008)

One things for sure 
he's a positive thinker!
No doubt the rail is behind schedule - but, he'll get it there any-which-way as he says.  
Brilliant people's-person


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## spectrumchaser (16 March 2008)

I was playing around with comparison charts today and was very surprised
to find the share price graphs for FMG and MGX for the last 12 months are very similar.
   MGX gained 330% over the period and
   FMG gained 300%.

    MGX has been in production for some time but ramping up
production with the takeover of Aztec,quite an interesting 
comparison all the same.


  holding shares in MGX and FMG


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## tigerboi (16 March 2008)

Getting it by a triple roadtrain on a 147t gross with 100t net,for around about 540kms all up,big operation for every 100t to port ,its very expensive as mmx do a 1200km round trip, ,thats why i got out at $50 for a nice earn,as i knew the rail wouldnt be on time.this must have an impact on the sp..tb


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## Duckman#72 (16 March 2008)

tigerboi said:


> Getting it by a triple roadtrain on a 147t gross with 100t net,for around about 540kms all up,big operation for every 100t to port ,its very expensive as mmx do a 1200km round trip, ,thats why i got out at $50 for a nice earn,as i knew the rail wouldnt be on time.this must have an impact on the sp..tb




Hi tb

I don't get what you mean about the triple roadtrain. Why do they have to do this?

Regards 
Duckman


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## Miner (16 March 2008)

Duckman#72 said:


> Hi tb
> 
> I don't get what you mean about the triple roadtrain. Why do they have to do this?
> 
> ...




Dear Duckman

Road trains are basically trailer truck used for material conveying. 
Normal trucks carry one trailer body with one prime mover. Then comes double road train where one driver's cabin is attached with two trains (if you can take the similarity with passenger railway trains with one or two cars). Now extend it to triple road trains . THis is nothing new however and very common in minesite. What it means that higher level of productivity and each driver will carry 3x 20 tons of ore body.

I hope that was your question !


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## Duckman#72 (17 March 2008)

Miner said:


> Dear Duckman
> 
> Road trains are basically trailer truck used for material conveying.
> Normal trucks carry one trailer body with one prime mover. Then comes double road train where one driver's cabin is attached with two trains (if you can take the similarity with passenger railway trains with one or two cars). Now extend it to triple road trains . THis is nothing new however and very common in minesite. What it means that higher level of productivity and each driver will carry 3x 20 tons of ore body.
> ...




Hi Miner

Thanks, but I should have been more specific. 

My question relates to road trains v rail. Why are FMG using road trains at all? No so much "what is a road train?" but "why are FMG using them to travel a 540km round trip?"

Cheers 
Duckman


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## Miner (17 March 2008)

Duckman#72 said:


> Hi Miner
> 
> Thanks, but I should have been more specific.
> 
> ...




Duckman

I believe FMG intends to use road trains as a plan B to catch up with any delay in railway tracks. 

Put it in this way : one normal wagon train will have any where between 30 to 56 cars . Rio Tinto (180 mtpa ? from Pilbara) / BHPB (135 mtpa ?) uses massive train length for a very high tonnage. Their haulage capacity is very high compared to FMG probably generate some where @35 MTPA  (not 45 or 55 mtpa) for the first four months until Sept 08 when ramping up will happen with lump circuit commissioning and second instalment of desanding plant. 

If rail hypothetically gets delayed by one month. FMG need to put its feet to show business as usual. So they need to have a contracted fleet about 15 *triple road trains for a month *to carry 4500 tons per day for a small distance of 540 (?) KM. Not a big deal for a snart operator who has billions at stake and going to get every ton from his mine will fetch more dollars (considering the low production cost without any primary crushing circuit from an advanced gardening). 

Down side is some extra dollars on operating cost for FMG.

Upside is Andrew will prove his worth and credibility,  shut up his critics and opponents like Ian Ashby or Sam Walsh. It will be real interesting scene in Australian Mining History from the grand son of ex Premier of WA.

Regards


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## waz (17 March 2008)

Just looking at the above calculations, are we saying 300t per truck??

4500 divided by 15, i dont think that is even possible, I did a quick search on google and the heaviest load ever moved on road is 500t, that was over a short distance on a freeway spread over many wheels.

Also, how would you load and unload the trucks?

In other news, why is FMG going up today, its the only short I have right now, and its also the only stock I have thats in the green. Just my luck.


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## treefrog (17 March 2008)

The road train pictured, used to transport zinc-

lead concentrate from MIM's McArthur River mine

 near Boroloola to the mine's export port at Bing Bong on the

 eastern gulf coast of the Northern Territory is the largest 

registered road train in Australia.

The road train is designed to haul 150 tonnes of concentrate, is 

160 m long and takes nerves of steel to overtake!


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## tigerboi (17 March 2008)

It looks like a few of the guys have already explained it to you, as for the N.T. triple side tippers my understanding is in w.a. you can go on a concession permit to 147t gross,with a tare of 46t to give you a 100t per triple,i dont work up there as i run eastern states b/double,but i dont think the rta in w.a. would let you cart 150t net,im assuming with the road train side tippers photo you meant 150t gross not net,i will stand corrected from any of the guys over there on the 150t subject,as they only let MMX run at 147t gross,tare 47t, = 100t net load,its a big job to run that amount all the way from the mine to the port,dont forget the trucks & trailers after awhile fall apart from the state of the roads...as for overtaking road trains people its always best to have a 2 way/cb in your car in the road train areas,usually on channel 40. All you have to do is call up the guy in the roadtrain:"copy in the triple roadtrain,iam on your rear in the car(little one),ah can you let me know when the coast is clear & i can come around you?yep no problems mate the driver will say to you"all the drivers are only too willing to keep things safe,its only when you get the odd few numbskulls that want to be foolish around the big ones..they are too impatient,in a hurry to get themselves killed...Alot of numnut car drivers cant understand what the"Do not overtake turning vehicle" sign means... like this guy!!...tb


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## tigerboi (17 March 2008)

Duckman#72 said:


> Hi Miner
> 
> Thanks, but I should have been more specific.
> 
> ...




My understanding is the mine is about 260-270 kms from port(see map in tolhurst research) so thats roughly a 540km round trip,as for 15 roadtrains it will have to be 30 to shift that amount of fe,you wont get a permit to go to port as MMX is only allowed 147t gross for 100t per trip,so work it out how much needs to go by road? 1mt at 100t a truck,10,000 trips required,maximum per driver a day is 2,did someone say 1mt in a month?333 trips a day,nope not in a month,too many drivers & trucks required...sorry it seems its 4500t a day,45 trips a day,trucks do 3 trips but drivers only allowed to do 2 as per work/drivehours,can be done sure but the best for the 4500t scenario is to go a little bit more as you will get many break downs,i would go 20 roadtrains & 40 drivers in a shuttle opreation...This is why i got out at $50 as i understood from my transport experience the rail would not be on time,if you want to see a heap of number crunching on the hole FMG set up,go on their website to brokers reports,here:http://www.fmgl.com.au/IRM/Company/ShowPage.aspx?CPID=1322&PageName=BBY Research

Here is the best,it even tells you how many flies are on twiggys back when he lobs at cloud break!...
http://www.fmgl.com.au/IRM/Company/ShowPage.aspx?CPID=1398&PageName=Tolhurst Research

cheers....tb


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## Go Nuke (17 March 2008)

I think todays Doji will indicate a change in direction tomorrow, assuming the U.S doesn't have an absoltue shocker tonight.

Still trading within my trend channel


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## Frankhalo (17 March 2008)

Personally I couldn't give a rats if they were using Tonka trucks and child labour to load the ships, ( actually child labour is wrong, just making a point  ) as long as they meet the May 15th quote I will be a happy investor. Regardless if its a day, week or month out BIG DEAL,you only have to see how far FMG have come to know this isnt some Junior start up Co, this is the full monty, third biggest IO play in Australia at a bargain price ATM.


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## tigerboi (17 March 2008)

Frankhalo said:


> Personally I couldn't give a rats if they were using Tonka trucks and child labour to load the ships, ( actually child labour is wrong, just making a point  ) as long as they meet the May 15th quote I will be a happy investor. Regardless if its a day, week or month out BIG DEAL,you only have to see how far FMG have come to know this isnt some Junior start up Co, this is the full monty, third biggest IO play in Australia at a bargain price ATM.




Ah tonka trucks that takes me back to my ankle biter days when i dreamed of being a truck driver,lets hope the FMG tonka drivers keep them shiny side up...


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## robjb5 (18 March 2008)

Luv your work,TB!!  Ok Tedi? About mid to late '80's?-----Photograph rouses the memory banks!!!!!!!!!!!!!!!


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## agro (18 March 2008)

*China bans BHP, Rio*
Updated: 08:53, Tuesday March 18, 2008
China has boycotted Australia's two biggest mining companies from selling iron-ore in the lucrative market; the move may have already cost around $300 million in export revenue.

It comes as both BHP and Rio Tinto attempt to increase prices in a bid to extract more value from the country's powerful steel industry.

Mining analysts say neither company has been able to send a single spot shipment into China since the start of the year.

It's understood no other companies have been blacklisted, with shipments still flowing from Australia's OneSteel, India and Iran.

The China Steel Association says there has been no official directive from the government, instead the steel companies were acting on their own accord.

The conflict threatens to escalate into a diplomatic row, and both BHP and Rio are urging Prime Minister Kevin Rudd to intervene when he visits Beijing next month.


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## tigerboi (18 March 2008)

robjb5 said:


> Luv your work,TB!! Ok Tedi? About mid to late '80's?-----Photograph rouses the memory banks!!!!!!!!!!!!!!!




yeah thanks mate,thats a fair dinkum photo too & it wasnt me who put it over either,got a few more drivers in the album who thought it good to test the laws of gravity!

this one is for all the guys who run containers out of botany or any where else... ALWAYS get out of the cab until the straddle/crane puts the container on...


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## tigerboi (18 March 2008)

Talking about the subject of FMG using roadtrains to get the fe to the ship,i rings up ol' mate the twigster,"i says i here you are having trouble finding the required trucks to shift that amount","he says its true but keep it dark,no probs twiggy,he said at the moment we will take anything & i will be on the shovel"...im leaving sydney now see you at cloud break!!!


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## Go Nuke (18 March 2008)

agro said:


> *China bans BHP, Rio*
> Updated: 08:53, Tuesday March 18, 2008
> China has boycotted Australia's two biggest mining companies from selling iron-ore in the lucrative market; the move may have already cost around $300 million in export revenue.
> 
> ...




I saw this story this morning on the business channel before I left for work and thought it would help FMG's share price today, but for some reason FMG has been pretty much pounded for the day

It should add more fuel to the rumour of the Chinese buying up more Iron Ore companies with good prospects here like they are trying to do with Midwest.

Perhaps CFE or BRM or may other hopefuls will get a knock on the door by a chinaman


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## Prospector (18 March 2008)

Agro beat you to it first thing this morning!   All resources got pounded today, so I think FMG was just part of the downturn for this sector.  Maybe it scared people into thinking if China bans BHP then the same thing could happen to FMG.  The market hates uncertainty.


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## Frankhalo (18 March 2008)

Tigerboi stop posting pictures of trucks doing bad things, your driving FMG's price down 

Yep till BHP + RIO lock away IO increase prices with China FMG may take a back seat for a little while. Take 50% - 65% this year instead of the 71% increase and ask for more next year when the worlds markets settle I say.


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## tigerboi (18 March 2008)

Frankhalo said:


> Tigerboi stop posting pictures of trucks doing bad things, your driving FMG's price down
> 
> Yep till BHP + RIO lock away IO increase prices with China FMG may take a back seat for a little while. Take 50% - 65% this year instead of the 71% increase and ask for more next year when the worlds markets settle I say.




keep ya daks on mate,market sentiment is that FMG wont make the may deadline & ive already told you that was the reason i sold,my twucks sending FMG spiralling downwards???lol...thanks for the rap mate ill keep in mind for TOLL,now take a deep breath & relax,i will find you a pic of the concrete mixer going into cloud break(i suppose joe will say no more pics tigerboi,the FMG crowd are nervous??)its a legitimate subject of FMG'S use of road instead of rail to get the job done,huge costs are associated with this type of transport & that is evident by FMG loking to sell 50% of their railway(great asset.they should lease it out imo)to claw back some of the $800,000+ it cost to build,FMG will get their up surge once the have foos...tb

twiggy in his cement truck....lol!!


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## tigerboi (18 March 2008)

tigerboi said:


> keep ya daks on mate,market sentiment is that FMG wont make the may deadline & ive already told you that was the reason i sold,my twucks sending FMG spiralling downwards???lol...thanks for the rap mate ill keep in mind for TOLL,now take a deep breath & relax,i will find you a pic of the concrete mixer going into cloud break(i suppose joe will say no more pics tigerboi,the FMG crowd are nervous??)its a legitimate subject of FMG'S use of road instead of rail to get the job done,huge costs are associated with this type of transport & that is evident by FMG loking to sell 50% of their railway(great asset.they should lease it out imo)to claw back some of the $800,000+ it cost to build,FMG will get their up surge once the have foos...tb
> 
> twiggy in his cement truck....lol!!




interesting to see how much of their other tenements,when they start drilling,how much they will get out of mt stuart jv with CUL,also when they  will start the upgrade on the rail to handle the 55mtpa when it comes out of the mines,when they do put it all together it will be the monster of all monsters,at present they have 2bt+ on only 10% of their ground...tb


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## tigerboi (18 March 2008)

tigerboi said:


> interesting to see how much of their other tenements,when they start drilling,how much they will get out of mt stuart jv with CUL,also when they will start the upgrade on the rail to handle the 55mtpa when it comes out of the mines,when they do put it all together it will be the monster of all monsters,at present they have 2bt+ on only 10% of their ground...tb




I think the biggest problem that FMG faces at the moment aside from the foos deadline is the charges asic have brought against twiggy concerning the supposedly agreements with the chinese steel mills,this brings unwelcome media attention at a time when the company needs total focus on the first shipment,some investors could view this in a bad light,however as i said once it all comes together for FMG its just a colosus juggernaut ready to sneak in between bhp & rio on the fe tonnages to export,good story about to fall into place notwithstanding un forseen disasters...tb


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## Go Nuke (19 March 2008)

wow!
 10Mil shares went through this morning before the open! I wonder what thats all about?
Id love to see FMG engage in some more drilling that would send the share price into space u would think


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## The Barbarian Investor (19 March 2008)

Received newletter analysis that they may be heading down (unless they head up)

Should be an interesting day for them....either way


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## Boggo (19 March 2008)

From an Elliott Wave perspective its not a pretty sight.

Two things happen in these cases, if its right you make money, if its wrong your stoploss gets hit.

With a R/R of over 5 it is a pretty sight.

28th Feb. and 18th March charts...


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## Prospector (19 March 2008)

The price rise so far today kind of blows a few theories out of the way!   Maybe the chart theories simply dont apply to a company that is very uniquely placed - ie a new miner with significant resources with a confirmed contract with China?  Perhaps in a years time the charts might tell the story, or even later this year, but not just yet.


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## MRC & Co (19 March 2008)

Prospector said:


> The price rise so far today kind of blows a few theories out of the way!   Maybe the chart theories simply dont apply to a company that is very uniquely placed - ie a new miner with significant resources with a confirmed contract with China?  Perhaps in a years time the charts might tell the story, or even later this year, but not just yet.




This is what I have been saying lately.  My charting techniques served me very ordinarily over the past while and as such, I have thrown my charting hat in the bin for the time being.

Too many chart patterns have been well off the mark!  

Ive turned to new indicators for the time being.  None being TA, see how we go.

TA works in trending markets a lot better, only TA I look at now is up, down or sideways along with momentum.  Very very simple.

Looks like a few guys here have been over at thechartist.com.au with this EW analysis.  I was reading it the other day, thinking very nice analysis by Nick, impressive.  However, worried a bounce in the US markets last night (due to the reasons I discussed in the XAO analysis thread), would disrupt the trend.


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## Nick Radge (19 March 2008)

MRC & Co.
The bounce in the US may well disrupt the trend, yet today the stock has closed at the lows again. The important information is the 'effort' that was excerpted. Effort = volume and todays ultra high volume means a lot of effort. So, if we saw a lot of effort, a lot of transactions, and the end result was a close on the low, then it suggests sellers remain in control.

The thing to remember, and importantly, is that I know when I'm wrong. Those that bought MQG at $90 looking for $110, ZFX at $16 looking for $10,  PEM at $4 looking for $5, NWS at $30 looking for $35, BNB at $25 looking for $40,  may consider that and the inadequacies of fundamental valuations. Its not being wrong that damages one's capital. Its staying wrong that wipes them out. 



_This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision._


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## MRC & Co (19 March 2008)

Nick Radge said:


> MRC & Co.
> The bounce in the US may well disrupt the trend, yet today the stock has closed at the lows again. The important information is the 'effort' that was excerpted. Effort = volume and todays ultra high volume means a lot of effort. So, if we saw a lot of effort, a lot of transactions, and the end result was a close on the low, then it suggests sellers remain in control.
> 
> The thing to remember, and importantly, is that I know when I'm wrong. Those that bought MQG at $90 looking for $110, ZFX at $16 looking for $10,  PEM at $4 looking for $5, NWS at $30 looking for $35, BNB at $25 looking for $40,  may consider that and the inadequacies of fundamental valuations. Its not being wrong that damages one's capital. Its staying wrong that wipes them out.
> ...




I completely agree Nick.  I learnt the second half the hard way, not setting tight enough stops and having half my yearly profits wiped out.  Lucky, my trading phsycology allowed me to cut those losses and get out (have to be an idiot not too on such strong downward momentum).  Have to be an idiot not to recognise this momentum earlier, but hey, you live and you learn.

I also agree on the FMG example, doesnt look good, the bears sure ate up the bulls.  

Divergence from materials to financials will aid the downtrend of FMG, though inflationary pressures and good news from China would send this in the opposite direction (however, this would be more a medium-term effect), and as you know, all will be seen in price trend.

Question is now:  Where to over the next few trading days.....continuation of momentum or profit taking/further capitulation of the bulls.  I will be glued VERY closely.

Disclaimer:  I do not own FMG, nor am I shorting.


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## agro (19 March 2008)

MRC & Co said:


> I completely agree Nick.  I learnt the second half the hard way, not setting tight enough stops and having half my yearly profits wiped out.  Lucky, my trading phsycology allowed me to cut those losses and get out (have to be an idiot not too on such strong downward momentum).  Have to be an idiot not to recognise this momentum earlier, but hey, you live and you learn.
> 
> *I also agree on the FMG example, doesnt look good, the bears sure ate up the bulls.  *
> 
> ...




look at it this way compared to the remainder of the market, i don't think FMG has faired too badly.. yes the upward trend has stopped somewhat but that is attributed to by whats happening in america etc..

once the market is back on track, FMG (and majority) of other stocks will be in an upward phase..

if BHP/RIO get the 71% increase in iron ore prices this also needs to be forecasted into the price of FMG which plans on increasing their output every year.. 

don't discount this stock.


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## tigerboi (19 March 2008)

I think from a forward perspective on the FMG sp with still the market setiment & volatility coupled with the logistics setbacks in the construction of the railway,there looks to be opportunities to get into FMG at sub $6.00. As the jigsaw has yet to come together inparticular the may foos where i can see if twiggy has to get on the shovel as he promised,FMG is going to get slammed,i reckon he needed another 3 months due to the cyclone...TB

Twiggys shovel...


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## reece55 (19 March 2008)

Nick Radge said:


> MRC & Co.
> The bounce in the US may well disrupt the trend, yet today the stock has closed at the lows again. The important information is the 'effort' that was excerpted. Effort = volume and todays ultra high volume means a lot of effort. So, if we saw a lot of effort, a lot of transactions, and the end result was a close on the low, then it suggests sellers remain in control.
> 
> The thing to remember, and importantly, is that I know when I'm wrong. Those that bought MQG at $90 looking for $110, ZFX at $16 looking for $10,  PEM at $4 looking for $5, NWS at $30 looking for $35, BNB at $25 looking for $40,  may consider that and the inadequacies of fundamental valuations. Its not being wrong that damages one's capital. Its staying wrong that wipes them out.
> ...




I'm with Nick here - been watching this one closely lately and if you have, it has been smelling of distribution for a week and a bit..... Every time it got anywhere close to around about the 8 level or so, someone has been selling big time..... looks like the buyers have lost the will to drive this one higher and  the momentum will move to the sellers quickly.... 

The intra day chart says it all - on this timeline for the last 10 days, nothing but selling everyday...... I still find it amusing that a Company that hasn't delivered a singe shred of ore is worth more than 3x Qantas....... HAHA...

Cheers


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## agro (19 March 2008)

tigerboi in particular - stick your shovel, you will be eating your own words come may shipment.. and do some *research * please re - the railway construction try and save yourself some embarrassment

if you don't understand research - have a look at their investor presentations... FMG has 40,000 km² tenement, biggest in australia, they still have another billion so iron ore in reserve..


so far the skeptics have it all wrong .... but continue to be skeptical caus once your skepticism is defied you will be buying into it the stock just like your fellow skeptic friends

*edit - * what gets me is why do people like you continue to post such remarks?


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## mrgroundwork (19 March 2008)

agro said:


> tigerboi in particular - stick your shovel, you will be eating your own words come may shipment.. and do some *research * please re - the railway construction try and save yourself some embarrassment
> 
> if you don't understand research - have a look at their investor presentations... FMG has 40,000 km² tenement, biggest in australia, they still have another billion so iron ore in reserve..
> 
> ...




biased much agro? you must be balls deep long in this stock  to come out with such a rant...

bottom line is not everyone believes the fairytale FMG story... a lot of people with long term memories have no faith in forrest... and let's be honest... to date he is yet to deliver anything concrete... hope he makes you rich agro, but i get the feeling that the market is waiting to smack this stock on even the slightest hint that FMG might not hit their forecasts...


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## spectrumchaser (19 March 2008)

Hi guys,

   No need for friendly posts to start getting emotional.
the opportunatety to make huge returns out of this stock are already
history.

   Jan 2007 you could have picked up this stock for the equivalent of 
one dollar and sold in March 2008 for eight.The wise ones that climbed on even earlier and held on have even larger smiles.


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## tigerboi (19 March 2008)

tigerboi said:


> My understanding is the mine is about 260-270 kms from port(see map in tolhurst research) so thats roughly a 540km round trip,as for 15 roadtrains it will have to be 30 to shift that amount of fe,you wont get a permit to go to port as MMX is only allowed 147t gross for 100t per trip,so work it out how much needs to go by road? 1mt at 100t a truck,10,000 trips required,maximum per driver a day is 2,did someone say 1mt in a month?333 trips a day,nope not in a month,too many drivers & trucks required...sorry it seems its 4500t a day,45 trips a day,trucks do 3 trips but drivers only allowed to do 2 as per work/drivehours,can be done sure but the best for the 4500t scenario is to go a little bit more as you will get many break downs,i would go 20 roadtrains & 40 drivers in a shuttle opreation...This is why i got out at $50 as i understood from my transport experience the rail would not be on time,if you want to see a heap of number crunching on the hole FMG set up,go on their website to brokers reports,here:http://www.fmgl.com.au/IRM/Company/ShowPage.aspx?CPID=1322&PageName=BBY Research
> 
> Here is the best,it even tells you how many flies are on twiggys back when he lobs at cloud break!...
> 
> cheers....tb




agro it seems you failed anger management,me i passed even though i slept through every session...as for research see the above posts  posted only just the other day,as for missing out if you had done your own research you would have known that i sold FMG at $50.00,if taking 100% at $50.00 is missing out then it was a great miss!by the way i am not looking to get back into FMG as i did very good already,my current interests is in the transport side of the operation. you shouldnt let emotion get the better of you as it will cloud what judgement you may have,the only thing ive been skeptical about is the very tight deadline of foos in may,i work in the transport industry & i know all about ill timed set backs,i do sydney-melbourne in 8 hours 45 mins,sydney-brisbane in 11 hours,sydney-adelaide in 15 hours..i run overnight express freight to those cities in a 62.5 tonne gross b /double,if i get just 1 unexpected setback like the highway being blocked then my schedule is kaput,its called time sensitive freight.FMG i believed set too tight a schedule without taking into account the possibility of an act of god like a cyclone,thats why i believe they wont make the deadline,while i believe i first brought up the subject of the use of roadtrains to get the ore to ship,it has not been a secret that FMG may not make the may foos,so you could look at it as a good buying opportunity as its fall to sub $5.00 recently was,& lastly dont try & treat me like a a fool..also if you ask joe nicely he might show you a FMG post of mine that was moderated ages ago for predicting that FMG will hit 3 figures... numbskull you do your research...


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## Miner (19 March 2008)

To be or not To Be!
I noticed there are few very interesting postings. Latest from Tiger Boi was very polite, subdued, gentle and balanced. Well done my friend and does not matter which scrip your comments would have been - they were writing wise excellent.

I also noticed some cynicism, skeptism, frustration (may be bought at a high price or just missed out) and emotion. 

My sincere advise is to keep emotion in left pocket and see how much dollars can be done in right pocket.  We hate or love it - FMG is going to be a real success story on a short term. Operating wise they are not very good and so safety wise less than standard. But they have the blessing of good luck and right time- so in short time in another month - see yourself what happens the share price. There is sign of some buy out is predictive and business wise probably Andrew needs someone else to share the cost for next expansion and to take the baton from him.

My only question - why we are so unkind to  someone Made in Australia where as all Made in USA companies are making big holes in finance market still we are forgiving them. 

Good luck.


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## Prospector (19 March 2008)

There are a couple of alternatives that chartists are saying is occurring.  

If it is the truth that the deadlines will not be met; then only those people 'in the know' would be aware of this, and these are the ones who are selling when the price starts to surge.  And that is insider trading.  Because the opposite has been conveyed to the market.

If it is people just guessing that the deadline  will not be met (based on past history), then how relevant is that to the long term strength of FMG?  It isnt, at all.  

_"a lot of people with long term memories have no faith in forrest"_  Well, if that is the case, would they really have bought any FMG shares in the first place?  Hardly!

So which is it?  Insider trading, or people guessing?


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## ans25 (19 March 2008)

CLoudbreak is in the middle of nowhere, and I hear it is cyclone season so if it buckets down, im sure the dirt roads are going to get closed.
Hmmm maybe we can air freight the ore and then Qantas can be going up again!


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## meganut (20 March 2008)

Prospector said:


> The price rise so far today kind of blows a few theories out of the way!   Maybe the chart theories simply dont apply to a company that is very uniquely placed - ie a new miner with significant resources with a confirmed contract with China?  Perhaps in a years time the charts might tell the story, or even later this year, but not just yet.




Prospector, your too smart, I agree with you, I hate seeing the SP smashed at times but your words are true, when they have a year under their belt and all the commissioning hiccups are out of the way (and there will be a few, I've worked on some IO projects and seen commissioning woes that can last a year or more, especially if they need to wash impurities from fines) then we will see some stability in the SP.


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## meganut (20 March 2008)

tigerboi said:


> I think from a forward perspective on the FMG sp with still the market setiment & volatility coupled with the logistics setbacks in the construction of the railway,there looks to be opportunities to get into FMG at sub $6.00. As the jigsaw has yet to come together inparticular the may foos where i can see if twiggy has to get on the shovel as he promised,FMG is going to get slammed,i reckon he needed another 3 months due to the cyclone




I'm with Agro on this one...stick your shovel Tigerboi, you ever been in the IO industry around cyclones...nope?...well I have and that last one was nothing, a 2 or 3 day setback at most, what stop mines is water and lots of it...ie FLOODING...rain and wind...bah NOTHING!!!


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## agro (20 March 2008)

tigerboi said:


> agro it seems you failed anger management,me i passed even though i slept through every session...as for research see the above posts  posted only just the other day,as for missing out if you had done your own research you would have known that i sold FMG at $50.00,if taking 100% at $50.00 is missing out then it was a great miss!by the way i am not looking to get back into FMG as i did very good already,my current interests is in the transport side of the operation. you shouldnt let emotion get the better of you as it will cloud what judgement you may have,the only thing ive been skeptical about is the very tight deadline of foos in may,i work in the transport industry & i know all about ill timed set backs,i do sydney-melbourne in 8 hours 45 mins,sydney-brisbane in 11 hours,sydney-adelaide in 15 hours..i run overnight express freight to those cities in a 62.5 tonne gross b /double,if i get just 1 unexpected setback like the highway being blocked then my schedule is kaput,its called time sensitive freight.FMG i believed set too tight a schedule without taking into account the possibility of an act of god like a cyclone,thats why i believe they wont make the deadline,while i believe i first brought up the subject of the use of roadtrains to get the ore to ship,it has not been a secret that FMG may not make the may foos,so you could look at it as a good buying opportunity as its fall to sub $5.00 recently was,& lastly dont try & treat me like a a fool..also if you ask joe nicely he might show you a FMG post of mine that was moderated ages ago for predicting that FMG will hit 3 figures... numbskull you do your research...




i might have failed anger management but i certainly did not fail picking good stocks 

and to mention you sold at $50 just confirms your regret (and now uncertainty) for not holding on longer.


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## tigerboi (20 March 2008)

agro dont be agro about FMG...long term very good stock but atm because of the railway setbacks & the very tight delivery schedule i believe that you will see alot of weakness in the SP as may foos nears,Investors are a fickle lot & the current price is hanging on a thread by the belief the may foos will be met,i  do expect an announcement soon about the temporary use of road to get the fe as far up the line to the trains or straight into the port,from a public view point my guess is twiggy will say we are only using the roadtrains to get it as far up the line as possible so as not to spook investors like yourself.as for  the twigster getting on the shovel,gee what a sight that would be..so i thought id give him a few options...http://www.agriculturetools.com/shovels-and-spades/shovels-and-spades.htm

amazing the array of tools just wating for twiggy to rip into it,i reckon they might even put a handle on for him!!!


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## Boggo (20 March 2008)

We are throught the three times R/R area.

Closed again on the low.

Lock in profits now with stop at 7.43.


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## Miner (21 March 2008)

something interesting happened with FMG today.
It fell down considerably . Normally it  does hold even market slides.
Today it fell faster than BHP fell.
The price was 6.95 at open and closed at 6.
*Someone at  09:37:31 AM sold at  $ 6.950 volume was 6,648,791 Total $ 46,209,097.45 XTSPOS .*

Do not know what XTSPOS mean. 
Does it mean any directors off loaded ?
We will not know until market opens on Tuesday. 
Is it proving market gossip is true ?
That would be a bad sign for DIY investors for Super FUnd and in general super funds. If BHP, ANZ falls along with FMG. Where is the opportunity to make money ?
Dow Jones opened in red.

Wayne Swan now confessed - we may not be far off from global stuff up.
WA Business has shown lack of confidence.

Where do we go now ? Probably Joe already saw that no of posts has reduced substantially. I have no stats but normally the no of pages is always more than two under New Posting. Now it has been consistent with two pages.


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## MRC & Co (21 March 2008)

Miner said:


> something interesting happened with FMG today.
> It fell down considerably . Normally it  does hold even market slides.




I think as Radge pointed out, after a low close on high volume and an up day (in the index) yesterday, the writing was on the wall for FMG.

Especially considering the XMJ took such a thumping, it was no wonder it didnt hold even while the market was sliding today.

Materials are being pounded and there is probably some time to go yet.  

Thats why its crucial to set your stops, limit your downside.

Good luck!

P.S  Where is the opportunity to make money, short FMG?  Not many other options except the bank at the moment, as hard as that is for me to say!  Others may feel different.  Perhaps short commodity futures, but that is a very dangerous game.

One thing I will throw out there however, for better or worse, was following the fall in the POG two days ago, and the rise in global indicies, I shifted assets back into some regular stocks (and cash), based purely on momentum changes.  Thought there would be a fall today (after the bounce we had), but was hoping the momentum would continue on based on historical trends (as I have discussed in other threads, including multiple cut to IR effect).  See how we go, feel a lot like Im gambling though.  Not waiting for strong enough momentum as per usual.

Just a few thoughts, good luck!


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## tigerboi (21 March 2008)

Boggo good work mate...ive been saying we will see sub $6.00 in FMG but i thought it might have support until next week, so its now around $6.00 which only confirms to me it will see sub $5.00 as early as wednesday,I await the february construction report which should have arrived before the easter break,it is giving some the chance to get out as 1 look on the sell side tells you the whole picture:bad news on the way.The reports on the railway never tell you we are this many kms from completion,no all you get is 90% complete(it does not say how far to go.) as of the january construction report,the march update shows alot of pics bit wont say how far before the tracks are finished,so the track is 260kms out of cloud break at 90% done as per the report released on 19/2/08,but where does the 10% to go begin???end of january or the 19/2/08..the original foos was january 2008 so it is already 4 months overdue,as the rail contract was 260kms over 25 months,which gave them 10.4 kms to lay each month but since then you have had the dramas of replacing the contractors plus imo the deadline was set too tight,by fmg's january report they say they have got 26kms left to lay in(lets say from 1/2/08-14/5/08)in 104 days...at the supposed rate of 10kms per month they would make it however the secrecy that surrounds the actual kms left to lay plus all the other associated infrastructure work required,there would seem to be alot more work is needed to get the rail finished on time,thats when FMG will really get a slamming,when they fess up to not having enough time, thereby the remainder of the ore has to go by road,that being the case they should be getting the ore as far up the track for loading on the roadtrains to lessen the costs of the road haulage & to give them a parachute for the fall...,going by the start of the rail,the current 10% figure i believe being more like 10% to go at may foos,they will be 25-30kms short on the line,the rumours & current sp do lend heavily to the deadline being missed by that margin.the sell side says it all as if FMG where putting this all together with 54 days left notwithstanding the dows rumbles then FMG would be rockin'...looks like sub $5.00 to be only days away as previously stated,plus ol mate twigster getting a shovel in his hands.priceless...TB

first to get his railway on this list you gotta finish the line,so looks like on the shovel first...TB,nice little gold number for twiggy...


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## prawn_86 (21 March 2008)

Tigerboi,

I actually think your posts may be informative, however I only ever read the first line.

How about using some paragraphs and you may find that you get a wider response range.

I (and a lot of users I know) refuse to read huge slabs of text.

regards

prawn


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## Prospector (23 March 2008)

prawn_86 said:


> Tigerboi,
> 
> I actually think your posts may be informative, however I only ever read the first line.
> How about using some paragraphs and you may find that you get a wider response range.
> I (and a lot of users I know) refuse to read huge slabs of text.




Totally agree, I dont have time to try to decipher what looks like good information.  Maybe just click that enter button every minute or so?


----------



## tigerboi (23 March 2008)

You mean like this...yesterdays racing tips...its been getting done.

Tigerboi's stable strikes pay dirt!!!casino prince gets the cash

at $7.10...6/1 trendsetters thats 3 from 6 tips with the 3 collects

$2.90,$2.30,$7.10...the tiger...


----------



## Prospector (24 March 2008)

Think you must be slow at typing if each of those lines took you a minute to type!  But actually even that looks easier to read, if only it was about FMG!  Maybe it is!


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## Julia (24 March 2008)

tigerboi said:


> You mean like this...yesterdays racing tips...its been getting done.
> 
> Tigerboi's stable strikes pay dirt!!!casino prince gets the cash
> 
> ...




Tigerboi,

It sounds as though you didn't learn to do paragraphs at school?

All everyone would like you to do - so we can more easily access the information you are offering - is break it up into sub-topics, if you like.

Twenty or so lines all together is offputting to the eye and we just tend to not want to read it.

So, maybe just try to think about your message and figure out where would be the most appropriate places to break it up and jump down a line.

I've done it here with this post, perhaps rather too much, but so you can see what we mean.

Cheers
Julia


----------



## Miner (26 March 2008)

Good sign in DJ - second day looks like up. So ASX will be up too on Wednesday. Market is still capable of giving nasty surprises.

FMG has gone up slightly on Tuesday and hope it will be much more on Wednesday. I should have bought on Thursday. 

Checking up with some of the site contractors the railway is not far off contrary to market belief. 

They are working very hard and even very senior managers are working 11 days Fly in and 4 days out of site  duty. 

Must be expecting some good bonus by mid May.

Signs are positive if I believe contractors stories.

Worley Parsons has started high speed recruitment for expansion project too. Remember Chinese called untouchable to BHP and Rio. FMG is still a darling.

That means I may get a ASF book out of tipping competition for March

Next dipping opportunity I should  sell ANZ and BHP and buy FMG (for a change !!) .


----------



## agro (26 March 2008)

this should shut the skeptics - monthly construction report out:

The First Ore On Ship (FOOS) date remains at mid May 2008 with overall project completion at 90% measured by value of work.

Port works are 93% with the value of work completed during February being 2.7% against the target of 2.3%.

The mine site was 84% complete as at end February with VOW achieved of 3.4% against a target of 2.9%.

Rail works were 91% complete with VOW achieved of 6.0% against a target of 3.3%.

Project Final Forecast Cost is now $2,796 million which represents an increase of $31 million from last period. The adjustment was split between a $11.7m increase for rail works, a $22.2 increase for mine works balanced by a reduction of $4.6m from forecast EPCM costs.


*wheres tigerboi - i like to hear his comments same with prawn_86 *


----------



## Prospector (26 March 2008)

I think tigerboi is too busy posting photos at the moment.  The report sounds good - hope all due diligence has been done in it!


----------



## agro (26 March 2008)

Prospector said:


> I think tigerboi is too busy posting photos at the moment.  The report sounds good - hope all due diligence has been done in it!




i think he has gone to look for pictures of spades that he needs to go and dig hole for himself maybe (jokes)


----------



## prawn_86 (26 March 2008)

Although it has come off a bit from its $8 ($80)+ its still trading at a forward (2009) PE of approx 33, which seems a bit high still for me. And a 2010 forwards PE of 14

For a company that is this big, and has a lot of salience would suggest 25 - 30 forward (1yr) PE would probably be appropriate.

So for me i would suggest around about $6 - $6.50 is fair value for FMG, given the current environment, demand etc etc

But once again i state the fact that there are co's already producing on PEs of 1 or 2, and they wont have any comminsioning or uprgrading problems, such as FMG may face to achieve full production...


----------



## agro (26 March 2008)

prawn_86 said:


> Although it has come off a bit from its $8 ($80)+ its still trading at a forward (2009) PE of approx 33, which seems a bit high still for me. And a 2010 forwards PE of 14
> 
> For a company that is this big, and has a lot of salience would suggest 25 - 30 forward (1yr) PE would probably be appropriate.
> 
> ...




why do you buy a stock based on P/E - i think its entirely up to you but personally its bs..

u said TMR had a low P/E ,,, meaning a good buy right? yet its going down??


fundamentals for the win..


----------



## tigerboi (26 March 2008)

Prospector said:


> I think tigerboi is too busy posting photos at the moment. The report sounds good - hope all due diligence has been done in it!




Nope been busy with the footy tips so i will have a look tonight,maybe you should follow my race tips,6/1 winner plus 3 others for a profit of 75% for the day.

For those who spoke of racing & stock market analysis,i will provide the analysis on how to research a race,pull it apart & back that 6 bagger..tb


----------



## tigerboi (26 March 2008)

agro said:


> i think he has gone to look for pictures of spades that he needs to go and dig hole for himself maybe (jokes)




No need to already done it so if you like here is the site,dont know if i am allowed to post anymore shovels because of sooks like you.

Twiggy brought up the shovel scenario so i reckon its fair game in print
or in photos...tb

http://www.agriculturetools.com/shovels-and-spades/shovels-and-spades.htm


----------



## Dezza (26 March 2008)

There's only one winner out of all this shovel talk, and that's Mr Forrest himself.

Top of the BRW Top 200 Executive Rich List at $8.4b. 

http://business.smh.com.au/forrest-beats-packer-murdoch-on-rich-list/20080326-21od.html


----------



## michael_selway (26 March 2008)

prawn_86 said:


> Although it has come off a bit from its $8 ($80)+ its still trading at a forward (2009) PE of approx 33, which seems a bit high still for me. And a 2010 forwards PE of 14
> 
> For a company that is this big, and has a lot of salience would suggest 25 - 30 forward (1yr) PE would probably be appropriate.
> 
> ...




The recent dip might be a good buying opportunity, and yes forward numbers do look good still

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS -2.6 -3.4 30.7 72.0 
DPS 0.0 0.0 0.0 0.0 *



> Date: 14/3/2008
> Author: Kevin Andrusiak
> Source: The Australian --- Page: 24
> Australian-listed iron ore hopeful Fortescue Metals Group (FMG) plans to deliverits first shipment from Western Australia in May 2008. Construction of arailroad linking the mine to the coast is about 90% complete, as is the terminalfacility at Port Anderson. However, FMG has called for an independentengineering firm to give it a final appraisal of the shiploader built in Chinato Australian specifications. The previous certifier was seen by the mininggroup as not sufficiently at arm's length from manufacturer ThyssenKrupp.On 13 March 2008 FMG stock closed $A0.24 lower at $A7.41


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## agro (26 March 2008)

michael_selway said:


> The recent dip might be a good buying opportunity, and yes forward numbers do look good still
> 
> *Earnings and Dividends Forecast (cents per share)
> 2007 2008 2009 2010
> ...




once more, the construction report put out today was for *febuary* so they targeted 3% for railway and achieve 6% to 93% (going by top of my head)

so come mid may the rate they going they will achieve it.. even if they don't they can still truck it

than the skeptics can no longer say FMG is an explorer and not a producer!!

once that first shipment is made FMG officially becomes a producer!

hows that sounds skeptics? (cough cough prawn_86)


----------



## Go Nuke (27 March 2008)

> Quote:
> Date: 14/3/2008
> Author: Kevin Andrusiak
> Source: The Australian --- Page: 24
> Australian-listed iron ore hopeful Fortescue Metals Group (FMG) plans to deliverits first shipment from Western Australia in May 2008. Construction of arailroad linking the mine to the coast is about 90% complete, as is the terminalfacility at Port Anderson. However, FMG has called for an independentengineering firm to give it a final appraisal of the shiploader built in Chinato Australian specifications. The previous certifier was seen by the mininggroup as not sufficiently at arm's length from manufacturer ThyssenKrupp.On 13 March 2008 FMG stock closed $A0.24 lower at $A7.41




Haha had to laugh at that.

I'd say thats good thinking by someone at FMG.
Probably started out on the tools:>

I work in the Alumina industry building valves etc for refineries, and if you saw some of the crap that comes out of India and China...well lets just say its more than substandard.

Hence the reason Alcans recent expansion of Gove has blown out significantly

I still think FMG's sp will continue to roll on upwards But will set tighter stops when it gets closer to the first shipment date just to cover for any bad news.


----------



## prawn_86 (27 March 2008)

agro said:


> why do you buy a stock based on P/E - i think its entirely up to you but personally its bs..
> 
> u said TMR had a low P/E ,,, meaning a good buy right? yet its going down??
> 
> ...




Umm...  PEs are fundamentals, not sure what you think they are.

Perhaps you should do some more research with regards to them.

I do not buy soley based on PEs, but they aid a decision.



agro said:


> once that first shipment is made FMG officially becomes a producer!
> 
> hows that sounds skeptics? (cough cough prawn_86)




If you actually read some posts objectively instead of just trying to have a crack at me the whole time you will notice that in my last post the figures i was posting were assuming that it is a producer and its projected figures would be met. IE - no commisioning or mining problems.

From now on i will only respond to intellectual posts, instead of those targeting my opinion.


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## Duckman#72 (27 March 2008)

Excuse my ignorance but are people being a little too fixated about the "shipping date" in May?

It just seems to me that haggling over a day, week or even a month in relation "kick off" when a company and its administration has already achieved what they have done to date in the timeframe allotted, together with the huge amounts of resources it holds, seems somewhat petty and shortsighted. 

In some ways it seems that a delay will give people a "victory" of sorts. But in the whole scheme of things - who cares? I've heard people say that if they don't meet the target delivery date the SP will be hammered by the market....will it really?........is the whole market so fixated on the short term?  

The Yanks landed on the moon sightly after they anticipated they would......but who remembers that now? Only the glory remains. 

Am I being too naive?

Duckman


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## Go Nuke (27 March 2008)

> I've heard people say that if they don't meet the target delivery date the SP will be hammered by the market....will it really?........is the whole market so fixated on the short term?




Unfortunately...I believe the answer is *YES*

Even in my limited experience in the stock market if there was one thing that stuck out like dogs balls to me it was that *the market always expects bigger, better and more!* Fall short of that and the sp is punished. perhaps temporarily but punished:flush:

I agree that its disappointing to see such a thing, but a little dissappointment seems to have a large impact on the share price.


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## agro (27 March 2008)

prawn_86 said:


> Umm...  PEs are fundamentals, not sure what you think they are.
> 
> Perhaps you should do some more research with regards to them.
> 
> ...




prawn_86 - your opinion is not warranted especially seeing though you have not been following the stock for as many years as i have mate. 

not to mention you'd probably have more capital if you backed the right stocks


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## prawn_86 (27 March 2008)

agro said:


> prawn_86 - your opinion is not warranted especially seeing though you have not been following the stock for as many years as i have mate.
> 
> not to mention you'd probably have more capital if you backed the right stocks




My opinion is just as warranted as any other member on this forum. I suggest you change your tone and have more respect for other members of this community.

If you have a problem with this please discuss it with me via PM


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## Miner (28 March 2008)

Duckman#72 said:


> Excuse my ignorance but are people being a little too fixated about the "shipping date" in May?
> 
> It just seems to me that haggling over a day, week or even a month in relation "kick off" when a company and its administration has already achieved what they have done to date in the timeframe allotted, together with the huge amounts of resources it holds, seems somewhat petty and shortsighted.
> 
> ...






Duckman 

You to my opinion not naive but very real.
I have been in the mining world for more than 27 years and that probably at least says I am a semi vintage car.
People are some what bias against FMG CEO for many things. One he stuffed Anaconda. Secondly even after stuffing he got his Midas touch back which made many people filthy rich including himself, his loyalists, his favourite stock broker like Southern Equities, Directors, loyal employees and contractors.
Some got jealous because they lost opportunity. You would notice some postings in this forum are like that.

BHP always delayed their project. No one complained. Rio delayed - over run . No one complained. BHP over run was more than $1B in HBI, and all major projects. HBI was a super flop. Any sensible guy who has had any experience in HBI plant would have said by visiting the plant .
BHP stuffed the steel plant at Whyalla. No one raised a finger at the national loss.
Once FMG becomes a producer (current debt equity ratio is 584% - basically company is surving on borrowed funds - that is true) then it will give Rio and BHP a run. That is why BHP management and Rio management felt threatened to loose their monopoly.

Since poor (?) Andrew firmed up his conviction the anti FMG gang started bad publicity. I therefore agree what in the earth will go down if he is delayed by one week. He only escalated by $37 M. Percentage wise it is insignificant for a capital project of $2B. 

I am however convinced (based on my experience and knowledge in mining project in iron ore and likes)  that does not matter what . Twiggy  will make sure that FOOS happens in MAy 08. It will be probably one or two days earlier just to prove his worth to market. 

As I said before production rate will be 35 MTPA until Sept 08 and not 55 MTPA (funny no one challenges that figure). Technically a production rate of 55 MTPA with one month delay is better than 35 MTPA on time. But market hype does not believe on that. 

*I do not own FMG shares nor paid by any of the media from FMG, Rio  or BHP.*

I am strongly believer of Australian ownership and until Chinese takes over FMG and ANdrew Forest does deliver I will have soft corner for the bloke from Western Australia compared to all yank leadership in other multi nationals siphoning money out of this country. 

Regards


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## agro (28 March 2008)

games being played at the moment

i noticed two sells at 6.57 and 6.58 of approx 90,000

the one at 6.58 pulled just in time.... 


this quite clearly indicates that by scaring the market psychologically they will get FMG at a discount

happend the day before good friday too e.g. drop the price and then buy up the sell side

only suckers get caught though


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## agro (28 March 2008)

*News in*

Date: 	28/3/2008
Author: 	Jamie Freed
Source: 	The Age --- Page: B3



> Fortescue Metals does not intent to raise additional equity to fund itsexpansion, according to CFO Chris Catlow. Speaking at the Euromoney AustraliaMarkets Financial Innovation Congress on 27 March 2008, Catlow said the companywas "most reluctant" to raise additional equity. The metals groupplans to ship the first production from its Pilbara iron ore project by May 2008and hopes to expand production to 200 million tonnes per year in the long term




news in today...

looks good to me


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## agro (28 March 2008)

> Fortescue paper not in plan for expansion
> Email Print Normal font Large font AdvertisementJamie Freed
> March 28, 2008
> 
> ...




more news - looks like media grabbing some early attention - i am sure more news to come

fingers crossed re - dividend too


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## Miner (30 March 2008)

Go Nuke said:


> Haha had to laugh at that.
> 
> I'd say thats good thinking by someone at FMG.
> Probably started out on the tools:>
> ...




Hi Go Nuke

I missed your mail to read in full content earlier. Sunday gives the chance to go back and see if I can dig some gold out of the postings.
I noted under FMG you have dug out some dirt on valve quality from China and India as crap. That is a bit of aggression. There is crap every where and that is not limited to China or India. We get very good quality valves from Israel and crap from Australia. Without naming the Australian company I have seen valves of FM  (Factory Mutual) quality I could import from USA and after paying air freight they came cheaper while using an agent in Adelaide. I paid at least 20% more for a Victorian valve and that too was only SSL (Scientific Services Lab) approved and not FM approved. 

Now a days a large extent of valves are getting manufactured and if you see the top class refineries in India probably they would not have survived if the valves from CHina and India were crap.

I do agree if your data base is more than 12 years old - you earned a merit.
However with latest industrial situation in China and India and quality of products from there I would probably discount any statement (as crap)  calling products from those countries as crap .

Sorry folks - it was not relevant to FMG thread but more of a right to reply situation.

Cheers


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## renim (6 April 2008)

still off topic
any aussie who looks for cheap from china will likely get cheap/nasty.
but if you take some care, and demonstrate to the chinese that you care, you can get cheap and good quality.

for example, where was your mobile phone made?
i bet you didn't source it yourself from china.

back to fmg

they have an office in shanghai...
therefore, they are likely to have demonstrated to the chinese that they care.
the quality should be good .  correction, for the chinese to have delivered as per twiggy's schedule, it is likely that twiggy had more than average expeditor's involved,  supervision and communication greatly assist quality.

my 2cents worth, he'll probably make it in May, first ore on ship anyway.
 completion is a vague thing, first ore on ship is not.

personnaly, i thought twiggy's anaconda job was better than resolutes or gutnick's attempt.  so that makes him the best of 3.   and nickel was pretty cheap then...

think annaconda as where he learnt his lessons, the bad projects give good lessons.


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## Miner (7 April 2008)

FOOT is on time- significant milestone achieved. Notional but very pertinent.
See attached report.
What was reported in ASX AS WELL  in West Australian today that between Graeme Rowly and Herbert Elliot Opes saga has wiped out $25 M of their shares.
 Watch FMG price today and onwards now.

Cheers


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## agro (7 April 2008)

Miner said:


> FOOT is on time- significant milestone achieved. Notional but very pertinent.
> See attached report.
> What was reported in ASX AS WELL  in West Australian today that between Graeme Rowly and Herbert Elliot Opes saga has wiped out $25 M of their shares.
> Watch FMG price today and onwards now.
> ...




Very very significant

wait for the next milestone - the shipment

and then the increase in output every year

twiggy keeps denying the public skeptics... 

those who are onboard will be rewarded


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## agro (7 April 2008)

FORTESCUE Metals is trumpeting the delivery of its first trainload of iron ore from the Pilbara to port, but has yet to reach the crucial milestone of loading a ship.

Chief executive Andrew Forrest said yesterday that the loading of ore at the company's Hunter rail siding, about 80km from its mine at Cloudbreak, was "highly significant". 

"It is the planned access point for other users as an open access siding, and the point where the proposed spur line out to Fortescue's large Solomon deposit will branch off its main line," he said. 

However, with the rail line still 10km short of the mine itself, the ore needed to be transported to the siding by truck before being loaded on to the train. The rail line is expected to be completed later this week. 

From the siding, the ore made a 185km rail journey to Fortescue's newly dubbed Herb Elliot Port, named after the company's chairman, who last week lost about $20 million in Fortescue stock that he was understood to have lodged with collapsed broker Opes Prime as collateral on a loan. 

Once at port, the ore was unloaded into stockpile areas to provide a base for future deliveries, so that reclaiming systems used to pick the ore up for loading on to ships did not pick up underlying soil. 

However, it will be at least a month before Fortescue loads its first ore on to ships for export as the commissioning of the port infrastructure is also yet to be completed. 

While Fortescue said the delivery was a successful test of its train unloading and stockpiling systems, it had yet to "wet commission" its ship-loading equipment. 

The ship loader, built in China by Thyssen Krupp to an Australian design, was delivered in January, after which Fortescue called in an engineering firm to look it over. 

The company is believed to have been dissatisfied with the original assessment and argued that the review was not sufficiently independent of Thyssen Krupp, ordering a second assessment in mid-March. The second review also cleared the loader for use, and Mr Forrest said yesterday that the company remained on track to have its first ore loaded on to a ship in mid-May. 

"This is the first and vital step to commissioning the entire operation. It is the major step towards achieving first ore on ship, production ramp-up and overall project completion," he said. 

"The operational commencement of Fortescue's rail and port heralds the opening up of Australia's, and one of the world's, richest mineral provinces and is a milestone achievement for the Pilbara and Australia." 

A successful delivery of ore on a ship by Fortescue would mark the end of Pilbara iron ore production duopoly currently enjoyed by BHP Billiton and Rio Tinto. 

"In so doing it will assist the growth of the Chinese, Indian and broader Asian region economies through their critical steel industries," Mr Forrest said. 

Iron ore prices are expected to rise by more than 70 per cent this year, as Chinese demand continues to surge.


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## Frankhalo (7 April 2008)

See Images posted today

http://www.fmgl.com.au/IRM/content/project_imagegallery.htm


On April 6th 2008, Fortescue celebrated a landmark moment when it transported its first load of Cloudbreak ore to Port Hedland. The train, newly named the Alannah MacTiernan Express, carried the first ore 185km from the Hunter Siding to the ore car dumper where it was automatically unloaded and conveyed to the stockpile yards at the Fortescue Herb Elliott Port.

LOL = Fortescue Herb Elliott Port Æ’ º, he now wants it back to re-coup funds

To all you doubters, knockers etc please check out the pics at link provided and enjoy.

Regards

Frank


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## agro (7 April 2008)

Frankhalo said:


> See Images posted today
> 
> http://www.fmgl.com.au/IRM/content/project_imagegallery.htm
> 
> ...




thanks frank, i got a new avatar now

true blue aussie battler twiggy is with his aussie flag being waved


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## Frankhalo (7 April 2008)

LOL, gotta love those Twiggy train pics Agro, have to hand it to the bloke he knows how to promote the major milestones FMG have taken in the past 4 years. Regardless its all falling into place nicely, love to see $10+ in the next five weeks ( first shipment May15th ), think alot of people, instos etc that are sitting on there hands will step up from this point and the coming weeks.


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## agro (17 April 2008)

*FMG reconfirms first iron ore shipment to China*

http://steelguru.com/news/index/200..._first_iron_ore_shipment_to_China_in_May.html



> Mr Andrew Forrest CEO of Fortescue Metals Group reconfirmed at Boao Forum for Asia held in Hainan that Fortescue Metals Group would begin exporting 20 million tonnes to 30 million tons of iron ore to China this year, approximately 95% of its total output to China's Baosteel Group in May.
> 
> Mr Forrest said the ongoing iron ore benchmark price negotiation would not influence the shipments. He said that "We do not fix prices. Our task is to sell as many iron ore as possible since our customers are anxious for sufficient supply."
> 
> ...


----------



## njc.corp (25 April 2008)

agro said:


> Very very significant
> 
> wait for the next milestone - the shipment
> 
> ...




Agro-fmg will  plot a long really nice in years to come-

theirs been so much bad things said  about forrest-like how he ran down his other company before fmg- but in the real world how many good business have been started by failed 1 time operators-owners-board members only for them to do alright the 2nd time round?

i know my first business did not do well- i brought that along to my 2nd busniess to see it doing well to this day-


i like this stock as their is so many skeptics-but in a way skeptics are good when they are  proved wrong- ask my old business partner who did not trust my idea's-his kicking himsef-

Anyway--i have to ask if the deadline is met- how will this effect bhp and rio's share price-

Thanks 

Nick--


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## Miner (26 April 2008)

I would like to share some thing I heard from one of my friend who is a railway contractor. What he told me was that in FMG the first on the rail might have been made as a letter of law.  He asked if any one knows about the condition of railway track and if they are really capable of hauling ? He also asked me to find out if there was full balast under the railway track in FMG railway. The iron ore price is too hot so any thing produces will be sold.

I do wish FMG a real sucess  . However I still wonder when the real production of 55 MTPA will start (desanding is a must for a high silica and high alumina plant), if FMG has borrowed too much to support its first short fall in 35 MTPA plant, How Cloudbreak and Chichester Ore will be behaving, how long to go to get over transfer of ore by truck to real transfer by rail. Or if the excellent infrastructure could be a money spinner for FMG to lease for other iron ore  hopeful to get the bottom line under control.

We are just a fort night way and surely the monthly report for March to be published in coming week will unfold lot of unknowns.

Could any one throw some real light ?

Regards

Disclaimer :  I hold a very small parcel of FMG acquired recently


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## Boggo (26 April 2008)

Interesting article in the Weekend Australian Business section re federal government views on FMG access to the BHP and RIO rail infrastructure.

Seems like Martin Ferguson (resources minister) has told them to come to an arrangement for access by negotiation outside of the court system.

May be of benefit to FMG ?

Mike


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## Miner (28 April 2008)

attached March end report.
Technically lot of water has already flown under the bridge. This report ending on 31 March gets published internally in a different format. Every week there is a report circulated for all contractors and staff whosoever has FMGL email access! 
Then the monthly report gets massaged to be published in ASX just one week before the next report is due. Must be done deliberately as there is no EXCUSE to take 27 days to massage a monthly report if there is any intention to keep the market informed. But that may be legality when you see March end report for a quarter gets published by the end of April by others. All connected get the reward to encash or unload as the case may be much ahead of market players could act. Funny game and still by the book OKAY.

Enjoy the report and if any question send email to Graeme Rowley or Andrew Forest at growley@fmgl.com.au or aforest@fmgl.com.au  (I am guessing their email addresses from standard email addresses at FMG site).

Disclaimer : I do now hold  a small parcel of FMG


----------



## i wanna b rich! (29 April 2008)

So the mid May comes, how do you think the SP is going to react? The market is expecting it, so if the SP is going to go up I presume. But by how much?


----------



## Sean K (29 April 2008)

i wanna b rich! said:


> So the mid May comes, how do you think the SP is going to react? The market is expecting it, so if the SP is going to go up I presume. But by how much?



I assume you mean there is something due to happen in mid May? Like some sort of mining? Or railwayline? Or shipment, or the like? How anticipated is it? Does everyone know? If so, perhaps the news is already factored in? Remember, the market is forward looking, and at other times makes no sense at all.


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## SM Junkie (29 April 2008)

I love watching FMG and I will be facinated to see how things progress in the coming weeks.  Ideally they should have completed all construction and be agressively moving the dirt into Port.  The recent construction report is already a month out of date and not much of an indicator of where things are at. So let me know if there has been further shipments? 

If they don't make it, I think the sp will drop, only due to the PR machine and everyone anticipating this date of shipment.  It will be a disaster if missed.


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## Miner (29 April 2008)

SM Junkie said:


> I love watching FMG and I will be facinated to see how things progress in the coming weeks.  Ideally they should have completed all construction and be agressively moving the dirt into Port.  The recent construction report is already a month out of date and not much of an indicator of where things are at. So let me know if there has been further shipments?
> 
> If they don't make it, I think the sp will drop, only due to the PR machine and everyone anticipating this date of shipment.  It will be a disaster if missed.




SM Junkie
You are absolutely right. It is not just you or me, but billion dollars will be at stake if May FOOS date is not met. Some people have made good money by selling and buying FMG excepting the directors who are sitting on paper money. The financial institutions have made real investment. So I am hoping they will be working harder not to miss the one of only opportunity.

Regarding PR - Yes, Andrew does it well. That is why we hear about the 55 MTPA, 100 MTPA, 200 MTPA - all buzz words until the real production starts even at 35 MTPA. However like Andrew has his PR machine so are RIO, BHPB having. They are trying hard balls to see FMG fails. For them success of FMG is a failure for them. Now it is up to you and others to calculate the level of stake and who will put the money and where.


----------



## njc.corp (29 April 2008)

Like i asked before-if the deadline in may is met-will this effect bhp and rio's price

Thanks

Nick--


----------



## Miner (29 April 2008)

njc.corp said:


> Like i asked before-if the deadline in may is met-will this effect bhp and rio's price
> 
> Thanks
> 
> Nick--




Dear Nick
Good question but I personally do not know the answer. My guess is the effect on Rio or BHP share will be a little. The reason both of the organisations are multi product miners whereas FMG is a single product would be miner. Ask some of our astrologer friends in this site who has the crystal ball 

However this will affect FMG's price if the deadline is NOT met. Market expectation is that FMG will meet its deadline and hence the price has probably been factored now. 

If you happened to read today's West Australian then there is something which I did  not like. Suddenly FMG has decided not to celebrate its FOOS in May and wait for one month until it gets stabilised. 
Under normal circumstances this is a good call. It is never happened that an EPCM project with such a high volume will have its full rate production from the date 1. One month time for stability  is not unreasonable.

But for Twiggy who does not spare any opportunity to flash his card of publicity this sudden retraction from a high profile publicity for the first time and a bit of humility  I see a sign of nervousness (or admittance of a reality) 

 For the sake of an Australian success story (an my little investment in FMG)  I wish him and all FMG employees, contractors and investors a successful FOOS.


----------



## Miner (29 April 2008)

njc.corp said:


> Like i asked before-if the deadline in may is met-will this effect bhp and rio's price
> 
> Thanks
> 
> Nick--




Dear Nick
Good question but I personally do not know the answer. My guess is the effect on Rio or BHP share will be a little. The reason both of the organisations are multi product miners whereas FMG is a single product would be miner. Ask some of our astrologer friends in this site who has the crystal ball 

However this will affect FMG's price if the deadline is NOT met. Market expectation is that FMG will meet its deadline and hence the price has probably been factored now. 

If you happened to read today's West Australian then there is something which I did  not like. Suddenly FMG has decided not to celebrate its FOOS in May and wait for one month until it gets stabilised. 
Under normal circumstances this is a good call. It is never happened that an EPCM project with such a high volume will have its full rate production from the date 1. One month time for stability  is not unreasonable.

But for Twiggy who does not spare any opportunity to flash his card of publicity this sudden retraction from a high profile publicity for the first time and a bit of humility  I see a sign of nervousness (or admittance of a reality) 

 For the sake of an Australian success story (an my little investment in FMG)  I wish him and all FMG employees, contractors and investors a successful FOOS.


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## spectrumchaser (29 April 2008)

Sneaky Chinese are already using expected FMG shipments
to play down BHP and Rio's negotiations 

China May Gain From Long Ore Talks With Aussie Miners - Assoc
 (  Partial extract from article)
"24/04/2008  4:03PM

SHANGHAI (Dow Jones)--Chinese steel mills might be able to benefit from prolonged negotiations with Australian iron ore miners, as prices of both domestic ores and imports have been falling, an industry official said Thursday.

The average domestic iron ore price fell in March by CNY100 ($14.31) per metric ton from the previous month, while the average cost, insurance and freight import price was down $4/ton, said Zou Jian, vice chairman of Metallurgical Mines' Association of China.

"If the negotiations can continue for another month, the situation will be even more advantageous to us, as FMG ores will further increase the supply," Zou said on the sidelines of a steel industry forum, speaking of shipments expected from Fortescue Metals Group Ltd. (FMG.AU).


Zou said in a speech at the forum that the first seaborne cargo of iron ore from FMG is expected to arrive at China in a month, which will probably result in an even lower price of ores.

Industry officials and analysts said that as Chinese steel mills are now short of cash, following official tightening measures to slow the rapidly expanding economy, high levels of iron ore stockpiles at the ports and the very limited upside expected for steel products imply that iron ore prices are likely to fall slightly from current high levels.

However, Chinese steel mills and Australian miners are expected to conclude the talks by the end of June, as a further delay would allow miners to sell more ore at spot rates, leading to even higher production costs for steel mills.


-Helen Sun contributed to this article; Dow Jones Newswires; "

   Some investment funds are not keen on explorers 
but producers are a different proposition.My guess is the
SP will easily go over $8.00 provided the shipping deadline
is meet.


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## njc.corp (29 April 2008)

Miner said:


> Dear Nick
> Good question but I personally do not know the answer. My guess is the effect on Rio or BHP share will be a little. The reason both of the organisations are multi product miners whereas FMG is a single product would be miner. Ask some of our astrologer friends in this site who has the crystal ball
> 
> However this will affect FMG's price if the deadline is NOT met. Market expectation is that FMG will meet its deadline and hence the price has probably been factored now.
> ...





Thanks for the reply back miner-

i hope for everyone's sake the deadline is met(also for my sake)-u cant keep saying its coming and not produce anything like fmg have done-very good pr  but the  real facts is that may is here-and everyone's waiting

Nick--


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## Miner (30 April 2008)

This is something FMG enthusiastics will be interested.
March Quarterly report as published in ASX today 30 April is attached.
They have published the March Construction report in ASX on 28 APril.
Now let us read them together.

Project assessed over 95% completed as at 25 April as per Quarterly report.
Overall project completion was assessed at 93.6% in Construction report by the end of March .
So in effect only 1.4% over all project progressed in 25 days ! 
( I do realise there is a difference between value of work and actual work. It remains to be seen who explains what. Some times 1% of actual work as per schedule could be .5 or 5% of the value of work) 

Enjoy and wait for Mid May 08 for FOOS


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## njc.corp (1 May 2008)

Thanks for the update Miner-

its looks on target and i am pretty sure they are working their butt's off to meet the deadline- i only hope they do it for the share-holders and will also shut up the critics.
i cant see them going backwards after all the hard work they have done-

i watch their video the other day-while its a video and their can be a lot of cutting and pasting-the operation looks bigger and better then what the critics say and those newspaper reporters saying this and that-

Thanks Nick--


----------



## tony montana (1 May 2008)

lets be honest here....even if they dont meet the foos deadline and the market reacts and sends the sp down...i only see it as a opportunity to buy more at a cheaper rate....because in six months time the market would have forgotten all about that and be focussing on turn over only.
so i dont care to much about all the hype its years down the track that i am looking at.


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## SM Junkie (1 May 2008)

TM, totally agree with you, I'm looking to buy back in and I hoping that if they don't meet the deadline it will provide the ideal opportunity.  When I look at FMG postposing their shipment for a few months, it looks like the time may be near to get this one back in the portfolio.


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## Miner (1 May 2008)

That is an irony. Depends on which side of the fence a trader is sitting : bull or bear.
If I am bullish on my investment then I pray for price to rise.
If I missed out to enter at right (?) time then I pray for price to fall so that I can re-enter.

It is like this if all houses are safe, there is no theft, cyclone, fire, storm, flood or collision - people will dispose the shares of insurance companies. If there are more problems then every one will insure their houses. So sometimes your problems are our business.

Sorry no direct FMG but probably universal philosophy we all know


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## agro (1 May 2008)

for those interested, there was an article in today's AFR about the backing FMG has by junior iron ore miners in the pilbara towards an open access railway ... its all against BHP if they don't want to share and be greedy considering only 1% of IO production comes from the line

also, another article on how the chinese wanted a 80% stake in FMG in 2005 but was rejected.

baosteel also wanting to increase their stake by purchasing it from the americans


----------



## meganut (1 May 2008)

What I like about FMG is that they have the rail infrastucture as a separate business that other IO players are now interested in using...hence more revenue.

Today started off ordinary and finished sensational, I reckon tomorrow will bring even better trading for FMG and think it will be another up day  and we may hit the $8 mark for the first time in a while...

I'll even hazard a close above $8 bucks tomorrow arvo.

Cheers


----------



## Miner (1 May 2008)

agro said:


> for those interested, there was an article in today's AFR about the backing FMG has by junior iron ore miners in the pilbara towards an open access railway ... its all against BHP if they don't want to share and be greedy considering only 1% of IO production comes from the line
> 
> also, another article on how the chinese wanted a 80% stake in FMG in 2005 but was rejected.
> 
> baosteel also wanting to increase their stake by purchasing it from the americans




Agro

My  guess is that once FMG establishes its production stability by the end of 2008, it will start to spin off its infrastructure as a separate business. Its strategy is working well by having junior resources behind FMG.
Probably FMG will make a substantial money by leasing its port, railways and other infrastructure facilities to junior miners. The port is very good and is a cash cow too.

We will definitely review this begining of next year if my so called one cent prophecy or educated guess work really hold good.

Until then enjoy FMG rise in next two weeks.


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## agro (2 May 2008)

looks as though anticipation for shipment shipping on the date set is built into the share price now.

skeptics hiding.


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## agro (2 May 2008)

0850 [Dow Jones] Fortescue Metals (FMG.AU) boosted to Buy from Hold by Goldman Sachs JBWere on improved outlook for iron ore prices and likely support company will get from customers during ramp-up and then expansion. "Fortescue remains a high risk, high return proposition...that said, it appears to be on track, the iron ore market remains strong and the customers are clearly keen to support Fortescue get into production and expand." Targets A$9.62, vs last A$7.79. (MCE)


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## Frankhalo (4 May 2008)

Watch the skeptics and people sitting on their hands now come out of the woodwork Agro, FMG has delivered on many fronts time and time again.
Todays Herald Sun Sunday edition stock watch had FMG as a buy aswell.


----------



## Ozland (7 May 2008)

Ignition! We have lift off!!!!!!!

"Pilbara upstarts are shown the way"

"Fortescue has done it, and others are lining up for a crack, writes Jamie Freed.

THE Australian iron ore industry entered a new era yesterday.

Fortescue Metals, the self-proclaimed "new force in iron ore", began loading at Port Hedland the long-awaited first ore from its $4 billion Pilbara project onto a ship bound for China."

http://business.smh.com.au/pilbara-upstarts-are-shown-the-way/20080506-2bl2.html

Not a bad first share buy eh? (I bought 1000 @ $7.34 last Wednesday, and just caught the wave! I am still smiling!!!)


----------



## Ozland (7 May 2008)

...and a great story about FMG's "epic struggle" with the harsh Pilbara environment and with its two heavyweight rivals! (for FMG fans  )

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article3876364.ece 

I suppose I have to 'come out' here and say that I have become a believer in FMG and a bit of a fan via my research into the company prior to investing my savings in something more productive than my bank's 'so called-high interest saver account'. 

Oh, and P.S. I wish I had known that I only had 20 minutes to edit a post!!!!!!!!!  I would have thought longer about the last line in my previous post above!


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## agro (7 May 2008)

Frankhalo said:


> Watch the skeptics and people sitting on their hands now come out of the woodwork Agro, FMG has delivered on many fronts time and time again.
> Todays Herald Sun Sunday edition stock watch had FMG as a buy aswell.




i am still waiting to hear an opinion from our beloved "prawn_86".

he seems to have a strong contrary opinion to mine so would like to hear what he says...


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## njc.corp (7 May 2008)

Ozland said:


> Ignition! We have lift off!!!!!!!
> 
> "Pilbara upstarts are shown the way"
> 
> ...




it seems it has met the deadline-i log into bloomberg last night to see a nice article about it-

i am a fmg holder so in a way  i am happy-even yesterday's  jump got me  but the bloomberg article did have a nice view on  fmg production-if it was to meet  the 200 a year ton mark-would the iron ore market be flooded-?

thats my little ? to the pro's as i dont know how much the people buying iron ore use or need-

should break its  high today or get closer as of this good news

Thanks

Nick--


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## dastrix (7 May 2008)

What a cracker of a share!! The tip my uncle gave me was a nice one. Good to see an aussie player make it into the big time

I brought 850 under $5.50, I'm definitely all smiles  Just wish I brought 3 times as many....


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## Prospector (7 May 2008)

Throw away the diamonds,  I am in love with iron ore 

(and have been holding since they were $27.00)


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## agro (7 May 2008)

broke $9 resistance just now

headed for $10+ and celebrations haven't even began yet!

iron ore on ship - wait for it to reach china


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## prawn_86 (7 May 2008)

agro said:


> i am still waiting to hear an opinion from our beloved "prawn_86".
> 
> he seems to have a strong contrary opinion to mine so would like to hear what he says...




Agro, I will spell it out for you, once again, but for the last time. Any further flaming comments will be ignored

1. FMG is overvalued *IMO* due to reasons I have previously stated. Future PE etc

2. I have *NEVER* said that there is not money to be made on the stock, I have just said to be careful

3. Well done to those that do hold, however when I conducted my analysis it did not meet *MY* criteria.

I dont think i can make it any more simple, if you do not understand, or choose to not understand that is your fault.

Any well done to all involved for actually meeting the deadline. A rare thing in the mining industry.


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## njc.corp (7 May 2008)

prawn_86 said:


> Agro, I will spell it out for you, once again, but for the last time. Any further flaming comments will be ignored
> 
> 1. FMG is overvalued *IMO* due to reasons I have previously stated. Future PE etc
> 
> ...





Prawn- by all means i am not being a smart ****-but like u said  in your last sentence- deadline-whats your views since it has been met-has your criteria change since this deadline -

Like i said i ain't being a smart **** just looking at some different angles here-

Thanks in advance

Nick--


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## prawn_86 (7 May 2008)

Nick,

No problems, I dont mind answering legitimate questions if people are actually interested rather than just flaming or have the whole 'im right, your wrong' mentality.

Im not at home atm so my analysis will just be fairly brief.

Basically on a forward PE basis, it still appears to me that they are overpriced. I said a few pages back, when they were about $6.50 that it seemed to represent fair value at those prices, given the scope for production increases. 

The problem with forward PEs is that you do not know market conditions in the future. Obviously the outlook for IO is good into the future, but as with all mining stocks i will/would be wary after the China olympics, as i honestly believe (just a feeling, no evidence), that China will slowdown somewhat, and try to tame their economy a little after the olympics

However, that said, the market likes the fact that the deadline was met so the next major technical resistance is $10. 

I think the next fundamental challenge will be becoming cashflow positive, how quickly that can be achieved, and then if the actual forecast profits are met.


----------



## goose22 (7 May 2008)

Hey Guys,
               I am pretty new to trading so I have this urge to sell every time I am making a good profit. Do you think that the price will reach $10 or at least $9.50 when the ship gets to China?


----------



## Prospector (7 May 2008)

Goose, you can never lose by selling for a profit.  One of the first things I learnt during s share trading seminar, was to realise you can never pick the top, just as you can never pick the bottom. Asking someone how high a share will go is like crystal ball gazing.  You can see for yourself that 2 posters here have an entirely different interpretation of what the future holds for FMG.

I think China will hold good for a few years yet, although there may be the occasional scare.  Having travelled to Guangzhou and Shenzhen recently, the development is breathtaking.  Have yet to see Shanghai; but if that kind of development spreads throughout China, then, well, you get the picture.  But anything can happen, say even something like Bird Flu becoming transmissable human to human and a pandemic will change it all.


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## MRC & Co (7 May 2008)

The thing that worries me with FMG, is the attack above all-time highs has not been accompanied by much volume, which does not support the gap.

RSI is also extremelly overbought, so we could get a pullback to close the gap.

Iron Ore news is definately positive, I'm split on this one for the moment.  I will look for either extremelly high volume to come in late today, or a pullback and consolidation around $8.50 before we get a solid run.


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## njc.corp (7 May 2008)

goose22 said:


> Hey Guys,
> I am pretty new to trading so I have this urge to sell every time I am making a good profit. Do you think that the price will reach $10 or at least $9.50 when the ship gets to China?




i dont think anyone could give u a good answer on the about ?-- will it hit a high or low-
who knows

u have rough ideas but no one is 100% sure-

if we did we would be well off-

when u bought fmg-did u have a target and was the target for something u needed like bills,lifestyle,repayments etc etc

so in a way-if u have a plan why not stick to it?

Prospector hit the nailed on the head

dont forget-something is better then nothing-

Thanks 

Nick-


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## goose22 (7 May 2008)

Yeah you guys all made good points. Something is better than nothing, and I may as well stick to my target. Thanks for the advice. My mates dad is striking it massively rich at the moment. This stock has made him a millionaire just by chance. Who would have the balls and the money for that matter, to throw away a couple of grand on a penny stock only to see it turn a thousand times over!


----------



## agro (7 May 2008)

*1 week countdown.*

i remember reading sometime ago that the offices in FMG have massive clocks with the countdown timer to their first shipment.

the celebrations that will go off in china and FMG.. probably would be comparable to the Olympics (i am exaggerating!)


----------



## Ozland (7 May 2008)

MRC & Co said:


> I will look for either extremelly high volume to come in late today, or a pullback and consolidation around $8.50 before we get a solid run.




I think volume at end of trade today was around 8 and a half million: does this constitute "extremely high volume"? 

It seems to be for this share, at least in relative terms.

I would love some advice on this so I can learn to read the market a little better.


----------



## michael_selway (7 May 2008)

Ozland said:


> I think volume at end of trade today was around 8 and a half million: does this constitute "extremely high volume"?
> 
> It seems to be for this share, at least in relative terms.
> 
> I would love some advice on this so I can learn to read the market a little better.




HI looks good today

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS -2.6 -3.0 31.2 82.3 
DPS 0.0 0.0 0.0 0.0* 



> Date: 7/5/2008
> Author: Jamie Freed
> Source: The Sydney Morning Herald --- Page: 21
> Australian iron ore mining upstart Fortescue Metals Group (FMG) on 6 May 2008reached its most important milestone yet. It began loading ore onto a vesseldocked at the new port facility servicing its mine in the Pilbara region ofWestern Australia. The $A4bn development is breaking the virtual duopoly helduntil now by major listed companies BHP Billiton and Rio Tinto, and is seen aslikely to encourage other small mining entities to also become active. Amongthese are Aquila Resources and Atlas Iron. Groups such as these will be able tostrike infrastructure sharing agreements with FMG, while Rio and BHP havecategorically ruled out any deals






> Date: 6/5/2008
> Author: Kevin Andrusiak
> Source: The Australian --- Page: 20
> The resources sector lobby group, the Minerals Council of Australia (MCA), hastaken sides in a competition matter. In a submission to the National CompetitionCouncil (NCC), the MCA argued that iron ore start-up Fortescue Metals Groupshould not be granted its wish to access rail infrastructure by dominant rivalsBHP Billiton and Rio Tinto. The partisan stance has been attacked by Fortescue,which is also celebrating a court win against Rio over the latter's appealagainst a ruling by the NCC. Fortescue says it is backed by Part IIIA of theTrade Practices Act. Meanwhile it has set another milestone by having the firstvessel sail into its new port, to be loaded with ore from its mine in thePilbara region of Western Australia






> Date: 1/5/2008
> Author: Michael Vaughan; Jo Clarke
> Source: The Australian Financial Review --- Page: 17
> Small iron ore exploration companies are increasing pressure for open railaccess in the Pilbara in Western Australia. Fortescue Metals Group is trying togain access to the rail networks of BHP Billiton and Rio Tinto. Fortescue'scase has been supported by submissions to the National Competition Council bythe Association of Mining & Exploration Companies, North West Iron OreAlliance and Atlas Iron. BHP may become more amenable to sharing infrastructureas it could help to satisfy European regulators considering its takeover bid forRio




thx

MS


----------



## MRC & Co (8 May 2008)

Ozland said:


> I think volume at end of trade today was around 8 and a half million: does this constitute "extremely high volume"?
> 
> It seems to be for this share, at least in relative terms.
> 
> I would love some advice on this so I can learn to read the market a little better.




Sorry Ozland, my words were not meant to be so exact and decisive.

While many look at "extreme" volume in comparison to "high volume", as per Tradeguider (a software program teaching Volume Spread Analysis), I do not take notice of such differences for now.  Just another way I try and keep it as simple as I can.

Yes, I would say volume looks promising, though would have liked to see it a bit higher.

I actually took the trade and sold later in the day.  I just think there will be a consolidation at this high shortly (perhaps a high tight flag, depending if that gap gets closed or not), though if there is not, I miss the boat and so be it.  

The recent iron ore news following on so close after the coking coal negotiations, is sure to get some excited!

I agree with Michael though, projections look fantastic!

Cheers


----------



## Nick Radge (8 May 2008)

> Something is better than nothing, and I may as well stick to my target. Thanks for the advice. My mates dad is striking it massively rich at the moment. This stock has made him a millionaire just by chance. Who would have the balls and the money for that matter, to throw away a couple of grand on a penny stock only to see it turn a thousand times over!




This is off topic so maybe it should be posted elsewhere.

Goose, 
read your comment above and then think about your dilemma.

Do you see your contradiction?

Your Dad's mate is making it rich because he _*didn't*_ sell.

You want to sell because the money is important to you. Remove that emotional bias and concentrate on what the market is telling you and you'll have your answer.

I'll make two bottom line comments:

(1) I _*strongly*_ disagree with the concept that you'll never lose taking a profit. Totally and utterly the wrong way to trade.
(2) You'll never make a big profit by taking small profits. Your Dad's mate shows you that. What if he had sold at $1?

Disclosure: I hold FMG and will get the heck out when the market tells me to.


_This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision._


----------



## Prospector (8 May 2008)

Nick Radge said:


> (1) I _*strongly*_ disagree with the concept that you'll never lose taking a profit. Totally and utterly the wrong way to trade.
> (2) You'll never make a big profit by taking small profits. Your Dad's mate shows you that. What if he had sold at $1?




Nick, I can give you many instances where that philosophy has saved my butt and my profit.  You say you will sell when the market tells you to, but what happens *if you miss 'the telling'; *or if overnight, something happens left field.  My worst ever fall was MFS; overnight the price vanished.  I should have taken profit even just the week before, instead took a significant loss.

This poster is a Newbie; he hasn't traded much; he has to protect his capital in a manner that allows him to sleep at night; he is learning (as we all are) as he goes.  He has made a profit, he has asked a "newbie" question and clearly has not learnt much about TA and trading; he could very likely, miss the trigger to sell and lose not just the profit, but the capital.

OK, so his dad's mate has made a profit this week.  Maybe the ship gets to China and the ore ain't good enough.  Kaboom!  And that could happen overnight before he gets the chance (or has the knowledge) to sell in time. Until you sell, it is ALL PAPER PROFIT!

I hold, but am realistic to say that I watch FMG very very carefully; and at the first sign of weakness, I offload for profit.  And then buy in again.  Maybe I dont make the mega dollars, but last night I worked out that instead of being in the red this financial year, like most, if not all Super Funds, I am actually in positive territory.  Wrong?  Nope.


----------



## Miner (8 May 2008)

Prospector said:


> Nick, I can give you many instances where that philosophy has saved my butt and my profit.  You say you will sell when the market tells you to, but what happens *if you miss 'the telling'; *or if overnight, something happens left field.  My worst ever fall was MFS; overnight the price vanished.  I should have taken profit even just the week before, instead took a significant loss.
> 
> This poster is a Newbie; he hasn't traded much; he has to protect his capital in a manner that allows him to sleep at night; he is learning (as we all are) as he goes.  He has made a profit, he has asked a "newbie" question and clearly has not learnt much about TA and trading; he could very likely, miss the trigger to sell and lose not just the profit, but the capital.
> 
> ...





Good posting FAB. 
Very positive and encouraging for newbies like me.
This forum is an excellent mix of newbies, verterans, and not so veterans. The amount of information posted here with a bit of filtering really highly educative (for me at least). 
Please keep it up

Regards


----------



## MichaelD (8 May 2008)

Prospector said:


> ...but what happens *if you miss 'the telling'; *or if overnight, something happens left field.  My worst ever fall was MFS; overnight the price vanished.  I should have taken profit even just the week before, instead took a significant loss.




1. MFS was SCREAMING "SELL ME SELL ME" for a week before its price was decimated.

2. If you keep taking small profits off the table before they have the chance to build into big profits, you GUARANTEE that the occasional big loss like MFS will wipe you out.


You absolutely can, do and WILL GO BROKE taking small profits. It's a mathematical inevitability.

Sure in the short term it looks good - lots of wins, a steadily increasing equity curve, but then... WHAM, the losses come home to haunt you. (They're the trades you've hidden in your bottom drawer and are steadfastly ignoring hoping they'll come good.)




Nick Radge said:


> Disclosure: I hold FMG and will get the heck out when the market tells me to.




I'm sure I remember this one getting the EW "kiss of death" a while back...? (Just after I'd finished fully pyramiding it, if I recall .) I presume therefore that you are now long FMG, not short.


----------



## MRC & Co (8 May 2008)

One simple method to exit for the newb who has no idea about T/A, is exit once the current days bar closes (just before close) below the low of the previous two days lows (whichever is lower).  (Vice-versa for shorts).  

That being said, learning support/resistance takes about 10 minutes, it is not a complex concept, so there is no real excuse not to understand it. 

Out of interest Nick, which pattern did you use to enter this trade? (long I guess also).


----------



## Prospector (8 May 2008)

MichaelD said:


> You absolutely can, do and WILL GO BROKE taking small profits. It's a mathematical inevitability.
> 
> Sure in the short term it looks good - lots of wins, a steadily increasing equity curve, but then... WHAM, the losses come home to haunt you.




Sorry, but I think some of your 'certainties' are just rubbish!  I have been doing this for 7 years now, with around 10 - 30% profit pa; is that short term and when exactly will it all come unstuck?  

MFS had dipped in years previously (I had been trading it back in the days when it was BRK!) but had always regained strongly; the week previous was really no different from its pattern of say, three years when it was tracking down again.  But then the Directors were involved in some shonky stuff which should be illegal (ie using the shares they had in a Company in which they were Directors, and which were sold off in a margin call) and that day, disaster!  That was what caused the downfall; that was not in the trades of the week before, and that is why the company was put into halt.  It was not the week before that did but the actions of the Directors.

Maybe it is a case of sticking with my plan, and you can stick with yours.  And maybe you should also give my accountant the same warning because he asks me what I am doing with the trades because I am one of his "gold stars" in terms of returns and good sells.


----------



## stad (8 May 2008)

Again, this is off Topic.

The previous 5 messages has explained something that I haven't seen put so plainly before.

I thank you all very much.


----------



## MichaelD (8 May 2008)

Really off topic...but I'm not having a go at anyone here. Don't take it personally.

Maybe these few posts could be moved to a new thread as there's much to think about.



Prospector said:


> Sorry, but I think some of your 'certainties' are just rubbish!  I have been doing this for 7 years now, with around 10 - 30% profit pa; is that short term and when exactly will it all come unstuck?



This return is in a market where a middle of the road trend following system has gone from $100K to $450K and where the index has doubled. Still, in all seriousness - WELL DONE on your returns. If you're able to consistently take that sort of return out of the markets year in year out, you are in the considerable minority.



Prospector said:


> MFS had dipped in years previously (I had been trading it back in the days when it was BRK!) but had always regained strongly; the week previous was really no different from its pattern of say, three years when it was tracking down again.



Any trailing stop put on MFS would have signalled an exit over and over again in the days before the big fall. Price was signalling there was something very wrong going on.

Having said that, it is also quite feasible that previous retracements which you rode out would also have gotten technical traders whipsawing in and out of a position in MFS - I no longer have the chart to be able to plot a trailing stop on it to see what it would show me.

Technical traders using stops OFTEN get out of perfectly good positions which then rebound and continue going skywards. We just get back in if a re-entry is signalled.

The idea is that we are OUT when the sky REALLY falls, and that more than makes up for the inconvenience of being whipsawed in and out.



Prospector said:


> Maybe it is a case of sticking with my plan, and you can stick with yours.  And maybe you should also give my accountant the same warning because he asks me what I am doing with the trades because I am one of his "gold stars" in terms of returns and good sells.




Indeed so - my plan suits me well.

btw, have you never wondered about the implications of what your accountant is actually saying in regards to your trading - your returns are clearly superior to the majority of traders he is aware of - in a screaming bull market for the last 4 years that says a lot about the ability of people to stuff up during even the greatest bull market in history.

Maybe if you held onto some winners a bit longer and cut some losers a bit earlier you might have made even more money...?


----------



## The Barbarian Investor (8 May 2008)

A friend takes his profits at 10% and cuts his losses at around 5 to 6%, his thoughts are he has more stocks that go up from 0-10% than 10% -25%, he also keeps a very small stable of stocks and has been known to buy in and out of the same one many times over

Once it hits around 10% + thats his magic mark, he doesn't set a stop-loss below that as he wont make his 10%+


----------



## Prospector (8 May 2008)

MichaelD said:


> Maybe if you held onto some winners a bit longer and cut some losers a bit earlier you might have made even more money...?




Yep, on that I will agree totally! And FMG is one of those.  If I had not taken profits along the way, I would have made some serious, serious money.  The nature of the SMSF in which I have most money will not allow too much% to be tied up in 'spec' stocks, so in some sense, because FMG had risen so well, it was well over double my next share holding, so I had to sell some anyway.  Am looking at over $80k profit on FMG on a small holding, so cant complain at all.  But it could have been more than that.  But still, $80k is $80k.  Which was my point prior to Nick's psot - a profit is a profit.

I also agree that if you get out potentially 'before the top' based on TA (market indicators), then you are certainly well out if it tanks.  In effect we are saying the same thing, although mine is based on profit (and sleeping at night) wheras yours is more TA based, although I do not sell, even if on a great profit, if the market signals are still strong. Which is what mainly happens with FMG, hence I have held consistently now for a few months.

Goose's query was about FMG.  At this stage, FMG must still be considered a speccy stock, and it might be a bonanza for him (and even more so for me)  so the normal TA for FMG does not apply until it is proven that the ore they are shipping meets Chinese expectations.  And therein lies the risk.

I think overall, we are both saying that you might end up selling before the top, and buying before the bottom.  And profit is profit.


----------



## Miner (8 May 2008)

(If India cuts down the steel price so significantly and they have a vast iron ore resources means Indian Steel will very competitively priced. Wil it provide ripple effect on steel prices and hence iron ore prices in near future. There would be changes in Chinese demand after olympic)
Not relevant posting but there is no such posting on steel vs iron ore etc and FMG being a most popular iron ore it has strong connection with steel. Sorry folks for out of the way posting here) 

_Steel makers agree to cut prices
8 May 2008, 0117 hrs IST,TNN
  Print  Save  EMail  Write to Editor (from Indian Press)

NEW DELHI: In a meeting with PM Manmohan Singh on Wednesday, steel manufacturers decided to reduce prices of flat products by Rs 4,000 per tonne and of rebars and structural steel by Rs 2,000, for next three months. 

“We endorse the government's concern over steel prices contributing to inflation,” SAIL chairman Sushil Kumar Roongta said. 

The reduction in flat steel prices will be done by those producers, who have increased prices in April. Almost all the companies except SAIL had increased prices in April. Price of downstream products will also be cut, even if their prices were not increased in the last two months. 

The price reduction would not be applicable for long-term contracts, where prices were fixed before March 31, 2008, due to contractual obligation. The reduced prices will only be applicable for the steel that gets consumed in India - either directly or after processing. 

The current price of flat products is around Rs 45,000 per tonne. The reduction will lead to a 10% price cut. 
A delegation of steel captains met Singh and apprised him of the problems being faced by the industry. The chiefs argued that the industry was forced to increase prices as input costs have gone up substantially since January 2008. They told PM that due to unprecedented rise in prices of iron ores and coking coal, the production costs in the last four months have gone up by Rs 8,000 per tonne to Rs 14,000 per tonne. And, a price increase by Rs 4,000 per tonne in April has not even covered the rise in input cost. 

In a statement, *Tata Steel said notwithstanding the adverse pricing situation, the steel industry took the price-cut measures to support the government's endeavour to check inflation. *
FM P Chidambaram, steel minister Ram Vilas Paswan and cabinet secretary K M Chandrasekhar were also present in the meeting. 

After agreeing to reduce prices, steel makers urged government not to impose export duty on steel, *to roll back increase in price of iron ore by 47% in 2008 by government-owned National Mineral Development Corporation and to maintain the price of coking coal by Coal India at 2007 level*. The industry also demanded relaxation in ceiling on external commercial borrowings for executing expansion plans and getting rid of high cost debts. 

Ispat Industries V-C and MD Vinod Mittal said the government has assured them that the notification for implementing the export duty on steel will be put on hold. 

While replying to the debate on the Finance Bill in Parliament last week, Chidambaram had announced up to 15% duty on steel exports to increase domestic supply of steel, to check the price of the metal, as it is seen as a major contributor to inflation.  _


----------



## Prospector (8 May 2008)

Miner said:


> If India cuts down the steel price so significantly and they have a vast iron ore resources means Indian Steel will very competitively priced. Wil it provide ripple effect on steel prices and hence iron ore prices in near future. There would be changes in Chinese demand after olympic)




And this is the kind of stuff that happens unpredictably, left field, overnight, and is not reflected in TA analysis from the close of ASX trade.

Profit is profit, but a paper profit doesn't count!


----------



## Ozland (9 May 2008)

MRC & Co said:


> Sorry Ozland, my words were not meant to be so exact and decisive.




No worries. I appreciate any feedback! 



MRC & Co said:


> I actually took the trade and sold later in the day.  I just think there will be a consolidation at this high shortly (perhaps a high tight flag, depending if that gap gets closed or not), though if there is not, I miss the boat and so be it.




High tight flag? .......ahhh, a technical analysis term (just googled it ). Can someone show me what a 'high tight flag' looks like? It seems to be a useful indicator. Thanks.

I have been thinking over the last few days, after hours of research into FMG and the commodities sector in general, that FMG will not fall back below $9.00 (perhaps a few cents for a couple of days at worst) because FMG has a big ace to play in the next few days: a MILESTONE!!! First genuine commercial shipment: not a 'token' shipment.  Barring equipment failure I can't see anything spoiling the party.

Regarding some comments others have made in this thread regarding possible rejection of the ore due to quality: it won't happen! The success of this shipment will be celebrated in China too as they are (literally) banking on FMG's success as leverage against BHP/RIO! The Chinese government will ensure that rejection of the ore due to quality does not happen.

This scenario is gold for a company at this point in its development. Great PR opportunity and while it may not dazzle the professionals, it will certainly impress your average investors (like me)!




MRC & Co said:


> I agree with Michael though, projections look fantastic!
> 
> Cheers




Damn! So the time honoured question remains unanswered.... "...should I stay or should I go?"   (hold or sell...that is the question!) 

Cheers, and thanks for your comments, MRC and Michael.


----------



## 2020hindsight (9 May 2008)

I'm holding for a bit longer yet. FMG busy building an extension to their wharf as we speak - with another extension to follow.  To say nothing of stockpiling options into the future.   Not sure about TA, but I do know that steel is getting much harder to find (and more expensive) around here these days. 

The idea that the end of the olympics will cause the bubble to burst ?  Or that China will somehow be made to set their dollar at a more sensible level?  etc - Can't comment - I'd be guessing.  But I'm certainly holding for a bit longer yet. (PS this entire game is a gamble if you ask me).


----------



## MRC & Co (9 May 2008)

Ozland,

http://thepatternsite.com/htf.html

I cannot give advice whether to sell or not, but if I were in the trade, I would not sell and have my stop placed around 8.50, this holds strong support due to the closing of the gap and the old high.  

Cheers


----------



## zaf39 (9 May 2008)

New to this forum, 
been day trading for approx. 3 years, if u look at the past charts of alot of the miners you could easily see that FMG could easily hit $14,i hope my past experience of not taking profits i.e rio is not the same pattern i will have again but hoping i get it right this time


----------



## njc.corp (9 May 2008)

zaf39 said:


> New to this forum,
> been day trading for approx. 3 years, if u look at the past charts of alot of the miners you could easily see that FMG could easily hit $14,i hope my past experience of not taking profits i.e rio is not the same pattern i will have again but hoping i get it right this time




Zaf-i been trading for about 3 months(early days) but i have some rules that i came up and stick to-one of them was regarding chart's

  anyone can  quote me if i am wrong-but the charts are whats happen in the past and why its happen-and everyday is a new making of a chart for a reason-

so my ?  to u is why do  think fmg could hit $14.00? i mean what part of the chart is indicating a up  to make or hope of a price rise-

Thanks

Nick--


----------



## Miner (10 May 2008)

zaf39 said:


> New to this forum,
> been day trading for approx. 3 years, if u look at the past charts of alot of the miners you could easily see that FMG could easily hit $14,i hope my past experience of not taking profits i.e rio is not the same pattern i will have again but hoping i get it right this time




Dear Zaf39

Welcome to this forum

It would be useful not to see your post as ramping FMG price please show your chart and the trend to justify your prediction for FMG to rise $14. Understanding you are new to the forum but please check the rules of posting at this forum
YOu would notice there are many learned chartists who always support their predictions with chart. Do not feel shy and give it a go


----------



## njc.corp (12 May 2008)

does anyone have anymore details on today's news that some chinese mob is keen to buy 15%+ in fmg

Thanks

Nick--


----------



## Nesa (12 May 2008)

njc.corp said:


> does anyone have anymore details on today's news that some chinese mob is keen to buy 15%+ in fmg
> 
> Thanks
> 
> Nick--




UPDATE 1-Three Chinese groups eye Fortescue iron ore stake
http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSSYD22829420080512


----------



## zaf39 (13 May 2008)

Miner said:


> Dear Zaf39
> 
> Welcome to this forum
> 
> ...




Good Morning Traders,
I was talking about the possibility of FMG reaching $14, when you compare the charts with ZFX, WSA etc. etc.
What are other peoples views on the possibility of FMG reaching $14?

Have a good trading day

--Zaf39


----------



## The Barbarian Investor (13 May 2008)

zaf39 said:


> Good Morning Traders,
> I was talking about the possibility of FMG reaching $14, when you compare the charts with ZFX, WSA etc. etc.
> What are other peoples views on the possibility of FMG reaching $14?
> 
> ...





Taking into account their 10 for 1 split that would be $140.00 

Be nice for those that have held for a few years


----------



## stuttgart (13 May 2008)

Anyone have any thoughts about the many 150k shares parcels being traded at ~9.38 today?  What's the theory relating to accumulation or distribution when multiple frequent abnormally large trades are performed at around the same price without any noticeable change in direction in the price action as a result? baffled!


----------



## Go Nuke (13 May 2008)

Guess people are just holding out for the first announcement of shipping before the share price heads further north.

Or just what im hopeing for
Nice big Overseas cross trade of $194+ K went through this arvo!

Im holding.


----------



## agro (13 May 2008)

skys the limit now with FMG,

*skeptics * gone into hiding and are now having a dig at FMG meeting its 250mt ramp up lol *shakes head*

twiggy proven them wrong the whole way through.. he's the one laughing with the billions

caus he has 36% stake, that protects from a takeover too

pitty the aussie instos didn't get on board

china know they are on a good thing - thats why 3 companies want in!!

wait for earnings and dividends - just another reason for it to go up further!!


----------



## SenTineL (13 May 2008)

yeah apparently I read FMG are trying to track down a big broker that said at the beginning a few years back that he would be willing to be tied up on the train track in May because there was no chance that FMG would be doing anything. 

would be mad to be selling now IMO, even if they don't make the deadline, the whole company isn't going to crumble because of a missed date!


----------



## Nesa (13 May 2008)

SenTineL said:


> yeah apparently I read FMG are trying to track down a big broker that said at the beginning a few years back that he would be willing to be tied up on the train track in May because there was no chance that FMG would be doing anything.
> 
> would be mad to be selling now IMO, even if they don't make the deadline, the whole company isn't going to crumble because of a missed date!




Famous last words....

"I'm happy to be chained to the tracks somewhere between Cloud Break and Port Hedland in May next year because I know that I will not be killed by a train"

Fund Manager (Name withheld), 2007


----------



## MRC & Co (13 May 2008)

Falling momentum on narrow spreads and increasing volume.  Would want this one to breakout soon or it could be headed lower.

Strong support around 8.50-8.60.  

Definately one to watch for the traders!  Good luck to all the investors!


----------



## reece55 (13 May 2008)

agro said:


> skys the limit now with FMG,
> 
> *skeptics * gone into hiding and are now having a dig at FMG meeting its 250mt ramp up lol *shakes head*
> 
> ...




Well, your persistence seems to have paid off agro here, but don't speak to soon..... life changes when production occurs. 

I'm goin to stick my neck out and reiterate that this stocks valuation way way exceeds it on paper value at the moment. There is soooo much hype in this mother of a Company, does anyone actually think it is going to deliver on it's promises?

I still think ramping up to 200 MTPA is going to be an extremely tough ask in 3 - 5 years. And even if they can scale up to 100 MPTA by year 5, the stocks intrinsic value is only about $6.00 at best case.....

Overrated IMO, great for trading, but investing at this point would be ludicrous.... Just my , I am sure you would disagree there agro....

Cheers


----------



## prawn_86 (13 May 2008)

I agree Reece.

On a fundamental, on paper, basis anything over about $6.50 seems overpriced. Hence why is said a while back when it dropped, it may represent an opportunity.

Im not saying this wont go up on hype, greed, sentiment etc etc, but those buying NOW for fundamentals are pushing their luck imo


----------



## Miner (14 May 2008)

prawn_86 said:


> I agree Reece.
> 
> On a fundamental, on paper, basis anything over about $6.50 seems overpriced. Hence why is said a while back when it dropped, it may represent an opportunity.
> 
> Im not saying this wont go up on hype, greed, sentiment etc etc, but those buying NOW for fundamentals are pushing their luck imo




Probably I agree with your fundamental analysis. However sometimes short time economy gives a bubble effect and depending on what side of bubble we are the situation gives us gain or loss. FMG probably will not be under ANdrew for next few years either. He is to have some fruits of his money which are only paper for him and real for many of us.

I met some of the old Anaconda guys who invested a fortune in old Anaconda and just can not condone him. But there are some who love him. I have seen him in action and personally have a respect for him because he is a smart Australian, a Joe Blogg like many of us, approachable and has the Midas touch. How many of us really can speak with Ian Ashby of BHPB Iron ore or Sam Walsh of RTIO just like a common person (forget about the CEO of their board) . If you happen to be at 87 Adelaide Terrace in East Perth and in FMG office then you will see Herb Elliot (ex olympian and CEO of FMG) is behind you in the queue to take coffee or Graeme Rowley is taking lunch with you. NOt their secreataries. ANdrew owns 40 percent of FMG, is the CEO and still you can speak with him. He takes decision on the spot right or wrong. Well once again I am not his paid publicist and not over excited with 15 May deadline as end of world either. 

ANy way I saw a news article which says tonight Tuesday FMG is going to ship some ore .

*Twiggy's iron ore export dream closer*
AAP

13/05/2008 3:50pm Email to a friend Print article 


It's taken almost four years and $3 billion, but Australia's wealthiest individual Andrew "Twiggy" Forrest is about to turn his iron ore dream into reality.


----------



## MRC & Co (14 May 2008)

Just, VERY quickly on the F/A side of things.

If those 80c projections can be acheived, it would create profit of over $2bil.

Quiet a return on equity despite the high debt.  

No idea if they will be acheived or not, but based on a quick calculation if they are even close to acheived, fundamental value does not look too bad at all.

Afterall, is that not how we determine the fundamental value?  Return on book (equity), extrapolated into the future based on current forecasts, whilst adding to the discount rate due to higher risk?  Which may be somewhat offset by more than likely commodity price volatility in favour of FMG with iron ore prices expected to rise.............

Last time I checked, that was the "Warren Buffett way" to calculate instrinsic value.


----------



## agro (14 May 2008)

reece55 said:


> Well, your persistence seems to have paid off agro here, but don't speak to soon..... life changes when production occurs.
> 
> I'm goin to stick my neck out and reiterate that this stocks valuation way way exceeds it on paper value at the moment. There is soooo much hype in this mother of a Company, does anyone actually think it is going to deliver on it's promises?
> 
> ...






prawn_86 said:


> I agree Reece.
> 
> On a fundamental, on paper, basis anything over about $6.50 seems overpriced. Hence why is said a while back when it dropped, it may represent an opportunity.
> 
> Im not saying this wont go up on hype, greed, sentiment etc etc, but those buying NOW for fundamentals are pushing their luck imo




the chinese and russians don't seem to think so... 

its only the australian public - thats interesting...


----------



## prawn_86 (14 May 2008)

agro said:


> the chinese and russians don't seem to think so...
> 
> its only the australian public - thats interesting...




Perhaps the Chinese and Russians are more interested in securing thier future commodity needs, rather than fundamentals (ie- current price)


----------



## agro (14 May 2008)

prawn_86 said:


> Perhaps the Chinese and Russians are more interested in securing thier future commodity needs, rather than fundamentals (ie- current price)




that sounds logicial re - securing their future commodity needs,,

now is this commodity so to speak going to increase in price?

i think so.

lets all be skeptical on the ramp up now that twiggy has achieved one goal without all the cyclones etc etc..

rather hold than be on the side lines lol especially in a milestone event within the history of mining in Australia


----------



## prawn_86 (14 May 2008)

agro said:


> rather hold than be on the side lines lol especially in a milestone event within the history of mining in Australia




Yes, but what price do you hold from, and are you buying more at these prices?

As I have said before the only time *I* would buy, is if I see fundamental value, which is around $6 for me, but preferably below.


----------



## nizar (14 May 2008)

prawn_86 said:


> As I have said before the only time *I* would buy, is if I see fundamental value, which is around $6 for me, but preferably below.




The problem with value buying is that some stocks that are undervalued stay undervalued for years and some others are already "expensive" yet keep going up.


----------



## CoffeeKing (14 May 2008)

Having watched the "dumper" being built, the "railway" to cloudbreak completed and driving the first train out with "the ore" on it............
now the "big ship" arrived this afternoon
Congratulations to Mr Forrest, job well done, proud to be a part of it,
FOOS tomorrow.


----------



## Lemme (14 May 2008)

Makes you proud to be an Australian I reckon. Well done to all the people who made it happen. If they can do this in a couple of years there is no stopping them now.


----------



## Ozland (15 May 2008)

CoffeeKing said:


> Having watched the "dumper" being built, the "railway" to cloudbreak completed and driving the first train out with "the ore" on it............
> now the "big ship" arrived this afternoon
> Congratulations to Mr Forrest, job well done, proud to be a part of it,
> FOOS tomorrow.




You drove the train?!!! How awesome! 

Wish I was there to see all these BIG things happening. I might drive up there and check it out. In fact, as a shareholder I see it as my duty to inspect the works to be sure my investment is secure!!!


----------



## agro (15 May 2008)

nizar said:


> The problem with value buying is that some stocks that are undervalued stay undervalued for years and some others are already "expensive" yet keep going up.




exactly look at Incitec Pivot..

anyhow


SHIPMENT TODAY - CONGRATULATIONS FORTESCUE, TWIGGY AND ALL THE SHAREHOLDERS WHO BELIEVE! LETS DO IT AGAIN WITH THE RAMP UP AND SHOW THE WORLD WITH FLYING COLOURS!


----------



## Prospector (15 May 2008)

The announcement is just out - the ore is being loaded.  Congratulations to all the workers who made this happen, and those who had the Vision in the first place to make it happen.  And thoughts of those who lost their lives as the story unfolded.


----------



## agro (15 May 2008)

anyone else notice a couple cross trades of 100,000 and 150,000 go through,

seems as though it gets dumped followed by a massive accumulation


----------



## njc.corp (15 May 2008)

agro said:


> anyone else notice a couple cross trades of 100,000 and 150,000 go through,
> 
> seems as though it gets dumped followed by a massive accumulation




Argo- yes i noticed that-started off good-spiked harded and cam back to earth-

i feel its good to balance things-bought more in at the end of the day as it hit the low-

friday is a new day and will c what the outcome is on the when the ship leaves-

2 more things in the way-ship leaving and ship arriving in china safely-

i also think that the increase in mtpa is the last thing fmg have to honor-

What u think?

i still hold-

Thanks

Nick--


----------



## agro (15 May 2008)

njc.corp said:


> Argo- yes i noticed that-started off good-spiked harded and cam back to earth-
> 
> i feel its good to balance things-bought more in at the end of the day as it hit the low-
> 
> ...




i think it is a wise idea that you bought more because we may not see under $10 ever again. 

look at it this way - the companies who are able to deliver ore to china in the next couple of years provided the prices increase and demand is strong, i think the earnings will only get better

we are talking 100s of tonnes of quality of ore, up there with BHP and RIO - remember if these two merge, FMG will be the second biggest in aus and its likly that China may boycott them if they continue to want higher freight differentials 

there is also the potential of dividends too so worth holding unless ofcourse you want to jump on the next potential fortescue which could be a juniour like Atlas, Ferraus or Gindalbie??

twiggys out to make a point.


----------



## njc.corp (15 May 2008)

agro said:


> i think it is a wise idea that you bought more because we may not see under $10 ever again.
> 
> look at it this way - the companies who are able to deliver ore to china in the next couple of years provided the prices increase and demand is strong, i think the earnings will only get better
> 
> ...




i also feel that it was a good time to buy-

but one thing i would like to ask fmg holders or asf members is the increase in mtpa a bit early-

i mean would u even say that fmg is up and running to say such and such increase in mtpa?

Thanks

Nick--


----------



## MRC & Co (15 May 2008)

Any chartists here?

This does not look good at the moment (only short-term), a flag flying on the wrong angle, volume increasing and today a bit of a shooting star took place.  

A little bit of distribution taking place?

Any votes for a retest of the old high?


----------



## MichaelD (15 May 2008)

MRC & Co said:


> Any chartists here?



There's more than one (including me). As the ramping gets more and more hysterical in here, I can't but help notice that we're no longer seeing higher highs...

Still, there has been more than one time lately where I've felt something couldn't go up (or down) much further and the market has proved me wrong.

Disclosure: I currently hold a fully pyramided long position in FMG.


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## Boggo (15 May 2008)

agro said:


> skys the limit now with FMG,
> 
> *skeptics * gone into hiding and are now having a dig at FMG meeting its 250mt ramp up lol *shakes head*




While running the risk of being called a one of those here is my take on it.

I bought in at 7.33 on 07/04 on the short term breakout in MS...

I sold yesterday at 9.20, MTP charting is a good heads up and often very accurate with wave 3, I have never lost while taking a profit in this area 

From a charting perspective there is a the potential for a return to around 8.50.

One piece of news can have quite an influence (either way) on this stock.

Where to from here, not sure, I am on the sidelines until it does something new.

This is my 2 cents worth based on my procedure.

Mike


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## MRC & Co (15 May 2008)

Boggo,

MS, MTP?  Any expansion and explanation of these acronyms you wish to share?  

Yellow lines support/resistance based upon?  Red line an MA used as trailing stop?

With some EW thrown in for an overall trend forecast?

Cheers


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## Boggo (15 May 2008)

MRC & Co said:


> Boggo,
> 
> MS, MTP?  Any expansion and explanation of these acronyms you wish to share?
> 
> ...




MS = Metastock
I saw $7 as a significant point on the MS chart and bought above that the next day.

MTP = MTPredictor Elliott Wave software.
It indicated where a typical wave 3 may end, unless it ploughs through that area I tighten the stops and wait (stop is normally the red line except in this scenario)

Nothing mysterious to it.
I may re-enter if it breaks out of the current congestion or if the Elliott pattern plays out.
I have followed an almost identical procedure on ABY (successfully) 

Just thought I would post my handling of FMG.

Mike


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## MRC & Co (16 May 2008)

Yes, thats good, thanks Boggo!  

Always interesting to see how other traders do it!

Just a few questions if you don't mind.

What are the yellow lines and how are they determined?  MTP predicts the length of waves using rules/guidelines/fibs?  What period MA is the red line?  

Good to see someone take initiative and simply exit without waiting for a stop to be triggered when the trade looks ominous (in this case, wave 3 looses it's momentum and hence, strong impulse).  As you say, you can always re-enter.

Cheers


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## agro (16 May 2008)

*Good news for Fortescue!! RIO Boycotted by Chinese*

MINING giant Rio Tinto yesterday shrugged off new threats of an iron ore boycott in China as tensions continue to boil over iron ore price talks.

Any such orchestrated boycott, if enacted, could put China in breach of World Trade rules. 

Rio has angered Chinese steel mills by exercising flexibility clauses in its contracts to divert some contracted iron ore sales to premium-priced spot markets. 

Both Rio and BHP have been putting more ore on spot markets to maximise pressure on the Chinese. But so far BHP, perhaps sensitive to China's concerns over its hostile $160 billion bid for Rio, has refrained from exercising similar clauses in its contracts. 

In a statement yesterday, the China Iron & Steel Association asked domestic steel mills and iron ore traders to boycott Rio's spot iron ore sales in retaliation for cutting back on its long-term sales volumes. 

"We appeal to domestic mills and traders not to support or participate in Rio Tinto's spot iron ore sales activities in China," the association said. 

In response, Rio said it was entitled to sell into Chinese spot markets and that "for CISA to suggest joint action by the Chinese steel industry to prevent this is a very concerning development". 

But it suggested CISA's statement was a negotiating tactic, noting that it should be considered "in the context of the iron price negotiation". 

"Rio can understand that when the market is as tight as it is, steel mills will want to maximise their volumes from Rio Tinto," Rio's head of iron ore Sam Walsh said. 

"However, Rio Tinto remains determined to achieve a fair price outcome for its shareholders." 

Rio and BHP are believed to be pushing for an annual price rise of about 85 per cent, breaking ranks with Brazilian rival Vale that has already agreed to a price rise of 65-71 per cent. 

Mr Walsh noted that spot prices in China were about $US180-$US190 a tonne, or more than double the old 2007-08 contract price.
http://www.theaustralian.news.com.au/story/0,25197,23705694-643,00.html


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## Lemme (16 May 2008)

Anyone know what the power supply infrastructure to the mine is? I haven't heard of a power line from Port Hedland being built or a gas pipeline to run Gas turbine generators. If they are running on diesel then production costs are going to be very high initially.


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## njc.corp (16 May 2008)

Lemme said:


> Anyone know what the power supply infrastructure to the mine is? I haven't heard of a power line from Port Hedland being built or a gas pipeline to run Gas turbine generators. If they are running on diesel then production costs are going to be very high initially.




Leme-this is a very good- point-

i have looked at this very basic but important point has its what makes or brakes a business or a major company *cost-*

but i dont know what power they use-but i asked a freind who has driven those massive tonga trucks and he say's-u would be amaze how much  they use in diesel on the up -load trip-

so my point is maybe they use a lot of diesel-but where are they saving money in production?

imo-they would save a lot of money-if what they are saying is true like--

surface mining- thats a first- means no drilling,no drilling and blasting-

in my eye's the blasting cost would save a lot of money and man hours

drilling is a labour cost-so no drilling in my eye's is more productive and can make more money-

but from a basic point of view the surface mining looks like a cost cut and must be effective to them or else i dont think they would have done it--

On the other hand-most companies that feel that the cost is going up-always past it on to the customers-

same story as the airline's jet fuel problem-the passenger is paying for it- i know  i am still flying-

Thanks

Nick--


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## Lemme (16 May 2008)

Nick,

Newman is now running gas generators supplied from the pipeline after initially running on diesel in the 70s and 80s. This is probably the way to go. FMG probably have plans to connect to the pipeline eventually. More cost savings ahead I would say.

Steve


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## Miner (16 May 2008)

Extract from Eureka Report Article by Charlie Aitken 

Charlie was the lone Australian broker who said FMG will reach $100 (before split) and many so called experts (skeptics ?) laughed at him. 
He and the believers in FMG are now laughing at those skeptics

I thought you would be interested to read the extract and for details please refer Eureka Report   http://www.eurekareport.com.au/ 
"*FMG Moving into a new higher trading range *

As the market now comes around to focusing on Fortescue as a 100 mtpa producer, *the stock – currently trading at about $9.20 – will trade between $12.40 and $15.* That also hasn't assumed Fortescue pays any dividends, which they are likely to do. 

Over the next 12–18 months the stock will track up to the "100 mtpa" trading range of $12.40–15. *I also suspect during that period the Chinese Government or Anglo American will come on to the register*. 

So even at just the interim production target of 100 mtpa I can see Fortescue's share price being almost double today's price over the next three years."


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## njc.corp (17 May 2008)

Miner good read-

i also had a look at the guys article on may 2007 and i am a bit stuck-

i mean i have been on fmg for a while(made good money) sold out for a good profit and also bought back in more the other day-but i am having trouble understanding the may article-
could some explain to me what it means that the world will pay 10-12 times?

what does that mean-

http://www.eurekareport.com.au/iis/iis.nsf/pages/9544F0377F65BF80CA2572D10000A107?OpenDocument

Lets just say Fortescue does generate earnings per share of $11.90 in 2011-12. The world will pay 10–12 times earnings for that annuity stream, which gives you a 2011-12 price target of $119.00 to $142.00. The 2011-12 market capitalisation could be $31–37 billion, placing Fortescue among Australia’s top 10 stocks. This could all happen in the next four financial years. 

Otherwise a good read-

i would also like to ask the asf  members who jump on fmg or did not-are u guys looking for a other fmg stock-condersing it started in the where abouts of 64 cents to 80 cents

is this how we trade mining now-looking for the next hot shot?

Thanks 

Nick--


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## Duckman#72 (17 May 2008)

tigerboi said:


> Boggo good work mate...ive been saying we will see sub $6.00 in FMG but i thought it might have support until next week, so its now around $6.00 which only confirms to me it will see sub $5.00 as early as wednesday,I await the february construction report which should have arrived before the easter break,it is giving some the chance to get out as 1 look on the sell side tells you the whole picture:bad news on the way.The reports on the railway never tell you we are this many kms from completion,no all you get is 90% complete(it does not say how far to go.) as of the january construction report,the march update shows alot of pics bit wont say how far before the tracks are finished,so the track is 260kms out of cloud break at 90% done as per the report released on 19/2/08,but where does the 10% to go begin???end of january or the 19/2/08..the original foos was january 2008 so it is already 4 months overdue,as the rail contract was 260kms over 25 months,which gave them 10.4 kms to lay each month but since then you have had the dramas of replacing the contractors plus imo the deadline was set too tight,by fmg's january report they say they have got 26kms left to lay in(lets say from 1/2/08-14/5/08)in 104 days...at the supposed rate of 10kms per month they would make it however the secrecy that surrounds the actual kms left to lay plus all the other associated infrastructure work required,there would seem to be alot more work is needed to get the rail finished on time,thats when FMG will really get a slamming,when they fess up to not having enough time, thereby the remainder of the ore has to go by road,that being the case they should be getting the ore as far up the track for loading on the roadtrains to lessen the costs of the road haulage & to give them a parachute for the fall...,going by the start of the rail,the current 10% figure i believe being more like 10% to go at may foos,they will be 25-30kms short on the line,the rumours & current sp do lend heavily to the deadline being missed by that margin.the sell side says it all as if FMG where putting this all together with 54 days left notwithstanding the dows rumbles then FMG would be rockin'...looks like sub $5.00 to be only days away as previously stated,plus ol mate twigster getting a shovel in his hands.priceless...TB
> 
> first to get his railway on this list you gotta finish the line,so looks like on the shovel first...TB,nice little gold number for twiggy...




Congratulations FMG for your success.

Perhaps even more amazing are posts like the one about written only weeks ago........which was AFTER, Charlie Aitken from Southern Cross equities(Eureka Report) had publicly stated that *there would not be any problems with the railway*. I believe his exact words were "it(ore) will be on trains all the way. There will be no double-handling". 

I know that we(investors) are rightfully a sceptical lot, but sometimes we look too hard to find faults. Sometimes things turn out just like they have been announced. 

Duckman


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## njc.corp (17 May 2008)

Duckman#72 said:


> Congratulations FMG for your success.
> 
> Perhaps even more amazing are posts like the one about written only weeks ago........which was AFTER, Charlie Aitken from Southern Cross equities(Eureka Report) had publicly stated that *there would not be any problems with the railway*. I believe his exact words were "it(ore) will be on trains all the way. There will be no double-handling".
> 
> ...





duckman- i like your last sentence-but i think that most skeptics  a) did not have money to invest and un happy how fmg turned out or b) or they are till waiting for more news or waiting for bad news on fmg to buy or say i told u so-(from the chart its been pretty smooth sailing)

this is my personal veiw on fmg and nothing else of how i jumped on fmg-

1. a freind told me about it and said jump on-i said to myself if i listen to everyone's tip i am going to end up broke-has u can't believe everyone's tip

2.so i did a bit of research and said -na- to many things have not been met like the deadline and  before they even shipped they were talking about 100+mtpa-
i still did not buy to that point as it was just a verbal game-

3.then i got some pics emailed to me showing me the construction of the operation-that got me in-just the scale of what they were doing was worth the risk-

i felt after i seen those pics that this was to big of a scale for them to turning back from either parties-

so in a way-i was a skeptic until something as silly as a picture got me in-

bought in at 7.77 sold half for a decent profit and decided to buy in more before the deadline and also bought in more the other day when the market still did not like the news of the ship being ready to load up-

Thats my little story

Thanks

Nick--


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## agro (18 May 2008)

for those interested, FMG is mentioned on Sunday Business on Sky Business Channel today..

nothing much new - Greg Rowley mentioning that they want to have 2 railway lines so they can increase their output,, got into the market at the right time and took opportunity of the iron ore prices..

also, the fact that they want to remain independently owned and Australian..

Twiggy with a 36% stake cannot subject a chinese company to full ownership,

unlike with Anaconda when his stake was small he didn't have much say..


good times ahead.


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## agro (18 May 2008)

Miner said:


> Extract from Eureka Report Article by Charlie Aitken
> 
> Charlie was the lone Australian broker who said FMG will reach $100 (before split) and many so called experts (skeptics ?) laughed at him.
> He and the believers in FMG are now laughing at those skeptics
> ...




yeah imagine if they had a dividend of between 50 cents to $1.00, 

that would certainly bring every man and his dog on board!

not to mention with supposedly increased earnings from increased output the dividend is likely to increase.

look at Woodside for example, was under $20 when it was an explorer a couple years ago, now $60+ the biggest in Australia


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## reece55 (18 May 2008)

njc.corp said:


> Miner good read-
> 
> i also had a look at the guys article on may 2007 and i am a bit stuck-
> 
> ...




Can anyone actually attach the PDF of the report........ It wants me to log in...

Those price targets are absolutely outrageous..... Even if by year 4 they are at 100 MTPA, their forecast for Iron Ore prices must be like $300 per tonne for that kind of price target.... What are we all living in fairy land????

Oh, hold on, who's behind Eureka, Alan Kolher...... Enough said....

Cheers


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## agro (18 May 2008)

reece55 said:


> Can anyone actually attach the PDF of the report........ It wants me to log in...
> 
> Those price targets are absolutely outrageous..... Even if by year 4 they are at 100 MTPA, their forecast for Iron Ore prices must be like $300 per tonne for that kind of price target.... What are we all living in fairy land????
> 
> ...




no pdf but here's what it states:


PORTFOLIO POINT: Fortescue has proved the critics wrong by becoming an iron ore exporter, and that is just stage one of its plans.


It was only a little over a year ago that I first visited Fortescue Metal Group's (FMG) port and mine construction sites in Port Hedland and the Pilbara. Today I am again writing to you live from Port Hedland, but this time I can confirm Fortescue has moved from an "explorer" to an "exporter".

Yesterday, May 15, at 9.30am, I was part of a small group who witnessed Fortescue's first load of commercial iron ore being loaded on to a cape-sized Baosteel ship. Fortescue is no longer a concept, it is a reality. 

It is difficult to comprehend what Fortescue has achieved in the 13 months since I was last up here. It is truly staggering to see the completed first stage of the project, particularly given that just 13 months ago there was still a huge amount of physical construction work to be done. Remember it was only 13 months ago that most people believed that "surface mining" wouldn't work and Fortescue would "never" be able to produce at anywhere near 55 million tonnes per annum (mtpa), if they were able to produce at all.

Thirteen months ago no mainstream investment banks covered the stock; now they all do. It is a tribute to the dynamism of this company that is just five years old that the first stage of this project could be completed on time and within budget. It is a tribute to the dynamism of this young company that they could beat a production target date that most people believed was "too aggressive". 

Today's "first ore on ship" celebrations felt like one of those old "Swan Lager" advertisements. You remember the ones: They said you'd never make it, but you finally came through. For all of you who've made it, this Swan's made for you.

To see the Fortescue ship-loader loading Fortescue iron ore that has been delivered to the Fortescue port on Fortescue trains on to a Baosteel ship right opposite BHP's operations is just such a huge victory for an underdog. Make no mistake: Fortescue has been a massive underdog and that is what really attracted me to the story after that first visit. Today Fortescue is in an elite and exclusive club that call themselves "iron ore producers".

To see how far Fortescue has come in just over a year, I’ve attached that report from last year (see Fortescue: blue sky miner).


Where to from here?

To believe that Andrew Forrest and his team would be content as a 55 mtpa iron ore producer would be an error. Once they have proven "practical completion" of stage one by beating a series of production hurdles (to satisfy financiers) I suspect focus will then turn to stage two of the production ramp up.

In a recent note (see Fortescue has arrived) I explored the next leg of the Fortescue production growth, earnings growth, dividend growth, and in turn, share price growth story. I am going to revisit that work below

The debate about Fortescue is no longer whether it will work but what it will earn and what the market will pay for those earnings.

In my view this isn't about discounted cash flows or net present values. This about working out what the potential earnings per share is and then having a shot at what multiple the market will pay for those earnings. This is a simple P/E-based price target scenario analysis.

Before you say that's too basic, remember my very first buy recommendation on Fortescue (at $1.80 with a $5 12 month target) was based on the same methodology. My now somewhat famous "$100" long-term target (adjusted to $10 after the share spilt) was also based on having a shot at estimating earnings over the next five years. So far, that P/E-based price target approach has proved more accurate than any other valuation or price target setting approach. However, my rough "e" estimates have been too low because we underestimated iron ore price rises.


100mtpa by 2010

With the first ore on ship achieved ahead of schedule, the market will now look to the future and start speculating about 100 mtpa production. Let's do some really basic analysis here of what is a really basic business.

*Let's assume in 2009-10 that Fortescue produces 100 million tonnes at an average margin of $50 a tonne (conservative). That's EBIT of $5 billion. Fortescue pays some corporate tax (30% conservative) and that leaves net profit after tax of about $3.5 billion. Fortescue has 2,802,393,400 shares on issue, of which an amazing 70% are owned by just five parties and the top 20 shareholders own 92%. Earnings per share works out $1.24 on that scenario and I think the market will pay an absolute minimum of 10 times for that earnings stream (globally unique stock in ultra-politically stable country). That generates a price target of $12.40 per share.

prawn_86 should read that, again would like to hear his comments*

*The more likely scenario is that the market pays 12 times for that earnings stream, which generates a price target of $14.88.
*
I'll be laughed out of town by sceptics for this analysis but I was also laughed out of town when I first speculated about Fortescue earnings-based share price targets 12 months ago. In reality, those initial estimates have proved very conservative.


Moving into a new higher trading range

As the market now comes around to focusing on Fortescue as a 100 mtpa producer, the stock – currently trading at about $9.20 –* will trade between $12.40 and $15. That also hasn't assumed Fortescue pays any dividends, which they are likely to do.*

Over the next 12–18 months the stock will track up to the "100 mtpa" trading range of $12.40–15. I also suspect during that period the Chinese Government or Anglo American will come on to the register.

So even at just the interim production target of 100 mtpa I can see Fortescue's share price being almost double today's price over the next three years.

Iron ore is the highest economic rent business in all of resources. It is a scaleable logistics game with wonderful margins. Once you have the logistics in place you are in an elite club. Some of the members of that elite club have previously undercut other members of the club, which has led to a multi-decade mispricing of Australian product. BHP is ending that mispricing and Australian producers will be the beneficiaries. Australian producers will get the freight differential one way or another. I also believe iron ore "benchmark" prices will rise again next year.

While many investors will naturally think "I've missed the Fortescue boat", I believe that certainly isn't the case. You have missed the share price all but discount a 55 mtpa producer, but you are still buying a 100 mtpa, 200 mtpa or eventually a 300 mtpa producer very, very cheaply.

Fortescue remains a strong buy and is the great " pure play" winner in all of this. It has done such an admirable job against enormous odds and enormous scepticism. It is now a physical "producer" and from this point domestic investors who need to see cash flow, can buy the stock.

Fortescue is the biggest story in Australian resources and very few Australian institutions own it (yet). If you build it they will come. Today the first ship came and it was great to see it loaded live.


Charlie Aitken is a director of Southern Cross Equities, which is a paid adviser to Fortescue Metals Group.


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## Miner (18 May 2008)

Thanks Agro for publishing the Eureka report for the greater benefit of the ASF community. I am sure others will appreciate you too.

Charlie has also published some ratings for top 20 stocks in the same edition of Eureka report. There is no direct thread for that, I can send the extract through PM. Due to copy right issue do not want to get flogged by moderator for publishing the same in open forum

Regards


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## michael_selway (18 May 2008)

agro said:


> no pdf but here's what it states:
> 
> 
> PORTFOLIO POINT: Fortescue has proved the critics wrong by becoming an iron ore exporter, and that is just stage one of its plans.
> ...




Do you know what the mine life is of FMG at the max production rate (MTPA)?

Also PE of 12 is too high in such an environment (risk) imo, esp if it doesnt pay any dividends etc

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS -2.6 -3.0 31.2 82.3 
DPS 0.0 0.0 0.0 0.0 *

Thanks

MS



> Back
> Date: 16/5/2008
> Author: Julie-Anne Sprague; Michael Vaughan
> Source: The Australian Financial Review --- Page: 1/57
> ...


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## Duckman#72 (18 May 2008)

reece55 said:


> Can anyone actually attach the PDF of the report........ It wants me to log in...
> 
> Those price targets are absolutely outrageous..... Even if by year 4 they are at 100 MTPA, their forecast for Iron Ore prices must be like $300 per tonne for that kind of price target.... What are we all living in fairy land????
> 
> ...




Hi Reece

If you think they are living in Fairyland at Eureka, you might like to have a read of Charlie Aitkens FMG report dated 4 May 2007. Despite being laughed at for his bullish outlook - FMG has grown (both company and SP) much faster than his estimates. 

The article written in May last year is a very good read - very well researched and provides a very compelling argument to buy FMG. I bought at $34.00 on the basis of his report. Back then Charlie was not a paid adviser to FMG. People can have a go at biased reporting but he was putting his money where his mouth is, well before he was on Twiggy's payroll.  

Duckman


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## reece55 (19 May 2008)

agro said:


> *Let's assume in 2009-10 that Fortescue produces 100 million tonnes at an average margin of $50 a tonne (conservative). That's EBIT of $5 billion. Fortescue pays some corporate tax (30% conservative) and that leaves net profit after tax of about $3.5 billion. Fortescue has 2,802,393,400 shares on issue, of which an amazing 70% are owned by just five parties and the top 20 shareholders own 92%. Earnings per share works out $1.24 on that scenario and I think the market will pay an absolute minimum of 10 times for that earnings stream (globally unique stock in ultra-politically stable country). That generates a price target of $12.40 per share.
> 
> prawn_86 should read that, again would like to hear his comments*




Right
Firstly, I think FMG getting up to 100 MTPA in one year after it took them 4 years to construct the infrastructure to get to 45 is a complete joke. BHP and Rio have been there for years and at present they are at 110. I spoke to a Geo who worked with BHP and their internal target in 3 years is to get to 200 MTPA - he reckons it will be a serious ask, because at 110 there is absolutely no capacity left.....

The next thing is that earnings multiples on a mining stock is a waste of time - dcf is the way to go for this sucker. 

Attached is a DCF I did back in December this year and I stick by it - I forecast they will reach 100 MTPA by year 5 and it will cost them about 4.5 Bil to upgrade the thing to actually ship the 100 MTPA of ore. I then have another lower case valuation. Middle of the range is about 6.50...... Sure, there could be a premium for the possibility that China will take them out, if that is the case then the price could be higher. But $30 valuations - MWAHAHAHA..... the brokers need to get themselves out of the sky.....

Any intelligent responses here, or are we all just going to talk about white fluffy fairytales spun by brokers????? I'd be more than happy to debate with someone who actually has some numbers to spin with insight, rather than broker rubbish....

Cheers


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## njc.corp (19 May 2008)

does anyone have any news or idea if the ship has left or when its leaving?

and i cant seem to find the loading rate per hour  at the port only the loading rate at the mine itself-

any info would be helpful-

Thanks

Nick--


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## agro (19 May 2008)

njc.corp said:


> does anyone have any news or idea if the ship has left or when its leaving?
> 
> and i cant seem to find the loading rate per hour  at the port only the loading rate at the mine itself-
> 
> ...




i was thought to beleive that it has shipped out on the 15th and that i might take a week or two to get to china?

hence the celebrations.


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## michael_selway (19 May 2008)

reece55 said:


> Right
> Firstly, I think FMG getting up to 100 MTPA in one year after it took them 4 years to construct the infrastructure to get to 45 is a complete joke. BHP and Rio have been there for years and at present they are at 110. I spoke to a Geo who worked with BHP and their internal target in 3 years is to get to 200 MTPA - he reckons it will be a serious ask, because at 110 there is absolutely no capacity left.....
> 
> The next thing is that earnings multiples on a mining stock is a waste of time - dcf is the way to go for this sucker.
> ...




Hi I noticed in your forecasts you predict the prices to go higher as time goes by except for a few years?

ALso have you got any similar analysis on anyother iron ore stocks?

thx

MS


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## Frankhalo (19 May 2008)

Hey Reece

Forget about your charts / numbers etc, one thing about this stock its driven by pure market sentiment and a well oil marketing unit. It’s also backed up by product / infrastructure on the ground and a strong client base. It’s been kicked in the teeth for the last 5 years by the instos and its come out smiling from ear to ear. Fortescue has a knack for surprising the market, if you have followed this stock for the last 5 years you will know that to be the case, whenever they said it couldn't be done, Fortescue proved them wrong. As for figures the China story is measured in decades, Iron ore prices increasing at a healthy rate and we have India on the side lines. Two / three years ago would you have believed $200 per ton on the spot market.

Regardless my two cents, brilliant performing share to hold in any portfolio...period, and it just keeps getting better. 

Regards

Frank


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## SenTineL (19 May 2008)

It's an impressive analysis Reece but i also agree with Frank, i think FMG was a one in a million and maybe all these by the book analyses don't apply to this company. 

Market sentiment is a powerfull thing and with Asia being iron ore hungry and FMG  providing an alternative to the big competitors they will lap it up.


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## renim (19 May 2008)

Why would it take FMG 4 years to ramp to 100mtpA.   My wild bet is more like one-two year.  Consider their ramp up to more like phase 2 in a 3 phase project.  with the first phase taking all the time, and the 2nd and 3rd phase taking 18 months each.   This stock still has a ton of upside.


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## renim (19 May 2008)

I haven't recently done an analysis on FMG,  (i did a rough comparison with BHP some time ago on this forum).  Rough and ready expectation,  current price is reasonable, and as further capacity comes onstream, prices will increase.   This is a 50mtpa operation, have you guys ever seen a 50mtpa port? they are massive,  if they hived off the port alone, they would effectively eliminate their debt.  Just compare it to BBI.

IMHO they have performed unrealistically well so far.  That is what separates the great companies from the good companies.

Also recent news articles from China, suggest that the Chinese had tried to depress the FMG price down to a point where they could take it over, but didn't succeed, so at least the Aussie institutions have good company, someone high in China missed the boat big time for his company too.

As far cost of production, iron ore mine production costs are available from the web,  FMG's own graph is not unreasonable.  Anyway a quick note on the cost curves is that there are a handfull of large really competitive producers  FMG, CVRD, Rio, BHP, and then there is everyone else..


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## renim (19 May 2008)

Now for some speculation,  will Mr Forrest be interested in dividends, I think his vision for FMG is big dividends.  This company could soon become a major dividend stock, with a bonus of a realistic plan to quadruple earnings in a 3 year time span.


----------



## njc.corp (20 May 2008)

renim said:


> Why would it take FMG 4 years to ramp to 100mtpA.   My wild bet is more like one-two year.  Consider their ramp up to more like phase 2 in a 3 phase project.  with the first phase taking all the time, and the 2nd and 3rd phase taking 18 months each.   This stock still has a ton of upside.




Renim-has a fmg holder- i asked a ? in this thread about added pressure of mtpa-

i dont recall fmg building their operation  from the start thinking 100-200 mtpa-only at the end was everyone saying those kind of figures-

i mean i happy about the way they are going its been a good stock to me and has made me and some members of my family very good money-but i am in it for the long haul-

i dont care if they do 100-200-300 mtpa-but i am always on the look out for the cost to produce those number-s

i cant remmember where-but i readed  a article on the weekend saying-their next plan in the next couple of year's is to extend the berths at the port to hold 3 ships,1 more train line etc etc-so i reckon going by  those things to do-3-4 years is better-but maybe fmg like to put high expectations on themselves as we have seen in the past

but either way i am happy if they take 5-10 years-as they have said they have the stuff to dig-while still looking in more reserve's

cost is the killer-if u want to compete with the big boy's--

i have always wanted to ask-maybe its to early to ask as they have only loaded or shipped 1-but  just say everything goes to plan-do u guys thing they will just do iron ore or branch into something else to become bigger like the two big boy's?

Just a thought only--

Thanks

Nick--


----------



## agro (20 May 2008)

20/05/2008 9:49AM 2  App 3Y - Change of Directors Interest 

one of the directors must have transferred a quanity in to a fund of some description


----------



## Frankhalo (20 May 2008)

Yeah, into their bank account Agro, why not he / she owns 6 million + shares, selling 250k odd and enjoying it....


----------



## renim (20 May 2008)

I have'nt looked at their resource map closely, but its Pilbara, they have a lot of holding, I won't be worrying about tonnage (I may worry about grade, but at the moment tonnes are king)

Originally they were to be about a 50Mtpa operation (limited by port stock yard) but BHP blocked their preferred location forcing FMG further inland and needing to build a capital intensive conveyor.  One side effect was that FMG now sits on a port yard that can grow to 200mtpA,  someone at BHP will be rueing that obstructionist decision.  This would have influenced their design from the start.

FMG need to move 2mt over a 4 week period before their bond caveats allow them to start the next expansion.  Thats a 52mtpA rate.  FMG will gun for this as soon as possible. 

As a private, non competition authority constrained, not government funded, not PPP funded, FMG has the luxury of being able to design for future growth.  Remember virtually all of Mr Forrests money is tied in this one company, he will be aiming to maximise it for both the short haul and the long haul.  This might be called 'gold plating' the design for throughput.

They will have a cost for the break between expansion, whether short or long time break, people leave etc.  If they can start the expansion very soon, then they may have some opportunity for saving.

As I alluded to before, 50mtpA is a giant starting rate, it probably took decades for Rio or Bhp to achieve that (don't believe me, go to BHPs iron ore history site).  The investment community in this country don't have a historical equivalent in living memory for this type of start-up.

I haven't seen their future ramp up plan, I would find it interesting.

Port works are expensive, 
additional locos, surface miners, truck etc are not expensive.

yeah I bet most of the directors have already 90% of their money is in FMG, If they want to play a little, they may need to sell some.


----------



## Lukeyz (20 May 2008)

Frankhalo said:


> Yeah, into their bank account Agro, why not he / she owns 6 million + shares, selling 250k odd and enjoying it....




Maybe they wanted to get a Import Luxury Car before the taxes go up on them..  If I had that many FMG shares, the first shipment would be enough of an excuse for me to splurge.. my


----------



## Duckman#72 (22 May 2008)

Big swings today - low of $8.91 and high of $9.70 (which it closed at).

The big $10.00 hurdle is inching closer.

Duckman


----------



## michael_selway (22 May 2008)

Duckman#72 said:


> Big swings today - low of $8.91 and high of $9.70 (which it closed at).
> 
> The big $10.00 hurdle is inching closer.
> 
> Duckman




Hm they raised forecasts yet again!

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS -2.6 -31.5 38.6 99.3 
DPS 0.0 0.0 0.0 0.0 *



> Date: 16/5/2008
> Author: Julie-Anne Sprague; Michael Vaughan
> Source: The Australian Financial Review --- Page: 1/57
> A number of leading businesspeople and politicians celebrated a milestone withAndrew Forrest on 15 May 2008 in Western Australia (WA). The CEO of iron oremining company Fortescue Metals Group was officially starting the loading ofiron ore from the $A2.8bn mine it has built along with rail and port facilitiesin the Pilbara region of WA. There had been many doubters of the project, butForrest has been vindicated by a massive boost to Fortescue's share price,in the process also becoming Australia's richest man. On the day, the stockclosed $A0.11 lower at $A9.24. Forrest admits readily that his track record inthe resources sector also shows some spectacular failures. He is not averse toChinese investment in Fortescue, and is donating the money from the sale of thefirst 5,000 tonnes of ore, to earthquake victims in that country




thx

MS


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## renim (22 May 2008)

my maths is not so good.  2mt over 4 weeks is only 26mtpA.

are FMG sharing shipping costs?

are they paying premium shipping cause of BHP booking up everyone?

what happens when oil hits $200


----------



## njc.corp (22 May 2008)

Duckman#72 said:


> Big swings today - low of $8.91 and high of $9.70 (which it closed at).
> 
> The big $10.00 hurdle is inching closer.
> 
> Duckman




correct what a dog of a start and early morning trading -i saw it again as more of a buying day-

when $10.00  come's- that will be a good day- is it me or does this stock regain well after a couple of  bad day's- thats what i have notice

Anyone?


----------



## agro (23 May 2008)

*Irons in the fire: Sinosteel says it's still interested in Fortescue Metals*



Kevin Andrusiak | May 23, 2008

CHINESE steel giant Sinosteel is again stoking the fires for a potential run at Fortescue Metals Group.

Company chairman Huang Tianwen was reported as saying yesterday that Sinosteel had kept Fortescue on its radar and would not reject the idea of buying shares in the iron ore upstart.

Fortescue last week broke the BHP-Rio iron ore duopoly in the Pilbara with the first shipment of ore from its Cloud Break operations in the West Australian Pilbara.

"We're not ruling out the possibility of buying shares in Fortescue Metals Group," Mr Huang said when reporters asked whether Sinosteel was interested in Fortescue.

Shares in Fortescue, which had been trading down before Mr Huang's comments, closed 46c higher at a record high of $9.70.

The share surge pushed company founder Andrew Forrest's personal fortune to within a whisker of $10 billion.

Mr Huang said Sinosteel would not participate in a multi-party raid on BHP Billiton's share register by Chinese companies.

It has been rumoured that China is preparing to take a strategic stake in BHP in a bid to gain leverage in BHP's takeover bid for Rio Tinto.

Austock, one of the few broking firms without conflicts of interest in relation to the bid, said this week that it believed BHP was about 20 per cent away from a successful result.

Analysts Hunter Hillcoat and Tim Gerrard said in a note to clients that a BHP takeover of Rio would establish a platform to "transform the way in which investors view the resources sector".

The pair even floated the idea that a combined BHP and Rio could then make a play for an oil major.

"We suspect one of the drivers behind the BHP Billiton bid for Rio is to be better positioned to grow significantly in the oil and gas sector," Austock analysts said.

"The merged group would be well-positioned in the thermal coal and uranium energy sectors with a reasonable, but relatively modest, exposure to oil and gas and LNG in the absence of any further acquisitions.

"BHP is intent on getting the message across to investors that it is already a metal, minerals and energy diversified company and it is looking to aggressively grow the oil and gas side of the business.

"This may have massive implications for the future strategies of Exxon Mobil, BP, Shell, Total.

"Interestingly, Rusal and Norilsk appear to be embarking along the same path as BHP as they plan to add oil and gas to their aluminium and nickel businesses."
Story Tools

http://www.theaustralian.news.com.au/story /0,25197,23743475-5005200,00.html


----------



## Prospector (23 May 2008)

I just posted this on the FDL thread, but I was flying to Hong Kong yesterday and presumed because of the fall in the US the night before, I would have lost some serious money.  Thanks to FMG and FDL, well, tonight will be champagne for me - unless it all comes apart today.  So, is this because of the increase  in production or the rumours of Chinese interest?  Again.  At this rate I might even have a look in at the Annual Share competition.


----------



## agro (23 May 2008)

Prospector said:


> I just posted this on the FDL thread, but I was flying to Hong Kong yesterday and presumed because of the fall in the US the night before, I would have lost some serious money.  Thanks to FMG and FDL, well, tonight will be champagne for me - unless it all comes apart today.  So, is this because of the increase  in production or the rumours of Chinese interest?  Again.  At this rate I might even have a look in at the Annual Share competition.




like wise i might crack open a bottle if it hits $10

sure packer and twiggy both happy 

and the chinese,, well they know where to put their money


----------



## Nesa (23 May 2008)

agro said:


> like wise i might crack open a bottle if it hits $10
> 
> sure packer and twiggy both happy
> 
> and the chinese,, well they know where to put their money




It came very close today. 2 cents short. maybe it will happen next week 

very late fade though...


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## agro (26 May 2008)

should see $10 today

up on strong volume backed by the construction report (not that anything has changed)

would have thought by now that the ship is in China..

should hear an ann too


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## alwaysactive (26 May 2008)

Simple question. Why would you sell today? 
10 bucks plus any day now... surely.
..................................................................
FMG news -

A Chinese steel company has confirmed its intention to buy at least a $2.2 billion stake in burgeoning miner Fortescue Metals Group.

Sinosteel, the steel trading giant, told the Australian Financial Review it was in discussions with US hedge fund Harbinger Capital Partners about acquiring half of its 16% stake in Australian miner.

Sinosteel Australia deputy general manager William Ren said the company would prefer to buy Harbinger's entire $4.4 billion stake but the fund would sell only half, the paper said.

cheers.


----------



## agro (26 May 2008)

alwaysactive said:


> Simple question. Why would you sell today?
> 10 bucks plus any day now... surely.
> ..................................................................
> FMG news -
> ...




Sinosteel plans $2.2b Fortescue stake

    *
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Related Coverage

    * Midwest shares jump on new Murchison bid
    * John Garnaut: A new breed: the man from Sinosteel

Advertisement

    * Chris Zappone
    * May 26, 2008 - 4:24PM
    *

Chinese steel company Sinosteel is eyeing at least a $2.2 billion stake in burgeoning miner Fortescue Metals Group.

Sinosteel, the steel trading giant, told the Australian Financial Review it was in discussions with US hedge fund Harbinger Capital Partners about acquiring half of its 16% stake in the Australian miner.

Sinosteel Australia deputy general manager William Ren said the company would prefer to buy Harbinger's entire $4.4 billion stake but the fund would sell only half, the paper said.

Fortescue shares ended the day 34 cents, or 3.6%, higher at the new closing high of $9.90, valuing the company at more than $28 billion.

Chinese steelmakers have been anxious to acquire stakes in Australian resources companies in order to secure the materials needed to sustain the nation's rapid industrialisation and growth.

In January Chinese aluminium company Chinalco partnered with Alcoa to take a 12% stake in Rio Tinto worth about $15 billion. Rumours persist the Chinese will make a play for a stake in Rio's larger rival BHP Billiton as well.

Fortescue, which has contracts to supply ore with ten major Chinese steelmakers, has been viewed as a potential acquisition target by the Chinese since the company's founding three years ago.

The Perth company loaded its first shipment of iron ore on schedule in West Australia two weeks ago, making good on a deadline promised by chief Andrew Forrest. Fortescue, which has extensive reserves in the Pilbara, is the third-largest Australian supplier of ore to China.

Sinosteel had made a previous play for Fortescue in 2007, but the deal fell apart over price issues, according to the AFR, but Fortescue's success in making its first shipment has triggered Sinosteel to take another look at the mining company.

Fellow Chinese miners Chinalco and Baosteel have also reportedly been linked to discussion with Harbringer over a stake in Fortescue.

Resources analyst Ben Kakoschke at Tolhurst said foreign investment by a strategic shareholder like Sinosteel would likely boost Fortescue's stock in the near term. Shares in the resources company neared Friday's highs on excitement about a potential deal, rising 2.4%, or 23 cents, to $9.79 in afternoon trade.

Mr Kakoschke has a price target of $7 a share on Fortescue. He said the stock is already overvalued based on fundamentals.

Fortescue's first shipment of ore was a "fantastic milestone for the company but largely factored in by the market."

"Now the challenge is to demonstrate reliable ore production and shipping at high volumes," he said.

An eventual Chinese bid for Fortescue is unlikely to ignite the firestorm over national interest issues as BHP or Rio, Mr Kakoschke said, in part because Fortescue's stock is not as widely held.

Also the mining company has grown through significant US investment and Chinese off-take agreements, which gives it a different image among investors than BHP or Rio, which are seen as cornerstones to the Australian sharemarket.


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## agro (27 May 2008)

hit new high of $10.15 today

congratulations all who hold.. patience has paid off

now wait for the next big ann to come


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## njc.corp (27 May 2008)

agro said:


> hit new high of $10.15 today
> 
> congratulations all who hold.. patience has paid off
> 
> now wait for the next big ann to come




My target was met and i lefted-this has been such a good stock to me-

i like to see who hold's do well has sky's the limit with this stock-

good luck to everyone-

Thanks

Nick--


----------



## awg (27 May 2008)

this stock is replete with money making opportunities.

quite volatile for the day trader, which is were it was with me

Radge recomended shorting it a while back, even in his free teaser ( was a good call)

I have recently upgraded it to my medium term hold category buying at $9.30, and widening my trailing stop.

seems everyone wants a piece of it, I think the big buyers cant ignore it


tony


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## gav (27 May 2008)

FMG was my first ever trade. Bought at $9.30, 15 days ago (or 11 trading days).  At close today I'm up 13.87%, which for me works out to be almost an entire weeks wage


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## bergers_n_fries (27 May 2008)

gav said:


> FMG was my first ever trade. Bought at $9.30, 15 days ago (or 11 trading days).  At close today I'm up 13.87%, which for me works out to be almost an entire weeks wage




well done...i hate you 

hopefully this levels off soon enough so i can chuck in a few quid if need be...seems a goer


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## agro (27 May 2008)

gav said:


> FMG was my first ever trade. Bought at $9.30, 15 days ago (or 11 trading days).  At close today I'm up 13.87%, which for me works out to be almost an entire weeks wage




congratulations to all who had faith in this stock and continued to hold

would suck to be a skeptic right now -  (i wont point out any names here) but looks like you have missed out on ride of the century 

much more to come 

cheers
agro


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## michael_selway (27 May 2008)

agro said:


> congratulations to all who had faith in this stock and continued to hold
> 
> would suck to be a skeptic right now -  (i wont point out any names here) but looks like you have missed out on ride of the century
> 
> ...




Hi how much do you thinkit can go up from $10+ 

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS -2.6 -31.5 38.6 99.3 
DPS 0.0 0.0 0.0 0.0 *




> Date: 26/5/2008
> Author: Julie-Anne Sprague
> Source: The Australian Financial Review --- Page: 16
> US-based fund Harbinger Capital Partners is looking to sell half its 16% stakein Fortescue Metals Group. Deputy GM William Ren stated that Sinosteel Australiawould be interested in acquiring the entire holding in the Western Australianiron ore group when Harbinger cashes out, but would be happy to settle for 8% inthe meantime. Fortescue's stock price reached a record $A9.98 on 23 May2008, valuing Harbingers stake at $A4.4 billion. The value of Fortescue CEOAndrew Forrest's interest reached more than $A10 billion as a result,confirming his status as Australia's richest person


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## agro (27 May 2008)

michael_selway said:


> Hi how much do you thinkit can go up from $10+
> 
> *Earnings and Dividends Forecast (cents per share)
> 2007 2008 2009 2010
> ...




well considering FMG are keen on giving a dividend.. $20 would still be unrealistic.. i just found this

http://www.abc.net.au/lateline/business/items/200805/s2246533.htm


Transcript
ALI MOORE, PRESENTER: Fortescue Metals Group has shipped its first consignment of iron ore out of the country.

The 180,000 tonne shipment is headed for Baosteel, China's largest steelmaker and one of the companies said to be circling Fortescue as a takeover target.

I spoke earlier to Graeme Rowley, Fortescue Metals' executive director.

Graeme Rowley, welcome to Lateline Business.

GRAEME ROWLEY, EXECUTIVE DIRECTOR, FORTESCUE METALS: Ali Moore, thank you very much for having me on the show.

ALI MOORE: At today's ceremony Andrew Forrest said, "Our integrity triumphs over the scepticism of others every day", does today's shipment finally prove the nay sayers wrong?

GRAEME ROWLEY: It absolutely does, Ali. We've had a number of them along the way.

Our competitors have been ably abetted by the analysts who've been ably abetted by various institutions and bankers who have said words to the effect that we would never do it and absolutely, today we demonstrated clearly that we in some 3.5 years from the first driller hole in Cloud Break have managed not only to construct a mine, not only to construct 260 kilometres of railway, not only to construct the port but to move our ore out of that mine along that rail, through that port and onto the first waiting vessel on the 15th of May when we said we would do it.

ALI MOORE: Do you think now that some of those naysayers, some of the domestic institutions will come on board?

GRAEME ROWLEY: I think they should. They'll all probably find out they're a touch light in our stock. I think it's unfortunate that they're doing it late in the piece.

But that's a challenge for them to get in there and obviously prove that along with everybody else that the Fortescue business is one very well worth supporting.

ALI MOORE: In terms of valuation, do you think it is going to change how Fortescue is viewed?

Because you are valued right now well above your 2013 production target?

GRAEME ROWLEY: I think the problem with valuations, Ali, is it depends on what assumptions people have put into their various models.

We would argue that if we are producing 160 million tonnes by 2013, I doubt that our shareholder, our share value as it is currently shown would, in fact exemplify what we would expect at that time.

Obviously it depends a whole lot on what happens to price between now and then.

We're confident of very strong market and, therefore, we remain confident of prices staying strong over time. And therefore, I would look at 2013 and us at 160 million tonnes as a very strong investment opportunity.

ALI MOORE: When it comes to expanding to that 160 million tonnes will you have to go back and raise more capital?

GRAEME ROWLEY: There are three options when we look at how we move into the expansion.

One obviously is debt. Not definitely our preferred option, it's the one we're currently in at the moment and one that we're managing successfully.

The second is an opportunity for some third party entrant by way of a joint venture and there are a number of parties out there that continue to demonstrate interest in joining Fortescue.

Obviously we listen to all their presentations and we hold our own counsel with respect to that.

But the third and obviously the most effective option that we look at is the very strong cash flows we'll have. We're expecting to see cash flows that will give us net dollars, well over a billion each year, then we obviously determine that that's going to support our cash flow, sorry, support our capital acquisitions, as well as payments to our various shareholders.

ALI MOORE: Indeed, how quickly do you think you will be paying a dividend?

GRAEME ROWLEY: I would expect that the end of the first year we'll be looking very seriously, that's 12 months from now, looking very seriously at the opportunity to be paying a dividend to our shareholders.

But we need to wait until that time.

ALI MOORE: You talked just then in terms of having three options and one of them being having a party take an equity stake.

There's been plenty of speculation regarding the likes of Baosteel, SinoSteel and Sinalco.

You say you've had various conversations, do you think it is the most likely solution in the short term that one of these three big players will take a stake?

GRAEME ROWLEY: There are already obviously at their own determination allowed to go into the marketplace.

We don't know whether they're doing that.

We are aware, of course, as is everybody that Russia went in for a stake in excess of five per cent.

We're not aware as yet of any moves by any other parties into our stock. We have heard rumours along with everybody else, but we've definitely not been in any discussions that indicate that other sorry, third parties are currently active in our stock.

But they could well be.

ALI MOORE: Would you welcome a large Chinese stakeholder?

GRAEME ROWLEY: We would see no problem in that. We are always happy to have third parties interested in our business who share the same goals that we do, which is a successful iron ore mining business. And clearly, when you have interest from China which is going to be one of the highest country demands in iron ore as we look into the future, we can understand that people there will obviously have a strong interest in our success, the same as we do.

ALI MOORE: That said, though, Andrew Forrest has resisted in the past the Chinese when they've wanted to take a big portion of the company.

What level of Chinese ownership would you be comfortable with?

GRAEME ROWLEY: Well, I can't actually speak for the board or for the shareholders, but we've always had the opportunity to discuss with various entities of the order of 10 to 15 per cent, but that's been in historical discussions and is not part of anything that we're looking at at this stage.

ALI MOORE: Is there anything to suggest that 10 to 15 per cent should change?

GRAEME ROWLEY: No, there isn't. No. Let me be very clear there, we are very, very keenly aware of the need to continue to control Fortescue.

Andrew's interests, management's interests, Leucadia's interests are very, very important to us. And we have not established such a strong shareholding to lose that as a result of what I would call inappropriate development in equity participation in the company, to the extent where we don't continue to maintain total control of Fortescue.

ALI MOORE: At the moment you've got Harbinger Capital with 16 per cent, is that the most you'd like to see any other party hold?

GRAEME ROWLEY: I would think that of that order of magnitude it definitely is the most we'd like to see another party have, yes.

ALI MOORE: Graeme Rowley, many thanks for talking to Lateline Business.

GRAEME ROWLEY: Ali Moore, thank you very much for the opportunity.


----------



## alwaysactive (27 May 2008)

From  Adelaide Advertiser
        14/05/2008

Fortescue, which started life as a junior explorer, has
been transformed under Mr Forrest's ownership into a
$26 billion company that aims to become a world
class iron ore exporter. Fortescue chief operating
officer Graeme Rowley said yesterday the first commercial
shipment would arrive in China no later than May 31. 
He said both commissioning shipments were
bought at "commercial prices" by an as yet
unnamed Chinese buyer. 

All aboard...


----------



## rob (27 May 2008)

gav said:


> FMG was my first ever trade. Bought at $9.30, 15 days ago (or 11 trading days).  At close today I'm up 13.87%, which for me works out to be almost an entire weeks wage




Same here have been reading as much as i could find  have decided to stick it out for the long haul, its nice when you do some  research and listen to the wise ones and learning about the stock makes you feel like you are actually learning somthing especially when it pays off and will continue to look forward to an even better progress thanks every one for  some good advise.


----------



## agro (27 May 2008)

rob said:


> Same here have been reading as much as i could find  have decided to stick it out for the long haul, its nice when you do some  research and listen to the wise ones and learning about the stock makes you feel like you are actually learning somthing especially when it pays off and will continue to look forward to an even better progress thanks every one for  some good advise.




here at aussie stock forums  we are more happy to provide any information we have 


the more you know about a company, the better are your decisions on deciding whether to keep it or hold it..

obviously, sinosteel has done their homework and has decided to get a 2.2bn stake in FMG - again, the chinese know where to place their money

they look to the future, not to the present


----------



## rob (27 May 2008)

Just how far  can fortescue go, thats another 7% for monday just amazing. Apparently i was talking about them in my sleep, maybe im studying to much.


----------



## agro (27 May 2008)

rob said:


> Just how far  can fortescue go, thats another 7% for monday just amazing. Apparently i was talking about them in my sleep, maybe im studying to much.




well if history is anything to go by... probably another 400% 

(if i can recall reading, FMG has been going up 400% every year)

i am joking - i doubt 400% - have to wait and c


----------



## Saffron (27 May 2008)

I'm pretty much a novice but my boss recommended Fortescue to me. I watched, I researched & I read as much as I could. I have been lurking here for 3 months reading up on people's thoughts on Fortescue. Eventually I did buy at $6.60. A friend's stockbroker daughter recommended I buy in at $7.00. It is so good to see them go over $10.00. I was sure their shares would go much further up.


----------



## Khailor (27 May 2008)

Read a while ago about Fortesque taking BHP to court over the use of the railway system (BHP owned it exclusively and didn't want Fortesque to use it). I think they failed in their bid to use the railway but something about the case being reopened... or am I tracking very behind in the news. Looks like "Twiggy: is a 10 billionaire. If only I owned 36.5% of FMG....


----------



## Spineli (27 May 2008)

agro said:


> well if history is anything to go by... probably another 400%
> 
> (if i can recall reading, FMG has been going up 400% every year)
> 
> i am joking - i doubt 400% - have to wait and c





*Somewhere toward the end of 2002, FMG was trading at $0.004* 

On a $10 share price, that equates to a *2500 multiple!* 

i.e. $50k investment (2002) would be worth $125,000,000 (2008)

Thats something you can stack up against the return on Berkshire since 1965 - over 400,000%


----------



## qazw80 (27 May 2008)

FMG is probably one of the top ones on my list that I had picked and feel proud of. Have seen its SP going up like rocket from $9 in the past week to today's breaking $10. In fact I had adjusted my parcel to $10.5 just few days ago and was thinking to aim higher and wanted to set it at $11 pending new ann to come out. 

Couldn't believe my eyes when I got home and saw the SP went up by nearly 7% today and so my $10.5 parcel was gone. 

As Nick said, good luck to the rest of you who are still holding this stock.



njc.corp said:


> My target was met and i lefted-this has been such a good stock to me-
> 
> i like to see who hold's do well has sky's the limit with this stock-
> 
> ...


----------



## barnz2k (28 May 2008)

anybody think it will drop below $10  again? thinking of selling some duds and putting it into FMG, i bought in at 6.50 and already great gains but it might go well further in long term. who knows, maybe we will look back on $10 as being cheap!


----------



## rob (29 May 2008)

Yet another great day for FMG with a top sp of 10.70 but still finishing 3% higher @ 10.630. There also seems to be tons of interest from chinese investers that can anly be more good news as well as the delivery of ore arriving today. nice one fortiscue.


----------



## agro (29 May 2008)

rob said:


> Yet another great day for FMG with a top sp of 10.70 but still finishing 3% higher @ 10.630. There also seems to be tons of interest from chinese investers that can anly be more good news as well as the delivery of ore arriving today. nice one fortiscue.



Fortescue says would welcome Chinese participation
http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSSHA20284120080529


 NINGBO, China, May 29 (Reuters) - Australian iron ore miner Fortescue Metals Group Ltd (FMG.AX: Quote, Profile, Research) would welcome major Chinese companies' participation in the company through joint ventures, share deals and financing, the company's founder said on Thursday.

Fortescue founder Andrew Forrest made the remarks after an event to mark the first shipment of Fortescue iron ore to Baosteel Group, China's largest steelmaker and parent of Baoshan Iron & Steel Co Ltd (600019.SS: Quote, Profile, Research).

"The Chinese industrial champion takes Fortescue very seriously and we will encourage its participation in the future of Fortescue," Forrest said.

"We have been in talks with the champions of Chinese industry for five years. We encourage Chinese industrial champions to participate in the future of Fortescue through joint ventures, shares, financing," he said. (Reporting by Fang Yan; Writing by Edmund Klamann; Editing by Ken Wills)


----------



## michael_selway (29 May 2008)

Spineli said:


> *Somewhere toward the end of 2002, FMG was trading at $0.004*
> 
> On a $10 share price, that equates to a *2500 multiple!*
> 
> ...




Hi Spineli, wait dont forget the 10 for 1 share split!, its $100.00+ now actually!

thx

MS

-------------


----------



## agro (30 May 2008)

blue skys ahead for FMG

you get people in here mentioning its over-valued which may be the case but you have to remember that less than 10% is in the holding of the public

most of it is held by chinese steel companies and twiggy..

5% by aussie brokers i think..


*new 52 week high by the way - cracked $11*


----------



## my mirror lies (30 May 2008)

I'm a yank who bought 10,000 shares after the split for $5.70US, so you know I'm very happy about this investment. Prior to the split the price was $53US. My question is how did the price go so high when the company had not produced any product at the time?


----------



## the barry (30 May 2008)

my mirror lies said:


> I'm a yank who bought 10,000 shares after the split for $5.70US, so you know I'm very happy about this investment. Prior to the split the price was $53US. My question is how did the price go so high when the company had not produced any product at the time?




You have to look at the market cap and not the share price. How so many people don't understand this relationship is beyond me. Should be one of the first things you learn to look at when deciding whether a company is undervalued or overvalued. No offence meant by this post, but on what justification did you buy this stock?


----------



## MRC & Co (30 May 2008)

the barry said:


> You have to look at the market cap and not the share price. How so many people don't understand this relationship is beyond me. Should be one of the first things you learn to look at when deciding whether a company is undervalued or overvalued. No offence meant by this post, but on what justification did you buy this stock?






Can you please elaborate?  

I barely EVER look at market cap and do not use it when running an intrinsic value equation.  

You 'value' your stock and then compare to it's current price.


----------



## my mirror lies (31 May 2008)

the barry said:


> You have to look at the market cap and not the share price. How so many people don't understand this relationship is beyond me. Should be one of the first things you learn to look at when deciding whether a company is undervalued or overvalued. No offence meant by this post, but on what justification did you buy this stock?



I bought the stock based on the strong recommendation of a very well known and respected investment advisor, Jim Jubak. He writes for MSN on a weekly basis.

I have bought his reco's in the past with great results. That's why I bought Fortescue after the split. In the 5 months since buying this stock it's up 81%. I had never heard of the company prior to December 2007. 

At that time, the company was reasonably close to being a producer, rather than an explorer. So I decided to take a chance and it has paid off handsomely. Now I can understand buying a stock that is very close to realizing it's goals like I did, but I don't understand how this stock could go from as little as 33cents to over $53US without producing any oar.

I just wish I had known about it then because I'd be sitting on over $18million right now. Maybe I should sue Jim Jubak for not informing his readers sooner.


----------



## the barry (31 May 2008)

MRC & Co said:


> Can you please elaborate?
> 
> I barely EVER look at market cap and do not use it when running an intrinsic value equation.
> 
> You 'value' your stock and then compare to it's current price.




For example go to the following website and have a read of the ccz equities report on the right hand side.

http://gindalbie.com.au/

Page 21 will give you a guide as to why market cap is important.


----------



## njc.corp (31 May 2008)

agro said:


> blue skys ahead for FMG
> 
> you get people in here mentioning its over-valued which may be the case but you have to remember that less than 10% is in the holding of the public
> 
> ...




i totally agree- over-valued?na not all-
? for the people that said it was over valued? at what price did u think  it was over valued??? 

the reason i ask is what will u say if the over-value was @$8.00? and now its $10.50-10.60? is it over priced now?

the only fact i go by is what the price is now-and thats living proof-

i supposed as a basic guess-their promised has been met-they loaded the ship-the ship when and has arrive-thats it-

so in my eyes-its back to work at fmg to fill in the other contracts and enough talking-because they dont need to talk anymore-

thankgod i kept my other shares in fmg-

Thanks

Nick--


----------



## agro (2 June 2008)

njc.corp said:


> i totally agree- over-valued?na not all-
> ? for the people that said it was over valued? at what price did u think  it was over valued???
> 
> the reason i ask is what will u say if the over-value was @$8.00? and now its $10.50-10.60? is it over priced now?
> ...




new 52 week high of 11.36 today

continues to go against all the odds 

would be good to get a chartists opinion


----------



## SenTineL (2 June 2008)

this becoming a monster of a share.

who are all these people on commsec selling? I'm almost afraid to sell as I would hate to look back and see how much higher it has gone after i sold....


----------



## njc.corp (2 June 2008)

agro said:


> new 52 week high of 11.36 today
> 
> continues to go against all the odds
> 
> would be good to get a chartists opinion




Agro-u know what i did not even see how it went today-

i log on to my account to see it in the $11.00 range- i did also buy some more today @ 10.90 so i wont complain-

i am sick of even thinking how high or low this will go-i just placed my stop's and will c where this baby will take me-

i like seeing  everyone's thats on this do good as usual-

Thanks

Nick-(melb)


----------



## barnz2k (2 June 2008)

I had planned to sell some others and buy more FMG today, but being 8hrs time diff and no internet at home means im now down 5% instead of being up 5% 

Think this is all build up only on spec that chinese will invest in FMG?


----------



## agro (2 June 2008)

njc.corp said:


> Agro-u know what i did not even see how it went today-
> 
> i log on to my account to see it in the $11.00 range- i did also buy some more today @ 10.90 so i wont complain-
> 
> ...




it's a good thing you are accumulating and have a stop loss in place (just in case).. 

like urself, i wish everyone else all the best and i do thoroughly beleive that this stock, from once being the target of skeptics is *'in vogue'* now - just look at the recent media publicity it has been given.

once more a BHP / RIO merger would make it 2nd biggest in australia (i am hoping the merger takes place.. obviously cause it will benefit FMG)




barnz2k said:


> I had planned to sell some others and buy more FMG today, but being 8hrs time diff and no internet at home means im now down 5% instead of being up 5%
> 
> Think this is all build up only on spec that chinese will invest in FMG?




i have been trying to pinpoint this out to people , but if the likes of baosteel and sino are buying at these levels ($10-$11) surly they have foresight into the future price of the company

remember both companies are government owned and only they know that iron ore will be in greater demand in future to come..

FMG $20 by end of the year considering the records of many other stocks that cracked the $10 mark (but then again i am bias and in for the long haul)


----------



## njc.corp (2 June 2008)

barnz2k said:


> I had planned to sell some others and buy more FMG today, but being 8hrs time diff and no internet at home means im now down 5% instead of being up 5%
> 
> Think this is all build up only on spec that chinese will invest in FMG?




Barnz2k-dont be to hard on yourself  on  not being on board-tuesday is a new day and so on

Chinese hype? i don't know what to think

like i said before i am over thinking where its going-i dont want to worry  about chinese interest nor do i want to know about the metal prices-

At the end of the day its still a catch 22- their customers are chinese away so no big loss in my eyes if the interest goes out the window-

Thanks

Nick--(melb)


----------



## agro (2 June 2008)

Baosteel plans to expand cooperation with FMG

Jun. 2, 2008 (China Knowledge) - Considering the rising price of iron ore, Baosteel Group Corp plans to expand cooperation with Australia's Fortescue Metals Group Ltd (FMG) to meet the huge demand in the world's fast growing major economy, according to sources.

With 170,000 tons of iron ore unloaded at the Majishan Harbor on May. 29, FMG had become a major iron ore supplier for Baosteel. Last year, FMG and Baosteel Resources Co, a subsidiary under Baosteel Group, had signed a 10-year iron ore supply contract. Under the terms of agreement, the former will provide 20 million tons of iron ore to the latter annually.

Baosteel may consider buying part of FMG's shares if the two can reach agreements on mutual aims, development strategies and market positioning, said Xu Lejiang, president of Baosteel.

China's steel industry is now seeking more channels for iron ore imports, with the hope to gain the upper hand in negotiations with Brazilian and Australian miners.


----------



## MichaelD (2 June 2008)

agro said:


> would be good to get a chartists opinion




Price go up.
Me go long.

Nothing else matters really.

"Prices will go up (or down) for longer than you could ever imagine possible"

(Still holding my fully pyramided long position in FMG with a stop loss that is now just about above my highest entry price.)


----------



## barnz2k (2 June 2008)

agro said:


> i have been trying to pinpoint this out to people , but if the likes of baosteel and sino are buying at these levels ($10-$11) surly they have foresight into the future price of the company
> 
> remember both companies are government owned and only they know that iron ore will be in greater demand in future to come..
> 
> FMG $20 by end of the year considering the records of many other stocks that cracked the $10 mark (but then again i am bias and in for the long haul)




Good point, basically they are the customer of FMG, so if they have an interest then they plan on being a customer for a while and planning their future.



			
				nic said:
			
		

> Barnz2k-dont be to hard on yourself on not being on board-tuesday is a new day and so on




true true. Cheers mate.
And with the updated news on interest with Baosteel as agro just mentioned, tomorrow may be another good day.

Is it possible to try and calculate what the opening price might be? If I have to set a buy and leave it cause i cant see the open, How can I judge where to set it? It may be up or down enough to throw out my buy order to get in early.


----------



## njc.corp (3 June 2008)

barnz2k said:


> true true. Cheers mate.
> And with the updated news on interest with Baosteel as agro just mentioned, tomorrow may be another good day.
> 
> Is it possible to try and calculate what the opening price might be? If I have to set a buy and leave it cause i cant see the open, How can I judge where to set it? It may be up or down enough to throw out my buy order to get in early.




it would be wrong for me to calculate it has it chops and changes anyway-but on my platform it is showing me that the estimate is $11.370-estimate only-

JUdge-how can u judge-i dont know-its your money-its your trading plan-

My plan is to get one thing 1 right and that is  how much of the profit i allowed it to take from me-

Hope that helps

Thanks

Nick--(melb)


----------



## Go Nuke (3 June 2008)

Well, how good was that to see FMG touch $12 today! 

Im glad that i sold out of *AVO* some time back to put some small money into FMG.

Anyone here use a trailing stop?

I know people are reluctant to give advice but I'd like to hear what % of risk people are finding acceptable with FMG.

My only concern with FMG is the lack of diversification. I know its only early days but if this iron ore bubble bursts....what then?


----------



## zaf39 (3 June 2008)

WOO HOO
$12 ! 
where to next? 
Sooner than i expected...
This is scary wouldnt you think?!?!


----------



## barnz2k (3 June 2008)

I managed to top up yesterday, about midaway through the day so not too bad (staying up till 3am probably worth it haha)
Small parcel but about all I can afford before selling some other stock.

Im wondering about trailing stop too, as it has so much movement.


----------



## njc.corp (3 June 2008)

barnz2k said:


> I managed to top up yesterday, about midaway through the day so not too bad (staying up till 3am probably worth it haha)
> Small parcel but about all I can afford before selling some other stock.
> 
> Im wondering about trailing stop too, as it has so much movement.




Good to hear-

3 am? no one said it was easy to make money-

but good to see-

what did u buy at if you dont mind me asking-

sorry in advance if u dont want to mention the buying in price-

Thanks

Nick--(melb)


----------



## agro (3 June 2008)

just a key point of interest i'd like to make

9,974,126 *volume*

116,512,373 *value*


is this a bullish stock or what?

sell side has totally depleted, half the amount of the sale side (i saw it under 300,000 at one stage)

again - sky is the only limit on FMG - for it to go up on a *down day* says it all

is it possible some people are switching BHP/RIO to FMG?

who know's


----------



## barnz2k (3 June 2008)

No problem, I was changing my buy order, I set one early at 11.25 just so it was setup and in the system, then once I saw the opening price upped it to 11.40, I should have left it at 11.40 and would have got it, but upped it to 11.6 to get it done . So finally got it at 11.59. Still, with a close of 11.74 not bad.

haha yeah not so late, but had already been staring at screen for 12hrs lol.


----------



## njc.corp (3 June 2008)

agro said:


> just a key point of interest i'd like to make
> 
> 9,974,126 *volume*
> 
> ...




Argo-like to see all is good-

loged on at the end of the day to see not a bad day at all-

as a basic trader- i been writing things on paper-until i get some good software-

since i am no expert-i have noticed in my notes that this stock does not go along the same lines as bhp and rio-

it happen today and also last wed or thur from memory-

i have also noticed through my notes that this stock got a good daily range of .25-.32 but it has change lately to about .33-to a high of .39-.40-

so i like the range as u can tell-


Argo-since i said i was a basic trader-could u put in english into what u mean  by todays volume-

would rather look silly then not know what u mean-

Happy trading people

Thanks

Nick--(melb)


----------



## agro (3 June 2008)

njc.corp said:


> Argo-like to see all is good-
> 
> log on at the end of the day to see not a bad day-
> 
> ...




well i have been always led to beleive, a fall in BHP or RIO = a gain in FMG price

vicea versa... usually when BHP or RIO takes spotlight (as with merger discussions etc) , FMG price drops..


as far as volume, this just indicates that a greater demand for the stock (more people buying in greater amounts) is what pushing the price higher and is a very bullish indicator

on a down day, usually the volume is a bit lighter one would hope (not many selling out)

and as far as daily range, when the price is more expensive (e.g. $11 as opposed to $6, it moves according to percentage, so example = 10% when its at $11 = 1.10, whereas at $6 10% is .60) so naturally, greater the price = greater the amount it can go up or go down

hope that clarifys your q

agro


----------



## njc.corp (3 June 2008)

agro said:


> well i have been always led to beleive, a fall in BHP or RIO = a gain in FMG price
> 
> vicea versa... usually when BHP or RIO takes spotlight (as with merger discussions etc) , FMG price drops..
> 
> ...




Thanks for the quick reply-

i thought so-but i could have been wrong-

so thanks for clearing it up-

Happy trading people-

Thanks

Nick--(melb)


----------



## agro (4 June 2008)

i would not be least concerned with the drop in share price by FMG today,

it was expected and most likely attributable to some profit taking..

history shows by the graph that with a big drop comes a big retrace to all time highs

for those who bought near highs, ur best bet is to hold unless u have already exercised your stop loss which may be another reason which caused a further tumble in price


cheers


----------



## barnz2k (4 June 2008)

seems that every time I plan on buying/selling a share but dont follow through, I miss a decent move in price, then when I act on it slightly later, It moves in the wrong direction!  lol. 
Plan to hold FMG for a while anyways, all my miners down today anyways, not just FMG.

btw nick, i wrote about my buying price incase you miss it, its at bottom of last page, it snuck between agro and your post


----------



## njc.corp (4 June 2008)

barnz2k said:


> seems that every time I plan on buying/selling a share but dont follow through, I miss a decent move in price, then when I act on it slightly later, It moves in the wrong direction!  lol.
> Plan to hold FMG for a while anyways, all my miners down today anyways, not just FMG.
> 
> btw nick, i wrote about my buying price incase you miss it, its at bottom of last page, it snuck between agro and your post




Sorry mate-just saw it now-

argo-well the way i see it is its been going up and up a down was going to happen 100%-and todays was a decent drop- i did get  some more in today-

Thanks

Nick--


----------



## rob (4 June 2008)

agro said:


> here at aussie stock forums  we are more happy to provide any information we have
> 
> 
> the more you know about a company, the better are your decisions on deciding whether to keep it or hold it..
> ...




Like I said in the first place I am commited and believe that fortescue will continue to grow and continue their pregress still up 14% from last week. There would of been a lot of stop losses that would make it interesting to see how many will try and buy back in. Who says we cant make another 400% this year, heres looking at you kid.


----------



## gav (5 June 2008)

cant believe that after hitting $12 less than 48hrs ago, it was at $10.01 just before.  yesterday and today have wiped off 2/3 of my profit


----------



## agro (5 June 2008)

gav said:


> cant believe that after hitting $12 less than 48hrs ago, it was at $10.01 just before.  yesterday and today have wiped off 2/3 of my profit




depends whether you are looking at a short term perspective or taking a long term approach

if it is the latter, then the price you paid for FMG is rather cheap,

brokers are estimating $15 for it


----------



## gav (5 June 2008)

Thanks agro, i am in it for the long haul.  I am very new to this, FMG was my first shares purchase just a few weeks ago at 9.30.

estimating $15? is that what they believe its worth now, or what they think FMG will be at at the end of the yr?


----------



## njc.corp (5 June 2008)

gav said:


> cant believe that after hitting $12 less than 48hrs ago, it was at $10.01 just before.  yesterday and today have wiped off 2/3 of my profit




Thats the name of the game- oh how quick  things can change-

the name of the game is what u are willing to cop on the chin-

all in all-everything on my screen as of 10.15 am today was red-so its not that bad-

2 days of ups and 2 days of downs-pretty even in my eye's

i want to buy more but i cant brake the egg in the basket rule-

will c how she pans out today-early days imo-
Thanks

Nick--


----------



## prawn_86 (5 June 2008)

rob said:


> Who says we cant make another 400% this year, heres looking at you kid.




Just to put it in perspective.

If FMG rose by 400% again this year they would be almost the same size as Rio Tinto...


----------



## njc.corp (5 June 2008)

prawn_86 said:


> Just to put it in perspective.
> 
> If FMG rose by 400% again this year they would be almost the same size as Rio Tinto...




prawn how u work that one out?--not having a go-

just say going by todays low-10.00+400%=$50.00-thats $80-90 off rio-

maybe i am  getting it wrong-

or u including the 10/1 split-+400%

Thanks

Nick--


----------



## prawn_86 (5 June 2008)

njc.corp said:


> prawn how u work that one out?--not having a go-
> 
> just say going by todays low-10.00+400%=$50.00-thats $80-90 off rio-
> 
> ...




Look at the market caps.

FMG approx 30bill (4x this = $120 bill)

RIO approx 150bill (from memory)

Its the market cap people should care about, not the actual share price


----------



## njc.corp (5 June 2008)

prawn_86 said:


> Look at the market caps.
> 
> FMG approx 30bill (4x this = $120 bill)
> 
> ...




Thanks

well i never looked at it from that point of view call me silly -its never crossed my mind-

Thanks

Nick--


----------



## Miner (5 June 2008)

agro said:


> depends whether you are looking at a short term perspective or taking a long term approach
> 
> if it is the latter, then the price you paid for FMG is rather cheap,
> 
> *brokers are estimating $15 for it*




Hi Agro

YOu have been absolutely bullish on FMG and hats off to you and FMG success;

Could you please give some light on which brokers estimated 15 dollars target for FMG ?

Regards


----------



## diliff (6 June 2008)

WTF is going on with FMG?? Everyone is freaking out at the moment.  Including me, I'm down $10k in the last week on it... what an awful time to invest.


----------



## agro (6 June 2008)

Miner said:


> Hi Agro
> 
> YOu have been absolutely bullish on FMG and hats off to you and FMG success;
> 
> ...




hi, 

thanks and I continue to remain bullish on FMG regardless of the short term voltaility it experiences.. iron ore prices set to rise again next year, and if the chinese are buying that should give you an indication ..

what is happening today and yesterday (e.g. slump in share price) is nothing new and should be expected considering the rise it has, no doubt will it be back to 52 week highs, the chart shows that with every major new 52 week high comes a retraction following by a new high.

at the moment, the resources are being sold of for financial as far as i am aware..

if you are going long on FMG (as i am) i would just switch the computer off, stop procrastinating, go for a walk and calm down,

it was noted that those who panic sold back in the January correction were the losers - those who bought up are the real winners,

just sit put.. better a paper loss than a guaranteed loss.

cheers

edit - *broker was on Sky Business Channel, last week, think it may have been TD securities but i never paid much attention to the broker who says it, they are all in the same game*


----------



## Miner (6 June 2008)

agro said:


> hi,
> 
> thanks and I continue to remain bullish on FMG regardless of the short term xxxxx
> 
> ...





Thank you Agro for such a comprehensive response.
BTW how can I switch off computer to  miss all your and others nice postings 

Have a great weekend and thanks again


----------



## njc.corp (6 June 2008)

better trading next week fella's

argo hit's the nail on the head-

so in today's view-today was cheap  if u looking for a bargin-well in my eye's-even though i did not buy as i am full with this--

someone asked last week if fmg would see under $10.00 well it did so i hope they got on-

This stock is like petrol price's at the moment 

Happy weekend people

Thanks

Nick--(melb)


----------



## barnz2k (6 June 2008)

njc.corp said:


> someone asked last week if fmg would see under $10.00 well it did so i hope they got on-




That was me, unfortunately Id already bought in 3days ago at a lot higher price, but oh well in for the long haul too.


----------



## agro (6 June 2008)

pretty basic chart for a basic person but this is what i was trying to explain before,

massive dip , before hitting a fresh high..


----------



## prawn_86 (6 June 2008)

agro said:


> pretty basic chart for a basic person but this is what i was trying to explain before,
> 
> massive dip , before hitting a fresh high..




going by that theory Agro, I would expect a month or so consolidation at these levels.

See how you have drawn 3 different, ever increasing, trendlines. If FMG jumped up to another all time high within the next week or 2, the 4th trendline would be virtually vertical, which from a technical perspective is massively unsustainable.

If howver it consolidates for a while and then the trend line is at a nice 45% then its a different story


----------



## Ausman (8 June 2008)

Yes I am inclined to agree.  

But what do you mean by 45%.  Is it 1% per day or 1% per week or  ??


Ausman


----------



## prawn_86 (8 June 2008)

Sorry dunno what i was thinking there,

The previous post of mine should read 45 degrees not 45%


----------



## agro (13 June 2008)

prawn_86 said:


> going by that theory Agro, I would expect a month or so consolidation at these levels.
> 
> See how you have drawn 3 different, ever increasing, trendlines. If FMG jumped up to another all time high within the next week or 2, the 4th trendline would be virtually vertical, which from a technical perspective is massively unsustainable.
> 
> If howver it consolidates for a while and then the trend line is at a nice 45% then its a different story




hey prawn_86 and others,

i am sticking to my well and truly proven theory that this always happens,

a dip then fresh new week highs!

as i have been following it for a while now, this has always happen.

if you're smart enough to take advantage of these dips in future, you could come out very well

cheers


----------



## njc.corp (13 June 2008)

about bloody time-

5-6 down days-

100% correct argo- what goes up must come down-but depends on how much u want to cop on the chin-

 i did manage to get some more (350) but not as low as i should have-

also what was with  todays announcement-fmg- drilling for something else or something?

Thanks people-

Happy trading for next week--

Nick--(melb)


----------



## Galax (13 June 2008)

I have just lost a lot of money on BNB so today i sold them should have done it earlier mind you.  and purchased FMG.  Does any one know what brokers predict FMG will go to in the next 3 - 6 months :


----------



## Galax (13 June 2008)

I have not seen or heard of any announcement today, can anyone tell me what the announcement was for?


----------



## Nesa (13 June 2008)

Galax said:


> I have not seen or heard of any announcement today, can anyone tell me what the announcement was for?




ASL: Ausdrill Wins New Important Contracts
http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00850671


----------



## njc.corp (13 June 2008)

Galax said:


> I have just lost a lot of money on BNB so today i sold them should have done it earlier mind you.  and purchased FMG.  Does any one know what brokers predict FMG will go to in the next 3 - 6 months :




what do u think it will go too-

i could say  $100.00 but i dont have any info to explain why it will or wont go that high-(so i would be lying)

have u got a target-

By all means- i am not having a go-

Thanks

Nick--(melb)


----------



## Galax (13 June 2008)

Yes I do the first time I purchased fortescue it was at $6.90 my target was $9.00 today I purchased some more and my target I believe is $15.00.

I wish you weren't lying $100.00 a share would be lovely but if any one was going to get close to that bench mark it would most probably be BHP. 
($70.00).  

I was curious to know what targets other believe it would go to.

Do you know about the announcement I can not seem to find it anywhere.


----------



## prawn_86 (13 June 2008)

Galax,

As you are a new member please read the posting guidelines.

Why do you think it will reach $15?

Please provide some form of analysis supporting this view, otherwise the post is meaningless and will be removed.

Thanks

prawn


----------



## Galax (13 June 2008)

Nesa said:


> ASL: Ausdrill Wins New Important Contracts
> http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00850671




Thank you Nesa i really appreicate the web link.  

I actually saw this anouncement but I must of read it incorrectly I thought it was stating that ASL have the contract.  I think i will need to read it again.


----------



## Galax (13 June 2008)

prawn_86 said:


> Galax,
> 
> As you are a new member please read the posting guidelines.
> 
> ...




My apologies 

On july 2008 there should hopefully be an announcement of price increase of 85 percent for iron ore.

And china also want to get their hand on them

And if you look at chart for Fortescue you can see in JAN - FEB the price was at  $5.00  then a high of $8.00 in March another fall In  $6.00 in Mar - Apr  than a high $11.50 in June  and a fall today.  Where do you think it will go?. 
 I would also have to agree with agro he is spot on the money.  
You can see it on the chart

This is my opinion so please always do your research.


----------



## njc.corp (13 June 2008)

Galax said:


> Yes I do the first time I purchased fortescue it was at $6.90 my target was $9.00 today I purchased some more and my target I believe is $15.00.
> 
> I wish you weren't lying $100.00 a share would be lovely but if any one was going to get close to that bench mark it would most probably be BHP.
> ($70.00).
> ...




a real target or  a hopeful target-

so many angles to cover and answer-

what happens if they dont produce such and such amount of iron ore-
what happens if people at the plant get hurt-
what happens if china does not want any iron ore?
does anyone else need iron ore-
will they make costly mistakes along the way-

such a hard  ? to answer-

impossible to know easy to guess-

What i am   trying  is to gain as much as i can in a timeframe i am working with-thats it really

Hope that helps

Nick--(melb)


----------



## Galax (13 June 2008)

njc.corp said:


> a real target or  a hopeful target-
> 
> so many angles to cover and answer-
> 
> ...




You are right it is easy to guess but really you never know what th real outcome will be. 

Things can look peachy and then a disaster strike.

I have been stung before but i will not allow that to happen again.  Once bitten twice shy.

All I can say do as much research as possible.


----------



## agro (13 June 2008)

Galax said:


> Yes I do the first time I purchased fortescue it was at $6.90 my target was $9.00 today I purchased some more and my target I believe is $15.00.
> 
> I wish you weren't lying $100.00 a share would be lovely but if any one was going to get close to that bench mark it would most probably be BHP.
> ($70.00).
> ...



switching from BNB (financial) to a resource play - probably the wisest thing you have done considering the turmoil at the moment, not to mention accumulating more, but increasing average

$15 will be attained easy.

reason - ramp up of production, higher Iron ore Prices (expected 20% increase next year), expected dividends, further consolidation within the pilbara (other small cap iron ores coming into production - AGO, GBG) and more potential take-overs..

sinosteel didn't buy a 2.2bn stake for nothing.. baosteel have their eyes set on them too

also read this from monday's australian:



> Fortescue well-advised with China link
> ANDREW Forrest's Fortescue Metals Group has become the first major Australian company to establish a China Advisory Board -- with internationally famous trade negotiator Long Yongtu as its chairman.
> 
> The board of five, which would usually meet twice a year, with other less formal consultations in between, held its inaugural meeting in Beijing on Saturday, with chief executive officer Mr Forrest and executive directors Russell Scrimshaw and Graham Rowley also attending.
> ...




http://www.theaustralian.news.com.au/story/0,,23831794-643,00.html?from=public_rss


----------



## njc.corp (13 June 2008)

agro said:


> switching from BNB (financial) to a resource play - probably the wisest thing you have done considering the turmoil at the moment, not to mention accumulating more, but increasing average
> 
> $15 will be attained easy.
> 
> ...




argo-nice article u got there-seems interesting and very good undertsanding on how they are planning their future-

Hmmm?

Thanks

As always better trading next week

Good weekend

Nick--(melb)


----------



## renim (14 June 2008)

Agree - nice article Agro

I now sometimes do my my news searching for FMG in Goggle.hk   nothing to report yesterday, but as this is a China story, why not.  
Personally I suspect that once the some more news from China comes out, that Macqaurie Equities reported brokers recommendation of $4.91 will seem incompetent.
I'm also waiting for an expansion to 100mtPA to be announced. Nb. Interest rates for borrowing in HK are much lower than here.

Another point,  there feels like there are ore carrier shipping constraints biting new and old entrants.  who makes these ships?  and who is nearest to market?  The Pilbara's proximity must be a useful hedge against Africa and America, cause after all, hauling Run Of Mine tis expensive in fuel and ships.

Lets see how Rio entertains its African sovereign risk situation

I also randomly suspect that FMG has been a shorting favourite for those who like to sell shorts.  (based upon its chart of incremental rising with period deep, temporary falls) I suspect that is the angle some analysts come from for this stock.  Generally I've bought into this stock immediately after its recovered from such an occurance, not a particularly profitable way of investing but it feels lower risk.   Also this is a volatile stock,  often it does go below an entry price I took, however 6 months later all becomes very rosy.  That is my strategy for this stock, I doubt that I'll sell until FMG hits 200mtPA or is demonstrated that it can't reach 200mtPA (which is an unlikely demonstration).

FMG's real competiton also includes India, since FMG ore displaces Indian spot price ore (not BHP Tinto).  There is still a strong anti-globalisation movement in India calling for higher export tarriffs on ore etc, this must help FMG.

It looks like the rail access to BHP Tinto is not going well for FMG, hey maybe its time to make some lemonade.


----------



## renim (14 June 2008)

from Yahoo, Rio Tinto market cap US 145B
elsewhere FMG market cap is Aus 24B

so its approximately 1/6th the size of Rio.  Currently Rio is rated at about 145mtPA.  I don't know, yet i would like to know what percentage of Rio's profits are attributable to iron ore.

Expansion possibilities for FMG to quadruple to 200mtPA are not difficult to grasp.  where-as Rio's great white hope expansion possibility is more adventurous. However Rio has many other large and long running assets out side of iron ore (does anyone else mine the periodic table - just kidding)


----------



## Frankhalo (15 June 2008)

Mac bank & BNB would not touch with a ten foot pole these days, there is not enough transparency IMO with these Investment banks dealings and balance sheets, and when things look like there going belly up mom and dad holders are left carrying the bag while the big boys in the know have long gone. My opinion only, I sticking to the black stuff in the ground, has looked after me very well and will continue for months, years, decades to come.

This helps explain ann Friday:

Ausdrill Mining Services

Also today, Ausdrill's wholly-owned subsidiary Ausdrill Mining Services Australia (AMSA), received a letter of intent from the Fortescue Metals Group to hire ten 100-tonne Caterpillar dump trucks for a minimum period of six months. This is a significant milestone for AMSA as it is the first major contract it has been awarded since acquiring its Australian contract mining fleet late last year. The contract complements Ausdrill's three year drill and blast contract with Fortescue Metals Group.

Regardless DOW big bounce on Friday, back over $10 plus Monday


----------



## Go Nuke (15 June 2008)

> It looks like the rail access to BHP Tinto is not going well for FMG, hey maybe its time to make some lemonade.




I know this is an announcement from Brockman Resources, but will this have an impact on FMG gaining access to BHP & RIO's railway??

http://imagesignal.comsec.com.au/asxdata/20080613/pdf/00850525.pdf


----------



## CoffeeKing (15 June 2008)

I plucked this from the praic public consultation paper:

http://www.dtf.wa.gov.au/cms/uploadedFiles/praic_public_consultation_issues_paper_june2008f.pdf

"It is for iron ore haulage only – the Regime does not extend beyond the provision of Haulage (i.e. the scope of the Regime does not extend to loading, unloading, mining and port facilities/services) and does not extend to haulage of non-iron ore products.
Haulage of non-iron ore products will need to be negotiated with a Provider under current access arrangements (e.g. State Agreement Act provisions)."

If or when third party access comes of age, reading the above will certainly be quite costly for the juniors as the way I read it means a line to the mine,
a loading facility, something and somewhere to unload the ore and then stockpile it, and then get it on a ship at a port.
It seems they are only getting a "haulage contract" to transport their ore and nothing else of benefit, but then again if they get that much it's a start to maybe getting big backers to fork out some cash.

I vote for the juniors having a win


----------



## renim (16 June 2008)

Go Nuke said:


> I know this is an announcement from Brockman Resources, but will this have an impact on FMG gaining access to BHP & RIO's railway??
> 
> http://imagesignal.comsec.com.au/asxdata/20080613/pdf/00850525.pdf




FMG has it's own 'extras' and rail stock, and would not like to pay/deal with/co-ordinate with bhp/tinto.  A bit like sharing a road when you own a car but are only allowed on the road in a taxi.  So for a long term perspective, FMG would basically still need to duplicate the rail for its own requirements.

The juniors don't have a 'road or a car' and being allowed in BHP Tinto's taxi would suit them just fine.


----------



## Miner (16 June 2008)

Please do not laugh for the two extracts from two reputed brokers on FMG,
Where is the science or accounting behind these two stories
So ironic or stupidity at least one of them is saying


*STEVEN HING
NOVUS CAPITAL 

BUY RECOMMENDATION *
Fortescue Metals Group (FMG) 

*The iron ore producer has dipped from $12 to trading below $10 on June 13. Expect support at these levels. I am a buyer of iron ore stocks, and firmly believe that FMG represents good value given an easier entry for Chinese investors compared to BHP Billiton or Rio Tinto*
*second recommendation published in same Compare Shares newsletter* 

*SELL RECOMMENDATION *


*Fortescue Metals Group (FMG) 

While FMG will be one of those companies to benefit from a strong bulk commodities market, we struggle with the price and continue to see better value elsewhere in the sector. Expect it to under perform, and our price target is $4.91 a share. 


Anthony Black is a long-standing journalist, having worked in newspapers for more than 20 years. He was the Sunday Herald Sun’s finance editor for eight years and his reports were published in News Limited papers across Australia*.


----------



## Prospector (17 June 2008)

Miner said:


> *BUY RECOMMENDATION*
> *Fortescue Metals Group (FMG)*
> firmly believe that FMG represents good value given an easier entry for Chinese investors compared to BHP Billiton or Rio Tinto
> 
> ...




But isn't this reflective of the whole FMG story and probably says more about what they think of Andrew Forrest than an iron-ore company.  One likes the guy, the other one doesn't, maybe even got burnt in the past?

You know, if the second guy was such an expert in finance, then wouldnt he be doing more than just writing in a magazine.  He is a journalist not a person who deals actively in the share market.  Maybe it is a case of 1 year being repeated 20 times.

And this post may be more reflective of my hope for FMG rather than a true critical analysis of the company's worth!:


----------



## Miner (17 June 2008)

Prospector said:


> But isn't this reflective of the whole FMG story and probably says more about what they think of Andrew Forrest than an iron-ore company.  One likes the guy, the other one doesn't, maybe even got burnt in the past?
> 
> You know, if the second guy was such an expert in finance, then wouldnt he be doing more than just writing in a magazine.  He is a journalist not a person who deals actively in the share market.  Maybe it is a case of 1 year being repeated 20 times.
> 
> And this post may be more reflective of my hope for FMG rather than a true critical analysis of the company's worth!:



I tend to agree with you Prospector.
I have seen Andrew very closely at work. He is a unique  and an unconventional character, down to earth and has lot of guts. He does not have the so called Harvard graduate class but produces better than them. That is why lot many black suit people envy him and express through their writing. I know while in Anaconda people lost lot of money by investing on his words but there is always a learning (even many have paid for that) curve and FMG is a great future for Australia and China and investors too.

Let us wait and see what comes in May report in next week.


----------



## njc.corp (17 June 2008)

Miner said:


> I tend to agree with you Prospector.
> I have seen Andrew very closely at work. He is a unique  and an unconventional character, down to earth and has lot of guts. He does not have the so called Harvard graduate class but produces better than them. That is why lot many black suit people envy him and express through their writing. I know while in Anaconda people lost lot of money by investing on his words but there is always a learning (even many have paid for that) curve and FMG is a great future for Australia and China and investors too.
> 
> Let us wait and see what comes in May report in next week.




I think people dont like forrest  because he is too-rich-its common for the human mind to think negative all the time-

yes-he fail-so what-who is perfect-i know i am not

my dad use to tell me-1 legal failure is 2 steps forward as u learn from your mistakes-

Most of the wealthy people have a story in common-they always fail and learn quick

i also thing people are not looking at the picture in a good way-they are asking who is this bloke and how come he made his money in 5-7 years?

typical gossip from the hater's-

newspapers-they just want to sell papers nothing more nothing less-

Thanks

Nick--


----------



## Nesa (17 June 2008)

Fortescue Plans to Triple Iron Ore Production, Review Says

By Angela Macdonald-Smith

June 17 (Bloomberg) -- Fortescue Metals Group Ltd. plans to triple annual ore output in the first expansion of its Pilbara project to 160 million metric tons, rather than doubling it, the Australian Financial Review said, citing Executive Director Graeme Rowley.

The mining company, which is ramping up production to 55 million tons a year, needs to produce 500,000 tons a week in four consecutive weeks for the project to be deemed complete, the newspaper reported. That is likely to occur in the second half of July or early August, enabling Fortescue to approve the first of a series of planned expansions, it said, citing Rowley.

While an initial expansion to 110 million tons had been planned, the company may now increase that by adding two iron ore dumpers instead of one and dredging for two extra wharfs instead of one, it said, citing Rowley.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net
Last Updated: June 16, 2008 17:47 EDT

http://www.bloomberg.com/apps/news?pid=20601080&sid=a.q3QMPZ2sUQ&refer=asia


----------



## njc.corp (17 June 2008)

Nesa said:


> Fortescue Plans to Triple Iron Ore Production, Review Says
> 
> By Angela Macdonald-Smith
> 
> ...




Nesa-thanks for the good read-

wow-

does this article represent that they have more iron ore then they told the public/world?

thats what i am asking myself-it might be a bit far fetch but who care's

Also some ? for the experts

whats bhp pumping out a year in iron ore

and also rio

Any help would be nice

Thanks

Nick--


----------



## Nesa (17 June 2008)

njc.corp said:


> Nesa-thanks for the good read-
> 
> wow-
> 
> ...




BHP's iron ore production for the quarter was a record 28.03 million metric tons.

Rio Tinto said its full year iron ore production for 2007 rose 9 percent from the previous year to a record 144.7 million metric tons (159.5 million tons).

The miner's iron ore production in the fourth quarter was 38.96 million tons, up 11 percent from a year ago, the company said.

gives you some idea.


----------



## njc.corp (17 June 2008)

Nesa said:


> BHP's iron ore production for the quarter was a record 28.03 million metric tons.
> 
> Rio Tinto said its full year iron ore production for 2007 rose 9 percent from the previous year to a record 144.7 million metric tons (159.5 million tons).
> 
> ...




Thanks for that-thats  what i wanted to know-

i must say as fmg holder-its a big ask to even think about 160 mtpa

Thats all i got to say really as i dont have any facts on wether they will or won't

Good Luck-come this far-

Thanks

Nick--


----------



## Go Nuke (17 June 2008)

Lets not forget one thing...RIO and BHP are *diversified* companies!

If Fe falls...FMG will have nothing to fall back on.



> Quote:
> Originally Posted by Miner
> BUY RECOMMENDATION
> Fortescue Metals Group (FMG)
> ...




Thanks for that bit of humour


----------



## agro (17 June 2008)

> By Angela Macdonald-Smith
> 
> June 17 (Bloomberg) -- Fortescue Metals Group Ltd. plans to triple annual ore output in the first expansion of its Pilbara project to 160 million metric tons, rather than doubling it, the Australian Financial Review said, citing Executive Director Graeme Rowley.
> 
> ...




http://www.bloomberg.com/apps/news?pid=20601080&sid=a.q3QMPZ2sUQ&refer=asia


looks as though they have given some indication to the media as to what they are going to do as far as ramp up,

will just have to wait for the announcement to come out to have it formalized


and re - Go Nuke: If Fe Falls??


well, when they start making building and infrastructure out of plastic, that's when i will sell my FMG


----------



## renim (17 June 2008)

FMG has repeatedly referred to expansion to ~100mtpA and then to 200mtpA.
An expansion to 160mtpA is like a big jump. First 4 years ~ 40years Rio Tinto growth.  Next 4 years is to catch up to Rio Tinto todays production.
That will keep the stock analysts valuations ahhh variable.  Then we will see with hindsight, who was good, and who is not.

FMG is not diversified, it makes it easier to value, but more vulnerable and less hedged.

Personally i tend to have a 5 year horizon with FMG and a 200mtPA capacity.  I must be an optimist.
or crazy, i also bought into BBP after the meltdown


----------



## njc.corp (18 June 2008)

Good  morning pople

found an other article that may be in interest to you guy's

Cazaly Resources Ltd. has agreed to work with Fortescue Metals Group to develop a potential A$200 billion ($189 billion) iron ore deposit it is trying to wrest from Rio Tinto Group, the Australian newspaper reported. 

Rhodes Ridge, discovered in 1950 in Western Australia, holds 2 billion tons of ore, making it one of the world's largest untapped deposits, the newspaper said. 

http://www.bloomberg.com/apps/news?pid=20601081&sid=anindSUWDbc8&refer=australia

Thanks

Nick--


----------



## Nesa (18 June 2008)

njc.corp said:


> Good  morning pople
> 
> found an other article that may be in interest to you guy's
> 
> ...




Details of the agreement can be found in this announcement:

http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00851862


----------



## gav (18 June 2008)

CAZ shares soared today...

But the thing I dont understand: Why would RIO sit on this for so long and not do anything about it?


----------



## agro (18 June 2008)

gav said:


> CAZ shares soared today...
> 
> But the thing I dont understand: Why would RIO sit on this for so long and not do anything about it?




who knows the reason ?

all i know is the news keeps getting better for Fortescue lol 

once they get the support of the smaller iron ores, they will only get better


----------



## jayinoz (18 June 2008)

njc.corp said:


> Good  morning pople
> 
> found an other article that may be in interest to you guy's
> 
> ...




Thanks for that fast info this morning Nick- I got into Cazaly straight away- it was like a xmas bonus. Now not sure whether to wait till they try their luck in court to get control of the iron ore mining rights or profit out. 

Maybe take 50% out then leave the rest with them and see how they go. Already had FMG shares yet many analysts saying well over priced- so was becoming nervous about FMG. 

Not so if the can extract the 200B $ in Iron Ore. If they do not win in court I would bank on a decrease to around $8-9 again. Yet Tiggy Fortesque seems to be a miracle worker in the past year. Who knows yet to date FMG has made my portfolio look at least half decent.

Anyone know how long the court ruling may take??????????

 All the best Jeremy


----------



## sleeper88 (18 June 2008)

IMO this is basically a free ride for FMG, if CAZ win, FMG get their hands on a mega deposit, if CAZ lose, it has no material impact on FMG business. There's only upside for FMG here, whereas CAZ's management creditability is on the line again


----------



## barnz2k (18 June 2008)

dont know anything bout this CAZ but %60 jump from this news?!
Looks like it had been a slow decline for a while - hope noone was sitting on the downtrend and finally sold out 2days ago - that, would really really suck


----------



## njc.corp (18 June 2008)

jayinoz said:


> Thanks for that fast info this morning Nick- I got into Cazaly straight away- it was like a xmas bonus. Now not sure whether to wait till they try their luck in court to get control of the iron ore mining rights or profit out.
> 
> Maybe take 50% out then leave the rest with them and see how they go. Already had FMG shares yet many analysts saying well over priced- so was becoming nervous about FMG.
> 
> ...





Not a problem- if u making money good luck to u i say-

U see i just read  the news to work out the facts-( and sometimes there is no facts just false stuff with no proof)

i do not believe any brokers and analyst-i go by facts and work out the worse case

what i dont get is why people say its over-priced-they never have a good enough reason the main fact i see is what the price on my screen as stopped at-

maybe they are un-happy on how good fmg have been going-

as  taking profit-well only u know what to do and how much to take-

good luck to u if u do well-i honestly like seeing people do good-

i did not see any trading today but i did see that we had another good gain which i cant complain about

so happy trading i say

Thanks

Nick--


----------



## njc.corp (18 June 2008)

sleeper88 said:


> IMO this is basically a free ride for FMG, if CAZ win, FMG get their hands on a mega deposit, if CAZ lose, it has no material impact on FMG business. There's only upside for FMG here, whereas CAZ's management creditability is on the line again




well more is the better in this game-the more u got the better u going to get until demand ends or starts slowing down  vs price's ?

i look at the picture as they need each other-

i also agree that it wont or can't affect fmg that much as they said they had they own 1+billion in iron ore themselves-

what i waiting to see if they can do that trial of producing 550,000 tones a week from the article i saw yesterday-


----------



## agro (18 June 2008)

just on an observational note, if you look at the moving averages (7 day and 21 day)

you see that FMG has been trading above its 21 day average (blue) and there is about to be a bullish cross over...

the last cross over occurred back in April

will be interesting to see where this is headed... i am tipping a new 52 week high past $12 (reasoning - my theory that when it dips, its subject to retraction to all time highs)


----------



## LeeTV (19 June 2008)

I tend to agree with agro. FMG look set for a decent run in the coming weeks. With this latest announcment from Cazaly Resources Ltd.(CAZ), that remains to be seen but I doubt they would make an announcement of this magnitude if they had no hope of their objectives and it will take sometime for it to go through the courts, and the imminent release of the freight premium in iron ore price negotiations things are looking rosey, imo.


----------



## jayinoz (19 June 2008)

HEM skyrocketed yesterday due to gaining explore permit beating Fortesque & 5 other bidders. The permit is right next to the Iron Ore deposit that CAZ\FMG are trying to secure a permit for. Surely HEM being small explorers need to strike a better deal than CAZ did with FMG, as HEM beat them for the permit. Although the area does not nearly as rich in Iron Ore.

CAZ is a punt- they lucked out b4. It does look as though the CAZ deal pumped up the FMG price a $1.

Personally I taking the profits from CAZ, as the chances of betting Rio Tinto in court will be small. Rio T will not give up a supposed 200 B $ easily- surely. Maybe wishful thinking by CAZ\FMG. But who knows- not me.

Good Luck.


----------



## agro (19 June 2008)

does anyone else have the feeling that the chinese or overseas investors continue to invest in this stock


this morning:

1.2 million bought @ 11.24 = $15 million

followed by 500,000 and 300,000 unit buyers - 11.24


----------



## jayinoz (19 June 2008)

It jumped right up after the CAZ\FMG proposed takeover of the supposed 200 B$ iron ore from Rio T- From what I have heard---yer good luck to them. Yet CAZ\FMG jumped again on this speculation. Yet worth a try for them. Rio T stated they have no chance as they adhered to their permit and have a development plan for site in question. My money would be on Rio keeping this 30 year tenament on the site.

Naturally could be wrong-


----------



## agro (19 June 2008)

jayinoz said:


> It jumped right up after the CAZ\FMG proposed takeover of the supposed 200 B$ iron ore from Rio T- From what I have heard---yer good luck to them. Yet CAZ\FMG jumped again on this speculation. Yet worth a try for them. Rio T stated they have no chance as they adhered to their permit and have a development plan for site in question. My money would be on Rio keeping this 30 year tenament on the site.
> 
> Naturally could be wrong-




my money is on FMG

look at the market sentiment at the moment

RIO down, FMG up..

on a red day lol


----------



## Boggo (19 June 2008)

agro said:


> just on an observational note, if you look at the moving averages (7 day and 21 day)
> 
> you see that FMG has been trading above its 21 day average (blue) and there is about to be a bullish cross over...
> 
> ...




I am thinking that around the $12.70 area is a potential target on this run up.

That's just my  though.

Mike


----------



## njc.corp (19 June 2008)

agro said:


> does anyone else have the feeling that the chinese or overseas investors continue to invest in this stock
> 
> 
> this morning:
> ...




would not suprise me at all-and why not-i mean they know better then us how how much iron ore their  country needs-

i just got a nice smile on my face today when i just checked 1.00 pm-

getting ever so near to all time highs

happy trading to all-

Thanks

Nick--


----------



## jayinoz (19 June 2008)

njc.corp said:


> would not suprise me at all-and why not-i mean they know better then us how how much iron ore their  country needs-
> 
> i just got a nice smile on my face today when i just checked 1.00 pm-
> 
> ...




Hey Nick,

As mentioned to u b4 ur fast info was a god sent to me- I out of CAZ now as not think they will get off RIO. Naturally I stuck with FMG and that is GREAT...... maybe stick with them for longer term. Who knows they may take on the bigger boys in the future. Thxs again

Good luck


----------



## njc.corp (19 June 2008)

jayinoz said:


> Hey Nick,
> 
> As mentioned to u b4 ur fast info was a god sent to me- I out of CAZ now as not think they will get off RIO. Naturally I stuck with FMG and that is GREAT...... maybe stick with them for longer term. Who knows they may take on the bigger boys in the future. Thxs again
> 
> Good luck




in a way all these court matters always happens and some time we hear about it like i also saw last night on lateline-

i dont know what the out-come will be as i dont know the inner details-

only they know

while i dont understand charts to a high level-going by todays price range of caz i think its  because they have a so-called big-brother fmg---(just my view)

i mean i hope it works out for everyone-

like someone metion before-its round 2 vs rio

but i did see the body language on twiggy last  night when he did not want to answer anything about the debate- i got the impression of a chance or something  brewing up-

he's  always got something to say even when his other business went down-

i would like to think i am making sense-

Thanks

Nick--


----------



## tony montana (19 June 2008)

i am pretty certain he would have been advised by his lawyers not say too much about the case....this must be costing a fair bit of money with all his legal team working on it....so i dont think they would go thru all this without thinking they have a very good chance of winning this battle.


----------



## Nesa (20 June 2008)

*FMG win on Pilbara rail line*
20-June-08 by Rebecca Lawson

Fortescue Metals Group Ltd has had a win against BHP Billiton and Rio Tinto over access to its rail lines in the Pilbara, after the National Competition Council said the lines should be declared open to third party access.

The NCC today released draft recommendations in response to three separate applications received from The Pilbara Infrastructure Fund, a wholly owned subsidiary of FMG, for the declaration of Rio's Robe and Hamersley rail lines and BHP's Goldsworthy line.

The recommendations bring FMG closer to the finishing line of a four year battle with the mining majors to have the lines declared open, however it is not known whether BHP and Rio can start further action.

NCC's recommendations are in parallel to the state government's Pilbara draft haulage regime which proposes that miners in the region pay a fee to BHP and Rio to use their rail infrastructure including rail wagons.

The draft recommendations will be followed by a further public submissions period, closing on July 21, before NCC makes its final recommendations to the federal treasurer Wayne Swan.

Mr Swan will then decide whether or not to declare the services open and has 60 days to make his decision.

http://www.wabusinessnews.com.au/en-story/1/63973/FMG-win-on-Pilbara-rail-line


----------



## njc.corp (20 June 2008)

just cant the government on how long they take to do things which is so straight forward yes or  no?

i cant see bhp and rio saying okay-whats an other 4 years

its just a buying time game for bhp-rio

Good read

Thanks

Nick--


----------



## Miner (20 June 2008)

Nesa said:


> *FMG win on Pilbara rail line*
> 20-June-08 by Rebecca Lawson
> 
> Fortescue Metals Group Ltd has had a win against BHP Billiton and Rio Tinto over access to its rail lines in the Pilbara, after the National Competition Council said the lines should be declared open to third party access.
> ...




Nesa 

Thanks for your post.

Definitely a good news under broader picture under Australian interest. May not be a good news for BHPB Rio alliance . 

It reminds the Hitler saga (I was not born at that time however) as read in history books. If my enemy is your enemy too then we are friends. So BHPB and Rio are friends to oust our billionaire vegemite Mr Forrest and his company.

Do not want to sound as an expert or a legal counsel. The follownig are not expert opinion or any kind of advise either.

With my little hands on experience in dealing with National Competition Policy in past, understanding the iron ore mining business (failure in investing to capitalise in share market due to confidentiality deeds  ) including working for  FMG, Rio and BHPB I personally feel that FMG will continue to be a winner in rail saga. 

BHPB and Rio will make their publicity bandwagons, _special interest groups_, lobbyists, selected media and legal advisers to burn midnight oils . So will be FMG being  a poor cousin to them.  I believe they will make every legal loophole to work against FMG wherever they can.

But end of the day it is so much black and white - FMG will see the end of war with a win. Having said that I feel that  FMG will probably continue to do poorly in operational aspects, OSHE  unless present operational culture gets improved. They will do so once start getting  the operational dollars put back into business and the project expansion pressure is evenly  distributed to bring the OSHE attitude a bit better. 

Bad news will be BHPB and Rio probably make harder effort to make their union together as one organisation  with continuous opposition  from Chinese Steel makers  not to make it happen !!!

My


----------



## gav (20 June 2008)

With such good news this afternoon, why did this close so low? Down 5.7% today

i dont understand...


----------



## njc.corp (20 June 2008)

taking profit-some investors might see this has a downer-if swan does not give the green line and someone  got to re-apeal-

like a bit or a dark cloud hanging around-

thats what i thought-

volume was down a bit compared to yesterday and wed from what i can see-

Have a good weekend and happy tradding for next week

Thanks

Nick--


----------



## awg (20 June 2008)

could the sp fall have anything to do with the CAZ trading halt?

As alluded to elswhere, RIO disputes the CAZ FMG tenement.

It keeps hitting my stops, so I have to sell, then buy back later.

tried to move it out of the short term to medium term portfolio recently.

so far,have made money each time, I am even ahead of where i would be if i had just held (came to this stock a bit late folks)

In fact taking another profit on this stock, then it fell right away,was one of the few highlights in a particularly cruel day for me today.

tony






.


----------



## agro (23 June 2008)

this is the kind of stock everyone would want in their portfolio:

- for the market to be down 1.20%

and FMG to defy the odds (yet again, yet again) to be as high of 11.30 is remarkable.

well done FMG and holders


----------



## njc.corp (23 June 2008)

Argo-seems flx is like that also

but overall its not a bad day for fmg-

would like to see how fmg does on tue when caz comes out of the trading halt-

might not make a difference but worth a look imo

Thanks

Nick---


----------



## LeeTV (23 June 2008)

njc.corp said:


> Argo-seems flx is like that also
> 
> but overall its not a bad day for fmg-
> 
> ...



The trading halt on CAZ is not related to FMG it's to do with NMI.

https://www.aussiestockforums.com/forums/showthread.php?t=2502&page=12


----------



## njc.corp (23 June 2008)

LeeTV said:


> The trading halt on CAZ is not related to FMG it's to do with NMI.
> 
> https://www.aussiestockforums.com/forums/showthread.php?t=2502&page=12




i know that-thats why i am saying when they come on tue-will people say that fmg little so called brother is back?

It might not be realstic but worth a try

Will c how these un-folds- after seeing the interview on abc yesterday-

did anyone see the interview between the caz ceo and allan yesterday?

what did u guys think of it?

Thanks

Nick--


----------



## Miner (23 June 2008)

No wonder FMG rose today constantly
Will Bao Steel the great committed steel company already tied up with FMG also reward FMG for its ore >

Because if you read ahead

China's Baosteel agrees 2008 iron ore term prices


SHANGHAI, June 23 (Reuters) - China's largest steel maker Baosteel <600019.SS> has agreed to pay up to 96.5 percent more for its 2008 iron ore under a _term contract with Australian miner Rio Tinto (RIO.AX 


RIO TINTO23 June,200823/06/2008 23:15 Sydney, Australia.
Value Change % Change 
137.580 -1.020 -0.740% 

Company overview
Real-time quote
RIO.AX , 137.580, -1.020, -0.740%), Baosteel said in a e-mailed statement on Monday.

*Baosteel agreed to a 79.88 percent price rise of Pilbara blend fines and Yandicoogina fines, and a 96.5 percent price rise of Pilbara blend lump*, the company said in the statement. _


----------



## agro (24 June 2008)

yeh i herd that - 85% price rise secured !

construction report was out yesterday too..

once more, this morning, 250k selling at 12 got sweeped up in less than a minute 

just keeps getting better for FMG


----------



## njc.corp (24 June 2008)

Just checked- big volume and good closing price of $12.80

hope everyone is doing  good-

for the the people who have been on this stock or watch this stock for a while- i have a question

past performance does not represent the future? right? only a indication of what if ?

so would it be fair to say that today we broke thru new highs-so if all was well would it be like the last 3 weeks tag $12.00 high  and come back to $9.50-$10 area?

since  we have $12.80 today would it be fair to see it tag $14.00 and then hover around $11.50  to $12.00 and then start the cycle again-

happy trading to all

Thanks

Nick--


----------



## agro (24 June 2008)

njc.corp said:


> Just checked- big volume and good closing price of $12.80
> 
> hope everyone is doing  good-
> 
> ...




yeh , at the moment FMG is on the bullish run to new highs,

no doubt i expect a retraction, or a dip before pushing on with its run,

it's like a racing car driver - unless he stops for petrol, he cannot finish the race..

so, yes the cycle will continue, a stock price doesn't head vertically up but in cycles.

well done Nick too


----------



## njc.corp (24 June 2008)

agro said:


> yeh , at the moment FMG is on the bullish run to new highs,
> 
> no doubt i expect a retraction, or a dip before pushing on with its run,
> 
> ...




Thanks for answering my question argo-

just needed some feedback thats all -really-

i cant say i am sooking-

but i hope everyone else is doing good-


happy trading for wed people

Thanks

Nick--


----------



## MRC & Co (24 June 2008)

FMG does look good at the moment, breakout to new highs on good volume, closing near the high.  Clear blue skies above now.  

Only thing I would be worried about, is RSI is displaying a negative divergence, something to keep in mind, maybe.

Cheers


----------



## Gekko (25 June 2008)

Strong breakout over the past 2 days. AF now nearing $13billion. Ironore price increases obviously assisted todays gains, but the breakout began a few days ago.

Stock of the year so far


----------



## agro (25 June 2008)

Gekko said:


> Strong breakout over the past 2 days. AF now nearing $13billion. Ironore price increases obviously assisted todays gains, but the breakout began a few days ago.
> 
> Stock of the year so far




defently

i just watched the first 30mins of trading, huge profit taking... then a rebound

just cracked $13...


----------



## zaf39 (25 June 2008)

What the   $13.00,well for all the fmg faithfull.

Now i am confused,would be nice if it finds support at 12.50 initially.

CHEERS GUYS


----------



## ThingyMajiggy (25 June 2008)

Now its plummeted down to $12 mark again, would this be a pull back from the recent breakout? Take off again tomorrow?


----------



## agro (25 June 2008)

ThingyMajiggy said:


> Now its plummeted down to $12 mark again, would this be a pull back from the recent breakout? Take off again tomorrow?




mix of profit taking, possibly margin calls, reaches a bottom then shoots back up again..

always happens after a huge rise..


----------



## MRC & Co (25 June 2008)

RSI definately looks very weak.

You would want it to stay above it's recent high (which it is sitting at right now), or this becomes a weak trend and we could see a bit of a retracement after it's recent run.  

Just one reason why it's important to set your stops, you don't want to be giving away too much profit in this type of environment.  It can be taken away, very.....very quickly!  

This is pretty soon after it's recent high for profit taking, not to mention, you would want buying pressure to come in over the next few days and not see too many wide spreads with low closes on high volume.  

Margin calls?  Don't think that would be a big factor here, at least not yet.


----------



## paulgarcia83 (25 June 2008)

I am def new to this whole stock thing and this is my first stock purchase.  I just have a quick question I'm in the states and I bought FSUMF is this the same stock as FMG or 2 totally different ones?  If so why the difference in price FSUMF up $1.05 and FMG down .76.


----------



## njc.corp (25 June 2008)

not the best and not the worst-

anyone get taken out today

better trading for thursday

Thanks

Nick--


----------



## LeeTV (25 June 2008)

I took my profits and ran 

I forsee a downward trend, perhaps back as far as $10.30/10.50, in the coming weeks(but what do I know?).


----------



## njc.corp (25 June 2008)

LeeTV said:


> I took my profits and ran
> 
> I forsee a downward trend, perhaps back as far as $10.30/10.50, in the coming weeks(but what do I know?).




Lee- good to hear-

lee-if i could pick your brain for a minute or so-

why do u see a downward that far back-could u go into a bit more detail

as a holder i would like to see other members tatics towards this stock

if i am out of line  please let me know

Happy trading

Thanks

Nick--


----------



## agro (25 June 2008)

njc.corp said:


> Lee- good to hear-
> 
> lee-if i could pick your brain for a minute or so-
> 
> ...




took your profits and run - hrmm, you probably would have been better suited for that yesterday..

one rule in stock trading is to never trade based on emotions - because you see something go down is not sufficient evidence to sell out..

and 10.30? no cognitive distortion or bias there based on your sentiment yesterday.. i am sure if you had bought it today you would be quiet the opposite lol


this is a long term thing, not a short term thing imo

my tactic nick - sit put and ride the fortescue wave... 

good luck nevertheless


----------



## njc.corp (25 June 2008)

agro said:


> took your profits and run - hrmm, you probably would have been better suited for that yesterday..
> 
> one rule in stock trading is to never trade based on emotions - because you see something go down is not sufficient evidence to sell out..
> 
> ...





As u know i am the same-

but just wanted to  know why he/she thought a retracement back that far-

i am not for 1 minute saying it won't-just want to know a good reason or stats -chart behind it-

i for one dont know how to read charts on a level u guys see it-but all in due time

Thanks

Nick--


----------



## Gekko (25 June 2008)

LeeTV, any correction will only be short lived imo. Perhaps steep, as FMG is up form $6 in only a few months, but still short lived. The long term trend is higher, but at these levels, its a cautious trade.
Anyone heard anything with regards to Harbinger? Are they still planning on offloading half their stake?


----------



## LeeTV (25 June 2008)

njc.corp said:


> Lee- good to hear-
> 
> lee-if i could pick your brain for a minute or so-
> 
> ...



I have watched this stock for sometime now and it has had some good runs then there is profit taking and a downward slide then it picks up again. The last time I bought in was @ 9.48 the stock topped out at 12 then fell back to 9.42 within 10 days only to rally and then get as high as 13.15 at one stage today 2 weeks later, that's quite some movement. I could have sold made a nice profit then bought back in slightly under my prior buy in and made double the profits. Maybe I am just being overcautious and over zealous or perhaps even hopeful as I intend to buy back in when the time is right else persue some of the juniors, bought AGO @ 3.55 on Monday(right on the low). As I said before, what do i know :


----------



## renim (25 June 2008)

there does seem to be regular, temporary, short lived downward spikes with FMG.  possibly shorters gain enough confidence and ride it down.  almost as fast it picks back up and continues onward and upward.  someone smarter than i could make a buck trading those dips.
personally fmg is for me a long term acculmulate.


----------



## gav (25 June 2008)

agro said:


> this is a long term thing, not a short term thing imo
> 
> my tactic nick - sit put and ride the fortescue wave...
> 
> good luck nevertheless




i agree.  i am very new to this, i know there will be times when its up and down.  Been holding for 6 weeks and im up 29%, so no complaints here.  Sure if I bought/sold at the right times I could be up more, but that is too risky for me - I believe in FMG which is why I bought in the 1st place, and believe it will be alot higher in coming months/years. plus each time you buy/sell, you have to take into account brokerage, what u will be taxed, etc. and if u stuff up your buy/sell just once, you can wipe out alot of your gains.

your chart last week was right agro, all time highs were reached.  and when $15M worth are bought at $11.24, surely that is a sign that the future looks bright...


----------



## Gekko (25 June 2008)

renim said:


> there does seem to be regular, temporary, short lived downward spikes with FMG.  possibly shorters gain enough confidence and ride it down.  almost as fast it picks back up and continues onward and upward.  someone smarter than i could make a buck trading those dips.
> personally fmg is for me a long term acculmulate.




Thats more or less how FMG has traded now for years. Short and sharp dips among a gigantic bull run. The question is, where are we in the bull run for FMG?


----------



## LeeTV (26 June 2008)

I noticed "Twiggy" has sold 3,460,000 this morning in The Metals Group Pty Ltd...maybe he needs some play money for the weekend?


----------



## prawn_86 (26 June 2008)

LeeTV said:


> I noticed "Twiggy" has sold 3,460,000 this morning = $45,000,000
> Interesting...maybe he needs some play money for the weekend?




Perhaps its to fund the Stark conspiracy. We are all going to die. 

You never know these things could happen....


----------



## njc.corp (26 June 2008)

LeeTV said:


> I noticed "Twiggy" has sold 3,460,000 this morning in The Metals Group Pty Ltd...maybe he needs some play money for the weekend?




maybe he is spending that on his bbq party for the weekend-

he should have taken more out-with todays food prices 45 million is not going to get much snags and maybe a slab of beer



Happy trading guys

Thanks

Nick--


----------



## Lucky_Country (26 June 2008)

Donated his FMG so his charity can secure the options on POS lloks like his focus is shifting.
POS also secured funding for its project toady from his mates at harbinger capital


----------



## Gekko (26 June 2008)

Gekko said:


> Thats more or less how FMG has traded now for years. Short and sharp dips among a gigantic bull run. The question is, where are we in the bull run for FMG?




Now that was short! 1 day. FMG traded up 4% at one stage today to 12.50. Goes to show, the momentum in this stock is incredibly strong and its so tightly held its easy to move up hard.
Hands up who's envious of twiggys 1,040,000,000 shares


----------



## agro (26 June 2008)

LeeTV said:


> I noticed "Twiggy" has sold 3,460,000 this morning in The Metals Group Pty Ltd...maybe he needs some play money for the weekend?




ummmmmmmmmmmm .... i don't think so

if he sold it would be to:

1 - his super fund (no one likes paying tax)

or

2 - transferred as a gift to someone (it states transfer)


selling on market not only would create a huge capital gain tax but would not look good on his behalf


----------



## renim (26 June 2008)

on the news tonight,  FMG's EBITDA for next year will be $3.4 billion AuD.
If's its potential is 4x current capacity.  (based on port capacity potential), that'll equate to $13billion PA EBITDA.  current market cap is 33billion
i'ld say that there is still plenty of upside here.


the 2.4million (close to $25m dollars) shares that forrest disposed today were gifted to various transferees.  most likely charities.  forrest has reputedly said that he doesn't plan to leave the money to his children, and he knows you can't take it to heaven.  he'll probably donate shares annually, (probably with the same care and responsibility that he conducts his business)


----------



## Go Nuke (27 June 2008)

I thought there was a gift tax?

To prevent people from giving their money away without paying tax on it?

I suppose if it was to a charity its a tax deduction for him??

ROFL. I bet Twiggy only pays about $1 tax with good accountants


----------



## Miner (27 June 2008)

Go Nuke said:


> I thought there was a gift tax?
> 
> To prevent people from giving their money away without paying tax on it?
> 
> ...




Go Nuke

On the contrary if you donate to recognised charity then you will get tax deduction, So one dollar will earn you 47 cents and free name and fame and saving of money from PR investment   for the balance 53 cents when you donate 20 million dollars


----------



## agro (27 June 2008)

renim said:


> on the news tonight,  FMG's EBITDA for next year will be $3.4 billion AuD.
> If's its potential is 4x current capacity.  (based on port capacity potential), that'll equate to $13billion PA EBITDA.  current market cap is 33billion
> i'ld say that there is still plenty of upside here.
> 
> ...




i am guessing this was the charity for the Chinese earthquake - more than likly to the government

Twiggy is smart - he builds a good relationship and rapport with our biggest consumer of Iron Ore - China..

and to finish green today - speechless


----------



## renim (27 June 2008)

twiggy and fmg board get pretty small renumeration packages.  
their main reward is that they were very early investors and have long term alignment with all the other shareholders.  i wish the same could be true of all major companies.

back to fundamentals,  what is rio's ebitda for next year.  thats the closest peer fmg has.

or what other aus company has 3.4b ebitda, and serious growth to 4 x size over the next 2-5 years.  their market cap would be useful to know.


----------



## Ben L (28 June 2008)

Does anyone know what the forecast earnings and profits are for the next 5 years? Looking hindsight, FMG would have been a great buy a year ago, anyone care to estimate how high the SP could go?


----------



## agro (28 June 2008)

Ben L said:


> Does anyone know what the forecast earnings and profits are for the next 5 years? Looking hindsight, FMG would have been a great buy a year ago, anyone care to estimate how high the SP could go?




i anticipate the day it reaches inline with the share price of BHP ($40)..

so long that FMG can meets its objectives:

ramp up of production, 

continue consolidation in the iron ore sector, 

increasing prices,

and win the numerous legal disputes it is involved with 

(200bn deposit with CAZ, a second railway line) and provide also a dividend on top, i think $40 (over the next couple of years) would be a little conservative.. my tip is $20 by end of year provided a strong finish to the all ords 

not to mention (i stand corrected) that their tennament size (size of BHP+RIOs combined), only a portion has been explored!


----------



## CAB SAV (28 June 2008)

I'm not in a rush to get into this yet. 
Capex/mine fleet costs up and gets worse with bigger ramp up.
Cash at end March  was $650 mill, probably will be well down under $50mill by end of year.
With costs rising, this is too thin cash wise.


----------



## agro (28 June 2008)

CAB SAV said:


> I'm not in a rush to get into this *yet*.
> Capex/mine fleet costs up and gets worse with bigger ramp up.
> Cash at end March  was $650 mill, probably will be well down under $50mill by end of year.
> With costs rising, this is too thin cash wise.




so you will eventually get into it i gather?

those costs are a drop in the ocean btw compared to the earnings

nevertheless, good to hear contrary opinions


----------



## CAB SAV (28 June 2008)

AGRO, will prob be in after next cap raising. At present they need to prove & maintain production (and should) and have promised to ramp up to 45mt by years end. Big costly task from 24mt to 45mt then 55mt up.
they needed dollars 06, 07 and I suspect 08. Nothing wrong with that, but price dips nicely after cap raising. 
Assuming markets keep pooping themselves this year, could be few dollars cheaper.


----------



## njc.corp (28 June 2008)

what industry is not affected by  huge cost these days-i pressume we are all talking about petrol/as thats the no1 topic these day's

from memory  the best low cost industry would be the  internet after the outlay cost have been sorted out

the demand would surely cover cost-compared to the  rio story of the the argreed 85% price increase in iron ore-

as always have  a good weekend and happy trading for next week guy&girls-

Thanks

Nick--


----------



## agro (28 June 2008)

CAB SAV said:


> AGRO, will prob be in after next cap raising. At present they need to prove & maintain production (and should) and have promised to ramp up to 45mt by years end. Big costly task from 24mt to 45mt then 55mt up.
> they needed dollars 06, 07 and I suspect 08. Nothing wrong with that, but price dips nicely after cap raising.
> Assuming markets keep pooping themselves this year, could be few dollars cheaper.




how do you come to these conclusions as if you are running the company? don't you think you are abit farfetched?

are you one of the fortescue accountants and do you think that the experts at FMG hasn't thought of all these sophisticated ideas that you are coming up?

ofcourse they need money to expand but not the way you are saying - once they expand the dividends will be bigger.

what counts is can they afford what they have in hand now - answer is yes and the expense will be paid for therefore what you are saying is invalid to apoint

i say no more


----------



## CAB SAV (28 June 2008)

AGRO, My point is that I am wary of  companies with high debt, rapid cash burn and are a single mine company (heard any of that lately) As I previously said, next time there is an equity raising and price drops, I will look to invest.


----------



## MRC & Co (28 June 2008)

CAB SAV said:


> AGRO, My point is that I am wary of  companies with high debt, rapid cash burn and are a single mine company (heard any of that lately) As I previously said, next time there is an equity raising and price drops, I will look to invest.




Sounds like common sense to me.

Quiet a few factors there of which could cause a black swan event for FMG.

But for the moment, on it marches, and excellent work by all the holders!  While I personally had it undervalued (see further back in the thread), despite most F/A analysts saying it was fair value or above, the risk was a bit too much for me personally.  Whilst I missed the trading set-ups which came up 

Good luck!


----------



## michael_selway (28 June 2008)

CAB SAV said:


> AGRO, My point is that I am wary of  companies with high debt, rapid cash burn and are a single mine company (heard any of that lately) As I previously said, next time there is an equity raising and price drops, I will look to invest.




Does FMG still have a lot of debt?







*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS -2.6 -3.2 38.2 88.8 
DPS 0.0 0.0 0.0 0.0 *



> Date: 27/6/2008
> Author: Barry FitzGerald
> Source: The Sydney Morning Herald --- Page: 25
> Fortescue Metals CEO, Andrew Forrest, donated 2.38 million shares worth $A28.5million to charity in mid-2008. Forrest also donated his entire stake inPoseidon Nickel to the Australian Children's Trust, as the company preparedto resume mining at its Windarra nickel operation. Poseidon believes the minecould produce around 60,000 tonnes of nickel and has struck a deal withHarbinger Capital for the provision of $US50 million ($A52 million) inunsecured, convertible notes
> ...




thx

MS


----------



## renim (28 June 2008)

my un substantiated thoughts on fmg

a, EBITDA to be 3.4b (next year)
b, current large project was about 3b + funding costs.
c, EBITDA exclude capital repayment, includes interest.
d, earlier expenses were likely to be paid by equity.

equals this is actually a small to moderate debt company for its earnings.

one of the keys to Forrest's success was that he treated other peoples money with respect in anaconda.  when it came to the crunch, he would've asked for a 2 year holiday on interest, whereas glencore asked for 25c in dollar or walk away.
the overseas capital that he accesses would remember that.

secondly on tv last year (or so) someone asked him if he would refinance as his project was progressing and his debt would not be so risky (therefore refinance at a lower rate).  his reply was something to the effect that the lenders had supported him and now he wasn't going to refinance just because he could get it cheaper.

but it is still good to get contrarian thoughts on fmg, with the reasoning behind them.


----------



## renim (28 June 2008)

single mine yes, multi deposit yes, and multiyear life ok by JORC.
burn rate, was scary, but now into production , earning rate is scary.
hi debt, no, its not high debt when you consider either equity or earnings.

basically they got in at the right time.

oh yeah, forrest does mention dividends a bit.  its been a long time between drinks.
i look forward to the drinks.

ramp to 50mtpa should be cheap, its already built and the mine costs are maybe 15% of this project.


----------



## renim (28 June 2008)

total debt 2.9 bill
long term debt 2.6 bill
total assets 1.9 bill
upcoming ebitda 3.4 bill

so there you have it, 'assets' are minute, debt is large and earnings are outta this world.  

assets is a rear view mirror looking concept, and by that i would'nt touch fmg with a ten foot barge pole 

ebitda is a forward looking concept, and its truly golden.

thats why analysts are divided
2 - strong buy
1 - buy
2 - hold
1 - sell
2 - strong sell

generally this is a sell, except its the buyers who have been laughing


----------



## renim (28 June 2008)

woolworths ebitda for 2007 was 2.7 billion, suppose it will increase 10% to 3 billion for 2008 etc.

that makes woolworths earnings very comparable to FMG,

except FMG has no history
and FMG has lots of upside (resonable to expect a quadruling in capacity to 200mtpa.)   WOW will not increase earnings by 4, australia can't support that.  (unless it merges with coles/wesfarmers, and doubles it margin) which is what WOW would need to do to match FMG's upside 

current market caps of both companies are similar wow is 30.5b,   fmg is 34b.

personally, it looks like that the market dos not yet factor in the upside for fmg.  so in general it looks like fmg is fundamental undervalued compared to WOW on a forward looking basis.  
it also looks that for present valuation only, FMG is neither high nor low compared to say WOW


----------



## rodgerdp (30 June 2008)

agro said:


> i anticipate the day it reaches inline with the share price of BHP ($40)..
> 
> so long that FMG can meets its objectives:
> 
> ...




My guess: if half of BHP's revenue comes from iron (which is a guess not based on much research), and FMG plans to produce the same quantity of iron as BHP, FMG's market cap could one day be about half of BHP's: $100B, which is share price of about $40.


----------



## enigmatic (30 June 2008)

Little hard to compare BHP and FMG right now. Both are based on future profits. FMG has one Iron ore plant starting up.

BHP Has well established Iron ore mines already producing more on the way. 
an Oil and gas sector with huge developments in the pipeline.
Olympic Dam Expansion underway 10million ore capacity to 70million, and surely many other large projects future and current projects factored into there share price.

with a current Revenue of 39billion and profit of 13.7Billion in 2007 which I'm sure has increased with most prices. 
I do not think we can expect FMG to just match BHP overall capacity over night. 

Please note I'm a keen holder of both companies.
DYOR.. And thanks to everyone else.


----------



## njc.corp (30 June 2008)

enigmatic said:


> Little hard to compare BHP and FMG right now. Both are based on future profits. FMG has one Iron ore plant starting up.
> 
> BHP Has well established Iron ore mines already producing more on the way.
> an Oil and gas sector with huge developments in the pipeline.
> ...





some very good basic points-i dont think anyone  is comparing bhp and rio-

people like me only use them as a example as they are the big two?

all fmg  wants to do is split the pie a bit-

to the people that have been  on fmg or watch it over the years--

what do u guys think it had a shae price once at $60+

Thanks

Nick--


----------



## agro (30 June 2008)

njc.corp said:


> some very good basic points-i dont think anyone  is comparing bhp and rio-
> 
> people like me only use them as a example as they are the big two?
> 
> ...




it was once $60 prior to a 10 for 1 share split 

so in theory now it is $126.40..

but the 10:1 attracted more retail investors on board and are much willing to pay a lower price, with more liquidity and have more shares so to speak


----------



## njc.corp (30 June 2008)

agro said:


> it was once $60 prior to a 10 for 1 share split
> 
> so in theory now it is $126.40..
> 
> but the 10:1 attracted more retail investors on board and are much willing to pay a lower price, with more liquidity and have more shares so to speak




Thanks as always argo

lets see if we can have a good week or at least average something decent

it looks not bad this morning

happy trading to all

Thanks

Nick--


----------



## gav (30 June 2008)

does anybody know what todays announcement is?  my commsec account is playing up, i can see my watchlist, depth, charts, etc. but when i click the little news symbol nothing loads


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## njc.corp (30 June 2008)

gav said:


> does anybody know what todays announcement is?  my commsec account is playing up, i can see my watchlist, depth, charts, etc. but when i click the little news symbol nothing loads




Nothing-its the the may construction report-

thats all really

Hope that helps

Thanks

Nick--


----------



## gav (30 June 2008)

ah OK, that was out last week, but the little news symbol is still there.


thank-you  

Gav


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## renim (30 June 2008)

fmg would be comparable to a small rio, as rio earnings have a large exposure to iron ore.
bhp is a significantly more diversified company. and significantly larger


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## njc.corp (2 July 2008)

boy gee's

we are having a rough week-could we be in for more price dropping?

happy trading people

Thanks

Nick--


----------



## agro (2 July 2008)

njc.corp said:


> boy gee's
> 
> we are having a rough week-could we be in for more price dropping?
> 
> ...




yeh, it's not FMG's week this week nor the all ords - must admit,

prices for FMG under $11 do look attractive - happy with what i have though

may be worth considering transferring it to the super if it gets any lower


----------



## zaf39 (2 July 2008)

I think it is time for everyone to hold their nerves.I think the  ASX200 hit  a year low today,wonder if this will trigger more buyers?

Cheers
Zaf.


----------



## Galax (2 July 2008)

What is happening with fortescue all ordinarys are down.

Wasn't there suppose to be a price increase?

Lets just hope that this is only a dip and that price will bounce back


----------



## gav (2 July 2008)

Galax said:


> What is happening with fortescue all ordinarys are down.
> 
> Wasn't there suppose to be a price increase?
> 
> Lets just hope that this is only a dip and that price will bounce back




As said by agro previously, dips have been followed by all time highs.  Lets just hope history repeats itself.  I will continue to hold.


----------



## oldblue (2 July 2008)

I wouldn't try to read too much into the SP at present, on a day when BHP and RIO are both down 3.5%ish.
It's just the market.



Disc: Not holding but very interested!


----------



## LeeTV (2 July 2008)

Was a good day for me to get back in though 
Now I just hope the sp start it's merry treck the other way.


----------



## njc.corp (2 July 2008)

Not to worry-this is how it rolls-

must take the good and the bad-

my dad did manage to see a buying  frenzy at $10.85-not to bad in my eye's

so here we are again-we were here about 2-3 weeks ago?

one member asked if we would see the $10 range-well did u get in-because we are here at 10.80

who's feeling the heat?

Happy trading to all for the rest of the week-

Thanks

Nick--


----------



## MRC & Co (2 July 2008)

This thread is a daily update on the price movements of FMG and the emotions that go with it.

It is a reminder of exactly how NOT to be.

If you are an investor, you should not be concerned with daily fluctuations.

if you are a trader, you should have your stop set and go about your business.

Now the question is, where is your price target, and where is your stop? 

If you are an investor, you will more than likely have a price target.

If you are a trader, it is more than likely your trailing stop (which you should have), has been wiped out already.


----------



## njc.corp (2 July 2008)

MRC & Co said:


> This thread is a daily update on the price movements of FMG and the emotions that go with it.
> 
> It is a reminder of exactly how NOT to be.
> 
> ...




what do u mean  by emotions-

i know i am a investor-but what does that mean-that i should not see how my investment is going  or talk about it-so who cares if i come on here and wish everyone a good  trading day-

i would love to tell u about my target-but i have no info to support the claim-

thats what u guys would call ramping-

i got told by 2 basic people not to take it to serious-looks like u are-

Thanks 

Nick--


----------



## MRC & Co (2 July 2008)

njc.corp said:


> what do u mean  by emotions-
> 
> i know i am a investor-but what does that mean-that i should not see how my investment is going  or talk about it-so who cares if i come on here and wish everyone a good  trading day-
> 
> ...




In just the small page above me, I can see the words, "hope, nerves, heat", and everybody is commenting daily on price movements.  

I am not taking anything seriously, but how many are here just to ride the waves, not knowing when to exit?  The price will not keep going up forever, so when will you get out?  As an investor, this would generally be fair value, and then any move above that target could be caught by trailing up the stop.  

For a trader, you should have had your stop protecting profits the entire time IMO.  

That is all I am stating, sorry if it came accross as rude.  

Looks like nobody knows what price to sell this one at......regardless of which way the price moves.........a very very dangerous gambling game to play.

I don't know who "you guys" refers too, I am not a mod, just making an observation.

So njc, what is your target as an investor, or what is your 'fair value', and why do you value it at that price?  What happens if the stock never hits your target, when will you know it is time to get out?  Or just hold indefinately until your emotions get the better of you?


----------



## agro (2 July 2008)

MRC & Co said:


> *If you are an investor, you should not be concerned with daily fluctuations.*




i have to agree with this statement - unless you are really skilled, trading in a bear market like this is rather hard (imo) much easier to do in a bullish market however, 

i am considered an investor, not the least worried about fluctuations, just in case anyone hasn't already realized..

i don't intend trading FMG but sitting on it

in 2-3 years what it is now be it $9, $10 or even $11 would look cheap

that's my disclose and


----------



## MRC & Co (2 July 2008)

So is there a 'value' at which you would sell Agro?

What if in 3 years, the price is $10?  

I mean, nothing is a guarantee, such is the nature of the markets.  Unless you can control them, then you cannot ensure anything when it comes to investing or trading.

So surely, there has to come a point, where you think the price has peaked, or at which time you start to question your own analysis and perception of price?


----------



## enigmatic (2 July 2008)

I'm pretty new to this and I can understand were your coming from MRC & Co
it is wise to both to have a stop loss and a target price. however In my personal opinion which is just that. Is it not wise to always re-valuate your position so for me to say that my target price is $20 in 2 years is in my eyes a good idea. However if the market a beautiful creature it is has a much high valuation of FMG which it has always had, been following this for arround 18 months now. would it not be wise for me to re-evaluate my price if this price is reached much earlier then expected or if new more detailed information is released which enables me to better evaluate my exit point.
Iron ore prices drops maybe i will re evaluate my exit value to be much lower.
fixing a price is in my eyes much better for speculative stocks were today up 100% tommorrow down 60% fix a price and get out with what you were expecting, as the change in prices are volitile and you don't get enough time to evaluate the fundamentals.

I however have 2 years to judge my fundamentals for FMG and know what I'm expecting based on the current market info, if this info changes then my evaluation will change.


----------



## MichaelD (2 July 2008)

MRC & Co said:


> If you are a trader, it is more than likely your trailing stop (which you should have), has been wiped out already.




Many good points there MRC about the emotional aspects of FMG, but I can assure you I have no emotional attachment to FMG, I am fully pyramided into it and my trailing stop has not yet been hit - it's at around 8.50 or so, so not even particularly close to it yet. The ATR for FMG of late has been very high.

The thread does make for interesting reading, though.


----------



## agro (2 July 2008)

MRC & Co said:


> So is there a 'value' at which you would sell Agro?
> 
> What if in 3 years, the price is $10?
> 
> ...




i'll probably end up selling when twiggy sells or when they find a substitute for iron ore to make steel


----------



## renim (2 July 2008)

i'm still bullish as crazy about fmg.
they finally got production, so cash flow will follow.
the world needs steel. if there is a recession due to oil, arabs will still need steel for their infrastucture
if inda gets her act together, she'll stop exporting iron ore but will need to import iron ore
china, need i say more
bhp merge with rio, bring it on.
seriously, fmg has repeatedly shown plans for expansion to 200mtpa, next stop 100 or 160. 
thats adding another 30-60bill to market capitilization. and doubling to trebling the share price.
what other producer has this scope. and yes fmg is now valued as a producer, its blue sky is ignored.
fmg may not have the blue sky ratio of some smaller stocks anymore, but they have a demonstrated capacity to project build faster than anyone else, through more adversity than average. 

i doubt this dip is finished, it feels more market driven than fmg targeted shorters.


----------



## renim (2 July 2008)

i suspect those of us who have held fmg for more than 6 months, probably don't feel too concerned about current fluctuations, they have seen it before and come out on top.  where as those who have just started or trade in and out will be somewhat nervous.

personally my wild guess is sooner than later fmg will announce 'project completion' at only 26mtpa, and shortly after will announce 45mtpa throughput achieved, and then shortly after that an expansion to perhaps 160mpta.  funded partially by cash flow, partially by debt (to china or america at a rate like 3% or so), and partially by a share dilution of less than 5%. 

the new debt/bonds would mostly be to replace the current debt.

the share dilution would be mostly to reward the suppliers of the debt

the cash flow could probably carry the expansion, with the other funding providing 'contingency'

historically, fmg's burn rate is lower than forward projected earning, ( 3year project about 3bill expense) (1 yr earnings about 3 bill income).  so they could expand using earnings only.

ok i'll bite.  4 year target price ~ $40  (hey thats slow compared to fmg historic rate)


----------



## MRC & Co (3 July 2008)

enigmatic said:


> I'm pretty new to this and I can understand were your coming from MRC & Co
> it is wise to both to have a stop loss and a target price. however In my personal opinion which is just that. Is it not wise to always re-valuate your position so for me to say that my target price is $20 in 2 years is in my eyes a good idea. However if the market a beautiful creature it is has a much high valuation of FMG which it has always had, been following this for arround 18 months now. would it not be wise for me to re-evaluate my price if this price is reached much earlier then expected or if new more detailed information is released which enables me to better evaluate my exit point.
> Iron ore prices drops maybe i will re evaluate my exit value to be much lower.
> fixing a price is in my eyes much better for speculative stocks were today up 100% tommorrow down 60% fix a price and get out with what you were expecting, as the change in prices are volitile and you don't get enough time to evaluate the fundamentals.
> ...




Yes, this is the point, your target is always going to be dynamic.  If profit upgrades ensue, of course, you will revise it upwards, vice-versa for downgrades.

Also, if it reaches your 'fair value', I agree, it is not neccisary to sell, sometimes the biggest gains come in this period, when the market jumps on board and the stock goes parabolic!  But like I say, this is where it is important to trail your stop IMO.  

How large you trail it, is upto the individual.  Like MichaelD says, his is still far from the current price, and a very good point with a large ATR due to volatility.  What ATR are you using to trail the stop BTW?  

On that note, though I was not in this trade, I would have had the stop much tigher, as my personal preference for this market environment is high frequency, short time-frame trades.  I also try to enter the trade when volatility is low, but give it enough room to move.  More discretionary and dependent on patterns and volume, as opposed to ATR (though I am going to trial this out down the track).

Cheers


----------



## MichaelD (3 July 2008)

MRC & Co said:


> What ATR are you using to trail the stop BTW?



I use a 6.5 ATR trailing stop on daily data - since I'm looking for the multi-year trenders I need a wide stop to keep away from the noise.


----------



## njc.corp (3 July 2008)

MRC & Co said:


> In just the small page above me, I can see the words, "hope, nerves, heat", and everybody is commenting daily on price movements.
> 
> I am not taking anything seriously, but how many are here just to ride the waves, not knowing when to exit?  The price will not keep going up forever, so when will you get out?  As an investor, this would generally be fair value, and then any move above that target could be caught by trailing up the stop.
> 
> ...




Mrc-i will also say that i am sorry if i cam across rude-

i will tell u what my target is without any fact-

$30-45 within the next 2-3 year's

now what happens if it does not go  to that-good question-

i will have to live with the fact once i am out i am out-meaning on a time frame-

if it does not get their-its loss time and also i will re- think how i trade-(long term trades)

i know one thing at the moment-that i am giving back profit-how much well i am out at  $8.50- and by  todays price it is  getting near-

its not my only stock-but one i really like because of how quick its go on with things-

why-do i think its worth 30-45?

i think when all the dust settles down about such and such mtpa per year and they get going on what they have said-the market will consider it a reliable producer--

all it is now in my eye's-is that they got off 1st base-

i dont think i am riding a wave at all-others get in and out-but not me-if my plan does not work out-the market will let me know-wether its in 2 weeks or 2-3 years-

Once again-sorry if i came across as rude 

Thanks

Nick--


----------



## DRILLINDK (3 July 2008)

Well, for the short-term.  I believe FMG will trend lower with the expectation that the ECB will raise rates.  It should find support around the 50 or 100 dma of $9.40- $8.15 usd.


----------



## DRILLINDK (3 July 2008)

Here's a link to support my statements:

http://www.guardian.co.uk/business/feedarticle/7624606

Any comments would be appreciated.


----------



## MRC & Co (3 July 2008)

No worries njc.

Good luck with the trade/investment everyone, bit of a harsh day today.

Personally DRILLINDK, I don't use any period MA as a strong support zone, not sure there is any data to support this.......


----------



## njc.corp (3 July 2008)

MRC & Co said:


> No worries njc.
> 
> Good luck with the trade/investment everyone, bit of a harsh day today.
> 
> Personally DRILLINDK, I don't use any period MA as a strong support zone, not sure there is any data to support this.......




well- i will say i just checked now to see a a huge -11%

the biggest i have seen since being on board fmg-

Everyone cop it today in the metrials sector-

Can some tell me why-bad metal prices-fuel cost??

Thanks

Nick--


----------



## Nesa (3 July 2008)

njc.corp said:


> well- i will say i just checked now to see a a huge -11%
> 
> the biggest i have seen since being on board fmg-
> 
> ...



.........................................Value...........Change.......% Change
DOW JONES INDUS. AVG.....11,215.51.....-166.75.......-1.46%	
S&P/ASX 200 INDEX............4,998.30........-96.50........-1.89%


----------



## sillybilly (3 July 2008)

Hi NJC,

I don't own FMG.

You're forecasting a sp of $30 - $45 in the next 2 - 3 years.

Does that mean you're forecasting RIO to be $400 - $600 in the next 2 - 3 years?

Does that mean you're forecasting BHP to be $120 - $180 in the next 2 - 3 years?

Just curious.

Bill


----------



## tony montana (3 July 2008)

sillybilly said:


> Hi NJC,
> 
> I don't own FMG.
> 
> ...




how did you get forcasting out of that ....he is saying that $30-$45 is his selling price might be mixed up with a bit of hope there but how did you get to bhp and rio out of that....?
i am sure if fmg do well which i am hoping for....that rio and bhp will also reach new highs as well.


----------



## enigmatic (3 July 2008)

I don't think you base BHP and RIO share growth rates with FMG possible growth or even define them as forecast these are just his selling point.

Proportionaly i think FMG have alot more coming on board in the next few years to RIO and maybe BHP.


----------



## agro (3 July 2008)

Forrest has not failed to disappoint the shareholders - that's all i can say,

he did it in 2 years (get the rail etc etc), it took bhp how many years?

never the less, you need to compare apples for apples i think, but it makes you wonder why BHP has stalled in price - was almost $50 at one stage? attribute it to the RIO take over or possibly the new force in iron ore (fmg)? 


never the less, good solid friendship with the chinese and should have some nice little earnings and jorc results

forget the share price, fundamentals are the same - it's just the global economies at the moment punishing our market


----------



## renim (3 July 2008)

bhp i can't comment on, they're too diverse

rio, are saying lots in their effort to defend against bhp's overtures, however if they were to expand iron ore to match their statements they would grow lots larger, but somehow i'm not so confident, part of it is based upon deposits in africa which have sovereignty issues, infrastructure issues, and transport cost (fuel, ships) issues.

having said that, the production synergies from a combined bhp tinto would probably justify an astronomical market capitalization.

i'm just an amateur punter, in this market i'm currently consolidating my portfolio around fmg and a few others.  ie i just sold wow and aqa over the past week and put some back into fmg today

oh yeah,  sooner or later, the chinese will come on board (despite sinosteels best efforts), and the market will overreact in the right direction.


----------



## Nesa (3 July 2008)

Fortescue cashes in on big ore price rise
3rd July 2008, 8:45 WST

Andrew Forrest’s Fortescue Metals Group has become the latest WA iron ore producer to cash in on the 85 per cent price rise Rio Tinto won for shipments to Asian steel mills.

A Fortescue spokesman said yesterday the Pilbara producer had advised key Chinese customers, including Baosteel and Hebei Iron and Steel Group, the giant created by the merger of Tangshan Iron & Steel Group and Handan Iron & Steel Group, of the new benchmark price which would apply until April next year.

Fortescue shipped its first iron ore load to Chinese mills two months ago and has since delivered more than one million tonnes from its Cloud Break mine.

Based on the new 2008 benchmark price, the shipped ore is worth more than $100 million once delivered to customers’ ships at Fortescue’s Herb Elliott export facility at Port Hedland.

Commissioning of Fortescue’s $2.8 billion mine-to-port project continues, with the miner hoping to reach a production rate of 24 million tonnes a year by next month.

Fortescue joins WA producers Portman Mining and Mt Gibson in wasting little time adopting the benchmark price regime settled between Rio and Baosteel last week.

BHP Billiton has so far remained silent on its negotiations although analysts expect the mining giant to announce soon a similar price deal to Rio’s.

The ground-breaking Rio deal includes for the first time a freight differential, which Rio argued was partcompensation for the cost savings Asia’s steel mills achieved by sourcing iron ore from the Pilbara rather than the more distant Brazil.

Soaring iron ore prices have triggered a rush of development projects across the Pilbara and the Mid-West.

Tony Poli’s Aquila Resources said yesterday it and partner AMCI had allocated an $84.4 million budget to advance their West Pilbara iron ore project over the next 12 months.

The money will be used to complete a definitive feasibility study on a project to deliver 30mtpa.

PETER KLINGER


----------



## njc.corp (3 July 2008)

sillybilly said:


> Hi NJC,
> 
> I don't own FMG.
> 
> ...




Okay- this is the reason why i did not even want to metion a target-and as i said i had a target without big facts- i said that in my post- (sad but true)

Mrc asked me- i told him the truth=simple as that-

why dont u tell me what u think its worth? since u are not a holder-it would be easier for u  answer that question-

i am not curious i want to know-


Anyway people happy trading for friday-

Thanks

Nick--


----------



## sillybilly (3 July 2008)

Hi all,

Woooohh.........you're a passionate lot. If your sentiment is anything to go by then the sky is the limit.

Honestly, I haven't got a clue what the price will be or should be tomorrow let alone in the medium term. Triple or quadruple what it closed at today just sounds like a big call. If RIO doubles in price and FMG quadruples their ASX market caps will be very similar (don't pick on me about the multiple exchanges RIO is listed on). No doubt, with the China/India story and the ongoing ramping up of operations further sp appreciation is probably to be expected.

Good luck to all the FMG holders. Wish I had some.

Bill


----------



## njc.corp (3 July 2008)

Billy-since past performance is not a indication of the future

why does my 30-45 price target seem not normal-yet others might recall it was at the $60+region without producing anything yet-

thats the funny thing-it was worth that while not producing any iron-ore-but
now they are shipping it oversea's and the the price is $9.50

yes yes i know times have changed-fuels threw the roof-job cuts,slowing economy-but see where i am coming from that in 2-4 years it might be up their again when the market get's going again

the above is my view only-

Sorry if i came across heavy-

like i said past performance does not represent the future as u can see in todays choppy market-

Thanks

Nick--


----------



## renim (3 July 2008)

fmg is to me now a type of 'stapled' stock, you get a newly 'solid' income miner (50mtpa) stapled to a (150mtpa) blue sky hopeful with access to funding (it's own income stream).  i know this butchered the whole 'stapled' concept, but it was the simplest way to explain it.

fmg has just entered production so they are not dependent on others for future expansion if need be.

fmg has easy to grasp potential for expansion to 200mtpa. just read some of their past presentations

and just comparing their ebitda with one of their size peers (wow), i decided that fmg was not unrealistically priced, and its growth potential is currently ignored by the market.  so i sell wow and junior explorers and get more fmg while its cheap, and get fmg's blue sky for free.  thats a bargain.

can they fall more, sure,  shortly after my first entry into fmg they fell 25-30%.  that became the second best share purchase i've ever made.

come on guys, i want some bears on this stock to explain why they are bearish on fmg.  i don't don't want to fall into rah rah self deception cause i like fmg,  otherwise i'll keep squirreling fmg.


----------



## sillybilly (3 July 2008)

Hi NJC,

There was a 10 for 1 stock split not that long ago - so $60 back then now equals $6.

The market always looks forward. Once the future becomes clouded that's when the sp comes under pressure.

The big question for FMG shareholders is whether or not the sentiment that has driven the sp over the past three years can be supported by operational results and the market more generally.

Make sure you leave some profit in the market for the next person.

Good luck.

Bill


----------



## renim (3 July 2008)

fmg's old $60 was before the 1 for 10 split 
if you don't have a basis for what you expect fmg future share to be, then don't  buy it.  don't invest in what you don't know, unless you know trading technique.

fmg is a simple company, one commodity, plenty of publicity (check news about it, it may be more current than what a discount broker displays).  few weird farmin/out arrangements.  go ahead and made an analysis of it,  find sites that measure the cost of production for the worlds iron ore miners (hint google).  you got at you fingertips resources that only a select few could access 20 years ago. and only if you are comfortable, then come along for the rollercoaster ride.
last i checked, 
2 analysts had strong buy
1 analysts had buy
2 analysts had hold
1 analyst had sell
2 analsts had strong sell
so the professionals have divergent views on fmg


----------



## LeeTV (3 July 2008)

All I can say is I'm glad I never listened to any of the "professionals" as I would never have bought FMG in the first place if I had. My last buyin was @ $9.48 and sold recently @ $12.00 Bought back in yesterday @ 10.70, damn it, and will probably be getting the same amount tomorrow(make my overall buy price a little better) dependant on the market as a whole. FMG has always been a little volatile, keeps you on the edge of your seat when trying to pick the bottom and top, I like to make a few trades along the way personally 

Some of the latest predictions...

*Macquarie*  25/06/2008  5  Underperform  $6.96  - 26.7%  
The broker has continued its move toward being more understanding of why everyone so loves Fortescue. There has never been an argument over potential, only price. So the analysts flew out to the Pilbara to have a look for themselves. 
The result is a target price upgrade from $4.91 to $6.96. The RIO ((RIO)) iron ore price settlement has helped. However, while the broker has increased forecast FY09 earnings by 10% it has cut FY10 by 18% due to a push-back in expansion. 

Underperform is maintained. There is better value elsewhere in the space, the broker reiterates. 


*Citi*  25/06/2008  5  Sell, High Risk  $8.70  - 8.4%  
Citi has bumped up Fortescue's target price to $8.70 from $7 but maintains its Sell rating, noting a market scramble to secure iron ore supplies. 
The broker notes Rio Tinto has settled iron ore prices with Baosteel at a higher than expected level, the benefits of which have been largely offset by a higher $A. 

It has cut its earning forecasts 3% in FY09 and added 4% to FY10 estimates. 


*JP Morgan*  25/06/2008  3  Neutral  $10.64  12.0%  
Target $10.64 (was $7.50). Higher iron ore prices make an expansion of operations more likely in the broker's view, so factoring in an increase to 160mt annually sees the broker lift its price target on the stock. 
Despite the higher target there is no change to the broker's Neutral rating.


----------



## renim (3 July 2008)

one other thing.  historically fmg appeared valued as a project,  and projects in oz recently have all  gone over budget and generally over schedule.  if a project did not go over budget then its original budget forecasted steel and oil price hikes, + skills shortage (fabricators find outsourcing to be failing in a heated market, do it inhouse, or don't even bother).  fmg managed to meet schedule and is a beneficiary of a primary cause of project cost overrun (being a iron ore producer).  they have current competence and experience for their next expansion, something juniors may lack.

i know thats all story and not numbers, how do you see it?


----------



## LeeTV (3 July 2008)

An interesting read http://afr.com/home/viewer.aspx?EDP://20080703000020858157&magsection=industry-metals-mining&portal=_summary&title=Fortescue+battling+legacy+of+the+bonds&source=/_xmlfeeds/industry/metals_mining/feed.xml

Fortescue Metals Group is examining options for expansion that avoid the control of financiers. A $A2.7 billion bond raising in August 2006 has terms that restrict the speed and size of expansion of Fortescue's iron ore operations. One possibility is the demerger of the company's west Pilbara iron ore deposits, as bondholders can only exert influence over assets in the parent company. While not among Fortescue's most preferred options, the company has registered a company name for the purpose, *West Pilbara Iron Ltd*


----------



## njc.corp (4 July 2008)

Make sure you leave some profit in the market for the next person.

Good luck.

Bill[/QUOTE]


Bill-is that not what we do all the time- leave profits for others-wether they turn it into  a fortune or more misfortune?

Oh well billy-we will see how the future turns out-

Thanks

Nick--


----------



## Miner (4 July 2008)

DJ is showing picking up but on COmmsec there are *359 buyers for 908,432 units and  637 sellers for 2,005,772 units *
Probably in the morning the situation will be reversed 

West Pilbara Iron is a good coy

Probably Andrew has put his focus on POS and that could be the reason why FMG sagged and POS is picking up notwithstanding all iron ore stocks have plummetted on Thursday


----------



## MRC & Co (4 July 2008)

LeeTV said:


> All I can say is I'm glad I never listened to any of the "professionals".




I would call them salesmen.  

They make money from your (not you inparticular) commissions.

Not from their choices.


----------



## agro (4 July 2008)

MRC & Co said:


> I would call them salesmen.
> 
> They make money from your (not you inparticular) commissions.
> 
> Not from their choices.




not to mention less than 5% of FMG is in the hands of australian brokers

and queit often i find that when a broker says "sell" they actually want to buy it themselves..

so whenever i see "sell" now, i usually interpret it as a buy signal


----------



## gav (4 July 2008)

I for one wasnt too worried about yesterday, although I wasnt too happy about it either!  I saw it more as a buy opportunity more than anything (not that I have the capital to put any more in). Just look how much RIO and BHP got smashed too.

I've held for 7 weeks, its been a roller coaster ride! I have been as much as 41% up in that time, and at one stage yesterday I was less than 3% up. Its seems to sky rocket as fast as it falls, and the last 2 times it sky rocketed to all time highs. I guess I could have made alot from selling/buying at the right time, but then I could have also been stung badly if I got it wrong. I will continue to hold


----------



## subaru69 (4 July 2008)

Gav,

My sentiments EXACTLY
 - not happy about the drop but not concerned
 - and it was an opportunity to buy more miners but no more capital (I've been following the 'Bottom Pickers' thread, however not smart enough to have sat patiently on the sidelines.)
 - we must have the same buy price too 

I wish you well because in a way it's the same for me


----------



## gav (4 July 2008)

Then in that case, I wish you very, very well also  


Gav


----------



## renim (4 July 2008)

7 weeks hey,  it's quite a ride getting on fmg.  but if you're not too smart, it can be quite rewarding.

i think analysts tend to be 'conservative' in their stated opinions and in their recommended options, which shouldn't necessarily represent their own opinion.

FMG bought its deposits cheap.  FMG spent 3bill on project.  Accountants might 'value' this as a 3 bill and a bit company.  Until evidence of actual cash flow, there will remain some skepticism.  Current stock value about 30 bill.  Hmmmmm looks fishy, maybe overpriced by 10 to 1, lets sell shorts on this stock.

however those russians bought in last year, and it was to make money.   the yanks are still holding,  the chinese want some.   All these also have pretty smart analysts, particularly when its their own funds they are using.   remember it was australian fund managers who virtually gave MIM to X Strata for a song (don't get me started there)


----------



## renim (4 July 2008)

LeeTV said:


> An interesting read http://afr.com/home/viewer.aspx?EDP://20080703000020858157&magsection=industry-metals-mining&portal=_summary&title=Fortescue+battling+legacy+of+the+bonds&source=/_xmlfeeds/industry/metals_mining/feed.xml
> 
> Fortescue Metals Group is examining options for expansion that avoid the control of financiers. A $A2.7 billion bond raising in August 2006 has terms that restrict the speed and size of expansion of Fortescue's iron ore operations. One possibility is the demerger of the company's west Pilbara iron ore deposits, as bondholders can only exert influence over assets in the parent company. While not among Fortescue's most preferred options, the company has registered a company name for the purpose, *West Pilbara Iron Ltd*




interesting but silly.   even with the current market difficulties, FMG's financiers are either very happy with FMG or quite capable of being replaced by FMG (refinanced elsewhere).  but i expect 'practical completion will be reached soon anyway.   FMG may however need a new vehicle for its endeavours with cazaly or long term plans for port/infrastructure etc etc etc.

remember a 10% dilution would wipe out all bondholders debt (except the royalty type stuff, which would like further acceleration)

IMHO a particular trait of forrest historically has been a higher than normal respect for bond holders,  it was possibly one reason why he got turfed from annaconda, and also why he could get fmg kick started.

i think this article annoyed fmg,  they tend to ignore most news articles about them, but this one they did respond to tday.


----------



## 2020hindsight (5 July 2008)

probably already mentioned,  but 
2 July "conversion of employee options"  56,000 at 70c
3 July ditto 350,000 at 28c
4 July ditto 125,000 at 27c...  etc

I assume (?) that those employees will be tempted to (and are free to) sell these shares soon (if they haven;t already)  - who wouldn't want to become an instant millionaire -   and that's 500,000 shares each making profit of almost $10 = $ 5million - possibly sold with a sense of "who cares" (?).  
Has to drive things down a bit more than say BHP (you'd think?). 

But I'm probably wrong in my assumption of any great significance of this effect.


----------



## Miner (5 July 2008)

2020hindsight said:


> probably already mentioned,  but
> 2 July "conversion of employee options"  56,000 at 70c
> 3 July ditto 350,000 at 28c
> 4 July ditto 125,000 at 27c...  etc
> ...





Dear 2020

Most of what you said is right as per my opinion

However the assumption of becoming instant millionaire may not be right
Often the lucky people having those cheap options could be one of the directors or senior managing staff , They are already multi millionaires 

It has been a tradition to pay some of the contracted price in terms of options by FMG in recent past
So those option holders could be the contractors needing cash

With such a large volume of share chips available in the market even if those exercised options come to market as SALE will make ripple unless the holders happen to be one or more of the directors


----------



## 2020hindsight (5 July 2008)

Miner said:


> With such a large volume of share chips available in the market even if those exercised options come to market as SALE will make ripple unless the holders happen to be one or more of the directors



Miner, howdy
I should have said (I guess) that there are more shares with staff etc in that situation than just those ..  plenty of new billionaires there - and (maybe) no equivalent in BHP. 

but I agree ...  not a ripple lol.

I was just trying to find an easy /convenient / self delusionary answer / =  ray of hope that the blip in the graph (FMG lost 20% since 30June) was a temporary phenomenon 
PS I hold - for the time being anyway


----------



## renim (5 July 2008)

a bit choppy recently,
i've tried to work out the winners and losers so far

winners
investors who held
vs
investors who stayed away

winners
short sellers who have good exits
vs 
investors who stop loses got triggered

winners
bulls who entered and exited well
vs
bulls who entered and exited poorly.


----------



## Miner (5 July 2008)

renim said:


> a bit choppy recently,
> i've tried to work out the winners and losers so far
> 
> winners
> ...




Hi Renim

It looks like you have become Wordsworth or Shelly - started writing a poem on winners vs not so winners 

Keep it up and well said


----------



## MACH (7 July 2008)

FMG falling, which is a shame cause it was at its peak highs, not to long ago. Most of the drop is panic selling though.


----------



## agro (7 July 2008)

MACH said:


> FMG falling, which is a shame cause it was at its peak highs, not to long ago. Most of the drop is panic selling though.




well observed - can you please enlighten me to how many other stocks are also falling??

i still remain bullish on this stock and iron ore stocks - nothing has changed, you are buying a business...


----------



## ans25 (7 July 2008)

agro said:


> well observed - can you please enlighten me to how many other stocks are also falling??
> 
> i still remain bullish on this stock and iron ore stocks - nothing has changed, you are buying a business...




Agro mate, wake up and smell the coffee and dont be blinded.

This has dropped abt 25 percent in a matter of a week or so and although other stocks are falling, yes, FMG seems in a mini spiral.

I am sure that it will pick up eventually, but in the meantime Im waiting until it hits under $9 for my entry.

Good Luck to all


----------



## SenTineL (7 July 2008)

amazing isn't it 
announcement out about securing same price as BHP and RIO and still gets smashed.

i wonder where the logic in the market is sometimes.
i can only see it being even more volatile this year


----------



## ans25 (7 July 2008)

Mate that's exactly what I was referring to @ Agro, FMG seems to me a lot more volatile the last 2 or so months, steady increase to abt 12 then a big drop 2 dollars or even more.

If you time it right, you can really manipulate this one and make a killing.


----------



## renim (7 July 2008)

fmg doesn't feel more volatile than usual.  think back to when it did the capital raising (about 5%) back at $35.  that was about a year ago, there was a market scare and fmg went from about $40 down to $27 (about 30%)

6mnths ago it went from $6.60 to $5.   thats similar % to recent slides.

so it does have choppy times, but it takes a better trader than I to to time this stock,  if you can, there is a killing to be made, but i suspect you will be in a zero sum game against professionals.

i'll hold, accumulate this stock,  its ebitda will be great, and its blue sky is unpriced and unannounced yet more certain than many others even if they are announced.   (by that i mean it may not have detailed its plans for ~200mtpa, but i got more confidence in fmg's expansion than any yet unproducing iron ore miners)

with fmg if you don't feed the shorters, they'll fall away soon enough, let them make their money from someone else's stop loss.  or if you're brave/foolish, be one yourself.


----------



## SenTineL (8 July 2008)

dont worry, i've ridden the FMG wave for about 3 years now so i'm familiar with the ups and downs. 

the market is going to crap fast though, good if you had some extra cash stashed away to buy into some of the bargains. wonder when this will all turn around again, interesting times


----------



## gav (8 July 2008)

its now back below my entry level  



Gav


----------



## Miner (9 July 2008)

probably another bad day for all stocks on Wednesday

*US stock futures dip on credit woes*08 Jul 2008 | Reuters 

US stock futures fell on Tuesday, putting Wall Street on course to extend a global sell-off fuelled by* fears the financial services sector could be hit by further credit losses, jeopardizing economic growth and profits.*


----------



## Prospector (9 July 2008)

The US certainly knows how to screw up the world in every way, doesn't it.  Unethical lending and the whole world suffers.  And then there is Iraq.


----------



## Miner (9 July 2008)

Miner said:


> probably another bad day for all stocks on Wednesday
> 
> *US stock futures dip on credit woes*08 Jul 2008 | Reuters
> 
> _US stock futures fell on Tuesday, putting Wall Street on course to extend a global sell-off fuelled by* fears the financial services sector could be hit by further credit losses, jeopardizing economic growth and profit*_*s.*




Woh what a relief to see contrary to what Reuters reported (probably wrongly printed for Tuesday and should have been for Monday market - not me as I only quoted ) the DJ rose up on Tuesday. Hangsang however declined severely. 

If I punt the market should be up at ASX to start with but certainly be volatile for FMG and DMM  - not good . We need some stability from this roller coaster

In Commsec as I could see for today there are more sellers for FMG than buyers


----------



## agro (9 July 2008)

Miner said:


> Woh what a relief to see contrary to what Reuters reported (probably wrongly printed for Tuesday and should have been for Monday market - not me as I only quoted ) the DJ rose up on Tuesday. Hangsang however declined severely.
> 
> If I punt the market should be up at ASX to start with but certainly be volatile for FMG and DMM  - not good . We need some stability from this roller coaster
> 
> In Commsec as I could see for today there are more sellers for FMG than buyers




those selling will inevitable buy back, unless they find a better stock..

it would be interesting to see these peoples rationales for selling... this stock once earnings announced will rocket.. has too many good things (dividend, cazaly 200bn if they win that) to come imo..

i spose people don't like uncertainty and would not rather wait a couple of weeks for the market to settle down ..


----------



## njc.corp (9 July 2008)

agro said:


> those selling will inevitable buy back, unless they find a better stock..
> 
> it would be interesting to see these peoples rationales for selling... this stock once earnings announced will rocket.. has too many good things (dividend, cazaly 200bn if they win that) to come imo..
> 
> i spose people don't like uncertainty and would not rather wait a couple of weeks for the market to settle down ..




Agro-how are u buddy?

is that not the topic lately-

this is what i am getting from the people i know-

they are selling because they are scared-

they are not professional traders just young timers-

it seems whatever i tell them to stick it out-the media is controlling them by feeding them bulldust-

i tell them what goes up must come down and u have to live with that-

thats the name of the game- i get the answer that i am off my head-

i mean-my dad as been loving the fall-he is a bargin hunter-

he has bought over 7500 units in fmg in the last week or so-

dads having to deal with becoming a holder for once in his life-

i am on the edge also- i am thinking of lowering my stop as i know  ( u know what i mean) it will come around-

the magic question  is when-

how u been away?

Happy trading people lets have a good week-whats lefted of it-

Thanks

Nick--


----------



## agro (9 July 2008)

njc.corp said:


> Agro-how are u buddy?
> 
> is that not the topic lately-
> 
> ...




g'day nick

well considering i hold mainly iron ore and coal stocks, i (as like others) have been hit pretty hard..

but my philosophy is not quick gains over night but for the future to come..

once the market has sorted itself out, its back to basics 

people buying now, into whatever stock are getting a substantial discount..

if you are going to trade based on emotion (all doom and gloom) it's easy to loose.. patience comes to those who wait

that's all i have to say


----------



## roland (9 July 2008)

I suppose you guys already know about the steel plants being shut down for the duration of the Olympic games. It will certainly have an impact on short term ore demand:

from China Mining . org



> *China to shut factories ahead of Olympics  *
> (Reuters)
> Updated: 2008-07-07 09:53
> Counter:90
> ...


----------



## Nesa (9 July 2008)

I'll tell you one thing, if I had some spare capital I would be sinking it into buying more of this stock at the price it's at.


----------



## LeeTV (9 July 2008)

Hit an intraday low of $8.75, accumulating at these prices. Sunk the last of my capital in today so now it's time to sit and wait for things to settle back to some type of normality, hopefully sooner rather than later


----------



## Jonesie (9 July 2008)

They can't be far off they're 2 million tonnes, maybe only a week away from what I hear?  Anyone else know anything?


----------



## gav (9 July 2008)

Far out, some very good buy opportunities today.  I considered topping up, but hesitated.  Then it bounced back up very quickly.  Well done LeeTV


----------



## roland (9 July 2008)

I'ts a great price - but I day traded - in at 8.80 out at 9.20 - can't get much better than that 

Unfortunately it makes my parcel sitting at $11.70 looking pretty sad


----------



## impala_group (9 July 2008)

What about this little story:

there is a restrictive term in the company's 2006 bond issue that limits the company's iron ore expansion in the short term. A growth that is very crucial at moment because of the good ore prices etc. 

FMG is trying to come up with a way to beat this because the bond holders have influence in what the company is doing as they had some targets locked in for their bond grading (from 'B' to 'BBB' - and they are a couple of months off). And until this is attained there is no much the company can do. There are other avenues ofcoz but at the moment: 

The company is considering a demerger then spin off some assets to the new company in order to expand as rapidly as they want to take advantage of good iron ore prices. 

They have registered another company name...West Pilbara Iron Ltd: with mining concentrated in the west side of the the pilbara project. I think this will directly impact on FMG SP and dividend yield in future if it goes through.....several scenarios!!!

Experts where you at....???


----------



## agro (9 July 2008)

impala_group said:


> What about this little story:
> 
> there is a restrictive term in the company's 2006 bond issue that limits the company's iron ore expansion in the short term. A growth that is very crucial at moment because of the good ore prices etc.
> 
> ...




yeh i herd about the West Pilbara subsidary - pretty smart idea by twiggy and co !! 

not only would this allow them to borrow money but expand as you said

i'd def purchase some if i got the opportunity


----------



## LeeTV (9 July 2008)

impala_group said:


> What about this little story:
> 
> there is a restrictive term in the company's 2006 bond issue that limits the company's iron ore expansion in the short term. A growth that is very crucial at moment because of the good ore prices etc.
> 
> ...



That's the same article I posted on July 3rd pg39 of this thread (post #3) 
Fortescue battling legacy of the bonds


----------



## Boggo (9 July 2008)

From a charting perspective its following the rules, a run back up to just over $11 possible.
FMGIMU instalment warrant is an excellent short term instrument on this stock.

Just my


----------



## hollowpoint (10 July 2008)

As a totally new investor (3 months young) it's hard not to be disturbed by the volatility of FMG.  I have watched as it has gone from $9 a share to nearly $13 a share, then back down to $8.80 a share....  it's a real rollercoaster.  I am struggling to understand why it has dipped so dramatically over the last few days, whether it's being short sold, or just natural price movements... can anyone say adamantly what is happening to drive the price down, and if they expect it to reach the $13 mark?

BTW, I understand WHY shortselling occurs, if it IS short selling, but I cannot understand the ethics behind it.... it seems on the face of it a rather unethical practice. Amongst ethical investors, is short selling considered a legitimate strategy?


----------



## njc.corp (10 July 2008)

hollowpoint said:


> As a totally new investor (3 months young) it's hard not to be disturbed by the volatility of FMG.  I have watched as it has gone from $9 a share to nearly $13 a share, then back down to $8.80 a share....  it's a real rollercoaster.  I am struggling to understand why it has dipped so dramatically over the last few days, whether it's being short sold, or just natural price movements... can anyone say adamantly what is happening to drive the price down, and if they expect it to reach the $13 mark?
> 
> BTW, I understand WHY shortselling occurs, if it IS short selling, but I cannot understand the ethics behind it.... it seems on the face of it a rather unethical practice. Amongst ethical investors, is short selling considered a legitimate strategy?




i mean we are in bad times-put the thought of stocks out for a minute-

the market is choppy-the % is low on who is doing well-

it is choppy out their-and u have to take that with the good-

if u dont like choppy waters-u should be on the sidelines like many others-

$13.00 why not- its been their before- but the magic ? is when-

well i dont know-someone mention would we ever see $8-$9.00 again-why not we are here now-


will we  see lower prices in fmg- why not?
theirs is so much bad news out their at the moment about the market-

life goes on- its always going to happen-

as a holder-been for a while its not  looking good--meaning the ups and downs-but i must admit i am not upset at all as i was happy when we were up their-

Thanks

Nick--


----------



## agro (10 July 2008)

bit of relief for all FMG holders with the stock finishing in the green +11 cents for the first time in a few weeks 

lets hope this is the beginning for the next leg up as is typical FMG nature shown by the graph


----------



## gav (11 July 2008)

Well I almost topped up in the past few days, ALMOST.  I had a price set for which I would buy more at, but it didnt quite get there.  Well at least I know that when I have a set plan, I have the discipline to stick to it.

And we had a good day to end the week.


----------



## 2020hindsight (11 July 2008)

gav said:


> Well I almost topped up in the past few days, ALMOST.  I had a price set for which I would buy more at, but it didnt quite get there.  Well at least I know that when I have a set plan, I have the discipline to stick to it.
> 
> And we had a good day to end the week.



well gav, all I can say is that the people who stuck to FMG since 30june had a great day to end the week   - now for about 4 more !.


----------



## my mirror lies (12 July 2008)

What a relief to see it jump nearly 9% here in the States. I have 12,000 shares that I bought back in December 07' at $5.77, so I can't really complain, but it takes some time to get accustomed to the volatility of this stock. Maybe next time it touches $12 I'll sell, then wait for another sizable dip and buy back in.


----------



## diliff (14 July 2008)

Will this rollercoaster ever end???  

FMG really looked poised for a big gain this week looking at the charts.. what happened? The rest of the big miners barely moved south at all.


----------



## njc.corp (14 July 2008)

diliff said:


> Will this rollercoaster ever end???
> 
> FMG really looked poised for a big gain this week looking at the charts.. what happened? The rest of the big miners barely moved south at all.




My point of view is not for a while-

it seems lately that everyday has got its ups and down-

and in todays market nearly everything that i have looked at  is choppy-

so if trading in these times i see 3- things-

1-ride it out

2-bargin buying-

3-stand aside-

thats the way i am seeing it from my angle-but on a other note other materials stock are just like fmg-

even bhp and rio are having a rocky day-

so its also good to see others not doing so well-

Thanks

Nick--


----------



## diliff (14 July 2008)

njc.corp said:


> but on a other note other materials stock are just like fmg-
> 
> even bhp and rio are having a rocky day-
> 
> ...




I don't know about that. BHP is down 1%, FMG was, at the time of my post, down almost 9%. Bit of a difference! Recovered slightly but more volatile by a factor of 10!


----------



## njc.corp (14 July 2008)

diliff said:


> I don't know about that. BHP is down 1%, FMG was, at the time of my post, down almost 9%. Bit of a difference! Recovered slightly but more volatile by a factor of 10!




if u want to get technical-yes bhp  0.99% and rio 1.975%

but its been like that for a couple of sessions-

for what its worth-on a basic level

Thanks

Nick--


----------



## Go Nuke (14 July 2008)

I still don't see why people compare BHP and FMG?

Iron ore is the only thing they have in common


----------



## diliff (14 July 2008)

Go Nuke said:


> I still don't see why people compare BHP and FMG?
> 
> Iron ore is the only thing they have in common




I suppose simply because of the iron ore connection. If iron ore prices rise/fall, the iron ore miners do too, although obviously BHP does far more than just iron ore... 

FMG is pretty unique though really, so what else is there to compare it to? Is there another ASX stock as volatile lately as FMG with equivalent market capitalisation? If there is I'm not aware of it!


----------



## MRC & Co (14 July 2008)

diliff said:


> FMG really looked poised for a big gain this week looking at the charts..




How so?

FMG made a lower low, RSI showed a negative divergence on it's last foray to it's latest peak.

Some good support around the $8.50-$8.75, but below that, watch out.......?

Could be forming a H&S now.  

Looks like it is ready to trend sideways to me.


----------



## agro (14 July 2008)

njc.corp said:


> My point of view is not for a while-
> 
> it seems lately that everyday has got its ups and down-
> 
> ...





yes, until the market settles down , don't expect miracles to happen - with FMG or the majority of stocks, remember FMG is doing quiet well on a YTD basis up some 300%, if you can achieve that every year your laughing

remember we are in bear market territory, so one has to wait until the market starts rallying before real profits can be made imo,

unless of course u r a skilled trader


----------



## fordxbt (14 July 2008)

agro said:


> unless of course u r a skilled trader



and a trader with enough time on your hands
...........................................................


----------



## agro (14 July 2008)

on a different note:

http://www.railwaygazette.com/news_...e_opens_the_worlds_heaviest_haul_railway.html

Fortescue opens the world's heaviest haul railway  see link above!

*



FMG has holdings or tenements spread over 40 000 km² - about the same size as Switzerland. This far exceeds the combined tenement areas of both Rio Tinto (11 000 km²) and BHP Billiton (7 000 km²). 

Click to expand...


*
^^ don't u just love reading that as a holder


----------



## LeeTV (15 July 2008)

agro said:


> on a different note:
> 
> http://www.railwaygazette.com/news_...e_opens_the_worlds_heaviest_haul_railway.html
> 
> ...



Very nice read that, thanks for the link. After reading that I can't see why anyone would want to sell FMG at these current prices, are they mad?! :


----------



## hollowpoint (15 July 2008)

FMG $8.88..... yeah, great.... this is starting to be a real dog of an investment... everyone says but wait, it will come back up, but it just goes straight back down again...


----------



## njc.corp (15 July 2008)

hollowpoint said:


> FMG $8.88..... yeah, great.... this is starting to be a real dog of an investment... everyone says but wait, it will come back up, but it just goes straight back down again...




Are u investing on the what everyone say's?

are u one of those people who want's to make a million dollars over night-

do u think its a cheap investment or a stay away stock-

simple basic's say its pretty cheap at the moment from where we were-(base on what i thought)

what do u think?

could u go into a bit more on what u mean by this is a dog of a investment-

Thanks

Nick--


----------



## hollowpoint (15 July 2008)

it's pretty simple....  in order to make money out of FMG, I need the share price to increase (stop me if i'm going too fast)... it DOES increase, however it is VOLATILE and keeps dropping just as quickly...  for the purposes of short to medium term investment, it is a DOG...

this is my opinion.... it's a dog.  you are entitled to yours, of course.


----------



## JackJackJack (15 July 2008)

Which stock isn't a dog of an investment right now?
Although I admit FMG probably has the most fleas in my kennel currently.


----------



## enigmatic (15 July 2008)

I'm pretty sure you will find it hard pressed to find an "investment" i use that loosely as its the word you used. that hasn't Dropped considerably in the last few weeks. 
The idea of an investment is its for the future not for tomorrow. 
I would definitely say that FMG has been a terrible Trade had you bought at above the current price. But it is definitely not a bad investment. you generally have to wait 12months to get your annual return. a few rocky months shouldnt be weighed into your "Investments" performance unless it hits your stop loss price.


----------



## diliff (15 July 2008)

enigmatic said:


> I'm pretty sure you will find it hard pressed to find an "investment" i use that loosely as its the word you used. that hasn't Dropped considerably in the last few weeks.
> The idea of an investment is its for the future not for tomorrow.
> I would definitely say that FMG has been a terrible Trade had you bought at above the current price. But it is definitely not a bad investment. you generally have to wait 12months to get your annual return. a few rocky months shouldnt be weighed into your "Investments" performance unless it hits your stop loss price.






OK, but what factors do you think are driving the price of FMG at the moment?

Obviously market sentiment is one, iron ore price another. It seems as though, at least when I've been paying attention, the price follows roughly what the miners are doing, only far more exaggerated. If mining stocks go down 1-2%, FMG seems to fall about 4-5%. I just don't entirely understand what makes it so volatile. I know its a company with a single focus - aggressively mine as much iron ore as possible, as fast as possible, and in that sense I suppose it is at the mercy of the market more than a lot of the other miners out there, but is there anything else at work here?


----------



## agro (15 July 2008)

hollowpoint said:


> FMG $8.88..... yeah, great.... this is starting to be a real dog of an investment... everyone says but wait, it will come back up, but it just goes straight back down again...




this thread is starting to sound like a broken record

if you think it is going to go down further - then stay out of it, simple as that! find another stock better than FMG to invest in

sentiment is what drives a share price.. at the moment it is negative due to the global markets, yes FMG gets hit the hardest but when the market recovers (eventually) it will recover the fastest (imo.. hence the sharp declines and rises)

Fortescue still remains Fortescue, nothing has changed, only the share price, iron ore will still be in demand for the next few years, twiggy still has his plans..

that's all, i don't think i will bother adding my further , getting a bit repetitive of myself, maybe until some significant news comes out, or market rallies again.. 

best to sit on the side and don't get run by your emotion


----------



## impala_group (15 July 2008)

diliff said:


> OK, but what factors do you think are driving the price of FMG at the moment?
> 
> If mining stocks go down 1-2%, FMG seems to fall about 4-5%. I just don't entirely understand what makes it so volatile. I know its a company with a single focus - aggressively mine as much iron ore as possible, as fast as possible, and in that sense I suppose it is at the mercy of the market more than a lot of the other miners out there, but is there anything else at work here?




Look, FMG is a new a player in the iron ore industry which as you well know is dominated by BHP & RIO. 
The first shipment for its ore was what... may 08 i think?? There are alot of reasons why FMG is very volatile at the moment. In my opinion this is what really matters:

1. The bond legacy issue and rapid short term company growth - the talk about a spin off company - (West Pilbara Iron Ltd).  Not really a biggie

2. The ailing global economy and the impact this will have on china's growth (china being the biggest market for iron ore) - there is already a slow down in growth in the chinese export market, rising inflation, the cost of food and fuel etc. All this factors are not favorouble to any trade....and they are global.

3. Many investors expect FMG stock to underperform at first - now that they have fully entered the iron ore trade.The stock then will find its place based on the company's perfomance in delivering. 

Basing ourselves on past achievements so far....i highly doubt that this will be the case. So when these guys are dumping stock....buy them!! Look at the long term prospects of the company.

On a good note though, FMG controls enormously fields of iron and if takeovers are anything to go by in evaluating any industry: Then Sinosteel's interest in Midwest should guide you on how important this resource is to the developing nations. 
Also its worth mentioning that Sinosteel and Baosteel have very strong interests in FMG as well. (they are the biggest state owned steel manufacturers in China - they must know their market needs- this is an assumption here: Do some research

I could go on all day.....my verdict: If you can....grab yourself these bargains and surf the wave. The stock exchange is driven by speculation.... ask questions, find answers and then just do it!!! Grab the profits when you can, but as the great one says...."dont loose money"


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## renim (15 July 2008)

broken record, hey.  what about the hackneyed phrase,  In the short term the market is only about popularity but in the long term the market is about value.

fmg seems to attract shorters,  its growth has been spectacular for some and unbelievable for others.  if you buy them using margin, expect to have your stop losses tested, keep away.  short term shorters make money from other people stop losses.  when the market goes bear, fmg gets savaged.
but
fmg fundamentals keep getting less risky and are still phenomenal. 08'09 ebitda of 3.4bill (just bigger than wow) do justify its market cap (back at $12 a share) and fmg has realistic options to quadruple.   their cost base is the same as Vale or bhp-tinto,  very low.  target valuations of fmg may seem absurd, but they have some fundamentals behind them not sentiment, and so fmg resumes it climb upward.

as for story,  unless china stops urbanizing, globalising and industrializing, then their demand for steel will be strong.  currently i'ld guess china accounts for 35%-40% of world steel production.  and for GHG, steel is better than concrete.


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## diliff (15 July 2008)

Well, looking at the UK Google Finance page (http://finance.google.co.uk/finance), FMG might be in for a rough ride tomorrow. Basic materials down 3.7%, BHP Billiton down 4%... Might be knocking down previous support levels around the $8.8 mark. We shall see.


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## enigmatic (16 July 2008)

Offcourse FMG would be more volatile.
BHP and RIO are proven companies with Proven Profit, these two companies have proven there capacity as Global mining companies. 
FMG is still just small fish in a big pond trying to prove itself. 

so i guess the point is BHP and RIO are "Known risk" FMG is an "Unknown risk"
we still havent seen a quartly report which indicates there profit. does FMG even have a positive P/E ratio.


----------



## LeeTV (16 July 2008)

diliff said:


> Well, looking at the UK Google Finance page (http://finance.google.co.uk/finance), FMG might be in for a rough ride tomorrow. Basic materials down 3.7%, BHP Billiton down 4%... Might be knocking down previous support levels around the $8.8 mark. We shall see.



Good call. FMG opened lower and has dropped some 4% in the opening minutes of trade to $8.61... wish I had some more capital! Stuck what I had left in to AVO yesterday.


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## hollowpoint (16 July 2008)

My first buy in was at 9.31, then 9.35, then 11.35.... then it dropped after that.  The bulk of my shares were bought at 11.35 though....

One could argue that no-one could be that stupid, but honestly, I thought that we were going to break the $15 a share mark....  

So, now it is currently at 8.57, down almost $3/share from the bulk of my buys, I somewhat regret it.  It was bought on emotion too, as my partner works for a company owned by FMG....  dumb de dumb dumb...

I guess you live and learn.  Mind you, all I need is a share price of $15 to make me happy.... but because of this whole Western Pilbarra thing, is that even possible?  What I mean to say is is there a limit to how high it can go?


----------



## njc.corp (16 July 2008)

hollowpoint said:


> My first buy in was at 9.31, then 9.35, then 11.35.... then it dropped after that.  The bulk of my shares were bought at 11.35 though....
> 
> One could argue that no-one could be that stupid, but honestly, I thought that we were going to break the $15 a share mark....
> 
> ...




$3.00 a share down- what do u do-

1.do u need the money asap

2.u got more captital to buy at the cheap price it is

3.u got a stop

dont take it to heart-thats just the way it rolls-

Keep your chin-up

Thanks

Nick--


----------



## hollowpoint (16 July 2008)

1.do u need the money asap - NOT REALLY

2.u got more captital to buy at the cheap price it is - UNFORTUNATELY NO

3.u got a stop - MY GIRLFRIEND'S WHINGEING


----------



## agro (16 July 2008)

hollowpoint said:


> *1.do u need the money asap - NOT REALLY
> *
> 2.u got more captital to buy at the cheap price it is - UNFORTUNATELY NO
> 
> 3.u got a stop - MY GIRLFRIEND'S WHINGEING




if you don't need the money asap, and want to save 50% discount of tax (depending ofcourse how much you have invested in it), 

it would be wise to leave it there untouched for the time being, people love to make money over night but it rarely occurs.. 

patience is a virtue esp. when it comes to the stockmarket, 

don't be shortsighted all i can say


----------



## oldblue (16 July 2008)

I've been reading up on FMG for some time now and have finally decided ( I think) to buy some when the SP shows a bit of strength.
Seems to me that a lot of contributors to this thread are traders and I can't see that this is a trader's stock at the present time, rather it's one for the long haul as it ramps up production, pays down some of that debt, whittles away accumulated losses ( $68m last year alone ) and finally gets down to paying good divs. Which I'm pretty sure it will, in time.
Just wish I'd bought a couple of years ago!


----------



## renim (16 July 2008)

fmg dropped about 30% shortly after my first entry into it.  that is now the second best purchase of stocks in my life


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## hollowpoint (17 July 2008)

you lost 30% and it's the 2nd best investment you have made? Did i read that correctly? lol

Buying FMG is much like 

I am down $20k on it so far.......  whilst that is not disastrous, I'm not too impressed.

I actually thought that i could make maybe 20% on my money in around 1 month.... hahahahahahahaha..... idiot......


----------



## Nesa (17 July 2008)

BHP and RIO both down 3% as of now, FMG up 1.70% 

on the back of a 2.52% gain on the DOW



- hollowpoint, what did you buy FMG at?


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## hollowpoint (17 July 2008)

too much....

9.31, then 11.35... then a small parcel at 9.15.... most was at 11.35 though..... duh!


----------



## subaru69 (17 July 2008)

I fell asleep in front of Bloomberg (or the like) a few nights ago and I woke up and on the screen were 2 points (therefore I can't put any context to this):

1. Sell into any rally
2. Go long on commodities

The conundrum is that FMG seems perfectly good to 'dollar cost average' (yes I know there are varied opinions and read the thread on it a while ago) into, thus satisfying Point 2. However it would contradict indirectly Point 1. as it's basic premise is that the market hasn't found a bottom and we are just seeing a series of Bull Traps.

Funnily enough commodities have gone to POO (pls excuse the _double entendre_) in the last 24hours, so the magical/prophetorial nature of my 'vision' is likely to be crap anyway.

PS- if anyone has the answer to life's mysteries please feel free to PM or if you're motivated enough why not start a new thread


----------



## njc.corp (17 July 2008)

hollowpoint said:


> you lost 30% and it's the 2nd best investment you have made? Did i read that correctly? lol
> 
> Buying FMG is much like
> 
> ...




idiot-no not really-u just want to make money-(dont we all)


seeing u are down-20k-looks like money does not seem to be a problem-

have u bought at these  $8.00 levels-or theirs no more captial left-

not telling u what to do with your money but it seems a good buying point to me and 8 compared to $9 vs $10 etc etc

just want to see how others are trading and want to see if that myth of having money for a rainy is valid here-

like i said i am not telling u to do anything--

Thanks

Nick--


----------



## subaru69 (17 July 2008)

subaru69 said:


> FMG seems perfectly good to 'dollar cost average' (yes I know there are varied opinions and read the thread on it a while ago)




Even though I am s-t-r-e-t-c-h-e-d currently, I think FMG isn't the worst stock on the market and probably deserves doubling up on (my buy in was just above current price and ~5000units). 

Only problem is SUN Margin doesn't give any leverage, apparently Commsuc gives 40%.


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## renim (17 July 2008)

hollowpoint said:


> you lost 30% and it's the 2nd best investment you have made? Did i read that correctly? lol
> 
> Buying FMG is much like
> 
> ...




i didn't sell that buy, and it was before fmg's split.  i'm just saying that my first entry into fmg was followed by a 30% drop, but is now worth considerably more than i paid for it.  historically you could make 240% pa  on fmg.  my target price for fmg is around $30-$40 in 3-4 years, which is not 240% pa anymore,  but with reduced risk 

off the dozen varied stocks that i watch closest, fmg is the only one that i'm bullish and confident on in this market over a 2 year timeframe


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## poretti (17 July 2008)

i bought in at ~$22 before the share split, current price equivalent would of course be ~$2.20.

i can solely thank charlie aitken for starting me on the research path to that purchase, the man has a rare degree of insight and clarity of thought that i find rare in our mainstream media sources.

im just your average punter but there are commentators they put on TV and in print, i see what they have to say, understand the logic / reason of what they say and pick massive flaws in it.  its just inane and banal but they feel safe in their majority views.

aitken FTW


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## hollowpoint (18 July 2008)

Catch-22

I think that at 8.88, FMG IS good value, however I do not have a margin lending account and I am maxed out.  It will take 5 days (excluding w/ends) to get the margin account approved and set up.

Is anyone aware of any other sources of lending that takes less than 5 days to set up?

NAB will lend 70%, but I need around 80-90% anyway.


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## njc.corp (18 July 2008)

hollowpoint said:


> Catch-22
> 
> I think that at 8.88, FMG IS good value, however I do not have a margin lending account and I am maxed out.  It will take 5 days (excluding w/ends) to get the margin account approved and set up.
> 
> ...





to be honest with u i dont know anything about margin stuff-as i have never had it-

who are u with if u dont me asking

Thanks

Nick--


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## hollowpoint (18 July 2008)

What do you mean Who am I with?   for my online trading? NAB....  Who am I with, in so far as my company? I have a web design company., the name of which should be self-explanatory!


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## hollowpoint (18 July 2008)

I just re-read my last post.... sorry about that, it came across as a bit aggressive when in fact it is not.   My company is Hollowpoint Pty Ltd...
a web design and marketing company.

I typed the last entry quite quickly, so I am afraid it came off as a bit rude....  sorry about that


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## hollowpoint (18 July 2008)

FMG $8.77... dammit... I want back in...    I really regret having bought high.  My girlfriend is none too happy either!


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## agro (18 July 2008)

anyone notice a difference in the market depth of FMG

5 million buy volume

there is 3 lots of 1 million under $8

wtf lol


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## njc.corp (18 July 2008)

agro said:


> anyone notice a difference in the market depth of FMG
> 
> 5 million buy volume
> 
> ...





ifs that's not a sign of value- i dont know what is-

argo have u been stocking up lately or u happy with your lot

Thanks

Nick--


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## agro (18 July 2008)

njc.corp said:


> ifs that's not a sign of value- i dont know what is-
> 
> argo have u been stocking up lately or u happy with your lot
> 
> ...




haven't had the opportunity to buy more cause i have been in margin call or buffer for most of the last two weeks , though i am queit happy with what i have, all one can do now if they bought at high prices is maybe to lower their average buy price (dollar cost average?)

i remain bullish on Fortescue though - its just the current markets that is real head  at the moment

once earnings are announced and the dust settles can FMG get back on track to its run to $15

i wonder who wants the 1m parcels though - chinese or someone playing games?


----------



## hollowpoint (18 July 2008)

ouch... $8.14 at one point....  

WHY did i spend all my money??!!!!!

should have kept some reserves i think


----------



## oldblue (18 July 2008)

oldblue said:


> I've been reading up on FMG for some time now and have finally decided ( I think) to buy some when the SP shows a bit of strength.
> Seems to me that a lot of contributors to this thread are traders and I can't see that this is a trader's stock at the present time, rather it's one for the long haul as it ramps up production, pays down some of that debt, whittles away accumulated losses ( $68m last year alone ) and finally gets down to paying good divs. Which I'm pretty sure it will, in time.
> Just wish I'd bought a couple of years ago!




Patience is required!( Not one of my strong points.)
Not a buy yet but looking better all the time!


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## agro (18 July 2008)

here's why FMG's price fell:

Native title win against FMG 



> Traditional owners in the Pilbara region are celebrating a win in the National Native Title Tribunal over Fortescue Metals Group Ltd after proving the company failed to negotiate in good faith over a tenement application.
> 
> Members of the Puutu Kunti Kurrama and Pinikura native title claim group and the Wintawari Gurama Aboriginal Corporation have successfully proved that the mining giant failed to fulfil its obligations under section 31 of the Native Title Act 1993.
> 
> ...




http://www.wabusinessnews.com.au/en-story/1/64765/Native-title-win-against-FMG-


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## hollowpoint (18 July 2008)

wow... i can't even comment here....  one would think that iron ore is good for the economy...  good for everyone....  apparently not.  without being specific, this really ticks me off.


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## subaru69 (18 July 2008)

hollowpoint said:


> wow... i can't even comment here....  one would think that iron ore is good for the economy...  good for everyone....  apparently not.  without being specific, this really ticks me off.




Cannot believe it either. 

As I've posted on other threads lately, I have finally decided that I don't understand the world anymore. 

Instead of studying, investing and researching I will now dedicate my energy to watching Mad MAx films so that I will know how to survive in the future.


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## gav (18 July 2008)

i bought a small parcel today at 8.25. brings my average down to 9.06 (from 9.30)                                                            



gav


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## njc.corp (18 July 2008)

subaru69 said:


> Cannot believe it either.
> 
> As I've posted on other threads lately, I have finally decided that I don't understand the world anymore.
> 
> Instead of studying, investing and researching I will now dedicate my energy to watching Mad MAx films so that I will know how to survive in the future.




mad max? come on--dont forget about waterworld-

Oh well the week ended on a downer-

happy trading for next week guy's

Thanks

Nick--


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## slj2009 (18 July 2008)

agro said:


> haven't had the opportunity to buy more cause i have been in margin call or buffer for most of the last two weeks , though i am queit happy with what i have, all one can do now if they bought at high prices is maybe to lower their average buy price (dollar cost average?)
> 
> i remain bullish on Fortescue though - its just the current markets that is real head  at the moment
> 
> ...




Chinese will help FMG all the time, coz FMG is becoming a strategic alliance partner with China (what I hope so)


----------



## Nick Radge (18 July 2008)

There have been some indications of weakness over the last month. This was from July 2:

http://www.projectstreamer.com/users/reefcap/020708_fmg/020708_fmg.html

The Elliott Wave picture suggests this current decline is now a 5-wave decline meaning its the first leg of an ongoing corrective phase. Unlikely we'll see new highs for some time but probable we'll go lower eventually.



_This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision._


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## Miner (18 July 2008)

subaru69 said:


> Cannot believe it either.
> 
> As I've posted on other threads lately, I have finally decided that I don't understand the world anymore.
> 
> Instead of studying, investing and researching I will now dedicate my energy to watching Mad MAx films so that I will know how to survive in the future.




Hi
You are so candid about your lack of understanding about world
May be you please ask who understands the world 

I am sure the brokers will lift FMG on Monday. It is now part of ASX 200 so will get support. I strongly feel that some brokers are manipulating the price Traditionally whenever FMG fell drastically it went up so let us hope

I was opportunist to buy a small parcel of FMG at $8.2 and hope it stays there for some time or rise up, Who knows when BHP is sliding down so much


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## subaru69 (18 July 2008)

Thanks Miner,

It's good to get a slap back to reality. 
Literally the only people I 'know' who invest/trade are on this site and it gets a bit lonely in the real world with no-one to bounce ideas off, esp with the market tanking. :nosympath
(In my industry, at the level I'm at, all anyone cares about is career progression. Their limit of knowledge re finances is HECS debt.)
Anyway now that I've had my whinge, back to the salt mines. 

In regards to strategy with FMG I agree some averaging is the way to go, pick some up at 8 if they get there Monday.  How ironic, I'm hoping the market drops.


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## Miner (19 July 2008)

some extract from Eureka Report

Part of this has already been reported in West Australian business page

Charlie Aitken has been the only broker who supported FMG share at its rock bottom price before the split

I personally will be interested to know his stand when formally Southern Equity starts as a wing of Bell Potter as the Head of Research of BPS has always circumspective of FMG

Extract from Eureka Report written by Charlie Aitken


*In the case of Fortescue, I expect the "trigger" event to be the announcement of "project completion" this month. That announcement should also be accompanied by a statement about Fortescue's expansion plans and product shipments to date. In my view that should lead to the "buy the fact" trading response we are seeing in large-cap Australia 

Fortescue has an extremely low free float of about 11%, so I would expect the short squeeze to be violent when it starts. It also surprises me that local institutions, who are structurally underweight Fortescue, are not using this period of price weakness to accumulate stock. Fortescue is the stock local institutions always forget to buy into weakness*


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## renim (19 July 2008)

friday's fin review was also making similar noises about fmg likely announcements on project completion etc


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## Frankhalo (21 July 2008)

Nice 

The achievement so far:

• Mine, railway and port completed
• Three million tonnes shipped, two million of those in the past four weeks
• 194 trainloads taken to port
• Twenty ships loaded and dispatched
• About $200 million already through the door by way of customer payments.

Brilliant achievement from a standing start mid May, and it keeps on growing.


----------



## CoffeeKing (21 July 2008)

extract from "Business Spectator" at 2:05PM 20th July 2008

Fortescue gets expansion nod

By a staff reporter 

Fortescue Metals Group Ltd says it can now expand and further develop growth projects throughout West Australia's Chichester Ranges, after achieving "Project Completion". 

The milestone required the resource firm to mine, rail and ship two million tonnes of iron ore within a four week period, which has been verified by Behre Dolbear Australia, the project's independent engineer. 

It means Fortescue has now satisfied certain conditions within its financial arrangements, allowing it to pursue expansion and development plans for the Chichester Ranges. 

It comes eight weeks after the company shipped its first load of iron ore to Chinese steel major Baosteel. 

Mr Forrest said it marked another step towards the company's goal to become a major mining player. 

"This sets a great platform for the continuing ramp up of our project to its initial targeted capacity of 55 million tonnes,” Fortescue chief executive Andrew Forrest said. He also said the Chichester Ranges could support operations of 150 million tonnes a year with demand for iron ore set to remain strong for more than a decade, Fairfax reports. 

Fortescue has previously flagged increasing iron ore production to 200 million tonnes a year. 

"We can achieve a mining house in the iron ore business at least the scale of BHP's medium term objectives just in the Chichester region alone," he said in the report.

http://www.businessspectator.com.au...sion-nod-GQ6CP?OpenDocument&alerts&loc=center


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## hollowpoint (21 July 2008)

interesting.... too many factors in play here to work out the right strategy. maybe price averaging is best.

current is 8.12....  but there is a project completion announcement, negative news regarding the native title claim (or whatever it is) and that other link seemed to suggest a price of around 8 was about right.....  so very confusing as to what will happen.  I'd like to see some major movement either way, but from all accounts it doesn't look like we will see $13 for a while.

again, i wish i had some readies to buy at 8.12......


----------



## hollowpoint (21 July 2008)

Does anyone know exactly when earnings are announced?  I thought someone said August before?       ..........


----------



## MichaelD (21 July 2008)

Well, FMG hit its stop loss for me on Friday, so I've now closed my positions - thanks to the true believers for an excellent exit slippage-wise this morning.

Good luck to those that hold.


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## hollowpoint (21 July 2008)

sorry to hear that.  i thought about a stop-loss, but i just have this feeling i cannot get away from that it's about to hit a high again.  clearly i'm not basing that on anything solid, but i believe it will be a nice week for FMG.  8-10% increase per day for a few days would make me happy.


----------



## Miner (21 July 2008)

Do not know if I should call myself a greedy, non believer or stupid but I was lucky to buy FMG last week at $8.12 on Friday and sold them at $8.75 today.

The price will go up again probably to $10 based on  what Andrew said in West News and his expansion plan published in ASX. 

But with my recent experience with GCR with loss of 50% in a substantial investment (still holding as just do not have the mental capacity to turn out the paper loss into real loss) I could not believe the market volatility. 

Regarding FMG the independent engineer's report is excellent to say that it has achieved full capacity within two months which is normally not even done in 10 months by many projects after commissioning. 

So not knowing how much due diligence has been really done behind the engineering analysis to certify the full capacity and if desanding is fully commissioned or not, (I am not doubting it but with my experience it is an excellent outcome) I do believe this report is a good story for me to return to FMG again in near future unless it reaches a fathomless high.

My best wishes to all true believers


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## Go Nuke (21 July 2008)

Yeah I too nearly pulled the pin on FMG on Friday, as I bought into the stock in about Jan for $7.70.
I copped too many losses in my short time and I was prepared to take a really crappy gain (from where the sp has been) rather than see yet another loss on paper

One day i might learn to use stops!

Guess I am looking long term, but for 7 months Ive holding, ive got little to show today


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## hollowpoint (21 July 2008)

nice finish at 9.10 

last parcel i bought was at 9.15, so i have almost recovered that at least! i'd like to see another 4 or 5 days with 12% gain!


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## njc.corp (21 July 2008)

hollowpoint said:


> nice finish at 9.10
> 
> last parcel i bought was at 9.15, so i have almost recovered that at least! i'd like to see another 4 or 5 days with 12% gain!




$9.130- nice-

but from what i have been told-its needs a bit more time-but i will take the nice gain we got today-

on the other note-was todays gain in fmg and even the metal sector driven by the stats that their is no sign of  china's economy slowing down-or was it due to a overselling point and profit taking of last week or bit of nerve's

Any more info would be nice

Happy trading

Thanks

Nick--


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## gav (21 July 2008)

Well, the little parcel I bought Friday arvo means that I'm back in the green 

Its funny how quickly things can change...

PS. I hope whoever has been shorting FMG got bit HARD today 

And a nice little article at news.com.au
http://www.news.com.au/business/story/0,23636,24052089-14334,00.html


----------



## hollowpoint (21 July 2008)

i thought it was being short-sold, but i have gathered from what other people in the forum are saying is that it is a combination of:

1.  low price from being overvalued anyway and that the drop is just a market correction

2.  lots of margin calls putting pressure on investors, lots of stop-loss

3.  increased again on the back of the latest announcement of completion

4.  overall improvement in the asx following wall st improvements

that's the way i understand it anyway.  i am betting (ie.. no stop loss for me) that we will see between 4-10% per day gains this week.


----------



## njc.corp (21 July 2008)

hollowpoint said:


> i thought it was being short-sold, but i have gathered from what other people in the forum are saying is that it is a combination of:
> 
> 1.  low price from being overvalued anyway and that the drop is just a market correction
> 
> ...




That all well and all-but hollow can i ask why  the comment on the stop loss-

is it a example or u dont use one-

i am a bit loss on that comment

Thanks

Nick--


----------



## hollowpoint (21 July 2008)

ie means That is, not For Example...

MichaelD said he hit his stop loss.  i was saying i am prepared to lose my money so i am not even going to contemplate selling for a loss.


----------



## questionall_42 (21 July 2008)

hollowpoint said:


> i was saying i am prepared to lose my money so i am not even going to contemplate selling for a loss.




Ummm.. isn't that a contradiction hollowpoint? Will you only realise losses if FMG goes bankrupt or into liquidation? If it plummets and hovers at half its value for 10 years will you still not contemplate selling for a loss? I struggle to see the logic in your buy and hold approach REGARDLESS of what is happening with FMG or the market.


----------



## njc.corp (21 July 2008)

questionall_42 said:


> Ummm.. isn't that a contradiction hollowpoint? Will you only realise losses if FMG goes bankrupt or into liquidation? If it plummets and hovers at half its value for 10 years will you still not contemplate selling for a loss? I struggle to see the logic in your buy and hold approach REGARDLESS of what is happening with FMG or the market.




Okay-what i gather is that he is ready to go down if it heads south

but he will not sell at a loss-

if so its no one's place to tell him how to trade-

but i must say i know a couple of traders like that-their motto is all in or nothing-

wether thats right or wrong-well i dont know

But the ? i see out of this is what happens if it stays south hollowpoint say for example 6-12 months will u still hang in their or will u say stuff it i am out of this one and look for something else?

only a question  nothing less so don't think i am having a go at u -

Thanks

Nick--


----------



## impala_group (21 July 2008)

I think i'm holding as well, at least until the waters calm down a little bit. I'm back in the green today so i take that as a positive.


----------



## hollowpoint (21 July 2008)

Questionall_42, you use your strategy, and I will use mine 

but thanks for your valued feedback, even though it doesn't really involve FMG but just a generalised comment you are making about my strategy... but thanks anyway.


----------



## hollowpoint (21 July 2008)

njc.corp said:


> Okay-what i gather is that he is ready to go down if it heads south
> 
> but he will not sell at a loss-
> 
> ...




spot on! Thanks Nick.

In for a penny, in for a pound, and if it sinks, it sinks.  If it takes 10 years to turn a profit, then it takes 10 years... but you know, i think we will see $15-30 per share within a year.


----------



## agro (21 July 2008)

IRON ore miner Fortescue Metals is expected to quickly achieve its ambitious production ramp-up to 55 million tonnes a year, analysts say. 
Fortescue (fmg.ASX:Quote,News) yesterday announced it had reached the `project completion' stage at its Cloudbreak mine in Western Australia's Pilbara region, under the terms of its $2.7 billion bond financing, allowing it to expand and develop new projects. 

The news sent Fortescue's shares 89 cents, or 10.96 per cent, higher to $9.01 at 3.18pm (AEST). 
Fortescue has shipped more than three million tonnes (Mt) of iron ore since commencing exports in mid-May, with 2Mt shipped in the past four weeks. 

Fortescue chief financial officer Chris Catlow told AAP recently that the company aimed to export 22Mt by December 31 and 45Mt by the end of the 2008/09 financial year. 

"We hope to be at the run rate of 55 Mt during the March quarter next year,'' he said. 

DJ Carmichael resource analyst James Wilson said he believed Fortescue would achieve its ramp-up goals. 

"I have no doubt they'll meet their target,'' Mr Wilson said. 

"They are ticking all the boxes. 

"It's been quite a successful mine commissioning, particularly considering it was the biggest infrastructure project in Australia.'' 

Mr Catlow said the company was "the process of negotiating with various banks to allow us to have operating lease facilities in place''. 

Fortescue had about $600 million in the bank at the end of the March quarter. 

"Under the restrictions that we have pursuant to the senior secured notes, we can take on more debt when we reach the interest coverage ratio: our earnings before interest, tax, depreciation and amortisation (EBITDA) has to be more than two and a half times the interest bill, and we probably won't be at that stage until either later this year or early next year,'' Mr Catlow said. 

"Up until that point, we're able to take on additional operating leases.'' 

He said Fortescue had repaid a $200 million bridge-to-equity loan and expected to achieve EBITDA of $3.4 billion for the 2008/09 financial year. 

"We've raised $3 billion, which is permanent capital and we've got $2.1 billion of (senior secured) notes, which are debts that get paid within five, seven and 10 years from when we raised them in August 2006. 

"And the rest of the money was in pure equity.'' 

Mr Wilson said Fortescue would ``pay that back in no time once they get firing'' at a production rate of about 30Mt per annum. 

"They've got quite a task juggling creditors, but in a couple of months we'll see funds going back into the bank.'' 

He said Fortescue's expansion was already factored into its share price.

http://www.news.com.au/business/story/0,27753,24052097-462,00.html


if anyone saw the eureka report the NPV stated is between $14-$18

FMG is greatly undervalued!


----------



## questionall_42 (21 July 2008)

hollowpoint said:


> Questionall_42, you use your strategy, and I will use mine
> 
> but thanks for your valued feedback, even though it doesn't really involve FMG but just a generalised comment you are making about my strategy... but thanks anyway.




yep - best of luck. Guess with a volatile stock in volatile times my approach has changed. enjoy the ride.


----------



## Miner (21 July 2008)

In the past I have quoted recommendations published in Compare Share from this mob about calling FMG as a SELL. I think the effect of 40% single malt has gone down a bit for him and still there is a hangover for him calling FMG from SELL to HOLD. 

Probabaly he has accumulated enough of FMG now to say BUY to his clients and then will dispose off his holdings. 

ANy way posting his extract for having some fun 

*MARK GOULOPOULOS
TOLHURST*

*HOLD RECOMMENDATION 

Fortescue Metals Group (FMG) *

_We have updated our commodity price and exchange rate forecasts to reflect the increased iron ore price settlements achieved by BHP Billiton and Rio Tinto, and the stronger Australian dollar. The net effect of this is an increase in our price target for this iron ore company and a resulting upgrade from sell to hold. Should the company meet its production forecast, we feel it’s appropriately valued at current levels_.

I do not know folks if I would put my money on his advice probably not but worried for those who are listening on such analysts


----------



## Go Nuke (22 July 2008)

Well i'm afraid with the market up today and FMG down, it was making me too nervous to continue holding so i closed my position for a crappy 15% gain

Still I'm happy to just have a gain than yet another loss.
Out of curiousity, what kind of % margin do people here use for a stop loss? I really need to use them

Ive decided to chase up a hot tip  instead so Goodluck to those that continue to hold FMG


----------



## Go Nuke (22 July 2008)

LeeTV said:


> A crappy 15% gain?! Any gain is a good gain in my books  (yada, yada, yada making up the required limit)




Its not good in my eyes when i bought them around Xmas time.

If I knew what i was doing I could have made that 15% many times.

Live and learn


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## njc.corp (23 July 2008)

Some more news for ones that are interested-

www.bloomberg.com/apps/news?pid=20601081&sid=agvNrhIxkce0&refer=australia

Fortescue Considering Funding From Asian Customers, Review Says 

By Rebecca Keenan

July 23 (Bloomberg) -- Fortescue Metals Group Ltd. is considering a funding package from Asian customers, including Baosteel Group Corp Ltd., for a proposed expansion of its mine in Western Australia, the Australian Financial Review reported without citing anyone. 

Happy trading-

Thanks

Nick--


----------



## Miner (23 July 2008)

Folks

This is an interesting  timely alert  from FMG posted today and self explanatory,

I am guessing considering there is a fund raising scenario the prices will be at high at least to be higher than the price FMG is going to raise fund for next phase.

Ironically last year when they raised $650 M at $36 (?)  (before split)  the price was hovering at about $39 some one asked Graeme Rowley if the price would ever be available at $36 ? He grinned and said NO. Ironically soon thereafter the big slump happened and the FMG was selling at market at $22. 

I wish the same immaturity from investors should not repeat now after fund is raised from ASIAN markets. We need to see green and green only.

Regards


----------



## renim (23 July 2008)

i doubt that they will go to market for more equity.   they've got good cash flow,  good profits, and apparently good customer relationships.  more likely forward sell some ore for expansion plans contingency cash.


----------



## fordxbt (23 July 2008)

anyone else seeing the golden cross appearing on FMG's charts, around 2 weeks away ill hold off getting more packages until then


----------



## renim (26 July 2008)

an interesting read in today's smh ?? about the rio/baosteel negotiations.   
+
eureka report also notes that the aussie market is shorted almost as much as the us market  4.3% vs 4.6%


----------



## paulgarcia83 (26 July 2008)

*whats going on over there?*

I am in the U.S. and I was just wondering what is the deal with this stock last week I seen it had only opened like 2 times or was I mistaken?  Either way can I get some advice on if I should hold my shares or sell?  Do you think this thing will go back up anytime soon?  Please someone give me something


----------



## njc.corp (27 July 2008)

*Re: whats going on over there?*



paulgarcia83 said:


> I am in the U.S. and I was just wondering what is the deal with this stock last week I seen it had only opened like 2 times or was I mistaken?  Either way can I get some advice on if I should hold my shares or sell?  Do you think this thing will go back up anytime soon?  Please someone give me something




u are mistaken  on fmg being opened on 2 times last week -

maybe u have some program issues with your broker-

ahmm-hold or sell=i aint going to tell u what to do  with your money-

but imo  i  do think it will take time to  go back to where we were at $10.50+ but when is that is a other  million dollar question

has far as i care - i just want  to see how much lower this fmg stock can go?

i have bought over 5,000 units lately on the low side-on advice that i enter at my own risk in these choppy markets-

i am looking at it for a long term point of view-

i want to see more good cash reports of profit and loss-seems its starting to come in but i need more time-

i want to see how they spend their money

i want to see if the div's are coming-

i want to see their how they go next year-if they are any where near their 44-55 mtpa

there's a lot of  things that i am waiting for so i reckon its going to take time-

imo-

The past week as brought me a little back to earth- on how this choppy market can  turn on u -well for me that is-

Happy tradding to all for this week--

Thanks 

Nick--


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## renim (29 July 2008)

all quiet on the fmg front
waiting for the next expansion announcement.   its still the only stock i follow with both a bullish and a confident feeling.


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## Nick Radge (29 July 2008)

As per post #861, we've now met the apex of the larger triangle however there is no technical evidence of a turn higher, yet. There are two positives; we seem to dropping in a descending wedge which may precede a bounce back to its origins circa $10, and, secondly, the bearish divergence which signaled this decline has unwound. No evidence of a relief rally just yet though. The larger trend is clearly corrective. Any bounce is more than likely going to be limited. New highs are not expected any time soon, if not at all this year.


_This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision._


----------



## ans25 (29 July 2008)

Hmm, I agree you with you except your last statement.

FMG has the potential to increase in sp very rapidly, I wouldnt discount getting to $12 high's in even 2-3 months.

I'm seriously looking to enter FMG sometime tomm, if you see someone buying about 3000 then thats me 

I just think long term this can increase a lot, however it is a bit volatile for a blue chip


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## Miner (29 July 2008)

Looks like many of us have read the quarterly report published.
Cash position is interesting though very small considering the fund required for T100 or T200 expansion (T45 means 45 million tonnes and so on)

With the tragic death in BHP iron ore today, probably some investors will tend to buy FMG on Wednesday - my guess based on typical investors mindset and own experience. I  can not prove with any scientific data unfortunately without having right crystal ball in front of me

http://www.asx.com.au/asxpdf/20080729/pdf/31bdgyqv08g96y.pdf


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## renim (30 July 2008)

the quarterly report was interesting
very roughly
    cash was close to crunch, but was not,  apears FMG knew how close to get the line
   cash flow is good and will get sublime
   10 road miners are go, 2 more being assembled and 2 more coming
   rough calc was road miners having 88mtpa capacity? (includes 2 being serviced at any time.)
   some type of expansion is also underway.

next 6 months should be very productive in SP, but near term will still be choppy until future expansion plans are known


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## Miner (31 July 2008)

You may like to see this from WERE

_FMG – Fortescue Metals– Weres keep BUY and 1219c target – said FMG has achieved excellent start to its iron ore production with project completion achieved within set time frames – says Australia’s iron ore stocks well positioned nearby major markets and that the global market will strongly support FMG’s ramp up and future expansions. Changes FY08 and FY09 EPS by -7.5% and +3.8%_

Looking for a up market after good DJ index 

Enjoy the prosperity (I do not hold FMG)


----------



## agro (31 July 2008)

*Fortescue shareholder sells $226 mln stake -source
*
SYDNEY, July 31 (Reuters) - A large shareholder in Australian iron ore miner Fortescue Metals Group (FMG.AX: Quote, Profile, Research) sold A$240 million ($226 million) worth of his stake to local and overseas investors, a source familiar with the deal said on Thursday.

The sale, which represents about 1.1 percent of Fortescue's issued capital, was managed by Goldman Sachs JBWere and Southern Cross Equities, the source told Reuters. He declined to be identified because the deal had yet to be made public.

The shareholder sold 30 million shares at A$8.00 each, the source added, a 4.8 percent discount to Fortescue's closing price of A$8.40 on Wednesday.

"The demand was strong, the book was well covered and well covered pretty early," the source said. ($1=A$1.06) (Reporting by Denny Thomas, editing by Mark Bendeich)


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## diliff (31 July 2008)

agro said:


> *Fortescue shareholder sells $226 mln stake -source
> *
> SYDNEY, July 31 (Reuters) - A large shareholder in Australian iron ore miner Fortescue Metals Group (FMG.AX: Quote, Profile, Research) sold A$240 million ($226 million) worth of his stake to local and overseas investors, a source familiar with the deal said on Thursday.
> 
> The shareholder sold 30 million shares at A$8.00 each, the source added, a 4.8 percent discount to Fortescue's closing price of A$8.40 on Wednesday.




Sucks to be him. He's down 20 million today alone... but hey, who knows what tomorrow may bring.. Is the recent rise looking strong, or is it just a blip?


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## roland (31 July 2008)

diliff said:


> Sucks to be him. He's down 20 million today alone... but hey, who knows what tomorrow may bring.. Is the recent rise looking strong, or is it just a blip?




What a goose, may account for a few of the shares I got and sold off later at a profit. My remaining parcels are running a loss - I'm down around 11% but not at all worried.

Just love the up beat announcements FMG put out - great marketing!


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## renim (31 July 2008)

we look at the guy selling at $8 per share instead of $12,  but the news site says he bought in at the equivalent of 1 to 3 cents per share,  he was the example of an investor who made a billion on fmg
and he still drives his old honda.


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## 2020hindsight (1 August 2008)

I assume people are aware that a fully laden FMG ore ship has run aground at Port Hedland
(the PH pilot was at the helm) 
All shipping in and out blocked as I understand it - (and that would presumably go for BHP as well as FMG) 
maybe it is cleared by now?
watch this space as they say


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## white_goodman (1 August 2008)

2020hindsight said:


> I assume people are aware that a fully laden FMG ore ship has run aground at Port Hedland
> (the PH pilot was at the helm)
> All shipping in and out blocked as I understand it - (and that would presumably go for BHP as well as FMG)
> maybe it is cleared by now?
> watch this space as they say




is there a linked article to back this up? how long would shipping presumably be blocked?......................................


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## 2020hindsight (1 August 2008)

white_goodman said:


> is there a linked article to back this up? how long would shipping presumably be blocked?......................................




This was put out by FMG at 10.55am :-
market has been heading south ever since

http://www.aspectfinancial.com.au/d...Jyb3JwYWdlcy9wZGZkZWxheWVkLmpzcA==&popup=true

how long blocked?
no idea m8 
 (sorry, I'm on a tight lunch break here)

They said high tide was at 10.48am - "hoped to be cleared then etc" - so maybe already cleared .

(now 12.48pm - no announcements since from FMG - so one explanation is that they failed to float it  - don't you love being kept in the flamin dark)


----------



## 2020hindsight (1 August 2008)

vessel refloated !!

.................  
poi poiu poiu opiu poi uopiu opiu poiu opiu opiu poiu poiu opiu opiu iopu opiu


----------



## 2020hindsight (1 August 2008)

ahh of course lol

High tide was at 12.48 Eastern time 
And that's when she was refloated.

BHP acknowledging that the ship was blocking them as well :- 
Just as well it wasn't serious.
Steering failure, ship swung  etc ..

http://www.news.com.au/business/story/0,23636,24111660-14334,00.html


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## agro (3 August 2008)

twiggy and co are one of the smartest and intuitive companies i have ever followed.,

i think this move is to counteract the "sacred land problem" that was occuring but who knows, 


http://skynews.com.au/business/article.aspx?id=255049



> The federal government says it will throw its support behind a scheme to create 50,000 jobs for indigenous Australians.
> 
> Fortescue Metals boss Andrew Forrest has put forward a plan to create jobs for indigenous Australians by involving the corporate sector.
> 
> ...


----------



## CAB SAV (3 August 2008)

Agro, When Rudd said he would be behind a scheme to " get housing righ, health right and education right I thought I was going back through his notes prior to the election for promises to All Australians. Twiggy /Ruddwon"t get 50,000 aboriginals into quick fix work schemes, been tried for 40 yrs, good ramp for twiggy though.


----------



## Miner (4 August 2008)

Good morning all

In case you have not, please have a look into AFR and see what they said at

*Street Talk
Monday, 04 August 2008 | The Australian Financial Review | Jemima Whyte (jemima.whyte@afr.com.au) *
*Chinese wagons go wobbly on Fortescue*

Can not reproduce more due to copyright issue and avoiding  Moderator's salvo


----------



## diliff (4 August 2008)

Miner said:


> Good morning all
> 
> In case you have not, please have a look into AFR and see what they said at
> 
> ...




For those of us without a subscription, can you give us an idea of what it says?  Not sure what chinese wagons going wobbly means exactly!


----------



## gav (4 August 2008)

An article on news.com.au about Fortescue being shorted

http://www.news.com.au/business/story/0,27753,24123962-14334,00.html


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## agro (4 August 2008)

gav said:


> An article on news.com.au about Fortescue being shorted
> 
> http://www.news.com.au/business/story/0,27753,24123962-14334,00.html




yeh i read that.. they will loose come earnings 

Rio slams Pilbara rail access proposal


AAP
04/08/2008 3:52pm 	Email to a friend Print article
i

Rio Tinto Ltd says granting third party access to its Pilbara rail network in Western Australia will create inefficiencies similar to those seen on the east coast coal chain.

Australia's newest iron ore exporter Fortescue Metals Group Ltd is battling through the courts and with the National Competition Council for third party access to the extensive rail network owned by Rio Tinto and BHP Billiton Ltd.

The rulings have so far been in Fortescue's favour.

But Rio Tinto chief executive of iron ore Sam Walsh on Monday told delegates at the Diggers and Dealers conference in Kalgoorlie that other options were available to iron ore juniors seeking transport options to move product to port.

"The moment you move to multi-user infrastructure, you lose 10 per cent to 20 per cent of your efficiency ... and Australia faces an annual NPV (net present value) loss of $30 billion," Mr Walsh said.

In addition to Rio Tinto's plans to produce 320 million tonnes (Mt) of iron ore a year from its Pilbara operations by 2012, he said the mining giant had a "conceptual pathway to 420 Mt".

"It's an immense undertaking," he said.

"Rio Tino has made substantial commitments to expand its rail network based on efficient production processes.

"It's pretty hard to maintain and grow that market share without having to deal with possible regulations which will crimp our growth and lead to inefficiencies."

Mr Walsh also touched on "the elephant in the room" - BHP Billiton's takeover offer - reiterating that the bid "fails to recognise the value of Rio's assets and prospects".

He said Rio could maintain annual growth of 8.6 per cent through to 2022 in key areas of base metals, energy, iron ore and aluminium.


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## prawn_86 (5 August 2008)

prawn_86 said:


> I agree Reece.
> 
> On a fundamental, on paper, basis anything over about $6.50 seems overpriced. Hence why is said a while back when it dropped, it may represent an opportunity.
> 
> Im not saying this wont go up on hype, greed, sentiment etc etc, but those buying NOW for fundamentals are pushing their luck imo




FMG is approaching my opinion of fair value. Another few days like this and it might be worth having a look at if you are bullish on the whole BRIC story.

However after the Olympics, personally, i would be wary as i think China may take some financial actions, which in turn could cause further sell offs.


----------



## agro (5 August 2008)

prawn_86 said:


> FMG is approaching my opinion of fair value. Another few days like this and it might be worth having a look at if you are bullish on the whole BRIC story.
> 
> However after the Olympics, personally, i would be wary as i think China may take some financial actions, which in turn could cause further sell offs.




oh defently prawn_86... i am going to have to sell all my holdings in FMG after reading a comment like that 

on another note - check out the number of XTSOS at $8 on FMG


----------



## diliff (7 August 2008)

WTF caused that massive (70 cents!!!) drop in the space of 5 minutes? The only announcement I can see on the ASX website is that FMG is going to allow Atlas to share its railways... surely not a big deal??

I'm pissed.. I had set a stop loss at 8.15 but accidentally set the trigger at 8.15 too, so by the time the order was placed, the share price had dived straight past :-(, I was poised to jump back in at 7.50 but didn't have the funds to buy in without the previous sale..... oh well...


----------



## Nesa (7 August 2008)

diliff said:


> WTF caused that massive (70 cents!!!) drop in the space of 5 minutes? The only announcement I can see on the ASX website is that FMG is going to allow Atlas to share its railways... surely not a big deal??
> 
> I'm pissed.. I had set a stop loss at 8.15 but accidentally set the trigger at 8.15 too, so by the time the order was placed, the share price had dived straight past :-(, I was poised to jump back in at 7.50 but didn't have the funds to buy in without the previous sale..... oh well...




in response to your first paragraph...

I am wondering the same thing here. very sharp decent in the chart


----------



## roland (8 August 2008)

Well, FMG is now officially my worst performing (active) stock 

Of course we all know that the lull we are in will change and we will all be happy vegemites again.

I have been tempted a couple of time this week to jump in and average down - but you know, it still doesn't feel right just yet.....

Seeems like every time the SP wants to have a run, a wave of sellers keeps a cap on the rise. Of course none of us would have missed the media reports on the fund shorting that is supposedly at the base of the down trend.

I'm averaged to $9.87 with the lowest at $8.95, so a way to go but certainly not stressing too much.

The sharing out of the rail and port infrastructure to other junior Pilbara miners is a very cool move and will help cement additional income and create dependance for FMG. One would hope the comitments on infrastructure resources won't impede FMG's productivity.


----------



## Go Nuke (9 August 2008)

Heres my thoughts on FMG at the moment.

If oil makes a comback so will resources.

Mind you the thought of dividend will lure many

Soz it hard to read.

Says _Broken trendline IMO_ and 
_200 day MA is under pressure, if it dips under and bounces off shorters will come in._
_MACD looks ready for a return though_


----------



## Plissken47 (10 August 2008)

Nice chart.  Where did you get it?  I've been looking for good software or web-based system.  There's a lot of systems out there.



Go Nuke said:


> Heres my thoughts on FMG at the moment.
> 
> If oil makes a comback so will resources.
> 
> ...


----------



## Nesa (11 August 2008)

FMG-Atlas deal breathes fresh life into ore juniors
9th August 2008, 14:45 WST

Fortescue Metals Group is expected to receive a flood of applications from Pilbara iron ore juniors desperate to use its Port Hedland port facility following this week’s ground-breaking access deal with Atlas Iron.

The Atlas deal, only two weeks after another landmark agreement was signed under which Rio Tinto allowed Iron Ore Holdings to develop its stranded project, has breathed life into a junior iron ore sector hard hit by the sharemarket collapse.

The two deals have demonstrated to the juniors the avenues available to develop their deposits without needing to invest in costly infrastructure.

By finally agreeing to a port access deal with Atlas, Fortescue has also laid to rest mounting concerns it would renege on earlier pledges to allow juniors to use its port.

Although there are a raft of potential avenues for juniors to get their ore to the Pilbara coast, access to ports is the most critical. The WA Government’s third-party haulage regime only covers Rio’s and BHP Billiton’s railways, and not their ports.

Commercial terms of the Fortescue-Atlas deal have not been revealed. But, importantly for Atlas, it will be a relatively low-cost way to load ships with ore from its Pardoo operation.

Initially, Atlas will be granted space at Fortescue’s Herb Elliott facility at Port Hedland to stockpile enough ore for two shiploads before Christmas.

From next year, when the schedule will allow Atlas to fill at least one ship a month, the junior will need to construct a stockpile and a railway siding 3km south of the Herb Elliott facility, where its ore will be loaded on to passing Fortescue trains and taken to the port for unloading. It remains to be seen what impact, if any, it has on Fortescue’s own mine-to-port operation.

Rio and BHP have aggressively argued that allowing anyone else on to their infrastructure network would do irreparable damage to their integrated operations. The only concession they have made to date is Rio’s deal with Iron Ore Holdings, which is structured as a mine-gate sale.

The Kerry Stokes-controlled Iron Ore junior has to deliver ore from its small Phil’s Creek mine 5km to Rio’s massive Yandicoogina operation, where it gets paid on a per-tonne basis in return for handing over ownership of the product, in the process limiting the disruption to Rio’s transport operation.

The deal is ideal for juniors with small deposits like Phil’s Creek (8.3 million tonnes) that would otherwise be left stranded, but insufficient for the likes of Brockman Resources (its Marillana deposit contains one billion tonnes) which want to control the ore from mine to ship and reap higher profit margins.

In the Fortescue-Atlas deal, Atlas retains ownership of the ore all the way from the mine to when it is loaded on to an Atlas customer’s ship, which means it will have to squeeze into gaps in Fortescue’s operating schedule.

By delivering on a promise to open up Fortescue’s infrastructure, Mr Forrest has staked his reputation on a belief that allowing others into the loop will not cause material damage to his miner’s financial performance, contrary to the Rio-BHP claim.

The pressure will now be on Fortescue to formalise an MOU with BC Iron, to allow the junior to develop its Nullagine project, as well as deal with an expected raft of fresh applications.

PETER KLINGER

Source: http://www.thewest.com.au/default.aspx?MenuID=3&ContentID=90182


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## agro (11 August 2008)

*FMG seeking to move into New Zealand - Report*



> It is reported that Fortescue Metals Group is making its first foray into international mining by applying to test for minerals in a vast area in New Zealand.
> 
> FMG has made several applications to test for iron ore sands on the west coast of the South Island in an area covering 4,000 kilometers. The venture has upset a group of miners who claim their century old gold mining business could be jeopardized. BlueScope Steel is already dredging iron ore sands along the North Island.
> 
> ...




next BHP anyone? if they start diversifying now what they going to be like within the next 5-10 years?!


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## agro (12 August 2008)

Fortescue Metals is full steam ahead with plans to more than double its annual iron ore production capacity.

According to the Sydney Morning Herald, the miner had initially planned to expand output from 55 million tonnes a year to 100 million tonnes, but the company now sees the possibility of an even higher output.

CEO Andrew Forrest says the equipment used to automatically unload iron ore onto rail cars is performing better than they had anticipated.

BHP and Rio Tinto each dump around 45 million tonnes per year from each of their rail cars, but Fortescue has demonstrated it can top that performance.

In order to reach the expanded output of around 120 million tons a year, the company would need to unload two iron ore cars per 90 seconds.


----------



## rotoso (12 August 2008)

"unload two iron ore cars per 90 seconds."

Is that a realistic goal? How are the cars unloaded? do they have hinged floors and they just open up above a pit or are they offloaded in another way?


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## njc.corp (12 August 2008)

rotoso said:


> "unload two iron ore cars per 90 seconds."
> 
> Is that a realistic goal? How are the cars unloaded? do they have hinged floors and they just open up above a pit or are they offloaded in another way?




To make simple for u its like meat on a spit-

its a bit more technical then that but its a basic understanding-

argo-how u going-have u had a chance to grab more-or u like your position as it is?

i do like the prices at what they are now and today's prices seem even better-

even though most of us  would like to see it going north-

I find it a buying chance even though i not making any money -lol

all in due time i say

Thanks

Nick--


----------



## impala_group (12 August 2008)

I think there is some good news coming out of china today with inflation easing for the first time in 10 months. 
This gives the Chinese Gov't more room to restrain the yuan's advance and concentrate on boosting economic growth through the usual ways - export rebates and yes...all that!!

However this is not to say that inflation has slowed globally because it hasn't in the US, UK, Australia (to a lesser extent) just to mention afew. My observation is that as inflation eases in China, the government will concentrate on boosting economic growth - especially their declining export sector: 

Which is good for Australian exports: WHY??

This i think is good for the demand for fuel and resources (raw materials) for industry...Will directly  impact on the ASX esp in the Resources sector. On the other hand, this will reverse the gains from lower Brent Crude Oil prices in recent times (there will be an upward swing in demand fo crude oil as economic activity increases).

Did anyone realise BHP & RIO rebound higher this afternoon??  
Ofcoz you did...My point exactly because China is the Australias largest resources market - Positive speculation is already in markets.

So i hope this theory holds more in the coming days.

(Just an observation...not really advice DYOR)


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## agro (12 August 2008)

njc.corp said:


> To make simple for u its like meat on a spit-
> 
> its a bit more technical then that but its a basic understanding-
> 
> ...




tell you the truth, i am not buying any shares for the time being,

i am sitting put like a duck on all my holdings until the market starts its bull run again to which i might start accumulating again

only time will tell - maybe once earning seasons comes out in sept we might c changes?!


----------



## SenTineL (12 August 2008)

yeah i'm with you agro i'm staying out of the market at the moment.
spewing to see this come down so far from the $13.00 highs, but i'm going to hold all mine


----------



## mino (13 August 2008)

My materials portfolio has down around 20% in average.. fmg is one of the worst  got it at 9.5 and been downhill since.. but I still believe they will make a come back.. maybe not in a short term though.


----------



## roland (13 August 2008)

I'm the same, maybe a little worse - down 27%. Have learnt though, from the thread on the benefits or lack of, of averaging down, that I am better to hold off adding more until we see the trend reverse.

Although very tempting to buy in now, it's probably better to wait - silly to tie up more $$'s only to lock in instant losses if she drops further.


----------



## Spaghetti (14 August 2008)

Sorry if this has been covered before and if wrong would like to be corrected. Lots of pages to sift through!

The way I see FMG is they want to increase debt but are not increasing high grade deposit quantity. The amount of DSO high grade would quickly be depleted unless inventories are increased. I have read website but cannot find if they have targets for further discovery Chichester range or similiar quality. So in a nutshell I see re-investment of funds from high return operations into lower return operations and cannot see how that would improve s/p.

Then I maybe way off mark but the impression I have presently.


----------



## Miner (14 August 2008)

Spaghetti said:


> Sorry if this has been covered before and if wrong would like to be corrected. Lots of pages to sift through!
> 
> The way I see FMG is they want to increase debt but are not increasing high grade deposit quantity. The amount of DSO high grade would quickly be depleted unless inventories are increased. I have read website but cannot find if they have targets for further discovery Chichester range or similiar quality. So in a nutshell I see re-investment of funds from high return operations into lower return operations and cannot see how that would improve s/p.
> 
> Then I maybe way off mark but the impression I have presently.




Dear Spaghetti

IMO you are bloody right 100% !
FMG is having a too quick start to ramp up its production (at least on paper).
The fact remains you put garbage in and get garbage out.
FMG is depleting the high grade resources and that makes every body specially the short term investors happy. 

There was never any ore analysis published for the next phase of expansion which is a worry. With low grade iron, high grade silica, alumina the production cost goes high through desanding facility (taking the silica and alumina out) and net realisation value also comes low as customer pays based on FE content. 

So it is a double edged sword.

The silver lining of FMG is however a competent management and with surface miner the cost of production is much much lower than Rio Tinto or BHPB iron ore when comparing with apples with apples. 

ON the long term even FMG has a vast resource field there could be an issue.

However again FMG is making good alliance with other small cap producers like AGO and soon will be others, has a good infrastructure facility which will make this stock a viable option IMO. I am no expert but sharing my  common sense here.


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## Spaghetti (14 August 2008)

Guess time will be the only judge if they should have started earlier with the lower grade mining. True economies of scale may see them through and demand should keep it profitable for a while, just how profitable and for how long is very difficult to ascertain with so many mixed messages from analysts.

So given this uncertainty further exploration I feel would be very important to excite potential share buyers.

btw as an aside, was prompted to ask an iron ore purity question on geology thread by a remark you made regarding silica on another thread. If you have a moment perhaps you could answer, would appreciate it, only if you have time of course.


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## agro (14 August 2008)

the shorters cannot hold FMG under water for too long,

the moment we see a recovery in commodities and the general market, FMG will be back to double digits imo

earnings in September ?? dividend ?? twiggy has alot of surprises i think


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## renim (15 August 2008)

with 'only' a expansion from 55 to 120 mtpa expansion,  fmg might be able to pull it off from just cashflow. that is still is a 65mtpa expansion over say 2 years + a bit. 
yeah it been a long time between drinks, must be about time for a dividend.

and its common sense to high grade first, it maximizes npv.  however they can only mine what they have access to (top down)


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## prawn_86 (19 August 2008)

Man this thread goes quite when the price is stagnating 

As i have said before, if it gets to about $6.50 it is what *I *would call fair value and i would consider buying in after some more research regarding the points raised above about ore quality


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## njc.corp (19 August 2008)

prawn_86 said:


> Man this thread goes quite when the price is stagnating
> 
> As i have said before, if it gets to about $6.50 it is what *I *would call fair value and i would consider buying in after some more research regarding the points raised above about ore quality




maybe its been quite-its always the case when things are not going north-

but i will be the first to say i am not happy-who is-but this aint the first or last stock to act like this-

on the other note-i am also happy to see it at these levels as i have  been stocking up

i do not trade like this on every stock-only on the ones that i find and feel  are cheap and will shine in years to come-

i dont know what happened today but the $6.50-6.90 would be good to see as i see it a better bargin-

Only time will tell-

Thanks

Nick--


----------



## tony montana (19 August 2008)

prawn_86 said:


> Man this thread goes quite when the price is stagnating
> 
> As i have said before, if it gets to about $6.50 it is what *I *would call fair value and i would consider buying in after some more research regarding the points raised above about ore quality




isnt this classed as ramping down....?
so you hope they drop to $6.50 what you call value and then you hope they go up to what over valued


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## renim (19 August 2008)

so what is your price then?

actually i'm more interested in how you derived that figure.  thats a market cap of $18.5b and a long term debt of 2.9b (commsec figure not fmg's figure) and a EBITDA of 3.4b and a realistic plan to double and an potential to double again.


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## renim (19 August 2008)

i meant exit price, but as i didn't make the edit until after 20mins, this becomes a new comment.

part of the interest in fmg is that is has such divergent valuations by people who are professional.


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## IFocus (19 August 2008)

Guys in bull markets you can price a stock any way you want but in bear markets company's are priced on risk.

Below is the chart, this is reality, the bias currently is to the down side.


I understand you are holders and its not fun right now.......
.


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## Miner (19 August 2008)

IFocus said:


> Guys in bull markets you can price a stock any way you want but in bear markets company's are priced on risk.
> 
> Below is the chart, this is reality, the bias currently is to the down side.
> 
> ...




Good grah IFocus

Would you be able to provide similar graphs with your comments on BHP, MRE and likes

Great service and thanks


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## prawn_86 (19 August 2008)

My apologies all, in my last post i should have linked back to why i believe $6.50 to be fair value, so here are the quotes:



prawn_86 said:


> I agree Reece.
> 
> On a fundamental, on paper, basis anything over about $6.50 seems overpriced. Hence why is said a while back when it dropped, it may represent an opportunity.
> 
> Im not saying this wont go up on hype, greed, sentiment etc etc, but those buying NOW for fundamentals are pushing their luck imo






prawn_86 said:


> Although it has come off a bit from its $8 ($80)+ its still trading at a forward (2009) PE of approx 33, which seems a bit high still for me. And a 2010 forwards PE of 14
> 
> For a company that is this big, and has a lot of salience would suggest 25 - 30 forward (1yr) PE would probably be appropriate.
> 
> ...


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## Spaghetti (20 August 2008)

I was reading one valuation that said just a $10 price rise for iron ore, either lump or fines, would result in them increasing their valuation by $5/share. If you use the same logic and say just a $10 price drop would result in a much lower s/p you can see easily how so many can arrive at such disparate valuations. Must add they see it valued at $11/share atm.

Many assumptions used for valuation need de-risking.

The valuation I read today (on talking point)  assumes all resources will be mined. The problem here most ore is still inferred status or unexplored that will be heavily discounted during bearish time. Better than making valuations on rock chip samples but still not ideal. More drilling/exploration required. Believe they are doing some at solomon Will help de-risk.

It assumes a mythical, at this stage, ramp up timetable. This would need to be confirmed by FMG. They suggest FMG may set a more ambitious timetable. Once known this assumption will be de-risked.

It assumes long term average exchange rate .78. I guess one would take all forecasts and average out updating regulary.

Cash costs will go higher before they go lower. Economies of scale on for eg 200mt per annum will be far lower than costs for the ramp up stage. Now read the report and see projected bottom for iron prices. The difference in margins if they at at full capacity when prices hit bottom will be staggering compared to if they are still at ramp up stage.

I have read iron ore prices expected to bottom 2011 and 2012. I have read they should bottom out at prices differing by up to USD $25/t.??

Capital required for expansion. 5bn quoted, also by Paterson according to press. How do they raise it, over how many installments, will FMG surprise by coming in with much lower capex requirements?

Now my opinion

In bearish conditions for FMG to reach this target $11.00 there needs to be more definition and metallurgical study of resource.

Actual capex plans and production ramp up timetable released by FMG.

More consensus between analysts on iron ore prices and foreign exchange rates going forward.

So earlier poster who said all about risk is on the money. What may probably may happen is probably not good enough for the market atm. De-risking of some assumptions will be required. I would personally add a premium to lowest valuations purely because I think they may well pull it off.


http://www.fostock.com.au/talkingpoint/FMG080801.pdf


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## renim (20 August 2008)

i agree with risk evaluation being the key to differing valuations for fmg.  and future risk both known and unknown are dastardly difficult to value.

how do you get a PE of 33?


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## agro (20 August 2008)

prawn_86 said:


> My apologies all, in my last post i should have linked back to why i believe $6.50 to be fair value, so here are the quotes:



*
and they wont have any comminsioning or uprgrading problems, such as FMG may face to achieve full production...*

twiggy got the project running up in 2 years

how long did it take BHP and RIO?

do you think he is going to fail to reach full production?

i don't think so.. he has the chinese, WA economy, local indigenous, local iron ore juniors behind him... 

the infrastructure is world class too - didn't you not hear about the dumper?

obviously not.. i am amazed by some people's comments especially *when they do not hold the stock - they must be good Samaritans, telling us for our best interest*


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## Spaghetti (20 August 2008)

agro

Never used to listen to non-holders of stocks i held  myself. Biggest mistake I ever made. 

Personally looking for point of reference for all iron ore miners or explorers. FMG is biggest pure iron ore play so stands to reason it will be pulled apart.

So many variables, so many what ifs...so will get so many price targets.

FMG have done insanely well but still cyclical implications need to be considered.


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## renim (21 August 2008)

do a valuation of bhps iron ore value, or rio, its not that hard for bhp....
maybe compare with vale

they are the same cost of production league as fmg,

everyone else is - not


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## ans25 (21 August 2008)

I love day trading with FMG in present market conditions.

Ive got on board - if you cant beat the day traders then I say join em!


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## Nesa (28 August 2008)

*Trial date set for FMG, ASIC showdown*
28-August-08 by Staff Reporters

Fortescue Metals Group Ltd and its chief executive Andrew Forrest will head to court in April next year to fight claims made by the corporate watchdog.

ABC radio reported the Australian Securities and Investments Commission claim FMG and Mr Forrest had allegedly mislead investors by claiming it had a binding contract to build and finance a railway, port and mine before its Pilbara operations were built in 2004.

If ASIC wins the case, it is calling for Mr Forrest to be disqualified from running a company and to pay for FMG's fines of more than $3 million.

http://www.wabusinessnews.com.au/en-story/1/66004/Trial-date-set-for-FMG-ASIC-showdown

concerning?


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## agro (28 August 2008)

Nesa said:


> *Trial date set for FMG, ASIC showdown*
> 28-August-08 by Staff Reporters
> 
> Fortescue Metals Group Ltd and its chief executive Andrew Forrest will head to court in April next year to fight claims made by the corporate watchdog.
> ...




even if twiggy did get disqualified, he will prob remain a member on the board..

and $3 million is a drop in the ocean for him..


wait for the news to come within the next month or so  good luck


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## renim (28 August 2008)

this has been dragging on for some time, and must be very distracting for forrest
which makes it a negative for share holders,

having said that, Forrest knows that ASIC has him in their sights (what a great trophy) and FMG has been very cautious in how they talk to the public.

the gist of the case is that what fmg announced as a binding mou, the chinese later announced as a non binding mou.  mou (Memorandum of Understanding)

Having said that anyone who bought fmg at that time and held, would be very happy as i strongly doubt that any share has performed as well as fmg over that time frame.

their is a chinese article i have about this somewhere,  basically the chinese changed meaning so as to depress fmg share price so they could buy 85% of fmg cheaply, but they failed.


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## agro (29 August 2008)

*Fortescue to use preference shares to fund expansion*



> IRON ore miner Fortescue Metals Group is to hold a shareholder meeting to change its constitution to allow it to issue preference shares.
> 
> Fortescue (ASX: FMG) said preference shares were just one of the funding options being advanced as part of an overall program to fund the expansion of its operations in the Pilbara region of Western Australia.
> 
> ...




http://www.theaustralian.news.com.au/story/0,25197,24260576-5005200,00.html




> Aug. 29 (Bloomberg) -- Fortescue Metals Group Ltd., an Australian iron ore producer, plans to sell preference shares for the first time to help fund expansion.
> 
> Fortescue is seeking shareholder support to change its constitution to allow it to sell the shares, the Perth-based company said today in a statement to the Australian stock exchange.
> 
> The company has already received a subscription application for shares worth A$140 million ($121 million), Fortescue said. The application is contingent on approval at a Sept. 30 shareholder meeting.



http://www.bloomberg.com/apps/news?pid=20601081&sid=aUPlsmokPVEc&refer=australia


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## CAB SAV (30 August 2008)

CAB SAV said:


> AGRO, will prob be in after next cap raising. At present they need to prove & maintain production (and should) and have promised to ramp up to 45mt by years end. Big costly task from 24mt to 45mt then 55mt up.
> they needed dollars 06, 07 and I suspect 08. Nothing wrong with that, but price dips nicely after cap raising.
> Assuming markets keep pooping themselves this year, could be few dollars cheaper.




SP week beginning 23/8/06 $10.20, funds required announcement,SP $7.85 week beginning 15/9/06
SP week beginning 20/7/07 $40.00, funds required announcement, SP $27.84
week beginning 24/8/07


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## Nesa (1 September 2008)

further to agro's post:

Preference issue for Fortescue
30th August 2008, 10:30 WST

Fortescue Metals Group yesterday confirmed it planned to sell preference shares for the first time to help fund its ambitious expansion.

The company will ask a shareholders meeting next month to vote to change its constitution to allow the sale of the shares, but did not reveal how many would be sold. The stock will pay a yield of 9 per cent and have a term of 8.5 years.

Fortescue said it had received a subscription application for $140 million from an unidentified investor as part of the proposed sale.

WestBusiness revealed two weeks ago that the company was looking to raise between $500 million and $1 billion in its first equity raising since it tapped the market for $504 million through a placement at $3.60 a share in July last year.

Fortescue wants to almost triple output to feed rising demand from steel mills in China and benefit from record prices.

Patersons Securities analyst Alex Passmore said the first stage of the company’s expansion from 55 million tonnes a year to 120mtpa may cost more than $3.9 billion.

“The preference shares are a small step in the overall financing,” Mr Passmore said. “There are a lot of people in the US who would like a 9 per cent coupon rate at the moment.”

The preference shares have limited voting rights and won’t change the level of control of major shareholders, including chief executive Andrew Forrest, who has 35.8 per cent of the company, or the Philip Falcone-controlled hedge fund Harbinger Capital Management, which has a 15.8 per cent stake.

Fortescue said yesterday it had received $US275 million ($316 million) as prepayment for iron ore from five Chinese steel mills.

MADALENE PEARSON

http://www.thewest.com.au/default.aspx?MenuID=3&ContentID=95037


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## agro (1 September 2008)

question to ponder:

"why is FMG up (and associates of FMG: e.g. AGO, BRM, FRS) up today and BHP and RIO down?"


anwser (speculating):

"because they won support for the second rail way imho, look at it this way with some foresight bias - why did FMG announce the pref shares all of a sudden??, funding for expansion"

my


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## gav (1 September 2008)

they were up over 5% (over the $8 mark for the first time in nearly a month), and I had a buy order in this morning for 7.50 but it only got down to 7.51 

but they have pulled back since, about they same price they closed on Friday


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## agro (2 September 2008)

*Fortescue raising reveals Andrew Forrest's support*

OTHER than May's headline-grabbing debut shipment of Cloud Break iron ore, nothing underscores the maturation of Fortescue Metals Group more resoundingly than the apparently competitive terms of its planned preference share issue.

For a third time since 2006, Fortescue has gone looking for cornerstone capital to secure its ambitious expansion plans. 

What makes the latest campaign for a $175 million preference issue unique in Fortescue's five-year history is that the New Force in Iron Ore seems to have locked in its money at potentially commercial terms. 

The preference issue is part of a $450 million raising, the bulk of which is in the form of pre-payments by Chinese steel makers, who will have to put up cash up-front to lock in a share of Fortescue's planned expansion output. 

Crucially, Fortescue has already secured a precommitment from just one investor -- believed to be an existing shareholder -- for up to 80 per cent of a preference share issue, which is planned to carry a coupon rate of just 9 per cent. 

Now, to put that into some sort of context, that means Fortescue will raise relatively long, highly strategic money at a premium of just 1.8 per cent over the current interbank swap rate of about 7.2 per cent. 

Again, some context. Fortescue has won serious pre-issue support on a coupon only 100 basis points higher than Suncorp's most recent raising. And for the insurer -- given Suncorp can fully frank its dividend stream -- its investors are getting nearer 11 per cent. 

Now, clearly, we have to wait until we see an issue price before making a final call on the cost of capital here. But, all things being equal, this has the making of a keenly commercial outcome for Fortescue. 

To get some idea how far Fortescue has come in just two years recall, if you dare, the terms of the cornerstone equity that secured the company's life-giving $3.2 billion raising in August 2006. 

The central player in that deal was US value investor Leucadia National Corporation. 

Forrest needed new equity to get a set of bond and debt issues away. Leucadia came to the party. And didn't it get value! 

The US fund spent $300 million buying a 9.99 per cent stake in Fortescue and the provided an additional $100 million through a subordinated loan note. Without that injection, Fortescue may well have failed. But the cost of life was very high indeed. 

After accounting for Fortescue's subsequent 10-for-1 share split, Leucadia paid the equivalent of just $1.13 a share for its new stake. Fortescue closed at $7.63 last night. Which looks great by every standard but for the servicing terms of Leucadia's bond note. 

The bond, which is repayable after 13 years, carries a coupon that is based on Fortescue's total iron ore sales. The effect of the deal is that Leucadia gets 4 per cent of all of Fortescue's post-government royalty income from iron-ore sales. To understand what that means, consider that Fortescue is expected to sell maybe $2.5 billion in iron ore in 2009 and more than $5 billion the following year. 

Now, get the calculator out, divide each of those revenue expectations by 100 and then multiply that number by four and then, if you are Leucadia, pat yourself warmly on the back. Because, if all goes to Fortescue's current plan, it will make its bond money back early in year two, and nearly triple its money well inside year three. 

Little wonder Forrest's people like the look of the preference share market space and tell us they intend to visit it a fair bit over the coming years. To that end, Fortescue is going to ask shareholders to approve much more than just a preference capital raising when they gather in Perth's Park Hyatt, September 30. The constitutional reform Fortescue is proposing would deliver the board the capacity to issue preference shares and redeemable preference shares without further need to again to seek specific shareholder approval. 

Preference capital and other varieties of non-voting equity tools are attractive to companies like Fortescue, which is famously controlled by chairman and founding force of nature, Andrew Forrest. He controls 36 per cent of Fortescue's voting capital and he wants it to stay that way. In this, Forrest is no different to News Corporation's chairman, Rupert Murdoch. 

The effect of preference capital is that finance is raised in the form of equity which can then be used to secure more debt. But because preference shares tend to carry tightly defined and limited voting rights, the balance of shareholder power is effectively not altered. 

The pay-off for the preference stock owners is that their paper comes with income certainty and priority over all other shareholders in any wind-up. 

Incidentally, Fortescue yesterday played down reports that Harbinger Capital was the applicant for the $140 million chunk of the preferences. 

That said, the company did not rule out the idea that an existing shareholder had come back to the iron ore well for preference capital could, under some conditions, mutate into ordinary shares. 

While we are on matters Fortescue, rumours continue to swirl about its production performance since first shipment in May. 

There have been stories, for example, that two Australian engineering firms have been bought in to deal with structural fractures in its rail wagons and, more recently, that the innovative surface mining fleet was at a standstill after two accidents at one of the five Cloud Break pits. 

Both stories have been vigorously denied by Fortescue though a company spokesman agreed yesterday that one of the surface miners had tipped over because of a problem in its stabilising mechanics. 

Meanwhile, those who (like me) have been waiting patiently for a Fortescue profit announcement can forget it. While Fortescue claims very accurately to be the new productive force of Australian iron ore, under ASX listing rules it remains an explorer until it has generated revenue for two consecutive quarters. Which means the company can continue on its cash-flow-based quarterly reporting cycle until February next year. 

Fegan adds to pool 

WHILE we are talking funding costs, let's ponder St George Bank's decision to add another $1.051 billion to its 2009 funding pool. 

St George boss Paul Fegan says the pricing of the RMBS issue is "competitive with comparable sources of funding to Australian banks". 

Fegan has now locked up 40 per cent of the bank's requirements for next year, which translates to $4.6 billion of the more than $11 billion the bank is expects to raise. 

Which would be a fair enough achievement except that St George is an A rated bank while its prospective partner in an $18 billion merger, Westpac, is AA rated. And that means, quite simply, Westpac can expect to raise term funding more cheaply that St George. And we are talking a more than 10 basis points difference here. 

Now clearly Fegan needs to keep running his bank as a stand alone entity here. No argument there. But it is clearly beginning to irk his future partners that the funding book has been filled aggressively and early. 

Perhaps that is why, to the muted relief of Westpac, Fegan indicated yesterday that St George has, for the time being, ended it search for '09 funding. 

http://www.theaustralian.news.com.au/story/0,25197,24278241-5001641,00.html


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## agro (2 September 2008)

announcement made just then.

Fortescue Shares the Subject of Stock Loans
Fortescue Metals Group (“ASX:FMG” “Fortescue”) wishes to advise that it has
been made aware that some 10% of the company’s shares have been the
subject of stock loans.
The stock loans were made by the owner’s custodian and the owner has since
advised the company that it will immediately rectify the situation.

price rocketed after that


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## agro (2 September 2008)

agro said:


> announcement made just then.
> 
> Fortescue Shares the Subject of Stock Loans
> Fortescue Metals Group (“ASX:FMG” “Fortescue”) wishes to advise that it has
> ...




this is IMHO major major news!!! the US hedge funds who shorted fmg will need to return the shares, they have been caught with their pants down and now will be shafted so to speak by other hedge fund players, the hunters now become the hunted and they deserve it.


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## Nesa (2 September 2008)

agro said:


> this is IMHO major major news!!! the US hedge funds who shorted fmg will need to return the shares, they have been caught with their pants down and now will be shafted so to speak by other hedge fund players, the hunters now become the hunted and they deserve it.




I understand short selling etc, but struggling to see the correlation between them "returning" the shares and the price going up?

How has FMG or whoever involved done this?


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## agro (2 September 2008)

Nesa said:


> I understand short selling etc, but struggling to see the correlation between them "returning" the shares and the price going up?
> 
> How has FMG or whoever involved done this?




they have loaned that many according to the announcement, but we still dont know just how many have been shorted. one could guess its a lot more than has been quoted on the asx web site?
the true owners of the stock have asked for the stock back, which means that any shorts have to cover and return the stock to its real owners. This in theory puts upwards buying pressure on the stock and hence the initial bounce. if the asx has allowed that many shares to slip under the radar, then its nothing short of a total uninformed market.

an undisclosed shorts are killing the market and it does not respresent a level playing field.


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## Prospector (2 September 2008)

I thought the announcement meant that some of the major players in FMG had the stock as part of a loan deal (such as the case in MFS and ABC) which caused the price to fall when the shares had to be sold.


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## agro (2 September 2008)

Prospector said:


> I thought the announcement meant that some of the major players in FMG had the stock as part of a loan deal (such as the case in MFS and ABC) which caused the price to fall when the shares had to be sold.




there have been numerous reports where the custodian/nominee has been lending shares without the owners knowledge and the asx/asic has been asked to investigate this was reported in the papers only in the last few weeks.

it looks to have legal implications imo. This sort of thing is subject to major class action in the US at the moment. Hope the same lawyers come over here.


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## blogs (2 September 2008)

After analysing it I thought it was pretty straight forward-FMG 'have been made aware that 10% of the companies stock has been the subject of stock loans' and that the 'situation will be imediatley retified' meaning the stock that has been lent out will be called back in. Hence all teh hedge funds that have shorted the bejezus outa FMG will have to cover their shorts.

The bit Im trying to get my head around is 10% is around 280 million shares?? Thats a heap of buying pressure!! Expect a HUGE day or 10 coming up!?


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## agro (2 September 2008)

blogs said:


> After analysing it I thought it was pretty straight forward-FMG 'have been made aware that 10% of the companies stock has been the subject of stock loans' and that the 'situation will be imediatley retified' meaning the stock that has been lent out will be called back in. Hence all teh hedge funds that have shorted the bejezus outa FMG will have to cover their shorts.
> 
> *The bit Im trying to get my head around is 10% is around 280 million shares?? Thats a heap of buying pressure!! Expect a HUGE day or 10 coming up!?*




that's what i beleive too,

for it to drop 50% was not justified (e.g. from $13-$7!!), maybe $10 if you were to factor in the recent turmoils but half price?!

so yes, i think a quick retrace to $10 is quiet well on the cards imo 

my opinion only

edit - as soon as they released the announcement the price spiked but that was a few minutes to closing bell.. sell side volume decreased significantly too


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## gav (2 September 2008)

agro said:


> they have loaned that many according to the announcement, but we still dont know just how many have been shorted. one could guess its a lot more than has been quoted on the asx web site?
> the true owners of the stock have asked for the stock back, which means that any shorts have to cover and return the stock to its real owners. This in theory puts upwards buying pressure on the stock and hence the initial bounce. if the asx has allowed that many shares to slip under the radar, then its nothing short of a total uninformed market.
> 
> an undisclosed shorts are killing the market and it does not respresent a level playing field.




thank-you for spelling it out, makes it easier for a dumb meathead like myself to understand! 

will be watching the price closely tomorrow, who knows - may even pick up a few more...


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## Go Nuke (3 September 2008)

Some guy was just on CNBC 's Closing Bell giving FMG a real plug as one of his biggest stocks and a great time to buy.
No doubt some in the US WILL google FMG and contact thier broker.
Could be an interesting day with the DOW down,metals down but bullish signs with FMG


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## agro (3 September 2008)

Go Nuke said:


> Some guy was just on CNBC 's Closing Bell giving FMG a real plug as one of his biggest stocks and a great time to buy.
> No doubt some in the US WILL google FMG and contact thier broker.
> Could be an interesting day with the DOW down,metals down but bullish signs with FMG




i also herd that they are going to have to cover their loan on late line business (marcus padley) last night


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## blogs (3 September 2008)

Anyone got a slant on todays action? Strange to be down, thought it would have opened strong?.....................


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## stock_dexter (3 September 2008)

Any mention of "shorting" can still put shivers up investors spines...whether it's a move to stop it or not. Also, the price jump towards the end of yesterday's session may be "correcting".


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## Nesa (3 September 2008)

Billionaire investor linked to Fortescue short selling
3rd September 2008, 7:30 WST

Fortescue Metals Group boss Andrew Forrest in Perth. Picture: Nic Ellis.

Billionaire New York investor Phil Falcone has inadvertently triggered a wave of short selling in Fortescue Metals Group after the custodian looking after some of his 15.6 per cent stake in the $22.3 billion iron ore miner lent the stock to other hedge funds.

After several weeks of investigations by Fortescue and its founder Andrew Forrest, who has been livid with the short-selling of his company’s stock, the Perth miner said yesterday it had discovered that 10 per cent of its issued capital was the subject of stock loans.

The shares were lent to other investors who then sold them in the expectation of being able to buy them back at a much lower price.

“The stock loans were made by the owner’s custodian and the owner has since advised the company that it will immediately rectify the situation,” Fortescue said in a brief stock exchange announcement.

Fortescue did not name the shareholder or the custodian and a spokesman for the miner last night refused to comment further.

But is it understood the shareholder in question is Mr Falcone’s Harbinger Capital, Fortescue’s second-biggest shareholder and the only party apart from Mr Forrest (36.5 per cent) to own more than 10 per cent of the Perth miner.

Sources said Mr Falcone had been unaware that his custodian had lent his Fortescue stock. It remains unclear how long it will take Mr Falcone’s custodian to unwind the transactions and recoup the lent stock.

The stock is thought to have been picked up by numerous hedge funds punting on sharp falls in Fortescue’s share price.

Mr Forrest has been outspoken in his attacks on short sellers, who he has accused of triggering a Fortescue share price collapse from $13.15 only two months ago to as low as $7.15 two weeks ago by spreading damaging rumours about the miner’s Pilbara operation.

“All these rumours we think are profligated by people we believe have a financial interest in shorting this company,” Mr Forrest said in July. “We don’t appreciate it. It is not helpful for the workings of a proper financial system.”

Fortescue is expected to continue probing its share register movements in an attempt to find out which brokers and hedge funds were behind the Harbinger stock-lending exercise.

Mr Falcone has been a long-term backer of Mr Forrest and Fortescue, rewarded by the miner’s 720 share price appreciation over two years.

That has not stopped the billionaire investor from profiting from short selling.

His decision to build up a 3.3 per cent short position in BankWest parent HBOS earlier this year almost scuppered an emergency $8.2 billion rights issue proposed by the UK bank.

PETER KLINGER Edited by SEAN SMITH

Source: http://www.thewest.com.au/default.aspx?MenuID=3&ContentID=95714


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## MR_B (3 September 2008)

6% down at this time today? What happened there any idea? Is it because I decided to buy yesterday? If I plan to sell this in 9months I have to stop this daily check...


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## Hendrik (3 September 2008)

MR_B said:


> 6% down at this time today? What happened there any idea? Is it because I decided to buy yesterday? If I plan to sell this in 9months I have to stop this daily check...




"In London on Monday night there were more falls in base metals, with copper dropping 2% and nickel 5%. Last night nickel held up but copper lost another 1%"
-sharecafe.com.au

commodities are weakening in price but overall the sectors growth looks strong for the second half of 08.


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## gav (3 September 2008)

I had a buy order in at 7.55 before I went to the gym this morning, but I didnt think it would get filled.  Got to work and couldnt believe the share price, and it has been down hill all afternoon since.  Down 8.7% today as I type this, and to think it hit 8.20 yesterday...


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## agro (3 September 2008)

gav said:


> I had a buy order in at 7.55 before I went to the gym this morning, but I didnt think it would get filled.  Got to work and couldnt believe the share price, and it has been down hill all afternoon since.  Down 8.7% today as I type this, and to think it hit 8.20 yesterday...




a please explain notice should hit the ASX

we need some disclosure imo... cause there is no reason but the shorters for it to go down?


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## oldblue (3 September 2008)

agro said:


> a please explain notice should hit the ASX
> 
> we need some disclosure imo... cause there is no reason but the shorters for it to go down?




Better ask about RIO too, then. It's down almost 6%!

Resources all getting thrashed, not just Fortescue.


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## prawn_86 (3 September 2008)

agro said:


> cause there is no reason but the shorters for it to go down?




I think its funny that ever since short selling became public knowledge EVERY stock that is falling has holders blaming short sellers.

What did people use to blame before the days of short sellers? Normal sellers? Could it still just be them...?


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## gav (3 September 2008)

well it hit $7.19 just before 

todays buy brings my average down to $8.62.  i thought it had start to steady the last few weeks, which is why i got some more today.  buying pressure has kept it above $7.  but after today, who knows...


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## gav (3 September 2008)

prawn_86 said:


> I think its funny that ever since short selling became public knowledge EVERY stock that is falling has holders blaming short sellers.
> 
> What did people use to blame before the days of short sellers? Normal sellers? Could it still just be them...?




Have you not read any of the posts that were made yesterday or today?  

And can you please explain why all your posts are so negative towards FMG?


----------



## agro (3 September 2008)

gav said:


> Have you not read any of the posts that were made yesterday or today?
> 
> And can you please explain why all your posts are so negative towards FMG?




be nice to prawn_86 he is only stating his own *personal* opinion to which he is entitled to 

i don't think the chap understands that 10% is being shorted which is equivalent to 238m shares


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## prawn_86 (3 September 2008)

My posts may appear 'negative' as a believe it to be overvalued, which i have stated in my previous posts.

I just find it funny how if a stock is falling (not just FMG) that the holders blame short sellers. If 10% is available to short sell, then that means that 90% isnt available...


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## simontitan (3 September 2008)

Hmm the Plot thickens. I got out at the $7.85 mark the other day, then this 

*Fortescue mystery*

_John Durie | September 03, 2008_ The Australian

SOMETHING doesn't wash with Fortescue Metal's claims that 10 per cent of its stock, or 280 million shares, had been "the subject of stock loans".

Certainly, the market has come to its own conclusion, and the 4 per cent spike in FMG’s stock price after the announcement yesterday was more than wiped out by a 5.9 per cent fall today, to $7.48 a share.

FMG boss Andrew Forrest has been banging the drum about heinous short-sellers destroying his company, as its stock price has fallen steadily from $13.15 a share in June.

Phil Green at Babcock & Brown played the same tune as his empire unravelled and, ultimately, the facts revealed that there was something fundamentally amiss with the company.

FMG has 2.8 billion shares on issue. so 10 per cent would be 280 million shares, but Data Explorers, which tracks stock loans around the world, said that as of August 31, just 28 million FMG shares were on loan and 170 million were available to be lent.

Now Data Explorer could have missed some loans, but 250 million shares is a pretty big miss.

Maybe someone served a notice on Phillip Falcone’s custodian, Bank of New York, and found that 280 million shares were available to be lent, but this is a long way from saying the stocks were actually lent.

Attempts to contact people at FMG to clarify the situation have proved unsuccessful, but surely they wouldn’t have put out the statement just to shore up the stock price.

At the very least, the saga highlights the urgent need to change the law to make stock loans transparent.

Stock-loan figures are as good a proxy as anything for short sales and the Government is meaning to changing the laws to require brokers to ask clients whether they are short selling.

If the answer is ‘yes’, a box is ticked and the market is informed.

The same system works for stock loans when they move from the custodian to the prime broker and to the client.

Unless the stock market is in free fall, politicians don’t seem to get energised about market reform and regulators can go to back to sleep.

But FMG has now provided a real live example of how lack of transparency can be used to manipulate prices.

Maybe someone should let Eric Mayne at the ASX and Senator Nick Sherry into the secret.


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## SenTineL (3 September 2008)

this is why i reckong day trading is a mug's game, very few people are succesful at it. you cannot predict the future in such a short space of time. it's just gambling IMO.

all i know is that i'm getting sick of the state of the market after such a great run of the last few years. it was going to happen sooner or later and serves as great learning tool.

good luck to all


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## diliff (4 September 2008)

prawn_86 said:


> My posts may appear 'negative' as a believe it to be overvalued, which i have stated in my previous posts.
> 
> I just find it funny how if a stock is falling (not just FMG) that the holders blame short sellers. If 10% is available to short sell, then that means that 90% isnt available...




And surely those 10% are shorting because they too believe the value of the share is going to decrease, whether it be in the short term or the long term. Otherwise they wouldn't short at all, as they'd lose money!

Maybe its undervalued, or maybe not, but whats the difference between that and a share being overvalued? Either way, the price is pushed in a particular direction by those who believe one way or the other...


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## gav (4 September 2008)

prawn_86 said:


> My posts may appear 'negative' as a believe it to be overvalued, which i have stated in my previous posts.
> 
> I just find it funny how if a stock is falling (not just FMG) that the holders blame short sellers. If 10% is available to short sell, then that means that 90% isnt available...




That 10% is only WHAT THEY KNOW is being shorted.  What about other companies doing the same thing?  What about your average joe who shorts them too?  10% is just the MINIMUM.  Also, if you think its 'overvalued', what price do you think is 'fair value' in your opinion?


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## njc.corp (4 September 2008)

as i see it wether its getting shorted or not its still a game that we choose to play-

i mean does that mean all the other stocks that i traded and had a loss is due to people shorting it?

come on-

as a holder i aint happy but its my choice to be in it-

what i been doing lately is moving in and out- as i have seen and most of u guys would agree that lately most stocks can't sustain a price increase the day after-

my 2 cents but could some explain to me the last couple of months not only on fmg but nearly everything-are they get shorted too?

come on guys-

lets play or move on or u can sit and collect more on the low-

I could be wrong and just be talking rubbish-

Thanks

Nick--


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## njc.corp (4 September 2008)

gav said:


> That 10% is only WHAT THEY KNOW is being shorted.  What about other companies doing the same thing?  What about your average joe who shorts them too?  10% is just the MINIMUM.  Also, if you think its 'overvalued', what price do you think is 'fair value' in your opinion?




gav-no personal attack on u-wether its 10 or 90 % that is getting shorted what diff does it make-

are people upset that they did not short it or knew what was going on-

i do see 2 sides to this

buy vs short ?

Thanks

Nick--


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## nomore4s (4 September 2008)

njc.corp said:


> as i see it wether its getting shorted or not its still a game that we choose to play-
> 
> i mean does that mean all the other stocks that i traded and had a loss is due to people shorting it?
> 
> ...




*If* there are a lot of people short this stock, they *must* buy those shares back at some stage, so we could see a huge short squeeze.


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## MichaelD (4 September 2008)

Stopped by this thread to see what's currently happening with one of my more recent multi-R winners.

Has anyone considered this;

1. The price goes up because it goes up.
2. The price goes down because it goes down.

The logic here in this thread would seem to be;

1. The price goes up and I make money because I am a clever stockpicker.
2. The price goes down and I lose money because of "them". (them = hedge funds, short sellers, corrupt directors, ASIC incompetence, insert villian de jour here)

Pick a stock, any stock, going south and read the thread - the story is always the same. (But don't forget the knife catcher's credo - it's only a loss if you sell).


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## prawn_86 (4 September 2008)

I would add:



MichaelD said:


> 1. The price goes up because it goes up.* Because of buyers*
> 2. The price goes down because it goes down. *Because of sellers*




Its a pretty simple equation really. And yeh, virtually any thread is the same these days, people blaming others/looking for reasons why the stock is falling.


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## Hendrik (4 September 2008)

Hi fellas im going to use my novice TA skills to try and make sense (if any) of the current FMG SP.





p.s read my sig.


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## IFocus (4 September 2008)

prawn_86 said:


> I think its funny that ever since short selling became public knowledge EVERY stock that is falling has holders blaming short sellers.
> 
> What did people use to blame before the days of short sellers? Normal sellers? Could it still just be them...?




Prawn it used to be day traders that were blamed for every thing including plagues and pestilence.

Many current market participants still haven't got their heads around that this is a bear market and prices will fall generally across the board no matter what CEO's and boards say about their company prospects.

Stock prices are currently being set based on risk and reality, you would have to have been living under a rock not have some understanding of current global financial issues.

Whether anyone believes that there are further shocks to come or not is not the problem its the risk that they may and the risks are real not just the usual set of doomsayers calling for the end.

As for short sellers well they only can because the market is falling.


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## simontitan (4 September 2008)

Two news articles today of interest. Just dipped below $7 mark. 


*Falcone in a flap over Fortescue Metals*
_MARTIN COLLINS: John Durie | September 04, 2008_

IF Andrew Forrest is right and two-thirds of Philip Falcone's shares are on loan, then Falcone must by definition be in breach of the law by not lodging substantial shareholder notices.

Whether the breach is intentional or not, either FMG's figures are wrong or Falcone is in breach.

The transparency around stock loans and short selling may be abysmal but one thing is clear: if you are a substantial shareholder and more than 1 per cent of your stock is lent then you must lodge a change in substantial shareholder notice.

The ASX looked at the FMG disclosure and was happy with it for two reasons: it is relying on the fact that Fortescue is aware of its obligations, and covered shorts are not reported in Australia.

In other words the ASX is presuming the innocence of Fortescue and lacks the physical evidence to question Fortescue's statement.

In short it is a disgrace.

The ASX disclosure policies, or more to the point, the lack of them, been beautifully exposed not by some heinous hedge fund but by the richest man in the land.

Forrest has had share register sleuths Orient Capital look at his register and they have uncovered that more 280 million shares were on loan.

Orient did its search using beneficial ownership provisions under section 672.

Stock loans are considered a proxy for short sales.

Nobody else in the Australian stock lending community can verify these numbers and say the evidence before it runs counter to the claims.

FMG is sticking to the Orient figures and thinks the Data Explorer numbers are garbage.

Neither stock loans nor short sales are disclosed in any meaningful way in Australia.

FMG rejects any suggestion its statement highlighting the potential stock loans was aimed at thwarting short sellers and maybe even manipulating the market.

Instead, its disclosure was in accord with its continuous disclosure obligations.

Fortescue Metal (FMG) shares were sold down 10.2 per cent yesterday at $7.14 a share after closing up over 4 per cent the day before on the company's statement that it had discovered that over 10 per cent of its shares were subject to stock loans.

You could call this the short seller's revenge.

The story put around by friends of the company was that 258 million shares owned by 15 per cent share holder (440 million shares), Philip Falcone, were held by Lehman, Merrill Lynch and Goldman Sachs -- as custodians -- and then on-lent to Bank of New York which in turn on-lent them again.

Putting to one side the lack of a substantial shareholder notice from Falcone, the trouble with this line is it simply is not supported by other data.

The accompanying table from Data Explorer, which is the acknowledged source on global stock lending, shows that after peaking in July FMG stock loans have dwindled fast.

In fact, as of August 31, there were just 28 million shares on loan and a massive 170 million available for loan.

In other words, if someone wanted to short the stock, it would not be a problem; there are plenty of shares to rent for the purpose.

FMG's Forrest is maximum bullish on his Pilbara mining operations with plans to increase production from a maximum 55 million tonnes of iron ore to 100 million tonnes a year.

If the Chinese or anyone else wanted to buy the stock via a stock issue, then the asking price would be closer to the company's view of its net present value which is closer to $35 a share or five times the present share price. Still it is inconvenient for a company promoter when the stock price is being hammered.

Forrest, it should be noted, has criticised the practice of creating false rumours and then short selling, but not short selling per se.

There were of course other reasons to sell mining stocks yesterday with the closure of an Ospraie commodities fund run by Dwight Anderson which obviously has big ramifications in Australia.

But the real point about the FMG situation is how perfectly it highlights the lack of transparency in the stock market.

This works both ways in the wrong hands with company promoters able to claim that stocks are lent when they are not and in doing so manipulate the price.

Likewise short sellers can manipulate the price. The regulatory debate in Australia works by crisis which means when stocks are plummeting the politicians take notice and ask the regulators why they are sitting on their hands.

When the market is settled the pollies are looking elsewhere and the regulators sit on their hands.

If it's true that Andrew Forrest has exposed his major outside shareholder as in breach of the continuous disclosure rules, someone will move to clear up this entire mess.

Transparency is the regulator's best friend. 

and....
*
Wild goose chase on Fortescue reveals an overdone market*
_Andrew Main | September 04, 2008_



FORTESCUE Metals' Andrew Forrest has never been a blushing violet but his people may be turning into conjurers too.

Tuesday's announcement by Fortescue that "10 per cent of the company's shares have been the subject of stock loans" had shades of the lady being sawn in half.

Most observers jumped to the view that the custodian for Phillip Falcone's Harbinger Capital Partners in New York, the second- biggest holder after Forrest, had lent stock out to someone who had gone short.

"The stock loans were made by the owner's custodian and the owner has since advised the company that it will immediately rectify the situation," sounded like a messy about-turn by an errant custodian.

It was getting exciting but there was a drum roll, a flash, and the lady jumped out undamaged. There's no evidence that the shares were sold short at all.

One, there's a difference between lending stock and someone going short. As my colleague John Durie has pointed out, his source Data Explorers says that as of August 31, just 28 million FMG shares were on loan and 170 million were available to be lent. With 2.6 billion shares on issue, that total is just over 7 per cent. Two, it's very possible that Falcone, who's a wheeler dealer par excellence, has done nothing more exciting than offering his Fortescue shares as collateral for a loan elsewhere.

The Australian understands that the information came out of a Section 672 notice issued about a week ago by registry search specialist Orient Capital Pty Ltd on behalf of Fortescue, which has been trying to find out who actually owns its shares. Some short scandal.

A final thought. If any of the stock had been shorted, then original owner Harbinger Capital, which shows up as owning 15.83 per cent of the stock or 444 million of them, would have been obliged to file a substantial shareholder notice to the ASX. It didn't happen and the share price yesterday dropped 66c to $7.29. And Falcone knows exactly the difference between being long and short.

The moral of the tale is that in the absence of clear and transparent declaration by covered or uncovered short sellers, the market jumps at shadows and comes to all sorts of erroneous conclusions, not aided by the conjuring business about "the subject of stock loans".

Senator Nick Sherry is about to introduce a bill to parliament forcing the declaration of all short positions, covered or uncovered. There have been regular instances of overseas and local hedge funds refusing to disclose positions to their brokers, who in turn fail to inform the ASX, and that may or may not be fully sorted by the new legislation.

The wild goose chase on the Fortescue issue shows how overdue our market is for an extra dose of information on stock lending and short selling.


I think FMG is a becoming a bit of a bargain personally. But this is just my opinion and limited research


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## agro (4 September 2008)

simontitan said:


> Two news articles today of interest. Just dipped below $7 mark.
> 
> 
> *Falcone in a flap over Fortescue Metals*
> ...




god knows what is going on at the moment

should be a trading halt imo

wait for someone to scoop the sell side up...

if 5 Chinese steel companies already signed up for the preference shares and the fact that FMG has contracts for the next 12 years, someone is going to get a bargain,

no doubt the shorts will be covered..

i am holding regardless


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## freddy2 (4 September 2008)

_If the Chinese or anyone else wanted to buy the stock via a stock issue, then the asking price would be closer to the company's view of its net present value which is closer to $35 a share or five times the present share price._

What a joke.

Current market cap @ $7 = approx. $20 billion
Market cap @ $35 = approx $100 billion

For a company to be worth $100 billion it has to earn approximately $5 billion every year after tax, interest and capital spending (mining is an expensive business). Is this company even profitable yet? Even at the current market cap it has to earn about $1 billion per year to justify the valuation. For $20 billion would you rather own 100% of FMG or 66% of Woolworths or 33% of the Commonwealth Bank?


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## Go Nuke (4 September 2008)

Its on the back of the decline in resources imo.

Look at Uranium.
The price of that is (slowly) going up, but everyone related to uranium is still trending down because its following resources.

Of course there are a heap of other factors involved but primarily...resources are retracing and so will FMG


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## wildthing (4 September 2008)

Hi All, 
Is that a bullish hammer showing on daily chart?
With a bit of luck it will go up tomorrow. What do you reckon.
I am now holding.
Asx tested support today so hoping it maybe up tomorrow too.
Heres hoping 
cheers:


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## MichaelD (4 September 2008)

agro said:


> i am holding regardless




Will you still hold at $6?
Will you still hold at $5?
Will you still hold at $4?
$3? $2? $1?

It's a good company, after all.


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## SenTineL (4 September 2008)

agro - why would you quote such a massive post when replying straight underneath it????     

sorry, i just don't get it


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## agro (5 September 2008)

SenTineL said:


> agro - why would you quote such a massive post when replying straight underneath it????
> 
> sorry, i just don't get it




i apologise..

September 05, 2008


Harbinger caught up in FMG short selling 
US hedge fund Harbinger Capital Partners has reportedly been connected to the short selling of shares in iron ore miner Fortescue Metals Group, an issue that has plagued the company’s share price over the past 2 months.

In an announcement to the Australian Securities Exchange, FMG advised that some 10% of the company’s shares have been subject of stock loans.

FMG, which didn’t name the shareholder, said that the stock loans were made by the owner’s custodian and the owner had since advised the company that it would immediately rectify the situation.

According to a report in the Australian Financial Review, the shareholder in question is Mr Phil Falcone backed Harbinger Capital Partners. The newspaper said that Harbinger’s custodian had lent the USD 2 billion worth of shares to other investors, *who sold the FMG shares in the hope they could buy them back at a lower share price, without Harbinger’s knowledge.*

FMG's southbound share movement has been linked to short sellers, with broker Southern Cross telling clients FMG had been subject to an aggressive and coordinated shorting campaign from a high of USD 13.15. However, it remained a mystery how short sellers could get their hands on the company’s shares given the top 20 shareholders, who own 91% of its stock, were long term FMG investors.


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## SenTineL (5 September 2008)

lol so you do it again straight after......

anyway back on topic, that share price is looking nasty, i wonder what peoples stops at set at??


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## gav (5 September 2008)

SenTineL said:


> lol so you do it again straight after......
> 
> anyway back on topic, that share price is looking nasty, i wonder what peoples stops at set at??




Stops?  I didnt sell at $13, why would I sell at $6.39?  

It is only a loss if you sell.


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## nunthewiser (5 September 2008)

gav said:


> Stops?  I didnt sell at $13, why would I sell at $6.39?
> 
> It is only a loss if you sell.




nah m8 , its only worth 6 bucks as valued by the market regardless of how u feel and if bought higher its still a loss regardlesss if u sell or not , cant say to the bank i have 100000 fmg bought at 13 can i use that as equity , as the actual answer is that they only valued at 6 at present according to market , often hear that quote and personally think itsa load of twaddle.
a loss  is a loss regardless how ya word it


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## gav (5 September 2008)

If I had sold a couple of months ago, I would have made a 41% profit.  I was up 41%, but I did not make a 41% profit, because I did not sell.  Im now down 26%, so my FMG investment is now WORTH 26% less than the capital I put in.  But I have not made a 26% LOSS, because I have not sold.

Do I wish to sell now? No
Do I wish to borrow against my FMG investment? No
Then I have not lost anything.

If I knew it was going to trace back to $5, then I would definitely sell now and lock in a loss.  But I dont know that.  What I think is more possible, is that in 2-3 years time FMG will be at all time highs, so I am not prepared to make a loss on something I believe will be worth alot more in the future.  If anything, I'll just continue buying more if it drops further


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## oldblue (5 September 2008)

Hi gav.

If I was going to buy FMG, and I've been often tempted these last few weeks, I'd wait until the current  trend turns up and the SP starts to show a bit of strength.



Discl. Not holding, yet.


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## michael_selway (5 September 2008)

gav said:


> If I had sold a couple of months ago, I would have made a 41% profit.  I was up 41%, but I did not make a 41% profit, because I did not sell.  Im now down 26%, so my FMG investment is now WORTH 26% less than the capital I put in.  But I have not made a 26% LOSS, because I have not sold.
> 
> Do I wish to sell now? No
> Do I wish to borrow against my FMG investment? No
> ...




Yeah sounds good

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS -2.6 -35.2 41.7 81.6 
DPS 0.0 0.0 0.0 0.0 *

Date: 5/9/2008 
Author: Michael Vaughan; Andrew White 
Source: The Australian Financial Review --- Page: 49 
 Questions regarding Fortescue Metals Group stock have prompted new calls forincreased disclosure of stock lending practices. Some have likened stock lendingto short selling. Fortescue has claimed that 10% of its issued capital has beensubjected to stock loans. Harbinger Capital Partners senior MD, Phil Falcone,has stated that he does not lend out his stock. Fortescue shares fell $A0.25 to$A6.80 on 4 September 2008 

thx

MS


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## nunthewiser (5 September 2008)

a wise man once told me , " a listed stock is nothing but a 3 letter word , marry it at your peril" i believe in this and yes i understand your belief but at the end of the day we here to make a buck not to wave goodbye to our cash. each to there own but been down this road before and learnt many a valuable lesson ..... anyways .........


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## agro (5 September 2008)

Here's hoping for a better day Monday:

Sep 8, 2008 	*Full Year 2008 FORTESCUE METALS GROUP LTD Earnings Release  - 12:00PM AEST*

source: Google finance


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## renim (5 September 2008)

Monday should be interesting then,  with production started and ramping up to see how cash flow is, i suspect fmgs downward momentum is driven by an expectation of poor cash flow due to onging expansion plans.

for some paper gains and paper losses are not real until realised,  just ask a tax man or an accountant.
for others paper gains and paper losses are real at every point in time,  just ask a banker.

both are correct, but for different reasons,  which reason fits your situation...

finally remember that this is a zero sum game,  for every seller there is a buyer, for every buyer there is a seller.


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## MichaelD (6 September 2008)

One thing's a given;

Those that are declaring they won't sell/it's not a loss until you sell/etc - you'll either ride the stock to zero and then blame someone else for the loss, or you will indeed sell...right at the very bottom, just when you can't take the pain any more.


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## agro (6 September 2008)

MichaelD said:


> One thing's a given;
> 
> Those that are declaring they won't sell/it's not a loss until you sell/etc - you'll either ride the stock to zero and then blame someone else for the loss, or you will indeed sell...right at the very bottom, just when you can't take the pain any more.




just think of the 92% of FMG that are holding shares and none of them decided to quit. 

Have you forgotten that both Chinese and Russian steel companies wanted a bigger slice of FMG but missed out?

do you really beleive that they don't want any more? and have they sold the slice that they bought in the first place?

you can fool the mums and dads, but you cannot fool twiggy

i stick with twiggy, i'll hold forever and ever amen.

don't worry about it, you wont be around if FMG is ever at 0.


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## agro (6 September 2008)

It is natural to feel insecure when the value of the share goes down.
Are you a trader or investor?
If a trader,review your tactics .No use ramping up and down to mislead others so you make a dollar.
If you are investor ,who bought FMG last year or before; lets look were it was and where it is now. FMG is nearly double in value to what it was sept last year.

Now fair to use BHP and RIO , to compare FMG as The New Force In Iron Ore.
Compare share prices then and now, include the dividends to be fair.

FMG started to look good already .

Now ,Look at the market history last year ,when FMG dipped by 50 %.
Now that was scarey and the weak ones sold ,ONLY to regret doing so later.

While they were selling The Russians were buying .And so happy, that they applied to gov for a bigger slice of FMG .

Then the Chinese wanted more of FMG ,but I believe Harbinger was not keen in parting shares despite of the reasonable price and credit at the time.

Next we have the Chinese companies who readily offering to fund the latest expansion.
You think they are mad ,when FMG share is going down?

And while you deciding on what to do ,Think of Twiggy who on paper lost billions.
Is he stupid that he did not sell, OR he can see his dream come to fruition in years to come ?

Who is accumulating shares behind the scene ?????

Well are you ready to sell ? Go ahead make my day .I hold and buy some more at give away price . There is always a buyer.


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## oldblue (6 September 2008)

Yes, there is always a buyer - at a price.
I didn't read Michael's comments as applying to FMG specifically but rather as to the potential danger in deciding to hold onto a stock, come what may, particularly in current market conditions. Perhaps he will clarify.


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## MichaelD (6 September 2008)

agro said:


> If you are investor ,who bought FMG last year or before; lets look were it was and where it is now. FMG is nearly double in value to what it was sept last year.



And it's less than 1/2 the value it was 2 months ago.

It was a bargain at $10
It was a Bargain at $9
It was a BARGAIN at $8
It must be a SUPER DUPER BARGAIN at $6.50

Want to hazard a guess at how low it will go?



agro said:


> Well are you ready to sell ? Go ahead make my day .I hold and buy some more at give away price . There is always a buyer.



I sold what seems an aeon ago when it hit my stop loss at $8.50. A nice multi-R profit. A lovely big gap up exit to close off courtesy of the true believers.


ps The GDN thread has perhaps the same story, only further advanced. A meteoric rise, trend followers cashing in, and then an even faster drop into....almost....oblivion. But it's a good company - just ask any of those that still hold from the peak ($1.30...now down to $0.07).


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## agro (6 September 2008)

MichaelD said:


> And it's less than 1/2 the value it was 2 months ago.
> 
> It was a bargain at $10
> It was a Bargain at $9
> ...




you must be looking to buy it yourself considering you are asking me how low it will go? lol

i don't have a crystal ball and i don't try and pick bottoms


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## MichaelD (6 September 2008)

agro said:


> you must be looking to buy it yourself considering you are asking me how low it will go? lol
> 
> i don't have a crystal ball and i don't try and pick bottoms




It's fascinating that we are so utterly on different pages.

Have you not worked out that I am being rhetorical (and just a wee bit sarcastic) with my comments?

1. How low will FMG go?
A. I don't know

2. How high will FMG go?
A. I don't know

3. What will FMG's share price be tomorrow?
A. I don't know

4. What will FMG's share price be next year?
A. I don't know

5. Is FMG a good company?
A. I don't know and I don't care

6. Would I buy FMG again?
A. Yes, if it signalled an entry into my system...which btw does NOT bottom pick, it waits for the resumption of an upwards trend before signalling an entry.

7. Do I know how to profit from trends?
A. YES I DO. And that differentiates what I do from the vast majority of stock market participants, as I will never; a. let a small loss turn into a large loss, b. cut a winner's run short by prematurely taking profits, and c. pick a big winner and watch the big win disappear when the price reverses.


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## Miner (7 September 2008)

If google finance report about publishing of FMG financial result is on Monday then it is likely that the result is not as per market. It could be some insiders who have let FMG share to fall down drastically which Andrew has attributed to short selling etc. 

Who knows and will be much clearer on Monday. Probably they will publish the report after closing of market on Monday


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## agro (7 September 2008)

MichaelD said:


> *5. Is FMG a good company?
> A. I don't know and I don't care*




i suggest you take a look at the Diggers and Dealers Presentation 2008 that occurred in August

i say no more - FMG going to expand, they got 5 steel mills already willing to undertake preference shares..

i seem to be repeating myself  / wasting my time with skeptics (same as i did when no one said FMG will ever ship iron ore)


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## MichaelD (7 September 2008)

agro said:


> i suggest you take a look at the Diggers and Dealers Presentation 2008 that occurred in August
> 
> i say no more - FMG going to expand, they got 5 steel mills already willing to undertake preference shares..
> 
> i seem to be repeating myself  / wasting my time with skeptics (same as i did when no one said FMG will ever ship iron ore)




The intriguing thing is you still just don't get it, and like all true believers you never will. You've got WAY too much invested in being RIGHT rather than profitable.

1. It is not necessary for me to know anything about a company to trade it profitably. All that I need to know is contained within one undisputable, incontravertible fact: the current share price.

2. I am not a skeptic. I feel no emotions whatsoever towards FMG. I would buy if my system says buy and sell if my system says sell. I would never buy something going down in price. I would never sell something going up in price. Right now, FMG is going down in price so I will not buy. If it goes up again and signals an entry, I'll be back in again without a second thought.

3. I nod my head to true believers - without you, I couldn't profit from trends. The true believers are the ones buying at the top and buying all the way down - the ones I'm selling to. The true believers are the ones who give up in disgust at the bottom and sell at the bottom or on the way back up at break-even - the ones I'm buying from.


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## Timmy (7 September 2008)

Michael, while I understand what you are getting at with your reference to your technical and money-management-based trading system, this thread is intended to allow a specific discussion on FMG, both from fundamental and technical perspectives, rather than a discussion of any one trading system or approach.  Having made your point it might be best now to leave the FMG people to their exchange of views.


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## renim (8 September 2008)

what was the source of saying the report comes on Monday, cause i've looked for it and can't find it?  It was a good day for FMG though, probably some bullishness on iron ore price, seeing how easily Vale got its price rise.  
any news on how to get some of the preference shares (9% yield).  that would sit nicely in my super 

(another way to get over the funds 20% share limit in any one company, my theory is that FMG will never reduce back to less than 20% of my super holding, no matter how long compulsory super keeps adding to the account.)

day traders must be having fun.


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## tony montana (8 September 2008)

MichaelD said:


> The intriguing thing is you still just don't get it, and like all true believers you never will. You've got WAY too much invested in being RIGHT rather than profitable.
> 
> 1. It is not necessary for me to know anything about a company to trade it profitably. All that I need to know is contained within one undisputable, incontravertible fact: the current share price.




so michael what you are saying is you dont look at anything but the current share price ?
not the...debts...contracts...management....past share price...volumes sold and bought...announcments...nothing....hmmmm?


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## aacantona (8 September 2008)

MichaelD said:


> The intriguing thing is you still just don't get it, and like all true believers you never will. You've got WAY too much invested in being RIGHT rather than profitable.
> 
> 1. It is not necessary for me to know anything about a company to trade it profitably. All that I need to know is contained within one undisputable, incontravertible fact: the current share price.
> 
> ...




I think i've read Nasim Taleb's (Fooled by randomness) post... i mean MichaelD's post 6 times over and feel dumber for doing so. You are every bid the herd trader but because you have trading rules, you somehow do much better than the "true believers"? I can't find anything in that post that has any value other someones ego getting a bit to big!


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## LeeTV (9 September 2008)

aacantona said:


> I think i've read Nasim Taleb's (Fooled by randomness) post... i mean MichaelD's post 6 times over and feel dumber for doing so. You are every bid the herd trader but because you have trading rules, you somehow do much better than the "true believers"? I can't find anything in that post that has any value other someones ego getting a bit to big!



Totally agree with aacantona, especially with *1.*

How in gods name can anyone trade a company profitably, or at all for that matter, when the only info they have is the _current share price_ 

Get off the crack pipe!


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## Miner (9 September 2008)

LeeTV said:


> Totally agree with aacantona, especially with *1.*
> 
> How in gods name can anyone trade a company profitably, or at all for that matter, when the only info they have is the _current share price_
> 
> Get off the crack pipe!




Hey Fellows

You know what some times it is good to have some crap posting from few egoists. Then we can have  mix and match between good and bad postings and will be able to filter real good postings. Life will be very dull otherwise (sorry nothing related to FMG and a bit digression)

Today market was good and so will be tomorrow. 

I am hoping to get FMG up tomorrow. Ironically banks were up much higher relatively than FMG or BHP shares.

Think positive and hope to see FMG at least to go up to reach $7.85 on Tuesday

Cheers


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## MichaelD (9 September 2008)

Ah, a ruckus. Good. It might get some people thinking about what they are doing instead of mindlessly following the crowd.

Just a few points and I'll leave it at that.

My trade in FMG began at $6.40 mid January. I bought it because the price was going up. As it kept rising, I bought more. No other assessment or analysis was necessary. I did not know what the company did.

After FMG stopped going up and started going down in July I sold it at $8.65 and moved on. (aka a trailing stop).

Things to think about;

1. Buying something when its price is rising seems intuitively wrong, doesn't it? And yet, whilst it's rising, it's likely to continue doing so.

2. Yes, trend followers follow the herd too...but they know when to step aside from the herd who will watch something rise and rise and also watch it fall back down again, hoping it's going to go back up again. Sometimes it does go back up again. Sometimes it doesn't.

3. Fundamental information can be lied about. Price cannot. (eg ABC Learning - but I digress.)


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## njc.corp (9 September 2008)

Miner said:


> Hey Fellows
> 
> You know what some times it is good to have some crap posting from few egoists. Then we can have  mix and match between good and bad postings and will be able to filter real good postings. Life will be very dull otherwise (sorry nothing related to FMG and a bit digression)
> 
> ...




miner-please tell me why u think fmg is going to gain a .75 jump today-

when was the last or when or how many times as fmg seen a .75 gain since its listing on the asx?

this market turn around was on high due to the us news on  feenie and whatever the other one is-

i dont see good news lasting for 2 day's

not having a go just want to understand  why u think we are going to get .75 cents today-

Thanks

Nick--


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## njc.corp (9 September 2008)

MichaelD said:


> Ah, a ruckus. Good. It might get some people thinking about what they are doing instead of mindlessly following the crowd.
> 
> Just a few points and I'll leave it at that.
> 
> ...




micheal-seen some of your above post before-

i will say they have some good points and i do agree on buying on the way up but that does that mean i cant buy on a low-

times have changed if u ask me-the view of buy low sell high is no longer around unless i am blind-

but i have a question for u-

and we will talk about fmg because its related to it-

what do u call small profit's?

i been in and out of this stock 17 times to day and have lost twice out of that

so where do i stand-

am i good-

i am good because i am taking small profits

or is it just luck-

very basic question-

Thanks

Nick--


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## Nesa (9 September 2008)

such an interesting stock

bit of a disappointment today though.

BHP and RIO also opened lower

even on the back of a healthy green day for the DOW


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## Miner (9 September 2008)

njc.corp said:


> miner-please tell me why u think fmg is going to gain a .75 jump today-
> 
> when was the last or when or how many times as fmg seen a .75 gain since its listing on the asx?
> 
> ...




Dear Nick

Very good question and thanks for asking me.

First of all the 0.75 was my hope based on the tremendous increase in Dow Jones INdex on Monday in USA market, FMG is highly volatile to react on such news, always backed by some financial investors who have put enough money on this company than real technical assessment as nothing came out in market in last few weeks from FMG. 

However it was strange to see Aussie Market went opposite to DJ movement today considering the Fennie Fred news probably already been factored on Monday. If I was so good to know all values ahead then  

Any way for your reference : 
On 11 Jan 2008 FMG changed values by 94 cents down and then up by 84 cents.
On 6 June FMG fluctuated by 83 cents
On 25 June 2008 the price fluctuated by $1.31
On 30 June 08 the price fluctuated by 80 cents
On 1 July fluctuation was for 82 cents
On 4 Sept fluctuation was for $1. 
Hope that will provide you some fact from recent history.
I was however hoping to see the price gone up than down today


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## njc.corp (9 September 2008)

Miner said:


> Dear Nick
> 
> Very good question and thanks for asking me.
> 
> ...





Thanks for the fact's- 100%-

But the feenie and whatever mac-that news was told on the weekend-so we did get the favor for our monday-

so my point  was i had a very good feeling that we would not sustain  the 10% gain yesterday for this morning-

if the feeling is not good enough-i have witness and most have also seen that lately a gain in fmg  does not hold the next day-

i dont know why and dont care-

past performance does not represent the future but it is a good baseline to study off in my book-

i am only upset that i dont have a great deal of cash to buy at this bargin price-

remember folks-somesones bargin price may not be your price-

Thanks

Nick--


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## nitpra (9 September 2008)

njc.corp said:


> micheal-seen some of your above post before-
> 
> i will say they have some good points and i do agree on buying on the way up but that does that mean i cant buy on a low-
> 
> ...



What parcel size did you use and what indicators work well for day trading this stock if dont mind it please


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## Schmuckie (9 September 2008)

Could this be the reason for the drop?

http://www.nypost.com/seven/09092008/business/hedge_hogs_hunker_128180.htm 

Harbinger going to cash.


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## MichaelD (10 September 2008)

njc.corp said:


> and we will talk about fmg because its related to it-
> 
> i been in and out of this stock 17 times to day and have lost twice out of that
> 
> ...




Going off topic here...

I'm not sure if you've given this small amount of information as merely a teaser or because you actually have no idea of the usual consequences of this type of trading.

I'll assume the latter.

So you've traded 17 times, winning 15 times. What actually matters is how much you win when you win and MOST IMPORTANTLY how much you lose when you lose.

Say you win $10 each time you win.
Say you lose $100 each time you lose.

15 wins  is +$150
2 losses is -$200

So let's ask the important questions;
How much do you win when you win?
How much do you lose when you lose?
How many trades using this method have you taken overall?
How do you know your results are NOT due to luck?


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## njc.corp (10 September 2008)

MichaelD said:


> Going off topic here...
> 
> I'm not sure if you've given this small amount of information as merely a teaser or because you actually have no idea of the usual consequences of this type of trading.
> 
> ...





micheal-if i was to say for example that the method as only been used 10 times what does that mean-

avg win is between 1500-1850

avg loss is 350-450-

well how does anyone know when luck has come into it-

maybe its my fault that i have taken this a bit off topic-but never the less-

Thanks

Nick--


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## MichaelD (10 September 2008)

njc.corp said:


> micheal-if i was to say for example that the method as only been used 10 times what does that mean-
> 
> avg win is between 1500-1850
> 
> ...




I'm confused; you've described 17 trades in one day, and now you're describing the method only being used 10 times...?

Your win size vs loss size is consistent with positive expectancy.


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## njc.corp (10 September 2008)

MichaelD said:


> I'm confused; you've described 17 trades in one day, and now you're describing the method only being used 10 times...?
> 
> Your win size vs loss size is consistent with positive expectancy.




u are not confused-maybe i said it wrong-

i am saying for example if i use your method only ten times -what difference does it make-


never mind-i think i am going to get the blame for hi-jacking this thread-

Thanks for the replies----

Thanks

Nick--


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## Nesa (10 September 2008)

(RTTNews) -  Ausdrill Ltd. (ASL.AX:  News ,AUSDF.PK:  News ) announced the receipt of an A$300 million contract expansion from Fortescue Metals Group Ltd. (FSUMF.PK:  News ). The contract extends and expands Ausdrill's existing engagement with FMG to encompass drill and blast and grade control drilling.

The contract expansion will be Ausdrill's largest drill and blast contract, with more than 30 drill rigs in operation.

Ausdrill said that the work formed part of the more than $1 billion in contract extension that Ausdrill was negotiating or tendering on in September and October.

by RTT Staff Writer

http://www.rttnews.com/ArticleView.aspx?Id=706029&SMap=1


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## renim (10 September 2008)

i think what michael is describing is the equivalent of buying when the pink is above the blue and sells when the blue goes above the pink.
or something similar.
so currently he would still be out, depending on his preferred lags or bands or whatever

a lot depends on ones time of hold, and fmg is an unusually wide volatile stock.


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## Miner (11 September 2008)

Folks

I am sure most of you have read the recent contract with AUS drill of $300 M with FMG

Where as it is an excellent news for Macmahon MAH and Aus Drill AUS but it is a bad news for FMG aspirants (I hold FMG) in my opinion

The reason is to align with West Australian report today that it shows FMG is having doubt on surface miners capability for its next phase of operatins.

If you refer back to my postings in the past one competitive advantage FMG has was surface miner and elimination of drilling and crushing cost by traditional route followed by BHP and Rio

THe fact is Ausdrill be used (300 M is not a small value contract for geological samples and that is a bull story to suggest so) means the cost of production for FMG will be very high than its earlier projection.

WIth sagging market FMG is increasingly going down probably the reason for down trend. Even market brings I think (no technical data excepting my own experience in this field) that FMG has to work very hard to get back to $8 for a while. I do not like as that means personally I will be in red

May be that was why Harbinger belled themselves out by partial sell off and it was not the short sellers

Wait and see in one month from now.

Regards


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## roland (11 September 2008)

I'm out - couldn't take it any longer. I should have ditched ealier, but it just doesn't seem to sink in though. Feel annoyed with FMG, but also relieved. Good luck to FMG holders, I may be back in better times.


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## MichaelD (11 September 2008)

Now below $6 - that didn't take long.

Will you hold on to this fine company if it gets down to $5?

If I'd held on I'd now have watched the price skyrocket up into a profitable trade and then plummet back down again to a loss, a cardinal sin for a trader.

Good luck to all that continue to hold.


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## SenTineL (11 September 2008)

I'm holding, it would have to drop below $0.30 for me to loose money, I've held for over 3 years now, selling parcels here and there so I've done nicely already.

In saying that, I'm spewing to know that it hit $13.00 not too long ago. But I'm also not a trader so even if I sold all my shares at $13.00 what would I have put it in? The bank? I just don't have time to reasearch much else these days.


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## tigerboi (11 September 2008)

*Re: FMG-id love to see $5.00($50)again*

I got into fmg last year at $33 then held & got a stack at $25 then sold at $50 just before the solomon announcement sent it to around $66.

i got into strife for saying they would reach $100($10 now)they did have dramas with the 1st shipment despite what others know or believe,the first shipment was trucked most of the way(initial 32,000t worth)

notwithstanding the current market conditions its clear fmg ran a bit ahead of itself now its all over for some as they move onto other plays,but ive had a look in the last few days thinking gee $5.00 is a gimme very long term if it happens.

fmg at $5.00 big chance i might raid the secret stash.see what gives by xmas...tb


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## Hendrik (12 September 2008)

Some food for thought:





Perhaps an opportunity to get some strength behind it, as some mentioned prior to my post its now in that 5/6 to 8 range.


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## LeeTV (12 September 2008)

Forming a head and shoulders pattern. Still holding, with white knuckles though.


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## Miner (12 September 2008)

LeeTV said:


> Forming a head and shoulders pattern. Still holding, with white knuckles though.




Hi Lee TV 

Would you please give more words to your high tech comment for low techs like me to understand 

Regards


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## fordxbt (12 September 2008)

Miner said:


> Hi Lee TV
> 
> Would you please give more words to your high tech comment for low techs like me to understand
> 
> Regards




are you serious?



http://www.urbandictionary.com/define.php?term=white+knuckles
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns

quite an uneventful week, punters taking their money & running


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## renim (12 September 2008)

I'm not that concerned about $300m contract for drill and blast,  i realize some consider it a sign of uncertainty for the roadminer concept, but until i know more on what the services are used for, I'm not too concerned.  (I have sometimes wondered if a bit of explosives could accelerate roadminers).  as long as they don't require a crusher and can run mostly continuously (not cyclically) then they should be ok.   And  i would expect drill and blast would still be used for overburden anyway.

yeah i'll still hold,  a 50mtPA low cost iron ore operation going to 100mtPA is too good a story for me to ignore.  I would say all stocks without dividends in Australia are being hammered and FMG is no exception, but that doesn't change its fundamentals, and while short term it go anywhere, a 100mtPA iron ore mine could carry a market cap of about 2xWoolies.

aus dollar down - good for miners
Vale increasing ore prices, good for miners.


----------



## Garpal Gumnut (12 September 2008)

I missed out on FMG , a stellar performance but short selling I am told has sent it down again.

I am interested in getting in.

Just below $6 seems like a reasonable entry point , although points at $1.50 above and below this have been support and resistance in the past.... $7.00 and  $4.40 in particular

Any thoughts from the technical aspect?

gg


----------



## diliff (13 September 2008)

Garpal Gumnut said:


> I missed out on FMG , a stellar performance but short selling I am told has sent it down again.
> 
> I am interested in getting in.
> 
> ...




I'm only learning technical analysis myself so I'm not going to claim to have all the answers, but given the amount of time and also change in FMG since the stock price was last at $4, I'm not sure that it is still a particularly valid support. I'm not exactly sure where the supports are now though, given that metal and oil commodities price fluctuations seem to be dominating the movements of FMG rather than any inherent strengths or weaknesses in the company. In the last couple of months, what have at first seemed like support lines ($8 in late July and $7 in August) have been broken straight through with ease...


----------



## CAB SAV (13 September 2008)

CAB SAV said:


> I'm not in a rush to get into this yet.
> Capex/mine fleet costs up and gets worse with bigger ramp up.
> Cash at end March  was $650 mill, probably will be well down under $50mill by end of year.
> With costs rising, this is too thin cash wise.




Still not rushing in. It,s not going to "shoot up" and your'e not going to miss the boat. Relax, wait. Would not touch till in definite upward trend.


----------



## LeeTV (13 September 2008)

Miner said:


> Hi Lee TV
> 
> Would you please give more words to your high tech comment for low techs like me to understand
> 
> Regards



Not sure if that was meant to be sarcastic or not :

If not:

http://stockcharts.com/school/doku...._analysis:chart_patterns:head_and_shoulders_t

High tech I'm not. Green I am, light green at that.


----------



## Miner (14 September 2008)

LeeTV said:


> Not sure if that was meant to be sarcastic or not :
> 
> If not:
> 
> ...





Lee TV

Bloody good education and thanks a lot 

Rest assured I was not at all sarcastic and never feel shy to ask if something I do not know. 

I also realise seeing the excellent reference site you gave me, that there is no short cut to get anything - good research and education is a must even in share market

Thank you very much once again.


----------



## Nesa (15 September 2008)

going to be interesting watching the DOW tonight on the back of the bankruptcy news of investment bank Lehman Brothers Holdings


----------



## tronic72 (16 September 2008)

GreatPig said:


> Sometimes the market can be so sadistic
> 
> I bought this stock in early August for $3.06 then sold a week odd ago for $3.00, as it appeared to be dropping off.
> 
> ...




What a sign of the times. This was posted 3 years ago and we are getting close to that price again. I think we may see stocks like FMG get there sometimes soon.

T


----------



## tigerboi (16 September 2008)

tronic72 said:


> What a sign of the times. This was posted 3 years ago and we are getting close to that price again. I think we may see stocks like FMG get there sometimes soon.
> 
> T




i bought this last 16th august at $25($2.50)after buying first at $33($3.30)...i think this may see $4.50...tb


----------



## Prospector (16 September 2008)

tronic72 said:


> What a sign of the times. This was posted 3 years ago and we are getting close to that price again. I think we may see stocks like FMG get there sometimes soon.
> 
> T





Well, not really, there was a share split!  Can't compare the two at that price.  Those shares went up to around $45 first.


----------



## rthakkar (17 September 2008)

http://business.smh.com.au/business/iron-supply-catching-demand-says-bhp-20080916-4hw8.html

"BHP BILLITON has painted a bullish view of the long-term demand for commodities but has warned that expanding iron ore supply is beginning to catch up with demand."

Silly comment!


----------



## prawn_86 (17 September 2008)

rthakkar said:


> "BHP BILLITON has painted a bullish view of the long-term demand for commodities but has warned that expanding iron ore supply is beginning to catch up with demand."
> 
> Silly comment!




Makes sense to me. A lot of small and mid teir co's coming online now and within the next year.

Why is it a silly comment? Or were you being sarcastic?


----------



## agro (17 September 2008)

noticed a few massive buys go in, in fact just saw one for 280k at 5.21..

and you people tell me there isn't someone on the side ready to pounce..


----------



## Trembling Hand (17 September 2008)

Agro. just shifting of the furniture on the decks,

Futures and index options expire tomorrow. :Lots of high volume changing of hands. Mostly they will not be directional bets.


----------



## njc.corp (17 September 2008)

Turn out to be a nice sunny day  but not on fmg-

i will say that i made some very good money on fmg in the past

but i have given back as much as i wanted too lately-

i feel i cant trade this stock and many others and i am due for a break too-- i am going to try some new angles and stay out of this ugly storm for has long as i can-

Like to say who ever is in fmg that they make good $$$ -good times ahead-well that should be the happy ending--

I am out-

Thanks

Nick--


----------



## gav (17 September 2008)

agro said:


> noticed a few massive buys go in, in fact just saw one for 280k at 5.21..
> 
> and you people tell me there isn't someone on the side ready to pounce..




could it just be shorters closing their position?


gav


----------



## Gspot (17 September 2008)

gav said:


> could it just be shorters closing their position?
> 
> 
> gav




Or could it be an announcement coming?
Either or either, she's starting to look good. Trying to get the confidence, for a Braveheart decision.


----------



## Trembling Hand (17 September 2008)

gav said:


> could it just be shorters closing their position?
> 
> 
> gav




Guys everything is an excuse to buy hey??

I remember seeing a couple of post here not that long ago paying out on someone because they knew nothing about the company but the share price and happily traded that way. They were so sure of other peoples methods that they can discredit them.

BUT they seem to not even have half a grasp on market mechanics.....

Google futures expiry and Arbitrage.


----------



## LeeTV (17 September 2008)

Some good news for all iron ore based stocks hopefully that will help stop the slide of FMG in to more negative country 



> Iron ore prices tipped to rise 18% in 09
> 17-September-08 by AAP
> 
> Iron ore producers are in line for a seventh consecutive price rise despite the upheaval in financial markets and question marks over the health of the global economy, analysts say.
> ...




http://www.wabusinessnews.com.au/


----------



## renim (17 September 2008)

i don't know how the low aussie dollar affects fmg debts, but it must be magic for its revenue/costs.  me thinks a reduction in interest rates would further assist exporters.


----------



## gwnth (17 September 2008)

I would like to think I would treat this stock as I would an old , past its time dog. I would take a Bucket of water out to the back garden pore it on the ground to soften the soil and start digging a hole. Once the hole was deep enough I would sit down have a drink and think of all the good times we had and probably shed a few tears then call the vet. The vet would come round with a needle and put the poor thing to sleep i would then teary eyed put it in the hole and fill it in. my belief is that this company is way past its use by date and should be gotten rid of before it totally breaks your heart and stops you getting another puppy.


----------



## diliff (17 September 2008)

gwnth said:


> I would like to think I would treat this stock as I would an old , past its time dog. I would take a Bucket of water out to the back garden pore it on the ground to soften the soil and start digging a hole. Once the hole was deep enough I would sit down have a drink and think of all the good times we had and probably shed a few tears then call the vet. The vet would come round with a needle and put the poor thing to sleep i would then teary eyed put it in the hole and fill it in. my belief is that this company is way past its use by date and should be gotten rid of before it totally breaks your heart and stops you getting another puppy.




Lol... lovely analogy and first post. Obviously it has been hit extremely hard lately, but is it fundamentally flawed? I don't claim to be an expert on the markets, commodities or even fundamental analysis but plenty of people still seem to think FMG is going to go places in the long term. Besides market sentiment, is there really reason to believe it is headed for a premature and painful (for holders, that is) death?


----------



## gav (17 September 2008)

Trembling Hand said:


> Guys everything is an excuse to buy hey??
> 
> I remember seeing a couple of post here not that long ago paying out on someone because they knew nothing about the company but the share price and happily traded that way. They were so sure of other peoples methods that they can discredit them.
> 
> ...




wat the? agro was just pointing out a big buy, and i merely suggested it could have been someone closing a short? whats wrong with that?


----------



## Trembling Hand (17 September 2008)

gav said:


> wat the? agro was just pointing out a big buy, and i merely suggested it could have been someone closing a short? whats wrong with that?




Because it wasn't a big buy!!!

Its almost 100% not a directional bet at all. Have a look at every top 50 stock on the close, and watch tomorrow too. Its Expiry time all the arbs cross hands.

And even if it wasn't roll over lets say today is 3rd Sep and that big trade when through. What can you take from that???? *Nothing!* a large buyer bought from a large seller?? If you look at it unbiased it could of been any of 4 things in combination.

If it was a short cover buying whats to say the big seller on the other side wasn't opening a new short position??? This is the thing with such statements there is two people on either side of every trade. What you choose to think it was has nothing to do with truth but rather shows bias.... you want the shorts to cover??


----------



## Miner (17 September 2008)

agro said:


> noticed a few massive buys go in, in fact just saw one for 280k at 5.21..
> 
> and you people tell me there isn't someone on the side ready to pounce..




Hi Agro

YOu have been a strong supporter of FMG. 

Just curious to know if you still have them and what indicative price you got them in your kitty.

I bought and sold them . Last I  bought them at $7,25 and still holding out of fear to see the downslide and have not able to cut the loss with a hope that price will revive. 

I am more afraid with the drilling contract with ALS for $300 M and selling by Harbinger (not short sell propaganda). 

Regards

Miner


----------



## tony montana (17 September 2008)

FMG mine expansion may cost $7b: JPMorgan

17th September 2008, 12:30 WST 


Andrew Forrest’s Fortescue Metals Group may need to raise more than $7 billion to almost triple capacity, according to JPMorgan Chase & Co.

The company “is assessing funding options - debt, equity, sale and leaseback, internal cash flow - but all but the last option have become more difficult to achieve at attractive pricing in this deteriorated financial environment,” Melbourne-based analysts led by David George said in a report dated yesterday.

Perth-based Fortescue wants to expand output to at least 160 million metric tons a year, JPMorgan said.

Fortescue, seeking to become Australia’s third-largest iron ore exporter, wants to increase output to take advantage of surging prices for the steelmaking raw material, which rose as much as 97 per cent this year. A global credit crunch is tightening access to funds, making it more difficult for some mining companies to finance expansions.

“Fortescue continues to generate strong income from iron ore sales which attracted a significant price increase so will provide a large part of the company’s expansion funding,” Cameron Morse, a Perth-based spokesman for Fortescue, said today. “We’ve always said that but that’s been forgotten given the current circumstances.”

Fortescue dropped 6.8 per cent to $5.21 at 12.22pm. The stock has fallen 60 per cent from its June 25 record.

BLOOMBERG


----------



## gav (18 September 2008)

yes, it could have been someone else opening a short. i was just offering an alternative to what agro said, nothing to do with any bias toward the stock. i never said that i wanted the shorts to cover. 



Trembling Hand said:


> Because it wasn't a big buy!!!
> 
> Its almost 100% not a directional bet at all. Have a look at every top 50 stock on the close, and watch tomorrow too. Its Expiry time all the arbs cross hands.
> 
> ...




WTF are you on about? "what i choose to think is the truth"????  what so called false truths have I claimed?


----------



## prawn_86 (18 September 2008)

Masrket sentiment has caught up with this one. 

This virtually did a reverse to what most near term producers do. Usually they are stagnant/falling leading up to production, then rise when production is confirmed.

Seems the markets 'golden child' has lost its shine though. Even those investing on fundies should be wary, as who know where the panic selling will end up.


----------



## Trembling Hand (18 September 2008)

Gav a big order goes through. What does that mean??? Nothing. A big buyer and a JUST as big sell swapped stock. Why would you weigh one side, the buyer, more than the other??

It means nothing especially at this time of the month. But Agro was inferring that it did mean something ie a big buyer. I can tell you it meant nothing.


----------



## gav (18 September 2008)

Trembling Hand, I am not the only one who believes in a company they own shares in whether the SP is going up or down (otherwise I wouldnt have bought in the first place), just take a look at the posts made by anyone on any other thread.  Yes I am new to all of this, and my knowledge is very limited, and I am the first to admit that.  This may just turn out to be a very expensive lesson for me.  But its the lessons you have first hand that are the ones you learn the most from, like everything in life.


----------



## Trembling Hand (18 September 2008)

Gav fair enough. I'm not having a go (although it probably looks like it) but just trying to point out two simple mistake that many make at this time.

One. All the large volume you see from big players means nothing as far as directional bets. They are Arbitrage trades being unwound.

Two. A big trade means nothing in isolation as there is obviously two equally big player on either side. And not to think its a buy because its also a sell.


----------



## agro (18 September 2008)

well i was forced to sell my beloved FMG today due to margin call..

just to recap, i was in at $2.95,

sold at 5.03 

looking to re-enter though


----------



## diliff (18 September 2008)

agro said:


> well i was forced to sell my beloved FMG today due to margin call..
> 
> just to recap, i was in at $2.95,
> 
> ...




Could have been worse, you could have been forced to sell at 4.60! When will this madness end.........? ;-)


----------



## njc.corp (18 September 2008)

agro said:


> well i was forced to sell my beloved FMG today due to margin call..
> 
> just to recap, i was in at $2.95,
> 
> ...




no stress agro- one door shut and the othe widely open-

Thats just the way it rolls-

Take it easy

Thanks

Nick--


----------



## agro (18 September 2008)

njc.corp said:


> no stress agro- one door shut and the othe widely open-
> 
> Thats just the way it rolls-
> 
> ...




i am most defently looking to buy in again

strongly beleive in the company, just in this uncertainty no one knows when the carnage will end..


----------



## njc.corp (18 September 2008)

agro said:


> i am most defently looking to buy in again
> 
> strongly beleive in the company, just in this uncertainty no one knows when the carnage will end..




argo-as we talked about- i made good money on this for a while-

it got me thinking yesterday that enough is enough-i sold @ $5.10

i just pulled a 1 year low chart and said we been at the top in june/july and we been in the low end since then

the 52 week low was in $3+ region

so i said why cant it get any lower-it can and will -well the trend been going down-so that a good fact right their-

i am sick of asking why its down or is it because of short selling etc etc-

i change my way of dealing with stuff like this-

i am in or out-

and when i am in i look at the price of it right their and then and make a choice-

I think thats the problem-people saying the market is down-well yes-what u going to do-

u can only fight so much until u got no more cash-

i say that their must be more bad times ahead- why-well why not?

keep chin up-plenty more where that came from-maybe after the storm clear's

Thanks

Nick--


----------



## diliff (18 September 2008)

njc.corp said:


> the 52 week low was in $3+ region
> 
> so i said why cant it get any lower-it can and will -well the trend been going down-so that a good fact right their-
> Nick--




True, but when it was last at $3ish, FMG hadn't actually delivered any iron ore and there were still plenty of question marks over that, if I remember correctly (didn't start watching the progress until it was around the $9-10 mark).

I suppose it seems there are still question marks about FMG's ability to ramp up production though, but presumably they're still profitable.


----------



## tigerboi (18 September 2008)

*Re: FMG-agro lives to fight another day.you won*



agro said:


> well i was forced to sell my beloved FMG today due to margin call..
> 
> just to recap, i was in at $2.95,
> 
> ...




that would be around the old $29.50 wouldnt it agro? close to when i got in at $33 then heaps more at $25 then out at $50.

gee mate you let it slide there,me i set a price target then stick to it as you see i sold at $50 & made lots...i would have sold at around $9.50-$10.00.

then get back in however you did ok...margin calls mmm i wouldnt touch them with a barge pole...bad value(gotta sell at the top as you know.)...tb


----------



## agro (18 September 2008)

*Re: FMG-agro lives to fight another day.you won*



tigerboi said:


> that would be around the old $29.50 wouldnt it agro? close to when i got in at $33 then heaps more at $25 then out at $50.
> 
> gee mate you let it slide there,me i set a price target then stick to it as you see i sold at $50 & made lots...i would have sold at around $9.50-$10.00.
> 
> then get back in however you did ok...margin calls mmm i wouldnt touch them with a barge pole...bad value(gotta sell at the top as you know.)...tb




yeh $29.05 last year in July 

would made a killing at $10-$13..

just staying put for time being, i can't really think of a share better than FMG.. caus most shares have declined


----------



## tigerboi (18 September 2008)

*Re: FMG-i love these days...craaasshh*

i love it when these days happen & its only bank related so your getting the chance for lower prices you normally wont get,ive set a fmg target of $4.45 which i first thought maybe,the only thing that will hold them back is cash.

at least you made some kanga mate unlike the cnp/bnb crowd chasing their tails praying for a miracle!more chance of harold holt returning...dreamers...

agro you got to be more disciplined with a target to sell,dont be disappointed if you sell at $50 like i did...set a target,sell then wait for the high & re-enter.me i went long on gold & its heading way back over its high...tb

fmg for me im looking at $4.45-$4.50...


----------



## renim (18 September 2008)

i don't think fmg is cashflow positive yet,  they have a target to achieve 'investment grade' in the near future.   that is next big step.


----------



## njc.corp (19 September 2008)

diliff said:


> True, but when it was last at $3ish, FMG hadn't actually delivered any iron ore and there were still plenty of question marks over that, if I remember correctly (didn't start watching the progress until it was around the $9-10 mark).
> 
> I suppose it seems there are still question marks about FMG's ability to ramp up production though, but presumably they're still profitable.




diliff- lets have a look at facts not because at that time they have not shiped-

they have been at the $3+ region-and also the $13.00

and the trend as been down for a while-

these are facts

the biggest fact is that it is in the $5.00 region

i was even wrong to say that we would not see under $10.00

how wrong i was-

the current price is the main fact

the question is what we or u going to do about it-

Thanks

Nick--


----------



## prawn_86 (19 September 2008)

*Re: FMG-i love these days...craaasshh*



tigerboi said:


> agro you got to be more disciplined with a target to sell,dont be disappointed if you sell at $50 like i did...set a target,sell then wait for the high & re-enter.




Or at least have a trailling stop (mental or as an actual order), so you dont end up giving away so much profit...


----------



## tigerboi (19 September 2008)

*Re: FMG-i love these days...craaasshh*



prawn_86 said:


> Or at least have a trailling stop (mental or as an actual order), so you dont end up giving away so much profit...




correct prawn,stop loss if you want,i dont use them myself as i set a target then sell as i did at $50 just before the slomon anns. crashed it through $65. at the time i was dirty but in light of the following events at least i made some coin.

agro not having a go at you mate but it is a dumb play letting it rip down to the present level,once twiggy got off the shovel coupled with the shorters the party was always over re:folks going elsewhere.

it is hard to pick a top for sure but i reckon the final get out was when the rumours of shorting came out that was the time to exit.

so best to set your sell limit so you bought at  $2.90(i was the first here to say it would reach $100)you then think how much profit do you want 100% go $6.00...so 300% would of seen you out at $12.

its all about discipline for me as you are getting out in front...tb


----------



## adobee (19 September 2008)

Okay well I am now on the FMG boat to CHina ! I have bought up this morning at mid $5 mark ...  hopping twiggy will pull something out of his hat to push his net worth back up !!


----------



## adobee (19 September 2008)

Was this announcement already out when I started buying ???? Comsec is a bit slow ...


FY 2008 Financial Accounts
Fortescue’s Maiden Trading Profit – A$72 million
Fortescue Metals Group Ltd (“Fortescue”) is pleased to lodge its accounts for the 2008
financial year. These accounts are the first to reflect Fortescue as an operating business
following the first shipment of iron ore in May 2008.
The accounts show approximately eight weeks of operations covering the early
commissioning stages of the business resulting in a trading profit of A$72 million. This was
generated from sales and shipping of 1.66 million tonnes of ore exported to end June 2008
which contributed to revenues of A$201 million.
Since July 1, a further 35 shipments totalling 5.90 million tonnes of product have been
shipped as the business continues to ramp up to full production. All facets of the integrated
mine, rail and port operations are performing well and a monthly run rate at the base target
of 45 million tonnes per annum “Mta” is expected to be achieved from November 2008
onwards. The optimisation to 55 Mta is then expected in Q1 2009 (calendar) as the second
ship loading berth and the lump circuit are brought into operation.
The other key feature of the accounts is the adjustment to the Leucadia subordinated loan
note. Under accounting standards, the note is required to be revalued each reporting period
to reflect the total expected interest payments over the 13 year note term calculated as 4%
of revenue net of government royalties. Given improved variables since the last report (1/2yr
2008), Fortescue has adjusted the note to reflect higher iron ore prices, a lower AUD/USD
exchange rate and higher forecast sales tonnages building to 160 million tonnes per annum
over the note period out to 2019.
The effect of the revaluation is a A$3.46 billion adjustment to the profit and loss account
which, after a tax adjustment, results in a net loss for the year of A$2.8 billion. This “paper
loss” reflects the total expected interest payable to Leucadia out to 2019, but noting that the
actual interest will only be paid at six monthly intervals after the tonnes have been shipped
and revenue determined. Notwithstanding, the revised note valuation in the 2008FY
Accounts is the Company’s best estimate of the likely future payments based on the
abovementioned variable assumptions agreed with Fortescue’s auditors.


----------



## Blacksmith (19 September 2008)

Here's the other rabbit out of the hat adobee:

1,625 Million Tonne Ore Reserve Estimate
Representing a 54% increase

•	Total Project Ore Reserves now at 1,625 Million Tonnes being a 572 Million Tonne Ore Reserve Upgrade
•	143 Million Tonnes Proved Ore Reserve estimate for studies at Cloudbreak and Christmas Creek
•	1,482 Million Tonnes Probable Ore Reserve estimate for studies at Cloudbreak and Christmas Creek
•	Study conversion rate of 87.6% from Measured and Indicated Resources to Proved and Probable Reserve


----------



## Prospector (19 September 2008)

I saw the announcement in news.com.au re loss first and then checked the share price to see how much FMG had fallen as a result.  It hadnt, so checked the announcements in NAB trading, and the only announcement they had there was the 54% increase in reserves.  So maybe everyone hasn't heard about the loss, or perhaps the 54% rise is more than enough to counter it.  Or maybe sellers in the last few days had thought the loss might have been higher.


----------



## Nesa (19 September 2008)

Fortescue reports $2.5 billion loss

    * September 19, 2008 - 12:19PM

Iron ore miner Fortescue Metals Group Ltd has reported an annual bottom line net loss and said it will not provide a forecast for the current year because this may prejudice "the interests of the company".

Fortescue also said it does not expect to pay any dividends in the current year.

The company made a net loss of $2.52 billion for the 2008 financial year ended June 30, compared to a loss of $192.36 million in the previous year.

In line with accounting standards, Fortescue made adjustments to its books to reflect the total expected interest payable on a 13-year subordinated loan note supplied by major shareholder Leucadia National Corp Inc, a US investment group that has a 10 per cent stake in the company.

"Given improved variables since the last report [at the half year], Fortescue has adjusted the note to reflect higher iron ore prices, a lower Australian dollar/US dollar exchange rate and higher forecast sales tonnages building to 160 million tonnes per annum over the note period out to 2019," company secretary Rod Campbell said in a statement.

"The effect of the revaluation is a $3.46 billion adjustment to the profit and loss account which, after a tax adjustment, results in a net loss for the year of $2.8 billion."

http://www.watoday.com.au/business/fortescue-reports-25-billion-loss-20080919-4jyb.html


----------



## adobee (19 September 2008)

"1,625 Million Tonne Ore Reserve Estimate
Representing a 54% increase"

Twiggy - My Man..

He knows how to keep his share price up ..  

The loss is not a big deal you would expect a loss.. it takes into account interest to 2019 for one project and they have only just started making money ....

Who knows by next week they might have 10 billion more tonnes of ore !! the way twiggy is going they will not need to ship it they will just drop it straight through the hole to china !


----------



## nunthewiser (19 September 2008)

Will the RBA bailout FMG from it's $2.5 billion dollar loss? ..... sorry just a bit of gutter humour to go with current lifesaving strategies
avaniceday


----------



## renim (19 September 2008)

"Funding for expansion to 80mtpa will be sourced from the Company’s strong
internal cash flows generated from our consistent production, which is
ramping up every day,” statement to ASX

i don't know how much of preference shares FMG will need to issue if any.  It looks like Forrest has decided to keep the program smaller than desired due to current market conditions.

So overall this is modest if good news, little share dilution, but earnings to fund expansion instead of dividends.


----------



## larrikin (19 September 2008)

Excuse my ignorance, but what are we as investors to make of the following:
*The bad news = 2.5 billion loss
* good news? = 72 million  profit

Being a newbie, Im struggling to understand how to decipher the 2.5 billion dollar paper loss and the 72 million profit. How is that you can have a loss of 2.5 billion, but a profit of 72 million. 

Thanks for your help


----------



## njc.corp (20 September 2008)

larrikin said:


> Excuse my ignorance, but what are we as investors to make of the following:
> *The bad news = 2.5 billion loss
> * good news? = 72 million  profit
> 
> ...




Larrikin-take the market out of it and u get a business-

so while they have only been operating for a short time-(not setting up)-meaning exporting the ore out-they have made 72 million since they first exported- which is pretty good for the time frame of so liitle ore out-

but they still owe 2 billion + because its a  new business and they got money to start the busniess-

all in all its not bad news-

the only bad is the current share price-but that might change and maybe not-

Thats just a basic view of it

Thanks

Nick--


----------



## renim (20 September 2008)

Its even weirder than that

FMG in the past needed money,  the aussies laughed at him, the chinese wanted 85% of the company, but a american wanted a 4% royalty for a few years.

That piece of money (debt) gets revalued in line with projected production.

If that projected production goes up that 4% royalty also goes up.  So we have a paper loss being recorded against a paper profit.  Its an attempt to give a 'true' picture.

It also happens to be approx. what FMG spent last year.


----------



## larrikin (21 September 2008)

Nick and Renim,

Thanks heaps guys for your help. It was very clear and informative. Its great that there is this forum for people like myself who can have their questions answered promptly and in a clear and concise manner.

Thanks once again guys and all the best for Fortescue's future!


----------



## ROE (21 September 2008)

My first post on FMG 
but this is my take.. I dont like it  one little bit

so you forgo a few billion dollar lost a year in hope making money back at some stage in the future... it's like .dot com bull****.

and why I dont like it, I like logic
say I got 16 Bill buck spare and I have an option of invest in FMG or BXB (could be any business I just pick one)

people predict FMG will make $2 Billion a year at some stage, $4 Billion even
any number, use valuation, DCF and what have you to come up with it.

mean while my BXB racked in $1Billion a year from day one.

every year FMG not making money they fall further behind and they must make more and more money faster in the future to catch up to my BXB $1Billion profit... my $1B a year profit also compound and grow so the gap is widen thick and fast each year.

When can FMG catch up to BXB?
maybe 2 years, maybe 5 years, maybe never
too many uncertainty and too many unknown make you lose sleep at night.


----------



## agro (22 September 2008)

where's MichaelD and friends now?

with the short selling ban the buyer volume is 3m vs 1.6m selling..

uptrend huh?!

or gone hiding...?


----------



## adobee (22 September 2008)

what is everyone so negative.. before they made any money and were borrowing heaps they took the stock price from $7 to $100 (pre 10:1 split) and now they are generating money you are going to be negative.. if they didnt borrow $billions they wouldnt have been able to get to where they are so fast..


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## njc.corp (22 September 2008)

adobee said:


> what is everyone so negative.. before they made any money and were borrowing heaps they took the stock price from $7 to $100 (pre 10:1 split) and now they are generating money you are going to be negative.. if they didnt borrow $billions they wouldnt have been able to get to where they are so fast..




i think his/her comments are saying if they have the money to buy that he/she finds other stocks to be better value then fmg-

wether thats right or wrong is someone else view-

but i must agree with u  and say i am yet to know anyone to start a business and make profit with-out debt-

their is no chance they (fmg) would got this far without the money help from who-ever-not that type of operation

Thanks

Nick--


----------



## Trembling Hand (22 September 2008)

agro said:


> where's MichaelD and friends now?
> 
> with the short selling ban the buyer volume is 3m vs 1.6m selling..
> 
> ...




Agro your smugness it a bit silly considering you had to spew out your holdings on pretty much the lowest day in 52 weeks because of a margin call. 

And now you are trying to dive back in on the biggest open in a long time. Quite the trader.

But anyway hope it turns out well for you.


----------



## prawn_86 (22 September 2008)

Trembling Hand said:


> Agro your smugness it a bit silly considering you had to spew out your holdings on pretty much the lowest day in 52 weeks because of a margin call.
> 
> And now you are trying to dive back in on the biggest open in a long time. Quite the trader.
> 
> But anyway hope it turns out well for you.




To add to this:

Do short sellers actually turn up in the sell queue? If they already have their positions then their orders would only be 'dummy' sell orders anyway and they will have to create a short cover rally when they want to buy back in anyway


----------



## Miner (22 September 2008)

As published in Marcus Today newsletter today

_FMG – Fortescue – Were’s maintain BUY and 1227c target. Have upped their earnings guidance slightly on the improved production forecasts of 39.5mt vrs previous 38mt. See FMG as perfectly positioned to supply the Chinese market. Say FMG meeting its targets and generating cash flow is crucial. Due the ramp up phase and the high debt levels sees the stock as high risk compared to other iron ore majors._

Interestingly very high asking rate to buy FMG today when the market is to open delayed. Certainly asking to buy at $10 about and to sell at $5.75 about is a bit fishy to me unless I get education how it can happen ? Why should I sell at a lower price when another wants to buy it a higher price.

Probably some one will cancel the buy order just before market opening 

On another point, I was amazed at Agro's comment when he or she sold the holding when FMG were diving down ? Charity begins at home but I am not a trader so do not know the style of their functioning either. Good luck so long as every one is making money today and tomorrow and thereafter and no one is making loss


----------



## gav (22 September 2008)

Open at $7.50! 




And I still HOLD! :


----------



## MR_B (22 September 2008)

gav said:


> Open at $7.50!
> 
> 
> 
> ...




$5.70 maybe?
                                                                                                        Anyway, as long as its up by next year ^^


----------



## gav (22 September 2008)

Nope, definitely opened at $7.50

Got as low as $6.75, and currently sitting at $7.18 (up 26%) 



Gav


----------



## LeeTV (22 September 2008)

Bugger the shorters I say! 26% woot! All my stocks are up today and up at least 9%, makes a refreshing change too I might add.


----------



## prawn_86 (22 September 2008)

LeeTV said:


> Bugger the shorters I say! 26% woot! All my stocks are up today and up at least 9%, makes a refreshing change too I might add.




And most of them are falling from their initial opening highs as people sell off. Its not shorters that push stocks down, its sellers in general.


----------



## nunthewiser (22 September 2008)

wonders what twiggy will blame next once its realised that shorters only short because they think a stock will fall


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## Prospector (22 September 2008)

People selling dont worry me, that is part and parcel of holding shares.  Shorters on the other hand are playing a different game.  Compounding the losses, and artificially raising the prices sometimes.  USA stopped it a while ago, we didnt which is why we have suffered far more than the US in market falls.


----------



## Trembling Hand (22 September 2008)

Prospector said:


> People selling dont worry me, that is part and parcel of holding shares.  Shorters on the other hand are playing a different game.  Compounding the losses, and artificially raising the prices sometimes.  USA stopped it a while ago, we didnt which is why we have suffered far more than the US in market falls.




Sorry Prospector but the US has only JUST stopped shorts in financials. 

Not sure where you got that from.


----------



## Nesa (22 September 2008)

26.84% rise today in the green. something I really like seeing.

I do feel sorry for one person though... agro

hopefully he managed to buy back in though


----------



## Prospector (22 September 2008)

Trembling Hand said:


> Sorry Prospector but the US has only JUST stopped shorts in financials.
> 
> Not sure where you got that from.




I was totally sure I read it over the weekend! 

And did Agro get sold out?  Agro, you were FMG's spirit - can you get back in?  So sorry for you, the share market sucks sometimes, as the initial post on this thread started with!


----------



## adobee (22 September 2008)

I must say buying fmg was a great decision.. if regret having ever sold this stock but relish the opportunity to buy back in...


----------



## renim (22 September 2008)

i feel sorry for agro,  with shorters gone fmg back up, 
also what was Were's prior forecast for fmg?


----------



## SenTineL (22 September 2008)

isn't it basic investing 101 that you only realise a loss once you sold?
if you believe in the company based on research or whatever surely you would stick with them through the tough times.


----------



## Prospector (22 September 2008)

SenTineL said:


> isn't it basic investing 101 that you only realise a loss once you sold?
> if you believe in the company based on research or whatever surely you would stick with them through the tough times.




Agro did believe in FMG but I gather he was required to sell when the market dumped    I dont think he would ever voluntarily sell FMG unless he wanted to fund his retirement.


----------



## Miner (22 September 2008)

Probably we should let Agro to complete with his or her hibernation and to rejuvinate back with aggressive buying FMG when it reaches $10


----------



## fordxbt (23 September 2008)

SenTineL said:


> isn't it basic investing 101 that you only realise a loss once you sold?
> if you believe in the company based on research or whatever surely you would stick with them through the tough times.




yes but a losing stock on paper is not considered legitamate collateral by the bank when margin calls are made


----------



## Trembling Hand (23 September 2008)

SenTineL said:


> isn't it basic investing 101 that you only realise a loss once you sold?
> if you believe in the company based on research or whatever surely you would stick with them through the tough times.




It seems so for retail traders who are in denial but thats it. Everyone else uses market to market valuation. Thats basic investing 101.


----------



## SenTineL (23 September 2008)

the way i read it is that nothing fundamentaly has changed with FMG except for the reserves increase so yeah the market is on a down turn and all companies are affected but should bounce back long term.

about 6 months ago i got out from BBP at $2.50 because I saw a major catastrophe in the making. whilst i lost a little money it could have been worse and almost lost the lot as it's now at $0.11.

back on topic though i can't see anything like this happening to FMG


----------



## renim (23 September 2008)

fundamental for fmg
aussie dollar back down (bad for purchases, good for sales)
rio tinto now less than bhp take-over offer
sino-steel progressing in the geraldton?
fmg reduces project scope, aims for internal funding


----------



## larrikin (23 September 2008)

renim said:


> fundamental for fmg
> aussie dollar back down (bad for purchases, good for sales)
> rio tinto now less than bhp take-over offer
> sino-steel progressing in the geraldton?
> fmg reduces project scope, aims for internal funding




Hi Renim (and everyone else)

Could you please elaborate upon "FMG reduces project scope." I have read that because of the current economic climate that it is difficult to get lending from banks but I dont know anything about FMG reducing their project scope.

Thanks in advance!
P.S Im aware that im quickly becoming the annoying person on this forum who asks a lot of questions but no comments to add


----------



## spottygoose (24 September 2008)

Fortescue wins court case against BHP, Rio
September 24, 2008 - 10:40AM 

The High Court has ruled mining giants BHP Billiton and Rio Tinto must share their Australian iron ore rail networks with other miners.

The ruling is a victory for new miner Fortescue Metals, which has battled through the courts and competition regulators to be able to use the rail lines to transport its ore to the nearest port.

"The High Court unanimously dismissed the appeals (of BHP). It held that the subject of Fortescue's application answered the description of a service provided by the use of an infrastructure facility such as a railway line,'' the High Court said in a statement.


----------



## agro (24 September 2008)

you wouldn't beleive how much i am kicking myself now lol 

trading halt btw - think its to do with the rail 

think i may have to budge and just buy regardless


----------



## Gspot (24 September 2008)

Buy BRM instead, given their sp, locality to rail, deposit size, cash account and ridiculously low SP. IMO of course.


----------



## Miner (24 September 2008)

agro said:


> you wouldn't beleive how much i am kicking myself now lol
> 
> trading halt btw - think its to do with the rail
> 
> think i may have to budge and just buy regardless




Hi Agro

Never mind the time will come again to build up the stock . It is just begining and surely you would probably have last laugh

But I could not see the TRADING HALT ?  Did you mean FMG's trading halt ?
No reference there in ASX . Could you please spell some light ? 

http://asx.com.au/asx/research/Comp...panyName=&principalActivity=&industryGroup=NO


----------



## renim (24 September 2008)

larrikin said:


> Hi Renim (and everyone else)
> 
> Could you please elaborate upon "FMG reduces project scope." I have read that because of the current economic climate that it is difficult to get lending from banks but I dont know anything about FMG reducing their project scope.
> 
> ...




various rumors were circulating about fmg next expansion being a step to 120mtpa, but with a requirement to obtain more capital.  fmg's announcement was that the next expansion will be to only 80mtpa but being essentially internally funded


----------



## brenno (25 September 2008)

Miner said:


> Hi Agro
> 
> But I could not see the TRADING HALT ?  Did you mean FMG's trading halt ?
> No reference there in ASX . Could you please spell some light ?
> ...




Miner,

The ASX may temporarily place a trading halt on a security following an announcement of market sensitive information that is considered likely to affect the price of a security during trading. FMG's release of the rail news was deemed market sensitive and as it was announced during trading hours, there was a trading halt put on the stock which lasted for 10 minutes. 

Hope this answers your question.

Cheers.


----------



## SenTineL (29 September 2008)

This is an amazing market.

FMG has had in the last week announcements about the reserve upgrade, project expansion, the BHP rail victory yet the price keeps going south.

I guess this will continue until the US govt. goes ahead with the rescue plan.

Here's hoping for a good October


----------



## renim (29 September 2008)

I think American sentiment is that the commodities boom is over,  world wide resources companies have lost 1.7 trillion US from their market highs.

Iron Ore spot market price is approaching long term price.

Chinese are playing hardball with Vale's rather impolite price hike.

However, I'm still bullish on FMG, compared to anyone on the ASX200.  Their earnings should be spectacular this year, relative to market capital.


----------



## michael_selway (30 September 2008)

SenTineL said:


> This is an amazing market.
> 
> FMG has had in the last week announcements about the reserve upgrade, project expansion, the BHP rail victory yet the price keeps going south.
> 
> ...




Hm do you reckon the rescue plan is a good thing ;p?

Earnings and Dividends Forecast (cents per share) 
2008 2009 2010 2011 
EPS -155.3 45.4 82.5 -- 
DPS 0.0 0.0 0.0 -- 



> Date: 25/9/2008
> Author: Ashley Midalia
> Source: The Australian Financial Review --- Page: 7
> The ruling on access to rail infrastructure has been criticised by MitchellHooke, the CEO of the Minerals Council of Australia. He says the judgment actsas a disincentive to invest in infrastructure such as rail lines and ports.However, his view has been rejected by Graeme Rowley of Fortescue Metals Group,as well as the iron ore miner's lawyer, Norman O'Bryan, SC





thx

MS


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## Miner (30 September 2008)

With a high downfall in resource market today to be followed by still lower value of ASX index tomorrow (DJ and FTSE fell down considerably tonight) could ultimately lead FMG to $4.5 

Agro you must be laughing now having bailed out of FMG ?


----------



## cartel31 (30 September 2008)

I guess we hit the **** tm, another down day on the bloody DOW, down 289 points as I type, I hope the US drown in credit, blood fat overweight obese maggots buying mcdonalds and coke on credit, not producing anything and taking down the world with them!

This is just outrageous, I'm getting out **** this!


----------



## Trembling Hand (30 September 2008)

Some more good news,

From the age, http://business.theage.com.au/business/china-boom-falters-as-steel-softens-20080929-4qfk.html



> THE head of China's leading steel company says the Chinese economy and steel industry are both "heading for a downward slide", as hopes fade that China can insulate Australia's resource-dependent economy from the widening global downturn.
> 
> The comments by Baosteel chairman Xu Lejiang coincide with evidence that a contraction in Chinese building construction is seriously crimping demand for key Australian commodities, like iron ore.




Not!!


----------



## agro (30 September 2008)

Miner said:


> With a high downfall in resource market today to be followed by still lower value of ASX index tomorrow (DJ and FTSE fell down considerably tonight) could ultimately lead FMG to $4.5
> 
> Agro you must be laughing now having bailed out of FMG ?




he who laughs last laughs best.. sold around $5 so getting it 20-30c cheaper

today's my day to buy back in fellas 

great opportunity


----------



## njc.corp (30 September 2008)

I reckon their is more in the tank to go down-

why--we come this far down which has been driven by last night bad market news,points  on the us?

so if it's bad news driven will their be more pain?

i think that is the million dollar question

all in all i feel pretty good to have lefted with some money-it beats having nothing to trade with but i still watching

Thanks

Nick--


----------



## rthakkar (30 September 2008)

agro said:


> he who laughs last laughs best.. sold around $5 so getting it 20-30c cheaper
> 
> today's my day to buy back in fellas
> 
> great opportunity




Agree with the Argo, the stock is poised to rebound. I maintain my $7.10 target for the end of the year. I would suggest trading options due to limited risks and keeping the cash available for better opportunities


----------



## spottygoose (30 September 2008)

Fortescue upbeat about China's growth
Tuesday September 30, 2008, 2:34 pm

China's massive steel industry is expected to rebound next year as a feverish pace of construction returns, Fortescue Metals Group Ltd executive director Graeme Rowley says.

There is no doubt China has "put the brakes on" its rapid urbanisation in recent months and has accordingly dropped steel prices, which had flowed on to a lower spot price for iron ore, Mr Rowley told media Tuesday.

However, he remained optimistic about China's ongoing growth driven by internal demand for its products despite the crisis in the US financial markets.

"All the evidence that we have seen is that China can isolate itself from the damaging economic destruction that is happening in the US," Mr Rowley said.

"We have had some pretty good advice last week from some people in China who were very confident about its ability to withstand the financial crisis.

"Clearly it has such an enormous population, and is so focused on its own urbanisation and growth and development of general living standards, that they are prepared to continue to finance (industry or projects).

"Of course, there will be a slowdown as a result of lower demand (for China's exports) from the US."

"But when growth drops from 11 per cent to eight per cent, it is still a very strong growth position."

To sustain and grow Fortescue's operations the company would consider joint ventures or investment by sovereign funds such as China's EXIM Bank, Mr Rowley said.

He said it was not currently in discussions.

http://au.biz.yahoo.com/080930/2/1z238.html


----------



## fordxbt (30 September 2008)

not bullish at all
this one seems to recover & fall fast
good day trading
sucks to be an investor


----------



## renim (30 September 2008)

me think america has someway to go before they come up with a plan.  2/3 republicans and 1/3 democrats voted against the plan despite what their respective leaders negotiated.  so the gloom should continue yet  (they will be thankful that they cut out shorts before this happened),  and china may not get to sell so many shiny things,  but china will still be industrialising, globalising etc etc etc and sooner or later the one child policy will become a two child policy.

in the resources game the middle is being thinned out, the bottom end of town is stopping as they need external funds for new projects.  the top end is going gangbusters trying to serve china etc,  the top end can fund internally through cash flow,  FMG has just entered the top end, with the decision to fund their expansion through cash flow.

any part of the aussie economy that competes with China, - forget it.  any part that benefits from China, yeah baby.   so FMG is a goer


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## adobee (1 October 2008)

It will be Bullish soon ! I am in between 4.90 and 5.02 !!
boom baby.. watch twiggy pull a rabbit out of a hat..


----------



## agro (1 October 2008)

adobee said:


> It will be Bullish soon ! I am in between 4.90 and 5.02 !!
> boom baby.. watch twiggy pull a rabbit out of a hat..




ACCC not opposed to BHP/RIO merger... if this goes through FMG will be second biggest iron ore in aus


----------



## renim (1 October 2008)

if bhp-tinto occurs then fmg has a good chance at becoming the world's no3 iron re exporter.  not a bad position to be in when n1 and n2 end up controlling 70% of ship borne product


----------



## Miner (2 October 2008)

I am sure JP Morgan announced this forecast for FMG much before the railway track judgement in favour of FMG and clearance of ACCC for BHPB and Rio Merger. Further JP morgan is not smart enough themselves any way .
So please DYOR  and reproduced the ntoe from Marcus Today newsletter of 2 Oct

*Second Downgrade of the Day –

JP Morgan has cut its target price on Fortescue Metal (FMG) by 47% to 541c from 1032c saying FMG has altered the timing of its expansion plans in response to the global credit crunch, which has made it more difficult to raise the $7bn capital required for expansion. The key risks to their target price include, “$A/$US and iron ore price forecasts, and capital costs and production ramp up rates of the assumed expansion”. *


----------



## renim (2 October 2008)

yeah, i had read that too,  its interesting but appears driven by calculations of fmg sticking only to an 80mtpa operation, which i find unlikely if fmg is able to use internal cash to expand to 80mtpa that they would stop there as at 80mtpa they should have more internal cashflow to expand further,  ie fmg lose 2 years of acceleration for the luxory/necessity of limiting itself to internal funding.   sooner or later those who have taken cash from the market will return to stock up the survivors,  bhp-tinto, vale, fmg will be there with great cashflows to justify their valuations.  (just been reading dry-blower)


----------



## agro (7 October 2008)

someone wanting to sell 1 million FMGs at 4.20

wonder who that is? retail, insto or other?

be interesting to see if they pull 

is this manipulation maybe?


----------



## Prospector (7 October 2008)

I am out, I just need to rationalise and buy shares that pay good dividends.  It has been a great ride, and I am way ahead accept for the last little patch.  Of course the SP will start to rise again now.  :


----------



## agro (7 October 2008)

Prospector said:


> I am out, I just need to rationalise and buy shares that pay good dividends.  It has been a great ride, and I am way ahead accept for the last little patch.  Of course the SP will start to rise again now.  :




your out - u do realize you may well have sold at the bottom? too late to sell now if u been holding

but do agree with the dividend part..


----------



## white_goodman (7 October 2008)

agro said:


> someone wanting to sell 1 million FMGs at 4.20
> 
> wonder who that is? retail, insto or other?
> 
> ...




split between 15 or so people...who knows, i got in at 3.90's, too good to resist...or is it? time will tell, but i expect a positive day tomorrow in light of the recovery on the US last nite and ASX today


----------



## Trembling Hand (7 October 2008)

agro said:


> your out - u do realize you may well have sold at the bottom? too late to sell now if u been holding
> 
> but do agree with the dividend part..




Bloody hell. Just LOL.

Whats the cost of loving something the market plainly hates.

Whats the cost of the worry and stress. No wonder people get depressed over this game when they are so illogical. Well done prospector.


----------



## Prospector (7 October 2008)

agro said:


> your out - u do realize you may well have sold at the bottom? too late to sell now if u been holding
> 
> but do agree with the dividend part..




I hear ya Agro, but I have been saying 'this is the bottom' for a few $$$ now!   I just reached me limit!


----------



## agro (7 October 2008)

that million got taken out btw

smashed - wonder who bought it

look at intra day chart..


i know someone is stalking FMG - its a good company


----------



## BrownHornet (7 October 2008)

agro said:


> your out - u do realize you may well have sold at the bottom? too late to sell now if u been holding
> 
> but do agree with the dividend part..




Geez this forum can be a good psychology lesson. I can't believe those that continue to call the bottom. Started about $9. I'm with Prospector...well done. Sure supporters will call told you so as it bounces for a few days on rate drop but give this a month I am confident this will be lower than $3.50. research shows iron ore prices coming off, lower demand from China for both internal steel and exports. A good company...maybe, good reserves....yes but we should all know this does not determine SP. I was out at $9 and made a nice profit. Not calling my expertise rather lots or research of global economy and a bit of luck. I see more downside. Only time will tell but I suspect you could make a lot more on betting which way the price will go than on actually holding!


----------



## agro (7 October 2008)

BrownHornet said:


> Geez this forum can be a good psychology lesson. I can't believe those that continue to call the bottom. Started about $9. I'm with Prospector...well done. Sure supporters will call told you so as it bounces for a few days on rate drop but give this a month* I am confident this will be lower than $3.50. research shows iron ore prices coming off, lower demand from China for both internal steel and exports. *A good company...maybe, good reserves....yes but we should all know this does not determine SP. I was out at $9 and made a nice profit. Not calling my expertise rather lots or research of global economy and a bit of luck. I see more downside. Only time will tell but I suspect you could make a lot more on betting which way the price will go than on actually holding!




why do you see more downside when quiet clearly, the DOW jones was as much as 800 points down last night and rallied to finish only 300 odd down?

also, FMG (unlike BHP/RIO) are closely tied with the chinese - they even have an advisory board set up in China

read today's AFR - BHP/RIO (think Vale too) are boycotting a chinese steel conference but FMG reps will be there..

who are the Chinese going to buy off in the end?

+ FMG has contacts for the next 12 years or so 

Good Luck either way


----------



## njc.corp (7 October 2008)

agro said:


> why do you see more downside when quiet clearly, the DOW jones was as much as 800 points down last night and rallied to finish only 300 odd down?
> 
> also, FMG (unlike BHP/RIO) are closely tied with the chinese - they even have an advisory board set up in China
> 
> ...




argo-i am in the same boat as u and i am out-

but i have noticed that even i was was comparing bhp/rio vs fmg- i do feel i was wrong because the other 2 vs fmg have nothing in common apart from iron ore etc etc

how wrong i was to also say  that we wont see  under $10.00

but lets have a look at it we come from a high of $13.00 to what $4.00 something-

i will say we might as well go down as we come this far-heck i dont want it to go down buts lets have a look at the current  price-

the current price is the story and its not a good story at the moment

i do like fmg as its taught me how to trade and read young miners-

its like a fresh business-it does worse then the ones that have been around a while to some  degree-

i have to agree its got huge/huge potential but not yet-things are going to quick

ramp up's-they want or need more money etc etc-slow down is what i feel

looking to get back on board-not on the bottom and not on the high but when this storm goes away-

hell knows when that will be-but it will come-

Thanks

Nick--


----------



## white_goodman (7 October 2008)

FMG to me is in a downward trend, however i think there will be some upward movement over next day or two or three...

Im trying to get out at 5.80ish if im lucky.


----------



## SenTineL (7 October 2008)

Yeah Nick this has been a huge ride and well worth the experience.

I'm going to hold this just to see what happens and ride out the storm.
Hopeful that with the US bailout and interest rate cut it will restore some interest. 

I don't need to cash any of these shares for another 12mth +.


----------



## BrownHornet (8 October 2008)

agro said:


> why do you see more downside when quiet clearly, the DOW jones was as much as 800 points down last night and rallied to finish only 300 odd down?
> 
> also, FMG (unlike BHP/RIO) are closely tied with the chinese - they even have an advisory board set up in China
> 
> ...





Agro,
"Australian shares are expected to open sharply lower as investors shrug off the rate cut by the Reserve Bank, after the Dow Jones Industrial Average capped the biggest five-day point loss ever on Wall Street.

The Dow Jones sank 508.39 points, or 5.11%, to end unofficially at 9447.11, losing more than 1400 points or 13% over the past five sessions."

The reason I see downside on FMG has little to do the company rather global economies. Market looks to take another down today. My research is tending to show this as at least a 4 year trend in massive bear. I would say if you're in profit very difficult to keep holding this. If your at a loss well....this is where learning a lesson might be the best you do. Doesn't help with you have nuts like Cramer on CNN saying sell everything now...

Are these great buying opportunities? I doubt it but would rather be out than in. Tough times ahead for traders but some good day trade opportunities on small bounces if you have the kahunas!


----------



## BrownHornet (8 October 2008)

Oh and good luck getting out at $5.80 in the next few days. One of the most valuable things I have learnt is to set a stop loss and stick to it like mud. No point in holding on a loss. Opportunity cost is where all losses are realised.


----------



## white_goodman (8 October 2008)

BrownHornet said:


> Oh and good luck getting out at $5.80 in the next few days. One of the most valuable things I have learnt is to set a stop loss and stick to it like mud. No point in holding on a loss. Opportunity cost is where all losses are realised.




stop loss is $3.80 in at $3.95... dont worry its all good


..........................................


----------



## gav (8 October 2008)

white_goodman said:


> stop loss is $3.80 in at $3.95... dont worry its all good
> 
> 
> ..........................................




ha! even with averaging down, my average buy price is $8.62! Down 55%!  

Bought some IPL last Monday, AND THIS TIME USED A STOP LOSS (20%).  Didnt take long for it to get there!


----------



## njc.corp (8 October 2008)

gav said:


> ha! even with averaging down, my average buy price is $8.62! Down 55%!
> 
> Bought some IPL last Monday, AND THIS TIME USED A STOP LOSS (20%).  Didnt take long for it to get there!




gav-u are down in fmg 55%?

u wish you sold?

or u not to worried as this is a long term project

just asking on  how some people are having a look at stocks this much down

Thanks

Nick--


----------



## gav (8 October 2008)

Thats correct, 55% down in FMG.  Originally in this for the medium-long term, and did not set a stop loss.  But now I just dont know... 

Trying to learn from my mistakes, I set a stop loss for IPL.  I get stopped out in less than 1 week.  Today, IPL is in the green and well above where I sold it.  

It seems the more I learn, the worse off I am


----------



## Prospector (8 October 2008)

gav said:


> Thats correct, 55% down in FMG.  Originally in this for the medium-long term, and did not set a stop loss.  But now I just dont know...
> 
> Trying to learn from my mistakes, I set a stop loss for IPL.  I get stopped out in less than 1 week.  Today, IPL is in the green and well above where I sold it.
> 
> It seems the more I learn, the worse off I am




I dont actually believe in adhering to stop losses   I have never used them. I would rather make a judgement call at the time rather than a mathematical response at a different point in time.


----------



## njc.corp (8 October 2008)

Prospector said:


> I dont actually believe in adhering to stop losses   I have never used them. I would rather make a judgement call at the time rather than a mathematical response at a different point in time.




i dont understand-u dont use a stop loss-

i understand we need to make jusdgements but take the stop loss out of it and i feel we are left with judgements vs the current price-

to me i get my  judgement from looking at the current price-

i mean its a numbers game or do u see it in a other format?

Thanks

Nick--


----------



## tcoates (8 October 2008)

gav said:


> Thats correct, 55% down in FMG.  Originally in this for the medium-long term, and did not set a stop loss.  But now I just dont know...
> 
> Trying to learn from my mistakes, I set a stop loss for IPL.  I get stopped out in less than 1 week.  Today, IPL is in the green and well above where I sold it.
> 
> It seems the more I learn, the worse off I am





Gav,

Not much to say (it won't get your $$$ back), but these are times  for learning. That said (some things to think about)...

1. William O'Neil  suggests a stop at 4% (from memory)

2. Recall journo at Courier Mail told readers to have stop at 10%

3. Other "educators" put stops at 4, 6 or 8%

4. Alternative is to use some sort of pivot as stop loss so that you don't lose too much of capital.

Need to work out whether you are in this for the long(er) term or (buys) are a short-term trade. Seems you are caught between the two? (To do this, you also need to know why you bought the shares in the first place.)

Tim


----------



## Prospector (8 October 2008)

njc.corp said:


> i dont understand-u dont use a stop loss-
> 
> i understand we need to make jusdgements but take the stop loss out of it and i feel we are left with judgements vs the current price-




Just checking, are you talking about a trailing stop loss or a stop loss that ensures you dont lose more than say, 5% from what you paid.

Well, until this last rout, my shares have always gone up! :  Well, not actually, but the only times I have been blindsided are with MFS, which, while trending downwards, didnt really cause any real concerns until 1 day it just collapsed; and with Bradken - again it fell instantaneously but still managed to get out ahead.  A stop loss wouldnt have helped in both cases.  And most of my shares are held in my superfund, so I cant really trade in and out of a share too much or else the ATO would consider me a trader, and then I would lose the SMSF 'privileges' and a significant penalty.


----------



## gav (8 October 2008)

tcoates said:


> Gav,
> 
> Not much to say (it won't get your $$$ back), but these are times  for learning. That said (some things to think about)...
> 
> ...




Thanks Tim.  As for the part highlighted in bold, you are not the first person to mention this to me.


----------



## BrownHornet (9 October 2008)

BrownHornet said:


> Geez this forum can be a good psychology lesson. I can't believe those that continue to call the bottom. Started about $9. I'm with Prospector...well done. Sure supporters will call told you so as it bounces for a few days on rate drop but give this a month I am confident this will be lower than $3.50.




WOW. Didn't really expect under $3.50 this week but hey. Keeping checking SP as a chance to buy back in. Had an alert set for $3.45. Now, no chance more likely to set an alert at $2.50. Can't see this correcting in near term. Need to remember in times like this that current SP is not a reflection of the company's value. Iron ore prices are taking a bit of a hammering regardless of 12 years of contracts. All the supporters of this what do you think Andrew needs to pull out of his hat to reverse this? My historical data shows it is very unlikely for a company to reverse fortunes from this position particularly now that the US Hedge fund is out of favour...and credit...on FMG


----------



## Trembling Hand (9 October 2008)

tcoates said:


> 1. William O'Neil  suggests a stop at 4% (from memory)
> 
> 2. Recall journo at Courier Mail told readers to have stop at 10%
> 
> 3. Other "educators" put stops at 4, 6 or 8%




Tim I'm not sure what % figure you are talking about, SP or capital, but they all seem wrong. IMHO.

Its generally accepted that risking any more than 2% of your capital as a trader will end in a blow up. Now that has nothing to do with actual share price movements.

And of course most people who fall in love with a stock like FMG are not actually traders. And I would guess completely blowing away sensible position sizing.



BrownHornet said:


> WOW. Didn't really expect under $3.50 this week but hey. All the supporters of this what do you think Andrew needs to pull out of his hat to reverse this?



 Not another rabbit  with myxomatosis I hope.


----------



## tcoates (9 October 2008)

TH,

There were/are all initial stops.

Obviously (?) when the share price moves in the intended direction then you can move the stop as appropriate.

The percentage has nothing to % of capital risked. That is, if you only want to risk 2% of capital, then using a stop placed at 4% (or 6 or 10%) from entry, MUST ensure that in your worst case (assuming no slippage) would not lose greater than 2% of total capital.

Hope that makes sense.

(The reply was in relation to deciding to sell after the share price lost 55% of value. And if you looked at prev. posts there seemed to be confusion between a trade vs investment (even if these have a stop).

Tim


----------



## tcoates (9 October 2008)

Further to prev post...

... if I were to follow Jim Berg's example, he does not want the initial stop to be greater than 10% from entry price.

Regardless of where the initial stop is set, he would not be risking more than 2% (or less) of capital.

Tim

PS. The only time when it might be acceptable to lose 55% and remain in the game is if you had not lost more than 2%. But then you might query why you still had the share if it had gone down that far.


----------



## afinno (9 October 2008)

gav said:


> Thats correct, 55% down in FMG.  Originally in this for the medium-long term, and did not set a stop loss.  But now I just dont know...
> 
> Trying to learn from my mistakes, I set a stop loss for IPL.  I get stopped out in less than 1 week.  Today, IPL is in the green and well above where I sold it.
> 
> It seems the more I learn, the worse off I am




I'm relatively new to this game and i'm in a similar position to gav with FMG where i'm down by about 55%.

I researched the company and liked it so decided to invest. Of course i don't like to see the price drop but i figure i've hit the point of no return. I don't really want to sell with that amount of loss. Would almost prefer to sink with the ship. I guess my question is, should i buy, sell or just sit and wait it out for the next year?

Buy: This could allow me sell sooner at a lower price in the future with profit.

Sell: Essentially means i'm out 55% of my acquisition cost.

Sit: I'm in no rush to get my money back so could probably wait it out for up to a year.

Also, if i decide to sit would it be good to tack on more volume at a lower price if i can afford it?

At the moment i don't really see selling as an option. But on top of that i don't think that FMG is a bad company so would consider staying long term (especially if they eventually do dividends).

Obviously i'm looking for other peoples perspective on my situations and will ultimately make my decisions based on many factors.

Cheers.


----------



## Prospector (9 October 2008)

I hate to sell a share and realise a loss.  Unfortunately I am sitting on a few at the moment   I have decided to look on all this as a positive, and review the portfolio.  And look at shares that pay good dividends, that actually helped pay for my tax this year.  But I wouldnt have done this a few years ago.


----------



## jackson8 (9 October 2008)

afinno said:


> I'm relatively new to this game and i'm in a similar position to gav with FMG where i'm down by about 55%.
> 
> I researched the company and liked it so decided to invest. Of course i don't like to see the price drop but i figure i've hit the point of no return. I don't really want to sell with that amount of loss. Would almost prefer to sink with the ship. I guess my question is, should i buy, sell or just sit and wait it out for the next year?
> 
> ...




in the current ecomomical climate with recession looming in the distance the demand for commodities quite possibly could recede just check out mgx latest announcement

for me averageing down is a bit like trying to bury s##t by covering it up with more s##t . noone knows how far this downturn will go

maybe work out how much you are or can be prepared to lose and set a stop loss or ride it out to see where it takes you but many stocks never reach their previous highs again


----------



## SenTineL (9 October 2008)

Funny how everyone is now talking about selling....

There's not going to be a rabbit out of the hat in this climate, no matter what Andrew does, share price isn't going to go through the roof. Too much negativity around.  

There's no way I'm selling at these prices, I don't need the cash anyway, I'm not a trader so I'm going to sit tight and see what happens. If I have to re-asses in another year or so I will do that then. 

In saying that, what would everyone here do if it ever returned to the all time highs of $13.00? Just a hypothetical. Would you cash in or hold in hope of a bigger rise? There has been a lot of greed around for a while now so I think people have to hurt and learn.


----------



## renim (9 October 2008)

firstly,  its worth trying stop losses, but don't depend on them,  my very limited experience with stop losses is, it was triggered, but the drop was so quick that the trade did not occur ;(

secondly, general sentiment/momentum downwards is strong, fmg is volatile, bad news for fmg,  i like buying fmg using rising buys.

thirdly,  aus at 70c just effectively increased fmgs revenue by approx 30%

fourth, australia has plenty to go with interest rates cuts, but i don't know if that will further affect the dollar.

so unless fmg's cash burn kills it,  its cashflow just got better

personnally i'm holding, someone is selling at these prices, and someone is buying at these prices.


----------



## nunthewiser (9 October 2008)

renim said:


> thirdly,  aus at 70c just effectively increased fmgs revenue by approx 30%
> 
> 
> so unless fmg's cash burn kills it,  its cashflow just got better
> ...






 um correct me if im wrong. BUT isnt FMG,s debt obligations payable in U.S dollars too? so effectively there Debt levels have risen by 30% too going by your scale .

on a side note , since the shorters cant be blamed for FMG,s dumping of late , any idea what twiggy can blame next ?


----------



## renim (9 October 2008)

one other thought about stocks,  TIME
fmg has retraced about 1 year,  (black)
stw (asx 200 index stock) has retraced about 3 years (red)
i would say that that as it stands, andrew has pulled a rabbit out of the hat, we just don't recognize it.


----------



## renim (9 October 2008)

i would expect that most of fmg's debt to be in US denomination, agree.
i don't have their accounts in front of me, they would be interesting.
but fmgs operating costs would mostly be AUD,  (labour, tax, hire) as would their current capital expenditures.

fmg's debt while large, is not large on a Projected earnings basis


----------



## dat111 (9 October 2008)

Since I am an investor and not a trader, I looked at this company determined that they have a great idea and a group that could bring this idea to fruition.  I planned on purchasing the stock in increments over the past year.  I am leary about purchasing the last increment.  I also made the plan that I would hold onto the stock for up to 5 years realizing that a start-up operatoin has ups and downs but I have long term belief in this company.  The biggest cause for the stock price to go down right now is the world economy.  Since the world behaves in cycles and I have a 5 year plan for this stock,  i have been asking myself the following:
 * Do I think that the world economy can force this company to go bankrupt.  
 * Amost equally bad, do I think that some other company will come along and buy out this company for a low share price.  
 * Do I think that the current ownership of this company will continue to devalue the shares that we own by offering other investors opportunity for growth at a better return.
Of the three above the last one is the most worrisome to me.  If the board of FMG continues to offer preferred shares that will take up the profits of the company, how long will the initial investors have to hold on before we will see a P/E ratio that will cause this stock price to become respectable.

I firmly believe that we live in a world where people will continue to want more.  I believe that China/India will increase their purchase of FMGs product over time.  This will create a company with value.  I only hope that over the next 5 years maybe more, I can share in this value.  I also hope that I am not sold out by FMG as they allow more preferred shares or they sell to another company.


----------



## nunthewiser (9 October 2008)

renim said:


> i would expect that most of fmg's debt to be in US denomination, agree.
> fmg's debt while large, is not large on a Projected earnings basis




yes very large and at current conversion rates roughly 30% larger.

lol gotta love projected earning statements aint they a blast  funniest bit is tho they actually mean squat when it comes to the bottom line but hey they read well for holders 

cheers


----------



## chops_a_must (10 October 2008)

nunthewiser said:


> yes very large and at current conversion rates roughly 30% larger.
> 
> lol gotta love projected earning statements aint they a blast  funniest bit is tho they actually mean squat when it comes to the bottom line but hey they read well for holders
> 
> cheers



Let me get this straight...

They have a large amount USD denominated debt?

And didn't hedge their currency risk?

Are these clowns for real? LMFAO!


----------



## Warren Buffet II (10 October 2008)

Andrew is a sucker, it is too easy to manage a company when everything is going very well. Now let see how this keep dropping like a rock.

WBII


----------



## afinno (10 October 2008)

jackson8 said:


> for me averageing down is a bit like trying to bury s##t by covering it up with more s##t . noone knows how far this downturn will go




I guess this is true, and it's an activity more inline with a habitual gambler.



SenTineL said:


> Funny how everyone is now talking about selling....
> 
> There's not going to be a rabbit out of the hat in this climate, no matter what Andrew does, share price isn't going to go through the roof. Too much negativity around.
> 
> ...




I think if that were to happen i'd sell 50% so i can try investing in some other companies. But i'll probably hold FMG as long as they are floating. I see your point though. I suppose you'd say i'm more of an investor than a trader. So i'm happy to wait however long it takes as i'm not in desperate need of an immediate return. That said i'd be upset if the company collapses, not just because of my investment but i also like the company and would like to see it prosper.

Thanks for all the input so far. It's been helpful. I think for now i'll just sit and watch. If FMG sink and i lose my investment then i guess i'll move onto something else. Now for my next question. Any predictions for FMG the bottom, my uneducated guess is $2.04

Would anyone agree that FMG is getting hit harder than BHP and RIO because it is a younger company offering a slightly more inferior product?

Cheers.


----------



## Prospector (10 October 2008)

nunthewiser said:


> on a side note , since the shorters cant be blamed for FMG,s dumping of late , any idea what twiggy can blame next ?




I was wondering when, in the midst of general market mayhem, that someone would be silly enough to be posting that remark!  Seriously, what is happening to FMG now is happening across the board.  FMG was documented in the financial section of the Australian (and not by Twiggy) for one of the reasons its price was falling.


----------



## nunthewiser (10 October 2008)

chops_a_must said:


> Let me get this straight...
> 
> They have a large amount USD denominated debt?
> 
> ...





...... i wonder if any holders here no the answer to these questions 

one would thinkso hey........... strange that these points are not brought up


----------



## BrownHornet (10 October 2008)

FMG is hit harder than BHP and RIO for a few reasons.
- BHPRIO diversify. They are world leading resource stock. FMG nowhere near the same basket of fish.
-FMG was a huge bubble. Blue sky stock in my books. Lots of potential as did many IT stocks in 2000. Potential counts for little in today's market.

Surprised by today's price. "Bottom of $2.04" (above post). Not sure how that is arrived at given none of us has the resources to really judge where the market will bottom. 

My take;
-Read historical data (took 13 years for investors in 1929 to break even after the crash. Is this comparable? Who knows
-China is already defaulting on iron ore imports as they have stock piles
-Every one who holds at the hope that it will correct and minimize loss is gambling.

Market psychology along with tight credit is a double edged sword today.


----------



## cruise61 (10 October 2008)

You people are crazy selling FMG stock on rumours.

It has amazing potential still and at these prices only a fool would sell.

Hold / Wait give the company a chance to operate fully 

Remember the Chinese are investors in FMG also and they wont let ther own ship sink too easily.


----------



## nunthewiser (10 October 2008)

cruise61 said:


> You people are crazy selling FMG stock on rumours.
> 
> It has amazing potential still and at these prices only a fool would sell.
> 
> ...




um ...... the chinese are also major holders in MGX in fact the funny part is , is that the same major holder in mgx is also MGX,s largest customer ..... 

its all about chess .


----------



## rthakkar (10 October 2008)

cruise61 said:


> You people are crazy selling FMG stock on rumours.
> 
> It has amazing potential still and at these prices only a fool would sell.
> 
> ...




Chinese are partly responsible for this resource mess we are in... 

It has been a big black box to me with no publicly released economic indicators. Do people know the unemployment rate in china? Do we know their monthly retail spending? 

It's time people start questioning how China is going to sustain itself in next 3yrs with their exports going to be badly hurt.


----------



## investedz (10 October 2008)

Anyone here hedge their stock using put options?

I don't have any FMG stock, but after watching it roll down the hill, it may be worth checking out the prices on put options.

As an example at the moment a December put at $7.5 strike (right to sell 1000 shares at $7.5) is going for $2.83 ($2830 per 1000 shares).

Please correct me if I'm wrong,

But protection at $7.5 for $2.83 seems like a huge bargain!


----------



## aaronphetamine (10 October 2008)

I just day traded the stock and made $150 profit, so im pretty happy with that, ive moved my buy FMG target down to $2.40 or less.. i seem to keep revising it down as every days trading session opens.. last week it was 4.20.. lol.


----------



## treefrog (10 October 2008)

cruise61 said:


> You people are crazy selling FMG stock on rumours.
> 
> *It has amazing potential still *and at these prices only a fool would sell.
> 
> ...




reackon the party was over at $8 cruise

assuming the bit in bold proves correct, tell me why I would not sell at $3 and buy at $1


----------



## cruise61 (10 October 2008)

Personal choice i guess :0)

Risk either way sell at 3.00 market goes back up its a loss

goes down its a gain if you buy lower

mind you all this depends on your original buy price

if i buy at 6.00 sell at 3.00 loss 3.00 buy back at 1.00 still need it to get back up to 4 to break even.

Either way is a risk ,but then again thats the rush 

Good luck


----------



## ASX_newbie (10 October 2008)

Hi, there

can anyone help me out? what's going on FMG price? 

today's price is half of my buy price,  how can I do? hold or buy again?

**** WALL STREET


----------



## rub92me (10 October 2008)

ASX_newbie said:


> Hi, there
> 
> can anyone help me out? what's going on FMG price? It's going down and has been for the past 2 weeks
> today's price is half of my buy price,  how can I do? hold or buy again? Those are 2 of the options, the other would be to sell.
> ...



See responses above. This is a great forum but please read the FAQ. We are not allowed to give advice.


----------



## njc.corp (10 October 2008)

i am hanging to pounce on this again-but i feel i am very lucky as everytime i  go to buy it just drops like a sack-

maybe its just a bit of payback--lol

i am just standing back-

wall st tonight will be a other hold your breath session

good weekend and happy trading for next week-

Thanks

Nick--


----------



## SenTineL (10 October 2008)

this is becoming a bloodbath...

jeez it would be nice to have some relief next week.
what's annoying is all the questions about where the bottom will be. 

NO ONE KNOWS!


----------



## Trembling Hand (10 October 2008)

SenTineL said:


> what's annoying is all the questions about where the bottom will be.
> 
> NO ONE KNOWS!





yeah and the really really really dumb thing is its not going back to $13 in a week.

Why even try to catch it. Just watch and wait. Buy AFTER the first higher low. Something we have not had since it broke its long term trend at $8.

Who gives a toss how good a company it is or how much of a bargain it is............... Its still going DOWN.


----------



## Joe Blow (10 October 2008)

ASX_newbie said:


> Hi, there
> 
> can anyone help me out? what's going on FMG price?
> 
> ...




ASX_newbie,

Welcome to ASF!

It is not permitted for anyone on this forum to give you buy, sell or hold advice on any particular stock. Only licensed financial advisors are legally allowed to provide you with such specific advice.

Here is some information on getting financial advice from ASIC's consumer website: http://www.fido.asic.gov.au/fido/fido.nsf/byHeadline/Getting good advice

Just a note to other participants in this thread: Please do not describe FMG (or any other stock) as a buy, a sell or a hold. It is not permitted and posts that contain this kind of advice will be edited or removed.

Now, please carry on.


----------



## SenTineL (10 October 2008)

that's it but everything is going down.

will be interesting to see how the recovery unfolds, if there is a recovery   surely the big fund managers and all the super funds cannot all pull their money out of the market, they have to join in or restart at some time


----------



## Prospector (10 October 2008)

Joe Blow said:


> Just a note to other participants in this thread: Please do not describe FMG (or any other stock) as a buy, a sell or a hold. It is not permitted and posts that contain this kind of advice will be edited or remove




Just a question on that Joe, does this mean if someone buys, or sells, they can't say that they did, nor the reasons for it?


----------



## Joe Blow (10 October 2008)

Prospector said:


> Just a question on that Joe, does this mean if someone buys, or sells, they can't say that they did, nor the reasons for it?




If someone is buying or selling then it's fine to mention that you have done so, but I (and presumably everyone else) would also like to hear the reasons for it. This puts those actions in context.

What is strictly forbidden are remarks like this:

"This stock is a good buy at the moment."

"I recommend those holding to sell this dog."

or

"You should hold this stock until after the next announcement."

Basically, any statement that advises others to buy, sell or hold a stock is not permitted on ASF. Also, it is forbidden to offer others specific advice on how to invest their funds.

Also, I should add that there is nothing wrong with stating that in your opinion that a stock is "undervalued" or "overvalued" as long as you provide reasons (any relevant analysis) to support your view.

Hope that clears things up a little.


----------



## cruise61 (10 October 2008)

Joe Blow said:


> If someone is buying or selling then it's fine to mention that you have done so, but I (and presumably everyone else) would also like to hear the reasons for it. This puts those actions in context.
> 
> What is strictly forbidden are remarks like this:
> 
> ...




So its okay to let everyone know im selling my wife? 

Spose it doesnt matter no one would buy bad stock  anyways :0)))

Hey gotta have some fun these hard times


----------



## 2020hindsight (10 October 2008)

renim said:


> i would expect that most of fmg's debt to be in US denomination, agree.
> i don't have their accounts in front of me, they would be interesting.
> but fmgs operating costs would mostly be AUD,  (labour, tax, hire) as would their current capital expenditures.
> 
> *fmg's debt while large*,* is not large on a Projected earnings basis*




I'd agree renim  (fwiw lol )

There have been a few posts suggesting Andrew Forrest should have hedged etc - not sure what facts are behind those posts - but in any case , surely his future exports are in USD.


----------



## nunthewiser (10 October 2008)

2020hindsight said:


> I'd agree renim  (fwiw lol )
> 
> There have been a few posts suggesting Andrew Forrest should have hedged etc - not sure what facts are behind those posts - but in any case , surely his future exports are in USD.




 seems not too many actual holders know too many facts about the co either ........ ive asked a few questions lately regarding facts but not many seem to get answered .....must be a sign of the times where perhaps that the ppl that know the facts have a;lready jumped ship ?


----------



## renim (10 October 2008)

fmg's annual report came out last year Oct 9th I think.  So it should be out shortly.  I don't envy anyone writing an annual report in this climate.

hopefully fmgs annual report will clear up as much as possible,  well compared to most of its peers, fmg's accounts should have higher than normal clarity (if only due simplicity of fmg's operation),  just no history for operations.

i'm particulary interested in their cash, and cash flow position,  if they are weak there, then there could be trouble.  If they are strong there, then they are another bargain stock thats oversold.


----------



## renim (10 October 2008)

a quick comment about China.
don't underestimate their growth,  their economy is fundamentally an internally driven economy not an export economy (unlike australia)
their government is able to exert a level of control that extends to people's fertility.   unless you have experienced it, you can't grasp it.
yes they have many unproductive workers (my feeling is that its about 3 people in china do the work of 1 in Australia)
yes they have high corruption, but they have established and effective anti-corruption measures, unlike say India or Wollongong 
Unless they do something stupid like invade Taiwan, they will continue to urbanize, industrialize and globalize.
and don't invest in anything that competes with them,  long term thats a very brave move.

i know it only a story, but few stocks in Australia are as exposed to China as FMG.  and a low dollar helps further.

its also brave to buy falling daggers against the market. but someone is?


----------



## cruise61 (11 October 2008)

ASX_newbie said:


> Hi, there
> 
> can anyone help me out? what's going on FMG price?
> 
> ...




Hi newbie , up to you my friend.

I have two lots of fmg some high and some at this bargain price 

I refuse to accept loss on my high priced stocks as i truly believe they are woth what i paid, its just not in my nature to lose so the higher ones will stay with me till they get back up , might be awhile but they will get back there.

Just need to remember the market will rebound as it has on all other occasions of this nature ,how long will it takes well toss a coin :0)

I dont need the money in a hurry so i can safely sit and wait ,so i guess its up to you do you need the cash or are you able to sit it out??

Mind you there is the possability of FMG colapsing but i cant see this happening .

Lots of pannick selling going on but i see this as a great time to invest in long term shares ))))

Hope this helps 

Roll on Monday the ride has just begun :0)


----------



## Prospector (11 October 2008)

renim said:


> a quick comment about China.
> don't underestimate their growth,  their economy is fundamentally an internally driven economy not an export economy (unlike australia)
> their government is able to exert a level of control that extends to people's fertility.




Yup, that is exactly true; 80% internal and 20% external.  Which is why the resource stocks are sitting well at the moment and have been oversold if the reason for the selling has been concerns about growth.  And I suspect they may hold the cash key to solving some of the debt issues at the moment.


----------



## michael_selway (11 October 2008)

cruise61 said:


> Hi newbie , up to you my friend.
> 
> I have two lots of fmg some high and some at this bargain price
> 
> ...




Hm yeah Monday will be an intersting day

*Earnings and Dividends Forecast (cents per share) 
2008 2009 2010 2011 
EPS -155.3 45.4 95.8 114.9 
DPS 0.0 0.0 0.0 0.0 *







http://www.theaustralian.news.com.au/story/0,,24472563-20142,00.html



> FEARS heightened yesterday that China's demand for iron ore was slowing.
> 
> Mount Gibson Iron announced that its customers in the economic powerhouse wanted to delay shipments.
> 
> ...


----------



## agro (11 October 2008)

1 - people are only thinking of the here and now, not the long term, ok china can be manipulative but that's not to say other emerging economies will need I/O.

2 - FMG is much bigger than MGX. also, FMG does not have just Iron Ore - if i can recall they have other base metal projects in NZ.

3 - MGX deny t/o talks - i call bs .. i smell Vale, 

forget the speculators, and know the facts

this is the same as Oil, they speculate it to goto $200.. its now $70, same with IO, atm they speculate down, whats the best it goes up in the future once the turmoil is over?


good chance i think
anyhow, thats all i have to say,., i am watching for a good entry as I don't hold (i do hold other stocks in coal / resources which i need to sell) but FMG is close to what i entered at July last year


----------



## nunthewiser (11 October 2008)

agro said:


> 1 -  forget the speculators, and know the facts




um .......how come then when all my questions ask for facts all you FMG worshippers beat around the bush and spew allsortsa sunshine and lollipops and forget to answer MY questions .

please scroll back and answer at will 

blessya


----------



## agro (11 October 2008)

nunthewiser said:


> um .......how come then when all my questions ask for facts all you FMG worshippers beat around the bush and spew allsortsa sunshine and lollipops and forget to answer MY questions .
> 
> please scroll back and answer at will
> 
> blessya




are you looking to buy in to FMG? do you care? what is your motive? surly, there must be a motive if you continue to look for facts? maybe ring the company or search google, cause i doubt the validity of answers you receive here are good.. 

why can't you find another company on these boards that are, for a guaranteed fact, in a worse of position than FMG (e.g. alco, centro, babcock)??


----------



## chops_a_must (11 October 2008)

Prospector said:


> Yup, that is exactly true; 80% internal and 20% external.  Which is why the resource stocks are sitting well at the moment and have been oversold if the reason for the selling has been concerns about growth.  And I suspect they may hold the cash key to solving some of the debt issues at the moment.




You do realise that a steel maker in china has recently gone belly up don't you?

That is real, and despite all the noise about demand etc. it is a material impact on the situation.

It has nothing to do with concerns about growth, it's about actually having a customer to sell to that can actually pay them.


----------



## nunthewiser (11 October 2008)

agro said:


> are you looking to buy in to FMG? do you care? what is your motive? surly, there must be a motive if you continue to look for facts? maybe ring the company or search google, cause i doubt the validity of answers you receive here are good..
> 
> why can't you find another company on these boards that are, for a guaranteed fact, in a worse of position than FMG (e.g. alco, centro, babcock)??





no not looking for a buy on FMG at present , trade it yeah why not tradethehype so many sing on about , draws punters .why not eh .all about the buck ..my questions are in relation to other iron ore co,s that i have looked at and hold , im trying to gage a feeling on fundamentals verses hype and therefoream asking HOLDERS these questions to see if anyone ACTUALL researched the nuts and bolts OR were just buyers because "ya should never let the facts get in the way of a good story"syndrome .

now please if you cant anser said questions please do not use my enquiries for a springboard to let off steam because you personally know squat about what im saying

have a great day chief
blessya
an inquistive nun


----------



## agro (11 October 2008)

nunthewiser said:


> no not looking for a buy on FMG at present , trade it yeah why not tradethehype so many sing on about , draws punters .why not eh .all about the buck ..*my questions are in relation to other iron ore co,s that i have looked at and hold* , im trying to gage a feeling on fundamentals verses hype and therefoream asking HOLDERS these questions to see if anyone ACTUALL researched the nuts and bolts OR were just buyers because "ya should never let the facts get in the way of a good story"syndrome .
> 
> now please if you cant anser said questions please do not use my enquiries for a springboard to let off steam because you personally know squat about what im saying
> 
> ...




have you tried maybe to target the holders of those companies then?

what difference does it make whether holders researched the nuts and bolts?

i can't answer your questions because i am not a credible source. neither are can any other holder on these boards, unless they have ties to the company


----------



## Prospector (11 October 2008)

chops_a_must said:


> You do realise that a steel maker in china has recently gone belly up don't you?




A steel maker?   That would be ONE of 264 steel makers in China, which produces one-third of the world's steel?


----------



## nunthewiser (11 October 2008)

agro said:


> have you tried maybe to target the holders of those companies then?
> 
> what difference does it make whether holders researched the nuts and bolts?
> 
> i can't answer your questions because i am not a credible source. neither are can any other holder on these boards, unless they have ties to the company




1. um im in a FMG thread,that should make sense.

2. refer to my last post explaining why im asking.

3. rubbish, the answers to my questions are in FMG reports and figured as holders you would have read them .

4. why the defensiveness to simple question or is the answer to my point 2 already answered and im responding to those that bought based on wishful thinking while the story was good ?

5. please convince me otherwise by stating some factual answers to my questions 

6 avaniceday

7. you dont have to answer my questions as obviously they are beyond your powers of research

8. i will wait for someone that has actually researched the company to answer my questions


cheers 

an inquisitve nun


----------



## chops_a_must (11 October 2008)

Prospector said:


> A steel maker?   That would be ONE of 264 steel makers in China, which produces one-third of the world's steel?



Mmm ok...

Steel makers under pressure, reports of iron-ore backing up on the docks, customers not wanting to take receivership of shipments... hmmm....

It's not exactly hard to join the dots at this stage.


What does astound me agro, is that a lot of holders here seem not to know the position of some absolutely crucial factors in the current climate. Instead leaving it as a faith based call in Twiggy, who is a renowned shyster who has been seen in the past to ignore risk management totally, with the ultimate burden being lumped on investors. I hope it isn't Murrin Murrin all over again.


----------



## Frankhalo (12 October 2008)

FMG bottom line is ships are leaving port with product and cash flow is coming in, sounds like a good business model to me. Not to many stella stocks out there on the old ASX lately and FMG has been whipped around but I'm happy to top up at this levels which in my opinion are bargain basement. Target production of 80mta for 2009 for @2.68 per share..


Some facts: 2007-2008

By the end of June, 1.66 million tonnes had been shipped to Fortescue's Chinese customers, generating $201 million in revenue and enabling Fortescue to report a maiden trading profit of $72 million for the June year.


The company made a net loss of $2.52 billion for the 2008 financial year ended June 30, compared to a loss of $192.36 million in the previous year. 

June 2008 - present

Executive director Graeme Rowley said the company so far had shipped 8.4 million tonnes to 26 Chinese customers, including Baosteel and other top ten steelmakers, bringing in $800 million in revenue.

May 15th 2008 START UP. FMG does not stand for Free Minerals Group, Sept 2009 report IMO will be brilliant. Yes their is debt, this is not a sand pit in the desert.
"Fortescue's fiscal 2009 earnings may rise 14 percent from JPMorgan's forecast to A$1.7 billion ($1.2 billion)", and this isn't pocket money folks.

Frank


----------



## Warren Buffet II (12 October 2008)

chops_a_must said:


> Mmm ok...
> 
> Steel makers under pressure, reports of iron-ore backing up on the docks, customers not wanting to take receivership of shipments... hmmm....
> 
> ...




Chop_a_must, my friend, if a donkey does not want to hear it won't mate.

Let the donkeys keep running to the abism 

WBII


----------



## Frankhalo (12 October 2008)

Thanks Warren and Chops, good to see the Australian tall poppy chopping is still alive and FMG holders need to be saved from evil Andrew Forrest. Tell me Warren, chops what stocks you would advise on in these dire times for a mere donkey like me.


----------



## Trembling Hand (12 October 2008)

Frankhalo said:


> Tell me Warren, chops what stocks you would advise on in these dire times for a mere donkey like me.




May I throw my  in.

*Ones that aren't in free fall would be a good start. *

There is time to be risk seeking and times to be risk adverse. Clearly risk adverse rules now. And yes its getting closer to the time to take risk. But no one knows if that was Friday, next Friday or late next year.

The smashing of the AUD is a clear sign that the big money have left the Aussie market for now. Stock don't rise without them. And they don't go back to old highs in a hurry when they return. Clearly there will be plenty of time to ride another trend when and IF it starts. If being the danger now.


----------



## agro (12 October 2008)

Trembling Hand said:


> May I throw my  in.
> 
> *Ones that aren't in free fall would be a good start. *
> 
> ...




what are these stocks that aren't in a free fall? 

compare FMG with BHP and RIO.. all three are down,

FMG is equivalent to $26 (pre-share split), BHP $27..

are people going to bag BHP and RIO too like they do with FMG?

or do they fall on the argument that both these miners are more diversified etc etc..

prices are relative to each other, nothing at FMG has changed, its only the market conditions which will recover, no ifs about it


----------



## Warren Buffet II (12 October 2008)

Let's have a look at the numbers:

They got 201 millions for shipping 1.66 million tonnes (201/1.66=121) and
and   got 800 millions for shipping 8.4 million tonnes (800/8.4=95)

That means that  before june they made 121 in average and then from June they are making 95.

Now, the dollar have drop 30% since, that means that instead of 95 they are now making 95x(1-30%)= 66.5

And then the iron ore prices have drop another 30%, so that means 66.5x(1-30%) = 46.55

Now they are shipping what 40 million tonnes 40x(46.55)=1.8 billion dollars.
Goal is 80 million tonnes 80x(46.55)=3.6 billion dollars.

Can they make a profit with that revenue, I doubt it, I believe they will generate a huge loss (around 2 billlion in my opinion).

WBII


----------



## Warren Buffet II (12 October 2008)

agro said:


> nothing at FMG has changed, its only the market conditions which will recover, no ifs about it




Nothing has changed ??

I'll give a couple of things that have changed for FMG
1) AUD
2) Commodity prices
3) Demand
4) Can't rise money for more expansions

Want some more?


----------



## skyQuake (12 October 2008)

Sure nothing about the stock itself has changed. But Global macro has changed. Future earnings are now far less certain... Everything is being factored in...
eg. Baosteel and co just cut steel production


----------



## agro (12 October 2008)

Warren Buffet II said:


> Let's have a look at the numbers:
> 
> They got 201 millions for shipping 1.66 million tonnes (201/1.66=121) and
> and   got 800 millions for shipping 8.4 million tonnes (800/8.4=95)
> ...




first of all, all contracts are settled in US$

secondly, any profits are tax-free and offset losses

lets not forget FMG's assets, FMG has a larger tenement acreage across WA than BHP+RIO combined

i doubt the chinese would be investing in something they were not keen on, they have already subscribed to preference shares, contracts for next 12 years etc, 

alright lets bring up MGX scenario - but how much are they shipping out? only a couple million tonnes


i am probably wasting my time , but to each his own, invest in what you believe i say


----------



## Trembling Hand (12 October 2008)

agro said:


> what are these stocks that aren't in a free fall?



 Xactly my point agro. That's why there is no need to be in the market now.



agro said:


> are people going to bag BHP and RIO too like they do with FMG?



 THEY ARE. They are all falling. 



agro said:


> no ifs about it



 We all hope so. Only diff is most are doing the smart thing and taking a small loss on the chin, standing aside and waiting till its clear.


----------



## Captain G (12 October 2008)

One thing that may happen with these low FMG prices is the Chinese may make take over bids. China is cashed up, so I reckon they may go on a buying spree on many of our resource stocks, if they do it would signal a bottom.


----------



## agro (12 October 2008)

Captain G said:


> One thing that may happen with these low FMG prices is the Chinese may make take over bids. China is cashed up, so I reckon they may go on a buying spree on many of our resource stocks, if they do it would signal a bottom.




that is one reason to hold imo, twiggy was quiet willing to sell to baosteel back in may http://www.businessspectator.com.au...tescue-shares-Andrew-Forre-EN8GU?OpenDocument

MGX deny t/o speculation - read somewhere in this thread.. 

China invested a large stake in murchison recently ..

not to mention swann allowed foreign investment now in our aussie companies

expect it to boom if thats the case


----------



## jet328 (12 October 2008)

Warren Buffet II said:


> That means that  before june they made 121 in average and then from June they are making 95.
> 
> Now, the dollar have drop 30% since, that means that instead of 95 they are now making 95x(1-30%)= 66.5
> 
> And then the iron ore prices have drop another 30%, so that means 66.5x(1-30%) = 46.55




I'm no FMG fan & have never owned, but this is absolute rubbish

I'd suggest learning some basic maths (& english) before trying to analyse companies. 

How does a falling AUD decrease the amount they receive in sales? Iron ore contracts are set in US DOLLARS (like most commodities). If the AUD falls, they receive more AUD's for each tonne. 

Learn the basics first


----------



## Frankhalo (12 October 2008)

Unfortunately Jet we need to put up with the Wally postings during this financial crisis along with their down ramps.

But I don’t need to tell you that.

When I hear it from Fortescue that there is a problem I’ll take note, as I stated before product going out, funds coming in. If anyone can prove this is not the case please post the facts.

PS. FMG is not MGX, chalk and cheese to compare these two IO plays.


----------



## nunthewiser (12 October 2008)

Frankhalo said:


> PS. FMG is not MGX, chalk and cheese to compare these two IO plays.




darn  skippy there m8 MGX been posting record profits year after year for the last 3 years(maybelonger)also cashflow positive bud.lol fmg aint even in the same timezone


----------



## Frankhalo (12 October 2008)

nunthewiser said:


> darn  skippy there m8 MGX been posting record profits year after year for the last 3 years(maybelonger)also cashflow positive bud.lol fmg aint even in the same timezone




Mount Gibson Iron Limited (Mount Gibson) production and sales performance for the first quarter of the financial year was very strong with 1.432 Mt  being shipped comprising 712 kt of Lump and 720 kt of Fine ore. IO must be coming to port in Tonka trucks and going to China in speed boats at this rate.

Yep chalk and cheese


----------



## nunthewiser (12 October 2008)

Frankhalo said:


> Mount Gibson Iron Limited (Mount Gibson) production and sales performance for the first quarter of the financial year was very strong with 1.432 Mt  being shipped comprising 712 kt of Lump and 720 kt of Fine ore. IO must be coming to port in Tonka trucks and going to China in speed boats at this rate.
> 
> Yep chalk and cheese




lol i give up . seems that you guys prefer to ignore what i try and point out and replace it with something shiny instead ..... scroll back through my posts here and you will see what im talking about ..good luck with your holdings


----------



## agro (12 October 2008)

nunthewiser said:


> lol i give up . seems that you guys prefer to ignore what i try and point out and replace it with something shiny instead ..... scroll back through my posts here and you will see what im talking about ..good luck with your holdings




Frankhalo is spot on,

you do realize that in the first year of production FMG has shipped more than MGX don't you?

ignorance is bliss

FMG is on the same level of RIO as far as IO is concerned


----------



## nunthewiser (12 October 2008)

agro said:


> Frankhalo is spot on,
> 
> you do realize that in the first year of production FMG has shipped more than MGX don't you?
> 
> ...




ROFLMAO .ya got me .i vowed not to post here again then that funny gag made me have to .....
 LOL dear rampers .. um the fact of thew matter IS FMG made a massive loss no matter how many gigatons they shipping dears.
MGX made new rtecord breaking profits  .
ya just dont get it 
um dont matter how big or small the bizzness is , ITS THE BOTTOM LINE THAT COUNTS 
make losess long enuff and ya fold .SIMPLE girls and boys 
MY point was re post earlier WAS mgx makes money and cash flow positive .
fmg DOESENT .

might hire a translator next time

and seriously IF you guys still dont get my drift after ALL my posts here re debt , contracts , profits ,losses well good luck to yas it cements my view earlier regarding the fact syndrome 

anyways please dont compell me to reply by giving me a giggle again and i promise just to read and not post in this thread

lol gawd bless oztrailia is all this nun got left to say


----------



## agro (12 October 2008)

nunthewiser said:


> ROFLMAO .ya got me .i vowed not to post here again then that funny gag made me have to .....
> LOL dear rampers .. um the fact of thew matter IS FMG made a massive loss no matter how many gigatons they shipping dears.
> MGX made new rtecord breaking profits  .
> ya just dont get it
> ...




you are correct in that regard, but you do understand that when they achieve the expansion they will be literally raking it in?

but its always good to hear opposing views  

maybe you could shed some light on the positives? e.g. how twiggy got the project up and running in 2 years (how long it take BHP/RIO??), do u think he will call it quits now


----------



## chops_a_must (12 October 2008)

agro said:


> do u think he will call it quits now




It's more than possible.

What did he do with Murrin Murrin?

I'm sure if he looks like getting nothing, shareholders interests will be high on the priority list.


----------



## agro (12 October 2008)

chops_a_must said:


> It's more than possible.
> 
> What did he do with Murrin Murrin?
> 
> I'm sure if he looks like getting nothing, shareholders interests will be high on the priority list.




i don't think twiggy had a 36% stake in Anaconda.. like he does with FMG

+ it was the other executives who shafted him


----------



## chops_a_must (12 October 2008)

agro said:


> i don't think twiggy had a 36% stake in Anaconda.. like he does with FMG
> 
> + it was the other executives who shafted him




Yes yes, poor him. He owned 9% of the company. A lot of investors were left with next to nothing as he drove the company into the ground, whilst over promising and under performing. Sound familiar?


----------



## IFocus (12 October 2008)

IFocus said:


> Guys in bull markets you can price a stock any way you want but in bear markets company's are priced on risk.
> 
> Below is the chart, this is reality, the bias currently is to the down side.
> 
> ...




Guys below the 1st chart I posted before shows the trend is down


The 2nd chart is current the trend is still down so I figure the above still stands

.


----------



## sammy84 (12 October 2008)

I think it would be very hard to find a stock at the moment with a positive trend line, therefore I am cutting FMG some slack at the moment...only wished I bought on Friday rather than 2 weeks ago


----------



## Frankhalo (12 October 2008)

nunthewiser said:


> ROFLMAO .ya got me .i vowed not to post here again then that funny gag made me have to .....
> LOL dear rampers .. um the fact of thew matter IS FMG made a massive loss no matter how many gigatons they shipping dears.
> MGX made new rtecord breaking profits  .
> ya just dont get it
> ...




Guess we will have to revisit this post in Sept 2009 with some figures for you Nun. Last time I checked FMG doesn't stand for Free Minerals Group, said it before and I'll say it again, product going out, funds coming in, sounds like a good business model to me. May 15th 2008 start up, you must have missed that part...


----------



## 2020hindsight (12 October 2008)

Warren Buffet II said:


> Nothing has changed ??
> 
> I'll give a couple of things that have changed for FMG
> 1) AUD



Warren
Is AUD fall good or bad (in medium term?) 
I would have thought neutral if not good 

PS big assumption on my part - that contracts are in USD or CNY


----------



## chops_a_must (12 October 2008)

2020hindsight said:


> Warren
> Is AUD fall good or bad (in medium term?)
> I would have thought neutral if not good
> 
> PS big assumption on my part - that contracts are in USD or CNY




Depends if the delivery contracts are to be paid in AUD or not. The long term ones that is.

It also depends if they have a lot of foreign denominated debt.

No-one seems to know, so who knows 2020?

They seem to have massive debt to me, so falls would be classed as bad without knowing further.


----------



## 2020hindsight (12 October 2008)

chops_a_must said:


> No-one seems to know?




.. lol - blind leading the blind here.   Just wish I'd stayed in cash ....  lol 
 FMG has been a major dent in my finances  

but hey - I still believe in their long term future. 
and that they'll turn around.

Will I live that long? - hey who knows? lol.


----------



## renim (12 October 2008)

At a wild guess, I would say iron ore contracts are in US dollars (as is oil, copper, coal, gold, etc) if they were not in US dollar then they would be in a Chinese centric currency basket, they will not be in AUD.

I was recently reading an article on the coal spot price, it has dropped significantly, but not as much as the Aud has, so the coal miners are sitting on a pleasant price increase.

This also makes a natural hedge within FMG, if debt is in US and sales is in US, then all up, there is a cancelling effect.  Actually they should hedge against the aussie dollar rising as sales should be planned to service the debt, so if they are unhedged, then they are 'in the money' so to speak.


----------



## nunthewiser (12 October 2008)

chops_a_must said:


> Depends if the delivery contracts are to be paid in AUD or not. The long term ones that is.
> 
> It also depends if they have a lot of foreign denominated debt.
> 
> ...




, i woulda thought the holders would know the answers to these but alas , seems they dont read and want ppl to point the way 


all you holders read page 1 of ann dated 14/08/06 contains DEBT and the demonination it due to be paid in and what dates

page 1 ann dated 21/08/06

the debt/cap raising /currency anns are mixed up allthrough the pretty anns too
then if you need more after that and i dare say it would be wise to read , i suggest you guys do ya own research for a bleedin change instead of relying on NON holders to do it for ya

avaniceday


ps or would you prefer me to cut and paste every ann here instead of you guys having to go to the trouble of finding the anns ?


----------



## nunthewiser (12 October 2008)

sorry if my last post sounded harsh , just pointing out that the answers have been there alll along as i stated further back in this thread and would of thought by now someone would have looked for themselves.


----------



## 2020hindsight (12 October 2008)

ok ntw, 
you win...
 but bottom line is that their contracts are (as I guessed ) in USD, and some of the posts back there seem pretty inaccurate as a result


----------



## nunthewiser (12 October 2008)

2020hindsight said:


> ok ntw,
> you win...
> but bottom line is that their contracts are (as I guessed ) in USD, and some of the posts back there seem pretty inaccurate as a result





     not my posts tho 

might wanna have a squiz at them contracts too m8 . the wording dont actually give a definative price on what they will recieve excdept for the market price at that time sorta thing .= they could actually fall
my post regarding contract prices are in regards to WISCO agreement 1/12/06 and i think theres another i skimmed , based on the yearly negotiated price =if negotiation price drops for that year thats what they get,

anyways..... will leave ya too it now ,thanks for reading it 20/20


----------



## cruise61 (13 October 2008)

Well i hope all the sceptics are holders and sell big this week so i can come in and increase my FMG portfoilio at rock bottom prices.

Basically stop winging about hear say if your not sure get rid off the stocks,drop the buy price and let me make some good money :0)

They spend nearly 3 billion building a company have just started operations and all you want instant millions.

They are an amazing long term investment opputunity so either jump on board or get in the life raft and sail away .

Ohh and yes i do have shares and yes i have done my research , what i havnt done is seen any reason to be negative about FMG on this forum .

My advice dont listen to poor researcehs on this thread , do your own research and at least give them a year to operate .

Roll on monday ,let the ride begin )


----------



## gav (13 October 2008)

More buyers than sellers at the moment, been a little while since we've seen that....
                                                                                                                                                                                                                                                                                                                                      .


----------



## adobee (13 October 2008)

I dont think that anyone can really predict what is going to happen. .. and speculation is just speculation .. I have kept buying FMG as I think it is much riskier than BHP but at the same time has alot more upside for bigger returns..  there is the potential for 460% return on my 2.80 back to its highs buys compared to by buys of bhp which I might get 100%..
anyway good luck to all who hold and all who dont ...


----------



## gav (13 October 2008)

Why did FMG go into pre-open just before? 



.


----------



## sanj (13 October 2008)

I didnt see it go to pre-open...but if so could be releasing their quarterly results...only guessing though.


----------



## treefrog (13 October 2008)

needs to hold that 62% support level or its back to the sick bay for mine.............................


----------



## agro (13 October 2008)

treefrog said:


> needs to hold that 62% support level or its back to the sick bay for mine.............................




what's a good price to buy in treefrog..

i want it at around 2.50 but don't think it will make it..


----------



## mfp (13 October 2008)

I recently bought FMG just below 4, sold 4.23, bought back Friday 2.77, sold today 3.06, and just bought back 2.84, now 2.90...hoping for a close above 3! :


----------



## cruise61 (13 October 2008)

mfp said:


> I recently bought FMG just below 4, sold 4.23, bought back Friday 2.77, sold today 3.06, and just bought back 2.84, now 2.90...hoping for a close above 3! :




done well ,just be carefull not to short sell and miss out , damn if it gets to 2.5 you wont be the only one buying  3.00 seems a good price for me i got this morning so will sit on that for a bit


----------



## agro (13 October 2008)

cruise61 said:


> done well ,just be carefull not to short sell and miss out , damn if it gets to 2.5 you wont be the only one buying  3.00 seems a good price for me i got this morning so will sit on that for a bit




no wonder the volume is 15 m + 

i am waiting for a good entry , 2.50 i would like it.. has to drop past the 2.80 first


----------



## treefrog (13 October 2008)

agro said:


> what's a good price to buy in treefrog..
> 
> i want it at around 2.50 but don't think it will make it..




hard to see this rate of fall reversing quickly agro, needs some very good news to pull it up.
agree with your 250 level (good S/R - at least as good as any on the chart; this baby is full on whichever way its going)
It was primed for a correction from the $6 level - that it kept going to $13 has made the correction much more brutal.
Possibly a staged entry strategy if you don't want to miss the low (whatever it turns out to be) 
If you determine probable turn to the downtrend (ie say a strong S/R line)
1/3 of total stake at that level, next third at either 5%+or- and last third only if it keeps going in the same dirrection - if moving up then at +10%.
then apply S/L to total averaged entry.
if you were right you have entered in 3 stages for a higher ave price but much less risk than an all in and fail entry.
if the price continued down, your entry will be averaged down and given youself more time to assess things and decide to execute your stop.

strategy would be the same if you decide your entry trigger was say $2:70 in this case.
I note the so called "acid test for this share" the current ratio is only .72 which indicates more liabilities than assets and no prospects of dividends into the foreseeable years - these likely to be helping drive prices down in big bear run like now


----------



## wildthing (13 October 2008)

Reported cash reseverse up $432 mil to $624 mil this quarter
Now 52 ore ships now departed since the first one.
Some customers prepaying shipments
Great position with their Chinese customers due BHP/Rio/Vales efforts to push chinese to pay more.
Read the quarterly report for more info
I am holding
GO FMG


----------



## gav (13 October 2008)

mfp said:


> I recently bought FMG just below 4, sold 4.23, bought back Friday 2.77, sold today 3.06, and just bought back 2.84, now 2.90...hoping for a close above 3! :




Hi MFP...

What plan did you use to buy and sell?  Did you have set indicators?  Or just went by what you felt was a good buy/sell price?


----------



## agro (13 October 2008)

wildthing said:


> Reported cash reseverse up $432 mil to $624 mil this quarter
> Now 52 ore ships now departed since the first one.
> Some customers prepaying shipments
> Great position with their Chinese customers due BHP/Rio/Vales efforts to push chinese to pay more.
> ...




you read the ann of former Oxiana / OZL and RIO directors join FMG?

i wouldn't be least surprised if OZL and FMG merge

that would give BHP something to worry about


----------



## agro (13 October 2008)

13-October-08 by AAP




*Fortescue Metals Group Ltd says its quest to become the alternative supplier of iron ore to the Chinese market has been boosted by jostling between rivals Rio Tinto and BHP Billiton, and by moves by Brazil's Vale to push up prices.*

In its September quarterly report, released today, Fortescue says that the "Chinese market's motivation to encourage the emergence of Fortescue as a strong new alternative seaborne supplier of iron ore has gained further momentum in the last quarter".

Fortescue said this was prompted by concerns over BHP Billiton's proposed takeover of Rio Tinto Ltd, and an attempt by Vale to increase annual benchmark iron ore prices halfway through the year.

This had "caused many of our customers to reconfirm to us the commitment of the Chinese market to the ongoing emergence of a fourth major seaborne supplier", Fortescue said.

Fortescue shares gained 28 cents, or 10.45 per cent, to $2.96 by 1300 AEDT.

The company, which operates in the Pilbara region of Western Australia, reported cash at the end of September of $624 million - an increase of $432 million on the previous quarter.

Fortescue shipped its first ore to Chinese steel mills in May and had loaded 8.536 million tonnes onto 52 ships by the end of September.

The company said it expected to be operating at an annual production rate of 45 million tonnes by the end of the year before ramping up to 55 million tonnes from April 2009.


----------



## mfp (13 October 2008)

gav said:


> Hi MFP...
> 
> What plan did you use to buy and sell?  Did you have set indicators?  Or just went by what you felt was a good buy/sell price?




Gav,

I don't use indicators. I basically entered each time when it appeared completeley oversold and was due for a bounce. The exit at 4.23 and re-entry at 2.77, without being burnt in between, was probably luck. I exited at 3.06 today as I was fairly certain it had run too far this morning, so decided to lock in a decent profit. It ran to 3.18, but one thing i never do is chase a stock higher after i've sold. I waited for the pull back, back in at 2.84, it fell to 2.74, but closed stronger. I always keep in mind the current price action in relation to the open, high and low and take notice of the close. In other words I keep a mental picture of the candle stick which is forming for the day and use it to guide my trading. From past experience and some knowledge of candle stick charting, i've learnt that the close just above the day's low with the spike up to 3.18 is actually a bullish reversal signal, most would probably disagree. The capitulation Friday also gave me confidence that we had hit some sort of interim bottom. Only time will tell if my re-entry is justified.


----------



## renim (13 October 2008)

In April's 2008 Australia's Mining Monthly,  the first 2 names in 'Mining's top leaders' are Owen Hegarty and Andrew Forrest.   While media articles should be taken with a grain of salt,  the appointment of Hegarty to FMG will set tongues wagging in mining circles, and portends FMG a bright future.

FMG's quarterly report, gave FMG cash on hand a boost to approx. $600m.  And stated that the low Aud was beneficial (as did Bloomberg).  Although development is still burning cash faster than earnings.

However, other stocks have been even more punished by what i call irrational pessimism, and a PE ratio of 2 is available elsewhere, for current dividend paying stock!


----------



## skyQuake (13 October 2008)

The PE ratio of 2 is based on old earnings... Future PE forecasts don't look so good.
Anyways, FMG has pretty much gone parabolic. Don't think today's price action constitutes a proper bounce but its gonna come sooner or later. Note volume is still going up; higher even than friday's.


----------



## cruise61 (14 October 2008)

Bit off a bounce back today ,much less than i predicted but nether the less a profit.

Andrew on tv tonight letting everyone know they are up and running and doing well.

Financials looking good .

Still think this is one off the best around at this price 

Roll on Tuesday let the ride begin again 

PS Good to see Australia lead the way to recovery today ;0)


----------



## Sean K (14 October 2008)

cruise61 said:


> Bit off a bounce back today ,much less than i predicted but nether the less a profit.
> 
> Andrew on tv tonight letting everyone know they are up and running and doing well.
> 
> ...



cruise, how is the likely fall in demand and prices for IO going to effect the income and growth profile of FMG? 

Also, what do you mean 'financials looking good'. Can you expand on this?

I think most long term holders would like to see some stability in the share price now as opposed to going on some wild ride. This is one fugly chart.


----------



## cruise61 (14 October 2008)

kennas said:


> cruise, how is the likely fall in demand and prices for IO going to effect the income and growth profile of FMG?
> 
> Also, what do you mean 'financials looking good'. Can you expand on this?
> 
> I think most long term holders would like to see some stability in the share price now as opposed to going on some wild ride. This is one fugly chart.




Hi Kennas yes a very ugly chart ,looks alot like BHP and RIO,s Charts :0)

There is no confirmation demand has slowed if there is please show me where?, at this stage China has asked to delay shipments to clear already stockpiled docks ,Lets face facts Chinas Growth and the rest of the world only increases the demand for steel , the Fact they have no more room doesnt mean they have stockpiled an endless quantity off ore and once it reduces and it will ,they will pay anything for it )

Prices have probaly come back down to a realistic level , Vale had way too much control over the market but that seems to have ended and things have stabalized rather than go on a sea saw ride.

Financials for last qtr from FMG look good because they are finally making money and spending there own money not investors :0)

There forcast off 3.6 billiion in sales is on target with the first quarter sales over 800ml

They have alot of Chinese contracts and i believe with their Chinese Board they will steel alot off buisiness away from Vale and Rio in the next 5 years .

FMG are not a quick get rich company for its shareholders but a long term investment and personally i couldnt dream off a better starting price for a company off FMG size than it is now .

Hope you have a good Tuesday and enjoy the ride


----------



## Sean K (14 October 2008)

cruise61 said:


> There is no confirmation demand has slowed if there is please show me where?, at this stage China has asked to delay shipments to clear already stockpiled docks ,Lets face facts Chinas Growth and the rest of the world only increases the demand for steel , the Fact they have no more room doesnt mean they have stockpiled an endless quantity off ore and once it reduces and it will ,they will pay anything for it )



The reason all the IO and coal stocks have been savaged is because of the perception growth is slowing in China and it will have a material effect of future earnings. 

I'm a big believer in stronger for longer in Chindia over the LONG term, but short term I'm not so sure.


*Chinese steel cut worries Aussie mining companies*
Matthew Stevens | October 14, 2008 

FIVE Chinese steel mills have revealed plans to cut production by up to 20 per cent over October.

Evidence has emerged that real-economy stresses are being created in emerging markets by the Western credit crisis.

The prospect of wide-ranging and unexpectedly deep cuts in Chinese steel production have surprised Australia's major iron ore and coal producers and fed fears that China is more closely "coupled" to the global economy than anyone has wanted to believe. 

While confidence in China's medium and long-term economic prospects remains very strong, there are fears of a material drift in demand for Australia's key raw materials over coming months.


----------



## gav (14 October 2008)

kennas said:


> FIVE Chinese steel mills have revealed plans to cut production by up to 20 per cent over October.




Correct me if I'm wrong, but isnt there over 100 chinese steel mills? If only 5 are cutting production by 20%, that is a pretty small amount!  Yes there may be a slowdown in growth in China, but its still growing rapidly!


----------



## rthakkar (14 October 2008)

Go Fortescue!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Currently up by 50%!!!

The announcement made yesterday was much liked by the market and timing couldnt have been any better!


----------



## adobee (14 October 2008)

wow i am sitting exactly even now.. between the parcels I bought at $5 on the way down and the parcels I bought at $3 ...  I thought it was value at $5 so $4 still looks pretty low to me.. I wouldnt be surprised to see $6+ by the end of the day..


----------



## sanj (14 October 2008)

As much as i would like $6 mate...seems a little farfetched to me! Alot of short term buyers would want to start collecting some returns...specially for what they would have got them 4


----------



## gav (14 October 2008)

Just my luck.  The last few times its jumped up just after open, it always loses some of its gains later in the day (eg. yesterday).  After holding since May, I SOLD this morning at $3.53 at a 60% loss, hoping to buy back in cheaper this afternoon.


----------



## cruise61 (14 October 2008)

sanj said:


> As much as i would like $6 mate...seems a little farfetched to me! Alot of short term buyers would want to start collecting some returns...specially for what they would have got them 4




Yeh agreed ,love this stock but 6.00 today isnt a reality sorry guys.

Lots of short termers today but only takes 1 big investor who wants in to swoop up all them shares .

Either way paid my mortgage today 

Let the ride continue


----------



## njc.corp (14 October 2008)

adobee said:


> wow i am sitting exactly even now.. between the parcels I bought at $5 on the way down and the parcels I bought at $3 ...  I thought it was value at $5 so $4 still looks pretty low to me.. I wouldnt be surprised to see $6+ by the end of the day..




How are u working out that it will or might get to $6.00 today?

what method or figures are u using?

thanks

Nick--


----------



## njc.corp (14 October 2008)

gav said:


> Just my luck.  The last few times its jumped up just after open, it always loses some of its gains later in the day (eg. yesterday).  After holding since May, I SOLD this morning at $3.53 at a 60% loss, hoping to buy back in cheaper this afternoon.




gav-look at it from this view-if the dow last night would have been -800 points none of this would have happen?

well i think so as i am having a had time trying to see any stock not doing good today

u win some and u dont

is this a big gain before we go south again?

i am happy to sit back and watch

good to see the fmg  holders get some  money back-

Hope all goes well and everyone makes a good earn--

Thanks

Nick--


----------



## adobee (14 October 2008)

I am using a very complex method of graphs and parabolas, whilst factoring in the market cap, market confidence, and the other guys greed..  If it can close at 4.4ish it will only be 36% required to get to $6 and if the world markets continue to rally..


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## gav (14 October 2008)

njc.corp said:


> gav-look at it from this view-if the dow last night would have been -800 points none of this would have happen?
> 
> well i think so as i am having a had time trying to see any stock not doing good today
> 
> ...




I think I will sit back and watch for a while.  At first I thought I should have had a stop loss.  So when I bought into IPL a couple of weeks back I had one.  It was 20%, I thought that was plenty of lee-way considering the volatility we've been having.  Got stopped out in just one week.  If I had've held, I'd be about even now (with IPL).  Im stuffed if I do, stuffed if I dont.

I've lost over half my capital in less than 4 months.


----------



## jackson8 (14 October 2008)

hi guys 

just wondering if anyone has any ideas as to why their are hardly any trades on the fmg options market for any of the series

i would have thought such a volatile stock would have attracted a lot of interest in options tradeing with this one

regards gary


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## prawn_86 (14 October 2008)

gav said:


> I've lost over half my capital in less than 4 months.




Perhaps its time to sit it out and re-evaluate and maybe just do some paper trading to try and find a better method.


----------



## Nesa (14 October 2008)

what an excellent day

DOW finished 11% higher

FMG currently 50+% higher

can't complain in seeing green again.


----------



## Bushman (14 October 2008)

Good on the holders. 

The way i look at an FMG is that it would be impossible to fund the infrastructure they have built in today's market - and probably for some time to come. 

China could well slow down in the short to medium term but I am sure the model was not priced at $80 per tonne - probably half that. 

So maybe not the blue sky upside but surely the downside is contained somewhat. 

Interesting days in the iron ore junior sector. 

DYOR.


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## Sean K (14 October 2008)

AWESOME move today, but one day does not make a recovery. It's back to where is was a week ago.

No extra negativity from me, just a reality check.

I am hopeful that Friday was a bottom, but the bear in me is saying sideways at best for some time.


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## njc.corp (14 October 2008)

gav said:


> I think I will sit back and watch for a while.  At first I thought I should have had a stop loss.  So when I bought into IPL a couple of weeks back I had one.  It was 20%, I thought that was plenty of lee-way considering the volatility we've been having.  Got stopped out in just one week.  If I had've held, I'd be about even now (with IPL).  Im stuffed if I do, stuffed if I dont.
> 
> I've lost over half my capital in less than 4 months.




Gav thats not good to hear-like prawn said and i will say it again-

their is nothing wrong in  waiting around for a nice calculated enviroment-

i stoped  trading a while back because i could not see anything-i  could not concentrate-i just needed a break-just too risky-(call me a wimp- i dont care as i got money to trade when it comes around)

i made good money this year-and gave back a bit too-but the point is if nothing going your way its a good sign of just sitting around and waiting for the good times

the name of game is to have money  wether u selling or buying

capital is a needed product or else its just talk and no play-

have a good think and take it easy

Takecare-

Thanks

Nick--


----------



## gav (14 October 2008)

*Fortescue gets its payments*

THE executive director of Fortescue Metals, Graeme Rowley, says the iron ore miner's Chinese customers are continuing to pay for their shipments in a timely manner despite the credit crunch.

The traditional method of payment in the shipping market - letters of credit - has tightened in recent weeks, causing costs to surge for companies looking to import products like iron ore.

"If a customer cannot get the [letters of credit], they cannot send the ships, and that may have happened, and may continue to happen, and long as the Chinese credit crunch continues," said a Merrill Lynch analyst, Mike Harrowell, in reference to Mount Gibson Iron's announcement last week that customers had asked it to postpone shipments. "The easing of lending conditions should improve this situation."

In its September quarterly report, published yesterday, Fortescue said revenue from some shipments made during the quarter had not been received by the end of the quarter.

Fortescue's shares closed 14c higher at $2.82, after rising as high as $3.18 before it published its quarterly report, which did not include standard information such as quarterly production and sales figures.

"It is a little bit confusing and not very clear, to be honest," said a BBY analyst, John Veldhuizen. "I'm surprised, I must admit."

Mr Rowley said Fortescue had received all of the outstanding shipping payments - involving five shipments - since the start of the month.

"What you had at the [quarterly] cut-off is while we had the guaranteed payment, the cash had not been received in the bank," he said.

Fortescue shipped 6.9 million tonnes of iron ore during the September quarter with an average grade of 59 per cent, receiving an average of $90 a tonne.

Mr Rowley said the company had already shipped an additional 700,000 tonnes this month and had negligible stockpiles of ore.

Fortescue, which will reach an annual production rate of 45 million by the end of the year, plans to spend up to $2 billion on expanding capacity to 80 million tonnes by the end of next year.

The company said it would later expand to 160 million tonnes of annual production "as the market conditions warrant".

Mr Rowley said all 160 million tonnes could be obtained from its Cloud Break and Christmas Creek deposits, which have a higher grade and lower impurities than its Solomon deposit in the western Pilbara.

Fortescue yesterday said it had applied for exploration licences off the coast of the Pilbara region.

It is investigating the potential for iron sands dredging in that area and in New Zealand.

Fortescue, which had negative operating cash flows of $227 million in the quarter, said it had benefited strongly from the recent weakening in the Australian dollar. It does not have any currency hedging.


----------



## Prospector (14 October 2008)

OK people, after selling last week for a small loss, I bought back in (but a reduced holding)  YESTERDAY!   Not sure for how long though; a bad day on the DJ and might regret it!


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## njc.corp (14 October 2008)

gav said:


> *Fortescue gets its payments*
> 
> THE executive director of Fortescue Metals, Graeme Rowley, says the iron ore miner's Chinese customers are continuing to pay for their shipments in a timely manner despite the credit crunch.
> 
> ...





Gav the article seems interesting but it does nothing-media hype-

look at what u are doing and look at the current price as of now-

the reason i say this is that their has been many articles written on fmg and other stocks but one thing that does not change is the current price as of now-

its how u look at the price is what returns or ideas of how u are going to attack it is the key-

i am not a fmg hater but i seen so many  articles which contain good and bad but we forget about the current price-

Thanks

Nick--


----------



## Frankhalo (14 October 2008)

Today.

The company shipped 8.5 million metric tons of iron ore and reported sales of A$645 million in the three months to Sept. 30, it said in a statement yesterday. A drop in the Australian dollar in the period "added significantly to the company's bottom line,'' as it earns revenue in dollars, Fortescue said. 

*"There has been some good off-shore buying,'' *in Fortescue today, MF Global's Anderson said today. "China's growth is still going to be between 7 and 9 percent and that spells OK times for Fortescue. They have benefited from this fall in the Aussie dollar, they're unhedged and all their shipments to customers have been accepted.'' 

Concerns over demand for the ore were sparked last week after Australian rival Mt. Gibson Iron Ltd. reported Chinese customers asked it to postpone deliveries because of slowing steel sales and a lack of credit. Contract iron ore prices may drop 20 percent in 2009, the first decline in seven years, Patersons Securities Ltd. said in an Oct. 10 report. 

Baosteel Group Corp., China's largest steelmaker, and Tangshan Iron & Steel Co. are Fortescue's two biggest customers.


----------



## agro (14 October 2008)

today i have been speechless, well done FMG and all those who have faith, the best is yet to come..

i certainly would like to hear the opinion of skeptics (e.g. people with opposing views).. i wont point any names out cause i might get into trouble


cheers

just to give you some of *my history:*

last year, July 2007, I had FMG at $29.05 (2.95 now), i held it all the way to $13+ did not sell, and rode it all the way down until selling due to a margin call at $5.05

I managed to get back in around $2.80 - had to sell CEY, managed to sell it at 3.50 (yesterdays peak) and shifted to FMG.

I am just stoked it worked out for me and the fact that i still hold my shares in FMG


----------



## njc.corp (14 October 2008)

agro said:


> today i have been speechless, well done FMG and all those who have faith, the best is yet to come..
> 
> i certainly would like to hear the opinion of skeptics (e.g. people with opposing views).. i wont point any names out cause i might get into trouble
> 
> ...




Argo- i dont feel that i am a skpetic as i been in fmg before the same as u from  7.60 all the the way to 12.50-12.70 region-

has i told u last time i have a big share which i mention

dont think i am a hater since i am out-i like to see all u guys do well-

but my reasons for being out of the market is prety basic-if we had a good couple of years their must be more slowdown and down trends-

thats all really-

i have nothing open at the moment-

so please dont think since i am no longer holding fmg i am against it-

its still a good company and it will grow like a small business with cool heads running it-

Thanks

Nick--


----------



## cruise61 (14 October 2008)

agro said:


> today i have been speechless, well done FMG and all those who have faith, the best is yet to come..
> 
> i certainly would like to hear the opinion of skeptics (e.g. people with opposing views).. i wont point any names out cause i might get into trouble
> 
> ...




hahah yer im always getting in trouble and having my post removed , but like i say ,i say it as i see it and i dont just throw endless amounts off cash in to a share that i havnt researched or am about to lose on .

GO FMG

Let the ride continue


----------



## agro (14 October 2008)

cruise61 said:


> hahah yer im always getting in trouble and having my post removed , but like i say ,i say it as i see it and i dont just throw endless amounts off cash in to a share that i havnt researched or am about to lose on .
> 
> GO FMG
> 
> Let the ride continue




yeh mate

i have been following the company since late 06... you can check out the earlier posts in this thread for proof.. i have received alot since then, and no doubt will i continue to receive alot of slack... that's life

i wouldn't put my hard earned into a company i had no faith in

look how far Twiggy has come.. i could write a thesis on this but i wont

best of luck to all holders 

agro


----------



## Joe Blow (14 October 2008)

cruise61 said:


> hahah yer im always getting in trouble and having my post removed , but like i say ,i say it as i see it and i dont just throw endless amounts off cash in to a share that i havnt researched or am about to lose on .
> 
> GO FMG
> 
> Let the ride continue




The posts that were removed contained absolutely no content, much like the one I am responding to. We will continue to remove posts like this as they add absolutely no value to the thread.

If, as you say, you have done plenty of research into FMG then perhaps you could share some of it with those reading this thread. After all, the purpose of a forum like ASF is so that those who have some information, news or analysis to share on a particular stock can do so and everyone can benefit as a result.

Those who are here simply to ramp or downramp can do so at another forum as we expect those posting in stock threads at ASF to contribute some meaningful/useful content.


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## BrownHornet (14 October 2008)

agro said:


> today i have been speechless, well done FMG and all those who have faith, the best is yet to come..
> 
> i certainly would like to hear the opinion of skeptics (e.g. people with opposing views).. i wont point any names out cause i might get into trouble




Are we nuts? The price has returned to where it was a week ago. Still a long way off $13 where many held. Think it is drawing a long straw saying well done FMG and those who have faith. YEAH great if you bought at $2.50. Suspect most here didn't.

But yes well done to those that picked a bottom. Price up has little to do with changes to FMG itself.


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## Frankhalo (14 October 2008)

Not out of the woods yet, nor are quality stocks on the ASX going to go belly up as some posters seem to suggest is the case with FMG. I'm no accountant, but the business model that is FMG sits very well with me, even more so with yesterdays Sept report, come Sept 09 based on the figures I read yesterday and potenial to achieve 80mta I'll take may day in the sun today and tommorow, if its $4.37 with an output of 8 - 9 million tons so far I'm tipping it will be alot more come 55 - 80mta, plus a check in the mail yearly. 

As of 5.00pm today:
1474 buyers for 4,698,024 units  
266 sellers for 1,265,958 units ..... 

I do like this ratio.


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## cruise61 (14 October 2008)

Frankhalo said:


> Not out of the woods yet, nor are quality stocks on the ASX going to go belly up as some posters seem to suggest is the case with FMG. I'm no accountant, but the business model that is FMG sits very well with me, even more so with yesterdays Sept report, come Sept 09 based on the figures I read yesterday and potenial to achieve 80mta I'll take may day in the sun today and tommorow, if its $4.37 with an output of 8 - 9 million tons so far I'm tipping it will be alot more come 55 - 80mta, plus a check in the mail yearly.
> 
> As of 5.00pm today:
> 1474 buyers for 4,698,024 units
> ...




Well said Frank

I hold 2 lots of FMG , 1 lot from when price was coming  down from 13 that i got at 7.23 for long term and the other  i couldnt resist the low on Fri and bought up at 2.74 but alas the mortgage needs to be paid so they went today at 4.26 giving me 1.56 prof per share.

Probaly done the wrong and shoulda held longer as FMG does look good but i will cotinue to bat with my long terms and support FMG.


----------



## investedz (14 October 2008)

jackson8 said:


> hi guys
> 
> just wondering if anyone has any ideas as to why their are hardly any trades on the fmg options market for any of the series
> 
> ...




Where are you getting your volume data from?
I've noticed the volume for FMG options as shown on the ASX website, are the same to OptionsXpress's data, but the open interest shows all zeros. There are some open interest shown in OptionsXpress. There might be something wrong with the ASX:FMG page?

Actualy looking at the options for the other shares on the ASX site, they all show zero open interest...

But yes you are right. Regardless, there isn't much open interest on the options for FMG (1 digit, 2 digit open interest), and surprisingly there wasn't much change in premium after the 50%+ rise of the underlying asset.

My guess is because of the lack of interest on the options, there is the lack of change in  premium, which I guess makes options trading on FMG not so liquid. 

Can anyone shed light on this?

Tomorrow will probably be a different story. FMG today was rated the highest gainer on the ASX:

http://markets.smh.com.au/apps/mkt/movers.ac

By now FMG would have caught attention from all sorts of traders/investors focused on other companies, including options traders.

Very interesting to see what will happen tomorrow.


----------



## sanj (14 October 2008)

hmm the futures are up both in the US and Europe so I would assume our market will continue to dance with the music.(US announcement tomorow of 250 Bil bank plan). As for FMG i also think the price will continue but at a slower rise....posibly consolidating at a support level where i think it may stay stangnet +/-30cents....i see a consoldiating period of about $5ish...this is just my personal thought...no maths to back that statement up however im sure many would agree. 

My question i wanted to raise is ...does anybody else have a sneeky feeling there is a possibility of a large chinese steel company buying up cheap stock ...or the CIC for example. I say this because the buying today was very bullish and it held relativly strong without too many fluctuations downwards for a breather. 

If FMG is as important as they say to China I thought it may be a worthy thought...correct me if im wrong but wasnt twiggy trying to sell his stake in some part to the chinese when it was at peak prices.  

Only trying to see raise a possible thought


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## cruise61 (15 October 2008)

Fortescue ``is very well positioned for Chinese iron ore demand and while there may well be startup risks, particularly if the Asian economies turn down, we do believe that Fortescue is strategically well positioned and valuable to both customers and peer mining companies,'' Goldman Sachs JBWere Pty analysts led by Neil Goodwill, who have a `Buy' recommendation on the stock and a 12-month price target of A$7.40, said in a note to clients dated yesterday. 

Link to article
http://www.bloomberg.com/apps/news?pid=20601081&sid=asom14pJN0q0&refer=australia:D:D


----------



## Kauri (15 October 2008)

cruise61 said:


> Fortescue ``is very well positioned for Chinese iron ore demand and while there may well be startup risks, particularly if the Asian economies turn down, we do believe that Fortescue is strategically well positioned and valuable to both customers and peer mining companies,'' Goldman Sachs JBWere Pty analysts led by Neil Goodwill, who have a `Buy' recommendation on the stock and a 12-month price target of A$7.40, said in a note to clients dated yesterday.
> 
> Link to article
> http://www.bloomberg.com/apps/news?pid=20601081&sid=asom14pJN0q0&refer=australia:D:D




*Goldman Sachs JBWere and/or its affiliates beneficially owned 1% or more of a class of equity securities of the company or trust as of the end of the week immediately preceding the publication date of this report. * 

*Goldman Sachs JBWere and/or its affiliates have managed or co-managed a public offering of securities of the company or its affiliates in the past 12 months.*

  What *they??* don't seem to reckon is important enough to attach...   

Cheers
..........Kauri


----------



## cruise61 (15 October 2008)

Kauri said:


> *Goldman Sachs JBWere and/or its affiliates beneficially owned 1% or more of a class of equity securities of the company or trust as of the end of the week immediately preceding the publication date of this report. *
> 
> *Goldman Sachs JBWere and/or its affiliates have managed or co-managed a public offering of securities of the company or its affiliates in the past 12 months.*
> 
> ...




Not sure where you got that info from??

If they have then they are on the right track. 

If i knew a stock was a good option i would certainly buy it isnt that why we are here  ?


----------



## rub92me (15 October 2008)

cruise61 said:


> Not sure where you got that info from??
> 
> If they have then they are on the right track.
> 
> If i knew a stock was a good option i would certainly buy it isnt that why we are here  ?



What kauri was trying to point out is that, similar to a recent phenomenon we've seen in this thread, GSJBW analysts' promotion of the stock could be more driven by a desire to profit from their holding, i.e. hope driven, rather than fact/risk management driven.


----------



## Sean K (15 October 2008)

rub92me said:


> What kauri was trying to point out is that, similar to a recent phenomenon we've seen in this thread, GSJBW analysts' promotion of the stock could be more driven by a desire to profit from their holding, i.e. hope driven, rather than fact/risk management driven.



And, extrapolate that to any person holding shares in this company posting anywhere else in the globe. 

It's quite absolutely, blindingly, positively, obvious, isn't it?



But, someone will be sucked in.....

Perhaps less so here.


----------



## treefrog (15 October 2008)

support at yesterday's open (350) held nicely but coming back again now to retest - quite a few cued up at that 350 line - guess the psyche is that if you missed yesterday but can get at yest. open, that is good.
open 4.25, now 3.50 - heading back to that chinaman with the checkbook at 2.50


----------



## cruise61 (16 October 2008)

treefrog said:


> support at yesterday's open (350) held nicely but coming back again now to retest - quite a few cued up at that 350 line - guess the psyche is that if you missed yesterday but can get at yest. open, that is good.
> open 4.25, now 3.50 - heading back to that chinaman with the checkbook at 2.50




Hey Frog 
            Yes could be a bit of a haul back up from here 

Hard  to say how far  FMG will drop or even if it will.

Rio's report today doesnt read stress to much. but to me alot is still talk.

http://www.businessspectator.com.au...-will-affect-Chinese-expor-KF6SC?OpenDocument

All world markets have been hit hard thanx to the good ol USA but alas weve been down here before and us long termers will come out okay .

But must admit was good to make a fast buck yesterday 

Never know if it gets to 2.50 again we might have round 2


----------



## adobee (16 October 2008)

Are there not a number of steel makers who are major share holders in FMG, would it not be in there interest to keep buying from FMG keeping it in good stead rather than cutting back.. They would want FMG to suceed because they own shares and to have a second player aside from BHP & Rio.. at current $ price wouldnt this be good for FMG..


----------



## treefrog (16 October 2008)

adobee said:


> Are there not a number of steel makers who are major share holders in FMG, would it not be in there interest to keep buying from FMG keeping it in good stead rather than cutting back.. They would want FMG to suceed because they own shares and to have a second player aside from BHP & Rio.. at current $ price wouldnt this be good for FMG..




heck adobee, if they buy more than they need, what would they do with it? make steel they can't sell?
but yes being shareholders they will obviously look after FMG as best they can but their own best interests will be their priority not fmg's even if they are shareholders


----------



## Prospector (16 October 2008)

Oh God, that will teach me.  I had an unfilled buy order for FMG and forgot all about it - for 3.10. I didnt think about cancelling it as I thought it would never dip so low again after the 55% rise.  This morning   I had a little panic when I saw the order go through......  But I see now I just made $600! hm, sweet!  So I guess I didnt learn me lesson after all!


----------



## agro (16 October 2008)

Prospector said:


> Oh God, that will teach me.  I had an unfilled buy order for FMG and forgot all about it - for 3.10. I didnt think about cancelling it as I thought it would never dip so low again after the 55% rise.  This morning   I had a little panic when I saw the order go through......  But I see now I just made $600! hm, sweet!  So I guess I didnt learn me lesson after all!




so are you back in Prospector?

that's alright... r u going long?

you prob got it cheaper than what you paid for it last year i am guessing


----------



## Prospector (16 October 2008)

hey Agro, I got back in a few days ago in a different entity which is my SMSF (therefore long); I also trade in our Company as a trader, and sometimes personally too.  I just sold the batch I 'acquired' today for a profit, because it immediately fell back 9% on the day but still above what I bought them for.  Must have been a blip in time being in the green! So will keep the Super fund ones for a while.  But much reduced now.


----------



## Miner (16 October 2008)

Where is Agro ? the great believer of FMG - we are missing you my friend in this forum for some good time .

On serious matter FMG expansion to 90 MTPA is accepting a reality of its capacity and capability and market sentiment 

Disclosure : Still holding FMG bought at $7 - just loving them to be a pepper corn value


----------



## agro (16 October 2008)

Miner said:


> Where is Agro ? the great believer of FMG - we are missing you my friend in this forum for some good time .
> 
> On serious matter FMG expansion to 90 MTPA is accepting a reality of its capacity and capability and market sentiment
> 
> Disclosure : Still holding FMG bought at $7 - just loving them to be a pepper corn value




Hey Miner, I am back in action mate - bring back some life to this thread

I managed to buy back in lower than I had bought from last year 

you could lower your average Miner if you bought at $7? i know a few people doing that.. 

I also got it tucked in my SMSF, so going long on it,

I would bet my bottom dollar than OZL (Oz Minerals) and FMG may merge one day based on a few directors going to them

wait and c


----------



## oldblue (16 October 2008)

agro said:


> Hey Miner, I am back in action mate - bring back some life to this thread
> 
> I managed to buy back in lower than I had bought from last year
> 
> ...




I'm not sure I'd be betting on that.
The small size of the pool of experienced   directors of mining companies means that we see a lot of overlaps, especially following a big merger such as ZFX/OXR.
David Humann, chairman of MCR is also a director of Territory Resources and the late lamented Monarch Gold but I don't see either of them merging with MCR.

I could be wrong.


----------



## nunthewiser (16 October 2008)

um call me silly but didnt hegarty LEAVE OZL already ? didnt he have a lil tiff over the NEW OZL cutting his bonus off ?? oh dear amazing what ya read


----------



## nunthewiser (16 October 2008)

ooops my apologies i forgot about the "dont let the facts get in the way of a good story" ideaology in this thread at times ..........will behave and just nod head from now on 

cheers
 a nun in a tinfoil hat


----------



## Frankhalo (16 October 2008)

nunthewiser said:


> um call me silly but didnt hegarty LEAVE OZL already ? didnt he have a lil tiff over the NEW OZL cutting his bonus off ?? oh dear amazing what ya read





Looks like the bonus at FMG might be a little more attractive Nun old boy. Read good things about the chap so time will tell, I'm sure MGX would love to have his services.


----------



## nunthewiser (16 October 2008)

Frankhalo said:


> Looks like the bonus at FMG might be a little more attractive Nun old boy. Read good things about the chap so time will tell, I'm sure MGX would love to have his services.




um . im sure he will be an asset at fmg actually and havent disputed that .my beef is with some of the space cadet posts here stating that FMG and OZL may merger because of hegarty , now dear read the posts and you will understand where im coming from instead of jumping on my case for stating facts ......

ps MGX already got mr johnson and he does fine ....


----------



## Frankhalo (16 October 2008)

Agro's just a passionate FMG supporter Nunny, BHP and RIO considering mergering up would have drawn a few heckles a few years ago too. Here is one for you, MGX and GBG in say two years time, btw I do tarot cards too.


----------



## nunthewiser (16 October 2008)

Frankhalo said:


> Agro's just a passionate FMG supporter Nunny, BHP and RIO considering mergering up would have drawn a few heckles a few years ago too. Here is one for you, MGX and GBG in say two years time, btw I do tarot cards too.




the mgx /gbg rumour was floating round the traps in geraldton 2 years back .

even got as far as the local paper up there whispering about it ... 

i did post about it back then but in another forum/chat

all piss and wind so far m8 , but who knows eh , personally prefer them to take out someone closer to koolan area, anyways.............


----------



## nunthewiser (16 October 2008)

when i say koolan as in koolan island i mean one of the smaller fish/explorers in the north pilbara area/southern kimberlys

anyways... wrong thread


----------



## gav (16 October 2008)

Miner said:


> Where is Agro ? the great believer of FMG - we are missing you my friend in this forum for some good time .
> 
> On serious matter FMG expansion to 90 MTPA is accepting a reality of its capacity and capability and market sentiment
> 
> Disclosure : Still holding FMG bought at $7 - just loving them to be a pepper corn value




Mate you could have done much worse, like buying in to MGX.  They have fallen over 85% from their all time highs this year! 

I am sitting it out at the moment, but for how long, I dont know...


----------



## nunthewiser (16 October 2008)

gav said:


> Mate you could have done much worse, like buying in to MGX.  They have fallen over 85% from their all time highs this year!
> 
> I am sitting it out at the moment, but for how long, I dont know...




havent looked at the % fall from high as hold a lot lower than now . is that right 85%?.... by the way whats FMG fall from its ATH?


----------



## renim (16 October 2008)

story blah blah
BHP hand looks stronger re Ri Tinto, thats good for FMG
Aud is down to 66cents, thats good for FMG
and Hegarty is now on board (rats heading for shore during the storm),  seriously, Hegarty is one guy I would keep an eye one, he did wonders with Oxiana in Laos.

The face value of the shares may have fallen, but the dividends look like that will still be strong, I would call this to be a share whose price is depressed by irrational pessimism.
I would go further and say we are witnessing the birth of a new major, or at least a mid tier of the ilk of the old WMC or MIM.


----------



## Warren Buffet II (17 October 2008)

renim said:


> story blah blah
> BHP hand looks stronger re Ri Tinto, thats good for FMG
> Aud is down to 66cents, thats good for FMG
> and Hegarty is now on board (rats heading for shore during the storm),  seriously, Hegarty is one guy I would keep an eye one, he did wonders with Oxiana in Laos.
> ...




Dividends? from where? They will have a huge loss in the coming years.!!

Maybe they will raise some money through more preference shares and then pay some divds 

WBII


----------



## Miner (17 October 2008)

another roller coaster on Friday
http://business.smh.com.au/business/fortescue-forced-to-revise-freight-contracts-20081016-52ck.html


----------



## chops_a_must (17 October 2008)

Miner said:


> another roller coaster on Friday
> http://business.smh.com.au/business/fortescue-forced-to-revise-freight-contracts-20081016-52ck.html




Ha!

"Fortescue forced to revise freight contracts

  * John Garnaut
    * October 17, 2008
    *

FORTESCUE Metals has been forced to renegotiate iron ore delivery contracts with some struggling Chinese customers, as plunging steel prices push higher-cost steel mills to crisis point."

And weren't us "down-rampers" told this was all nonsense and wouldn't affect FMG?


----------



## gav (17 October 2008)

nunthewiser said:


> havent looked at the % fall from high as hold a lot lower than now . is that right 85%?.... by the way whats FMG fall from its ATH?




MGX's 52wk high is $3.78

$3.78 - 85% = $0.567 (MGX's current SP is 0.55)

FMG's 52wk high is $13.15

$13.15 - 75% = $3.28 (FMG's current SP is $3.23)

So have all those who criticize Agro and the like for holding all the way down from FMG's highs been to the MGX thread to criticize them too?


----------



## nunthewiser (17 October 2008)

gav said:


> MGX's 52wk high is $3.78
> 
> $3.78 - 85% = $0.567 (MGX's current SP is 0.55)
> 
> ...




no actually , i critisize ppl for posting fanaSy storys instead of facts , darl , and agro sure likes to tell a good fairy tale , couldnt give a hooot about anyones holdings ,........


----------



## gav (17 October 2008)

nunthewiser said:


> no actually , i critisize ppl for posting fanaSy storys instead of facts , darl , and agro sure likes to tell a good fairy tale , couldnt give a hooot about anyones holdings ,........




Well as someone else said, 2yrs ago you would have called someone crazy for suggesting a BHP/RIO merger.... 

I never named you as down ramping on FMG, but there are a few here that have.  And I was just suggesting that they should go MGX bashing instead.  Good luck with your MGX holdings...


----------



## Bushman (17 October 2008)

renim said:


> Hegarty is now on board
> but the dividends look like that will still be strong




Err Hegarty has done well getting mines on line but presided over the merger with Zinifiex - not too flash given zinc has tanked and Zinifex had bought Allegiance at the very very top of the commodities market.

Dividends? You must be joking. Also miners typically pay low dividends - rather they re-invest cashflow. It is a high risk, capital growth story, not a yield play! 

Having said that, they have built infrastructure that could not be replaced in today's market and their exploration efforts have been top notch. 

I think at these prices they are ripe for a takeover once credit markets start to settle down. Chinese steel mills will be licking their lips as a few of them are struggling and would love to lock in long-term supply as a hedge against the Rio/BHP/Vale oligopoly. My 2c


----------



## treefrog (17 October 2008)

main battle on now at $3 S/R level will decide significant up or down from here for my...........................


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## Miner (17 October 2008)

nunthewiser said:


> no actually , i critisize ppl for posting fanaSy storys instead of facts , darl , and agro sure likes to tell a good fairy tale , couldnt give a hooot about anyones holdings ,........




Hi Bud

Your spellings are par excellence

I normally cut and paste the sentence in Word and run a spell check if I am unsure what I am writing and making sure that others can understand my writing too.

Any way back to FMG sordid story


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## Sean K (17 October 2008)

Miner said:


> Hi Bud
> 
> Your spellings are par excellence



I have been keeping track of posts containing the bestest grammar and that one is streets ahead.

Into the ASF Hall of Shame.


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## nunthewiser (17 October 2008)

Miner said:


> Hi Bud
> 
> Your spellings are par excellence
> 
> ...




ROFLMAO!!!!!!.......hahahahahaha "Your spellings are par excellence"


ONYA DARL ! .gotta love a moonbeam!


----------



## Frankhalo (17 October 2008)

chops_a_must said:


> Ha!
> 
> "Fortescue forced to revise freight contracts
> 
> ...




And now for the real story for a change: 

FORTESCUE Metals Group says it is not renegotiating any iron ore delivery contracts.

The Perth-based miner also added it was shipping every tonne of ore it can produce to its customers in China. 

While the miner’s larger customers arrange their own shipping, Fortescue ships ore for its smaller customers and a report today said some Chinese mills were seeking to have the freight rates they are charged reduced. 

“Fortescue has not renegotiated any delivery contracts to China, we are selling every tonne of ore we can produce,” a spokesman for Fortescue said. 

“We are always talking with our customers, but there is no formal renegotiation of any contracts.”


----------



## Joe Blow (17 October 2008)

Just a reminder to everyone to *please link to the original article* when quoting from other sources. It is important that people be aware of where others are sourcing their information from.

Also, please familiarise yourself with what you are allowed to reproduce on a forum like ASF by reviewing this thread on respecting the copyright of others.

With regard to this thread in particular can we please stay on topic and drop any personal attacks/references. This thread is starting to become a little emotional and as a result the usefulness of the information being posted is beginning to diminish somewhat.

Please ensure that your posts contain some useful/meaningful information (news, analysis or related information) that will be useful to others reading this thread.

Thank you all in advance for your co-operation.


----------



## MRC & Co (18 October 2008)

kennas said:


> I have been keeping track of posts containing the bestest grammar and that one is streets ahead.
> 
> Into the ASF Hall of Shame.




And this has to be a hall of fame/shame thread.

If ever I have seen a perfect depiction of emotions from bullmarket to bearmarket to crash cycle, this is it.  Next time I start analysing the psychological reasoning behing T/A, this is the first place I will come.

A lot of people could learn a lot of things from this thread, if only they stood back and looked at it objectively.  Excitement, greed, told you so, averaging down, doubt, hope, fear, married to positions, panic, anger, dispair, hopelessness, hope.  I think it goes something like that.......


----------



## Warren Buffet II (18 October 2008)

http://business.smh.com.au/business...20081017-539p.html?page=fullpage#contentSwap2

"At Delong Steel, Han Chunwen and her family are closely watching the three large furnaces that remain in operation. The four smaller furnaces have been shut down for early maintenance and can be restarted within weeks if demand picks up again. But the large furnaces take months to cool and then be cleaned out and started up again. That's something no factory owner would choose to do - unless they think their business is going under.

Andrew Forrest at Fortescue Metals Group also has a direct interest in the smoke that continues to billow from the large blast furnaces at Delong. If they shut down he will have to find another buyer.

The two companies signed a long-term contract that helped place Fortescue on the investor map. But now, just five months after its first cargo load arrived in China, Mr Ding has sacked the hapless manager who signed the deal. The Herald understands that Fortescue contracted to arrange freight for the iron ore deliveries and pass the costs on to Delong Steel. Fortescue locked in the freight costs months ago, when freight rates were high. But the deal now looks expensive because spot market iron ore and freight rates have collapsed and Mr Ding's own customers are deserting him in droves. Mr Ding wants Fortescue to wear the cost of expensive freight before agreeing to take more ore. Fortescue says they are flexible, and they might have no choice."


This company is in big trouble, it would imagine that this will be sold to one of the big ones soon for 2 o 3 billions.

WBII


----------



## Frankhalo (18 October 2008)

Warren Buffet II said:


> http://business.smh.com.au/business...20081017-539p.html?page=fullpage#contentSwap2
> 
> "At Delong Steel, Han Chunwen and her family are closely watching the three large furnaces that remain in operation. The four smaller furnaces have been shut down for early maintenance and can be restarted within weeks if demand picks up again. But the large furnaces take months to cool and then be cleaned out and started up again. That's something no factory owner would choose to do - unless they think their business is going under.
> 
> ...




Ok Warren let me get this straight, FMG so far has a customer base of 26 seperate clients including Baosteel the biggest in China, now one of the 26  has cut back on out put and FMG is in big trouble. !!!!

Sorry Warren I find this a ridiculous statment IMO, FMG has been only running for five months now, in a climate thats changed sum what, but yet has meet many milestones and targets.

October 17, 2008

http://steelguru.com/news/index/2008/10/17/NjY5ODU=/FMG_to_go_ahead_with_deliveries_for_China.html]

FMG to go ahead with deliveries for China

It is reported that Fortescue Metals Group Limited has so far loaded 8.536 million tonnes of iron ore onto 52 ships dispatched from Fortescue's Herb Elliott port facility in Western Australia.

After news last week that China would be asking to delay iron ore shipments, Fortescue said all of its iron ore shipments had been accepted by its customers and the company was loading ore as fast as possible.

Fortescue said "Chinese market's motivation to encourage the emergence of Fortescue as a strong new alternative seaborne supplier of iron ore has gained further momentum in the last quarter. It said it expected to be operating at an annual production rate of 45 million tonnes by the end of the year before jumping up to 55 million tonnes from April 2009.

The company said it had USD 624 million cash in had at the end of the September quarter, an increase of USD 432 million on the previous quarter. It said the increase in cash was due to funds from a preference share issue, sales prepayments and from leasing and sales receipts.

Sounds good to me


----------



## SenTineL (18 October 2008)

I agree Frank, WBII's statement is ridiculous, I think people have to just take a deep breath in this time of turbulance


----------



## oldblue (18 October 2008)

I read the post to mean that De Long Steel "is in big trouble."

Clarification sought, please.


----------



## SM Junkie (18 October 2008)

Call me stupid but I'm not getting this slow down or close down of China's steel mills stories that are circulating all the iron ore threads at the moment. (See BHP thread)

So for those that know a lot more than me about China's economy, I have a few questions.


 I thought that China was more internally driven and therefore more state owned companies. Then why is China the first country talking about closing steel mills?

I have not heard of China being hit in any other way as a result of the credit crisis, just look at what all the other countries are doing, yet nothing mentioned about China's financial stress?

I don't hear anything about other businesses closing down, surely steel mills closing would not be in isolation, what about other industries?

I would think that organisations in crisis firstly start cutting back on staff, hours of operations, skeleton maintenance, etc before they would close their doors?

I would have thought we would be hearing about industries closing in other countries like the US or UK before someone like China? I find this extremely odd.

Has anyone heard of the Chinese companies reducing their stock in Australian Mining companies? Surely if there was going to be long term reduction in the demand for ore, they would be reducing their stake in our mining orgs.

Isn't it just a little ironic that these stories are starting now, given that price negotiations are starting and that there are a couple of junior minors about to hit production?

I'm certainly no expert but I think China are playing silly buggers, there is no logic to what I've been reading and in my world I need to see a correlation with other events and this does not seem to be the case.


----------



## Sharks37 (18 October 2008)

Talk about reading too much into things and seeing shadows in the forest, to mix my metaphores! The various doom & gloom comments in this thread demonstrate to me very nicely the level of hysteria and uncertainty currently pervading the market.

Let's not forget some of the basics:

Even the most bearish of analysts and conservative of institutions such as the IMF & World Bank are forecasting growth in China may slow down to as little as 8% next year. This means demand in China next year will be 8% higher than it is this year, to state the obvious, and at least 8% higher again in 2010. They will need more commodoties to fuel their economic activity.

China is sitting on cash reserves in excess of a trillion $'s, so if any country can afford to give their economy a kickstart its them, that's if they need to actually kickstart it.

Settle your nerves folks, in a couple years' time companies like FMG and some of other solid Aussie miners will seem cheap at today's prices...


----------



## alex arigo (18 October 2008)

china will slow down but remember india and china will need to consume a lot of iron ore in the long term fmg is a great buy at these levels remember they are going to produce 45 mtpa thats selling for 90 dollers a tone thats 4 billion in revenue and long term  goals is 180 mtpa add the numbers  your a full to be selling a these prices


----------



## agro (18 October 2008)

Sharks37 said:


> Talk about reading too much into things and seeing shadows in the forest, to mix my metaphores! The various doom & gloom comments in this thread demonstrate to me very nicely the level of hysteria and uncertainty currently pervading the market.
> 
> Let's not forget some of the basics:
> 
> ...






alex arigo said:


> china will slow down but remember india and china will need to consume a lot of iron ore in the long term fmg is a great buy at these levels remember they are going to produce 45 mtpa thats selling for 90 dollers a tone thats 4 billion in revenue and long term  goals is 180 mtpa add the numbers  your a full to be selling a these prices




could not agree any more

i think when people are stirring the pot a bit one needs to be a contrarian investor and buy what they beleive in.

until they start constructing buildings out of plastic they (e.g. china and india) will always need iron ore..

don't look at today, but look to the future

if we see BHP take over our good friends RIO, mark my word, FMG's iron will be in greater demand  from China


----------



## Sharks37 (18 October 2008)

Agreed. And look at the various facts that make FMG a good long term prospect, one way or the other:

The Rio deal probably won't go through, so a company like FMG would be a good acquisition for BHP, also considering the synergies to be had from rail networks they are currently fighting over.

FMG is very cleverly positioning itself as the "4th sea-borne iron ore major" for the chinese - it is in the interest of the chinese to ensure FMG succeed.

If not BHP, then one of the chinese steel mills like Baosteel taking a stake in them to ensure long term supply.

And finally, FMG operationally have so far delivered on every promise and performance target they have announced. 

I work in manufacturing and I have a lot of respect for what FMG have done operationally - a company I've set as the benchmark to aim for. I have only bought a few shares, and yes at prices higher than they are at present, but I consider these guys to be a blue chip long term investment.


----------



## Garpal Gumnut (18 October 2008)

I have never held FMG and it is a great regret for me. I was set in pmm, bhp and rio from long ago and did not have the iron back to support another great miner. 

Now fmg is back in buying territory.

I do not follow funnymental opinion on stocks.

I enclose a chart which is very interesting. FMG followed a channel up from aug 07 to may 08 when it leapt incredibly to a top exactly the width of the channel it had been in.

It happens like that in Technical Analysis, its much more exciting than annual reports.

It has then fallen through 4 channels and is now half way through the fifth.

I'll be buying it when it reaches the bottom of the last channel.

gg


----------



## diliff (20 October 2008)

Garpal Gumnut said:


> I'll be buying it when it reaches the bottom of the last channel.
> 
> gg




Do you really think it will reach around ~1.5? It has fallen like a stone but I doubt it will go quite that far... Of course, if it does, I might be tempted to buy too (assuming the company was still viable that is.. which would be one explanation for it going down that far!!)


----------



## jonojpsg (20 October 2008)

diliff said:


> Do you really think it will reach around ~1.5? It has fallen like a stone but I doubt it will go quite that far... Of course, if it does, I might be tempted to buy too (assuming the company was still viable that is.. which would be one explanation for it going down that far!!)




Gotta remember diliff that gg's buy point might come in a month or two in which case the price would be around $2.50.  Channels move up with time.


----------



## derty (20 October 2008)

gg if you had've looked at that diagram in say early August, would you then have concluded that buying once it reached the bottom of the third channel was in order?

Is there some significance in the number of channels a stock falls through? I am familiar with the concept of a trend channel though are a bit of a noob when it comes to most technical analysis still.


----------



## Garpal Gumnut (20 October 2008)

diliff said:


> Do you really think it will reach around ~1.5? It has fallen like a stone but I doubt it will go quite that far... Of course, if it does, I might be tempted to buy too (assuming the company was still viable that is.. which would be one explanation for it going down that far!!)






jonojpsg said:


> Gotta remember diliff that gg's buy point might come in a month or two in which case the price would be around $2.50.  Channels move up with time.






derty said:


> gg if you had've looked at that diagram in say early August, would you then have concluded that buying once it reached the bottom of the third channel was in order?
> 
> Is there some significance in the number of channels a stock falls through? I am familiar with the concept of a trend channel though are a bit of a noob when it comes to most technical analysis still.




All good points. You would need to confirm with a daily chart. Often the price will hit a channel line. Say its in a long term bear trend, so it will fall to a lower trend line , touch it and then rise and then fall again to touch and rise as confirmation. This didn't happen in early August.

There is much on trend trading on the net, google it, and see.

I enclose a pdf copied from my version of MStock with a basic explanation of the concept. 

Some guys say it will go up or down twice the width of the dominant starting channel. This is a crazy bear market so it won't surprise me if I'm peering at fmg between $1.50 and $2.50 as it recovers.

gg


----------



## Miner (20 October 2008)

http://www.abc.net.au/news/stories/2008/10/20/2396410.htm?section=justin

Secret got exposed. China Demand has slackened means probably another small blood bath on Tuesday


----------



## spottygoose (21 October 2008)

NMDC Raises Contract Iron-Ore Prices in India by 40% (Update1) 

By Debarati Roy

Oct. 20 (Bloomberg) -- NMDC Ltd., India's largest iron-ore producer, raised local prices of the key steelmaking raw material by as much as 40 percent, following global peers and increasing the pressure on mills. 

Prices of fines were lifted by as much as 10.5 percent and lumps by as much as 40 percent, Chairman Rana Som said today in a telephone interview from the southern city of Hyderabad, where the company is based. The increase will be backdated to April 1. 

NMDC Chairman Rana Som is increasing prices to close the gap with international rivals such as Rio Tinto Group and BHP Billiton Ltd., which have doubled their rates this year. Cia. Vale do Rio Doce, the world's biggest iron-ore producer, wants to charge Asian mills more to match what European steelmakers are paying. 

``While others have raised prices substantially, our price increase is not that steep,'' Som said, without specifying the final prices. ``Fines account for most of our sales.'' 

NMDC charged 1,783 rupees ($37) a ton for iron-ore fines as of Oct. 1 last year. 

Indian steelmakers will have to pay more for iron ore even as slowing demand from manufacturers and builders drives down prices and prompts companies including ArcelorMittal to consider output cuts. Global steel production and consumption may slump 5 percent in 2009, Research & Consulting Group AG said Oct 9. 

``We've heard NMDC aims to raise prices but there's nothing on paper as yet,'' JSW Steel Ltd.'s Finance Director Seshagiri Rao said today by telephone in Mumbai, where the company is based. An increase in prices ``will put pressure on margins,'' he said.  

JSW Steel expects to pay 180 rupees more for each ton of fines, Rao said. 

Smaller Furnace 

JSW Steel, India's third-biggest producer, pared the size of a new venture by three-quarters to 40 billion rupees ($822 million) and delayed the start of the new 3 million ton blast furnace by two months as it expects demand to remain subdued. 

NMDC has raised prices by as much as 40 percent for long-term contracts in India, the Economic Times reported today, without saying where it got the information. The increase may affect local steelmakers such as Ispat Industries Ltd., Essar Steel Ltd., JSW and Rashtriya Ispat Nigam Ltd., the newspaper said. 

The price increase of 40 percent will affect less than 1 percent of sales, Som said.


----------



## LeeTV (21 October 2008)

Miner said:


> http://www.abc.net.au/news/stories/2008/10/20/2396410.htm?section=justin
> 
> Secret got exposed. China Demand has slackened means probably another small blood bath on Tuesday



Actually I am expecting FMG to rise by around 10 - 15% today on the back of the big miners and the renewed enthusiasm in the US overnight. Soon find out I guess.


----------



## shag (21 October 2008)

china was always going to slow this quarter, they purposefully slowed it as much as they could so the world could see the place relatively smog free.
this isnt news, its history. if china hits 6p or lower then it will bite.
it didnt rise as much as the other fe plays but it has to soon unless some actual bad news occurs.


----------



## Garpal Gumnut (21 October 2008)

Garpal Gumnut said:


> I have never held FMG and it is a great regret for me. I was set in pmm, bhp and rio from long ago and did not have the iron back to support another great miner.
> 
> Now fmg is back in buying territory.
> 
> ...





Its closing at lows on v low volume so this technical interpretation sill holds. China., trains, ore, margin loans, annual reports , competent/incompetent managers/directors, sinosteel, rio, bhp, kev07, its all too complicated for a simple technician like me. 

This stock appears to be still in a downtrend albeit rising recently but not convincingly.

gg


----------



## njc.corp (22 October 2008)

diliff said:


> Do you really think it will reach around ~1.5? It has fallen like a stone but I doubt it will go quite that far... Of course, if it does, I might be tempted to buy too (assuming the company was still viable that is.. which would be one explanation for it going down that far!!)




have u heard of the term anything can happen-

in this game anything can happen-

i have been taught to focus on the current price-meaning the actual price of actual viewing-

now like i said i have been at the top at the $12+ region-

and now the price is what it is now-

so the question is why cant it go any lower-

i dont have that answer but anything happens wether we have good times or bad times or slowdown's blah blah

besides-the lower it goes the better for the people who missed the boat-their has to be a winner out of this little issue we face-

Thanks

Nick--


----------



## adobee (23 October 2008)

I have continued buying FMG but am running out of cash.. I am considering taking out a loan to buy more.. (I usually only spend my own monies! but am very tempted) I noticed the LVG on this from comsec is 40% has that been reduced? Does anyone know if it was around 60% previously?


----------



## Sean K (23 October 2008)

adobee said:


> I have continued buying FMG but am running out of cash.. I am considering taking out a loan to buy more.. (I usually only spend my own monies! but am very tempted) I noticed the LVG on this from comsec is 40% has that been reduced  ? does anyone know if it was around 60% previously ?



I am not an authorised financial adviser, but I reakon taking out a loan to buy more of these is a brilliant idea. 

I also suggest you take as much money as possible out of your credit card and put it into the market as well. 

Also, what an opportunity to sell your family jewells and put it ALL in to FMG. 

Of course, you could also sell a kidney and put it into the market right now! 

I like your tactics!

I'm going out with my life savings and putting it all on black!

Wish me luck!



Cheers,
kennas


----------



## Mr Capital (23 October 2008)

-Detects sarcasm- 

adobee -> I would "curb your enthusiasm" if I were you. Consult a licensed professional.


----------



## M34N (23 October 2008)

adobee said:


> I have continued buying FMG but am running out of cash.. I am considering taking out a loan to buy more.. (I usually only spend my own monies! but am very tempted) I noticed the LVG on this from comsec is 40% has that been reduced? Does anyone know if it was around 60% previously?




Has this bear market taught people nothing...

Please, seriously, if the price keeps going down and you are buying in, and it's STILL going down, then why would it rise once you take out a loan and use money that you don't technically have?

Like the others have said, seek financial advice, because this is a risky idea and you will lose more than you think.


----------



## adobee (23 October 2008)

say what you like.. this is a rare point in time where some people are going to loose alot of money and others are going to make alot of money..  I have an average price of about $3.. I dont have a wife and kids and I do have a good cashflow and am in a position to make or break.. See if I am still posting in 12months and we can all have a chat then ..


----------



## Mr Capital (23 October 2008)

If you had good cash flow you would not need to consider a loan. 
but anyway..good luck with that


----------



## Miner (23 October 2008)

kennas said:


> I am not an authorised financial adviser, but I reakon taking out a loan to buy more of these is a brilliant idea.
> 
> I also suggest you take as much money as possible out of your credit card and put it into the market as well.
> 
> ...





Hmm Interesting post Kennas and hope you have returned from holiday now.
If GK Chesterton or Jean Paul would have been alived to read your satire they would join you too.
No one really knows now where the market is moving. If the big guns are rolling down how could people in FMG will withstand in this slide ?

Ironically (in an iron market) FMG sloped lesser extent than BHP and Rio have gone. I am talking on prices in last one week and please do not tell me that FMG already slipped from $12 to $2.86 now 

Question about loan however - is not marginal loan still considered to be a cost effective means of course when the leverage is low? Then there are people who take loan and invest back in shares and property


----------



## Sean K (23 October 2008)

Miner said:


> Hmm Interesting post Kennas and hope you have returned from holiday now.



Yes, good holiday, thank you! 

Just trying to set a balance, as I always try to do.

Except if it's a stock I own .... LOL 

Actually, I downramp my own stocks better than anyone else I reckon!!!


----------



## agro (23 October 2008)

lets consider our rivals:

BHP - 8.26%

RIO - 11.78%

FMG -5.15%

and you tell me people aren't looking for value at the moment


----------



## nomore4s (23 October 2008)

lol, this thread makes me laugh, reminds me of the BMN thread when the U craze was in full swing.

No matter which way you look at it FMG is a dog atm, just look at the chart.

What amazes me is some of the people in this thread still can't admit at $12+ FMG was overvalued, and now that market conditions and the world economy have changed they still expect FMG to have the same future prospects.

While it's fine being bullish on a stock, what's wrong with sitting out for a while and at least waiting for some signs the sp is turning around?

Have any of the bulls in this thread thought about what could happen to the sp if this isn't the bottom, and the world economy gets worse?


----------



## agro (23 October 2008)

nomore4s said:


> lol, this thread makes me laugh, reminds me of the BMN thread when the U craze was in full swing.
> 
> No matter which way you look at it FMG is a dog atm, just look at the chart.
> 
> ...




yeah... it's a dog with earnings of $600 million to date 


i wont continue to provide my feedback - people know where i stand

enough said


----------



## chops_a_must (23 October 2008)

agro said:


> i wont continue to provide my feedback - people know where i stand
> 
> enough said



Is that so is it?

Is this another one of those shares that you only ramp because you own?

Or are you the bastion of objectivity?


----------



## SenTineL (23 October 2008)

I must admit real value in relation to companies SP seems to have gone out the window in this climate so yeah no knows how far down SP will get pushed. Looking back I am also looking to admit $12 was overpriced.

Looks like the volatility is not so great though at this $3.00 SP at the moment except for a 50% rise in one day a few days ago now.


----------



## adobee (24 October 2008)

Mr Capital said:


> If you had good cash flow you would not need to consider a loan.
> but anyway..good luck with that




Buddy if you have cash big savings you dont need a loan.. if you have cashflow you can support a loan..


----------



## nomore4s (24 October 2008)

adobee said:


> Buddy if you have cash big savings you dont need a loan.. if you have cashflow you can support a loan..




If you have good cash flow, why not save some money to buy, the sp isn't going anywhere atm, and even if it starts to head north just buy on the next dip - at least then the sp will be moving in the right direction.

If FMG is going to be such a great long term blue chip, who cares if you miss the first bit of the move, there will be plenty of time to get in when it does start to go up.


----------



## Mr Capital (24 October 2008)

nomore4s said:


> If you have good cash flow, why not save some money to buy,




Seems logical, of course it depends how desperate you are to buy FMG.

Nice win by the hawks eh nomore4s ?


----------



## Garpal Gumnut (24 October 2008)

From the charting point of view there is much indecision in fmg's recent price and volume movements.

It is in a hell of a downtrend.

It is now in a descending triangle pattern and if it goes below 2.62 on higher volume it will fall a considerable way imo.

A chart from last night.  Its about 2.89 as I post on moderate to low volume.

I would be not buying at present, probably at lower sp though

gg


----------



## SenTineL (24 October 2008)

I think FMG are still very smart with their announcements, they always seem to have an up to date presentation somewhere.

Personally at looking at the latest presentation I'm still very optimistic, and yes I realise it's a bit of marketing hype.

Looking at what they have achieved and built in infrastructure:
Brand new rail line, train loaders
Stackers, crushing and screening plants
Port

and the ugrade to 160mtpa etc

With all the doomsday scenarios I can't see how it's not undervalued now if it was overvalued at $12.00, maybe someone with a bit more fundamental analysis can shed more light? I've said before though that at the moment value seems to have nothing to do with a company's share price


----------



## prawn_86 (24 October 2008)

SenTineL said:


> With all the doomsday scenarios I can't see how it's not undervalued now if it was overvalued at $12.00, maybe someone with a bit more fundamental analysis can shed more light? I've said before though that at the moment value seems to have nothing to do with a company's share price




Im at uni now but cant give a detailed anlysis, but if you look back in about April or so I was calling fair value at about $6.50.

This was mainly based on projected earnings and PE ratios, however while they may be fundamentally undervalued, virtually every stock on the bourse is and we all know the pain of trying to go against sentiment.


----------



## Knobby22 (24 October 2008)

I would be very wary buying in at present: From ABC site today.

Access Economics' latest business outlook predicts that China's economy has now joined the list of nations hit by the global financial crisis, and that Australia will feel the effects.

China says that its growth will slow slightly to nine per cent next year but Access Economics director Chris Richardson expects it will be a shade above 7 per cent. 

He says that could push Australia's Budget into deficit.

Mr Richardson told the ABC that while he thinks Australia will avoid a recession, it will feel like the country is in one.

"It's a problem for Australia as markets fall, share markets, property values fall in China. And as construction weakens off, that's weakening the demand for steel and Australia's risk is we sell the inputs that become Chinese steel - coking coal and the iron ore," he said.

*He says spot steel prices have fallen from $US1,200 a tonne in July to $US255 a tonne yesterday. *


----------



## MichaelD (24 October 2008)

Howdy all true believers,

I've been on holidays - hence no time for posting.

Wow - what a difference 2 months makes.

$2.85 - who'd thunk it a year ago. But then, there was a lot of bottom picking going on at the start of July and the results of that are equally gruesome. Makes my exit at $8.65 look very pleasant in hindsight even though I didn't particularly like taking the stop at the time.

The most apt market saws at the moment seem to be;

"Don't fall in love with a stock. It won't love you back."
"The market can stay irrational for longer than you can remain solvent."

Lotsa loving still going on in this thread.


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## treefrog (24 October 2008)

Knobby22 said:


> I would be very wary buying in at present: From ABC site today.
> 
> Access Economics' latest business outlook predicts that China's economy has now joined the list of nations hit by the global financial crisis, and that Australia will feel the effects.
> China says that its growth will slow slightly to nine per cent next year but Access Economics director Chris Richardson expects it will be a shade above 7 per cent.
> ...




Mrs Treefrog will hop 3km and shed 3kg to get to a 50% off sale so after hearing that about iron ore this morning and smart enough to know they use iron to make steel, she wants me to put in an order for all the remaining colourbond cladding we need to finish the holiday pondhouse.
I suggested that it would be after Xmas before the price drop filters back down and it might not be that much as there are many bulls on the FMG thread who reackon it will stay high for years yet because of the high priced contracts they have.
Nonsense! she said.
All those silly steelmills who paid that price and keep their steel price high because they did just won't get any customers - they will go to the other mills who are buying at $255. Just make sure you get it from them as well.

Just to be sure that the bulls are right and Mrs Treefrog is wrong I decided to check the other metals prices to get some indication..........Holey crap Batman, you seen this!! (_GFMS Metals Consulting's base metal price index is based on the official LME cash settlement price for primary aluminium, copper, lead, nickel, tin and zinc. The index is an average of the six prices with equal weighting given to each of the six metals. The index is based on January 4th 2000 = 100_.)


----------



## Warren Buffet II (25 October 2008)

adobee said:


> I have continued buying FMG but am running out of cash.. I am considering taking out a loan to buy more.. (I usually only spend my own monies! but am very tempted) I noticed the LVG on this from comsec is 40% has that been reduced? Does anyone know if it was around 60% previously?




We need to love this kind of stupidity, this is the kind of people that help others to get out of bad businesses and save some of their capital.

Keep buying as much as you can so the poor shareholders can sell to you as much as they can.

Copper dropping to $1.76 @ the moment.

WBII


----------



## Miner (25 October 2008)

Warren Buffet II said:


> We need to love this kind of stupidity, this is the kind of people that help others to get out of bad businesses and save some of their capital.
> 
> Keep buying as much as you can so the poor shareholders can sell to you as much as they can.
> 
> ...




Interesting WBII to suggest some one was stupid when he mentioned to buy more FMG by taking loan

Some times hidden rampers jack up people sentiment suggesting others will start buying so he could sell. I am thinking that could be the person's strategy to letting us think that he is stupid and he probably is laughing at us 

IMO it will be a real disaster for any one to buy FMG even I know to have bought them at high price and to hold them. 

Reading through Andrew's comment on CHinese hold and hearing FMG is now relying on smaller contractors to deliver their expansion could be a sign of disaster. DYOR and I am not an expert on stock prediction or calculation.


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## alex arigo (25 October 2008)

every thing they post about fmg is a load of crap what they say is not true they are a great iron ore company that are moving forward i own 3000 shares and yeah i am down 40 percent but i am a long term investor and i know in 6 years i will look back and say it was worth the wait the iron ore boom is not over china is only having a deep breath i all so hold atlas iron and brockman knowing that these are great iron ore plays who have a great future a head brockman 110 million in the back and 1.6 billion tones off high grade ore and a market cap of 60 million thats a joke and atlas what can i say great out look a head these 2 companys i love because fmg has links with these companys to hall there ore for them  iron ore all the way


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## nunthewiser (25 October 2008)

alex arigo said:


> every thing they post about fmg is a load of crap what they say is not true they are a great iron ore company that are moving forward i own 3000 shares and yeah i am down 40 percent but i am a long term investor and i know in 6 years i will look back and say it was worth the wait the iron ore boom is not over china is only having a deep breath i all so hold atlas iron and brockman knowing that these are great iron ore plays who have a great future a head brockman 110 million in the back and 1.6 billion tones off high grade ore and a market cap of 60 million thats a joke and atlas what can i say great out look a head these 2 companys i love because fmg has links with these companys to hall there ore for them  iron ore all the way




oh dear........good luck in the market champ

cheers............................................................................................................................................................................................................


.......................

ps was being sincere in my saying good luck in the market


----------



## chops_a_must (25 October 2008)

alex arigo said:


> every thing they post about fmg is a load of crap what they say is not true they are a great iron ore company that are moving forward i own 3000 shares and yeah i am down 40 percent but i am a long term investor and i know in 6 years i will look back and say it was worth the wait the iron ore boom is not over china is only having a deep breath i all so hold atlas iron and brockman knowing that these are great iron ore plays who have a great future a head brockman 110 million in the back and 1.6 billion tones off high grade ore and a market cap of 60 million thats a joke and atlas what can i say great out look a head these 2 companys i love because fmg has links with these companys to hall there ore for them  iron ore all the way




Right...

So what would people say if I told them that I'm hearing from people in the industry, that FMG are having problems with their grades?


----------



## gav (25 October 2008)

nunthewiser said:


> oh dear........good luck in the market champ
> 
> cheers............................................................................................................................................................................................................
> 
> ...




Oh dear indeed.... At least he didnt buy into MGX.  Imagine the sleepness nights he'd have if he was holding MGX right now.....


----------



## nunthewiser (25 October 2008)

gav said:


> Oh dear indeed.... At least he didnt buy into MGX.  Imagine the sleepness nights he'd have if he was holding MGX right now.....




my average hold is at 32 cents darl

this is comprised of a free ride from 18.4 average , a parcel mid 50s , a parcel mid 40s

no sleepless night here 

still in profit

will stop out if needs be 

just because i found a previous post tragic please do not iclude me in your obviously frustrated state at being unable to  hold a trade without losing half ya capital

thankyou


----------



## nunthewiser (25 October 2008)

P.S darl i should point out too that over the ourse of mgx rise i removed original capital PLUS removed another 3 times that amount and the remainder is free essentially


sorry to hear u were unable to remove any profits gav and watched the hold sink 50% instead but hey dont take out ya frustrations on me


blessya son


----------



## alex arigo (25 October 2008)

fmg will make 45 dollers profit for every tone in ore they sell 45 millions tones  is what  a billion plus in profits next year i am a long term holder go fmg


----------



## renim (25 October 2008)

Different plans, different strategies.  Personally I like the hold 6 years idea (if you can't hold for less than 6 years than why be in shares anyway).  Mine is more the hold until after dividends, and then re-assess.  Yes that means that I cop the risk for non-dividend paying stock, which is a punishing place to be in a bear market.   But having said that, there are other stocks out there that are being even crazierly priced from a PE ratio.


----------



## jman2007 (25 October 2008)

chops_a_must said:


> Right...
> 
> So what would people say if I told them that I'm hearing from people in the industry, that FMG are having problems with their grades?




Chops,

Do you know if the FMG Resource calculations take into account the internal waste ratio? I'm not an iron ore expert by any means, but failure to take into account the volume of waste between the high grade Fe2O3 lenses could cetainly dilute the grade imo. 

Comments?

jman


----------



## chops_a_must (25 October 2008)

jman2007 said:


> Chops,
> 
> Do you know if the FMG Resource calculations take into account the internal waste ratio? I'm not an iron ore expert by any means, but failure to take into account the volume of waste between the high grade Fe2O3 lenses could cetainly dilute the grade imo.
> 
> ...




I wouldn't have a clue to be honest jman.

This is just what I hear from a metallurgist in the field.


----------



## jman2007 (25 October 2008)

chops_a_must said:


> I wouldn't have a clue to be honest jman.
> 
> This is just what I hear from a metallurgist in the field.




No worries Chops,

I don't think we have any met's lurking on ASF atm, this question may have to remain unanswered for tonight at least 

jman
(dnh)


----------



## BrownHornet (26 October 2008)

Can't help but feel a few here still to micro in their focus on FMG. 
Worth a watch.
 Roubini Sees Crisis Worsening, Hurting Emerging Markets

He has been spot on with most everything to date and calls for at least another 20% drop in commodity. It is these reasons that the informed are still moving out of stock and resources in particular. Too many don't understand opportunity cost and a declining SP is a loss. No matter what you think.

Exciting time but FMG is not that good to keep holding just because it looks cheap. Enjoy


----------



## Sean K (26 October 2008)

BrownHornet said:


> Can't help but feel a few here still to micro in their focus on FMG.
> Worth a watch.
> Roubini Sees Crisis Worsening, Hurting Emerging Markets
> 
> ...



Hi BH, 

I'm wondering about this 20% further drop, or more, and if everyone believes it then it's factored in, no?

Maybe no...

But, the stock market is a prospective forward looking beast, and not a true representaion of the economy.....maybe.

I am personally struggling to see what is really factored in, or not, due to the emotion of the market at this time.


----------



## ROE (26 October 2008)

prawn_86 said:


> Im at uni now but cant give a detailed anlysis, but if you look back in about April or so I was calling fair value at about $6.50.
> 
> This was mainly based on projected earnings and PE ratios, however while they may be fundamentally undervalued, virtually every stock on the bourse is and we all know the pain of trying to go against sentiment.




Remember resource stock are no different from the tech bubble stocks.
they all counting future earning and potential earning which may or may not eventuate.

if you like resource stock why not get something like BHP/RIO that are making REAL cash now and not going into deficit each year.

Don't count on China to keep resource stocks going and here is the simple economic of why 

when the bull rule the market, debt is cheap and everyone is feeling richer
they look to invest in emerging country hoping to better return namely China,  and that give them the cash cow to buy our resources.

that the nature of human Greed, always want more and not content of what they can get right now, present in hand and in countries they know best  instead they pump their money in some strange land, where they know nothing about.

so what happen now? all those money will be pulling out of China to save their own ass  and China once again become an emerging country with less money in their pocket and hence they aren't going to pay crazy price for resources.

Hello what happen to stronger for longer? people dont tell you what keep China going longer for stronger do they? and that is Foreign money

same thing they don't tell you when you borrow the margin loans 
they only tell you that stock can only goes up and show you pretty graphs of how much money you COULD be making.

Stick to the basic you never lose money 
economic 101


----------



## BrownHornet (26 October 2008)

kennas said:


> Hi BH,
> 
> I'm wondering about this 20% further drop, or more, and if everyone believes it then it's factored in, no?
> 
> ...




I guess my point is that most people still don't see that this can go another 20% down or are not informing themselves. I do sincerely believe that the video does no favours for the market and subsequent psychology behind it. But all I know is I'd prefer to be a first out of everything than hanging on. Worst I see is market starts a move up again (unlikely) and I jump on board. Everything I read is I likely have 6-12 months (of course will be some bear rallies in there along the way). I guess it is all about hedging your investments. My prediction will be as things get worse and then your average Jo starts to think about putting all of their super into cash you will see the biggest ever market bottom. Average Jo is not there yet but I have heard people talking in shops about it. This is unprecedented.

Super funds will be forced to change their positions. That is when I'll think about quality stocks again. A bit of topic I guess so will I look at FMG again? Probably but at much lower price than currently is.


----------



## agro (26 October 2008)

how come every time i log on to aussie stock forums i notice FMG in the top 10 threads on the main page?

just goes to show, regardless of whether you like it or hate it, there is heated debate about the company


does this say something about its popularity


----------



## treefrog (26 October 2008)

agro said:


> how come every time i log on to aussie stock forums i notice FMG in the top 10 threads on the main page?
> 
> just goes to show, regardless of whether you like it or hate it, there is heated debate about the company
> 
> ...




er.....................,ummmm,.....................no!!!
Need to check the chart to determine popularity agro


----------



## agro (26 October 2008)

i couldn't careless about the chart, find me a chart that is trending up and i will buy stocks in that company..

if FMG being in the top 10 threads is not a predictor of popularity than can you explain to me what it is a predictor of?

i mean even the people not in favor of FMG and unlikely to hold it are posting!!

there must be a motive  otherwise they would not be doing it

cheers

cbf further replying - waste of time


----------



## skyQuake (26 October 2008)

Former stock market darlings always had a following. Its spectacular fall from grace attracts attention... Its more morbid curiosity than true speculative interest... Similar for pre-merge Zinifex, Centro, Bear Sterns... etc


----------



## gav (26 October 2008)

treefrog said:


> er.....................,ummmm,.....................no!!!
> Need to check the chart to determine popularity agro





er ummmmmm, almost everything is going down at the moment.... 

Lets compare to other Iron Ore stocks...

BCI - Down 85%
AGO - Down 84%
CFE - Down 56%
*MGX - Down 89%*

FMG - Down 78%


----------



## treefrog (26 October 2008)

gav said:


> er ummmmmm, almost everything is going down at the moment....
> 
> Lets compare to other Iron Ore stocks...
> 
> ...




that is exactly the point gav. when a stock is obviously, so very, very, obviously headed south, the options are to:
1) cover
2) short
3) exit
not a lot to be made from either of:
4) holding
5) buying
particularly when that stock is speculative - ie not paying a div, but hey, each to their own I guess.
I am not currently in FMG (either dirrection) having shorted after the uptrend broke. I post here attempting to provide some balance to bad advice that some may be influenced by.
As for the seasoned trader/investor, I do not for a second think they would take notice of much on here.


----------



## gav (26 October 2008)

Treefrog,

I dont hold FMG, but did in the past.  Held a bit too long, an expensive lesson.  Some of the posts flogging FMG here amaze me, why arent these ppl doing the same in the MGX thread?

I am all in cash atm.


----------



## chops_a_must (26 October 2008)

agro said:


> i couldn't careless about the chart, find me a chart that is trending up and i will buy stocks in that company..



MTS is, and CPU aint doing too badly.


gav said:


> Treefrog,
> 
> I dont hold FMG, but did in the past.  Held a bit too long, an expensive lesson.  Some of the posts flogging FMG here amaze me, why arent these ppl doing the same in the MGX thread?
> 
> I am all in cash atm.



Because you don't have an admitted ramper cheerleading it, in the thread?


----------



## nunthewiser (26 October 2008)

gav said:


> er ummmmmm, almost everything is going down at the moment....
> 
> Lets compare to other Iron Ore stocks...
> 
> ...




LOL u wanna know the funniest part ? MGX the only one actually turning a profit with a positive cashflow ...............weird aint it .........

oops sorry or pointing that out , its just your statistics had me lookin


----------



## nunthewiser (26 October 2008)

gav said:


> Treefrog,
> 
> I dont hold FMG, but did in the past.  Held a bit too long, an expensive lesson.  Some of the posts flogging FMG here amaze me, why arent these ppl doing the same in the MGX thread?
> 
> I am all in cash atm.




lol my turn to dig now darl 

 all 50% of it ............. anyways ya read my posts ............. go fmg for lovers of stock

ps the reason MGX thread aint so heated is perhaps ppl post facts there and research INSTEAD of some of the fairytale posts made here 80% of the time

blessya son


----------



## gav (26 October 2008)

Nun, my last post was not a "dig" at you or anyone else.  I was simply posting FACTS (which according to you, only make up 20% of this thread).

MGX may be cash flow positive, but how much profit have they lost due to the ridiculous hedging of $0.90AU.  What a silly risk to take that was, assuming the aussie dollar would remain over 90cents.  Meanwhile SP is down 90%, so their shareholders suffer.


----------



## Miner (27 October 2008)

jman2007 said:


> No worries Chops,
> 
> I don't think we have any met's lurking on ASF atm, this question may have to remain unanswered for tonight at least
> 
> ...




Folks who hold FMG and JMAN (who does not hold)

Have you ever seen the metallurgical analysis published by FMG for its current 45 55 or 100 MTPA mines ore body? 

Last time they published it was very high silica and alumina. I remember have posted in this thread about requirement of desanding plant

Still FMG a real mystery but unfortunately with share price slump Twiggy is not the richest person of Australia any more 

Cheers

Miner (Do hold_


----------



## jonojpsg (27 October 2008)

treefrog said:


> that is exactly the point gav. when a stock is obviously, so very, very, obviously headed south, the options are to:
> 1) cover
> 2) short
> 3) exit
> ...




I think we need to be careful here with our definitions - a speculative stock is generally accepted to be one that is exploring yet has not found anything yet, or that has found something but could find more, or that still needs to sort out partners, funding etc in order to proceed to production, eg SDL.

To say that FMG is speculative because it does not pay a dividend is misleading IMO


----------



## treefrog (27 October 2008)

jonojpsg said:


> I think we need to be careful here with our definitions - a speculative stock is generally accepted to be one that is exploring yet has not found anything yet, or that has found something but could find more, or that still needs to sort out partners, funding etc in order to proceed to production, eg SDL.
> 
> To say that FMG is speculative because it does not pay a dividend is misleading IMO




accept different definitions jono but have always held to the following from Business Encyclopedia: Stocks

"There are four main categories of common stock, each of which is best for a particular investment strategy and purpose.

Blue-chip stocks. High-grade, or blue-chip, stocks are issued by well-established corporations with many years of proven success, earnings growth, and consistent dividend payments. Blue-chip stocks tend to be relatively high priced and offer a relatively low-income yield. They are a relatively safe investment.
Income stocks. Income stocks pay a higher-than-average return on investment. They are generally issued by firms in stable businesses that have no need to reinvest a large percentage of profits each year.
Growth stocks. Issued by firms expected to grow rapidly during the years to come, growth stocks have a current income that is often low, since the company plows back most of its earnings into research and expansion. However, the value of the stock may rise quickly if the company performs up to expectations.
Speculative stocks. Speculative stocks are backed by no proven corporate track record or lengthy dividend history. Stocks issued by little-known companies or newly formed corporations, high-flying "glamour" stocks issued by companies in new business areas, and low-priced "penny stocks" may all be considered speculative stocks. As with any speculative investment, there is a possibility of tremendous profit””but a substantial risk of losing all as well."


----------



## enigmatic (27 October 2008)

Wouldn't those definitions place FMG in as a Growth stock then not spec.  The Cash for FMG did just increase $432million in the last Qtr.


----------



## agro (27 October 2008)

enigmatic said:


> Wouldn't those definitions place FMG in as a Growth stock then not spec.  The Cash for FMG did just increase $432million in the last Qtr.




correct but people don't know what the definition of speculative is

they tend to use it freely.. cash will increase next year too with further ramp up of production


----------



## treefrog (27 October 2008)

enigmatic said:


> Wouldn't those definitions place FMG in as a Growth stock then not spec.  The Cash for FMG did just increase $432million in the last Qtr.




no, because it does not meet this essential requirement to be a growth stock *yet**"Speculative stocks are backed by no proven corporate track record or lengthy dividend history*"
FMG is still spec because it has no div history at all.


----------



## agro (27 October 2008)

treefrog said:


> no, because it does not meet this essential requirement to be a growth stock *yet**"Speculative stocks are backed by no proven corporate track record or lengthy dividend history*"
> FMG is still spec because it has no div history at all.




tell me this...

was RIO and BHP once a speculative stock in that case?

i think you are forgetting 2008 has been the year FMG has shipped its first iron ore

it has done remarkably well... dividends will come


----------



## jonojpsg (27 October 2008)

treefrog said:


> accept different definitions jono but have always held to the following from Business Encyclopedia: Stocks
> 
> "There are four main categories of common stock, each of which is best for a particular investment strategy and purpose.
> 
> ...




According to these definitions, FMG is a growth stock then - current income is low due to self-funding expansion, expected to grow rapidly (40 - 50 - 160mtpa over the next five years), value may rise quickly (as evidenced up until June)


----------



## ROE (27 October 2008)

agro said:


> how come every time i log on to aussie stock forums i notice FMG in the top 10 threads on the main page?
> 
> just goes to show, regardless of whether you like it or hate it, there is heated debate about the company
> 
> ...




Because lot of people are now sitting at a paper loss and looking for way to calm their confidence 
Until China buying iron at crazy price again this stock is not going any where soon and if this prolong and at the rate they are burning money they may goes broke before the good time start again.


----------



## bluboy (27 October 2008)

*BHP, Rio Must Share Rail With Fortescue*
http://www.bloomberg.com/apps/news?pid=20601081&sid=ac5PBHxZZxv8&refer=australia

Woot!  Finally some very good news for FMG.
Can I start the rumour mill with:
- BHP (or BHP/RIO) will fight this as hard as they can.
- When the aboves fail, BHP just launches a hostile takeover for FMG.

--
BluBoy


----------



## Miner (27 October 2008)

jonojpsg said:


> According to these definitions, FMG is a growth stock then - current income is low due to self-funding expansion, expected to grow rapidly (40 - 50 - 160mtpa over the next five years), value may rise quickly (as evidenced up until June)




I hope you are not suggesting FMG to be one day as BHP or Rio. It will be too much expectation by any standard. FMG is okay for quick money earning but does not have the nerve to be a sustaining business like Rio or BHP. I could say so, because I have worked for all three and have seen their working very closely. Each has a plus point and minus point.

Rio is multi site and multi product  operation, strong board management and very structured. They have grown by acquiring Hamesley, Alcan and others organically. Market price was not too hot those days

So was BHP grown by acquisition and growth in an almost monopolistic situation.

Unfortuantely FMG is a late arrival, working against too many odds, single product, WA site only, primarily driven by Graeme Rowley and Andrew Forrest (other directors are just lucky to be there), very much unstructured, very high risk driven and of course Andrew has lot of guts unlike other directors in Rio and BHP. FMG has some high risk with few great managers but if they leave the organisation then there could be disaster. Whereas BHP or Rio even the MD leaves - there will be some ripple but no storm.


----------



## Trembling Hand (27 October 2008)

agro said:


> how come every time i log on to aussie stock forums i notice FMG in the top 10 threads on the main page?
> 
> just goes to show, regardless of whether you like it or hate it, there is heated debate about the company
> 
> ...






agro said:


> i couldn't careless about the chart, find me a chart that is trending up and i will buy stocks in that company..
> 
> if FMG being in the top 10 threads is not a predictor of popularity than can you explain to me what it is a predictor of?
> 
> ...




Actually Agro you got it all wrong here. Again bias unfounded by stats.

I ran a query on market cap to amount of post on ASF to find their 52 week return mid year.

I'm not at home at the moment and haven't access to my data but the basic finding of these stats were the companies that have higher posting per market cap than average were VERY crappy long term returns.

Bottom line stocks that people love are Sh!te investments. And I'm sure that they are even worse stats now. 



agro said:


> find me a chart that is trending up and i will buy stocks in that company..




LOL. In that case why the hell would you buy or hold one thats going down.


----------



## nunthewiser (27 October 2008)

Trembling Hand said:


> I ran a query on market cap to amount of post on ASF to find their 52 week return mid year.
> 
> I'm not at home at the moment and haven't access to my data but the basic finding of these stats were the companies that have higher posting per market cap than average were VERY crappy long term returns.
> 
> ...




thats bloody intresting actually ...... ive noticed things like this in other chats etc too ........ fms , ego , vcr many moons back etc etc etc the list is extensive

very intresting 

would luv to see your data if u ever get the time later

cheers


----------



## ROE (27 October 2008)

bluboy said:


> *BHP, Rio Must Share Rail With Fortescue*
> http://www.bloomberg.com/apps/news?pid=20601081&sid=ac5PBHxZZxv8&refer=australia
> 
> Woot!  Finally some very good news for FMG.
> ...




Here is another take
RIO and BHP address a while ago, anyone want their rail access need to fight them in court and in this environment they have cash to pro-long court case and make FMG burn even more money.... 

When you have +ve cash flow and incredible earning and you fight against someone who are burning cash, you can guess who will end up winning the fight .. and even if they lose they just charge FMG a nice chunk of money for their network access. 

People will then lose patient and switch to invest in BHP/RIO instead


----------



## prawn_86 (27 October 2008)

Trembling Hand said:


> Actually Agro you got it all wrong here. Again bias unfounded by stats.
> 
> I ran a query on market cap to amount of post on ASF to find their 52 week return mid year.
> 
> ...






nunthewiser said:


> thats bloody intresting actually ...... ive noticed things like this in other chats etc too ........ fms , ego , vcr many moons back etc etc etc the list is extensive
> 
> very intresting
> 
> ...




Def worth a new thread if/when you get the time TH. 

I would also be interested in the results


----------



## Frankhalo (27 October 2008)

Miner said:


> I hope you are not suggesting FMG to be one day as BHP or Rio. It will be too much expectation by any standard. FMG is okay for quick money earning but does not have the nerve to be a sustaining business like Rio or BHP. I could say so, because I have worked for all three and have seen their working very closely. Each has a plus point and minus point.
> 
> Rio is multi site and multi product  operation, strong board management and very structured. They have grown by acquiring Hamesley, Alcan and others organically. Market price was not too hot those days
> 
> ...




Good post Miner, but lets balance it up too. Firstly lets also not place FMG with some junior IO play with 1 to 3 mta output, FMG 9 million odd tons in 6 months of operation, 57 odd ship loads to 27 different mills including Baosteel.
Its already placed as a top mid tier IO play. I can not find one article or ann that points out cancelled shipments, payment defaults or rejection of IO in regards to *FMG operations*. Yes their output target is now 80mta and expansion to 160mta, given current market climate, is on hold ( this is well documented ). Yearly production target is ever increasing and product is being shipped, if anyone can disprove this please post a creditable link. I'm not questioning current market / global climate but FMG continues to forge ahead on all fronts regardless, again post it if you got it and prove me wrong.

PS. Not some article that states the world has turned to Kaka, one that clearly states FMG operations with the above mentioned points.....

Thankyou


----------



## Trembling Hand (27 October 2008)

Yep I will start a thread on the stats I found when I'm home.

Was interesting. To compare where the interest lies and is that an indication of past or future performance.


----------



## gav (27 October 2008)

bluboy said:


> *BHP, Rio Must Share Rail With Fortescue*
> http://www.bloomberg.com/apps/news?pid=20601081&sid=ac5PBHxZZxv8&refer=australia
> 
> Woot!  Finally some very good news for FMG.
> ...




I am positive I read somewhere that BHP would have to unload some of their Iron Ore projects if they were to successfully acquire RIO.  If this is the case, I doubt they would be allowed take over FMG..


----------



## gav (27 October 2008)

Trembling Hand said:


> Actually Agro you got it all wrong here. Again bias unfounded by stats.
> 
> I ran a query on market cap to amount of post on ASF to find their 52 week return mid year.
> 
> ...




T/H, Agro bought FMG for $2.95 and sold at just over $5.  Yes he sold due to margin call, but still made a good profit with FMG.  I dont see how this was a sh!te investment for him.  If he had've sold FMG at a 50% loss like I did, then yes it would have been a sh!te investment.  But then again, if I still held I'd be down even more.  I'd rather be holding FMG than any of the smaller Iron Ore companies right now..


----------



## Miner (28 October 2008)

Frankhalo said:


> Good post Miner, but lets balance it up too. Firstly lets also not place FMG with some junior IO play with 1 to 3 mta output, FMG 9 million odd tons in 6 months of operation, 57 odd ship loads to 27 different mills including Baosteel.
> Its already placed as a top mid tier IO play. I can not find one article or ann that points out cancelled shipments, payment defaults or rejection of IO in regards to *FMG operations*. Yes their output target is now 80mta and expansion to 160mta, given current market climate, is on hold ( this is well documented ). Yearly production target is ever increasing and product is being shipped, if anyone can disprove this please post a creditable link. I'm not questioning current market / global climate but FMG continues to forge ahead on all fronts regardless, again post it if you got it and prove me wrong.
> 
> PS. Not some article that states the world has turned to Kaka, one that clearly states FMG operations with the above mentioned points.....
> ...




Yes I agree Frank

My hands are itching to write but under confidentiality deed signed off with FMG I can not except quoting from press articles etc 

But one think please remember those stock analysts with good suit and tie travel with industrialists see those things which are meant to be shown, read the report which are given to them, and if the future is rosy then read the roses but can not read beyond them. 

It is better to use own research than relying on those analysts. If they were so smart why so many financial banks are getting bank rupt, why banks shares dived ? 

Similarly if I am so smart why my stock and super investment got down by  less than 50 percent? 

I think it is our inherent greed where idiots like me tend to defy logic, miss the obvious and rely on hunches than rational analysis. Some of us are intelligent and they become Warren Buffet or likewise. 

Sounding philosophical because there os hardly any silver line in the market to turn my nickel into silver


----------



## bluboy (28 October 2008)

gav said:


> I am positive I read somewhere that BHP would have to unload some of their Iron Ore projects if they were to successfully acquire RIO.  If this is the case, I doubt they would be allowed take over FMG..




Ahhh crap - Facts getting in the way of a good rumour!

http://www.busrep.co.za/index.php?fArticleId=4120136
*"Iron ore is the toughest obstacle since BHP and Rio are the second- and third-biggest iron ore producers respectively and would together command a 30 to 35 percent of the seaborne market, analysts said."*

This leaves the 'run it through the courts' idea still in play... Are there any positive outcomes?  I was looking forward to tomorrows action based on this news.  (Even the US is looking green due to the housing data released!)

EDIT: Whoops - Back into the red... Although, they have only had a 2% swing today... Very stable compared to recent history.


----------



## Miner (28 October 2008)

It is good sign to see FMG has shot up today against the market factoring the rail news.

They do need the rail desperately as there is probably no people to execute them (?)

I heard from one of my colleagues that 200 people from Worley Parsons  that are working on FMG expansion project has got a demobilisation notice effective on 7th of November 2008. (Demobilisation basically a protected contractual way of sacking for contracted people)

They just left a handful of people that are working on optimisation of mine site at Cloud Break and dredging boat at the port, the rest of the people are all sacked (all port, rail and Christmas Creek mine). WP promised them relocation.

Interesting news if it is true (PLEASE CHECK YOURSELF AND THIS COULD BE A RUMOUR TOO)

Disclosure : I do own FMG now and waiting for them to rot like pepper corn


----------



## Rhynoceros (28 October 2008)

Hey as obvious I'm new to this forum (so hi all) but have been lurking and reading for a fair while ,I have noticed that this stock continues to be pushed onto the front page.

I"m not sure if it is appropriate to post, what can only be rumors, but from reading another forum which posted what is claimed to be Citigroups recommendations on FMG as follows:

"Fortescue Metals Group Ltd (FMG.AX)
Site Visit – Commissioning Well Despite Mine
 Mine Constraint — Mine production constrained by overburden removal which
is behind schedule, but contractors on site to catch up. Production target
remains 45mtpa rate by year end and 55mtpa by end-1Q09. Production might
reach the 22mt target for 2008, but shipments likely to fall short. Other key
issue is getting moisture content down to 7% target, currently ~9%. Rail and
port infrastructure is operating well and waiting to be pushed by the mine.
 Expansion Plans — Current economic/credit crisis has slowed expansion
ambitions to what can be funded by cash flow. Revised plan is 80mtpa by end-
2009, 120mtpa by end-2010 and 160mtpa by end-2011. Still very ambitious
targets in an over-supplied market, but if credit and iron ore markets improve
in 2H09, expansions could be back on the fast-track. Capex A$2b+ to get to
80mtpa, additional A$2.5b to get to 120mtpa and another A$2.5b to reach
160mtpa, all excluding leased mine fleet.
 Iron Ore Market — In deteriorating iron ore market, we forecast a 20% price cut in
2009, but risk is to the downside given spot price collapse to US$67/t delivered
implies a 33% decline. Price risk is a threat to funding expansion capex from cash
flow, but could be largely offset by the A$ fall, which is proving an unexpected
kicker under current contract prices (realising A$120+/t v budget of A$95/t).
 Contracts — FMG has had only had one customer fail to take a shipment due to
inability to get a letter of credit, but this shipment was taken by another
customer. Whilst there are no sales into the spot market and off-take contracts
up to almost 100mtpa, the risk of customers delaying/cancelling shipments in a
rapidly softening market is a very real and significant risk.
FMG.AU (Y/E Jun) 2008A 2009E 2010E 2011E
Reported Profit (A$m) -2,516.2 1,519.7 1,594.6 1,838.3
Core Net Profit (A$m) -89.9 1,519.7 1,594.6 1,838.3
Core EPS (A ¢) -3.2 53.9 56.6 65.2
Core EPS Growth (%) -158.9 1,780.1 4.9 15.3
PE Ratio (x) -89.7 5.3 5.1 4.4
DPS (A ¢) 0.0 0.0 0.0 0.0
Dividend Yield (%) 0.0 0.0 0.0 0.0
Franking Rate (%) 0.0 0.0 0.0 0.0
P/Operating Cashflow (x) -22.0 4.2 3.7 3.1
ROE (%) na na 281.7 72.1
Source: Powered by dataCentral
Buy/High Risk 1H
Price (27 Oct 08) A$2.88
Target price A$4.50
Expected share price return 56.3%
Expected dividend yield 0.0%
Expected total return 56.3%
Market Cap A$8,085M
US$5,040M
Price Performance (RIC: FMG.AX, BB: FMG AU)
See Appendix A-1 for Analyst Certification and important disclosures.
Clarke Wilkins1"


The forum was HotCopper if these sort of post are inappropriate i apologise and will delete my post  .

For what its worth I do currently hold a small parcel of FMG.


----------



## treefrog (28 October 2008)

Miner said:


> It is good sign to see FMG has shot up today against the market factoring the rail news.
> 
> They do need the rail desperately as there is probably no people to execute them (?)
> 
> ...




collegue advises he rang FMG and they pretty much confirmed saying it is "precautionary" and that 45mtpa target for eoy still on track


----------



## adobee (28 October 2008)

Warren Buffet II said:


> We need to love this kind of stupidity, this is the kind of people that help others to get out of bad businesses and save some of their capital.
> 
> Keep buying as much as you can so the poor shareholders can sell to you as much as they can.
> 
> ...




Lets see.. you and the other 'poor shareholders' you speak off are keen as hell when the price is $13, the market is hot and the market cap is around $40,000 miliion.. I am buying their shares off them at $2.80 when the market cap for the same company is around $8,000million and all sentiment is doom and gloom..  I am buying at a 80% discount and you are suggesting that I am the one who is going to loose my money..  Because you have just taken a crazy lose and think the world is going to end dont hate on the person who has balls to buy when everyone else is in panic.. Perhaps check out what your mate Warren Buffet 1 is doing...


----------



## CapnBirdseye (28 October 2008)

Miner said:


> It is good sign to see FMG has shot up today against the market factoring the rail news.
> 
> They do need the rail desperately as there is probably no people to execute them (?)
> 
> ...




This probably has more to do with a design handover than any cancellation of projects.  I'm fairly certain that this phase of the the expansion is going ahead, em and thats about all i can say.


----------



## Miner (28 October 2008)

CapnBirdseye said:


> This probably has more to do with a design handover than any cancellation of projects.  I'm fairly certain that this phase of the the expansion is going ahead, em and thats about all i can say.




 Thanks my friend
Just watch WOR Worley Parsons share price if it tells you any story here to connect with FMG precautionary measures


----------



## agro (28 October 2008)

http://www.asx.com.au/asxpdf/20081028/pdf/31d6dsy4g4s4q4.pdf

Call for Rail Co-Operation Agreement

if all three can be happy then its good


----------



## CoffeeKing (28 October 2008)

Posted on MSN 1840 hrs

defers iron ore expansion spending

http://money.ninemsn.com.au/article.aspx?id=656578


----------



## renim (28 October 2008)

FMG's delay by one year is also on Reuters
nb WP share price vs Asx index shown below
i suppose this means that cash is king and fmg wants some now.
still 55mtpa does place fmg as a small fish in bigboys ring as far as IO is concerned.  (Vale, Bhp Tinto, FMG & Kumba)


----------



## Miner (28 October 2008)

CoffeeKing said:


> Posted on MSN 1840 hrs
> 
> defers iron ore expansion spending
> 
> http://money.ninemsn.com.au/article.aspx?id=656578




thanks for posting.
I was at least ahead of MSN broadcast.
Just watch tomorrow FMG price - either will rise drastically or fall depends on market expectation.


----------



## sanj (28 October 2008)

I think its a smart move to hold out on expansion in this current period. By holding cash will allow them to weather the economic storm with a little more ease. As a current shareholder I would prefer this outcome rather than having expansion go ahead only to find it very difficult to:

A) Sell it
B) Get a competitive price for the goods
C) Over supply the market giving the Chinese more bargining power
D) produce more Negative outflow earnings reports due to expansion


----------



## Frankhalo (29 October 2008)

renim said:


> FMG's delay by one year is also on Reuters
> nb WP share price vs Asx index shown below
> i suppose this means that cash is king and fmg wants some now.
> still 55mtpa does place fmg as a small fish in bigboys ring as far as IO is concerned.  (Vale, Bhp Tinto, FMG & Kumba)




The income generated from current and targeted 55mtpa contains a hell of alot of zeros. From a *May 08 start up * to be in the company of the above mentioned speaks louder than words on the subject of FMG's achievements *so far*. July 09 figures will tell the full story.


----------



## Sharks37 (29 October 2008)

Miner said:


> thanks for posting.
> 
> Just watch tomorrow FMG price - either will rise drastically or fall depends on market expectation.




Thanks for the very insightful advice miner, I'll look forward to seeing the FMG price either rise or fall tomorrow...


----------



## treefrog (30 October 2008)

Sharks37 said:


> Thanks for the very insightful advice miner, I'll look forward to seeing the FMG price either rise or fall tomorrow...




sharks, the message I got from miner's post was more an indication of the market expectations following:
recent FMG trip to china to determine feel for china market followed by FMG announcing pruning of expansion timetable
wonder what the 'indications' were??


----------



## SenTineL (30 October 2008)

Did everyone notice the price movement has been very small either way in the last 8 days?

Do you think this signals a bit of stability in regards to current SP? ie it shouldn't really go below $2.50?

With the reserve confident Australia is going to avoid a recession, China slowing but not stalling, ASX in some positive momentum I am optimistic.


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## Frankhalo (2 November 2008)

*From other poster on a FMG thread, any accountants out there ?*

FMG expects to produce a conservative 55mt this year with an average grade of 60% fe.

the current benchmark price is $144 USD per tonne.

lets assume that the benchmark price falls by 25%, ie to $108 USD per tonne.

lets assume the long run AUD/USD rate is $0.75.

lets assume that FMG's debt of $3b AUD is charged 10% pa in int.

lets also assume that all FMG's customers dont increase or decrease consumption and that they all pay their bills.

one last assumption, assume that FMG's cost per tonne is $25 AUD.

so they will produce 55mt x 60% x {($108/$0.75)-$25} = 33mt x $119 AUD per tonne = $3.927b AUD in profit from the ore sales.

less the int of $3b x 10% = $300m AUD.

Therefore FMG should still make $3.927b - $300m = $3.5b AUD.

for FMG's price to fall further the fe price will have to really collapse. remember that the spot price was $200 USD per tonne last year, so the fall in benchmark prices wont be as drastic as the spot market. i think 25% is quite reasonable.

so $3.5b of EBIT x 4 = $13.4b. If FMG is trading around this level then it quite attractive, if the benchmark price falls further than 25% or the AUD goes back over $0.75 then the price will weaknen, BHP is still trading on a forward PE of 6x.

so i suggest all you doom and gloomers out there look at the fundamentals first, then try and work out a fair entry level.


----------



## skyQuake (2 November 2008)

Spot prices are around $70 US at the moment which tends to lead the Long term contract prices. RIO is selling at spot despite the massive price difference to the contract.

I would also assume several of FMG's smaller customers would be very strained at the moment. Demand is slacking off noticable.

Alternately, I would suspect cost per tonne to take a drop with falling oil prices, and the possibility of winning the rail dispute.


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## Miner (2 November 2008)

Frankhalo said:


> *From other poster on a FMG thread, any accountants out there ?*
> 
> FMG expects to produce a conservative 55mt this year with an average grade of 60% fe.
> 
> ...




Fantastic set of assumptions Frankhalo

YOu might have noticed your assumption on price of $108 per ton is already discounted on $70 per ton spot price.

Few things you forgot to assume:

You have assumed that the 55 MTPA will be achieved in the full financial year of 2008-09. What about plant availability and utilisation. 

WIthout having any creative accounting I am ready to put my only two baxxlls against the surface miner to be crushed  if with current rate the annual producton will be even 50 MTPA at the end of this financial year. I am not a gloom or doom man but any one with some  experience in Operations and Maintenance and understanding of ramping of a new plant will understand what I said


Look do not get me wrong I am still holding FMG and purchased at a very high price. My heart tells me that the FMG wil rise beyond $7 

But I can not distort reality of FMG strength and possibilities just because my head does not in agreement with my heart

Please revisit this site with your calculated stuff and what percentage of assumptions became true in next 12 months. Until then let us enjoy the falling market from the heavenly bliss


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## nunthewiser (2 November 2008)

Miner said:


> Fantastic set of assumptions Frankhalo
> 
> YOu might have noticed your assumption on price of $108 per ton is already discounted on $70 per ton spot price.
> 
> ...




Thankyou Miner for an unbiased post from a holder. ya know what they say about assumption .....makes an ass outa U and umption 

cheers


----------



## gav (2 November 2008)

Wonder if this will affect FMG's share price tomorrow...

From businessday.com.au

Mine giant slashes production
Alan Clendenning 
November 2, 2008 

THE world's top iron ore producer will cut its annual production by 30 million tonnes, as demand for steel crumbles because of the global economic crisis. 

A spokesman for Brazil's Companhia Vale do Rio Doce SA said yesterday that steel companies across the globe have cut production on average by 20 per cent. Chief executive Roger Agnelli said some have slashed production by as much as 40 per cent. 

Stalling demand for iron, the world's most common metal, used to make everything from sewing needles to oil tankers, reflects a broad economic slowdown. 

Vale predicts a 9 per cent reduction of its 2008 annual production forecast of 325 million tonnes of iron ore, the raw ingredient for making steel. 

The world's second-largest miner after BHP Billiton, Vale also will reduce output of nickel and aluminium.

Mr Agnelli said steel demand may start to pick up in the second quarter of next year, but that no one knows for sure because the global credit crunch is so severe that it has crushed sales of everything from cars to steel beams. 

"There are some parts of the world where people don't want to buy anything," Mr Agnelli said. "Nothing, nothing, nothing." 

Vale said today it will shut some mines in the Brazilian state of Minas Gerais. 

Employees will be sent home with pay. Vale did not say how long the shutdowns will last. 

The company will keep a ferroalloy plant in France idle until April and a plant in Norway will extend its furnace maintenance until June. The two closures will result in a production cut of 600,000 tonnes of manganese ore and 90,000 tonnes of ferroalloy. 

The global slowdown has led to a drop in demand for base metals such as nickel and aluminum, reflected in declining prices. 


Vale's net profit for the July to September period hit $US4.8 billion ($7.2 billion), up from $US2.9 billion in the third quarter of last year.


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## Frankhalo (2 November 2008)

Miner said:


> Fantastic set of assumptions Frankhalo
> 
> YOu might have noticed your assumption on price of $108 per ton is already discounted on $70 per ton spot price.
> 
> ...




Just wanted some feed back on this post Miner, yes alot of assumptions, till July 09 comes around the true figures will not be known. My understanding is that FMG do not currently sell on the spot market ( correct me if I'm wrong ) but rather agreed on contracts. Again the Simple truth is till we get a full financial year of trade with abit of global crisis added to the mix a full accurate figure is still a long way off, but I dont need to tell you that guys.

Regards

Frank


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## Sharks37 (2 November 2008)

All well and good to quote what Vale are doing, but one thing FMG have demonstrated to date is they are very switched on and they are cleverly marketing themselves as the 4th seaborne supplier of IO to the chinese market and I think this will suit the chinese. So just because Vale's output is cut doesn't mean a corresponding loss for FMG - they could well be positioned to take some of Vale's market share.

I've got a position in FMG and bought in at higher prices than current levels, but I don't think my comments above are simply wishful thinking.


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## Garpal Gumnut (2 November 2008)

SenTineL said:


> Did everyone notice the price movement has been very small either way in the last 8 days?
> 
> Do you think this signals a bit of stability in regards to current SP? ie it shouldn't really go below $2.50?
> 
> With the reserve confident Australia is going to avoid a recession, China slowing but not stalling, ASX in some positive momentum I am optimistic.




I do not hold FMG but am looking at it.

The price action seems eeringly familiar to Aug 08, apart from the recent spike up and down.

I'll wait.

I may miss it, but I'll wait.

gg


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## Sharks37 (2 November 2008)

GG the price movement doesn't look that similar at all if you take into account the earlier part of the August plateau which is actually an extended slide, whereas in October it has completely levelled after a steep fall. As they say in the classics, only time will tell...


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## gav (3 November 2008)

Sharks37 said:


> All well and good to quote what Vale are doing, but one thing FMG have demonstrated to date is they are very switched on and they are cleverly marketing themselves as the 4th seaborne supplier of IO to the chinese market and I think this will suit the chinese. So just because Vale's output is cut doesn't mean a corresponding loss for FMG - they could well be positioned to take some of Vale's market share.
> 
> I've got a position in FMG and bought in at higher prices than current levels, but I don't think my comments above are simply wishful thinking.




Where did I say that this would correspond to a loss for FMG?  I merely stated that I wonder if it will affect FMG's SP tomorrow (now today).


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## Sharks37 (3 November 2008)

gav said:


> Where did I say that this would correspond to a loss for FMG?  I merely stated that I wonder if it will affect FMG's SP tomorrow (now today).




Sorry Gav I wrote that badly. You are right you (or more correctly the article) didn't say a loss for FMG but the implication from Vale's statements was that the whole market would be having to take a cut in volume because they were. I was trying to point out that each player is facing different circumstances and just because Vale was cutting production (rather than cutting price as I understand it) that doesn't mean other players like FMG will have to, as they could be taking market share at Vale's expense.


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## SenTineL (3 November 2008)

Garpal Gumnut said:


> I do not hold FMG but am looking at it.
> 
> The price action seems eeringly familiar to Aug 08, apart from the recent spike up and down.
> 
> ...




Big lesson that's been around for a long time - past performance is not indicative of future performance.

Even in this thread from memory there people saying things to the effect of "once the SP hits all time high it goes down then hits another all time high" - that proved to be BS along with all other predictions as in regard to future SP


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## gav (4 November 2008)

I just noticed that three directors purchased shares yesterday afternoon.  Maybe they know something we dont?


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## treefrog (4 November 2008)

gav said:


> I just noticed that three directors purchased shares yesterday afternoon.  Maybe they know something we dont?




not their choice gav.
the listed nature of change for all 3 directors was purchase by independent trustee for their share plan so carries little if any weight


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## MichaelD (4 November 2008)

Frankhalo said:


> so i suggest all you doom and gloomers out there look at the fundamentals first, then try and work out a fair entry level.




How about $6.50?

That was a fair entry level put forward 6 months ago.

Of course 6 months ago FMG was trading at $12, so buying $6.50 must have been a bargain, right? After all, FMG ALWAYS goes up after dips, doesn't it? (Except when it doesn't).

$6.50 doesn't seem like much of a bargain any more now that FMG is trading at $2.90.


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## prawn_86 (4 November 2008)

MichaelD said:


> How about $6.50?
> 
> That was a fair entry level put forward 6 months ago.
> 
> ...




It was me that put that level forward, and you'll note it wasnt exact, more of a 'rough' figure.

FA can be dynamic too, and with the markets the way they were the last few months i wouldnt (and hadnt until last week) have bought anything.

Dynamic FA affects of that valuation would include the cooling of IO demand, the expected price drop for IO and the fact that there are now questions surrounding the speed of expansion of FMG, therefore their future earnings.

Also note that the $6.50 valuation was based on very rough (1 min) calculations without any detail involved. 

Not defending my analysis, just saying that FA is as dynamic, if not more so, than TA.


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## agro (5 November 2008)

14 million volume today

if one goes through the course of sales you find at least 2-3 orders of 500,000 ($1 million) and 200,000

big buyers moving in or what?

even though its trending side ways?


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## prawn_86 (5 November 2008)

agro said:


> big buyers moving in or what?
> 
> even though its trending side ways?




Perhaps it's big sellers moving in...

There is always a buy and a sell for every trade so it could be either, it's impossible to tell


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## SenTineL (5 November 2008)

Still a low % move up today, even BHP put on a higher % than FMG, which was unusual a few months back, certainly seems the volatility is easing off


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## Warren Buffet II (8 November 2008)

FMG is a dead company walking.

Prices keep dropping fast and soon they will get very close to the company costs.

I would think FMG will become a uni study company on how an entrepenuer did not have enough time to succeed with a company before the recession hit him hard.

Hellloo? is anyone in here? This forum looks deserted, just like an abandoned mine.

WBII


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## Sean K (8 November 2008)

Warren Buffet II said:


> FMG is a dead company walking.
> 
> Prices keep dropping fast and soon they will get very close to the company costs.
> 
> ...



This all a temporary set back for the IO industry imo. It may take some time, but the rise of Chindia is only part way into the game. Maybe the first day of a test match. Once the recession/depression sorts itself out IO and commods will be back in. So, it's just a matter of time. 2-10 years? Of course, some companies will fail, but it's hard to see FMG totally collapsing, from my armchair. Of course, I hardly know the details of this company, just a pedestrain passing by. 

Where is everyone? They're in bed WB. It's 3.30 am on Sat morning!!


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## chops_a_must (8 November 2008)

kennas said:


> This all a temporary set back for the IO industry imo. It may take some time, but the rise of Chindia is only part way into the game. Maybe the first day of a test match. Once the recession/depression sorts itself out IO and commods will be back in. So, it's just a matter of time. 2-10 years? Of course, some companies will fail, but it's hard to see FMG totally collapsing, from my armchair. Of course, I hardly know the details of this company, just a pedestrain passing by.
> 
> Where is everyone? They're in bed WB. It's 3.30 am on Sat morning!!




Given the collapse of the automobile industry worldwide, I just can't see how IO prices are going to recover anytime soon.

In fact, I would go as far as to say that IO prices are going to fall further than others, given that most resources are already bumping along at production cost, where IO still has some way to go to get there.


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## Sean K (8 November 2008)

chops_a_must said:


> Given the collapse of the automobile industry worldwide, I just can't see how IO prices are going to recover anytime soon.
> 
> In fact, I would go as far as to say that IO prices are going to fall further than others, given that most resources are already bumping along at production cost, where IO still has some way to go to get there.



I agree they probably will in the short term.

I'm guessing world recovery anywhere between 2-10 years..

So, you think their entire program becomes uneconomical? 

I'm trying to work out their assets and it seems in their Ann Report they had $200m in the bank, but $6.8b in liabilities.

Hmmmmm...


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## sinner (8 November 2008)

kennas said:


> Where is everyone? They're in bed WB. It's 3.30 am on Sat morning!!




Some of us manage infrastructure 7pm-7am on a Friday night/Sat morning so you can sleep sound. You can show your gratitude by keeping up the posts so we have something to read while making sure all those little LEDs stay green


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## chops_a_must (8 November 2008)

kennas said:


> I agree they probably will in the short term.
> 
> I'm guessing world recovery anywhere between 2-10 years..
> 
> ...



That's the problem really though isn't it?

If prices bump into their production costs, then their debt becomes a massive issue.

At this stage, for me, it wont be time to buy until mining companies start going bust. And at least then, you'll know which ones are going to make it.

Not saying FMG will or wont... just saying...  But obviously because of their stage as a company, their risks are much higher in survivability terms.


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## bloomy88 (8 November 2008)

chops_a_must said:


> That's the problem really though isn't it?
> 
> If prices bump into their production costs, then their debt becomes a massive issue.
> 
> ...




Yeah i totally agree, unfortunately for FMG they hust get the excess demand from bhp and rio. also in their last contract with china they stiched them up on the shipment price, i think 4 times more than it should have been. Now china is making them deliver IO in the next contract for free.
I dont think it's a great idea to piss off china, especially when they will lead the demand for IO as we emerge from this recession...


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## nunthewiser (8 November 2008)

Yes they do have a HUGE amount of debt dont they , pretty sure a chunk of that due to be paid shortly too off the top of my head , its in research. what happens when its FMG turn to be put thru the wash by them crafty chess players out there ? honestly u guys really dont think fmg gunna be the only iron ore co to continue along as normal when the REAL players out there , ie vale etc are gettin the thumbscrews on them ..............i dont think so.....personally think its just yet another plaything for the m,aster chess players out there and they gunna take what they want for the price they want and some here will just have to grin and bear it.
anyways , not here to be negative nor downramp cos that will be how its viewed by some of the more sensitive souls , i am merely stating my thoughts on a debt ridden company in a controlling buyers market

hey prolly got it all wrong and the chinese major holders / ore buyers are all innocent until proven guilty and there just as upset on the situation as all iron ore company stockholders...........

blessem

great stock to trade


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## Garpal Gumnut (8 November 2008)

Sorry to rain your parade guys, but unless someone makes a t/o bid this stock is heading lower.

Lower lows, lower highs, 

Breaking down through support levels.

gg


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## BrownHornet (9 November 2008)

Very much fun watching the comments in the forum. I love FMG as it so nicely fits into a beautiful bubble mania stock. It will head further south and I have some sympathy for those that have not done their research on the stock and keep jumping on board with lower prices as they perceive value. ...

Dont be fooled by bear rally, although good value for the trader to get in and out, this is heading further south. Where? Well I was thinking $2.50 but not far from that and I see a lot more downside through next year. 

The real issue now would be when global markets start to recover in a few years I think we might find that Chindia will have a lot more control over prices. IO companies will be price takers. US will likely take many many years to recover. Japan still wailing. World order has changed. Bernake has to stop prints $US at some point.


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## agro (9 November 2008)

just look at the graph,

the last time the 7day MA crossed the 21 day MA was back in July 08!

surly its over due to cross again or potential bull run 

the 7day is so close to convergence


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## Miner (9 November 2008)

Garpal Gumnut said:


> Sorry to rain your parade guys, but unless someone makes a t/o bid this stock is heading lower.
> 
> Lower lows, lower highs,
> 
> ...





Dear Garpal

When I see my heart it says Garpal should be wrong

When I read my head I am fear that Garpal could be absolutely right

Still there are few 'believers' of FMG who are thinking FMG will make a turn around and posting accordingly. THere are few rampers who are posting selectively to keep the sentiment (heart again) up on FMG. 

With all stories coming from China and other sides of the world, I have to look for Lotto Win to get even my money back on FMG 

Cheers

Disclosure : I am still holding FMG not with a great hope but because I am scared to get rid of my paper script with the name FMG now  worth pepper corn


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## wildthing (9 November 2008)

Hi All,
While I agree FMG doesnt look good ....here is another possiblity...other than down to $1.00
Price on Friday bounced off the last credible support value of $2.46. It bounced here a couple of times in Mid August 2007....and went on to $13.00 high! $2.40 was resistance in April earlier that year and turned into support once broken.
Also with the gap down on friday and the small price range ...a doji [think that's what u call it] has been formed I think.
Now this sets up the possibility if a gap up happens tomorrow of a Bullish Reversal/Morning star? Can it go up on from here?
This possibility in current times is probably very much wishful thinking....but a possibility surely....for those TA's and those like me who are just trying to learn in this difficult times.
One things for real, we will have a better idea tomorrow.
And yes I am holding and just wish I hadnt been greedy hoping for a rebond and deviating from using stops. Guilty as stated, but hope to learn by mistake.
Cheers


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## agro (10 November 2008)

i am getting sick of FMG... and am considering selling at 2.50 and getting out all together

this is being a dog of a stock and is just heading in one direction - south

so much for an up day 

also with the volume 9m i am starting to beleive a substantial holder is trickling the stocks for sales

look at course of sales for an indication!

seems like there is an unlimited amount of selling!!  dog


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## prawn_86 (10 November 2008)

agro said:


> i am getting sick of FMG... and am considering selling at 2.50 and getting out all together
> 
> this is being a dog of a stock and is just heading in one direction - south
> 
> ...




Wow, this post is either dripping with sarcasm, or FMGs main supporter here has had a huge change of heart. 

What happened to the long term fundamentals? Why is it suddenly a dog overnight?

Methinks Agro needs to be less emotionally invested in his stocks


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## agro (10 November 2008)

out at 2.52 

its just getting smashed - maybe twiggy is selling who knows?!


----------



## YELNATS (10 November 2008)

agro said:


> out at 2.52
> 
> its just getting smashed - maybe twiggy is selling who knows?!




Capitulation, the last of the sellers, time for a turnaround? 

I doubt twiggy would abandon ship at these prices.


----------



## agro (10 November 2008)

YELNATS said:


> Capitulation, the last of the sellers, time for a turnaround?
> 
> I doubt twiggy would abandon ship at these prices.




well the selling seems to be endless - like when is it going to stop situation?!

thats why i think a substantial holder is selling ,,

also notice whenever their is a purchase or sell, its in huge quantities 

i am watching course of sales


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## oldblue (10 November 2008)

Quite so!

Someone, or someones, are buying in big quantities, matching the big sellers.
The market for iron ore is very fragile at present and all companies, particularly the newer producers such as FMG are being hammered. Don't try to read too much more than that into the equation.


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## agro (10 November 2008)

oldblue said:


> Quite so!
> 
> Someone, or someones, are buying in big quantities, matching the big sellers.
> The market for iron ore is very fragile at present and all companies, particularly the newer producers such as FMG are being hammered. Don't try to read too much more than that into the equation.




also...

i notice huge buyers, e.g. 500,000s are already lined up at a lower prices..

is this any indication of whats to come

i bet someone knows something


----------



## wildthing (10 November 2008)

This from Compare Shares today.

News
Rio, Fortescue cut iron ore output
 AAP

10/11/2008 2:03pm  Email to a friend  Print article  


Iron ore producers Rio Tinto Ltd and Fortescue Metals Group Ltd have each cut annual production of the steel making commodity by ten per cent after a slowdown in Chinese demand.

The move mirrors a decision last month by the world's largest iron ore producer, Brazil's Vale, to reduce output by 30 million tonnes a year in response to softening demand.

Rio Tinto chief executive Tom Albanese said the reduction from its Western Australia mines was to align production with revised customer delivery requirements after Chinese demand dropped in this quarter.

"We believe this will be a short, sharp slowdown in China, with demand rebounding over the course of 2009, as the fundamentals of Chinese economic growth remain sound," Mr Albanese said in a statement.

The Reserve Bank of Australia (RBA) said on Monday China's annual growth rate had dropped back to a "still-rapid" nine per cent in the year to the end of September, reflecting measures to restrain domestic demand.

The central bank also said in its monetary policy statement released Monday that it was increasingly clear the global commodity price cycle had peaked and that a price fall was expected in the months ahead.

Rio Tinto has revised its iron ore shipments for calendar 2008 to between 170 million tonnes and 175 million tonnes, down from 190 million tonnes and 195 million tonnes.

Steel companies worldwide have initiated a significant cut to production amid the global financial crisis leading to a weakening demand for iron ore, a key steel-making ingredient.

Fortescue, Australia's third largest iron ore producer, has brought forward a planned shutdown to upgrade port and mine processing facilities, reducing calendar 2008 output by 2 million tonnes or 10 per cent.

The company last month temporarily deferred plans to expand its operation in WA to 80 million tonnes per annum, but expects to ramp-up the mine to an annual capacity of 55 million tonnes by the end of March, 2009, "subject to market conditions".

BHP Billiton Ltd, the world's third largest iron ore producer, said there was no plans to cut output from its Pilbara operations in WA at this stage.

"We have no plans to cut production," BHP Billiton spokesman Peter Ogden told AAP.

But an analysts said cuts could still occur.

"I think you'll definitely see BHP come out with some news. They'll have to now," DJ Carmichael analyst James Wilson told AAP.

"There is an oversupply (of iron ore) in the Asian ports at the moment and there are no surprises these guys are cutting production."

BHP Billiton is expected to produce about 137 million tonnes of iron ore from its WA mines in 2008/09, up from 122 million tonnes in the previous corresponding period.

Mount Gibson Iron Ltd has been forced to sell its iron ore at a significant discount and will cut a third of its workforce after some of its customers defaulted on binding offtake agreements last month.

Rio Tinto spokesman Gervase Greene said the company did not expect to lay-off any workers as a result of the production cut.

Shares in Rio Tinto had gained $5.79 to $78.06 by 1400 AEDT, BHP Billiton had put on $2.04 to $29.97, Fortescue Metals had added three cents to $2.63, while Mt Gibson had picked up 3.5 to 41.5 cents.


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## oldblue (10 November 2008)

agro said:


> also...
> 
> i notice huge buyers, e.g. 500,000s are already lined up at a lower prices..
> 
> ...




Probably no more than that someone thinks that FMG has been oversold at these levels and is now prepared to take a position.
The market works that way!


----------



## impala_group (10 November 2008)

I think if anyone hasnt pulled out so far....then there is no reason to rush out assuming you accumulated at higher prices than current.

Its harsh to judge FMG or any other company given the market conditions currently!! My suggestion is that if you think according to YR you need to pull out...do so nicely without the smear campaign. If you are geared, by any means pay up abit of that and stay safe.

I'm holding after leveraging and quietly buying back at these low prices. I mean if you paid $10/share at some stage based on some research you did a while back....why not revise it and find your entry/exit points. The world is always in need of iron and an economic down turn isnt going to extinguish this need, but thats not to say some companies wont be "extinguished" so to speak.


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## SenTineL (10 November 2008)

at Agro

So by your thinking BHP must be a dog too - down 50% from it's highs in May
Capitulation alright.

Someone is buying all these shares remember


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## agro (10 November 2008)

SenTineL said:


> at Agro
> 
> So by your thinking BHP must be a dog too - down 50% from it's highs in May
> Capitulation alright.
> ...




After capitulation selling, it is thought that there are great bargains to be had. The belief is that everyone who wants to get out of a stock, for any reason (including forced selling due to margin calls), has sold. The price should then, theoretically, reverse or bounce off the lows. In other words, some investors believe that true capitulation is the sign of a bottom. 


I will keep it on my watch list - they have maintaince to do but I spose better to do it now when demand is down then in march when it recovers.


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## M34N (10 November 2008)

agro said:


> *Fortescue shareholder sells $226 mln stake -source
> *
> SYDNEY, July 31 (Reuters) - A large shareholder in Australian iron ore miner Fortescue Metals Group (FMG.AX: Quote, Profile, Research) sold A$240 million ($226 million) worth of his stake to local and overseas investors, a source familiar with the deal said on Thursday.
> 
> ...






diliff said:


> Sucks to be him. He's down 20 million today alone... but hey, who knows what tomorrow may bring.. Is the recent rise looking strong, or is it just a blip?






roland said:


> What a goose, may account for a few of the shares I got and sold off later at a profit. My remaining parcels are running a loss - I'm down around 11% but not at all worried.
> 
> Just love the up beat announcements FMG put out - great marketing!






renim said:


> we look at the guy selling at $8 per share instead of $12,  but the news site says he bought in at the equivalent of 1 to 3 cents per share,  he was the example of an investor who made a billion on fmg
> and he still drives his old honda.




I had to dig up these old quotes for you guys especially, remember reading it and thinking I want to look back in a few months and see how FMG goes. All the people lambasting this investor for selling and missing out on $20 million, but suddenly that $8 doesn't look so bad.

Moral of the story? Good old Warren Buffett said it best; "Be fearful when others are greedy, and be greedy when others are fearful."


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## skyQuake (10 November 2008)

Why thank you, it was a hard choice to make on the day, but selling at $8 was too attractive to pass :


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## M34N (10 November 2008)

skyQuake said:


> Why thank you, it was a hard choice to make on the day, but selling at $8 was too attractive to pass :




Glory hog :

BTW, I feel for you agro, what price did you buy in at? It wasn't substantial I hope.


----------



## SenTineL (10 November 2008)

sorry to harp on about this agro but why would you sell then still want to buy back in at around the price you sold? 

or will you look for an entry way below your sold price?

how much will you have to gain if you buy in again to make up the difference that you lost?

also you didn't answer about BHP. what makes FMG now a 'dog' compared from when you bought? apart from the stock market crach which has pushed all stocks down


----------



## joeyjoejoe (11 November 2008)

My FMG story.

bought 1000 @ 6.0
Sold 1000 @ 7.0

bought 1000 @ 8.89
sold 1000 @ 8.51

bought 650 @ 4.75
sold 650 @ 2.85


(my next order is 1000 @ 2.0)


----------



## skyQuake (11 November 2008)

joeyjoejoe said:


> My FMG story.
> 
> bought 1000 @ 6.0
> Sold 1000 @ 7.0
> ...




Hey... that sounds like revenge trading; quit while you're ahead. Apologies if its not.    
Good luck.


----------



## Nesa (11 November 2008)

Rio Tinto, Fortescue cut iron ore output

THE ASSOCIATED PRESS

MELBOURNE, Australia -- Australian iron ore miners Rio Tinto Ltd. and Fortescue Metals Group Ltd. said Monday they have each cut their annual production by 10 percent due to weakening demand from China.

The move follows a decision last month by Brazil's Vale, the world's largest iron ore producer, to cut its annual ore production by 30 million metric tons as demand for steel crumbles because of the global economic crisis. BHP Billiton Ltd., the world's third-largest iron ore producer, said it had no plans to cut production ........


----------



## Warren Buffet II (11 November 2008)

Nesa said:


> Rio Tinto, Fortescue cut iron ore output
> 
> THE ASSOCIATED PRESS
> 
> ...




RIO and VALE have the balls to name things by their name, cut production. Instead FMG comes with a nice word to avoid bad press, as I said before, FMG is a death mine walking (DMW). 

This is actually a good news for those of us tired of hearing the same blafing about the 80 mtp and all that crap. This sets the scene, 2008 below 40mtp and 2009 below 50mtp as simple as that. Reaffirm my previous post, I believe they will give a huge loss around 2blns.

Can RIO or BHP buy this for 2blns? That is too expensive, who wants to get more production if you are cut it off? 

WBII


----------



## njc.corp (11 November 2008)

Warren Buffet II said:


> RIO and VALE have the balls to name things by their name, cut production. Instead FMG comes with a nice word to avoid bad press, as I said before, FMG is a death mine walking (DMW).
> 
> This is actually a good news for those of us tired of hearing the same blafing about the 80 mtp and all that crap. This sets the scene, 2008 below 40mtp and 2009 below 50mtp as simple as that. Reaffirm my previous post, I believe they will give a huge loss around 2blns.
> 
> ...




some very good points ^^^^

i would think bhp could  and would afford to buy fmg-whats the chances=well anything goes in this market-

they were going or wanted to pay 100 billion+ for rio-but rio just does more then iron ore so thats a different story all together

could be a cheap investment---

its not looking  good for fmg today

happy trading guy's


----------



## DB008 (11 November 2008)

l can't believe how low it is going. Looks like it might be heading south of the $2.00 mark soon. Another rough night on Wall St and it's a strong possibility.


----------



## njc.corp (11 November 2008)

DB008 said:


> l can't believe how low it is going. Looks like it might be heading south of the $2.00 mark soon. Another rough night on Wall St and it's a strong possibility.




i am lead to think that its a buyers market and people  thing it might be worth less-

i know this as my business as turn into  a buyers market of them telling me what my stuff is worth-wether thats right or wrong is a different story all-together-

i am not happy but who is in this market place-

if u not in fmg i supposed u can have a better look from the outside-


----------



## YELNATS (11 November 2008)

agro said:


> I will keep it on my watch list - they have maintaince to do but I spose better to do it now when demand is down then in march when it recovers.




Well Agro, here's your chance. Not a bad call to sell at $2.52. Today you could have bought back in at $2.26 and picked up 11% extra at no cost, except brokerage. Unless you expect it to go much lower, that is.


----------



## skyQuake (11 November 2008)

Iron ore is a buyer's market now since China can cite falling demand, commodities etc to bargain.

Which kinda leads to a seller's mkt in FMG shares...


----------



## MichaelD (11 November 2008)

It seems appropriate to quote one of my posts from a few months ago now that FMG has gone below $2.30.



MichaelD said:


> 3. I nod my head to true believers - without you, I couldn't profit from trends. The true believers are the ones buying at the top and buying all the way down - the ones I'm selling to. The true believers are the ones who give up in disgust at the bottom and sell at the bottom or on the way back up at break-even - the ones I'm buying from.




No smugness, just a yawning feeling in my stomach as I empathise with all those in so much pain.


----------



## agro (11 November 2008)

MichaelD said:


> It seems appropriate to quote one of my posts from a few months ago now that FMG has gone below $2.30.
> 
> 
> 
> No smugness, just a yawning feeling in my stomach as I empathise with all those in so much pain.




meh..

the market sentiment is only a reflection of today's situation - yes there is slowdown in China at the moment - but how long for? the next 10, 20, 30, years??!

doubt it

i still hold, only sold a portion mind you - high risk i know, but who knows where the company ends up?


----------



## joeyjoejoe (11 November 2008)

skyQuake said:


> Hey... that sounds like revenge trading; quit while you're ahead. Apologies if its not.
> Good luck.




yeah i see what you mean.. its not revenge trading though.. examination of the above transactions shows im down $1515 on FMG... considering how much i liked it. i think i did okay... the general downturn forced me onto the sidelines so my exposure has been very limited.. ill probably be looking a price lower than 2.0. because i belive it probably reach there.

as everyone has been saying.. the bottom has been hard to predict.... but i think at the end of a capitulation it HAS to be the bottom. i mean anything between $1.00 and $2.00 isnt a big deal. as long as you dont buy too many..


----------



## nunthewiser (11 November 2008)

agro said:


> i am getting sick of FMG... and am considering selling at 2.50 and getting out all together
> 
> this is being a dog of a stock and is just heading in one direction - south
> 
> ...






agro said:


> out at 2.52
> 
> its just getting smashed - maybe twiggy is selling who knows?!






agro said:


> meh..
> 
> the market sentiment is only a reflection of today's situation - yes there is slowdown in China at the moment - but how long for? the next 10, 20, 30, years??!
> 
> ...




mmmmmmm ok i thought you sold out cos you thought they was a dog of a co ? not a dog anymore ? 

personally think they are a great stock to trade tho


----------



## Warren Buffet II (12 November 2008)

Big drop in commodities at the moment. Copper down 5%, I would say FMG will drop to $2 very soon.

WBII


----------



## Miner (12 November 2008)

Warren Buffet II said:


> Big drop in commodities at the moment. Copper down 5%, I would say FMG will drop to $2 very soon.
> 
> WBII




WBII

Thanks a lot for your optimism to see FMG will come down to $2 .

You (and me) may get a shocking surprise to see your optism is a reality this week considering not only commodity fall, DJ fall, GM crisis but also FMG has stopped dredging and got into a legal battle with Aboriginal group for his rights. I saw big news on FMG in West Australian including Graeme Rowley's worried face. The sum up was not a rosy picture.

In a few minutes we will know how FMG and rest are behaving today


----------



## njc.corp (12 November 2008)

joeyjoejoe said:


> yeah i see what you mean.. its not revenge trading though.. examination of the above transactions shows im down $1515 on FMG... considering how much i liked it. i think i did okay... the general downturn forced me onto the sidelines so my exposure has been very limited.. ill probably be looking a price lower than 2.0. because i belive it probably reach there.
> 
> as everyone has been saying.. the bottom has been hard to predict.... but i think at the end of a capitulation it HAS to be the bottom. i mean anything between $1.00 and $2.00 isnt a big deal. as long as you dont buy too many..




joey it seems i keep meeting people or hearing people trying to pick the bottom or top-

i feel that is never going to happen

like my dad says if unsure just wait-no hurry and plenty more where that came from-


----------



## Pairs Trader (12 November 2008)

FMG has probably been the biggest broker/hedgefund/media/''twiggy'' partnership pump'n'dump in ASX history.


----------



## Rhynoceros (12 November 2008)

http://www.wabusinessnews.com.au/en-story/1/68207/FMG-s-chief-operating-officer-resigns

Chief operating officer, Alan Watling resigned today...supposedly to spend time with family hmmm.


----------



## UraniumLover (12 November 2008)

Doesn't look good. If they keep falling at this rate their economic model may no longer become viable - People tend to stay away from companies with large debt in 'crashes'. Not to mention declining iron ore prices so nothing but a short for me.


----------



## Miner (12 November 2008)

Rhynoceros said:


> http://www.wabusinessnews.com.au/en-story/1/68207/FMG-s-chief-operating-officer-resigns
> 
> Chief operating officer, Alan Watling resigned today...supposedly to spend time with family hmmm.




That is realy shocking. He was one of the key drivers of this operation and carried lot of say. Probably he got shot being the messenger of truth or since there is no operation then why need a Chief of Operations (sorry for being tongue and cheek). But Rob is a great operator and many heads to roll with FMG price to slide down.

Should I wait for it to go to the original price when Twiggy bought and then buy million shares at 1 cent ?


----------



## CanOz (12 November 2008)

UraniumLover said:


> Not to mention declining iron ore prices so nothing but a short for me.




Who are you shorting this through? Or did you mean this in the proverbial sense? As i am currently aware, there is a shorting ban on ASX stocks.

Cheers,


CanOz


----------



## Warren Buffet II (13 November 2008)

Will this become a Grooves II business?

Going up and up and up and talk your business up and up and then crash and burn.

WBII


----------



## chops_a_must (13 November 2008)

"Will this become a Grooves II business?"

I've mentioned it before, but it's more likely to become an Anaconda II type business.

My guess is they wont survive the downturn.


----------



## hollowpoint (13 November 2008)

I bought 4,000 shares at $13, $11, $9, etc.... thought I would price average at $5/6... now at $2.03 I'm pretty f$%#ked! If the online advertising business was not booming at the moment, I'd probably be forced to sell by now.  As it is, I was hoping to trade out after a few months.  Now it looks like I will have to take a long term view of FMG.  IF they survive, then perhaps 2011/12 will show some promise.  I think I will buy more at $1.60-80, but I thought I had picked the bottom at $5 and how wrong was I on that!

So, I have lost around $30k at this point, but obviously only if I sell, however, Miner's comments about buying in at 1c have got me worried.  Will it really come to that? At what point will FMG become unable to service it's debts? This was my first exploration into the stock market, and wow, could I have done much worse?!!

So, all I can really say is.... AAAARRRRGGGGGGHHHHHHHH


----------



## oldblue (13 November 2008)

So why not wait until the trend changes and the SP starts to improve? When/if this happens it won't go to $5, $7, $9 or whatever overnight. There'll be plenty of time to get set if that is what you want.


----------



## hollowpoint (13 November 2008)

oldblue said:


> So why not wait until the trend changes and the SP starts to improve? When/if this happens it won't go to $5, $7, $9 or whatever overnight. There'll be plenty of time to get set if that is what you want.




Agreed...  but really at the end of the day, it's all just another form of gambling.  There is no science or reason when the market is like this.


----------



## nomore4s (13 November 2008)

hollowpoint said:


> Agreed...  but really at the end of the day, it's all just another form of gambling.  There is no science or reason when the market is like this.




So why trade/invest in a market like this? Nothing wrong with waiting for the markets to turn around before entering.


----------



## hollowpoint (13 November 2008)

nomore4s said:


> So why trade/invest in a market like this? Nothing wrong with waiting for the markets to turn around before entering.




I didn't.... I bought in before the fall.  So now I need to decide if I just hold or try to price average again.


----------



## Mr Capital (13 November 2008)

Hold or sell, don't average down
its only going one way at the moment which is

down.. take a long term view.


----------



## hollowpoint (13 November 2008)

Mr Capital said:


> Hold or sell, don't average down
> its only going one way at the moment which is
> 
> down.. take a long term view.




wow! and ouch! watching it as we speak..... freaking ridiculous! Just keeps falling and falling and falling and......


----------



## enigmatic (13 November 2008)

Well looks like the company is nearing a market Cap of $5billion. If it goes much lower Mr Forest will be off the Billionaire list alltogether.


----------



## njc.corp (13 November 2008)

chops_a_must said:


> "Will this become a Grooves II business?"
> 
> I've mentioned it before, but it's more likely to become an Anaconda II type business.
> 
> My guess is they wont survive the downturn.




fmg is a business on a bigger scale-

so to really have a good idea  on what might happen is a couple of things

what they reckon they will produce- i seen  that  article saying they are going to downgrade their production-and not  go full steam on their expansion plan-

tells me they are smart with their money or they cant get that money up or they are on the edge-

thats 1

and the next one for me would be cutting empolyment hours or getting rid of their employee's

Thats 2

after that-well take it for what it is-


----------



## hollowpoint (13 November 2008)

Am I being misinformed that this is actually exactly what happened to Andrew Forrest's last venture before FMG?

I seem to recall being told that his last business was pumped up to the max, then crashed in spectacular fashion.

IF that is correct, then you would think he would learn some lessons from it.  I think I heard something about too fast an expansion, thus too much debt, and when share price fell, they couldn't service the debt.

Anyone hear something like that, or am I getting my wires crossed?


----------



## njc.corp (13 November 2008)

hollowpoint said:


> Am I being misinformed that this is actually exactly what happened to Andrew Forrest's last venture before FMG?
> 
> I seem to recall being told that his last business was pumped up to the max, then crashed in spectacular fashion.
> 
> ...




hollowpoint-the story looks like the same everyone knows or heard at one point -so it holds some merit-but for the pure fact u would have to ask forrest himself-

doubt he would give u a honest answer-

if it is true-u would hope that any business owner would learn from their past mistakes-

i surely do as a company owner and i keep making new mistakes-its the nature of the beast-

but like i said in one of my post-it could be just plain bad timing and the current market conditions says it all-

i dont know if they will go broke and dont know if they will go up in price

impossible to tell

but i know for fact that only the strong will weather these conditions usually because they have cash or a small % of debt-

big debt and not much cash in this game is a signal of danger-well for me that is- i know that my business is very quiet but i really have no bills and the  repayments  i  have are easily met in advance-

like i told my freind a couple of weeks ago when he was taking a other loan out

--why are u asking or wanting more  money when u cant even meet the first loan repayments??????

tough times ahead with xmas around the corner and stuff-


----------



## hollowpoint (13 November 2008)

njc.corp said:


> hollowpoint-the story looks like the same everyone knows or heard at one point -so it holds some merit-but for the pure fact u would have to ask forrest himself-
> 
> doubt he would give u a honest answer-
> 
> ...




I am also in business.... but things are great this time of year.... so many companies wanting to get the biggest bang for their buck, so their advertising focuses more online than tv or print.  Everyone backs off for a couple of weeks over Xmas though.... just part of doing B2B...

I guess the fundamentals of business should be used to decide where to invest...  that is to say, you would be absolutely correct in my opinion.  High debt companies/corps would struggle in current markets and low debt and high liquidity businesses would be more attractive to investors.

So going back to absolute business basics, yes, I can't help but think you are 100% correct.  So i wonder where this leaves FMG.... 

Just slightly off topic (ie.. not focused on FMG in particular) I wonder if the following would also be accurate....

1) in tougher economic times, alcohol consumption in Australia increases, as does gambling, prostitution and pharmaceuticals (all used to deal with the extra stress of recessions), therefore,
2) any companies involved in these are going to do well, therefore,
3) companies like FGL, ALL and SOL are going to kick ass in the coming months.

I suppose there is a thread in these forums somewhere that deals with this, but I am too lazy to find it.  Anyway, just a random thought...


----------



## njc.corp (13 November 2008)

hollowpoint said:


> I am also in business.... but things are great this time of year.... so many companies wanting to get the biggest bang for their buck, so their advertising focuses more online than tv or print.  Everyone backs off for a couple of weeks over Xmas though.... just part of doing B2B...
> 
> I guess the fundamentals of business should be used to decide where to invest...  that is to say, you would be absolutely correct in my opinion.  High debt companies/corps would struggle in current markets and low debt and high liquidity businesses would be more attractive to investors.
> 
> ...




hollowpoint i just got off the phone to a freind-he is going back home to work from their-

his business started from home-so the basics holds 100%truth-or is it the smart that run back to basics-

well i hope so as basic is easy to control-control usually cost less in a workforce enviroment from what i have seen and productive force  is usally their also-

well i dont drink or have paid much attention to *****'s-but your topic ^^^ is worth thinking and planing out in these market conditions as nothing is silly at the moment-

if u would like to talk more pm me 

Thanks

Nick--


----------



## hollowpoint (13 November 2008)

njc.corp said:


> hollowpoint i just got off the phone to a freind-he is going back home to work from their-
> 
> his business started from home-so the basics holds 100%truth-or is it the smart that run back to basics-
> 
> ...




Easiest way to contact me is at Hollowpoint Pty Ltd.... not sure if we are allowed to mention websites here, so if you search in google, it will be the one that's a web design company.

Yeah, regarding the back to basics and home offices, that's the exact path I went down... thought of expanding to an office, but most clients said they would prefer to deal with a small firm that has no massive overheads if it means I can keep my pricing cheaper yet provide a more comprehensive and personalised service. Perhaps i cannnot sell it down the track, but I would prefer to keep overheads low than to expand at this point in time.

Back on topic, though, my partner works for a company owned by FMG, and of course I get stressed wondering if she will have a job if FMG collapses.  Her work was the motivating factor behind my first foray into shares and FMG in particular.  Not that I had any inside info (clearly, or I wouldn't have lost so much) but it was just one of those things that everyone warns you against (emotional buying combined with company loyalty).  Still, one day things will improve and i will be happy again!


----------



## Miner (13 November 2008)

Where is Agro ? 

One of the earnest believers of FMG ?

Coming to more serious point I do have three colleagues ex Anaconda.

They lost their family fortune by investing on Anaconda by responding to the call made by Andrew to invest in the company where they worked. 

I remember about 18 months back Graeme Rowley ex Rio said that Andrew has learnt from his mistake and that gives him confidence.

It was going all good for every one and Andrew (and shareholders / speculators) until Chinese Bomb (or Bubble)  Shell on demand reduction exploded.


----------



## alex arigo (13 November 2008)

i am still holding fmg as a long term hold everyone is getting belted not just fmg look at rio bhp atlas iron all have been smashed because iron ore demand has fallen when will it hit bottom know one knows but long term if china wants to grow at 8 percent they will need to build a lot of buildings rial lines houses and out of this they will consume a lot of steel and higher demand for iron ore in the long term so guys give fmg a chance look at what they have done in 5 years till now they shipped 10.5 million tones in 5 months that a lot of cash flow their long term goal is 200 mtpa they will get their it will just take time thats the point of being a long term holder to be part of the story fmg has made it big but the story has just started time will tell


----------



## prawn_86 (13 November 2008)

Just got this weeks BRW in the mail. 

Front page is:

*Fortescue: Will it survive?*

Have not read the article yet but will do so tonight


----------



## MichaelD (13 November 2008)

hollowpoint said:


> I bought 4,000 shares at $13, $11, $9, etc.... thought I would price average at $5/6... now at $2.03 I'm pretty f$%#ked!
> 
> I think I will buy more at $1.60-80, but I thought I had picked the bottom at $5 and how wrong was I on that!




Let me see if I've got this straight.

You bought at $13. You now concede this was a mistake.
You bought at $11. You now concede this was a mistake.
You bought at $9. You now concede this was a mistake.
You bought at $5/$6. You now concede this was a mistake.

And now you want to buy MORE at $1.60?


----------



## horst (13 November 2008)

the way their going they will end up like MGX owned by Chinese and that would relly put the wind up the other two majors in this game  Ha Ha  Yamsing!!


----------



## Warren Buffet II (14 November 2008)

It is amazing how Twwigy Grooves keeps talking FMG up.

He was in China saying that everything is as normal and that Chinese customers are demanding more and more iron ore.

He is risking losing all credibility at this point of the game, but who can blame him when the day come and they admit that demand has effectively slow and that will send the share price lower. I would respect the shareholders and if you can't say the truth just don't say a lie. 

WBII


----------



## john2k (14 November 2008)

*Forbes Magazine article, November 17th*

I've been researching FMG, planning to jump in at some point soon.  Earlier today I stumbled upon the following article from Forbes Magazine (will be in their November 17th issue):

http://www.forbes.com/business/forbes/2008/1117/089.html

The article is about the steel industry in China.  Not a very positive article, so I'm thinking that maybe I should wait a bit longer before getting into this stock.  Long-term I think FMG will be a big winner, in my opinion.


----------



## hollowpoint (14 November 2008)

FMG ship was turned back at a chinese port, from the sound of it... not good news I guess.

Here's a thought... for those interested in conspiracy theories...

1) china reduces demand
2) miners panic and get on the phone to find out more
3) china says okay, we could possibly take more, give us a better deal and we will think about it
4) in the interim, china buys up chunks of mining stock while prices are low
5) china sits back and waits, telling australia they can't possibly take any more iron ore
6) miners say okay, here is a better price
6) china eventually says okay, now we can take more
7) china gets better prices AND now owns a chunk of miners for peanuts
8) now that china is buying again, the shares go up, and china makes a killing

just an idea i had.  are they devious enough to do this? absolutely. is it in their best interests? absolutely. is there anything we could have done to stop this from happening? absolutely not.

the chinese economy is very very healthy, and it would not be the first time that they have used such a tactic.  

thoughts?


----------



## prawn_86 (14 November 2008)

prawn_86 said:


> Just got this weeks BRW in the mail.
> 
> Front page is:
> 
> ...




Nothing too new in the article, just Twiggy saying that FMG will be fine cause they have agreed contracts in place and dont sell on the spot market and that their 'Rocket Fines' are great for blending and very popular.

Take from it what you want.


----------



## njc.corp (14 November 2008)

hollowpoint said:


> FMG ship was turned back at a chinese port, from the sound of it... not good news I guess.
> 
> Here's a thought... for those interested in conspiracy theories...
> 
> ...




idea seems to be spot on- i mean why would u not do it-

the name of the game is to look and takecare of yourself first and caculate the risk-which the chinese people will 99.9% do-

still to many angles to cover on this stock so it looks like i am on the sidelines again for more months to come-

Thanks

Nick--


----------



## nunthewiser (14 November 2008)

AD08-65 ASIC lifts ban on covered short selling for non-financial securities

Thursday 13 November 2008


ASIC today said it would, as expected, lift the current ban on short selling of non-financial securities from opening of trading on 19 November 2008 but would continue the ban on covered short sales in financial securities.

ASIC put a 30-day ban on covered short selling of securities on 21 September and extended this ban on 21 October as market conditions remained difficult.

The ban on short selling of financial securities will remain in place until at least 27 January next year, consistent with many other jurisdictions, while ASX will maintain the ban on naked short selling indefinitely. ASIC confirmed that financial securities would be those comprising the S&P/ASX 200 Financials (including property funds) plus five other APRA regulated businesses. 

Key details

ASIC announces the following effective from Wednesday 19 November:

Covered short sales of non-financial securities will be permitted; 
The ban on covered short selling of financial securities will continue until 27 January 2009. Financial securities are those comprising the S&P/ASX 200 Financials and five additional securities (being those with APRA regulated businesses). 
Existing exemptions for covered short selling, for example those relating to hedging and arbitrage transactions, will continue in relation to financials; and 
The facilitation of the sale of securities being recalled from a stock-lending program (whether or not they are financials) will also continue.


----------



## hollowpoint (14 November 2008)

Is lifting the ban on short selling good or bad news for FMG? Am thinking that it might start getting more interest, but on the other hand, hasn't it already dropped, therefore short selling would be a bit pointless? If you were going to short something, you'd do it when it's trading high but falling, wouldn't you? I mean, you'd make a killing if something fell like 30%, but would it really be worth shorting if it only falls 5%?


----------



## njc.corp (14 November 2008)

hollowpoint said:


> Is lifting the ban on short selling good or bad news for FMG? Am thinking that it might start getting more interest, but on the other hand, hasn't it already dropped, therefore short selling would be a bit pointless? If you were going to short something, you'd do it when it's trading high but falling, wouldn't you? I mean, you'd make a killing if something fell like 30%, but would it really be worth shorting if it only falls 5%?




yes and no-also depends on the volume of shorting on the stock

so 5% with like 10-20,000 units  worth is not bad at all in my books-

example only


----------



## hollowpoint (14 November 2008)

Competition time - Pick the Bottom...

I think we have hit it.  Obviously a guess but I think $1.83 or whatever it was was the lowest it will go.  Anyone else care to guess?


----------



## nunthewiser (14 November 2008)

hollowpoint said:


> Is lifting the ban on short selling good or bad news for FMG? Am thinking that it might start getting more interest, but on the other hand, hasn't it already dropped, therefore short selling would be a bit pointless? If you were going to short something, you'd do it when it's trading high but falling, wouldn't you? I mean, you'd make a killing if something fell like 30%, but would it really be worth shorting if it only falls 5%?




who is to say it wont fall another 30% or more ? dunno personally ..

im only happy about the ban being lifted as previous to the ban FMG was one of my main dollar earners trading short and on occasion long , was an easy stock to get the probabilitys right on , i did short others too but FMG was my main stock that i was most successful on in the way of win to lose ratios


----------



## skc (14 November 2008)

hollowpoint said:


> the chinese economy is very very healthy, and it would not be the first time that they have used such a tactic.
> 
> thoughts?




Hollowpoint: Great tactic. Can you share some examples where the Chinese has done the same thing? 

Also, is China's economy really that healthy from the perspective of FMG? Iron ore is used to make steel for either capital or consumer products. I can see consumer products take a hit from the reduction in export demand, offset perhaps somewhat by gains in domestic consumption. I can also see a demand reduction in capital products, as less businesses contemplate capacity expansion, less private construction etc. For example, the planned construction of another mega casino (by Sands) has just been postponed in Macau today with ~10,000 workers affected. Capital product will increase somewhat by the recent stimulus package, however. These are just my understanding of the market landscape, but I have not researched into the relative volume / value of each drivers. 

If anyone seen relevant articles or stats it would be great to share them


----------



## hollowpoint (14 November 2008)

skc said:


> Hollowpoint: Great tactic. Can you share some examples where the Chinese has done the same thing?
> 
> Also, is China's economy really that healthy from the perspective of FMG? Iron ore is used to make steel for either capital or consumer products. I can see consumer products take a hit from the reduction in export demand, offset perhaps somewhat by gains in domestic consumption. I can also see a demand reduction in capital products, as less businesses contemplate capacity expansion, less private construction etc. For example, the planned construction of another mega casino (by Sands) has just been postponed in Macau today with ~10,000 workers affected. Capital product will increase somewhat by the recent stimulus package, however. These are just my understanding of the market landscape, but I have not researched into the relative volume / value of each drivers.
> 
> If anyone seen relevant articles or stats it would be great to share them




Don't quote me on it, but I believe that they did this with Wool and going a lot further back (80's I think) I vaguely remember it happening with Aussie beef.

It's foxing.... 

Remember when RAM was $15 per MB? Back in the early 90's (91 or 92)...  then an earthquake in japan took out a factory (I think it was mitsubishi) but then China raised their asking price to up to $140 per MB (even though they were neither impacted by the earthquake, nor did they buy from Japan). After a few weeks of higher prices, major Australian buyers said they 'no longer needed as much' memory, which was a blatant lie. China then reduced their prices to around $25-40 per MB on 'falling demand'... the consortium then invested in various chinese (and malaysian) shares (I was not in the loop, so I don't know precisely what they were) and made a motza when demand 'increased' again and the memory market stabilised. We were buying from the consortium that led that push for lower prices. They made money on both the cheaper RAM (relatively cheaper, anyway) and also the lower share prices. Of course, in Australia, the consortium was still selling RAM at the higher prices of around $110-140.  

So, that is Australia doing it to China....


----------



## gav (14 November 2008)

skc said:


> Also, is China's economy really that healthy from the perspective of FMG? Iron ore is used to make steel for either capital or consumer products. I can see consumer products take a hit from the reduction in export demand, offset perhaps somewhat by gains in domestic consumption. I can also see a demand reduction in capital products, as less businesses contemplate capacity expansion, less private construction etc. For example, the planned construction of another mega casino (by Sands) has just been postponed in Macau today with ~10,000 workers affected. Capital product will increase somewhat by the recent stimulus package, however. These are just my understanding of the market landscape, but I have not researched into the relative volume / value of each drivers.




Hello Skc, 

Do you have a link or article to Sands postponing that work?  They would be the 2nd major casino company recently to stop work over there.  The reason I ask is because I know someone that works on Casinos over there...

Thank-you


----------



## hollowpoint (14 November 2008)

hollowpoint said:


> Don't quote me on it, but I believe that they did this with Wool and going a lot further back (80's I think) I vaguely remember it happening with Aussie beef.
> 
> It's foxing....
> 
> ...




Actually, thinking about it, it may have been Taiwan.... so long ago I can't remember too much about it....  only that it was all rubbish... the factory was down for only a few days, but in that time, it sent prices skyrocketing.


----------



## jamcdoug (14 November 2008)

Just wanted to offer my two bobs worth on FMG and China.

First of all, You'd be cray not to believe in China's long term growth story. For the next 10 years, on average, 20 million people a year will be moving from rural to urban centres. That means an entire Australia's worth of property, infrastructure and power needs to be generated each year. This places huge demand on our resources in the long run..particularly iron ore and coal.

Sure, China is slowing at the moment. No one country is immune from the fragile global economy. But I think the global slowdown has come at an ideal time for China. It was growing at a frenetic pace and there was a very real threat of the economy over-heating. 

The credit crunch and subsequent decline in demand for Chinas exports has completely removed the inflation threat and this has enabled the Chinese government to pursue growth policies (in the form of cutting interest rates and their recently announced multi-billion dollar stimulus package). In addition to this, Chinese banks have been extremely prudent in their lending policies, have limited exposure to toxic sub-prime securities and Chinese household debt is at extrememly low levels compared to Western peers. Add to this their ENORMOUS foreign currency reserves and you have an economy exceptionally well placed to handle the worst economic crisis in 100 years.

I'm hoping that since China's announcement that the stimulus package is to be spent on infrastructure, transport, propertry etc. we have found a floor in commodity prices and hopefully FMG's share price. Further i'm hopeful that with the shelving of many expansion projects, supply cuts, infrastructure problems, the inability of small explorers/producers to remain as a "going concern" and the fact that many of the worlds biggest resource deposits are maturing...we shall see another BOOM in commodity prices in the next few years as Demand once again hugely outweighs supply. Bare in mind that a mine usually takes around 6 years to reach full production...so suipply is likely to seriously lag demand and this will keep prices high for many years yet.

All this bodes well for FMG in the long term but i've NEVER liked FMG. Its meteoric rise was reminiscent of the tech boom. It was completely based on overly optimistic projections regarding capacity and expansion plans. Everyone seems to forget how difficult it is  to run a mining company and all the associated teething problems. 

Twiggy wouldn't have forgotten that though.... He was the former head of Anaonda Nickel (now Minara Resources) - a spectacular failure.
Twiggy is just a bloke who was in the right sector at the right time and (given his former career as stockbroker) is able to sell a GREAT stock story.

The only numbers we have is $600 million cash in the bank...and $5.9 BILLION in DEBT. There is NO DOUBT they are going to need to raise cash. They seem to have missed the boat on that one given that so many available funds are being sucked up by the likes of NAB, Incitec Pivot, Proprty trusts etc... so a cornerstone investor is definitely needed.

Apart from that they are just another commodity business. One of several trying to secure Chinese customers. The only thing that differentiates them is a larger deposit base. It is highly unlikely that they will reach $13 any time again in the near future.


----------



## oldblue (14 November 2008)

hollowpoint said:


> Actually, thinking about it, it may have been Taiwan.... so long ago I can't remember too much about it....  only that it was all rubbish... the factory was down for only a few days, but in that time, it sent prices skyrocketing.




Back in the 1980's I had first hand experience of China's tactics as a buyer of crossbred wools. It was usual for them to wax hot and cold in their approach to wool auctions, making it difficult to assess the extent of demand at any time and exerting a downward pressure on prices. Mind you, this was nothing more than you would expect a dominant buyer to do when competition for the product was otherwise quite modest.
China has had to wear the dictates of dominant sellers of iron ore such as BHP and RIO in recent years. We can hardly expect them not to play hardball now that the advantage has passed to buyers.


----------



## hollowpoint (14 November 2008)

oldblue said:


> Back in the 1980's I had first hand experience of China's tactics as a buyer of crossbred wools. It was usual for them to wax hot and cold in their approach to wool auctions, making it difficult to assess the extent of demand at any time and exerting a downward pressure on prices. Mind you, this was nothing more than you would expect a dominant buyer to do when competition for the product was otherwise quite modest.
> China has had to wear the dictates of dominant sellers of iron ore such as BHP and RIO in recent years. We can hardly expect them not to play hardball now that the advantage has passed to buyers.




I agree... it's nothing personal after all....  just business, and in business you have to get the best deal possible.  If I didn't get the biggest bang for my client's bucks, they'd abandon me for someone who is a harder negotiator.


----------



## skc (14 November 2008)

gav said:


> Hello Skc,
> 
> Do you have a link or article to Sands postponing that work?  They would be the 2nd major casino company recently to stop work over there.  The reason I ask is because I know someone that works on Casinos over there...
> 
> Thank-you




News here: http://www.iht.com/articles/ap/2008/11/14/business/AS-Macau-Las-Vegas-Sands.php

Another article on Bloomberg http://www.bloomberg.com/apps/news?pid=20601103&sid=arlSBrVgumXM&refer=us


----------



## skc (14 November 2008)

hollowpoint said:


> Actually, thinking about it, it may have been Taiwan.... so long ago I can't remember too much about it....  only that it was all rubbish... the factory was down for only a few days, but in that time, it sent prices skyrocketing.




Thanks for responding . It was Taiwan indeed. RAM price rocketed when it was Taiwan's turn to have a massive earthquake in 1999. Anyway, back to FMG.


----------



## Ruincity (14 November 2008)

In my experience when there is more than one supplier of a particular product and the product is basically the same the power is ALWAYS with the buyer....
Having worked both sides of the industry being the buyer is the best IMO.

Plenty of companies worldwide selling IO last time I checked.....


----------



## Warren Buffet II (15 November 2008)

First Vale, then RIO now BHP, who is next?

http://www.theaustralian.news.com.au/business/story/0,28124,24652943-643,00.html

You can see in the article that BHP is using the same excuse than FMG about their good relationship with buyers and that crap but they concide that revenue will be hit big time.

WBII


----------



## UraniumLover (15 November 2008)

nunthewiser said:


> who is to say it wont fall another 30% or more ? dunno personally ..
> 
> im only happy about the ban being lifted as previous to the ban FMG was one of my main dollar earners trading short and on occasion long , was an easy stock to get the probabilitys right on , i did short others too but FMG was my main stock that i was most successful on in the way of win to lose ratios




I was very upset when they banned short selling too.
Was a good exercise on FMG considering the percentages it has declined by. 
Certain shares in the financial sector also showed strong downward trends.. linked to large debt.. 
Not sure how much lower it will go. 
Let's hope Hedge funds don't jump back on it and short large volumes...
The bottom.. who know's.. someone mentioned 1 cent but i'd say closer to current prices if the recession doesn't deapen thanks to Chinese consumption of iron ore.


----------



## cbacamden (15 November 2008)

FMG has killed me   (and others)

Down 70K as of friday - Why am I so stupid ? 

7 Years + of good results has gone in 6 mths

Just when you think it carnt get any worse - it crashes down hard.

Unless things come good next week, IM OUT

For those people just starting out learn from my mistakes and protect your capital. What ever strategy you decide to go with it needs to be able to withstand 10 bad trades in a row - otherwise you end up like me.

A try hard


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## SenTineL (16 November 2008)

why do people assume it's all over?

has the company gone bust? are the administrators walking in?
BHP and RIO are also down by over 50% and they are huge companies. yes FMG do only have IO to pin their hopes on but still....

i am waiting to see how it pans out, mind you if I had 70k to play with i would be more carefull than riding this stock all the way down


----------



## cbacamden (16 November 2008)

I dont think its all over - You just have to draw the line somewhere.

I havnt ridden it all the way down either, it is a result of numerous (about 10) trades using stop losses. This is 1 stock of about 20 that I have been trading + options, warrents etc

as to the 70K - you may have got the impression that this was all my cash, but far from - but I dont want to loose any more expecting the best only to continue taking losses. Regardless of how much I have left, 70K is 70K.

Its just the market is making no sense at all at the moment.

Fundamentally I think this stock is way over sold (like many others) 

And for those that use puts shorting etc to make money on the way down good on you. I wish I could do it, but for some reason my brain has a problem with it


----------



## Frankhalo (16 November 2008)

I Dont think the lifting of the short selling ban will have any effect on FMG. Company has been bled to death last few weeks, the swings will be small up or down. Regardless you need a bit of fire power to really have a big effect on the share price short selling. I hear its going to 20 cents, 50 cents etc, I personally doubt that very much.

Simple fact remains that FMG's product is still going out the door and income is coming in. If 20 cent call comes true then income from 11 million tons shipped already in 6 months will be worth more than FMG's market Cap, which makes no sense at all. I dont know of any company who's income exceeds its market cap, if you do please post I'll buy some of those shares....

Funny how that 11 million tons is over looked, not bad for a start up IO play with 6 months production under its belt, I imagine July 09 report will answer alot of questions.

Regards

Frank


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## SenTineL (16 November 2008)

Lots of people here have the right answers.

"It's just the market is making no sense at the moment" is a clincher.

What are the traders doing in this sort of a market? I can't imagine making money unless people are shorting. Wouldn't some of the strategies include:

1. Buy now at good prices and hold for the long term - 5 years plus
2. If you don't need your cash now - hold the shares that you think are worth holding

I can't get my head around the theory of waiting while a stock goes down by 70% and then selling, i would draw that line much sooner than that


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## IFocus (16 November 2008)

SenTineL said:


> Lots of people here have the right answers.
> 
> "It's just the market is making no sense at the moment" is a clincher.
> 
> ...




SenTinel as a trader I can only trade a method that's tested and that I have an understanding of the market conditions in which it works.

If the market conditions do not suit the method then I guess I am gambling or not taking responsibility for my behavior if I persist in trading.

My own method centers around trading with the trend, if the trend is down and I cannot short because of market rules then I cannot trade that market.

But there are markets currently with really good trends in fact some of the best I have seen i.e. oil and currency's. 

I have to take responsibility and trade these markets if I wish to profit that is the point of why I trade not to prove a point but to profit.

Hope this helps


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## IFocus (16 November 2008)

Below are the charts for FMG its a down trend, where is the bottom no idea the trend is down. Due to the rules we cannot short this stock, please note the shorting ban has not stopped the fall it has only killed the rallies.



Next is USO an ETF on the AMEX exchange in the US can be traded through an IB account you can trade it long you can trade it short with great liquidity just like a stock.

Note the trend and opportunities to get on board USO


Hope this helps


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## Rhynoceros (17 November 2008)

http://www.bloomberg.com/apps/news?pid=20601081&sid=aAzniJNJxcdk&refer=australia

"CIC Resumes Talks to Buy Stake in Fortescue, Morning Post Says 

By Aaron Pan

Nov. 17 (Bloomberg) -- China Investment Corp., the country's $200 billion sovereign wealth fund, has restarted talks to acquire a stake in Australia's Fortescue Metals Group Ltd., the South China Morning Post said, citing people it didn't identify. 

CIC may bring in Baosteel Group Corp. and China Shenhua Energy Co. as partners to invest in the iron ore producer, the newspaper reported today. The sovereign wealth fund and Fortescue both declined to comment, while Baosteel and China Shenhua were unavailable for comment, the Morning Post said. 
"


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## hollowpoint (17 November 2008)

Rhynoceros said:


> http://www.bloomberg.com/apps/news?pid=20601081&sid=aAzniJNJxcdk&refer=australia
> 
> "CIC Resumes Talks to Buy Stake in Fortescue, Morning Post Says
> 
> ...




Well, well, well.....  does this validate my theory I made about China foxing on demand, only to reduce the share price in order to buy FMG cheap, then increase demand again?  The fact that Baosteel has a potential interest would indicate that I may just be barking up the right tree on this one. I'm usually not a conspiracy theorist, but it seems that if China can have their cake and eat it too, they will.  At least if Baosteel is interested, that would indicate that they know something we don't.... that FMG is going to soar in share price sometime in the forseeable future.  I'm putting my money where my mouth is and buying up at this point.

I have emailed Aaron Pan to ask his opinion on my theory...  I will, if permitted, post his response here.  This to me seems to be of incredible significance and should be very good news for those of us still willing to take a risk by purchasing FMG shares on a down trend.  China very rarely makes mistakes in their long-term investments, so I would be inclined to think that if they are willing to look at FMG in this economic climate, then it's solely because they can perfectly control the IO market enough to make some serious money here. I like smart money... and I think we are going to see a lot of it going into FMG. That's my two cents worth.


----------



## prawn_86 (17 November 2008)

I agree with your point and sentiment Hollowpoint, but isnt the vast majority of FMG already held my instos or management?

If im correct then theoretically there is only so much smart money that can come in, unless others are selling out.


----------



## agro (17 November 2008)

prawn_86 said:


> I agree with your point and sentiment Hollowpoint, but isnt the vast majority of FMG already held my instos or management?
> 
> If im correct then theoretically there is only so much smart money that can come in, unless others are selling out.




correct on this point - so long as Twiggy holds the 36% stake, FMG will always be Australian owned


----------



## hollowpoint (17 November 2008)

prawn_86 said:


> I agree with your point and sentiment Hollowpoint, but isnt the vast majority of FMG already held my instos or management?
> 
> If im correct then theoretically there is only so much smart money that can come in, unless others are selling out.




Are you suggesting that the top 20 shareholders are not allowed to sell? I would suggest that China will try and buy 4-5% of FMG (plenty of room for that to happen), then make a bid for a bigger slice of the pie.... same as what happened with Midwest and (I think) Murchison (with Sinosteel).

And who says Andrew Forrest WILL retain 36%? He has said he won't sell out, but conditions change, and perhaps it is in his best interest... really depends what offer China puts on the table.

Either way, there IS interest in FMG, and I still think my theory has merit at this time.  I guess we will know in the coming months.


----------



## Rhynoceros (17 November 2008)

http://www.theaustralian.news.com.au/business/story/0,28124,24662203-5005200,00.html

"FMG denies it is in talks with CIC over stake"

Ok does it seem strange to anyone else that South China Morning Post is Reporting talks between parties and i believe that Forrest is in china, but reps here are denying any talks.


----------



## hollowpoint (17 November 2008)

Rhynoceros said:


> http://www.theaustralian.news.com.au/business/story/0,28124,24662203-5005200,00.html
> 
> "FMG denies it is in talks with CIC over stake"
> 
> Ok does it seem strange to anyone else that South China Morning Post is Reporting talks between parties and i believe that Forrest is in china, but reps here are denying any talks.




Where there is smoke...

I think this may be it...  China will probably try to acquire at least 6% by end of month...  when companies go quiet, there is usually a very good reason for it. Think I might buy even more at this point... okay, so I am a perpetual optimist!


----------



## skc (17 November 2008)

hollowpoint said:


> Where there is smoke...
> 
> I think this may be it...  China will probably try to acquire at least 6% by end of month...  when companies go quiet, there is usually a very good reason for it. Think I might buy even more at this point... okay, so I am a perpetual optimist!




I still find it hard to believe that China is "faking" a fall in demand just to buy into FMG. My guess is the fall in demand is real, but they also think it is a good time to build a long term strategic stake. 

Hollowpoint: Thanks for the theory, research, update and backing yourself with action. Good luck but do observe your stop loss.


----------



## hollowpoint (17 November 2008)

skc said:


> I still find it hard to believe that China is "faking" a fall in demand just to buy into FMG. My guess is the fall in demand is real, but they also think it is a good time to build a long term strategic stake.
> 
> Hollowpoint: Thanks for the theory, research, update and backing yourself with action. Good luck but do observe your stop loss.




You sure about that? Have you heard ANY news that China's mills are cutting production? It's one thing to say a country is reducing demand, it's another thing entirely for them to actually do it.  Despite the economic climate, China is still experiencing exponential growth, and they are NOT stockpiling enough IO to keep up with this rate of growth.  

When you see articles about China actually INCREASING their infrastructure, then it's hard to come at a falling demand for the base metals that are required to make that happen.  http://news.xinhuanet.com/english/2008-11/16/content_10366114.htm

In addition, Baosteel are building more plants. Their share price is up, and companies like China Steel's sales are outstripping their volume.

So, yeah, I DO think they are foxing...

There is far more evidence that China should be increasing their demand than to the contrary.


----------



## oldblue (17 November 2008)

skc said:


> I still find it hard to believe that China is "faking" a fall in demand just to buy into FMG. My guess is the fall in demand is real, but they also think it is a good time to build a long term strategic stake.
> 
> Hollowpoint: Thanks for the theory, research, update and backing yourself with action. Good luck but do observe your stop loss.





I go along with that, skc.
It looks like another case of a big buyer taking the opportunity to get a strategic stake in a major source of supply, as AnSteel is doing with GBG.


----------



## prawn_86 (17 November 2008)

hollowpoint said:


> You sure about that? Have you heard ANY news that China's mills are cutting production?




Yes. Quite a few of the smallers mills have cut production by up to 50%. Further back in this thread i think Chops posted an article on it. There is also info on it in the latest BRW magazine.


----------



## hollowpoint (17 November 2008)

prawn_86 said:


> Yes. Quite a few of the smallers mills have cut production by up to 50%. Further back in this thread i think Chops posted an article on it. There is also info on it in the latest BRW magazine.




Baosteel cut production from one facility whilst building a new coastal facility... they are upsizing, not downsizing.

Anyway, we will see.


----------



## skc (17 November 2008)

hollowpoint said:


> You sure about that? Have you heard ANY news that China's mills are cutting production? It's one thing to say a country is reducing demand, it's another thing entirely for them to actually do it.




Here's one example
http://business.theage.com.au/business/as-demand-slumps-china-closes-steel-mills-20081031-5fhh.html



hollowpoint said:


> When you see articles about China actually INCREASING their infrastructure, then it's hard to come at a falling demand for the base metals that are required to make that happen. http://news.xinhuanet.com/english/20...t_10366114.htm




I totally agree that there are fundamental news driving steel volume in both directions. As I said before, one needs to do really thorough research to determine the net impact on steel demand.



hollowpoint said:


> In addition, Baosteel are building more plants. Their share price is up, and companies like China Steel's sales are outstripping their volume.




Baosteel Share price is up?? 52-week high = $20.01, 52-week low = $4.26, last close $5.42. http://www.bloomberg.com/apps/quote?ticker=600019:CH


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## hollowpoint (17 November 2008)

skc said:


> Here's one example
> http://business.theage.com.au/business/as-demand-slumps-china-closes-steel-mills-20081031-5fhh.html
> 
> 
> ...




And for every negative story, you can find a positive one.  $4.26 --> $5.42 is up, according to my calculations...  I never claimed it was up from it's 52 week high.

Anyway, if you are trying to talk down FMG, congrats... there's always one. Maybe you should look into BNB or something...


----------



## prawn_86 (17 November 2008)

hollowpoint said:


> Anyway, if you are trying to talk down FMG, congrats... there's always one. Maybe you should look into BNB or something...




No need to get snide Hollowpoint.

SKC is simply putting forwards their opinion, backed up with facts and thoughts, same as you have done so far.


----------



## nunthewiser (17 November 2008)

LOL . skc thanks for the facts m8 and pay no heed to the attacks you will get from posting them , this is one of the funniest threads on this forum as the only facts that are acceptable here are the ones that ramp FMG 

i personally like both sides to every story so cheers


----------



## chops_a_must (17 November 2008)

It's far more likely that anyone buying into FMG would be doing it by the way of equity raising, not an outright stake. Because moreso than anything, they need to get rid of debt to be able to weather the downturn.

But... continue on ramping away as you wish...


----------



## skc (17 November 2008)

prawn_86 said:


> No need to get snide Hollowpoint.
> 
> SKC is simply putting forwards their opinion, backed up with facts and thoughts, same as you have done so far.




Thanks Mod.

Hollowpoint: Certainly not comparing FMG to BNB - Digging iron ore sounds a lot more like a real business than whatever BNB is up to these days. 

Back to my post #1593, thanks for the discussion and good luck with the trade.


----------



## hollowpoint (17 November 2008)

I don't believe I ever said that alernate opinions were unwelcome... I have gone over my posts, and just cannot see it.

I said if you are trying to talk it down, it's working....  If you actually hold FMG, it would make NO SENSE AT ALL to actually WANT the share price to decrease.  Yes, I would seriously question a FMG shareholder who wants to spread negativity... it just doesn't seem too bright to me... it's usually buyers who want to buy as cheap as possible that are negative on a particular stock.

As for ramping, is it ramping to put forward a theory that has merit? Is it ramping to have a positive outlook? It's not like I am saying it's a sure thing or anything.... it's a theory, and one I believe to be true.  Of course I'd like to see FMG trading a lot higher... so would every other FMG shareholder.  But I have made it very very clear it's a theory, not a reality (yet).

But, like I said, posting FMG negative is a bit like going to an AC/DC fan club website and trashing the band...


----------



## chops_a_must (17 November 2008)

hollowpoint said:


> it's usually buyers who want to buy as cheap as possible that are negative on a particular stock.



Ahahahahahahahahahahahahahahahahahaha....

Here we go again...

This thread, without fail, delivers.


----------



## nomore4s (17 November 2008)

hollowpoint said:


> FMG ship was turned back at a chinese port, from the sound of it... not good news I guess.
> 
> Here's a thought... for those interested in conspiracy theories...
> 
> ...




lol, I love these type of threads, very entertaining.

How's this for a conspiracy theory:

FMG was over priced and is now _maybe_ starting to find some value, or maybe not:. It's a long way back up to $10+ from here and it could be a long time before we see those levels again (if ever). The fact is FMG is currently carrying alot of debt with little or no earnings (atm) and in these current conditions that is asking to be punished by the market.

FMG is a very good example of a bubble stock imo, look at some of the old posts and you will see the euphoria and carry on that this stock can't fail etc etc. Then on the way down there are numerous posts about this being the bottom and now is the time to buy - all the way down from $12+ to below $2.00. A very good lesson about the stockmarket imo.

The people that make good money consistantly from the markets are the ones that know not only when to buy but when to sell.


----------



## nunthewiser (17 November 2008)

Hi can someone give me an exact production cost per tonne for fmg it should be available under research somewhere

thanks in advance


----------



## agro (17 November 2008)

nunthewiser said:


> Hi can someone give me an exact production cost per tonne for fmg it should be available under research somewhere
> 
> thanks in advance




Registered Office and Principal Place of Business

Level 2, 87 Adelaide Terrace
East Perth WA 6004
Australia
Phone: +61 8 6218 8888
Fax: +61 8 6218 8880

email : fmgl@fmgl.com.au


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## nunthewiser (17 November 2008)

agro said:


> Registered Office and Principal Place of Business
> 
> Level 2, 87 Adelaide Terrace
> East Perth WA 6004
> ...




does that mean you dont know and are pointing me the way ?

thats ok i,m asking here as i thought someone may know


----------



## njc.corp (17 November 2008)

i work out my view of this stock-

and i  understand everyones point of view-because i dont feel any of us is wrong we are just stuck between yes or no-

others feel its worth what it should be worth

others feel its cheap and u can't blame them because we have come from $13.00 to  to the high $1.90 etc etc

others feel that its in trouble because its loss over 80 % in 3-4 months etc

others dont care if they buy now and hold for 5-7 years wether they make money or it never gets pass their buying point?

others think the market conditions are bad-i said that myself and who can say its good trading out their-

so if  we take in all the above and more- i feel that i am getting what the market is saying-i am not saying i understand it just saying its going to do whatever its going to do wether i have a say about it-

is that not the talk? the market talks and we choose to listen or not?

their is heaps of good buys or stocks out their doing well but the market does not think so-

i made up my mind-

Thanks

Nick--


----------



## Miner (18 November 2008)

nunthewiser said:


> does that mean you dont know and are pointing me the way ?
> 
> thats ok i,m asking here as i thought someone may know




Nunthewiser

You are lucky to get the address of FMG from Agro -  our only hope for FMG information and the very fact you did not get andrew or graeme's email address or website fmgl.com.au . 

Jokes apart with so much debt no matter whatever $ per ton data published in last quarterly report about the production cost of FMG ore will be wrong and it is only to be delivered by Chris C or Peter Thomas (also director of MOL) to the board. 

But they will not tell any one  until the next quarterly report is due.

I will not try to do any research on FMG at least for next two months and will watch on the side line without committing any further money.

Good luck my friend

Disclaimer I am still holding the papers stating FMG shares on my drawer.


----------



## Miner (18 November 2008)

Just read in share select site

Fortescue is consolidating at the $1.85 level. This stock hit a high of $13.15 in June, so after an 86% fall maybe it has found a base value. However that has been said before. We said that the Bollinger bands were squeezing and it gave the impression that a break-out would occur. Fortescue has proven it with massive falls over the past few days. As the chart shows, there is a dominant downtrend that has pushed Fortescue through successive support levels. It went up very quickly and has fallen faster.

Click here for details on FMG company events and announcements.


----------



## Rhynoceros (18 November 2008)

Number of conflicting articles going around...has to be some truth to the rumors.

"Chinese steel mills eye FMG stake" 7:48 AM, 18 Nov 2008


A tour of China by Fortescue Metals Group CEO Andrew Forrest has paid off, with a number of Chinese iron ore clients now reportedly prepared to offer capital in return for an equity holding. The most likely steel producer to make that move is Baosteel. On 17 November 2008 Fortescue stock closed $A0.02 lower at $A1.855


Distributed by News Bites. Copyright 2008 LexisNexis Australia. All Rights Reserved

http://www.businessspectator.com.au...ills-eye-FMG-stake-LGVF3?opendocument&src=rss


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## nunthewiser (18 November 2008)

nunthewiser said:


> Hi can someone give me an exact production cost per tonne for fmg it should be available under research somewhere
> 
> thanks in advance




hi again thought i,d bump this question back up for any holders that would like to answer

thanks in advance


----------



## Rhynoceros (18 November 2008)

nunthewiser said:


> hi again thought i,d bump this question back up for any holders that would like to answer
> 
> thanks in advance




Fortescue claims its costs are in the range of $20 to $25 a tonne.  


http://business.smh.com.au/business...a-hammering-20081116-683i.html?skin=text-only


----------



## champ (18 November 2008)

Its a bit quiet today, too quiet!!  well im jumping in big time tomoro,Any of you sidelines fellas with me, wish me luck!!!


----------



## cbacamden (18 November 2008)

Champ - I wish you all the best !

If its not the bottom its got to be close - go get em 

I dont think I can join you yet though


----------



## nunthewiser (18 November 2008)

Rhynoceros said:


> Fortescue claims its costs are in the range of $20 to $25 a tonne.
> 
> 
> http://business.smh.com.au/business...a-hammering-20081116-683i.html?skin=text-only




Thankyou kindly , excellent article , personally think we gunna see a lot ofa different story come full year accounts .

 my question was mainly to a few of the rampers here to see if they knew the mechanics of there company .i like to ask these things from time to time

onya rhino , good article


----------



## Frankhalo (18 November 2008)

nunthewiser said:


> Thankyou kindly , excellent article , personally think we gunna see a lot ofa different story come full year accounts .
> 
> my question was mainly to a few of the rampers here to see if they knew the mechanics of there company .i like to ask these things from time to time
> 
> onya rhino , good article




Funny how 11 million tons already shipped fails to get a mention too Nunny, not too bad an effort for 6 months work, would take MGX 4 years to even see these figures . Regardless the old FMG is pretty battered and bruised ATM, think its going to be the first company in history who's income exceeds its market cap...


----------



## nunthewiser (18 November 2008)

Frankhalo said:


> Funny how 11 million tons already shipped fails to get a mention too Nunny, not too bad an effort for 6 months work, would take MGX 4 years to even see these figures . Regardless the old FMG is pretty battered and bruised ATM, think its going to be the first company in history who's income exceeds its market cap...




 funny how you didnt answer my original question frank , by the way what date is FMG,s due debt repayment due ? pretty sure theres one due soon


----------



## prawn_86 (18 November 2008)

Frankhalo said:


> think its going to be the first company in history who's income exceeds its market cap...




Nope, already seen a few of them. Just have to dig around a bit. Already a heap of companies with cash exceeding market cap.


----------



## Frankhalo (18 November 2008)

nunthewiser said:


> funny how you didnt answer my original question frank , by the way what date is FMG,s due debt repayment due ? pretty sure theres one due soon




Nunny I imagine FMG dont need to repay the billions they have used to build this project in the first year of operation, as many seem to think is the case.
Yes there is debt, no arguements here but on the flip side there is also income in US dollars , I imagine the accountants at Fortescue are pretty switched on and contracted replayments are at hand, I have not read otherwise, 600 million in the bank so far which is pretty healthy too. Sorry I didn't answer your original question, cost to produce was answered correctly by someone else. But hey, what do I know, I'm just a simple tradesman


----------



## Frankhalo (18 November 2008)

prawn_86 said:


> Nope, already seen a few of them. Just have to dig around a bit. Already a heap of companies with cash exceeding market cap.




Damm, thanks Prawno, point me in the right direction and I'll buy some of those shares...

Just goes to show how messed up the current market is on a serious note.


----------



## nunthewiser (18 November 2008)

Frankhalo said:


> Nunny I imagine FMG dont need to repay the billions they have used to build this project in the first year of operation, as many seem to think is the case.
> Yes there is debt, no arguements here but on the flip side there is also income in US dollars , I imagine the accountants at Fortescue are pretty switched on and contracted replayments are at hand, I have not read otherwise, 600 million in the bank so far which is pretty healthy too. Sorry I didn't answer your original question, cost to produce was answered correctly by someone else. But hey, what do I know, I'm just a simple tradesman




nah m,8 , not saying they have to pay it all back in the first year , just saying im pretty sure off top of head from previous research they due a repayment soon , scrolling thru at present but geez its been years since i looked at there anns and boy havent they had a few since  might pay to keep in mind around accounts time

tradesmen are what keep australia ticking


----------



## Frankhalo (18 November 2008)

nunthewiser said:


> nah m,8 , not saying they have to pay it all back in the first year , just saying im pretty sure off top of head from previous research they due a repayment soon , scrolling thru at present but geez its been years since i looked at there anns and boy havent they had a few since  might pay to keep in mind around accounts time
> 
> tradesmen are what keep australia ticking




Best I could find Nun, doesn't sound too techincal and at best maybe an all to simple guide, by no means claiming this is 100% true or false, taking this on face value only.

"Fortescue Metals. In 2006, it raised $2.7 billion of junk bonds to fund its iron ore project. Since the raising was in US dollars and euros, the debt would equate to $3.2 billion at today's exchange rate.

The bonds will mature between 2011 and 2016, meaning the total repayment is not an immediate liability, but it is paying annual interest of around 10 per cent. "

Good read if you get the chance.

http://business.smh.com.au/business/high-debt-prelude-to-a-hammering-20081116-683i.html


----------



## nunthewiser (18 November 2008)

Frankhalo said:


> Best I could find Nun, doesn't sound too techincal and at best maybe an all to simple guide, by no means claiming this is 100% true or false, taking this on face value only.
> 
> "Fortescue Metals. In 2006, it raised $2.7 billion of junk bonds to fund its iron ore project. Since the raising was in US dollars and euros, the debt would equate to $3.2 billion at today's exchange rate.
> 
> ...




intresting article , i may have it wrong re debt payment as ive scrolled and searched and cant find any due 08/09 , my mistake i must be confused with another company i been looking at .

cheers


----------



## Rhynoceros (18 November 2008)

nunthewiser said:


> funny how you didnt answer my original question frank , by the way what date is FMG,s due debt repayment due ? pretty sure theres one due soon




They have quarterly interest repayments due on the 1st December on a US$250 Million secured note, calculated at the 3 month LIBOR rate + 4% per annum and obviusly the remaining 2 quarters are on the balance sheet as a current liability. FMG's current liability in their financials (Would have risen considering downward movement in AUD since) was $358,294,000.

Large chunck of debt payable in 2011 

Some of their debt interest is tied to a % of revenue. They also have a US$200 Mil Syndicate loan which they've drawn a NIL amount from i guess this gives them access to funds if needed..


----------



## nunthewiser (18 November 2008)

Rhynoceros said:


> They have quarterly interest repayments due on the 1st December on a US$250 Million secured note, calculated at the 3 month LIBOR rate + 4% per annum and obviusly the remaining 2 quarters are on the balance sheet as a current liability. FMG's current liability in their financials (Would have risen considering downward movement in AUD since) was $358,294,000.
> 
> Large chunck of debt payable in 2011
> 
> Some of their debt interest is tied to a % of revenue. They also have a US$200 Mil Syndicate loan which they've drawn a NIL amount from i guess this gives them access to funds if needed..




well well well , you certainly are a fountain of research , well done.... do you hold FMG ?

thanks for your time on it also


----------



## KFC soup (19 November 2008)

Rhynoceros said:


> They have quarterly interest repayments due on the 1st December on a US$250 Million secured note, calculated at the 3 month LIBOR rate + 4% per annum and obviusly the remaining 2 quarters are on the balance sheet as a current liability. FMG's current liability in their financials (Would have risen considering downward movement in AUD since) was $358,294,000.
> 
> Large chunck of debt payable in 2011
> 
> Some of their debt interest is tied to a % of revenue. They also have a US$200 Mil Syndicate loan which they've drawn a NIL amount from i guess this gives them access to funds if needed..




i think the large chunck of debt payable in 2011 is only the us$250mil notes
the rest is in 2013 2016 2019

any increase in liability in usd debt isn't much of a worry when most of the iron ore shipped is paid in usd

what we do have to worry about is when the super fines drop further, cutting in on the profit margin, and fall short of analyst expectation, then the stock wont bunce back up.

forrest should really be focus on building stronger relationships for march contracts, which i'm sure is part of the reason he's in china or hopefully anyway


----------



## oldblue (19 November 2008)

Frankhalo said:


> Damm, thanks Prawno, point me in the right direction and I'll buy some of those shares...
> 
> Just goes to show how messed up the current market is on a serious note.




Hi  Frank.

I know this is the wrong thread but you could start by having a look at PPP. Sp 20c; cash per share 25.5c as at 30 September; still pulling in net cash from the Tui field.
But DYOR.


----------



## Rhynoceros (19 November 2008)

nunthewiser said:


> well well well , you certainly are a fountain of research , well done.... do you hold FMG ?
> 
> thanks for your time on it also




No problem.
And yes i do hold FMG I got in at below $1.80 and fully acknowledge their a high risk stock.

I intend to hold long term as IMO they have exceptional potential and to be honest i don't care what happens in short term.


----------



## nunthewiser (19 November 2008)

Rhynoceros said:


> No problem.
> And yes i do hold FMG I got in at below $1.80 and fully acknowledge their a high risk stock.
> 
> I intend to hold long term as IMO they have exceptional potential and to be honest i don't care what happens in short term.




no worries and fair enough, i hope they work out well for you , good to see unbiased factual research from a holder here , kinda refreshing actually 

have a good day


----------



## ASX_newbie (19 November 2008)

Isn't FMG is going to come down $0?  My trading history was

$7.52 buy , $8.01 sell
$7.32 buy, in hold
$5.8 buy , in hold
$2.8 buy, $2.58 sell
$1.6 buy, .... 
seems every buy is like gamble. 
What boldy FMG is going on? Can anyone help me out? Maybe GOD can only.

In fact I got lots of infomation from China that Government is intending to put billions money into domestic infrastructure. There should have high demands for metal. Why Mining sector here has dropped like this?


----------



## prawn_86 (19 November 2008)

ASX_newbie said:


> Why Mining sector here has dropped like this?




Check back through this thread for your answers or run a search on your questions

thanks

Prawn


----------



## SenTineL (19 November 2008)

i can undersand the frustration though ASXnewbie

it's like the **** has fallen out of it
i'm waiting for the stem of the bloodflow any day now...


----------



## njc.corp (19 November 2008)

cbacamden said:


> Champ - I wish you all the best !
> 
> If its not the bottom its got to be close - go get em
> 
> I dont think I can join you yet though




What facts  have u  got that it is close-

why are people so interested in working out a bottom or a top-- does it matter--

someone teach me something has i cant work this out-

why dont we just have a look at the price right now- and lets talk about  15% down day today---------

in the past i was a holder- so dont think i am just talking it up---


----------



## champ (19 November 2008)

Im pretty sure the rampers here and the people still trying to work out the fundamental positives on this stock are still trying to pick themselves up off the floor. The facts are that theres a lot of pain still to come regardless of how good a company looks, fundamentals and charts mean absolutley nothing right now.


----------



## nunthewiser (19 November 2008)

champ said:


> , fundamentals and charts mean absolutley nothing right now.




can i say "what a load of bollox " in this thread guys ? charts pointed out this fall aNd was pointed out , fundamentals point to the bleeddin obvious at present as obviously the market thinks its overpriced  for what its is AT the moment , ppl factoring in the worse place scenarios re contracts /prices/debt/NTA/eps and allsorts of FUNDAMENTAL factors

thanks champ


----------



## champ (19 November 2008)

Ok, so i guess the chart for every single stock on the asx has said the same thing, that is amazing!!!  The fundamentals for every stock on the ASX have said down down down, wow what a coincidence.


----------



## ASX_newbie (19 November 2008)

njc.corp said:


> What facts  have u  got that it is close-
> 
> why dont we just have a look at the price right now- and lets talk about  15% down day today---------




the slump trend has been making me to suspect what hell is happening inside company. Is it oversold?

the most recent trend is heaps weaker than the trend of market. right now  fundanmentals, charts don't make any sense. 

why other market in China or USA or other Asian countries has been recovered a little bit, but ASX has kept going down and down? 

WHERE IS THE BOTTOM?!!!


----------



## nunthewiser (19 November 2008)

champ said:


> Ok, so i guess the chart for every single stock on the asx has said the same thing, that is amazing!!!  The fundamentals for every stock on the ASX have said down down down, wow what a coincidence.




sorry champ but not all darl .. um MTS still within its long term trend , EXT still within its trens , numerous others if you look, and yes charts pointed out many falls that have happened as with fundamentals . 

www.asx.com.au  might help with research 

good luck


----------



## sinner (19 November 2008)

Yea agreed nun, ORG is trading way up as a good example (although slowly down a $1 the last few days), if it was down-down-down for everyone then you think they would have at least reverted to their BG takeover offer.


----------



## cbacamden (19 November 2008)

like I have said before I personally dont think things will be anywhere near as bad as the market is factoring in. Having said that there are many unknowns and the graph shows that.

Until that changes Im out  - but I think its fair to say, if there is any news to suggest even the slightest good may see the price jump.


----------



## nunthewiser (19 November 2008)

personally hope they fly for some holders here that have done there research and calculated what they reckon is fair value fundamentally .

obviously wasnt fair value at 13/10/8/5/etc etc etc 

oops i forgot maybe we can blame the short sellers again for any falls


----------



## champ (19 November 2008)

Ok I stand corrected. But im guessing only on a small percentage of stocks.
If you look at the Dow preopen and the Euro markets you see that the Euro markets follow the preopen like lambs, its sad to watch, is it always like that or just a recent phenomenon. Dont you think also that if the Dow was still around 10 or 11 thousand Fmg would still be at 6 to 8 dollars... I do.


----------



## nunthewiser (19 November 2008)

champ said:


> Ok I stand corrected. But im guessing only on a small percentage of stocks.
> If you look at the Dow preopen and the Euro markets you see that the Euro markets follow the preopen like lambs, its sad to watch, is it always like that or just a recent phenomenon. Dont you think also that if the Dow was still around 10 or 11 thousand Fmg would still be at 6 to 8 dollars... I do.




well you only got too look at a history chart to see that really , i dont really understand your point re the dow and 11k and what was past for fmg . i think if the dow was still 11k and nothing happened um a lot of stocks would be a lot higher ...your point being ?


----------



## champ (19 November 2008)

My point is that the only fundamental that means anything is that if the DOW is sick everything else is too, had a look at the stocks u mention and they collapsed in october like evrything else. Im just saying that in my opinion its going to be much worse than it is now simply because of the US economy and not because of the situations of individual stocks..


----------



## nunthewiser (19 November 2008)

champ said:


> My point is that the only fundamental that means anything is that if the DOW is sick everything else is too, had a look at the stocks u mention and they collapsed in october like evrything else. Im just saying that in my opinion its going to be much worse than it is now simply because of the US economy and not because of the situations of individual stocks..




nope ...... theres still fundamentally overpriced INDIVIDUAL stocks out there hence some falling more than others and falling more than indicies % falls , bugga it , im wasting my time 
have a niceday come up with whatever theorys tickle ya fancy


----------



## champ (19 November 2008)

If u dont agree with me  nun thats fine, its a forum.   im just giving my two cents worth and its probably not worth that, dont you love the internet!!


----------



## nunthewiser (19 November 2008)

champ said:


> If u dont agree with me  nun thats fine, its a forum.   im just giving my two cents worth and its probably not worth that, dont you love the internet!!




LOL yeah no worries  the internet sure is a funny ole joint at times .......

have a great evening


----------



## champ (19 November 2008)

Maybe ive been reading too much Bill Bonner from The Daily Reckoning, he dosent exactly fill me with hope for the  financial future but he seems to make a lot of sense.


----------



## agro (20 November 2008)

how do you value a company or tell if it is is oversold?

i am sitting on the sidelines at the moment but am very tempted to buy in if it hits $1 !

mind you, with the shorting, even if it does hit $1 prob go lower


----------



## Warren Buffet II (20 November 2008)

agro said:


> how do you value a company or tell if it is is oversold?
> 
> i am sitting on the sidelines at the moment but am very tempted to buy in if it hits $1 !
> 
> mind you, with the shorting, even if it does hit $1 prob go lower




$1 that is expensive!! It may go under $1.20 today

If commodity prices keep following as predicted, this baby will hit a low low low level, very very low low one soon.

Most people are looking at the auto industry bailout in the US but China is in the same boat, their auto industry is in big big trouble and that means a huge impact for iron ore producer at the end of the food chain.

So, brace yourself as the coconut has futher to fall.

WBII


----------



## agro (20 November 2008)

Warren Buffet II said:


> $1 that is expensive!! It may go under $1.20 today
> 
> If commodity prices keep following as predicted, this baby will hit a low low low level, very very low low one soon.
> 
> ...




so you think 50 cents is reasonable price for FMG - considering long-term outlook, e.g. 5 years when China picks up per say?


----------



## Warren Buffet II (20 November 2008)

agro said:


> so you think 50 cents is reasonable price for FMG - considering long-term outlook, e.g. 5 years when China picks up per say?




Agro, what I am saying is that there is no reasonable price for FMG at the moment, I see $1 as a high price and I may believe that it could hit a much much lower lower price that those 50c you mentioned.

Do you really believe that China will pick up in 5 years? Do you really believe that FMG will be around that long?. Just 6 months ago I was hearing that the mining boom was just starting and was going to last for another 10 years, no the case any more, if the US falls the rest of the world falls and in particular China will be hit big time. In the meantime, mines will be closed by the dozens per month and people will lose their jobs in that industry in masses.

WBII


----------



## agro (20 November 2008)

Warren Buffet II said:


> Agro, what I am saying is that there is no reasonable price for FMG at the moment, I see $1 as a high price and I may believe that it could hit a much much lower lower price that those 50c you mentioned.
> 
> Do you really believe that China will pick up in 5 years? Do you really believe that FMG will be around that long?. Just 6 months ago I was hearing that the mining boom was just starting and was going to last for another 10 years, no the case any more, if the US falls the rest of the world falls and in particular China will be hit big time. In the meantime, mines will be closed by the dozens per month and people will lose their jobs in that industry in masses.
> 
> WBII




well the chinese think so if they are looking to buy a stake

refer to recent posts of a company in china acquiring a 5% stake...


----------



## Warren Buffet II (20 November 2008)

Warren Buffet II said:


> $1 that is expensive!! It may go under $1.20 today
> 
> If commodity prices keep following as predicted, this baby will hit a low low low level, very very low low one soon.
> 
> ...




Did I mention $1.20 today? It started as low as $1.16, I believe it will go up intraday and at closing it will plump as the DOW did.

WBII


----------



## agro (20 November 2008)

Warren Buffet II said:


> Did I mention $1.20 today? It started as low as $1.16, I believe it will go up intraday and at closing it will plump as the DOW did.
> 
> WBII




looks like 1.20 is the base now 



here's hoping.. alot of support coming in i noticed 


don't you think?

edit - i am right


----------



## Mr Capital (20 November 2008)

agro said:


> looks like 1.20 is the base now
> 
> 
> 
> ...





Don't bank on it 
There is no reason why it wont fall further. 
I do hope you're right though, but i'm not optimistic


----------



## agro (20 November 2008)

Mr Capital said:


> Don't bank on it
> There is no reason why it wont fall further.
> I do hope you're right though, but i'm not optimistic




well i still got it on target for $1..

hopefully the dow crashes bit further down

though it looks like it has reasonable support now


----------



## Miner (20 November 2008)

I am looking for a level playing price. That means waiting to level the price of FMG to come its true value at which Twiggy invested 

the way FMG is tanking and probably Twiggy is praying before the Chinese to TAKE ME HELP ME, the price in terms of cents not far off.

then I can average with more buying at 50 cents (Aligning with what Agro said) with my current purchase at $7 

I am currently left myself with the downslide flow without trying to swim against with a hope it will reach the bank of an estuary one day


----------



## impala_group (20 November 2008)

I dont think it will hit $1.00 this week.
Infact if you missed the low today - there may never be a chance. If we get +ve lead from the dow tonite i think FMG will actually recoupe some of its losses this week.

have a look at that link

http://business.smh.com.au/business/fortescue-secures-more-sales-to-china-20081120-6cm3.html


----------



## agro (20 November 2008)

impala_group said:


> I dont think it will hit $1.00 this week.
> Infact if you missed the low today - there may never be a chance.* If we get +ve lead from the dow tonite* i think FMG will actually recoupe some of its losses this week.
> 
> have a look at that link
> ...




chances of that happening 

still think long term - give it a couple years will be back around $5

just want to be the bottom picker i guess lol


----------



## drsmith (20 November 2008)

That announcement was made to the ASX after the market closed but interestingly FMG finished off it's lows. 

RIO however took a pounding.


----------



## alex arigo (20 November 2008)

i own fmg for the long term they said today they made 360,000,000 bucks in net profit from the sale of 6,800000 tones of iron ore thats 53 dollers profit a tone they said one off the steel mills said they wanted more iron ore from them and they got it every one is saying demand is slowing but at the end of the day the smaller steel mills will suffer and lose money and cut demand for iron ore because they cant pay higher prices for the ore where the larger steel  mills like bousteel and other huge still mills will increase demand for ore and thats what fmg  is doing there got deals will large steel mils not small mills fmg said demand was very strong for there iron ore and the chinese steel mills were very happy with there ore this is short term problem but china will come out bigger and better and stronger


----------



## agro (20 November 2008)

alex arigo said:


> i own fmg for the long term they said today they made 360,000,000 bucks in net profit from the sale of 6,800000 tones of iron ore thats 53 dollers profit a tone they said one off the steel mills said they wanted more iron ore from them and they got it every one is saying demand is slowing but at the end of the day the smaller steel mills will suffer and lose money and cut demand for iron ore because they cant pay higher prices for the ore where the larger steel  mills like bousteel and other huge still mills will increase demand for ore and thats what fmg  is doing there got deals will large steel mils not small mills fmg said demand was very strong for there iron ore and the chinese steel mills were very happy with there ore this is short term problem but china will come out bigger and better and stronger




yes - exactly

FMG will come out trumps long term

remember they have better relationships when china than do BHP and RIO -

i still remember twiggy denoting a portion of the 1st shipment to the earthquakes that happened in china!! if that's not good customer relationship building !


----------



## Dowdy (20 November 2008)

The problem with this share is that they don't have dividends so you don't know if there earning are fake or not (like ABC)


----------



## Warren Buffet II (21 November 2008)

*How much crap this Twwigy guy can say?*



alex arigo said:


> i own fmg for the long term they said today they made 360,000,000 bucks in net profit from the sale of 6,800000 tones of iron ore thats 53 dollers profit a tone they said one off the steel mills said they wanted more iron ore from them and they got it every one is saying demand is slowing but at the end of the day the smaller steel mills will suffer and lose money and cut demand for iron ore because they cant pay higher prices for the ore where the larger steel  mills like bousteel and other huge still mills will increase demand for ore and thats what fmg  is doing there got deals will large steel mils not small mills fmg said demand was very strong for there iron ore and the chinese steel mills were very happy with there ore this is short term problem but china will come out bigger and better and stronger




This Twwigy guy is the master of ramping and talking up his companies, ASX should ban those idiots who do not give the full story to the common people than later on come to this forums triumph and say that FMG will outperform the market to reach $5 soon?????

From:

http://business.smh.com.au/business/fortescue-opens-its-books-20081120-6cth.html

Profit:
They said a profit of $360ml but they had a loss of as follows:
"Coinciding with its annual meeting in Perth yesterday, Fortescue reported a loss during the quarter - calculated by the Herald to be $55 million, after excluding the revaluation of a subordinated note and the effects of currency fluctuations on its long-term debt but including interest payments and taxes."

So the $360ml is pure bull sh**, tell the whole story. This shows the are in a huge debt problem.

Mills asking for more:
What a piece of crap.....
"The miner yesterday said it had amended one of its sales contracts with an unnamed top-five steelmill in China to increase the size of deliveries to 5.5 million tonnes next year compared with the 2 million tonnes a year of the original contract.

But since Fortescue already has contracts for up to 100 million tonnes of annual sales, this revision implies one or more other customers must have lowered or abandoned their offtake agreements."

This also shows that they are master at confusing the market and just ramping it up. Good Chinese relationships is pure crap, this Twwigy guy went to China to beg the Mills to get his iron ore because other mills broke their contract full stop.

WBII


----------



## agro (21 November 2008)

up 20%

whoooooo hoooooooo

wheres all the critics now

do u hold warren...

good thing i got in at 1.23


----------



## Warren Buffet II (21 November 2008)

agro said:


> up 20%
> 
> whoooooo hoooooooo
> 
> ...




I am here, I do not hold and won't for anything on earth. 

Just wait, wait..., laughing too soon. Have lost 10% for your 20% high already.

WBII


----------



## agro (21 November 2008)

Warren Buffet II said:


> I am here, I do not hold and won't for anything on earth.
> 
> Just wait, wait..., laughing too soon. Have lost 10% for your 20% high already.
> 
> WBII





alot of buyers now mate

why don't you hold.. its all good news?!!

you seem to keep a strong interest in this thread


----------



## prawn_86 (21 November 2008)

agro said:


> up 20%
> 
> whoooooo hoooooooo
> 
> ...




You want a critic?

Wasnt it you who rode them all the way to the top, refusing to sell only to be forced to sell way below the high due to a margin call?

Then you got back in at about $2.50 but sold not long after because it was a "dog". If it drops below $1 will you call it a dog again?

I wouldnt be gloating just yet the way the whole market is, unless you sell and actually lock in your profits...


----------



## Sean K (21 November 2008)

While I think we might be around a bottom of some sorts, I wouldn't be too excited about a few % right now.

Emotion is driving this at the moment.

But, emotion may drive it the other way too when people are too afraid of missing the rebound where a lot of gains will be made.

hmmmmm


----------



## spooly74 (21 November 2008)

agro said:


> alot of buyers now mate
> 
> why don't you hold.. its all good news?!!




Broker valuation came through today with a 12 month price target of $1 based on DCF.
While they acknowledge that the ann that it reached an agreement with the existing ‘top 5’ Chinese steel mills to increase portion of production from 4.4% to 10% for 09 was positive, it does not represent any increase in sales volume.
There are real concerns on the status of FMG's other contracts which represent 90% of production for 2009, and there has been no guidance from the company on this.
The extent of the sales volume risk is also increased as FMG has out of the money freight contracts due to the sharp pull back in freight prices over the past month.

...not all good imo


----------



## jonojpsg (21 November 2008)

Surely if they are producing 40m tonnes a year at around $30 a tonne and selling it all for $70 a tonne then there shouldn't be too much problem??  that makes $1.6b a year which more than covers debt repayments of $500m.

big question is whether they can sell it all


----------



## Aussiejeff (21 November 2008)

spooly74 said:


> Broker valuation came through today with a 12 month price target of $1 based on DCF....




Who in their right mind would trust a broker's recommendation right now? 

After the steaming piles of over-optimistic B$ that a raft of "respected brokers" fed the media as the World's financial markets crashed down, can anyone seriously take any recommendation into the future price of a share as being remotely "accurate" anymore? 

Currently, to base a BUY/SELL decision on some half-a$$ed "expert broker" twaddle is akin to playing Russian Roulette - they are as trustworthy as used car salesmen. IMO of course.


----------



## KFC soup (21 November 2008)

also keep in mind that while the cost of freight graph looks bad, fmg did not contract the freight at the top. it is thought to be less than half and is shared arrangement with the buyer meaning they pay.

on top of that there's no long term freight contract on spot selling


----------



## champ (21 November 2008)

This market is awesome, better than sportstab or any online casino.
Made  a truckload today on fmg. you dont need brains or stats, just balls!!


----------



## Mr Capital (21 November 2008)

champ said:


> This market is awesome, better than sportstab or any online casino.
> Made  a truckload today on fmg. you dont need brains or stats, just balls!!




It's also very easy to blow your brains out. 
Sounds like you are a gambler, not an investor. 
Tread carefully.


----------



## prawn_86 (21 November 2008)

champ said:


> This market is awesome, better than sportstab or any online casino.
> Made  a truckload today on fmg. you dont need brains or stats, just balls!!






Mr Capital said:


> It's also very easy to blow your brains out.
> Sounds like you are a gambler, not an investor.
> Tread carefully.




Yep, just wait till it goes the other way and then see how you feel.

What was your R:R for the trade? What % of capital did you risk? Why did you enter the trade? What was your target?

If you cant answer all of these (plus many others) then its pure gambling.


----------



## champ (21 November 2008)

Its true I am a gambler, the investors got out of this market ages ago.
Gambling on the asx is great because unlike horses or sports you dont lose your entire stake if you gamble wrong.


----------



## InDaMoney (21 November 2008)

FMG closed at $1.80, so that's nearly 40% up... much better, and there are approx 7 times the number of buyers than sellers.  Not a buyer's market now!


----------



## Prospector (21 November 2008)

InDaMoney said:


> FMG closed at $1.80, so that's nearly 40% up... much better, and there are approx 7 times the number of buyers than sellers.  Not a buyer's market now!




What the hell just happened in this afternoon's trade   I have no idea but I will take it, everytime!


----------



## agro (21 November 2008)

came home to find 1.80 on my computer

i am stoked!!


who else in here got some FMG yesterday or today

i am sure some of the critics did but they just deny admitting it to save face  

don't think it will goto $1 either unfortunately..


----------



## InDaMoney (21 November 2008)

agro said:


> came home to find 1.80 on my computer
> 
> i am stoked!!
> 
> ...




I bought 4000 at $1.445 and 10000 at $1.45.  My first lot was bought at the 52 week high, though, so that wasn't too good! Still, in maybe a year or five, we will be laughing about this!


----------



## Prospector (21 November 2008)

agro said:


> came home to find 1.80 on my computer i am stoked!!
> who else in here got some FMG yesterday or today




Way to go Agro, I am pleased for you after the last few crappy weeks!:
I have no idea why the market did what it did this afternoon, I wonder if they will now get a speeding ticket.  Makes up for OZL who got one this week, in the wrong direction!


----------



## agro (21 November 2008)

Prospector said:


> Way to go Agro, I am pleased for you after the last few crappy weeks!:
> I have no idea why the market did what it did this afternoon, I wonder if they will now get a speeding ticket.  Makes up for OZL who got one this week, in the wrong direction!




do you think this is the start of a turn around or do you beleive FMG will touch it's lows again (e.g. 1.20 mark)??

certainly, the market has a bit more to fall overall? it has seemed to do that - maybe today was based on emotion?


like to hear warren's opinion too


----------



## agro (21 November 2008)

Nov. 21 (Bloomberg) -- Fortescue Metals Group Ltd., Australia's third-largest iron ore exporter, rose the most in five weeks in Sydney trading after reporting a new sales agreement and a quarterly "trading profit'' of A$360 million ($219 million).

Fortescue jumped 40 percent to A$1.80 at the 4:10 p.m. Sydney time close on the Australian stock exchange, the biggest gain since Oct. 14, after announcing the earnings late yesterday. Goldman Sachs JBWere Pty raised its profit forecast 22 percent after the Fortescue announcement.

Net profit after tax may be A$950 million for the year ending June 30, up from an earlier estimate of A$777 million, Goldman analysts led by Melbourne-based Neil Goodwill said in a report dated yesterday. Goldman has a `Buy' rating on the stock.

"We have increased our earnings as Fortescue reported lower costs than our estimates to September,'' Goldman said. Iron ore sales of 6.8 million metric tons for the quarter were "slightly better than our estimates,'' the report said.

Fortescue yesterday also said an unidentified top-five Chinese steel mill agreed to almost triple the amount of ore it will buy under an existing long-term sales contract. Representatives of the company including Chief Executive Officer Andrew Forrest visited Hebei Iron & Steel Group and Wuhan Iron & Steel Co. last week, according to The Tex Report on Nov. 17.

Fortescue has existing sales contracts with Tangshan Iron & Steel Co., China's fifth-biggest listed steelmaker and a unit of Hebei Iron, and Wuhan, China's third-biggest steelmaker, Tex said. 




see, the stuff i put up with in this thread - but i still come out on trumps


----------



## InDaMoney (21 November 2008)

I'm with you there, Agro.

Lots of naysaying and gloom and doom from this forum for a long while now.  But I think it's important to remember that anyone posting to this forum could be a buyer or seller, so motives are unclear.  So I tend not to listen to ramping up or down, and just base decisions solely on what I know to be true.

Unfortunately, not everyone does this, so I hope new members realise that the very person who says FMG is dead could be the person who wants to buy FMG for peanuts... and vice versa.


----------



## agro (21 November 2008)

InDaMoney said:


> I'm with you there, Agro.
> 
> Lots of naysaying and gloom and doom from this forum for a long while now.  But I think it's important to remember that anyone posting to this forum could be a buyer or seller, so motives are unclear.  So I tend not to listen to ramping up or down, and just base decisions solely on what I know to be true.
> 
> Unfortunately, not everyone does this, so I hope new members realise that the very person who says FMG is dead could be the person who wants to buy FMG for peanuts... and vice versa.




exactly!!- whenever i hear negativity or alot of interest being put into a thread such as this (i always notice someone posting) it is not because they are helping others by simply informing them but... 

its because they have a vested interest in the company !!

so when u hear negativity from others --> thats ur sign to buy in and confirm your beleifs !!


people hate to deny it though - it's like convincing you not to buy the piece of land the other person wants because it is supposedly 'bad' lol


----------



## Adam A (21 November 2008)

Well done to every one who made money on fmg today

Great  to see a little aussie battler gain some ground today


----------



## prawn_86 (21 November 2008)

Yep well done to those that managed to pick this bottom. Remember that a 'paper profit' is the same as a 'paper loss' neither are locked in, so in uncertain times it might be prudent to take some off the table, or at least run a trailling stop


----------



## skyQuake (21 November 2008)

agro said:


> exactly!!- whenever i hear negativity or alot of interest being put into a thread such as this (i always notice someone posting) it is not because they are helping others by simply informing them but...
> 
> its because they have a vested interest in the company !!
> 
> ...




Agree somewhat, a lot of the time people post negativity just to justify their opinion cause they missed the boat or they've been burnt by it...
Esp those who have been burnt; they can be as deluded as holders who have taken on too much size.
Don't base your investment decision on others, but do consider their advice objectively. 

Do however, separate basic opinion from money management advice.
Cheers


----------



## skc (21 November 2008)

InDaMoney said:


> Lots of naysaying and gloom and doom from this forum for a long while now.  But I think it's important to remember that anyone posting to this forum could be a buyer or seller, so motives are unclear.  Unfortunately, not everyone does this, so I hope new members realise that the very person who says FMG is dead could be the person who wants to buy FMG for peanuts... and vice versa.






agro said:


> exactly!!- whenever i hear negativity or alot of interest being put into a thread such as this (i always notice someone posting) it is not because they are helping others by simply informing them but...  its because they have a vested interest in the company !! so when u hear negativity from others --> thats ur sign to buy in and confirm your beleifs !! people hate to deny it though - it's like convincing you not to buy the piece of land the other person wants because it is supposedly 'bad' lol




Where do people get such thinking from? This is totally ridiculous on so many levels. Do you really believe poster on ASF can influence the market? Talking down something with the intention of buying it on the cheap may work in a private sale (e.g. a block of land)...but it will not work for any shares because they are traded on the exchange! This kind of thinking will merely block yourself from listening to balanced views about a company's prospects - which is what this forum is for.


----------



## agro (21 November 2008)

skc said:


> Where do people get such thinking from? This is totally ridiculous on so many levels. Do you really believe poster on ASF can influence the market? Talking down something with the intention of buying it on the cheap may work in a private sale (e.g. a block of land)...but it will not work for any shares because they are traded on the exchange! This kind of thinking will merely block yourself from listening to balanced views about a company's prospects - which is what this forum is for.




never said they influence the market in general - but they certainly do influence people without a clue in the world to think twice about their decision..


----------



## Dowdy (21 November 2008)

champ said:


> This market is awesome, better than sportstab or any online casino.
> Made  a truckload today on fmg. you dont need brains or stats, just balls!!




Still too early to get back into the market, i reckon. Although commodities are still in a bull market, i don' think they've reached the bottom of their dip


----------



## 2020hindsight (21 November 2008)

yes but agro, I'm sure there are posts back there where "some here" were saying it would be blue skies above $13 

So it falls to 10% of that - literally decimated - 

and wow - it rebounds 40% = 50c ;  which is only 4% of the June value of $13  - and "some here" are talking as if FMG should never have been doubted. 

Let's be honest, FMG has been a disaster in the investment stakes, hit heavily as it has been by the downturn in the international community that (dammit) has even reached China. 

Perhaps it just proves that "the market always overshoots".  Then again, maybe there are tougher times ahead.


----------



## sammy84 (21 November 2008)

prawn_86 said:


> Yep well done to those that managed to pick this bottom. Remember that a 'paper profit' is the same as a 'paper loss' neither are locked in, so in uncertain times it might be prudent to take some off the table, or at least run a trailling stop




If there ever has been a time that trailing stops are paramount it is now! I've learnt that lesson the hard way


----------



## SenTineL (21 November 2008)

yeah getting sick of some of the crap posted in this thread, mostly from agro.

you are talking it up as the best thing since sliced bread at it's highs, calling FMG a dog at it's lows and what do you do today?  omg

i actually value Warren and the other guys comments as it's always good to hear different views especially different to mine. it's how i like to learn. i've also stopped listening to people that say 'oh i think this may be the bottom' or 'i think there's still tough times ahead' YOU ARE ALL WRONG, NO ONE CAN PREDICT THE FUTURE. until we some reality of the market actually turning around, then we can say 'that was the bottom'

then ramping - as if anyone on this forum can influence the share price!

i disagree about it being a disaster, anyone that has held any stocks through the last year would have had a huge loss with majority of their shares and blue chips.


----------



## Dowdy (21 November 2008)

SenTineL said:


> YOU ARE ALL WRONG, NO ONE CAN PREDICT THE FUTURE.




In terms of stock markets, you can - if you understand the fundamentals. 


Peter Schiff was right. Predicted this accurately in 06
http://www.youtube.com/watch?v=2I0QN-FYkpw


----------



## 2020hindsight (21 November 2008)

Dowdy said:


> Peter Schiff was right. Predicted this accurately in 06



Maybe someone could ask Peter what to do and/or what to buy or sell when the trading opens on Monday


----------



## sinner (21 November 2008)

Peter has been advising his clients to accumulate gold (according to him a lot of his clients being sent to Perth Mint, not sure if they are asking for physical delivery or just allocated gold in certs) and if they want stocks, to pick dividend paying good yield sound foreign undervalued oversold (from the US) companies.

What else would you expect from the former economic adviser to Ron Paul.

Between him and Mish, I am very curious to see who will end up being right (Schiff in the "buy gold and a gun" camp Mish in the "hey the US aren't the only cheaters so if we are bust you're all bust" camp).


----------



## champ (21 November 2008)

Dowdy said:


> Still too early to get back into the market, i reckon. Although commodities are still in a bull market, i don' think they've reached the bottom of their dip




Im not really into getting in or getting out of the market, im into betting intraday, its a rush, especially with the extreme swings we are having now, you dont get to play it like this too often.
Today i did allright with FMG AGS and AIS, too scary holding over the weekend these days


----------



## Mr Capital (21 November 2008)

champ said:


> Its true I am a gambler, the investors got out of this market ages ago.
> Gambling on the asx is great because unlike horses or sports you dont lose your entire stake if you gamble wrong.







champ said:


> Im not really into getting in or getting out of the market, im into betting intraday, its a rush, especially with the extreme swings we are having now, you dont get to play it like this too often.
> Today i did allright with FMG AGS and AIS, too scary holding over the weekend these days




Too scary to hold over the weekend ?? fair enough, but i thought you were a gambler. Correct me if I'm wrong


----------



## sammy84 (21 November 2008)

Why invest in a FMG when there are so many other attractive miners out there who have been similarly oversold? The likes of BHP, RIO and OZL all are DIVERSIFIED, have solid past returns, spare cash etc to name a few benefits. Don't understand the hype of FMG. I used to hold but sold quite sometime ago, in this current market it survival of the fittest.


----------



## Mr Capital (21 November 2008)

sammy84 said:


> Why invest in a FMG when there are so many other attractive miners out there who have been similarly oversold? The likes of BHP, RIO and OZL all are DIVERSIFIED, have solid past returns, spare cash etc to name a few benefits. Don't understand the hype of FMG. I used to hold but sold quite sometime ago, in this current market it survival of the fittest.




Fair enough BHP & RIO, but OZ Minerals ? nah. I can think of many other places to put my $. I'd only want 1-2 in the mining sector max anyway.


----------



## sammy84 (21 November 2008)

Mr Capital said:


> Fair enough BHP & RIO, but OZ Minerals ? nah. I can think of many other places to put my $. I'd only want 1-2 in the mining sector max anyway.




Yeah I only have 1 in my portfolio, which is OZL. Figured the others have a bigger downside risk. Also I particularly like like OZL, beside a stupid currency swap I find them robust. Then again I'm sure there are reasons why people like FMG, and I think it is a dog.


----------



## Frankhalo (22 November 2008)

sammy84 said:


> Yeah I only have 1 in my portfolio, which is OZL. Figured the others have a bigger downside risk. Also I particularly like like OZL, beside a stupid currency swap I find them robust. Then again I'm sure there are reasons why people like FMG, and I think it is a dog.




The last two ann's from FMG have certainly put alot of the lies and rumours that were pointed at FMG to bed. Should you get a chance they are a fantastic read and clearly highlight current and future operations, facts / future / figures. 3rd biggest IO exporter in Australia now, moving forward it will be the second biggest once BHP/RIO join ranks, I look forward to that day.

FMG’s Fundamentals / business model are sound in these challenging times, the jury is still out globally though on many other companies


----------



## joeyjoejoe (22 November 2008)

hi guys just RE: yesterdays "what happend in the afternoon"

i was watching the market depth at work yesterday....saw the price around 1.66 mark..... then during the pre-open just after 4pm i saw an order on the buy side from 2 buyers for around 592,000 shares at 1.80 which gobbled up all the sellers up to that point.. big fish... with the dow move last night heres hoping for a great monday!

i bought some shares in @ 1.50 yesterday at 10:05am      and brought my average down to 2.13 so quite pleased with the result


----------



## agro (22 November 2008)

sammy84 said:


> Why invest in a FMG when there are so many other attractive miners out there who have been similarly oversold? The likes of BHP, RIO and OZL all are DIVERSIFIED, have solid past returns, spare cash etc to name a few benefits. Don't understand the hype of FMG. I used to hold but sold quite sometime ago, in this current market it survival of the fittest.




what would you rather:

1 share in BHP = $20

or

20 shares in FMG = $20

i'll take the FMG any day,


----------



## agro (22 November 2008)

sammy84 said:


> Yeah I only have 1 in my portfolio, which is OZL. Figured the others have a bigger downside risk. Also I particularly like like OZL, beside a stupid currency swap I find them robust. Then again I'm sure there are reasons why people like FMG, and I think it is a dog.




OZL?!!! u have got to be kidding me

Zinc is one of the commodities that was hit the hardest !

at least with BHP/RIO they have iron ore and coal...


----------



## Prospector (22 November 2008)

sammy84 said:


> Then again I'm sure there are reasons why people like FMG, and I think it is a dog.




Well, I am a dog lover then.  I have been trading FMG for a long time now and it has made me some serious money.  OZL - holding as Zinifex, the dividends were nice but other than that? Downhill all the way!  And dont even mention it in the same breath as BHP and RIO


----------



## Sean K (22 November 2008)

agro said:


> what would you rather:
> 
> 1 share in BHP = $20
> 
> ...



Are you kidding me?

Flabbergasted. 

I'm going out to buy 1m shares in XYZ @ .0001c because it's 'cheaper'.


----------



## jonojpsg (22 November 2008)

kennas said:


> Are you kidding me?
> 
> Flabbergasted.
> 
> I'm going out to buy 1m shares in XYZ @ .0001c because it's 'cheaper'.




Careful though Kennas, make sure you don't have to pay another two installments of $1 on those though, you might end up on 7.30 report


----------



## sammy84 (22 November 2008)

agro said:


> OZL?!!! u have got to be kidding me
> 
> Zinc is one of the commodities that was hit the hardest !
> 
> at least with BHP/RIO they have iron ore and coal...




Zinc.....and copper, lead, gold, silver and entering nickel, hence why they are a diversified miner. More options lead to a greater chance of survival. Further, even after the big lift that FMG has had in the last day, OZL is still fairing in terms of % loss (not much though...around 1.5% better). 

Such argument like these are silly however, everyone has there own preferences....and FMG isnt mine in this environment.


----------



## Miner (22 November 2008)

kennas said:


> Are you kidding me?
> 
> Flabbergasted.
> 
> I'm going out to buy 1m shares in XYZ @ .0001c because it's 'cheaper'.




Kennas

Not sure if you have had a typo in your message.
Did you mix up in letters and wrote XYZ instead of FMG 

(days are not probably far off that FMG will soon be like the XYZ one forget the sudden gain they have had on Friday on profit news).


----------



## 2020hindsight (22 November 2008)

Frank - hope you don't mind me getting a smile at your comment below ...
How FMG will move up to second biggest IO exporter? - by numbers 1 and 2 joining ranks, lol 

PS I agree with the sound business model into the future. 


Frankhalo said:


> ... 3rd biggest IO exporter in Australia now, moving forward it will be the second biggest once BHP/RIO join ranks, I look forward to that day.
> 
> FMG’s Fundamentals / business model are sound in these challenging times, the jury is still out globally though on many other companies




Meanwhile I suspect that FMG will settle for 55MTa capacity (with optimisation, Apr2009) - for a while, and put the 80MTa etc plans on temporary "hold" ) .  Further expansion will happen one day, but not for a while.  The good news is that they've managed to export 50 odd (60 odd?) shiploads before the **** hit the fan. 



			
				SenTineL said:
			
		

> I disagree about it being a disaster, anyone that has held any stocks through the last year would have had a huge loss with majority of their shares and blue chips.



Ok I said it was a disaster for the recent 5 months or so (i.e. some of the others stocks might have lost 50% of their June value - but sheesh - to lose 90% in the case of FMG was very sobering  

I didn't mean it would be a disaster into the future.  I personally remain very optimistic.  Each day I ask myself "will I sell? - why should I? - I'd be buying if I didn't already own em ! "


----------



## 2020hindsight (22 November 2008)

I like the way the Chinese define their "Lecessions" - as when gLowth falls below 8% pa lol

PS (These jpegs taken from the recent AGM presentation - and also recent presenatations to the Chinese buyers obviously  .)


----------



## Frankhalo (23 November 2008)

Frank - hope you don't mind me getting a smile at your comment below ...
How FMG will move up to second biggest IO exporter? - by numbers 1 and 2 joining ranks, lol 



Hey 2020 Hindsight

Simple really, BHP and RIO hold 1 and 2, joining ranks becoming one next year, if it goes through, they become one big *** mining company, let’s call them BHIO, actually when you pop in to work Monday walk around the office repeating "BHIO" really fast, guaranteed your work mates will finally think you have lost the plot..

We are now left with a vacant number two spot, I’m tipping it’s not CVI “City View” going to fill that spot…


----------



## ASX_newbie (24 November 2008)

guys who are back FMG or Miner sector, the following may be a good news from China

_China's provincial governments have proposed more than 10 trillion yuan ($A2.35 trillion) in infrastructure spending, state television reported on Sunday, following Beijing's launch of a massive stimulus plan to revive slowing economic growth.

China is trying to boost domestic consumer spending by injecting money into the economy in hopes of insulating it from a sharp drop in global demand for its exports.

The biggest proposal came from Yunnan province in the south-west, which plans to invest 3 trillion yuan ($A721.03 billion) over the next five years, Chinese state television said.
...._


Hopefully the needs of Steel would be going up again.


----------



## Frankhalo (24 November 2008)

ASX_newbie said:


> guys who are back FMG or Miner sector, the following may be a good news from China
> 
> _China's provincial governments have proposed more than 10 trillion yuan ($A2.35 trillion) in infrastructure spending, state television reported on Sunday, following Beijing's launch of a massive stimulus plan to revive slowing economic growth.
> 
> ...




This is dam good news, unless of course the Chinese are planning to use Lego blocks 

I look forward to the finer details of the plan soon, thanks for posting...


----------



## agro (24 November 2008)

Frankhalo said:


> This is dam good news, unless of course the Chinese are planning to use Lego blocks
> 
> I look forward to the finer details of the plan soon, thanks for posting...




once more - factor in the supply cuts by BHP, RIO, FMG, CRVD should c IO prices up again

we are on a good thing here boys


----------



## agro (25 November 2008)

where is warren and nun

haven't herd from them in a few days ? whats going on?

FMG 10m volume and up 16%


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## agro (25 November 2008)

bought some more just around 2 for a short-term trade

hehe

looks like someone big is accumulating!!


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## sammy84 (25 November 2008)

agro said:


> bought some more just around 2 for a short-term trade
> 
> hehe
> 
> looks like someone big is accumulating!!




Agro I dont understand. You sold off FMG at $2 calling it a dog, now you say its a good opportunity. Its still the same company.


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## Sean K (25 November 2008)

sammy84 said:


> Agro I dont understand.



Emotion changes a lot of things in this business.

We could have a bad night on the DJI based on some good news and the world will cave in heading to oblivion.


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## agro (25 November 2008)

sammy84 said:


> Agro I dont understand. You sold off FMG at $2 calling it a dog, now you say its a good opportunity. Its still the same company.




yeah warrenbuffet on here got the better of me

i bet he went and bought at the same time

goes to show how we can be easily influenced


----------



## prawn_86 (25 November 2008)

agro said:


> i am getting sick of FMG... and am considering selling at 2.50 and getting out all together
> 
> this is being a dog of a stock and is just heading in one direction - south
> 
> ...






agro said:


> well i was forced to sell my beloved FMG today due to margin call..
> 
> just to recap, i was in at $2.95,
> 
> ...






agro said:


> yeah... it's a dog with earnings of $600 million to date
> 
> 
> i wont continue to provide my feedback - people know where i stand
> ...




You seem to be a bit all over the place Agro. Now you are saying its a great company, only because you are holding.

And you accuse people that dont hold of downramping. Does that mean you are just blatantly ramping?


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## Nyden (25 November 2008)

Agro is clearly a gambler; nothing more, nothing less.

High as a euphoric kite when the stock rises, bitter and angry as a shirtless punter when it goes south.

If you continue to allow yourself to be so influenced here agro; I promise that you will eventually lose the lot. I would note that the level of emotional influence FMG seems to have over you suggests that your position is far too large, especially in this market. In short - you have too much capital in FMG, this one's a near-spec, not a bluechip.


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## agro (25 November 2008)

Nyden said:


> Agro is clearly a gambler; nothing more, nothing less.
> 
> High as a euphoric kite when the stock rises, bitter and angry as a shirtless punter when it goes south.
> 
> If you continue to allow yourself to be so influenced here agro; I promise that you will eventually lose the lot. I would note that the level of emotional influence FMG seems to have over you suggests that your position is far too large, especially in this market. In short - you have too much capital in FMG, this one's a near-spec, not a bluechip.




i want to add to my position around $1 but i can't see it heading that far down!!

yes i am a bit of a gambler too, guess i may have to wait


----------



## impala_group (25 November 2008)

impala_group said:


> I dont think it will hit $1.00 this week.
> Infact if you missed the low today - there may never be a chance. If we get +ve lead from the dow tonite i think FMG will actually recoupe some of its losses this week.
> 
> have a look at that link
> ...




  Like i said in the post above you might have missed your chance to but it at the low $....but this stock is always a target of short sellers so maybe Agro there is still some hope.

I'm holding...but no more buys at the moment on FMG


----------



## Frankhalo (25 November 2008)

impala_group said:


> Like i said in the post above you might have missed your chance to but it at the low $....but this stock is always a target of short sellers so maybe Agro there is still some hope.
> 
> I'm holding...but no more buys at the moment on FMG




I'm in the same boat too Impala, like to increase my holdings but I feel FMG has become the play thing for day traders and shorters, and without dropping the "F" bomb I hate that volatilty it brings to FMG and my investment.

What is reassuring though is FMG play well with the Chinese and the business model is sound imo, last two ann's put alot of fiction and rumours to bed. Have enjoyed the movements upwards in the last few days, the finer details of the Chinese internal infrastructure package will benefit most in OZ iron ore wise, so in passing when I start to see a clear upward trend I'll go back to investing rather than gambling.

Look forward to the day when strong fundamentals again count for something...


----------



## joeyjoejoe (25 November 2008)

i dont really think its fair to people to have ago at agro.. i mean sure he called the stock a dog and clearly is in love with it now a short time later... without using all the cliches under the sun.. the stock headed south from $13 to 1.16.. whilst maybe "dog" is not the right word . it was a loser in alot of peoples portfolios. agro has seen the upward trend now to todays close of 2.05 and is feeling postive of recouping some of the losses. i sold my fmgs for 8.51 in july and said i would wait until i saw it heading north again before i would re enter had a dabble around 4.75 got it totally wrong got back out at at 2.85 and now im back in at 1.50 and my average price is only 2.125 

maybe it takes some guts to come out and admit the stock possibly isnt a dog after all. and i think agro would be the first people to come online and admit that if the price continues to head north.

in summary im sure he is happy to be proven wrong if it means more moola in the back pocket

(as we all would be)


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## agro (25 November 2008)

prawn_86 said:


> I can see this going considerably lower once the market realises exactly how much they will be earning.
> 
> Unless Twiggy sells out to the Chinese...




quote from 6th march lol

can i just say that if this is any evidence of negativity from day one then what is it based on?


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## Frankhalo (25 November 2008)

BHP and RIO deal is now off, RIO is down as much as 40% on the FTSE tonight, thats dam huge. 

Any thoughts on what this now might mean for Fortescue ? Sitting duck !


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## Prospector (25 November 2008)

Agro was just tired and emotional when he called FMG a dog.  He has been a fervent supporter for ever, and as soon as he had a sleep, he felt much better again and is now back to normal.

Cant imagine Twiggy letting go of his 36% but it might make tomorrow interesting.


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## sammy84 (26 November 2008)

The withdrawn BHP bid should spell good news for you Agro. It will be interesting to see how the smaller miners fair tomorrow, so far it has been positive in the US.


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## chops_a_must (26 November 2008)

prawn_86 said:


> And you accuse people that dont hold of downramping. Does that mean you are just blatantly ramping?



Prawn, he is actually on record as saying he ramps stocks he owns, on this site. 

LMAO at all the people here still having a go at the short sellers.

Why has it risen so much lately Twiggy? Oh yeah, that's right, they unbanned long buying didn't they!


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## noirua (26 November 2008)

Analysts views on Fortescue Metals from ft:  http://markets.ft.com/tearsheets/analysis.asp?s=AU:FMG


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## 2020hindsight (26 November 2008)

noirua said:


> Analysts views on Fortescue Metals from ft:  http://markets.ft.com/tearsheets/analysis.asp?s=AU:FMG



Fascinating isn't it, lol - in the last 12 months, not one of these analysts has recommended "Sell" .
(While it slid from $13.00 to $1.30 - ok back to $2.00 now) 

One bloke had the courage to say "No Opinion" lol.

The other thing that I find interesting is that the Universities, with all their economists on staff, have managed to lose a bundle on the market in recent times as well.  At least I'm in good company lol


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## 2020hindsight (26 November 2008)

noi, they say 81% increase ... 

just messing around with exchange rates :-



> "The 7 analysts offering 12 month price targets for Fortescue Metals Group Ltd (FMG:ASX) have a median target of 307.00, [AUD 3.70 ?] with a high estimate of 930.00 [AUD 11.25] and a low estimate of 170.00 [AUD 2.05]. *The median estimate represents a 81.12% increase from the last price* of 169.50 [AUD 2.05]."




They say "last price 169.50".  Assuming this is current, i.e. last price in Aus was AUD $2.05, then the conversion to AUD seems to be 170=$2.05.  Hence I have added the values (guesses) in square brackets.


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## Miner (26 November 2008)

2020hindsight said:


> Fascinating isn't it, lol - in the last 12 months, not one of these analysts has recommended "Sell" .
> (While it slid from $13.00 to $1.30 - ok back to $2.00 now)
> 
> One bloke had the courage to say "No Opinion" lol.
> ...




You were right to get this research

These brokers are to my opinion good for nothing and change their colour with wind

First most of them refused to pass any recommendation on FMG

Secondly they are always divided in saying worse than half empty or half full syndrome

THirdly, when we see a scrip is termed as buy by one and hold by another then the math does not work,

If a broker will publish its true recommendation in public forum then it will not make any money for its favoured clients. So I do not trust its recommendation in public. They rather create market opinion just opposite to their intention to sell or buy in general, 

Goldman Sachs predicted oil to reach $200 per barrel on the same time period when it reached $65


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## 2020hindsight (26 November 2008)

noi, they say 81% increase ... 

just messing around with exchange rates :-



> "The 7 analysts offering 12 month price targets for Fortescue Metals Group Ltd (FMG:ASX) have a median target of 307.00, [AUD 3.70 ?] with a high estimate of 930.00 [AUD 11.25] and a low estimate of 170.00 [AUD 2.05]. The median estimate represents a 81.12% increase from the last price of 169.50 [AUD 2.05]."




They say "last price 169.50".  Assuming this is current, i.e. last price in Aus was AUD $2.05, then the conversion to AUD seems to be 170=$2.05.  Hence I have added the values (guesses) in square brackets. 

Then again - those figures could be a day or two old.  Since FMG had 20% increase yesterday (for instance), presumably there's only 1.8 / 1.2 = 50% increase left in the cookie jar if you buy today.


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## 2020hindsight (26 November 2008)

Miner said:


> If a broker will publish its true recommendation in public forum then it will not make any money for its favoured clients. So I do not trust its recommendation in public. They rather create market opinion just opposite to their intention to sell or buy in general,
> 
> Goldman Sachs predicted oil to reach $200 per barrel on the same time period when it reached $65




Lol - yep could well be true..

I remember in the late 70's "investent consultants" were predicting that gold would reach USD 1000 short term.  back when that was a lot of money lol.   

Charge a fortune, and just say "in summary buy gold".  Then the Iran-Iraq war started and a heap of gold was sold by those countries to finance it - and gold stayed at around $300 for yonks.  

Back to the blindfold and throwing darts at the Stock Secton of the Herald ..


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## BentRod (26 November 2008)

2020hindsight said:


> Fascinating isn't it, lol - in the last 12 months, not one of these analysts has recommended "Sell" .
> (While it slid from $13.00 to $1.30 - ok back to $2.00 now)
> 
> One bloke had the courage to say "No Opinion" lol.
> ...




This seems to be the case with every Company that has suffered a similar decline as FMG.

They were even screaming buys on ONTEL and HIH all the way down weren't they?

Times like this the charts speak volumes.


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## 2020hindsight (26 November 2008)

Lol I was happily in cash on Jun30 - then read an article  "make sure you buy on July 1 - don't miss the boat !"

THey forgot to mention it was the bludy Titanic lol. 

PS Here's a good consultant ... operates out of Martin Place on Thursday nights ..


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## Miner (27 November 2008)

FMG did well today as well

Cancelled (Deferred !!) NRW contract is one story

Mr Herb Elliot the reverred Olympian, respected Chairman sold his share at $1.5 or so when the market is so rosy for the company. I am sure if he needed money other than worried for the company then Andrew, Russell or Graeme (who has millions of shares in the company) would have helped me out of respect and for the royalty of using his name for the port (?) . Unless Herb saw something well in advance which market is going to see see in a week's time

Long live FMG believers for long term (how long the piece of thread who knows.

I am holding FMG and hopefully my grandchildren will be able to encash them to earn their in heritance


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## Warren Buffet II (27 November 2008)

*FMG smells like bull*****

Something funny is happening in there and looks they keep hidding the facts or as twiggy always does he is talking that Death Mine Walking (DMW) company up.

Hello 25Mtons, then 22Mtons, then 20Mtons, then 18Mtons, now 15Mtons, next month what 10Mtons?

Same for next year, first 80Mtons, then 55Mtons, probably that will go down to 35Mtons?

Very unreliable business and information, one has to be blind not to see the truth or too twi(cky)ggy 

http://business.smh.com.au/business/fortescue-folds-on-shipments-20081126-6iri.html


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## Frankhalo (27 November 2008)

*Re: FMG smells like bull*****



Warren Buffet II said:


> Something funny is happening in there and looks they keep hidding the facts or as twiggy always does he is talking that Death Mine Walking (DMW) company up.
> 
> Hello 25Mtons, then 22Mtons, then 20Mtons, then 18Mtons, now 15Mtons, next month what 10Mtons?
> 
> ...




You must have miss the last 12 months sleeping beauty...

Expansion works on hold is pretty well documented and its a fair call given the current global mess were in. FMG's ships are still coming in and going out, so I imagine so is the income unless its all freebies. 45 to 55 mta for first year still puts a smile on my face and I look forward to next years July 09 full figures.

Again FMG and Andrew has a long history of suprising the market, I tipping the finer points of his recent trip to China will slowly come out, he has played well with the Chinese and this will place him and the company in the box seat IMO, the same can not be said for BHP, RIO or VALE.

Last three ann's from the past week can help you out, they tackle debt, IO grades, shipments and the future, all add up nicely IMO. As for Herbie enjoying his spoils why not I say, nice Ferrari for Xmas...:


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## SenTineL (27 November 2008)

Herb was affected by the opes prime collapse from memory so it may be that he had to sell some shares....dunno

Also FMG still has contracts with the top 16 Chinese Mills and I think Frank you are right, Andrew has been really friendly with the Chinese and relationships count a lot to them


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## Frankhalo (28 November 2008)

SenTineL said:


> Herb was affected by the opes prime collapse from memory so it may be that he had to sell some shares....dunno
> 
> Also FMG still has contracts with the top 16 Chinese Mills and I think Frank you are right, Andrew has been really friendly with the Chinese and relationships count a lot to them




Here you go SenTinel, the finer points of Andrews trip slowly seeing the light of day. , and its all very promising IMO.

On the evening of Nov.24, Zhou Qiang ,deputy of Hunan Provincial Party Committee and governor of Hunan province, met with the senior delegation of Fortescue Metals Group Ltd (FMG) in Australia headed by Andrew Forrest, executive director and CEO of FMG, in Changsha.

FMG is the world's fourth largest provider of iron ore and Hunan's steel enterprises are its clients. This delegation paid a special visit to Hunan to discuss about further cooperation with the Valin Group.

Zhou briefed that, to tackle effects brought by the present international financial crisis, Hunan actively implements the CPC Central Committee's significant decision of expanding domestic demand to promote economic growth by strengthening construction of such infrastucture as expressways and railways so as to ensure stable and relatively rapid growth of Hunan's overall economy. Zhou said steel demand is bound to continuously increase with the further progress of infrastructure construction and the steel market is therefore promising. Hunan supports wide, comprehensive, thorough and stable cooperation between Hunan and Australia and pushes forward bilateral cooperation in such aspects as low-grade ore exploitation and raw ore processing, relying on the world's leading low-grade ore dressing technology of Central South University in Hunan in the hope of making it a successful example of steel cooperation between China and Australia, furthering exchanges between Hunan and Australia and driving cooperation in such fields as tourism, sports, science and technology. Andrew Forrest expressed his gratitude for Zhou Qiang's meeting and said, he was deeply impressed by steady and healthy development of Hunan and was confident of bilateral further cooperation. Chiefs of relevant departments directly under Hunan Provincial Committee of the CPC accompanied the meeting.


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## jonojpsg (28 November 2008)

Frankhalo said:


> Here you go SenTinel, the finer points of Andrews trip slowly seeing the light of day. , and its all very promising IMO.
> 
> On the evening of Nov.24, Zhou Qiang ,deputy of Hunan Provincial Party Committee and governor of Hunan province, met with the senior delegation of Fortescue Metals Group Ltd (FMG) in Australia headed by Andrew Forrest, executive director and CEO of FMG, in Changsha.
> 
> ...




This is one thing that IMO will be a big positive for FMG over other IO companies - Andrew Forrest is into the diplomatic approach which for Chinese culture is a major tenet.  The big 3 have their CEOs and obviously have the volume to be able to make deals, but there isn't the personal touch that having a CEO who has basically built the company up himself and negotiates from that position.

WHile some of you may scoff and say the Chinese don't care as long as they get the best deal they can, I think that FMG (read AF) have worked and are working their way into being able to sell as much IO as they can produce to China.  It may be a couple of years off but I have no doubt that FMG will be producing and selling their 160MTpa and it will all go to China.


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## SenTineL (28 November 2008)

i can say by being involved with a company that deals with the chinese regularly with imports/exports that the chinese place a very high importance on personal contact and good relationships.

anyway good to see it break the $2.00 mark today


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## Miner (28 November 2008)

SenTineL said:


> Herb was affected by the opes prime collapse from memory so it may be that he had to sell some shares....dunno
> 
> Also F*MG still has contracts with the top 16 Chinese Mill*s and I think Frank you are right, A*ndrew has been really friendly with the Chinese* and relationships count a lot to them




*Relationship with Chinese really go well.*

I have read in history books when I was a student and taking the opportunity to recount it. 

In about 1962 India met a friendship treaty with China. Mr Nehru (the first PM of India who was also father of Mrs Indira Gandhi ex PM of India and grand father of Mr Rajiv Gandhi ex PM of INdia).

 INdia was not as powerful like today, had a very poor military base and worse infrastructure. It was all good handshakes, MOU etc between Chou En Lai (then Chinese PM) and Nehru Indian PM.

WIthin three months of that treaty China attacked India, literally defeated them  and encroached some good areas still under dispute between two countries.  *To me all is fair in love and war *- so do not want to blame Chinese Government in 1962 what did to India. It was a good lesson for India however to wake up. 

We are now having an economic war across the world and many of us have learnt lessons !

Regarding contracts with 16 Chinese Mills. I think they are MOU par se. Who has read the contract and its fine clauses to exit from obligation ?  If contract is all about guarantee then why FMG terminated so many existing contracts with their suppliers ?  What is the guarantee that Chinese Mills will not learn from the lessons taught by FMG ? 

Let us not be pessimistic and let us say SHE WILL BE ALRIGHT MATE 

No comments on FMG however and world has changed since then.


----------



## Frankhalo (29 November 2008)

Miner said:


> *Relationship with Chinese really go well.*
> 
> I have read in history books when I was a student and taking the opportunity to recount it.
> 
> ...




History does not determine your future, your actions / planning / diplomacy today do, that folks is what makes your tomorrow. If you think Andrew and his board leaders were over in China for a cup of tea your sadly mistaken.


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## Surly (29 November 2008)

Frankhalo said:


> FMG is the world's fourth largest provider of iron ore and Hunan's steel enterprises are its clients. This delegation paid a special visit to Hunan to discuss about further cooperation with the Valin Group.




Frank,

What is the production of number 5?

It was easy to come up with  1-3, after that very hard.

cheers
Surly


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## Miner (29 November 2008)

Frankhalo said:


> History does not determine your future, your actions / planning / diplomacy today do, that folks is what makes your tomorrow. If you think Andrew and his board leaders were over in China for a cup of tea your sadly mistaken.




Hi Frankhalo

Good point and no arguments.

Just watch FMG and its so called relationship with 16 Chinese Mills.

One year from here, please review how many of those 16  Mills really placed or bought iron ore from FMG. 

There is always some difference between flirting, just dating and serious dating before a marriage takes place. So what is the level of  relationship currently exists between 16 Chinese Mills and FMG ? 

I have financial interest on FMG as a shareholders and would like to see you win to prove your point so that  I can encash my grand kids inheritance earlier :sheep:

It would have been the world's most expensive cup of tea the FMG shareholders have ever paid for  if Andrew and his team went to China just to have a cup of tea unless they are following Tata who produces iron ore, steel, IT, cars, and *also make Tea (Tetley Brand)* and manage Hotels


----------



## Frankhalo (30 November 2008)

Miner said:


> Hi Frankhalo
> 
> Good point and no arguments.
> 
> ...




Hi Miner

Fortescue has about as much transparency as any other company out there, we all would like to know the finer points of a company’s operation
But unfortunately its not the case. So it’s a matter of mom and dad holders to do the ground work, period reporting and respected news
Articles and the company announcements that come our way with a bit of financial institution spin along the way.

FMG is a sound business model, product going out income coming in and more importantly good ties and a hands on approach with
Our Chinese friends. Diplomacy , product and customer service will see FMG weather the global financial storm IMO and I hope to see
The finer points of the FMG’s team results from their recent trip to China soon.

Regardless Miner enjoy your FMG wealth as well not just your grand kids, never too old for a couple of middle life toys….


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## kkyyoo (1 December 2008)

....

what happened today ?? 

FMG suddenly leaped from around $2.15 to $2.93 (40%++ increase on SP)

Some institutional investor bought in ?? 

Damn missed the boat


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## jonojpsg (1 December 2008)

WOW!  What's happening this am???  Up 35% atm with no news - nice look on my trade that's been in the red for ages and ive averaged down to $2.94 and almost there - woohoo


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## joeyjoejoe (1 December 2008)

man im kicking myself. i sold my 1.50 parcel.. for 2.00 on friday thinking the asx would be down on monday (it is 63.5 in the red) no news.. and hits a high of 2.93 cant belive it.. it feels equally as bad as actually losing 40% on a trade


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## GundamZeta (1 December 2008)

kkyyoo said:


> ....
> 
> what happened today ??
> 
> ...




yes so am i...  miss the chance.. 
by the way, it seems too late to buy it now as the price is 2.8 now... unless another rally for FMG tomorrow... but who knows? don't want to gamble on it.


----------



## Prospector (1 December 2008)

Maybe coincidental but FMS is starting to increase too! Dont stress on it GundamZeta, tomorrow I might be cross because I didnt sell today!  You just do what you think is the right thing to do at the time.


----------



## gav (1 December 2008)

Before the market opened I seen a few buyers wanting to buy a few hundred thousand shares around the $2.20 mark.  I thought that was a bit strange... Maybe they knew something we dont?


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## agro (1 December 2008)

i am tipping it has something to do with the Cazaly land that RIO was debating

RIO have to sell assets i think because they are in debt


----------



## kkyyoo (1 December 2008)

"SHARES in Fortescue Metals Group jumped 34 per cent in afternoon trading, hitting $2.77.

Two traders attribute today’s FMG share price strength to the recent completion of a large share sale by Russia’s Magnitogorsk Iron & Steel, which they say sold just over 150 million shares (5.4 per cent) over the past few months. 

An FMG spokesman said the company has no comment. 

Dow Jones Newswires"

Is this why? completion of selling pressure by the Russian co?


----------



## agro (1 December 2008)

where's the critiques now huh!!!

* Iron ore miner Fortescue Metals Group soared 40 percent, boosted by rumours that BHP Billiton may make a takeover bid or Chinese firms may seek a stake in Fortescue.

The stock leapt as high as A$2.93 before easing back to A$2.86.

Speculation centred on either Chinese interests taking a stake in Fortescue or BHP making a takeover bid for the firm, having dropped its $66 billion bid for rival Rio Tinto last week, mining analysts said.

Both Fortescue and BHP declined to comment.

Fortescue is one of the bigger targets for short sellers, according to figures from the Australian Securities Exchange.


----------



## Sean K (1 December 2008)

agro said:


> where's the critiques now huh!!!



Agro, I hope for longs that it keeps going up, but rejoicing like this over an intra day move can come back to bight you. Too much emotion here.


----------



## stockwatcher51 (1 December 2008)

All very interesting.
I would think a lot of this is speculative. watch for a bit of a sell off tomorrow.


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## njc.corp (1 December 2008)

i seen todays jump- impress me a little but for me to get back in i got to see a  lot of these jumps wether its 5-10 cents-but is got to  be everyday- doubt that can happen in this market state

and the volume got to be their too-

when was the last time we seen fmg in the 15 mil+ volume- give me stats people

its good to see some people make a dollar for a change-

happy trading to all-

Thanks

Nick--


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## Nick Radge (1 December 2008)

> where's the critiques now huh!!!




21% of nothing is nothing...

On a serious note, prices tested the October lows on ultra high volume and finished with a weak close. A lot of bearish confluence there...



_
This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision._


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## skyQuake (1 December 2008)

agro said:


> Fortescue is one of the bigger targets for short sellers, according to figures from the Australian Securities Exchange.




_was_


Daily Gross Short Sales reported for 28-Nov-2008

FMG     FORTESCUE METALS GROUP LTD        FPO             2,000,099       2,807,438,770    

=0.07% short.


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## MichaelD (1 December 2008)

agro said:


> where's the critiques now huh!!!




Still here. Still have no current position in FMG, although today came close to signalling an entry in one of my short term systems.

Agro, I hope for your sake it's not a big seller faking up the price to suck the punters in so they can offload at a better price. If it is, the price action's going to get ugly again very soon. There's now a ton of new punters in this stock at between $2 and $3 (including yourself) who'll all be looking for a breakeven exit if things go south from here, and they'll hold the price down for a while yet I would think.

Good luck with the gamble.


----------



## agro (2 December 2008)

MichaelD said:


> Still here. Still have no current position in FMG, although today came close to signalling an entry in one of my short term systems.
> 
> Agro, I hope for your sake it's not a big seller faking up the price to suck the punters in so they can offload at a better price. If it is, the price action's going to get ugly again very soon. There's now a ton of new punters in this stock at between $2 and $3 (including yourself) who'll all be looking for a breakeven exit if things go south from here, and they'll hold the price down for a while yet I would think.
> 
> Good luck with the gamble.




i am starting to accumulate this now

looks like its heading higher



no chance of it going under $2 now


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## agro (2 December 2008)

not listening to critiques any more - they just inspire me to know i am on the right direction

bought more

now its up 8% high of 2.70

thanks critiques


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## impala_group (2 December 2008)

agro said:


> i am starting to accumulate this now
> 
> looks like its heading higher
> 
> ...




I take that as light joke - Agro. haha

I actually i think it might get below 2 bucks...., got rid of my holding and waiting for an entry below the $2 mark. Historically, i think FMG tends to retrace back after huge spikes in SP.

On the other hand, this depends on whether the rumours are confirmed soon.


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## agro (2 December 2008)

impala_group said:


> I take that as light joke - Agro. haha
> 
> I actually i think it might get below 2 bucks...., got rid of my holding and waiting for an entry below the $2 mark. Historically, i think FMG tends to retrace back after huge spikes in SP.
> 
> On the other hand, this depends on whether the rumours are confirmed soon.




reminds me of the old FMG up 10-20% each day 

volume is increasing too

i dont think it will go under $2 unfortunately


----------



## impala_group (2 December 2008)

agro said:


> reminds me of the old FMG up 10-20% each day
> 
> volume is increasing too
> 
> i dont think it will go under $2 unfortunately




Its looking like that now....will wait and see. the market might be falling head over heals all over agin


----------



## Trembling Hand (2 December 2008)

Just a point on comparing previous volume on disaster stocks like FMG D)

Its better to compare $ flows rather than volume when something gets cut by 80%. Obviously the volume will increase but its attracting a lot less interest than it was this time last year.

Avg daily turn over for November 07 = $37,000,000

Avg daily turn over for November 08 = $24,000,000


----------



## Prospector (2 December 2008)

I have been too scared to log in to my online trading account as I hate seeing all the red.  Are you saying that FMG is green?


----------



## njc.corp (2 December 2008)

agro said:


> not listening to critiques any more - they just inspire me to know i am on the right direction
> 
> bought more
> 
> ...




Good to see u make a dollar-u only make a dollar when u sell it-

u might be  missing the point -people are not critics-they just have a different view which leads to a different approach and so on and so on-

like i said i would like to jump on board but i need to see  more days like yesterday and today and even on wed  and volume to match it  to even think  about coming on board-

good to see people make a dollar-

Thanks

Nick--


----------



## Sean K (2 December 2008)

agro said:


> no chance of it going under $2 now



Another good quote to hold on to for posterity.

Absolutes in this game end up with egg on one's face.

I'm afraid to say that I'm praying to the giant tea pot that you cop it.


----------



## prawn_86 (2 December 2008)

kennas said:


> Another good quote to hold on to for posterity.
> 
> Absolutes in this game end up with egg on one's face.
> 
> I'm afraid to say that I'm praying to the giant tea pot that you cop it.




Yeh, its amusing as this is coming from the genius forecaster who said something along the lines of:
"FMG ALWAYS goes to new highs after it pulls back" after which the price promptly plummeted down to nearly $1.

NJC is right, people are not critics they merely have differing opions. Unless Agro is also calling himself a critic for when he called FMG a dog.... Im confused..


----------



## agro (2 December 2008)

21 million volume and rising

looks like rumors might be true? 

good day for FMG yet again

good luck


----------



## Nyden (2 December 2008)

agro said:


> 21 million volume and rising
> 
> looks like rumors might be true?
> 
> ...




The dangerous thing about rumours - especially in this environment, is that once they've run their course (have been proven to be false); any gains eventuated from said rumours are usually very quickly reversed, and potentially more.

Agro, if you are actually sitting on some gains now - you should really consider implementing some risk management.

My opinion on the rumours? BHP just walked away from an IO play takeover, why the heck would they jump on another? China has no need to buy any right now as well, since it's apparent that we might start seeing contract prices fall as fast and as hard as they've risen in the past years. Wouldn't that just sound fantastic to investors; a 70% fall in profits?


----------



## jonojpsg (2 December 2008)

kennas said:


> Another good quote to hold on to for posterity.
> 
> Absolutes in this game end up with egg on one's face.
> 
> I'm afraid to say that I'm praying to the giant tea pot that you cop it.



Hmm, am I seeing cross thread fertilisation here?  Is this evolution?  Or is it a byproduct?  Surely it's not adaptive?


----------



## SenTineL (2 December 2008)

Shouldn't comments like "no chance of it going under $2 now " be banned or removed?

I just read this thread for a laugh most of the time, except when TH makes a comment that is actually a bit of wisdom (and others of course).

I'm not trading this so just happy to go along with the ride on this one.

I don't believe people on here have any ability to infuence a stock by ramping but Agro you take the cake mate only post when there's a positive day and when it falls from the sky it's a "dog".....classic


----------



## joeyjoejoe (2 December 2008)

this stock is like a woman, you dont fully understand it but you can still love it all the same. lol


----------



## skyQuake (2 December 2008)

joeyjoejoe said:


> this stock is like a woman, you dont fully understand it but you can still love it all the same. lol




Bit worse imo... in the divorce you'll lose 80% of your money and still have to look after the kids.


----------



## Trembling Hand (2 December 2008)

joeyjoejoe said:


> this stock is like a woman, you dont fully understand it but you can still love it all the same. lol




I completely disagree. A women will mostly reward you for your loyalty where a stock will chew you up and spit you out because you love it.

Stocks deserve the same amount of loyalty as a bic pen. When they are working you use them. When they stop working you just throw them out and get a better one.


----------



## joeyjoejoe (2 December 2008)

but a woman cant screw u and go down on you at the same time like FMG can lol

TH - good point, food for thought


----------



## kgee (2 December 2008)

Trembling Hand said:


> When they are working you use them. When they stop working you just throw them out and get a better one.




And how is that differrent from a been with a woman??
lol
no just kidding no really
well maybe a little


----------



## agro (3 December 2008)

good support now for FMG

6.3m vs 4.7m 

buy vs sell volume

up another 8%

RIO down

may head back to $5 soon


----------



## prawn_86 (3 December 2008)

agro said:


> not listening to critiques any more - they just inspire me to know i am on the right direction
> 
> bought more
> 
> ...






agro said:


> good support now for FMG
> 
> 6.3m vs 4.7m
> 
> ...




Agro, FMG is not up "another" 8%. it is the same as one of your previous previous posts, just a couple days later, so it hasnt moved despite your ramping.

In the future any posts containing low content price and volume commentary will be removed. We have been more than lenient with your sub standard posts


----------



## agro (3 December 2008)

prawn_86 said:


> Agro, FMG is not up "another" 8%. it is the same as one of your previous previous posts, just a couple days later, so it hasnt moved despite your ramping.
> 
> In the future any posts containing low content price and volume commentary will be removed. We have been more than lenient with your sub standard posts




your the boss prawn_86 - will promise not to post low content posts 

good to see your continual interest in Fortescue however,


----------



## Frankhalo (3 December 2008)

*This is my opinion only as I'm not buying the whole BHP kaka floating around.*

IMO Baosteel will look to take an equity position in FMG, this will more than likely come in the form of a share issue, thus increasing the amount of FMG shares in the market. Upside is a debt free / low debt FMG and a client / holder which will have a preference to buy product from an equity holding position.

Also expansion plans back on the boards and a healthy balance sheet in the form of income / profit / no or little debt.
Downside is dilution of share value, but if expansion targets are back on the boards to 160mta, your debt is wiped out and you share in the profits it’s all a good scenario for mom and dad holders.

Above is happening with GBG at present with JV partner Ansteel.

Again my 2 cents only, interested in our opinions aswell.


----------



## SenTineL (3 December 2008)

Baosteel and FMG have had a solid relationship for over 5 years.

I'd say the Chinese would be keen on 160mta, very keen.

If FMG debt could be dramaticaly reduced, it would also like you said make it more attractive to a lot more buyers.


----------



## justiceotp (3 December 2008)

If what Frankhalo says was to become the situation what would be the likely effect on share price? Would it drop similar to a capital raising in the current market or come on strong from the expected improved profitabilty and long term reliable outlet for its product?


----------



## Miner (4 December 2008)

Hi All

Thought to share with Insider Report extract published by Keith Neilson.

Although he professes to be an expert with his graph etc but in my personal experience I have seen him (like any other sales person and analyst) to take the credit too much and have failed to suggest MRE constantly as buy at $5, $4, $2 and now says nothing, View Resources and next day it collapsed, VCR, and many others. 
_(Disclaimer : I am neither  recommending Keith Neilson's  tools like Smart Money and Hawk Eye nor believe he walks and talk)_

*So please take sufficient care and do your research to read the following extract* :

*Extract from Insiders Report *

_This iron ore stock has fallen from $12 to $2 and now seems to be gaining support. Could the rumour be true that BHP are looking at a takeover? Who knows! But there has been a sustained increase in buyer demand and it was one of the only stocks to rally yesterday when the All ords fell 145 points. We think it's definitely worth a look_..(attachment).


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## Trembling Hand (4 December 2008)

LOL what about the last time their smart money analyzer showed "solid increase in buying demand"?????

It went from $4.50 to $2


----------



## MichaelD (4 December 2008)

Trembling Hand said:


> Stocks deserve the same amount of loyalty as a bic pen. When they are working you use them. When they stop working you just throw them out and get a better one.




ROFL!

That's a classic way to put this truism. Straight to the pool room!

(to make it relevant to FMG...I see it's back down below $2.50 again. That didn't take long.)


----------



## Miner (5 December 2008)

Good morning folks

Another day for the Mohicans

It reminds me of the saying in world war " The Alliance successfully retreated" (Of course I was not born that time and read in the book.

Similarly FMG has done smart marketing where cancelling/ changing the FOB shipping schedules (with no demand).

*Quoted in the report lodged  by  FMG *

" _Fortescue Metals Group (“ASX:FMG” “Fortescue”) advises that consistent with the continued prudent management of its business and in reflection of changed operating conditions, it has exercised suspension of all of its long term CFR shipping Contracts of Affreightment  and Consecutive Voyage Contracts on the basis of unforeseen circumstances."  _

" The changed arrangements as a result of these suspensions, should not affect *Fortescue’s marketing program in *regards to volumes of product shipped, just the split between CFR and FOB sales terms"  ( _Miner added : So does it mean that  we will continually getting marketing speeches. Andrew and his team will keep on discussing with 16 Chinese Mills  )_


"_The changed arrangements are in direct response to market conditions demanding greater FOB sales." _(_Miner added : So does it mean the market is dictating to disclose the true story with FMG as well in line with world trend - a realistically level playing field now)_ 

Disclaimer : Currently still holding FMG bought at $7


----------



## Sean K (5 December 2008)

agro said:


> i am starting to accumulate this now
> 
> looks like its heading higher
> 
> ...






kennas said:


> Another good quote to hold on to for posterity.
> 
> Absolutes in this game end up with egg on one's face.
> 
> I'm afraid to say that I'm praying to the giant tea pot that you cop it.






kennas said:


> Another good quote to hold on to for posterity.
> 
> Absolutes in this game end up with egg on one's face.
> 
> I'm afraid to say that I'm praying to the giant tea pot that you cop it.




Eggs primed, pies in reserve.

Good luck agro.


On the other hand, long term (2-7 years), you could have picked a winner.


----------



## Trembling Hand (5 December 2008)

Kennas maybe time for some light hearted mucking around before FMG goes from $2,01 to $28,00 ::


----------



## joeyjoejoe (6 December 2008)

come on guys, im sure most people here would like to see the stock go up, i dont currently own any but always keep a watchful eye.. i think the "i told you so thread" is a little bit harsh.. i dont REALLY like to see or hear about people losing money. agreed perhaps they should be more careful or maybe im just a big softie. my advice after watching FMG everyday for about 2 years.. the way AT THE MOMENT id say to make money on it..... find a dirt cheap entry point.. buy during one of those rallys that occur every now and then try and get in either the day before.. or (more likely) at 10:01am on the day... when you can see it going nuts in the pre open.. and then sell it out 1-2 weeks later when you have made 30-40%.. wait for it to go down again then repeat.. and for those who say "you cant time the market"..... i ask whats your average price on FMG (probable responses 7,8 dollars or higher....(im not saying theres anything wrong with that.. but dimiss what im saying at your own peril) surely on THIS STOCK ... you would have been better with this stratergy if stop loss was used.

i dont expect to cry myself to sleep because i sold it for 2.50 or 2.90 and then it went to $13 any time soon


----------



## yettieboy (6 December 2008)

joeyjoejoe said:


> come on guys, im sure most people here would like to see the stock go up




I would agree I would love to see it go up.  partly because i own some but I think it will bounce back to resistance around 2.93 $3.  then keep bouncing between support of 2.20 and $3 what does everyone think.  Once it takes off past the $3 it won't be no Titanic but nice Bahama Cruise that's bringing home the bacon.


----------



## joeyjoejoe (8 December 2008)

I was actually thinking about it today on the drive home....with the closing price.. if it does go below $2.00 and or below 1.50 it could be a little bit scary because its been there before but this time would we see resistance broken?? could a new low cause a capitulation? I think bargin prices offered for a "2nd time" might not appear such a bargin to some investors. I AM looking to buy back in just a bit concered if the price is allready low (say just over $1.00) it wouldnt take much of a move for you to lose a large %. Stop loss could be hit quite quickly. although the possible gains are big.

I guess im some what stating the obvious.

FYI - currently not holding FMG.


----------



## Nesa (8 December 2008)

*China Valin Signs Iron Ore Deal With Fortescue Metals -Xinhua*
Monday, Dec 08, 2008

Australias third-largest iron ore supplier, Fortescue Metals Group Ltd. (FMG.AU), has inked a deal with Chinese steelmaker Hunan Valin Steel Co. (000932.SZ) to develop iron ore mines and to process ores in Changsha, Hunan province, Xinhua News Agency reported Thursday.

Xinhua didnt specify the expected volume or the value of the deal. Valin, which has limited iron ore supplies, hopes to get stable and competitively priced ores out of the deal, the state-run news agency said.

Fortescue Chief Executive Officer Andrew Forrest was quoted by SinoCast China Business Daily News last week as saying the deal would allow Valin to get a stable iron ore supply over the long term, and that Fortescue would get strong support in developing low-tenor iron mines from a couple of higher education institutions in Hunan province - he named Central South University.

The Xinhua report Thursday said Hunans provincial government supported the deal.

Source: http://www.yourindustrynews.com/chi...deal+with+fortescue+metals+-xinhua_17731.html



could be interesting come tomorrow


----------



## kkyyoo (10 December 2008)

Forrest mentions BHP but coyly

Alex Wilson | December 10, 2008
Article from:  Dow Jones Newswires

FORTESCUE Metals Group chief executive Andrew Forrest says the miner's iron-ore assets would be attractive to BHP Billiton.

But the best option for the company is to stick to its growth plans. 

Since BHP walked away from its $135 billion bid for Rio Tinto, there has been speculation it could turn its sights on Fortescue.

Mr Forrest said his company's assets were likely to be of interest to the mining giant.

Fortescue has a suite of assets that on the global commodity scene would be almost impossible to replace, he said.

"We would be very attractive to BHP and to other companies, but I think we are most attractive to our current shareholders," Mr Forrest said.

He said that, although he would have to keep an open mind to any offer, Fortescue shareholders would be best served by the company pursuing its growth plans at its operations in the Pilbara region of Western Australia.

"I am paid to never say never, but I can say that the value that we see in front of the company is very, very strong," he said.

"The option on the growth of Asia, which Fortescue shareholders have, is enormous and unless BHP or anyone else can show them a shorter path to that growth, then we will stick to the current plan."

LINK: 

http://www.theaustralian.news.com.au/business/story/0,28124,24777156-36418,00.html

Would be interesting if BHP make a comment in relation to the possible t/over


----------



## chops_a_must (10 December 2008)

Why would they bother with FMG?

They are riddled with debt, and that's the reason they left RIO alone. And RIO has some stunningly good Iron Ore assets.

As opposed to FMG, which from reports I'm hearing from on the ground, have absolutely shizen grades and the geos simply do not know what they are doing.

Why would BHP bother?

Typical BS ramping from Twiggy once again.


----------



## Warren Buffet II (10 December 2008)

chops_a_must said:


> Why would they bother with FMG?
> 
> They are riddled with debt, and that's the reason they left RIO alone. And RIO has some stunningly good Iron Ore assets.
> 
> ...




BHP could pay 2Billions dollars for the whole FMG easily and get rid of all the problems they are generating with trains and ports.

WBII


----------



## jackson8 (10 December 2008)

Dec 09, 2008, Carol Chan and Bloomberg, 533 words 

The mainland, the world's largest consumer of iron ore, may ask the three biggest producers to accept an 82 per cent price cut because steel prices have plunged, but market watchers said such a large discount seemed unrealistic. 

one of the articles from china news
surely there are a lot of ongoing dramas which will have an effect on all iron ore producers whether positive or negative
i am sure the whole situation will play out like a good game of chess


----------



## Miner (10 December 2008)

jackson8 said:


> Dec 09, 2008, Carol Chan and Bloomberg, 533 words
> 
> The mainland, the world's largest consumer of iron ore, may ask the three biggest producers to accept an 82 per cent price cut because steel prices have plunged, but market watchers said such a large discount seemed unrealistic.
> 
> ...




IMO if 85 to 90 % price increase was possible in the begining of this year in the name of increased demand, increased freight cost etc  then 82% price reduction is not a discount. It will be still a net gain with industry demand situation, lower freight cost and better break even situation. If the three big producers increase their efficiency, cut down the redundant fats (lot of business improvement and excellece teams with high salary with no improvement or excellence), cutting down the STIP (short term imporvement program and allowing GM and MD to get 60% bonus), cutting down expensive site allowance some 65 % in some places leave alone high salary then the companies will still make profit generously to give back somethign to sharehodlers


----------



## freddy2 (10 December 2008)

Miner said:


> *IMO if 85 to 90 % price increase was possible in the begining of this year in the name of increased demand, increased freight cost etc  then 82% price reduction is not a discount. *It will be still a net gain with industry demand situation, lower freight cost and better break even situation. If the three big producers increase their efficiency, cut down the redundant fats (lot of business improvement and excellece teams with high salary with no improvement or excellence), cutting down the STIP (short term imporvement program and allowing GM and MD to get 60% bonus), cutting down expensive site allowance some 65 % in some places leave alone high salary then the companies will still make profit generously to give back somethign to sharehodlers




Of course it is a discount - what would happen to the price following a 200% increase followed by a 100% decrease?

Here are the figures (for 90% increase followed by 82% decrease) if you still can't work it out

Initial Price: 100
90% Increase: 190
82% Decrease: 34.2 = 65.8% loss on initial price


----------



## agro (10 December 2008)

did anyone else here FMG's assets look attractive to BHP

it was mentioned on sky business channel 

though i am not sure if selling FMG's assets is a good thing


----------



## Timestar (10 December 2008)

*FMG - drowning in debt (next Allco?)*

Far too much attention has been directed to it's bus. model and (potential) P.E. Ratio but almost none towards the fact that it is swimming in debt, most of it current debt at that.

I'm holding out until they can clear this up.

Thoughts ?


----------



## Garpal Gumnut (10 December 2008)

*Re: FMG - drowning in debt (next Allco?)*



Timestar said:


> Far too much attention has been directed to it's bus. model and (potential) P.E. Ratio but almost none towards the fact that it is swimming in debt, most of it current debt at that.
> 
> I'm holding out until they can clear this up.
> 
> Thoughts ?




You'd need to back this up with figures and perhaps post it in the FMG forum under asx stocks.

gg


----------



## nunthewiser (17 December 2008)

Fortescue Metals Group has plunged 7.2 per cent in early trading after analyst reports yesterday claimed the WA iron ore miner’s decision to suspend shipping contracts could cost it $US300 million.

An analyst at investment bank Morgan Stanley Australia also said Armanda Shipping of Singapore had lodged a legal case against Fortescue with the US Federal District Court, which it believed related to the cancellation or non-payment of shipping contracts by the miner.

The report forecasted a loss of $542 million for Fortescue for the first half of 2008-09 due to a number of factors including shipping losses.

Fortescue subsequently issued a statement to the Australian Securities Exchange this morning in which the company said it was seeking legal advice ahead of taking decisive action over 10 shipping contracts.

“Each of the 10 contracts that have been actioned need to be considered on their specific facts and merits as Fortescue will use the all the appropriate legal mechanisms for determining the disputes that have arisen between some of the parties and any future disputes that may arise,” the company said.

The statement was issued following reports earlier this month that Fortescue was looking to suspend long-term vessel charter contracts due to plunging freight rates and the slump in Chinese demand for iron ore.

Fortescue put the contracts in place earlier this year when cape-size iron ore carriers where difficult to tie down due to the booming iron ore market but has not yet revealed details of the shipping arrangements, nor the financial impact of its decision to suspend the charter agreements.

The Baltic Capesize Index (BCI), which measures the charter rate for the biggest iron ore carriers, has fallen more than 90 per cent in the past six months as part of a global collapse in freight rates.

The plunging BCI has resulted in Fortescue dealing with freight rates well above the charter spot price.

Fortescue shares had dropped 19 ¢ to $2.44 by 10.27am.

PERTH
DALE MILLER


----------



## Warren Buffet II (19 December 2008)

*Valuation at 20c?*

From:
http://business.watoday.com.au/business/fortescue-in-flux-20081217-6zy1.html?page=2

It is interesting to note the changes in assumptions and outlook in the Morgan Stanley coverage.

In the first report, forecast prices in the MS model showed:

Iron ore (fines) $US/ton 2008: $58, 2009: $87, 2010: $108, 2011: $116 and 2012: $114 and a LONG TERM PRICE: $US60.

Iron ore (lump) $US/tn 2008: $74, 2009: $111, 2010: $138, 2011: $148 and 2012: $146 and LONG TERM PRICE: $US77.

*This generated a price target of $8.39 when FMG was trading at $6.00 (40% upside).*

In yesterday's report however:

Iron ore (fines) $US/ton 2008: $51, 2009: $93, 2010: $65, 2011: $65 and 2012: $78 and LONG TERM PRICE : $US82.

Iron ore (lump) $US/ton 2008: $66, 2009: $118, 2010: $83, 2011: $83 and 2012: $99 and LONG TERM PRICE : $US104.

*This generated a price target of $1.06 when FMG was trading at $2.63 (60% downside).*

Price increase

While the world has got a lot darker since March, particularly the outlook for commodity prices reverting to long-term averages, Morgan Stanley's prices have actually increased by 36% for fines and 35% for lump.

*What would have happened if the analysts had not lifted their long-term iron ore price assumptions by 35%? The value for Fortescue under a DCF (discounted cash flow) valuation would be marginal.*

I can only say that this company based on those numbers is highly overvalued, it seems that based on *DCF its valuation would be 20c.*

you cna only expect bad news coming from FMG from now on.

WBII


----------



## agro (19 December 2008)

*Re: Valuation at 20c?*



Warren Buffet II said:


> From:
> http://business.watoday.com.au/business/fortescue-in-flux-20081217-6zy1.html?page=2
> 
> It is interesting to note the changes in assumptions and outlook in the Morgan Stanley coverage.
> ...




I certainly hope you are right

I (and others I know) all want to buy FMG back around $1 - $1.20!!

though it seems to have built good support at $2?

Demand for IO will remain, i think it's manipulation by China at the moment + olympic games


----------



## SenTineL (19 December 2008)

Wait a minute......you hope a share price will fall so you can buy it at a bargain price, based on a huge unknown and assumption that it will automatically go back up and you make some easy money?

That's a new one. Oooh ooh can my shares please go down so I can buy some more at a cheap price? Of course they will go back up. 

The only certainty in this market is the reality of each day and share price of the moment. People may think a company is worth 10 times it's current price but that doesn't mean it will ever reach those prices. Not anymore.


----------



## nunthewiser (19 December 2008)

19th December 2008, 8:00 WST 

Fortescue Metals Group has dismissed the size of about $200 million in legal claims against it as “ambit claims” as the company’s shares slump 5 per in early trading.

The company has also revealed that about $US1.5 million of its cash had been frozen in American accounts as a potential security for any claims made against it.

Shares in the iron ore miner had dropped 12 ¢ to $2.24 by 9am Perth time.

In a statement this morning Fortescue said it maintained it was legally entitled to suspend or delay a number of shipping contracts and that any potential liability was likely to be “substnatially less” than the contract’s face value.

“The alleged value of claims that have been suggested in recent press articles are considered by Fortescue to be ambit claims,” the company said.

A so-called ambit claim is an extravagant initial demand made in expectation of a counter-offer and compromise.

The company also said “less than $US1.5 million” had been frozen in US accounts as a result of a court order, but said it did not expect the total value of funds frozen would be material.

Greek shipowner Angelicoussis Group has lodged a claim in the District Court in New York claiming $US129.8 million ($193 million) in damages and interest in the biggest of three legal actions facing the miner.

Armada (Singapore) and Zodiac Maritime Agencies are also understood to have begun actions, each claiming about $US2.5 million in damages allegedly resulting from Fortescue’s decision to axe their charters.


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## nunthewiser (19 December 2008)

18th December 2008, 11:45 WST 



Fortescue Metals Group is being sued for $130 million by Splendour Special Maritime Enterprise, which claims the mining company cancelled a five-year ship charter.

Fortescue refused to accept delivery of the Anangel Splendour earlier this month, Splendour said in a December 11 US District Court, Southern District of New York filing. The East Perth-based miner agreed on July 4 to pay $77,500 a day for the ship, according to the filing.

Armada (Singapore) Pte has also begun legal action against Fortescue for cancelling a shipment. The miner earlier this month said that it wanted to change contracts so that customers arrange more of their own transportation because of a plunge in shipping rates.

“Fortescue took prudent and decisive action to exercise its rights under its shipping contracts,” spokesman Paul Downie said today. “Any disputes are being referred to arbitration in London as per the terms of the contracts.”

The miner is conferring with its British lawyers with the aim of resolving disputes via arbitration, Downie said. Splendour’s New York law suit was “expressly filed without prejudice to the right of London arbitration.”

Armada is seeking $2.5 million from Fortescue, according to a December 4 US District Court, Southern District of New York filing. The miner has failed to deliver a cargo promised for the fourth quarter of year, the shipping line said.

Fortescue said on December 16 it was reviewing the legal status of shipping contracts that have been suspended or delayed.

Bulk-shipping rates have tumbled this year because of waning demand for shipments of iron ore to China, the biggest customer for bulk-shipping lines. The Baltic Dry Index, a measure of commodity-shipping costs, has fallen 93 per cent from a May 20 record.

BLOOMBERG


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## Warren Buffet II (20 December 2008)

*FMG - More bad news*

Now they are paying contractors with cash to "preserve cash" 

As I said before, more bad news will keep rolling.

http://www.theaustralian.news.com.au/business/story/0,28124,24825156-643,00.html

Anaconda II?

WBII


----------



## joeyjoejoe (20 December 2008)

Im sorry but i feel i must post.. it will be a cold cold dark day in hell before FMG is 20c and to suggest that (if im reading correctly is totally absurd.. lets not get carried away here.. you can use whatever stats you like but we all know it wont happen. regardless of any technical analysis the stock is too WELL loved by the market for this to happen.

- Not currently holding FMG.


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## nomore4s (20 December 2008)

joeyjoejoe said:


> Im sorry but i feel i must post.. it will be a cold cold dark day in hell before FMG is 20c and to suggest that (if im reading correctly is totally absurd.. lets not get carried away here.. you can use whatever stats you like but we all know it wont happen. regardless of any technical analysis the stock is too WELL loved by the market for this to happen.
> 
> - Not currently holding FMG.




lol, can't be that well loved by the market. Has fallen from over $13 to around $2 - not alot of love if you ask me.

Other people on this thread have already got egg on thier face over these sort of calls, just be careful because the market isn't always rational.

If a stock can fall from over $13 to a low under $1.20, it can fall from $2.50 to 20c, don't kid yourself that the market won't let it happen because they "love" the stock.

Not saying it will fall that far but anything is possible.


----------



## chansw (20 December 2008)

*Fortescue share issue begs question of cash position*
Matt Chambers | December 20, 2008 
Article from:  The Australian 

http://www.theaustralian.news.com.au/story/0,24897,24825156-643,00.html


ANDREW Forrest's Fortescue Metals Group has taken the unusual step of issuing shares to pay contractor bills in a move that raises questions about the strength of the company's cash position.

Yesterday, Fortescue said it had issued 1.55 million ordinary shares to raise $3.65 million. 

A spokesman said the shares were issued to a contractor in lieu of a cash payment and that the company might do similar deals in an effort to preserve cash. 

The notice came on the same day the company revealed that a US court had frozen close to $US1.5 million ($2.19 million) of its cash in relation to claims lodged by ship owners seeking more than $US130 million in damages for suspended contracts. 

Paying bills by issuing shares is not unheard of but in the financial sector it is usually done with success fees. 

"The issuing of the scrip shows how tight things are for Fortescue at the moment," said one analyst who covers the stock. "It is a worry, as are the legal issues with the shipping contracts." 

Fortescue shares fell 20c, or 8.5 per cent, to $2.16 yesterday. 

The issued shares were sold to the contractor, whom Fortescue refused to name, at $2.36 a share, the previous day's closing price. 

It was unclear whether the contractor immediately sold the shares, which would have weighed on the price yesterday, or chose to stay on as an investor. Any further deals might need to be mindful of the dilution effect the issuing of new shares would have for existing shareholders. 

Fortescue would not say how much available cash it had, and pointed to the $624 million figure it previously gave at the end of the third quarter. One analyst said available cash was probably lower than this due to funds Fortescue needed to keep in an account to service debt. Fortescue, however, said all the cash was available. 

In another effort to preserve cash, the spokesman said, Fortescue had put on 180-day terms of credit contractors that had been working on a now-suspended expansion. 

Other contractors remained on normal terms of trade, he said. 

The moves to preserve cash come amid a collapse in Chinese iron ore demand and still-frozen global credit markets. 

In November, Fortescue suspended plans to increase capacity at its mines from 55 million tonnes to 80 million tonnes. This month it cancelled two-thirds of its shipping contracts as it switched to traditional deals that require the buyer to freight the product. 

Fortescue is being sued by Greek shipping giant the Angelicoussis Group for $US130 million ($188 million) after cancelling a five-year contract to hire a bulk carrier. The miner said yesterday the face value of the case was considered to be an ambit claim.


----------



## agro (21 December 2008)

SenTineL said:


> Wait a minute......you hope a share price will fall so you can buy it at a bargain price, based on a huge unknown and assumption that it will automatically go back up and you make some easy money?
> 
> That's a new one. Oooh ooh can my shares please go down so I can buy some more at a cheap price? Of course they will go back up.
> 
> The only certainty in this market is the reality of each day and share price of the moment. People may think a company is worth 10 times it's current price but that doesn't mean it will ever reach those prices. Not anymore.




Yes

I seriously hope they go down so i can buy more - $1 - 1.20 is what i want to get them at.. 

what is hard to comprehend about that? 

I know they will go up because they have the best iron ore assets in australia..

i'll let u know when i get more.. but yes, please bring on negative sentiment so hopefully i can get in


----------



## oldblue (21 December 2008)

Well, agro, you may get your price target met if those contractors all rush out to redeem their shares for cash tomorrow.
Keep watching that ticker!



Disc: Not holding currently.


----------



## Boggo (21 December 2008)

agro said:


> Yes
> 
> I seriously hope they go down so i can buy more - $1 - 1.20 is what i want to get them at..




Mid 80 cents will get my attention agro.

I am not trying to create negative sentiment, reality is the driver of that unfortunately.


----------



## treefrog (21 December 2008)

Glossary 

Price to Book Ratio

The ratio of the current price per share divided by book value per share. The book value measures the value of the shareholders ownership in the company, as measured by the last full year balance sheet. 

The price to book ratio is usually greater than one as the market value will usually exceed the balance sheet value attributed to the assets of the company. This is because assets are generally recorded at their original cost, less any accumulated depreciation. The market, on the other hand, is concerned with the cash-generating ability of the companys assets rather than its historical cost. If an asset can generate returns in excess of its cost of capital, then a premium will be paid for the asset. This premium is the price to book ratio.

 FMG P/B ratio currently -3.69 (yes folks that is a minus sign)

so suggest you check the funny mentals at time of buy regardless of whether that's $2, $1 or 20c

2.8billion shares already out there and printing more - it is still a spec share folks


----------



## shaunQ (22 December 2008)

agro said:


> I know they will go up because they have the best iron ore assets in australia..




I am an absolute amateur but know that having the best assets means nothing if you aren't the best at managing those assets. I would have thought those assets will look just as attractive to their bankers.

The assets will remain, who controls them is another matter.

Even being the best doesn't guarantee success. Look at Betamax video, the DVORAK keyboard, the Blue-ray competitor.


----------



## Sean K (22 December 2008)

agro said:


> i am starting to accumulate this now
> 
> looks like its heading higher
> 
> ...






kennas said:


> Another good quote to hold on to for posterity.
> 
> Absolutes in this game end up with egg on one's face.
> 
> I'm afraid to say that I'm praying to the giant tea pot that you cop it.






kennas said:


> Eggs primed, pies in reserve.
> 
> Good luck agro.



Eggs and pies both thrown. 

Hopefully you can see the futility of laying out these types of statements. It will both assist in your trading, and save credibility. 

Good luck.


----------



## prawn_86 (22 December 2008)

kennas said:


> Eggs and pies both thrown.
> 
> Hopefully you can see the futility of laying out these types of statements. It will both assist in your trading, and save credibility.
> 
> Good luck.




Yeh i think anyone relying on agros calls, opinions or credibility would be severely disadvantaged. He has even admitted to being a ramper


----------



## nomore4s (22 December 2008)

prawn_86 said:


> Yeh i think anyone relying on agros calls, opinions or credibility would be severely disadvantaged. He has even admitted to being a ramper




lol, fading him will be a good option.

When he's bullish sell, and when he's bearish buy.

The ultimate indicator:, been pretty accurate so far.


----------



## tigerboi (22 December 2008)

*Re: FMG-getting a pounding*

gee talk about getting reamed real hard,most traded by 8m volume  & ripped down nearly 20%...

i feel pretty happy now i got in at $33 & alot more at $25 then set the sell target at $50 & was happy to take nearly 100% even when it went to $13.00($130) later on

as for agro well he let it slide from $13 to sub $6 before selling on a margin call...stop loss is the go if your not going to set a sell price,things look ugly atm...tb


----------



## oldblue (22 December 2008)

prawn_86 said:


> Yeh i think anyone relying on agros calls, opinions or credibility would be severely disadvantaged. He has even admitted to being a ramper




But his posts don't get pulled?

Must be keeping him on for the entertainment value, or, as has been mentioned as a contrarian indicator!


----------



## joeyjoejoe (22 December 2008)

joeyjoejoe said:


> my advice after watching FMG everyday for about 2 years.. the way AT THE MOMENT id say to make money on it..... find a dirt cheap entry point.. buy during one of those rallys that occur every now and then try and get in either the day before.. or (more likely) at 10:01am on the day... when you can see it going nuts in the pre open.. and then sell it out 1-2 weeks later when you have made 30-40%.. wait for it to go down again then repeat.. and for those who say "you cant time the market"..... i ask whats your average price on FMG (probable responses 7,8 dollars or higher....(im not saying theres anything wrong with that.. but dimiss what im saying at your own peril) surely on THIS STOCK ... you would have been better with this stratergy if stop loss was used.
> 
> i dont expect to cry myself to sleep because i sold it for 2.50 or 2.90 and then it went to $13 any time soon




hi guys its seems the cycle is on the downward trend clearly....... as per the above posting from 6th of december...... the key i belive is to buy when its trending up.. it might sound obvious but you would be surprised how many people put it a bid for say $1.50 or $1.25 or $1.00 because its a nice even number.......


(no people dont use that as entry point i hear you say?? a study of the market depth shows you they do......currently at the close there are 80 people wanting to buy 400,000 shares at 1.70...

the next closest after that is only 18 and 15 people at 1.71 and 1.68

and they consider it a good entry point with no other reason..(even though the stock is still trending down.....perhaps averaging down at a set price to make your figures match up nicely..) your destined to be plaiyng catch up before you have started) however the key is to buy it when its trending UPWARDS espically for large one day gains as mentioned.. if u can buy at 10.01AM (or at the open) at the start of a big 20-30% daily gain... youll be in front and have some room to play.....(assuming of course all the increase does not appear in the OPEN price) ie. it goes up gradually during the day........and IMO with FMG normally it rises steadily throughout the day..........its not normally one to open up HIGHER and then remain unchaged throughout the day......

 if all goes to plan and it goes up instantly (within minutes of your purchase....)you can always set a stop loss at your entry point (break even) or you can set it at -10%........ in the mean time ill be watching.. waiting and lurking for that day...if that day never comes.. i wont have lost anything. 

work out how much you want to make.. work out what % increase you will need and how much capital you have to spend and set a goal and stick to it.

use your stop loss....or bail out before then if you then you have made decent profit and you expect to be soon wiped out by another downward trend settling in


----------



## MichaelD (22 December 2008)

agro said:


> no chance of it going under $2 now






agro said:


> I (and others I know) all want to buy FMG back around $1 - $1.20!!






oldblue said:


> Must be keeping him on for the entertainment value, or, as has been mentioned as a contrarian indicator!




So, Agro, let's put a chronology on this.

1. At the start of December you felt there was NO CHANCE of FMG going below $2 and you were "accumulating".
2. 3 weeks later when the price DOES go below $2, the plan is to buy MORE of FMG at $1 - $1.20. That's 1/2 of the price which it couldn't possibly get down to in the first place.

So, the stock has proved your analysis wrong yet again, it has blown you up once in the past and you STILL love it.

Mate, at what point will you stop loving FMG? Before or after you are forced to declare bankruptcy because of it?

If all punters are like you (and they apparently are), no wonder there are people getting smashed in the markets left right and centre at the moment and then complaining to the media about how it was everyone else's fault.


----------



## agro (22 December 2008)

ok, i will mention it once and for all... every company has it's ups and downs and don't expect me to be everyone's crystal ball..

and i wont stop loving FMG either because i know the Chinese love this company.. 

i will sell out when Twiggy sells.. and for the final time i will be buying at $1 - $1.10

enough said..so continue to post in this thread, ur only wasting ur time


----------



## stockt12 (22 December 2008)

http://www.theaustralian.news.com.au/business/story/0,28124,24833101-5005200,00.html?referrer=email


what a surprise... i posted this a few months back, unfortunately it turned into a bit of a ****fight between myself and agro


----------



## agro (22 December 2008)

stockt12 said:


> http://www.theaustralian.news.com.au/business/story/0,28124,24833101-5005200,00.html?referrer=email
> 
> 
> what a surprise... i posted this a few months back, unfortunately it turned into a bit of a ****fight between myself and agro




how come everyone (all the haters and critiques) come in here when FMG is doing really poorly but they all go into hiding when it is going up??

always been the case,

FMG has been successful in reaching all its milestones and is the 3rd biggest in Australia

twiggy mixes with packer, the chinese etc.. 

enough said


----------



## Macquack (22 December 2008)

agro said:


> twiggy mixes with packer, the chinese etc..
> 
> enough said





The only Packer worth mixing with (Kerry) is dead...........................................................................


----------



## Trembling Hand (22 December 2008)

agro said:


> how come everyone (all the haters and critiques) come in here when FMG is doing really poorly but *they all go into hiding when it is going up??*
> always been the case,




Oh God that's nearly as ridiculously funny as your avatar. 
Mate it hasn't gone up, only in your love struck eyes. It has yet to make 1 higher high since June. Until then I think you will be the only one thinking its going up.

She has not trended up Full stop! Only lower highs that's a down trend mate.


----------



## MichaelD (22 December 2008)

agro said:


> how come everyone (all the haters and critiques) come in here when FMG is doing really poorly but they all go into hiding when it is going up??
> 
> always been the case,
> 
> ...




24-June-2008 $12.78
22-Dec-2008 $1.715

Dare I say it - "enough said". Nah, I need to say more...

I'm sorry, but when exactly since June 2008 has FMG been doing anything other than doing really poorly? It has fallen 87% in value in 6 months, Agro. The only thing it has done well is in outperforming most of the rest of the market by falling MORE than most.

And let's throw some cliches in here as well for good measure;

"The market can remain irrational for longer than you can remain solvent"
"Don't fall in love with a stock since it won't love you back"

You know, this truly is one of the most illuminating threads here on ASF.


----------



## prawn_86 (22 December 2008)

agro said:


> enough said..so continue to post in this thread, ur only wasting ur time




If us posting can stop one person out there having the same mentality and love for a stock, then it has been more than worth all of our time.

We are here to try and share knowledge and help each other, but some people are too ignorant to see that.


----------



## nomore4s (22 December 2008)

agro said:


> and i wont stop loving FMG either because i know the Chinese love this company..




The same chinese that are manipulating the steel market?



> i will sell out when Twiggy sells..




Or when you get another margin call



> and for the final time i will be buying at $1 - $1.10




Oh so now it's $1 - $1.10.



agro said:


> FMG has been successful in reaching all its milestones and is the 3rd biggest in Australia




Doesn't mean a thing if it can't turn a profit. And with the lower prices for IO and the huge amount of debt this company has it is yet to prove that it can do it.
The fact it is issuing shares (yet more shares) to pay contractors for completed work is a major red flag imo, running out of money and can't take anymore debt on maybe?

This company already has over 2.8 billion shares on issue, this means it is going to have to turn a profit of over $280 million dollars just to make a profit of 10c per share. And it still has debt of around $5.9 billion to pay back as well. And this is without issuing anymore shares.

Put this in perspective (all figures are from Commsec so don't blame me if they are wrong:

RIO - 1.2 billion shares on issue. EPS - $6.53 or profit of $8.2 billion. Current SP $37.40

BHP - 5.6 billion shares on issue. EPS - $2.85 or profit of $15.9 billion. Current SP $29.64

and compared to a different sector

CBA - 1.3 billion shares on issue. EPS - $3.44 or profit of $4.7 billion. Current SP $27.06

Still looks like an expensive spec stock to me atm.


----------



## larrikin (22 December 2008)

(no people dont use that as entry point i hear you say?? a study of the market depth shows you they do......currently at the close there are 80 people wanting to buy 400,000 shares at 1.70...

the next closest after that is only 18 and 15 people at 1.71 and 1.68

Joeyjoejoe, where did you go/what do you use to find out out this information?(i.e how many people bought at what price and how much] I would find it a really helpful tool. Is it available through a certain stockbroker? 

Thanks in advance.


----------



## drsmith (22 December 2008)

agro said:


> how come everyone (all the haters and critiques) come in here when FMG is doing really poorly but they all go into hiding when it is going up??
> 
> always been the case,
> 
> ...



There is no doubt that Twiggy has done most could only dream of. He is not in Packer's class however as his wealth has not yet stood the test of time and there are serious doubts as to whether it will.

It will be interesting to see where things lie in say, 12 months time.


----------



## joeyjoejoe (23 December 2008)

larrikin said:


> (no people dont use that as entry point i hear you say?? a study of the market depth shows you they do......currently at the close there are 80 people wanting to buy 400,000 shares at 1.70...
> 
> the next closest after that is only 18 and 15 people at 1.71 and 1.68
> 
> ...




i was just looking at the after hours adjust market depth. these transactions havent taken place and this will change in the morning but what im saying remains consistant all day.... for example i watched probably 500,000 shares + waiting to be sold for 3.00 the other day.. i dont remember the exact but it was quite high amount and alot of sellers compared to other prices...none of those were executed as the high was 2.99..

it also works in reverse people ....... resistance levels.... 

my point is just........in regards to FMG.. forget entry price.. focus on entry time (in relation to the chart...more specifcally short term chart

as per the below: 

this information is free by signing up with an online broker. for example Commsec

Number	Quantity	Price
1	7,000	1.715
18	86,420	1.710
8	45,200	1.705
80	400,117	1.700
3	10,500	1.695
9	67,217	1.690
2	5,100	1.685
15	100,418	1.680
1	9,000	1.670
1	1,000	1.665


----------



## Warren Buffet II (23 December 2008)

joeyjoejoe said:


> Im sorry but i feel i must post.. it will be a cold cold dark day in hell before FMG is 20c and to suggest that (if im reading correctly is totally absurd.. lets not get carried away here.. you can use whatever stats you like but we all know it wont happen. regardless of any technical analysis the stock is too WELL loved by the market for this to happen.
> 
> - Not currently holding FMG.




*The stock is too WELL loved???*. That must be one of the funniest things ever heard.

Just an example:

http://www.theaustralian.news.com.au/business/story/0,28124,24833639-5005200,00.html

“I don’t think they are a particular favourite of the market and it’s been punished heavily today.

WBII


----------



## SenTineL (23 December 2008)

I think the sentiment of this stock being well loved belongs in the past.

Yeah it's been well loved in the last 2 - 3 years prior to July 08 because of the massive gains. But those gains are gone or at least the opportunity to make the sort of gains seen back then by FMG.

People should look somewhere else if they expect a return to the past gains IMO.


----------



## joeyjoejoe (23 December 2008)

Warren Buffet II said:


> *The stock is too WELL loved???*. That must be one of the funniest things ever heard.
> 
> Just an example:
> 
> ...




read the quote in its context brother and READ THE DATE ....please dont start bashing me now WB 11.. i couldnt give two droppings about FMG..and at the moment i dont "love it" .. i dont even hold it and havent since it started dropping from 2.90 downwards read my posts on how i trade on FMG...... i wrote that BEFORE the funding problems... please.... dont you have better things to do with your time.. the stock is a spec at the moment.....mainly the reason people LOVE it .....it because it makes them money....in which ever way the choose .....IT DOSENT mean they ALL love it because its just a fantastic LONG TERM BUY...

ITS NO SUPRISE THAT IT IS A FAV STOCK OF DAY TRADERS.....

i dont mean its loved by the general public as a fantastic way to save for retirement and you should put your whole self managed super into it

I stand by my quote of saying it wont hit 20 cents.... if it does u can come on here and tell every1 how stupid i am and ill cop it sweet


if ur so sure WB 2 sign up to COmmsec CFDS.. and short it till the cows come home and then go for a trip to hawaii


----------



## Garpal Gumnut (24 December 2008)

I'll watch my charts on FMG.

I've never owned it but its a bit like Dracula, when you think its dead, up it rears again.

Has it had a stake through it's heart?

If not lets wait and see.

gg


----------



## nunthewiser (28 December 2008)

nomore4s said:


> lol, fading him will be a good option.
> 
> When he's bullish sell, and when he's bearish buy.
> 
> The ultimate indicator:, been pretty accurate so far.




ROFLMAO!!!!!

LUV THIS THREAD.........luv ya work guys........

ps over the xmas party bits i heard a rumour from a cousins auntys daughter in laws son that FMG had actually done a bit of laying off around the 20th -22nd
this news cannot be verified by me from a link or any articles as i just walked in the door to catch up on the top class humour here and havent had time to look to see if anything been mentioned yet 

BUT can definately say that from my source where i heard this said rumour that they would be in a fairly good position to know and the cousins auntys daughter in law sure knows how to make a great fish curry


----------



## Poppypop (2 January 2009)

Well,l i bought 90,000 shares at an average price of 190, a few days ago, and will sell when i feel the rise is over (220 - 280). Currently it sits at 201 and rising. I believe there is going to be a substancial rise very soon.  I have no doubt they will be sitting around the $3 mark before March (2009). I feel very confident of my investment, as far as making me some quick cash goes


----------



## Trembling Hand (2 January 2009)

Popster nice ramp completely void of analysis or info or value for you first post . You got a stop on that trade or is it a 100 % chance that its going to 220 - 280


----------



## MichaelD (2 January 2009)

Trembling Hand said:


> You got a stop on that trade or is it a 100 % chance that its going to 220 - 280




Don't forget it's first got to get down to $1 again so Agro can buy some more. Then it can go to the sky.


----------



## nunthewiser (3 January 2009)

Poppypop said:


> Well,l i bought 90,000 shares at an average price of 190, a few days ago, and will sell when i feel the rise is over (220 - 280). Currently it sits at 201 and rising. I believe there is going to be a substancial rise very soon.  I have no doubt they will be sitting around the $3 mark before March (2009). I feel very confident of my investment, as far as making me some quick cash goes




you da man...........



is there a reason for 3 bucks ?

should i sell nannas left titty and buy all i can ?


does this come with a money back guarantee?


so many questions......................


----------



## Sean K (3 January 2009)

Trembling Hand said:


> Popster nice ramp completely void of analysis or info or value for you first post . You got a stop on that trade or is it a 100 % chance that its going to 220 - 280




It's a 110% chance of going to the moon TH. The train is leaving the station. Toot toot.



nunthewiser said:


> you da man...........
> 
> is there a reason for 3 bucks ?
> 
> ...



Put the right titty on it too nunthe. How can it possibly not go to 3 bucks?


----------



## Prospector (3 January 2009)

Hey people, this thread is starting to read like one found on HC!  Can we get it back to analysis maybe?   

<ducking for cover>


----------



## oldblue (3 January 2009)

Prospector said:


> Hey people, this thread is starting to read like one found on HC!  Can we get it back to analysis maybe?
> 
> <ducking for cover>





Indeed!

Is anything allowed in the silly season or does it mean that our esteemed moderators are having a well-earned holiday?


----------



## Sean K (3 January 2009)

oldblue said:


> Indeed!
> 
> Is anything allowed in the silly season or does it mean that our esteemed moderators are having a well-earned holiday?



Sometimes posts are left for humour value. 

I thought it was pretty funny. 

Damn this 100ch rule!


----------



## nunthewiser (3 January 2009)

Prospector said:


> Hey people, this thread is starting to read like one found on HC!  Can we get it back to analysis maybe?
> 
> <ducking for cover>






oldblue said:


> Indeed!
> 
> Is anything allowed in the silly season or does it mean that our esteemed moderators are having a well-earned holiday?




Hi guys.......... um if you scroll backover the last 8 months or so you will see many posts of mine regarding analysis and various other nuts and bolts of FMG ............ just wondering if you guys had any to add or you just prefer to pick on posts instead ?? im finding it hard to find any analysis by you guys tho , is there a reason for this ?

thankyou in advance


----------



## oldblue (3 January 2009)

Hi nun.

I'm probably guilty as charged.

My "involvement" in FMG is as an interested observer - I havn't done any research on the company but I'm more than a little interested in what others think of it. I just like to see reasons for dogmatic statements about the SP!

I'm also a little sensitive to the fraught question of what is and what is not regarded as ramping, having been disciplined myself in these forums for what was classed as a "minor ramp". A decision with which, naturally, I strongly disagreed!

Cheers


----------



## nunthewiser (3 January 2009)

oldblue said:


> Hi nun.
> 
> I'm probably guilty as charged.
> 
> ...




 gday Blue .i too am guilty as charged of being a minor ramper in the past ....so have now decided to become a shameless one  ......goooo stox !

on a serious note . I too wonder on many of these guestimates on how far this and thats going to fly to when there is no reasons given other than " i just bought a heap , yeah man there goin to 3 bux !"


gotta admit though , this has got to be one of the more entertaining threads out there 

have a great day


----------



## Boggo (3 January 2009)

Boggo said:


> Mid 80 cents will get my attention agro.
> 
> I am not trying to create negative sentiment, reality is the driver of that unfortunately.




If it breaks below the recent low of $1.69 then I think that below a dollar is possible, as low as mid 80 cents even.

There are a lot of stocks just hanging on to the current positive sentiment, lets hope it lasts, if it doesn't ... 

I see a lot of potential wave 4's behaving as wave 4's do at the moment.

Just my  in an attempt to get other views on what they think may happen.


----------



## joeyjoejoe (4 January 2009)

thread is always good for a laugh..

I think also personally $1 looks attractive. id grab some of that.. but id actually watch it closely...if it hit $1 and bounced off it back above a few times.. definately id tap that.

but if it lingers at $1 and starts to drop slowly into the 90's id stay away.....unless it begins to shoot up strongly past $1.

in other words dont grab it at $1.00 on the first drop.. wait for it to hit and bounce above 2-3 times before you buy in (by this i mean on the day....not over a period of days)

watch the depth for resistance basically .......looking for large buy orders at $1.00 or above keeping it above water

just my thoughts on trading the stocks.. SP.. nothing technical about the company.. 

and dont be afraid to buy from 1.01 - 1.05 as mentioned previously. by doing this you will be infront of ALOT of people at 1.00 even. (who might miss out by 1cent)

let me just say my day job is not very stimulating but computer based work.... i probably watch the depth for 50% of the time the market is open on various companies.

im off the iron ore bandwagon and onto the CSG....albeit fairly tardy


----------



## SenTineL (5 January 2009)

This thread never seizes to amaze me.

One of the lessons I've learned is to trade the market as it is not try to second guess it or expect it to do what you want it.

All these 'what ifs' at $1.00 are a waste of time, the stock is trading at $2.12 as I type this.


----------



## justiceotp (5 January 2009)

Yeah good call its hard enough working out what the market is going to do currently. Why would you bother to work out what you are going to do if it ends up at $1 as it could end up at $1 for many reason not even known yet and if its at $1 it could be cheap or still over priced depending on the reason it hit $1.


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## michael_selway (5 January 2009)

justiceotp said:


> Yeah good call its hard enough working out what the market is going to do currently. Why would you bother to work out what you are going to do if it ends up at $1 as it could end up at $1 for many reason not even known yet and if its at $1 it could be cheap or still over priced depending on the reason it hit $1.




Hi yeah thats true, but its debt is still the issue i think

*Earnings and Dividends Forecast (cents per share) 
2008 2009 2010 2011 
EPS -163.6 33.4 48.4 45.8 
DPS 0.0 0.0 0.0 0.0 *



> Date: 23/12/2008
> Author: Sarah-Jane Tasker
> Source: The Australian --- Page: 15
> Iron ore miner Fortescue Metals Group has been punished by investors forresorting to a share placement to bolster its finances. In order to consolidatecash, it is paying some contractors in scrip worth $A3.65m. As a result thestock closed $A0.44 lower at $A1.71 on 22 December 2008. It had recently risenon takeover speculation, mostly involving Chinese parties
> ...










thx

MS


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## joeyjoejoe (5 January 2009)

i also don't think its very likely we will see $1. just as i suggested people were getting carried away when they suggested 20c and was mocked.

i see your point on looking at "why" it got to $1.00, of course you would be aware of the goings on to some extent without blindly day trading it. but basically you can still tell which way a stock is trending on any given day. maybe thats a blanket statement.. but I back my ability to do this. ....i have been more hit than miss in recent times but this has only come on the back of lessons learnt early and plenty of screen time (whilst making my primary income from my day job) which as mentioned is computer based and taking moderate risks.


----------



## Frankhalo (7 January 2009)

Business as usual, 2.7 million metric tons shipped in Dec08...

PERTH, Jan 06, 2009 (Dow Jones Commodities News via Comtex) -- BHP Billiton Ltd. 

BHP exported 10.6 million metric tons of iron ore from the Pilbara region of Western Australia in December, a slight increase on November, according to figures posted Wednesday on the Port Hedland Port Authority website. 
Slowing demand from steelmakers has forced many global iron ore miners to cut production, but BHP's Pilbara shipments are holding up, based on the port data of the past few months. 

BHP's latest shipments compare with 10.1 million tons exported in November - the lowest monthly shipments since February - and October exports of 10.2 million tons. 
BHP's December exports are still 13% down on the June record of 12.26 million tons, shipped during the peak of the China-driven iron ore boom. 

BHP has said that it doesn't plan to scale back its Pilbara production with any tons surplus to contract requirements to be sold into the spot market. 

*The port's website also shows a strong recovery in export volumes for Fortescue Metals Group Ltd., (FMG.AU) following a temporary port closure in November to carry out expansion work. 

Fortescue's shipments of 2.7 million metric tons were up 50% on the November figure of 1.8 million tons, and bettered the previous record July shipments of 2.5 million tons. *

By Stephen Bell, contributor to Dow Jones Newswires; +61-8-9244-4243; sgbell@bigpond.com 
(END) Dow Jones Newswires


----------



## gav (8 January 2009)

Poppypop said:


> Well,l i bought 90,000 shares at an average price of 190, a few days ago, and will sell when i feel the rise is over (220 - 280). Currently it sits at 201 and rising. I believe there is going to be a substancial rise very soon.  I have no doubt they will be sitting around the $3 mark before March (2009). I feel very confident of my investment, as far as making me some quick cash goes




Well well well... Didnt the haters roll on in after this post.  Granted it would have been nice to know what made you believe the share price was on the way up...

In less than 2 weeks those 90,000 shares @ $1.90 are up 20%, a profit of $33K!!!  

Congrats


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## Poppypop (8 January 2009)

gav said:


> Well well well... Didnt the haters roll on in after this post.  Granted it would have been nice to know what made you believe the share price was on the way up...
> 
> In less than 2 weeks those 90,000 shares @ $1.90 are up 20%, a profit of $33K!!!
> 
> Congrats





Thank you Gav, I sold all my 90,000 shares at 2.24 on Wednesdays open and made just over 30k. I have bought 12,000 more today for 210 and plan to buy more if they fall tomorrow (Friday).


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## prawn_86 (8 January 2009)

Poppypop said:


> Thank you Gav, I sold all my 90,000 shares at 2.24 on Wednesdays open and made just over 30k. I have bought 12,000 more today for 210 and plan to buy more if they fall tomorrow (Friday).




Ahh, nothing like a bit of hindsight trading.

Isn't it amazing how you managed to pick very close to the high...


----------



## gav (8 January 2009)

prawn_86 said:


> Ahh, nothing like a bit of hindsight trading.
> 
> Isn't it amazing how you managed to pick very close to the high...




WTF?! If it was another company in another thread then this statement wouldnt have been made.  Actually, I've seen similar posts in a number of different threads with no accusations like this.  In "hindsight", it looks like poppypop sold a little soon (not that I'd complain with the profit!).  The high was $2.37, so the high was missed by $0.13, which is quite alot of money if you have 90,000 shares!    

Who knows, FMG could be $2.60 on Monday and the decision to sell would have been premature, or they could be $1.90 again and the sell decision was a wise one.

The funny thing is, if the SP had tanked, you'd be asking poppypop if they had sold already or a Stop was used - but because the SP went up, oh it has to be "hindsight" trading...


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## SenTineL (8 January 2009)

At the end of the day it's a profitable trade no matter what happens after this or how much more you could have lost / gained.

Well done on the trade.

It's also funny how there's no posts here when the share price has been up in the last few days, but when it drops the posts rack up again.


----------



## prawn_86 (8 January 2009)

No im just laughing at his lack of analysis and veiled attempts at ramping. Which seems to be quite common amongst this thread for some reason


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## gav (8 January 2009)

No, you said it was "hindsight" trading. I already stated that it would have been good to know WHY poppypop thought the SP would rise.  Being a first post, perhaps they didnt read the rules about posting in the Stock Discussion part of the forum.

"Veiled" attempts at ramping?  Clearly it wasnt very "veiled", judging by the responses.


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## Poppypop (8 January 2009)

prawn_86 said:


> Ahh, nothing like a bit of hindsight trading.
> 
> Isn't it amazing how you managed to pick very close to the high...




Was not worth the risk, FMG was past my minimum selling target, and there was a better stock to be bought (IPL). Today proved me right.


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## Joe Blow (8 January 2009)

Let me just step in here for a moment and make a few points.

This thread has been one of the most troublesome on ASF for some time now and has been close to being temporarily shut down on more than one occasion.

For those posting in this thread I would just like to remind you of what is required:

1. If you are bullish and you think FMG's share price is going up then you must explain in some detail why you believe this to be the case.
2. If you are bearish and you think FMG's share price is going down then you must explain in some detail why you believe this to be the case.
3. If you are neither bullish or bearish and you think FMG's share price is going sideways then you must explain in some detail why you believe this to be the case.
4. If you post a price target (in either direction) then this price target *must* be accompanied by some supporting analysis. If the analysis is t/a based then posting a chart which illustrates your thoughts would also be advisable.
5. If you state in a post that you have bought FMG then it would be helpful to explain why you bought. This puts your actions in context.
6. If you state in a post that you have sold FMG then it would be helpful to explain why you sold. This puts your actions in context.

Lastly, moderators are ASF members too and are not always posting in the role of a moderator. They are, however, bound by the same rules that all other ASF members are (as I am as well). When they are posting with their mod hats on they will make you aware of that. Otherwise, they are ordinary ASF members and are entitled to their opinion like everyone else.

Now, with that said, lets get back to discussing FMG. I look forward to seeing plenty of posts loaded with valuable content.


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## yettieboy (8 January 2009)

FMG Hits its 15th mill ton shipment through the Herb Elliott port anyone heard the news.  Is that going to effect the price come tomorrow?


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## M34N (8 January 2009)

yettieboy said:


> FMG Hits its 15th mill ton shipment through the Herb Elliott port anyone heard the news.  Is that going to effect the price come tomorrow?




It was released to the market at 2:02pm so it was released 2 hours before the close of today; should be factored in. Hard to say to be honest though, the price has risen from a low of $1.70 only about 2 weeks ago to $2.09 now, that's still a respectable rise and considering the drop on the Dow last night, it was a good excuse to get out.

FWIW, I'm still holding FMG from $1.92; felt it would either smash through the $2.00 barrier or face some strong resistance; still hasn't breached it and have stop set at $1.95 (wouldn't surprise me if it gaps down though). Today was the first down day since the 24th Dec, so it has had a good run and any break below $2.00 will most likely face some selling I suspect. It's also forming a nice triangle on the 3 month chart, so a big break either way?


----------



## prawn_86 (8 January 2009)

It has had a good run in the last week or so MEAN, thats for sure.

Looking at your chart, it looks to me as though it made a higher low, but then failed on the higher high. So that indicates either back down to test support, or sideways for a while imo


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## Mr Capital (20 January 2009)

It's been rather quiet in here for a number of days, so i thought I'd give it a bit of a kick

Does anyone see any potential for good news re FMG in the future
Considering our bigger miners are being hurt further & reporting season is upon us. I wonder whether FMG will survive, I'm personally not optimistic with its large debt issues & lower iron ore prices & a slow in demand. Does anyone think it has the potential to get back to the 4-4.50 mark within the next year or so ? 

future take over target ?


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## SenTineL (20 January 2009)

I believe there's a long term future there. 
They have the infrastructure in place and third parties are using it (Atlas Iron), worse case scenario is that they will get taken over if they don't sort out the debt, that's why I'm happy to hold.

In today's West Australian there was an article about Atlas Iron but within it it also said there's rumours of lower quality IO from FMG, problems with output at the mines, which they are "optimising" etc. I haven't heard this in anything official except from people on the ground in terms of rumours...

But FMG has still loaded 6 shipfulls of IO since the start of the year! That must be worth a lot of revenue since AGO's shipment from one cargo ship was estimated at $4 million and FMG's ships are supposedly bigger.


----------



## Boggo (23 January 2009)

Boggo said:


> If it breaks below the recent low of $1.69 then I think that below a dollar is possible, as low as mid 80 cents even.
> 
> There are a lot of stocks just hanging on to the current positive sentiment, lets hope it lasts, if it doesn't ...
> 
> ...




The post above was on the 3rd of Jan, seemed like a bit of a long shot at the time as it was going up.

Looks like it may be on the way now though, 1.69 getting close.
(and Marketech have taken it off their shortable list  )


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## joeyjoejoe (27 January 2009)

http://www.bloomberg.com/apps/news?pid=20601081&sid=abq99vAsUu58&refer=australia

Fortescue Shuts Ore Port in West Australia After Worker Killed 





Looks like this one will be in the RED 2mrow


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## Poppypop (27 January 2009)

joeyjoejoe said:


> http://www.bloomberg.com/apps/news?pid=20601081&sid=abq99vAsUu58&refer=australia
> 
> Fortescue Shuts Ore Port in West Australia After Worker Killed
> 
> ...




I hope not. I have 50,000 shares with an average price of 173.5 and a stop at 163.5. I think it will go up in price cos RIO had a good run today, therefore it's FMG's turn tomorrow .


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## prawn_86 (27 January 2009)

Poppypop said:


> Thank you Gav, I sold all my 90,000 shares at 2.24 on Wednesdays open and made just over 30k. I have bought 12,000 more today for 210 and plan to buy more if they fall tomorrow (Friday).






Poppypop said:


> I hope not. I have 50,000 shares with an average price of 173.5 and a stop at 163.5. I think it will go up in price cos RIO had a good run today, therefore it's FMG's turn tomorrow .




How can you have 50,000 at that average, if you sold your entire holding as your first quoted post indicates? *That means you have bought 38000 since then, which makes it actually impossible to have that average, even if you bought the whole 38000 at the lows ($1.70) since then.*


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## SenTineL (27 January 2009)

dissapointing day today considering the overall market was up, even with the tragic news.


joey called it


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## Poppypop (27 January 2009)

prawn_86 said:


> How can you have 50,000 at that average, if you sold your entire holding as your first quoted post indicates? *That means you have bought 38000 since then, which makes it actually impossible to have that average, even if you bought the whole 38000 at the lows ($1.70) since then.*




When I sold the 90,000 shares that ended that transaction. This is the average price for my new transaction which currently holds 50,000 shares.


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## SenTineL (31 January 2009)

A few quotes from Saturday's The West Australian

"$1.1 billion half year profit"
"Cash balance has shrunk to $439 million at the end of December compared to $624 million on Sept 30th."
"financial position is 'highly profitable' and pointing to a $58.41 gross profit margin per tonne on the 13.2 million tonnes shipped to Chinese steel mills in the past 6 months"
"cash operating cost $33.9/t was higher than FMG's target of $30/t"
"pilbara's benchmark iron ore price would be at least 20 percent below last year's figure"
"Admitting to problems with high alumina levels and wet ore, Mr Rowley said FMG had changed the mine plan at Cloudbreak and would fast-track mining at Christmas Creek"
"He said FMG would ship 17.6 million tonnes to customers this half"

There was also  a derailment of 80 carrieges from 200 of one of Rio's IO trains which plans to disrupt their traffic. Might work in FMG's favour? Not sure if there are any implications from this.


----------



## SenTineL (31 January 2009)

Also more detail here

Some of the figures seem to be a bit different
http://www.theaustralian.news.com.au/story/0,25197,24986287-643,00.html


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## Miner (1 February 2009)

SenTineL said:


> A few quotes from Saturday's The West Australian
> 
> "$1.1 billion half year profit"
> "xx
> ...




Graeme is taking advantages of people's short memory. It was known from day 1 that Christmas Creek ore had a very high alumina and silica. (you could see my posting in this forum some 10 months ago or so on the same matter) That is why they wanted to commission desanding plant, That is why effective $per ton for FMG ore will actually be lesser than competitive product unless the alumina and silica get reduced at minesite in Australia itself. Unfortunately they are fooling investors in a calculated way and changing the mine plan now.  

Further they will never disclose the mass analysis of the ore for expansion project either and will reshuffle with orators and stock specialists in the board to fool the market .  

I thought they would be some trust worthy this time but a leopard seems to be not changing its spots ever


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## Sean K (1 February 2009)

Poppypop said:


> When I sold the 90,000 shares that ended that transaction. This is the average price for my new transaction which currently holds 50,000 shares.



So what price did you buy the 38,000 at Poppy?

The first buy was 12,000 at around 2.10 wasn't it? = $25,200

The lowest the stock has gone since then is 1.65 I think, so lets assume you bought in then. = $62,700

50,000 shares cost $87,900 = $1.75. 

Ah, I see, a typo. You meant to say $1.75 average. 

Nice work!


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## SenTineL (1 February 2009)

Miner said:


> Graeme is taking advantages of people's short memory. It was known from day 1 that Christmas Creek ore had a very high alumina and silica. (you could see my posting in this forum some 10 months ago or so on the same matter) That is why they wanted to commission desanding plant, That is why effective $per ton for FMG ore will actually be lesser than competitive product unless the alumina and silica get reduced at minesite in Australia itself. Unfortunately they are fooling investors in a calculated way and changing the mine plan now.
> 
> Further they will never disclose the mass analysis of the ore for expansion project either and will reshuffle with orators and stock specialists in the board to fool the market .
> 
> I thought they would be some trust worthy this time but a leopard seems to be not changing its spots ever




The grade quality is only one part of the equation.
Report should be out Monday that will be a bit more transparent.


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## M34N (1 February 2009)

Following on from my post back early in the year, FMG has broken down from its support at $2.00, and now showing some resistance at $1.80. But still well above its lows in November. Looks like now it is still trading in that triangle I posted last, and I suspect a big break is due any time soon, probably within the next few weeks. Positive or negative I am unsure, depends a lot on the Dow which held its 8000 support, by a thread 

Anyone going to pick which way it's going to go? It's also following a nice trend line down. A break up I feel will follow a lot of buying and push the price much higher, otherwise any break down and I think we will see a much lower low this time around. Not holding FWIW.


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## M34N (2 February 2009)

M34N said:


> ...I suspect a big break is due any time soon, probably within the next few weeks...




Well, that was quick! 

It bounced off the $1.80 resistance and opened well above that this morning, bought in quickly this morning at $1.85 and set a tight stop/loss at $1.855 in case it is a fake breakout. Suspect this may be a move higher in response to Rio selling it's assets and getting investment from Chinalco over the weekend, so not trusting it to be a big break higher yet.

Anyone else willing to buy it? $2.00 will be the major resistance now if $1.80 holds from here.


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## joeyjoejoe (2 February 2009)

i am considering a small play at 2.00 if they support is there and the sell  side dries up @ 2.00

and exit at 2.50 (however long that takes)

i saw big sell orders for amounts such as 2.02 2.04 2.05 etc etc which scared me off it this afternoon... where it went from 2.00 closed at 1.95


i also noted that sell side has double the amounts of units to be sold than buyers buying. 5million vs 2.5 million.

id like to see more buyers than sellers and the sell side dry up. and id be looking to enter.


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## Miner (4 February 2009)

Good announcement from FMG today

: Formation of a JV with shipping company. 

Andrew is always good to buy at low and then make money for him and others from there. Remember what price he paid for FMG and got freebies for POS presumably to help its share up 

FMG made alliance with AGO to ship its ore.

There was strong possibility to acquire HBI plant when the market was high.

All becoming part  of vertical integration under shrewed  corporate strategies 

So the next move will be to have a JV with some scrap companies like SIM metals so that once FMG becomes like HBI plant the shareholders will not be disadvantaged from the profit earned from selling scraps


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## SenTineL (4 February 2009)

there hasn't been any comment on the interim accounts released by FMG in the last couple of days. 

the market seems to have approved of their position and this latest JV especially during the last few days of red.


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## SenTineL (5 February 2009)

I guess this forum doesn't like good news from FMG anymore?

Up 9.45% today.

BHP also up after a huge profit downgrade?!?


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## Frankhalo (5 February 2009)

SenTineL said:


> I guess this forum doesn't like good news from FMG anymore?
> 
> Up 9.45% today.
> 
> BHP also up after a huge profit downgrade?!?




Its all good SenTineL, come mid year when the full yearly figures are released we'll both be smiling , hell I'm smiling now with the 6 month figures, given the twist the worlds got itself into FMG are doing very, very well. Sorting the shipping mess out too was a huge plus aswell.


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## M34N (6 February 2009)

I think the main test now is to see if it passes the high it set Jan 7 around $2.35 (someone might have the exact figure) so any breakdown from there would most likely see a big pullback towards the $2.00 mark, and depending on the market conditions, lower. Any break above that price and I would suspect we would see clear sailing up to the highs set on December last year at around $2.70. So a nice trading range there with plenty of $$$ to be made.

This is probably one of the best stocks on the ASX to trade lately, good volume and plenty of swings. Perfect stock for day trading IMO.


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## vincent191 (6 February 2009)

I read from the papers that conserving cash is their main priority. I see three positives here;

1.) They have settled their shipping dispute with equity and not cash.
2.) They have cut back on capital expenditure and put the railway extension on hold, thus conserving more cash.
3.) They are expecting shipment to increase and an improved revenue stream.
4.) Twiggy is off the opinion that the price of iron ore has bottomed out.

I hope we will see the share push above the December high and test the $2.50 mark and hopefully the Dow wont come and spoil the party.


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## M34N (6 February 2009)

Looks to be flirting with the $2.35 level I posted before, kind of stuck there and unsure if it will go either way? I thought it would stall here, I think we'll need a big move up in the Dow to push it higher from here, otherwise maybe a retracement to the $2.20 range at the least. Lets see how it closes in the next 40 mins.


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## vincent191 (6 February 2009)

I will hold for a bit longer hoping it will reach a new year high. My personal target is $2.70. Then I will take some profit and sell half to get some of my money back to keep trading. The other half I will leave it until the second half of 2009 and wait for the bull to arrive.


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## gresim25 (6 February 2009)

Hey guys...just wanted to see what are your thoughts on FMG...I have entered yesterday at around 2.200 and I didn't decide to close off the trade today...it looks like it formed the double bottom and closed above Jan 7 high...the wolume wasn't too shabby either?

Greg


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## Mr Capital (6 February 2009)

Hopefully FMG have seen the bottom @ 1.16 which i rode down. 
Is the upside just temporary, or is the Spot Price actually on the rise.
Seems like its flowing with BHP's Marius Kloppers' comments on iron ore.
Maquarie Group have downgraded this stock to an underperform with a price target of 1.00 Which seems to be going against the short term trend.
Any insight ?


----------



## MichaelD (6 February 2009)

Ah, my "favourite" stock - FMG.

It's appeared on my radar several times in the last week or two (and I have indeed short term traded it profitably when my system indicated to do so this week).

For some reason, my gut keeps screaming "sucker's rally" with the market action here - I cannot shake the nagging feeling that this rally is merely a manipulated one so a big player can dump their stockholding at a better price next week, but I guess time will tell. Certainly the believers look like they've piled in again.

(Currently, I hold no position in FMG).


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## joeyjoejoe (7 February 2009)

i was going to get back in @ 1.875 but I was too indecisive unfortunately.. i predicted sideways for longer that what were getting but good luck to all holders.

 i tend to agree with the comments that if it breaks 2.50 it will continue trending up.

- this just my opinion an obviously not a technical analysis.


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## M34N (7 February 2009)

M34N said:


> Looks to be flirting with the $2.35 level I posted before, kind of stuck there and unsure if it will go either way? I thought it would stall here, I think we'll need a big move up in the Dow to push it higher from here, otherwise maybe a retracement to the $2.20 range at the least. Lets see how it closes in the next 40 mins.




OK, it closed at the $2.32 level so it held around that high reached early Jan 09, and with that big push up higher on the Dow I potentially think we could see a strong spike up on Monday again. EMA also showing bullish signals and indicating a move higher. I can't put a value on it myself, but I'm expecting the $3.00 level to be reached and become resistance, which would fit this nice channel that has formed over the past few months (refer to chart).

I guess it's up to the Dow and how how this bear market rally goes, but going by the signals I'm seeing, a test of $3.00 is very possible, given the noticeable increase in buying volume on positive days, it is likely a lot of the sellers have gone and a lot of potential room to the upside.

So in response to this, I have moved my stop up to $2.20 and will progressively move it higher, unless something bad happens in the near future I see no sell signals yet.


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## Miner (7 February 2009)

After holding FMG for long time with little hope to sell the costly investment I am now eyeing for SIMS Metal. THis company is not doing too good and hopefully FMG will have some alliance with it to recover . Both of them feed to the same customer - steel makers so there could be an excellent synergy when steel price recovers


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## vincent191 (9 February 2009)

Some people seems to think it will go higher than $2.57. Buyers still outnumber sellers by nearly 2:1.

I will hold my breath until tomorrow. Mr Dow Jones please don't gatecrash my party.


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## Trembling Hand (9 February 2009)

vincent191 said:


> Some people seems to think it will go higher than $2.57. Buyers still outnumber sellers by nearly 2:1.
> 
> I will hold my breath until tomorrow. Mr Dow Jones please don't gatecrash my party.




LOL

They aren't buyers till there is a transaction and then there is an equal amount of sellers.

What is sitting in the order book is rubbish. What is important is which side is hitting the market. That's what moves stocks. Not Spoofs.


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## M34N (9 February 2009)

vincent191 said:


> Some people seems to think it will go higher than $2.57. Buyers still outnumber sellers by nearly 2:1.
> 
> I will hold my breath until tomorrow. Mr Dow Jones please don't gatecrash my party.




Lets look at the figures:

1. FMG had amongst the highest volume on the ASX today, this is a bullish sign.
2. Had an open price of $2.45 (which is up $0.12 from the close on Friday), low of $2.43, high of $2.59 and a close at $2.57. This indicates demand pushed the price higher through the day and is bullish.
3. It is up 10.7% on the day, and up around 45% from Jan 30th (about 6 trading days). Bullish.
4. Broke through key resistance levels at $2.00, then $2.20 and then $2.50. Again, bullish.

Its close today was also up from $2.55 and closed at $2.57, so 'buyers' as you put it pushed the price higher at the close so people are buying in and pushing the price higher as the sellers can command a higher selling price. So the demand is there to push the price up. I think this is what you may be referring to?


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## enigmatic (9 February 2009)

Trembling Hand said:


> LOL
> 
> They aren't buyers till there is a transaction and then there is an equal amount of sellers.




I don't think this statement really holds true.
If there are a fix number of sellers say 10 then for those number of sells there can be relatively infinite number of buyers.

For Example
*10 Sellers total 1,000,000 Shares*
_1 Buyer total 1,000,000 Shares
10 Buyers each 100,000 Shares
100 Buyers each 10,000 Shares
1000 Buyers each 1,000 Shares_

but you are correct they are both only potential buyers and potential sellers.


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## vincent191 (10 February 2009)

Looks like someone has spoiled my party. The price is dropping. Just a case of profit taking I hope??  Anyway, it has had a good run the past few days.


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## nomore4s (10 February 2009)

enigmatic said:


> I don't think this statement really holds true.
> If there are a fix number of sellers say 10 then for those number of sells there can be relatively infinite number of buyers.
> 
> For Example
> ...




What does it matter how many buyers there are? 
All that matters is how many shares are traded and at what price.


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## enigmatic (10 February 2009)

Well that is debatable. Only having 1 buy with a large packet doesnt correspond to a large demand.
You increase your chances of effecting the mind of an individual within a crowd then an individual who has no one to compare with.

But then thats more to do with the mind of the masses, people want something more if someone else is demanding it too.

You are also speaking about after the trade I believe we are speaking about before the trade.


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## shaunQ (10 February 2009)

enigmatic said:


> Well that is debatable. Only having 1 buy with a large packet doesnt correspond to a large demand.
> You increase your chances of effecting the mind of an individual within a crowd then an individual who has no one to compare with.
> 
> But then thats more to do with the mind of the masses, people want something more if someone else is demanding it too.
> ...




I'm no expert, but I think the point is that just because the offer is in the market, doesn't necessarily mean the trade will (or has any intention to) take place. And in the above case, it would be simple to instead of buying 1,000,000 shares, put in 100 lots 10,000 and make the "demand" sky rocket, or vica-versa depending on what _you _ are going to think that implies.


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## jackson8 (10 February 2009)

shaunQ said:


> I'm no expert, but I think the point is that just because the offer is in the market, doesn't necessarily mean the trade will (or has any intention to) take place. And in the above case, it would be simple to instead of buying 1,000,000 shares, put in 100 lots 10,000 and make the "demand" sky rocket, or vica-versa depending on what _you _ are going to think that implies.




in my experience the market depht on both sides seem to be their purely to prop up or create an actual value for the sp
watching market depth throughout the day . when sp starts to drop then participants on the buy side start lowering there buy price therefore the sell side lower their offer almost like a host of conditional orders at play which are always changeing to suit the ebb and flow of the actual transactions that are actually taking place (i call them ambulance chasers)  

take for instance lgl , over the past few weeks there is an average of 3-4 mil shares on offer both sides on any one day yet the turnover for today was 12 mil other days up to 40mil turnover yet the totals at end of day, start of day and throughout the day remains in the 3-4 mil depth range

i can only assume then that most of the transactions are from outside those who are listed in the depht and are at market purchasers

comments welcome


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## enigmatic (10 February 2009)

I was well aware of the point it however was not the initial point.

How can it only be import what side is hitting the market when apparently the number of sellers equals the number of buyers, wouldnt that mean that both sides are hitting the market equally.



Trembling Hand said:


> LOL
> 
> What is sitting in the order book is rubbish. What is important is which side is hitting the market. That's what moves stocks. Not Spoofs.




I aswell would never classify myself as an expert or even a half decent trader as of yet however I am only asking these questions and stating the facts as i see them to better myself.


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## shaunQ (10 February 2009)

enigmatic said:


> I was well aware of the point it however was not the initial point.
> 
> How can it only be import what side is hitting the market when apparently the number of sellers equals the number of buyers, wouldnt that mean that both sides are hitting the market equally.
> 
> I aswell would never classify myself as an expert or even a half decent trader as of yet however I am only asking these questions and stating the facts as i see them to better myself.




Nor here, but to continue until someone smarter comes along, they are equal because a share is traded 1:1. You sell, I buy. If no one buys - you do not sell. In the end, all trades are equal with the same number of shares bought as sold.

Edit - may I also possibly suggest this thread is for FMG related stuff, and people may start yelling if we continue to clog this fairly popular thread up. Suggest you go into the Beginners Lounge - lots of interesting stuff.


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## enigmatic (10 February 2009)

Was looking at the one of the lastest releases on ASX for FMG

http://www.asx.com.au/asxpdf/20090205/pdf/31fxj2m4k2c2nh.pdf

which i noticed that they are aiming for only 39mtpa rather then the 45mtpa which would be expected from the max capacity of the plant.

I believe this is a good sign that they are willing to admit that the peak performance of the mine will not happen over night, however 39mtpa is pretty good even that current prices. 
30.7 mtpa shipped at $100 US minus operation cost of arround $40US
getting reasonably close to $2Billion US.


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## Miner (11 February 2009)

Interesting note published in FN Arena and do not know if ASIC takes action against FMG or FMG takes action against FN Arena for making some suggestion without any proof. Any way  here u go as reported by FN Arena  www.fnarena.com .  

" *FMG -* Investor sentiment towards producers of bulk commodities has improved considerably over the past weeks. Many an expert remains convinced this optimism will prove too early, but investors appear willing to take their chances. Meanwhile, strange things are happening. On Wednesday and Thursday last week the Australian Financial Review carried an advertisement: "WANTED, Iron Ore - Overseas iron and steel manufacturers want a large quantity of high quality iron ore produced in Western Australia". Odd. Since when do these manufacturers have to sollicit via ads in an Australian newspaper? The story becomes even more suspicious when the email address provided wendy.wu@ansongroup.com.au bounces back as an "address unknown". The webaddress doesn't bring up a kosher website either. 
*Maybe ASIC should consider a possible attempt to market manipulation?*"


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## Harro7 (11 February 2009)

That's a very interesting one. I was sucked in by that false pull for iron ore demand. I still think FMG has good long term prospects so I'm going to hold.


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## M34N (12 February 2009)

Just took a quick look at the intra-day chart for FMG, nice bounce up this morning after 2 days down, regained all those losses. Sell off in the middle of the day was kind of expected I guess but still a bit of buying in late in the day. Volume to price action looks bullish to me, plenty of transactions again today at 28m. Interesting trading range highlighted below, still looks good and see no reason to sell yet.

Has held up pretty well with the Dow down some 400 points in the past few days and FMG holding flat, but I guess you can thank Rio for the support today. EMA and MACD also looking positive. Not willing to call it just yet, but looking at the EMA it could see a big break up, anyone else willing to provide any analysis on this?


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## nomore4s (13 February 2009)

M34N said:


> Just took a quick look at the intra-day chart for FMG, nice bounce up this morning after 2 days down, regained all those losses. Sell off in the middle of the day was kind of expected I guess but still a bit of buying in late in the day. Volume to price action looks bullish to me, plenty of transactions again today at 28m. Interesting trading range highlighted below, still looks good and see no reason to sell yet.
> 
> Has held up pretty well with the Dow down some 400 points in the past few days and FMG holding flat, but I guess you can thank Rio for the support today. EMA and MACD also looking positive. Not willing to call it just yet, but looking at the EMA it could see a big break up, anyone else willing to provide any analysis on this?




Todays high volume and weakish close is a worry, needs to break resistance and close above $2.70 in  the next few days or else I think we could se $2.00-$2.15 again, a close under $2.00 would be bearish imo, if we do see a pullback and $2.00 holds I will probably be looking for a trade.
A close above $3.00 in the next few weeks and we could see as high as $5.00 sometime in the next quarter but that would require a strong rally by the market in general imo.

Where FMG closes this week might give a few clues.


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## Harro7 (13 February 2009)

Looking very strong around the 2.75 mark right now. Three dollars not out of reach? 

Not sure about the $5...


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## vincent191 (13 February 2009)

Go baby go !!!!!!

I am not greedy.....$3.50 in the next few weeks will do me very nicely, Thank You.


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## nomore4s (13 February 2009)

Harro7 said:


> Looking very strong around the 2.75 mark right now. Three dollars not out of reach?
> 
> Not sure about the $5...




lol Harro, as I said it would probably require a strong rally by the market in general to get that high and take 3-6 months. A close above $3.00 would be bullish as it looks to have built a solid base since about Oct.


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## M34N (13 February 2009)

Harro7 said:


> Looking very strong around the 2.75 mark right now. Three dollars not out of reach?
> 
> Not sure about the $5...




$3.00 fits into my trading range that I posted a page or two back, so I'd be expecting some consolidation around there, if not sooner. The run up in the past 2 weeks now is something around +50%, maybe even more IIRC. But again, today's price action has been similar to that of late; open up flat and head progressively up during the day.

So no signs of the rise stopping right now; I think today's closing price may set the tone for next week and looks like there will be a fair bit less volume today compared with other days (but still amongst the top of the ASX today). A close above the $2.70-2.75 resistance signals to me a jump to $3.00 may well be possible next week, again so long as there is no deterioration in the market. But that looks like being the toughest line of resistance, similar to what $2.00 was last week, and given the rise over the past week it would be fair to say a retracement in the share price would be expected.


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## vincent191 (13 February 2009)

Hehehehe.....closed at $2.81.  Hope the Yanks don't spoil the party tomorrow. I haven't had a winner for a while and my account is looking grim.

Cheers everybody and haveagoodweekend.


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## Harro7 (13 February 2009)

nomore4s said:


> lol Harro, as I said it would probably require a strong rally by the market in general to get that high and take 3-6 months. A close above $3.00 would be bullish as it looks to have built a solid base since about Oct.




 Sorry nomore4s. I'm very new to the game, as you can probably tell, and was just looking to get the conversation started/get some more information. 

The DJI is looking very shaky to me I hope the mid/late day rallies continue to get FMG to circa $3.


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## M34N (13 February 2009)

OK, now that I have had some time to look at the charts properly, it looks to me like the EMA(25) has broken up above the EMA(50), which did not happen the last 3 times in early Dec, mid Dec and early Jan; when FMG attempted to make a break higher on these occasions, and subsequently failed. The MACD also looks to be signaling a move higher, again the signs are similar to that in May last year.

The last time these events both occurred, FMG broke up higher and proceeded record highs back in May to July. So within the next 3 months this suggests, like nomore4s has said, a significant break higher is possible. I can't put a figure on it myself, but it follows the trend line I've managed to spot on the 1-year chart, it looks like it could top the $4.00 range. But to do this it needs to solidly smash through the $3.00 barrier, which has been support, and then resistance, since October last year.

Everything is there to support this move up, including the volume and today's closing price action again confirmed a bullish bias, closing on the day highs. Volume again showing up among the top of the ASX, so it's looking like a lot of the sellers have move on away and every attempt to sell down has been met by more buyers willing to push the price up at every dip.

One final note on today's action though, it formed a nice narrowing trend upwards to the end of close, and every push higher was with increasing volume, unlike previous rallies. And the $2.75 barrier was firmly broken and it quickly became support after being breached.

That's enough for now, I'm sure you've all had enough of my ramblings :

EDIT: uploaded old 1 year chart, EMA is shown braking up higher better there


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## Poppypop (13 February 2009)

kennas said:


> So what price did you buy the 38,000 at Poppy?
> 
> The first buy was 12,000 at around 2.10 wasn't it? = $25,200
> 
> ...




Yes, and I bought another 40,000 @ 167 with a stop @ 149 before going overseas. I have just got back from Thailand and wow, my prediction is correct!  I have made in excess of $100,000 in less than a month. I will sell my FMG shares on Mondays open and go out and buy a new car to celebrate my accurate prediction


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## sammy84 (13 February 2009)

Thanks for the last post M34N. FMG's charts are on my watchlist aswell. Not many EMA's have been trending positively in recent times. A break above $3 should be very interesting.


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## Poppypop (13 February 2009)

Poppypop said:


> Well,l i bought 90,000 shares at an average price of 190, a few days ago, and will sell when i feel the rise is over (220 - 280). Currently it sits at 201 and rising. I believe there is going to be a substancial rise very soon.  I have no doubt they will be sitting around the $3 mark before March (2009). I feel very confident of my investment, as far as making me some quick cash goes




I posted this on the 2nd of Jan this year  I bought and sold it and made about 30k in Jan before rebuying at around the 170 mark. My portfolio is looking very very healthy. hehehehehehe.


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## Harro7 (13 February 2009)

M34N said:


> That's enough for now, I'm sure you've all had enough of my ramblings :
> 
> EDIT: uploaded old 1 year chart, EMA is shown braking up higher better there




Hey thanks M34N. I Enjoyed your "ramblings". I have emailed your charts and some of your analysis to my mentor for further explanation to myself  (only learning). Can I ask where you get your charts from...


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## M34N (14 February 2009)

Harro7 said:


> Hey thanks M34N. I Enjoyed your "ramblings". I have emailed your charts and some of your analysis to my mentor for further explanation to myself  (only learning). Can I ask where you get your charts from...




I use E*Trade, their interactive charting is very good and displays any time frame you wish to select, very handy. Only problem is their interactive charts are delayed by 20mins for the non-Power E*Trade accounts, but that's not so important for me since I don't day-trade _on this analysis_ (only if I spot a trend manually). I use it more to pin-point entries and chart the trends in the market so it's fine for what I use it for.

If any of you have a question about what I've written, feel free to PM me, I don't mind taking the time to explain some of my analysis, as I realise I write a lot of it with glaring spelling/grammatical mistakes everywhere


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## M34N (18 February 2009)

Well, just bounced off $3.00 only moments ago and hovering around there, here is the moment to see if it bounces higher or faces resistance. Today's move is unusual, I would expect a speeding ticket for this move considering the general market is down close to 2%. Again high volume on the upswing days, still looking very positive.

Anyone got a reason for today's move? It opened down 2% this morning and was expecting a walloping to be honest. Will post more later after the close and analyse the moves for today closer.

EDIT: In the time it took me to type that post, it shot up to $3.06. Lets see if it closes above $3.00 to reinforce the move higher. +$0.40 of +15% today in light of general market, something sus is going on I reckon.


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## Harro7 (18 February 2009)

Well I got in far too late on this stock and far too early I get out. I'm out at $3, next time I shouldn't be so trigger happy. Happy my first trade was a profit though 

I believe this may be the reason http://www.news.com.au/heraldsun/story/0,21985,25070851-664,00.html

Edit: this is crazy. 3.10 to 3.30 in the time it took me to post that. It's making me depressed


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## M34N (18 February 2009)

Harro7 said:


> Well I got in far too late on this stock and far too early I get out. I'm out at $3, next time I shouldn't be so trigger happy. Happy my first trade was a profit though
> 
> I believe this may be the reason http://www.news.com.au/heraldsun/story/0,21985,25070851-664,00.html
> 
> Edit: this is crazy. 3.10 to 3.30 in the time it took me to post that. It's making me depressed




Ah, that explains it.

Looks to be in a pre-open (halt) now, speeding ticket issued as expected? Currently at $3.33, up 10% in the 20mins since my post 

EDIT: You edited too quick for me, Harro


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## gfresh (18 February 2009)

Investigating "investment and interest from third parties".. Nice to see them waiting at least a week for a speeding ticket before announcing it to the market


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## Prospector (18 February 2009)

What are you guys talking about, it is trading at $2.96 on my screen?  Has it re-opened and dropped back?


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## matty193 (18 February 2009)

Prospector said:


> What are you guys talking about, it is trading at $2.96 on my screen?  Has it re-opened and dropped back?




It's fallen back, just as quickly it seems.

It was interesting to see for a few mins there the bid was way beyond the offer. Can someone explain that to me? Is this the sellers realising the rally ending any moment and trying to outsell each other in the imminent fall?


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## vincent191 (18 February 2009)

There is speculation about somebody snooping around the mine. Read the Sydney Morning Herald for details.

Very impressive looking at the "course of trade" and the volumne. I guess where there is smoke there is fire, will have to wait and see.

Also something in their reply to the ASX.


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## Family_Guy (18 February 2009)

Thought it was interesting and it totally sucks, but the ASX rec'd the fax 2 hours before the announcement was made and looking at the volumes and the SP rising 35 odd cents BEFORE it was released and it's obvious i need to make some friends on the inside. I noticed the volume jump and topped up but by the time i sold i didn't make much profit on my buy today.


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## M34N (18 February 2009)

I still think today's close is positive, given that every bit of resistance today ($2.75, $2.85 and $3.00) were all breached confidently, and followed a nice uptrend as shown on my chart below.

Volumes were ridiculous and I don't think you can draw much from the intra-day action today because there would of been a lot of 'in-and-out' day traders forcing this wild price action. And the close below $3.00 could be a sign of the day-trade action and not a sign of a failed opportunity to close above a major resistance line. Volume was roughly equal before and after the rise above $3.00 so kind of unsure how to interpret this.

Too many variables to draw a firm conclusion, but the positive is that is was still up 12% on a day when the majority of the market was down 1.3% so it doesn't take a genius to see that is very bullish, and even out-performed the gold stocks, some of whom also finished well off their day highs.


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## gfresh (18 February 2009)

Have to wonder now whether the news is "in the open" so to speak whether the speculative support may fall out of it a little??

More likely to simply be an equity stake, rather than any takeover (going on articles). Could be interesting what issue price it may be..


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## Miner (19 February 2009)

Fresh hopes for FMG

I am surprised to see Agro is missing to surface in FMG for long time

Must be holidaying in cold Europe 

Any way, last financial deal saw FMG to ramp up substantially. However if the past trend is any indication to watch then we should note after the financial deal at $38 per share (before split) the SP came down at $28 or so giving us opportunit

Please wait and see 

I do hold FMG still


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## nunthewiser (19 February 2009)

Well looks like that time again fight fans .......... just got a stickit note pinned on my forehead from the bishop informing me that perhaps i,d better start looking at a FMG short ......

i personally think why fight the trend man, but he is closer to god than i , so should i listen ? 

oops too late i think he gorn done it


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## nunthewiser (19 February 2009)

LOL .......... geeez hasnt that bishop got a lot to answer for hey........ any chartists want to place some targets up ?


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## sammy84 (19 February 2009)

Can anyone explain what happened to FMG today? I was away from my computer, and in the space of a few hours I went from a nice profit to a loss


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## M34N (19 February 2009)

nunthewiser said:


> LOL .......... geeez hasnt that bishop got a lot to answer for hey........ any chartists want to place some targets up ?




Should find a floor around $2.60-2.70, roughly where the stiffest support and resistance was over the past 5 days so I would expect that to hold.

FWIW, I sold half my holding today at $3.10, felt it had run its course and +70% for one trade over 3 weeks is enough! Also wanted to pump some money into BHP for a short-term trade. Still holding the other half out of sheer curiosity of where the stock can go, but looking maybe to sell if the support of $2.60 breaks and have set stop accordingly.

Based my sell mostly on the fact yesterday's high failed to be breached, and the price was flat lining and going nowhere. More traded it out of 'feel' than a chart this time. Intra-day shown below.


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## nunthewiser (19 February 2009)

M34N said:


> Should find a floor around $2.60-2.70, roughly where the stiffest support and resistance was over the past 5 days so I would expect that to hold.
> 
> FWIW, I sold half my holding today at $3.10, felt it had run its course and +70% for one trade over 3 weeks is enough! Also wanted to pump some money into BHP for a short-term trade. Still holding the other half out of sheer curiosity of where the stock can go, but looking maybe to sell if the support of $2.60 breaks and have set stop accordingly.
> 
> Based my sell mostly on the fact yesterday's high failed to be breached, and the price was flat lining and going nowhere. More traded it out of 'feel' than a chart this time. Intra-day shown below.





 check my time of entry as posted when i did ... no feelings involved .... the stock had run its course for now and that was indicated to me by chart and watching the action 

well done on ya 70% by the way .nice trade....

cheers for your thoughts

this may help to keep an eye on them scumbag shorters (hehehe) if ya want a general look on who,s doin what on a daily basis

http://www.asx.com.au/data/shortsell.txt

only a rough guide but ya can get a small guesstimate from it


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## Lexie86 (20 February 2009)

BYL has announced this morning that it received a notice late yesterday from FMG that their contract is to be terminated early (was due to end in August)....


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## nunthewiser (20 February 2009)

FMG.... closed position . it is the weekend after all and the bishop a bit concerned that the yanks may have a rally "for old times sake" OR they may fall like a rock tonight . either way he is unsure of the powers that be and figured a quid in the pocket beats crying over spilt milk anyday


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## CoffeeKing (23 February 2009)

From the Busi spectator

Fortescue to raise $500m: report

http://www.businessspectator.com.au/bs.nsf/Article/Fortescue-to-raise-500m-report-$pd20090223-PHRKC?OpenDocument

will not paste link


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## vincent191 (23 February 2009)

Fortescue has requested a trading halt until Wednesday 25Feb. There is a lot speculation of how much and who and how. 

So I will have to sweat it out and hope for the best. In my opinion, I was hoping for a much bigger capital raising (say 2 to 3 billion) to fund Fortescue's expansion into a "big" miner in "nearly" the same league as BHP, Rio & Vale.

I have read many comments that you really need to reach an output >70 mtpa to have any significance in the world market and to have any influence in the price setting mechanism.

PS ...I own shares in Fortescue and the above is strictly my opinion only.


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## Timestar (23 February 2009)

I too am an interested party in FMG and am very concerned what this will do to the share price when Wednesday arrives. I'm guessing that if they're after $500m then it will trade at around $240-2.45.

My estimate only but I'm not thrilled about them having to go to the marketplace for more cash!!


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## maungatapu (23 February 2009)

CoffeeKing said:


> From the Busi spectator
> 
> Fortescue to raise $500m: report
> 
> ...




The article said that Cameron Morse would not confirm or deny Fortescue would raise a minimum of $500m. That is just speculation at the moment. Whatever they do it will either dilute share holdings or put it deeper in debt.


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## vincent191 (23 February 2009)

Capital raising does NOT always mean a drop in the SP. It depends on why they need to raise new capital and how it is going to be used.

Twiggy has already said Fortescue will use the new capital to expand the business and not for working capital like repayment of debt.

If this is true IMO the share price will not fall it may even go up because the Company is expanding it's productivity and output and hopefully, all else being equal, produce more profit.


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## gfresh (25 February 2009)

Appears FMG bid to raise another $500M funds from Institutionals has failed, as they didn't think $2.48 was fair value, and obviously Forrest didn't want to undercut the Chinese.

http://business.theage.com.au/business/fortescue-scraps-share-offering-20090224-8gva.html

So where do we think FMG will open tomorrow?


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## Miner (25 February 2009)

gfresh said:


> Appears FMG bid to raise another $500M funds from Institutionals has failed, as they didn't think $2.48 was fair value, and obviously Forrest didn't want to undercut the Chinese.
> 
> http://business.theage.com.au/business/fortescue-scraps-share-offering-20090224-8gva.html
> 
> So where do we think FMG will open tomorrow?




Have you seen Charlie Aitken the magic man from Southern Equity who predicted $50 and more for FMG share before split has been into action.

Probably he will write again why he thinks financial inst should buy FMG and then rest of us will get sucked into buying it. This will lead (?) financial analysts in turn to escalate their price for FMG 

My wishes however because I am looking for my dream to come true and sell off FMG then (just honestly declaring my interest without coming from the back door) . But wishes are made in heaven and they are supposedly not to be fulfilled.


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## Warren Buffet II (26 February 2009)

No instos wanted to buy FMG, I am sure there is a big reason to do so.
My opinion is that they believe FMG is junk and will run into big problems, so they do not want to get into a sinking boat (finally they are doing something smart).

WBII


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## vincent191 (26 February 2009)

Warren, just because the Institution did not buy in does not mean FMG is a sinking boat. The Institutions just want too big a discount.

IMO I don't think the SP of FMG will ever reach it's former glory for a long long time to come but I do think it will improve when the world economy improves. 

That is the way I see it and that is why I hold FMG shares. I still have faith in Twiggy. Not as much as before but still a bit of faith left.


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## SenTineL (26 February 2009)

WBII's opinon is becoming monotonous, it's like he wants FMG to collapse just he can say "I told you so".

He just believes and it's his opinion other believe it's junk.

very quiet in here following a big announcement though.


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## MichaelD (26 February 2009)

So has anything changed here?

I see again that a few lucky true believers got in early and convinced many more punters to hop on board...right at the top.


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## nunthewiser (26 February 2009)

MichaelD said:


> So has anything changed here?
> 
> I see again that a few lucky true believers got in early and convinced many more punters to hop on board...right at the top.




LOL and some even luckier punters got on nr the top and shorted the bejesus outta it ................

blessem


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## nizar (27 February 2009)

Does anybody here know when FMG was added to the ASX100?

I had a look at ASX announcements last 6 months, it wasn't there, so must've been before this....

Thanks.


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## Harro7 (3 March 2009)

Since the suspension there has been a massive retreatment back to old territory. 

Seemed to find support at the 2.50 for a couple of days but since yesterday's poor close it has since crashed through to old lows. 

Is there any potential to buy at the low $2 mark and see it rebound again? What's the story here?


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## M34N (4 March 2009)

Will hopefully have the time to post something more informative later tonight, but just briefly I sold the rest of my position on this one at $2.88 after coming out of the trading halt, so looking at the least at a retracement/test of the $2.20 level, then $2.00. If these hold it's a buy signal to me (major support is $2.00 so that is critical), but if they both break... expect $1.80 and below, even up to $1.60. Volume has been lacking of lately so it's going to be a slower trip down this time around as opposed to the pace it went up. It seems to mostly follow the 20c ranges so there's plenty of $$ to be made in trading the ranges so always ready to do some quick trading.

It has also lost a lot of momentum of late (hence the lack of volume) and is less speculative, so the price movements should be less rapid either up or down.


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## vincent191 (4 March 2009)

I was too greedy. I did not get out in time at the high $2 mark. I was hoping it had further to go. 

No use looking backwards, I hope it will rebound soon only this time I wont be so greedy.


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## M34N (22 March 2009)

M34N said:


> Will hopefully have the time to post something more informative later tonight, but just briefly I sold the rest of my position on this one at $2.88 after coming out of the trading halt, so looking at the least at a retracement/test of the $2.20 level, then $2.00. If these hold it's a buy signal to me (major support is $2.00 so that is critical), but if they both break... expect $1.80 and below, even up to $1.60. Volume has been lacking of lately so it's going to be a slower trip down this time around as opposed to the pace it went up. It seems to mostly follow the 20c ranges so there's plenty of $$ to be made in trading the ranges so always ready to do some quick trading.
> 
> It has also lost a lot of momentum of late (hence the lack of volume) and is less speculative, so the price movements should be less rapid either up or down.




Well, the time has come for me to re-visit FMG and looks like it's coming back into my trading range. Broke below $2.20 on Friday, but as I said the trip down would be slow and on low volume, so it's no surprise.

It's looking very interesting here, and I suspect a big move is on the cards again, it looks like it's hitting a critical juncture here and I would not be surprised to see it go either way. What's most important IMO is that it is just sitting below the downtrend line that it has struggled with since July '08, and I would expect a rally here will be short-lived, maximum I see it going is up to around $4 if it does head higher (so it's a very nice rally), otherwise if it heads down, which I am more likely to be inclined to believe as this downtrend I see being difficult to break out of, then we could see new 52-week lows. 

Anyone else want to place bets? Maybe a rally then a big fall back down? EMA showing critical juncture also, and volume slowly increasing on the down days...


----------



## SenTineL (24 March 2009)

Very interesting M34n, it certainly has been pretty flat trading in the last few weeks. I suppose it shows on the forum also.

Hasn't been this quiet in this thread for a long time.


----------



## Warren Buffet II (25 March 2009)

M34N said:


> I see being difficult to break out of, then we could see new 52-week lows.





Hi M34N,

Does the comment "we could see new 52-week lows. " means:

1) those are my 2 cents 
2) or a new 52-week lows of 2 cents ? I predicted 20c but 2 cents, that is  low 

Expecting a fury of FMG twwigies saying that the company should be trading @ 20 dollars.

WBII


----------



## Lachlan6 (25 March 2009)

FMG is tracing out a small descending triangle currently. I expect this to break to the downside which should result in FMG falling to around the $1.58 area in the larger wave B. Only from there is a move higher possible in the wave C. At this stage I would suggest the $3.76 area. Notice the series of low closes over the last week or so, suggesting underlying weakness in this stock in the short term.


----------



## nomore4s (25 March 2009)

I also have been watching the triangle form and was thinking of shorting FMG but the R:R was just not good enough as there looks to be good support around the $1.60 area.

There is also a larger triangle forming. If prices do break down this triangle will be invalidated and we could see an extended trading range.
If price break up from the micro triangle I will look to enter a long trade and see if prices can break through $3.50

ATM I probably favour a break down as FMG has had weak closes and has done nothing while the rest of the market has rallied.


----------



## CoffeeKing (31 March 2009)

http://bigpondnews.com/articles/Top..._approves_Chinese_Fortescue_stake_317536.html

17.55% for Hunan Valin, where will the inflow of cash go...


----------



## Aussiejeff (3 April 2009)

Well, this announcement out of left field might set some cats among the clay (or should I say) iron ore pidgeons...

Courtesy of the Herald Sun



> By Chelsea Mes
> 
> April 03, 2009 02:04pm
> 
> ...




More to come indeed....

SP heading down (-5%) as I type


----------



## M34N (3 April 2009)

Aussiejeff said:


> Well, this announcement out of left field might set some cats among the clay (or should I say) iron ore pidgeons...
> 
> Courtesy of the Herald Sun
> 
> ...




Got stopped out of this one today for a loss myself today, went long in the morning at $2.68 only to get stopped out at $2.59, and the volume was pretty poor all morning until this announcement. Was glad I got out when I did though, expected a lot better out of this one today!

Knew I should of gone long one of the banks instead, oh well live and learn


----------



## Warren Buffet II (8 April 2009)

Aussiejeff said:


> Well, this announcement out of left field might set some cats among the clay (or should I say) iron ore pidgeons...
> 
> Courtesy of the Herald Sun





Well, we knew at this forum for a long long time that this guy twwigy was talking the company up all the way all the way.

Good to see the gov doing something about it. I hope this prevent those cowboys riding the poor Dads and Mums money.

WBII


----------



## Miner (9 April 2009)

Warren Buffet II said:


> Well, we knew at this forum for a long long time that this guy twwigy was talking the company up all the way all the way.
> 
> Good to see the gov doing something about it. I hope this prevent those cowboys riding the poor Dads and Mums money.
> 
> WBII




Without going into debate with Twiggy commit wrong or not when we saw last Government did any thing good for mum and dad ?

That is a joke considering what happens with mum and dad investors for TLS telstra ? What Government did or could do ?

Look the RBA slashed the rate and the banks like NAB said we don't care ANZ and CBA slashed 10 points and West pac did nothing so far Who is this government ? THe same incompetent bureaucrat who advised Johnny Howard and let the party collapsed Mr Swan - when did he last saw how mum and dads are running families under this gloom/ 

Height of expectation to get any thing from Rudd than it is better to ask Twiggy for help even he is seen as a crook


----------



## togs (9 April 2009)

I'm curious now, what sort of events out of this fraud case could cause the stock price to head upward? The obvious one is Forrest avoids the rap entirely, at least IMO . 

What do other ASF'rs think?


----------



## M34N (9 April 2009)

togs said:


> I'm curious now, what sort of events out of this fraud case could cause the stock price to head upward? The obvious one is Forrest avoids the rap entirely, at least IMO .
> 
> What do other ASF'rs think?




Honestly it's hard to say, it was at 2.70 a week ago to 2.20-2.35 now, I've personally traded this one once yesterday and just ridden it up for a few $, not game enough to hold for much time incase something else comes out to spook the market again.

I'm going to only trade this one intra-day for a while, would sit on the sidelines if you were looking for a longer time-frame but that's my opinion, personally the volume is lacking here for me to take much more of an interest and looking at other opportunities like the gold miners, etc. Something tells me it's going to possibly be sideways for a bit but I wouldn't be surprised at anything, not for me


----------



## SenTineL (9 April 2009)

Warren Buffet II said:


> Well, we knew at this forum for a long long time that this guy twwigy was talking the company up all the way all the way.
> 
> Good to see the gov doing something about it. I hope this prevent those cowboys riding the poor Dads and Mums money.
> 
> WBII





I've tried to ignore this post but I can't. It's almost disturbing.

WBII you are making some very bold assumptions here and actually appear to state that it's a fact that 'we' at this forum know that twiggy is a crook, has been deliberately giving false info and talking the company up with nothing else to show for it. And now he's also a cowboy.

Last time I checked the company is employing hundreds of people, it's not a one man show. Hmm they are an ore producer and have contracts for future sales. They've spend millions / billions in infrastructure, but he's all talk that's all.

Ever heard of innocent until proven guilty? It seems that almost all your posts here are intended to bring down the company name. What's the grudge, or are you just praying for a day where you can say "I told you so" and bask in your own self adulation???

It's getting tiresome


----------



## dat111 (10 April 2009)

If the CEO/Majority owner does not speak passionately about his company and does not preach that the glass is half full, he wouldn't be in the position.  IT IS HIS JOB TO PUMP UP THE COMPANY!  Unfortunately, sometimes the preaching gets out of hand and the glass becomes 3/4 full when it is really half empty.

In any case, any investor better take what the CEO and other folks in PR release to the press as a very optimistic outlook.


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## rala (14 April 2009)

Warren Buffet II said:


> Hi M34N,
> 
> Does the comment "we could see new 52-week lows. " means:
> 
> ...




Hi All,

This is my first post and I found this of interest...

You may also.

http://www.financial24.org/commodities/china-iron-ore-import-surge-caused-by-fake-demand/


----------



## Warren Buffet II (18 April 2009)

rala said:


> Hi All,
> 
> This is my first post and I found this of interest...
> 
> ...




Cowboy twiggy should read that post. 

The case is still running and it is not looking pretty for him.

WBII


----------



## Bhenn (20 April 2009)

FMG has a 52 week high of over $13. Does anyone on here reckon it can recover to anywhere near that within the next few years? I bought into the stock a few times over the last few months at an average price of probably $2.80. I think it's relatively safe in the long term.


----------



## SenTineL (20 April 2009)

If we knew the answer to questions like that there would be a lot of millionaires around mate, pretty silly question.

You should ask WBII he seems to be the expert on FMG.....

On the other hand, he's been following the court case and he reckons twiggy is in trouble, which is surely to send the share price tumbling


----------



## Mitsimonsta (21 April 2009)

I'd be interested on some opinion of FMG's current chart formation. Are we going to find resistance at $3?


----------



## Gillie (21 April 2009)

Mitsimonsta said:


> I'd be interested on some opinion of FMG's current chart formation. Are we going to find resistance at $3?




Could be, depends on how the CIC talks go.

"China Investment Corp. is seeking ways to finance the large mine expansion in a way that would avoid problems with Australia's Foreign Investment Review Board."


----------



## Warren Buffet II (21 April 2009)

SenTineL said:


> On the other hand, he's been following the court case and he reckons twiggy is in trouble, which is surely to send the share price tumbling




hahaaha, that is just funny.

So what you are saying is that the court case was brought just as an exercise and that cowbiy twiggy does not have to worry about anything. That is just pure stupidity, if they call the case is because there is enough information to do it so, they are not there just to waste their time as you do mate.

Go and get inform!!!

WBII


----------



## Bhenn (21 April 2009)

SenTineL said:


> If we knew the answer to questions like that there would be a lot of millionaires around mate, pretty silly question.




I'm a newbie to the stockmarket. I was merely seeking the advice of those more informed, those who know better how to research the market, what their thoughts are on FMG now, and into the future. Not looking for guarantee's or comfort lol...I don't think such a thing exists in stockbroking. If I wanted that I'd just lock it in the bank.


----------



## SenTineL (21 April 2009)

Warren Buffet II said:


> hahaaha, that is just funny.
> 
> So what you are saying is that the court case was brought just as an exercise and that cowbiy twiggy does not have to worry about anything. That is just pure stupidity, if they call the case is because there is enough information to do it so, they are not there just to waste their time as you do mate.
> 
> ...




Ummm no, I preffer to wait until there is an outcome either way before labeling people. 

FMG is defending for a reason, because they believe there's not a case to answer.

Anyway this is getting boring....


----------



## Sean K (29 April 2009)

Wonder how he's going to get away with this?

Is it jail material? Or a slap on the wrist, and a fine? Banned as a company dirctor? Looks pretty ordinary.


*Fortescue knew Chinese deal was dead, documents show *
April 29, 2009 
Article from:  Australian Associated Press 

FORTESCUE Metals Group knew a deal with a Chinese company had collapsed a month before a newspaper article forced the miner's admission, court documents show.

Documents released by the Federal Court in Perth show Fortescue received a fax from China Metallurgical Construction (Group) Corporation on February 3, 2005, advising that a deal with the iron ore miner was off. 

But Fortescue did not announce to the stock exchange that its so-called "binding" deal with MCC had collapsed until a newspaper article on March 24, 2005, forced its hand. 

In the documents released yesterday, former Fortescue executive assistant Wei Fisher said in a witness statement company chief executive Andrew "Twiggy" Forrest was "very upset" when he received a fax from MCC saying the deal was off. Her statement alleges she heard Mr Forrest say words to the effect: "This is ridiculous. If anyone tells the press, we've had it." 

Her statement also said she was fired shortly after the fax arrived for not doing well in negotiations with the Chinese. The deal in question was announced by Fortescue on November 5, 2004, as a binding contract under which MCC would provide financing, design and construction for Fortescue's Pilbara mine and beneficiation plant. 

The miner later admitted, on March 31, 2005, the deals were in fact only "framework agreements". The talks between MCC and Fortescue hit a brick wall when the Chinese company demanded an 80 per cent stake in the miner but Mr Forrest was only prepared to offer 30 per cent.


----------



## Warren Buffet II (29 April 2009)

kennas said:


> Wonder how he's going to get away with this?
> 
> Is it jail material? Or a slap on the wrist, and a fine? Banned as a company dirctor? Looks pretty ordinary.
> 
> ...





He misleaded the market in a big big way. And many people have notice that in the last few years with every company announcement they just keep talking and talking the company up, how much of that has been real?. I would be very afraid to trust from now on that kind of behaviour.

WBII


----------



## shag (29 April 2009)

that has to be fraud, in one way or the other.
and you would like to think he would get slammer time.
if they can show he benefited finacially from this, as he must have in one way or the other, they have to look to do something serious.
but u doubt it would happen here. too much money, assests and friends.
so you wounder what excuse they will use....charities....big fine.....too long ago...
it must have leaked out from either the china or aus end, and people make fortunes. its a big can of worms, u wonder why the opened it.
i'm no lawyer tho.


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## vincent191 (29 April 2009)

That is what happens when you count your chickens before they are hatched. Twiggy tells you he has a "contract" with China and people start to read all sorts of things into one brief statement and push the share price up, whose fault is it? Can't put all the blame on Twiggy can you? Punters want to speculate, they will have to take the risk.


----------



## prawn_86 (29 April 2009)

vincent191 said:


> That is what happens when you count your chickens before they are hatched. Twiggy tells you he has a "contract" with China and people start to read all sorts of things into one brief statement and push the share price up, whose fault is it? Can't put all the blame on Twiggy can you? Punters want to speculate, they will have to take the risk.




You dont say you have a contract until you have a contract. You say you are in negotiations. The issue here appears to be the fact he didnt inform the market meaning he was trying to keep the price artificially inflated...


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## Warren Buffet II (29 April 2009)

Dud deals and dud CEO and now dud results.

I wonder how many post in this forum are about the now infamous 80 tonns per year? Now the guidance is 26 and falling!!. No wait, probably an announcement is coming with soon....

Never had a share in this company, never will, no connection in any form with them or know anyone with interest on them (apart from the guys in the forum buying dreams of 80 tons a year). I just hate this corporate cowboys.

WBII


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## enigmatic (29 April 2009)

Warren Buffet II - I was just wondering were it stated that they were going to have 80million tonnes a year and secondly were it stated this 26million tonnes a year.

I know recently I haven't been following FMG to thoroughly the last few months but i dont think both of those annoucements would of come out over the last few months. surely there contradicting views.

Any how It would be nice to see some actually facts.


----------



## Warren Buffet II (30 April 2009)

enigmatic said:


> Warren Buffet II - I was just wondering were it stated that they were going to have 80million tonnes a year and secondly were it stated this 26million tonnes a year.
> 
> I know recently I haven't been following FMG to thoroughly the last few months but i dont think both of those annoucements would of come out over the last few months. surely there contradicting views.
> 
> Any how It would be nice to see some actually facts.




The 26 million for this year was announced yesterday, check on the www.asx.com.au website the "March Quarterly Production Report"".

And for the 80 million it has been their goal for a long long time and they say they were going to achieve that in 2009/2010, you can check their announcements too or this forum is full of that blant crap.

But as I said before, dud company, dud CEO, dud deals and dud announcements, maybe they change their minds about the 26 millions tomorrow!!

WBII


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## enigmatic (30 April 2009)

Not that it matter to much but i believe the targets were 55mtpa once Lump circuit was completed and up and running for a year 45mtpa once there Desand circuit had been completed for a year.. 

I yet to hear anything about lump but desands i believe was completed arround Feb.. so I assume they have some time to iron out the issues.  

I have yet to see a company maybe its just me that says the plant will be capable of so many tonnes and in the first year they even come close to so called tonnes.

Although 26million is slightly dissappointing I have some confidence that they will atleast make 35million next year  

The 80mtpa I'm not to sure about I actually thought it was 80mtpa more from Christmas Creek.. which was unfortunetly stopped due to finances. so that one is not in the cards for 2009 maybe its now 2010-2011. 

Even so there share price is undervalued slightly no were near as may have been when expectations were blown out of proportions by the media and FMG

When ever buying into shares you should expect less then is promised especially in the mining industry. so many times things are over budget over scheduled heck the plant was initial expected to be up and running Sept 07 which turned out to be March 08 thats a few months difference.


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## vincent191 (30 April 2009)

It all boils down to one thing.....if you buy in at the right price and made $$$ then he is a good guy. If you bought in at the wrong time and losted you bread then he is the biggest  SOB in the world.


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## SenTineL (30 April 2009)

exactly right, FMG has been good to me.

WBII is a hater....yawn. Maybe because he's missed the boat on riding all the waves.

FMG has still put together a company that has been become a producer and is shipping ore. It has put in place millions of dollars of infrastructure in the Pilbara. You don't do that over night by being a 'cowboy'. During their boom they probably were very sensitive to media releases.

We'll see what happens but even I admit it's not looking good for the court case. Then again there's a lot of hearsay evidence.


----------



## Front Runner (11 May 2009)

On DJ after market... FMG possibly listing on shanghai exchange. No release on the ASX yet. Wish i knew ahead of time too! 


0621 GMT [Dow Jones] Fortescue Metals (FMG.AU) shares surge as Chief Executive Andrew Forrest says the miner is considering listing on the Shanghai Stock Exchange. Forrest tells reporters in Changsha the company has been discussing the possible listing with the relevant regulator and will soon announce a bank as a listing advisor. FMG shares up 16% to A$3.07 in what looks like a speculative rally on the possibility that a Shanghai listing could help fund the iron ore miner's expansion plans. One analyst says the rally in the shares looks overdone and any China listing, if it eventuated, would likely be a long way off. (APW)


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## jono1887 (11 May 2009)

I wish i knew about this listing!! I bought 2 weeks ago at 2.34 and sold today at 2.75  should've held them  oh well... what can you do...


----------



## kpas (11 May 2009)

Some profit is better then no profit.

Be happy that you made money and didn't lose any.

Be interesting to see how this one opens tomorrow, it closed very strongly on the buzzer.


----------



## nomore4s (11 May 2009)

****Putting my Mods hat on for a moment****

This is a warning for everyone who posts in this thread. As this stock is starting to move up again and the market in general is somewhat bullish atm we are starting to get some mild ramping and low content posts - *this will not be tolerated on ASF *- so please think before you post.

I have already had to delete some posts on this thread tonight and as this thread has a bad history for ramping there will be no more warnings.

Thank you.


----------



## choochoo35 (21 May 2009)

Chinese have asked Rio to take 45% cut from '08 IO benchmark price. Any guesses as to impact on FMG sp?


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## Nesa (26 May 2009)

not many replies as of late? what's going on.. just becuase the price is stagnant.

strong spike in volume today though.


----------



## DVEOUS (1 June 2009)

Stagnant?

I'm riding the wave.
Bought 10 days ago @ $2.51.
Peaked at $2.71 today, with a $2.67 close.
There's an uptrend (since early April) that blind Freddy can see.


----------



## renim (1 June 2009)

so what do you make of today's profit announcement.  Is it real profit or is something else?  and how does it compare to other ASX 20 companies?


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## Miner (3 June 2009)

FMG is looking for a perfect condition: High Ore price, No accident even if no care was taken on OSHE front, price realisation based on negotiation done by Rio and BHPB, perfect weather without any rain when every one looks for it 

Then they will produce modest production with every opportunity to dodge the naive investor

Here u go with latest press 

Disclaimer : Still holding FMG 

*Rains hit Fortescue's iron ore mining
June 1, 2009*

Fortescue Metals Group shipped 20 million tonnes of iron ore to China in the first three quarters of the financial year after heavy rain affected mining, the company says.

Mined iron ore was impacted by heavy rains across the Pilbara, Fortescue says in a financial report on the nine months to March 31.

Patersons analyst Alex Passmore said *Fortescue's 20 million tonnes of iron ore exports was below original estimates, but had been expected.*

He said original estimates from the company varied between 45 million tonnes per annum (mtpa) and 80mtpa, with 55mtpa as a base case, depending on market conditions.

"It is 20 million so far this year, to the March quarter," Mr Passmore said.

"They are on track for 26 million for the 12 months, and they have said their target is about 35 for next year.

"Their last guidance was after the wet season which impacted on their rail and mine, so that has come down, but they did announce that in February," Mr Passmore said.

In the nine months to March 31, Fortescue had almost $US1.4 ($A1.74) billion in revenue, and a gross profit of about $US497 million ($A618.93 million).

Fortescue shares finished up five cents at $2.67 on Monday.


----------



## GumbyLearner (3 June 2009)

I don't hold but used to.

I'd hold for a while.

While = http://en.wikipedia.org/wiki/While

JMO

DYOR

IAYP

Cheers
Gumby


----------



## DVEOUS (3 June 2009)

Love the FMG ride!!!

Bought in at $2.51 less than two weeks ago, and closed today at $2.98, peaking at $3.03 during the session.

Makes up for my dog stocks, like Clinical Cell Culture!


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## DVEOUS (5 June 2009)

I seem to be posting to myself.
Is no one else interested in the potential with FMG???

After closing yesterday at $2.88, I decided I'd accumulate more under $3.
Whoa!
Checking just before 10:30 this morning, I noticed they had spiked to $3.41.
For me, buying in at $2.51 two weeks ago, this is great news.


----------



## nathanblack (5 June 2009)

congratulations. you are clearly a talented investor. good luck and enjoy the ride. and remember paper profits mean little


----------



## AQR (5 June 2009)

nathanblack said:


> congratulations. you are clearly a talented investor. good luck and enjoy the ride. and remember paper profits mean little




Hey sour grapes, do you really enjoy bursting other peoples balloons?

Good luck to the guy, I hope your investments have performed as well.

Geoff.


----------



## nathanblack (5 June 2009)

AQR said:


> Hey sour grapes, do you really enjoy bursting other peoples balloons?
> 
> Good luck to the guy, I hope your investments have performed as well.
> 
> Geoff.




sour grapes for congratulating the guy? im truely happy for him. but, as i said, at this stage they are paper profits. we cant offer specific advice, but if his holdings are large or his portfolio has become overweight from the gain, then perhaps selling down and locking in some gains could be considered.

and no, unfortunately my investments havent been as successful. but im on target for my own goal. im pretty tight with my stops in both directions atm.


----------



## SenTineL (5 June 2009)

nomore4s said:


> ****Putting my Mods hat on for a moment****
> 
> This is a warning for everyone who posts in this thread. As this stock is starting to move up again and the market in general is somewhat bullish atm we are starting to get some mild ramping and low content posts - *this will not be tolerated on ASF *- so please think before you post.
> 
> ...





I think you'll find this is the reason the thread has been quiet and it's a fair point made. No point posting just what you bought and sold at, no one cares. What people are interested in is opinions and analysis

Most people will not post because they've had a 15% gain in a few days.

I for one think the latest price move is largely affected by the BHP and RIO deal announced today. FMG will basically be the second largest producer out of the pilbara after the JV. 

Interesting trading ahead in the next week no doubt


----------



## renim (5 June 2009)

It feels like the ramp up to 55mtPA is slow.....
but they got into production while the price was right
and now the Chinese must be looking at them closer
what is their profitability now anyway.
I always was a bull on this stock


----------



## Joe Blow (5 June 2009)

DVEOUS said:


> Love the FMG ride!!!
> 
> Bought in at $2.51 less than two weeks ago, and closed today at $2.98, peaking at $3.03 during the session.
> 
> Makes up for my dog stocks, like Clinical Cell Culture!






DVEOUS said:


> I seem to be posting to myself.
> Is no one else interested in the potential with FMG???
> 
> After closing yesterday at $2.88, I decided I'd accumulate more under $3.
> ...






nathanblack said:


> congratulations. you are clearly a talented investor. good luck and enjoy the ride. and remember paper profits mean little






AQR said:


> Hey sour grapes, do you really enjoy bursting other peoples balloons?
> 
> Good luck to the guy, I hope your investments have performed as well.
> 
> Geoff.






nathanblack said:


> sour grapes for congratulating the guy? im truely happy for him. but, as i said, at this stage they are paper profits. we cant offer specific advice, but if his holdings are large or his portfolio has become overweight from the gain, then perhaps selling down and locking in some gains could be considered.
> 
> and no, unfortunately my investments havent been as successful. but im on target for my own goal. im pretty tight with my stops in both directions atm.




As SenTineL has pointed out people reading these threads are primarily interested in information and analysis and less in how many shares people hold or how much the price has gone up.

If the price goes up, it would be interesting to read why you believe this to be so, rather than how much money it made you. So please, lets try and focus a little more on content and adding some value to the thread.

Thank you for your co-operation.


----------



## nathanblack (5 June 2009)

SenTineL said:


> I for one think the latest price move is largely affected by the BHP and RIO deal announced today. FMG will basically be the second largest producer out of the pilbara after the JV.
> 
> Interesting trading ahead in the next week no doubt




The rise can be attributed to :
(1) general positive market
(2)strength in bhp/rio flowing on to other resource stock
(3)the JV announcement;

After reading the announcement, its clear there are many synergies and cost savings that can occur for the JV due to existing FMG infrastructure and nearby projects in a fairly remote region. Its a fairly cost effective way for FMG to expand/gain further exposure in the Pilbara.

It makes you wonder if there are other JV oportunities in the region.

Although they may be the second largest ore producer in the pilbara, for some reason i cant put them in the same league as bhp/rio. Maybe because they are relatively new and have less of a history, or the fact they are one dimensional(iron ore only).

still a lot of upside to this stock when the economy/ore price rebounds.

Dissclosure: I dont hold and never have.


----------



## jbocker (10 June 2009)

nathanblack said:


> The rise can be attributed to :
> (1) general positive market
> (2)strength in bhp/rio flowing on to other resource stock
> (3)the JV announcement;
> ...




Up 13.5% on June 5 with a good announcement and BHP/RIO news, and today up another 15.4%, on no real news (that I have heard). Anyone enlighten me further with their theory? Or is this a continuation of response to the original news (even though FMG fell slightly yesterday).
cheers Jbocker


----------



## renim (10 June 2009)

I'ld say its partially the ongoing effect of BHP/RIO JV
and the detail of FMG's agreement with BC? iron,  I think production will be 50% to FMG


----------



## catman (10 June 2009)

Ok this is the trade.  FMG rallying on the back of BHP/RIO JV being forced to open rail way to 3rd party.  If they do - FMG can increase production and ship more ore per annum therefore increase the valuation of the company which China could potentially takeover at some stage.


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## jono1887 (11 June 2009)

if this is the case.. what has caused todays 16% jump on opening?? i just dont get it 

shouldnt the news of the joint venture be over now and the prices stabilised... or has resource prices climbed today??


----------



## awg (11 June 2009)

big volume today

the day traders are all over this one

I bought on the open yesterday, up 33% since then

the reason I bought was simple

with bhp/rio tie-up

fmg will be the No1 target of Chinese investment, given their already strong links

therefore, every man and his dog wants to jump on board.

the Chart is screaming to buy for days

have traded this stock many times

IMO


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## vincent191 (11 June 2009)

BCI is only a minnow. Whatever it does should not have affected FMG's sp by very much. 

I have no idea on what is driving FMG up by so much, all I have to say is the market will do what the market will do.

Maybe it is just taking a random walk on the wild side.


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## c-unit (11 June 2009)

How do you guys learn who owns all the railways and who uses them etc running through the Pilbara and the rest of WA? Is there an easy way of doing it or is it a matter of sitting down with a map and ploughing through annual reports?

In regards the FMG's rallying, I suspect that it can be at least partially attributed to speculation of Chinese investment in it. There is no doubt that the Chinese are bitter regarding the RIO/BHP deal and they definitely want to get their hands on some Iron ore assets. I guess FMG is the next best thing. Wish I bought last week!


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## Sean K (11 June 2009)

c-unit said:


> How do you guys learn who owns all the railways and who uses them etc running through the Pilbara and the rest of WA?



Have you heard of this internet company called Google?

I suggest googling Google, and then punch in some things like:

Rail maps in WA
Rail lines of BHP, RIO, FMG

etc.

Maybe even use the 'map' search.

Good luck!!!

Here's one I found, lots more..

http://content.edgar-online.com/edgar_conv_img/2007/11/26/0001156973-07-001712_U54234U5423427.GIF


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## c-unit (11 June 2009)

kennas said:


> Have you heard of this internet company called Google?
> 
> I suggest googling Google, and then punch in some things like:
> 
> ...




Ah cheers of course. Bit of a dumb question, new to all this. Ta

Having a look at that map makes you realise how much of a great deal BHP got out of the JV. They could have been in strife had RIO cooperated with Chinalco in regards to their ability to compete in Iron Ore


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## Sean K (11 June 2009)

Also, check the most recent presentations from all three companies on their websites regarding IO. They'll have maps of their lines and probably the competition as well. I reckon you google the companies, find their web sites and keep them as favourites for later on. Your on line broker will also have all the previous announcements from the companies that will include presentations.


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## SenTineL (11 June 2009)

Huge volume today, means the big boys are getting back into this and are serious. 

Probably why the price is affected so much also, BHP/RIO deal is also probably starting to look much more attractive for FMG and other parties are probably working this out.

I'd like to hear WBII's analysis


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## happytown (11 June 2009)

rumours doing the rounds (rumourtage anyone) that chinalco is looking at making a bid for fortescue, fmg responded to the speeding ticket with dunno

note rumours only and fmg have said they are* not aware of any information* etc, etc

cheers


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## persistentone (11 June 2009)

Does anyone have a link to the CLSA analysis of its recent downgrade for FMG?  

Obviously the stock is up today on rumors about possible Chinese investment, which may or may not materialize in the next few years.   I would like to have some idea of how to value FMG on fundamentals as I have not studied them before.   Does anyone know of a good analyst report?


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## njc.corp (11 June 2009)

vincent191 said:


> BCI is only a minnow. Whatever it does should not have affected FMG's sp by very much.
> 
> I have no idea on what is driving FMG up by so much, all I have to say is the market will do what the market will do.
> 
> Maybe it is just taking a random walk on the wild side.




It seems that bci is a little fish but anything is better then nothing-

I find it simple but i aint going in  because fmg has had a good couple of weeks-

its very simple-bhp and rio have their deal going on-

fmg got some things to do with bci,and they got their operation  going and running okay-

So the Chinese got  a new fish to catch-but i would like to see more of the last couple of days of people not taking profits and holding the damm stock which will sustain a good price-

But on the other hand most resource stocks are up

so its a bit of a hard one to understand-

so that leaves us to go by the current price.......


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## MRC & Co (11 June 2009)

Didn't that Oz Minerals takeover go through today?  Probably explains the bump in the SP of FMG.  Looking as a takeover target now.


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## stompa (15 June 2009)

so what you guys reckon heading back to the $3 mark?or a steady rise from now. looking for an entry stock


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## NitrosOxide (17 June 2009)

I am also looking for an entry point into FMG, was  as I missed the boat @ 2.50 but 'hopeful' for a 3.20 entry point. I am curious to see how much the news from RIO will effect if at all and why.. does anyone else have any speculation as to what may have any effect negative or positive on FMG?
seems to be bouncing back up atm 3.60.


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## renim (21 June 2009)

BHP/RIO joint venture valued at $116billion and 120+150 mtpA? current, growth to maybe 50% more at pre feasibilty stage

FMG valued at $12billion and 25mtpA, nameplate capacity 50mtPA, growth to 200mtpa with footprint of port design  (ie pass pre feasibility stage)

now these are very approximate, unsubstantiated figures, which i would love for someone to correct on this forum (they just my top of head figures)

so if FMG ramped up to its 200mtpa capacity it would be worth a LOT more (think 2/3s of BHP Tinto JV), if was at its nameplate capacity it could be at 1/5 to 1/6 of BHP Tinto (very roughly share price around $7).

if it stays at 25mtpA then it is a par value at $3.50 per share

this off course assumes everything else being equal which is obviously not true, its just back of envelope calcs.


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## LeeTV (25 June 2009)

*Fortescue Metals’ Stock Is “Over Priced,” Morgan Stanley Says *

_By Jesse Riseborough_


June 25 (Bloomberg) -- Shares of Fortescue Metals Group Ltd., Australia’s third-largest iron ore exporter, are “over priced” and reflect assumptions for demand, prices and production that are too optimistic, Morgan Stanley said. 

“The price scenario back to a bull market in iron ore is unrealistic given the outlook for steel markets in Asia,” analysts led by Melbourne-based Craig Campbell and Cameron Judd said in a report dated yesterday. “Iron ore is heading into a period of excess supply, placing downside risk on revenues in the near to medium term.” 

Fortescue, which has almost doubled this year, rose 2.4 percent to A$3.78 at 10:22 a.m. Sydney time on the Australian stock exchange. Morgan Stanley reaffirmed an “underweight” rating and a price target of A$1.08, 71 percent lower than the current price. 

Perth-based Fortescue spokesman Cameron Morse said the company doesn’t comment on analyst reports. 


http://www.bloomberg.com/apps/news?pid=20601081&sid=avxPpQV1QlX0


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## renim (29 June 2009)

FNArena had an article about FMG being a "Nigel No Friends" stock.  It'll be interesting to see how it goes...


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## LeeTV (29 June 2009)

renim said:


> FNArena had an article about FMG being a "Nigel No Friends" stock.  It'll be interesting to see how it goes...




Yea I read that. The 'experts' were spouting the same rhetoric last year too.  FMG were up 200% not long after :

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=1B7D6A33-1871-E587-E1FA39773AD0D15E


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## Miner (29 June 2009)

Extract from The Bull Newsletter

"Mark Goulopoulos, Patersons Securities


*SELL RECOMMENDATIONS
*


Fortescue Metals Group (FMG)

The share price moved up very strongly in response to the proposed iron ore joint venture between BHP Billiton and Rio Tinto.  Expect Chinese interest in Fortescue to help it expand production in future. But the stock is now overvalued for the short term."

Disclaimer : I do hold FMG


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## LeeTV (30 June 2009)

Interesting read(not really FMG related but the sector as a whole).

*China rolls out the welcome wagons for our ore *
_Michael Sainsbury | June 27, 2009 
Article from:  The Australian _
http://www.theaustralian.news.com.au/business/story/0,,25695619-36418,00.html

ONE block back from the heaving docks at the endlessly sprawling Port of Tianjin in northern China, scores of empty, dirt-encrusted tip trucks wait in line for their next load.

By twos and threes they are let through the boom-gates to the wharf, taking their place beneath one of the eight giant cranes picking up the red dirt from the hold of an ageing Panama-registered ship that has ferried 50,000 tonnes of iron ore across the ocean. 

A thick patina of red dust -- which quickly covers everyone and every vehicle that approaches -- blankets the wharves. 

The weatherbeaten shift workers who have toiled in freezing winter winds now work under the burning sun and into the night unloading up to 15 ships at a time. The shifts run around the clock. And the ships keep coming. Every week, dozens of ships arrive from Australia, Brazil, India and Indonesia to feed China's hungry steel mills. 

But not all of it is finding its way to the mills. 

Iron ore is heaping up in China, creating the world's biggest ever stockpile of the mineral. 

That stockpile is now at 100 million tonnes or more. 

That's the result of a combination of confidence, price and the increasingly fractured nature of the iron and steel sector in what is still the globe's key growth nation and the biggest consumer of iron ore. 

In 1990, China imported 14.2 million tonnes of iron ore. 

In 2002 it was taking in 112 million tonnes and last year it consumed 443 million tonnes -- about 45 per cent of the world total. That figure is widely expected to be exceeded this year. Right now, about 90 ships lie off the coast of China awaiting their turn. At Tianjin port, about 150km southeast of Beijing, it takes 20 days to get a berth. 

"Business is good," truck driver Guo Jianjun says as he waits for his modest 50-tonne truck to be filled. 

Last year, when the world's economy was still expanding and China was racing along at a GDP growth rate of 9 per cent, the giant nation needed iron ore to feed its steel mills. Global demand for steel -- where 98 per cent of iron ore is used -- has since fallen, in line with a general drop in demand. Yet China is importing more iron ore than ever. This year several records have been smashed as volumes have topped 50 million tonnes in each of the past three months. Even though the international steel sector is working at only 70 per cent of capacity, China's traders and steel mills defy government edicts and buy, buy, buy. 

There is confidence that the steel industry has bottomed out and -- at least in China -- will show signs of recovery this year. While manufacturing remains in the doldrums, the Chinese government's 4 trillion yuan ($727billion) stimulus package has been directed at infrastructure projects -- including the $US32bn ($39.7bn) Beijing-Shanghai high-speed rail link -- that will require millions of tonnes of steel. 

Indeed, over the past few weeks signs of life have been emerging. "The outlook is improving, with steel prices staying relatively strong," says Hong Kong-based Macquarie Bank China analyst Andrew Dale. 

"More importantly, global steel production and demand could be entering an up-cycle with most of the global indicators looking more positive." 

There has been speculation in recent months that traders were hoarding iron ore in the hope of turning a profit when the annual contract price with iron ore producers was set. But there are growing signs that the appetite for iron ore -- and the steadily rising spot price -- is driven by real demand. 

Steel prices in China have risen 16 per cent from their lows and now sit about 30-35 per cent below the record peaks of last year. "We expect some normalisation in the third quarter but all the major metrics are positive," Dale says of the steel market. "Construction volumes are slowly picking up and the property sector is showing signs of life. This would be positive for overall steel demand." 

All this puts a dent in the government's arguments as it belligerently holds out for a 40per cent-plus cut in contract iron ore prices for the coming year -- deeper than the Koreans and Japanese accepted last month. 

On the ground, at the Tianjin docks, it is easy enough to find answers about what is coming into China. But what happens to the iron ore after that is harder to determine -- and is causing headaches at the highest levels of the government. 

In Tianjin it takes about two days to unload a ship. There is no modern rail infrastructure to the wharf. Instead, a fleet of mid-sized pickup trucks, often piloted by owner-drivers, haul the ore back to the port's "warehouse". 

Guo says he would be happy to work "24 hours a day" if he could. "It's been several months since I came from Jiangsu (several hundred kilometres south)," he says, estimating he can make 700-800 yuan ($127-$145) a day, minus the cost of diesel. 

(continues in next post)


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## LeeTV (30 June 2009)

(continued from previous post) 

The "warehouse" is actually hundreds of acres of open grounds a few blocks back from the ports. It houses pile after 4m pile of imported dirt. They are covered by an uneven patchwork of lurid green tarpaulins that are regularly hosed down with a sprinkler system to stop the cargo from joining the other pollutants in Tianjin's thick, choking haze. 

Hou Zhiyun, from steel industry website Langsteel.com, says that, according to the latest figures to the middle of this month, there are 70 million tonnes of iron ore stored at China's ports. There are an estimated further 30 million tonnes at mills and traders' warehouses. 

A warehouse supervisor, who would only give his name as Lin, says the space is constantly full as ships make their deposits and customers come to pick up their consignments. He says the tight space means that mills and traders have a maximum of 30 days to get the ore to their own warehouses around northern and central China before fines are imposed. Many smaller mills and traders choose to delay moving the iron ore out of ports, to achieve lower storage costs. 

The small mills have this year been cut out of the annual price negotiations with the big iron ore producers -- Australia's Rio Tinto and BHP Billiton and Brazil's Vale. The talks have been taken over from Baosteel and other major steel producers by the government-run China Iron and Steel Association. Both the smaller steelmakers and the proliferation of traders are betting that CISA's deal won't be as good -- if they can get it -- as a deal on the spot market, which has been down as much as 40 per cent from last year. 

China's authoritarian government has been struggling to maintain control over the steel sector for years. And the growing stockpile suggests its grip has been further loosened. 

For more than a year, the government has been trying to force consolidation in the steel industry, rub out unlicensed traders and control imports. A strongly worded missive last June from eight departments, including the Chinese cabinet, was all but ignored. Last month came another attempt. 

As in many other key sectors of "national importance", China's leaders have long wanted to create a small group of giant steelmakers that can help it better control prices. It does not want countless small mills forcing up the price by bidding against one another. In recent years, as the iron ore price has soared to record levels, mainly on the back of Chinese demand, the government has stepped up its efforts. 

Instead, the opposite has happened. As big state-owned mills have splurged on infrastructure to build high-end and cutting-edge products for industries such as the depressed airline and shipping sectors, more efficient privately owned mills stepped into the breach to make regular steel products. 

The global recession curbed demand for the more expensive products in the steel market, cutting the profits of industry giants and landing them with excess capacity at the top end. This handed a further advantage to the smaller, focused mills that now number in the hundreds. 

Now CISA is believed to be threatening to take away up to 30per cent of the 112 official iron ore import licences. The group has succeeded in stopping most traders and mills from commenting to the media, but other than that they are getting on with their business. 

Zeng Jieshen, an analyst at Mysteel.com, does not think such a cut will help. He says that since the Ministry of Commerce issued the licences in 2005, the licence numbers have dropped from 523 to 112 "but the situation wasn't improved". 

"Even if they cut another 30per cent, it won't solve the problem at its roots," he says. 

To make things worse, the stockpile adds a fresh and unwanted element into the simmering, long-running discussions between China's steel sector and major iron ore producers. These have a deadline for a new benchmark price of next Tuesday, June 30. 

But the winds of change that are sweeping through the iron ore and steel sectors mean this benchmark system, which sets iron ore import prices each year, is under perhaps terminal threat. At the Australian end, BHP has been pushing hard to introduce an index system. In China, Xu Tao, vice-general manager of Jianlong Co, a mid-sized mill in Tangshan that makes 2 million tonnes of steel each year, says the import system is in chaos. 

"According to the country's policy, importers should charge a 3-5 per cent agents' fee only, but in reality the policy became a blank piece of paper," he told China's CCTV. Xu says his company is being forced to pay 1400 yuan for every tonne of iron ore, even though the contracted price is only 700-800 yuan. 

"We're not included in the negotiations, nor can we share the long-term contract price, and we have to buy from the real market at a higher price." 

Earlier this month, unconfirmed -- and undenied -- rumours swept the Chinese market that Brazilian iron ore behemoth Vale had signed a secret contract with 38 mid-sized and smaller mills around China, causing further fury at CISA. 

Chinese steelmaker Sinosteel said this week that 70 per cent of the country's iron ore was now being imported. Now that the mineral's price has fallen back -- albeit only to 2007 levels -- its superior quality is triumphing over the local iron ore from high-cost, low-grade and dangerous Chinese mines, many of which have been forced to close. 

This week, like a miracle answer to CISA's prayers -- only days before the benchmark negotiations are due to be completed -- China announced it had found Asia's largest iron ore deposit in the northeast province of Liaoning. But many are sceptical about the time -- three to four years -- and cost it will take to develop the exceptionally deep deposit, particularly with China's restrictive rules on offshore miners and their superior technology exploiting homegrown resources. Another wrench was tossed into the system this week when the US and Europe lodged a complaint with the World Trade Organisation about China restricting exports on certain minerals and chemicals used in steelmaking.


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## nomore4s (11 July 2009)

For all the FMG lovers out there:

Weekly chart.
Breakout of triangle on increased volume, now testing breakout level on reduced volume, target is around $5.50 but more realistic target is probably around $5.00. Pretty textbook pattern really.

Daily chart.
In Wykcoff terms a nice jump across the creek (or SOS) and now a last point of support. All very bullish atm imo.

Probably depends on what the market decides to do now though. If the market tanks FMG might find it hard to push on.


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## DVEOUS (11 July 2009)

I hold FMG, and hope that you might be right. 
I do regret not selling a few weeks ago, at the $4.55 peak though.

You must be assuming the current cluster f##k with RIO staffers does not affect anything?
Many companies will be wary of dealing with the Chinese in future.
The Chinese did not do themselves any favors last week, in terms of international business relationships.

Also, the Chinese have stated that they will be using up 100,000 tonnes of the 280,000 tonnes of iron ore stockpiles, driving the price lower.
I read this morning that the June peak we saw will not be revisited until late 2010.

I also read that the Chinese will be establishing a fund for the purpose of investing in "struggling explorers", so they have a direct investment, and can help guarantee supply/prices for themselves.

My thinking is, both RIO and BHP have created such a bad "loss of face" to the Chinese, (which triggered the action against the RIO employees), that FMG would have to be the next obvious door to come knocking on.

I am slightly concerned that market commentary mentions not seeing the June peak until late 2010 again, but I won't panic sell FMG, because I expect FMG should get into bed with the Chinese.
FMG would be fools not to exploit the situation created by RIO/BHP.


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## nomore4s (11 July 2009)

DVEOUS

I know nothing about any of that (it's all chinese to me:) and tbh I don't really give a rats about it. I trade these set ups purely off the charts, if I'm wrong I'm stopped out - simple.


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## investorpaul (21 July 2009)

Anyone else currently in this?

I got in at $3.66 a couple of days ago and since then it has run pretty hard. Current market depth is indicating it will open up again today and it will be interesting what sort of gains it will put in.

However given that the market has run hard for 5 days (and will prob be up today after the DOW was up 104pts), I am tightening up my stop on this one so when it does retreat I dont give too much back.


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## nomore4s (21 July 2009)

investorpaul said:


> Anyone else currently in this?
> 
> I got in at $3.66 a couple of days ago and since then it has run pretty hard. Current market depth is indicating it will open up again today and it will be interesting what sort of gains it will put in.
> 
> However given that the market has run hard for 5 days (and will prob be up today after the DOW was up 104pts), I am tightening up my stop on this one so when it does retreat I dont give too much back.




Yep I'm also in @ $3.60.

Still pretty bullish based on the patterns in the charts I posted a few posts earlier. The target I have based on those patterns is around $5.50 not sure if it will make it there at this stage. I will be looking to exit half my position at that target price (if not stopped out first) and try to ride the trend higher if it can be sustained.


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## investorpaul (21 July 2009)

nomore4s said:


> Yep I'm also in @ $3.60.
> 
> Still pretty bullish based on the patterns in the charts I posted a few posts earlier. The target I have based on those patterns is around $5.50 not sure if it will make it there at this stage. I will be looking to exit half my position at that target price (if not stopped out first) and try to ride the trend higher if it can be sustained.




Out of interest do you operate on a percentage stop? or set price level?

With FMG I struggle with where to place my stop as I believe it will run further and the stop cant be too close incase of gaps. 

Currently I have it at 3.98 (which is 7% away) but I feel its prob a bit loose and will move it up to circa 5%


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## nomore4s (21 July 2009)

investorpaul said:


> Out of interest do you operate on a percentage stop? or set price level?
> 
> With FMG I struggle with where to place my stop as I believe it will run further and the stop cant be too close incase of gaps.
> 
> Currently I have it at 3.98 (which is 7% away) but I feel its prob a bit loose and will move it up to circa 5%




It depends on what I'm trying to achieve with the trade. Generally it is price levels but I do also use percentage stops to protect open profit.

When they run hard like this I generally put the stop to a position that will protect some profits but give it plenty of room to try and capture a larger part of the trend - especially when the market is showing very good strength atm. I can always exit or tighten stops if a bar or bars appear that I don't like. My current stop is at $3.85.

The patterns I posted earlier especially the daily chart indicate that a sustained trend _may_ be about to start but with stocks like FMG you can never be sure. Here is a chart with some similar principles marked on it.


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## DVEOUS (27 July 2009)

An extract from an article on Business Speculator (Saturday 25/7);



> *Agreement in sight on iron ore talks*
> By Alfred Cang of Reuters
> SHANGHAI - When China's steel executives meet next week for their biannual meeting, issues such as first-half performance and oversupply may take a back seat as the industry body braces itself to be grilled about its protracted iron ore talks with global miners...




The full article can be found here; http://www.businessspectator.com.au/bs.nsf/Article/PREVIEW-Eyes-peeled-on-China-iron-ore-deal-as-CISA-U9C9R

Although most of what we read in the media over these Iron Ore negotiations has to do with RIO and BHP, what effect on FMG, if any, do you feel there will be on FMG?

If a deal is finally struck, indicating some confidence that things are moving forward, could we see a small rally in FMG later this week/next week?
Or, would a discount arrangement have a negative impact on SP?
(Given China is paying spot prices ATM, which is significantly higher than what they are trying to negotiate).

Friday's close of $4.33 was quite a fall from the $4.60 peak in the first minutes of trade that morning. Getting quite volatile at these levels.
Peaked $4.55 on June 10.  Seems to have resistance around here.

I am really stuck, as to what to do.
Do I sell my FMG very soon, bank a profit, and wait for this pending correction in equities that the media were writing about this morning. Then buy back in again later.
OR
Do I simply hang onto FMG?

Keen to hear your thoughts on where the Iron Ore miners might go in the very short term.


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## Nick Radge (27 July 2009)

> I am really stuck, as to what to do.
> Do I sell my FMG very soon, bank a profit, and wait for this pending correction in equities that the media were writing about this morning. Then buy back in again later.
> OR
> Do I simply hang onto FMG?




The trend if your friend until it ends, then it bends.
You'll never make a large profit by taking a small profit.

Disclosure: I hold FMG.


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## Miner (28 July 2009)

SELL RECOMMENDATIONS BY Peter Rudd, Balnave Capital PUBLISHED IN BULL ON 27 JULY


_Fortescue Metals (FMG)

Iron ore production levels for the June quarter rebounded strongly on the March quarter, which was impacted by heavy rain. The group’s high operating costs need cutting to lift profitability as mine output ramps up to full production._

I do not hold FMG and recommend do your own research. Often these brokers manipulate market. Bell Potter also said SELL after which the price has gone up by 80 cents. I wrote a note to the analyst and he / she never responded.


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## DVEOUS (29 July 2009)

Hmmm, it's 13:40 local time, and they've gone in pre-open.
Bids are now higher than offers.

I see the (market sensitive) announcement about Glacier Valley, but there is no announcement of a trading halt.
Wouldn't pre-open status during the trading day indicate a halt?

I guess it will all come out in the wash later tonight/tomorrow.
Lets see if this can break that resistance at $4.55-$4.60.


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## DVEOUS (29 July 2009)

Sorry, false alarm there. 
Trading status changed back to normal after about 10 minutes.
Price did spike up to $4.49, but then retreated well back from there.


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## LeeTV (6 August 2009)

*China on the prowl for smaller Oz miners*
_05 August 2009 @ 11:08 am ET_
http://www.ibtimes.com/articles/20090805/china-on-prowl-smaller-oz-miners.htm

KALGOORLIE, Australia - Who ever said China's loss of face over Chinalco's collapsed $19.5 billion Rio Tinto tie-up bid would curb the country's hunger for Australian natural resources?

Chinese state-owned and privately-held metals firms are actively on the prowl for acquisition and financing deals with Australia's small and medium-capped miners of base metals and iron ore, analysts and bankers say.

"I reckon there's still a few in the cards, there's still more to do -- particularly in steel-related products," said James Wilson, an analyst at DJ Carmichael.

"You can't shut the door on these guys because they are related to the long-term health of the mining industry here," Wilson said, adding that Chinese companies account for a huge proportion of Australian mining firm's customers.

"It's a symbiotic relationship these days."

China's hunger for Australian assets is far from satisfied, two regional investment banking sources told Reuters, even though most of the distressed deals have already been completed earlier this year in the immediate wake of the global financial crisis.

New potential buyout or financing deals may include Australia's smaller iron ore players, the likes of Atlas Iron, and small base metals firms such as Kagara Ltd -- anything involved in steel making or infrastructure to assist in China's massive modernization drive.

Just last month Australia gave the green light to China's Guangdong Foreign Trade Group to take a 19.9 per cent stake in debt-laden Kagara.

Rumors are also swarming China Investment Corp (CIC), the country's $200 billion sovereign wealth fund, is eyeing a financing deal with *Fortescue Metals*, Australia's third largest iron ore miner.

What is more, Fortescue's boss Andrew Forrest is expected to ultimately sell his firm sometime in the near future -- even after Fortescue struck a $438 million stake deal with China's Hunan Valin Iron and Steel Group earlier this year.

"I think that Andrew Forrest is definitely a seller," one Hong Kong-based banker with knowledge of the Fortescue-Hunan Valin deal said, adding that Forrest may prefer to develop the company more before he exits at a higher price.

The banker predicted that Chinese firms, including Hunan Valin Iron and Steel, could be interested in buying Fortescue.

Both bankers declined to be named to protect client sensitivities.

Analysts say, there will be scant political opposition to such deals, because they will be with smaller-sized companies, and won't attract headlines such as Chinalco's failed $19.5 billion mega tie-up attempt with household name Rio Tinto.

"At the end of the day, its the shareholders who vote on these things," said DJ Carmichael's Wilson.


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## LeeTV (8 August 2009)

*Merrill Lynch Reverses Iron Ore Contract Price Call to 10% Gain* 
_By Jesse Riseborough
Aug. 7 (Bloomberg) _
http://www.bloomberg.com/apps/news?p...d=a4EoJFIcq4g4

Iron ore contract prices may rise 10 percent next year on demand from China, said Bank of America Merrill Lynch, reversing its estimate of a 5 percent drop. 

Steel mills may pay 106.6 cents a dry metric ton unit for Australian iron ore fines in the year starting April 1, Merrill Lynch said yesterday in a report. That compares with this year’s 96.9 cents and the bank’s previous forecast of 92.1 cents. 

Cash prices for Australian ore delivered to China, the world’s biggest buyer, have risen 38 percent this year. China’s imports surged almost a third in the first half as the government’s 4 trillion yuan ($585 billion) stimulus program spurs mills to produce more steel for automobiles and buildings. 

“Iron ore’s seaborne trade is recovering spectacularly from the steel market’s massive fourth quarter 2008 correction,” Merrill Lynch analysts led by Michael Jalonen and Tom Price said in the report. “2009 is a far better year than seaborne iron ore producers ever expected. We are now modest bulls on iron ore.” 

Australia is the world’s largest exporter of the steelmaking ingredient. Rio Tinto Group, BHP Billiton Ltd. and *Fortescue Metals Group Ltd*. are the nation’s three biggest exporters respectively. 

To contact the reporter on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net;


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## sammy84 (10 August 2009)

Anyone care to explain todays price action. I had a chartist recommended trade in, which managed to catch my entry trigger and my stop in the one day. Would seem to be a very large reversal....Need to get home to check my charts.


----------



## skyQuake (10 August 2009)

Reporting results. Pretty shabby results after taking out all the crap. Sat there for a few minutes before it collapsed.

Then again, entire index was sold down heavily today.


----------



## LeeTV (10 August 2009)

skyQuake said:


> Reporting results. Pretty shabby results after taking out all the crap. Sat there for a few minutes before it collapsed.
> 
> Then again, entire index was sold down heavily today.



What part of it is shabby? Profits up. Cash reserves up. Operating costs down. What part am I missing


----------



## LeeTV (10 August 2009)

Can someone explain to me the last 2 after hour trades? Why the price is 4.41? I'm not clear on the conditions either i.e. XTOS and XTSXOS

04:56:12 PM 4.410 32,042 141,305.22 XTSXOS 
04:50:44 PM 4.410 128,170 565,229.70 XTSXOS 
04:42:54 PM 4.160 15,000 62,400.00 XTOS


----------



## Dark1975 (10 August 2009)

LeeTV said:


> Can someone explain to me the last 2 after hour trades? Why the price is 4.41? I'm not clear on the conditions either i.e. XTOS and XTSXOS
> 
> 04:56:12 PM 4.410 32,042 141,305.22 XTSXOS
> 04:50:44 PM 4.410 128,170 565,229.70 XTSXOS
> 04:42:54 PM 4.160 15,000 62,400.00 XTOS




Yes,The above after trades are called "Portfolio Special Crossing"in short :These are brokers making adjustments on trades which took place in the day,and have to be made transparent to the market,So usally done after hours.


----------



## LeeTV (10 August 2009)

Dark1975 said:


> Yes,The above after trades are called "Portfolio Special Crossing"in short :These are brokers making adjustments on trades which took place in the day,and have to be made transparent to the market,So usally done after hours.




Many thanks I have wondered what these were especially when some are worth so much  yada yada yada


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## skyQuake (10 August 2009)

LeeTV said:


> What part of it is shabby? Profits up. Cash reserves up. Operating costs down. What part am I missing




Look at the 91 paged report instead of the shorter easier to read one.

Lots of juggling with fx and other 1 time stuff.

Didn't do as well as mkt expected. Couldn't make any real money despite all the hype.


----------



## DVEOUS (10 August 2009)

Yeah, WTF? !!!
I didn't think the short report was that shabby, so it was either a big co-incidence, or something else.

I did note that whilst the SP was falling away, Commsec indicated there was an announcement, but it took an eternity for the latest announcement to actually appear. (Probably 10 minutes or so)... which ended up being the short report.

And to think I almost put a sell order in at $4.60. 
To close at $4.12 hurts.


----------



## Dark1975 (11 August 2009)

hmmm wow what a jump 2.41est pm and i thought i made a good gain when buying today @ 4.02 And selling @ 4.10....../CRY


----------



## skyQuake (11 August 2009)

Oh sweet, bought at $4 and missed getting filled at $4.11, decided to hold for arvo 
Apparently china doing some convertable bonds stuff with fmg. No idea what it means, but its apparently bullish!


----------



## Dark1975 (11 August 2009)

skyQuake said:


> Oh sweet, bought at $4 and missed getting filled at $4.11, decided to hold for arvo
> Apparently china doing some convertable bonds stuff with fmg. No idea what it means, but its apparently bullish!




Nice work,well done on the gain.Where abouts did you see the announcement with china and FMG? I have trade pro platform,currently looking through fmg announcements and cant see any info besides yesterday's 2009 fin/ report?


----------



## fureien (11 August 2009)

yeh where did you see it. i cant find it either.
what were your reasons for buying at $4? it was tempting but too risky for me. if i you posted the bonds stuff then i mightve considered it.


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## skyQuake (11 August 2009)

The news came out after the spike. I was just lucky to be there. 

DJ Market talk had some info at 2:50, Reuters possibly eariler. 



> China's sovereign wealth fund CIC and Fortescue Metals
> (FMG.AU) may be closer to a funding deal with Reuters reporting the two are in advanced
> talks on a $1 billion plus package for the miner's planned expansion of its iron ore
> operations in the Pilbara region of Western Australia. Citing sources familiar with the
> ...




Edit: Bought at 4 for a scalp. Volume and price spike this morning, and the long tail candle meant selling from y'day announcement was prob over. Mostly luck on this trade.


----------



## Dark1975 (11 August 2009)

skyQuake said:


> The news came out after the spike. I was just lucky to be there.
> 
> DJ Market talk had some info at 2:50, Reuters possibly eariler.
> 
> ...




Arh cheers for the information.Dam i sold to early,still made 2% on this trade for today,I was following my trading plan,I just thought to myself why didn't i just hold on for one more hour!Anyway im just being greedy,pay no attention to me.
Nice work again on your hold and trade for today.


----------



## fureien (11 August 2009)

yeh thanks for that and nice work. but that announcement isnt very substantial for a spike, but i believe movement is mostly from recovery from yesterday. so yeh mostly luck  gw nevertheless. have u sold it yet or are u still holding


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## DVEOUS (11 August 2009)

Thanks for the info.
That explains the late bullish run.

To think I was sitting here on my big fat A watching it hover $3.99-$4.01 this morning... and wondering if I should accumulate more... or whether it had further to fall.

 I knew I should have jumped in at $4. 

You need balls of steel.


----------



## DVEOUS (11 August 2009)

OK, this is what Business Speculator have to say about it;

http://www.businessspectator.com.au/bs.nsf/Article/UPDATE-1-CIC-in-talks-with-Fortescue-on-1-bln-conv-UT8DL


----------



## LeeTV (12 August 2009)

*11 iron ore "winners*"
_Robin Bromby | August 12, 2009 
Article from:  The Australian _
http://www.theaustralian.news.com.au/business/story/0,28124,25918554-36418,00.html

TAKE the possible 21 iron ore stocks - outside the two Pilbara majors, of course - and Petra Capita of Sydney has found 11 they can recommend as value buys.

The broker tried to make it a level playing field - comparing apples with apples, if you like - by converting magnetite resources to their haematite equivalent; they did the sums on the amount of beneficiation required to produce a concentrate. Current benchmark iron ore prices were used to calculate enterprise value and that was all mixed up with expected EDITDA for the companies concerned. 

Then they were handicapped into three divisions by market cap - one above and two below the $500 million threshold. 

Four got the big tick in the heavyweight category: Murchison Metals with its Jack Hills project in the Mid West region of Western Australia; Gindalbie Metals which is also in that region with its Mungada and Karara projects; Fortescue Metals Group, the “new force” in the Pilbara; and Mount Gibson Iron which has Tallering Peak, Koolan Island and Extension Hill. 

Middleweight contenders that got the nod from Petra Capital were Brockman Resources with its Pilbara iron ore deposit, Sundance Resources toiling away in tropical Cameroon, Northern Iron   - a surprise winner - with the Sydvaranger deposit in Norway and - back to the Pilbara - United Minerals Corp. 

In the lightweight division, there’s Western Plains Resources drilling away in the South Australia at Peculiar Knob and Buzzard, Strike Resources over there in Peru, BC Iron which has kneeled at the foot of FMG in return for access to the latter’s Pilbara railway and as a consdequence will be in production next year, and Flinders Mines and its Hamersley project. In regard the last mentioned, FMS yesterday received a speeding ticket from the ASX, the company responding that the price and volume surge may have been due to a new broker’s report. 

It was interesting to see which companies got taken out in the cull. Notably there was Atlas Iron which is one of the great Pilbara junior success stories - but remember, this was all about finding stocks that are still value buys, not ones whose achievements and prospects have already been factored into their price. 


_The writer implies no investment recommendation and this report contains material that is speculative in nature. Investors should seek professional investment advice._


----------



## DVEOUS (12 August 2009)

Well, today's announcement by FMG didn't confirm they were in talks with anyone specific, but it certainly didn't deny it wasn't in talks!
Seems like the Reuters report yesterday was credible.

Assuming that FMG do achieve 95MTpA, and given that BHP is what, 125MTpA and SP ~$37, would it not be reasonable to expect that FMG could end up being ~$30 in 2 years or so.
Bear in mind they were $12-$13 before the GFC.


----------



## fureien (12 August 2009)

either way u need to have balls atm to speculatively buy in. esp since theres no official announcement or indication of anything. They didnt indicate a timeframe did they? otherwise just camp out everymorning and pound the refresh button for news announcements lol

2 years is a loooong time


----------



## skyQuake (12 August 2009)

DVEOUS said:


> Well, today's announcement by FMG didn't confirm they were in talks with anyone specific, but it certainly didn't deny it wasn't in talks!
> Seems like the Reuters report yesterday was credible.
> 
> Assuming that FMG do achieve 95MTpA, and given that BHP is what, 125MTpA and SP ~$37, would it not be reasonable to expect that FMG could end up being ~$30 in 2 years or so.
> Bear in mind they were $12-$13 before the GFC.




You are ignoring BHP's market cap.... You cant compare share price with share price.

BHP also has oil nickel uranium alum copper gold silver lead assets etc.


----------



## DVEOUS (12 August 2009)

fureien said:


> ...They didnt indicate a timeframe did they?



By 2012.



skyQuake said:


> You are ignoring BHP's market cap.... You cant compare share price with share price.
> 
> BHP also has oil nickel uranium alum copper gold silver lead assets etc.



Yes, good points skyQuake, but no matter what they're digging up, profit is profit. I wouldn't say that 3 x annual output is 3x profit, but it must add to the bottom line in a significant way? Especially when you have your own rail and port infrastructure.

Factoring everything in, would you care to *guestimate* what the potential SP might reach, assuming the 95mta, no further GFC ramifications, etc?

(I already hold FMG, and are in for the medium term)


----------



## Surly (12 August 2009)

DVEOUS said:


> Well, today's announcement by FMG didn't confirm they were in talks with anyone specific, but it certainly didn't deny it wasn't in talks!
> Seems like the Reuters report yesterday was credible.
> 
> Assuming that FMG do achieve 95MTpA, and given that BHP is what, 125MTpA and SP ~$37, would it not be reasonable to expect that FMG could end up being ~$30 in 2 years or so.
> Bear in mind they were $12-$13 before the GFC.




I think it is fairly reasonable to say that FMG have performed very poorly in reaching production targets and dates.

The original engineering and construction crew were called Team 45 as in 45Mtpa. They still arent there let alone any further along.

cheers
Surly


----------



## DVEOUS (13 August 2009)

Surly said:


> ...The original engineering and construction crew were called Team 45 as in 45Mtpa. They still arent there let alone any further along.



Having just gotten onboard back in May, I didn't know that, so thanks for the heads up.

I then found this article http://www.sharecafe.com.au/fnarena_news.asp?a=AV&ai=5398 from just over 2 years ago which explains the Team 45 business.
It seems JP Morgan were very bullish with FMG at the time, and were forecasting 100Mtpa for 2012 back then!


----------



## fureien (13 August 2009)

lol is this the fabled chinese deal that skyqauke posted about? if it is likely to see some nice movements


----------



## Dark1975 (13 August 2009)

fureien said:


> lol is this the fabled chinese deal that skyqauke posted about? if it is likely to see some nice movements




Agreed,I did look up that thread from sky,And personally thought the deal wouldn't take place for a few weeks. Im now smashing my head as the emo suggests


----------



## DVEOUS (13 August 2009)

fureien said:


> lol is this the fabled chinese deal that skyqauke posted about? if it is likely to see some nice movements



Let's see who is laughing next Monday!

*TRADING HALT*

"Fortescue Metals Group Ltd, Australia's third biggest iron ore miner, has asked for trading of its shares to be halted as it completes an undisclosed commercial negotiation..."

http://www.businessspectator.com.au/bs.nsf/Article/Fortescue-share-in-a-trading-halt-pd20090813-UV7QF


I think I'll give myself an uppercut for not accumulating more at $4 on Tuesday. 

Ohh well, feet up until Monday fellow FMGers.


----------



## LeeTV (13 August 2009)

*China mulls $1bn boost for Fortescue*
_Tuesday August 11, 2009 21:21:06 EDT
Aug 11, 2009 (The Australian - ABIX via COMTEX News Network) -- _Chinese Government entities are scaling back their ambitions for investment in Australia due to regulatory concerns. They are now pursuing joint ventures and funding deals rather than complete takeover bids. The latest proposal is for sovereign wealth fund China Investment Corporation to take on $A1bn worth of convertible bonds issued by iron ore miner Fortescue Metals Group. However, Yanzhou Coal still aims to acquire all of Felix Resources, for up to $A3.3bn. 

http://au.quote.com/news/story.action?id=ABX223i3214

This seems to be the culprit eh?


----------



## LeeTV (15 August 2009)

*Fortescue and Exim nutting out lucrative deal*

_Matt Chambers | August 15, 2009 _

Article from: The Australian 

ANDREW Forrest's Fortescue Metals Group is believed to be in advanced talks with major policy bank Export-Import Bank of China (Exim Bank) over a multi-billion-dollar deal to finance expansion of its Pilbara iron ore mines.

Financing is being discussed along with a potential price negotiation that would give Fortescue certainty to meet repayments. 

Contrary to previous speculation, sovereign wealth fund China Investment Corp is not one of the parties involved in the deal and the issue of a convertible bond is not being discussed. 

In line with Mr Forrest's stated reluctance to further dilute shares, financing is not expected to contain an equity component. Fortescue shares were placed in a trading halt on Thursday, pending the expected completion of a commercial negotiation to be announced on Monday. 

It is believed talks to nut out the final details of the agreement are scheduled to extend over the weekend. 

Since the beginning of the year, Fortescue has held talks with Exim and CIC, among others, to finance a jump in production from its current plan of 45million tonnes a year to 120m tonnes. 

Last week, it downgraded its ambition to 95m tonnes a year. 

Some analysts have speculated that China is keen to see Fortescue increase production to provide a sizeable Australian competitor to BHP Billiton and Rio Tinto's planned iron ore merger, which would create a giant with more than 300m tonnes a year combined annual production. 

Before Rio rejected Chinese aluminium giant Chinalco's $US19.5billion rescue package in May, China Exim Bank had offered the mining giant an unlimited line of credit, potentially worth $20bn, at attractive rates. 

Any price agreement would be new territory for Fortescue, which has previously said it was a price taker. 

A fraught round of price talks this year has seen it extend longer than ever before, as China has refused to fall in line with a 33 per cent discount settled on iron ore fines by Japanese, Korean and Taiwanese steel makers. 

That deal now looks increasingly attractive for steel makers as spot prices are rising back to the levels of 2009 contract prices.


----------



## LeeTV (15 August 2009)

*Fortescue Metals Group *

Pilbara iron ore miner Fortescue Metals Group has entered a halt pending "an expected release on Monday regarding the completion of a commercial negotiation". Speculation that the company is set to sign a $US1 billion convertible note issue with China Investment Corporation is no doubt foremost in investors' minds, but Alex Passmore from Patersons Securities wrote in a note to clients that Fortescue would usually say "funding negotiations", not "commercial negotiations" if it were the case. Fortescue's current halt could thus have little to do with the company's earlier response to such speculation: that its present funding negotiations were incomplete. Passmore said that pending commercial negotiations otherwise include Fortescue’s current shipping dispute, potential investment for the Solomon or Glacier Valley magnetite projects, provisional iron ore price setting and infrastructure sharing arrangements. Updates on any or all of these issues will no doubt be welcomed but the CIC deal – if it happens – could still be a little while off. 

http://www.businessspectator.com.au...s-catch-pd20090814-UVTKY?OpenDocument&src=sph


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## skyQuake (15 August 2009)

ADRs closed at $4.91 lol, some buying at the close.
Stupid how its halted here but not in the US..
.


----------



## LeeTV (17 August 2009)

*FORTESCUE ACHIEVES CHINA IRON ORE PRICE
AND TOTAL VOLUME AGREEMENT FOR 2009*
Perth 17 August 2009: Fortescue Metals Group Ltd (“Fortescue”
“ASX”:”FMG”) has achieved a landmark agreement with Baosteel Group
Corporation (Baosteel) and China Iron and Steel Association (CISA) for an
agreed China price for all Fortescue iron ore sold to Chinese mills for the period
July 1 to December 31, 2009.
The agreement, signed by Baosteel and CISA, commits Chinese steel mills to
acquire approximately 20 million wet metric tonnes from Fortescue for the
period between 1 July and 31 December 2009.
The agreed price is US$0.94 / dry metric tonne unit (“dmtu”) for Fortescue’s
Rocket Fines (on an FOB basis) and is around 3% under the price agreed by
other Australian producers with non Chinese Steel mills. This price equates to
approximately US$55.50 per dry tonne for Fortescue grade iron ore. Fortescue
has also agreed a lump price of US$1.00/dmtu for high grade lump which is
equivalent to approximately US$61 per dry tonne FOB.
A condition subsequent to this agreement is the completion of finance by 30
September 2009, by Chinese financiers on terms acceptable to Fortescue. This
is estimated by Fortescue to be an amount of US$5.5 billion to US$6 billion.
Under the Agreement, CISA has guaranteed that a priority will be given to FMG
to negotiate iron ore prices for 2010 if the annual pricing negotiation is
conducted.
Fortescue Chief Executive Officer, Mr Andrew Forrest, said the agreement
breaks the market impasse which has enveloped the Chinese iron ore industry
in uncertainty and added risk for the past 12 months.
“This groundbreaking agreement cements the strength of the bilateral
relationship between Australia and China in which mutual issues can be
resolved and future opportunities identified. It also creates a realistic and
agreed iron ore price that delivers value for all parties and provides strong
support for Fortescue’s continued growth” Mr Forrest said.
“The ongoing market speculation has promoted unprecedented iron ore and
steel price volatility, which in turn has created extreme production uncertainties
for Chinese steel mills and for suppliers setting individual contracts with those
mills.

“This agreement eliminates that price uncertainty, sets a solid platform for
Fortescue to deliver increased product into China and affirms our close working
relationship with CISA and all Chinese steel mills.”
Fortescue notes that while the price of steel in China has nearly doubled over
the past three months, it has fallen by 20% over the past 10 days alone,
reflecting the continued volatility in the industry.
“This agreement highlights Fortescue’s extraordinary achievement of becoming,
in only our first year of production, a critical element in the Chinese steel market
and guarantees our short to medium term tonnage volumes and underpins cash
flows irrespective of market volatiity,” Mr Forrest said.


----------



## mfsperth (19 August 2009)

*FMG deal yesterday*

Hunan Valin takes a stake in FMG, et voila, FMG takes a price drop in China for its ore.
It also ends up under the deal in debt to China.
Bang goes a slice of WA state royalties.
Is this good for FMG shareholders?


----------



## renim (19 August 2009)

is this good for fmg shareholders, its currently neither good or bad.
but if fmg gets a line of credit like china was to give rio, then it will be great for both WA employment and FMG shareholders.  the  losers in this win-lose situation will primarily be indian iron ore producers, then brazil iron producers and finally rio/bhp   (in that order too)


----------



## Dark1975 (7 October 2009)

*Re: FMG*

Well im currently kicking myself when i saw fmg at 3.38yesterday ,Well its a great move so far already 8%..hmmm well i missed that move,


----------



## Prospector (7 October 2009)

*Re: FMG*



Dark1975 said:


> Well im currently kicking myself when i saw fmg at 3.38yesterday ,Well its a great move so far already 8%..hmmm well i missed that move,




And I was thinking of selling because it kept drifting lower and lower.  But FMS was steadily rising (nearby mine) so I held off for a bit as something was happening.  Both up nicely today.
(It's quite cute watching all those  doing it in time together!)


----------



## swm79 (7 October 2009)

*Re: FMG*



Dark1975 said:


> Well im currently kicking myself when i saw fmg at 3.38yesterday ,Well its a great move so far already 8%..hmmm well i missed that move,




i saw it going to... and i let it go.

imo - too many factors telling me not to get in yet. it's just bounced on a support level (i believe)

MACD is still saying the down trend is continuing, eventhough RSI indicated the best buying point (yesterday) that we've seen since the lows in december.

fundamentally there is the big issue of the refinacing... AND the issue of metals prices continuing to fall in coming months. 

so i think you might get some more buying opps before the end of the year... (as long as they still havent re-financed)

but DYOR


----------



## Dark1975 (7 October 2009)

*Re: FMG*



swm79 said:


> i saw it going to... and i let it go.
> 
> imo - too many factors telling me not to get in yet. it's just bounced on a support level (i believe)
> 
> ...




I'd tend with agree with your comments made,MACD yes it still pointing downwards and I think the CISA agreement is affecting the price also as it moved past the deadline on the 30th of sept,But on rsi and also stochastic view it has indicated a good buying point.Also to mention it didn't move through it's resistance level of $3.25,It's consolidated and moved up.


----------



## swm79 (7 October 2009)

*Re: FMG*



Dark1975 said:


> I'd tend with agree with your comments made,MACD yes it still pointing downwards and I think the CISA agreement is affecting the price also as it moved past the deadline on the 30th of sept,But on rsi and also stochastic view it has indicated a good buying point.Also to mention it didn't move through it's resistance level of $3.25,It's consolidated and moved up.




i dont know but to me stochatics are trending towards lower lows - the last four troughs have been lower lows... granted K has diverged quite considerably from your trigger.... which is still hanging below 20... but there's been about 13 crossovers in the last three days!!! 

i think that means we go back to the fundamentals.... which are screwed

if the cisa agreement comes through shortly it will prove me wrong... but the longer people wait for that, the further the price will go down i think.

for my sake (because i want to buy back in) i hope the agreement stays away for as long as possible


----------



## Dark1975 (7 October 2009)

*Re: FMG*



swm79 said:


> i dont know but to me stochatics are trending towards lower lows - the last four troughs have been lower lows... granted K has diverged quite considerably from your trigger.... which is still hanging below 20... but there's been about 13 crossovers in the last three days!!!
> 
> i think that means we go back to the fundamentals.... which are screwed
> 
> ...




Well would have to agree,The longer the agreement delays with the CISA,The longer it will affect the price,The orginal deadline was the 30th,The longer it delays the more suspect the deal could be.Seems Baosteel group and the chineese iron association are sitting in the box seat as falling commodity prices continue.Could they renege on the price of ore?Or re-settle for a better deal due to the falling commodity prices?I'm not sure,But if the deal falls apart,So will the share price!


----------



## swm79 (8 October 2009)

*Re: FMG*



Dark1975 said:


> Well would have to agree,The longer the agreement delays with the CISA,The longer it will affect the price,The orginal deadline was the 30th,The longer it delays the more suspect the deal could be.Seems Baosteel group and the chineese iron association are sitting in the box seat as falling commodity prices continue.Could they renege on the price of ore?Or re-settle for a better deal due to the falling commodity prices?I'm not sure,But if the deal falls apart,So will the share price!




agreed. 

in that situation i'd say they would re-test support at $2.40(odd) or possibly lower!

i'll still never know why i didnt buy them when they slipped under $1.50 tho - doubt we'll see that again.... actually given the fact that i think we'll see another, bigger wave of the GFC within the next two years then maybe we will???


----------



## DVEOUS (21 October 2009)

Who else saw the story about FMG on tonight's "The 7:30 Report"?

I'm not sure what to make of it, or how it might affect the SP.
It could go either way.
It was great PR, if people didn't know about the "New Force", and their planned increase in production.

On the other hand it reveals that Andrew Forrest may have told some porkies (to be investigated), and if found guilty, would be banned from being a company director.


----------



## cornnfedd (21 October 2009)

DVEOUS said:


> Who else saw the story about FMG on tonight's "The 7:30 Report"?
> 
> I'm not sure what to make of it, or how it might affect the SP.
> It could go either way.
> ...




i missed it and saw the last 5 seconds!, here is the link if anyone else wants to watch it.

http://www.abc.net.au/7.30/

will be interesting to see what happens with FMG shares. (yes i am a holder)


----------



## dat111 (6 January 2010)

FMG has been making a steady upward trend over the past year.  As I said a year and a half ago, if the investor holds onto the stock for a long enough period of time and the company does not sell at a reduced rate, the chances are good that money can be made on this stock.


----------



## tony montana (6 January 2010)

wow up over 8% in one day something must be going on...they might get a please explain from the asx...but i am not complaining


----------



## cornnfedd (6 January 2010)

tony montana said:


> wow up over 8% in one day something must be going on...they might get a please explain from the asx...but i am not complaining




no complaints here, another 9.1% and I will break even...

yes I learnt a lesson on averaging out your stock (or why NOT to) ..


----------



## SenTineL (6 January 2010)

wow well timed comment by dat111, do you know something we don't?

Not much news lately, it's been business as usual for a while now, wonder why the price jump.


----------



## DaveMac (6 January 2010)

FMG made a Dow Theory entry on a weekly chart in Nov 09, and has been tracking up ever since.  It still makes me smile to have days like these though.

Forget the news, trade the price.


----------



## dat111 (7 January 2010)

I live in the heartland of the US.  I am looking at the businesses that appear to be working somewhat OK with the new administration making a decision to push health care and cap and trade.  Those two items make it very difficult to grow business in the US because the engineers who are responsible for planning new projects do not know what the price of energy and labor will be with the new regulation.  This has caused America to stop growing.  A good deal of the manufacturing in the US has slowed way down because there is no growth.  The one industry that I do business with that still seems to be working is coal.  Not only is it working but it is expanding.  This made absolutely no sense as our power plants and steel mills are operating at less than 40% of their production rate.  I asked my customers where the coal is going and they told me that it is being shipped out of the country with China being the biggest purchaser.  This also did not make sense to me as China has one of the largest deposits of coal on the planet.  The issue is that China cannot produce their coal fast enough and is importing from the US.  Or it could be that China is dumping US dollars and buying a commodity that they need before inflation destroys the value of the dollar.  

The same might be going on with FMG.  China might be dumping US dollars to purchase assets.  It is my guess that this will continue over the next year.


----------



## dat111 (7 January 2010)

SenTineL said:


> wow well timed comment by dat111, do you know something we don't?
> 
> Not much news lately, it's been business as usual for a while now, wonder why the price jump.




I know nothing.  In fact, I probably know less than the rest of you regarding what happens in Australia.  I have been there once.  It was about 30 years ago as a teenager. Was in Sydney, Canberra and stayed in a town called Kiama.


----------



## cornnfedd (7 January 2010)

rumour is FMG is hitting record 24hr production in december, well on their way to getting 55mpta, which is what they are aiming for.

they are also looking for more money to increase production, talk is that it wont be equity based, maybe the Chinese will put some $ in...

all good for FMG, yes I am a holder.


----------



## tony montana (16 January 2010)

good week for fmg..closing the last trading day of with a solid gain when the rest of the market was fairly flat..volumes of trades are up...all signs are looking good for the new force.


----------



## LeeTV (10 February 2010)

Perth junior Cazaly back in fight for Rio deposit
_Matt Chambers From: The Australian February 10, 2010 12:00AM _

ANDREW Forrest's Fortescue Metals Group and Perth junior Cazaly Resources are renewing an audacious attempt to wrest control of one of the country's biggest iron ore deposits from owners Rio Tinto and Gina Rinehart. 
In September last year, the Perth mining warden's court ruled Cazaly did not have the right to peg Rhodes Ridge, a deposit that could contain about three billion tonnes of iron ore.

Yesterday, Cazaly said it would continue to try to wrest control of the deposit from the iron ore giant. "The Supreme Court today held that Cazaly has an arguable case and that the matter should proceed to a substantive hearing before the Court of Appeal," Cazaly said.

Under a 2008 agreement with Fortescue, Cazaly's legal costs will be covered by the iron ore miner. In return, Cazaly has agreed to hand the land to Fortescue for between $20 million and $120m if it can grab control. Cazaly will also receive a $1 royalty for every tonne of iron ore produced.

Yesterday, Cazaly managing director Nathan McMahon would not go into details of the appeal. "We're just contending the ground is open for us to peg," he said.

He said there was no indication of when a date for the appeal would be set.

Cazaly has previously argued that Rio and its joint venture partners, Mrs Rinehart's Hancock Prospecting and Wright Prospecting, had not done enough work on the land to keep it under the state's "use it or lose it" mining laws. A Rio spokesman said the company had not been surprised at the court's decision, but would not comment further.

Rhodes Ridge is not the first deposit Mr McMahon has tried to take off Rio. In 2006, then West Australian mining minister John Bowler knocked back Cazaly's right to peg the Shovelanna deposit after a mix-up with a courier had delayed Rio's renewal.

Cazaly shares did not move much on the announcement yesterday, ending up 1c at 39c.

Rhodes Ridge was discovered in the 1950s by Mrs Rinehart's father, Lang Hancock, and his business partner, Peter Wright.

Rio owns 50 per cent, while Hancock Prospecting and Wright Prospecting own 25 per cent. Cazaly is not the first group to contest claims over Rhodes Ridge. Hancock Prospecting and Wright Prospecting have also butted heads in court over ownership.


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## Wysiwyg (24 March 2010)

From a charting point of view it shows the FMG price has been contained to a point near the apex of two converging trend lines. Another observation is the price action of FMG has not followed the market index upward movement of recent times. I think it was Bulkowski who suggests that the closer price gets to the apex, the less likelihood of a trend continuation breakout. 
Anyways it is coming to a break either way because there isn't much room left. Maybe some news or market index action will force the hand. 

(Linear scale)


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## nunthewiser (25 March 2010)

And that to *me* is one humdinger of a short pattern with a bewt low % loss on stoploss point............1st target 4.20-425.........i could be wrong but cheers for pointing it out.


above ramblings are mere ramblings of what is glaring me in the face........pay no heed as my plan and your plan are 2 different things.


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## Wysiwyg (25 March 2010)

nunthewiser said:


> And that to *me* is one humdinger of a short pattern with a bewt low % loss on stoploss point............1st target 4.20-425.........i could be wrong but cheers for pointing it out.



All positive company news with resource upgrade and conference presentation so there is something else feeding the indecision.

On further reading, this pattern is considered bearish due to 3 hits on the upper trend line. This close-up of the previous chart shows FMG price closed on the lower trend line today. 
A false break is a possibility followed  by a reversal at the apex. 
Not that it will occur now the possibility is worded. (don't believe the echoes )


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## Wysiwyg (13 April 2010)

A few weeks later and after the breakout. The market has a look at $5.40  following the previous bullish day. The breakout came a month too late in hindsight. *A breakout with the Index upswing* from late February would have seen a much different outcome to this stage.


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## nunthewiser (14 April 2010)

nunthewiser said:


> And that to *me* is one humdinger of a short pattern with a bewt low % loss on stoploss point............1st target 4.20-425.........i could be wrong but cheers for pointing it out.
> 
> 
> above ramblings are mere ramblings of what is glaring me in the face........pay no heed as my plan and your plan are 2 different things.





And i was very wrong.

see what happens when one wants to be an internet guru.............................


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## trainspotter (27 April 2010)

A Perth court has decided there is no basis to dismiss charges against Fortescue Metals Group. 

FMG will face trial over the deaths of two mine workers, the company is accused of failing to provide a safe workplace.

Deborah Till and Craig Raabe were killed when Cyclone George tore through the mining camp where they lived.

FMG argued it was not responsible for the design or construction of the dongas that failed to protect the pair.

Any suggestions as to where share price will end up?


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## DVEOUS (27 April 2010)

You've got to be kidding?
If they were fearful for their lives, they should have exercised a bit of common sense, and got the hell out of there!

So if a cyclone rips through my place, in the after life, am I going to sue AV Jennings because they built the house, or the agent who sold it to me?

Everyday now, there is something in the news where one idiot wants to try and sue someone else, because they couldn't take responsibility for their own actions.

The sad things is, the courts are allowing this "dumbing down" to get worse and worse.


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## Wysiwyg (4 May 2010)

nunthewiser said:


> And that to *me* is one humdinger of a short pattern with a bewt low % loss on stoploss point............1st target 4.20-425.........i could be wrong but cheers for pointing it out.
> 
> 
> above ramblings are mere ramblings of what is glaring me in the face........pay no heed as my plan and your plan are 2 different things.



And *you*, as time has passed, were close to the mark. Albeit Humpty got a good shove from the news of the week. Present price $4.06 with the wheel still in spin.


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## The_Snowman (24 May 2010)

A small bounce perhaps, followed by slightly more downside?

A lot depends on the general market conditions over the next few weeks, even months.....


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## Jamesdee (20 November 2010)

Its strange that have there been no posts in this thread for so long.
... especially since the last post there has been ~80% increase. 

How are forum members viewing FMG at the moment?


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## dhaines (21 November 2010)

Jamesdee said:


> Its strange that have there been no posts in this thread for so long.
> ... especially since the last post there has been ~80% increase.
> 
> How are forum members viewing FMG at the moment?





I dont know where everyone is. Im also looking for discussion on FMG. Myself, I am still very bullish. Up about 30% so far and I reckon im in for the long hall. Great management, vision, and I think that their goals are high but achievable. I reckon this will go above $7 in the very near future and alot higher next year.

Anyone know any forums where there is a more active discussion on fortescue??


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## shinobi346 (29 November 2010)

Not sure what to make of this. They intend to double iron ore production by 3x and enter the lucrative coal business in QLD but their second largest shareholder has reacted by selling $19.3m worth of shares. It looks good to me that they are diversifying their resources while squeezing their cow a bit more.


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## drlog (29 November 2010)

I read over FMG's announcement and didn't see anything about coal? Did I miss something?

All I read was that they were going to triple iron ore output like crazy. I think the amount of money they are throwing at this is incredible. If the iron ore price stays high, FMG is a great stock to own. If the iron ore price drops, it will be in a world of hurt.


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## shinobi346 (30 November 2010)

It was on the courier mail site but I can't find it there anymore.
http://www.steelguru.com/raw_materi...the_search_for_coal_in_Queensland/177963.html

however Andrew Forrest has already threatened to move it offshore depending on how the MRRT plays out to places like NZ.


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## TheAbyss (1 December 2010)

drlog said:


> I read over FMG's announcement and didn't see anything about coal? Did I miss something?
> 
> All I read was that they were going to triple iron ore output like crazy. I think the amount of money they are throwing at this is incredible. If the iron ore price stays high, FMG is a great stock to own. If the iron ore price drops, it will be in a world of hurt.




There has been a bit about FMG chasing coal in the press of late.

http://www.perthnow.com.au/business...al-in-queensland/story-e6frg2s3-1225962786346

Also some conjecture that FMG may make a bid for BRM and or BCI.

Note sure of the accuracy of this as again it is musings from the press however the AFR alluded to the BRM bid so maybe...


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## rustyheela (4 December 2010)

I read an article somewhere last week, but cant remember where ( true ) from a respected source in the international iron market , that a possible threat to OZ iron exporters will come from the South Americans, who whilst having to pay more $$ per mega ton to ship to Asia, labour costs are cheaper and Vale, i think it was, is investing in many of the new "super carriers" which can carry 5 - 10 x the volume making it cheaper to export by sheer volume. They also have deep ports to support these vessels whilst the West does not. Also BHP & RIO are investing heavily in ore in the West ramping up production.

Anyone in the know or care to comment who is more familiar with FMG,MGX, MMX, GBG, etc


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## matty77 (19 January 2011)

8% yesterday, and I would ask the question why?


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## drlog (19 January 2011)

Look at their announcement! Increase of ore production and an increase in the price they are selling the stuff for. Makes sense why the SP went up yesterday.


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## mikeroxoz (21 January 2011)

Quite an announcement;

"Jan 19 (Reuters) - Nassim Investments is selling its entire 128.9 million shares in FMG.

The stake is being offered in the range of A$6.76-$6.88 each, a 4.3-6.0 percent discount to its last traded price. Morgan Stanley is the sole book runner"

I don't hold so am just curious to hear of any good wins or losses on this opening move today? I'd imagine a few stops may have been triggered...

Closed at 6.63 -0.560 (-7.789%)


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## sammy84 (21 January 2011)

mikeroxoz said:


> Quite an announcement;
> 
> "Jan 19 (Reuters) - Nassim Investments is selling its entire 128.9 million shares in FMG.
> 
> ...




This is what caused the sell off yesterday. Market should have digested the news by today.


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## questionall_42 (9 April 2011)

I urge anyone who is invested in FMG, or contemplating investing in FMG to watch this video. 

This is about native title negotiations for FMG to gain access to the land. 

I am sure this is not specific to FMG, but it is a demonstration of how *not* to negotiate.


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## kingcarmleo (10 April 2011)

Fortescue really is an amazing story. 

Anyway, I wonder if they will end up listing on the hong kong exchange.


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## questionall_42 (14 April 2011)

questionall_42 said:


> I urge anyone who is invested in FMG, or contemplating investing in FMG to watch this video.
> 
> This is about native title negotiations for FMG to gain access to the land.
> 
> I am sure this is not specific to FMG, but it is a demonstration of how *not* to negotiate.




The original video was on vimeo (see above quote). It has been removed. The following text is taken from the Yindjibnarndi Aboriginal Corporations facebook site:

"Last night Vimeo removed the "Great FMG Swindle" video after threats
from Andrew "Twiggy" Forrest. We had a new version on Youtube within an
hour of finding out and over 11,000 people have now seen it in just over
a week. We have just put out a press release about FMG's latest dirty tricks,
lets wait and see what tomorrow brings."

And this is from crikey.

There are also rumours that Getup will take this up as a campaign.

This is getting big. Worth watching.


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## matty77 (14 April 2011)

I am officially embarrassed to be a holder of FMG.

I will still hold the stock, and as a shareholder will communicate my disappointment to them.


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## drlog (15 April 2011)

questionall_42 said:


> The original video was on vimeo (see above quote). It has been removed. The following text is taken from the Yindjibnarndi Aboriginal Corporations facebook site:
> 
> "Last night Vimeo removed the "Great FMG Swindle" video after threats
> from Andrew "Twiggy" Forrest. We had a new version on Youtube within an
> ...




Typical Barbra Streisand effect (see http://en.wikipedia.org/wiki/Streisand_effect) - try to suppress anything on the Internet and it self propagates. Old people, such as Twiggy and most company directors, often don't understand that in this day and age, it is impossible to contain information. This is the power of the Internet.

If FMG wanted to hide this, they should have let the video stay on vimeo. Now it's front page on ABC news.

Unfortunately for me, I am a FMG shareholder.


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## donkeykong (15 April 2011)

Pretty disgraceful (and stupid) behavior from FMG managment. Just because its way out in the outback doesn't mean whatever they do can come under scrutiny through the internet. Theres an article on the abc website today about it http://www.abc.net.au/news/stories/2011/04/15/3192211.htm

I can understand that FMG is frustrated with the indigenous elders being split on the issue but to carry out a public meeting like that then try to censor it beggars belief.


----------



## DB008 (15 April 2011)

donkeykong said:


> Pretty disgraceful (and stupid) behavior from FMG managment. Just because its way out in the outback doesn't mean whatever they do can come under scrutiny through the internet. Theres an article on the abc website today about it http://www.abc.net.au/news/stories/2011/04/15/3192211.htm
> 
> I can understand that FMG is frustrated with the indigenous elders being split on the issue but to carry out a public meeting like that then try to censor it beggars belief.




So they want more money, for what? 

Build them (indigenous land owners and local community) housing and they take the beds out and sleep under the stars anyways or they trash it beyond belief... 

I was at one mine site years ago for the opening with the Attorney General and ABC news crew too; the mining company pledged $30millioon over a decade and l went back some 5 years later. Nothing has changed for the better of the indigenous community. Where is all this money going that they (ALL INDIGENOUS ROYALTY RECEIVERS) get?

I think that educating the youth would be a far better way of doing things.


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## youngone (7 May 2011)

drlog said:


> Typical Barbra Streisand effect (see http://en.wikipedia.org/wiki/Streisand_effect) - try to suppress anything on the Internet and it self propagates. Old people, such as Twiggy and most company directors, often don't understand that in this day and age, it is impossible to contain information. This is the power of the Internet.
> 
> If FMG wanted to hide this, they should have let the video stay on vimeo. Now it's front page on ABC news.
> 
> Unfortunately for me, I am a FMG shareholder.




Nothing personal here, so what you are suggesting is that, their action is immoral. SO why not sell your shares??

If you are suggesting that their action is immoral and you are ashamed as a holder, what is then your goal? Financially, aren't you the same as FMG? All you care is money and the results, why not stop banging your head against the wall.


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## drlog (9 May 2011)

youngone said:


> Nothing personal here, so what you are suggesting is that, their action is immoral. SO why not sell your shares??
> 
> If you are suggesting that their action is immoral and you are ashamed as a holder, what is then your goal? Financially, aren't you the same as FMG? All you care is money and the results, why not stop banging your head against the wall.




I think you missed the point I was trying to make - I am more worried about how FMG has handled the suppression of this video more than the video itself. Hopefully they have learnt their lesson when it comes to the Internet - you can't stop it once it goes online and the harder you squeeze, the more it will slip between your fingers.


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## McCoy Pauley (19 July 2011)

questionall_42 said:


> I urge anyone who is invested in FMG, or contemplating investing in FMG to watch this video.
> 
> This is about native title negotiations for FMG to gain access to the land.
> 
> I am sure this is not specific to FMG, but it is a demonstration of how *not* to negotiate.






questionall_42 said:


> The original video was on vimeo (see above quote). It has been removed. The following text is taken from the Yindjibnarndi Aboriginal Corporations facebook site:
> 
> "Last night Vimeo removed the "Great FMG Swindle" video after threats
> from Andrew "Twiggy" Forrest. We had a new version on Youtube within an
> ...






drlog said:


> Typical Barbra Streisand effect (see http://en.wikipedia.org/wiki/Streisand_effect) - try to suppress anything on the Internet and it self propagates. Old people, such as Twiggy and most company directors, often don't understand that in this day and age, it is impossible to contain information. This is the power of the Internet.
> 
> If FMG wanted to hide this, they should have let the video stay on vimeo. Now it's front page on ABC news.
> 
> Unfortunately for me, I am a FMG shareholder.






donkeykong said:


> Pretty disgraceful (and stupid) behavior from FMG managment. Just because its way out in the outback doesn't mean whatever they do can come under scrutiny through the internet. Theres an article on the abc website today about it http://www.abc.net.au/news/stories/2011/04/15/3192211.htm
> 
> I can understand that FMG is frustrated with the indigenous elders being split on the issue but to carry out a public meeting like that then try to censor it beggars belief.




Last night's 4 Corners episode was entitled "Iron and Dust" and focused on Fortescue's native title negotiations with the traditional owners of the land surrounding the Solomon Hub mine site.

http://www.abc.net.au/4corners/content/2011/s3270263.htm

I am not a holder of FMG, but I have to admit that Andrew Forrest's responses to Kerry O'Brien's questioning was impressive, to a certain degree, though O'Brien had him nailed on a few points (which prompted Forrest to bluster and obfuscate with the best politicians going around).

If you have a spare 45 minutes, it's well worth watching, as it focuses heavily on the dispute between the tribal elders and the friction that is being caused by the negotiations with FMG.


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## Philoz (22 July 2011)

So what do you guys see in the future for this stock?  Do you think its huge expansion, 8 Billion dollars, will pay off?  Do you guys think that Iron ore prices will drop soon, because they are very high at the moment.


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## notting (22 July 2011)

You need to remember that so called commodity prices are seemingly high due to US dollar weakness. Whilst there is growing demand that will remain. You need to also remember that AU$ is very strong so these great commodity prices are not high at all for Australian mines.


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## kat (26 September 2011)

where is this puppy going?


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## FA3TS (2 October 2011)

Still going down, even in light of announcements of the 30th September and media release on the same day. A record quarter for production.


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## Garpal Gumnut (4 February 2012)

I have been accumulating FMG recently and have noted a nice ascending triangle developing at the $5.20 mark.

Should it push above this it may be worth a punt.

A similar triangle was very profitable in September 2010 at these levels.

I enclose a chart.

gg


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## mrlister (4 February 2012)

Seems t be a lot more resistance at the 5.20 mark this time though.


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## Garpal Gumnut (4 February 2012)

mrlister said:


> Seems t be a lot more resistance at the 5.20 mark this time though.




Agree, but it's had four go's at this level recently , so it may push through if volume increases as well.

gg


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## Garpal Gumnut (7 February 2012)

Well it's gone through it, let's see how it goes from here.

gg


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## Garpal Gumnut (15 February 2012)

Just catching up on the newspapers.

There is always a reason for a break through resistance.



> THE mystery buyer snapping up shares in Fortescue Metals may be planning a move on the iron ore miner, an analyst says.
> A 2.9 per cent interest in Fortescue has been bought by an undisclosed party in recent weeks.
> Observers speculate that it could be Canadian mining giant Teck Resources.
> IG Markets institutional dealer Chris Weston said Swiss mining giant Xstrata was another possibility.
> ...




gg


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## Logique (16 February 2012)

Purely technically, not unreasonable to hope for 6.50 - 7.00 as the next waypoint in the sp, but none of us can guess the time frame. So a decent call GG.


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## Tysonboss1 (18 February 2012)

Not just technically, I can see this stock being easily worth $7 by the end of the year should the iron price hold above $100.

I do hope it drops back below $5 at some stage though because I don't actually own any shares yet,


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## Garpal Gumnut (26 February 2012)

Logique said:


> Purely technically, not unreasonable to hope for 6.50 - 7.00 as the next waypoint in the sp, but none of us can guess the time frame. So a decent call GG.




Thanks L,




I've been loading up on FMG with a stop at $5.20.

A more recent chart.

gg


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## tinhat (12 March 2012)

FMG is experiencing a solid rally. I don't want to commit any more funds into the stock market at the moment, otherwise I would buy some more as I feel this rally could have a way to go yet. On the weekly chart the MACD crossed over into positive last week with a nice degree of separation from the signal line.

I've also noticed that FMG is starting to come up again on the radar overseas too. If US investors keep bullish they may start looking for more overseas opportunities such as FMG.

http://seekingalpha.com/article/424201-get-on-board-the-iron-ore-train
http://www.reuters.com/article/2012/03/09/markets-ratings-idUSWNA207720120309
https://wwss.citissb.com/adr/common/file.aspx?idf=2567


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## Garpal Gumnut (13 March 2012)

Tysonboss1 said:


> Not just technically, I can see this stock being easily worth $7 by the end of the year should the iron price hold above $100.
> 
> I do hope it drops back below $5 at some stage though because I don't actually own any shares yet,




I will not be greedy and will sell at $7 or thereabouts.

gg


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## skc (13 March 2012)

While FMG has powered ahead, the share price of the two other smaller iron ore producers are behaving very differently. AGO is still 30% off its year high in a sideway pattern, while MGX is languishing at the year low and poised to breakdwon further.

These 3 stocks used to have good correlation but that has really broken down since Feb. Perhaps there are more fundamental reasons driving the divergence, or may be it's just a result of fund flows in the short term. Interesting to see if / how they converge.


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## notting (20 March 2012)

skc said:


> Interesting to see if / how they converge.




FMG is appearing to look a little afraid of $6 and is having a downward glance.
Perhaps after todays dampening announcement by BHP on Iron Oar *demand!!* it's going to reverse.
With all that wonderful debt that's had the market so excited about it recently, it would make sense that it may catch down to it's less indebted friends to me?


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## tinhat (20 March 2012)

notting said:


> FMG is appearing to look a little afraid of $6 and is having a downward glance.
> Perhaps after todays dampening announcement by BHP on Iron Oar *demand!!* it's going to reverse.
> With all that wonderful debt that's had the market so excited about it recently, it would make sense that it may catch down to it's less indebted friends to me?




$6.05 is the 61.8% retracement to the Jan 2011 high. I would not be surprised to see a pull-back to somewhere around $5.65 which s the 50% retracement to the Jan 2011 high. $5.60 is also the 52 week moving average price.

My charts are saying buy, so I just went longer buying a parcel last week at $5.95. $7.36 is the Jan 2011 high. $7.17 is the 50% retracement to the June 2008 all time high. I'm targeting $7 for the current bull cycle.


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## notting (22 March 2012)

tinhat said:


> Notice that FMG went up today?




Yeah,  rallied yesterday on the story that they are mulling an IPO in Shanghai or HK for magnetite ore assets  Couldn't believe it finished on it's high too!! 
After today you could argue it is consolidating above it's break out above 6 which would be technically appropriate, but not me!!
I think you pointing out it's due for a replacement was insightful.
I'm sure you weren't one of the idiots buying yesterday!!
I was so shocked it was up yesterday that I couldn't help myself and put a fat short on it!


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## Garpal Gumnut (25 March 2012)

Just an update on FMG.

It is climbing like a turtle, increasing volume on the up moves, and decreasing on the down.

I have moved my stop up to $5.80 and still maintain a target of $7.

gg


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## notting (25 March 2012)

The technical concern that is disturbing about the iron ore miners is the posturing that BHP is showing (not confirmed as yet), even with it's diversification and oil interests which has been booming recently.

The fundamental thing is that in the past the markets have over reacted, on many occasions, to slightly weak data coming from China. This has been easy to dismiss because it's just a factory to the world and so what is going on in the world is more relevant. The commodity prices would have a bit of a dip and then quickly return to growth.

However,* this time* the figures out of China pointed to *lower demand, not lower ore prices*.  The answers from the big miners, in the past, has always been *we can crank up production to cover lower prices* basically because there is so much demand from China!  

FMG is cranking up production for sure, however, if demand is falling off, the cranking up production to offset margin loss, is not going to cut it and in that environment it's going to be hard to compete with the big three for survival let alone profit even if the prices remain relatively strong at the 120 mark which is hard to imagine with slowing demand!

At present the hope is that the US economy is so strong that production for exported goods will outstrip the slower infrastructure and housing, government manipulated, fake boom in China - ghost cities of badly built buildings!!  The US recovery has to be so strong that it will make up for a European recession as well as slow down and likely collapse of the fake boom in China!

Has there ever been a time in recent history when the breaks are still *reportedly* being applied in China whilst imports have exceeded exports?  

The breaks are not being applied, all that's happened is that the dictators can no longer gorge on the peoples labor and turn the profits into housing and infrastructure that the majority of the population can not afford by a long shot!!  So now the dictators are *trying to look like they are slowing it down in a controlled manner! Crap*, it is slowing rapidly due to natural forces that are finally coming to bear! - Inflation that was starting to spiral out of control and people unable to eat!

The  reason the Chinese have allowed their dollar to rise recently has nothing to do with putting a stop to their strategy of destroying manufacturing in the rest of the world, it's been because they had to try and address some of the inflation i.e. so it can import oil, coal, ore and food at more affordable prices.

Now that imports are exceeding exports China has no where to go.
They may choose to spend some of their so called vast reserves (that are diminishing against the rising Yuan) to keep the boat afloat for a little longer, however the dictators see that as their money and have always been reticent to spend too much of it unless social unrest would threaten their grip on the people!!

The question for our Iron Ore exporters is this - Is the US recovery so strong that it will make up for a cessation of the housing and infrastructure boom in China and a recession in Euro land?!

The markets may continue to boom along with more optimism in the US as manufacturing recovers due to a less competitive China, but even that doesn't help our miners if the majority of their exports were being consumed in the fake housing and infrastructure boom *that happened* in China!!

Markets can overshoot and there could be some more technical legs in the ore miners yet, however I feel the risk is to the downside and raising stops is a prudent step!!

So all eyes on BHP as it looks  to attempt to break through it's downside resistance at around 33.70 ish as a broad indicator for timing!!


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## Garpal Gumnut (7 April 2012)

FMG is a concern for me. It has shown a 50% profit from the lows at $4 in October last year to a recent $6 price.

Price action has fallen recently and has been on falling volume.

I am planning to exit if the sp falls below 5.78 next week.

The amount of steam it needs to get through the resistance area in the rectangle between $6 and $7 just seems too much for this stock at present. The recent attempt faltered at 26m and 20m shares, on 21/3 and 22/3 and volume has dropped since as has price.

If volume and price increase on Tuesday, I'll stay in.

gg


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## TrendGAIN (19 April 2012)

Good call Garpal. OBV has been falling with rising prices - usually a divergence signalling weakness. The brokers still like it with about 20% to its consensus target ($7.06)  - but my trend indicator has it slowing or stopping. Did you get out or are you still riding it?


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## Garpal Gumnut (19 April 2012)

TrendGAIN said:


> Good call Garpal. OBV has been falling with rising prices - usually a divergence signalling weakness. The brokers still like it with about 20% to its consensus target ($7.06)  - but my trend indicator has it slowing or stopping. Did you get out or are you still riding it?




Thanks trendG, I got out at $5.77 last week.

It's starting to look interesting again though.

I'll post a chart on the weekend. Good trading.

gg


----------



## Tyler Durden (27 April 2012)

Relevant:



> PROMINENT hedge fund manager and short-seller Jim Chanos has singled out Fortescue Metals as a ''value trap'' stock, telling a New York conference that shares in billionaire Andrew Forrest's company will fall ''materially''.
> 
> In a presentation this month to Grant's Spring Conference, a private investment forum, Mr Chanos, the boss of Kynikos Associates, told investors he feared iron ore miner Fortescue has ''a somewhat promotional management team''.
> 
> ...




http://www.smh.com.au/business/renowned-shortseller-bets-against-fortescue-20120426-1xo0r.html


----------



## Garpal Gumnut (29 April 2012)

Tyler Durden said:


> Relevant:
> 
> 
> 
> http://www.smh.com.au/business/renowned-shortseller-bets-against-fortescue-20120426-1xo0r.html




Thanks Tyler,

Useful information, it looks as if FMG may be rolling over to the downside.






FMG is becoming quite a good trading stock.

gg


----------



## nulla nulla (29 April 2012)

Tyler Durden said:


> Relevant:
> 
> 
> 
> http://www.smh.com.au/business/renowned-shortseller-bets-against-fortescue-20120426-1xo0r.html




Interesting article. When I saw it I noticed that they didn't give any indication as to what they thought it was worth. When you consider that FMG is still a long way off its' pre gfc highs it is interesting to see that a "renowned short seller" has singled fmg out and the reasons given are fairly light weight (imo).

All things considered if the "international-renowned-shortseller" was to push the price down I would be looking to take a position. IMO fmg still has plenty of upside.


----------



## Garpal Gumnut (29 April 2012)

nulla nulla said:


> Interesting article. When I saw it I noticed that they didn't give any indication as to what they thought it was worth. When you consider that FMG is still a long way off its' pre gfc highs it is interesting to see that a "renowned short seller" has singled fmg out and the reasons given are fairly light weight (imo).
> 
> All things considered if the "international-renowned-shortseller" was to push the price down I would be looking to take a position. IMO fmg still has plenty of upside.




Just looking at the charts above, anything under $4.50 would bring strong buying, should it be sold down.

I'll sit it out at present.

gg


----------



## tinhat (29 April 2012)

Garpal Gumnut said:


> Thanks Tyler,
> 
> Useful information, it looks as if FMG may be rolling over to the downside.
> 
> ...




Yep, I believe it is at a pivot point right now around the $5.60-$5.65 range. Note that it bounced off a higher low of $5.68 a couple of weeks ago.


----------



## tinhat (3 May 2012)

FMG seems to be hovering around 5.60. Weakness not helped by the high prospect that diesel rebates for miners will be going in the budget.


----------



## skc (3 May 2012)

tinhat said:


> FMG seems to be hovering around 5.60. Weakness not helped by the high prospect that diesel rebates for miners will be going in the budget.




Probably more to do with what Jim Chanos said.



> US Hedge fund manager and short seller Jim Chanos has singled out Fortescue Metals as an example of a ''value trap'' in the ''iron ore rush", according to a report by Fairfax Media.




http://www.businessspectator.com.au...ument&src=idp&emcontent_asx_financial-markets

Chanos was well known for his call on Enron.


----------



## Tysonboss1 (26 May 2012)

I can see a big opportunity for gain at the current price,

Even factoring Higher production costs and a much lower iron price (say $100), Fmg could still easily maintain a profit margin of $20 a tonne.

This means that by june next year they will be earning at least $0.99 per share, and thats only if there is a sustained fall in the iron ore price.

Their current margin is over $50 per tonne, so they are cashflowing quite strongly, which is paying for a decent chunk of the expansion projects.

If they are able to maintain a margin of around $50 a tonne, by june next year they will be earning, $2.47 pershare,

Either way this looks like a great opportunity to me,


----------



## Garpal Gumnut (28 May 2012)

Tysonboss1 said:


> I can see a big opportunity for gain at the current price,
> 
> Even factoring Higher production costs and a much lower iron price (say $100), Fmg could still easily maintain a profit margin of $20 a tonne.
> 
> ...




I would agree from the charting view.

FMG has fallen from nearly $6.20 to the $4.20's in just over one month.

The pivot point low over this last 3 trading sessions has me in again, with a stop loss at $4.23.







gg


----------



## Garpal Gumnut (30 May 2012)

I got out today with a 5.8% profit, net.

I take smaller profits in this volatile environment.

gg


----------



## Garpal Gumnut (21 June 2012)

Garpal Gumnut said:


> I got out today with a 5.8% profit, net.
> 
> I take smaller profits in this volatile environment.
> 
> gg




For the brave, if volume increases over the next few sessions with a move up a nice profit of 5-10% may be achievable with a target of $5.15 to $5.30 before FMG hits bigtime resistance between $5.30 and $6.00.

Poisonally I will sit on my hands at this point in time.






gg


----------



## Garpal Gumnut (22 June 2012)

FMG has made 2.5% at this moment since my above post. I do regret not taking my own advice.

gg


----------



## Tysonboss1 (26 June 2012)

Garpal Gumnut said:


> FMG has made 2.5% at this moment since my above post. I do regret not taking my own advice.
> 
> gg




Mr Forrest has announced he has used this recent down turn to buy about $60M FMG shares at $4.90. 

I am looking forward to the full year results, They should be quite good and put FMG to about 8 times earnings.

A long position at current levels seems very rational to me, I am looking to extent my position in fortescue, I have sold some puts recently.


----------



## beatthemarket (6 July 2012)

Entering seasonal steel strength from September. Quarterly, FY result likely positive surprise..


----------



## seanious (29 August 2012)

So I got in at 4.40 early this month, down to 3.90 on last close

What do you guys think of this stock now? Looks like everyone is freaking out because of their high debt and lower iron ore prices.


----------



## skc (29 August 2012)

seanious said:


> So I got in at 4.40 early this month, down to 3.90 on last close
> 
> What do you guys think of this stock now? Looks like everyone is freaking out because of their high debt and lower iron ore prices.




Is everyone _freaking out _because of their high debt and lower iron ore prices, or is everyone _adjusting their investment _because of their high debt and lower iron ore prices?


----------



## seanious (29 August 2012)

skc said:


> Is everyone _freaking out _because of their high debt and lower iron ore prices, or is everyone _adjusting their investment _because of their high debt and lower iron ore prices?




Sounds like a question for someone more educated on this then me....


----------



## ROE (29 August 2012)

Creditor of Iron Ore Miners are freaking out due to falling iron ore price mentioned in AFR
credit default swap on FMG, RIO etc.. debt jump but FMG in particular...


----------



## nulla nulla (29 August 2012)

seanious said:


> So I got in at 4.40 early this month, down to 3.90 on last close
> 
> What do you guys think of this stock now? Looks like everyone is freaking out because of their high debt and lower iron ore prices.






skc said:


> Is everyone _freaking out _because of their high debt and lower iron ore prices, or is everyone _adjusting their investment _because of their high debt and lower iron ore prices?




Isn't FMG being shorted by a big U.S hegde fund?


----------



## ROE (29 August 2012)

nulla nulla said:


> Isn't FMG being shorted by a big U.S hegde fund?




they are spot on on this.. all FMG modeling involve Iron Ore around $110 a Tone 
what is Iron Ore price today? 95-99? going back to GFC price FMG no more

This guy is way over leverage and the CEO for some reason or another refuse to beleive
Iron Ore can not revisit GFC price  .. Hubris + Large Debt ~= Game Over

so I can see why people are exiting ...


----------



## doctorj (29 August 2012)

ROE said:


> they are spot on on this.. all FMG modeling involve Iron Ore around $110 a Tone
> what is Iron Ore price today? 95-99? going back to GFC price FMG no more



Sub 95 now... with Macquarie and Morgan Stanley predicting further falls up to another 16%.


----------



## ROE (30 August 2012)

Iron ore  future crash over night to $80 ish level here we go interesting day for fmg


----------



## prawn_86 (30 August 2012)

ROE said:


> Iron ore  future crash over night to $80 ish level here we go interesting day for fmg




Andrew Forest bought $18.5m worth of shares on market yesterday apparently so putting his money where his mouth is and trying to support the FMG share price by the looks


----------



## seanious (30 August 2012)

Thanks for the information, if anything this is going to be an interesting learning experience for me, will follow it closely


----------



## Huskar (30 August 2012)

ROE said:


> Iron ore  future crash over night to $80 ish level here we go interesting day for fmg




Out of interest where do you source your current iron ore and other base commodity prices from ROE? Is there free and up-to-date source? Most seem to want to charge you an arm and a leg..


----------



## skc (30 August 2012)

Plenty of notes floating around today on how FMG is barely breaking even at current Iron Ore spot price... it could have easily capitulate today. May be Twiggy was buying again.

Interesting times.


----------



## notting (30 August 2012)

skc said:


> Plenty of notes floating around today on how FMG is barely breaking even at current Iron Ore spot price... it could have easily capitulate today. May be Twiggy was buying again.
> Interesting times.




I also heard this industry insider talking a few weeks ago about how him and his team where almost certain it was going to be taken out within 7 months!  He was some dude on TV can't remember his name.  Just interesting as to why he seemed so certain.  Didn't come accross as spruiking but yeah.


----------



## ROE (30 August 2012)

Huskar said:


> Out of interest where do you source your current iron ore and other base commodity prices from ROE? Is there free and up-to-date source? Most seem to want to charge you an arm and a leg..




I got my source from freebies sites but I do a fair bit of reading on stock and business articles everyday and I have AFR subscriptions so articles I read cross link and reference to update price so I have a fair idea of where things are.

I'm not into mining or hold any iron ore stock so I have little interest in it apart from reading what is 
publishing at the time..

Sorry cant help where you can access that stuff for free


----------



## ROE (30 August 2012)

This is where FMG CEO think Iron Ore price at

http://www.abc.net.au/news/2012-06-...-mining-tax-revenue/4049302?section=business#


----------



## doctorj (30 August 2012)

prawn_86 said:


> Andrew Forest bought $18.5m worth of shares on market yesterday apparently so putting his money where his mouth is and trying to support the FMG share price by the looks



Twiggy has always been a gambler, so I wouldn't read too much into it.  He might as well buy up because the rest of his fortune is tied to FMY anyway...  The reality is that FMG is a much more marginal producer than the big boys - both in terms of their break even price and the timing of their capex and so they will continue to be vulnerable to weaker commodity prices.


----------



## seanious (4 September 2012)

Announcement was made this morning they are slowing their expansion projects.

Friend on Facebook and his co-workers (no idea how many or on what mine) who just joined FMG has been told they will find out at the end of the day if they will still have a job.


----------



## prawn_86 (13 September 2012)

Getting absolutely nailed today. Down 15% at the moment, 10% of that fall coming in last ten or so minutes. All on rumours they are requesting a suspension of their debt covenants for 12 months


----------



## skc (13 September 2012)

prawn_86 said:


> Getting absolutely nailed today. Down 15% at the moment, 10% of that fall coming in last ten or so minutes. All on rumours they are requesting a suspension of their debt covenants for 12 months




Come on, they can't not halt this ****. It really is't that hard for ASX to issue a please explain!

Put in reg_halt for anything >7% move on ASX 100.


----------



## notting (13 September 2012)

Will be interesting to whatch how it closes and trades tomorow, when everyone knows about it.
3.00 has been pretty critical.


----------



## prawn_86 (13 September 2012)

skc said:


> Come on, they can't not halt this ****. It really is't that hard for ASX to issue a please explain!
> 
> Put in reg_halt for anything >7% move on ASX 100.




haha i bet those who are short would disagree with you :


----------



## Klogg (13 September 2012)

I'm guessing this was the catalyst...
http://www.macrobusiness.com.au/2012/09/afr-fortescue-seeking-debt-relief/


----------



## McLovin (13 September 2012)

Boom!

And so it begins...

https://www.aussiestockforums.com/forums/showthread.php?t=8383&page=16&p=727506#post727506

Only took a week.

Whatever happened to Anaconda Nickel?


----------



## notting (13 September 2012)

Twiggy will not be able to afford a capital raising to avoid dilution, if they have to go to market to avoid covenents.  
He was quite vocal a few years back in praising the Chinese. 
He will now find out how nice they really are as he seeks a white knight rescue of his fortune.


----------



## Klogg (13 September 2012)

McLovin said:


> Boom!
> 
> And so it begins...
> 
> ...




Haha, becoming a bit of a prophet, McLovin


----------



## blue0810 (13 September 2012)

prawn_86 said:


> haha i bet those who are short would disagree with you :




James  Chanos 

http://www.moneymorning.com.au/2012...ock-will-slump-when-iron-ore-prices-fall.html


----------



## McLovin (13 September 2012)

Klogg said:


> Haha, becoming a bit of a prophet, McLovin




If you've seen the movie then you know the only choices I had for my fake ID were McLovin or Mohammed, so prophet isn't that far off!

To be fair, the overseas press, and several well known hedge funds, have been poking fun at FMG for a while, as well as the supposed "price floor" in iron ore.

This is a good example from the FT...

http://ftalphaville.ft.com/blog/2012/08/24/1131841/danger-trap-door/


----------



## notting (13 September 2012)

Before Jim Chanos placed his short on FMG, he interviewed Twiggy about his holding.
It went something like this:


----------



## sammy84 (13 September 2012)

skc said:


> Come on, they can't not halt this ****. It really is't that hard for ASX to issue a please explain!
> 
> Put in reg_halt for anything >7% move on ASX 100.




Sounds like you were long?

Have to agree though


----------



## skc (13 September 2012)

sammy84 said:


> Sounds like you were long?
> 
> Have to agree though




Lol. No. I am not long. 

It's just good market governance. Everyone knows there's a rumour out there. Market is trading uninformed. That's the basis for a halt.


----------



## Timestar (13 September 2012)

Debt, it will do it to you everytime.

When will Aust Companies get off the debt bandwagon and focus on core business and tempering costs. You don't have to always be the biggest fish in the pond.


Prediction:

Transurban (TCL) is going the same way as FMG. 4.5b in debt and an interest bill big enough to choke a horse.

Will Chanos be shorting this as well?


----------



## Klogg (13 September 2012)

McLovin said:


> If you've seen the movie then you know the only choices I had for my fake ID were McLovin or Mohammed, so prophet isn't that far off!




Haha, didn't know if you'd get the reference.

On the topic of FMG - does anyone know how I can find out what the Oz banks' exposure to this is?


----------



## ROE (13 September 2012)

Klogg said:


> Haha, didn't know if you'd get the reference.
> 
> On the topic of FMG - does anyone know how I can find out what the Oz banks' exposure to this is?




They basically borrow from any one who willing to lend them money...this is a list of lenders to FMG

Australia big 4, Bank of America, Merrill Lynch, UBS and JPMorgan.

I say most of them evenly split with maybe give or take a few hundred mil from one lender or another
as their total debt is around 9-10 Billion  

I got no FMG or shorting it, its CEO scare me with various interview I see and how they run their business

The longer iron ore below $110 bucks the less sleep these CEO get to sleep night 

The beauty of all this is when and if something blow up BHP will stand to benefit the most


----------



## McCoy Pauley (14 September 2012)

ASX issued FMG with a "please explain" letter yesterday afternoon to which FMG responded citing "media speculation about the suspension of debt covenants".

Now FMG has sought and been granted a trading halt until Tuesday next week to sort out things with its bankers.


----------



## VSntchr (14 September 2012)

McCoy Pauley said:


> ASX issued FMG with a "please explain" letter yesterday afternoon to which FMG responded citing "media speculation about the suspension of debt covenants".
> 
> Now FMG has sought and been granted a trading halt until Tuesday next week to sort out things with its bankers.




LOL @ them missing the up day!!!


----------



## Huskar (14 September 2012)

skc said:


> Lol. No. I am not long.
> 
> It's just good market governance. Everyone knows there's a rumour out there. Market is trading uninformed. That's the basis for a halt.




How do you short skc?

I am just retail with small $ and have been trying for a while to figure out the best way to go short China and FMG in particular. Have missed the big drop on the roller coaster but suspect there might be a few more dives yet. Listed options or warrants? Or do I have to join the dark side and use CFDs?


----------



## skc (14 September 2012)

Huskar said:


> How do you short skc?
> 
> I am just retail with small $ and have been trying for a while to figure out the best way to go short China and FMG in particular. Have missed the big drop on the roller coaster but suspect there might be a few more dives yet. Listed options or warrants? Or do I have to join the dark side and use CFDs?




For retail and straight forward delta, just use CFDs.

My reference to the dark side has nothing to do with CFDs. I don't consider that to be the dark side.


----------



## Joules MM1 (15 September 2012)

http://www.businessspectator.com.au...-report-pd20120914-Y5494?OpenDocument&src=hp5

Published 12:10 PM, 14 Sep 2012 Last update 12:10 PM, 14 Sep 2012





> Unconfirmed reports have emerged that Fortescue Metals Group will attempt to offload a 15 per cent stake in the company to China's Baosteel over the weekend, according to The Australian Financial Review.
> 
> The newspaper said Fortescue may attempt the placement at $4 per share, representing a 33 per cent premium on its last closing price of $2.99.
> 
> ...




----------------------------------------------------
twittshpeak:


> Peter Esho ‏@PeterEsho
> 
> Twiggy trying to do 15% placement for FMG at $4 per share with Baosteel, possible?



Chief Market Analyst at City Index Asia Pacific


----------



## ROE (16 September 2012)

VSntchr said:


> LOL @ them missing the up day!!!




I doubt that will help, with the current iron ore price it probably cant meet its bank liability
most people probably head out for the exit.

I still cant believe they model all their stuff at iron ore price at $110 and refuse to cater for a scenario
below $110 ....such reckless and hubris management...the CEO need to go I reckon and fall on his sword


----------



## notting (16 September 2012)

Lender's should have seen this coming, must not have expected the dramatic fall in iron ore prices which is just as stupid, capital raising after capital raising to be expected. 
Chinese will want to steel it, not buy it! 
Go go go  taxes and royalties WA!


----------



## roders (16 September 2012)

Not sure if anyone else is following the transaction trades on FMG but is it just me or is something strange going on.
7.05am on Friday just prior to trading halt a number of transactions were done at $5.00?
Strange when market price was $2.99?

Is there a big jump expected upon trade resumption on Tuesday?


----------



## banco (16 September 2012)

ROE said:


> I doubt that will help, with the current iron ore price it probably cant meet its bank liability
> most people probably head out for the exit.
> 
> I still cant believe they model all their stuff at iron ore price at $110 and refuse to cater for a scenario
> below $110 ....such reckless and hubris management...the CEO need to go I reckon and fall on his sword




Pretty obvious Twiggy's overriding priority was not diluting his holdings.


----------



## skc (17 September 2012)

roders said:


> Not sure if anyone else is following the transaction trades on FMG but is it just me or is something strange going on.
> 7.05am on Friday just prior to trading halt a number of transactions were done at $5.00?
> Strange when market price was $2.99?
> 
> Is there a big jump expected upon trade resumption on Tuesday?




No. Those were put options exercise.


----------



## Timestar (18 September 2012)

*Debt + Interest = the end of FMG !!*

What on earth was Twiggy thinking ??

Let's manage our debt situation by - BUYING MORE DEBT !!

This is the last straw for FMG and their "1" real customer (China), they will drown in debt and sit back and watch the iron ore price slide into oblivion.

No backup plan, no strategy, that's is some management team.

Not happy Jan.


----------



## sammy84 (18 September 2012)

*Re: Debt + Interest = the end of FMG !!*



Timestar said:


> What on earth was Twiggy thinking ??
> 
> Let's manage our debt situation by - BUYING MORE DEBT !!
> 
> ...




Without knowing the details in full detail I thought this was a master stroke. What else did you want him to do?

He has effectively rolled over his previous borrowings into a new facility which doesn't have an iron ore price covenant and repayment isn't due for a few years. His other option was to sell shares at their current levels, which has been heavily oversold by anyone's account. 

The sale and leaseback idea had merit but he wasn't exactly in the best bargaining position to extract real value out of it.


----------



## notting (18 September 2012)

*Re: Debt + Interest = the end of FMG !!*



Timestar said:


> What on earth was Twiggy thinking ??
> 
> Let's manage our debt situation by - BUYING MORE DEBT !!




Well it was actually a pretty slick deal, under the circumstances. 
All depends on the Ore price now
If that doesn't hold around 1.20 for a fair amount of time FMG will struggle to service it's debts.


----------



## drsmith (18 September 2012)

*Re: Debt + Interest = the end of FMG !!*



notting said:


> Well it was actually a pretty slick deal, under the circumstances.
> All depends on the Ore price now
> If that doesn't hold around 1.20 for a fair amount of time FMG will struggle to service it's debts.



If it does, the real test will then be whether or not Twiggy is a chronic gambler.


----------



## McLovin (18 September 2012)

*Re: Debt + Interest = the end of FMG !!*



notting said:


> Well it was actually a pretty slick deal, under the circumstances.
> All depends on the Ore price now
> If that doesn't hold around 1.20 for a fair amount of time FMG will struggle to service it's debts.




I think you're pretty much spot on.


----------



## Tysonboss1 (10 October 2012)

*Re: Debt + Interest = the end of FMG !!*



notting said:


> Well it was actually a pretty slick deal, under the circumstances.
> All depends on the Ore price now
> If that doesn't hold around 1.20 for a fair amount of time FMG will struggle to service it's debts.






McLovin said:


> I think you're pretty much spot on.




I have spent a bit of time chruching the numbers on FMG, I see $106 a tonne as being a figure that will see FMG earn a fairly decent margin.

If Iron ore averages $106 for the next 12months FMG will be worth more than  double what it closed at today.

Ofcourse nobody can predict the ore price, But there is a decent chance of a large gain on this one.


----------



## prawn_86 (10 October 2012)

*Re: Debt + Interest = the end of FMG !!*



Tysonboss1 said:


> Ofcourse nobody can predict the ore price, But there is a decent chance of a large gain on this one.




Yes, many market commentators say that FMG is essentially a leveraged investment into iron ore prices.


----------



## notting (10 October 2012)

Anything is possible, but why not just buy AGO which has not debt and produces cheaper and has been just as badly, actually more badly spanked.  No BRAINER.  :screwyr RIO.


----------



## Tysonboss1 (10 October 2012)

*Re: Debt + Interest = the end of FMG !!*



prawn_86 said:


> Yes, many market commentators say that FMG is essentially a leveraged investment into iron ore prices.




yes, they have leverage and they do rely on selling iron ore above a certain price so i guess they are right. 

Just as Westfeild is a leveraged investment into retail leases.


----------



## Tysonboss1 (10 October 2012)

notting said:


> Anything is possible, but why not just buy AGO which has not debt and produces cheaper and has been just as badly, actually more badly spanked.  No BRAINER.  :screwyr RIO.




I am not an expert on AGO but I do prefer FMGs infrastructure position, and I think FMG is better value than RIO.

also my exposure to FMG so far has been through selling deep out of the money puts, AGO doesn't have an options market


----------



## Tysonboss1 (15 October 2012)

notting said:


> Anything is possible, but why not just buy AGO which has not debt and produces cheaper and has been just as badly, actually more badly spanked.  No BRAINER.  :screwyr RIO.




I have had a closer look and I definately prefer FMG over AGO.

The scale of FMG's mining operations and developments puts it infront of AGO in my opinion, Not to mention the infrastructure FMG owns, which puts it in great shape to easily expand and/or take on JV partners like BC iron by offering access to it's rail and port.

Yes FMG has more debt, But this is becaue it has built and owns the infrastructure. And the type of and structure of the debt it low cost and stable so I am comfortable with it.

FMG is also better Value than AGO at the moment when you look at what your getting for your $$$.


----------



## notting (20 February 2013)

> Developed economies have spent 40+ years consuming more than 500kg of
> steel per person




This is a shockingly misleading statement from their presentation.
If the management of FMG really believe that the Chinese are going to do that with the current level of population they should all be removed.
They are either utterly naive or deceptive.


----------



## Muschu (21 April 2013)

i don't hold this stock but I see it went up 10% on Friday following a production report.  Other big miners also went up of course but not to this extent.
I've viewed FMG as very risky and have stayed away (in fact the only resource stock I hold is MIN).
FMG seems to work from a "promise" base and I understand also carries significant debt.
However I am now beginning to wonder whether it offers value at a price below $4.
Any thoughts from people who follow this company more closely?  (I know the iron ore price is a major variable).
Regards
Rick


----------



## dat111 (22 April 2013)

Muschu said:


> i don't hold this stock but I see it went up 10% on Friday following a production report.  Other big miners also went up of course but not to this extent.
> I've viewed FMG as very risky and have stayed away (in fact the only resource stock I hold is MIN).
> FMG seems to work from a "promise" base and I understand also carries significant debt.
> However I am now beginning to wonder whether it offers value at a price below $4.
> ...




Do you believe the world will increase or decrease the need for Iron Ore?  If your belief is the world will increase the need for Iron Ore, this is a buy and hold type stock.  The infrastructure that FMG is putting in place will create a mechanism to supply Iron Ore for many years to come.  Start-ups for new mining companies of this magnitude do not happen all of the time.  Since my belief is that the need for Iron Ore is going to grow greatly, I am hoping that FMG will be bought by BHP, Rio Tinto, or Vale as they have greater lease holding than any of these companies.


----------



## Muschu (23 April 2013)

dat111 said:


> Do you believe the world will increase or decrease the need for Iron Ore?  If your belief is the world will increase the need for Iron Ore, this is a buy and hold type stock.  The infrastructure that FMG is putting in place will create a mechanism to supply Iron Ore for many years to come.  Start-ups for new mining companies of this magnitude do not happen all of the time.  Since my belief is that the need for Iron Ore is going to grow greatly, I am hoping that FMG will be bought by BHP, Rio Tinto, or Vale as they have greater lease holding than any of these companies.




Appreciated dat111 and thank you.  I consider my beliefs about iron ore futures to be a poor base for making assessment decisions.  There is too much I don't know.  Will significant iron ore resources be found on other continents and mined more cheaply? Will there be an under supply or over supply of product....  

I don't particularly want to buy FMG at $3.80 and watch it go to $3 l wait for it to go to $5.... I don't want to rely either on a hope that FMG will become a buy target.

AGO bought Aurox. The price surged and has now plummeted.  Yet AGO is producing and selling.

I agree FMG has attractions.  I am trying to weigh up the risk.


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## tinhat (12 May 2013)

I've just been reading through Fortestcue's most recent quarterly update. They are forecasting that once at 155mta production their all in cash cost of production will be $40US wmt (per wet metric tonne).

They report their costs per wet metric tonne but they report their revenue per dry metric tonne. Do Fortescue sell their iron ore as a "wet" product and will this be the case when they have finished expanding and are blending all their production? If so, what is the price discount for their wet iron ore versus the dry price they quote and what is it likely to be the same once they are at full production? I'm confused by this.

Also, has anyone seen any figures as to what their total costs are forecast to be once they have reached expansion?

Basically I would like to be able to grab a forecast of earnings for FMGs total planned output of 155mta.


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## tinhat (13 May 2013)

I've answered one of my questions from above, looking at the last half year results report.

The report quotes the price achieved for the half year as:
62% CFR Platts Index price of US$118 per dry metric tonne

Looking at their sales revenue and tonnes shipped figures for the half year, they achieved revenue of approx $94 per tonne shipped, so we can conclude that the price achieved for ore shipped is approximately 80% of the 62% CFR Platts Index price they quoted.

Looking at their most recent presentation they reckon I'm concluding that they reckon they can get their total operating costs down to US$60 per dry metric tonne.

I'm going to do some number crunching. At a guess I don't think that FMG is as compelling an iron ore play as RIO but I don't think that the pessimism around FMG being a going concern in the long run is warranted either. If they keep their landed costs lower than Vale then they win.

Of course the debt gearing will always be a deterrent. It is currently at around $12.5 billion? What is it likely to be by the time they are at full production?

I'm thinking out loud here - a correction of the gold price -> correction of AUD -> realignment of AUD and terms of trade -> opportunity to go long iron ore?


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## sptrawler (13 May 2013)

If FMG sells off its rail network to a third party, this would give easier access to companies like Atlas. 
It will be interesting to see how much they reduce their debt, if the sale goes ahead.


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## piggybank (6 November 2013)

On a roll since late June (when it was just around the $3 mark). Closed today at $5.84.


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## dat111 (14 November 2013)

piggybank said:


> On a roll since late June (when it was just around the $3 mark). Closed today at $5.84.




I love to see a growth company attack debt before it is due especially when the interest rate is high.  FMG announced that they are paying off half of the debt that is due in 2015.  By paying down debt early, offering a dividend, having a competitive P/E ratio, having a low cost model for iron ore production, etc bodes well for a long term viable company.


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## ROE (14 November 2013)

dat111 said:


> I love to see a growth company attack debt before it is due especially when the interest rate is high.  FMG announced that they are paying off half of the debt that is due in 2015.  By paying down debt early, offering a dividend, having a competitive P/E ratio, having a low cost model for iron ore production, etc bodes well for a long term viable company.




They attack because they have to ...they close to die when iron ore price collapse last year, after that management wake up and said we have to do something before the next collapse in price...

Andrew stepped in sack a whole lot of senior management and cut cost and go about paying down debt...

Has iron ore price keep heading south they are in deed in trouble....

Never the less it was a good thing for fmg holder ...you see lot more conservative going forward


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## Country Lad (14 November 2013)

ROE said:


> ...you see lot more conservative going forward




This has been the key to the recent re-rating of the company.  Many brokers and analysts have been unnecessarily critical of FMG and Forrest  from the start and some still are without justification.

Now that the mine and infrastructure development is mostly over, and the company is becoming simply a digger and exporter, it has settled down to managing the reduced number of risk, being mainly debt, costs and fluctuating iron ore price.  The more boring company it becomes, the more the market will take to it.

Cheers
Country Lad


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## piggybank (30 December 2013)

Sad to see yet another accident resulting in a death - do they have a OH&S induction course policy at their plants? If so, it sadly seems that it either not effective enough or the workers aren't adhering to the law.

A young worker has died, and another man been injured, in an industrial accident at Fortescue's Christmas Creek mine. It is the second time in four months that a worker has been killed in incidents at the mine, owned by Andrew Forrest's Fortescue Metals Group. Fortescue says the 23-year-old contractor was fatally injured while working in the mine's heavy vehicle workshop overnight. The company says the man and a workmate were doing maintenance on a surface miner when the incident occurred - the other man suffered leg injuries. Fortescue's statement gives no further details of the incident, but it says the police and the Department of Mines and Petroleum have been informed and will assist with investigations.The dead man's name has not been released yet by police, but Fortescue says it is making chaplaincy and other counselling services available to affected workmates and to the deceased worker's family and friends. In a statement, Fortescue's chief executive officer Nev Power says he is deeply saddened by the news. "Our thoughts and prayers are with the family and loved ones confronting the loss of a young life full of promise" he said. The death is the second to occur at the mine this year, with New Zealand electrician Kurt Williams crushed to death in August. Another worker had his leg amputated after a truck accident at the same mine in October this year.


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## CanOz (30 December 2013)

Managing safety in the workplace is more than just induction. Its a complete strategy focused on eliminating risks. 

If you cannot manage safety, you have no business managing.


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## Value Collector (13 January 2014)

This is one of my favourite companies at the moment. Based on my analysis it is grossly undervalued. It is being undervalued I think because of a fear the price of iron ore may collapse, however if FMG are able to keep their costs down and clear a $20 / tonne profit, I can see them being worth a lot more than they are trading at now, and they are currently making a lot more than $20 per tonne.

The Kings deposit mine is due to begin ramp up this quarter and with the production from the firetail mine this years profit should be a decent one. But I expect a major rerating leading up to the reporting of the first full years production from all four mines being reported in July 2015, between now and then or perhaps shortly after we should see FMG over $10 / share perhaps even as high as $15.00.


I hold FMG.


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## Valued (13 January 2014)

I have been looking at this too. Looks like we are coming up on a previous support area. I am waiting to see what happens. I could short or long this one yet depending what I see in the next week.

FGE was a company that looked undervalued too and they didn't even kill anyone and still was a huge loser.


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## Value Collector (13 January 2014)

Valued said:


> I have been looking at this too. Looks like we are coming up on a previous support area. I am waiting to see what happens. I could short or long this one yet depending what I see in the next week.
> 
> FGE was a company that looked undervalued too and they didn't even kill anyone and still was a huge loser.




FGE is a completely different style of business with different economics. Mining infrastructure companies make their money in the construction boom, Mining companies make their money after the construction boom as they mine the deposit. FMG's capex is done, its now just a story of mining the deposits and clearing debt and paying dividends to shareholders.

To put the matter of the work place deaths in perspective, BHP's worst year of work place fatalities was 16 deaths in one year. Offcourse the death is a terrible occurrence and I hope the contracting company running FMGs work shop learn the lessons needed.


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## HCC (13 January 2014)

basic observation = SMA 50 still trending above SMA 200, hope that helps a lil bit. crossed back in sept, med term holding might worth it, having said that im definitely in for 6 months holding once the SP finds support.


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## Value Collector (14 January 2014)

The debt reduction at Fortescue continues, they have announced today that 

"Fortescue Purchases Christmas Creek Ore Processing Plants"

"The buy-out of the finance lease for the OPFs continues Fortescue’s ongoing debt reduction program."

I expect we will see more of this kind of thing as they aim to knock out their most expensive debts, The free cash flow being produced at the moment is going to mean they will be reducing their debt loads quite rapidly.

this debt buy out should also have a positive effect of the cost of production, because they will no longer have the contracting company that ran the asset as a middle man, as they have taken over the running of the OPF them selves.


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## skc (14 January 2014)

Value Collector said:


> The debt reduction at Fortescue continues, they have announced today that
> 
> "Fortescue Purchases Christmas Creek Ore Processing Plants"
> 
> ...




I think this was somewhat unplanned and opportunistic. MIN (the crushing contractor) was kicked off the site back in Sept for some sort of compliance / safety failure. FMG took the opportunity to acquire the operations under the contractual terms after much negotiations.

And while it takes a lease liability item out of the balance sheet, it adds opex to FMG's operations. So there's some net benefits - namely the margin previously enjoyed by MIN. MIN fell about 7% on the back of this news.


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## Value Collector (14 January 2014)

skc said:


> I think this was somewhat unplanned and opportunistic. MIN (the crushing contractor) was kicked off the site back in Sept for some sort of compliance / safety failure. FMG took the opportunity to acquire the operations under the contractual terms after much negotiations.
> 
> And while it takes a lease liability item out of the balance sheet, it adds opex to FMG's operations. So there's some net benefits - namely the margin previously enjoyed by MIN. MIN fell about 7% on the back of this news.




Fortescue took control of the OPF from MIN following the investigation into the death at the site. (not the most recent death at cloud breaks vehicle work shop, but the last one)

However today's release is related to them buying out the finance associated with the plant.


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## skc (14 January 2014)

Value Collector said:


> Fortescue took control of the OPF from MIN following the investigation into the death at the site. (not the most recent death at cloud breaks vehicle work shop, but the last one)
> 
> However today's release is related to them buying out the finance associated with the plant.




Yes. Buying out from a subsidiary of MIN. No doubt FMG flexed some muscle in the negotiations, since MIN has been kicked off site.


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## Value Collector (14 January 2014)

skc said:


> Yes. Buying out from a subsidiary of MIN. No doubt FMG flexed some muscle in the negotiations, since MIN has been kicked off site.




No need for muscle, they had an early buy out clause, and it makes sense, these leasing finance contracts are normally >9% interest, plus a fatty operating margin I am guessing.


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## tinhat (14 January 2014)

Yes, Ouch for me as I hold a small parcel of MIN which tanked today. Big loss of contracted cash flow for them. It will be interesting to hear of what the agreed amount is for the buy-out.


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## Value Collector (15 January 2014)

Value Collector said:


> I expect we will see more of this kind of thing as they aim to knock out their most expensive debts, The free cash flow being produced at the moment is going to mean they will be reducing their debt loads quite rapidly.
> 
> .




Well I didn't have to wait long, again today 



Fortescue continues debt reduction program with repayment of US$1.6 billion of
Senior Unsecured Notes
Fortescue Metals Group (ASX: FMG, Fortescue) has issued two voluntary redemption
notices for:
i) the remaining US$1.04 billion Senior Unsecured Notes due in 2015; and
ii) the US$600 million Senior Unsecured Notes due 2016 (collectively the
“Notes”).
The Notes will be redeemed on Friday March 14, 2014.
Today’s announcement comes less than a month after Fortescue repaid an initial
US$1.0 billion of the 2015 Notes and takes total debt repayments since November 2013
to US$3.07 billion, including the recent repayment of the CSI lease facility.


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## Valued (16 January 2014)

This just went into a trading halt. I was just crunching the numbers for going long here and I was about to take a look at the option pricing and I saw the halt. It's probably an ASX price query.

Edit: Nevermind, apparently we are good to go again. No reason for the very brief halt given though.


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## Ves (16 January 2014)

Valued said:


> This just went into a trading halt. I was just crunching the numbers for going long here and I was about to take a look at the option pricing and I saw the halt. It's probably an ASX price query.
> 
> Edit: Nevermind, apparently we are good to go again. No reason for the very brief halt given though.




ASX listing rules.  

http://www.asx.com.au/documents/about/guidance-note-16-compare.pdf

See below:



> Halts imposed by ASX on receipt of market sensitive announcements
> Under ASX Operating Rule 3301(a), ASX may implement a halt to trading in an entity’s securities if it receives an announcement from or about the entity which it considers to be market sensitive.
> If the announcement relates to a takeover offer by or for, or a scheme of arrangement involving, the entity, the halt will last for approximately one hour. In all other cases, the halt will last for approximately 10 minutes. The purpose of the halt is to allow the market to absorb and react to the information in the announcement. Trading will then resume in the normal way without the entity being required to take any action. This procedure is described more fully in Guidance Note 14 ASX Market Announcements Platform.
> Where ASX implements a halt to trading in securities under ASX Operating Rule 3301(a), the securities are placed into a “pre-notice received session state” on the ASX market platform. In that state, ASX market participants are able to place orders for, but are not able to trade in, the securities. Existing orders for the securities in the ASX trading platform are not automatically purged, as they are in the case of a voluntary suspension, but instead remain in the trading platform with the same price/time priority and are available for execution when trading resumes after the halt has been lifted.27 ASX market participants are also able to amend or cancel their existing orders.
> ...


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## Valued (16 January 2014)

Ah that's right, there was an announcement. The market doesn't really seem to care about it though. Must not be important/already known.


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## Value Collector (16 January 2014)

Valued said:


> Ah that's right, there was an announcement. The market doesn't really seem to care about it though. Must not be important/already known.




two bits of information, nothing major.

1, a company is building a gas pipeline across to FMG's power station so it can switch from diesel to gas

2, FMG has agreed on spending $1,000,000 to explore a neighbours tenements for minerals, By doing this they are taking an 80% ownership interest in the tenement (sounds big, but $1,000,000 is about 6 hours production for FMG)


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## Valued (16 January 2014)

Value Collector said:


> two bits of information, nothing major.
> 
> 1, a company is building a gas pipeline across to FMG's power station so it can switch from diesel to gas
> 
> 2, FMG has agreed on spending $1,000,000 to explore a neighbours tenements for minerals, By doing this they are taking an 80% ownership interest in the tenement (sounds big, but $1,000,000 is about 6 hours production for FMG)




Yea, doesn't sound like anything major at all. Thanks for the explanation.


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## Value Collector (19 February 2014)

Very nice half year profit announcement from FMG, 

Net profit after tax Profit up 260%
Debt down by $3.1 Billion
fourth mine is now ramping up.

Everything seems to be going well, I am expecting a  big rerating of Fortescue over the next 12months. If the Iron ore price holds above $100 / tonne, I can easily see this company be worth well over $10 / share, Probably $15


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## nulla nulla (5 September 2014)

Is now an appropriate time to consider FMG for an entry?


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## notting (5 September 2014)

nulla nulla said:


> Is now an appropriate time to consider FMG for an entry?




Absolutely.
Just don't buy any.
Wait till world war three has finished and we need to rebuild the world.
Which will be just enough to take up the current slack in demand vs supply.

In other word ~ SHORT.


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## systematic (5 September 2014)

Gosh I wouldn't say short!  Not the worst cheap stock to buy in my opinion!


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## notting (5 September 2014)

systematic said:


> Gosh I wouldn't say short!  Not the worst cheap stock to buy in my opinion!




Let me put it this way.

Let's say you are lying on the beautiful white sand of 90 mile beach in Queensland sipping on your favorite icy drink in the wonderful sunshine, when suddenly a couple of blokes, one who looks a little like Twiggy the other of Aborigine descent comes up to you with a bucket of sand and says, "Would you like to buy some sand from me?"  How much would you want to give him for it?
*
'Clear and present danger': Australia to be hit as Chinese economy starts unravelling*

Read more: http://www.smh.com.au/business/chin...nravelling-20140905-10cs4j.html#ixzz3CPzLZ8ia


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## Value Collector (5 September 2014)

nulla nulla said:


> Is now an appropriate time to consider FMG for an entry?




I guess it all depends on the iron ore price, But at $85 a tonne FMG is still worth at least $7.50 in my opinion, and if the ore price goes back above $100 they will be worth a lot more.

I own and intend to hold, I have also recently sold some put option contracts on them, I can't predict the Iron ore price, but at these levels they are still undervalued.

I guess it depends on your holding time frame, if your happy with a long term hold, I think they are a good option at these prices.


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## systematic (5 September 2014)

notting said:


> *'Clear and present danger': Australia to be hit as Chinese economy starts unravelling*
> 
> Read more: http://www.smh.com.au/business/chin...nravelling-20140905-10cs4j.html#ixzz3CPzLZ8ia





I forced myself to skim the article.  And what?  I look for good investments, not businesses (or industries).  FMG could go bankrupt tomorrow, of course.  But that article means nothing to my previous opinion.


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## Value Collector (5 September 2014)

Value Collector said:


> The debt reduction at Fortescue continues, they have announced today that
> 
> "Fortescue Purchases Christmas Creek Ore Processing Plants"
> 
> ...




In their last update they committed to repaying another $500Million, so the cash generation continues, albeit at a slower rate due to the current Iron Ore price.


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## Value Collector (5 September 2014)

The current Iron ore price decline reminds me of the fall in the oil price when it dropped from near $150 to $40, because of over supply caused by demand shrinkage due to the gfc, it didn't take long to recover back to very profitable levels, and the fall proved to be a great time to get exposure to oil companies with excellent recourses and infrastructure. 

I think we are either at that stage or very close in the iron ore sector, and FMG looks like it is the cheapest and has one of the best infrastructure positions.


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## nulla nulla (5 September 2014)

Thank you for all the responses. I have taken a couple of parcels and am prepared to ride out the storm.....for now.


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## rimtas (5 September 2014)

notting said:


> Let me put it this way.
> 
> *
> 'Clear and present danger': Australia to be hit as Chinese economy starts unravelling*
> ...






Yep...after China was falling for more than 5 years now, everybody seems to be very good for projecting further price falls on everything. What is even more interesting, they say that " downturn is about to happen soon"  , as if the china was rising in the past years....  Doom and Gloom at the bottom, this is classic. Analysts are especially attracted to this kind of behaviour as herding impulses tells them that it is dangerous to say and analyse anything that is not in line with a trend... 

 Iron ore is also quite long in downtrend, but with China already bottomed and a new massive advance underway, steel consumption, demand for materials will rise also.  Don't be late to jump in the train that just have left the station....


 I don't know which stocks will rise on ASX in relation to this (maybe none)  , but probably those that have exposure to China markets, and this tells me that one of the sectors could be miners...  They are also correcting quite a long time, and with a giant BHP in a large scale Triangle which foretells me that uptrend is not finished yet, miners are set to soar along with upcoming medium term China bull...(in a bear market)

 If you have direct access to China markets, it is better to buy stocks on SSE rather than through indirect relation from AUS companies, as ASX further bull is upon big question now....


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## notting (8 September 2014)

rimtas said:


> Yep...after China was falling for more than 5 years now, everybody seems to be very good for projecting further price falls on everything. What is even more interesting, they say that " downturn is about to happen soon"  , as if the china was rising in the past years....  Doom and Gloom at the bottom, this is classic. Analysts are especially attracted to this kind of behaviour as herding impulses tells them that it is dangerous to say and analyse anything that is not in line with a trend...




Dude this is a stock forum. 
I have been calling China down for 6 years and that's exactly what has happened.
It's irrelevant what the lying corrupt Chinese dictator thieves say about Chinese growth and miraculous bullsh$t economy and so forth.
Where else have you seen a so called economy expand at between 8 and 10 percent for 5 years whilst the stock market does a 5 year run in one direction - DOWN!!!


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## Value Collector (8 September 2014)

notting said:


> Dude this is a stock forum.
> I have been calling China down for 6 years and that's exactly what has happened.
> It's irrelevant what the lying corrupt Chinese dictator thieves say about Chinese growth and miraculous bullsh$t economy and so forth.
> Where else have you seen a so called economy expand at between 8 and 10 percent for 5 years whilst the stock market does a 5 year run in one direction - DOWN!!!




Has China's economy dropped below where it was 6 years ago yet?


I mean if a stock were $10 and you say its going down, then 6 years later it drops from $30 to $25, you can hardly claim you were right.


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## nulla nulla (20 September 2014)

We managed to extract ourselves from two (2) parcels with modest profits early in the week when FMG spiked up to the inter-day high of $4.11. However the subsequent collapse to $3.72 has seen us so far down the mine we can no longer see the light at the top of the shaft. Anyone got a torch?


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## nulla nulla (23 September 2014)

Hmmm.......at $3.58 close ($3.50 inter-day low) I think that light at the top of the shaft went out. A question for the TA and chartist experts, is this the capitulation stage?




I noticed an article in todays paper that China thinks the miners are over estimating the future demand for steel.  More cold water for the iron ore producers or brinkmanship to keep iron ore prices down?


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## skc (23 September 2014)

nulla nulla said:


> Hmmm.......at $3.58 close ($3.50 inter-day low) I think that light at the top of the shaft went out. A question for the TA and chartist experts, is this the capitulation stage?
> 
> View attachment 59521
> 
> ...




Move your chart's vertical scale such that the current price is in the middle of the chart. That way you won't accidentally perceive the bottom edge of the chart to be the *bottom*. 

FMG touched $3 back in 2012 and 2013 so in all likeihood it will gravitates towards there. Back then the iron ore prices were higher, but FMG now has slightly less debt and more production. According to UBS, FMG's breakeven cost is US$74. So the margin is getting a bit thin. We haven't seen any articles on the death of FMG yet so... either people have forgotten or the worse will come when those articles start to surface.

As to Chinese brinksmanship on iron ore prices? I think iron ore price is still very high relative to historical standards, and it looks like it is the deliberate capacity expansion by the big miners that drove down prices (and drove less efficient operators to the grave). A great illustration of capitalism at work!


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## ftw129 (23 September 2014)

nulla nulla said:


> Hmmm.......at $3.58 close ($3.50 inter-day low) I think that light at the top of the shaft went out. A question for the TA and chartist experts, is this the capitulation stage?
> 
> View attachment 59521




Hi Nulla Nulla,

It really depends on your investment time frame. If you're a trader that wants to get in and out quickly then yesterdays low may be a punt but that's all it is because your chart just looks deadly. Not pretty at all and not something you'd want to be putting much cash on that you weren't wanting to part with in the short term.

For any meaningful analysis it really helps to zoom out and look at the weekly chart. Short term daily charts are more for traders with a view of no more then a few weeks. 




I have been watching FMG for a long time but it is not a stock that gives clear technical areas of support and resistance. I feel like I forced these lines on because the areas of support and resistance were not clear until I drew the lines in (something that I've learned does not suit my own risk tolerance but that's another story...).

As to your question, I don't see any cause for REAL capitulation until another 50% reduction of the share price and even more. There is a real possibility, that if the stock sees some very strong pressure, that it could test the 2008 low and create a new low, which is where REAL capitulation happens. Call it insane, call it ridiculous and impossible but i've seen this happen many times before.

That's a longer time frame however. In the short term, odds are it will bounce around these levels between here and $2.50. That's exactly what I don't like about FMG. It's levels of support and resistance have very wide margins, meaning that the stock regularly goes passed them by 5-10% before turning around, sharply.

Scaling in to stocks like this is the only way to reduce the pain as they are going down, if you are an investor for the longer term and you are confident in the future of the business. I have added my own lines and amounts that I'd be comfortable chucking in BUT even though we are using technical analysis here, this is still a punters game. You are only putting on an amount that you are willing to lose.

When REAL capitulation hits, it's unquestionable. You'll know. NCM is an interesting one to watch over the next few months .

Hope that helps someone. 

(The chart and and information posted is purely my own opinion and should not be taken as advice. I am not licensed to give advice. You make your own decisions at your own risk)


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## ftw129 (23 September 2014)

ftw129 said:


> Hi Nulla Nulla,
> 
> It really depends on your investment time frame. If you're a trader that wants to get in and out quickly then yesterdays low may be a punt but that's all it is because your chart just looks deadly. Not pretty at all and not something you'd want to be putting much cash on that you weren't wanting to part with in the short term.
> 
> ...




(I'd like to also add that my chart and the levels I drew representing levels for entry are not what I personally do or am going to do. Stock trading is no longer my main game. I do however keep a "reserve" of cash aside for times of "compelling opportunity". That is why my technical analysis can come across as a bit extreme for some people that are invested in these things (as you may see in a few of the other threads that I've contributed in). I'd like to make it clear that my own criteria for entry would be after a clear capitulary low, followed by clear stabilisation of the stock price and a good sign that the stock is beginning to resume a healthy and sustainable trend. This means that I will almost always miss out on the first 10, 20 even 30% of a stocks recovery price. The diagrams, chart and ideas above are purely there for illustration purposes only.)


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## Wysiwyg (6 October 2014)

FMG down near 4% today at $3.32 with prominent past support/resistance around $3.28. Low volume today so far but that could be because of a public holiday for Labor Day.


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## Value Collector (22 December 2014)

As of last week, FMG has become my second largest holding, making up 25% of my portfolio.

I couldn't resist loading up at current levels, by my calculations even on the current low iron price and reduced profit margin they still represent very good value, and if the iron price creeps up over the next year and their profit margins increase to where they can clear $20 of more profit a tonne, I can see them being worth significantly more than they are now, at the moment I see them as having the biggest profit potential in my portfolio.

The biggest risk off course is the iron price, if it hovers at current levels, we should do ok, if it rises to say $85 over the next 12months, we should do brilliantly, if it sits less than $60 for a prolonged period, we may be in trouble though.

So there is so risk to my position, but I am pretty confident the iron ore price will stabilise in a region where FMG can make sustainable margins, and if it does, the current price represents great value.

Happy to patiently hold this one.


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## CanOz (22 December 2014)

Value Collector said:


> As of last week, FMG has become my second largest holding, making up 25% of my portfolio.
> 
> I couldn't resist loading up at current levels, by my calculations even on the current low iron price and reduced profit margin they still represent very good value, and if the iron price creeps up over the next year and their profit margins increase to where they can clear $20 of more profit a tonne, I can see them being worth significantly more than they are now, at the moment I see them as having the biggest profit potential in my portfolio.
> 
> ...




Wow.....nerves of....well...steel


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## Value Collector (22 December 2014)

CanOz said:


> Wow.....nerves of....well...steel




We all have our opinions, and when you feel your right you have to back yourself, no point being right if you don't have a position, or only have a token position. 

Generally I am pretty patient, and I don't mind taking a contrarian position if I think the basic fundamentals of the situation are in my favour, I don't mind if it takes 2- 3 years for these sorts of positions to play out, short term volatility doesn't worry me in the slightest, my biggest gains have always been in positions that most people thought were crazy, at the time, but that's just how I roll, I care about the basic economics, not popular opinion.

Based on my research, and the thinking I have done about Iron ore and FMG's assets, I believe that when the iron ore price stabilises (and it will), it will be in a range that will be sustainable for FMG, and it may even be in a range where FMG can make a really good profit of more than $20/ tonne, if that's the case, todays share price will seem like peanuts, even if they are stuck earning $5 - $10 / Tonne they are great value.


----------



## nulla nulla (22 December 2014)

Value Collector said:


> We all have our opinions, and when you feel your right you have to back yourself, no point being right if you don't have a position, or only have a token position............




Might have to wait out a couple of dividends along the way before our positions come good. Of course, the oversupply of iron ore, slowing Chinese Growth and the level of debt are all negatives for FMG. However the current share price is an oversold price compared to the likes of BHP and RIO,in my opinion. FMG is one of the most shorted shares on the ASX. When the shorters start closing out their positions the price could jump quickly and be more in line with the other miners. Time will tell.


----------



## notting (22 December 2014)

Yet when compared with the like of BCI which has little debt and produces at a similar cost, FMG could go below a dollar with all it's debt, it could even go under if IO does not recover.


----------



## Value Collector (22 December 2014)

> Yet when compared with the like of BCI which has little debt and produces at a similar cost, FMG could go below a dollar with all it's debt, it could even go under if IO does not recover




Bci is nothing compared to Fmg.

Fmg has 4 young mines that are massive compared to Bci, an enviable infrastructure position, large resource base, plenty exploration acreage and potential large scale projects. 

The infrastructure is key, it is hugely valuable, owning mines is only half the story, hence why fortescue take a pound of flesh from every tonne Bci produce.

Fmg could sell the infrastructure to an infrastructure company, clear their debt and still be in a better position than Bci.


----------



## notting (22 December 2014)

Value Collector said:


> Fmg could sell the infrastructure to an infrastructure company, clear their debt and still be in a better position than Bci.




Dude! You don't really believe that. 
For a start if the current price is the new normal then there would be no one wanting to buy 8 billion dollars of infrastructure and move it to God knows where for God knows how much and re set it up. Move the railway lines too.
Nope. You don't think so.
Further, no one would pay the amount needed to cover FMGs debt, for it, even if it could be relocated economically.


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## Value Collector (23 December 2014)

notting said:


> Dude! You don't really believe that.
> For a start if the current price is the new normal then there would be no one wanting to buy 8 billion dollars of infrastructure and move it to God knows where for God knows how much and re set it up. Move the railway lines too.
> Nope. You don't think so.
> Further, no one would pay the amount needed to cover FMGs debt, for it, even if it could be relocated economically.




Who is saying anything about moving it? FMG's Infrastructure is extremely valuable where it is, doing the job it's doing.

FMG owns 3 main groups of assets.

1, operating mines ( 4 of them)
2, A railway network
3, A 5 berth port

Each one of these assets can operate as it's own stand alone business.

eg, FMG could retain ownership of it's mines, but sell the Port and the railway to two separate companies, who then continue to operate the infrastructure charging a toll on each tonne they ship for FMG and BCI or any other future project in the area.

or FMG could sell it's mines and retain the infrastructure and just be a transport infrastructure company earning a shipping toll on tonnes transported from existing mines and future projects over the next 100 years.

They could also package up and sell some mining infrastructure eg processing plant, power plants, mining fleet etc. there is plenty of options for them to reduce debt if needed.

As a shareholder though, I don't want them to sell off their infrastructure, because it is the reason I prefer them over the other smaller miners, because the infrastructure will still be in place and making money long after their current mines are depleted.


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## notting (23 December 2014)

Well all that isn't worth much if the mine is running at a loss, no one in their right mind would buy it. You can't run at a loss for 100 years and the mine would never be 'active' for 100 years regardless of any scenario 25 at best.


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## Value Collector (23 December 2014)

notting said:


> Well all that isn't worth much if the mine is running at a loss, no one in their right mind would buy it. You can't run at a loss for 100 years and the mine would never be 'active' for 100 years regardless of any scenario 25 at best.




they are not running at a loss yet, but hence why I made reference to prices remaining sustainable.

commodities are cyclical, high prices won't stay around forever, and neither will low prices, and if there is a part of the world that's going to be the lowest cost producer and be the base for sustainable iron ore production, it the Pilbara, and FMG's infrastructure is there.


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## notting (23 December 2014)

As far as I can see at these levels it's making enough money to manage it's debt and that's about it.
I don't regard that as profit.
FMGs ore isn't the spot price quality and so they get less per ton than BHP and RIO.
When it comes to restructuring that debt, when interest rates may not be so accommodating, well it will be in strife (Even if China continued it's massive overbuild of ghost cities and so forth which it will not)
I suspect FMG will lumber along as a non profit organization and see 60c at some point.  Not sure what the time frame will be, it depends on how much the Chinese demand to maintain the slow motion housing crash.


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## Value Collector (23 December 2014)

notting said:


> the mine would never be 'active' for 100 years regardless of any scenario 25 at best.




there are more than a 100 years of resources in the Pilbara, existing mines will be producing for decades, plus new developments as the older mines are depleted, exploration will continue to prove up more resources also, FMGs train lines and port will be busy for over 100 years easily.



> As far as I can see at these levels it's making enough money to manage it's debt and that's about it.




No, they are making a profit even after their interest payments, 




> FMGs ore isn't the spot price quality and so they get less per ton than BHP and RIO.




I know, I have factored all that in.



> When it comes to restructuring that debt, when interest rates may not be so accommodating, well it will be in strife.




That's not for a very long time, and they would have cleared a bunch debt by then, even at todays iron prices. Not to mention production costs continue to fall, and the low oil price is a windfall for them at the moment.



> I suspect FMG will lumber along as a non profit organization and see 60c at some point. Not sure what the time frame will be, it depends on how much the Chinese demand to maintain the slow motion housing crash.




I don't agree with you at all, but time will tell, you make your bets and I will make mine. The fact that a lot of people agree with you at the moment is making a fantastic opportunity for me.


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## notting (23 December 2014)

Value Collector said:


> I don't agree with you at all, but time will tell, you make your bets and I will make mine. The fact that a lot of people agree with you at the moment is making a fantastic opportunity for me.




I was short it but closed it out. So I'm not speaking my book just yet. 
Good luck to you!


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## tinhat (29 December 2014)

Value Collector said:


> We all have our opinions, and when you feel your right you have to back yourself, no point being right if you don't have a position, or only have a token position.




IMHO you need to also be willing to accept when you get it wrong too. Backing yourself also means being willing to make a rational decision to recognise when you've made a bad call.



Value Collector said:


> they are not running at a loss yet, but hence why I made reference to prices remaining sustainable.
> 
> commodities are cyclical, high prices won't stay around forever, and neither will low prices, and if there is a part of the world that's going to be the lowest cost producer and be the base for sustainable iron ore production, it the Pilbara, and FMG's infrastructure is there.




Low prices won't stay around forever, but they might stay around for the next 25 years. Personally, I have no idea.

FMG have no control over the price of iron ore and I've learnt the hard way recently not to treat any miner or resource market as a long term bet.

Good luck. I don't share your enthusiasm. I'd be looking for a bounce in the short term.


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## McLovin (30 December 2014)

McLovin said:


> Boom!
> 
> And so it begins...
> 
> ...




Assuming the price drop is temporary, which is a big assumption, IMO, my question is how long can FMG sustain a price squeeze? 

And this from a couple of years ago when we had the discussion originally (in the FGE thread)





			
				McLovin said:
			
		

> I read about Chinese demand all the time. For some reason I never read about supply. It's almost as though iron ore markets exist with static supply but continously expanding demand. What happens when those new iron ores mines in Africa and Mongolia come online? You can buy a lot of miners at "less than $2 per day".






			
				Intrinsic Value said:
			
		

> Okay so RT's cost per tonne in the Pilbara is roughly 18 dollars but for the African joint venture with the Chinese it is approx 45 dollars a tonne. He reckons BHPs Pilbara cost per tonne is around 30 dollars. FMG around 80.
> 
> So why are they doing the African joint venture? Because it is the second biggest iron ore deposit in the world and they want to be part of it.






			
				Ves said:
			
		

> Thanks mate - that is actually quite scary. Because historically iron ore prices have sat just above the cost of production (obviously with a small profit margin for the producers).
> 
> If there is a heap of supply coming online in Africa from 2014 onwards - it is possible that some (or a lot) of mean reversion still could happen. I think it would be interesting to see what happened when the Japanese stopped having a huge hunger for our iron ore when they went through their growth spurt in the 20th century. Was there a severe correction in prices after a bubble of sorts?




Discussion here...

https://www.aussiestockforums.com/forums/showthread.php?t=8383&page=16&p=727506#post727506

This iron ore price drop seemed pretty predictable a couple of years ago.


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## Value Collector (6 January 2015)

tinhat said:


> IMHO you need to also be willing to accept when you get it wrong too. Backing yourself also means being willing to make a rational decision to recognise when you've made a bad call.
> 
> 
> 
> .




offcourse, but you shouldn't accept you are wrong just because the market disagrees with you, you accept you are wrong when the real world outcomes of the underlining business operations fail to produce the returns you need for your investment to bear fruit over the time frame you originally had in mind and there fore not have a chance of acting as a satisfactory investment.



> Low prices won't stay around forever, but they might stay around for the next 25 years. Personally, I have no idea



.

I have no idea on prices either, I don't need prices to rise though, All I need is for FMG to be able to make a satisfactory margin between their production costs and their sale price.

As I said, I believe the Pilbara operators will be able to rationalise the costs that have been bloated in the rush to bring ore to market fast, and the price will eventually settle at a price where the low cost Pilbara operators, including FMG will make a decent margin on the tonne's they ship.


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## notting (6 January 2015)

What would be most useful is to know what the all in costs are.
That means admin, interest payments, cost of getting the stuff out and to their one customer - China.

Then you have to consider what is stated above, the huge amount coming online just from RIO and BHP alone is enough to keep prices where they are now. Let alone Vale and Africa and bigger ships to make shipping cheaper from those places.

If that isn't enough the real possibility of a slow down in consumption of IO which for the large part is saddled to the Chinese overbuild.
China is making progress in raising wages and moving to a consumer model.  This means moving away from building ghost cities which were part of the corruption that pumped up property in the ghost cities through propaganda in the communist controlled media to the people, so the communist cronies made a killing selling empty concrete cells to the brainwashed emerging middle class masses.

It really is a perfect storm.

What you see with oil has some parallels with the oversupply, but not so much with the utter dependence on one mad country building ghost cities to take the money back off the people and back into the dictators pockets.

I'm thinking IO ain't much different to rare earths, all things considered and rare earths an't that rare and neither is IO and not a business you'd want to be in right now unless you can control supply.
Apart from the Big Three all the other guys were under the illusion that IO would stay around the 80c mark minimum. Producing the high grade IO, at cost for the big boys, as with coal, is not out of the question at all.

There are still these analysts crapping on about how consumption hasn't slowed and all this BS. It will and it doesn't have to for there to be a coal like effect, coal and rare earth consumption hasn't slowed either!

This is s dangerous space.


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## Wysiwyg (22 January 2015)

FMG breaking below the previous $2.25 low today and what appears to be a 5 day flag formation. No volume on the break so far so could be a falsey. Wouldn't like to bet on it being a false break down though. Down trending stock in most cases = buy low, sell lower.


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## notting (29 January 2015)

For now, at least, FMG can sell iron ore for more than it costs to produce.  So getting a bit of a relief rally, but once interest rates on its 9.1 Billion debt are considered it's not such a rosy situation as todays reaction thus far suggests.  Survival is all that is happening for the moment.
Future development will be costly in order to get the medium and long term ore shipped which they are curbing development of for the moment.  Better hope IO goes up from here, unlikely!


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## Value Collector (29 January 2015)

notting said:


> For now, at least, FMG can sell iron ore for more than it costs to produce.  So getting a bit of a relief rally, but once interest rates on its 9.1 Billion debt are considered it's not such a rosy situation as todays reaction thus far suggests.  Survival is all that is happening for the moment.
> Future development will be costly in order to get the medium and long term ore shipped which they are curbing development of for the moment.  Better hope IO goes up from here, unlikely!




Based on the production costs from todays report, and the Iron ore price today, they are earning about $8 / tonne, that's after interest payments.

Not to mention they have just paid down another $500M in debt, that should generate another $25M in cost savings alone.

If the cost savings they say they are getting for this quarter continue, they will be earning over $12 / tonne at todays price.

These margins are still very healthy, By my calculations on the way things stand today, every $1 in margin the are earning should equal about $0.75 in market value of the stock, So if they can maintain an $8 earnings margin that values them at $6 / share, $12 earnings margin is $9, things have to deteriorate a lot further to make their current price fair value.

I am happy to hold at this point, I think that FMG still have further to go in its cost reductions, and when the Iron price finally stabilises they will be making a decent margin some where above $8 a tonne, and todays price will look like a bargain.


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## notting (29 January 2015)

When the December quarter began IO prices were at around US$85 They are now at around US$63.  The miner said today it received about $US63 per tonne for its product in the December quarter, implying the business is profitable at those prices.

Take a further 20% off that if prices do not improve.  
How's that looken?


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## Value Collector (29 January 2015)

notting said:


> When the December quarter began IO prices were at around US$85 They are now at around US$63.  The miner said today it received about $US63 per tonne for its product in the December quarter, implying the business is profitable at those prices.
> 
> Take a further 20% off that if prices do not improve.
> How's that looken?




In the December quarter production costs were $45 / DMT (they are lower now, but I'll use this figure)

Current ore prices are a little over $62, FMG are currently getting 89% of this due to grade discount, but we will use 85% to be safe, because that's the average, which means current price received would be about $53.

That equates to a margin of $8, based on last quarters production price and todays selling price.

However the production cost continues to decline, $38.46 is the current production cost forecast for this quarter, if the sale price remains the same that equals a margin of $14.50

So you have to have a much lower price before the current share price would be considered accurate, and the price has to stay there long term, not just hit a low temporarily. 

As I have said before, the Pilbara operators will continue to reduce production costs, Asia can not do with out their ore, so where ever the price ends up, it will be above the Pilbara production cost.


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## notting (29 January 2015)

OK, fair enough.
What about the new language with respect to demand weakening and stock piles still surprisingly high in China who is pretty much their only customer.
Along with RIO and BHP and Vale ramping up supply aggressively price rising is  unlikely being more likely to be weaker for a long time, still OK? Wonder how much FMG have available to ship without further mine developments which will require further capital? These mine developments have been curbed in the face of the questionable feasibility at this price.
Isn't the cessation of such development at these IO prices an indication that it is not feezable going forward unless prices of IO rises again.  Which it may not for decades.


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## Value Collector (29 January 2015)

notting said:


> OK, fair enough.
> What about the new language with respect to demand weakening and stock piles still surprisingly high in China who is pretty much their only customer.
> Along with RIO and BHP and Vale ramping up supply aggressively price rising is  unlikely being more likely to be weaker for a long time, still OK? Wonder how much FMG have available to ship without further mine developments which will require further capital? These mine developments have been curbed in the face of the questionable feasibility at this price.
> Isn't the cessation of such development at these IO prices an indication that it is not feezable going forward unless prices of IO rises again.  Which it may not for decades.




Demand isn't shrinking, its just growing more slowly, more iron is being used everyday now, than this time last year. But yes supply has grown faster than demand, hence the price weakness.

Stock piles have shrank by more than 10% in recent months.

Fmg's mines are some of the youngest in the pilbara, plenty of life to run in them, not to mention developments around existing mines that would utilises the same rail, ports and even power stations and processing facility etc.

The cessation of some mine developments means at this price its not the best time to bring on more supply, but as the numbers show this price is still profitable. Even if the price doesn't rise.


----------



## notting (29 January 2015)

I'v heard there has been a slight drop in demand recently from China not just a drop  in increasing demand.

So your saying without any further development FMG has like 10 years of mine life left at these volumes?

As far as I know, BHP and RIO are rather concerned that Vale who is halfway through construction of a $US19.49 billion expansion in the Carajas will allow it to produce at US18MT, using mega tankers and with a lower oil price shipping costs will make Vale, the worlds biggest producer, able to easily out price the closer located AU Pilbara setup.

It seems that BHP and RIO are trying to squeeze the price now in order to make the 19.49 billion spend for Vale difficult to manage on current earnings leading up to it's completion and commencement.  It's hard to understand why else RIO and BHP are pretty much throwing mountains of IO at China. So the price could go and stay a fair bit lower for 20 to 30 years just on the supply glut.

Personally I think the demand side will weaken significantly given the move away form mega over construction in China.

Red dirt aint worth what it used to be.


----------



## Value Collector (29 January 2015)

notting said:


> I'v heard there has been a slight drop in demand recently from China not just a drop  in increasing demand.
> 
> So your saying without any further development they have like 10 years of mine life left at these volumes?
> 
> ...




I know the media say a drop in demand, but really it is a slowing in demand growth, same with oil, we are using 1% more oil everyday now than this time last year, but we are producing 2.5% more, hence price weakness.

Fmg's mines have probably have about 20years to run on current reserves, but like most mines they will probably expand that reserve base at those mines, plus most of their capital is invested in the port, railway and other infrastructure, that will still be operating after the current mines are depleted.

FMG has a resource base that would last for almost a century, but yes that requires more mines, but as I said the port and railway would still be utilised, 

FMG has its own mega ships in the pipe, plus Brazil in still a lot further away than the pilbara,

Rio,  bhp and FMG, are still throwing ore at china because it is profitable for them to do that, 

The players who will drop of of the market the the highest cost producers, thats not Bhp, rio or FMG.


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## notting (29 January 2015)

Other little guys falling over are irrelevant. Given the ramp ups from BHP, RIO and VALE.
Question is is FMG going to be one of them.

"Iron Ore price is too low for the good of the industry, Western Australia and Australia" - Nev Power

Sounds kind of desperate and hardly an endorsement of the business at current levels.

Is almost a desperate call to the WA Administration to hold back RIO and BHP to save FMG and it's jobs.
Also Nev said, "Price should stabilise after Chinese New Year."  Not sure why, it's not like the big boys are going to cut back.

You can glean quite a bit from the 'involuntary nuances' over 'assurances,' that everything is swell look at the books, which it should be at face value.  
So why is it so bad for everybody?

Not convinced, but you make a reasonable argument.


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## nulla nulla (30 January 2015)

How much oversupply will there be when Gina Rinehearts mine comes into production?


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## Value Collector (30 January 2015)

nulla nulla said:


> How much oversupply will there be when Gina Rinehearts mine comes into production?




i guess that depends on how much growth in demand there is between now and then, and how many of the high cost mines decide to shut down production in china or decide not to reopen in spring after the winter shutdowns.


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## notting (11 February 2015)

> ANZ has downgraded its 2015 and 2016 iron ore price forecasts by 24 per cent and 30 per cent to an average of $US58/tonne and $US60/tonne respectively.
> 
> ‘‘The market has been hit by substantial new iron supply entering the market in a weakened demand environment,’’
> Traditional high cost Chinese iron ore swing supply is also not responding  ”” either lowering costs or being sheltered by more profitable steel mill owners.
> While the price slump has been dramatic and hard to monitor, 85 per cent of the seaborne market is still making money, making it difficult to conclude that it looks oversold.




Looken a little shaky.


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## Value Collector (11 February 2015)

notting said:


> Looken a little shaky.




I wouldn't put to much weight in forecasts of price, FMG is profitable at those prices anyway.

The half year results are due some time next week, I wouldn't be surprised if they are better than the Bears think, we should see a bump in the share price I think.


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## Wysiwyg (12 February 2015)

Yes the news and forecasts can be confusing but as was mentioned FMG can still run at a profit at these low ore prices. That being the case then sentiment will play a role as to where the low is because looking down the track at India and its proximity to W.A. makes a lot of sense for a long term hold on FMG. The wait in years until demand gains momentum again is a deterrent for me but $2.25 and lower is very tempting to start accumulating in my opinion only. Being a small gap at  $2.25 - $2.30


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## Value Collector (12 February 2015)

Wysiwyg said:


> Yes the news and forecasts can be confusing but as was mentioned FMG can still run at a profit at these low ore prices. That being the case then sentiment will play a role as to where the low is because looking down the track at India and its proximity to W.A. makes a lot of sense for a long term hold on FMG. The wait in years until demand gains momentum again is a deterrent for me but $2.25 and lower is very tempting to start accumulating in my opinion only. Being a small gap at  $2.25 - $2.30




I don't think you have to wait years to see a profit on this one, if they can make $10 a tonne profit, they will be worth well over $6 per share.


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## burglar (12 February 2015)

Wysiwyg said:


> ... looking down the track at India and its proximity to W.A. makes a lot of sense for a long term hold on FMG. ...




I hope you are right about India.
Though any country will do!!


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## notting (17 February 2015)

According to the market, at first it looked bad, then it looked good for a little while, now it's worse than the bad it first thought it looked like.
It could be bad, real bad, if dividend holders treat it like they have everything else that has cut.
Then of course, there is this - 


> 12:57pm: A senior government official in Beijing has likened conditions in China to those that existed in the lead-up to the 1997 Asian financial crisis, as capital flight gathers pace in the world's second-biggest economy.
> 
> Guan Tao, the director of international settlements at the State Administration of Foreign Exchange (SAFE), sounded the warning even as the government continues to stress the economy is stable.
> 
> ...




It's bad.


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## Wysiwyg (17 February 2015)

notting said:


> if dividend holders treat it like they have everything else that has cut.



The question is why bother with a company that is up to its eyeballs in debt and making a foreseeable small margin of profit in the future. Day traders love it.


----------



## notting (17 February 2015)

Why bother? 
I think you answered your own question.



Wysiwyg said:


> Day traders love it.


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## notting (18 February 2015)

As if RIO and BHPs excessive expansions weren't enough  But wait.  There's more - 



> Gina Rinehart's $10 billion Roy Hill iron ore mine is on track to begin exporting in September 2015 and will have shipped 5 million tonnes by the end of the year, a company executive said.
> 
> "We're certainly on budget. We remain ahead of overall schedule," Garry Torte, chief financial officer of Roy Hill, told Reuters.
> 
> ...


----------



## nulla nulla (18 February 2015)

Are you long or short?


----------



## Wysiwyg (18 February 2015)

notting said:


> As if RIO and BHPs excessive expansions weren't enough  But wait.  There's more -



Talk about late for the party. Supply glut and hence low iron ore prices now for the next 10 years? Dumb.


----------



## notting (19 February 2015)

nulla nulla said:


> Are you long or short?




It depends what time of day it is at the moment it seems.
Right now I am short.
Negativity should continue to weigh with 70% cut to dividend and 80% drop in profits.
With no light on the horizon other than some vague hope that the Chinese will stimulate once more before the collapse. But even then the supply side will be too strong. 
FMG has 9 Billion in debt and can't moth ball mines due to that if they become unprofitable. 
The future is not looking to bright right now.


----------



## skc (13 March 2015)

Hmmm... what does this mean? 3 days of short covering followed by massive sell down by the holder who made the recall?


----------



## notting (13 March 2015)

Wysiwyg said:


> Talk about late for the party. Supply glut and hence low iron ore prices now for the next 10 years? Dumb.




Too busy being a control freak.  She should have floated it years ago kept a controlling stake to satisfy her madness in thinking she knows how to run it. At least that way she could have diversified.

RIO is on at 61.8 retrace and BHP is very close.
Could get a little bounce here as BCI, FMG and AGO did for some of the day.
But chances are RIO and BHP will just keep falling, they have really shot themselves in the feet.


----------



## notting (17 March 2015)

> FMG will also extend its $US4.9 billion term loan to December 2021 and may pay a minimum yield of 5.5 per cent, the person familiar with the deal told Bloomberg, up from the current 3.75 per cent and at the higher end of the range it had been expected to pay. The deadline to agree to the extension was pushed out to March 17 from March 13, the company said.
> 
> Read more: http://www.smh.com.au/business/mark...roled-rally-20150317-3s9ld.html#ixzz3UbJ4OotZ




Yikes!


----------



## notting (18 March 2015)

notting said:


> Yikes!




No one wants the bonds!!
Oh no.  Equity issue? I donno. A dollar maybe?
Doing nothing would probably be the best thing at the moment but now they have let the cat out of the bag, doing nothing will not help the stock price.


----------



## notting (19 March 2015)

Just broke out of the mornings high and it seems some shorters are getting out quick.
Not sure why, perhaps Twiggy has got another financing deal penned.
Watching closely.


----------



## notting (19 March 2015)

Bit of selling there on the close to keep it in short zone!



> Fortescue needs iron ore prices above $US70/tonne to be able to repay debt through cash flow, Morgan Stanley analysts say.
> 
> Analysts and shareholders are back studying the iron ore miner's balance sheet after the failed $US2.5 billion ($3.2 billion) debt deal.
> 
> ...


----------



## Knobby22 (19 March 2015)

It will be sad to see this company fail when it has got so close to success. 
I am wondering more about Gina's mine and whether it has a future.


----------



## notting (19 March 2015)

Andrew Forest has always had a question mark sitting on the top of his head despite the charade of success that FMG seemed to be.

Anything that runs on massive debts, other peoples money, from some redneck from the bush with a highly questionable track record prior, is not a success story until the debt is under control and FMG's has never been under control in realistic terms.

If you had run a very clear ruler over this thing during the GFC you would have found it hard not to stamp one word on it's report card - *insolvent*.

They probably should have declared it and the only thing that saved it was the huge stimulus undertaken by China which popped up IO prices for the medium term to give FMG the best possible chance it had to get that tag off its financial state.

The team did as good a job as you could expect, and should expect in the face of it's real situation, in the breathing space offered to it, as *luck* would have it, but even with all that it's paid off and restructured, it is *still* yet to get ahead of the tsunami  of debt over running it.

This whole Mindaroo charity thing has always seemed like a bloke trying to paint himself as a pillar of society when in reality he may turn out to have been a rather overenthusiastic opportunist, nothing more, than a salesman and the founder of another failed company of other peoples money.

Mindaroo's holding in FMG was worth  6,2B or so about one year ago, it's now worth 2B
Yep that's a 4.2 Billion dollar loss in a year and it aint over yet it seems!
Lets see if they can suck in some more backers to peddle it along a little longer.

All this time when big question marks have arisen over China, he has been very vocal saying, it's all good and there wasn't a problem the massive expansion is going to go on for decades to come and the Chinese know what they are doing, and we should listen to and trust them. 
Blah blah *BS*!!


----------



## fiftyeight (24 March 2015)

Recently at a FMG site.

Did not expect to see exploration drilling going on and work is going ahead on a new pit.

Also, in the mess there are signs asking for money savings ideas to achiever their goal of $20/tonne. I wonder how close they actually are to that target?


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## notting (25 March 2015)

fiftyeight said:


> Did not expect to see exploration drilling going on and work is going ahead on a new pit.
> their goal of $20/tonne. I wonder how close they actually are to that target?




That is a joke.

As is this - 



> Mr Forrest said the major miners, Rio Tinto, BHP Billiton and Brazil's Vale, should cap their production in what is an over-supplied market, helping push the price "straight back up to $US70, $US80, $US90".




In desperation Mr Forrest calls for what could actually be called an illegal cartel.


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## Wysiwyg (25 March 2015)

notting said:


> In desperation Mr Forrest calls for what could actually be called an illegal cartel.



There is no doubt he feels large.


----------



## luutzu (25 March 2015)

notting said:


> That is a joke.
> 
> As is this -
> 
> ...




He probably forgot that RIO, BHP aims to gain market share at his expense. So there's already a wink and a nudge, but it's at him and not with him.


----------



## banco (25 March 2015)

notting said:


> That is a joke.
> 
> As is this -
> 
> ...




His lawyers must have had a heart attack when they heard that stupid speech.


----------



## systematic (25 March 2015)

I'm starting to like the look of it as a value pick.


----------



## skc (25 March 2015)

systematic said:


> I'm starting to like the look of it as a value pick.




Are you sure  Can you share your thinking and assessment?

I can't see this as a value stock at spot price - they are touch and go in terms of profitability. And it's difficult to forecast long term value without some big assumptions (i.e. guesses) on future iron ore prices. Add to that potential balance sheet issues, FMG doesn't quite fit the conventional thinking of a value stock.


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## skc (25 March 2015)

banco said:


> His lawyers must have had a heart attack when they heard that stupid speech.




FMG with press release as Nev Power actually consulted lawyers and try to re-interpret what Twiggy said.

I don't really understand the legal context of this... but to me it is hilarious. Consulting facts for a few minutes: FMG actually has the largest increase in supply over the last 4 years. So it's OK for FMG to ramp up product and move down the cost curve, but when BHP and RIO do the same thing, it's bad for the Nation and everyone. 

Hypocrite much?


----------



## nulla nulla (25 March 2015)

skc said:


> FMG with press release as Nev Power actually consulted lawyers and try to re-interpret what Twiggy said.
> 
> I don't really understand the legal context of this... but to me it is hilarious. Consulting facts for a few minutes: FMG actually has the largest increase in supply over the last 4 years. So it's OK for FMG to ramp up product and move down the cost curve, but when BHP and RIO do the same thing, it's bad for the Nation and everyone.
> 
> Hypocrite much?




It would certainly be a double standard if Mr Forrest called for a cap on production by BHP and RIO while ramping up his own production. However, given that Iron Ore in Australia will eventually prove to be a limited resource, I am surprised that the Federal and State Governments aren't calling for a slowing of supply to improve prices and subsequently their royalties. 

If every Australian miner ramps up production, trying to offset a falling price with increased volume, the resources will be exhausted faster. The big losers the Australian Tax payer that gave mining companies extra deductions on their exploration as well as huge rebates on diesel fuel.


----------



## banco (25 March 2015)

skc said:


> FMG with press release as Nev Power actually consulted lawyers and try to re-interpret what Twiggy said.
> 
> I don't really understand the legal context of this... but to me it is hilarious. Consulting facts for a few minutes: FMG actually has the largest increase in supply over the last 4 years. So it's OK for FMG to ramp up product and move down the cost curve, but when BHP and RIO do the same thing, it's bad for the Nation and everyone.
> 
> ...




The anti-cartel provisions are pretty broad in order to catch "wink, wink, nod, nod" arrangements. I don't think when the provisions were drafted they really contemplated a Chairman calling for the creation of a cartel in public though.


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## needsajet (26 March 2015)

Must be some late nights for FMG, the ACCC and trade officials!

"Let's get together, cut production, divvy up the market, and raise prices!!" Uh Oh, Whoops! Let's advertise that Australia allows cartels if the output is all export (provided of course we don't discuss price, wink wink). Good thing ACCC isn't holding any conferences and waxing eloquent about their exemplary cooperation with other nations as they fight international cartels. It's a comedy of PR/IR blunders, which makes me wonder if FMG hires the same spin-doctors as Abbott. The company's poor judgement in going public with their desperate plea will not be good for FMG, that's for sure.


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## Bintang (26 March 2015)

skc said:


> View attachment 62105




skc, do you know if the numbers in the table and chart are adjusted for iron ore quality or are they just based on the bulk tonnages?


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## skc (26 March 2015)

Bintang said:


> skc, do you know if the numbers in the table and chart are adjusted for iron ore quality or are they just based on the bulk tonnages?




The reference is from BHP presentation to the AJM Conference released on 10/3/2015. Slide 5. Will let you read investigate your own questions.


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## Bintang (26 March 2015)

skc said:


> The reference is from BHP presentation to the AJM Conference released on 10/3/2015. Slide 5. Will let you read investigate your own questions.




Thanks


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## skc (26 March 2015)

I hope his lawyers are more expensive than ACCC's.



> Mr Forrest says he is protected by an exemption in the Australian Competition and Consumer Act encouraging Australian exporters to act in the nation's interest.
> 
> He told Fairfax Media he is "absolutely" confident that section 51(2)(g) allows him to propose the production cap he has floated.




http://www.afr.com/business/mining/...s-harebrained-iron-ore-scheme-20150326-1m7x98


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## qldfrog (26 March 2015)

Obviously not the smartest move by Forrest but there is some irony in the current situation where the Saudis are blamed for going to war by NOT restraining their oil production within a cartel.
Or am I  the only one to see it that way?
And I wish the royalties were based on moved material, shipped or not.high grade or not, as pointed before the Australian people are the ones paying for the Rio/BHP war.


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## Value Collector (26 March 2015)

qldfrog said:


> And I wish the royalties were based on moved material, shipped or not.high grade or not, as pointed before the Australian people are the ones paying for the Rio/BHP war.




Most royalties used to be a fixed $ amount per tonne, but the governments changed it to a percentage as the commodities price rose and they wanted a bigger piece of the pie,


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## notting (26 March 2015)

If you think the war is between RIO and BHP you have no idea.


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## Bintang (26 March 2015)

After reviewing the guidance given in FMG’s last half-year report I think they will be pushing the proverbial uphill from here on if iron ore prices do not recover. Even producing at maximum capacity and assuming all the production can be sold will not pull them out of the hole.
I estimate their breakeven** iron ore price (Platts 62% CFR reference price) to be $58 to $60 per dry metric ton.  
(** being the price at which profit before income tax equals zero)

Current Platts price is US$55.86/tonne

I used the following metrics:
Dry/Wet yield = 0.92  mt/mt (derived from Annual report)
Realised price  = 0.845 x Platts Ref Price  US$/dry mt (derived from Annual report)
Annual equity ore shipped = 160 million wet mt (FMG guidance for 2015)
Unit total delivered cost  = US$35/wet mt  (FMG guidance for 2015)

Annual finance expense = US$750 million  (assumption)
Annual  D&A  =  US$1000 million (assumption)

With the above the breakeven Platt’s price (P) can be formulated as:

P = [35 + 1750/Q]/0.777  US$/dry mt

where Q =annual equity ore shipped (million wet mt)


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## skc (27 March 2015)

Bintang said:


> Annual  D&A  =  US$1000 million (assumption)




The D&A would be non-cash so the cash breakeven picture is a little bit better. You do have to make some allowance for maintenance capex (which is real cash), but that number should be lower than the D&A figure. I think they must have published guidance somewhere...

Regardless of the above, they are touch and go in terms of generating excess cash. So they are in trouble to repay the debt's capital when it fall due in 2017 (from memory). Having said that, they can manage the interest payment so you'd assume that the lender will not just pull the plug. They will roll the debt over whilst waiting for the iron ore price recovery.


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## Bintang (27 March 2015)

skc said:


> The D&A would be non-cash so the cash breakeven picture is a little bit better. You do have to make some allowance for maintenance capex (which is real cash), but that number should be lower than the D&A figure. I think they must have published guidance somewhere...
> 
> Regardless of the above, they are touch and go in terms of generating excess cash. So they are in trouble to repay the debt's capital when it fall due in 2017 (from memory). Having said that, they can manage the interest payment so you'd assume that the lender will not just pull the plug. They will roll the debt over whilst waiting for the iron ore price recovery.




Yes, that's why I did the calculation in the manner described since it’s too difficult to figure out what their debt repayment schedule would be and by setting profit before tax equal to zero there is also no tax calculation to consider.
But I can’t imagine they would get away for too long with zero debt repayments, so that’s what would likely happen to any excess cashflow.
And if maintenance capex is included the break even price would just be higher.

I was just after a quick look feel for what kind of price limits would allow them to stay afloat and to do a quick sensitivity on the impact of sales quantity.

If you start to factor in :
1)	Possible lower demand from China
2)	Oil prices lifting above the current ~$US$50/bbl

 ….. then the problems just compound even further.

Their unit shipping costs look to be approximately proportional to oil prices by a factor of 0.1, so if oil prices increase to say $75/bbl it will cost them roughly an extra $2.50/wmt.


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## ROE (27 March 2015)

A simple view of the world is like this, sometimes simple view is better than complex finance thingy 

at the current iron ore price, FMG is in trouble as simple as that, the longer it goes on, the worse it get as it getting closer to its debt repayment date and as the date draw closer it harder and harder for it to refinance debt at a reasonable rate... based on that fact right now why would you want to invest in it because it close to worthless.

now you can predict iron ore may go up or down or what ever but it is still a guessing game
the safest options is you take iron ore price as it is and assume it going to be like that for the next 3-5 years can FMG survive?

FMG refinancing exercise is all about buying time and time is a luxury it doesnt currently have


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## Miner (27 March 2015)

ROE said:


> A simple view of the world is like this, sometimes simple view is better than complex finance thingy
> 
> at the current iron ore price, FMG is in trouble as simple as that, the longer it goes on, the worse it get as it getting closer to its debt repayment date and as the date draw closer it harder and harder for it to refinance debt at a reasonable rate... based on that fact right now why would you want to invest in it because it close to worthless.
> 
> ...




IF I take  bit of Bacardi and make comment - what about a possible take over by BHP ? Thinking outside the box, ore body, scale of economy and cost reduction with volume of production?
Does it look like a Chinese whisper ?
DNH


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## luutzu (27 March 2015)

Miner said:


> IF I take  bit of Bacardi and make comment - what about a possible take over by BHP ? Thinking outside the box, ore body, scale of economy and cost reduction with volume of production?
> Does it look like a Chinese whisper ?
> DNH




I think soon after the South35 spin-off, BHP might take another tilt at RIO then do RIO's job of spinning off a unit or two for them.


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## banco (27 March 2015)

luutzu said:


> I think soon after the South35 spin-off, BHP might take another tilt at RIO then do RIO's job of spinning off a unit or two for them.




Would be pretty funny in light of Twiggy's cartel comments if BHP did go after Rio.


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## Bintang (27 March 2015)

Miner said:


> IF I take  bit of Bacardi and make comment - what about a possible take over by BHP ?



At what price?


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## Miner (29 March 2015)

Bintang said:


> At what price?




ASF does not endorse any price predictions.
So with my hangover, I would say whatever price BHPB likely to offer for FMG would have to be at least 50% more than the current price of offer time.
Andrew Twiggy would not easily give up unless his 40% holding fetches good amount.
All my wishful thoughts


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## Bintang (29 March 2015)

Miner said:


> ASF does not endorse any price predictions.
> So with my hangover, I would say whatever price BHPB likely to offer for FMG would have to be at least 50% more than the current price of offer time.
> Andrew Twiggy would not easily give up unless his 40% holding fetches good amount.
> All my wishful thoughts




I doubt that BHPB would be interested unless it was a fire sale with the share price having dropped to almost nothing.

Iron ore prices are going down because China is cutting back demand. At some point FMG might find they can't sell all that they can produce. That plus low iron or prices would surely make them cash flow negative. I can only see the share price going down, down down.


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## Value Collector (30 March 2015)

by my calculations Fmg's current absolute break even price is a little under $50 per tonne.

Their all in cost is $35 / tonne, that includes interest, so when you allow for moisture content and the discount there is still a comfortable margin.

Remember if they are making a $10 margin at $X, just because the price drop by $10 dollars doesn't mean they are breaking even, because the royalties go down.


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## Bintang (31 March 2015)

Value Collector said:


> by my calculations Fmg's current absolute break even price is a little under $50 per tonne.
> 
> Their all in cost is $35 / tonne, that includes interest, so when you allow for moisture content and the discount there is still a comfortable margin.




The $35/wet tonne is not their all-in cost. It is only their 'total delivered cost to customers', which does not include interest payments.

_Components of total delivered costs as per FMG Annual Report 2014 page 85_




_Total delivered costs guidance as per FMG FY15 Half Year Financial Results - page 4_



They need roughly another US$4.80 per wet metric tonne to cover interest costs.


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## notting (31 March 2015)

Bintang said:


> They need roughly another US$4.80 per wet metric tonne to cover interest costs.




Interest costs that are relatively low and soon to turn skyward.
What people need to get is that the low cost is achieved through economies of scale, so if miners started slowing production then costs would head up too.  Catch 22 for Fotescue.  Then, of course, they to have actually pay some of the debt back not just the interest.  In short - 

They can't.


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## Value Collector (31 March 2015)

Bintang said:


> The $35/wet tonne is not their all-in cost. It is only their 'total delivered cost to customers', which does not include interest payments.
> 
> _Components of total delivered costs as per FMG Annual Report 2014 page 85_
> View attachment 62151
> ...




yes your right, you have to add back the interest, which is reduced to about $4 since the annual report.

However this still puts the break even at about $50 when you factor in reduction in royalties, you also have to factor in that sustaining capital is less than the depreciation due to FMG's assets being quite young, eg they depreciate the paper value of the rail and other infrastructure by more than they have to actually spend to maintain it.


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## Value Collector (31 March 2015)

notting said:


> Interest costs that are relatively low and soon to turn skyward.




Soon? you mean in 4 years time, 2019. They have cash in the bank to cover all the debt due till then. and 4 years is plenty of time for markets to improve and to reduce costs etc.


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## notting (31 March 2015)

Value Collector said:


> Soon? you mean in 4 years time, 2019. They have cash in the bank to cover all the debt due till then. and 4 years is plenty of time for markets to improve and to reduce costs etc.




Let's see what kind of demand there is over the next 12 months amidst the mountains of cheap supply from everywhere.

Cash tends to have a way of vanishing when you begin to lose money.


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## notting (7 April 2015)

> shares down
> 10:53am: Meanwhile... Fortescue Metals Group's Andrew Forrest has lashed out at "immoral" short-sellers, warning attempts to force him to sell his 33 per cent personal shareholding in the iron ore company are futile.




This is called - lashing out with a red herring.  The idea is to make people who may be interested in going long think that the short sellers are foolish because Andrew is not leveraged.  All the  short sellers know that Andrew is not leveraged, as you do Andrew.  
We also know, as you do, that it's FMG that is leveraged.
We also know that if there has to be a capital raising you will struggle not to be liquidated to some extent because you most likely will not be able to afford your quota and maintain your % of the company. 
This guy is very sly.  

He makes sure he slips in a boast about being a million dollar donor and bastion for slave laborers, whilst has been singing the praises of the Chinese for decades.  The Chinese are the most brutal slave labor dictators ever seen, not just because of how brutal they are to the workers but because of the scale. 
This garbage about the emerging middle class is all on the back of the Chinese Communist dictatorships huge slave labor force.
You have something like 350 million so called emerging middle class raised out of poverty on the back of a billion slaves! It's on a scale the world has never seen before.




These pictures are from a brick works factory where many workers are just plucked off the streets or farms and forced to work.  They are guarded by dogs and beaten to death in front of the other workers if they don't work hard enough.
Not unlike the iron factories and all the other factories, you know the ones with nets outside the windows so the workers can't commit suicide.

How  about adding this to your slave labor crusade Andrew!


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## fiftyeight (9 April 2015)

There is probably a lot more to it than the headlines

http://www.fmgl.com.au/UserDir/News...ue transparent tax structure explained278.pdf

But at least Twiggy is not dodging tax like RIO and BHP.


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## Miner (11 April 2015)

notting said:


> This is called - lashing out with a red herring.  The idea is to make people who may be interested in going long think that the short sellers are foolish because Andrew is not leveraged.  All the  short sellers know that Andrew is not leveraged, as you do Andrew.
> We also know, as you do, that it's FMG that is leveraged.
> We also know that if there has to be a capital raising you will struggle not to be liquidated to some extent because you most likely will not be able to afford your quota and maintain your % of the company.
> This guy is very sly.
> ...



First of all great posting.
Secondly, Andrew has not paid me to write this posting.
But I believe such a lashing on Andrew woas very unfair . He is the only AUSTRALIAN who helped millions of Australians to make money on FMG. He was a loner to fight against big guys like Rio and BHPB. It is also those two big guys (by the way I have worked for all three companies - BHPB , FMG and Rio - so know the game more closely than many sideliners). Of course Andrew and so were many Ausssie business houses including Fed and State Governments have sung for Chinese. We all knew Chinese labour agony. But the same we do in African countries as expats? Why not refer to Gina who told that Chinese labours were $2 per hour than Aussie labours ?
It is the market which driving all crazy. By lashing against Andrew alone there will be no gain. At least he is fighting to save many faces including his own. At least he has not sold off his shares when there was hay day. At least he is the only one who does not sit on a cubicle ? At least he is the only one who has literally tried to uplift  original Australians . Just visit Pilbara sites and you know what Andrew has done. It is all political and pressure from Rio and BHPB who would strive to see Andrew fails. Yes, FMG is under tremendous financial crisis. But once again, please please do not crucify Andrew alone.  Thanks for saving the lone Australian Hero.


----------



## stit (14 April 2015)

Would love to get some opinion on this article. It seems to be very well researched and is one of the few articles i've found that actually break down the situation with real numbers. Would love to hear some opinions around how accurate people think these numbers are and why or why not he might be on the right track. I personally can't grasp how the price of iron ore has fallen so sharply on the back of a "glut" when ore inventory stockpiles has not increased. Why have these stockpiles not started to increase towards the 30 - 50 million tonne mark as the suggested surplus for this year? Why are port inventories actually declining? Is the price really being influenced by sentiment as the article suggests? Would love to hear your thoughts

http://seekingalpha.com/article/3058186-fortescue-a-strong-pop-more-pain-and-then-victory


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## Miner (14 April 2015)

fiftyeight said:


> There is probably a lot more to it than the headlines
> 
> http://www.fmgl.com.au/UserDir/News...ue transparent tax structure explained278.pdf
> 
> But at least Twiggy is not dodging tax like RIO and BHP.




Dear Fiftyeight

Well said. If I may add to what you said, Twiggy is living in Australia and got his office in Australia without any high flying office in London like Rio (yes international company earning  more than 50% wealth from Australia). Twiggy personally runs lots of charitable initiative (thanks Mrs Twiggy) and takes $1 salary (if it is still the case) . Any lead by example from BHPB , Fairfax,  Rio or Kerry Stokes/Ryan Stokes (Seven Media )   ? Funny enough we never point out Rupert Murdoch our great Aussie Hero lives in USA almost permanently while managing Australian media.


----------



## Value Collector (14 April 2015)

stit said:


> Would love to get some opinion on this article. It seems to be very well researched and is one of the few articles i've found that actually break down the situation with real numbers.
> 
> http://seekingalpha.com/article/3058186-fortescue-a-strong-pop-more-pain-and-then-victory




I pretty much agree with the article, FMG is a decent part of my portfolio for the reason he outlined, I said earlier in this thread that I am not banking on a short term uptick in FMG, and that it is a 2-3 year play for me, I believe in 3 years we will be looking back and FMG will be a source of very nice returns in my portfolio.

His comments about fortescues Infrastructure position compared to debt are spot on, FMG is nothing like the mining juniors with their tiny mines and trucking operations, The assets FMG has are highly valuable, and they provide a backstop for FMG should they need cash, plenty of chinese steel mills would be interested in Buying FMG's port and rail infrastructure, Discovered resources and tenements, not to mention power plants and other related infrastructure. 

One thing I feel he didn't focus on enough was the ability for FMG to continue reducing costs over time, costs will steadily be reduced and the difference between FMG and RIO/BHP's production costs will narrow. FMG are coming out of boom period where costs blew out as labour and contracting services were in short supply, but over the past year as FMG has settled into running at full capacity they have found many areas where costs can be reduced, this will continue and as service contracts come up for renewal prices will continue to trend down. Infact today FMG made an announcement about changing rosters to a lower cost model, this sort of thing will continue


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## banco (14 April 2015)

Value Collector said:


> His comments about fortescues Infrastructure position compared to debt are spot on, FMG is nothing like the mining juniors with their tiny mines and trucking operations, The assets FMG has are highly valuable, and they provide a backstop for FMG should they need cash, plenty of chinese steel mills would be interested in Buying FMG's port and rail infrastructure, Discovered resources and tenements, not to mention power plants and other related infrastructure.




I can't imagine the Government approving the sale of port and rail infrastructure to the CHinese.


----------



## notting (14 April 2015)

Miner said:


> But I believe such a lashing on Andrew woas very unfair . He is the only AUSTRALIAN who helped millions of Australians to make money on FMG. He was a loner to fight against big guys like Rio and BHPB.At least he is fighting to save many faces including his own. At least he has not sold off his shares when there was hay day.Yes, FMG is under tremendous financial crisis.




When you balance it out there is no evidence of Andrew uplifting anybody.  He has created an extremely risky entity built on other peoples money and debt whilst singing the praises of the Chinese who are profoundly corrupt and cruel - something Andrew claims to be working against!
That's about it.

I always suspected his mouthing off or so called uplifting the indigenous people is also a way of getting a leg over for land rights and so on.
The pain of all this is now being realized as he kind of side stepped out of the way just before this current implosion.

I would have admired him  had he gotten out of his shares when they were say between 5.50 and 6.  Then spent the rest of his days using that 10 billion to uncover what he really knows about the Chinese culture of vicious atrocities that is systematic in Chinese regime.

It's harder for governments who have to play an element of diplomacy, in order to soften trade deals and hopefully the culture over the longer term. 
Andrew had his chance to make a difference as an individual with great wealth.  Yet he preferred to, well, cover up what is far worse in scale and cruelty to any holocaust the world has seen, by praising the evil Chinese dictatorship, whilst having the gall to say he was trying to fight against slavery and inequality.

Doesn't gel.


----------



## Value Collector (14 April 2015)

notting said:


> When you balance it out there is no evidence of Andrew uplifting anybody.




What do you mean, he has provided plenty of jobs in communities that struggled prior, and he has pushed to provide aboriginals with training and employment opportunities they don't always have.

Any charity work he does is on top of this, I don't see why you are so negative about his community and charity work.



> He has created an extremely risky entity built on other peoples money and debt




Can you name any large infrastructure company that hasn't used debt in the early stages to fund the development of the infrastructure?



> whilst singing the praises of the Chinese who are profoundly corrupt and cruel - something Andrew claims to be working against!
> That's about it.




I doubt any foreigner, let alone an Aussie can influence chinese internal politics, saying that though, the chinese industrialization, built with Australian Iron ore, has lifted millions of people out of poverty. How is this a bad thing. 




> I would have admired him  had he gotten out of his shares when they were say between 5.50 and 6.




That's probably where you and I differ, I admire people who build great companies, and then back them for decades, taking the ups and downs in their stride.



> Then spent the rest of his days using that 10 billion to uncover what he really knows about the Chinese culture of vicious atrocities that is systematic in Chinese regime.




Nothing is going to change the chinese government except changes from within.


----------



## Value Collector (14 April 2015)

banco said:


> I can't imagine the Government approving the sale of port and rail infrastructure to the CHinese.




I couldn't see why they wouldn't, but either way, there is plenty of ways to unlock equity through various financial schemes that would achieve the same result.

BHP/ Rio all have lots of foreign shareholders, So foreigners are already owning Australian port and rail infrastructure. not to mention one of our big coal terminals is Canadian owned.

But it wouldn't have to be chinese anyway, there would be heaps of interest from the chinese, but no doubt BHP and Rio would be interested in making sure those 5 births don't fall into the hands of another competitor, the would be making bids also.


----------



## notting (14 April 2015)

Value Collector said:


> What do you mean, he has provided plenty of jobs in communities that struggled prior, and he has pushed to provide aboriginals with training and employment opportunities they don't always have.



I think you missed the words 'On balance'  meaning the amount being lost now and the cover up of suffering in China and the countries it attacks and occupies.



Value Collector said:


> Any charity work he does is on top of this, I don't see why you are so negative about his community and charity work.



I'm not negative about it in isolation.  I question his motives, it's more like an investment in his own character, which he seldom shy's away from promoting about 'himself.'  Like I said if he really wanted to do that, he could have on a much greater scale.




Value Collector said:


> Can you name any large infrastructure company that hasn't used debt in the early stages to fund the development of the infrastructure?



 It's irrelevant.  It depends on the level of risk, and the greatest enterprises have no debt but massive amounts of cash - like Apple.




Value Collector said:


> I doubt any foreigner, let alone an Aussie can influence chinese internal politics, saying that though, the chinese industrialization, built with Australian Iron ore, has lifted millions of people out of poverty. How is this a bad thing.



You certainly can.  You make them understand that business will be hard for them if they continue to brutalize their own and other people whose countries they occupy.  You also use your means to highlight how the the Chines import children for sex slavery from places like Vietnam.




Value Collector said:


> That's probably where you and I differ, I admire people who build great companies, and then back them for decades, taking the ups and downs in their stride.




I don't admire a fool who builds a highly risky enterprise and can't even save himself when clear fundamentals indicate the risk.  The one who should know the business better than any other should be able to recognize that and know when to exit and save himself for a greater good if that is what he *really* is about.
He claims his main focus is now to abolish slavery and so on so it would make sense that he should have gotten out of FMG as there is a clear conflict of interest, if he still owns a large chunk of a company who is 100% selling to the biggest and most brutal slave nation of them all - China.
His actions are not in line with his claims.




Value Collector said:


> Nothing is going to change the Chinese government except changes from within.




Well if Andrew had cashed out his 10 billion -
He could have perhaps organized global board meeting between all the union leaders in the free world and create a political body that would make it very hard for the Chinese to sell anything unless they provided standards and transparency as to how it was created. 
This would save and create jobs all over the world and show to the Chinese that they will not flourish unless they become humane.  
Andrew could use the union movements because they have a vested interest in employment and they have a genuine moral stance in issues when they get to this horrific level of social abuse by those in power like the Chinese.
Andrew, if he was genuine, also could have used that wealth to shame businesses using the kind of slavery and corruption to make their products and he could advertise against politicians fudging over it to garner trade deals.

Andrew could have added that he believes in free markets, and what needs to be understood is that slavery and brutality is not free, its forced and in the end has consequences for the well being and prosperity of all humanity. China is not a free market it's an evil dictated economy so there is no contradiction in creating and using a unified global union to genuinely fight for humanity.
China is the worst in scale and brutality, so he should address them first, then they could target the Africans and so on who would likely start to change as a result any way.


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## Value Collector (14 April 2015)

As I said I think you are being rather negative towards a guy who has donated millions of dollars to some very good causes, to lump the problems of china on one Australian Business man seems very unfair, plenty of other business leaders selling into china or producing in china that you don't seem to fuss about. I mean do you hold such feelings about other companies such as Apple? or other investors such as Buffet?

Comments on forests personal charity dealings and the chinese government probably are better suited to another thread




notting said:


> I don't admire a fool who builds a highly risky enterprise and can't even save himself when clear fundamentals indicate the risk.





"Can't save himself"????

I think he originally put about $6Million dollars of his own money into Fortescue, and has since earned 100's of millions in dividends, I don't think he needs saving and I don't think he is a fool, If so I wish I was more foolish.

The fundamentals of the business are a lot different than you make out, I have stated my case and am happy to let time prove me right.


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## notting (14 April 2015)

Value Collector said:


> As I said I think you are being rather negative towards a guy who has donated millions of dollars to some very good causes, to lump the problems of china on one Australian Business man seems very unfair, plenty of other business leaders selling into china or producing in china that you don't seem to fuss about.




It's not unfair because he puts himself out there as a bastion against slavery whilst selling into it (the others don't)!
Don't get me started on Murdoch, he ended up being spanked by his lovely Chinese bride, but at least he never said he was all about anti slavery.  This is my point!!!!



Value Collector said:


> "Can't save himself"????




When your net worth has gone from 12Billion or so to 2.4Billion in charity run by your wife, your not saving, your losing, especially when you had grand proclamations and about what you were going to do with it all. I'm calling that foolish.



Value Collector said:


> I think he originally put about $6Million dollars of his own money into Fortescue, and has since earned 100's of millions in dividends, I don't think he needs saving and I don't think he is a fool, If so I wish I was more foolish.



Ah yes but we seem to have lost our focus here once again.  Andrew walks away with millions but billions are lost by others as a consequence of his activities, with not even a moral benefit, ON BALANCE, to anyone (apart from Andrew Forrest).



Value Collector said:


> The fundamentals of the business are a lot different than you make out, I have stated my case and am happy to let time prove me right.




I hope the price of IO turns around and he gets his chance to exit and live up to his claims. It seems like it may be a long road from here, and I doubt he will be around to see it.  So in the end - not impressed.


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## stit (14 April 2015)

Thanks for your response value. What is your take on his numbers re current supply/demand of iron ore? Do you think that it is currently being impacted by market sentiment as much as he says?


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## Value Collector (14 April 2015)

notting said:


> When your net worth has gone from 12Billion or so to 2.4Billion in charity run by your wife, your not saving, your losing, especially when you had grand proclamations and about what you were going to do with it all. I'm calling that foolish.
> 
> 
> .




His wealth went from much less than $50 Million, to a paper high of $12Billion caused by speculation in FMG's share price, and is now at a very reasonable $2.4 Billion.

$50 Million to $2.4 Billion is a massive, I don't think you would complain if that happened in your portfolio. the $12 Billion number was not really real, it was caused by a temporary spike in fmg share price, FMG was not worth $12 a share when it traded that high, so his quoted net worth wasn't real, he couldn't have ever gone to $12Billion cash.

Fmg is actual worth much more today than it was when it's share price hit $12, Just as it wasn't worth $12 then, it's worth much more than it's current share price now.

Also he is not dead yet, he is still relatively young, he still has plenty of time to keep building wealth and donating to causes.



> Andrew walks away with millions but billions are lost by others as a consequence of his activities, with not even a moral benefit, ON BALANCE, to anyone (apart from Andrew Forrest).




Who has lost Billions?

Any one who invested into fortescue at the start has made ship loads of money, the only people you could say have lost are the ones that bought at the high and sold low, but their loss is offset by the zero sum gain of other investors who sold to them, so the market as a whole has made a massive net gain on FMG.

So FMG has made it's investors rich through large capital gains and dividends, Paid Millions to the government in royalties and taxes, Paid millions in wages, Paid millions in interest, paid millions in contracts etc, and brought millions of tonnes of product to an undersupplied market.

Every one seems to have done well, Who lost?


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## Value Collector (14 April 2015)

stit said:


> Thanks for your response value. What is your take on his numbers re current supply/demand of iron ore? Do you think that it is currently being impacted by market sentiment as much as he says?




Yeah, I think market sentiment definitely has an effect, I can't see anything glaringly wrong with his figures, it fits in with other figures I have seen in other company reports and some news releases.

As he pointed out port stocks have gone down, but also I have see other reports that show Mills are holding less stock at the mills as they have run down stocks as the prices have fallen, this can only go on so long, if the price creeps up as seasonal demand comes on, there may be a rush to restock.

But saying that, Its very important to point out this is a 2 - 3 year play.


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## skc (14 April 2015)

I had no idea that mine workers do 8 days on, 6 days off. That's like 42.86% of days off. Compared that to a standard office worker who does 5 days on, 2 days off... which is only 28.57% of days off. 

In other words, the 8/6 roster is like having a 3.75-day weekend every week. 

The change to 2 weeks on, 1 week off makes it 33.33% off time, which is closer to the standard work week.

http://www.afr.com/business/mining/...st-more-than-700-pilbara-jobs-20150414-1mkqd1


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## VSntchr (14 April 2015)

skc said:


> The change to 2 weeks on, 1 week off makes it 33.33% off time



Quantified like a true statistical trader 
Another consideration is travel time.


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## sikboy (14 April 2015)

How many hrs a day are the miners working?


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## notting (14 April 2015)

The conditions are pretty basic and many are fly in fly out so have to spend lots of time without seeing their family and hanging out in these kinds of gigs!!!


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## Value Collector (14 April 2015)

sikboy said:


> How many hrs a day are the miners working?




I think there is two 12 hour shifts a day, but I could be wrong


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## sikboy (14 April 2015)

Yeh that's what I thought. In anyways, I think most miners work longer days than the average office worker so skc's calculations are probably off.


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## Value Collector (14 April 2015)

sikboy said:


> Yeh that's what I thought. In anyways, I think most miners work longer days than the average office worker so skc's calculations are probably off.




Here is the company video showing life at the mine site if you're interested.

[video]https://m.youtube.com/watch?v=Ni8yVMxJDi0[/video]


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## notting (15 April 2015)

Value Collector said:


> Who has lost Billions?




It seems I am talking of potential losses to creditors and yes share holders who bought in at what ever level you believe is reasonable, which by the way is what according to your aspirations/valuation?


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## Value Collector (15 April 2015)

notting said:


> It seems I am talking of potential losses to creditors and yes share holders who bought in at what ever level you believe is reasonable, which by the way is what according to your aspirations/valuation?




Creditors haven't lost anything, all interest is being paid and some creditors have recieved principle early.

And as I explained, investors have received a massive net gain, sure anyone who bought in at $12 and sold out now is down $10 a share, but this is completely offset by the gain the investors who bought in at $0.05 per share and sold at $12. over all, the current market cap is much higher than the capital that was originally injected by investors, plus there has been some dividends larger than the original capital, so there is a net gain over all to investors, if any indivual has lost, that's just poor timing on their part.

You can find people that have lost money on any company, no doubt many people have lost money on cba shares at various times, but cba has generated net gains to investors of billions of dollars, becuase its current market cap is probably more than a million times higher than its founding capital, and it's paid billions in dividends, the fact some people bought in a high and sold at a low isn't the companies fault.

What the true value of the company is will depend on the margin they are able to make and how many tonnes they are able to mine and ship.

I am very confident that the market price of iron ore will eventually settle at a price that bhp, rio, vale, and FMG can all make a decent margin, that will be achieved by high cost ore leaving the market, the remaining players reducing costs, I believe when this happens FMG will beable to make between $10 and $20 per tonne.

if FMG can make $10 per tonne, they are easily worth $6 - $8 per share, at $20 per tonne they could be worth $15 per share.

as I said this is going to be maybe a 2-3 year play, but the rewards for me will be well worth the wait.


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## notting (15 April 2015)

FMG right now has a market value of $5,5 Billion.
Has debts between 8 and 9 Billion, is losing money at the current price of IO.  
Will need to pay interest on that 8 to 9 Billion.  
That's around a 3 to 4 Billion dollar negative.
I guess you could call these Billions of dollars of losses in it's current predicament and counting!


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## Miner (15 April 2015)

sikboy said:


> How many hrs a day are the miners working?






Value Collector said:


> I think there is two 12 hour shifts a day, but I could be wrong




Not sure if this will make sense to some who are unaware of FIFO system
If a Miner works 8+6 system means he or she will work 8 days straight @12 hours. If you compare this with some one 9 to 5 working 40 hours per week plus annual leave, public holidays, sick leave etc.
A person with FIFO work does not get annual leave or public holidays. So eventually over two weeks a Miner works 48 hours per week. Plus penalty for working additional hours, plus free food and lodging, plane fare. 
So it is immaterial if a Miner works 12 hours a day.
Before any one gets too concerned,  a Central Asian Miner asking to work 11.5 hours per day for 6 days a week and 6 hours on 7th day, no break for 8 continuous weeks and then 32 hours total travel time between Perth to the minesite on 8+2 schedule. If you see what life others have to in mines outside Australia, the FIFO schedule for companies like FMG with 1 - 2 hours flight is working in heaven. Please do not forget most of the times Australian Miners travel on company hours. If people still are unhappy, they should go to work in China, Mongolia or Kazakhstan to know the reality.
DO not hold FMG.


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## galumay (15 April 2015)

Miner said:


> A person with FIFO work does not get annual leave




Yes they do, every worker gets annual leave.


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## galumay (15 April 2015)

skc said:


> I had no idea that mine workers do 8 days on, 6 days off. That's like 42.86% of days off. Compared that to a standard office worker who does 5 days on, 2 days off... which is only 28.57% of days off.




Its more meaningful to look at average weekly hours, the better sites have even time rosters, so the last place I worked at the FIFO's were on 8 days on, 8 days off. This works out to be an average of 42 hours per week.

8 days on 6 days off works out to 48hrs a week on average.

2 week on, 1 week off works out to 56hrs a week on average.

% of days off doesnt work as a comparison because of the difference in the length of the work days.


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## Value Collector (15 April 2015)

notting said:


> FMG right now has a market value of $5,5 Billion.
> Has debts between 8 and 9 Billion, is losing money at the current price of IO.
> Will need to pay interest on that 8 to 9 Billion.
> That's around a 3 to 4 Billion dollar negative.
> I guess you could call these Billions of dollars of losses in it's current predicament and counting!




Ok, there is a few things wrong with your logic here,

Firstly, FMG might be marginally losing money at the current price, however this is based on the production cost listed in the last operating results, these production costs have been steadily reducing, so in the next report we will probably find the production costs have further reduced. Also, this marginal loss is after interest on the loans have been paid, so bond holders are not losing yet, and a third thing you have to realise is that this production cost includes depreciation and amortisation, which includes some non cash costs, for example they are writing off their equipment at a higher dollar value each month than what they actually have to spend to maintain it, and the amortisation expense can actually go to pay the debt which was used to buy the asset that is being amortised.

You also don't seem to have any idea of how to calculate enterprise value, you don't simply subtract debt from market cap to work out the value of a company, you add the market cap and the debt together, to get an enterprise value. And if you want to work out the safety of the debt holders position you compare the debt to the value of the total assets of the company, and compare interest costs to cashflow.

Eg, the enterprise value of FMG = the total amount of capital contributed by debt holders + market cap

For example if I started a real estate firm, by buying a $500k house, I might get $400k from bond holders and $100k from investors. When the stock lists on the market, it might have a Market cap of $100k, the fact that the market cap is less than the bonds doesn't mean the bond holders have lost, because the bonds are worth less than the total assets which is the $500k house.

In fact one way to look at it is that the market cap, is the value the market has put on the equity held in the company, and that equity is the bond holders buffer, that protects their position, just like a deposit on a home loan, banks want you to put up a deposit, so that their loan is protected by a buffer of equity.


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## notting (15 April 2015)

Value Collector said:


> so bond holders are not losing yet, and a third thing you have to realise is that this production cost includes depreciation and amortisation, which includes some non cash costs, for example they are writing off their equipment at a higher dollar value each month than what they actually have to spend to maintain it, and the amortisation expense can actually go to pay the debt which was used to buy the asset that is being amortised.
> And if you want to work out the safety of the debt holders position you compare the debt to the value of the total assets of the company, and compare interest costs to cashflow.
> 
> Eg, the enterprise value of FMG = the total amount of capital contributed by debt holders + market cap
> ...




No Bond holders are not losing YET!
Enterprise value is fanciful and the assets are not worth anything if they are loss making and stuck in the middle of nowhere.
Comparing FMGs so called assets to a house in which you can actually live is untenable.
Writing off excessively your depreciation is probably better done in the good times for tax reduction, not in the bad times!

yesterdays closing price action on BCI and FMG was very strong with a slight continuation of the IO price rise last night, indicates to me that the Chinese mills may be starting to restock. Lets see how far it goes.

Not much of a rally yet however -


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## Miner (15 April 2015)

galumay said:


> Yes they do, every worker gets annual leave.




Great news.
I have worked FIFO from Telfer to Perth, Pilbara to Perth, Vancouver to Perth, Peru to Perth and now doing Madagasar to Perth. 
The annual leaves are always factored with Fly Out section.
I would be thankful to know which company in world offers annual leave for FIFO workers and could you forward my resume to them ?
It is a serious  question and love to hear .


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## pilots (15 April 2015)

Miner said:


> Great news.
> I have worked FIFO from Telfer to Perth, Pilbara to Perth, Vancouver to Perth, Peru to Perth and now doing Madagasar to Perth.
> The annual leaves are always factored with Fly Out section.
> I would be thankful to know which company in world offers annual leave for FIFO workers and could you forward my resume to them ?
> It is a serious  question and love to hear .




I worked all my life FIFO, one job we was on it was 91 days on and 91 off, this was to avoid Australian tax,  I never once got annual leave.


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## galumay (15 April 2015)

Miner said:


> .
> I would be thankful to know which company in world offers annual leave for FIFO workers and could you forward my




BHP, RIO & FMG to start with. I thought you said you had worked for all of them.

Its part of the National Employment Standards, its an entitlement enshrined in law

"*Who is entitled to annual leave?
*
_*All employees (except for casual employees) get paid annual leave."*_

http://www.fairwork.gov.au/leave/annual-leave


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## Value Collector (15 April 2015)

notting said:


> No Bond holders are not losing YET!
> Enterprise value is fanciful and the assets are not worth anything if they are loss making and stuck in the middle of nowhere.




So you agree, Billions have not been lost due to Andrew forests formation of Fortescue, and the net affect on the market, employees, government revenue, and the supply of material to a market that needed it has been positive to the affect of many Billions of dollars.

Enterprise value is not fanciful, it's a measure of the value of a company, it's a much more accurate measure of the value of an organisation than simply referring to a companies market cap as you did, which is just a measure of the current market value of the equity. Bond holders are stakeholders in the company just like equity holders, bonds and debt securities are just another part of the capital structure.



> Comparing FMGs so called assets to a house in which you can actually live is untenable.






The share holders of a real estate firm can not just "Move into" their real estate.



> Writing off excessively your depreciation is probably better done in the good times for tax reduction, not in the bad times!





It's not about writing off excessively, My point is that some of the things they are writing off do not require cash to replace them at all, and some have will have residual value long after they have been written off.


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## notting (15 April 2015)

I say that billions have been lost in terms of value with respect to speculation on FMG.  
Those who invest perhaps underestimate the risks due to claims by people like Andrew about how the Chinese know what they are doing and it's going to go on for decades!. He should know, he's in with them and considered an industry guru according to those who believe/d him!

I'm highlighting the risks of the reality of the current position vs enterprise fantasies entirely based on hope for future IO price rises at the *end* of the biggest mining boom ever.  
There may never be another mining boom like what we have just seen and the end is likely to run for far longer than expected. Not good for an oversupplied market still geared for that boom, and worst for higher cost over leveraged enterprises!!

I'm not blaming Andrew for anything other than running a massively risky enterprise at other peoples risks, having questionable motives with respect to his charitable dealings as he praises the worlds worst monsters - the Chinese - whilst holding a halo above his own head claiming to be a champion of the opposite of what the Chinese do.

The Chinese were still stimulating the fake housing boom during the GFC, when FMG was arguably insolvent.  So there was some enterprise hope at that point but not from the realistic.  The Chinese have exhausted that kind of stimulus and let it run for way, way too long. So there really is little to raise FMG off it's knees.


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## Value Collector (15 April 2015)

notting said:


> I say that billions have been lost in terms of value with respect to speculation on FMG.




FMG has steadily built value since it listed, as I have described the market has had a net increase in value due to FMG.

If everyday I bought $1000,000 of shares from you and sold them back to you at $2000,000 the next day, then your losing $1000,000 every two days, But I am making $1000,000 every to days, the two transaction offset each other, you can't complain that the complain that the company we are trading has lost you millions. your trading has lost you millions.

The company is probably building value everyday regardless of the trading losses you make, it's up to you to have a strategy that lets you profit from the value building inside the company you trade.



> I'm highlighting the risks of the reality of the current position vs enterprise fantasies entirely based on hope for future IO price rises at the *end* of the biggest mining boom ever.




your negative sentiment is based on pessimism of future iron prices, you don't know what the price will be in 2 years.

If Iron ore stays at current levels, a lot of supply will leave the market before FMG is squeezed, and tonnes leaving the market will have a positive effect price support. If FMG shut down today, the price of Iron ore would sky rocket, So their assets have value and are needed by the market, that creates a back stop for bond holders and equity holders.




> There may never be another mining boom like what we have just seen and the end is likely to run for far longer than expected. Not good for an oversupplied market still geared for that boom, and worst for higher cost over leveraged enterprises!!




we don't need a another mining construction boom, we just need the price to settle at a little higher rate than where FMG's production prices settle, Both production costs and price have fallen dramatically, Fmg has the scale to continue lowering costs, and I believe will eventually get a healthy margin.



> when FMG was arguably insolvent.




FMG has never been insolvent.


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## notting (15 April 2015)

Value Collector said:


> FMG has steadily built value since it listed, as I have described the market has had a net increase in value due to FMG.




I don't consider market increased balanced off by debt as value appreciative.  It's currently 3 Billion or so in negative value relative to debt.

It's utterly dependent on IO price which is looking sick.



Value Collector said:


> If Iron ore stays at current levels, a lot of supply will leave the market before FMG is squeezed, and tonnes leaving the market will have a positive effect price support. If FMG shut down today, the price of Iron ore would sky rocket, So their assets have value and are needed by the market, that creates a back stop for bond holders and equity holders.




RIO, Vale and BHP could fill any hole left by the demise of FMG without any increase in commodity price and probably will. Vale is undergoing a massive expansion then there is Glencore and Roy Hill.  These are the realistic  fundamentals and no drunken rants at Chinese lunches will make them curb for Andrew's sake.  

Leaving Andrew's 'moral' pontificating aside - it comes down to IO price and there is over capacity and oversupply even if the mining boom was still on!  There is nothing on the 5 year horizon that can soak up all the overcapacity of higher grade IO to lift prices.


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## Value Collector (15 April 2015)

notting said:


> I don't consider market increased balanced off by debt as value appreciative.  It's currently 3 Billion or so in negative value relative to debt.
> 
> .




Every dollar that FMG has taken from equity holders and bondholders (together them make up the capital of FMG), has been used to develop assets that are worth more than the cash used to purchase them, these assets have also be run profitably for a few years and produced cash flow that has been used to pay interest and some principle to the bond holders, and pay dividends to the equity holders over and above the original capital they injected into the enterprise.

So yes the company has been steadily building value.



> RIO, Vale and BHP could fill any hole left by the demise of FMG without any increase in commodity price and probably will. Vale is undergoing a massive expansion then there is Glencore and Roy Hill.  These are the realistic  fundamentals and no drunken rants at Chinese lunches will make them curb for Andrews sake.




No, if you took away fmg's production in the last 12months, the stock piles of Iron ore and finished product would be gone, and the price of Iron ore would be over $180/ tonne.

But before fmg turns off production, many other will


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## notting (15 April 2015)

Value Collector said:


> But before fmg turns off production, many other will




Both RIO and Vale where publicly voicing that China would stop unprofitable mining of IO and that would take out enough to keep things afloat.
The glorious manipulating cheating Chinese responded with subsidies violating trade agreements as usual. Last hopes, dashed.
The 'many' small fry are irrelevant as previously stated. 
Who of significance will fold before FMG, exactly?


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## Value Collector (15 April 2015)

notting said:


> Both RIO and Vale where publicly voicing that China would stop unprofitable mining IO and that would take out enough to keep things afloat.




Lots of Chinese mines have shut, and of the 200 Million tonnes they produce, more will shut, some state run mines will stay, but not all.




> The 'many' small fry are irrelevant as previously stated.
> Who of significance will fold before FMG, exactly




The small miners are not irrelevant, as a group they make up a lot of production.

There are plenty of mines struggling at this stage, Atlas is just one example.

But look I have said my piece, we just need to wait and see now. In the mean time I think you do need to brush up on your basic understanding of business and how the capital structures work, and how companies generate value for security holders, Here is a great video I suggest you watch.


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## notting (15 April 2015)

Thanks Value Collector for the discussion. 
I like Bill Ackman, reminds me of someone.


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## stit (15 April 2015)

Value Collector said:


> Yeah, I think market sentiment definitely has an effect, I can't see anything glaringly wrong with his figures, it fits in with other figures I have seen in other company reports and some news releases.
> 
> As he pointed out port stocks have gone down, but also I have see other reports that show Mills are holding less stock at the mills as they have run down stocks as the prices have fallen, this can only go on so long, if the price creeps up as seasonal demand comes on, there may be a rush to restock.
> 
> But saying that, Its very important to point out this is a 2 - 3 year play.




eah I have seen the reports that mills have been reducing their inventory - I think these reports date back to around November last year. However if this is the case where is the surplus iron ore??? The level of inventory at port has remained relatively unchanged at approx 100 million tonnes since 2013. Lets assume that the mills have reduced inventory by a nominal figure of 5% per month - does this not suggest that port inventories increase by an avg of 5 million a month?. A five million tonne increase per month would also be in line with analysts predictions of a 50 million tonne surplus this year. So without compounding, by the end of april, port stocks should be touching 120m tonnes right?? Why have port stocks actually been decreasing??? Are these analysts banking on the christmas fairy delivering 50 million tonnes in December - because i can't see where its materialising at the moment.

These same analysts would also have us believe that by 2018 we will have an oversupply of 200 million tonnes, but iron ore will still be commanding $40 per tonne???? How can this possibly be a reality when ore is only commanding $50 per tonne with an assumed surplus of maybe 20 million tonnes - which isn't even apparent currently based on port inventory stocks. Common sense based on current market dynamics would dictate that if the industry ever ended up with a surplus of 200 million tonnes that ores currency would be zero - it would be worthless. Its like they pluck these numbers out of there @ss. 
,
I guess what my query is in all that ramble, is there any real hard evidence, by any of these genius analysts or other, to support that there is currently a surplus in stock? They just seem to be fools that have re adjusted there outlooks down every month with no hard evidence to back it up. I fail to understand how prices have more than halved since 2013 without any change held in port inventories since that point. If not, can market sentiment really be that influential, because the current collapse in price can't be backed up with data?? Would love to hear your input


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## stit (15 April 2015)

Thanks Value:

eah I have seen the reports that mills have been reducing their inventory - I think these reports date back to around November last year. However if this is the case where is the surplus iron ore??? The level of inventory at port has remained relatively unchanged at approx 100 million tonnes since 2013. Lets assume that the mills have reduced inventory by a nominal figure of 5% per month - does this not suggest that port inventories increase by an avg of 5 million a month?. A five million tonne increase per month would also be in line with analysts predictions of a 50 million tonne surplus this year. So without compounding, by the end of april, port stocks should be touching 120m tonnes right?? Why have port stocks actually been decreasing??? Are these analysts banking on the christmas fairy delivering 50 million tonnes in December - because i can't see where its materialising at the moment.

These same analysts would also have us believe that by 2018 we will have an oversupply of 200 million tonnes, but iron ore will still be commanding $40 per tonne???? How can this possibly be a reality when ore is only commanding $50 per tonne with an assumed surplus of maybe 20 million tonnes - which isn't even apparent currently based on port inventory stocks. Common sense based on current market dynamics would dictate that if the industry ever ended up with a surplus of 200 million tonnes that ores currency would be zero - it would be worthless. Its like they pluck these numbers out of there @ss. 
,
I guess what my query is in all that ramble, is there any real hard evidence, by any of these genius analysts or other, to support that there is currently a surplus in stock? They just seem to be fools that have re adjusted there outlooks down every month with no hard evidence to back it up. I fail to understand how prices have more than halved since 2013 without any change held in port inventories since that point. If not, can market sentiment really be that influential, because the current collapse in price can't be backed up with data?? Would love to hear your input


----------



## stit (15 April 2015)

sorry re the double post!!!


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## Value Collector (15 April 2015)

stit said:


> eah I have seen the reports that mills have been reducing their inventory - I think these reports date back to around November last year. However if this is the case where is the surplus iron ore??? The level of inventory at port has remained relatively unchanged at approx 100 million tonnes since 2013. Lets assume that the mills have reduced inventory by a nominal figure of 5% per month - does this not suggest that port inventories increase by an avg of 5 million a month?. A five million tonne increase per month would also be in line with analysts predictions of a 50 million tonne surplus this year. So without compounding, by the end of april, port stocks should be touching 120m tonnes right?? Why have port stocks actually been decreasing??? Are these analysts banking on the christmas fairy delivering 50 million tonnes in December - because i can't see where its materialising at the moment.
> 
> These same analysts would also have us believe that by 2018 we will have an oversupply of 200 million tonnes, but iron ore will still be commanding $40 per tonne???? How can this possibly be a reality when ore is only commanding $50 per tonne with an assumed surplus of maybe 20 million tonnes - which isn't even apparent currently based on port inventory stocks. Common sense based on current market dynamics would dictate that if the industry ever ended up with a surplus of 200 million tonnes that ores currency would be zero - it would be worthless. Its like they pluck these numbers out of there @ss.
> ,
> I guess what my query is in all that ramble, is there any real hard evidence, by any of these genius analysts or other, to support that there is currently a surplus in stock? They just seem to be fools that have re adjusted there outlooks down every month with no hard evidence to back it up. I fail to understand how prices have more than halved since 2013 without any change held in port inventories since that point. If not, can market sentiment really be that influential, because the current collapse in price can't be backed up with data?? Would love to hear your input




The level at the ports has declined by about 25million tonnes in the past year, at one point it was a little over 120million tonnes, it's now at around 96million, and some reports are saying that stocks at mills have declined, some mills are holding only a few days supply.

To me this suggests, Some of the recent price fall is caused by traders exiting position of physical ore, So the traders reducing their port holdings has been effectively adding a short term supply, also due to weakness, mills have been running down stocks thinking they can rebuy later at a cheaper price, so some of the price decline is due to a burning off of inventory.

The only reason I can think that port inventories have not risen, and actually gone down, is that the extra australian and Brazilian supply is being offset by chinese supply reductions, chinese finished product exports or increased local chinese usage. Some chinese mines have definitely closed.


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## Miner (16 April 2015)

pilots said:


> I worked all my life FIFO, one job we was on it was 91 days on and 91 off, this was to avoid Australian tax,  I never once got annual leave.






galumay said:


> BHP, RIO & FMG to start with. I thought you said you had worked for all of them.
> 
> Its part of the National Employment Standards, its an entitlement enshrined in law
> 
> ...




Galumay
Please read what Pilots said.
I think you are perfect to take a role of Australian Treasurer Joe Hockey or WA Minister Mike Nathan (who denied the iron price would come down when it came at $100 per ton). 
There are always some people who do not want to learn and I can see one here. Good luck. Do not want to waste my energy here. Good luck.


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## galumay (16 April 2015)

Miner said:


> Galumay
> Please read what Pilots said.



I did, I was replying to him too. (one possibility that comes to mind is that all his work was off shore and not subject to australian law given his tax comment.)



> I think you are perfect to take a role of Australian Treasurer Joe Hockey or WA Minister Mike Nathan (who denied the iron price would come down when it came at $100 per ton).




Sorry, but I have no idea what you are talking about. You claimed to have worked for RIO, BHP & FMG, all of their FIFO workers get annual leave, as does every FIFO worker in Australia, because its the law - the law that I linked to.

I have worked in this industry for 35 years and never seen or heard of a case of a company here not providing what is one of the core conditions of employment in Australia.



> There are always some people who do not want to learn and I can see one here. Good luck. Do not want to waste my energy here. Good luck.




Oh the irony! And good luck to you too!


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## qldfrog (16 April 2015)

galumay said:


> I did, I was replying to him too. (one possibility that comes to mind is that all his work was off shore and not subject to australian law given his tax comment.)
> 
> 
> 
> ...



I worked for BHP and Vale, and always as contractor.
The high $ received was indeed paid against a no paid leave context;
I assume most FIFO are contractors as well;
It is a choice; 
When FIFO O/S for Vale, as I have a white collar job (8h/d 5dper week) I did not receive any day on/day off, just working 3 weeks overseas and one week here; time for travel was not paid, and I was taking a day off (unpaid) when back in Oz;
a lot of FIFO are on similar deal; the high $ is deserved..believe me.
As a proof, I do not know of many people who can carry FIFO for too long.Even with VERY good money


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## stit (16 April 2015)

[The only reason I can think that port inventories have not risen, and actually gone down, is that the extra australian and Brazilian supply is being offset by chinese supply reductions, chinese finished product exports or increased local chinese usage. Some chinese mines have definitely closed.]


To my understanding the 100m at port is roughly 70% presold and the remainder is effectively auctioned off creating the "spot price". If I'm understanding you correctly given port stocks are actually declining, steel output has remained flat and overall monthly imports have remained steady at 80 million that there is quite possibly a deficit in supply and not a surplus. Also mills are trying to manipulate the price in combination with pessimistic sentiment to drive the price down. Its interesting to me how everything that analysts seem to say is negative - surely its not to difficult for them to see these numbers for themselves? Instead when the chinese government cuts tax by a measly few bucks ( which would be the minimum expected token political gesture ), all you hear is them crowing about  the demise of the whole industry. Like you say the only plausible explanation is that chinese mines have been closing - not that they're invincible due to mill and state support due to a political gesture. I think they have a lot to answer for with regards to the industry sentiment. 

A lot has been said about roy hills 50 m this year - but to my understanding they're only planning to export a maximum of 5m this year and that 70% of what she produces will go directly to business partners, leaving the remaining 30% for sea bourn trade. 50 million is the mines maximum production - not what they're adding to the market this year - but again, this is what is reported in the media and by analysts.

It would seem inevitable that the stock has been oversold and will be interesting to see what the correction will be and when


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## galumay (16 April 2015)

qldfrog said:


> I worked for BHP and Vale, and always as contractor.
> The high $ received was indeed paid against a no paid leave context;




An independent contractor is not an employee.



> I assume most FIFO are contractors as well;




No, nearly all employees on remote mine sites are FIFO, very few site based these days. All of them have to get annual leave.

Independent contractors are a small part of the workforce in % terms.


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## Value Collector (16 April 2015)

stit said:


> [The only reason I can think that port inventories have not risen, and actually gone down, is that the extra australian and Brazilian supply is being offset by chinese supply reductions, chinese finished product exports or increased local chinese usage. Some chinese mines have definitely closed.]
> 
> 
> To my understanding the 100m at port is roughly 70% presold and the remainder is effectively auctioned off creating the "spot price". If I'm understanding you correctly given port stocks are actually declining, steel output has remained flat and overall monthly imports have remained steady at 80 million that there is quite possibly a deficit in supply and not a surplus. Also mills are trying to manipulate the price in combination with pessimistic sentiment to drive the price down. Its interesting to me how everything that analysts seem to say is negative - surely its not to difficult for them to see these numbers for themselves? Instead when the chinese government cuts tax by a measly few bucks ( which would be the minimum expected token political gesture ), all you hear is them crowing about  the demise of the whole industry. Like you say the only plausible explanation is that chinese mines have been closing - not that they're invincible due to mill and state support due to a political gesture. I think they have a lot to answer for with regards to the industry sentiment.
> ...




Yes, Have you read the Fortescue quarterly production update that was released this morning. Production costs have dropped again, So any recovery in the Iron ore price is going to very good margins develop.

Also, FMG completed it's 5th ship berth in march, So growth capital spending is now complete, capital expenditure is now limited to sustaining capital, which they have also been able to reduce also.


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## Bintang (16 April 2015)

Value Collector said:


> Yes, Have you read the Fortescue quarterly production update that was released this morning. Production costs have dropped again, So any recovery in the Iron ore price is going to very good margins develop.




Interestingly they provide a break even price guidance (with breakdown) for FY16 of US$39/dmt 62% Platts, which is based on a much further reduced C1 cost (US$18/wmt) than for Q3 (which was US$25.9/wmt)

It remains to be seen if they can actually achieve a C1 of US$18/wmt but even if they can I think the iron ore price needs to get back to at least US$55/dmt 62% Platts (annual average basis)  to justify the current share price.


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## notting (16 April 2015)

Report is encouraging.
The figures are almost hard to believe with all in costs forecast to drop to  US$39/dmt.
Lets hope IO stays above US$40dmt for FMGs sake.

250 loss making WMTs is still being pumped into the market according to Nev.
This is what RIO, BHP, Vale and FMG must all be a little puzzled by.
Perhaps China is looking to buy something!

The question a lot of people like Sam Walsh were openly asking was, ‘Why did Andrew make that speech in front of his Chinese customers, basically calling for a cartel.’

Answer: It was a sales pitch! 

Between the lines - ‘Buy FMG and supply yourselves.  If you want to insure against a cartel.”

Makes sense.


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## Value Collector (16 April 2015)

Bintang said:


> Interestingly they provide a break even price guidance (with breakdown) for FY16 of US$39/dmt 62% Platts, which is based on a much further reduced C1 cost (US$18/wmt) than for Q3 (which was US$25.9/wmt)
> 
> It remains to be seen if they can actually achieve a C1 of US$18/wmt but even if they can I think the iron ore price needs to get back to at least US$55/dmt 62% Platts (annual average basis)  to justify the current share price.




If they can clear a $10 profit on each tonne, they are worth over $6 / share, at $10 profit per tonne, their current dividend policy of paying 30% of profits as dividend would have them paying a 10% fully franked yield on todays share price.


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## Value Collector (16 April 2015)

notting said:


> Report is encouraging.
> The figures are almost hard to believe with all in costs forecast to drop to  US$39/dmt.




It's not that hard to believe, production costs have been trending down for ages, that's what I was talking about over the last few days.

As a company brings it's projects online, and settles into production, it's natural that production costs decline, add to that the ballooned costs projects faced during the construction boom, it makes complete sense that as the construction boom fades, and there is less competition for labour and the many other services, costs reduce.

FMG's projects are large scale projects, there is no reason why they can't eventually get their operating cash costs down near BHP and RIO, Paper costs will look higher for some time, because a lot of Rio and BHP's infrastructure is older so depreciation expenses are less, but when it comes to running costs and sustaining capital, the gap will be narrowed, it's inevitable.

And when prices stabilise, the low cost FMG will be making a healthy margin.

Small guys like Atlas are a different story, they have far less productivity levers to pull, and the projects don't have scale, it's companies like them that are the ones who will switch off, not FMG.

It all comes back to scale and infrastructure, FMG has it.


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## Value Collector (16 April 2015)

Here is a reminder of FMG's scale, compare it to the small guys like Atlas, and the many other small miners around the world and you will find there is no comparison, and the flexibility of supplying any steel mill near a port. I wouldn't be surprised if many steel mills around the world mothballed local high cost Ore production and came to the sea borne market


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## Bintang (17 April 2015)

Value Collector said:


> If they can clear a $10 profit on each tonne, they are worth over $6 / share, at $10 profit per tonne, their current dividend policy of paying 30% of profits as dividend would have them paying a 10% fully franked yield on todays share price.



If I understand you correctly this implies they can achieve and maintain net profit after tax of close to US$1500 million.  They might get that if iron ore prices average US$65/dmt  (Platts 62) and oil prices stay at $50/bbl.  Even then a dividend payout of A$0.19/share hardly justifies a share price over $6.00. An investor would be better off buying TLS for $6.25 and getting a dividend of $0.30/share.

Goldman Sachs have just issued a “sell” recommendation on FMG with a target price of 50cents, which I am forced to agree with if their iron ore price scenario is accurate.

Goldman Sachs slaps 'sell' on Fortescue


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## Value Collector (17 April 2015)

Bintang said:


> If I understand you correctly this implies they can achieve and maintain net profit after tax of close to US$1500 million.  They might get that if iron ore prices average US$65/dmt  (Platts 62) and oil prices stay at $50/bbl.  Even then a dividend payout of A$0.19/share hardly justifies a share price over $6.00. An investor would be better off buying TLS for $6.25 and getting a dividend of $0.30/share.
> 
> Goldman Sachs have just issued a “sell” recommendation on FMG with a target price of 50cents, which I am forced to agree with if their iron ore price scenario is accurate.
> 
> Goldman Sachs slaps 'sell' on Fortescue




A $0.19 cent dividend on today's price a 10% franked yield, that's better than Telstra, and FMG return on equity would be better.

It's strange you mention Telstra, because if you look at the Telstra thread, most people were saying telstra was a bad investment at $3, when it was paying nearly a 10% dividend. Suddenly it sky rockets, making halving the yield and every thinks it's a great investment?????

I think it's th old trap, stock falls bad bad,... Stock goes up good good,

People that bought Telstra at $3 will do a lot better than people that bought now


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## stit (17 April 2015)

Value Collector said:


> Yes, Have you read the Fortescue quarterly production update that was released this morning. Production costs have dropped again, So any recovery in the Iron ore price is going to very good margins develop.
> 
> Also, FMG completed it's 5th ship berth in march, So growth capital spending is now complete, capital expenditure is now limited to sustaining capital, which they have also been able to reduce also.




Yes have seen the report which is good news. It underlines that fortescue continues to achieve what it says its going to do. It was only february that most "analysts" refused to believe that fortescue could have reduced their production costs down from $70 to roughly $50. I think when fortescue did, it was the trigger for most of these genius's to revise their "floor" price  yet again. I've read that further savings of 50 - 60c per tonne are estimated in the re gig of the roster. Not sure what additional savings will be when they convert to gas from diesel with the completion of their gas pipeline, but would imagine this would be a substantial saving. Couple this with the automated trucks they're also looking to implement it doesn't seem too far fetched that they could reduce costs by another 5$ per tonne in the very near future. If they manage do to this it would seem they will lower than position on the cost curve to a point that they will be able to break even at the most current bearish forecast. Again - when you consider the estimates that 3 in every 4 tonnes of ore being produced at current prices is at a loss - i fail to see how the rout can continue as long as analysts would have us believe.

Read the goldman report - again I wish these analysts would back up their claims with hard facts. Again where is all this surplus ore??? They must have their own secret port in china somewhere. And again - how they think ore would still command $40 per tonne if there ever was 200 million surplus tonnes of the stuff is just fantasy land given we're currently already at $50.

Value - what do you know about vale? A lot of reports have their break even above $50 which seems excessively high given they're such a large scale producer. Is this just more "analyst" number plucking? If its correct, why is it so high? Is it additional freight and taxes debt expenses? If it is also really this high do "analysts" really believe that they will continue to strive for 400 million tonne output at a $10 per tonne loss? Seems a little unrealistic if thats the case?


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## notting (17 April 2015)

Vale have stated that when they crank up after their expansion they will be able to do it at 18 WMT.  They are much bigger than FMG.
I suspect RIO and BHP are trying to trip them up before they can do that given the debt load of their expansion plans.
FMG is just kind of stuck in the middle of that dog fight.


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## Bintang (17 April 2015)

Value Collector said:


> A $0.19 cent dividend on today's price a 10% franked yield, that's better than Telstra, and FMG return on equity would be better.
> 
> It's strange you mention Telstra, because if you look at the Telstra thread, most people were saying telstra was a bad investment at $3, when it was paying nearly a 10% dividend. Suddenly it sky rockets, making halving the yield and every thinks it's a great investment?????
> 
> People that bought Telstra at $3 will do a lot better than people that bought now




TLS was unusual because the share price got beaten down by the Future Fund dumping shares while people also claimed TLS was bleeding cash and could not continue paying their 28 cent dividend. But total revenue and profit were maintained, the dividends kept coming and the doubters were proved wrong.

However, for FMG their after tax net profit has plummeted. It was US$2740 million in 2014 FY and will probably come in around US$550 in 2015 FY. After that if the reference iron ore price remains at US$50/dmt they will struggle to achieve NPAT greater than $450 million even if they can get C1 costs down to $18/wmt.


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## notting (17 April 2015)

Bintang said:


> TLS was unusual because the share price got beaten down by the Future Fund dumping shares while people also claimed TLS was bleeding cash and could not continue paying their 28 cent dividend. But total revenue and profit were maintained, the dividends kept coming and the doubters were proved wrong.




I was saying TLS was a buy at the time.  It was a good call on account of the hunt for yeild that prevailed afterword, it was a lucky call when Rudd decided to buy up the copper lines for the NBN!! Very lucky.  Nobody could see that idiot coming.

I have had a 60c number that just kept jumping into my head on FMG since about September 2014.  I always feel good when Goldman starts to agree about a year later. 
Although they are going for 50c!


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## Bintang (17 April 2015)

notting said:


> I was saying TLS was a buy at the time.  It was a good call on account of the hunt for yeild that prevailed afterword, it was a lucky call when Rudd decided to buy up the copper lines for the NBN!! Very lucky.  Nobody could see that idiot coming.
> 
> I have had a 60c number that just kept jumping into my head on FMG since about September 2014.  I always feel good when Goldman starts to agree about a year later.
> Although they are going for 50c!




I don't own FMG and never have but I will get interested if the price drops below $0.70


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## Miner (17 April 2015)

Bintang said:


> I don't own FMG and never have but I will get interested if the price drops below $0.70




Great call. I will send you a bottle of scotch or bunch of flowers depending on if  you are a He or She if the price even drops down $1. Would you send me just a token $5 if next 12 months   FMG price rises about $2 ? 
I do not hold FMG but believe on Andrew's leadership, have seen closely how he walks the talk and have some understanding of FMG ore body being involved directly with the expansion . My contractual obligation to deal with FMG will be soon over and hopefully will acquire some FMG as my pocket allows at that time. No price speculation here.
Yes Yes, I burnt on AGO not because of any thing but poor leadership there and scale of economy with the synergy of my stupidity and blindness.
Regarding some of the posters' reference to Goldman and other analysts. Those people are mostly suit and tie  bean counters, use software and may not have adequate hands on knowledge even how a process for iron ore or any commodity works. How many times Goldman went wrong  just  like many of us ?

Besides what Goldman publishes in public could be opposite what they recommend their high profile clients purely by ramping. Why should they provide some free advise when they are obligated to create values for their captive clients.

One of the reputed brokers told me how they stack the market opinion . Remember a famous broker (Chris of Southern Cross Equities now owned by Bell)  batted for FMG when Quinton (Bell) and other brokers were not even looking FMG of any value. I still remember Quinton (check the spell) of Bell Potter said in an open meeting 'I will not touch FMG ever" only to be seen Bell Recommended FMG as a buy within 3 years. If we go buy / sale  what broker says in public that is a wonderful decision. 
DYOR any way.


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## Value Collector (17 April 2015)

Miner said:


> Great call. I will send you a bottle of scotch or bunch of flowers depending on if  you are a He or She if the price even drops down $1. Would you send me just a token $5 if next 12 months   FMG price rises about $2 ?
> .




Lol, I would be happy to bet a bottle of scotch $1= I lose, $3 =I win.


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## Bintang (17 April 2015)

Miner said:


> Great call. I will send you a bottle of scotch or bunch of flowers depending on if  you are a He or She if the price even drops down $1. Would you send me just a token $5 if next 12 months   FMG price rises about $2 ?






Value Collector said:


> Lol, I would be happy to bet a bottle of scotch $1= I lose, $3 =I win.




Thanks for the offer but I was not making a call.
I was simply stating the price level at which I might become interested to buy.
The market has never agreed with my valuation of anything but sometimes it disagrees higher and sometimes it disagrees lower. I just try to pick what I think are the opportunities.


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## Miner (17 April 2015)

some followers of FMG https://au.news.yahoo.com/thewest/a/27171884/mining-wages-may-be-next-to-fall/some 
What they should follow that CEOs to take a token salary having earned multi millions and deferred bonus.
If they can show the courage then would be able to cut down wages of miners as well.
It is too late realisation how our wages in mines were inflated by none but all those people BHPB Rio FMG and their contractors in 2011-12. You ask for people - imported from overseas in 14 days 457 visa. You do not want to change job they were paying $20000 bonus just for signing the offer, 15% retention bonus .
Now all of them are biting us .


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## Miner (18 April 2015)

Miner said:


> xxxxxxG
> 
> Regarding some of the posters' reference to Goldman and other analysts. Those people are mostly suit and tie  bean counters, use software and may not have adequate hands on knowledge even how a process for iron ore or any commodity works. How many times Goldman went wrong  just  like many of us ?
> 
> ...




I did not visit Bell site until now to see they have actually recommended FMG as A SPECULATIVE buy when the price was $1.95 with a prediction to go up $2.48 against previous prediction $1.95. Ironically FMG has dived down to $1.85 today.  I still value technically FMG is a good value at today's price . But I am disregarding BP's prediction with their covering up  to call it a speculative recommendation. What  is a joke because they (BP)  have not done research enough. This reinforces my comment on this thread earlier that brokers' recommendation to be always taken with a pinch of salt. With Europe crashing on Friday, probably Monday will give the bargain hunters an opportunity. 
Please see attached.


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## stit (21 April 2015)

Value - your $10 per tonne profit might be just around the corner...............

http://seekingalpha.com/article/307...er-than-expected-and-will-continue-to-improve


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## stit (21 April 2015)

Apparently "analysts" suggest chinese mines are not reducing output magnifying the glut...............

http://www.scmp.com/business/commod...h-iron-ore-output-falls-134-cent-imports-rise

Would be amusing if the price has actually bottomed at $46 after they've all just fallen over each other to out do each other on their latest forecasts


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## Value Collector (21 April 2015)

stit said:


> Value - your $10 per tonne profit might be just around the corner...............
> 
> http://seekingalpha.com/article/307...er-than-expected-and-will-continue-to-improve




When you showed me his original argument for Fortescue, I said he was missing the case for lower costs, atleast he gets it now 

I don't know if we have bottomed yet, although I think we may have, but I am confident that where ever the price settles it will be where FMG make a good margin, and it may end up being a very good margin, every $ FMG can make per tonne, adds $0.75 to their value.


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## stit (21 April 2015)

Value Collector said:


> When you showed me his original argument for Fortescue, I said he was missing the case for lower costs, atleast he gets it now
> 
> I don't know if we have bottomed yet, although I think we may have, but I am confident that where ever the price settles it will be where FMG make a good margin, and it may end up being a very good margin, every $ FMG can make per tonne, adds $0.75 to their value.






i actually think it may be a different author. Does the $.75 have a mathematical basis? If it does based on the latest report there share price should have an additional $2.10 in value given there costs are $3.00 lower than expected. With a further $7 in savings by 2016 that would put there share price value well over $10.00??


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## Value Collector (21 April 2015)

stit said:


> Does the $.75 have a mathematical basis? If it does based on the latest report there share price should have an additional $2.10 in value given there costs are $3.00 lower than expected. With a further $7 in savings by 2016 that would put there share price value well over $10.00??




Yes, each $1 of profit margin FMG are able to make multiplied by the number of tonnes they produce, adds X amount of net profit at the end of the year, dividing this net profit by the number of shares on issue, gives you the profit per share per $1 profit margin. 

Once you know roughly have many cents per share are earned for every $1 profit margin you can work out how much you would be prepared to pay for the company based on different profit margins. 

Based on my required return I would have to pay no more than 75cents per dollar of profit margin to make sure I am likely to get a satisfactory return, so the fair value for FMG is about 75cents for whatever it's average margin turns out being over the next few years.

If it turns out they can average a $10 margin, that's $7.50
If it turns out they can average a $20 margin, that's $15.00

who knows where it will be, But I think over time they will be earning atleast $10 on average, So the current price is super cheap, if they get $5 it's still cheap, but if they can get $15 to $20, FMG will be one of those big winners in my portfolio, I am happy to wait and see how it plays out over the next 2-3years, I suspect we will see substantial appreciation from it's current level, and dividends will be over 10% of todays share price.

Others will disagree, but only time will tell, pretty much every stock I have had earnings on in the 100's of %, have seen people all around me tell me I am wrong.

look at the capilano thread, I tried to layout the investment position, and was shouted down, the stock went from $2.25 to $11.50. I made 100's of thousands on that one.

https://www.aussiestockforums.com/forums/showthread.php?t=25082&highlight=czz


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## Knobby22 (21 April 2015)

Value Collector said:


> who knows where it will be, But I think over time they will be earning atleast $10 on average, So the current price is super cheap, if they get $5 it's still cheap, but if they can get $15 to $20, FMG will be one of those big winners in my portfolio, I am happy to wait and see how it plays out over the next 2-3years, I suspect we will see substantial appreciation from it's current level, and dividends will be over 10% of todays share price.




I suspect that you are right but in my experience these downturns always seem to last longer than expected. Also there is the loss of that capital for other shorter term trades while you are waiting.
I wouldn't be putting big money on such a trade...not yet anyway.


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## Value Collector (21 April 2015)

Knobby22 said:


> I suspect that you are right but in my experience these downturns always seem to last longer than expected. Also there is the loss of that capital for other shorter term trades while you are waiting.
> I wouldn't be putting big money on such a trade...not yet anyway.




I don't tend to make short term trades, But as I said it's 2-3 year thing for me, I am happy to wait 3 years to triple my money. 

I am happy with a 10% return over time, so locking my money away for 3years to achieve a compounded rate of greater than 50% is nothing. I am actually not expecting it to take 3 years, but I don't mind if it does.


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## Knobby22 (21 April 2015)

I note the he company is on a long term down trend over 1 year and over 5 years with no sign it is changing direction. Good luck. 

I am keeping my eye on it and will advise when I join you but it will be minimum 6 months away.


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## notting (21 April 2015)

> Rio Tinto shares are 1.7 per cent higher despite revealing a surprise 12 per cent fall in iron ore exports over the March quarter at 74.7 million tonnes.




Andrew Forrest has locked himself in his office and has requested that no calls or disturbances of any kind should occur until he comes out with 

A letter. ----- and he starts writing - 

Dear Sam,

I love you, I love you, I love you.........


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## stit (22 April 2015)

Value Collector said:


> I don't tend to make short term trades, But as I said it's 2-3 year thing for me, I am happy to wait 3 years to triple my money.
> 
> I am happy with a 10% return over time, so locking my money away for 3years to achieve a compounded rate of greater than 50% is nothing. I am actually not expecting it to take 3 years, but I don't mind if it does.




What do you think of this:

http://www.moneymorning.com.au/20150416/ignore-warren-buffett-and-speculate-on-resources.html


In the article it states a worse case scenario of china steel production at 800 million tonnes for the next ten years. I don't really understand how this is such a dire forecast. I could be mistaken, but understood that it takes about 1.6 tonnes of ore to produce 1 tonne of steel. This continues to put china's appetite for ore annually between 12 - 1300mt a year. The forecast total output for the 4 majors is 1075 for 2015???? Assuming that almost every other miner is at a loss i still fail to see how people are not forecasting a correction???
.
http://www.steelorbis.com/steel-new...trategies-amid-low-iron-ore-prices-877867.htm

The above link goes onto say how mills previously purchased stock 70% from majors 30% local. Now in order to preserve costs the almost exclusively purchase from the majors and the figure is more like a 90/10 split. How this won't go onto decimate the local market is beyond me......

http://www.steelorbis.com/steel-new...ecreases-slightly-at-chinese-ports-877795.htm

But still at a loss as to where the surplus ore is going since imports remain steady and inventories continue to slide!!!


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## Value Collector (22 April 2015)

stit said:


> But still at a loss as to where the surplus ore is going since imports remain steady and inventories continue to slide!!!




That's the big question isn't it. The Iron ore inventories are slowly drawing down, yet the nobody mentions that,all they want to talk about is a glut, but where is the ore.

Meanwhile BHP has deferred it's inner harbour debottlenecking plans, So their goal of 290MT has been pushed back.


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## stit (23 April 2015)

Value Collector said:


> That's the big question isn't it. The Iron ore inventories are slowly drawing down, yet the nobody mentions that,all they want to talk about is a glut, but where is the ore.
> 
> Meanwhile BHP has deferred it's inner harbour debottlenecking plans, So their goal of 290MT has been pushed back.





http://www.heraldsun.com.au/busines...oars-on-bhp-talk/story-fnn9c0hb-1227316359708

Gotta love these headlines - like the world of iron ore revolves around assumptions, predictions and rumours rather than real current numbers.

Is it too early to call the bottom in.........................


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## stit (23 April 2015)

stit said:


> http://www.heraldsun.com.au/busines...oars-on-bhp-talk/story-fnn9c0hb-1227316359708
> 
> Gotta love these headlines - like the world of iron ore revolves around assumptions, predictions and rumours rather than real current numbers.
> 
> Is it too early to call the bottom in.........................





http://www.smh.com.au/business/mark...-up-on-revived-bond-deal-20150422-1mr8o7.html

Should see a nice jump in the price today...............


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## Value Collector (23 April 2015)

stit said:


> http://www.smh.com.au/business/mark...-up-on-revived-bond-deal-20150422-1mr8o7.html
> 
> Should see a nice jump in the price today...............




An interesting point to note, is that BHP and RIO, have now deferred Iron ore expansions in excess of the capacity that Roy Hill will bring to market, add to that the planned mothballing of many other smaller mines in china, Australia and around the world.

One other concept which I have no idea how to quantify, but which I am sure will have an effect, is a reduction is steel scrap rates. When the iron ore price is high, there is a large incentive for people to spend a lot on labour and transport costs to bring every piece of scrap metal available to market, however as the iron ore price reduces so does the price of scrap steel, meaning a certain percentage of the scrap steel that requires higher transport costs or labour processing will not be traded in, increasing the need for lower cost virgin material.

check out this video below, the speed at which scrap steel is brought to market from ship breakers such as this, and all the other scrappers around the world, depends on the scrap price, the lower the scrap price, the less workers willing to work, and the longer equipment owners will hold onto their ships/cars before selling them to processors.


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## notting (23 April 2015)

> Sole lead JP Morgan launched a 9.75 per cent US$2.3bn senior secured seven-year non-call three bond at a discount of 97.608 to yield 10.25 per cent - just a touch inside talk of 10.5 per cent.




OK, that will put off any chance of covenant breach, but it's a shiity deal for FMG. The kind of deal you make when, 'you get an offer you can't refuse!'

Today's short squeeze already looks to be weakening.
  But due to the 12.5% all in quite crowded short trade, that could hurt those running for the exits.  
Although it's been hard to get longs to short against lately, those taking profits at the moment may be snapped up by those who couldn't short before due to lack of shorts on offer.

Let's see how it finishes off the day, will need to see continued improvement in IO price.


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## Value Collector (23 April 2015)

notting said:


> will need to see continued improvement in IO price.




No, it's about profit margin, not what the Iron ore price is.

the reason I mention margin, is because that's what's important, If people are only focusing on the iron ore price, they are missing half of the story.


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## notting (23 April 2015)

Value Collector said:


> No, it's about profit margin, not what the Iron ore price is.
> 
> the reason I mention margin, is because that's what's important, If people are only focusing on the iron ore price, they are missing half of the story.




Given you are writing to someone who has been shorting since $6 whilst you have been staying long above that and the price is at $2.09 after a 15% jump in 3 days your remarkably plucky. The *reality* as far as investing in it is concerned is far from the story in which you have been believing. It should be added you are absurdly claiming someone else has missed half the story.  No this investor  has bought back his shorts over 3 days, ending 3 days ago, only to be a little *long NOW*.  But wait there's more, the long is now 11% in the money. 

Whilst I respect some of your analyses, you probably should stop trying to learn me by starting with *fanciful no's *and *play school level Bill Ackman videos*, which you seem to have failed to understand - "not too much debt." 
Perhaps you should start again by taking your own curriculum. 

BHP got a loan at about 1.2% for 15 years whilst FMG got one for about 11% to insure against what they must feel is a pending covenant breach. Why else would they take such a shocking deal in an environment when a competitor can do such unbelievably one!!

On the bright side for both of us *now*, having noted some unusual enthusiastic buying action on FMG and BCI, just before (noted at the time above) China announces it is *now* stimulating to the degree that it did during the GFC and analysts are saying they may do more and BHP and RIO have cut back a little on production, along with the overcrowded short positions in FMG and BCI.  Any one short, with half a brain, would have taken profit over the last trading week very profitably and even gone a bit long just to keep feeling the temperature so to know when to go again if there is no follow through in all the above including the price of IO.

Sorry but that's the story and it doesn't look like I have missed a word of it in this particular one.


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## Value Collector (23 April 2015)

My point is, even if there was no further increase in the Iron price, and FMG just merely brought their cost down to where their guidance is, there would be more than enough margin to see FMG increase in value to 400%.

Also my cost on my FMG holding is closer to $3 than $6, and and a bunch of them were funded with premiums from put options I was writting over the last 3years.


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## ROE (24 April 2015)

Food for thought, I don't invest in resource but I do read about them and various other business

Does FMG cost of production including debt repayment?  interest pay on debt + cost or cost of cash only?

If FMG said they can handle at the current price, why are they desperate to do a debt deal that is more expensive than the one they pulled out not long ago? they pulled out at 9% only to come back pay 10% and force to hand over asset for security...if that is not desperate I don't know what is...
They bluffed last time, thinking they can get away with cheap debt and they got called, it is a poker game they playing and the other player knows they has no hand and bluffed 

at this sort of rate its junk bond stuff.

This hasn't change FMG risk, it just buying them sometimes and if Iron ore is this low, the longer it goes the risker it gets.

There is so much cost cutting you can do, you cant keep cutting cost forever, you need iron ore price rising at some point, when no one knows and that where the risk is.

I am not predicting doom day scenario but it look fairly risky still to be invested in FMG.


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## pixel (24 April 2015)

even more to the point: I can remember a time when borrowing more in order to repay earlier borrowings would land you in prison quick smart. Smells much like a Ponzi Scheme - except that it's done on a much larger scale. Maybe that makes it okay


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## Value Collector (24 April 2015)

ROE said:


> Does FMG cost of production including debt repayment?  interest pay on debt + cost or cost of cash only?




The break even price of $39 in their guidance includes interest on the loan, obviously principle would need to be paid back over time from the profit margin.



> If FMG said they can handle at the current price, why are they desperate to do a debt deal that is more expensive than the one they pulled out not long ago?




Just to play on the safe side I guess, it's given them a lot more staying power if their margin do get compressed for longer than expected.


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## Value Collector (24 April 2015)

pixel said:


> even more to the point: I can remember a time when borrowing more in order to repay earlier borrowings would land you in prison quick smart.




I call BS on that

When was bond refinancing illegal?

Companies have issued bonds to pay back old bonds for probably as long as bonds have been used in the capital structure of companies.

There is nothing illegal or immoral about refinancing early dated bonds with longer dated bonds.


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## stit (24 April 2015)

pixel said:


> even more to the point: I can remember a time when borrowing more in order to repay earlier borrowings would land you in prison quick smart. Smells much like a Ponzi Scheme - except that it's done on a much larger scale. Maybe that makes it okay





If you had 2.5b would you lend it to a desperate company in dire straights? I think not. Sure any company lending money lends it at the appropriate interest rate to ensure adequate return for risk, and by industry standards atm the cost of the funds is expensive - but at the end of the day 2.5b is a sh*t load of money in anybodies books, and anybody that lent it and lost it would be in a world of pain themselves. Fortescue's story/position is no secret, but I'm sure the powers that be that conducted the due diligence on fortescue prior to this advance factored in a lot of "flesh" or movement in the transaction. The point being I'm sure they know a whole lot more than we do - certainly more than "analysts" that believe the company will fold in the next couple of years.

I think their original run at the refinance was at the end of march - since then the price of ore has declined close to $10 per tonne and recently rebounded. I can only assume that at $55 per tonne they were comfortable, at $46 maybe they were starting to panic a little. At the end of the day there doesn't seem to be an "authority" that has any idea on what the market is doing. On one hand you have the likes of citi citing a avg price of $37 and has revised that "prediction" more times than they've changed their undies, and this week the world bank citing a price of $63......$26 a tonne difference seems a big margin for me for "authorities" that should have a clue. I'm sure if the price got to $37 and stayed there as per citi forecasts, fortescue would struggle to raise funds. At $55 or above, i tend the believe maybe they'd be comfortable based on forecast profits. Given the volatility and uncertainty in the market at present - I'm not surprised they bit the bullet and put the matter to bed


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## Klogg (24 April 2015)

Value Collector said:


> I call BS on that
> 
> When was bond refinancing illegal?
> 
> ...




Agreed - I can't see what's wrong with rolling over debt.
The risk involved in not being able to roll it over is a different story, but it's not a ponzi scheme. Ultimately, the interest payments are funded by cash flows.



> If you had 2.5b would you lend it to a desperate company in dire straights? I think not. Sure any company lending money lends it at the appropriate interest rate to ensure adequate return for risk, and by industry standards atm the cost of the funds is expensive - but at the end of the day 2.5b is a sh*t load of money in anybodies books, and anybody that lent it and lost it would be in a world of pain themselves. Fortescue's story/position is no secret, but I'm sure the powers that be that conducted the due diligence on fortescue prior to this advance factored in a lot of "flesh" or movement in the transaction. The point being I'm sure they know a whole lot more than we do - certainly more than "analysts" that believe the company will fold in the next couple of years.




Assuming the guy who approved the loan is rational is probably not a good starting point. For all we know, he works for a huge bank and write a certain amount of credit to ensure a bonus. Add to that, he plans to work for another year or two before retiring, so he doesn't really care if they default in 5 years.
This is just one example, but a very possible one at that.

Incentive caused bias (along with other biases) can cause some fairly irrational decisions.


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## coolcup (24 April 2015)

While the debt may seem expensive, it is very inexpensive compared with their alternative - a deeply discounted rights issue to an equity market that is deeply unsure about the company's prospects. The long term impact on ROE through a discounted rights issue would be far greater than a higher rate on their borrowings.

Also suspect that Twiggy can't fund his pro-rata share of any equity raising, so that was never going to be plan A anyway.


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## stit (24 April 2015)

Klogg said:


> Agreed - I can't see what's wrong with rolling over debt.
> The risk involved in not being able to roll it over is a different story, but it's not a ponzi scheme. Ultimately, the interest payments are funded by cash flows.
> 
> 
> ...




To assume that one person would sign off an advance of 2.5b on their own is ridiculous - it just doesn't happen like that at any level. This would have been thoroughly researched over a long period of time by a full board of unbiased independent decision makers - i would suggest this was in the pipeline in parallel with the previous float for a number of months prior to it becoming public. It just didn't spring up in the month of April - it's just that this one saw the light of day for whatever reason that the fortescue board of directors chose. Its a similarly ridiculous notion of the american investment giant capital buying a 7% stake worth over $350m that the mail boy made the decision to make that investment as some people would like to think. The fact is that these companies investing millions and billions into the one entity  are privy to a lot more information and inner workings that any of us will ever be and is based on a viable commercial decision rather than a retirement bonus


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## galumay (24 April 2015)

stit said:


> ...The fact is that these companies investing millions and billions into the one entity  are privy to a lot more information and inner workings that any of us will ever be and is based on a viable commercial decision ...




Be careful with assumptions like that, the sort of biases that Klogg mentioned are in play!


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## stit (24 April 2015)

galumay said:


> Be careful with assumptions like that, the sort of biases that Klogg mentioned are in play!




Im new to share trading but been in banking my whole career. Unless the board of directors making these investments don't value their million dollar salaries - then maybe your right and they would choose to sacrifice their careers for someone else's Christmas bonus


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## galumay (24 April 2015)

stit said:


> Im new to share trading but been in banking my whole career. Unless the board of directors making these investments don't value their million dollar salaries - then maybe your right and they would choose to sacrifice their careers for someone else's Christmas bonus




You are missing my point slightly, not saying they would specifically make poor decisions for someone's xmas bonus, rather that assuming they are making rational decisions, based on more knowledge and based on a viable corporate decision is a dangerous assumption that flies in the face of what we know about human psychogy and biases in decison making.

A short reflection on the excesses and failings of corporate banks around the GFC shows the danger of this assumption!


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## stit (24 April 2015)

galumay said:


> You are missing my point slightly, not saying they would specifically make poor decisions for someone's xmas bonus, rather that assuming they are making rational decisions, based on more knowledge and based on a viable corporate decision is a dangerous assumption that flies in the face of what we know about human psychogy and biases in decison making.
> 
> A short reflection on the excesses and failings of corporate banks around the GFC shows the danger of this assumption!




This is true - but since the gfc credit regulations and guidelines have been tightened ten fold to avoid a repeat of exactly what your talking about. Loose credit decisions are very much a thing a the past. I'm not saying that bad decisions aren't inevitably made - but initially they're always made on sound commercial decisions. Typically in the case of fortescue being " higher" risk the interest rate is higher but the tolerance in assesment against risk and scrutiny on the worse case scenario is much higher. I can assure you that if an advance went bad and procedures were not followed in line with the organisation making the adcance coupled with much tighter government regulations than pre gfc heads would roll coupled with civil liability with potential criminal liability for those that made the decision. I'd bet my house this has been in the works for months and every aspects if the business has been gone over with a fine tooth comb. That's beside the fact that were talking about a 2.5 b Dollar advance - a mere drop in the ocean


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## galumay (24 April 2015)

stit said:


> Loose credit decisions are very much a thing a the past.




Ok, well lets just agree to differ then!


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## notting (24 April 2015)

> Pushing out maturity is undoubtedly a positive but "we forecast a cash burn of circa $US1.6 billion over financial years 2016-18 that could make refinancing the 2019 debt challenging"
> "At spot prices (about $US54/t versus Citi estimate of $US40/t for the next few years) Fortescue would generate cash of about $US1.5 billion, but would still face a significant refinancing in 2019 – iron ore price of about $US80/t is required to generate enough cash to retire debt."
> 
> Wilkins has a $1 price target.
> ...




I don't think any one thinks IO will see 80 again for short to medium term which would take us very close to D day.
Debt repayment day.


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## stit (24 April 2015)

notting said:


> I don't think any one thinks IO will see 80 again for short to medium term which would take us very close to D day.
> Debt repayment day.




A reasonably balanced article with reference to how accurate "analysts" have been over the past 12 months

http://www.businessspectator.com.au...urces-and-energy/has-iron-ore-found-its-floor


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## Value Collector (25 April 2015)

notting said:


> I don't think any one thinks IO will see 80 again for short to medium term which would take us very close to D day.
> Debt repayment day.




They are, and look like they will continue generating positive cashflow, so they will be able to retire debt as they go along, and if the total can't be retired they can just refinance the remaining balance with another bond before it is due, just like they did in the past few days, they have 4 years before anything is due.

You seem like you're trying to make out that there is this make or break "d-day" around the corner, but they just demonstrated that they can refinance their bonds, even in the worst of times, in 4 years total debt will be a lot less than it is now, refinancing won't be a problem, he'll it may not even be needed.


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## qldfrog (25 April 2015)

Value Collector said:


> They are, and look like they will continue generating positive cashflow, so they will be able to retire debt as they go along, and if the total can't be retired they can just refinance the remaining balance with another bond before it is due, just like they did in the past few days, they have 4 years before anything is due.
> 
> You seem like you're trying to make out that there is this make or break "d-day" around the corner, but they just demonstrated that they can refinance their bonds, even in the worst of times, in 4 years total debt will be a lot less than it is now, refinancing won't be a problem, he'll it may not even be needed.




VC I would buy the idea of perpetual debt (aka capital never repaid, just interest) for a "normal" business but for a mining company, resources decrease and go to zero unless you purchase/find  some more assets, moreover, you have a "real" depreciation of your infrastructure: belt to change, rusting structure, fleet to renew;
Not to say that Fortescue is doomed but I can not agree on the idea of a mining company working on an interest only repayment plan


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## Value Collector (25 April 2015)

qldfrog said:


> VC I would buy the idea of perpetual debt (aka capital never repaid, just interest) for a "normal" business but for a mining company, resources decrease and go to zero unless you purchase/find  some more assets, moreover, you have a "real" depreciation of your infrastructure: belt to change, rusting structure, fleet to renew;
> Not to say that Fortescue is doomed but I can not agree on the idea of a mining company working on an interest only repayment plan




Firstly, I am not saying they will have perpetual debt, I am just saying that if is came to 2019, and they had only repaid $3billion of the $4billion, they could just refinance the remainder.

but, look Both Rio and Bhp have debt on their balance sheets that you could call perpetual, debt is a almost permanent part of the capital structure, bhp just refinanced the other day.

if a mining company had one mining lease, and no plans or hope for future growth, then yes it must clear its debt by the time the mine is exhausted. But if the mining company owns enough resources where it will be deploying capital and mining for the next 100 years, and owns infrastructure that will be operating for 100 years, and continues exploration etc, then it can have bond holders as a permanent part of its capital structure.


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## tinhat (26 April 2015)

Another thing to keep in mind with Iron Ore, especially all these second tier producers and their cost reduction initiatives, is how much of that apparent cost reduction is attributable to the recent collapse in the oil price. When oil recovers then so too will the cash costs for these producers.


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## Miner (26 April 2015)

Miner said:


> I did not visit Bell site until now to see they have actually recommended FMG as A SPECULATIVE buy when the price was $1.95 with a prediction to go up $2.48 against previous prediction $1.95. Ironically FMG has dived down to $1.85 today.  I still value technically FMG is a good value at today's price . But I am disregarding BP's prediction with their covering up  to call it a speculative recommendation. What  is a joke because they (BP)  have not done research enough. This reinforces my comment on this thread earlier that brokers' recommendation to be always taken with a pinch of salt. With Europe crashing on Friday, probably Monday will give the bargain hunters an opportunity.
> Please see attached.






stit said:


> *Apparently "analysts" suggest chinese mines are not reducing output magnifying the glut...............*
> 
> http://www.scmp.com/business/commod...h-iron-ore-output-falls-134-cent-imports-rise
> 
> Would be amusing if the price has actually bottomed at $46 after they've all just fallen over each other to out do each other on their latest forecasts






Value Collector said:


> When you showed me his original argument for Fortescue, I said he was missing the case for lower costs, atleast he gets it now
> 
> I don't know if we have bottomed yet, although I think we may have, but I am confident that where ever the price settles it will be where FMG make a good margin, and it may end up being a very good margin, every $ FMG can make per tonne, adds $0.75 to their value.




FMG thread is getting hotter and gives the opportunity to look into each of them to get great values from different angles.
I noticed there was a thread citing UBS prediction of FMG to reach $1. 
As previously suggested by me, if we rely on the prediction of these brokers then the investment or trading pattern will be dwindling like another volatile share price. I wonder why these analysts publish host of data to prove their point and change next day ? In the same newsletter for example, from Bull Weekly, I have noticed a scrip has been rated as buy, sell and hold by three different analysts.
Attached are few reports from Bell Potter - very talent analysts 
On 8 MARCH they said FMG as hold,  6 March as buy  (no speculation and solid research Hey ??) and then again 16 April it becomes a BUY but with SPECULATIVE note on it. In one week's time who consumed lots of red or vodka ?
I can read the analysts reports but not putting money unless it is designed and made for me.  That does not help . I engaged a planner from BT and paid very high fee for my whole super. He consolidate and charged another 2.5% fee just to be taken over by me now to manage the super as a wrap account paying only less than 1% fee with much better  average 16 % return (averaging after -84%  AGO, - 45% BNO, -33 % MYR and -30% MIN). I have learnt a lot recently from ASF threads on AGO and FMG and moving ahead.
Enjoy the attachments and researches


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## luutzu (26 April 2015)

Miner said:


> ...
> 
> I wonder why these analysts publish host of data to prove their point and change next day ? In the same newsletter for example, from Bull Weekly, I have noticed a scrip has been rated as buy, sell and hold by three different analysts....




It's called "plausible deniability", aka, azz covering.



Recently went to Intelligent Investor newsletter website and they promote how their recommendations have returned something like 17%p.a. since 2009, this compare the some 14%pa from an ASX index.

Nifty right?

But then during those same period they've made some 400 to 500 recommendations. Add to it the brokerage, tax, and you having enough time and cash but not enough common sense to listen to your own thinking and do as you're told... I don't think returns from their picks is anywhere near that 17%.


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## Miner (27 April 2015)

luutzu said:


> It's called "plausible deniability", aka, azz covering.
> 
> 
> 
> ...




Agreed and felt better to see some one in agreement. Same Intelligent Investor called me offering a great discount  I asked a simple question why you recommended TPI a buy a $1.17 when within two months it came down to mid eighty cents. Since then one year passed the share trader has never called me back. Another intelligent master is Kris Sayce.  He keeps on sending junk mail at least five times saying how wonderful his stock recommendation are. Always why he is right and rest of the world are idiots.
Sorry folks nothing related to FMG but just got side tracked. 
Coming to FMG since my restriction is over, I made a quick trade profit last week on FMG buying at $1.85 and selling at $2.15. I was not greedy to wait for long but needed some cash to recover AGO slowly


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## Bris Vegas (27 April 2015)

Value Collector said:


> Has China's economy dropped below where it was 6 years ago yet?
> 
> 
> I mean if a stock were $10 and you say its going down, then 6 years later it drops from $30 to $25, you can hardly claim you were right.




You need to read the _Far Eastern Economic Review_ to see what is really happening in China. It is widely understood by economists that the Chinese government (like the former USSR) simply *make up* economic data. It has absolutely no factual basis.


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## Value Collector (28 April 2015)

Bris Vegas said:


> It is widely understood by economists that the Chinese government (like the former USSR) simply *make up* economic data. It has absolutely no factual basis.




I think that is a gross over statement, anyone can see that over the recent decades China has seen impressive economic growth. 

The main point of this thread atleast is discussing the Chinese/Asain iron demand story, and how this impacts FMG, now I may be wrong, but I don't think it takes a genius to recognise that China is a manufacturing power house. Go to any Bunnings or similar around the world, and you will find a large portion of products are made in China, and most are made of or use steel in their production or packaging.

I mean whether it's nails, screws, paper clips, cans, fridges, car parts, air conditioners, tv's, microwaves, farm equipment, shipping containers or whole ships etc etc, China is making them and shipping them around the world on a never ending conveyer belt. That consumes a lot of iron ore.

China also has over a billion people, supplying their needs as well as the needs of the industry above consumes a lot of steel every day.

This is what really counts, I have spoken before about the merits of Fmgs infrastructure and the low cost supply base of the Pilbara, the global demand for iron ore, and the pilbaras low cost supply, will see FMG and its low cost peers have sustainable long term businesses, whether China massages its numbers to turn a 5% into a 7% is irrelevant.


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## stit (28 April 2015)

Value Collector said:


> I think that is a gross over statement, anyone can see that over the recent decades China has seen impressive economic growth.
> 
> The main point of this thread atleast is discussing the Chinese/Asain iron demand story, and how this impacts FMG, now I may be wrong, but I don't think it takes a genius to recognise that China is a manufacturing power house. Go to any Bunnings or similar around the world, and you will find a large portion of products are made in China, and most are made of or use steel in their production or packaging.
> 
> ...




http://www.hellenicshippingnews.com...small-bhp-output-deferral-ridiculous-russell/

Another article from a journo/analyst trying to justify their potential over bearish forecasts from less than a fortnight ago. His reasoning seems to be that the most recent price rally is ridiculous as its based on market sentiment - and i agree with him. The problem that I have with 99% of people writing these commentaries is that theyre  happy to base their slim forecasts based on exactly that.........market sentiment on a future supply glut. 

It now seems possible that the article I posted earlier this month suggesting that the market may actually be in deficit  and a price correction to 60 - 70 per tonne may have some merit. It annoys me that no expert commenting on the matter does not seem to touch on simple mathematics - 1.6 tonnes of ore for 1 tonne of steel. China is expected to produce 800 million tones of steel for the next 10 years. That means they need 12 - 1300 tonnes per year. 4 majors currently produce a little over 1m - and thats just to supply china that consumes only 70% of seabourne ore. Nearly every other ore producer is making a loss at current prices below $60. No wonder the majors are not deterred on proceeding with expansions - but everybody seems to ignore that elephant in the room


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## galumay (28 April 2015)

Value Collector said:


> I think that is a gross over statement,




Agreed, they might fudge, (who doesnt?), but to suggest that growth in China is a fiction is just silly.

The other thing that struck me as really odd was that its a first post, seems a very unlikley first post to a forum you have just joined. My cynical self wondered if it were not someone's ghost username they either logged in with by mistake or wanted to appear incognito?!


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## stit (28 April 2015)

galumay said:


> Be careful with assumptions like that, the sort of biases that Klogg mentioned are in play!




http://www.bloomberg.com/news/artic...membership-privileges-are-worth-a-fortune-now

$63m in two days isn't bad if you can get it........................


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## notting (28 April 2015)

stit said:


> It annoys me that no expert commenting on the matter does not seem to touch on simple mathematics - 1.6 tonnes of ore for 1 tonne of steel. *China is expected* to produce 800 million tones of steel for the next 10 years.




According to your definition of sentiment that seems to fit into it.


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## stit (28 April 2015)

notting said:


> According to your definition of sentiment that seems to fit into it.




Sentiment and reality given that's what they're currently doing. Its a little different from some bullsh@t pie in the sky figure


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## stit (28 April 2015)

ok - so somebody - maybe the iron ore pessimists please steer me in the right direction.............and this kinda carries on from my former rants..........

http://www.smh.com.au/business/mini...t-for-the-iron-ore-price-20150428-1murdt.html


The above link has 8 predictions.............2 in the eight see ore above $60 and the rest see a glut...............


As i was saying previously china is currently producing 800m tonnes of steel per annum. As stated by previous posters this may not be the case in the future even though it is expected............ This requires 12 - 1300 m tonnes of iron ore currently. This represents 70% maximum of the global seabourne trade. That means that global seabourne trade is approximately 1700m tonnes. Currently the 4 majors produce a little over 1m tonnes. The four majors are the only producers making money under $60. Everybody else is hanging on  by a wing and a prayer day to day. How does that represent a glut???? What am I missing that the experts are not???????????


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## notting (28 April 2015)

stit said:


> What am I missing that the experts are not???????????




Do you have difficulty reading or is it comprehension?

From your article -



> We need to see demand-linked data improve (or at least stop getting worse) in the Chinese steel industry for us to gain any confidence in the current rally. Good volatility for traders, but no change in fundamentals," he said.






> Goldman Sachs' analyst team led by Eugene King believes the iron ore landscape is scarcely changed by recent events, and the familiar dynamic of rising supply amid weak demand will quickly resume.
> "We don't expect any of the major iron ore producers to alter plans. The capex has largely been spent and the internal rates of return of delivering the production into the infrastructure, even at  sub-$US50-per-tonne prices, is very compelling," the analysts said.






> The World Bank believes iron ore will lead declines among metals this year as the biggest producers in Australia and Brazil expand low-cost supplies further while demand remains weak.






> Australia's richest woman, Gina Rinehart, last week said prices could be low for some time amid a supply glut.
> 
> "The ore price could be down for quite some time," according to Mrs Rinehart


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## stit (28 April 2015)

notting said:


> Do you have difficulty reading or is it comprehension?
> 
> From your article -




ummm - yeah maybe i have a comprehension problem - or maybe I'm missing your point.........that you didn't make. As I pointed out all of the articles see a downside because they can't see a fundamental change. The argument that i'm making that you obviously didn't read - and please correct me if I'm wrong, is that based on fundamental numbers it doesn't make sense to me


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## notting (28 April 2015)

There is too much supply not as much demand and the expected on going demand is as fanciful as any other figure.

Watching Andrew Forest and Jones crap on avoiding the fact that Vale is cranking up 18 billion dollars worth of infrastructure for pending IO supply.

Andrew made the point that Vale were there before BHP and RIO???!!!
Inferring Vale can't suddenly produce ship loads more to fill any hole that RIO and BHP might leave if they slow production, which is exactly what Vale is doing! Don't forget Gena.

Andrew Forest and Alan Jones are also going on about how much it is costing each Ausi in lost royalties throwing around figures like 60 Billion PA which is what RIO and BHP generate in revenue, not in profit and they are largely owned by international share holders. The royalties are in the single figure Billions.

Having said that, I think they'd be better off not expanding so fast and cutting back, which unfortunately will raise the cost of production so what ever the balance is it may not be that much more profitable in terms of margin gain.

Reality is that the boom is over.

"The Multinationals" as Andrew keeps refering to, rather than saying names because it's not true what Andrew is saying so he could be sued if he says lies naming a company, haven't said they are going to 'oversupply for years,' they have just said they are going to keep expanding.
The word, 'over' supply has not been used by the majors as Andrew is stating! Inferring BHP and RIO are trying to manipulate the market which is what he trying to do.

Oh and the morality of Andrews 'jobs card,' if you slow down production, how is that going to increase jobs?

One wonders if cash for comments is back on, through the back door.


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## luutzu (29 April 2015)

Maybe IO prices could be predicted by simply asking whether a high or a low price will hurt China.

Supply and demand is overrated. 

Demand is always there... may not rise and grow at x percent, but it's there.
Supply is always there, or not there, depends on what the big 3 decides to do. And if you could shut down work, spend less cash but make more money, would you do it?

So in the short term we can speak of supply and demand, in the medium and long term it's geopolitics.

China is about to finish a couple of airstrips in the South China Sea, starting its own bank to take on the IMF/World Bank, making friends with most neighbours while slapping a couple around, extending work with Pakistan to create a "corridor" to the ME, it's getting friendlier with Russia...

It's unthinkable that such balls could go on unpunished.

How do you punish and weaken a nuclear armed power with 1.5 billion people and trillions of your corporations investment ties up with it? Economics... If you drop a bomb it's going to be nuclear armageddon; but if your corporations hike the price of imports it needs, that's free market and free trade.

Same result, only a few millions will be out of work and go hungry for a while. None of your people die.


China might be wiser and, I don't know, price their current projects to future prices or something... but who knows.


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## Bris Vegas (29 April 2015)

Value Collector said:


> I think that is a gross over statement, anyone can see that over the recent decades China has seen impressive economic growth.
> 
> The main point of this thread atleast is discussing the Chinese/Asain iron demand story, and how this impacts FMG, now I may be wrong, but I don't think it takes a genius to recognise that China is a manufacturing power house. Go to any Bunnings or similar around the world, and you will find a large portion of products are made in China, and most are made of or use steel in their production or packaging.
> 
> ...





"I think that is a gross over statement, anyone can see that over the recent decades China has seen impressive economic growth."

It is just a mirage. Selling junk below cost and building flashy apartments that nobody can afford is not a sound way to run an economy.


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## galumay (29 April 2015)

Bris Vegas said:


> It is just a mirage.




Its not a mirage, a mirage is something that doesnt exist. No one seriously denies China's massive growth, they debate the % value, but not the reality of the economic growth. There are just so many obvious and observable impacts of their growth over the last 10 years.


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## Value Collector (30 April 2015)

Bris Vegas said:


> "I think that is a gross over statement, anyone can see that over the recent decades China has seen impressive economic growth."
> 
> It is just a mirage. Selling junk below cost and building flashy apartments that nobody can afford is not a sound way to run an economy.




I think you will find the shipping containers full of pretty much every type of manufactured product you can imagine that flow out of China are very real, it's not a mirage, sure they sell some junk, but a lot of it is high quality stuff, white goods, electronics, car parts etc brand name stuff,  hell even the iPad I am typing this on was made there.


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## Miner (30 April 2015)

FMG researchers /punters
 I just read in MF and surely many might also have read.
THis is their foolish bantor 

" I_s Fortescue Metals Group Limited set for a big fall?
Credit: glyphwalker
By Ryan Newman - April 30, 2015 | More on: BCIFMG


The iron ore price hike came to an abrupt halt overnight as the commodity shed roughly 4.6% to be trading at US$57.13 a tonne, according to figures from the Metal Bulletin Ltd.

Although I couldn’t see any news which wold specifically explain the sudden sharp pullback, it’s likely that the market may have begun questioning the sustainability of the commodity’s recent rise.

Prior to last night’s session, the iron ore price had enjoyed one of its strongest rallies in recent memory. Driven by Chinese stimulus, a rebounding oil price and signs of a cutback in supply expectations from BHP Billiton Limited (ASX: BHP), iron ore prices surged from a 10-year low of US$46.70 earlier in the month and maxed out at US$59.88 a tonne during Tuesday’s session, according to the Metal Bulletin.

However, the iron ore bears were back in force last night, selling the commodity down to US$57.13 a tonne. The sudden selloff will likely have investors on the back-foot again after many elected to invest in the sector in the hope of profiting from a huge rebound. In particular, Fortescue Metals Group Limited (ASX: FMG) and BC Iron Limited (ASX: BCI) have rallied hard and could be set for a significant pullback, especially if iron ore prices continue to dip over the next few sessions." _

This could be a sales pitch inviting to buy their newsletter. Do not know if it is to entice potential members or to move market. This is in public domain as an advertisement so I am not breaching copy right .


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## Klogg (30 April 2015)

Miner said:


> Do not know if it is to entice potential members or to move market. This is in public domain as an advertisement so I am not breaching copy right .




With the volume of FMG shares that are traded everyday, it's very hard to believe a newsletter aimed at retailer investors can move the FMG price.

May I ask why you believe this is foolish banter?


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## skyQuake (30 April 2015)

Article is just an overnight summary. FMG moving in lockstep to iron ore (as it should)

Green line = FMG
Red/White Bar = Iron ore futs (all sessions)


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## Miner (1 May 2015)

Klogg said:


> With the volume of FMG shares that are traded everyday, it's very hard to believe a newsletter aimed at retailer investors can move the FMG price.
> 
> May I ask why you believe this is foolish banter?




Dear Klogg

Good questions
Not sure if you have followed a publication called Potterphillip and they publish quiet a few newsletters. I have often found 5 out of 10 times when they publish something exciting news about a trade, that goes up drastically. The publisher beat their drums and then price falls through. But yes, I agree with you that to change FMG type share's huge volume no newsletter could probably influence.

Secondly, foolish banter !!! Not my words. Motley Fool newsletter www.fool.com always declare that the readers are fools and they publish foolish banters. I copied the text from their public domain. 

Now hopefully FMG has come to a good low price to give my tipping a good start for May


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## joeno (1 May 2015)

Can't figure out what's going on with this stock. Was about to pull the trigger at 1.85 but decided to wait a day and it skyrocketed up a few days after to 2.6. Now it's back down a bit but seems like it will rally again despite the lower Iron Ore prices and stronger dollar. Think i'll wait until the price stabilizes.


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## Value Collector (1 May 2015)

joeno said:


> Can't figure out what's going on with this stock. Was about to pull the trigger at 1.85 but decided to wait a day and it skyrocketed up a few days after to 2.6. Now it's back down a bit but seems like it will rally again despite the lower Iron Ore prices and stronger dollar. Think i'll wait until the price stabilizes.




Welcome to the forum.

not sure why you would want to wait until prices "Stabilise" if your a trader I would think you would be looking to take advantage of the volatility, and if your an investor, you should just be ignoring the volatility and getting in while you can buy below what you think the value will be when it finally does stabilise.

I mean, if you think that FMG will eventually have a stable business with good margins once their cost cutting is finished and the iron ore price has stabilised, then it's best you get in before the market for their shares has stabilised at a much higher price, If you don't think FMG will have a business, then you shouldn't want to get into them at all, even if the share price was stable.

To me volatility does not mean "risk", it is there to be taken advantage of or just ignored completely.


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## Miner (2 May 2015)

FMG betrayed me today. Instead going down and supporting my tipping price on the start day it went up more than 9% . Totally unfair as I was hoping to get it rock bottomed by 1 May when tipped it . 

Any way on the serious front, we are often extremely critical on FMG (as I write, think of departed Julia who often helped me to get English grammar and syntax corrected through PM  - will miss you coach) why don't we put the same salvo on Rio or latest one Vale.

http://www.mining.com/vale-falls-victim-of-the-iron-ore-slump-posts-3-2bn-loss/ 

Is it because in the core of our hearts some of us are jealous on Andrew Twiggy's wealth but never raised a finger on Rupert Murdoch minting money in a foreign land and criticising Australia, or James Packer spending fortune on casinos ? Just my thought .


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## stit (5 May 2015)

Miner said:


> FMG betrayed me today. Instead going down and supporting my tipping price on the start day it went up more than 9% . Totally unfair as I was hoping to get it rock bottomed by 1 May when tipped it .
> 
> Any way on the serious front, we are often extremely critical on FMG (as I write, think of departed Julia who often helped me to get English grammar and syntax corrected through PM  - will miss you coach) why don't we put the same salvo on Rio or latest one Vale.
> 
> ...




To be honest I think there is a real school of thought out there that blames fmg for the current iron ore slump. I think people assume that if you take 160m tonnes out of the market that maybe there would again be a short supply in the market and the remaining three could continue to manipulate prices and reap massive returns at their discretion. If you read the bs that gets carried on about fortiscue on the macro business website all they carry on with is how fortescue's days are numbered and how theyre wrecking Australia in the interim. When I hear the other three carry on about producing more to avoid somebody else producing it, I think they're referring directly to fortescue. Lets face it, fortescue was built on the others dregs and has grown into a company that is too big to drown now that their costs are forecast at 39/ t and I think it really irritates them. Every other company except fmg can be squeezed out of the market without the earth being scorched. Without fmg things would be just as rosy as it was a few years ago - and I think that's what irritates people the most


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## Klogg (5 May 2015)

stit said:


> If you read the bs that gets carried on about fortiscue on the macro business website all they carry on with is how fortescue's days are numbered and how theyre wrecking Australia in the interim.




I must say that I do agree with at least half of their argument - the supply side dynamic. (Forecasts for demand are just that, forecasts. The supply side is far more visible.)

If you read Buffett's shareholder letters (I think it's early 90s, but I couldn't find the exact paragraphs), he talks about the supply/demand of commoditized business - in his case, insurance. It goes something like this:
- a major catastrophe occurs, and insurers that under-estimated the payouts required go bust.
- no additional supply is brought into the market, but demand continues to increase slowly
- eventually margins improve
- upon margins and sentiment improving, insurers realise this and move to create more supply (i.e. raise capital in this case, if required)
- supply continually comes on-line until margins are squeezed, premiums don't adequately cover costs and the first point occurs again

Now insurance has a very quick turn-around time from the time you decide to increase supply and when it's available to customers; mining on the other hand, is very different. 

We've had a number of years where there has been a large margin to be made because of this excess demand. Others see these margins, and decide to mine and sell their own (increase supply). Over years they start developing mines, eventually selling to the market after years of building the mining site - resulting in a huge increase in supply, much larger than would be the case in insurance, because of time to market.

And of course, like insurance, oversupply (which MAY occur, remember I didn't forecast the demand side of this) over a long duration means lower prices, up until higher cost producers go bust.

I don't know, and won't even hazard a guess as to how much excess supply there will be (or if there will be any) after the period of excess demand that we've experienced. If you're able to get that right, then there's definitely money to be made. But it's a rather big if, and a big downside risk.

Add to all of this, that Jim Chanos, a man famous for his ability to identify a company in trouble, has shorted this company (albeit at a much higher price), and I don't know if the risk/reward is justified.


(This is not a shot at those invested in FMG, but rather me posting my risk-averse thoughts on this particular scenario).


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## tinhat (5 May 2015)

There is no such thing as excess demand or excess supply in a commodity market, at least not in the long run. I've been listened to Twiggy on the radio yesterday and it's all propaganda and spin and good old fashioned rent seeking from the government. In the short term disequilibrium can be created as in the latest price slump when buyers, seeing price deflation, run down inventory and postpone purchasing anticipating that price may drop further. Producers, fearful that prices will drop rush to push their inventory onto the market.

At the end of the day, producers who have a business case that can supply at a marginal cost below what they forecast the long term price will be will invest in production hoping to make a profit. That is what FMG did. That is how the company came about. There are only three major producers who can supply the market at lower cost: RIO, BHP and Vale. As long as global demand exceeds the output of those three producers and other major sources of supply don't come online with a cost structure lower than FMG, FMG will have a market. What profit it will make is another issue. Remember that in a commodity market, price equals the marginal cost along the industry cost curve. There is always someone who hasn't gone broke but isn't making any money either. It's a very simple equation over the short term. Grab one of the industry cost curves that UBS and others publish. Find the level of global demand for IO at any given time. Observe that producer's cash cost per tonne and that gives you the market price. That producer isn't making any profit. Every producer to the left on the industry cost curve is in profit and every producer to the right is making a loss and their supply is unsustainable at that price.


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## Klogg (6 May 2015)

> There is no such thing as excess demand or excess supply in a commodity market, at least not in the long run.




If this was the case, then we could keep adding supply without the price changing. I'm not quite sure I follow the argument to be honest... 
The only way this makes sense to me, is if we're talking a really long time. If the time span is long enough, you'd almost cover the cyclical nature of the business.




tinhat said:


> As long as global demand exceeds the output of those three producers and other major sources of supply don't come online with a cost structure lower than FMG, FMG will have a market. What profit it will make is another issue.




I agree with all of this. My question is, how can you be sure what profit FMG will make? If you get it wrong, you've got a highly leveraged company running at negative OCF.





> Find the level of global demand for IO at any given time. Observe that producer's cash cost per tonne and that gives you the market price. That producer isn't making any profit. Every producer to the left on the industry cost curve is in profit and every producer to the right is making a loss and their supply is unsustainable at that price.




Agree with you on this point. My question is, does FMG come out of this OCF positive? If so, by how much? 
And remember, IO demands are just forecasts, prone to the same errors as every other forecast. Nobody forecast an IO price of $50-$60 1-year ago.


All this said, I really do hope FMG thrives. Twiggy is great for the country.


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## tinhat (6 May 2015)

Klogg said:


> If this was the case, then we could keep adding supply without the price changing. I'm not quite sure I follow the argument to be honest...
> The only way this makes sense to me, is if we're talking a really long time. If the time span is long enough, you'd almost cover the cyclical nature of the business.




Without getting into an argument over semantics, a commodity market (where the product is generic by definition) will always find a clearing price for the additional supply because demand is price elastic so the market will always find a clearing price at which the supply will be absorbed. In the short run supply is relatively inelastic but demand is always price elastic. In practice demand will at some point become saturated even at zero price. I remember going back a few years ago a day when traders at Flemington Markets (Sydney) were giving away their tomatoes (a perishable good which cannot be stockpiled) because demand had become completely saturated. Iron ore on the other hand can be stockpiled.


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## stit (6 May 2015)

[There are only three major producers who can supply the market at lower cost: RIO, BHP and Vale.]

Does vale really produce at a lower cost than fortescue? Last I heard was that fortescue was still in the black and vale was in the red to the tune of $3.2b!!!! I don't know much about their cost structure, but have seen estimates that at one point were similar to fmg. I have also heard arguments that their cost of production will come down after expansion. Whatever the case by the next quarterly report they'd certainly want a vastly different outcome. If it was fmg making a proportionately similar loss the stock wouldn't be worth five cents.


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## tinhat (6 May 2015)

stit said:


> [There are only three major producers who can supply the market at lower cost: RIO, BHP and Vale.]
> 
> Does vale really produce at a lower cost than fortescue?




Personally, I have no idea. The accepted wisdom up until recent times was that Vale was lower landed cost into China than FMG but that may have changed. At the end of the day, I guess it makes more sense to look at marginal cost in terms of individual mines if one assumes that port and rail infrastructure is a sunk cost. Individual mines can always be shut down or brought back online.


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## McLovin (6 May 2015)

tinhat said:


> There is no such thing as excess demand or excess supply in a commodity market, at least not in the long run. I've been listened to Twiggy on the radio yesterday and it's all propaganda and spin and good old fashioned rent seeking from the government. In the short term disequilibrium can be created as in the latest price slump when buyers, seeing price deflation, run down inventory and postpone purchasing anticipating that price may drop further. Producers, fearful that prices will drop rush to push their inventory onto the market.




Hmm...That view pretty much relies on the twenty years to 2003 being an outlier to the downside, and the 2008-2014 period being "normal". Even in 2007 the iron ore price was below $50.


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## Value Collector (6 May 2015)

stit said:


> [There are only three major producers who can supply the market at lower cost: RIO, BHP and Vale.]
> 
> Does vale really produce at a lower cost than fortescue? .




My understanding of Vale is that they have a wide range of production cost in their portfolio of mines. 

eg. Some is high grade, low cost stuff that requires little processing before being shipped, How ever some of there mines produce very low grade that requires significant processing to make it into higher grade pellets.

 it's a very different process to the Pilbara operations of FMG, RIO and BHP.


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## stit (6 May 2015)

"My understanding of Vale is that they have a wide range of production cost in their portfolio of mines."

It certainly changes the market dynamics if vales average cost of production is in fact the highest of the majors inclusive of fmg. Obviously this is why they have spoken about curtailing 30 million tonnes of production, however with a 3.2b loss and previous cost of production estimates in the $50's i suspect it may well be a lot more than 30 million tonnes currently being produced in the red. Personally I think that the next report from Vale may well be the single most influential piece of information for the future price of iron ore.


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## Value Collector (6 May 2015)

from the 40second mark in this video you can see a USA pelletizing plant working.

The process is used in areas that have low grade Iron Ore.


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## Value Collector (6 May 2015)

stit said:


> "My understanding of Vale is that they have a wide range of production cost in their portfolio of mines."
> 
> It certainly changes the market dynamics if vales average cost of production is in fact the highest of the majors inclusive of fmg. Obviously this is why they have spoken about curtailing 30 million tonnes of production, however with a 3.2b loss and previous cost of production estimates in the $50's i suspect it may well be a lot more than 30 million tonnes currently being produced in the red. Personally I think that the next report from Vale may well be the single most influential piece of information for the future price of iron ore.




Transport is another cost that Vale have to deal with, take a look at a globe, and you can see Brazil is 3 times the distance to china.


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## Ves (6 May 2015)

Value Collector said:


> Transport is another cost that Vale have to deal with, take a look at a globe, and you can see Brazil is 3 times the distance to china.



Isn't that why Vale built a fleet of massive ships and is in the process of modifying China's ports  (now that docking restrictions have been reduced) to significantly drop shipping costs?

As far as I recall reading in the AFR,  the drop in oil price made Vale the cheapest producer in the world.


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## Value Collector (6 May 2015)

Ves said:


> Isn't that why Vale built a fleet of massive ships and is in the process of modifying China's ports  (now that docking restrictions have been reduced) to significantly drop shipping costs?




Yes, they are doing that to try and reduce the currently wide spread in shipping costs, It won't put them on par though, especially because FMG has 4 of the VLOC on order also.



> As far as I recall reading in the AFR, the drop in oil price made Vale the cheapest producer in the world.




It's reduced the cost of all the producers. all the miners have been issuing reports showing large reductions, FMGs cost savings are the most impressive though.

I guess it depends on the timing of when the Author of the article saw Vales cost reduction, if it was before the others stated their reductions, then for a few weeks Vale might have looked cheaper.


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## Ves (6 May 2015)

Value Collector said:


> Yes, they are doing that to try and reduce the currently wide spread in shipping costs, It won't put them on par though, especially because FMG has 4 of the VLOC on order also.
> 
> 
> 
> It's reduced the cost of all the producers.




Here's a view that appeared in Bloomberg earlier this year.



> The cost of freight for capesize vessels from Brazil to China has dropped below $10 a wet metric ton for the first time since January 2009, compared with about $5 a ton for Australia to China, Macquarie Group Ltd. analysts said in a Jan. 9 note. Vale can now ship a ton of iron ore to China cheaper than BHP “for the first time in many years” and is close to challenging Rio as the lowest cost supplier, Macquarie said.




http://www.bloomberg.com/news/artic...eapfrogs-rio-bhp-as-cheapest-iron-ore-shipper


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## tinhat (6 May 2015)

McLovin said:


> Hmm...That view pretty much relies on the twenty years to 2003 being an outlier to the downside, and the 2008-2014 period being "normal". Even in 2007 the iron ore price was below $50.




Index Mundi's data is that in 2007 iron ore was US$36.63 (Iron Ore Fines 62% FE spot CFR Tianjin port, US Dollars per Dry Metric Ton). What I am suggesting is that at that time, that was the marginal cost of production along the industry cost curve for whatever global volume of demand there was in 2007. What I am also suggesting is that the price of iron ore in any period you chose to look at is "normal".


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## stit (6 May 2015)

Ves said:


> Here's a view that appeared in Bloomberg earlier this year.
> 
> 
> 
> http://www.bloomberg.com/news/artic...eapfrogs-rio-bhp-as-cheapest-iron-ore-shipper





If this is true - where has the 3.2b loss come from? Its not just a loss - its a sh*tload of money in anyones books


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## Value Collector (6 May 2015)

tinhat said:


> Index Mundi's data is that in 2007 iron ore was US$36.63 (Iron Ore Fines 62% FE spot CFR Tianjin port, US Dollars per Dry Metric Ton). What I am suggesting is that at that time, that was the marginal cost of production along the industry cost curve for whatever global volume of demand there was in 2007. What I am also suggesting is that the price of iron ore in any period you chose to look at is "normal".




2007 was still the 12 month bench mark system that's why the price chart is flat for 12 month periods, the mills had the miners locked into 12 month contracts, the spot price was much higher. 

during that time the mills with the contracts were often selling the ore to other mills without contracts for much higher prices. that's why bhp pushed to end the bench mark pricing model because they were missing out on the fat margins being earned by resellers in the spot market.


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## Value Collector (6 May 2015)

> The cost of freight for capesize vessels from Brazil to China has dropped below $10 a wet metric ton for the first time since January 2009, compared with about $5 a ton for Australia to China, Macquarie Group Ltd. analysts said in a Jan. 9 note. Vale can now ship a ton of iron ore to China cheaper than BHP “for the first time in many years” and is close to challenging Rio as the lowest cost supplier, Macquarie said




I am not an expert in shipping, but it does seem weird that it would cost less than 50% more to ship product 3 times further.

any way, what's more important is the Margin FMG can make. at the moment, that's looking good.


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## Ves (6 May 2015)

stit said:


> If this is true - where has the 3.2b loss come from? Its not just a loss - its a sh*tload of money in anyones books



Non-cash impairments.


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## McLovin (6 May 2015)

tinhat said:


> Index Mundi's data is that in 2007 iron ore was US$36.63 (Iron Ore Fines 62% FE spot CFR Tianjin port, US Dollars per Dry Metric Ton). What I am suggesting is that at that time, that was the marginal cost of production along the industry cost curve for whatever global volume of demand there was in 2007. What I am also suggesting is that the price of iron ore in any period you chose to look at is "normal".




Yes, you're correct. My point was that there was a huge spike in demand in 2008, from what could be called a non-rational buyer (China). It has taken years for the supply response to happen, but it seems to be playing out. When does Africa come online? Similarly, how long could you build empty cities?


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## stit (7 May 2015)

Ves said:


> Non-cash impairments.




Vales ebit for the last quarter was 500m. If a comparative small fry like fmg can eek out a 330m net profit I think it's a fair assumption at current prices they're struggling with cogs. Their next report will be interesting. If it's not in the black by then I think their goal of 400m tonnes may well be very optimistic


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## Value Collector (7 May 2015)

FMG's presentation today had a few interesting charts, two cost curve charts one from the prior period had FMG sitting ever so slightly above Vale, however the forward looking chart put together by JP Morgan has FMG sitting below Vale on the cost curve.

there is also an interesting chart showing how FMG's costs have declined massively as they have been well and truly been narrowing the spread between themselves and Rio/BHP. Fmgs cost have dropped more than 50% since the 1st half of 2013, offsetting a large part of the declines in commodity price.

Also in a side note the Iron ore price seems to be continuing is upward trend, so margins are looking pretty good at the moment, things are looking pretty good to me.


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## stit (7 May 2015)

Value Collector said:


> FMG's presentation today had a few interesting charts, two cost curve charts one from the prior period had FMG sitting ever so slightly above Vale, however the forward looking chart put together by JP Morgan has FMG sitting below Vale on the cost curve.
> 
> there is also an interesting chart showing how FMG's costs have declined massively as they have been well and truly been narrowing the spread between themselves and Rio/BHP. Fmgs cost have dropped more than 50% since the 1st half of 2013, offsetting a large part of the declines in commodity price.
> 
> Also in a side note the Iron ore price seems to be continuing is upward trend, so margins are looking pretty good at the moment, things are looking pretty good to me.




Is that on the net? Is there a link? Would love to have a look.

I keep thinking old mate from seeking alpha may be on the money re his forecast. Yes it's obvious that demand may be peaking, but the current demand isnt going to disappear overnight. The current demand from china ( 70% of seaborne trade only ) is more than the increase forecast production of the big 4. I tend to think the worst is over as other players above 60 per tonne inevitably leave the market. Maybe this has already happened and left a deficit forcing up the price. The doomsdayers with the sky falling attitude just don't seem to make that adjustment and only focus on a glut based on current total global production, even though inventory stockpiles  don't back up what they're saying. Could be very wrong but hope I'm right!!


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## notting (7 May 2015)

stit said:


> The doomsdayers with the sky falling attitude just don't seem to make that adjustment and only focus on a glut based on current total global production, even though inventory stockpiles  don't back up what they're saying.




The Chinese are not stocking up like they used to.
The positivism is based on IO v US$ which is negated by the rise in AU$.
Perhaps the positivists are overlooking that!!!

I'm in no mans land at the moment taking a breather from FMG looking to get back in on the short side whilst remembering FMG needs an IO price of around 80 to repay debt over the longer term but only if it has to.
Getting through 2.80 on a long would be a start whilst remembering it does Vs not Us.


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## Value Collector (7 May 2015)

stit said:


> Is that on the net? Is there a link? Would love to have a look.
> 
> I keep thinking old mate from seeking alpha may be on the money re his forecast. Yes it's obvious that demand may be peaking, but the current demand isnt going to disappear overnight. The current demand from china ( 70% of seaborne trade only ) is more than the increase forecast production of the big 4. I tend to think the worst is over as other players above 60 per tonne inevitably leave the market. Maybe this has already happened and left a deficit forcing up the price. The doomsdayers with the sky falling attitude just don't seem to make that adjustment and only focus on a glut based on current total global production, even though inventory stockpiles  don't back up what they're saying. Could be very wrong but hope I'm right!!




The presentation is on CommSec and the asx website under FMG's asx announcements, I tried to link it a few times but my iPad keeps refreshing the page every time I try.


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## stit (8 May 2015)

Value Collector said:


> The presentation is on CommSec and the asx website under FMG's asx announcements, I tried to link it a few times but my iPad keeps refreshing the page every time I try.




ok thanks for that will try and dig it up


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## Value Collector (8 May 2015)

stit said:


> ok thanks for that will try and dig it up




Here it is, hopefully the link works now that I am on my computer.

http://www.asx.com.au/asxpdf/20150507/pdf/42ydz9c18cm2qs.pdf


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## stit (12 May 2015)

Value Collector said:


> Here it is, hopefully the link works now that I am on my computer.
> 
> http://www.asx.com.au/asxpdf/20150507/pdf/42ydz9c18cm2qs.pdf




awesome - thanks for that, an interesting read


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## stit (12 May 2015)

........so a month after the price began to rally and all we can get for an explanation is mills are restocking and will be short lived. I can only imagine how it plays out in china.......Billo wakes up one morning in April and rings Stevo.....vling vling, vling vling......Stevo "harrow?"...Billo " horry tit Stevo i bin down at da beach dinking bing tang watching poo tang and i outta stock!!!!!" Billo....."holy tit me too!!!! I ring Teddy and tell him we go to markets.......vling vling, vling vling...Billo " me and stevo outta stock...... we go to markets.......you come too".........and so like the three little piggies they all got on their bikes, went to market, filled their bike baskets with ore and lived happily ever after. I feel so blessed that highly educated "analysts" can write a children's novel. Given the steel market in china is in such dire straights.......what are the mills restocking for? Why don't they just continue to operate on next to no inventory just like they have been doing and keep prices low and falling? If we're to believe what we've been fed for the past 12 months and that the market is so heavily oversupplied, why has Billo, Stevo and Ted all woken up in April and started to bid against each other?? Surely a halfwit could see its counter productive to all restock ( restock for a non event that is ) at the same time and force up the price of an over supplied commodity??? That must be too much foresight for Billo, Stevo and Teddy to come to terms with. I guess i must also have to believe that Stevo, Billo, and Teddy (in their wisdom) all going to market together, has more of an impact on price than the millions of tonnes exiting the market over the last 18 months with no impact on price....... Clearly Stevo, Billo and Teddy buy a sh*t load of ore in one foul swoop to force the price up by $15/tonne. 

Clearly nobody has a clue.................


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## stit (12 May 2015)

lol - look out the price is up again today...........Clearly Stevo, Billo and Ted have bigger bike baskets than i thought..........


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## Knobby22 (12 May 2015)

Rumours in the Fairfax press that South 32 and FMG might merge.
That would solve a lot of problems (reduce debt risk for FMG, improve cash flow for South 32)but I don't think BHP would like it, it would be effectively a second BHP producing iron ore.


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## Value Collector (12 May 2015)

Knobby22 said:


> Rumours in the Fairfax press that South 32 and FMG might merge.
> That would solve a lot of problems (reduce debt risk for FMG, improve cash flow for South 32)but I don't think BHP would like it, it would be effectively a second BHP producing iron ore.




South 32 shareholders would be getting the better deal, FMG's assets are better and are totally undervalued at the moment, I can't see Twiggy wanting to support the deal unless the terms fully recognised FMG's value, but then south 32 wouldn't want to do it.

I am a shareholder in both enterprises, but I have a lot more FMG than BHP/south32, I kinda like having FMG as a pure play, I would rather see them just continue clearing debt, and wait to cash flow acquisitions in the future.


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## stit (13 May 2015)

" FMG's assets are better and are totally undervalued at the moment"

Ok so fmg should be making approx $20 per tonne at the moment. Let's assume prices have established a floor at $46 and fmg generates roughly $10 per tonne as a minimum going forward. Obviously to garner share price support the market needs to be convinced that floor has been reached. In your opinion how long do you think this will take to unfold?  6 months? 12? I think you've said once before that you'd be looking for a share price around $5 with a $10 margin


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## Value Collector (13 May 2015)

stit said:


> . In your opinion how long do you think this will take to unfold?  6 months? 12? I think you've said once before that you'd be looking for a share price around $5 with a $10 margin




$10 clear operating profit / tonne should mean they could be worth $7.50 / share. It can take the market a while to reflect this though.

I am prepared to wait 3 years, But don't think it will take that long.

it will probably happen progressively, as the market gets over the shock of the Iron ore price falls and becomes comfortable with FMG's profit margin and earning power. As certain milestones are hit eg, half and full year profit results that reflect the new lower production cost we should see surges in share price, or if there is a significant rise in the iron ore price to the point that it is obvious to everyone that FMG are making a great margin and they resume clearing debt the price should surge.

I think over $6 could be easily achieved by the end of the year, and my 2-3 year price target is over $10, potentially $15 is the next 2-3 years prove to be a margin of close to $20 and are able to clear a bunch of debt and pay some healthy dividends.


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## stit (13 May 2015)

Value Collector said:


> $10 clear operating profit / tonne should mean they could be worth $7.50 / share. It can take the market a while to reflect this though.
> 
> I am prepared to wait 3 years, But don't think it will take that long.
> 
> ...




So you don't share the common perception that ore is going to crash again at the end of the year assuming a price of $6?

What price did you buy into go long at?

You been doing this long?


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## Value Collector (14 May 2015)

stit said:


> So you don't share the common perception that ore is going to crash again at the end of the year assuming a price of $6?




No, the world needs Iron ore, and Rio, Bhp and FMG are the low cost producers, I believe where ever the price settles, it will be where these three can generate a sustainable return, plenty of other producers will leave the market before FMG is forced to.

People talk about FMG as if it still costs them 90/ tonne to produce, they focus on the fall in the Iron ore price but ignore the fall in the production cost which has offset most of the fall in the commodity price.



> What price did you buy into go long at?
> 
> You been doing this long?




I didn't just buy into FMG outright, I have been selling put options on them since 2012 and collected a little over $200k in premiums, when the price dropped some of these options have been exercised.

All up I have spent about $450k, to purchase 123,000 FMG shares, but as I said $200k of that was from options premiums, so the net cost to me of my FMG shares is some where around $250k, that puts me at around $2.00 / share for the operation as a whole.


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## stit (14 May 2015)

Value Collector said:


> No, the world needs Iron ore, and Rio, Bhp and FMG are the low cost producers, I believe where ever the price settles, it will be where these three can generate a sustainable return, plenty of other producers will leave the market before FMG is forced to.
> 
> People talk about FMG as if it still costs them 90/ tonne to produce, they focus on the fall in the Iron ore price but ignore the fall in the production cost which has offset most of the fall in the commodity price.
> 
> ...




You seem pretty knowledgable and I appreciate your input.

I don't think that fmg share price has ever been at $7.50, but over the course of the last couple of years must have consistantly been clearing more than $10 per tonne ( particularly the 2014 financial year ). Why do you think that is when your expecting it to reach that now?


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## Value Collector (14 May 2015)

stit said:


> .
> 
> I don't think that fmg share price has ever been at $7.50




FMG has been as high as $13.15 (but that was in 2008, and at the time it wasn't worth that)



> but over the course of the last couple of years must have consistantly been clearing more than $10 per tonne ( particularly the 2014 financial year ). Why do you think that is when your expecting it to reach that now




Simple, earnings. 

FMG didn't reach it's 165 Million tonne run rate until march last year, and by that time the price of ore had already started it's down trend. For the FMG share price to get to $7.50, the market has to be confident that they will be able to sustain a profit margin of $10 or more, with a falling ore price, there was no confidence, although it did trade over $6 for a while.

So now that the capital expenditure is over, and FMG can focus on cutting costs, and maintaining a decent margin, I believe it is very likely they will start heading back towards $7.50 as it becomes clearer the Iron ore price has stabilised at sustainable margins and Fmg continue to reduce costs.

and if over a longer period of say 3 years, if Fmg enjoy a margin of closer to $20, and they pay some larger dividends and pay back a few billion of their debt, they could even go as high as $15.

I don't need it to get to $15, because $7.50 would make it a fantastic return for me, But if in 3 years it was $15 I will make over a $1,000,000. While I am not banking on it happening quickly, I there is a decent chance it could happen, so I am happy to hold as long as it continues to earn decent margins.


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## notting (14 May 2015)

Value Collector said:


> I don't need it to get to $15, because $7.50 would make it a fantastic return for me, But if in 3 years it was $15 I will make over a $1,000,000. While I am not banking on it happening quickly, I there is a decent chance it could happen, so I am happy to hold as long as it continues to earn decent margins.




What will be your losses if it hits 70c?



> Low-cost seaborne supply entering the market is not only displacing high-cost Chinese production, but also high-cost seaborne supply," Alan Chirgwin, BHP iron ore marketing vice president, told the conference. Supply will rise by about 100 million to 110 million tonnes this year, exceeding modest demand growth of about 30 million to 40 million tons, he said.




In other words, there is no upward from here.


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## Value Collector (14 May 2015)

notting said:


> What will be your losses if it hits 70c?
> 
> 
> 
> In other words, there is no upward from here.




If it hit 70c, and never recovered, I Would be down 160k, if it hits $7.50 I will be up over 600k. 

As I have mentioned regularly here, I don't need a massive rise in Iron ore price, just a sustainable margin that's it.


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## Knobby22 (18 May 2015)

The way to be rich in the Share market is to go against established thinking and get it right. 
So good luck Value Collector.


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## stit (18 May 2015)

Value Collector said:


> If it hit 70c, and never recovered, I Would be down 160k, if it hits $7.50 I will be up over 600k.
> 
> As I have mentioned regularly here, I don't need a massive rise in Iron ore price, just a sustainable margin that's it.




I read recently that rio still has some approvals outstanding in order to achieve it's run rate of 360m. I don't know how much merit it has or if you have heard something similar? Makes you wonder if this is twiggy's motive if it does with his political manoeuvring lately....


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## notting (20 May 2015)

stit said:


> I read recently that rio still has some approvals outstanding in order to achieve it's run rate of 360m. I don't know how much merit it has or if you have heard something similar? Makes you wonder if this is twiggy's motive if it does with his political manoeuvring lately....




Trust me the administration will do nothing.
Twiggy probably made a donation and Abbot is looking to look like he is looking into it.
Bluster.
It sits at an important retrace level right now IO is down on US$ strength as are all the commods.


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## Potator (20 May 2015)

notting said:


> It sits at an important retrace level right now IO is down on US$ strength as are all the commods.




I don't post much... Is there a good intra-day source of iron ore price? Because to me it sure looks like IO is still up off the lows and roughly the same price as when FMG was 20% higher a week ago:

http://www.barchart.com/charts/futures/ITIK15

Also the AUD is back below US 80c.

As an aside, aren't the other majors costing their shareholders profits by ramping up and selling more for a much smaller margin? (Not to mention the Aus tax man).


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## Value Collector (20 May 2015)

notting said:


> It sits at an important retrace level right now IO is down on US$ strength as are all the commods.




Port stocks are down by another 3.8% this week.


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## ROE (20 May 2015)

China Bankroll Vale mega expansion, cheap cheap price is here to stay

http://www.afr.com/business/mining/china-to-bankroll-vale-iron-ore-expansion-20150520-gh5leq

"More importantly, China will loan the company up to $US4 billion ($5 billion) to help fund a $US16.5 billion expansion called S11D. The project, which should be finished next year, will produce 90 million tonnes of high-quality iron ore that will be shipped to China at a cost almost as low as that achieved by industry leader Rio Tinto. "


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## ROE (20 May 2015)

Potator said:


> As an aside, aren't the other majors costing their shareholders profits by ramping up and selling more for a much smaller margin? (Not to mention the Aus tax man).




No that is a smart business decision long term, take out all your rivals during down turn, you becomes stronger while everyone disappear, even more profit margin when the cycle turns.

The major making money even at this level and enjoy the benefit of wiping out smaller players.

DMP and FLT do that all the time, undercut their rival on price and slowly bleeding them out of the market. They get stronger as smaller guys disappear, can you get pizza cheaper than DMP  ?
and you want to fight DMP on price, they take you on and then some more..

FMG tauting rio and bhp he is the third force in Iron ore to be reckon with during boom time, now they answer his call


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## stit (21 May 2015)

notting said:


> Trust me the administration will do nothing.
> Twiggy probably made a donation and Abbot is looking to look like he is looking into it.
> Bluster.
> It sits at an important retrace level right now IO is down on US$ strength as are all the commods.





I can appreciate that they may do nothing at this juncture - but could see state governments in the future paying much closer attention to supply demand dynamics in the future when deciding on future mining approvals. I appreciate that a mine site is a very long term investment but could foresee that pending approvals for expansion could be put at risk in the future if the approval is outstanding in an oversupplied market. I can also see federal governments rejigging how they get paid on royalties moving from a cut of the price per tonne to a tiered system where the amount paid is geared via usage. e.g pay more over 200m tonnes increasing to 250m increasing to 300m and so on.


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## notting (21 May 2015)

The main thing to be thinking about is what demand looks like from China.
At present price of BHP, RIO, Vale and FMG are indicating negligible demand growth.

If the latest Chinese stimulus measures push demand higher then this would be a buying opportunity.

So far Xi has shown plenty of guts in resisting the old ways of overbuilding to achieve growth targets as well as discipline in many other areas of the Chinese economy, which is a good thing but not good for IO.

Twiggy is displaying plenty of acts of desperation which spells things are not good for FMG right here and now, not  as good as the FMG managers are trying to pretend.

Twiggies backing of AGO looked like a desperate act of trying to show that no one is going broke and that someone muchy bigger should do the same and make a bid for FMG.

I suspect he is trying to help the Chinese think that they would be smart to buy FMG at this point cause it would allow them an influence on supply that is proving costly whilst they subsidise  the Chinese miners to keep them in the game.

If there was going to be a sudden lift in demand from China they could do worse than buy it. But they are not!
So far that spells trouble.


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## notting (21 May 2015)

Oh Noooooooooo.

Vale Inks massive deal with China - 

http://www.afr.com/business/mining/china-to-bankroll-vale-iron-ore-expansion-20150521-gh5leq

Andrew is left just so - 



Moral of the story - Don't stand up at a Chinese banquet and call for a cartel.


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## stit (21 May 2015)

notting said:


> The main thing to be thinking about is what demand looks like from China.
> At present price of BHP, RIO, Vale and FMG are indicating negligible demand growth.
> 
> If the latest Chinese stimulus measures push demand higher then this would be a buying opportunity.
> ...




Maybe - personally i think he's a little bit more shrewd than to be that transparently desperate. I tend to think there is more than meets the eye than he's just being plain desperate. I think he's playing a long term political game trying to educate every australian  that these two massive foreign owned companies are having a purge of smaller australian owned companies at the public expense - which is essentially what they are trying to do however you spin it - and he's striking while the iron is hot with a massive whole in the budget because of it.  I think he's doing it so when they eventually come back to state and federal governments cap in hand - which they have to do sooner or later, they are heavily scrutinised. I dont think he's concerned about the viability of his company - again if he thought the company was doomed ( and he would know ) he would have cashed out his billions by now and sailed off into the sunset. Why would he continue with this charade if its days are numbered? What does he get out of it? To me the simple numbers tend to stack up for fortescue. The world currently needs 1.7 - 1.8b tonnes of seaborne ore. The majors intend on producing 400 + 360 + 290 + 180 = 1240. At sub $39 62% platts break-even - soon to be $34 and a demand of 1.8b tonnes - fortescue  are too competitive to be drowned, with nearly every other producer on the earth underwater - I just can't grasp the fortescue doomsday logic. Yes china's appetite for ore may have peaked and on the decline, but its not going to just disappear. China's recent stimulus measures would indicate they are not prepared to let this sort of disaster happen.


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## Value Collector (21 May 2015)

notting said:


> Vale Inks massive deal with China -




It doesn't seem like it's something they would do if they believed there was an impeding decade long over supply, maybe the supply side is not what the bears think.

I think shows Vale is worried about it's own costs, with FMG's production costs likely to be less than Vale's in the next quarter and brazil continuing to be three times further from china, they are doing their best to reduce costs.

Do you think the consistent reduction of Iron ore inventories at the chinese ports says anything about the Iron ore supply? Down 3% in the last week is a decent move, could this have anything to do with weakness in price in the last 7 days? If it weakness is due to draw downs, How long can the weakness be sustained?


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## stit (21 May 2015)

notting said:


> Oh Noooooooooo.
> 
> Vale Inks massive deal with China -
> 
> ...





Hang on.........Am i reading this right in that the investment from china is to buy eight existing vale ships to help consolidate vale balance sheet woes because they've been making a loss, are struggling with capital expenditure and china wants to make sure they get their hands on higher grade ore than what australia produces? And what is the cost to vale in return for this? The story only seems to focus on the benefits?? I'm sure a $5b investment comes at a price....


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## notting (21 May 2015)

stit said:


> And what is the cost to vale in return for this?




*Shipping*. (The point of difference. The edge!)

China puts up prices to increase their own margines for shipping profits, harms Vale and buys into it to 'save it,' - Stealth attack (China all over.)

It's always seemed to me that BHP and RIO were concerned about Vale not FMG despite Andrews over inflated sense of self importance.
This does not seem to have been lost on the Chinese who have picked the genuine contender.  FMG is a sad side show and will continue to be with all it's debt.


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## stit (21 May 2015)

notting said:


> *Shipping*. (The point of difference. The edge!)
> 
> 
> This does not seem to have been lost on the Chinese who have picked the genuine contender.  FMG is a sad side show and will continue to be with all it's debt.





Maybe...........but at least they continue to be in charge of all their own faculties. What your saying is that China considers Vale the most attractive weak link. Like Value says.........Who cares if your a sad side show making $10/tonne or 1.6b  - 2b a year and in control of your own destiny.


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## Value Collector (21 May 2015)

notting said:


> FMG is a sad side show and will continue to be with all it's debt.




Vale is the one going into debt to the Chinese here, and their 16billion plus investment is going to generate 90million tonnes capacity, FMG got to 165million tonnes on an investment of less than 14billion, and that was an all green field investment including port and rail.

Not to mention a chunk of that 14 has been cash flowed already.


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## notting (21 May 2015)

stit said:


> $10/tonne or 1.6b  - 2b a year and in control of your own destiny.




Maybe not.  

Call it profit in your dreams. The reality is that FMG are about $20/tonne short of being able to pay off the debt if price does not rise. Lenders, scrambling like never before for yield, in the lowest interest rate environment ever, aren't willing to give FMG less than 10%.  Hardly a vote of confidence in Twiggies business plan.
Wonder what FMG will be offered next time they try to role over debt when interest rates are likely to be more normalized. 

Lower grades, smaller margins and no way of influencing the price of oversupplied IO.

Not quite the the captain of their own destiny when you scratch a little further below the dirt on the surface.


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## Value Collector (21 May 2015)

notting said:


> Maybe not.
> 
> Call it profit in your dreams. The reality is that FMG are about $20/tonne short of being able to pay off the debt if price does not rise. Lenders, scrambling like never before for yield, in the lowest interest rate environment ever, aren't willing to give FMG less than 10%.  Hardly a vote of confidence in Twiggies business plan.
> Wonder what FMG will be offered next time they try to role over debt when interest rates are likely to be more normalized.
> ...




Not that old chestnut again 

At $10 profit per tonne FMG could clear most of their debt before it comes due, and like I have said before just refinance the remainder if they needed to.

and yes money that goes towards clearing principle on debt is profit, it's called building equity. 

If you look at rio and bhp, they have no plans to clear their debt to zero, bonds are a permanent part of their capital structure, as it is with most large companies, especially ones with large property or infrastructure investments.


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## notting (21 May 2015)

Value Collector said:


> Money that goes towards clearing principle on debt is profit, it's called building equity.



Yeah it's called profit. The trouble is that kind of 'profit' needs to be qualified. 
When you have made more money than what has been put into the business I call that profit.
You ask a simple question - Did the business make money or lose money when you count the total of what it cost compared to what it made.



Value Collector said:


> $10 profit per tonne FMG *could* clear most of their debt.




So why the 'could?' That sentence screams one thing to me.  - 'FMG won't clear much, if any of their debt, even if they can squeeze a %10 margin out of their lower grade IO whilst higher grade IO is trading with a roof of $60 on it's head.



> The premier echoed his earlier criticism of BHP and Rio in March when he accused them of "offending" the Chinese by charging them top dollar at the peak of the iron ore boom.
> 
> "The major producers here have offended the Chinese over the last few years and Chinese don't forget that," Mr Barnett said.




Well Australia was offended by everything the Chinese communist party stands for and all that it does. Like paying 10,000 of it's students, occupying this country to take buses to Canberra and attack Australians including old women and children on the lawns of parliament house, during the Olympic flag relay.  
Not to mention hacking into the reserve bank of Australia, after calling openly to the world, literally the day before, to end state based hacking!
There is no level we could stoop to, to offend the lowest example of humanity the world has had to put up with since humans began.


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## Value Collector (22 May 2015)

> Yeah it's called profit. The trouble is that kind of 'profit' needs to be qualified.
> When you have made more money than what has been put into the business I call that profit.
> You ask a simple question - Did the business make money or lose money when you count the total of what it cost compared to what it made



.

The equity holders have more equity capital today than the actual capital they injected at the start, about a third of the debt principle has been repaid with interest, and the remaining debt is earning interest and will be repaid over time.

If you don't count profit until the fix asset costs have been earned back 100%, you are going to get a pretty warped earnings profile, that doesn't match reality. Eg if you own a fixed asset worth $100k and 12 months later it's worth $95k but has thrown off $20 of cashflow, you have $15k profit, you don't treat it like you are still down $85k just because the fixed asset hasn't been total amortised yet.

Profits are the cash that the asset generated minus the amount of deprecation/ depletion the asset suffered. The capital value of the asset is still a real thing, so it forms part of the net worth, you don't ignore it and only count the cash flows.

FMG own a bunch of assets, some with very long productive lives ahead of them, So as they take their cashflow and repay the bond holders, they are building equity for shareholders, and increasing future cash flows by reducing interest payments.



> So why the 'could?' That sentence screams one thing to me.  - 'FMG won't clear much, if any of their debt, even if they can squeeze a %10 margin out of their lower grade IO whilst higher grade IO is trading with a roof of $60 on it's head



.

What is $10 x 165,000,000 tonnes x 4 years till debt is due? Seems like a lot of cash to me.

I say could, becuase they could pay it all in dividends, or they could make acquisitions etc, they probably won't though, they will reduce debt. But yes some companies hold their bonds permanently refinancing so they can keep growing, eg bhp and rio


----------



## stit (22 May 2015)

notting said:


> Maybe not.
> 
> Call it profit in your dreams. The reality is that FMG are about $20/tonne short of being able to pay off the debt if price does not rise. Lenders, scrambling like never before for yield, in the lowest interest rate environment ever, aren't willing to give FMG less than 10%.  Hardly a vote of confidence in Twiggies business plan.
> Wonder what FMG will be offered next time they try to role over debt when interest rates are likely to be more normalized.
> ...




Im not surprised that they had to pay a premium on their interest given the current level of hysteria in the ore sector atm. They've secured funding at the height of uncertainty and paid a necessary higher price. At the end of the next five year term i would be very surprised if FMG gearing was not at the lower end of the scale compared to the other three......

Balance sheets of the four majors from 2014

FMG assets $22.69b.......liabilities $15.11b.........debt ratio 66%

Rio assets $107.82b.......liabilities $61.54b.........debt ratio 57%

Vale assets $116.49b.......liabilities $60.17b........debt ratio 52%

Bhp assets $151.41b.......liabilities $72.27b.........debt ratio 48%

Is the FMG debt ratio really that obscene compared to the majors? When people bang on about the debt laden FMG, do they hold the majors accountable to clear their debt in the given term without extension also? Is it that much of a stretch to imagine that fortescue will reduce debt by a further $1.278b in the very near future which would give the same debt ratio of rio which is considered sound? I'm not sold on the debt ridden logic.....................


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## notting (22 May 2015)

stit said:


> Im not surprised that they had to pay a premium on their interest given the current level of hysteria in the ore sector atm. They've secured funding at the height of uncertainty and paid a necessary higher price.




BHP the biggest IO minor on earth, secured more money for almost nothing virtually on the same day!!!!
If the difference between these models is negligible, why the chalk and cheese and why is Twiggy tearing his hair out? 

- *Money talks*.

If Twiggy was sitting back with a smug grin on his face like Sam and co.  I'd be a little more comfortable.  Perhaps we could only argue, then, that banksters lose their ability to count when it comes to FMG. (unlikely)

I guess they can raise capital if they had too.  
Twiggy on the other hand? 
That's an argument for FMG at a diluted level. 

Seeing the light yet?


----------



## stit (22 May 2015)

notting said:


> BHP the biggest IO minor on earth, secured more money for almost nothing virtually on the same day!!!!
> If the difference between these models is negligible, why the chalk and cheese and why is Twiggy tearing his hair out?
> 
> - *Money talks*.
> ...




Bhp is 7 times the size of FMG. Bhp is not a pure play iron ore miner. Bhp has long been established as a low cost producer that will never be squeezed out of the market. Of course they can secure money at a lower rate than fortescue. Your not comparing apples with apples and I'm not getting the gist of your point? You were talking about debt.....Are you suggesting that fortescue cannot obtain funding as cheap as BHP because the market sees them as a risk because of their debt levels? As per above their level of debt doesn't seem as obscene to me as people would make out. I tend to think that fortescue paid through the nose because they're still proving they can be profitable in a market that is currently very difficult. Until they manage to prove they can produce ore at the break even levels that they are forecasting, obtaining funding will attract a premium. It seems to me however that they are reducing their cost of production nearly every quarter at a rate that people find difficult to believe. This is to the point that they may even be undercutting - to this point - much larger competitors in vale, who as you say are starting to sell their soul to the devil to survive. The fact that they can obtain money at the height of the hysteria suggests to me that the market believes they can and will survive, but they will pay a premium. Yes your right, money talks........and $2.5b is a lot of money talking in secured funding when the market is in an unprecedented crisis.


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## notting (22 May 2015)

:fanWell you made the list of *comparables. *
blinkers.

I guess the banks would have been heartened by BHPs recent oil investments, like in Petrohawk when oil was at $100.   Or maybe just the state of oil in general, at the time - 45 ish. 
Copper? hmmm . 
What else is there? Potash! 500million take over cost for :bad: 

Well diversified indeed.  

Psst, IO is their biggest earner.


----------



## stit (22 May 2015)

notting said:


> :fanWell you made the list of *comparables. *
> blinkers.
> 
> I guess the banks would have been heartened by BHPs recent oil investments, like in Petrohawk when oil was at $100.   Copper? hmmm . What else is there? Potash! 500million take over cost for :bad: Well diversified indeed.




I wasn't deliberating about the viability of BHP - its a mute point. You made the comment that FMG was debt laden. I made the point that based on its rivals balance sheets that maybe its not as bad as you make out. I was hoping you were going to educate me with something I didn't know. Instead you seemed to move on from debt to the rate that bhp and fmg can obtain funding at? I made the point that once fortescue establishes its profitability under the new regime of lower ore prices that funding would be cheaper for them. You moved back to BHP? Maybe your on the wrong forum??


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## notting (22 May 2015)

Well, their all capital intensive. BHP did it at close to 1% FMG 10%.
Even with BHPs awesome ability to do deals as shown above.
That's money talking, confidence vs lack of it from money experts.  Just a point.


----------



## Value Collector (22 May 2015)

notting said:


> BHP the biggest IO minor on earth, secured more money for almost nothing virtually on the same day!!!!
> If the difference between these models is negligible, why the chalk and cheese and why is Twiggy tearing his hair out?
> ?




Rio Mines more Iron ore than BHP.

And what do you mean the difference between BHP and FMG is negligible? BHP is more diversified, it's not 100% iron and has less debt, obviously the diversification and the lower debt is the reason for the cheaper financing, not to mention Fmg is still in the process of reducing costs, where as bhp and rio have already reduced costs due to the time they have been mining.


But as I said when it comes time to refinance next time, FMG will be on a much lower debt ratio, and will achieve beter financing, (if it needs it of course)


----------



## Potator (22 May 2015)

notting said:


> Yeah it's called profit. The trouble is that kind of 'profit' needs to be qualified.
> When you have made more money than what has been put into the business I call that profit.
> You ask a simple question - Did the business make money or lose money when you count the total of what it cost compared to what it made.
> 
> ...




This guy...


----------



## notting (22 May 2015)

Value Collector said:


> Rio Mines more Iron ore than BHP.
> 
> And what do you mean the difference between BHP and FMG is negligible?




They mine stuff that is pretty cheap at the moment.  

I was certainly not referring to their current debt v's equity situation or CAPEX investment status relative to 'ready to ship status.'


----------



## Ves (22 May 2015)

If, as some analysts claim, FMG was "high-grading" (ie.  cherry-picking their highest quality ore to improve the output grade) to increase margins in the short-term,   how would an investor be able tell?


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## notting (25 May 2015)

> "several" applications had recently been lodged with the Foreign Investment Review Board that would affect mining companies. The applications "raise the possibility of significant upheaval in the iron ore industry and ownership of sections of it over the next 12 months"




I'd rather be long on this rumor for the moment.


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## Potator (26 May 2015)

notting said:


> I'd rather be long on this rumor for the moment.




But China evil, debt vs market cap, FMG 50c, Andrew.

Now that that's out of the way, even if FMG says it's not aware of anything the said rumour suggests someone with at least reasonable backing thinks there are "players" worth buying. If it's not FMG and assuming it's not one of the bigger companies it points to FMG being worth more again. I wonder how much Goldman owns!


----------



## notting (26 May 2015)

Not too impressed with the speculation in FR talking of Andrew selling a stake which is the last thing the company needs as part of the deal.  
Along with the boasting about driverless trucks.  What was that about employment Andrew?
If he offloaded a stake now, along with the employment plans recently instigated, it would hero to zero in a flash.
FMG needs cash.  
Assets for cash is the only thing that makes sense.


----------



## stit (26 May 2015)

Value - would like to hear what you think about these developments........


At what point of investment do companies have to go through the FRIB? Is it over a certain percent of value of the company?  What potential implications do you think this could have on the share price? Is the suggestion that these chinese entities looking at buying into the company via buying listed shares or via some other manner?

Would appreciate if you could shed a little more light on what you think about the matter


----------



## stit (26 May 2015)

It would seem to me that the chinese are playing rio and bhp at their own game. Bhp and Rio seem to have been treating the market with complete arrogance and contempt with the eat sh*t and die mentality of sink or swim by flooding the market with low cost product with a long term strategy of recouping profits when competition is crushed. It seems with the recent investments from the chinese in Vale and now the rumours surrounding fmg that they may be one step ahead of the primary two by ensuring that they have at least four permanent big producers in the market to ensure they never get screwed again............

Twiggy may yet have the last laugh..........


----------



## Value Collector (26 May 2015)

stit said:


> Value - would like to hear what you think about these developments........
> 
> 
> At what point of investment do companies have to go through the FRIB? Is it over a certain percent of value of the company?  What potential implications do you think this could have on the share price? Is the suggestion that these chinese entities looking at buying into the company via buying listed shares or via some other manner?
> ...




I haven't heard any firm details on what the deal is or how likely it is that it will go through, so It's all speculation at this point.

There are certain deals could be good and others that could be bad, If any deal does end up coming about, it would most likely be positive for the share price from it's current position, but dilute some of the future capital growth which as I have said potentially may end up being $15/ share over time.

My personal opinion is that Plan A should be that FMG just sits there and uses it's positive cash flow to improve it's balance sheet, this way over time full value generation will pass on to shareholders.

I think that is also Andrews Preference also, I have a feeling that these talks are part of a "Bullet proof plan B" as Andrew always says, and may amount to nothing.


----------



## stit (26 May 2015)

Value Collector said:


> I haven't heard any firm details on what the deal is or how likely it is that it will go through, so It's all speculation at this point.
> 
> There are certain deals could be good and others that could be bad, If any deal does end up coming about, it would most likely be positive for the share price from it's current position, but dilute some of the future capital growth which as I have said potentially may end up being $15/ share over time.
> 
> ...




But does Twiggy have a choice? How can he stop these massive companies from buying in, who have a vested interest in keeping a healthy competition in the market and ore prices low?. Obviously this would seem the strategy of the chinese to ensure they don't end up at the mercy of the duopoly of bhp and rio in the future in a worse case scenario?


----------



## Value Collector (26 May 2015)

If a deal does go through with the chinese firms, it could take several forms. 

1, It may be a deal to sell an equity interest in one or more of the existing mines, leaving FMG with reduced equity position in the mined tonnes, but still earning a toll as the tonnes pass through the rail and port infrastructure, and still controlling it's other tenements and future developments.

2, It could be a sale of equity in the whole system, eg mines, port, rail, exploration tenements, future developments etc.

3, It could be some deal that essentially translates to a financing deal, such as the vale deal or a buy and lease back deal on some of the infrastructure eg power plants etc.

there are other options also.

My preferred deal would be 3, followed by 1, and the worst option would be 2.


----------



## Value Collector (26 May 2015)

stit said:


> But does Twiggy have a choice? How can he stop these massive companies from buying in, who have a vested interest in keeping a healthy competition in the market and ore prices low?. Obviously this would seem the strategy of the chinese to ensure they don't end up at the mercy of the duopoly of bhp and rio in the future in a worse case scenario?




He can't stop them buying shares in the open market, and I wouldn't have a problem with them doing that, that's not going to dilute any future gains, it will probably speed up the gains. 

What can cause dilution of future value is deals that are basically capital raisings, where we sell them newly issued shares for less than what they are truly worth, or sell equity in our assets for a lot less than the value we would get by just holding them our selves and paying the interest on the current loans that funded them.


----------



## stit (26 May 2015)

Value Collector said:


> He can't stop them buying shares in the open market, and I wouldn't have a problem with them doing that, that's not going to dilute any future gains, it will probably speed up the gains.
> 
> What can cause dilution of future value is deals that are basically capital raisings, where we sell them newly issued shares for less than what they are truly worth, or sell equity in our assets for a lot less than the value we would get by just holding them our selves and paying the interest on the current loans that funded them.






Given the FRIB is involved one would assume it involves a scenario like one of the three above rather than buying shares on the open market which is fair game for everybody? Or does foreign buy ins like this on the open share market still have to be approved?

If one of the three above eventuates what would you speculate on the share price as an immediate factor?


----------



## Value Collector (26 May 2015)

stit said:


> If one of the three above eventuates what would you speculate on the share price as an immediate factor?




It all depends on what the deal is, and most importantly the price the deal gets done at.

If a 50% stake in the existing mines was sold for a good price that basically cleared FMGs debt, and included a good Tolling charge for access to the port and rail infrastructure, and the exploration and development book remains 100% FMG I can see it having an immediate positive impact on the share price.

If the deal went through at a price that wasn't great, it may still have a positive impact at first, but the large future gains would be diluted.

If the deal was basically a capital raising at todays price, it would not be good, I can't see Andrew doing anything that would dilute him though, and the way the FMG management talked about potential deals last time they were looking at making some sales was pretty good, they seemed to have the shareholders interests at the front of their mind.

Last time they went it negotiations it was a plan B, and they never went through with a deal, I would think the current talks ( if they indeed are happening) are much the same, It's a Plan B, unless the price offered is very good.


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## stit (26 May 2015)

Value Collector said:


> It all depends on what the deal is, and most importantly the price the deal gets done at.
> 
> If a 50% stake in the existing mines was sold for a good price that basically cleared FMGs debt, and included a good Tolling charge for access to the port and rail infrastructure, and the exploration and development book remains 100% FMG I can see it having an immediate positive impact on the share price.
> 
> ...




Awesome - thanks for that. Will be interesting to see how it pans out and how much truth there is to the matter. The semi annual update is just around the corner too i guess so will be interesting to see what sort of a profit they turn especially if the price continues to hover around the $60 mark until then.


----------



## stit (27 May 2015)

Thought this was an interesting read this morning...........


http://www.smh.com.au/business/comm...l-of-his-iron-ore-empire-20150526-gha0k6.html


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## Value Collector (28 May 2015)

Value Collector said:


> Port stocks are down by another 3.8% this week.




Port stocks are down again this week, close to a 1% drop. So far they are about 40Million tonnes off their High.

It's interesting to note, the Port stocks are declining faster than the expected production rate of the Roy Hill mine.


----------



## notting (28 May 2015)

> Andrew Forrest says he has no interest in selling down his 33 per cent share in Fortescue Metals Group and Fortescue will not issue new shares unless the price reflects the company's high underlying asset value.




Dat's a gooood boy. Goood boy.  Smacko for that.


----------



## Value Collector (28 May 2015)

notting said:


> Dat's a gooood boy. Goood boy.  Smacko for that.




Sounds like good common sense to me, He doesn't want to sell his own shares because he knows their true value, and he doesn't want to issue new ones that don't reflect that value.


----------



## stit (28 May 2015)

Value Collector said:


> Port stocks are down again this week, close to a 1% drop. So far they are about 40Million tonnes off their High.
> 
> It's interesting to note, the Port stocks are declining faster than the expected production rate of the Roy Hill mine.




Yes - it would seem that the market is currently in a deficit position. I noted that credit suisse was the only group of analysts to come out this week and acknowledge that fact.

The author of the link that I posted seemed to be inferring that any purchase into the company would more than likely be through the share market itself. It seems to make sense as if it was via an equity arrangement fortescue would have to declare this to the asx?


----------



## qldfrog (29 May 2015)

The financial review had this long article last week end about the recently announcement of Chinese mega investment  with Vale: Super mega tankers and very high quality ore at 11$ a tonne on their way.
The ships built on purpose to smash the delivery cost from Brazil to China.
It seems China is keen to ensure IO price will not go high again.
Expansion planned is huge and coupled with lower demand and higher scrap metal reuse, I do not see IO much higher in 5 years or ever.Could jitter but the trend is down IMHO
So unless they actually buy FMG at a current discount, I do not believe the SP will rise in medium or long term.
Did I miss it or was that critical news for FMG never discussed in that thread?


----------



## ROE (29 May 2015)

There are a few AFR articles that mentioned the deals and it essential boiled down to

they dont want to buy shares, they want to own asset  if FMG goes down bankers cant take
the asset, they still owned by the Chinese.

and if that to happen (Chinese buying Assets) FMG holder dont get much as their profit from asset shrink. It just provide them with breathing space and some working capital.

Caught between a rock and a hard place, their only hope is Iron Ore price rise and AF will resist selling assets as long as he can but if banker force his hand there isn't much he can do.


----------



## qldfrog (29 May 2015)

ROE said:


> There are a few AFR articles that mentioned the deals and it essential boiled down to
> 
> they dont want to buy shares, they want to own asset  if FMG goes down bankers cant take
> the asset, they still owned by the Chinese.
> ...




yes agree with you, not good for fmg but it is a fact now for Vale: the chinese de facto buy their mines and logistics.
Will be hard to compete and is not years away.


----------



## notting (1 June 2015)

> Li Xinchuang, deputy secretary of the China Iron and Steel Association (CISA), which represents China's biggest state-owned steel mills, said last week it was inevitable Fortescue would require an equity partner for it to be able to compete on a global stage with BHP Billiton, Rio Tinto and Brazil's Vale.




I've been wrong on being China desperate to buy things before so take it with a grain of salt.

But I reckon that the purchase of ships from Vale rather than other assets and talking down FMG is a double edged threat to try to drive down FMG price so they can buy it.  They can use the ships for both. If they owned FMG they would just make that their preferred source when deman is lower. It is encouraging that they have just baught PNA.


----------



## orty53 (1 June 2015)

Baosteel has created a new Australian-registered company called "Baosteel Financing 2015 Pty Ltd", & issued a $500m bond in January - money to be used to purchase a FMG asset?


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## Value Collector (1 June 2015)

orty53 said:


> Baosteel has created a new Australian-registered company called "Baosteel Financing 2015 Pty Ltd", & issued a $500m bond in January - money to be used to purchase a FMG asset?




Where have they said they would be purchasing a FMG asset?

All I can see is that they have said the money would be used for debt repayments and "investment in overseas resources".

Boasteel are a joint owner of a mine with Rio, they also have existing deals with BHP and green field Pilbara projects on their books, So the money could be used for nearly anything.


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## notting (1 June 2015)

500m is a trivial amount with respect to FMG anyway.


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## Value Collector (2 June 2015)

notting said:


> 500m is a trivial amount with respect to FMG anyway.




In other news, Chinese port stocks are down by over 1% again last week. port stocks are now the lowest they have been since 2013.


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## Value Collector (10 June 2015)

Value Collector said:


> In other news, Chinese port stocks are down by over 1% again last week. port stocks are now the lowest they have been since 2013.




And down another 2.6 percent this week.


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## stit (10 June 2015)

Value Collector said:


> And down another 2.6 percent this week.




Deficit or as analysts say we're still restocking sprinkled with the usual suspect of bad weather?


----------



## stit (15 June 2015)

Thought this was an interesting read from Forrest's perspective on the inquiry, inquiries into other markets, vale and where they stand in the market, combined with their costs and the $4b deal, along with where fortescue stands. Has some interesting points.

http://www.businessspectator.com.au...ces-and-energy/thin-veil-irrational-behaviour

Can anybody shed some light on what Forrest means by this statement....

"Last week was also the start of the mischievous ‘play the man, not the ball’ suggestions that we are high-grading our ore bodies. The statement completely misunderstands the Australian ingenuity in our processing plants that allows us to upgrade the iron ore, meaning part of our success is operating more and more effectively. We mine a lower grade and therefore less overburden is produced and lower costs are achieved"

How do they "upgrade ore"? Do they blend it in some way?


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## pinkboy (15 June 2015)

stit said:


> How do they "upgrade ore"? Do they blend it in some way?




Yep.  Im assuming its the same as coal.  Different processing produces different grades.  They can even blend them after the process by physically blending with dozers etc dependant on customer requirements.


pinkboy


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## Value Collector (15 June 2015)

stit said:


> How do they "upgrade ore"? Do they blend it in some way?




Ore is blended in the processing plant to certain specifications, each company has their own blend that they market.

But I think in this case he is talking about upgrading the ore by removing some of the non Iron content.

Eg. If a mine is producing Ore that is 59% Iron Ore, then  it is 41% other stuff. If you can some how remove some of the "other stuff" during the processing, you can take your 59% Ore up to 62% or higher, and you will achieve a better sale price or you could target some of the shallower ore that's cheaper to get at but that is lower grade, but then upgrade it.


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## Miner (16 June 2015)

Value Collector said:


> Ore is blended in the processing plant to certain specifications, each company has their own blend that they market.
> 
> But I think in this case he is talking about upgrading the ore by removing some of the non Iron content.
> 
> Eg. If a mine is producing Ore that is 59% Iron Ore, then  it is 41% other stuff. If you can some how remove some of the "other stuff" during the processing, you can take your 59% Ore up to 62% or higher, and you will achieve a better sale price or you could target some of the shallower ore that's cheaper to get at but that is lower grade, but then upgrade it.






pinkboy said:


> Yep.  Im assuming its the same as coal.  Different processing produces different grades.  They can even blend them after the process by physically blending with dozers etc dependant on customer requirements.
> 
> 
> pinkboy




Folks
Ore blending is a common process done by BHPB, Rio and FMG was no exception.
For iron ore companies like Rio Tinto they use the reclaimers and virtually it is mechanical mixing . It is like you use a stirrer to mix two different solids in a jar. Difference is the reclaimer mixes two different ores into one stock pile. 
It is not exactly done at processing plant by definition of processing plant (beneficiation and ore treatment plant) but very near vicinity of processing plant.
Contrary in gold plant often the pressure is to process the high grades to look nice and as driven by gold prices.
Trust it has made some sense


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## stit (16 June 2015)

Value Collector said:


> Ore is blended in the processing plant to certain specifications, each company has their own blend that they market.
> 
> But I think in this case he is talking about upgrading the ore by removing some of the non Iron content.
> 
> Eg. If a mine is producing Ore that is 59% Iron Ore, then  it is 41% other stuff. If you can some how remove some of the "other stuff" during the processing, you can take your 59% Ore up to 62% or higher, and you will achieve a better sale price or you could target some of the shallower ore that's cheaper to get at but that is lower grade, but then upgrade it.




If they can "upgrade" ore why don't they just churn out 62% graded ore rather than 58% for a discounted rate? Or is one to assume that the 58% that they produce already upgraded?


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## qldfrog (16 June 2015)

stit said:


> If they can "upgrade" ore why don't they just churn out 62% graded ore rather than 58% for a discounted rate? Or is one to assume that the 58% that they produce already upgraded?



smelters are tuned to a specific mix, and with the time, some de factor "standards" appear.
Consistency is the key word


----------



## Value Collector (16 June 2015)

stit said:


> If they can "upgrade" ore why don't they just churn out 62% graded ore rather than 58% for a discounted rate? Or is one to assume that the 58% that they produce already upgraded?




Suppose it all comes down to cost, it may be cheaper to sell for a discount rather than upgrade in some cases.

I mean then could build a concentrating and pelletising plant and like vale uses in Brazil and rio uses in North America to take low quality ore into a high quality pellet, by it all comes down to cost.


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## stit (18 June 2015)

Value Collector said:


> Suppose it all comes down to cost, it may be cheaper to sell for a discount rather than upgrade in some cases.
> 
> I mean then could build a concentrating and pelletising plant and like vale uses in Brazil and rio uses in North America to take low quality ore into a high quality pellet, by it all comes down to cost.




So, I guess what that means is that as technology and efficiency of iron ore companies processing plants is refined, the grade of the ore in the mine becomes less relevant. The capital outlay of companies on the processing is more important, which is essentially what forrest was saying to a degree.


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## stit (18 June 2015)

Ive noticed with the fortescue share price on a day to day trading basis, that more often than not there seems to be a big sell off in the last hour of trade between 3 and 4 o'clock. This seems to be the case regardless of whether the stock is having a positive day or a negative day. Does anyone know if there is any rhyme or reason for this?


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## Value Collector (18 June 2015)

stit said:


> Ive noticed with the fortescue share price on a day to day trading basis, that more often than not there seems to be a big sell off in the last hour of trade between 3 and 4 o'clock. This seems to be the case regardless of whether the stock is having a positive day or a negative day. Does anyone know if there is any rhyme or reason for this?




I suspect it has to do with whispers coming out in the afternoon in relation to how the Iron price is trading that day.

I have noticed in afternoons where it has ticked up, later that night it's announced the Iron Ore price surged higher, and in afternoons that show weakness often later it comes out that Iron has traded lower.

This sort of stuff doesn't bother me, I am more interested in the averaged realised margin, and how this will affect the end of year and half year profit reports.

Whether the price of ore ticked up or down on a given day is almost meaningless.


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## Value Collector (18 June 2015)

stit said:


> So, I guess what that means is that as technology and efficiency of iron ore companies processing plants is refined, the grade of the ore in the mine becomes less relevant..




The technology already exists, Vale and Rio both mine low grade ore in the Americas, and have to concentrate and pelletize it to make a marketable product, Offcourse it means production cost is higher though, because you have to move more earth and you have a whole other process of concentrating and pelletizing which the Pilbara operators don't have to do.

It's much cheaper just to dig up high grade lump and ship it, in some cases though, which I suggest forrest might be talking about  there might be simple ways to arrive slight grade increases


----------



## Value Collector (18 June 2015)

stit said:


> So, I guess what that means is that as technology and efficiency of iron ore companies processing plants is refined, the grade of the ore in the mine becomes less relevant. The capital outlay of companies on the processing is more important, which is essentially what forrest was saying to a degree.




Watch this video from the 6min 50second mark, It's extremely corny and old fashioned, But Talks about how when the North American Iron ranges ran out of High grade ore in the 1950's they continued mining the other 95% of remaining low grade ore, and used concentrators and pelletisers to upgrade it.


At the 11min 40 second mark it talks about upgrading the ore 

It shows there is nothing new to mining low grade ore.

Also note, when the Americans are talking about "High Grade" ore, they are talking about any ore over 51%, So FMG's 59% in comparison is pretty high grade stuff.


----------



## Value Collector (19 June 2015)

as of Monday, the port stocks of Iron ore have contracted another 1.5%.


----------



## stit (23 June 2015)

Value Collector said:


> as of Monday, the port stocks of Iron ore have contracted another 1.5%.




Awesome - once again thank you, I really appreciate your input. I see that the price of ore is dropping again and the drop in port stocks being attributed to rio shipping less because of " bad weather ". I understood that pretty much the only thing that stopped shipments was a cyclone. From what I can see the Ore ports in wa have only been affected by one cyclone this year, and that was Nathan in March and was a long way from rio's ports. Am I missing something to this story or are people just speaking sh@t?


----------



## Value Collector (23 June 2015)

stit said:


> . From what I can see the Ore ports in wa have only been affected by one cyclone this year, and that was Nathan in March and was a long way from rio's ports. Am I missing something to this story or are people just speaking sh@t?




Well, the port stocks have been declining pretty steadily for months, So I don't think weather is the cause of the decline in port stocks. I am no expert of what affects port stocks, But I think it is probably a combination of traders reducing the amount of physical they hold, Chinese mine closures and the restocking that's been happening. 

A cyclone only slows down shipping temporarily, and won't normally affect prices that much unless supply is already tight.


----------



## herzy (23 June 2015)

Sorry for a potentially obvious question, but what is the significance of port stocks?


----------



## stit (23 June 2015)

Value Collector said:


> Well, the port stocks have been declining pretty steadily for months, So I don't think weather is the cause of the decline in port stocks. I am no expert of what affects port stocks, But I think it is probably a combination of traders reducing the amount of physical they hold, Chinese mine closures and the restocking that's been happening.
> 
> A cyclone only slows down shipping temporarily, and won't normally affect prices that much unless supply is already tight.




Yeah thats what i thought seems to be the obvious answer even to a particular novice like myself. It annoys me the comments that are quoted by analysts - its nearly to the point that the public comments they make are purposefully underhanded. 

Let me ask you this about what you think of the strategy of the 3 majors. Lets suggest for a moment that their sole intention is in fact to drown fortescue out of the market. It seems to me that its clearly evident at prices sub $50/tonne that the chinese have every intention of buying not only fortescue but every other viable mining company under duress regardless of what continent it sits on. It seems logical to me that every viable mine they send to the hands of the chinese is a nail in the coffin of their profits because its an extra tonne at lower prices that won't be purchased from them. If the chinese were to buy fortescue it would be an absolute catastrophe for the 3 majors because all of a sudden there is up to 200 million tonnes in circulation not subject to market dynamics anymore. I really don't grasp the strategy. They say its about market share but in fact they're not gaining market share - rather handing all their corporate power to their primary buyer. The strategy makes no sense to me??


----------



## Value Collector (24 June 2015)

herzy said:


> Sorry for a potentially obvious question, but what is the significance of port stocks?




Port stocks are is the amount of Iron ore China has stored at the port, it is handy to know what is going on with port stocks so you can interpret the price movements more effectively and get a clue to future demand.

eg. If port stocks are declining each week for months, it means that China is currently consuming more Iron Ore each week than is arriving on ships, So any weakness in price is likely to be temporary, because the price is being held lower because the shortfall in supply is being filled by eating into the stockpiles, eventually the stockpiles will drop to a level where they can not support the deficit and the excess demand will flow through to higher prices.

if it was the opposite, eg prices declining while port stocks also rising, that is a bad sign. 

So I guess what I am saying is to get a proper understanding of what's happening you have to look at port stocks as well as price.


----------



## Value Collector (24 June 2015)

stit said:


> Let me ask you this about what you think of the strategy of the 3 majors. Lets suggest for a moment that their sole intention is in fact to drown fortescue out of the market. It seems to me that its clearly evident at prices sub $50/tonne that the chinese have every intention of buying not only fortescue but every other viable mining company under duress regardless of what continent it sits on. It seems logical to me that every viable mine they send to the hands of the chinese is a nail in the coffin of their profits because its an extra tonne at lower prices that won't be purchased from them. If the chinese were to buy fortescue it would be an absolute catastrophe for the 3 majors because all of a sudden there is up to 200 million tonnes in circulation not subject to market dynamics anymore. I really don't grasp the strategy. They say its about market share but in fact they're not gaining market share - rather handing all their corporate power to their primary buyer. The strategy makes no sense to me??




I don't think they are trying to force Fortescue out, Bhp and Rio are only really completing projects they had already committed to before the big price drop, other smaller projects they commit to are just productivity based debottle necking stuff mainly.

Because their production cost is so low, even at these prices is makes sense to spend a little here and there to debottle neck and eek out a few more tonnes, FMG is doing the same thing.

When they say they are trying to protect market share, what the mean is they are trying to stop the high cost producers and low cost competitors from adding tonnes.

eg. The current price is about $60, at that price no high cost producer is going to add tonnes, Rio, BHP, FMG and VALE have the volume growth to them selves.

However, if Rio said it was going to be a nice guy and cut production 50Million Tonnes to support the price, the price would rise to $100, that would cause 50Million Tonnes of high Cost production to come back on line, the price would drop again and Rio would be sitting there earning the same per tonne but with smaller market share because they reduced production.

Rio and BHP have both said it's not up to them to cut production, they are the low cost guys, its up to the high cost guys to reduce, But its a balancing act, $49 Ore might cause 150M tonnes to leave the market, which would cause the price to rise back to $90, so the low cost guys have to add back 50M tonnes to bring the price back to $60 etc.

So we will see a fluctuating price, but High cost will leave during the lows and low cost will add on the upswings, But I am Confident Rio,BHP and FMG will all have good low cost businesses throughout the fluctuations.


----------



## Value Collector (25 June 2015)

As of Monday june 22, the port stocks have declined another 1.5%


----------



## stit (30 June 2015)

*Re: FMG - Fortescue Metalss*



Value Collector said:


> As of Monday june 22, the port stocks have declined another 1.5%




So your basically saying that you believe that the majors are going to regulate the flow of supply to keep higher cost supply out of the market, rather than flood the market completely? I don't know that I've heard that theory before but may hold some credit given "supply interuptions" that have been inherent since the start of the year since the price dropped below $60. 

Why would they not be better off at a $90 per tonne mark? I appreciate the theory re market share but what's the point of working harder for less or equal money?

What impact do you think that the Greece debacle will have on share value? The value has dropped a massive .60 in the last fortnight with no primary reason other than Greece and or people flicking fmg prior to the end if the financial year because it's been an atrocious performer? Not unless the stock is being heavily shorted again on the basis of likely lower ore prices?


----------



## Value Collector (30 June 2015)

*Re: FMG - Fortescue Metalss*



stit said:


> So your basically saying that you believe that the majors are going to regulate the flow of supply to keep higher cost supply out of the market, rather than flood the market completely?




I Believe they will continue deploying capital to add to their resource base, increase output through debottlenecking and increase output if it reduces total costs per tonne for as long as they are able to earn a decent margin and therefore a decent return on the capital employed.




> Why would they not be better off at a $90 per tonne mark? I appreciate the theory re market share but what's the point of working harder for less or equal money




At $90 tonnes, everybody is going to be deploying capital to produce more, long term its probably not sustainable. If BHP and RIO tried to support the $90 price by reducing production, others would just fill the gap, FMG, VALE and everyone else would continue increasing as long as they were earning a decent return on each tonne, and all that would happen is RIO and BHP would have to keep reducing supply every year to maintain the price, and the less they produce the higher the cost per tonne.



> What impact do you think that the Greece debacle will have on share value? The value has dropped a massive .60 in the last fortnight with no primary reason other than Greece and or people flicking fmg prior to the end if the financial year because it's been an atrocious performer? Not unless the stock is being heavily shorted again on the basis of likely lower ore prices




I don't think FMG have lost value in the last 2 weeks, they are still worth at least $6.00

What you are seeing is fluctuations in market price, Price is what you pay, value is what you get. Price and value are two separate concepts.

Do I think the Greek crisis will cause Market price for stocks and other securities to fluctuate? Yes

Do I think the Greek crisis will affect the long term earning power of most companies and there fore reduce their value? No

Will the Greek crisis have a large effect on the number of people that globally go to the movies this weekend and see Inside out or Jurassic World? will it cause people to eat less sushi in Sydney this week end? will less coca cola be sold at Wall mart? I don't think so the world economy will tick along just fine, and the economy needs iron


----------



## notting (30 June 2015)

*Re: FMG - Fortescue Metalss*



stit said:


> What impact do you think that the Greece debacle will have on share value?




Surely you don't think the old news Greece finale has much to do with this.  China's market is now a bear market, rather abruptly.  That is what is pushing the price down along with a retrace from the recent run up in the price of IO.  That's what you should be focusing on.

Personally I consider China's stock market as becoming more relevant to China's economy, but still about 85% irrelevant.


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## Trembling Hand (30 June 2015)

China is in a real panic. Even their central bank.

China iron ore just gone limit down..... At least the falls are not going to get any worst...... today.


----------



## stit (1 July 2015)

*Re: FMG - Fortescue Metalss*

I don't think FMG have lost value in the last 2 weeks, they are still worth at least $6.00

What you are seeing is fluctuations in market price, Price is what you pay, value is what you get. Price and value are two separate concepts.


Ok - so we're now at the end of the financial year, and for this half its probably fair to assume an average iron ore value of $60 per tonne. If we adopt $41 production costs,  fmg should be making $10/tonne. 60 x 85% = 51 - 41 = 10.

Run rate 165mt x 10/2 = 820m profit for the half. If they continue the general policy of paying a third in dividends, I'm estimating a dividend of around 7 - 8 cents for this half. That would take the total dividend for the year to 10 - 11 cents for the year. The last time the company paid this sort of annual dividend was in 2013 and the stock was worth around 4.75. 

Do you agree with these numbers as rough estimates and what do you anticipate the value of the stock when this report is released, bearing in mind that in 2013 the price of i/o was on the way up?


----------



## Value Collector (1 July 2015)

*Re: FMG - Fortescue Metalss*



stit said:


> I don't think FMG have lost value in the last 2 weeks, they are still worth at least $6.00
> 
> What you are seeing is fluctuations in market price, Price is what you pay, value is what you get. Price and value are two separate concepts.
> 
> ...




I don't value a company by how much the dividend is.

In 2013, FMG hadn't finished developing its projects, and had more debt, and its production costs were significantly higher now. so it is in a more secure position.

I value a company based on its earning power not its dividend, and also they use that these earnings are going to be used for.

Eg, a company earning a $1, that can deploy that dollar where it can earn 20%, and pay no dividend is worth more than a company that earns $1 and pays 80cents dividend, and deploys the left over 20cents at 5%


----------



## stit (1 July 2015)

*Re: FMG - Fortescue Metalss*



Value Collector said:


> I don't value a company by how much the dividend is.
> 
> In 2013, FMG hadn't finished developing its projects, and had more debt, and its production costs were significantly higher now. so it is in a more secure position.
> 
> ...




Yes, I appreciate what your saying, but the primary reason in investing in a company is capital growth and dividend returns. Dividend returns is the primary driver of capital growth, without it public investment exits, capital growth is more difficult to achieve and share prices fall.

Do you think that fmg could reach the $6 share price value without paying a dividend between now and then?


----------



## Value Collector (1 July 2015)

*Re: FMG - Fortescue Metalss*



stit said:


> Yes, I appreciate what your saying, but the primary reason in investing in a company is capital growth and dividend returns. Dividend returns is the primary driver of capital growth, without it public investment exits, capital growth is more difficult to achieve and share prices fall.
> 
> Do you think that fmg could reach the $6 share price value without paying a dividend between now and then?




No, increasing earnings is the primary driver of capital growth. And the companies that retain earnings and deploy them at high rates of return will grow their earnings the most.

take Berkshire Hathaway as an example, it has not paid a dividend since the mid 1960's when it was $9 per share, now it's $204,000 per share and it earns more than $15,000 per share in earnings.

It has only grown it's earnings to $15,000 per share because it has retained every cent of earnings and deployed it into new investments where it can earn a high rate of return.

Yes, FMG could reach $6 without paying a dividend, if it focussed 100% of earnings into a mixture of clearing debt, adding to its assets (increasing reserve base, and development pipeline) and buying back its own shares, then yes it could go 20years without a dividend and the capital growth would be very good.


----------



## joeno (1 July 2015)

*Re: FMG - Fortescue Metalss*

FMG has been brutalised in the last few weeks. You guys reckon this is due to short term factors or long term debt issues?


----------



## stit (1 July 2015)

*Re: FMG - Fortescue Metalss*



Value Collector said:


> No, increasing earnings is the primary driver of capital growth. And the companies that retain earnings and deploy them at high rates of return will grow their earnings the most.
> 
> take Berkshire Hathaway as an example, it has not paid a dividend since the mid 1960's when it was $9 per share, now it's $204,000 per share and it earns more than $15,000 per share in earnings.
> 
> ...




Ok fair point.

As I speak it appears fmg is about to break an all new low. 

Given it's all about profit are you expecting them to reach the $10 average per tonne profit this period?


----------



## craft (1 July 2015)

*Re: FMG - Fortescue Metalss*



joeno said:


> FMG has been brutalised in the last few weeks. You guys reckon this is due to short term factors or long term debt issues?



Its all about the iron ore price.

You can’t value/price  FMG without predicting the future price of Iron Ore.  It’s hugely operationally and financially leveraged to Iron Ore Price.  At a low enough Iron Ore price FMG will lose control of all their assets with no return for equity holders – at high enough Iron Ore Price equity holders will make a fortune.   Whatever way you want to disguise it FMG is nothing more than a leverage bet on Iron Ore pricing and they will remain that way until they change the leverage in the business by lowering debt or lowering their position on the cost curve relatively to their competition.


----------



## Value Collector (1 July 2015)

*Re: FMG - Fortescue Metalss*



craft said:


> Its all about the iron ore price.
> 
> You can’t value/price  FMG without predicting the future price of Iron Ore.  It’s hugely operationally and financially leveraged to Iron Ore Price.  At a low enough Iron Ore price FMG will lose control of all their assets with no return for equity holders – at high enough Iron Ore Price equity holders will make a fortune..




Yes, I basically agree, though it's more about the margin that FMG can make on a tonne, rather than the price of a tonne.

Offcourse the profit margin is affected by the price they can sell the tonnes for, but if the price of the tonnes is all you are watching you are only getting half the story.

I mean in the last 12 months the iron ore price has halved, which if you were just watching that you would see its a disaster, but at the same time FMG's production costs have halved, and will continue to reduce in the next 12 months.

No one knows for sure what the price of a tonne will be in the next 12 months, but we have a pretty good idea that FMG's production costs will continue to shrink. To Invest in FMG you have to have an opinion on the likely margin they will make, and that's a product of both price and cost.

In my opinion, as FMG continues to reduce cost, they will be pretty close to BHP and RIO in cost, and I think a lot of other supply can not survive at prices any where near FMGs Break even, so there is a very good chance Fmg will have a good average margin over time, and that's all they need.

$10 per tonne EBIT would be great, $20 per tonne = amazing returns.

Time will tell.


----------



## Value Collector (1 July 2015)

*Re: FMG - Fortescue Metalss*



stit said:


> Given it's all about profit are you expecting them to reach the $10 average per tonne profit this period?




I think for last quarter they would have done that easily.

But look, I am not expecting a quick turn around, as I have said, this is a 2 - 3 year play.

I wouldn't expect a full recovery in share price until FMG can book a full financial year at a profit margin of $10 or more.

It will be interesting to see the profit announcement for the last 6months and see what they decide to do with the dividend.


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## Ald123 (1 July 2015)

The problem with allowing the iron ore price to collapse as it has, is that stockpiling is then undertaken by the buyers who know how expensive it has just been. The collapse was also caused on the excess supply side by vale mining in Brazil. 

This means that the iron ore price will have difficulty moving out of what is essentially a new equilibrium, as long as ships can sail the seas and mines can function as they are, this is the long term iron ore price.

If Australians wanted to get themselves out of the situation they find themselves in now, which is giving the ore to China at below cost, (remember that Australians funded the infrastructure on the stock exchange and taxes and the royalties are minuscule) then they need to start using the ore internally in Australia and creating products which can be sold at massive profit.


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## Value Collector (1 July 2015)

Ald123 said:


> The problem with allowing the iron ore price to collapse as it has, is that stockpiling is then undertaken by the buyers who know how expensive it has just been.
> .




The stockpiles have actually been shrinking, which leads me to think that some of the price weakness has been because stockpiles are being eaten into.




> The collapse was also caused on the excess supply side by vale mining in Brazil




FMG now has a delivered cost lower than Vale.



> If Australians wanted to get themselves out of the situation they find themselves in now, which is giving the ore to China at below cost



,

The three big Aussie suppliers eg BHP, RIO and FMG, are not selling below cost.


> (remember that Australians funded the infrastructure on the stock exchange and taxes and the royalties are minuscule) then they need to start using the ore internally in Australia and creating products which can be sold at massive profit




The mines and infrastructure have not been solely funded by Australians.

Australians, chinese and various other international investors provided the equity, and the bonds and debt financing is largely international.

If you want to invest in a steel works to use our ore go ahead, I am happier to sell the ore to china.


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## stit (3 July 2015)

Value Collector said:


> The stockpiles have actually been shrinking, which leads me to think that some of the price weakness has been because stockpiles are being eaten into.
> 
> 
> 
> ...




With fmg currently sitting at near 12 month lows I assume you must be thinking that this must be an approximate floor for the price to go long on the stock for a long period? Why aren't you shorting the stock and making money on it during the next couple of years instead?


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## Value Collector (3 July 2015)

stit said:


> With fmg currently sitting at near 12 month lows I assume you must be thinking that this must be an approximate floor for the price to go long on the stock for a long period? Why aren't you shorting the stock and making money on it during the next couple of years instead?




I wouldn't risk shorting it, Because I believe it is significantly under valued. I have no idea where the markets will move, on monday or next month, but I am confident that this stock at some point will surge in value, and when it does I want to be long not short.

I have said it is a long term play for me, that just means I am happy to own the businesses for a long time, and I am confident I am going to do very well out of owning it. It doesn't mean that I know it will take a long time. it might take a long time, it might not. I don't know, I am terrible at timing the market in the short term, but generally pretty good at finding long term value plays.

I mean if you knew you could buy something that was worth $1Million dollars for $200K, but you might not be able to sell it for $1Million for up to 3 years, would you refrain from buying it? would you try and short it hoping it was going to go to $150K?

I don't think 3 years is a long time to wait to quadruple your money. FMG is probably going to pay a tax advantaged dividend better than I could get with bank interest over the next three years, plus a decent capital gain, that's good enough for me.

I would rather a bumpy ride that nets me over a 50% per year averaged return over the next 3 years, than a steady 3%


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## Value Collector (4 July 2015)

Iron ore Inventories at chinese ports were down by another 1.04% this week.

Less than 20 days supply, and a level not seen for almost 2 years.


----------



## joeno (4 July 2015)

Value Collector said:


> I don't think 3 years is a long time to wait to quadruple your money. FMG is probably going to pay a tax advantaged dividend better than I could get with bank interest over the next three years, plus a decent capital gain, that's good enough for me.
> 
> I would rather a bumpy ride that nets me over a 50% per year averaged return over the next 3 years, than a steady 3%




I'm betting the same as you but with considerably less investe in this stock than you have. 

Wondering why aren't you investing between the other iron ore stocks such as MGX and BCI?


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## Value Collector (4 July 2015)

joeno said:


> Wondering why aren't you investing between the other iron ore stocks such as MGX and BCI?




Simple, those companies don't compare to FMG.

Look at FMG's Infrastructure, their system of ports, rail lines, 4 operating mines, exploration acreage, discovered reserves for future projects etc. the other companies don't compare.

Take a look at this video, they assets beat anything those bci has, in fact bci actually pay FMG to ship their ore on their rail and port infrastructure.

[video]https://m.youtube.com/watch?v=PRw3m_EBknk[/video]


----------



## joeno (5 July 2015)

Value Collector said:


> Simple, those companies don't compare to FMG.
> 
> Look at FMG's Infrastructure, their system of ports, rail lines, 4 operating mines, exploration acreage, discovered reserves for future projects etc. the other companies don't compare.




You wouldn't expect them to have FMG's infrastructure given the size of their company. For a co like BCI you'd expect once they get a proper footing, reduce their expenses and become profitable they would surge more than FMG.

Can i ask how much % of your total portfolio you have in FMG? Sounds like this is your LT punt of the decade!


----------



## stit (6 July 2015)

Value Collector said:


> Iron ore Inventories at chinese ports were down by another 1.04% this week.
> 
> Less than 20 days supply, and a level not seen for almost 2 years.





Whilst this may still indicate a shortfall in supply, I'm starting to think that the inventory levels being at their lowest for a long period of time ( 2 years ) is becoming less and less relevant if steel mills are carrying less and less inventory as demand contracts. This has to be the case given the 11 % drop in ore prices in the last week even though ore inventory continues to decline.

On another note - how is it that everybody seems to have an idea of roy hills break even price? Where would people get an idea on this information given none of the necessary info is public?


----------



## stit (6 July 2015)

Value Collector said:


> Simple, those companies don't compare to FMG.
> 
> Look at FMG's Infrastructure, their system of ports, rail lines, 4 operating mines, exploration acreage, discovered reserves for future projects etc. the other companies don't compare.
> 
> ...





What do you think about this report that the reduction in their cost base is unsustainable? I also note that this analyst is one of many that seem to refuse to believe that their cost base is at $39 and rates it much higher at $44. He also goes on to state he is only expecting $300m in free cash flow this financial year, which would suggest that he believes that fmg will only clear approximately $2 per tonne this financial year.

http://www.afr.com/business/mining/...eyond-two-years-analysts-20150702-gi3mgx.html

Fortescue says it can reduce its cost of production, known as cash or C1 costs, to $US18 a tonne this fiscal year – from $US26 a tonne last half – and all-in-costs to $US31 a tonne, which includes sustaining capital expenditure of just $US2 a tonne. 

"We think this is sustainable only in the short to medium term and expect the average group strip ratio to increase … this will have a significant impact on FMG's all-in costs and product quality in our view," Mr Young said. 

The miner has said its break-even point – the price at which it is not making or losing cash – is tracking at $US39 a tonne, from $US60 a tonne late last year, and the group is aiming to reduce that further. 

Fortescue is on track to achieve its production cost targets, he says, but takes a different view on its break-even point – estimating it at about $US44 a tonne right now. 

"The question is how long can they do this for, and what potential outcome does it incur in terms of curtailing or reducing the reserve life?" Mr Lawcock said.  


"They've done a commendable job [in reducing costs], but that break-even number in the low $US40s, or $US39 if you take their number, will only be sustainable for the next one to two years. It will then start to move up gradually, because there will be an inability to maintain sustaining capital at $US2 a tonne." 

He tips costs will creep back up by at least $US5 to $US6 a tonne from about 2020.  

Mr Young is tipping Fortescue will generate about $US300 million in free cash flow in the current financial year, and for it to take three to four years to reduce gearing to a comfortable level.


----------



## Value Collector (6 July 2015)

joeno said:


> You wouldn't expect them to have FMG's infrastructure given the size of their company. For a co like BCI you'd expect once they get a proper footing, reduce their expenses and become profitable they would surge more than FMG.




The infrastructure is important for two reason, the first reason is that in the Iron Business, the large infrastructure is what gives you the lower running cost, FMG's scale is what will give it the ability to reduce costs and basically be in the position of the other low cost miners. Low scale mines, trucking ore and begging for ship loading capacity all increase you costs.

Also, The Infrastructure provides safety to the investment.

When you purchase stock in BCI, you own a relatively high cost mine and that's it. 

When you have a lot more assets backing your stock, which could be sold off individually or partial equity interest sold, which combined have value far in excess of its share price, eg you have 4 low cost mines, associated power plants and processing equipment, a rail line and a 5 birth/3 loader port, exploration acreage and resource base. 

The rail lines and port are fantastic assets to own even if FMG didn't have mines, they will be operating for the next 100 years even after FMGs existing mines are depleted.



> Can i ask how much % of your total portfolio you have in FMG? Sounds like this is your LT punt of the decade




about 25% of my share portfolio, probably close to 10% of my net worth, It's certainly a large play for me, But it wouldn't wipe me out if it went pear shaped, but yes it would make my decade, except CZZ has already made this decade for me, lol


----------



## Value Collector (6 July 2015)

stit said:


> What do you think about this report that the reduction in their cost base is unsustainable? I also note that this analyst is one of many that seem to refuse to believe that their cost base is at $39 and rates it much higher at $44. He also goes on to state he is only expecting $300m in free cash flow this financial year, which would suggest that he believes that fmg will only clear approximately $2 per tonne this financial year.
> 
> http://www.afr.com/business/mining/...eyond-two-years-analysts-20150702-gi3mgx.html
> 
> ...




I guess time will tell who is right, I have got my position, we just have to wait now.


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## stit (8 July 2015)

What is the underlying story here? Has fortescue always had forward contracts for its ore? Does this in some way suggest that fortescue has lost some level of corporate support from china?

Furthermore, and rather shocking given the excesses that look apparent in the iron ore market, we learned that, for the first time ever, Fortescue Metals Group is offering iron ore on a spot basis, or, for all intents and purposes, “dumping” iron ore into China.


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## ROE (9 July 2015)

I thought they scrapped the contract pricing a few years ago
when Iron ore price was roaring up BHP and the like got greedy and decided they want to play spot price instead so most miners now sell at spot price, it now back fire

that is my recollection I could be wrong.


----------



## Wysiwyg (9 July 2015)

$1.61 low to $1.79 bounce today. Can't believe this crap. Sold yesty for $1.73


----------



## Potator (9 July 2015)

Wysiwyg said:


> $1.61 low to $1.79 bounce today. Can't believe this crap. Sold yesty for $1.73




And now you can buy them again for 172. Who knows what's going on immediate term - it's just trading.

Re: Price setting, didn't it become a bit irrelevant when the contracts seemed to be unenforcable when Chinese customers pulled out of high price contracts saying they couldn't pay? In any case the best thing would be a transparent source of spot and bulk prices that everyone refers to and clarity on which is being referred to.

All these headlines about IO dropping most in x number of years etc and they don't bother to say whether they're talking about spot price and what the significance is. The media loves a headline!


----------



## tech/a (9 July 2015)

Wysiwyg said:


> $1.61 low to $1.79 bounce today. Can't believe this crap. Sold yesty for $1.73




Why didn't you buy (again) at $1.73 or anywhere in between $1.61 with a stop on the low?

This "Crap" is to be expected. China/Greece---highly volatility
China Iron ore going limit.


----------



## notting (9 July 2015)

Wysiwyg said:


> $1.61 low to $1.79 bounce today. Can't believe this crap. Sold yesty for $1.73





Our miners were sold off heavily before the spot tanked. 



> iron ore futures in China shot nearly 6 per cent higher in early  trade, signalling the sell off in spot prices may take a break tonight.




And someone had their buying hat on this morning.

I'm seeing two hands on the handle so far.

RIO's only up .9 is yielding 5%, buying itself and has less downside risk. 
And if you don't like the look of the daily chart, blow it out to the weekly. One way to make yourself feel better.


----------



## sydboy007 (9 July 2015)

ROE said:


> I thought they scrapped the contract pricing a few years ago
> when Iron ore price was roaring up BHP and the like got greedy and decided they want to play spot price instead so most miners now sell at spot price, it now back fire
> 
> that is my recollection I could be wrong.




Actually the Chinese started to break contracts so BHP and RIO took advantage of that to break down the annual price setting of I/O.  Prob for the best as it got away from the annual fight over pricing.

Can see the same issue now appearng in the LNG market now that the contract price is way over spot.  Japan has not accepted test cargoes from Gorgon - in the past they have but since they can buy on the spot market there's no incentive for them to start paying contract pricing before they have to.  Something like 2.4M tonnes of LNG could hit the spot market betwen now and April, so expect the price gap to widen.

I can see a LOT of pressure on the LNG companies to renegotiate the contracts.  There's massive oversupply going out to the mid 20s.


----------



## Value Collector (9 July 2015)

stit said:


> What is the underlying story here? Has fortescue always had forward contracts for its ore? Does this in some way suggest that fortescue has lost some level of corporate support from china?
> 
> Furthermore, and rather shocking given the excesses that look apparent in the iron ore market, we learned that, for the first time ever, Fortescue Metals Group is offering iron ore on a spot basis, or, for all intents and purposes, “dumping” iron ore into China.




Fortescue sells some spot cargos, however most of its ore is sold via pre payment agreements, eg FMG takes payment in advance for a set $$$ amount of ore, with set tonnes delivered at a certain intervals eg 250k tonnes delivered a week, the price of the ore is calculated using a formula based on the average spot price I think.

Eg company X pays FMG $100million for a set amount of ore to be delivered each month until the $100million has been used up. If the price drops, they get more ore for their $ if the price rises they get less.

Based on their last figures they had over $1billion of prepayments on their balance sheet.


----------



## So_Cynical (10 July 2015)

FMG under $1.80 - has always been the way to go....screaming buy i would think.


----------



## skc (10 July 2015)

So_Cynical said:


> FMG under $1.80 - has always been the way to go....screaming buy i would think.




Always? It's only happened 3 times, and one of them was the bottom of the GFC 7 years ago.


----------



## stit (13 July 2015)

Just re looking at fmg price guidance for 2016. Why do they add what appears to be a nominal figure of a $5 price adjustment when they receive a 15% discount? A $5 price adjustment would equate to a sub $40 per tonne price?


----------



## dat111 (21 July 2015)

Anyone know what is holding up Fortescue's Quarterly Report?


----------



## stit (21 July 2015)

dat111 said:


> Anyone know what is holding up Fortescue's Quarterly Report?




I think its due on thursday


----------



## Value Collector (21 July 2015)

dat111 said:


> Anyone know what is holding up Fortescue's Quarterly Report?




There is no hold up, the calendar of events on their website says it's due on the 23rd of July.

You can see the dates of reports months in advance, he September report will be released on the 15th of oct


----------



## dat111 (21 July 2015)

Value Collector said:


> There is no hold up, the calendar of events on their website says it's due on the 23rd of July.
> 
> You can see the dates of reports months in advance, he September report will be released on the 15th of oct




Thanks...


----------



## stit (23 July 2015)

Value Collector said:


> There is no hold up, the calendar of events on their website says it's due on the 23rd of July.
> 
> You can see the dates of reports months in advance, he September report will be released on the 15th of oct




So what do you think? I thought it was pretty impressive reading. Once again management has delivered all promised and even exceeded in some areas. Realised price of $52/mt - $39 delivered costs  x 42m shipped = $551m gross for the quarter roughly but yet share price drops by 3%. lol go figure.


----------



## notting (23 July 2015)

stit said:


> I thought it was pretty impressive reading. Once again management has delivered all promised and even exceeded in some areas. Realised price of $52/mt - $39 delivered costs  x 42m shipped = $551m gross for the quarter roughly but yet share price drops by 3%. lol go figure.




The elephant in the room just blew it's trumpet.



> "Fortescue have felt the full force of the bears by *admitting* that the current strip mining rates are *unsustainable* and these will likely rise,"




Figured.


----------



## stit (23 July 2015)

notting said:


> The elephant in the room just blew it's trumpet.
> 
> 
> 
> Figured.




sorry - I'm rely not up to speed on the ins and outs of strip ratios so don't understand how you've come to that conclusion. Can you point me to the part in this report that indicates such a dire piece of information?

As a result, life of mine strip ratios have also been revised and are now expected to average 2.3 at the Chichester Hub and 1.7 at the Solomon Hub over a 20 year period.
These sustainable improvements in strip ratio reflect
the strategic investment which Fortescue has made in processing capacity and focus on mining efficiencies. Specifically, lower strip ratios have been achieved through:
• product blending strategy – Firetail and Chichesters
• enhancing processing capacity – 85 per cent of product beneficiated
• low strip ratio Firetail operations
• improved ore body modelling and ore recovery
Strip ratios have been lower through the June 2015 quarter and will continue at low levels through the September 2015 quarter before gradually reverting to the life of mine averages in FY16.
The improvement in strip ratios is not expected to have any material impact on Reserves and Resources with an updated Reserve and Resources statement scheduled for release in the Annual Report on 24 August 2015.


----------



## Value Collector (23 July 2015)

stit said:


> So what do you think? I thought it was pretty impressive reading. Once again management has delivered all promised and even exceeded in some areas. Realised price of $52/mt - $39 delivered costs  x 42m shipped = $551m gross for the quarter roughly but yet share price drops by 3%. lol go figure.




Yeah, the report is pretty good I am happy with it.

just on your calculations, keep in mind that every dollar over the break even price does not generate a dollar of profit.

Eg, if their production cost was $39 and the iron price was $40, they would be making about 80cents profit margin, because that extra $1 needs to be discounted by the 15% grade discount and royalty.



notting said:


> The elephant in the room just blew it's trumpet.
> 
> 
> 
> Figured.




That strip ratio is not bad, have you seen the strip ratios of the Chinese mines? Some are more than double that and lower grade ore.

Also the strip ratios always fluctuate as they work the mine plan, if you look bad over the last few years, strip ratios are never steady.


----------



## notting (23 July 2015)

stit said:


> Strip ratios have been lower through the June 2015 quarter and will continue at low levels through the September 2015 quarter before gradually reverting to the life of mine averages in FY16.
> The improvement in strip ratios is not expected to have any material impact on Reserves and Resources with an updated Reserve and Resources statement scheduled for release in the Annual Report on 24 August 2015.




Reading between the lines - what this says is that costs are unsustainably low and will rise.  Margins are in danger over the medium term if the IO price remains subdued.


----------



## Value Collector (24 July 2015)

notting said:


> Reading between the lines - what this says is that costs are unsustainably low and will rise.  Margins are in danger over the medium term if the IO price remains subdued.




Did you read the report?

Break even Costs are still forecast to be $39 or less, any rise due to the strip ratio will be offset buy the continued reduction in other areas.

If FMG can't earn a decent margin, then a lot of other capacity is going to be making losses, that capacity will close and prices will rise to a sustainable margin for FMG, FMG is not atlas Iron.


----------



## notting (24 July 2015)

Value Collector said:


> Did you read the report?
> 
> Break even Costs are still forecast to be $39 or less, any rise due to the strip ratio will be offset buy the continued reduction in other areas.




If we consider the market reaction today, it seems that there is some doubt about that offset ability, probably in the light of the fact that FMG have put a cap on production and most of the cost savings are generated from economies of scale. I guess for your sake, we hope the market got that wrong today!


----------



## stit (24 August 2015)

Value Collector said:


> Did you read the report?
> 
> Break even Costs are still forecast to be $39 or less, any rise due to the strip ratio will be offset buy the continued reduction in other areas.
> 
> If FMG can't earn a decent margin, then a lot of other capacity is going to be making losses, that capacity will close and prices will rise to a sustainable margin for FMG, FMG is not atlas Iron.






You still on this or cutting your losses after such a sh*tty report?


----------



## Value Collector (26 August 2015)

stit said:


> You still on this or cutting your losses after such a sh*tty report?




It was roughly inline with what I expected, I mean this report includes the period with the biggest part of the price fall, and the cost cutting kind off lagged the price fall, So I wasn't expecting miracles, As I said this is a 3 year play, I expect future reports to be better from here on, I believe we have reduced cost to a low enough level to ensure sustainable margins.

What exactly was it that you thought was so sh*tty? 

Free cash flow was 65cents pershare, for the year we have had that's pretty good.


----------



## notting (26 August 2015)

The report was good under the circumstances.
BHPs profit was down over 80% so their doing no better really but are not so leveraged.
FMG are surviving and not loosing money.
What's happening at the moment is going to show us how bad the price action may get.
Then there will need to be a pick up in demand from China and IO price will need to lift, to get some positive price action.
I got some at 1.64 and sold em yesterday, the next day, at 1.765.


----------



## Value Collector (26 August 2015)

When you take a closer look at the numbers, FMG's report is actually pretty good.

If you add back the depreciation and amortisation to the net profit after tax, and then minus a more realistic figure which I calculated at $480million ($2 per tonne sustaining capital + $1 per tonne allowance for future projects) then the actual underlying profit comes to around $0.50 AUD per share.

That's pretty good for a year like we have just come through.


----------



## stit (27 August 2015)

Value Collector said:


> It was roughly inline with what I expected, I mean this report includes the period with the biggest part of the price fall, and the cost cutting kind off lagged the price fall, So I wasn't expecting miracles, As I said this is a 3 year play, I expect future reports to be better from here on, I believe we have reduced cost to a low enough level to ensure sustainable margins.
> 
> What exactly was it that you thought was so sh*tty?
> 
> Free cash flow was 65cents pershare, for the year we have had that's pretty good.





To be honest I was expecting a much better net profit, but am struggling to make any great real sense of it as the true merit in the report can easily get convuluted in accounting. Broadly speaking $330m net profit in the previous six months with higher costs - I was expecting the same or better in the following six months


----------



## Value Collector (28 August 2015)

stit said:


> To be honest I was expecting a much better net profit, but am struggling to make any great real sense of it as the true merit in the report can easily get convuluted in accounting. Broadly speaking $330m net profit in the previous six months with higher costs - I was expecting the same or better in the following six months




They actually made a lot more than that, the net profit figure is not an accurate representation of the value generation. The reason for this is because the depreciation and amortisation charges, are accounting charges that don't reflect the actual situation.

The D and A charges amount to about $8.5 per tonne, but the actual sustaining capital required to maintain the assets is only about $2 per tonne, in my numbers I increased this to $3.

The reason for this is that the depreciation charges is an accounting charge based on the original cost to build the infrastructure, such as the rail lines and port, so over a set period of time these costs will be written off, reducing the reported earnings each year.

What makes the difference in accounting charge and actual maintained cost, is the fact that it cost a lot more to build a green field rail line, than it does to maintain one, costs such as design, environmental studies, various other legal permitting etc, major earth works (carving through hill sides, leveling land), foundations for bridges etc are largely once of costs, which are written off against income each year, when the reality is all that really needs to be spent is the cost of replacing some track.

And a lot of the assets such as heavy duty bridges etc have lives much longer than their accounting life.

so the best way to deal with this is to add back the depreciation charges to the net profit after tax, and then minus a more realistic maintaince cost, they quote $2 per tonne in their break even price, I raised this to $3 in my numbers.

Fmg has build a lot of infrastructure, and it's all quite young, hence the depreciation charges on it are quite high, so you have to adjust you figures to take it into consideration.


----------



## stit (31 August 2015)

Value Collector said:


> They actually made a lot more than that, the net profit figure is not an accurate representation of the value generation. The reason for this is because the depreciation and amortisation charges, are accounting charges that don't reflect the actual situation.
> 
> The D and A charges amount to about $8.5 per tonne, but the actual sustaining capital required to maintain the assets is only about $2 per tonne, in my numbers I increased this to $3.
> 
> ...





Once again I appreciate your insight. 

Do you know why there has been a discounting of finance and leases of $1.3b by $830 million? Why would this have been done?


----------



## Value Collector (1 September 2015)

stit said:


> Once again I appreciate your insight.
> 
> Do you know why there has been a discounting of finance and leases of $1.3b by $830 million? Why would this have been done?




Not sure, where abouts did you see that? If it's in the annual report, is there a number corresponding to a section in The notes?

I know as part of the cost reduction process they have been going back to service providers and renegotiating service fees etc, not sure if this is what's caused it or not, a lot of the deals that we originally signed in the heat of the construction boom when services were in tight demand had a lot of fat in them, as these roll over, service providers wanting to maintain contracts are offering deals at much lower rates and better terms, My cousin and uncle are involved in haulage contracts, a few years ago they could easily get away with raising prices each year, now contracts are sometimes 30-40% less, due to so many contractors just wanting the work, and less contracts available now construction has slowed right down.


----------



## Gringotts Bank (25 September 2015)

Was busy posting... duh...


----------



## Value Collector (15 October 2015)

Very good quarterly report released today.

Production costs reduced again, and a healthy margin is currently being made.

over the quarter debt was reduced to by over $380 Million, the debt was bought on market at a 20% discount to face value, cash on hand was increased to 2.6Billion while also amortising $100Million of prepayments.

There is a lot of value generation happening, inside this company, I am very happy to hold the stock.


----------



## skc (25 November 2015)

A good article on FMG. Plenty of details inside the operations which is difficult for outsiders to know.


http://www.afr.com/business/mining/...-head-off-the-iron-ore-plunge-20151123-gl62um


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## notting (25 November 2015)

> But it's well worth getting to the top of either of the two giant steel structures, where the ore is separated from the waste to deliver a higher quality iron for Chinese steel mills. From here you get one of the best views in Western Australia's Pilbara.




Perhaps they should diversify and build a hotel.


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## notting (26 November 2015)

Pessimism or Realism?



> Pessimistic people who hold its debt, have been offering the miner a big discount on its debt repayments.
> 
> Fortescue started taking advantage of this in September, when it bought back $US384 million of debt at a 20 per cent discount, meaning it only had to shell out $US305 million.
> 
> ...




Clayton's default - Get in first :homer:


----------



## skc (26 November 2015)

notting said:


> Pessimism or Realism?
> Clayton's default - Get in first :homer:




What a great side business by FMG. 

1. Issue debt at par... who cares about the interest rate?
2. Market value of debt falls as FMG leverage increased.
3. FMG re-purchase back at discount.
4. Free money!!!


----------



## VSntchr (26 November 2015)

skc said:


> What a great side business by FMG.
> 
> 1. Issue debt at par... who cares about the interest rate?
> 2. Market value of debt falls as FMG leverage increased.
> ...




LOL!

What about when they want to access leverage in the future? I guess the market does have a short memory though doesn't it...
In fact it'll probably be the same guys offering up the $$$


----------



## Knobby22 (11 December 2015)

Fascinating.
if they can get more offers - doo a rights issue and retire the debt. Why the hell are they still paying a dividend?

They are only breaking even at the moment. Can they run the mine on a minimal level without mothballing?
In a few years they might be in a good position.


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## fiftyeight (31 January 2016)

More pondering about things I dont know much about

If there is a credit tightening, are the debt holders more likely to want to reduce exposure and therefore offer FMG a discount? Or will they want to maximise profits from FMG and not offer any more discounts? Or is this like asking "how long is a piece of string?"


----------



## Value Collector (31 January 2016)

fiftyeight said:


> More pondering about things I dont know much about
> 
> If there is a credit tightening, are the debt holders more likely to want to reduce exposure and therefore offer FMG a discount? Or will they want to maximise profits from FMG and not offer any more discounts? Or is this like asking "how long is a piece of string?"




If interest rates go up, the price of existing bonds should go down.

For example, is the interest rates on US treasury bonds went up to 6%, would you pay full price for some other companies 5 year bond that also had an interest rate of 6%, probably not because it's a riskier asset that a government bond, so you might want a 12% return to offset some of the risk you are taking, to achieve that you have to buy the bond for half price.

that's what is happening now, FMG's bonds are being discounted for risk, probably way to much discount, so they are buying back their bonds for less that face value, it's actually a wonderful thing to be able to do.

New bonds will be issued by various entities every day at interest rates reflecting market conditions, what ever the prevailing interest rate is, will affect the buy/sell price of the older bonds trading in the market.


----------



## notting (24 February 2016)

Such BS they way they report costs at 15 per mton.
All in costs, including interest on debt are the only costs worth knowing.
That's what it cost to make this much.  That's all that fricken matters.  Cut the bs.
Barely breaking even to pay the cost of the debt, without paying off any more debt.
Increased their dividend too, dick heads.  Put it in the goddamn bank or buy someone else bonds. to help service the debt.

Apart from that. Doing a great job running in front of the tidal wave.


----------



## fiftyeight (25 February 2016)

Value Collector said:


> If interest rates go up, the price of existing bonds should go down.
> 
> For example, is the interest rates on US treasury bonds went up to 6%, would you pay full price for some other companies 5 year bond that also had an interest rate of 6%, probably not because it's a riskier asset that a government bond, so you might want a 12% return to offset some of the risk you are taking, to achieve that you have to buy the bond for half price.
> 
> ...




Wow missed this reply sorry VC. Thanks for the detailed response


----------



## Value Collector (29 February 2016)

notting said:


> Such BS they way they report costs at 15 per mton.
> All in costs, including interest on debt are the only costs worth knowing.
> .




They do a pretty good job of breaking all the costs down on slide 9 of the investor presentation, the breakeven price is important but the rest is good to know also.



> That's what it cost to make this much.  That's all that fricken matters.  Cut the bs.
> Barely breaking even to pay the cost of the debt, without paying off any more debt.




Break even price is going to be somewhere around $29 a tonne soon, they are earning pretty good margins at the moment, net debt reduced by $1.1 Billion in the last 6 months, I can't see them having any debt troubles if this rate of debt reduction continues.



> Increased their dividend too, dick heads.  Put it in the goddamn bank or buy someone else bonds. to help service the debt.




What's wrong with the divvy? they are sticking to their pay out ratio, 30% paid out 70% for debt reduction.



> Apart from that. Doing a great job running in front of the tidal wave




I have said it all along, FMG's scale will allow them to reduce costs to below the long term price of Iron ore, if FMG can't earn a decent margin, neither can most of the global industry, FMG isn't a junior marginal producer, the market relies on their tonnes, 

Free cashflow for the half was 44cents, this company is worth a hell of a lot more than its current share price, value is building up every day inside this company.


----------



## notting (29 February 2016)

Value Collector said:


> They do a pretty good job of breaking all the costs down on slide 9 of the investor presentation, the breakeven price is important but the rest is good to know also.




Yeah thanks for all those pointers.
My gripe is with the CEO who kept barking at every opportunity - 15 WMT which is deliberately misleading.  
They are doing a good job but they should be buying back as much debt as possible.



> China’s surplus capacity in steel making, for example, is bigger than the entire steel production of Japan, America and Germany combined. Rhodium Group, a consulting firm, calculates that global steel production rose by 57% in the decade to 2014, with Chinese mills making up 91% of this increase. In industry after industry, from paper to ships to glass, the picture is the same: China now has far too much supply in the face of shrinking internal demand.




And as China tries to dump it on everyone esle -



> One option is for China’s zombies to export their overcapacity. But even if the Chinese keep their promises not to devalue the yuan further, the flood of cheap goods onto foreign markets has already exacerbated trade frictions.
> The American government has imposed countervailing duties and tariffs on a variety of Chinese imports.
> India is alarmed at its rising trade gap with China. Protesters against Chinese imports clogged the streets of Brussels in February.
> There is also pressure for the European Union to deny China the status of “market economy”, which Chinas government says it is entitled to after 15 years as a World Trade Organisation member *(that's what you get for letting the evil pricks in)*, which would make it harder to pursue claims of blatant Chinese dumping.




I repeat, everything should be going into paying off the debt!  
Remembering FMG has only one customer!


----------



## Value Collector (1 March 2016)

notting said:


> Remembering FMG has only one customer!




not really, they have multiple steel mills they sell to.

I think what you are trying to say is China is their only customer, but china is a country not a customer, the customers are the steel mills of which there are many, and FMG has also started shipping to other nations also.

Also, this customer "China" you speak of, is a world leader in manufacturing and exporting, so by default if "china" is your customer, the world is your customer, not to mention that "one customer" makes up 20% of the worlds population, and your product is the back bone of its economy suddenly I don't see the risk.


----------



## Value Collector (2 March 2016)

An interesting point to note,

FMG is now earning the same profit margin on $50 Iron ore as it used to earn on $100 Iron ore, yet their share price is still about 3 times less.

RIO who is now earning considerably less at $50 than they were at $100 (because there production cost was already very low) has not suffered such a large reduction in share price.

So at $50 per tonne, FMG is just as profitable as they used to be at $100, but the share price is still very low, I think this makes FMG a super undervalued sleeper stock at the moment, I am super Happy to hold at the moment.


----------



## sinner (2 March 2016)

Value Collector said:


> An interesting point to note,
> 
> FMG is now earning the same profit margin on $50 Iron ore as it used to earn on $100 Iron ore, yet their share price is still about 3 times less.
> 
> ...




Isn't the margin only relevant in context of good volume over the life of the security? They could have a 1000% profit margin but if would not be very useful if they are only selling 1 kilo every year?


----------



## sinner (2 March 2016)

Value Collector said:


> not really, they have multiple steel mills they sell to.
> 
> I think what you are trying to say is China is their only customer, but china is a country not a customer, the customers are the steel mills of which there are many, and FMG has also started shipping to other nations also.
> 
> Also, this customer "China" you speak of, is a world leader in manufacturing and exporting, so by default if "china" is your customer, the world is your customer, not to mention that "one customer" makes up 20% of the worlds population, and your product is the back bone of its economy suddenly I don't see the risk.




But there are obvious issues with overcapacity (to put it mildly) at those mills, and their rather questionable business models which are funded by state banks forced to lend by the government on criteria that have nothing to do with viability...


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## Value Collector (2 March 2016)

sinner said:


> Isn't the margin only relevant in context of good volume over the life of the security? They could have a 1000% profit margin but if would not be very useful if they are only selling 1 kilo every year?




FMG is also producing more volume than they were before the price drop, their mines are young and they have a lot of resources on the books for future development, they could maintain 165 million tons per annum for decades probably more than 50 years, there is plenty of ore in the pilbra and fmg has the most tenements.


----------



## notting (2 March 2016)

> Last year China’s steel industry, which accounts for more than half of global production, reduced production for the first time since 1981. The government has set a target of cutting 150m tonnes of production in the five-year plan to 2020.
> 
> Wang Guoqing, director of research at Lan Ge Steel Information Research Centre in Beijing, estimates that one in 10 steel workers face being laid off. She added that solid statistics are hard to come by after the government stopped reporting steel employment figures at the end of 2013.



Can't imagine why they would stop reporting the figures, can you?
I guess you cold draw a long bow and think that possibly  *it's worse than one in ten*!
As long as FMG customers are none of these, then happy be.!


----------



## Value Collector (3 March 2016)

notting said:


> Can't imagine why they would stop reporting the figures, can you?
> I guess you cold draw a long bow and think that possibly  *it's worse than one in ten*!
> .!




Employee count isn't a good indicator of production, over time operations in most industries (especially in china) have increased production while lowering total employee count.

As wages rise in china automation is reducing the amount of labour needed to produce at the same level, as the steel price has reduced it makes sense they would be looking to cut costs and their labour bill would be a main target.


----------



## notting (3 March 2016)

Value Collector said:


> Employee count isn't a good indicator of production, over time operations in most industries (especially in china) have increased production while lowering total employee count.
> 
> As wages rise in china automation is reducing the amount of labor needed to produce at the same level, as the steel price has reduced it makes sense they would be looking to cut costs and their labor bill would be a main target.




The Chinese have also been consolidating all the smelters to assist with pollution reduction.  
So all your analyses stacks up as usual.


----------



## Value Collector (7 March 2016)

Fortescue finished with a Bang today, up 23% for the day.

Perhaps the market is waking up to the fact that they aren't going to go bust and are instead earning a decent margin, maybe some big short sellers are scrambling to bail on their positions.

The company has done a great job at reducing costs, as I said earlier they currently are earning about the same profit per tonne at $50 tonne as they were when they were selling it for $100 / tonne, add to that the debt reductions and the current price still looks very cheap, I can see them heading north to over $6 which would still be very cheap if iron ore price holds over $50.

Time will tell, but I am happy to hold this company, I can see value generation inside this company that is not reflected in the share price at the moment.

----------------------------------

One negative to the market waking up to their good position is they may not be able to continue to get discounts of their debt purchases, I was pretty happy while the negative nellies held the floor, I was happy to sit back and let the market talk itself into selling it's bonds back to us at a 20% discount.


----------



## notting (7 March 2016)

Was an insane day.
After a ripping week like last week you normally expect a bit of consolidation on the Friday afternoon and Monday morning at the very least. Especially if it is heading into resistance and a yearly high. 
Any one short on the opening today should have sh@t their pants as it opened higher and simultaneously broke resistance at $2.65 and by the looks of they did it did!!

Remembering they are producing a lower grade product than RIO and BHP and have been changing mining techniques by reducing waist removal to Ore production which is not sustainable.  
They will have to move more waist to Ore mined than they did at much higher cost levels to get rid of the surplus waist as well as moving normal amounts of waist for future Ore. 
Not sure how long they can sustain that for before they have to raise costs and mine normally!

Further the market seems to be thinking that China is going back to it's old ways and heading into another real estate acceleration through easy money to everyone!
This is also an internal perception with the Chinese too, with those who have money and who also went sick on Shanghai real estate over the last month under the impression that finally the dictators have capitulated and resorted to going back to their old way of faking the economy.  
They think the dictatorship has capitulated and is going to allow the mad building like before.  This is a mistake and when the market realizes this isn't going to happen - 
Be selling and back short.


----------



## Value Collector (7 March 2016)

notting said:


> Remembering they are producing a lower grade product than RIO and BHP.




That's built into their break even costs already, if you look at the break down of costs on slide 9 in the investor presentation, it accounts for the grade discount.



> and have been changing mining techniques by reducing waist removal to Ore production which is not sustainable.
> They will have to move more waist to Ore mined than they did at much higher cost levels to get rid of the surplus waist as well as moving normal amounts of waist for future Ore.




What you are referring to is over burden removal, lowering overburden is not where most of their cost reduction has come from, the over burden removed will increase slightly it will add about $1 per tonne next year, but they predict this will be more than offset but cost reductions and improvements in other areas.

Their new blending stratergy and improved ore processing actually allows them to mine lower grade ores than they could in the past, so their mining cost reductions are sustainable, the "high grading" (only mining the good 10% of their deposit) accusations made last year have proved to be a myth, they aren't high grading at all, they have improved their processing and blending and its allowing them to mine more of the low grade ore.


----------



## Wysiwyg (7 March 2016)

Over 100% gain in 31 trading days for a top 100 company is not common. All those sellers just wiped off the face of the earth.


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## notting (7 March 2016)

Wysiwyg said:


> Over 100% gain in 31 trading days for a top 100 company is not common. All those sellers just wiped off the face of the earth.




WOR and MIN too.

AZJ is the only one, looking like you'd expect at this point.  Was week Friday and today midst the massive 2 day rally on the big ones.  Being a transporter you'd think if things were looking brighter it would be moving too. 
Hence you could suspect at this early stage it's all just price speculation and nothing fundamental.  A weaker US$ on a some dovish FED talk after the market tantrum about the Fed hike, I see no reason for them not to hike again, which will reverse it all by kicking the US$ back up.
It's a traders paradise!


----------



## sinner (7 March 2016)

Wysiwyg said:


> Over 100% gain in 31 trading days for a top 100 company is not common. All those sellers just wiped off the face of the earth.




The FMG beta to the iron ore price is very high. Iron Ore futs listed on the SGX did about 19% today according to ZH, after limit up moves on all Chinese exchanges.

My , very likely the move was influenced by expectations around this weekends China National Peoples Congress, but I doubt many heavy players would be foolish enough to be short into an event like the NPC. Much more likely that interested participants would use todays move to initiate such positions.


----------



## Value Collector (8 March 2016)

sinner said:


> , but I doubt many heavy players would be foolish enough to be short into an event like the NPC. Much more likely that interested participants would use todays move to initiate such positions.




I think it has just become clear that FMG is not a marginal producer, and can compete at the lower end cost of the field with rio and BHP, they aren't going bust they are earning good margins.

Also, the Chinese government in their new 5 year plan mentioned specifically that they want to rationalise or exit inefficient and loss making industries, people's minds immediately jump and think this means steel mill closures and a negative effect on the iron ore price.

I think the opposite is true, the steel mill closures willbe very limited, and they will choose to make these more efficient rather than close, but they will close the many loss making Iron Ore mines.

There is still a whole host of Chinese mines with production costs up near $100 / tonne, these are prime targets for closure, this will take a lot of Iron ore off the market, and provide support for the Iron ore price at levels where rio, BHP and FMG can make good money.

FMG with a break even of $29 is worth a lot more than its current price if iron stays above $50, this is what the market is realising all of a sudden. 

FMG makes about $0.75 free cashflow for every $1 that iron ore is above their break even point, that's about $123,000,000 on their 165,000,000 tonnes of production, and it means for every $1 above their break even they average, their shares are worth about $0.65 so with an ore price in the $50's you can see they are super under valued.

No time to be shorting in my opinion, the market will fluctuate offcourse, but man there are some super strong fundamentals at play here going against you in my humble opinion.

It's also not just Chinese mines that are struggling, less scrap is moving around the world, as mines in countries like the USA are struggling to compete with low ore prices, USA steel mills are using more local scrap, meaning less is available for export to China.


----------



## notting (8 March 2016)

*Unbelievable* IO Spot move





It is following the steel price!!!.
Why is steel going up in China?  Well because they have implemented a *curb on over production*. OMG :dunno::bonk:

Where are the brains?
That means less IO required.  Still expect a 15% jump ........ that's the market

Besides that I'm not disputing the value of FMG given that this (price action) buys it even more breathing space.

AGO was up 46% today, but I don't think anyone is realizing it is a great business all of a sudden!!
Don't lose perspective! But trade away.

Oi Oi Oi!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


----------



## Value Collector (8 March 2016)

notting said:


> AGO was up 46% today, but I don't think anyone is realizing it is a great business all of a sudden!!
> Don't lose perspective! But trade away.




FMG and atlas are worlds apart, I wouldn't touch atlas.

It's on a hospital bed and it struggling to breath after having bipass surgery, atlas is going to rely on a much higher ore price to survive, maybe it will get it maybe it won't, it will never be in the same class as FMG, rio and BHP's Iron assets, it doesn't have the scale needed to thrive in a low ore price environment.


----------



## notting (8 March 2016)

Value Collector said:


> FMG and atlas are worlds apart, I wouldn't touch atlas.
> 
> It's on a hospital bed and it struggling to breath after having bipass surgery, atlas is going to rely on a much higher ore price to survive, maybe it will get it maybe it won't, it will never be in the same class as FMG, rio and BHP's Iron assets, it doesn't have the scale needed to thrive in a low ore price environment.




Yep, but the sentiment will still take it back down.  Although when I predicted RIO would hit 40 which must have seemed nuts at the time, in the back of my head I was thinking FMG would be around .60c (lucky I didn't voice that!).  The market has voted FMG as better than RIO and BHP, even before this latest months run up, over the last year which is consistent with your analysis.  Wasn't questioning your brain but this is running on sentiment, despite what ever fundamental position you take just like the rubbish - AGO, MGX, GRR, ARI, is what I'm sayen.  Recoginising that is critical, cause it will turn, with the others when the turn comes.

So, when might the turn come?  
Well This is a chart of the US transports which front ran the markets down.  It has kicked back up to the critical/classical 61.8% ratracement level and what it does from here will determine what happens next!


----------



## sinner (8 March 2016)

Value Collector said:


> I think it has just become clear that FMG is not a marginal producer, and can compete at the lower end cost of the field with rio and BHP, they aren't going bust they are earning good margins.




Come on VC, it's a pretty long stretch to make this claim, essentially you're saying it's a big coincidence that pure play iron ore miner FMG rose 25% on the day IO futs rose 20%.

I mean, we get it, you're a fan, but blind Freddy can see the technical beta is to the iron price. As notting pointed out, and regardless of whether you'd touch them, if this move was related to FMG specific fundamentals then other iron miners would not have made significant moves.



> No time to be shorting in my opinion, the market will fluctuate offcourse, but man there are some super strong fundamentals at play here going against you in my humble opinion.




Shorts are looking at the iron price and borrow availability, not FMG fundamentals. I'm not short, was merely discussing the idea that Wys proposed of shorts getting wiped out into an NPC weekend.


----------



## Value Collector (8 March 2016)

sinner said:


> Come on VC, it's a pretty long stretch to make this claim, essentially you're saying it's a big coincidence that pure play iron ore miner FMG rose 25% on the day IO futs rose 20%.
> 
> I mean, we get it, you're a fan, but blind Freddy can see the technical beta is to the iron price. As notting pointed out, and regardless of whether you'd touch them, if this move was related to FMG specific fundamentals then other iron miners would not have made significant moves.
> 
> ...




Offcourse the Iron ore price has a lot to do with the value of FMG, as I pointed out they make an extra $123,000,000 of so free cash flow for every $1 move up in the price of Ore, But FMG's share price is now higher than it was last time Iron Ore was at this level.

I am not saying there isn't a lot of speculation going on, I am just saying I think the market is slowly realising that FMG is a solid low cost miner that was priced as if it was an Atlas. Once All this shake out is through, this stock is going to be worth so much more.


----------



## notting (8 March 2016)

You can't get a short on it.
In other words everyone is!!


----------



## dat111 (8 March 2016)

What is going on with Vale's MOU?


----------



## Value Collector (8 March 2016)

dat111 said:


> What is going on with Vale's MOU?




http://http://www.bloomberg.com/gadfly/articles/2016-03-08/father-ted-explains-the-vale-fortescue-iron-ore-venture

The MOU has a couple of points, partly its about the prospect of Vale making an investment in FMG assets by taking an ownership interest in some of its current or future projects and perhaps buying up to 15% of FMG on market.

But the main part I found interesting is the blending joint venture Idea, its basically going to mean both FMG and VALE can reduce their costs, and will allow FMG to mine longer into lower grades.

At the moment both FMG and Vale have a weakness that puts them at a slight disadvantage to BHP and RIO.

FMG's weakness is the grade of the ore, they are currently supplying 58% Iron content ore, but the industry standard is 62% so they get paid 10% - 15% less for their ore. 

Vale's weakness is distance, it costs them $14.10 / tonne to ship their ore from brazil to china, compared to $3.50 for the Aussie miners, But they have the ability to supply ore that is higher in Iron content above the industry standard 62%, but they blend it in brazil and ship the diluted product.

The proposed concept is to have vale load their high grade ore on ships to make the $14.10 / tonne trip to china, where it then meets FMG's lower grade ore, blend them together to make the industry preferred 62% blend and then sell it.

By doing this they have access to more customers, it will reduce FMG's low grade pricing penalty (their product has just 6.4% less ore but they lose 10-15% on pricing, blending it to 62% should reduce that loss towards in price down to some where near the actual 6.4% rather than the penalty 10-15%) and increase the amount of ore available for mining and lower strip ratios (they can mine into lower cut off grades and hit low grade ore with lower strip ratios/over burden), and reduce VALE's shipping costs because more of the tonnes of Iron rather than Blended material.


----------



## notting (8 March 2016)

For some reason I'm finding this rather amusing.
What are they going to use to blend it?  A giant Sunbeam on the docks?
Vale can't afford to buy anything at the moment, they have so much debt they will, as usual, depend on the Brazilian government to back them out of bankruptcy, the big deal, is 'Big deal'.:bs:
Perhaps they leaked it out yesterday that there was a tie up with Vale on the cards and insiders bet on a take over, a little disappointed today, we see.
The Chinese will probably introduce a $10 per ton blending tariff!


----------



## Value Collector (8 March 2016)

notting said:


> For some reason I'm finding this rather amusing.
> What are they going to use to blend it?  A giant Sunbeam on the docks?
> Vale can't afford to buy anything at the moment, they have so much debt they will, as usual, depend on the Brazilian government to back them out of bankruptcy, the big deal, is 'Big deal'.:bs:
> Perhaps they leaked it out yesterday that there was a tie up with Vale on the cards and insiders bet on a take over, a little disappointed today, we see.
> The Chinese will probably introduce a $10 per ton blending tariff!




You can blend ore with the existing stackers and reclaimers, at the stock yard.

Picture an iron ore stock yard, as its unloaded off the ships you would have seen its "stacked" in long triangle shaped piles, and then later reclaimed by a rotating shovel, you can just lay one layer of ore over another and then the rotating shovel mixes it as it scoops it back up, blending isn't a new thing, all the iron ore miners do it already, and vale already does it before they ship to customers requesting 62%, it's a smart idea to ship only high grade at $14.10 / tonne from Brazil and then blend in China.

The customer gets the grade they prefer, vale doesn't have to pay to ship as must non iron material, and fortescue avoids the penalty and gets paid for the iron content they deliver.


----------



## Value Collector (8 March 2016)

Here is a a video of a reclaimer and stackers working in a stock yard,

[video]https://m.youtube.com/watch?v=LNc0i2PhoVc[/video]


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## luutzu (8 March 2016)

Value Collector said:


> Here is a a video of a reclaimer and stackers working in a stock yard,
> 
> [video]https://m.youtube.com/watch?v=LNc0i2PhoVc[/video]




Saw a slide where they stacked these a while back, thought it was very clever. The video made it look awesome. Almost like watching Lucas' prequal Star Wars.

So you're back in black yet?  [I'm on a similar ship so can crack that kind of joke right?]


----------



## notting (8 March 2016)

Value Collector said:


> You can blend ore with the existing stackers and reclaimers, at the stock yard.
> The customer gets the grade they prefer, vale doesn't have to pay to ship as must non iron material, and fortescue avoids the penalty and gets paid for the iron content they deliver.




Your really do know everything don't you?!  

I was hoping I might get an Iron Ore Slurpee when I go to China.


----------



## skc (8 March 2016)

notting said:


> Vale can't afford to buy anything at the moment, they have so much debt they will, as usual, depend on the Brazilian government to back them out of bankruptcy, the big deal, is 'Big deal'.:bs:




Yes... I do find it funny that the market seems to so quickly forget that Vale isn't exactly a picture of health as recently as 2 weeks ago. 

Also interesting... the FMG debt in the second market are now trading at some 5% premium to face value.

The market does have a short term memory.



Value Collector said:


> You can blend ore with the existing stackers and reclaimers, at the stock yard.
> 
> Picture an iron ore stock yard, as its unloaded off the ships you would have seen its "stacked" in long triangle shaped piles, and then later reclaimed by a rotating shovel, you can just lay one layer of ore over another and then the rotating shovel mixes it as it scoops it back up, blending isn't a new thing, all the iron ore miners do it already, and vale already does it before they ship to customers requesting 62%, it's a smart idea to ship only high grade at $14.10 / tonne from Brazil and then blend in China.
> 
> The customer gets the grade they prefer, vale doesn't have to pay to ship as must non iron material, and fortescue avoids the penalty and gets paid for the iron content they deliver.




What would Vale do with its current low grade ore? Does this imply / hint that they will reduce production of low grade ore? I can see blending achieving an operational cost benefit... but without a change in the demand and/or supply dynamics, reduction in cost will quite likely flow straight to a reduction in price.


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## notting (8 March 2016)

This is funny, Nev Power, 'Couldn't even remember how the conversation between, Vale and FMG got started."  But the Fin Review helped him with that today - 



> The extraordinary deal between Fortescue Metals Group and Brazilian iron ore giant, Vale, started with a cold call from Andrew Forrest to Vale's chief executive Murilo Ferreira last June.
> 
> The Brazilian was certainly surprised to hear from one of his key competitors but Forrest soon convinced him the two companies had a mutual interest in cooperation. After all, he had a particularly interesting business proposition that Vale had never considered.
> 
> ...


----------



## Value Collector (9 March 2016)

luutzu said:


> So you're back in black yet?  [I'm on a similar ship so can crack that kind of joke right?]




I am not entirely sure of what my entry cost is, because I bought several parcels and I got them via a put option operation I was running on them, so there was various strike prices, but I collected premiums which reduces that and most of the puts I wrote over the 2-3 years expired out of the momey so premiums collected there reduces the total cost of my fortescue position, If I had to guess my cost would be less than $3 / share.

But as I said, this stock is worth so much more once we get through, I am not phased at working out exactly what my breakeven mark is.



notting said:


> I was hoping I might get an Iron Ore Slurpee when I go to China.




Maybe just eat some steak if you need Iron in your diet. 



skc said:


> Yes... I do find it funny that the market seems to so quickly forget that Vale isn't exactly a picture of health as recently as 2 weeks ago.
> 
> .




No doubt that's why they are exploring options to reduce costs.

I don't think FMG will sell any existing assets to them, they would want full price for them and vale probably wouldn't want to pay up, In the future they may do a deal with vale such as the Iron bridge deal they have done with a chinese party, where they basically get the other party to fund a project on one of their tenements, and then earn a royalty on the other parties share of the ore + transport fees for use of their railway and port + fee's for operating the project and then full earnings on the FMG equity portion.



> Also interesting... the FMG debt in the second market are now trading at some 5% premium to face value.
> 
> The market does have a short term memory.




I guess they got sick of selling it back to fmg at a discount, Maybe FMG's debt repurchases have helped force up the price



> What would Vale do with its current low grade ore? Does this imply / hint that they will reduce production of low grade ore?




A few options, firstly they have already said last year they were likely going to shut down some of their low quality mines, but most likely they will just sell the lower grade or in market on their side of the world, eg Steel mills in Brazil, the rest of the Americas and Europe, where the transport costs are lower.

They can also feed the lower quality ore into pelletising plants.



> I can see blending achieving an operational cost benefit... but without a change in the demand and/or supply dynamics, reduction in cost will quite likely flow straight to a reduction in price




As I said before, I think the biggest change here is going to be the continued shutdown of the expensive chinese mining operations, they are losing money even at $70 / tonne, so vale and FMG will be fine with a $30 break even.

It takes time to play out, but most of the worlds Iron ore production is well above the costs of RIO,BHP,FMG and VALE so over time the Iron price will settle well above the breakeven mark of this group.

It takes time to settle, but Iron/steel industry will adjust and find ways to reduce the expensive supply and use more of the big fours capacity.

We are already seeing this by people around the world choosing to import steel from china rather than use their own countries capacity, the low cost of Iron ore has already forced down the price of scrap, so now its not worth while shipping scrap to Asia from America, meaning the scrap will stay in America, offsetting USA Iron ore production and increasing Asian reliance on virgin materials.

These and many other things are basic arbitrages that will continue to grow and reduce the utilisation of the worlds more expensive mines, and increase utilisation of the 4 low cost guys.


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## notting (10 March 2016)

Fortunately I did end up getting a short on it after it was not available for a while, at it's highs of course! .
Unfortunately it hasn't performed as well as expected after last nights rout. 
Fortunately that just means the opportunity is extended to do more. 
Fortunately for FMGs fans its fundamentals must be helping it whilst IO is still higher than anticipated.  Unfortunately market sentiment will trounce this and the below will make it fundamentally justifiable to see $1.40 again. 



> Iron ore dropped hard overnight, eroding Monday's record surge, amid a revival in concern that global supply is outpacing demand.
> 
> Spot iron ore delivered to Qingdao port fell 8.8 per cent to $US58.02 a tonne. The price dipped 0.2 per cent on Tuesday after Monday's 19 per cent rally to the highest since June. The retreat was preceded by losses on futures in Singapore and China.
> 
> ...


----------



## Value Collector (10 March 2016)

notting said:


> Unfortunately market sentiment will trounce this and the below will make it fundamentally justifiable to see $1.40 again.




For $1.40 to be justified by fundamentals Iron ore price would have to be $32 / tonne, forever and FMG would have to never reduce operating costs.

Currently the Iron ore price is well over $50 / tonne, hell I am happy with anything over $40


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## notting (10 March 2016)

Value Collector said:


> For $1.40 to be justified by fundamentals Iron ore price would have to be $32 / tonne, forever and FMG would have to never reduce operating costs.
> 
> Currently the Iron ore price is well over $50 / tonne, hell I am happy with anything over $40




Unfortunately I think with a yield of 1.85% and downside trading price of stock, coupled with further capital expenditure required to develop mines for the longer term.  I would not be holding on with too much glee.


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## Value Collector (10 March 2016)

notting said:


> Unfortunately I think with a yield of 1.85% and downside trading price of stock, coupled with further capital expenditure required to develop mines for the longer term.  I would not be holding on with too much glee.




I think there is a lot you are missing, we will see who is right, lets look back 12 months from now and decide whether it was worth holding


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## notting (10 March 2016)

Why wait for 12 months.  I can enjoy looking back to March 2012 FMG price 6.00 where I was a roaring bear amongst all the break out bulls#!) and putting on a fat short.

https://www.aussiestockforums.com/forums/showthread.php?t=1935&p=692302&viewfull=1#post692302

Crystal balls working pretty good so far!!
corn:


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## notting (18 April 2016)

> Fortescue  today  announced  that  Mr  Peter  Meurs, Director Development and Executive Director on the Fortescue Board, has accepted a full time international role with The  Church  of Jesus  Christ  of Latter-day Saints  and  resigned  his  Board and executive positions at Fortescue.




:22_yikes:


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## notting (21 April 2016)

Got absolutely pounded at the close yesterday and is following a similar pattern today.


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## Value Collector (5 May 2016)

FMG have reduced their debt in the last few days by another $1.2 Billion, Bringing total debt reduction this year to $2.3 Billion.

It's interesting to note that means total debt reduction has be equal to about $0.74 / share, another interesting point to note is that with the reductions operating costs, at $55/ tonne Iron price, $0.99 per share free cash flow can be be achieved.

What that means for the share price is up to you to decide, but its looking pretty good to me.


----------



## notting (5 May 2016)

Value Collector said:


> What that means for the share price is up to you to decide, but its looking pretty good to me.




Well all you making sense of it has proven correct, so well done to you.

The way management have run this thing since they looked over the edge of the debt black hole is simply flawless and brilliant.
There is no way FMG is going under now, even if we do have the steal 'ice age' as declared by the Chinese and if FMG management keep running it like this, and they bloody well should, they are going to go very well.  

Problem is FMG will get sucked into the over supply issue of IO which makes it pretty risky on the sentiment side.
All resource companies should be run like this has been since they made paying off the debt the number one priority.


----------



## joeno (19 May 2016)

Value Collector said:


> FMG have reduced their debt in the last few days by another $1.2 Billion, Bringing total debt reduction this year to $2.3 Billion.
> 
> It's interesting to note that means total debt reduction has be equal to about $0.74 / share, another interesting point to note is that with the reductions operating costs, at $55/ tonne Iron price, $0.99 per share free cash flow can be be achieved.
> 
> What that means for the share price is up to you to decide, but its looking pretty good to me.




Is your price target still $7 VC?


----------



## Value Collector (19 May 2016)

joeno said:


> Is your price target still $7 VC?




As a minimum.


----------



## notting (19 May 2016)

Value Collector said:


> As a minimum.




Watching it carefully down 5.5% today.  IO stalling it's falling at 55. AU$ going with it. Looks like they will get another 500m off the books shortly.


----------



## joeno (19 May 2016)

Value Collector said:


> As a minimum.




Some time this decade?  I shouldn't be laughing i have a large holding in FMG as well. But forecasts for next year seem pretty dismal.


----------



## Value Collector (20 May 2016)

joeno said:


> Some time this decade?  I shouldn't be laughing i have a large holding in FMG as well. But forecasts for next year seem pretty dismal.




Which forecast?


----------



## joeno (20 May 2016)

Value Collector said:


> Which forecast?




For Iron Ore* $40 predictions http://www.smh.com.au/business/mark...o-bolster-iron-ore-bulls-20160425-goe4uy.html

I suspect some dodgy tactics to manipulate commodity prices by the banks to serve their short positions: http://www.afr.com/business/mining/...llish-say-economists-analysts-20160505-gon6h2

It's funny how they can make such a specific prediction for next years then whenever the IO price experience an increase or decrease they can "adjust" all their original forecasts by absurd amounts and still call themselves top tier Analysts.


----------



## Value Collector (20 May 2016)

joeno said:


> For Iron Ore* $40 predictions http://www.smh.com.au/business/mark...o-bolster-iron-ore-bulls-20160425-goe4uy.html
> 
> I suspect some dodgy tactics to manipulate commodity prices by the banks to serve their short positions: http://www.afr.com/business/mining/...llish-say-economists-analysts-20160505-gon6h2
> 
> It's funny how they can make such a specific prediction for next years then whenever the IO price experience an increase or decrease they can "adjust" all their original forecasts by absurd amounts and still call themselves top tier Analysts.




I would take that forecast with a grain of salt, but either way even if iron ore price did average $40 FMG is still worth about $6, if it averaged $43 it's worth over $7, and as they further reduce costs and interest expenses, profit per tonne rises.

I am not saying iron ore won't fluctuate and drop to $40 or below, but that's not what I care about, I care about what iron ores average price was over the year compared to their average production cost, if it went sub $40 for a couple of weeks but before that it was over $50 for a few weeks they offset each other.

You can see in the debt reduction they are generating value, that's all I care about, the market will eventually wake up.


----------



## notting (31 May 2016)

Value Collector said:


> I am not saying iron ore won't fluctuate and drop to $40 or below, but that's not what I care about,




I care about this -







> Billionaire mining magnate Andrew Forrest is challenging world leaders to abolish slavery by enacting laws which will eradicate forced labour practices.
> 
> There are an estimated 45.8 million people living in slavery - including 4300 in Australia - according to the 2016 Global Slavery Index, released today.
> 
> ...




Andrew could just be trying to cover his tracks, we'll stop if you stop, we can't stop it -



> Mr Forrest found "abhorrent" forced labour practices in Fortescue Metals' supply chains after ordering an audit, warning that other corporations and governments would find the same if they looked.




But the fact that he is challenging publicly his customers even,  it's a good thing.

Economics and business realities aside.  This stock deserves to go to $100.  Andrew is a legend


----------



## joeno (1 June 2016)

Value Collector said:


> I would take that forecast with a grain of salt, but either way even if iron ore price did average $40 FMG is still worth about $6, if it averaged $43 it's worth over $7, and as they further reduce costs and interest expenses, profit per tonne rises.
> 
> I am not saying iron ore won't fluctuate and drop to $40 or below, but that's not what I care about, I care about what iron ores average price was over the year compared to their average production cost, if it went sub $40 for a couple of weeks but before that it was over $50 for a few weeks they offset each other.
> 
> You can see in the debt reduction they are generating value, that's all I care about, the market will eventually wake up.




You should call up today tonight and do a segment on how great the company is. People need to know


----------



## notting (28 June 2016)

FMG had a cracker of day yesterday to the surprise of all, even if the markets had not been melting down it was a cracker of a day.
Then IO rises 6% over night in China.  

Someones playing something!!!


----------



## notting (30 June 2016)

notting said:


> FMG had a cracker of day yesterday to the surprise of all, even if the markets had not been melting down it was a cracker of a day.
> Then IO rises 6% over night in China.
> 
> Someones playing something!!!




And yesterday China announces that the second half will require stimulus in order to meet the 6.6% growth target!!
If there was ever obvious front running this would be it!!!


----------



## joeno (4 July 2016)

Nice slow upward trend from Fortescue. Seems like consensus still is that Iron Ore demand will decline from next year. Any substance to these claims or just huff and puff?
http://www.afr.com/markets/commodit...o-shrink-as-old-economy-fades-20160703-gpxle2


----------



## Value Collector (28 July 2016)

Value Collector said:


> , lets look back 12 months from now and decide whether it was worth holding




Well, its only been a little under 5 months, but holding has certainly paid off, the share price has nearly doubled.

FMG's quarterly production report looks great, it confirmed cost reduction is well and truly putting them close towards their low cost peers, debt reduction has been huge and profit margins continue to refill the bank balance.

every thing is going well


----------



## notting (28 July 2016)

Value Collector said:


> Well, its only been a little under 5 months, but holding has certainly paid off, the share price has nearly doubled.
> 
> FMG's quarterly production report looks great, it confirmed cost reduction is well and truly putting them close towards their low cost peers, debt reduction has been huge and profit margins continue to refill the bank balance.
> 
> every thing is going well




Yes they have managed a very difficult situation brilliantly.  How are you with this investment?  Ahead yet?
IO seems to be going it alone in the commodity space.  Seems like there is still enough demand in China even though some officials have declared a steel ice age!!


----------



## Value Collector (28 July 2016)

notting said:


> How are you with this investment?  Ahead yet?
> !!




Yes, well ahead now, and I have been banking loads of premiums on puts I was selling on these guys when they were sub $2.50 they have all been expiring worthless. 

I still think there is loads of share price growth left, I am not saying things won't get volatile, bad as a long hold, the value being generated inside this company is great.


----------



## Knobby22 (28 July 2016)

I only got on board two weeks ago. Too hard to ignore but missed the big rise so good on you value collector.
Still 12% return in two weeks is a nice. probably the best company in iron to be in if you have faith that the world is turning up (or at least this rise will continue a bit longer). 

I have to admit I didn't realise just how efficiently they were going to get it out of the ground. Their costs are pretty good.


----------



## qldfrog (28 July 2016)

trusting my contrarian attitude, i bought some shorts in the last 2 days
->short term, current level is a bit optimistic in my opinion will see, I do not play the bank on it


----------



## Value Collector (29 July 2016)

qldfrog said:


> trusting my contrarian attitude, i bought some shorts in the last 2 days
> ->short term, current level is a bit optimistic in my opinion will see, I do not play the bank on it




Be careful, this thing is going to $8 in the next 12 months


----------



## qldfrog (29 July 2016)

Value Collector said:


> Be careful, this thing is going to $8 in the next 12 months




as long as we have a touch down to $4 before christmas, I will be right..as I said, did not play the house there..will see, I made a small profit shorting FMG in the last 3 months, trying to do the same


----------



## Value Collector (29 July 2016)

qldfrog said:


> as long as we have a touch down to $4 before christmas, I will be right..as I said, did not play the house there..will see, I made a small profit shorting FMG in the last 3 months, trying to do the same




you may be right, but I think playing that game at this stage is like picking up pennies in front of a steamroller, as they say.


----------



## Value Collector (19 August 2016)

Value Collector said:


> , bad as a long hold, the value being generated inside this company is great.




I just realised I wrote "Bad" as a long hold, I meant to say "But" not bad, 

-----------------------------------------------

Results will be announced on Monday, the dividend should be increased, things are looking pretty good for FMG.

A special thanks goes out to all the bears who have been buying my puts for the last 12 months, its been great thanks.


----------



## Klogg (19 August 2016)

Value Collector said:


> A special thanks goes out to all the bears who have been buying my puts for the last 12 months, its been great thanks.




Well done. Can't say I had the knowledge, nor the testicular fortitude to be doing that.
Resources is pretty much out of bounds for me.


----------



## peter2 (19 August 2016)

I have to say well done to you also ValueCollector. 

I decided to pass on the many break-outs that have setup since the 3.00 level. Mainly due to my aversion to resources and iron ore in particular. The charts don't lie. The management team at FMG have done a great job and you ValueCollector believed in them all along. You deserve the profits and the accolades.


----------



## Value Collector (19 August 2016)

Klogg said:


> Well done. Can't say I had the knowledge, nor the testicular fortitude to be doing that.
> Resources is pretty much out of bounds for me.






peter2 said:


> I have to say well done to you also ValueCollector.
> 
> I decided to pass on the many break-outs that have setup since the 3.00 level. Mainly due to my aversion to resources and iron ore in particular. The charts don't lie. The management team at FMG have done a great job and you ValueCollector believed in them all along. You deserve the profits and the accolades.




Cheers Guys


----------



## joeno (19 August 2016)

Yeah great call on FMG. Can't say the Iron Ore boom lately wasn't a big factor. But still great company pick.


----------



## Porper (19 August 2016)

joeno said:


> Can't say the Iron Ore boom lately wasn't a big factor.




I'd hardly call Iron Ore as being in a boom. The rise in FMG has been mostly down to company specifics. Most other companies aligned to Iron Ore have fared much worse.

I too have sat and ignored FMG's resurgence as I was a non-believer. Just one of those things, at least the rally in the broader market has been much more widespread recently offering other opportunities.


----------



## Value Collector (22 August 2016)

Fortescue dividend up 4 fold.

A nice boost to the dividend, the dividend is now 20% higher than what it was prior to the fall in the iron ore price.


----------



## Knobby22 (22 August 2016)

Value Collector said:


> Fortescue dividend up 4 fold.
> 
> A nice boost to the dividend, the dividend is now 20% higher than what it was prior to the fall in the iron ore price.




I like how the debt is falling rapidly.


----------



## Value Collector (23 August 2016)

Knobby22 said:


> I like how the debt is falling rapidly.




Yeah, $2.7 Billion in free cash flow will do that, things are looking pretty good.

with prices of ore over $50, there will be plenty of free cash flow to keep the dividends and debt reduction flowing, and they have the most exploration land and the most efficient exploration team discovering new resources at a rate about 3 times higher than their mining rate, so plenty of future projects in the pipe when existing mines are depleted or if the market needs growth in supply in the future.


----------



## joeno (23 August 2016)

VC: what do you think is the "fair value" price range of this stock? I've noticed a few commentators lately providing a "sell" recommendation for FMG.


----------



## Value Collector (23 August 2016)

joeno said:


> VC: what do you think is the "fair value" price range of this stock? .




I think easily north of $7, at over $60 a tonne Iron ore price it could be significantly more.



> I've noticed a few commentators lately providing a "sell" recommendation for FMG




Let blockheads read what blockheads wrote. (As they say)

Did they happen to give their reasons?


----------



## Klogg (23 August 2016)

Value Collector said:


> Did they happen to give their reasons?




I haven't looked at FMG closely enough, but I can almost guarantee it's one of these:

1) They want to create turnover and generate revenues
2) Groupthink
3) Because they didn't want to say "I don't know"


----------



## qldfrog (23 August 2016)

while I believe FMG is/was well managed (as opposed to BHP disastrous Marius impact), I am always suspicious when everyone is self congratulating about how good times are;
usually the time when sh*t hit the fan;
Why/when do not know but probably better to short FMG now than a year ago based on past general experience
So maybe the reason some trader want to put a sell on it.
Especially if the dividend is already included in the price, you can remove some risk and still benefit anyway..

A play not specific to FMG  by the way....


----------



## qldfrog (23 August 2016)

or the sell is just linked to that:http://www.brisbanetimes.com.au/business/mining-and-resources/this-hot-commodity-is-destined-to-cool-off-soon-20160823-gqz727.html
even if FMG makes money, it may not be as much


----------



## Value Collector (24 August 2016)

qldfrog said:


> or the sell is just linked to that:http://www.brisbanetimes.com.au/business/mining-and-resources/this-hot-commodity-is-destined-to-cool-off-soon-20160823-gqz727.html
> even if FMG makes money, it may not be as much




So Basically they are just hoping for a significant and permanent fall in the IO price, they may see that,  but I don't think so.

Basically I am happy to hold FMG with a long term average IO price over $50 over $60 is really, really good.

I am not saying that IO won't at some stage tick down below $50, Just that I don't think it will sit there long, and so banking on that happening is crazy IMO, especially when in the mean time cash flows are coming in wiping away debt.

_______________________________

Some thing that a lot of people have missed, is that FMG is now just as profitable as they were at IO $100, BHP and RIO are not.

BHP and RIO had lower production costs prior to the falls, FMG had much higher costs, as the price has fallen, bhp and Rio's margins have been compressed, however FMG has maintained their margins by reducing costs.

eg.

Prior to fall,

BHP break even was in the $30's meaning gross margins of over $70

FMG Break even was in the $80's meaning gross margins of $20's

since the fall BHP no longer earns $70+ gross margins, however fmg still earns $20+ as they did before.

So FMG returning to their pre IO price collapse is Justified, infact they should be even higher because they now produce more tonnes, and have less debt.


----------



## qldfrog (24 August 2016)

Value Collector said:


> So Basically they are just hoping for a significant and permanent fall in the IO price, they may see that,  but I don't think so.
> 
> Basically I am happy to hold FMG with a long term average IO price over $50 over $60 is really, really good.
> 
> ...



Agree with you cf BHP/RIO; but as you know and have experienced, SP varies based on sentiments;
It does not take much to see IO/FMG go down irrespective of the profit per tonne;
All good for long term holders but not if you are ready to get out/back at a week notice, this is a different matter
Still , FMG mgt did a great job, reselling the debt at a discount, reducing costs:well done; FMG may still be around in 10y time which was not a given 5 year ago.


----------



## Value Collector (24 August 2016)

qldfrog said:


> Agree with you cf BHP/RIO; but as you know and have experienced, SP varies based on sentiments;
> It does not take much to see IO/FMG go down irrespective of the profit per tonne;
> All good for long term holders but not if you are ready to get out/back at a week notice, this is a different matter
> Still , FMG mgt did a great job, reselling the debt at a discount, reducing costs:well done; FMG may still be around in 10y time which was not a given 5 year ago.




Offcourse share prices fluctuate, but the value generation linked to profit per tonne is what's important, that will ensure the debt keeps getting wiped and the dividends strengthen and the share price gets stickier at higher levels.


----------



## Value Collector (13 September 2016)

Value Collector said:


> Offcourse share prices fluctuate, but the value generation linked to profit per tonne is what's important, *that will ensure the debt keeps getting wiped *and the dividends strengthen and the share price gets stickier at higher levels.




Another $700 Million of debt to be cleared on Friday.


> *the US$700 million Term Loan repayment will be made at par on Friday 16 September 2016, generating annual interest savings of approximately US$26 million.  *




with $2.9 Billion cleared last year, and $700Million cleared in the first 3 months of this financial year, combined with a record final dividend of 12cents, this company is generating cash fast.



> you may be right, but I think playing that game at this stage is like picking up pennies in front of a steamroller, as they say.




The FMG steamroller is certainly rolling forward at a steady pace, watch your hands if you are shorting, those pennies are pretty close to the roller imo


----------



## CanOz (13 September 2016)

Looks like today retested the break lower from the prior value area....doesn't this track the iron ore price quote closely. Here in China they're quite bearish on iron ore now as the last effort stimulating the credit boom could be running out of steam.....


----------



## skc (13 September 2016)

CanOz said:


> Looks like today retested the break lower from the prior value area....doesn't this track the iron ore price quote closely. Here in China they're quite bearish on iron ore now as the last effort stimulating the credit boom could be running out of steam.....




The more debt FMG repays, the less they are financially leveraged (or held randsom) to IO prices. We are seeing that already.

I/O spot prices has gone from a peak of 511 on 9 Aug to 393 today... some 23% fall.

Yet FMG is trading pretty much flat since early Aug.

Back in the days a 20% fall in IO would see equal if not larger fall in FMG.


----------



## notting (13 September 2016)

Their running in front of the steam roller, now, like a Monty Python character tossing money out the sides like their at a mass Greek wedding.
They are basically printing money and are running more efficiently than pretty much anyone else now.
Unbelievable, but true.


----------



## Value Collector (25 October 2016)

Value Collector said:


> with $2.9 Billion cleared last year, and $700Million cleared in the first 3 months of this financial year,
> 
> The FMG steamroller is certainly rolling forward at a steady pace, watch your hands if you are shorting, those pennies are pretty close to the roller imo




The recent production report and investor presentations released look pretty good, the cash position has recovered back to $1.8 Billion after last quarters debt repayment of $700Million, so it looks like they will be ready to make another debt repayment soon. 

If the Iron ore price holds above $50, full year debt repayments could even get to $2.8 Billion, this should enable them to start issuing investment grade debt at much lower interest rates, and would allow them to turn their attention to using the cash flow for dividends/buybacks or making some investments.


----------



## Ves (25 October 2016)

Value Collector said:


> The recent production report and investor presentations released look pretty good, the cash position has recoved back to $1.8 Billion after last quarters debt repayment of $700Million, so it looks like the will be ready to make another debt repayment soon.
> 
> If the Iron ore price holds above $50, full year debt repayments could even get to $2.8 Billion, this should enable them to start issuing investment grade debt at much lower interest rates, and would allow them to turn their attention to using the cash flow for dividends/buybacks or making some investments.



That's an amazing effort given some of the circumstances.

Well done for sticking to your guns on this one.


----------



## Value Collector (11 November 2016)

joeno said:


> Is your price target still $7 VC?






Value Collector said:


> As a minimum.




Doesn't seem to implausible any more does it, 

Here are the annual general meeting speeches for anyone that's interested.


----------



## joeno (11 November 2016)

Value Collector said:


> Doesn't seem to implausible any more does it,




Great call mate. Such a consistently high performing stock. Only regret I didn't buy more at $1.7


----------



## Porper (11 November 2016)

joeno said:


> Great call mate. Such a consistently high performing stock. Only regret I didn't buy more at $1.7




MGX an alternative. Low volume at times so higher risk but recently broke up out of a long consolidation pattern. High risk/high reward.

I hold.


----------



## skc (21 November 2016)

Just sharing this article about the iron ore miners...

http://www.nikkoam.com.au/knowledge...ian-iron-ore-miners-what-does-the-future-hold


----------



## Value Collector (7 December 2016)

FMG just closed at the highest closing price for more than 5 years, $6.58.


----------



## Value Collector (8 December 2016)

It has just been announced that Fortescue metals group is the lowest cost producer of Iron ore.

They are now in a wonderful position, producing low cost Iron ore at a time when Iron ore selling at over $80 a done, they are now making better cashflows than they were when the spot price was $120.

I am very, very happy to be holding this company right now, their debt is melting away and with these cashflows the dividend should be very nice indeed, not long now and the share price should reflect the true performance of FMG.

Happy days.


----------



## Knobby22 (8 December 2016)

Yes, if the iron ore price can hold up for a while then the company will be in an amazing position.


----------



## Toyota Lexcen (8 December 2016)

Well done, good selection

Do you think they should offer better dividend? Would that impact share price appreciation?


----------



## Value Collector (8 December 2016)

Knobby22 said:


> Yes, if the iron ore price can hold up for a while then the company will be in an amazing position.




even at $50 per done their position is good



Toyota Lexcen said:


> Well done, good selection
> 
> Do you think they should offer better dividend? Would that impact share price appreciation?




Dividends make share prices go down, (well grow less strongly over time than they would if the cash was retained and invested well)

But, the company has stated they plan to pay out between 30% and 40% of earnings, so yes dividends will rise.

-----------------------------

if you had a Jar of coins, and you knew that there was $100 in it, what would be the value of the jar? 

$100 right

but if the owner of the Jar took out $5 (e.g. a dividend) and then tried to sell it, how much is it worth?

$95 is the answer.

if the money in the jar is earning 25% interest, its better to leave it in the Jar, that will make the value of the jar grow over time, as the coin build up.

if each 6 months you pay out the 25% interest, the value of the jar will not grow.


----------



## adds4 (18 December 2016)

Long term, fmg is a no brainier. 

Dividends aren t going to be really high, more likely be 40% of profit. Its what fmg will do with the other 60% that really counts. Debt should be paid off in 2 years, and firetale replacement mine will only be 3 months of cashflow.

Obviously for fmg to grow its going to have to buy some other assets? Maybe copper, zinc, gold and the smokey could be oil and gas - woodside maybe? take a stake in, and take over years down the track? I like ozl for copper too


----------



## Value Collector (21 December 2016)

adds4 said:


> Obviously for fmg to grow its going to have to buy some other assets? Maybe copper, zinc, gold and the smokey could be oil and gas - woodside maybe? take a stake in, and take over years down the track? I like ozl for copper too




Not really (I mean they probably will), but they could just focus on their Pilbara Iron ore tenements, there is enough Ore there to keep them busy for 100 years.

it would be a great investment if they did nothing but run the Iron ore business, clear debt, pay dividends and buy back stock.


----------



## Younga (24 December 2016)

I agree with you.  I think it's a well-run company.  With the price of iron ore, I expect the profit for the next half year to be pretty tidy.  I read the company has had some barges built for it to save money on transportation.  What next?


----------



## notting (17 January 2017)

Iron ore futures in China soared 8 per cent to a three-year peak overnight.
Yet FMG hits short term resistance at 6.40 and then turns pretty hard.
Top in place for a while one suspects


----------



## Value Collector (14 February 2017)

joeno said:


> Is your price target still $7 VC?




There you go Bud,

We just hit $7, 

We will probably fluctuate, but I think we still have a lot higher to go over the next 12 months.


----------



## joeno (5 May 2017)

Fortescue is getting battered  Quite concerned with my disproportionately high holdings in this stock


----------



## Value Collector (15 May 2017)

joeno said:


> Fortescue is getting battered  Quite concerned with my disproportionately high holdings in this stock




What is your concern?


----------



## PeterJ (15 May 2017)

joeno said:


> Fortescue is getting battered  Quite concerned with my disproportionately high holdings in this stock



no stock can keep going up exponentially,
it must retrace at some stage
my simple chart...and
why i use stops
Peter


----------



## dat111 (19 May 2017)

All,

I have been a holder of FMG for about 13 years now and have added to my position many times over the years...especially when it dipped....unfortunately, some of those dips were still higher than todays price.  My hope has always been that it becomes are $20 stock with a nice yield.  I have been reading this Forum since about page 40...
Do you think this stock will make it to this valuation in the next 13 years?
Unfortunately in the US it seems the government is controlling more and more of what happens...is it the same in Australia?  If so, is Australia's current government and media pro business?

Thanks for your response...I appreciate others perspectives...


----------



## tinhat (20 May 2017)

dat111 said:


> All,
> 
> I have been a holder of FMG for about 13 years now and have added to my position many times over the years...especially when it dipped....unfortunately, some of those dips were still higher than todays price.  My hope has always been that it becomes are $20 stock with a nice yield.  I have been reading this Forum since about page 40...
> Do you think this stock will make it to this valuation in the next 13 years?
> ...




Hi Dat. I don't hold FMG and I don't recall ever having held it. I'm having a rough punt to say that the underlying commodity is probably more resonant to a 30 year cycle rather than a 13 year cycle.


----------



## Value Collector (23 May 2017)

dat111 said:


> All,
> 
> I have been a holder of FMG for about 13 years now and have added to my position many times over the years...especially when it dipped....unfortunately, some of those dips were still higher than todays price.  My hope has always been that it becomes are $20 stock with a nice yield.  I have been reading this Forum since about page 40...
> Do you think this stock will make it to this valuation in the next 13 years?
> ...




I don't know about $20, But I am pretty confident it will be over $10, probably well over $10.

A PE of 12.5 doesn't seem crazy to me, and this would have it over $10.

It's generating equity quite rapidly, clearing down debt etc, as this build up of value continues if we see a high quality diversification investment that grows earnings over time we could probably get to $20.

Also if over time the Iron ore market stabilises around this level or higher, and we have a few years good profits at FMG, a higher PE in the market along with a few buybacks could push the price towards $20.

But if it were $10 in 5 years, and there were good dividends along the way, that would be a great investment at this level.


----------



## Value Collector (21 August 2017)

FMG announced a record dividend today.

25 cents final dividend (fully franked), bringing it to 45cents for the full year.

Including the franking credit, this makes it over 10% dividend based on the current share price, 25% if you got in under $2.

Things are looking pretty good.


----------



## McLovin (21 August 2017)

Well done on that VC. You certainly had conviction 18 months ago when most thought FMG was dead.

The cost reduction is pretty impressive, even with the decline of the AUD.


----------



## qldfrog (21 August 2017)

Value Collector said:


> FMG announced a record dividend today.
> 
> 25 cents final dividend (fully franked), bringing it to 45cents for the full year.
> 
> ...



True, I would genuinely never have thought taking abysmal debt level at the time to mine the most common mineral on earth with a unique customer could ever be successfull: well done/ good bet VC.
Nice win


----------



## notting (12 October 2017)

Looks like FMG it's going to test 4.60 again.
With it's lower grade IO and weakness in the Chinese market, as the Chinese try to concentrate more on higher grades, to stave off pollution, FMG could be a bit volatile for the short to medium term.  IO is now in a bear market again.
So lucky and good FMG has deleveraged!
Would be awesome if FMG could keep that dividend in tact and don't go buying anything stupid.!
Now that Xi has full control of China, will be interesting if he starts to cut into overbuilding.  That could be a bit scary for fmg.


----------



## notting (30 October 2017)

Not looking too rosy.
My worst fear, if I were still long on FMG, would be that the the Chinese Dictatorship now really slows down the over construction and tries to make the swing to consumer driven model.
With that there is also the pollution problem which the dictators are feeling the pinch on because pollution is  killing babies and people more and more.

So the dictators are curbing the factories and looking to rely on the high quality IO.  Given the amount Vale, BHP and RIO alone have to supply of that, what's left for FMG may not be that much.  Exit Nev a timely jump?!.



> China's central government has ordered regions near the capital to shut 44,000 coal-fired boilers that provide steam and energy for factories, including steel rolling mills, ceramics and chemical manufacturers, and convert or replace them with gas-fired boilers or switch to electricity by the end of October.




http://mobile.reuters.com/article/amp/idUSKBN1CZ0K7


----------



## notting (31 October 2017)

notting said:


> Not looking too rosy.
> My worst fear, if I were still long on FMG, would be that the the Chinese Dictatorship now really slows down the over construction and tries to make the swing to consumer driven model.
> With that there is also the pollution problem which the dictators are feeling the pinch on because pollution is  killing babies and people more and more.
> 
> ...



Further, the significant cost savings FMG has achieved over the last few years are largly due to scale, it's not a pound for pound thing. There for if FMG has to cut back some productiom or alot due to waning demand from China, its only customer, for its lower grade IO, production costs will rise sharply as they sell less.


----------



## Value Collector (16 November 2017)




----------



## Value Collector (16 November 2017)

notting said:


> There for if FMG has to cut back some productiom or alot due to waning demand from China, its only customer, for its lower grade IO, production costs will rise sharply as they sell less.




China isn't the only customer any more, they have recently sent ore as far as Germany.


----------



## notting (16 November 2017)

How much of the high grade stuff do they have? that may be all they have!
They seem to be saying the 58% is the high grade IO.  Yikes
There was an analyst on Sky today saying they could be making a loss again if there is further discounting to the benchmark and IO dips again.  She said it has potential to go to $1


----------



## fiftyeight (16 November 2017)

"We are the lowest cost IO producer today", really?

After penalties and other charges???


----------



## fiftyeight (16 November 2017)

Snip from the September 2017 Quarterly Production Report does not seem ideal


----------



## fiftyeight (16 November 2017)

Annnnnnd just to keep myself honest, well kinda haha


----------



## notting (16 November 2017)

So the reality is it is currently costing them about 35US to make about 45US at today's prices.


----------



## Value Collector (16 November 2017)

notting said:


> How much of the high grade stuff do they have? that may be all they have!
> They seem to be saying the 58% is the high grade IO.  Yikes
> There was an analyst on Sky today saying they could be making a loss again if there is further discounting to the benchmark and IO dips again.  She said it has potential to go to $1




She doesn't know what she is talking about.


----------



## Value Collector (16 November 2017)

notting said:


> So the reality is it is currently costing them about 35US to make about 45US at today's prices.




Its actually better than that, but even using your numbers, thats 77 Australian cents per share profit, making a PE of around 6.


----------



## fiftyeight (16 November 2017)

Value Collector said:


> Its actually better than that, but even using your numbers, thats 77 Australian cents per share profit, making a PE of around 6.




What price US$dmt are FMG making 77 Australian cents per share profit?

Thoughts on Nevs comments "We are the lowest cost IO producer today"?


----------



## notting (17 November 2017)

So the reality is it is currently costing them about 35US to make about 45US at today's prices.
Those figures include everything, shipping, interest on debt, admin, exploration because miners need to be always doing that stuff as they go so to exclude anything is misleading.


----------



## Value Collector (17 November 2017)

fiftyeight said:


> What price US$dmt are FMG making 77 Australian cents per share profit?




I was simply using Nottings Number, of a $10US / tonne profit margin, $10US x 170million tonnes, divided by the number of shares, converted back to Aussie dollars.


> Thoughts on Nevs comments "We are the lowest cost IO producer today"?




When he is talking about being the lowest cost producer, he is saying their operations are producing tonnes cheaper than any other miner, So their Mining equipment, Processing equipment, Trains, port and ships etc are currently the most efficient operation in the world.

The down side is the marketing side of things, their production is medium grade, so they can't charge as much for their Ore.

So yes they are the lowest cost producer, However they have to sell their production at a discount, So don't have they best profit margin at the moment, But there are both Pros and cons to this.


----------



## Value Collector (17 November 2017)

notting said:


> So the reality is it is currently costing them about 35US to make about 45US at today's prices.




Where are you getting the $35 figure from? I have it at $30.


> Those figures include everything, shipping, interest on debt, admin, exploration because miners need to be always doing that stuff as they go so to exclude anything is misleading.




The figures aren't misleading, you have to understand both figures, you want to know the cost to produce each tonne, and then you also want to know the break even point on each tonne. FMG have always presented both figures.


----------



## Value Collector (17 November 2017)

I am probably more confident in FMG than I have ever been, very happy with the company at the moment.


----------



## fiftyeight (17 November 2017)

Value Collector said:


> I was simply using Nottings Number, of a $10US / tonne profit margin, $10US x 170million tonnes, divided by the number of shares, converted back to Aussie dollars.




How are you calculating $10US / tonne profit margin? Or is that what FMG made last year?


----------



## Value Collector (17 November 2017)

fiftyeight said:


> How are you calculating $10US / tonne profit margin? Or is that what FMG made last year?




My response was to nottings post, using his numbers, he quoted a $10 profit margin.

But I actually think they are making $15US per tonne at the moment, I think I went over my calculation of that in the PM with you a while back.


----------



## notting (17 November 2017)

I was guesstimating the figures expecting to be corrected if they were way off.
So we should be watching the IO price for if it falls to 47 then FMG will not be profitable they also indicated that they may have to discount their product further this coming year.


----------



## fiftyeight (17 November 2017)

Yeah I have had read through the PM.

Maybe what I am getting at is what notting has asked. All in inclusive of fines what price do you calculate FMG to break even at?


----------



## notting (19 December 2017)

2 very good days for IO however FMG seems to be running into strong selling as it gets close to the $5 and finishing with only marginal gains.


----------



## notting (6 February 2018)

I suspect they will be cutting their dividend tomorrow,given the one off costs and lower prices per WMT and higher AU$ relative to spot prices.
May disappoint quite a few optimists hoping for a yield feed on a rough day.


----------



## Value Collector (6 February 2018)

notting said:


> I suspect they will be cutting their dividend tomorrow,given the one off costs and lower prices per WMT and higher AU$ relative to spot prices.
> May disappoint quite a few optimists hoping for a yield feed on a rough day.




Maybe, But they don't need to, I reckon they will match the 20cents of the prior corresponding period.

But the announcement isn't tomorrow is it? 21st of Feb I thought.


----------



## notting (6 February 2018)

Someone said they were announcing something tomorrow.  So you may be right.


----------



## Value Collector (6 February 2018)

notting said:


> Someone said they were announcing something tomorrow.  So you may be right.




half yearly report is out on the 21st, This is where the dividend will probably be announced.

http://www.fmgl.com.au/investors/key-dates


----------



## notting (20 August 2018)

FMG plats going nowhere.
Div reduced
Profit down 58% despite lower Au$
Not great.


----------



## fiftyeight (20 August 2018)

When I was looking at FMG previously I was surprised how little impact the $AUD had on FMG.

Debt in $USD so I was thinking they are hedging accordingly to protect themselves???

(Had a quick look for a reference but I can’t it find at the moment)


----------



## Garpal Gumnut (10 September 2018)

How come most Financial Analists have FMG as a BUY when it's making less money than last year and going down the crapper on the charts.


----------



## noirua (14 September 2018)

Garpal Gumnut said:


> View attachment 89259
> 
> 
> How come most Financial Analists have FMG as a BUY when it's making less money than last year and going down the crapper on the charts.




The lower value of the AU$ against the US$ should be quite dramatic on margins in the tough iron ore sector. Eliwana is their key mine with 60% grade and 170mtpa and as a low cost mine it should advance profits with a lower Aussie.
During the year, Fortescue continued to undertake early stage, low cost exploration on copper-gold prospective tenements in South Australia and New South Wales. This comment has been picked up on and the number of cases in the Wardens Courts after tenements.
Fortescue has needed to diversify and is taking this more seriously.

Debt has been paid down steadily since US$13 billion in 2013.
https://thewest.com.au/business/min...ets-on-top-of-its-debt-mountain-ng-b88762140z

The 62% Fe price has been fairly steady this year.
https://www.marketindex.com.au/iron-ore


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## Garpal Gumnut (26 September 2018)

Come back down FMG and then up thro $4 convincingly and I'm in again. A new high off the bottom, (done), the a new higher low, then a higher high.

Simples. 

gg


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## Garpal Gumnut (3 October 2018)

FMG seems to be falling more like the Liberal Party than a stock with a parachute today. And it has gapped thus far.

We may see a new low in this recent trend soon or as I predicted above a halt before climbing higher. Twiggy's wallet covering must be more open than the ideological gap between SHY and Sen. David Ean Leyonhjelm.

A chart.


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## Garpal Gumnut (8 October 2018)

FMG continues to fall with quite exquisite lows on medium volume.

I'm inclined to look for an entry quite soon.

The action is all very vanilla.

gg

Change:




	

		
			
		

		
	
 -0.16 Open:3.76
             High:3.77 
              Low:3.60
              Volume:  14,638,710
              Percent Change:   -4.24%
              Yield:  6.65% 
              P/E Ratio: 9.9614
              52 Week Range:  3.515 to 5.46


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## noirua (8 October 2018)

Garpal Gumnut said:


> FMG continues to fall with quite exquisite lows on medium volume.
> 
> I'm inclined to look for an entry quite soon.
> 
> ...




Vale seem to be doing very well but FMG is moving against the trend.
https://www.msn.com/en-us/money/top...-giant-rose-11percent-in-september/ar-BBNSDxi May be just an Aussie thing going on. JMS are on a yield of 22% to 32% with manganese prices rising - demand for the shares abroad is low due to the weakening Aussie.
On another company OMH once at a price not long ago of 10c and around $1.65 less than two years later. People were screaming how cheap the shares were but the price kept descending. Basically the market is clueless at times. Now OMH are too expensive but the shares wont stop going up.


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## Garpal Gumnut (12 October 2018)

Well good ole FMG have bounced up over the last few days. 

They are still shy of $4.00 though by only 4 or 5c.

Perhaps a trading range or a breakout as I suggested above.

One to keep a close eye. 

gg


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## fiftyeight (13 October 2018)

Bought  a large size (for me) in my super.

Not overly concerned with the price action, but China is a worry. My thoughts are that it won't be as bad as the doomsdayers think and if it is there will always be the next "China"


----------



## Garpal Gumnut (16 October 2018)

fiftyeight said:


> Bought  a large size (for me) in my super.
> 
> Not overly concerned with the price action, but China is a worry. My thoughts are that it won't be as bad as the doomsdayers think and if it is there will always be the next "China"




I'll be in like Flynn if it cracks up through $4 on high volume. 

It may be a good buy for you 58, if not, not a bad one. 

gg


----------



## notting (16 October 2018)

fiftyeight said:


> Bought  a large size (for me) in my super.
> 
> Not overly concerned with the price action, but China is a worry. My thoughts are that it won't be as bad as the doomsdayers think and if it is there will always be the next "China"




I don't think China is a worry from a short term resources point of view. Their likely to just keep building infrastructure for stimulus.


----------



## Garpal Gumnut (19 October 2018)

Is in a trading range.

http://bigcharts.marketwatch.com/ka...1&lf2=2&lf3=0&height=444&width=579&mocktick=1


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## Garpal Gumnut (22 October 2018)

For those of you not involved in General Chat I reckon Monday may be a good day to enter FMG if it speeds through $4.00 on good volume. 

gg


----------



## Parse (22 October 2018)

Question. Does this mean you are of the opinion that if it doesn't go through $4 in the very near future it's going to be range bound $3.50-$4.00 for quite sometime?


----------



## Garpal Gumnut (22 October 2018)

Parse said:


> Question. Does this mean you are of the opinion that if it doesn't go through $4 in the very near future it's going to be range bound $3.50-$4.00 for quite sometime?




Yes

So I'll buy at 3.55 and sell at 3.95 and then re-enter at 4.20 or 4.30 only if it had high volume.


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## Ann (30 November 2018)

I have put a fibbo level over the chart and it appears to be riding the correct line. There is a falling overhead resistance coming early September '17 which may slowly press it out of its range. That falling overhead may be something to watch. There is also another overhead resistance at around 4.30. The current support line is around 3.60.


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## jjbinks (9 January 2019)

FMG seems as though it may turning the corner on the weekly down trend. However, it is early days with rising prices on low volume. (Perhaps low trade volume during holiday period I guess)


----------



## Ann (9 January 2019)

jjbinks said:


> FMG seems as though it may turning the corner on the weekly down trend. However, it is early days with rising prices on low volume. (Perhaps low trade volume during holiday period I guess)




G'day jjbinks,

FMG announced a A$500 million buy-back starting from 25th October 2018 which is expected to run for up to twelve months. This is likely to add real value to the shareholders and should see a healthy rise in the price, one would expect. I am seeing from the time of the announcment on the daily chart, higher lows. Higher highs have yet to come perhaps.


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## Ann (13 January 2019)

I am putting up a chart specifically inspired by tech/a but hopefully others may enjoy how I like to enter a trade. We were discussing the ability to be successful using 'vanilla' charts alone to gain a successful trade over in the Dump it Here thread pg 41 #801 and on . Of course there is much more to it than just getting a chart right. When I see a chart with potential I then ask myself why would it continue to rise? My answer with FMG was a share buy-back. I am sure it is not always the case but the few I have been a part of have done very well. Before I buy into a stock I look around for any potential hazards. Check various indices and look at how the markets are travelling. 

FMG was going to be picked up for my portfolio as it was setting up really nicely. As this is a 'commodity' stock, I checked the $CRB Index, found that FMG is part of the CRB Index and became seriously disturbed at what I was seeing. In fact it so disturbed me I have decided to wait and see and not buy in as I feel there is a high risk of failure of a successful trade in the near term. If I am wrong, I can always pick up FMG on another support re-test if I still want it. Here is a link to the CRB Index explanation I just put up for clarification. https://www.aussiestockforums.com/threads/crb-index.34478/#post-1009610

This is how I like to enter a stock, higher lows, higher highs, above resistance lines and wait for a re-test of a potential support, then my 'sweet spot' of entry. It is not rocket science, nor is it the holy grail. It is very basic chart reading along the lines of the KISS principle, anyone can do it.


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## InsvestoBoy (13 January 2019)

Ann said:


> I checked the $CRB Index, found that FMG is part of the CRB Index




huh? The CRB index is an index of commodity futures, there are no equity components.


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## tech/a (13 January 2019)

So FMG is a set up you’d usually take but you haven’t because you think it has a high risk of failure.

For me it was a buy 8 periods ago with a stop below the October lows on Binks’s
Chart.

Still doesn’t indicate a near 100% success rate?
Any charts you’ve posted up and they have gone on with it!

This is really basic stuff Ann
Anything better than 50/50 would be amazing


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## Ann (13 January 2019)

tech/a said:


> So FMG is a set up you’d usually take but you haven’t because you think it has a high risk of failure...........



Correct.



tech/a said:


> ..............This is really basic stuff Ann
> Anything better than 50/50 would be amazing




Correct Tech/a it is very basic stuff, so basic it works. Anything as poor as 50/50 returns and I wouldn't bother.


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## tech/a (13 January 2019)

Well your not giving me any evidence it “works”

Could you post up say 5 of them as they set up
I and I’m sure others would be very interested.


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## tech/a (13 January 2019)

Ann said:


> Correct Tech/a it is very basic stuff, so basic it works. Anything as poor as 50/50 returns and I wouldn't bother.




Why not
It’s NOT about win rate
It’s about profit

I can make massive profit and be wrong 70% of the time!
Everyone “can”


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## Ann (13 January 2019)

tech/a said:


> Why not
> It’s NOT about win rate
> It’s about profit
> 
> ...



Good onyamate! Go for it!


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## tech/a (13 January 2019)

Ann do you seriously think the only way to profit in trading is win rate?


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## Ann (13 January 2019)

tech/a said:


> Ann do you seriously think the only way to profit in trading is win rate?



No.


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## tech/a (13 January 2019)

Thank goodness.


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## Ann (13 January 2019)

tech/a said:


> Well your not giving me any evidence it “works”
> 
> Could you post up say 5 of them as they set up
> I and I’m sure others would be very interested.



Missed this post.....yes I would be happy to do that tech/a. A setup I would trade from I am hearing you say? I am not going to work it to death as I would if I planned to trade it. And I would not be recommending the stock just demonstrating how I enter a stock for those who would like to learn the first steps. Happy to do this if I can find five at the moment.


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## tech/a (13 January 2019)

Excellent 
Look forward to it


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## Ann (23 January 2019)

This is related to the previous chart on post on #2843

I indicated a 'sweet spot' for entry (red circle on this chart, star on the last chart). The sweet spot was around the 4.40 - 4.50 level. There has been a small pullback from the top of A on the chart but not a real re-test of the support line at B level. It did pull back to my potential entry price but if I had actually been going to trade this I would not have entered at this time. I would wait until that B level is given a proper re-test. If the stock continues to run upward, I would reconsider the trade. Three things I never do, chase trams, chase men or chase stocks. There is always another tram coming, men and stocks often come back but it depends on my mood as to whether I am still interested. I may have found something better in the meantime! 
I had intended to enter this stock but I am not happy with the markets at the moment, I don't think I am alone if you look at the current volumes. Capital protection is very important, so entering a trade at a weak period in the markets can can offer extra risk for a failed trade and loss of money.


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## tech/a (23 January 2019)

Well I still think it was a buy back at the low with high volume 
On jj’s Chart
So we differ on this one.
I don’t see any reason to sell if anyone was in it.


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## tech/a (24 January 2019)

Another chart.


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## Ann (24 January 2019)

tech/a said:


> Well I still think it was a buy back at the low with high volume
> On jj’s Chart
> So we differ on this one.
> I don’t see any reason to sell if anyone was in it.




I am simply using this as an example of how I would trade this stock. I am not recommending any action of either a buy or sell or suggesting anyone is right or wrong. It is merely showing my style of a trade. It may not suit everyone or anyone for that matter, but it has been very successful for me. All things in this life are subjective, how a chart is read, are our emotions upbeat about a stock, what are our biases, do we feel comfortable about the markets. All of this will come into play when we trade. When a stock comes to a high point and then a bit further down the track it equals that top, it is then I tend to exit a stock. This can work for me or against me, sometimes I lose the very tip of the top price. Sometimes I totally eff up and lose a really good stock which just goes on and on. But I am not greedy, a good profit is always a joy! 
I draw horizontal lines of support and resistance in order to give myself an indication of the weakness or strength of a stock as seen in this weekly chart. The green lines are my potential support lines and the red lines are the resistance lines. I like these on my weekly charts it is a good indicator for me as to a stocks strength or weakness. For instances if this stock fell to the green line of $3 and bounced, I would regard that as a strength. If it began working its way back up again with higher lows and higher highs, I would be most impressed and probably enter the trade if the markets were looking OK.


----------



## tech/a (24 January 2019)

Ann said:


> I am simply using this as an example of how I would trade this stock. I am not recommending any action of either a buy or sell or suggesting anyone is right or wrong. It is merely showing my style of a trade. It may not suit everyone or anyone for that matter, but it has been very successful for me.




Ditto



> All things in this life are subjective, how a chart is read, are our emotions upbeat about a stock, what are our biases, do we feel comfortable about the markets. All of this will come into play when we trade.




Here we differ.



> When a stock comes to a high point and then a bit further down the track it equals that top, it is then I tend to exit a stock. This can work for me or against me, sometimes I lose the very tip of the top price. Sometimes I totally eff up and lose a really good stock which just goes on and on. But I am not greedy, a good profit is always a joy!




Many have gone broke taking profits.



> I draw horizontal lines of support and resistance in order to give myself an indication of the weakness or strength of a stock as seen in this weekly chart. The green lines are my potential support lines and the red lines are the resistance lines. I like these on my weekly charts it is a good indicator for me as to a stocks strength or weakness. For instances if this stock fell to the green line of $3 and bounced, I would regard that as a strength. If it began working its way back up again with higher lows and higher highs, I would be most impressed and probably enter the trade if the markets were looking OK.




Again different here but that's fine.


----------



## Ann (24 January 2019)

tech/a said:


> Many have gone broke taking profits.




So far so good! 



tech/a said:


> Again different here but that's fine.




Thank goodness we all trade differently.


----------



## tech/a (24 January 2019)

Ann said:


> Happy to do this if I can find five at the moment.




Nothing around that takes your fancy Ann?

Don't have to be all at once---as they come up.


----------



## Ann (24 January 2019)

tech/a said:


> Nothing around that takes your fancy Ann?
> 
> Don't have to be all at once---as they come up.




Sorry tech/a, I got all fired up and found a couple, then I got side tracked with other stuff which rather pulled my attention away. There is a new and very complex thread I am trying to build and then today I veered again with some very interesting economic data charts I found. I think they may be very valuable indicators for the markets. Now I want to get a thread going for them.  I will get there....I put up AIA so far. Very early days of course.


----------



## Ann (24 January 2019)

tech/a said:


> Nothing around that takes your fancy Ann?
> 
> Don't have to be all at once---as they come up.



NSR


----------



## tech/a (24 January 2019)

Ann said:


> I think they may be very valuable indicators for the markets.




Ann if your currently getting close to 100% success rate with Vanilla T/A why on earth are you looking at other things???

*So* 

AIA and NSR
Your analysis tells you what?

Ready, setty, go??


----------



## Ann (24 January 2019)

tech/a said:


> Ann if your currently getting close to 100% success rate with Vanilla T/A why on earth are you looking at other things???
> 
> *So*
> 
> ...




Not ready, setty, go. I wait for a support confirmation.  I said I would enter on the area I described if I was happy with the markets.* I am not happy with the markets*. I don't short. I only trade long._ *I do not believe there is much long left in the markets*_.

I have already said tech/a,* I am not happy with the markets*. I keep saying this over and over. _ *I only trade when I am happy with the markets*_. As the tide rises so do the ships, if I think there is going to be a feckin tsunami about to hit the markets, I am happy to sit on the sidelines. If I am wrong I have missed a very small proportion of the up market and I have my support and resistance lines on which I judge.  

So I will say this one more time and hope reading comprehension will occur, because* I do not believe the markets are in a healthy state I will not trade* but I am simply describing how I would enter a stock if I was happy about the markets which I am not because *I believe they are going to puke big time *and have no desire to be diving around trying to save my capital.


----------



## tech/a (24 January 2019)

So your not happy with the markets so no long set up is going to be a trade.

What would alter your position to be confident in trading long again?

Do you feel all markets are going to puke at the onetime or just our market?
Is your analysis pointing to this big time puke? Here there and everywhere?

Can you show us? 
(1) why your thinking financial vomit.
(2) what will need to happen to placate your current feeling?
Or is it a gut feel?

Just to be clear you don’t like the current market conditions for any long trades no matter how good they seem. ( Your view I think I get that )


----------



## barney (24 January 2019)

tech/a said:


> Well I still think it was a buy back at the low with high volume




I only trade Stocks under 10 cents so FMG is not even on my radar now days, but the 7th January was also definite later confirmation if looking for an entry ...… Gap up/break out of consolidation at $4.35 

Chart still looks positive  as well


----------



## barney (24 January 2019)

PS Just for the conversation, and in my humble opinion for what its worth …. 

*AIA* looks to be better trading value on pullbacks so there may be a few cents to be gained buying the open above the current close, but I wouldn't be doing that ……

*NSR* has still shown no real "plan" technically and could easily go either way at the moment  … also no trade for my money

PPS Above is based on Technicals only … Fundamentals may add more substance to the longer term story??


----------



## Ann (24 January 2019)

barney said:


> *AIA* looks to be better trading value on pullbacks so there may be a few cents to be gained buying the open above the current close, but I wouldn't be doing that ……



I think it looks weak and indicisive but that is just what I see Barney, thanks for the view, appreciated!



barney said:


> *NSR* has still shown no real "plan" technically and could easily go either way at the moment … also no trade for my money




I can feel strength here and it is working within my plan however I agree with you, either way.


----------



## Miner (25 January 2019)

My two cents with a humble apology.
This thread is for FMG. Now it became too technical for me because I could not see FMG on last few threads. Then AIA and NSR came. 
Am I confused or our learned friends got sidetracked :
Disclaimer - DNH FMG, NSR, AIA as of 24 Jan 2019


----------



## Ann (25 January 2019)

tech/a said:


> So your not happy with the markets so no long set up is going to be a trade.



Correct.



tech/a said:


> What would alter your position to be confident in trading long again?




Responded here. 



tech/a said:


> Do you feel all markets are going to puke at the onetime or just our market?
> Is your analysis pointing to this big time puke? Here there and everywhere?




I havn't looked _everywhere _but so far every where I have looked looks like it is going to ****. I am working on a mountain of stuff at the moment and have seen heaps but I am trying to prioritize and get the most urgent things up first. I will try to put up more tomorrow.



tech/a said:


> Can you show us?
> (1) why your thinking financial vomit.
> (2) what will need to happen to placate your current feeling?
> Or is it a gut feel?



1) and 2) I believe I have answered...or will have after tomorrow.
My gut is telling me to keep calm, and watch the markets. Screaming boo into the mirror is not helpful! 



tech/a said:


> Just to be clear you don’t like the current market conditions for any long trades no matter how good they seem. ( Your view I think I get that )




Correct.

as a footnote..... to use a derogatory term such as 'vanilla charts' tends to make you look like you feel threatened. It is a girly ploy, avoid it. It is not worthy of a man.


----------



## Ann (25 January 2019)

Miner said:


> My two cents with a humble apology.
> This thread is for FMG. Now it became too technical for me because I could not see FMG on last few threads. Then AIA and NSR came.
> Am I confused or our learned friends got sidetracked :
> Disclaimer - DNH FMG, NSR, AIA as of 24 Jan 2019



You need to read back onto the last page Miner, sorry for the off topic.


----------



## barney (25 January 2019)

Miner said:


> I could not see FMG on last few threads. Then AIA and NSR came.




Don't be disillusioned Miner ….. The brief reference to the other Stocks was part of a longer conversation between Tech and Ann …… All "technically" based so hopefully of some value in general even though not FMG.

Getting back to FMG however …. of the three charts just mentioned, it would be my pick of the bunch as at todays close …. tomorrow may tell a different story of course


----------



## Ann (25 January 2019)

barney said:


> Getting back to FMG however …. of the three charts just mentioned, it would be my pick of the bunch as at todays close …. tomorrow may tell a different story of course



Agree 100% barney, still looks like a darn good stock to me. Strong and decisive. I had intended to make it mine! It is a tasty morsel and if not now, maybe one day!


----------



## tech/a (25 January 2019)

Ann 
Vanilla T/A is what you have shown you are using.
Support , Resistance, Channels, RSI etc it’s standard 
Without exotics like VSA ,Elliot, Market Profile to name a few.

Your use of Vanilla T/A to return close to 100% success when you
Trade has me and I’m sure every serious T/A practitioner on the edge
Of their seat. I can’t wait to see your selections from entry to exit.
Your analysis from entry to exit and any commentary.

To watch any practitioner trade even 4 out of 5 to a profit let alone 18/20 
( near 100% ) using nothing more than vanilla no frills T/A will inspire all 
Technical traders. it will me!

You shouldn’t be offended.
Doing what you claim to be able to do is frankly amazing.


----------



## tech/a (26 January 2019)

A daily FMG chart with an interesting bar.
I expect a small pullback in a very bullish chart


----------



## Ann (26 January 2019)

tech/a said:


> Vanilla T/A is what you have shown you are using.
> Support , Resistance, Channels, RSI etc it’s standard
> Without exotics like VSA ,Elliot, Market Profile to name a few.




I use a few 'exotics' such as PVI (Positive Volume Indicator) to gauge the punters sentiment, I use EquiVolume to see where there is likely to be volume pressure, I look at the Heikin Ashi charts to gauge how strong the upward or downward movements are, I use fibonacci levels but I find they tend to be pretty much the same as my horizontal support and resistance lines, so a bit superfluous other than for confirmation. The EW is not really something I would use. I think I would be out of the stock before it resolved fully. I use to have MAs and stop loss on my charts but I found I tended to ignore them, so I dropped them. I can't get the Market Profile to work on IC, I would probably glance at that if I had the option.



tech/a said:


> Your use of Vanilla T/A to return close to 100% success when you
> Trade has me and I’m sure every serious T/A practitioner on the edge
> Of their seat. I can’t wait to see your selections from entry to exit.
> Your analysis from entry to exit and any commentary.




It shouldn't be edge-of-seat stuff if one is properly trained in basic charting. Way, way back in the day, I was blessed to be trained by some amazing chartists on IC forum when it was a busy interesting place. We all pretty much used IC charts so it was easy to compare what they were doing. They were amazing traders and many of them shared their secrets. I watched, learned, asked questions, read lots of charting books, and practiced. 



tech/a said:


> To watch any practitioner trade even 4 out of 5 to a profit let alone 18/20
> ( near 100% ) using nothing more than vanilla no frills T/A will inspire all
> Technical traders. it will me!




I really hope I can offer something to someone to help them get an edge with their trading, that would be lovely.



tech/a said:


> You shouldn’t be offended.
> Doing what you claim to be able to do is frankly amazing.




I don't think it is amazing, it is just practice. I try to practice everyday, whether I am trading or not. It is like playing a musical instrument, you need that hour or two a day of practice. If I have been sick for a while and not able to practice, I notice it takes its toll on my charting comprehension.

This is a chart with the rising support/resistance lines I drew on this chart. You will notice how the volumes react at certain points of support and resistance. This is always a good confirmation for me I have my supports and resistances on the correct levels as all the other traders. I also agree about a pullback, the rising resistance has failed to be broken too many times and now it looks weak. The volumes also confirm this.


----------



## tech/a (26 January 2019)

Thanks Ann
I’m looking forward to seeing it all put together 
Vanilla and or Exotics
Near 100% success on long trades only is un heard of 
I hope I see it in practice.


----------



## Ann (26 January 2019)

tech/a said:


> Thanks Ann
> I’m looking forward to seeing it all put together
> Vanilla and or Exotics
> Near 100% success on long trades only is un heard of
> I hope I see it in practice.



I shall do my best tech/a! I have never done it in public before. In real time trades, I never trade into a new stock more than one stock at a time, I like to give it 100% full focus.  So this is a bit of a new experience trying to describe trading multiples at once. Doing the brain in a bit but whatever.  I shall just give it my best shot. 
No 100% success is not unheard of with the people I knew. I met many of the traders in person, we held meetings and get-togethers over a number of years. Many traded for a living without other jobs. A number of them told me how they did it. The day trading scalper style was exciting but I could see success only came with years of practice and getting to know a single stock and massive $ risk. The small stock penny dreadfuls was inside info, pump and dump from dealers. "If anyone asked how it was done, whisper in their ear "momentum"." Then there were the forex traders who grouped together in packs. I never got the pip thing. There were the old guys who had been doing it for years and said, get a plan, work on it until it works be patient and never enter a trade if the markets look wobbly. Check the news, check the international markets, check the indices and watch for major Economic Indicator releases. Then there were the wankers, the bullsh!t artists. I can pick those without meeting them. The meeting just confirms it. Sadly they tend to be the charismatic ones who do dreadful damage by suggesting trading is a snap and if you just listen to me I will tell you all the tricks and psychology you need to be a winner! We have all met them, they stick out like dog's balls. They are the losers, the insincere dipsticks who love to hear themselves talk. Like empty vessels, they make the most sound.


----------



## ducati916 (27 January 2019)

Ann said:


> I use a few 'exotics' such as PVI (Positive Volume Indicator) to gauge the punters sentiment, I use EquiVolume to see where there is likely to be volume pressure, I look at the Heikin Ashi charts to gauge how strong the upward or downward movements are, I use fibonacci levels but I find they tend to be pretty much the same as my horizontal support and resistance lines, so a bit superfluous other than for confirmation. The EW is not really something I would use. I think I would be out of the stock before it resolved fully. I use to have MAs and stop loss on my charts but I found I tended to ignore them, so I dropped them. I can't get the Market Profile to work on IC, I would probably glance at that if I had the option.
> 
> 
> 
> ...





I will declare my bias upfront: I am with Tech in being a 50/50 advocate.

As such, I have a few issues to raise on this chart and analysis:

(a) if your analytical method is 100% as claimed, then there are is no 'maybe'. It will do exactly as your analysis indicates. That is the meaning of 100%. Therefore on this chart there should be no equivocation: it is either going higher, or lower, or staying the same. As you have agreed with Tech, it is going lower, then it must go lower, otherwise we are out of the 100% argument and into something completely different.

(b) the rising resistance channel: to draw a support/resistance line that is valid, you need at least two points [A,B]. Further points on that line reinforce the predictive value in the mind of the trader who drew them. You state that this line has held four times. I would argue it has held twice, with a current third test. I would not count the first two, as these two initial points are required to create the line. However, this is a minor point and could simply be an individual thing.

(c) the points [1] through [11] imply that you are creating a list of bullish/bearish factors. At some point, there is enough evidence to indicate that a position should be taken. I feel safe in saying most traders/systems will do the same thing: yet, most systems/traders have a failure rate that precludes 100%. I see nothing that raises your analysis above any other analysis, which rather suggests that your method will also produce similar results to the herd.

(d) to find five or ten charts that Tech requested is easy, as any chart can be analysed. The prognosis is not hard, after all it is either going higher, staying the same or going lower. I will let Tech pick any three charts and I will provide him with a diagnosis of higher/lower/no change within about 20 mins of seeing them. Of the three I would expect [hope] to get at least one right, because I'm a 50/50 sort of chap.

Now I'm going to disagree with both you and Tech and enter a bullish vote on this stock.

jog on
duc


----------



## tech/a (27 January 2019)

Pullback likely Duc. Not necessarily a reversal. If I was in the stock Id be cautious with profits.
To be bullish Id like to see a clear pull away from this small consolidation pattern sometime this
week without a pullback as low as $4.65. My concern is Supply is entering as the stock moves
towards old $5 highs---Although I think the $5.50 high is more significant. Cautiously Bullish. (60/40)

Ann.
Great to see your interested in showing your analysis.

You trade in a discretionary manner. 
I find it interesting that you also consult some other forms of analysis.

No need to trade 5 at a time.
One at a time is fine. 5 in a row one after the other will be amazing to watch.
How many of these guys did you watch live and with even 70% success (That is also unheard of
on a consistent basis).




Ann said:


> The day trading scalper style was exciting but I could see success only came with years of practice and getting to know a single stock and massive $ risk.




Certainly very different scalpers to any I know. These guys know risk -- I at times scalp the DAX. While the entertainment director watches Home and Away!
Massive risk is not in any scalping method I've seen by anyone I've seen scalp. 



Ann said:


> The small stock penny dreadfuls was inside info, pump and dump from dealers. "If anyone asked how it was done, whisper in their ear "momentum"."




The pump and Dump brigade are rank amateurs.
Momentum sure---Trick is when is it going to start---when is is going to continue and---when is it going to stop.
You gotta be good in all time frames and without liquidity your going to have a very high failure rate.



Ann said:


> There were the old guys who had been doing it for years and said, get a plan, work on it until it works be patient and never enter a trade if the markets look wobbly.




So when is the market Not wobbly?
You must have a plan Ann and it is without doubt very very good.
Id have thought it would be a very simple step by step process with clear unambiguous steps in -- during -- and out.
But maybe not and that is what interests me.



Ann said:


> Check the news, check the international markets, check the indices and watch for major Economic Indicator releases.




Have you ever noticed how at the end of any day commentators make an economic case for *WHY* the market rose or fell.
Yet many stocks Rose and Fell on the same economic news!!



Ann said:


> *love to hear themselves talk*




In the 20 years Ive been on ASF Ive never used the ignore button until yesterday.
Its a lot quieter.


----------



## ducati916 (27 January 2019)

tech/a said:


> Pullback likely Duc. Not necessarily a reversal. If I was in the stock Id be cautious with profits.
> To be bullish Id like to see a clear pull away from this small consolidation pattern sometime this
> week without a pullback as low as $4.65. My concern is Supply is entering as the stock moves
> towards old $5 highs---Although I think the $5.50 high is more significant. Cautiously Bullish. (60/40)




tech/a,

Yes, I realise that that is what you meant. I, on the other hand, think it will run higher [on the daily chart] from this point on: that is to say, it will close higher in its next trading session than its previous close on its last trading session. There could be some intra-day lower prices, but those are irrelevant fluctuations.

There is a world of difference between 70% and 100%, which I'm sure you realise. While you seem to have become magnanimous in your old age and will accept 70%, I have not. 100% is what was claimed - I would like to see the evidence. If I had a 100% strike rate, I would be close to owning all the money gambled in the markets.

jog on
duc


----------



## Ann (27 January 2019)

ducati916 said:


> I will declare my bias upfront: I am with Tech in being a 50/50 advocate.
> 
> As such, I have a few issues to raise on this chart and analysis:
> 
> (a) if your analytical method is 100% as claimed, then there are is no 'maybe'. It will do exactly as your analysis indicates. That is the meaning of 100%. Therefore on this chart there should be no equivocation: it is either going higher, or lower, or staying the same. As you have agreed with Tech, it is going lower, then it must go lower, otherwise we are out of the 100% argument and into something completely different.




This is the thing duc, I am not _predicting_, I am saying what I want to see on a chart. These are the one and only times I am drawing what appear to be predictive lines. They are not meant to be predictive, just what I want to see happen. I want to see it behave the way it would make me feel comfortable to enter the trade. For this to be a trade for me I would want to see it bounce up off or very close to the $4.20 level. *I really want to make this as clear as possible, while the markets are in a nervous state I wouldn't enter this trade regardless if it did exactly what I wanted.                          *
If I think the market has potential to fall then I won't enter a trade, what I am doing is demonstrating how I enter a trade and what has been successful for me. I think there is a real potential for a fail here if the market gets a decent jolt. This US shutdown has been causing a lot of nervousness as a lot of major economic information hasn't been getting out. If there are any surprises now they are back with the economic data, it could be a bit nasty. No matter how good a call you make on a chart it can get smashed if the market falls on top of it. To know when to sit on your hands can increase your success rate to quite a degree.



ducati916 said:


> (b) the rising resistance channel: to draw a support/resistance line that is valid, you need at least two points [A,B]. Further points on that line reinforce the predictive value in the mind of the trader who drew them. You state that this line has held four times. I would argue it has held twice, with a current third test. I would not count the first two, as these two initial points are required to create the line. However, this is a minor point and could simply be an individual thing.




I find there are times I will draw lines from certain points as they 'feel' valid and other times I will draw from slightly different points. Every chart is different, the method of entry is the same, three higher highs, three higher lows, overcome and bounce back off a horizontal support. I hope I am not going to confuse you with what I am about to say....
In the early stages of a rise I just need two points for the rising support as long as it looks about 45degrees, it is enough, when there is a third touch I may re-adjust my line. When I see the rising support at what appears the correct or proven angle, I will draw a second line underneath it at an identicle angle and then I will lift that line up for a rising resistance, I only need one point of reference for the rising resistance to be put into place. Sometimes this rising resistance will need to be re-adjusted which on occassions can turn into a bearish rising megaphone or fall down into a wedge pattern. None of my lines are set in concrete. They are indicators for me, not predictors. I don't see charts as predictors merely indicators. Gosh, I hope all that makes sense, I am seeing it my mind but not sure it is translating onto the page. It is like trying to describe a reflection in moving water! 



ducati916 said:


> (c) the points [1] through [11] imply that you are creating a list of bullish/bearish factors. At some point, there is enough evidence to indicate that a position should be taken. I feel safe in saying most traders/systems will do the same thing: yet, most systems/traders have a failure rate that precludes 100%. I see nothing that raises your analysis above any other analysis, which rather suggests that your method will also produce similar results to the herd.




As I said before, I know when to sit on my hands, that helps. I watch to see if there are any major resistance lines coming up on the All Ords. I also check what side of the 'mountain' the All Ords is sitting on, left or right. If left and moving up, I am comfortable to trade if right, then I like to wait until I feel there is a support for a rise but watching for potential overhead resistance which could see it fall back.



ducati916 said:


> (d) to find five or ten charts that Tech requested is easy, as any chart can be analysed. The prognosis is not hard, after all it is either going higher, staying the same or going lower. I will let Tech pick any three charts and I will provide him with a diagnosis of higher/lower/no change within about 20 mins of seeing them. Of the three I would expect [hope] to get at least one right, because I'm a 50/50 sort of chap.
> 
> Now I'm going to disagree with both you and Tech and enter a bullish vote on this stock.




Again I need to explain, _I am not being predictive, _I am simply trying to describe an ideal set-up. You may well be right, it might leap up and break through my rising resistance, never to be seen again. That would then mean I would re-think entering the stock. If it doesn't conform to my entry requirements then it is not going to be a trade. I am very strict with my trades, behave or fcuk off!


----------



## tech/a (27 January 2019)

Ann said:


> This is the thing duc, I am not _predicting_, I am saying what I want to see on a chart. These are the one and only times I am drawing what appear to be predictive lines. They are not meant to be predictive, just what I want to see happen. I want to see it behave the way it would make me feel comfortable to enter the trade. For this to be a trade for me I would want to see it bounce up off or very close to the $4.20 level. *I really want to make this as clear as possible, while the markets are in a nervous state I wouldn't enter this trade regardless if it did exactly what I wanted.                          *
> If I think the market has potential to fall then I won't enter a trade, what I am doing is demonstrating how I enter a trade and what has been successful for me. I think there is a real potential for a fail here if the market gets a decent jolt. This US shutdown has been causing a lot of nervousness as a lot of major economic information hasn't been getting out. If there are any surprises now they are back with the economic data, it could be a bit nasty. No matter how good a call you make on a chart it can get smashed if the market falls on top of it. To know when to sit on your hands can increase your success rate to quite a degree.




I dont think any of us are being predictive---we have not given a specific price or area. (Gann theorists often do)
But even then I think its anticipation given the information we have. With FMG Duc and I anticipate a longer term bullish
Chart until evidence proves other wise. I'm anticipating a possible short term pause. So I agree you are not predicting.

This nervous state isn't shared by all all the market is still rising------but it doesn't have to be----- for you it is what determines your 
"timing". The market has a perpetual potential to fall *and* rise!

Sitting on your hands in *fear* of what *Could* happen can also see many opportunities pass you by.

But *I get it* its your style of trading. You have also peaked my interest in how you will determine that the Market/s are *NOT* nervous and its safe to trade!
I dont know if Ill ever see that in my lifetime!




> I find there are times I will draw lines from certain points as they 'feel' valid and other times I will draw from slightly different points. Every chart is different, the method of entry is the same, three higher highs, three higher lows, overcome and bounce back off a horizontal support. I hope I am not going to confuse you with what I am about to say....
> In the early stages of a rise I just need two points for the rising support as long as it looks about 45degrees, it is enough, when there is a third touch I may re-adjust my line. When I see the rising support at what appears the correct or proven angle, I will draw a second line underneath it at an identicle angle and then I will lift that line up for a rising resistance, I only need one point of reference for the rising resistance to be put into place. Sometimes this rising resistance will need to be re-adjusted which on occasions can turn into a bearish rising megaphone or fall down into a wedge pattern. None of my lines are set in concrete. They are indicators for me, not predictors. I don't see charts as predictors merely indicators. Gosh, I hope all that makes sense, I am seeing it my mind but not sure it is translating onto the page. It is like trying to describe a reflection in moving water!





Perfect sense. a good strong trend will often rise at about 45 degrees on a log scale.
A very strong trend greater,and a weak trend less. There are trends and support and resistance within trends and support and resistance
along with patterns within patterns.See it all the time. What does it all mean --- how is it interpreted-- up to the practitioner.
How do you implement it into a profitable trading method---we will hopefully see demonstrated by you.



> As I said before, I know when to sit on my hands, that helps. I watch to see if there are any major resistance lines coming up on the All Ords. I also check what side of the 'mountain' the All Ords is sitting on, left or right. If left and moving up, I am comfortable to trade if right, then I like to wait until I feel there is a support for a rise but watching for potential overhead resistance which could see it fall back.




So that covers entering a trade.
What do you do if in a trade? Exit--hold ?
Stock can and does rise and fall despite what the Indexes do.
With all these ifs and could happens I really am peaking in interest.



> Again I need to explain, _I am not being predictive, _I am simply trying to describe an ideal set-up. You may well be right, it might leap up and break through my rising resistance, never to be seen again. That would then mean I would re-think entering the stock. If it doesn't conform to my entry requirements then it is not going to be a trade. I am very strict with my trades, behave or fcuk off!




*No need to re explain I totally get it.*
We are very different.
While there are more ideal times than others waiting for the perfect storm will mean youll miss out on a lot of cocktails basking in the sun in Barbados.
I am never perfect---*I dont have to be.*

A few questions Ann

How many trades do you do a year?
What sort of Positive expectancy do you have ---Reward to risk?
What is your average time in a trade?
Do you trade on Daily/Weekly or other charts?
What is your longest string of Losses/Wins.
What is your trading universe?
What software do you use?
How do you determine a watch list? 
Who are in it at the moment?

Is it news or charts that determine if the market is nervous for you?
If a chart then can you show us how nervousness looks in the chart from your point of view?

Thanks
Very interesting Im getting to understand as much as Im not quite grasping!!!


----------



## ducati916 (27 January 2019)

Ann said:


> 1. This is the thing duc, I am not _predicting_, I am saying what I want to see on a chart. These are the one and only times I am drawing what appear to be predictive lines. They are not meant to be predictive, just what I want to see happen. I want to see it behave the way it would make me feel comfortable to enter the trade. For this to be a trade for me I would want to see it bounce up off or very close to the $4.20 level.
> *
> 2. I really want to make this as clear as possible, while the markets are in a nervous state I wouldn't enter this trade regardless if it did exactly what I wanted.
> *
> 3. If I think the market has potential to fall then I won't enter a trade, what I am doing is demonstrating how I enter a trade and what has been successful for me.




1. I don't want to belabour the point, however: drawing support/resistance lines has as its sole purpose the requirement to be predictive. That is the whole point. If they don't 'behave' they are a fail and are not predictive. The postulated trade is scrapped.

2. Which is simply another 'indicator', much as anything else.

3. Clearly, otherwise you could not be 100%.

The point that you are trying to make is understood, viz, that unless you are 100% happy with the set-up of the trade, you will not take it.

My point [and probably tech/a also] is that even if you are 100% happy with the trade today and enter it, tomorrow it can all turn to custard. That is the difficulty with the future: it is unpredictable.

Line up all your stars to your heart's content: it means nothing more than a probability. A probability is never 100%, otherwise it would not be a probability.

jog on
duc


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## Ann (27 January 2019)

tech/a said:


> Ann.
> Great to see your interested in showing your analysis.



I am always interested to see other peoples analysis, either FA or TA, so feel I should share as well, seeing you asked.



tech/a said:


> You trade in a discretionary manner.
> I find it interesting that you also consult some other forms of analysis.




When I am going to enter a trade I look at the thing from as many angles as I can, daily, weekly, monthly. Any exotics I have found which will say something to me. Minor FA stuff. I would like to do more in this field, now I have time to research and think. I spend hours and hours for a number of days looking at a stock, become one with it if that doesn't sound too creepy. Over the years I have built up a repertoire of things I look at. Some fall by the wayside when they don't prove all that valuable, others come into the picture. It tends to be a bit of a moveable feast but with the same central core. Three higher highs, three higher lows, overcome a resistance line, retest that line for support, enter the trade.



tech/a said:


> No need to trade 5 at a time.
> One at a time is fine. 5 in a row one after the other will be amazing to watch.
> How many of these guys did you watch live and with even 70% success (That is also unheard of
> on a consistent basis).




It will be amazing to watch if I can pull off even one in this market! I am expecting them to all go t1ts up. 

Some of the guys were sheer genius, they would call a stock and often they would call a top price and do so in public. It happened regularly, these were the guys I watched and questioned as to how they did it. In all cases they had a trading plan, all different but all experienced and all were very disciplined. I think having a plan and having discipline were the two characteristics which seemed to dominate with the successful traders.



tech/a said:


> Certainly very different scalpers to any I know. These guys know risk -- I at times scalp the DAX. While the entertainment director watches Home and Away!
> Massive risk is not in any scalping method I've seen by anyone I've seen scalp.




Back in those days there were no CFDs. I think he had $100,000 bank loan which he used for the day, then there would be a day of 1c and 2c trades on the one stock, after the session the loan would be returned no interest of course. He made an excellent living doing this. That discription of 'massive risk' was mine. I don't think he thought twice about what he did and he did it successfully.



tech/a said:


> The pump and Dump brigade are rank amateurs.
> Momentum sure---Trick is when is it going to start---when is is going to continue and---when is it going to stop.




No, there are a group of traders who are given a plan of dates, price levels to enter and exit, it is all well co-ordinated. I have seen one of the plans, many years ago I had an offer to join one of the groups (unrelated to a forum). Thanks, but no thanks. I guess it still happens, occassionaly I will see a pump and dump that has that old familiar stairway-to-heaven look about it. I like to savage them when I get the chance.



tech/a said:


> So when is the market Not wobbly?
> You must have a plan Ann and it is without doubt very very good.
> Id have thought it would be a very simple step by step process with clear unambiguous steps in -- during -- and out.
> But maybe not and that is what interests me.



Excellent question!  As we know, the US market has an influence on the Australian Market, the Australian Market has an influence on the market constituents. There are three movements possible on a chart, up, down and sideways.  When the Indices are going up that is what I see as the left hand side of the hill, this is where I will enter a trade happily after I have done the business on the stock. Then there is the down and that I see as the right side of the hill, this is where we are at the moment. I will never enter a trade here. I call this a wobbly market, especially with the US shutdown added to the mix.

How we are standing at the moment is the All Ords are right on a support line of 6,000, if it rises above and re-tests that support line succesfully, then we might be looking at a move up, fast or slow I am not sure, fast probably. Currently the All Ords has a massive overhead resistance line coming from November 2007 at just below 7,000. If it makes it above the current resistance line at around 6,000 it may be a trade up to 7,000 but a bit short term for me. I think once it hits the 7,000 resistance line it will retrace, how badly and quickly I don't know. If it gets above and restest 7,000 I will be back in again, depending on the US indices.
So I trade going up on the left of the hill, if the stock moves sideways that is OK for a bit if it doesn't break below a support, if it is very volatile and looks very 'spikey' and we start to have double or triple tops, I look at the MACD for confirmation of weakening tops. I tend to sell out here as these things can drop quickly. I lose a bit of top here sometimes. This is an area I would like to improve.



tech/a said:


> Have you ever noticed how at the end of any day commentators make an economic case for *WHY* the market rose or fell.
> Yet many stocks Rose and Fell on the same economic news!!




No I am not talking about commentator bullsh!t, I mean news like what uS hedge funds are doing, that the majority of major US stocks are offering buyback at the moment, what is happening with the US shutdown, what the economic indicators are saying that sort of news. Stocks will fall or rise in different ways, a rise in oil price will see the oilers rise but it may have a negative impact on qantas shares. There are many factors and they are mostly interlinked in some way. If the Aussie dollar falls, booze stocks may rise, depending on their hedging. It is a see-saw. The news hour is all fiction, something worth ignoring.


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## barney (27 January 2019)

tech/a said:


> In the 20 years Ive been on ASF Ive never used the ignore button until yesterday.
> *Its a lot quieter*




Damn Tech …… How many people did you put on ignore

I hope I wasn't one of them … I would be extremely disappointed


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## tech/a (27 January 2019)

Only 1


----------



## Ann (27 January 2019)

tech/a said:


> Sitting on your hands in *fear* of what *Could* happen can also see many opportunities pass you by.



No I don't have fear when I sit on my hands, I have certain areas where I want to see support levels achieved. I counted on the All Ords, three lower lows and three lower highs. It is all in my plan, it is not an emotional thing. I think I went into more of this on my previous post which I think was a cross-over. Yes, I often see many opportunities pass me by but that is OK, there are plenty more. I never let that feeling influence me. I think it can make people panic and rush to trade, possibly to their detriment. 



tech/a said:


> How many trades do you do a year?



I don't hold more than ten stocks at any one time. I find it is enough to watch. It can take me several months to build up to that level.



tech/a said:


> What sort of Positive expectancy do you have ---Reward to risk?



I expect to see all my stocks moving above the entry price. I have messed with stocks out of my trading plan just for the experiment, it has without exeption been a failure but a good and valuable lesson each time.



tech/a said:


> What is your average time in a trade?




About four years +/- depends on if they get taken over. That can be annoying when I have worked out a swing trade calculation and see there is a whole lot of upside left.



tech/a said:


> Do you trade on Daily/Weekly or other charts?



I do an entry on a daily chart, I do weekly maintenance on a weekly chart.



tech/a said:


> What is your longest string of Losses/Wins.



Not quite sure what you mean here but I will answer by saying, I stay in a stock until it looks as though it has reached a top and retested that top and then I use MACD to check the weakness of the second high. If I am messing with a stock outside my trading plan I flick it the minute it fails a support.



tech/a said:


> What is your trading universe?



No idea what this means, it sounds like something skate would ask! 



tech/a said:


> What software do you use?



IC charts delayed midnight. On the day I trade I use the bank software. I know what price I want to enter so I don't need bells and whistles.



tech/a said:


> How do you determine a watch list?



I call it a theme and it is one of the fun things I enjoy doing, choosing a theme. I don't stay strictly to the theme but over the years my main themes have been health stocks, mining adjuncts, and stocks which offered DRP.



tech/a said:


> Who are in it at the moment?



I am not in anything at the moment. I closed out of my last three stocks about 18months ago after I was injured at work and off for three months. I was heavily sedated and knew I couldn't watch them. I have been struggling with my health ever since. I don't trade if I am not well. I can't put in the energy. Recently I was feeling better and decided I wanted to start trading again, then I smashed into a wall and gave myself concussion, then the market hit the right hand side of the hill. That's fine, I am still looking for a theme, although doing this is rather a distraction, but that's all good, I might find a theme along the way.



tech/a said:


> Is it news or charts that determine if the market is nervous for you?
> If a chart then can you show us how nervousness looks in the chart from your point of view?
> Thanks
> Very interesting Im getting to understand as much as Im not quite grasping!!!



I think I answered the nervous markets on the last post, hopefully. Ask again if I haven't been clear enough.
You are most welcome to keep asking questions tech/a, I will do my best to help you grasp whatever it is you are trying to understand.


----------



## barney (27 January 2019)

tech/a said:


> *Only 1*




 ….. Ok At least I now know its not me then … lol ….

Curiously Tech, I am surprised that you would "ignore" anyone.   You must feel they basically have zero input to offer? …. maybe even less??

You normally engage in a healthy debate to get to the bottom of what might appear an "unjustified" opinion …. 

Not a big deal, but are you sure "Ignore" is the most productive option?


----------



## tech/a (27 January 2019)

Very very interesting
Your answers, answer a lot of questions I didn’t ask.
Looking forward to when there isn’t a nervous market!

With a 4 year average hold a nervous market must be
A rare find for you!

Trading anything that doesn’t make 2 lower lows and 2 
Lower highs over 4 years—- well I can only think of a few 
US stocks that have done that. 
Same with flicking a stock that has an M/A crossover of X
On a test of a high just can’t imagine that NOT happening in 4 years
If you flick some stocks fast then they are on the minus side of 
The ledger!

Universe is the stocks you pick your prospects from
Reward to risk is the Return against your risk.
So in 10 trades you make $1000 and risk on each trade $100
Your trading at 10 to 1 R/R 
Expectancy total trade profit / total trade loss = expectancy 
Positive expectancy is a positive figure 
Anything over 3 is considered very good.

What are a few of the stocks you have held in the past for around 4 years?


----------



## tech/a (27 January 2019)

barney said:


> ….. Ok At least I now know its not me then … lol ….
> 
> Curiously Tech, I am surprised that you would "ignore" anyone.   You must feel they basically have zero input to offer? …. maybe even less??
> 
> ...




Yes I do 
That way I can Skate right past time wasting self indulgent 
Rhetoric.


----------



## barney (27 January 2019)

tech/a said:


> Yes I do
> That way I can Skate right past time wasting self indulgent
> Rhetoric.




You are a busy man Tech …. I understand


----------



## tech/a (29 January 2019)

Nice!!

FMG has powered away.


----------



## Ann (30 January 2019)

tech/a said:


> Very very interesting
> Your answers, answer a lot of questions I didn’t ask.
> Looking forward to when there isn’t a nervous market!




So am I 
As I said once before I look at international business news everyday. This is what I saw today...
JP Morgan sitting on their hands.

Reporting season and it isn't looking great.

Rally in Gold is an indicator of falling markets.

Potential for a fall in wheat prices, with a potential for a fall in commodities markets which could affect FMG as it is a commodity company.

Sabre rattling by the US, which can have a positive effect on the market.

Consumer Confidence falls.

PG&E bankrupt. They owe lots of money to  renewable power companies, may send a few of them broke. 

Exposing the GW bullsh!t, no idea what effect that will have. Less money into universities? Less money donated to charity funds, less money invested into Goldman Sachs et al?





tech/a said:


> With a 4 year average hold a nervous market must be
> A rare find for you!



I can never recall a time since I have been in the markets where there has been a lengthy shutdown by the Feds. This is causing serious uncertainty as there has been no market sensitive data released for nearly a month. As in the COT (Contracts of Trade) there has been no data released since December 22. The market reacts on the OI (Open Interest). It won't be released until Friday afternoon or made public until next week. It will have a major impact on all the Commodities. This will be reflected, maybe negatively, in the $CRB Index FMG is a constituent of the $CRB Index.



tech/a said:


> Trading anything that doesn’t make 2 lower lows and 2
> Lower highs over 4 years—- well I can only think of a few
> US stocks that have done that.



No I said_ three _lower highs and _three _lower lows and a fail on a support.  If I was doing the two x two then I would only be in the market for two or three months.



tech/a said:


> What are a few of the stocks you have held in the past for around 4 years?



DUE it held all supports and I had done a swing trade calculation, it would have reached around $3.60 but was taken over at $3.00. I was not happy!
IOF held all supports I flicked this when I got sick in 2017
SPK held all supports again it got the flick when I got sick
SGP, sat like a toad on all supports, this sort of went nowhere but they paid a fair divie I flicked this just before I got sick.
There were another couple of long termers, I just can't remember, one which got taken over like DUE with a lot of up still in it by my calculations, the other I closed out of as it failed a double top.

As this is all mostly off topic, I had better add a chart. It looks like FMG is trying to break above the Fibonacci 38.2% of $5.00. With that top tall tail on the candle it looks like a lot of selling pressure.


----------



## tech/a (30 January 2019)

FMG up another 46c so not being held back by anything at this point.

*Vertical rises don't last forever so we need to look for either a pause
(Pullback) or a blow off.* 

Currently two strong gaps away on some serious volume.
*Id be trailing a stop at $5.39.
*
Just watching course of trades.There are some serious parcels changing hands!

There has been some excellent profit potential from FMG
since we have discussed it here!


----------



## Miner (30 January 2019)

tech/a said:


> FMG up another 46c so not being held back by anything at this point.
> 
> *Vertical rises don't last forever so we need to look for either a pause
> (Pullback) or a blow off.*
> ...



I saw yesterday and  today's FMG prices and thought of you : A messiah  
You could make billions (if not already) if all of your calculated targets reached their goals.
Thanks to you, Ann and other posters on FMG. I was more reading but saw the strength of the research data published by you all.


----------



## tech/a (30 January 2019)

Well Its reached my stop!

Looks like its now coming off
pretty hard At $5.50 ish resistance.

Off to Golf.
Enjoy


----------



## captain black (30 January 2019)

tech/a said:


> Well Its reached my stop!




Nice trade tech, always good to see a practical example of someone trading a consolidation pattern in real time


----------



## tech/a (31 January 2019)

Thought Id follow this for a while.
The daily chart indicates an inside day.
Strength will depend on how deep it is
Range and Volume.






Here is a 15 min chart showing yesterdays 
Price moves. Of greatest interest to me is the 2 very high volume bars which
conformed to VSA perfectly in that *BOTH* corrected immediately
The turquoise very bullish opening
Then the Magenta Very bearish dump exhausting and supply stalling allowing
a small re bound---unsupported by volume!


----------



## tech/a (31 January 2019)

Ah
I see a pre market release of their Quarterly activities report.
Could explain the interest now we will see how it is seen on
release.


----------



## Ann (31 January 2019)

tech/a said:


> Ah
> I see a pre market release of their Quarterly activities report.
> Could explain the interest now we will see how it is seen on
> release.



It appears the price hike in FMG and other iron ore stocks is related to the Vale dam disaster in Brazil. They have introduced large production cuts.   I have been reading about Vale every day since the disaster and didn't connect the risk to the Iron Ore price,_ so_ need to improve my FA!
This has made the price of iron ore rise dramatically. I have been trying to find a chart for Iron Ore inventories but no luck so far. If the inventories are high the hike may be short lived, just don't know. 
This is a current price chart for Iron Ore.


----------



## tech/a (31 January 2019)

Ann

Good pick up 
I note price was at resistance in April when Iron was a similar price.


----------



## tech/a (31 January 2019)

Having said that.

If we were trading purely from the chart we
wouldn't have to know *WHY.*
We only care that price is moving in our direction
and we look for reasons to stay in or pull out
of the trade.
*
We just trade the analysis.*


----------



## tech/a (31 January 2019)

Very interesting day.
another very high volume day with FMG 
creeping higher to close on its highs.

The 15 min chart shows a diminishing volume M/A
I saw today as a distribution into strength.
But I maybe wrong with the declining volume possibly
indicating a lower supply. I doubt this as price was contained
buyers didn't have to look much higher to get a fill. 

Next resistance is around $6 but I doubt it will make it.

So while Im out I wont be re entering until I see a pattern form
which will be part of the pullback I think FMG will have to have 
Sooner than later.


----------



## Ann (31 January 2019)

tech/a said:


> Ann
> 
> Good pick up
> I note price was at resistance in April when Iron was a similar price.




Thanks tech/a, I have noticed stocks tend to mirror their commodity prices, which is not very surprising really.


tech/a said:


> If we were trading purely from the chart we
> wouldn't have to know *WHY.*




True but I like to know why stuff happens. I find the markets very interesting.


----------



## tech/a (31 January 2019)

By the time we find a reason most of the move has gone
If indeed we ever REALLY “know”


----------



## Ann (1 February 2019)

tech/a said:


> By the time we find a reason most of the move has gone
> If indeed we ever REALLY “know”



No, if I had been smarter with FA I saw the Vale disaster in Brazil mentioned on the weekend and saw it would take it off line for a while. I knew it was an iron ore company, I should have looked at its market weight. Had I been smarter I would have realized as it was such a major player being taken out, that would put pressure on the iron ore price, that would have made me less bearish regarding a pullback.  I am sure a number of people would have had broker alerts on Monday, about it being a good trade because of the disaster.


----------



## tech/a (1 February 2019)

Ann

I don't know why you would even have to try and trade like this.
Whatever you do to trade nearly 100% correct is *ALL* you need.
Why waste your time with anything else?


----------



## Ann (1 February 2019)

tech/a said:


> Ann
> 
> I don't know why you would even have to try and trade like this.
> Whatever you do to trade nearly 100% correct is *ALL* you need.
> Why waste your time with anything else?




Because I believe you and I were right about FMG about to do a retrace tech/a, not that we will ever know for sure. It was on the Friday chart we made the call, the day before the accident, so no possibility of an indication for a rise on the chart. I don't like being wrong when I chart. Any time I fail, I want to know why. Then I want to get better at what I do. It is the reason I would never buy Qantas, stuff might happen with no prior warning.


----------



## tech/a (1 February 2019)

We are indeed different.
I have no expectation only
contingencies. If my anticipated trade doesn't pan out
I re adjust. Wrong is simply a cost of doing business.

In every case I'm wrong or right because of the anticipated 
price action occurred or didn't occur. Buy Hold or Sell.


----------



## Ann (1 February 2019)

tech/a said:


> We are indeed different.
> I have no expectation only
> contingencies. If my anticipated trade doesn't pan out
> I re adjust. Wrong is simply a cost of doing business.
> ...




Clearly we both enjoy our approaches, I bet we will often agree as in FMG. However if I reckon something may not happen, I will give you a heads up so you can re-think a trade. Hope you will do the same for me?


----------



## tech/a (1 February 2019)

Done !


----------



## Ann (1 February 2019)

tech/a said:


> Done !



Good man!


----------



## Ann (4 February 2019)

For anyone interested in seeing footage of the Vale dam disaster here is some disturbing footage.


----------



## Miner (4 February 2019)

Ann said:


> For anyone interested in seeing footage of the Vale dam disaster here is some disturbing footage.



Thanks for the footage. It is horrifying. No wonder in last few days three different head hunters approached me for PM roles of TSF and alike areas. All three represented reputed  miners in Australia - listed as ASX 200.


----------



## Ann (4 February 2019)

Miner said:


> Thanks for the footage. It is horrifying. No wonder in last few days three different head hunters approached me for PM roles of TSF and alike areas. All three represented reputed  miners in Australia - listed as ASX 200.



That sounds great Miner, what does PM roles of TSF and alike areas mean?


----------



## tech/a (5 February 2019)

FMG powering along.
Very solid.
Approaching old resistance 
A lot of demand supply is being
met easily.

See if there is a pullback at this level for another 
possible trade.


----------



## tech/a (7 February 2019)

FMG now has a very solid volume base and has not found a level at which
price has found resistance. Volume is now dropping off as it rises. This indicates
supply is less and as such holding is preferred. So price rises without needing 
to battle through supply. Demand is also less as interest at these prices wanes.

There is a topping pattern evident in lower time frames. I see $6.22 a critical level


----------



## ducati916 (9 February 2019)

tech/a said:


> FMG now has a very solid volume base and has not found a level at which
> price has found resistance. Volume is now dropping off as it rises. This indicates
> supply is less and as such holding is preferred. So price rises without needing
> to battle through supply. Demand is also less as interest at these prices wanes.
> ...




For me, it would now be a short.

jog on
duc


----------



## tech/a (9 February 2019)

For how long Duc?
Any targets 
I’ve not had a good look at a chart
But will.
This has got a great deal of strength now built in
Taking out a lot of old sellers and powering on.
Supply just dried up. Demand continued until
It reached a level where it appears value has 
Been found. Hence it’s come off a bit.


----------



## ducati916 (9 February 2019)

tech/a said:


> For how long Duc?
> Any targets
> I’ve not had a good look at a chart
> But will.
> ...




The [by far] strongest level was the $4.50 level. A weaker level [which didn't really participate in this breakout] were the $5.50 and $5.00 levels.

Therefore if I were actually trading this and were short, I'd be looking at $5.00 to cover. This assumes that there is actually some fundamental improvement in the stock and not just some headlines over a random event that was a positive for the stock.

If it were the latter, then I'd be more inclined to the $4.50 mark.

If it [the short] takes hold...it could be pretty fast, potentially lots of technical trades entered on the breakout...they will fold their cards pretty quick.

jog on
duc


----------



## tech/a (9 February 2019)

Im a little different and not so certain.
Now I am looking for a test of the high 
and due to the late strength shown on Friday
a test of that low.

Before doing anything--was out very early so like you
out with the popcorn.


----------



## ducati916 (9 February 2019)

tech/a said:


> Im a little different and not so certain.
> Now I am looking for a test of the high
> and due to the late strength shown on Friday
> a test of that low.
> ...




Re. a retest of the high. If this were a trend that had been in place for some time, then absolutely, a retest of the high is a common occurrence as the trend ends.

With a very fast move, often, there is no retest, price just collapses. Also, on the intra-day data, the pattern is different. There have been large bar moves, then a consolidation, then a continued move higher.

The last large bar was significantly greater than previous bars and there has been an immediate decline, I suspect as early buyers now lock-in profits. This can have a cascade effect in the shorter timeframes.

I have no idea on the fundamentals of this stock, but if it is to trend higher over time, it will require the buying support of the fundies, they will not come in much before $4.50 assuming there actually is value here.

But ultimately...who knows....50/50

jog on
duc


----------



## tech/a (9 February 2019)

Your observations of the lower timeframes are classic 
I only looked at the daily 
I’ll open TWS and see what I find. Should have been
Using these earlier by the sound of it.


----------



## ducati916 (9 February 2019)

tech/a said:


> Your observations of the lower timeframes are classic
> I only looked at the daily
> I’ll open TWS and see what I find. Should have been
> Using these earlier by the sound of it.




I'll be interested in your observations and whether they match my own.

jog on
duc


----------



## tech/a (9 February 2019)

TWS is being worked on so can’t open 
I’ll try tomorrow


----------



## greggles (1 March 2019)

FMG coming off its recent highs and looking for support.


----------



## rnr (1 March 2019)

greggles said:


> FMG coming off its recent highs and looking for support.









There are least 4 unfilled gaps to choose from.
You almost have to believe that the chances of a bounce off support would be relative high.


----------



## fiftyeight (1 March 2019)

Vale disaster was here..ish.

Is FMG about to test how much of this run up is due to the disaster and short term trader action

OR

Long term buyers getting in before the price gets away from them as Vale may be in strife

OR

Vale disaster is over stated and the value investors who were buying pre breakout are getting squeezed by the traders because of Vale

OR

None of the above?  I vote none of the above and who knows what is going down in IO town, but I hope Vale and FMG succeed together


----------



## joeno (18 April 2019)

What do we think about FMG? I've got quite a large portion of my FMG in my portfolio. Wondering if i should sell some...


----------



## Value Collector (18 April 2019)

joeno said:


> What do we think about FMG? I've got quite a large portion of my FMG in my portfolio. Wondering if i should sell some...




For what it’s worth I am not selling, (except for a short term parcel I sold a call option on that is now in the money)

To be honest, I actually wouldn’t mind FMG heading back towards $5.50, it would give me a chance to sell some more puts, but either way it doesn’t really matter to me.

I think FMG’s future is very bright, these fluctuations don’t really register in my brain much except when deciding whether to sell puts or not.


----------



## joeno (19 April 2019)

Value Collector said:


> For what it’s worth I am not selling, (except for a short term parcel I sold a call option on that is now in the money)
> 
> To be honest, I actually wouldn’t mind FMG heading back towards $5.50, it would give me a chance to sell some more puts, but either way it doesn’t really matter to me.
> 
> I think FMG’s future is very bright, these fluctuations don’t really register in my brain much except when deciding whether to sell puts or not.




Thanks for the vote of confidence. i'm no longer living in Australia but still have all my stocks there, so I'm a bit out of the loop. Is there reason to believe FMG is still undervalued? I'm not going to sell all my holdings - by no means. I'm very happy with the dividends in itself. But i'm thinking about reducing my holdings to invest in other stocks. Perhaps $10 is a good target for cashing in? But if there's still a lot more potential for the stock to rise... perhaps i'll stay put.


----------



## Value Collector (19 April 2019)

joeno said:


> Thanks for the vote of confidence. i'm no longer living in Australia but still have all my stocks there, so I'm a bit out of the loop. Is there reason to believe FMG is still undervalued? I'm not going to sell all my holdings - by no means. I'm very happy with the dividends in itself. But i'm thinking about reducing my holdings to invest in other stocks. Perhaps $10 is a good target for cashing in? But if there's still a lot more potential for the stock to rise... perhaps i'll stay put.




If you remember back a year or two, I think me and you had a conversation where I said FMG was worth atleast $7.

Well, I believe it’s grown in value since then.

But also, I don’t generally sell a good company that is growing share holder value just because it reaches “fair value”, It would have to become quite over priced before I sold.

For example, take Coca Cola for instance, maybe it reached “fair value” in 1923, but it’s “fair value” grew at a steady rate for decades after that.

It can be risky to sell a good company at fair value, because you might end up locking yourself out, or end up buying back in at a price that may be lower on paper, but if worse after capital gains taxes and missed dividends etc are applied.

One thing I know is that I can’t time markets, but I can generally pick which are good Company’s to hold long term.

Any win I make timing the market is likely to be offset by off balance sheet opportunity losses I make by selling.

Some believe believe you should sell out if you double your money, if I did that on all my big wins that got me where I am, they wouldn’t have been the big wins, and I wouldn’t be where I am.

I pay attention to the ships heading, not the choppy seas.


----------



## Skate (21 April 2019)

Value Collector said:


> If you remember back a year or two, I think me and you had a conversation where I said FMG was worth atleast $7.
> 
> Well, I believe it’s grown in value since then.
> 
> ...





What a great tag from @Value Collector..

_"I pay attention to where the ship is heading, not the choppy seas"_

Skate.


----------



## Ann (21 April 2019)

Ann said:


> It appears the price hike in FMG and other iron ore stocks is related to the Vale dam disaster in Brazil. They have introduced large production cuts. I have been reading about Vale every day since the disaster and didn't connect the risk to the Iron Ore price,_ so_ need to improve my FA!
> This has made the price of iron ore rise dramatically. I have been trying to find a chart for Iron Ore inventories but no luck so far. If the inventories are high the hike may be short lived, just don't know.
> This is a current price chart for Iron Ore.




That was a post I made back on January 31st.

Now Vale is back in business....

*Iron ore miners tumble after Vale allowed to restart Brazil mine*
_
Australian iron ore miners have shed more than $7 billion in value on Wednesday after Brazilian courts allowed Vale to re-open an iron ore operation that was closed following a fatal mine dam disaster.

Vale's Brucutu iron ore mine will resume operations after it was closed when tailings dams burst in January, flooding the town of Brumadinho in Brazil's Minas Gerais state and killing hundreds. It means about 30 million tonnes of iron ore will come back onto the market. More..._

It will be interesting to see what happens to the price now. The temptation is great to say Vale FMG!


----------



## notting (14 May 2019)

Jesus Christ.  Just declared a special div of .60 going ex 22May That is HUGE!!!
They say you should not buy commodity stocks for div but this takes it to 10% fully franked for the Fyear. At it's current closing price of 8.09.
What an unbelievable year for holder types.  Well done Value Collector.  This thing is killing it and I don't think it's gonna stop here as it pays down debt and is just going to be a money printing machine.

Weekly chart going back to 2009 looks alright too -


----------



## SuperGlue (15 May 2019)

*Forrest in $654m payday from surprise Fortescue dividend*

"*If the polls are correct and Labor wins power on Saturday*, the deadline for excess franking credits to be paid as cash refunds to low-taxed investors could be June 30. The Fortescue dividend will be paid on June 14."

https://www.afr.com/business/mining...m-surprise-fortescue-dividend-20190514-p51n8d

Notice that a few companies are also paying dividends before June 30.


----------



## Value Collector (17 May 2019)

notting said:


> Jesus Christ.  Just declared a special div of .60 going ex 22May That is HUGE!!!
> They say you should not buy commodity stocks for div but this takes it to 10% fully franked for the Fyear. At it's current closing price of 8.09.
> What an unbelievable year for holder types.  Well done Value Collector.  This thing is killing it and I don't think it's gonna stop here as it pays down debt and is just going to be a money printing machine.
> 
> ...




That’s a 45% dividend for the year so far if you bought in at $2 when you and I were discussing it a few years back, it’s been a great run since then. Fully franked too.


----------



## notting (18 May 2019)

FMG Letter to share holders rushed out on Monday. 
Re Shortens defeat -
Do you mind if we cancel the payout and keep the franking credits now!?


----------



## joeno (27 May 2019)

A bit off topic - if say I have 1000 shares of Fortescue how much $$$ should i see in my trading account after the dividends are paid out?

I'm using IB (interactivebrokers) who are international, so don't want them to be taxing me incorrectly.


----------



## Value Collector (27 May 2019)

joeno said:


> A bit off topic - if say I have 1000 shares of Fortescue how much $$$ should i see in my trading account after the dividends are paid out?
> 
> I'm using IB (interactivebrokers) who are international, so don't want them to be taxing me incorrectly.




$600 Australian.

Eg. 60 cents for each share you own.

Unless for some reason there is a withholding tax applied, say for example you haven’t provided them with your tax file number, they may withhold tax.


----------



## Value Collector (27 May 2019)

The iron ore price looks to be strong for quite a while, and the discount of low grade is sitting near historical lows.


----------



## rnr (27 May 2019)

joeno said:


> A bit off topic - if say I have 1000 shares of Fortescue how much $$$ should i see in my trading account after the dividends are paid out?
> 
> I'm using IB (interactivebrokers) who are international, so don't want them to be taxing me incorrectly.




From the comments I've seen with regard to IB they pay you the franking credits.
If that is the case then approx $857.14.


----------



## joeno (28 May 2019)

rnr said:


> From the comments I've seen with regard to IB they pay you the franking credits.
> If that is the case then approx $857.14.




Looking at my previous dividends paid, they are definitely not paying me the franking credits. They pay just the declared dividend. How do I claim the franking credits from them?


----------



## rnr (28 May 2019)

@joeno

You may have a better chance of getting a response if you post this question in the IB thread.


----------



## Value Collector (28 May 2019)

joeno said:


> Looking at my previous dividends paid, they are definitely not paying me the franking credits. They pay just the declared dividend. How do I claim the franking credits from them?




Are you an Australian resident for tax purposes?


----------



## joeno (29 May 2019)

Value Collector said:


> Are you an Australian resident for tax purposes?




Yes.


----------



## Value Collector (29 May 2019)

joeno said:


> Yes.




In that case the franking credit is applied to your tax return, and you get a refund if the credit is higher than the tax due.

For example, on 1000 shares the following happens.

You receive $600 cash + $257 franking credit (That’s just a tax credit, not given in cash)

When you do you tax return both amounts are added as taxable income to your return.

So your taxable income rises by $857 (divy and franking combined), but you also get a credit for tax already paid of $257 (the amount of the franking credit)

So if you are on a 0% tax bracket, you won’t owe any tax on that $857 so you will get a $257 tax refund of your franking credit.

If you are on a 30% tax bracket, the franking credit will offset the whole $257 tax owed, so you won’t get a refund but you won’t get a tax bill either.

However if you are on a 45% tax bracket, you will owe $385 tax on the $857, but they will deduct the $257 franking credit first and send you a bill for the remaining $128.

———-
Franking credits are just a tax credit for the company tax already paid by the company on the profits they are distributing as dividends, they are used to prevent double taxation, and to ensure when those company profits hit the investors tax return, they are taxed at the appropriate rate for that investor eg at his or her tax bracket.

Eg. If a company earns $100, they pay $30 company tax which leaves $70 available to pay dividends.

When that $70 gets paid as a dividend, it comes with a $30 franking credit.

So, the total $100 is added to the investors tax return as income, but a $30 credit is also added to represent the tax already paid.


----------



## Ann (14 June 2019)

*Fortescue pegs more copper ground near Olympic Dam via Strategic Energy and Tasman Resources farm-in*

_Twiggy-backed Fortescue Metals (ASX: FMG) has made another copper grab with the iron ore miner to farm into Strategic Energy Resources (ASX: SER) and Tasman Resources’ (ASX: TAS) iron-oxide-copper-gold assets in South Australia, near BHP’s renowned Olympic Dam operation and Oak Dam West discovery.


With a dry pipeline of advanced copper projects and the mineral deemed critical for the surging lithium-ion battery and electric vehicle sectors, mining majors such as  BHP’s (ASX: BHP) and Rio Tinto (ASX: RIO) have both been scooping up prospective copper ground across South Australia and Western Australia in recent years.


Not to be left behind, Andrew Forrest’s “Twiggy’s” Fortescue has also been pegging up copper ground in both regions over the last 18 months, and its agreement to farm-in to Strategic’s Myall Creek copper-gold project in South Australia will consolidate some of its holding in South Australia. More..._


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## notting (6 August 2019)

Massive reversal as did, RIO and BHP.
At first I thought it must have been the Diggers and Dealers conference but since the other two did the same thing I guess it was also above $7 peg of the Yuan that surprised to the upside rather than a continuation of last nights historic Yuan below 7 panic attack.


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## notting (7 August 2019)

Price of FMG IO as of yesterday.
China Imported Iron Ore Price (Fe: 58%, CFR)(SHCNIOI) - 90.83USD/t【734】
FMG trades it's lower grade IO at a discount to the FE 58% usually of about 10%

Should FMG shareholders be worried?
Well not really given the margin is still very healthy all the way down to about US$45.
Not that market will trade beyond the sentiment.

China could be in deep trouble if it continues to bury itself in infrastructure and apartment madness to try to prop up 'the appearance of it's economy to it's serfs and the world which it may continue to do until local debt massively exceeds it's international treasury holdings and the hole thing collapses.
'Saving face' could be the ultimate downfall of the Chinese

Regardless I'd be surprised  if FMG did not have at least one more dividend bonanza left in it.
Although it would seem smarter if it bought some other downtrodden miner/s instead.


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## bigdog (27 August 2019)

https://www.smh.com.au/business/com...-surges-on-iron-ore-boom-20190826-p52kpd.html

'Twiggy' Forrest's $1.24b day: Mining magnate cashes in as Fortescue pays record dividend

Australian miner Fortescue Metals Group will pay out a record annual dividend to shareholders, sending more than $1 billion into the bank account of mining magnate Andrew "Twiggy" Forrest, following a bumper year boosted by booming iron ore prices.

With a 35 per cent stake in the company, Andrew Forrest, the company's founder and chairman, is set to pocket $1.24 billion from the full-year dividends


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## InsvestoBoy (18 October 2019)

https://www.abc.net.au/news/2019-10...peal-over-pilbara-native-title-claim/11615706



> Mining magnate Andrew Forrest faces a compensation fight after losing an appeal against a WA native title ruling over a huge tract of ore-rich Pilbara land.


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## Value Collector (26 November 2019)

Very proud to have been a share holder of this company for the past 5 years.


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## Value Collector (3 December 2019)

So we broke through $10 today.

Refelecting back to a few years ago when we were at $2, and I was trying to convince people it was worth at least $7, Congrats to anyone that went agains the status quo and took my advice and loaded up.


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## dat111 (6 December 2019)

Value Collector said:


> So we broke through $10 today.
> 
> Refelecting back to a few years ago when we were at $2, and I was trying to convince people it was worth at least $7, Congrats to anyone that went agains the status quo and took my advice and loaded up.





I first purchased in 2004....unfortunately sold 1/4 of my position end of last December as I wanted to take a loss to offset other long term capital gains.  Was sitting out a month as required to buy back in and Vale has their flood causing FMG to go up....Thinking that the price was going to come back down after the Vale issue was worked out but I was wrong...I am still waiting and smiling.....


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## joeno (9 January 2020)

i did follow the advice and bought a moderate amount (not huge, not tiny) around the $1.80-$2 range. Wish i bought more  +500% gain in 5 years. Not too shabby.

Any of you guys planning to sell? I think there's room to grow further... but i don't see the potential as being "infinite" or having the same gains in the next 5 years as the past 5 years.


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## barney (10 January 2020)

Don't hold FMG … but anyone who dips in for $70 million like Twiggy has done to help other Aussies is a legend


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## dat111 (13 February 2020)

barney said:


> Don't hold FMG … but anyone who dips in for $70 million like Twiggy has done to help other Aussies is a legend





First Go Twiggy...Love a guy who is willing to risk a fortune to make a larger fortune and give me opportunity to make money with him....

Here is my take on what could happen in the future for FMG but we must first remember why the price was so low.  When the price was less than $2/share investors (me) were/was worried that another entity would purchase FMG and I would not realize any return and more than likely a loss.  The concern was attributed to the price of Iron Ore being low and the projected price of iron ore in the future was going down instead of up.  So the market price for iron ore from 2015 - 2020 was projected to be $35/wmt-$45/wmt.  FMG was producing in the high twenties as I remember.  So the difference did not allow FMG to make their debt payment when they came due.  This caused them to push the debt out further.  This allowed the price to recover a bit.  Then FMG dropped their cost of producing the ore to the high teens.  This raised the price/share to the $3 dollar range as there was less of a chance to go bankrupt but they still weren't making a bunch of money.  But over the last five years, the price of iron ore especially in 2019 was way above what was prognosticated and the cost of production was further reduced in 2018 to the low teens.  This allowed FMG to pay down the debt...heck at one time it was about $9B now FMG publishes their net debt as $0.7B.  

So the question is do you trust Twiggy to use the profits generated in the future to help FMG grow or at least be distributed to the ownership.  I think FMG paid out a little over a $1 in dividend payments in 2019 and paid down a bunch of debt.  Since the debt is going to be gone, if he decided to payout $2 in dividend payments what would the price be with no debt and little risk of forced sale of the company.  I think that it is too early to get out of this stock as the future appears to be very bright.  I wouldn't be surprised if we see a 15%-20% return each year for the next 5 years with very little down side risk.  This obviously is not a 500% gain over the next 5 years but in my book an excellent investment.


----------



## qldfrog (13 February 2020)

Agree for the overall figures but i expect a serious hit to profit and price when the data for chinese business ssand imports in the first2029 quarter are released.
China remains closed


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## Value Collector (13 February 2020)

qldfrog said:


> Agree for the overall figures but i expect a serious hit to profit and price when the data for chinese business ssand imports in the first2029 quarter are released.
> China remains closed




The Iron Ore price is still above $80, last years wonderful result was achieved with an average price of $80.

not to mention that the 1st half result due to be reported had a much higher price.

Also, some Chinese Iron Ore mines have been closed due to corona, so local production is down.

All in all I am not worried, we have some big figures due to be reported and Corona panic will come and go soon.


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## Value Collector (13 February 2020)

dat111 said:


> First Go Twiggy...Love a guy who is willing to risk a fortune to make a larger fortune and give me opportunity to make money with him....
> 
> Here is my take on what could happen in the future for FMG but we must first remember why the price was so low.  When the price was less than $2/share investors (me) were/was worried that another entity would purchase FMG and I would not realize any return and more than likely a loss.  The concern was attributed to the price of Iron Ore being low and the projected price of iron ore in the future was going down instead of up.  So the market price for iron ore from 2015 - 2020 was projected to be $35/wmt-$45/wmt.  FMG was producing in the high twenties as I remember.  So the difference did not allow FMG to make their debt payment when they came due.  This caused them to push the debt out further.  This allowed the price to recover a bit.  Then FMG dropped their cost of producing the ore to the high teens.  This raised the price/share to the $3 dollar range as there was less of a chance to go bankrupt but they still weren't making a bunch of money.  But over the last five years, the price of iron ore especially in 2019 was way above what was prognosticated and the cost of production was further reduced in 2018 to the low teens.  This allowed FMG to pay down the debt...heck at one time it was about $9B now FMG publishes their net debt as $0.7B.
> 
> So the question is do you trust Twiggy to use the profits generated in the future to help FMG grow or at least be distributed to the ownership.  I think FMG paid out a little over a $1 in dividend payments in 2019 and paid down a bunch of debt.  Since the debt is going to be gone, if he decided to payout $2 in dividend payments what would the price be with no debt and little risk of forced sale of the company.  I think that it is too early to get out of this stock as the future appears to be very bright.  I wouldn't be surprised if we see a 15%-20% return each year for the next 5 years with very little down side risk.  This obviously is not a 500% gain over the next 5 years but in my book an excellent investment.




Fmg are definitely using their capital wisely.

They cleared the debt down to a low level (gross debt will probably now sit at this level).

Now they are paying very solid dividends, while making wise incremental growth investments E.g. the expansion into magnitite, and exploration in other areas.

I think it’s great Fmg is using exploration as their primary growth model, to many other miners have rushed into big take overs in the good times and later regretted them.

if Fmg does do a big acquisition in the future I have no doubt it will be well calculated and not an impulse.


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## Value Collector (19 February 2020)

Another solid dividend from FMG today 76 cents,

If you got in at $2, that is an annualised dividend yield return of over 100% including the franking credit.

or a 19% dividend yield based on todays share price (including franking), 13.4% excluding the franking.

I am very happy collector.


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## CBerg (19 February 2020)

Value Collector said:


> Another solid dividend from FMG today 76 cents,
> 
> If you got in at $2, that is an annualised dividend yield return of over 100% including the franking credit.
> 
> ...



Well done mate, what a monstrous dividend!


----------



## SirRumpole (21 February 2020)

You sure can pick em VC. What's your next tip ?


----------



## joeno (28 February 2020)

Value Collector said:


> Another solid dividend from FMG today 76 cents,
> 
> If you got in at $2, that is an annualised dividend yield return of over 100% including the franking credit.
> 
> ...




Yes i followed VC's advice as well as doing personal DD and picked this up sub-$2. One of the better choices i've made in life 

I'm wondering what was your basis for thinking FMG would grow so much. Financials? Perspective on management?


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## qldfrog (28 February 2020)

joeno said:


> Yes i followed VC's advice as well as doing personal DD and picked this up sub-$2. One of the better choices i've made in life
> 
> I'm wondering what was your basis for thinking FMG would grow so much. Financials? Perspective on management?



Past history


----------



## Value Collector (28 February 2020)

joeno said:


> I'm wondering what was your basis for thinking FMG would grow so much. Financials? Perspective on management?




Basically it just came down to an assessment of it’s likely earning power over time which is a function of

1, where I thought Iron Ore price would settle at.

2, What it would cost them to produce and ship each tonne.

3, How many tonnes they can ship per year.

The market made a couple of big mistakes,

1, They were valuing Fmg as if they were a high cost producer, which they were at the time, but only because They were in the process of ramping up production and opening new mines feeling their way, I believed there was nothing magic about BHP and RIO, and that Fmg would eventually have their cost per tonne drop to the level of BHP.

2, The market was valuing FMG on the basis of IRON ORE staying below $40 per tonne forever, given the cost curve and the amount of production around the world above that level, I didn’t see it as being sustainable to have Iron ore prices that low, so I knew they would rise eventually.

3, given their opinions above, the market thought FMG would either fail due to their debt, or become a debt zombie only being able to pay interest and never making a decent return on equity, I believed the opposite, I knew once the cashflow started to rise as the cost per tonne dropped and the iron ore price lifted they would be able to smash the debt and eventually pay large dividends, which they are now doing.


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## fiftyeight (18 March 2020)

My biggest winner by far recently has been FMG. But having some doubts over the medium term.

Vale takes a hit due to announcing


Value Collector said:


> Basically it just came down to an assessment of it’s likely earning power over time which is a function of
> 
> 1, where I thought Iron Ore price would settle at.
> 
> ...




Surely there is some medium term pain on point 3).

Vale have made announcements on possible reduction in exports and covid-19 is yet to play out here.

If either FMG or the ports have to scale back operations, FMG will take a hit in the medium term. FIFO camps will have issues and so will the remote towns servicing the industry.

All ifs and maybes, but does not seem to factored in yet

https://www.theguardian.com/comment...he-frontline-of-the-coronavirus-health-crisis


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## Value Collector (18 March 2020)

fiftyeight said:


> Surely there is some medium term pain on point 3).




Well at the moment shipments are up, price is high in US dollars, and the Aussie dollar super low, so we are printing money at the moment.

But sure, there could be disruptions or slowed production at some point in the future, but I don't see that as being any sort of long term blow, surely nothing that justifies a PE of less than 5.

I would think FMG's share price is so low compared to their current earnings, that all sorts of factors are already priced in.

I mean they could completely shut down for 3 months and still have a PE of less than 10 for the year.


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## fiftyeight (4 April 2020)

I made a comment in the PLS thread, re FMG reporting on their C1, and PLS should be reporting a similar number if they are truly trying to be a low cost Li producer.


Just had quick look while on lunch, and the earliest I can find FMG mention their C1 is the Half year Report 2012. Is this correct or have I missed something?


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## Value Collector (1 June 2020)

Value Collector said:


> Well at the moment shipments are up, price is high in US dollars, and the Aussie dollar super low, so we are printing money at the moment.
> 
> But sure, there could be disruptions or slowed production at some point in the future, but I don't see that as being any sort of long term blow, surely nothing that justifies a PE of less than 5.
> 
> ...




FMG are still going from strength to strength and generating a lot of cash at the moment.

Iron Ore prices are over $100, and the cash is flowing in, as a result the share price has gone well over $14, not to mention the very large dividends of late.

The crazy thing is if dividends continue at the same rate, it is still a 10% fully franked return even at todays share price.

I think unless we see Iron Ore prices drop well below $80, then FMG is probably worth at least $18, maybe $22 if the good times keep on rolling.


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## systematic (1 June 2020)

Value Collector said:


> I think unless we see Iron Ore prices drop well below $80, then FMG is probably worth at least $18, maybe $22 if the good times keep on rolling.




...Sounds good to me! As of Friday, they're 13% of my portfolio. On my radar since 2014/15 - think I first mentioned in this thread in 2014, but never needed them until August dip last year...yep, 2019! Got in ~$7.00 Been a nice trade and all, but wish I'd put them in the portfolio a little earlier!


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## Barry2020 (20 June 2020)

If I could exclude FMG from my Fund's holdings I would. Twiggy Forrest, UNaustralian of the Year. Does he have a conscience? All those people the CCP has enslaved, tortured and murdered! So called Ethical Funds probably shouldn't hold FMG.


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## over9k (20 June 2020)

All the big 3 are basically flat for the last month and down significantly since roughly the 9th of june. Might be decent long positions, but I suspect there's some more dips yet on account of virus data playing merry hell with things. All good times to buy.

Oh and iron ore prices won't drop - brazil's going to be obliterated. That's 25% of global supply right there.


----------



## martaart077 (20 June 2020)

Forrest is one of those who would sell out our national sovereign interests if he could turn a dollar. 
Hijacking a federal press conference by bringing an un invited Chinese govt official.....
And the press conference was about him doing deal with Chinese to bring in crappy face masks at over inflated prices.....in a plane originating from wuhan.  The Chinese must have been laughing themselves sick ( cough cough) over that one. What a philanthropist Forrest is..... 
Rub a bit of salt into the wound, we tax payers end up paying for it as well. 
As an Aussie.. I'm not happy with it
As a GSS shareholder I'm also not happy with it.
It sort of symbolises what's wrong with this country. 
Certainly in the reverse situation, the Chinese would not have allowed this to occur.


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## Kerway (20 June 2020)

Barry2020 said:


> Twiggy Forrest, UNaustralian of the Year. Does he have a conscience? All those people the CCP has enslaved, tortured and murdered! So called Ethical Funds probably shouldn't hold FMG.




The Forrest family have a long and distinguished history here in WA. Twiggy's $25 mil donation to UWA is the single largest donation in the history of WA. FMG alone paid $1.382billion in income tax alone last financial year. Twiggy and his tens of thousands of employees have also no doubt paid a lot of tax. He is also contributing hundreds of millions of dollars to schemes to irrigate land currently unsuitable for farming. If only we had more like him, WA and Australia would be far better off.

If you are not going to invest in a company that does business with China you'll certainly have to exclude a great number of Australian companies from your portfolio.


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## Barry2020 (21 June 2020)

Kerway said:


> The Forrest family have a long and distinguished history here in WA. Twiggy's $25 mil donation to UWA is the single largest donation in the history of WA. FMG alone paid $1.382billion in income tax alone last financial year. Twiggy and his tens of thousands of employees have also no doubt paid a lot of tax. He is also contributing hundreds of millions of dollars to schemes to irrigate land currently unsuitable for farming. If only we had more like him, WA and Australia would be far better off.
> 
> If you are not going to invest in a company that does business with China you'll certainly have to exclude a great number of Australian companies from your portfolio.



My last word on the matter in this thread as its getting OT. All businesses try to win hearts and minds by doing those sort of things, its PR. Here though, he knew which side his bread was buttered on. He aided and participated in CCP propaganda for his own financial interest. Those who do that are aiding the CCP to enslave, torture and murder more people. He said, "stuff everyone else, I'm looking out for number 1, no matter what". Business is business, but don't go jumping into bed with them (the CCP), at least have an arms length relationship.


----------



## Kerway (21 June 2020)

Barry2020 said:


> He aided and participated in CCP propaganda for his own financial interest. Those who do that are aiding the CCP to enslave, torture and murder more people




What a lot of nonsense. 

China is Australia's biggest trading partner, by a country mile. They receive 33% of our exports. Our next biggest trading partner is Japan on only 9%. Allowing the Chinese Consul to express his opinion (or the Chinese view on any matter) goes to the core of what Australia is all about. Of course he has a vested interest in not harming our trade with China, but then so has every single Australian. Suggesting that by doing so he is aiding slavery, torture and murder is simply a gross misrepresentation of what happened. 

Twiggy suggested that everyone should "take a chill pill"....not just Australians. He merely wanted everyone to agree to disagree.


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## joeno (19 July 2020)

Barry2020 said:


> My last word on the matter in this thread as its getting OT. All businesses try to win hearts and minds by doing those sort of things, its PR. Here though, he knew which side his bread was buttered on. He aided and participated in CCP propaganda for his own financial interest. Those who do that are aiding the CCP to enslave, torture and murder more people. He said, "stuff everyone else, I'm looking out for number 1, no matter what". Business is business, but don't go jumping into bed with them (the CCP), at least have an arms length relationship.




Wow big fighting words. So what are you doing to solve hunger, poverty, gang violence, environmental challenges in Australia? The problems here in this country are more important than problems in China / other countries surely. Or is this another "sponsored by the US Embassy" moment 

I'd suggest you urgently sell shares of FMG at discount to people like me. And you can buy companies that refuse to do business with China. Pretty simple solution.


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## tinhat (20 July 2020)

I don't play iron ore except for a small holding in MIN (talking of old stickman). I hope everyone is out now or has at least taken profit. BTW, copper has broken out.


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## basilio (20 July 2020)

Have to say I'm very impressed with the recovery of Fortescue in the last 10 years.
VC  critical ongoing analysis  of the companies operations and likely outcome have earned him a rightful  packet.

It looks as if it still has a strong future.


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## systematic (20 July 2020)

tinhat said:


> I hope everyone is out now or has at least taken profit.




Hang on, what? Why out? Hoping to hold to one year mark at least (August). No profit taken. What have I missed?


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## over9k (20 July 2020)

Nothing. Brazil's been obliterated and china targets employment whether there's a market for the goods or not so it keeps making steel even when there isn't a market for it. They're at the point of even filling their (now empty) sports stadiums with it. 

Hold.


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## dat111 (22 July 2020)

Your welcome everyone.  I have been a buyer of FMG since 2004 and sold 5,000 of my ~20,000 shares end of December 2018 to take a loss...


Been hoping for the price to run up and it finally has in spades.  Regarding what the future will bring...who knows....but those of us who have been in for 15 plus years it has been a roller coaster.  The cost basis for what I have left is about $2.58/share... the dividend is about $0.92/year... The debt is all but gone... The drivers to force a sale or bankruptcy are not the same as in the past...  So I will continue to take my 35% yield...


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## basilio (22 July 2020)

*How challenging was it for Twiggy to build his mine ?*
I found an online biography of Twiggy which is a good read. 

*TO GET RICH IS GLORIOUS*
_You will look back and know you were part of history, like building the Sydney Harbour Bridge._

*—ANDREW FORREST
*
https://erenow.net/biographies/twiggy-high-stakes-life-of-andrew-forrest/10.php


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## Dona Ferentes (22 July 2020)

basilio said:


> *How challenging was it for Twiggy to build his mine ?*
> I found an online biography of Twiggy which is a good read.
> 
> *TO GET RICH IS GLORIOUS*
> ...



all he's doing is digging stuff out of the ground.  He was lucky his open cut coal mining techniques worked on surface iron ore. And what a China suck.


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## basilio (22 July 2020)

Dona Ferentes said:


> all he's doing is digging stuff out of the ground.  He was lucky his open cut coal mining techniques worked on surface iron ore. And what a China suck.




Did you read the extract Dona?  Interestingly enough the really BIG challenge was pulling together the investment to actually start the mine. Eye opening. 

As far as being a China suck ? Perhaps.  But what this storypoints out was that at the time Rio, BHP and vale operated a cartel to keep iron ore prices as high as possible and extract maximum value from China.

I suggest it's worth a read just to expand one's knowledge base.


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## over9k (22 July 2020)

The chinese government targets employment - they'll give you money to produce something even if you can't really sell it just so long as you promise you can employ people. There's a reason why they're as overcredited as they are. 

With physical things like steel they then just produce it flat out whether there's demand or not and then fill their storage yards with whatever is surplus. Now, they're at the point of the storage yards all being full and so they're filling their (now empty) sports stadiums with it. 

It suggests a glut of really cheap steel for the inevitable infrastructure spend we're going to see from basically all governments everywhere (which is great) but a continuing serious demand for iron ore. 

The normal rules of supply/demand go out the window when it comes to chinese state owned (or just financed) companies and the amount they intervene or just write off on the government's books or whatever. 

Hotcopper or one of the commodities-focused forums is where you should go for proper info on this stuff.


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## basilio (28 July 2020)

FMG has gone off on a serious run this morning. Up 70c - 4.2%. Certainly seems to have attracted some continuing support.

I think Dr Fauci saying that a COVID vaccine was likely in October/November could be a spark.

*Fauci says vaccine is possible by October but more likely by November*
Jessica Glenza

Director of the National Institute of Allergy and Infectious Diseases, Dr* Anthony Fauci*, refused to rule out the possibility of “October surprise” news of an effective vaccine.

Fauci made the comments as he announced Moderna and the NIAID had started a Phase 3 trial of a vaccine candidate in the US.


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## Dona Ferentes (28 July 2020)

basilio said:


> *How challenging was it for Twiggy to build his mine ?*
> _You will look back and know you were part of history, like building the Sydney Harbour Bridge_



FMG


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## basilio (30 July 2020)

The June Quarterly production report came out today.
Exceptionally good results in terms of shipping, cost control and profit.

I suspect yesterdays run and todays leap reflected this report.
I Hold.

*Outstanding operating performance in Q4, contributing to record shipments for FY20, lower C1 costs and increased revenue realisation*
https://www.fmgl.com.au/docs/default-source/announcements/2090882.pdf


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## Value Collector (30 July 2020)

basilio said:


> The June Quarterly production report came out today.
> Exceptionally good results in terms of shipping, cost control and profit.
> 
> I suspect yesterdays run and todays leap reflected this report.
> ...




Yes, very good results in the last quarter.

Of particular interest is the fact that these great results are for the quarter ending ending 30th June, and are based on an average Iron Ore price of $93.30 for the quarter, However the Iron Ore price is currently about $110, so for the current period we are logging results that are even better than in this report.

Also, the Eliwana Mine is scheduled to have first ore on train in December, thats only 5 months away, so they the higher grade product mix will kick in soon.

Eliwana was built to replace, the fire tail mine but I think there will be an over lap period, I don't think they will shut down the fire tail mine straight away, But I am unsure on this.


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## basilio (24 August 2020)

Sheaf of reports issued by FMG this morning.
The money shot was  the Final Dividend of $1 per share. Could be a bit of a share rush in the next few days to take advantage of that announcement.

Overall a bit of a bonanza. I think Twiggy is going to go a serious buying spree with his billion dollar dividends.
https://www.fmgl.com.au/docs/defaul...20-results-announcement.pdf?sfvrsn=2fcd21ef_4


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## over9k (24 August 2020)

This morning's announcement: 

Profit up 49% year on year.


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## bux2000 (24 August 2020)

As my lifes journey continues there are always so many lessons to be learned

I sold about 1/3 of my small holding in FMG on 12/05/2020 for $11.81 only after reading a brokers recommendation to SELL with a valuation of $7.70...... that recommendation still stands.

Am I right to think brokers have never really cottoned on to the Twiggy story?

bux


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## basilio (24 August 2020)

bux2000 said:


> As my lifes journey continues there are always so many lessons to be learned
> 
> I sold about 1/3 of my small holding in FMG on 12/05/2020 for $11.81 only after reading a brokers recommendation to SELL with a valuation of $7.70...... that recommendation still stands.
> 
> ...




That is a very heroic "recommendation" from the brokers.  Barely 3 months ago.  A huge profit surge and  84c dividend in early part of the year. On going prospects looking bright. There has been no lightbulb announcement since then beyond ongoing favorable production achievements.

And they valued it at $7.70? Sounds dangerously incompetent .
It would be interesting to see the basis on which they made the earlier assessment and if/when they changed it.


----------



## Value Collector (24 August 2020)

basilio said:


> That is a very heroic "recommendation" from the brokers.  Barely 3 months ago.  A huge profit surge and  84c dividend in early part of the year. On going prospects looking bright. There has been no lightbulb announcement since then beyond ongoing favorable production achievements.
> 
> And they valued it at $7.70? Sounds dangerously incompetent .
> It would be interesting to see the basis on which they made the earlier assessment and if/when they changed it.




Yes, that does seem like a pretty crazy valuation, and would need some key metrics to turn very negative to see that price again in my opinion (which off course is not impossible in the grand scheme of geo politics, but in my opinion unlikely.

Net profit after tax per share was $2.29 AUD
Owner earnings / share $2.45 AUD (thats NPAT + depreciation figure - actual sustaining capital spent)
Dividend of $1.76 AUD for the year fully franked (9.4 % yeild on share price of $18.60)
Return on equity of 44% with equity per share of $6 AUD

--------------------
Here are my thoughts about todays report.

FMG is currently experiencing a period of very high profitability, the above results were based on a realised price of Iron Ore of $79 (spot price of $93), however the first two months of this financial year have seen prices over $120, which means realised prices are likely to be about $100 at the moment, which is a significant increase above the prices that generated the above figures.

Of course being a commodity business we don't know where prices will go longterm, but for now profits remain strong, and the share price seems undervalued even on a lower Iron ore price of last years $93/$79 realised.

The current share price is $18.56 which translates to a 9.4% dividend yield (13.5% including franking credit), and the business is currently over performing the metrics that created this result.

I am happy to hold at this level due to the fact that the current over performance of the business could create higher dividends and higher share price over the next 12 months, and the fact that the current share price is undervalued even at a reduce iron ore price, so I believe there is a decent margin of safety.


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## over9k (24 August 2020)

Sounds like a typical numbers guy broker that only ran the sums he had and could only see the numbers in front of him.

Brazil was always going to get annihilated and leave AU as the only producer left. That fact alone makes FMG a buy up to, considering the dividends now getting paid, $20/share easily. Even if you overestimated by 50%/underestimated by 33% (depending on how you look at it) at your $11.81 sell price, you're still in front.

There's no way you could have ever put an actual figure on that (which I have no doubt the broker wanted), but numbers will only ever get you so far and unfortunately numbers guys usually have terrible gut instincts (hence them being numbers guys).

I was posting about/trying to explain this in the "trading the trend" thread *months* ago and all I got was dismissal & ridicule for it.

Unfortunately, numbers guys all have massive ego's and can't even so much as admit that there might be *anything* that their calculations can't tell them.


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## bux2000 (25 August 2020)

*Latest recommendation report*

Valuation: *$7.70*






Last updated:
24/08/20

*Fortescue Rides Iron Ore Price to Strong Fiscal 2020, but Record Profits Unlikely to Last*
*Investment rating*
Fortescue's accelerated development plans and unprecedented volume growth, fuelled predominantly by debt, saw the company rapidly rise to become the world's fourth-largest iron ore miner. Earnings grew considerably, and Fortescue established itself as a large second-tier player. Operating leverage is high, with margins are below those of peers BHP, Rio Tinto, and Vale, mainly due to the production of lower-grade iron ore, which attracts a discount to the 62% benchmark. Considerable debt repayment has lowered financial leverage and the balance sheet is now solid. Fortescue built its assets during the iron ore boom, meaning the unit cost of its installed capital base is higher than the established majors, who benefit from investments made when industry capital costs were much lower. Development of the 22 million tonne a year Iron Bridge magnetite mine should add a higher-cost but higher-value 67% grade iron product.

*Event*





*Impact*





*Recommendation impact (last updated: 24/08/2020)*
--

*Event analysis*
Fortescue Rides Iron Ore Price to Strong Fiscal 2020, but Record Profits Unlikely to Last

No-moat-rated Fortescue Metals' fiscal 2020 net profit after tax of USD 4.7 billion was nearly 50% ahead of the previous year's USD 3.2 billion. It was slightly below our USD 4.9 billion forecast due to the mildly unfavourable timing of iron ore price realisation and a higher-than-expected effective tax rate. There is an approximate one-month delay between shipping the iron ore and prices being finalised. Higher profit versus last year was driven primarily by price, which rose 21% to USD 79 per tonne. Volumes were mildly positive, with iron ore shipments up 6% to 177 million tonnes. The strong result saw Fortescue increase total dividends by 54% to AUD 1.72 per share, slightly ahead of our AUD 1.60 forecast.

We make no change to our AUD 7.70 per share fair value estimate. While the fiscal 2020 result was strong, we struggle to see how the buoyant iron ore price can be sustained. It's hard to imagine external conditions getting materially better, and we see longer-term downside. On the demand side, we see a coming headwind as infrastructure spending to offset the COVID-19 downturn in China abates and as urbanisation and infrastructure requirements generally reduce. The peak of urbanisation has passed, and China's stock of housing and infrastructure is now relatively mature. We expect China's steel consumption to slow accordingly and for a growing proportion of steel to come from recycling at the expense of iron ore demand.

We see modest supply additions from Fortescue's Iron Bridge, Vale's planned 20 million tonne S11D expansion, and the 7 million-8 million tonne Samarco restart. Longer term, the restart of production from Vale's mines interrupted by the 2019 Feijao tailings dam failure is material. Production in 2020 is likely to be almost 100 million tonnes lower than we expected before the failure, or about 6% of global supply. We also see development of the high-grade Simandou deposit in Guinea as likely and material in about five years.



Previous close Market cap
$18.560 $57,146 Million
52 week high/low
$18.920 - $7.170
Sector
Materials
Intrinsic valuation
Moat rating None
Business risk Very High
Pricing risk --
Company beta 0.86
Sector beta 0.99
Year 06/19A 06/20A 06/21E 06/22E
NPAT ($m) 4,459.2 6,999.3 6,206.2 4,022.4
EPS (c) 143.9 226.5 200.6 130.0
% change 222.1 57.4 -11.4 -35.2
DPS (c) 114.0 176.0 140.0 78.0
Franking (%) 100.0 100.0 100.0 100.0
Yield (%) 20.9 17.2 7.5 4.2
PER (x) 3.8 4.5 9.3 14.3
_Source: Aspect Huntley analyst estimates.
_

I am certainly no expert but the 450 shares I bought 17/07/2018 for $4.43 look pretty good now. I just wish I had been more diligent back in the late 1990's

But Hey one thing I know ........learn from the past for a brighter future.

Thank you for your replies.

All the best

bux


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## basilio (25 August 2020)

Andrew Forrest holds 35% of FMG. He will take $1.8 Billion in dividends this year.

And yet... He is still actively developing a suite of other business projects as well philanthropic interests.

_Tattarang, formerly known as Minderoo Group, is one of Australia’s largest private investment groups and is owned by the Forrest family.   
Our investment portfolio spans across agri-food, energy, resources, property, hospitality, sport and entertainment.
The group is made up of six business divisions: Fiveight, Harvest Road, SFM Marine, Squadron Energy, Wyloo Metals and Z1Z.
We believe in investing for growth and pursue opportunities in both the listed and unlisted space with a long term investment horizon._

https://www.tattarang.com/who-we-are/


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## joeno (27 August 2020)

$7.7 FMG valuation? Yeah and I'm valuing Tesla at around $150 a share


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## basilio (27 August 2020)

bux2000 said:


> *Latest recommendation report*
> 
> Valuation: *$7.70*
> 
> ...




For the short term at least the market is jumping into FMG. It's interesting that generally speaking mining shares are about "promise and possibilities". Companies are drilling holes and shares skyrocket on  promising results and then inferred resources, potential profits (years away) before a  shovel is actually turned. And of course FMG was similarly treated when it began it's process of becoming the third iron ore exporter in Australia.

But today the mines are built. The  operating systems are well oiled. The contacts are lucrative. All the debt has been paid off. The profits are in real dollars and being distributed as fully franked exceptionally high yielding dividends.

And yet the analyst believes this will all contract severely within a couple of years and the SP will fall to well less than half it's current price despite all the runs on the board.

Even if the dividend dropped by 40% the return of $1.10 p/share would still make the current price of  $19.50 good value. Strange.


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## over9k (27 August 2020)

Methinks he had an agenda perhaps


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## Value Collector (27 August 2020)

joeno said:


> $7.7 FMG valuation? Yeah and I'm valuing Tesla at around $150 a share




I remember the days when people thought a $7 valuation was crazily optimistic, what a difference a couple of years can make.

----------

The way I value a company like FMG is to look at the cashflows and dividends they will generate under certain circumstances to give me a range of possible valuations, and then I rate which of those range of possibilities is likely to play out in the future and then base my valuation on that.

One of the most important factors for a company is their return on equity (ROE), and I have a method of valuing a company based on their ROE.

Based on the $93 Iron ore price they averaged last year, they had a return on equity of 44.6%, which is very high and probably won't hang around forever, although with the current $120 Iron ore price they are probably earning 60% ROE.

Based on different possible ROE figures that could be achieved these are what I believe the share price should be (if ROE averaged at the levels for the longterm)

45% ROE - $39.57   
35% ROE - $28.20
25% ROE - $18.24
15% ROE - $12.36

Now I don't believe a ROE of 35% or above could be sustained over the longterm, but I do think that we will be above that level for at least this financial year, and that it will eventually settle some where between 25% and 35% meaning based on that metric a share price of $23 to $25 is very fair, so there is a great upside potential in my option, and a limited down side if the ROE did drop back to 25% or 20%

----------

I then also like to make an assessment of what the possible price people (including myself) would be happy to pay or hold at based on the range of possible dividends, and again I then pick which outcome I think is likely.

I think a fully franked dividend of 7% (10% gross) long term is pretty attractive, while alot of people would still be happy with a 5% dividend (7.1% gross).

So here is where the share price would be to achieve those dividend yields based on different dividends.

Current full year dividend ($1.76 full year) - 
$25.16 (7%)  -  $35.20 (5%)

$2 / share (final dividend annualised)
$28.60 (7%)  -  $40 (5%)

$1 / share 
$14.30 (7%). -  $20.00 (5%)

$0.76 / share
$10.86 (7%)  -  $15.20 (5%)

---------

So based on the above metrics (and some others) my opinion of different price points is as follows.

$19.00 (pretty safe to hold at, should see very good dividend return)
$25.16 (probable result, and should produce a decent dividend retune)
$28.60 (possible outcome, may look to reduce holding, still a good dividend though so no rush to sell)
$33.00+ (blue sky valuation, requires $120+ Iron ore price for long time, definitely be reducing my holding back to maybe 10% of my current position).

-----------

As for the guys $7.70 valuation, I can't really see a way that is likely, I think it $33 blue sky is more likely than his $7.70 gloomy number, not that I think we are guaranteed $33, its just I think the surprise to the upside is more likely than the surprise to the down side at the moment)


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## joeno (27 August 2020)

Nice analysis VC. But can easily see $40 for Fortescue - about $100B market cap as the markets don't always go by such low PE valuations for "innovative" market leading companies like FMG. Which I would categorize it as. Whether this happens this year, or in a few years time i don't know. But i see this is where this stock is heading.

- Interest rates are low and likely will go lower in Australia to prevent a market / property crash, which means *profitable* businesses overall will be bought at an even higher PE ratio. Unprofitable and risky companies will be dumped.

- 10PE is already very good for FMG. Further to that their profit margin is high and expenses low. That means they can scale up, expand and become a bigger company than it is today. I believe this is much harder to do when you're strapped for cash, have profitability issues and are already "too big" like Vale.

- There is no existential threat to Iron Ore unlike oil products. 3rd world economies are growing and they will need Iron to build their machines and skyscrapers. $200AUD/ton iron doesn't seem crazy. Even if iron prices decrease, FMG is safe due to industry low COGS.



Value Collector said:


> I remember the days when people thought a $7 valuation was crazily optimistic, what a difference a couple of years can make.
> 
> ----------
> 
> ...


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## Value Collector (27 August 2020)

joeno said:


> Nice analysis VC. But can easily see $40 for Fortescue - about $100B market cap as the markets don't always go by such low PE valuations for "innovative" market leading companies like FMG. Which I would categorize it as. Whether this happens this year, or in a few years time i don't know. But i see this is where this stock is heading.
> 
> - Interest rates are low and likely will go lower in Australia to prevent a market / property crash, which means *profitable* businesses overall will be bought at an even higher PE ratio. Unprofitable and risky companies will be dumped.
> 
> ...




Yeah, it all just comes down to the what the average Iron Ore price is over time, we are in a very good position with current over prices, and even much lower ore prices. 

So I don’t see a dooms day scenario from here, (although fluctuations are bound to happen) We will just have to wait and see whether from here we get a wonderful result or maybe just a good result.


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## over9k (28 August 2020)

Everything eventually boils down to P/E. There's a few different ways to get there, but everything eventually boils down to P/E.

In many ways, in this economy, a lower ROE is actually better (assuming the aggregate return isn't lower) in a way because the bigger the company the better they can weather this storm.

I said the other day that FMG is worth $20 easily. It's looking like it'll crack it soon


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## joeno (28 August 2020)

Forward looking PE is the name of the game. But it's where the challenge is.

 A growing innovative and high margin business can be a bargain at 50 prior year PE. Not saying FMG is worth $100 a share now... but hey nobody thought any tech companies could grow so much and run on such high PEs. Apple at 2tril market cap. Tesla at 1000 PE. yowzers



over9k said:


> Everything eventually boils down to P/E. There's a few different ways to get there, but everything eventually boils down to P/E.
> 
> In many ways, in this economy, a lower ROE is actually better (assuming the aggregate return isn't lower) in a way because the bigger the company the better they can weather this storm.
> 
> I said the other day that FMG is worth $20 easily. It's looking like it'll crack it soon


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## over9k (28 August 2020)

joeno said:


> Forward looking PE is the name of the game. But it's where the challenge is.
> 
> A growing innovative and high margin business can be a bargain at 50 prior year PE. Not saying FMG is worth $100 a share now... but hey nobody thought any tech companies could grow so much and run on such high PEs 10 years ago. Apple at 2tril market cap. Tesla at 1000 PE. yowzers



Well dumping interest rates will always raise P/E and that's exactly what we've done and are on record as stating no intention of raising them for bloody ages, so this is the new normal now.


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## Value Collector (28 August 2020)

over9k said:


> Everything eventually boils down to P/E. There's a few different ways to get there, but everything eventually boils down to P/E.
> 
> In many ways, in this economy, a lower ROE is actually better (assuming the aggregate return isn't lower) in a way because the bigger the company the better they can weather this storm.
> 
> I said the other day that FMG is worth $20 easily. It's looking like it'll crack it soon




The higher the ROE, the higher a PE is justified to be.

The lower the ROE, lower the PE is justified to be.

———————

Think about it this way.

Imagine company A, earns $1 per share, and has $5 of equity per share it has a ROE of 20%.

while company B, also earns $1 per share however it has $20 of equity per share, it has a return on equity of 5%.

Let’s say both companies retain their $1 and it gets reinvested at the companies ROE rate.

In year 2 company A’s equity has grown to $6 and they will earn $1.20, while company B’s equity grew to $21 and their earnings only grew to $1.05.

both companies earn $1 in year 1, but the retained earnings in company A caused a higher profit growth because of their higher ROE. 

the end result is that because company A can retain earnings and genera 20% returns on them it is a far more valuable business than company B who is only going to earning 5% on those retained earnings.

This has a huge affect on valuation, because company A is probably worth paying a PE of 20 for because each dollar of retained earnings can potentially produce more than a dollar of share price growth, where as company B is probably worth much less, because each $1 retained probably produces less than $1 of share price growth.


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## over9k (28 August 2020)

Of course - but that's just factoring future earnings (and thus p/e) into account.

Like I said, there's a few ways to get there, but everything still ends up at p/e.

Also like I said before, depending on the business, I'd actually rather a bit lower roe if it came about as withholding profits as cash to act as a buffer or something like that. Sure beats raising it through borrowings later on if the proverbial hits the fan again.

FMG isn't one of those businesses though. It's in way too good a shape to need to forego dividends for a while.


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## Value Collector (28 August 2020)

over9k said:


> Of course - but that's just factoring future earnings (and thus p/e) into account.




Yeah, thats what investors do.



> Like I said, there's a few ways to get there, but everything still ends up at p/e.




Kind of, but its not about what the PE is today that's important, it's about how the future earnings related to the price you are paying today.



> Also like I said before, depending on the business, I'd actually rather a bit lower roe if it came about as withholding profits as cash to act as a buffer or something like that. Sure beats raising it through borrowings later on if the proverbial hits the fan again.




I am not sure what you mean by that, P/E has nothing to do with whether earnings are retained or not.



> FMG isn't one of those businesses though. It's in way too good a shape to need to forego dividends for a while.




My ROE based valuation takes into account what portion of the earnings are paid out as dividends and what is retained inside the company, an puts a multiplier on the equity based on my required return and the estimated longterm average return on equity.

let me show you how I got to the valuation.

Above I said FMG would be worth $28.20 today if it was going to earn 35% ROE, that is based on me having a 10% required return, that means I can pay $28.20 today and my return over time will be 10% based on the company earning 35% return on equity and paying out 80% and retaining 20%.

the calculation goes like this.

$6 of equity per share earning 35%, means I can pay the following

$6 of equity x 80%  = $4.80 x 3.5 = $16.80  (first 80% of equity where earnings paid out)
$6 of equity x 20%  = $1.2 x 9.5 = $11.40    (remaining 20% of equity where earnings retained)

$16.80 + $11.40 = $28.20

So if I want to average a 10% return over time, and I believe that FMG will average a 35% return on existing and retained equity, the share is worth $28.20 to me today, if its selling for less than that it is undervalued.

Here is 2 tables that give you the multipliers to use based on your ROE estimate and your required return.

1 table is for earnings that are 100% paid as dividends the second table is for earnings that are 100% retained, when a company pays some and retains some, you split the calculation like I did above.


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## joeno (28 August 2020)

This is going to sound speculative - but *if* we believe FMG has better tech, a more innovative mindset from its teams, and a lower cost structure than other big miners like BHP and RIO and can sustain this, then I don't see why FMG can't diversify into other products like BHP does. Into uranium mining, copper (good prospects in the future) and met coal.

Or expand it's iron ore operations to other regions. They can buy unprofitable companies or assets for cheap and leverage their existing low cost systems to turn them around.


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## Value Hunter (29 August 2020)

Value Collector said:


> Yeah, thats what investors do.
> 
> 
> 
> ...




Where did you get those multiplier tables? From Richard Simmons? From a Roger Montgomery book?

By the way I must tip my hat to you sir. You were completely on the money with Fortescue Metals. I remember your analysis back when it was $7 or $8 per share not even a few years ago.

But I never invested in Fortescue or any mining company despite your previous excellent analysis really because I never liked commodity companies because they are difficult to analyze (cost of production can swing a lot from year to year as can commodity prices) with too wide a range of likely outcomes and the fact they are price takers.

Also I noticed with mining companies generally (not talking about Fortescue specifically) once you get too big its hard to keep growing because they have to find bigger and bigger new deposits to keep growing at a reasonable percentage rate.

Either one of a few things happens to mining companies once they hit a certain size. Production growth slows/stalls dramatically, they take over other mining companies at inflated prices, often creating multi-billion dollar write downs some years later, they find new deposits but with higher costs or lower grade products, thus reducing their overall margins and ROE.

I think Fortescue will avoid overpaying for takeovers (if they do make a takeover it will be sensible) because Andrew Forest has billions of dollars of his own money on the line so unlike the executives of BHP or RIO, etc who are playing with other peoples money he has a lot to lose from a bad takeover. But some of the other problems I mentioned could occur in the next 3 or 4 years. Who knows though I am just guessing and could be completely wrong. I do not know enough about Fortescue to make an accurate assessment.


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## Value Collector (29 August 2020)

Value Hunter said:


> Where did you get those multiplier tables? From Richard Simmons? From a Roger Montgomery book?
> 
> By the way I must tip my hat to you sir. You were completely on the money with Fortescue Metals. I remember your analysis back when it was $7 or $8 per share not even a few years ago.
> 
> ...




Yep, Those tables are from Roger Montgomery’s book “Valuable”.

I totally understand your thoughts on miners being commodity businesses, that’s why I do a range of valuations based on different ROE levels, and then and try and work out which is the most likely situation, while also figuring how comfortable I would be with some of the other outcomes.

As for being a “Price Taker”, I think it can be a bit of a misconception that “Price Takers” can’t have competitive advantages, for a price taker being the lowest cost producer of a commodity is a very big competitive advantage.

as for having sensible ways to deploy capital, I think FMG has done very well with this for the following reasons

1, They don’t mind paying out big dividends if they don’t have uses for the capital (my valuations were based on 80% payout, which lowers the valuation)

2, They have a lot of good options for new mines when it makes sense, especially in magnetite.

3, they have a list of Existing projects under way that is soaking up capital and will have decent returns on equity.

4, they have shown that they are willing and able to invest vertically in their system in smart ways eg buying ships, tug boats, power stations, gas pipelines etc these have been good uses of capital.

5, they seem to be avoiding rushing into silly Merger and acquisitions, and instead are running a low cost exploration strategy.

So I am pretty confident that the cash flows they produce throughout the cycle will be either paid out or invested in smart ways, and the Mistakes BHP made shouldn’t be repeated here.


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## over9k (29 August 2020)

Not to mention their credit rating compared to everyone else at the moment is absolutely spectacular so they could raise a massive amount of capital virtually overnight if they saw a need.

FMG should really be heralded as one of those amazing aussie success stories (taking on the big guys at bhp, rio, vale etc and winning) but instead all we get is sour grapes every time twiggy's on the news.


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## Value Hunter (29 August 2020)

Value Collector said:


> Yep, Those tables are from Roger Montgomery’s book “Valuable”.
> 
> 
> As for being a “Price Taker”, I think it can be a bit of a misconception that “Price Takers” can’t have competitive advantages, for a price taker being the lowest cost producer of a commodity is a very big competitive advantage.
> ...




A few points, firstly I am interested how come a clever guy like you decided to use a valuation table from Roger Montgomery's book when its been proven time and time again on this forum that he is a snake oil salesmen with a checkered history and little idea of what he is talking about. Now you may have assessed the valuation methodology on its own merits completely aside from Roger and decided its a worthwhile tool that can be applied in certain situations. I assume that this is the case and fair enough then.

I never said being a price taker means you can't have competitive advantage. Low cost of production is indeed a source of competitive advantage that is real and meaningful. If you can stay in the best quartile in terms of cost of production for the majority of commodities over a full cycle you will usually make a high return on equity. I am in 100% agreement there. I will however note on this point that in the mining game where companies sit on the cost curve relative to competitors has shown a habit of changing dramatically over time as its both volatile and subject to many factors outside the company's control. While it is a competitive advantage in many cases (not specifically talking about Fortescue here) one must be extremely wary of the sustainability of such an advantage.

Overall I think you have solid arguments for investing in Fortescue and your analysis has been both logical and correct.

I must say though that in hindsight I am rather surprised that the world is experiencing the worst economic downturn in since the great depression and yet Iron Ore prices remain this high, as do the share prices of Iron Ore Miners!! I understand the China stimulus story and the inflation trade, low interest rates, etc but I am still surprised.

If anybody had told me 12 months ago "next year the world will experience the largest economic downturn in in over 80 years yet Iron Ore prices will remain high and Fortescue shares will record highs amid the downturn" I would laughed at them! And yet here we are! On top of the fact that you analyzed the situation well and acted accordingly you also had good luck on your side which supercharged your returns on Fortescue.


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## Value Collector (29 August 2020)

Value Hunter said:


> A few points, firstly I am interested how come a clever guy like you decided to use a valuation table from Roger Montgomery's book when its been proven time and time again on this forum that he is a snake oil salesmen with a checkered history and little idea of what he is talking about. Now you may have assessed the valuation methodology on its own merits completely aside from Roger and decided its a worthwhile tool that can be applied in certain situations. I assume that this is the case and fair enough then.




What ever your opinions on Roger (I don't have strong feelings either way, I didn't recommend his book I just shared the tables), The Tables are just a reference guide to show which multiplier to use based on the two inputs, its based on simple maths so it doesn't really matter who's book it comes from, if the math is correct the tables are accurate.

E.g. if the end result you want it a 10% return, it just a mathematical fact you can pay $3 for something that produces  $0.30 in cash flow to you, or pay $7.22 for something that compounds that $0.30 at 30%pa.

Of course there is more to it than just looking at the current performance and assuming that things will compound to infinity, but thats why I explained I look at multiple possible outcomes at different ROE's and also use other valuation methods, and in the past have gone into a lot of detail explaining my thoughts as a whole on the company and the industry.




> I will however note on this point that in the mining game where companies sit on the cost curve relative to competitors has shown a habit of changing dramatically over time as its both volatile and subject to many factors outside the company's control. While it is a competitive advantage in many cases (not specifically talking about Fortescue here) one must be extremely wary of the sustainability of such an advantage.




Agreed, but I don't think that FMG's position on cost is at risk any more than any other companies own competitive advantages, whether that is Coke, Apple or Tesla, each companies "moat", could be drained some how in the future.

Saying that, there is some very solid facts that create FMG's Low cost position, that would be very hard for competitors outside of the Pilbara to match, and aren't as fickle as consumer preferences can be over time.



> I must say though that in hindsight I am rather surprised that the world is experiencing the worst economic downturn in since the great depression and yet Iron Ore prices remain this high, as do the share prices of Iron Ore Miners!! I understand the China stimulus story and the inflation trade, low interest rates, etc but I am still surprised.
> 
> If anybody had told me 12 months ago "next year the world will experience the largest economic downturn in in over 80 years yet Iron Ore prices will remain high and Fortescue shares will record highs amid the downturn" I would laughed at them! And yet here we are!




I am not really that surprised, as you would understand the Iron price is based on Supply and demand, So you have to look at both Supply and Demand to see what is happening and both have been affected in ways that people don't think of at first glance.

Demand - The industries that have been the most affected by the down turn were not big Steel consumers in the first place, where as some of those being stimulated are big steel consumers, and it doesn't matter if you drink a beer at the pub or at home you still pop a steel bottle cap (and consume steel in many other ways)

Supply - Australian Sea bourne Iron ore is only one component of supply and it has remained pretty steady being shipped directly into the Chinese industrial centres along the coast, however other sources of supply such as scrap metal also forms a significant part of supply which for months were heavily reduced as collection networks distributed around regional china and other nations were locked down, also Chinese mines suffered shut downs due to the lock downs, and even those that could produce were choked off by transport restrictions, then you have brazils mining areas which have been affected by covid19 too, and that has slowed some supply from there.


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## basilio (31 August 2020)

Some serious profit taking with FMG since Friday.
Currently at $17.36 after  reaching $19.50 plus.


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## over9k (31 August 2020)

See the announcement? 

It is ex dividend day today though.


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## basilio (31 August 2020)

over9k said:


> See the announcement?
> 
> It is ex dividend day today though.




Clearly there would be a pullback when it went ex dividend.  But I think it has been running too hard in the past few months and essentially speculative.

The Director seemed to buy in at close to the top. It looked around the $18.40 point. Gets the divvie though!
___________
There was a good analysis of the tensions underlying Australia trade with China on the ABC. The Iron Ore industry was discussed in that context.

*Why iron ore has been out of bounds in China's trade war with Australia — for now*
https://www.abc.net.au/news/2020-08...out-of-bounds-in-the-china-trade-war/12611498


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## over9k (31 August 2020)

Yeah it's a $1 dividend and it's dropped about $1.40/share. Nothing to be concerned about.

China won't do anything about the iron ore. They need it for all their infrastructure etc and brazil's been annihilated so they don't have anyone else to buy from. It's all bluster.


----------



## Value Collector (1 September 2020)

basilio said:


> Some serious profit taking with FMG since Friday.
> Currently at $17.36 after  reaching $19.50 plus.




todays drop is pretty much exactly what the dividend was, 

eg, total dividend value was $1.43 ($1 dividend + $0.43 franking credit)

So that considered, FMG was flat today, not down compared to Friday, meanwhile Iron Ore is still about $30 higher than it was last financial year, and the cash is rolling in building up to pay the next dividend.


----------



## aus_trader (1 September 2020)

Value Collector said:


> todays drop is pretty much exactly what the dividend was,
> 
> eg, total dividend value was $1.43 ($1 dividend + $0.43 franking credit)
> 
> So that considered, FMG was flat today, not down compared to Friday, meanwhile Iron Ore is still about $30 higher than it was last financial year, and the cash is rolling in building up to pay the next dividend.




Good story, but I am not buying it now that the gains have been already had. As @basilio pointed out earlier, I think the risk/reward is not worth it to jump in now.

Congrats on you for riding it all the way back from $2 VC. What's in your radar other than FMG ? What's the next FMG or 'Capilano Honey' you are doing research on ?


----------



## joeno (1 September 2020)

$1.8 average buy in for getting on VC's analysis  good payout. Though i didn't put in a lot. 20% of a humble sized portfolio. FMG is simply and outperformer in its industry. The mining industry has been stagnant. Non-tech non-US markets are still depressed. We're not in the "boom" cycle in energy stocks. We're in the tail end. 

Once economies recover we should see capital coming out of big tech and non cyclicals. The increasing inflation should spell an upward draught for Energy, mineral, gold stocks in general. 

i think it would be a bad idea to cash out at this current price. let winners win properly.


----------



## joeno (1 September 2020)

also as someone mentioned FMG has a "great general bonus" so to speak with Twiggy. A visionary. Not some no name suit in 99% of aussie companies just there to listen to shareholders and pray they don't get sacked.

This is obv great thing. Companies with visionary CEOs like Facebook, Tesla do very very well compared to their peers.


----------



## over9k (1 September 2020)

aus_trader said:


> Good story, but I am not buying it now that the gains have been already had. As @basilio pointed out earlier, I think the risk/reward is not worth it to jump in now.
> 
> Congrats on you for riding it all the way back from $2 VC. What's in your radar other than FMG ? What's the next FMG or 'Capilano Honey' you are doing research on ?



I hold FMG and I still think it's a buy just FYI. Brazil's going to be obliterated for quite some time yet


----------



## Value Collector (1 September 2020)

aus_trader said:


> Good story, but I am not buying it now that the gains have been already had. As @basilio pointed out earlier, I think the risk/reward is not worth it to jump in now.




Well, I mean it’s just a simple fact that the dividend was worth $1.43 and that’s pretty much what it dropped by on ex dividend date, so it’s flat so far.

maybe it will drop further, who knows, I can’t predict the ups and downs of the market.

All I can do is work out how much I think the company is worth based on different ROE’s and look to fundamentals to see how I think that will play out.

so far I am still in the camp of thinking that ROE will average above 25%, (60% currently), Iron ore is up again today, So I think FMG is still undervalued.

but we will have to wait and see.

—————
as for future ideas, I am working on two possibilities at the moment.


----------



## systematic (1 September 2020)

Time for me to not be lazy and do an assessment somewhere in the next couple months. Have held for just over a year (after finally getting in), currently at 15% of my portfolio.


----------



## joeno (1 September 2020)

no one can tell what the price will be. But compared to some stocks i held in token capacity such as Tesla- FMG has hardly moved at all. Energy market is in a slump. imo always keep a winner in a loser industry. weak hands made me sell 10 shares of tesla for cheap cheap cheap


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## aus_trader (1 September 2020)

Value Collector said:


> as for future ideas, I am working on two possibilities at the moment.



Cheers mate, keep us informed when you are ready to do so. There is no hurry VC, you can even wait till you sell out of FMG to re-invest the profits into the new prospects.

I am in no hurry to rush into anything that's high-flying. Congrats in getting in early. Although not as good as your FMG 10x I have had the opportunity to ride a few smaller winners. I am on a 3x small cap that's in the hottest sector of the asx. I am talking the same sector as APT, Z1P & SZL. I don't recommend anyone to buy it now, but I mentioned it because it's good to get on the baggers early. All my trades including the 3x small cap is posted in the *Speculative Stock Portfolio*, so I am not just making up stuff.


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## Value Collector (2 September 2020)

FMG have made an announcement that they are looking into green energy investments in PNG utilising Hydro power.



> *Fortescue Metals Group Ltd (Fortescue) confirms that its wholly owned subsidiary, Fortescue Future Industries Pty Ltd (Fortescue Future Industries), has entered into a Deed of Agreement with the Papua New Guinea (PNG) Government and its wholly owned corporation, Kumul Consolidated Holdings Limited (KCH).
> 
> Under the Deed, the parties will promptly investigate the feasibility of potential projects for development of PNG’s hydropower resources to support green industrial operations largely for export to global markets, and also for domestic consumption. This is consistent with Fortescue’s record of delivering both capital growth and yield to our shareholders while sharing the benefits of sustainable development and employment with our local communities.
> 
> ...




https://www.fmgl.com.au/docs/defaul...stries-deed-of-agreement.pdf?sfvrsn=8274399_4


----------



## Ferret (2 September 2020)

I like FMG and think it is a really well run company.  I get a bit nervous, though, when a company moves too far away from what it does best.  

It will be interesting to see how this plays out.


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## over9k (2 September 2020)

I know they're not an energy company, but green energy is *finally* becoming properly popular:


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## Value Collector (2 September 2020)

Ferret said:


> I like FMG and think it is a really well run company.  I get a bit nervous, though, when a company moves too far away from what it does best.
> 
> It will be interesting to see how this plays out.




I know what you mean, I feel the same way, hopefully they do it in a way that isn’t “ betting the company”, and hopefully enough of the skills in infrastructure and financing carry over to give them a competitive advantage.

I don’t know know to what extent hydrogen or electricity could be exported from PNG, but yeah it’s an interesting story to watch and if it does become a viable way for FMG to deploy capital it will be a good diversification.


----------



## basilio (2 September 2020)

Value Collector said:


> I know what you mean, I feel the same way, *hopefully they do it in a way that isn’t “ betting the company”, and hopefully enough of the skills in infrastructure and financing carry over to give them a competitive advantage.*
> 
> I don’t know know to what extent hydrogen or electricity could be exported from PNG, but yeah it’s an interesting story to watch and if it does become a viable way for FMG to deploy capital it will be a good diversification.




From the Press release Twiggy made it clear Fortescue Futures would be financing and developing the PNG project off its own bat. There would be no drawdown from current mining operations.

He did say however they would be using their mining skills and experience to gain best engineering value for the proposal.

https://www.fmgl.com.au/docs/defaul...stries-deed-of-agreement.pdf?sfvrsn=8274399_4


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## Value Collector (2 September 2020)

basilio said:


> From the Press release Twiggy made it clear Fortescue Futures would be financing and developing the PNG project off its own bat. There would be no drawdown from current mining operations.
> 
> He did say however they would be using their mining skills and experience to gain best engineering value for the proposal.
> 
> https://www.fmgl.com.au/docs/defaul...stries-deed-of-agreement.pdf?sfvrsn=8274399_4




What they meant by that is that each project will be its own entity, with its own debt funding that is not recourse back to Fortescue, but Fortescue will be investing equity capital into the project, so if the project collapses all Fortescue can lose is their equity investment in that project, they are not on the hook to repay the debt funding.

So Fortescue will allocate a certain amount of capital/equity into the project, and fund the rest through bonds etc secured by the project, most infrastructure projects of this nature require the owners to fund at least 30% of the project costs through equity, and the balance is funded by debt.

This is a very common structure used by utilities all around the world.


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## basilio (4 September 2020)

FMG announced a increase in their capacity to export more iron ore and manganese. Could/should signal increase export tonnages  in the next few years.

Also noted that FMG is now in the re balanced ASX20 list. Obviously reflects the last 3 months of SP increases. 
https://www.fmgl.com.au/docs/defaul...oughput-in-port-hedland.pdf?sfvrsn=1d13d037_4


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## basilio (17 September 2020)

SP taking a beating in the last few days.  Current price is now $16.53.  Interesting comparison to the announcement that dividend re investment  price will be $17.83.  Iron Ore price is still very high

Previously there has been a sharp rebound when the SP has dipped.


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## over9k (17 September 2020)

The P/E is still great though. 

But a lot of stuff has been smashed since the "tech wreck" that started on iirc the 2nd?


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## aus_trader (17 September 2020)

over9k said:


> The P/E is still great though.
> 
> But a lot of stuff has been smashed since the "tech wreck" that started on iirc the 2nd?



You are calling this one early mate, I wish you could warn us about the Tech Wreck back in Y2K


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## Chronos-Plutus (17 September 2020)

Ferret said:


> I like FMG and think it is a really well run company.  I get a bit nervous, though, when a company moves too far away from what it does best.
> 
> It will be interesting to see how this plays out.




The FMG pivot to the alternative energy space was surprising. Particularly hydrogen of all energy fuels; although hydrogen is easy to produce.


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## basilio (17 September 2020)

Still falling. Currently $16.20.  Be interesting to see if the end of day brings out bargain hunters who believe it has bottomed.

Also wonder if some bigger traders have decided to take their profits from 2020 off the table.


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## Value Collector (18 September 2020)

basilio said:


> Still falling. Currently $16.20.  Be interesting to see if the end of day brings out bargain hunters who believe it has bottomed.
> 
> Also wonder if some bigger traders have decided to take their profits from 2020 off the table.




Just fluctuations IMO, its normal for the market to panic every now and then, times like this is best to re-read chapter 8 of Ben Grahams intelligent investor, and sharpen your pencils.


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## basilio (1 October 2020)

Twiggy has been a major onmarket buyer in the last 3 days.
Picked up 6m shares  (out of 29m sales) for $97m.
Interesting to note that if FMG holds its payouts for the next 12 months he will net  an extra $10m dividends

Current shareholding by Twiggy is now 1,122,165,000  shares.


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## basilio (1 October 2020)

Pre Market prices for FMG have jumped  3% after Twiggy announcement of a 6m share buy in the last 3 days.

(Wonder if he will sell into the rush ?)


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## over9k (1 October 2020)

So in other words, he's buying the dip.


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## joeno (3 October 2020)

Hey guys one question about taxes and franking credits. I've been holding a bunch of FMG shares since 2015 in my InteractiveBrokers account. I've never declared it on my tax forms (it's automatic for shares in my commsec account but not showing for IB) so i haven't paid taxes or received franking credits. Is there any penalty in me leaving it all alone and doing it years in the future?

Also my residency situation has changed and I live overseas now. So I'm thinking about  claiming the dividend as income in my new country.


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## Value Collector (11 October 2020)

joeno said:


> Hey guys one question about taxes and franking credits. I've been holding a bunch of FMG shares since 2015 in my InteractiveBrokers account. I've never declared it on my tax forms (it's automatic for shares in my commsec account but not showing for IB) so i haven't paid taxes or received franking credits. Is there any penalty in me leaving it all alone and doing it years in the future?
> 
> Also my residency situation has changed and I live overseas now. So I'm thinking about  claiming the dividend as income in my new country.



I would definitely speak to my accountant about that and try and get it cleared up.

if it turns out that the Ato owes you money, there won’t be any penalty.

Also, if the amounts involved are small and it’s a genuine mistake there probably won’t be a penalty either.

one issue with claiming the dividend income over seas is that you won’t get the benefit of franking credits.

eg. A $1 dividend will probably be fully taxable overseas, where as if you are paying tax here you get the franking credit.


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## basilio (12 October 2020)

I noticed that FMG has  extended a committment to buying back its shares (up to $500m).  They must believe the current best value for spare FMG dollars is their own shares .


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## over9k (12 October 2020)

Encouraging sign.


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## joeno (13 October 2020)

basilio said:


> I noticed that FMG has  extended a committment to buying back its shares (up to $500m).  They must believe the current best value for spare FMG dollars is their own shares .




That's a great sign.


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## Value Collector (14 October 2020)

joeno said:


> That's a great sign.




We just need them to actually start buying some shares, they have had the Buy Back approved for. a long while, but have been very gun shy about actually pulling the trigger and buying some some stock.


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## over9k (14 October 2020)

Because it'll trigger a run when they do. 

They're not idiots.


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## Trav. (29 October 2020)

FMG released their Quarterly Production Report and the highlights look good, and with IO price sitting at high levels FMG are in a pretty strong position

holding


from Market Index


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## basilio (30 October 2020)

Trav. said:


> FMG released their Quarterly Production Report and the highlights look good, and with IO price sitting at high levels FMG are in a pretty strong position
> 
> holding
> 
> ...




It certainly was a good result.  Market responded accordingly today.
"People" are saying its only a matter of time before Iron Ore prices and exports  to China fall dramatically.  Maybe - maybe not.

But there is certainly some hefty margins in FMGs figures little debt and some useful  further cost savings in the future with their renewable energy projects coming online.


----------



## Value Collector (30 October 2020)

basilio said:


> It certainly was a good result.  Market responded accordingly today.
> "People" are saying its only a matter of time before Iron Ore prices and exports  to China fall dramatically.  Maybe - maybe not.
> 
> But there is certainly some hefty margins in FMGs figures little debt and some useful  further cost savings in the future with their renewable energy projects coming online.




Yep, basically they have been printing money for the last 3 months at current Iron ore prices, the return on their invested capital is currently over 60%, I don't those return can last, but its great while it does.


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## Trav. (30 October 2020)

One thing I found interesting is that the announcement (Quarterly) came out early in the day and there was plenty of time to read / review and buy if happy. 

But instead of buying FMG was down -2.9% yesterday

Then obviously a green today +4%.

Maybe people were unsure about the US Markets (that includes me) and they had a good night so maybe that was the trigger? 










						FMG share price and company information for ASX:FMG
					

View today’s FMG share price, options, bonds, hybrids and warrants. View announcements, advanced pricing charts, trading status, fundamentals, dividend information, peer analysis and key company information.




					www2.asx.com.au


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## barney (30 October 2020)

Trav. said:


> Then obviously a green today +4%.




Don't hold but very positive looking "candle" today .... Good luck to you guys who hold

ps. I think Twiggy (even with all his multi-millions, is a legend Aussie, so good luck to him also)


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## basilio (30 October 2020)

Trav. said:


> One thing I found interesting is that the announcement (Quarterly) came out early in the day and there was plenty of time to read / review and buy if happy.
> 
> But instead of buying FMG was down -2.9% yesterday
> 
> ...




I was surprised about that as well. Perhaps, after whatever reservations were expressed with yesterdays sell off, investors looked at the SP, the quarterly figures,  the dividends, the cost analysis and thought "Yep this still makes sense".

I wouldn't be surprised if some of the buying comes from inside FMG management and the company itself. After announcing the Quarterly results there is no question of  insider trading - and the figures were very good.


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## basilio (11 November 2020)

AGM coming up for FMG.  Obviously doing exceptionally well on the Iron Ore front.  Now Andrew Forrest is focusing on developing vast new renewable energy projects investing some of  the billions of dollars of cash generated by the current iron ore export.

The renewable energy projects will firstly  reduce to zero all the current costs associated with their venture. After that they are looking at exceptionally large export markets of Green hydrogen,  H2 produced  ammonia, green fertilisers.



			https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02307419-6A1006704?access_token=83ff96335c2d45a094df02a206a39ff4


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## over9k (14 November 2020)

Zero plans to sell my FMG position.


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## Value Collector (14 November 2020)

over9k said:


> View attachment 114668
> 
> 
> Zero plans to sell my FMG position.




I won’t sell my FMG simply based on the Iron Ore Business alone, if anything comes of this energy business all the better.


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## over9k (23 November 2020)

Just watched a twiggy interview on bloomberg. He near as no difference said he's transitioning a lot of his business into being a renewable energy business. Considering the amount of energy needed to actually produce steel, it makes a lot of sense 

I've posted in the MCR thread as well.


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## Trav. (3 December 2020)

Very nice morning for FMG, on the back of the the iron ore price jump to ~$130 us/t (Vale cut output expectations)

Happy holder today.


----------



## Trav. (3 December 2020)

Strong finish to the day.


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## Value Collector (4 December 2020)

Value Collector said:


> Based on the $93 Iron ore price they averaged last year, they had a return on equity of 44.6%, which is very high and probably won't hang around forever, although with the current $120 Iron ore price they are probably earning 60% ROE.
> 
> Based on different possible ROE figures that could be achieved these are what I believe the share price should be (if ROE averaged at the levels for the longterm)
> 
> ...




FMG broke through $20 yesterday and hit an all time high, and it holding on to those gains today down 7 cents as I write this.

Iron ore price is well above where it was when I wrote the above analysis, So FMG is still firing on all cylinders, now as long as we can keep out of any Political trade wars, we should be able to continue printing money.

Very happy to hold at this stage.


----------



## over9k (4 December 2020)

yep same. the only thing i did was trim a bit and buy some mcr. we'll wait & see how that goes.


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## SirRumpole (4 December 2020)

Value Collector said:


> *now as long as we can keep out of any Political trade wars*




You are pushing the boat out on this one.

We are in a political trade war like it or not, not of our choosing but definitely real.

I have a bad feeling that China will use our one and only trump card to beat us up again.

Brazil iron ore mines will boom and ours will plummet once Brazil gets started again.


----------



## Value Collector (4 December 2020)

SirRumpole said:


> You are pushing the boat out on this one.
> 
> We are in a political trade war like it or not, not of our choosing but definitely real.
> 
> ...



I actually don’t think they can afford to threaten their iron ore supply, they are in the manufacturing business, they need raw materials, they can stop importing luxury goods etc for a while, but not Iron Ore, the price is already through the roof,


----------



## Value Collector (4 December 2020)

SirRumpole said:


> Brazil iron ore mines will boom and ours will plummet once Brazil gets started again.




Brazil has just reduced their forecast production for this year and next year.


----------



## basilio (4 December 2020)

It seems the kick off for the repricing of  Australian Iron ore shares was the latest down grade of Brazil ore exports. 

China does have a potentially huge  African mine they want to develop but from all accounts that is a 5-10 year project. I also think  that Twiggy is going to diversify into renewable energy in the next few years to have some insurance against China reviewing its need for Australian iron ore.

Anyway lets not look  at a very attractive gift horse in the mouth !!  If these prices and volumes continue the there will be  substaintial re calibration of the next  profit/dividend figures









						Vale reduces 2020 iron ore output forecast
					

Company expects to produce 300-305 million tonnes this year, missing a previously lowered 2020 target of at least 310 million tonnes.




					www.mining.com
				











						Could China replace Australian iron ore with metal from Africa?
					

Analysis: Amid rising trade tensions, Chinese interests are keen to develop a high-quality deposit in Guinea. Analysts warn any restrictions on Australian sales to China would ‘send shockwaves through the market’




					www.theguardian.com


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## sptrawler (4 December 2020)

SirRumpole said:


> You are pushing the boat out on this one.
> 
> We are in a political trade war like it or not, not of our choosing but definitely real.
> 
> ...



Without the political overture for effect, I would be very surprised if China hasnt enough stockpiled iron ore, to squeeze our bollocks really hard.
There is a reason Twiggy is diversifying IMO and it isnt because he feels more exposure to iron ore is a winner ATM.
With our dependence on China buying our resources, to fund our welfare, it doesnt take a genius to work out how fragile that link is.


----------



## againsthegrain (4 December 2020)

sptrawler said:


> Without the political overture for effect, I would be very surprised if China hasnt enough stockpiled iron ore, to squeeze our bollocks really hard.
> There is a reason Twiggy is diversifying IMO and it isnt because he feels more exposure to iron ore is a winner ATM.
> With our dependence on China buying our resources, to fund our welfare, it doesnt take a genius to work out how fragile that link is.




Unfortunately china is a few moves ahead, its always preplanned with them so logic would dictate they have io covered


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## sptrawler (4 December 2020)

againsthegrain said:


> Unfortunately china is a few moves ahead, its always preplanned with them so logic would dictate they have io covered



One hopes you are correct.


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## basilio (6 December 2020)

Good story on the ABC about the iron ore industry in WA which largely services China.  Essentially Australia and China equally dependent on the production/purchase of the ore at the moment. Doesn't mean however we shouldn't be looking for alternative markets.

China is not currently stockpiling ore either.









						It was 'built for the benefit of China' — and there's no need to panic about the iron ore industry now
					

The bust that followed our mining boom will be on more than a few minds as the spat between Beijing and Canberra plays out. But dig a little deeper and it seems there's little to worry about.




					www.abc.net.au


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## InsvestoBoy (6 December 2020)

sptrawler said:


> Without the political overture for effect, I would be very surprised if China hasnt enough stockpiled iron ore, to squeeze our bollocks really hard.




I am not sure that is correct.

Robert Rennie was on the BIP show recently discussing this in extreme detail









						Ep 25 - Westpac's Robert Rennie - The benefits of RCEP, and the future of global trade and manufacturing | The BIP Show
					

Westpac Global Head of Financial Market Strategy Robert Rennie joins us to explain the details of the vast RCEP trade deal, and what it means in an age of shifting priorities on global trade




					shows.acast.com


----------



## sptrawler (6 December 2020)

InsvestoBoy said:


> I am not sure that is correct.
> 
> Robert Rennie was on the BIP show recently discussing this in extreme detail
> 
> ...



Interesting podcast InvestoBoy, they make reference to the stockpiling at 24 min mark, hopefully they are correct and China keeps pumping out the steel at the record levels.
Another article, on the same issue.





						Iron ore rebounds as China port stockpile growth slows | Hellenic Shipping News Worldwide
					






					www.hellenicshippingnews.com


----------



## basilio (6 December 2020)

The recent profits earned by FMG have been, frankly, astronomical. And of course WA, The Federal Government, Twiggy Forrest  and  us other shareholders have all had an excellent run.

FMGs determination to rapidly develop massive sustainable energy  projects is the insurance against  China potentially developing alternative suppliers. And who knows. Perhaps with massive cheap energy supplies FMG could develop Australia own  new steelworks on site to value add or bring in the appropriate partner.


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## joeno (6 December 2020)

loving the price action. only regret was back in the day i decided to put $5k into Sundance Resource rather than adding to my fortescue position. This was in 2015!

I wouldn't worry about China using other suppliers. FMG has had good relationships with China, donated masks to China back in Feb this year, and shown respect. Anyone with half a brain would know FMG will be the last to be hit by this trade war... unless Scomo takes some drastic actions to worsen relations with China. Which at this point is unlikely.


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## over9k (8 December 2020)

over9k said:


> Just watched a twiggy interview on bloomberg. He near as no difference said he's transitioning a lot of his business into being a renewable energy business. Considering the amount of energy needed to actually produce steel, it makes a lot of sense
> 
> I've posted in the MCR thread as well.



Ok so I did buy some MCR, and check this out:







Twiggy's definitely up to something, and I suspect it's a case of copying someone else, but who cares, if it works this well...


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## over9k (8 December 2020)

Just checked this out. WOW.


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## peter2 (8 December 2020)

Random thought: If the Fed Gov't cancels Victoria's Belt&Road contract with China, will China retaliate through our iron ore exports?


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## Value Collector (8 December 2020)

peter2 said:


> Random thought: If the Fed Gov't cancels Victoria's Belt&Road contract with China, will China retaliate through our iron ore exports?




I don't actually think china can afford to reduce Iron Ore exports at the moment, the price of Iron Ore is already through the roof.


----------



## sptrawler (8 December 2020)

peter2 said:


> Random thought: If the Fed Gov't cancels Victoria's Belt&Road contract with China, will China retaliate through our iron ore exports?



I'm sure, if they can, they will. You can take that to the bank.
They are caught in a cleft stick ATM, they need iron ore for their stimulus infrastructure spend and the urbanising of the masses and we supply 60% of it.
If they can get it elsewhere they will, but it ain't that easy, we are very geared up to dig it and ship it, Africa isn't.
Just my thoughts.


----------



## over9k (8 December 2020)

peter2 said:


> Random thought: If the Fed Gov't cancels Victoria's Belt&Road contract with China, will China retaliate through our iron ore exports?



Short term no, long term yes.

Short term, brazil's been obliterated by coronavirus. AU's supplying even more of the world's iron ore than usual at the moment. But once brazil gets cured (a solid year or so away), then yes.

But AU could also negotiate a supply deal with USA as part of an allied economic sanction or something like that. We'd obviously need someone (USA) to pick up the demand slack, but it's more than conceivable if china really gets on their sh!tlist, which they're well on their way to doing. Hawkishness on china is by no means unique to trump.


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## Value Collector (9 December 2020)

sptrawler said:


> I'm sure, if they can, they will. You can take that to the bank.
> They are caught in a cleft stick ATM, they need iron ore for their stimulus infrastructure spend and the urbanising of the masses and we supply 60% of it.
> If they can get it elsewhere they will, but it ain't that easy, we are very geared up to dig it and ship it, Africa isn't.
> Just my thoughts.




Also demand is growing at about 35 Million tonnes per year, it would take a huge investment to not only cater for the demand growth, but on top of that build out enough green field infrastructure to replace us, Africa has their own economic growth story to fulfil any additional economic stimulus Africa receives will boost over all steel demand there to and add to the amount of sea borne Iron ore required


----------



## basilio (10 December 2020)

Another analysis of why Iron ore prices are rocketing and not likely to come down for the next 12 months.
Bit of a perfect storm for FMG.








						Iron ore — the commodities sector’s runaway train
					

Iron ore at US$150 per tonne is now being talked about after the 62% fines price moved above US$145/t on Friday (and came just US$1/t short of that key threshold in Chinese futures trading).




					smallcaps.com.au


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## Dona Ferentes (11 December 2020)

three periods where FMG pulled away in last 12 months
1. mid March ... recovered early when Covid hit
2. July  ............... steady appreciation
3. December ..... done a bolter

_One year FMG, vs Materials XMJ and ASX200 XJO:_


----------



## over9k (19 December 2020)




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## basilio (4 January 2021)

Talk about starting 2021 with a Bang !!
Currently up almost 5% and an all time high. Racing through revised projected highs from the analysts.

I think the past 6 months results will be reaching new heights and should reflect in increased dividends .  We'll see how 2021 pans out in terms of trade with China. I do think FMG will be moving as rapidly as possible to their renewable energy projects.  It is inevitable that iron ore prices will subside and China will be doing all it can to diversify supply.  The mines in Brazil can't be expected to underperform forever either.


----------



## over9k (4 January 2021)

Yeah MCR flew too


----------



## againsthegrain (4 January 2021)

over9k said:


> Yeah MCR flew too




Instead or selling mcr and buying fmg should of doubled down on both, ah well


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## over9k (4 January 2021)

We'll see. I bought FMG as a dividend stock and MCR as a growth and so far FMG's been a growth as well as a dividend so I'm not complaining.


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## Value Collector (4 January 2021)

basilio said:


> Talk about starting 2021 with a Bang !!
> Currently up almost 5% and an all time high. Racing through revised projected highs from the analysts.
> 
> I think the past 6 months results will be reaching new heights and should reflect in increased dividends .  We'll see how 2021 pans out in terms of trade with China. I do think FMG will be moving as rapidly as possible to their renewable energy projects.  It is inevitable that iron ore prices will subside and China will be doing all it can to diversify supply.  The mines in Brazil can't be expected to underperform forever either.



Yep, Brazil’s production will rise I wouldn’t bet on it rapidly though, I would be surprised if Vale could increase production faster than the Iron Ore demand grows.

it’s also important to remember Fortescue divided yield would still be pretty good even if the share price went to $28 and the Iron ore price dropped to $93, any price above that is just gravy.

in my opinion this high iron ore price was triggered by the low production from vale, buts its root cause was the under investment in new supply during the low iron ore price years back around 2016, and that supply imbalance is going to take a while to remedy, and should only bring iron ore prices back to $80 or $90, which as I said is still a very good spot to be for fmg, but in the mean time the cash machine continues to pump.


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## over9k (5 January 2021)

Just buy BRZU if you're concerned


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## joeno (6 January 2021)

Given the current market conditions i think FMG is still grossly undervalued despite the somewhat princely gains us shareholders have had lately.

The reason is: One of the lowest cost producer. Still sitting around 12PE which is exceptionally good. FMG is consistently profitable and consistently growing. 30% annualised growth in revenue AND net income (in recent years). This is huge as it proves it's both a value stock and a growth stock.

In comparison a stock like Amazon has 30% revenue growth and 50% net income growth with a PE of 100.

Tesla has a kingly 50% revenue growth which justifies an almost insane 1000+ PE and other paltry ratios.

The price of FMG should be around 2.5x what it is now. 30PE with 30% growth rate. That's about right for a good hybrid growth/value stock. That few that are <30PE and >30% growth rate typically have some looming risk to their business in the near future. 

FMG has a competitive edge, has expansion plans, and if the Aus-China trade war has proven anything is that Iron Ore is a necessity even without having developing countries like India being considered who will in the future be buying more Iron.

Yes. $60/share ($200B market cap) is imo the fair price all things remaining the same.


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## over9k (6 January 2021)

Extremely exposed to china though joeno, and china's on the entire planet's shitlist at the moment and doesn't look like coming off it any time soon. 

In other words there's a lot of _political _risk it's exposed to, which is obviously impossible to quantitatively evaluate. I suspect its price might actually be somewhere up near what you say if not for that factor, i.e it is the political risk that's keeping it where it is. 


I'm not selling though


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## Value Collector (7 January 2021)

over9k said:


> Extremely exposed to china though joeno, and china's on the entire planet's shitlist at the moment and doesn't look like coming off it any time soon.
> 
> In other words there's a lot of _political _risk it's exposed to, which is obviously impossible to quantitatively evaluate. I suspect its price might actually be somewhere up near what you say if not for that factor, i.e it is the political risk that's keeping it where it is.
> 
> ...




Being exposed to the worlds second largest economy is not exactly a bad thing, I mean FMG sells Iron Ore and China is the worlds largest consumer of Iron Ore and they are basically the worlds factory, exporting products that are either made of or using steel around the globe to all the other economies large and small.

Australia wants to sell Iron Ore our government needs the taxes, and Chinese steel mills want to buy it they need it to keep their local and export market ticking, I wouldn't get to wrapped around the axels of trade war talk, the Iron ore market is like oxygen to both of our countries, neither is prepared to hold their breath for long.

Steel is used in absolutely everything, there is pretty no product or service that exists that doesn't consume steel, hence why even the Iron ore price doubling has not slowed down imports, because demand is inelastic.

The average person consumes about 400 grams of steel / day, and most of that is sourced either directly or indirectly from china, I mean even if you buy your steel from an Australian steel mill, its probably made from 95% recycled steel that was sourced from melting down a car that was made with Chinese steel, and that car needs to be replaced with another car that contains fresh Chinese steel.

Have a think about it, there is no product or service that I can think about that doesn't either directly contain steel or use steel in its supply chain or cause action that consumes steel, and 50% of the total steel made comes from china, and portion of the other 50% comes from recycled Chinese steel in other markets.


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## Value Collector (7 January 2021)

Value Collector said:


> Have a think about it, there is no product or service that I can think about that doesn't either directly contain steel or use steel in its supply chain or cause action that consumes steel, and 50% of the total steel made comes from china, and portion of the other 50% comes from recycled Chinese steel in other markets.




Out of interest, can anybody think of a product or service that doesn't consume steel (and therefore Iron Ore) in some way?

I honestly can't think of a single thing, it leads me to think that steel / Iron Ore demand is probably a better indicator of economic activity than crude oil has been traditionally, especially now that we are moving towards more renewable energy (which consume steel also), and also because crude oil production itself consumes steel.


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## over9k (7 January 2021)

Value Collector said:


> Being exposed to the worlds second largest economy is not exactly a bad thing, I mean FMG sells Iron Ore and China is the worlds largest consumer of Iron Ore and they are basically the worlds factory, exporting products that are either made of or using steel around the globe to all the other economies large and small.
> 
> Australia wants to sell Iron Ore our government needs the taxes, and Chinese steel mills want to buy it they need it to keep their local and export market ticking, I wouldn't get to wrapped around the axels of trade war talk, the Iron ore market is like oxygen to both of our countries, neither is prepared to hold their breath for long.
> 
> ...



Agreed completely. But little of this has anything to do with political risk.

As I said, I reckon if not for the political risk, FMG's price would actually be higher for all the reasons you listed above.


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## dat111 (7 January 2021)

over9k said:


> Agreed completely. But little of this has anything to do with political risk.
> 
> As I said, I reckon if not for the political risk, FMG's price would actually be higher for all the reasons you listed above.



For those of us who have been a buy and hold for the most part since 2004... Political risk is short lived.  All governments can make bad decisions that impact business but if the business is big enough and good enough (meaning there is a need for it) the business will come back stronger than ever after the government corrects their mistake or mistakes...


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## over9k (7 January 2021)

Sure but that's a different thing to a trade war.


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## Value Collector (7 January 2021)

over9k said:


> Agreed completely. But little of this has anything to do with political risk.
> 
> As I said, I reckon if not for the political risk, FMG's price would actually be higher for all the reasons you listed above.



What I am saying is that politicians on both sides can not afford to mess with Iron Ore, they rely on our Iron Ore just as much or maybe more than we do.


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## over9k (7 January 2021)

Value Collector said:


> What I am saying is that politicians on both sides can not afford to mess with Iron Ore, they rely on our Iron Ore just as much or maybe more than we do.



Hmmm dunno about that. 

Housing, however...


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## Value Collector (7 January 2021)

over9k said:


> Hmmm dunno about that.
> 
> Housing, however...



The three Iron Ore miners BHP, RIO and FMG are some of Australia’s largest  tax payers, add to that the Iron Ore royalties.

Whether the government budget is going to be in surplus or deficit each year pretty much depends on the iron ore price, same with our trade deficit, so yeah you can bet they care.

there is a reason the government gives an Iron ore price prediction in their budget each year.


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## joeno (7 January 2021)

Irrelevant since FMG is an Australian stock, not a Chinese one. Iron ore is in demand everywhere, not just China. China is a big market but aside from China imploding (which sure some of the people here would love to see happen) they will keep buying iron from Fortescue.

Also your statement "China is on the enire planet's shitlist" being a political risk is wrong. It doesn't matter to me whether they are or not, but it wrong factually and it would affect your ability to make financial decisions relating to China and companies that do business with China.

China is on the *US/NATO's hitlist* for reasons which should be obvious. Which also means it's on Australia govt's (s)hitlist as we are part of NATO. China has clear good relations with the majority of nations on this Earth. This is not bias and me wanting for it or caring about it. This is just a fact. You can look for example the UN record for countries which recognize Taiwan as a country. The majority of the world doesn't. If China was in the majority of the world's sh*tlist, they would piss China off and recognize Taiwan.

So i would argue the political risk is small even if we assume China is driving all of FMG's share price growth.



over9k said:


> Extremely exposed to china though joeno, and china's on the entire planet's shitlist at the moment and doesn't look like coming off it any time soon.
> 
> In other words there's a lot of _political _risk it's exposed to, which is obviously impossible to quantitatively evaluate. I suspect its price might actually be somewhere up near what you say if not for that factor, i.e it is the political risk that's keeping it where it is.
> 
> ...


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## over9k (7 January 2021)

joeno said:


> Irrelevant since FMG is an Australian stock, not a Chinese one. Iron ore is in demand everywhere, not just China. China is a big market but aside from China imploding (which sure some of the people here would love to see happen) they will keep buying iron from Fortescue.
> 
> Also your statement "China is on the enire planet's shitlist" being a political risk is wrong. It doesn't matter to me whether they are or not, but it wrong factually and it would affect your ability to make financial decisions relating to China and companies that do business with China.
> 
> ...




Right so you clearly have no idea. China is not "a big market", China buys about 2/3rds of the world's shipped iron ore. For australia specifically, it purchased 87 per cent of iron ore sold by Australian producers in 2019-20 when the value of the trade hit a record $102 billion.

It is not a big market or whatever you want to describe it as, it's as near as makes no difference the country's _only _market. A couple of years ago a big deal was made when FMG managed to get 11% of its exports to non-chinese customers. Leaving china being, you know, _89% _of its business.


It is also primed for an implosion:




























China is an incredibly precarious country and it would (will) take absolutely sweet **** all to knock over this apple cart. The rest of your post about it being on good terms with everyone etc etc is just lunacy, and the fact that it is on such bad terms with everyone whilst being so vulnerable is precisely why political risk is so significant here.

We aren't talking about a strong country with which if relations with the world go sour it won't actually effect money/business that much. We are talking about the opposite. The whole country could be brought to a virtual standstill if any one of malaysia, singapore, or indonesia decided to close its shipping routes to them just for one example of dozens.

There is no country in the world more reliant on political stability than china. None.


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## againsthegrain (7 January 2021)

over9k said:


> Right so you clearly have no idea. China is not "a big market", China buys about 2/3rds of the world's shipped iron ore. For australia specifically, it purchased 87 per cent of iron ore sold by Australian producers in 2019-20 when the value of the trade hit a record $102 billion.
> 
> It is not a big market or whatever you want to describe it as, it's as near as makes no difference the country's _only _market. A couple of years ago a big deal was made when FMG managed to get 11% of its exports to non-chinese customers. Leaving china being, you know, _89% _of its business.
> 
> ...




Chinese economy is a little like North Korean army,  skeletons holding wooden gun replicas... all for show


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## over9k (7 January 2021)

Here's an example of what the most basic of soft power can (will) do to a chinese company.






That's just a booting off the NYSE. That's it. Just don't let people trade it as an ADR, and it's down that much. And these are two of the big ones that do most of their business in china too. Imagine a smaller company more exposed to the U.S market.


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## Value Collector (7 January 2021)

againsthegrain said:


> Chinese economy is a little like North Korean army,  skeletons holding wooden gun replicas... all for show



Really... do you not think China is a manufacturing power house, walk into Bunnings and check where everything made of steel comes from, they buy 2/3rds of the worlds Iron ore for good reason, because they are the worlds factory.

Do you really think they are storing all this iron under their mattress.

if you took all the chinese made products out of Australia right now cities would literally collapse, haha.


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## againsthegrain (7 January 2021)

Value Collector said:


> Really... do you not think China is a manufacturing power house, walk into Bunnings and check where everything made of steel comes from, they buy 2/3rds of the worlds Iron ore for good reason, because they are the worlds factory.
> 
> Do you really think they are storing all this iron under their mattress.
> 
> if you took all the chinese made products out of Australia right now cities would literally collapse, haha.




But on the flip side Chinese would starve to death, we just would go without cheap luxuries


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## Value Collector (7 January 2021)

over9k said:


> Here's an example of what the most basic of soft power can (will) do to a chinese company.
> 
> View attachment 117913
> 
> ...



I will sell you a put option on your shares if you are that worried. (Serious offer)


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## Value Collector (7 January 2021)

againsthegrain said:


> But on the flip side Chinese would starve to death, we just would go without cheap luxuries




how are we going to feed ourselves with out all the Chinese made tractors, water pumps, fencing materials, refrigeration equipment, trucks and truck parts, tyres, food processing equipment, building materials for the grain silos, flour mills, blades, ovens, toasters, communication equipment etc etc


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## againsthegrain (7 January 2021)

Value Collector said:


> how are we going to feed ourselves with out all the Chinese made tractors, water pumps, fencing materials, refrigeration equipment, trucks and truck parts, tyres, food processing equipment, building materials for the grain silos, flour mills, blades, ovens, toasters, communication equipment etc etc




Its not as straight forward as you think,  those things are not "chinese" made,  they are simply produced there.  All the great minds of the West invested research, knowledge, intelligence and hard work to produce a final blueprint which is then created and assembled by non skilled labour in china which yes happens to have the biggest factory infrastructure in the world.. currently.  Without that blueprint or idea none of these things can be made, so yes it will logistically and economically be a nightmare to manufacture elsewhere but if backed to a wall no none of our cities will collapse.  Our "business man" and "salesman" might have to go back to work rather then salivating at 1000% mark-ups from slave labour operated sweat shops


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## sptrawler (7 January 2021)

Value Collector said:


> how are we going to feed ourselves with out all the Chinese made tractors, water pumps, fencing materials, refrigeration equipment, trucks and truck parts, tyres, food processing equipment, building materials for the grain silos, flour mills, blades, ovens, toasters, communication equipment etc etc



Probably the same way we did pre 1990, which is only 30 years ago and before China was producing anything.
We would have to rebuild the blast furnaces and steel mills, that we pulled down 20 years ago and rebuild the factories that we sent to China. Probably wont be done, but if it has to be done, it will be done. Simple really, we wont go back into caves.


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## Value Collector (7 January 2021)

againsthegrain said:


> Its not as straight forward as you think,  those things are not "chinese" made,  they are simply produced there.



that’s got to be the silliest statement I have seen for a while.

—————
yes we have all seen the Apple phones that say “designed in California made in China”

but that in no way takes away from the fact that when you hold an iPhone it is “made in China”

No country is an island, it’s a global economy we all rely on each other to do our bit, and we can all make bucket loads of money doing it, this politics about trying to cut each other off is just silly brinkmanship.

The simple fact is that Australian standard of living is increased by having a strong trading partner like China, and anyone that says we should sacrifice that is in my opinion and idiot.


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## Value Collector (7 January 2021)

sptrawler said:


> Probably the same way we did pre 1990, which is only 30 years ago and before China was producing anything.
> We would have to rebuild the blast furnaces and steel mills, that we pulled down 20 years ago and rebuild the factories that we sent to China. Probably wont be done, but if it has to be done, it will be done. Simple really, we wont go back into caves.




pretty sure most of our farms had a lot of American and European equipment on them back then still.

whether that John Deere tractor is made in China or America doesn’t bother me, or whether the water pump is made in Berlin or bejing, but to say we have ever been close to self sufficient is just a fallacy.

If we tried to close our borders to trade we would be nothing but a banana republic no where to sell our bananas, we would be like North Korea but with more toothless bogans.


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## againsthegrain (7 January 2021)

Value Collector said:


> that’s got to be the silliest statement I have seen for a while.
> 
> —————
> yes we have all seen the Apple phones that say “designed in California made in China”
> ...




Two can play that game, so in that case in my opinion anybody that thinks china is the only trading partner in the whole world is *a *idiot


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## sptrawler (7 January 2021)

Value Collector said:


> pretty sure most of our farms had a lot of American and European equipment on them back then still.
> 
> whether that John Deere tractor is made in China or America doesn’t bother me, or whether the water pump is made in Berlin or bejing, but to say we have ever been close to self sufficient is just a fallacy.
> 
> If we tried to close our borders to trade we would be nothing but a banana republic no where to sell our bananas, we would be like North Korea but with more toothless bogans.



No one is saying close our borders to trade, we are talking about if China decides to reduce its dependence on our iron ore, which is the more likely outcome. 
With China being Authoritarian they can quite easily change their modus operandi, so to think we are immune from China reducing its steel output, is a dangerous assumption IMO.
A lot of companies will already be changing their supply lines, for critical equipment.
By the way, John Deere and Case IH, are made outside of China.


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## over9k (7 January 2021)

China produces everything because it's the _cheapest _place to do it. It is competitive through cost, not quality. China is not high-end manufacturing, it's low-end. Ergo, it can be moved pretty easily. This again, makes it vulnerable to any (every) one that can undercut it. Mexico's an excellent example due to simple proximity to its target market. It also means that if you take the economics out of it, if you wanted to return this manufacturing home for _political _reasons, it would be very easy to do. 





Value Collector said:


> I will sell you a put option on your shares if you are that worried. (Serious offer)




Depends on the cost, expiry, & strike. The democrats are in power for the next couple of years so things should get a bit better. I'm not concerned short term. I also haven't said that I think FMG's currently overpriced, I said that the political risk is why it isn't higher. Very different things.

Once the saudi's & iranians start shooting at each other and china's oil supply gets cut off, I'll take you up on your offer


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## Value Collector (7 January 2021)

sptrawler said:


> No one is saying close our borders to trade, we are talking about if China decides to reduce its dependence on our iron ore, which is the more likely outcome.
> With China being Authoritarian they can quite easily change their modus operandi, so to think we are immune from China reducing its steel output, is a dangerous assumption IMO.
> A lot of companies will already be changing their supply lines, for critical equipment.
> By the way, John Deere and Case IH, are made outside of China.



They can’t just click their fingers and replace us though, and as I said before, any move to build mines else where would actually produce more demand for iron ore in the intermediate time, and they need an additional 35 million tonnes a year just to cover growth.

John Deere use heaps of Chinese parts, I actually just watched a doco on on of their factories,and the flat steel is bought on the open market, which means would often be coming from China.


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## Value Collector (7 January 2021)

againsthegrain said:


> Two can play that game, so in that case in my opinion anybody that thinks china is the only trading partner in the whole world is *a *idiot



You mean “*an*” idiot, we all have typos. Haha

I didn’t say they are our only trading partner, but they are our main trading partner, by a long shot.


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## againsthegrain (7 January 2021)

Value Collector said:


> You mean “*an*” idiot, we all have typos. Haha
> 
> I didn’t say they are our only trading partner, but they are our main trading partner, by a long shot.




I wasn't trying to insult you, sorry if it came across that way.


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## Value Collector (7 January 2021)

over9k said:


> China produces everything because it's the _cheapest _place to do it. It is competitive through cost, not quality. China is not high-end manufacturing, it's low-end. Ergo, it can be moved pretty easily. This again, makes it vulnerable to any (every) one that can undercut it. Mexico's an excellent example due to simple proximity to its target market. It also means that if you take the economics out of it, if you wanted to return this manufacturing home for _political _reasons, it would be very easy to do.
> 
> 
> 
> ...




I would be happy to take that political risk off your hands, would be happy to do a $25 strike, for $2 per 90 days, which is a bit of a discount from the market price.


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## sptrawler (7 January 2021)

Value Collector said:


> They can’t just click their fingers and replace us though, and as I said before, any move to build mines else where would actually produce more demand for iron ore in the intermediate time, and they need an additional 35 million tonnes a year just to cover growth.
> 
> John Deere use heaps of Chinese parts, I actually just watched a doco on on of their factories,and the flat steel is bought on the open market, which means would often be coming from China.



That is the assumption I was mentioning, that is dangerous, you are assuming they can't just click their fingers and reduce steel production, when in reality they can if they wish so.
A capitalist country couldn't but a country like China can, on a whim they can cut back growth and infrastructure projects and mothball furnaces it actually is that easy for them.


----------



## againsthegrain (7 January 2021)

sptrawler said:


> That is the assumption I was mentioning, that is dangerous, you are assuming they can't just click their fingers and reduce steel production, when in reality they can if they wish so.
> A capitalist country couldn't but a country like China can, on a whim they can cut back growth and infrastructure projects and mothball furnaces it actually is that easy for them.




I read a article last week how some chinese cities are rationing energy,  e.g no elevators, lights out after a certain time etc.  Because of the tariffs on our coal.  In Aus or Us this would be a "bloody outrage"  but in china you do or disappear - so if they really want to they can


----------



## sptrawler (7 January 2021)

againsthegrain said:


> I read a article last week how some chinese cities are rationing energy,  e.g no elevators, lights out after a certain time etc.  Because of the tariffs on our coal.  In Aus or Us this would be a "bloody outrage"  but in china you do or disappear - so if they really want to they can



There will be a reason twiggy Forrest is diversifying out of iron ore, it may be because of flexibility, but generally large companies try to stick to core competencies and divest non core assets.
I'm not saying there is a problem, but to think a problem can't happen, is a bit foolhardy, especially when China is being backed into a corner ATM.
Just my thoughts.


----------



## Value Collector (7 January 2021)

sptrawler said:


> That is the assumption I was mentioning, that is dangerous, you are assuming they can't just click their fingers and reduce steel production, when in reality they can if they wish so.
> A capitalist country couldn't but a country like China can, on a whim they can cut back growth and infrastructure projects and mothball furnaces it actually is that easy for them.




reducing Steel production means reducing the over all global steel consumption and slowing total economic activity globally, that’s not going to happen.

Sure they could do it, but they would have to sacrifice a lot of their export industry,not to mention the living standard of 1 Billion of their citizens.


----------



## Value Collector (7 January 2021)

againsthegrain said:


> I read a article last week how some chinese cities are rationing energy,  e.g no elevators, lights out after a certain time etc.  Because of the tariffs on our coal.  In Aus or Us this would be a "bloody outrage"  but in china you do or disappear - so if they really want to they can




yep, and I think they are learning from that.

mans if they wish to build more non coal generation, that’s going to take a lot of steel.


----------



## over9k (7 January 2021)

__





						Bloomberg - Are you a robot?
					





					www.bloomberg.com
				





_China’s roaring industrial rebound from the pandemic has an unforeseen consequence -- the surge in power demand has left factories, office buildings and street lights in some areas straining under an electricity shortage.

The country’s local governments are cutting power to some industrial and commercial customers in several provinces. State-owned companies are sending an army of workers to inspect power lines, and authorities are urging coal miners to produce more.

But that’s done little to quell the stream of domestic media reports on struggling cities. With the rest of the world growing ever-more dependent on China’s medical equipment and electronics exports as their pandemic-ravaged economies suffer, the focus abroad is also increasingly turning to the Asian manufacturing giant’s power supply.

“As the global economy recovers, it will be imperative for China to stabilize its power supplies,” said Rana Mitter, professor of Chinese politics at the University of Oxford. “There is a move in the West to re-shore supply chains and unreliability of power supply in China could be another motivation to do this.”

The world is relying on China’s factories like never before. As one of the first economies to emerge from a pandemic induced lockdown, and as a leading producer of protective gear and medical equipment, China’s exports have soared to record levels. That’s led to surging demand for power, with November consumption up 9.4% over the previous year, the highest level in more than two years.

On top of that, colder-than-normal weather is now adding to winter demand as people heat their homes, and ice is also wreaking havoc on grid infrastructure. Meanwhile, some parts of the country are curtailing electricity to keep emissions in check. That’s left some regions without enough power during peak hours, with two expected to have lasting shortfalls.

“Weather conditions for the following months will be the key factor to determine the scale of the outage,” said Hanyang Wei, an analyst with BloombergNEF. “Peak load would drop quickly if cold weather lasts for just a few days.”

This is all happening as coal, the fuel of choice for a majority of China’s power generation, remains in short supply. The government had limited imports to support domestic miners, and imposed an unofficial ban on Australian shipments amid a diplomatic spat. But domestic supplies haven’t risen as much as needed following a recent spate of deadly mining accidents.

That’s left the country grappling with surging energy prices. Local coal futures have soared to a record, while the costs for natural gas, another heating and power fuel, have also jumped. State-owned energy giants have gone so far as to warn firms against publicly discussing the supply-demand issue on concern prices will rise further, and the government has urged major mining regions to boost output.

Nearly all major cities are facing colder temperatures this winter, with some as much as 5 degrees Celsius below last year’s levels, Morgan Stanley analysts including Sara Chan said in a Dec. 23 research note. This is the main reason behind the surge in coal prices and is helping drive government intervention in power allocation.

In Hunan and Jiangxi provinces, power supplies have been cut to some industrial and commercial customers after demand rose at least 18% from a year earlier and transportation issues curtailed coal supplies, a National Development and Reform Commission official said Monday. Hunan’s power supply could be short by as much as 12%, according to BNEF.

The power crunch “will probably linger as an issue for a couple more months,” said James Stevenson, senior director for coal, metals and mining at IHS Markit. “When you get this short, really what you need to do is curtail demand, and that is what we are seeing.”

Big industrial users are on the front-lines of being cut off from electricity, followed by commercial buildings, in order to keep supply safe for residential consumers, according to BNEF’s Wei said. “Local industries will take a hit if the outage lasts for long,” Wei said._



Result?

Everyone are buying diesel generators to produce their own electricity as the grid can't provide enough of it:





__





						Bloomberg - Are you a robot?
					





					www.bloomberg.com
				




_A frigid winter is leading to power shortages in parts of China, driving up demand for diesel as factories rush to install generators to keep the lights on.

Some provinces have started rationing electricity to industrial and commercial users to make sure there’s enough power to heat homes during a colder-than-typical winter. That’s prompting factories to snap up portable generators and the diesel they run on to ensure their plants stay open to meet orders amid record-high exports from the country.

The Chinese meteorological authority earlier issued an orange alert nationwide - the second-highest level in its four-tier system - as a cold wave sweeps through the nation. With temperatures still expected to dip further, grid operators are prioritizing the supply of energy to homes and the community, leaving other customers to scramble for alternative power sources.

“Power cuts have brought us extra orders,” Huang Yu, a sales manager at Shandong Dianyuan Village Power Technology Co., a company that supplies generators of different sizes. “We have been quite busy since November, receiving non-stop orders from customers in Jiangsu and Zhejiang,” she said via phone.

The company, which has a wide range of generators including some large enough to power a small town, has sold more than 20 a day recently, more than triple the normal level, Huang said. Its social media account posted a video Dec. 17 showing trucks loading dozens of power generators getting ready for shipment to power-cut regions.

Wholesale diesel prices in China rose to the highest level since April, according to data from the country’s National Bureau of Statistics. Inventories of the fuel across the country fell 5.26% in the month to Dec. 25 to 20.76 million tons, according to information provider OilChem.

“If there is a shortfall in electricity, diesel is the most responsive energy to fill the gap,” Sengyick Tee, an analyst with Beijing-based SIA Energy said. “Even 0.5% of China’s electricity switching to power by diesel would make a large impact on diesel demand.”

China’s power demand has surged in the second-half of this year as its economy recovered from the pandemic and global demand for protective gear and medical equipment it produces soared. A colder-than-normal winter caused by a La Nina weather pattern added to that, boosting consumption by 11% in December, more than double the growth of a year ago, according to National Development and Reform Commission.

*Coal supplies have also been tight amid safety checks at domestic mines and import restrictions, *and natural gas has also been rationed to ensure supplies for heating. Governments cut electricity to some businesses in Hunan and Jiangxi provinces because of shortages, while Zhejiang officials also curtailed industrial power in order to meet emissions and efficiency goals for the five-year plan ending Thursday.

Beyond China, low temperatures are also affecting other nations across Northeast Asia. Japan’s spot power price extended its record-breaking rally as utilities struggle to keep pace with higher demand for heating, while South Korea is prepared to release state reserves of kerosene should supply of the heating fuel remain tight._






The green zone band is typically between 500 and 570 yuan ($76 to $87) a ton, but spot prices are now well above 600 yuan and bids are closer to 700, according to analysts. Thermal coal futures on the Zhengzhou Commodity Exchange closed 1.1% lower Friday at 744.6 yuan a ton, and traded at about $34 a ton more than Australian supplies.





China is loving the fact that the west are virtue signaling their way to a self inflicted economic, political, and social controlled demolition, championed and led by our Silicon Valley elites, Gates, Dorsey, Bezos, Zuck and of course employed via the UN thugs led by Klaus and his ilk at the WEF.

China has nearly 250 gigawatts (GW) of coal-fired power now under development, *more than the entire coal power capacity of the United States.* So when Xi says China will peak…what he is preparing us all for is a massive (they never stopped) and continued investment.

Our Chinese friends now have 97.8 GW of coal-fired power under construction, and another 151.8 GW at the planning stage. And so while some poor sap was penning Xi’s carefully crafted speech to the UN, Xi and his underlings were busy. Busy financing and building out what is likely to be the worlds most impressive global energy infrastructure.

Just this year plants accounting for some 17 GW began construction in China. To put this into context this is *more than the total amount approved during the previous two years*. But they are not only investing in their backyard. Nope… according to a Boston University database they have made more than $244 billion in energy investments abroad since 2000 with the bulk of that in recent years going into oil and gas.

(Yeah not wind, solar or renewable and recyclable Unicorn farts. Good ol Oil & Gas…)


A healthy $50 billion has gone toward *dirty old coal*!

They’ve done all of this, and will continue to do more, while paying lip service to “carbon emission reductions”. That our western leaders are as gullible as they are is a tragedy but simply ensures the west is going to end up being a source of houseboys for their Chinese overlords by the next decade. Watch!

The reason is simple and it’s one I’ve repeated more times than I care to count.

*No country has political security without energy security.*

And energy security is one thing that the liberal hand wringing “we’re all going to die from climate change in 12 years” crowd neither understand, nor care to understand.

That’s how religious-like ideologies work after all.

On the topic of securing political power globally consider this:

It is one thing to develop domestic energy, but that isn’t enough to rule the world. To rule it you need global capacity and leverage over other nations. This was always what the “belt and road” initiative was all about… a trojan horse. That discussion of the Belt and Road has faded from the MSM does not mean it isn’t being pursued. I assure you it continues.

A report in January found that more than one-quarter of coal plants under development outside China have some commitment or offer of funds from Chinese financial institutions. Imagine that.

Keep this in mind. China is the largest consumer of fossil fuels and over the last decade has become the largest financier of the fossil fuel industry.

Here, take a look:






I posted this graph earlier for a reason.


So expect to see China championing and cheering on the West, encouraging them to divest of fossil fuels, encouraging them to keep their economies locked down with Covid hysteria and encouraging the decimation of their economies, and the subsequent political and social mayhem being unleashed.

Why? because if you’re running a race and you’re not the fastest that doesn’t matter if your competition has swapped out their track shoes for concrete boots and iron shackles. Why wouldn’t you encourage them to keep it up…and with vigour.

https://capitalistexploits.at/how-china-is-capturing-global-energy-market-share/


So in other words, it's all a bluff. They aren't even food secure, let alone energy. They import everything. Food, energy, oil, commodities, everything. The entire country is the world's step between raw commodity and industrial steel. That's it. That's all it is. They can't even feed themselves or even keep their own lights on ffs.




The bottom line is that Australia has far, far more leverage here than people realise. If not for the need for the income, AU could shut a quarter of the planet's power stations off virtually over night. Can't make steel without (a LOT of) power, can you?


----------



## Joe Blow (7 January 2021)

Folks, let's stay focused on FMG in this thread please. I understand that these are related issues but if the discussion doesn't come back to FMG the thread is going to slowly drift away.

It's great to see such detailed and enthusiastic debate, but try and bring the focus back to FMG to keep the thread on topic. Thanks.


----------



## sptrawler (7 January 2021)

With regard FMG, it will be interesting to see Twiggies next move, after his sojourn over to Europe, my guess is more diversification for FMG.
When Sandfire resources exploration licenses in Africa were torn up, a second string to FMG's bow seems prudent IMO.


----------



## Dona Ferentes (7 January 2021)

I suspect the dividends paid by FMG to Forrest will be employed through Tattarang, the holding company for the Forrest family’s private business interests. 





__





						Tattarang
					






					www.tattarang.com


----------



## over9k (7 January 2021)

Joe Blow said:


> Folks, let's stay focused on FMG in this thread please. I understand that these are related issues but if the discussion doesn't come back to FMG the thread is going to slowly drift away.
> 
> It's great to see such detailed and enthusiastic debate, but try and bring the focus back to FMG to keep the thread on topic. Thanks.



It relates to FMG because china's almost all of its export market, and without electricity, which is overwhelmingly produced by coal, you can't produce steel.

Iron ore exports thus effectively depend on coal exports, which are the lever being used in the soft power being wielded, which is being wielded for political reasons.

Hence me pointing out why FMG is so sensitive to political risk - because china is. There's a reason why twiggy got up on the news a couple of months ago and made that big spiel about not wanting to upset the apple cart that is china etc etc.

As china goes, FMG follows.


----------



## Value Collector (7 January 2021)

Joe Blow said:


> Folks, let's stay focused on FMG in this thread please. I understand that these are related issues but if the discussion doesn't come back to FMG the thread is going to slowly drift away.
> 
> It's great to see such detailed and enthusiastic debate, but try and bring the focus back to FMG to keep the thread on topic. Thanks.



Well back to FMG news, It closed today at $25.92  it’s highest close ever, after trading above $26.00 for part of the day.


----------



## Joe Blow (7 January 2021)

over9k said:


> It relates to FMG because china's almost all of its export market, and without electricity, which is overwhelmingly produced by coal, you can't produce steel.
> 
> Iron ore exports thus effectively depend on coal exports, which are the lever being used in the soft power being wielded, which is being wielded for political reasons.
> 
> ...




I thought the discussion was good, and appreciated the points being made. Was just worried that thread drift was setting in and wanted to remind everyone to bring the discussion back around to FMG.


----------



## over9k (7 January 2021)

Joe Blow said:


> I thought the discussion was good, and appreciated the points being made. Was just worried that thread drift was setting in and wanted to remind everyone to bring the discussion back around to FMG.



Nah it's relevant. When china's 9/10ths of the market, a discussion about mining is effectively a discussion about china.


----------



## qldfrog (7 January 2021)

sptrawler said:


> That is the assumption I was mentioning, that is dangerous, you are assuming they can't just click their fingers and reduce steel production, when in reality they can if they wish so.
> A capitalist country couldn't but a country like China can, on a whim they can cut back growth and infrastructure projects and mothball furnaces it actually is that easy for them.



Iron ore is the most current on earth.they can just decide to boycott our ore and pay a little more for other sources, knowing they have huge stockpiles to smooth the switch, as to the low quality cheap profuct, my Huawei smartphone was  3y ahead of iphone.all computers laptops are built there etc etc
Low quality is the lowest pricedoes not have to be so, offer decent price and you get high quality..yet still cheaper then other places.
Fmg could be slaughtered with a ban signature in a bj office....
it is all good..until it is not


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## noirua (7 January 2021)

Those of us following coal and iron ore back to 2000 will know all about the volatility of both.  So I've just kept a small interest in the sector knowing it's possible to make up to 60 times what is invested in the 2003 to 2009 runup.  Or after that date lose up to 90% on the reversal.








						Iron ore price leaps into 2021
					

Iron ore opens new year with a bang as Chinese crude steel output set top one billion tonnes for the first time.




					www.mining.com


----------



## over9k (7 January 2021)

qldfrog said:


> Iron ore is the most current on earth.they can just decide to boycott our ore and pay a little more for other sources, knowing they have huge stockpiles to smooth the switch, as to the low quality cheap profuct, my Huawei smartphone was  3y ahead of iphone.all computers laptops are built there etc etc
> Low quality is the lowest pricedoes not have to be so, offer decent price and you get high quality..yet still cheaper then other places.
> Fmg could be slaughtered with a ban signature in a bj office....
> it is all good..until it is not



Yeah but china needs the ore & coal far more than AU needs the money frog, hence australia actually holding the whip here.

If AU was to just stop exporting iron ore (or coal) it would make the power that OPEC has with its oil supply look like child's play.


----------



## joeno (8 January 2021)

1) Never said it was a small market. Iron/Steel is a global essential commodity. Let me know when we can make forks and cars cheaply from silver lol.

2) If China is not there to supply the the iron/steel products, someone else will. China is not consuming and producing iron products while the rest of the world does something different. As VC said China currently buys the Iron due to global demand of iron products.

*China's demography: *yes... and? 2020 demographics vs 2040 projected demographics. In what way are FMG holders supposed to pee ourselves?

*Oil Balance: *we're talking about iron. Not oil. So they import a lot of oil. And what?

*Coal power: *again, moot point.

*Debt to GDP: *so it's going up. Good. Chinese are spending more. It's pretty much the basis for the US economy: consume more than what is created.

*China's political alliances in the world: *no it is not lunacy. It is a fact. How many African countries, Middle Eastern countries, South American, FSU countries (which comprise of the majority of countries in the world) currently have a political feud with China? Not only do they side with China, many side with China *against* America. You're the one that said China is on every country's sh*tlist, i'm just pointing out the fact it isn't true. It is not whether i like it or not. It's just a fact.

If you really believe in what you're saying then simply sell FMG and short iron ore. I missed out on picking up more earliest this year



over9k said:


> Right so you clearly have no idea. China is not "a big market", China buys about 2/3rds of the world's shipped iron ore. For australia specifically, it purchased 87 per cent of iron ore sold by Australian producers in 2019-20 when the value of the trade hit a record $102 billion.
> 
> It is not a big market or whatever you want to describe it as, it's as near as makes no difference the country's _only _market. A couple of years ago a big deal was made when FMG managed to get 11% of its exports to non-chinese customers. Leaving china being, you know, _89% _of its business.
> 
> ...


----------



## over9k (8 January 2021)

"debt to gdp going up is good" 

Look dude half your post is nonsensical and the other half is just plain wrong. A dead giveaway that you've been caught with your pants down talking shite about something you thought you understood but actually did not. You clearly don't even understand the relationships between demographics & economics. 

I have explained why coal power is so relevant. It's not moot at all and the fact that you think it is is precisely what proves how clueless you actually are. 

Nor do you even understand what I was saying as you've made a complete strawman of it with your "hurr just short fmg then" drivel. I never said it's all going to fall apart tomorrow, I said it's exposed to political risk in a way that no other country is. These are completely different statements.

It is also clear that you are very, very, young.


----------



## qldfrog (8 January 2021)

over9k said:


> Yeah but china needs the ore & coal far more than AU needs the money frog, hence australia actually holding the whip here.
> 
> If AU was to just stop exporting iron ore (or coal) it would make the power that OPEC has with its oil supply look like child's play.



We do not go 5km under the sea to get iron or coal.boths commodities are very very common.and china got both internally or in Mongolia which is same.. australia has no leverage.wecan believe otherwise but the earth was made so.i can not be blamed for facts.
And in my opinion,this is FMG issue.to a lesser extend Rio and BHP.and i do not mention the minors.


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## over9k (8 January 2021)

Rubbish. Australia provides 55% of the world's iron ore and enough of china's coal to take a fifth of its electricity production offline. China's alternatives are about 50% more expensive than australian coal and electricity is approximately 60% of the cost of producing steel (yes, really).

They _need _australian coal far more than they care to admit/that people realise. In fact, the whole world does. Remember, this stuff doesn't happen in a vacuum. 

People do not realise just how much australia is half the planet's quarry.


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## qldfrog (8 January 2021)

over9k said:


> Australia provides 55% of the world's iron ore and enough of china's coal to take a fifth of its electricity production offline



Get a bit of knowledge in that area, first part is true (even if it implies that we have a monopoly which is wrong, we are just nearer cheaper and willing to export ships of dirt whereas other places force refining)
, second point is absolutely rubbish; And I mean real rubbish: 100% false...
Now, the absence of knowledge/education in that area is actually a bonus:
most people have no clue about the difference between thermal or coking coal; but the boycott of Australian coal imports has nothing to do about China power production.It is a fact .
Where you are blessed is that 95% of people share your "absence of knowledge" (I do not want nor mean to be insulting), and as such funds, medias and investors share the narrative, and truth is nothing, narrative is everything especially at this stage of the bubble.
Look at your zoom success, inferior product, no real sales, I was skyping/wechat 4y ago across the world with better.and working tools, yet the lemmings jump in and you have a win.
If you want to discard facts and only go for the narrative (the fake news term is not trendy anymore), all good:
and this is why i am trading systems, *probably the way to make money *at the moment,
but do not "rubbish" truth and facts, just be aware
For FMG, it just mean they face a serious political risk, can come at any time, but yesterday BHP jumped up  higher while losing billions in the coal ban...who cares about profits


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## over9k (8 January 2021)

You're going to have to back those assertions up with something frog, because china's actually looking at rolling blackouts & factories have panic-bought diesel generators as a result of the lack of australian coal they've had lately. 

Did you not read my other big post?


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## Value Collector (8 January 2021)

over9k said:


> You're going to have to back those assertions up with something frog, because china's actually looking at rolling blackouts & factories have panic-bought diesel generators as a result of the lack of australian coal they've had lately.
> 
> Did you not read my other big post?



Frogs claim that China could use its “Huge stockpiles” to smooth a transition to internally sourced iron is just completely false.

China only holds about 25 days of Iron ore supply, that is hardly “Huge”, and he is dreaming  if he thinks Chinese production can be ramped up to anything like Australian production any time soon if ever.

I must admit Frogs posts in regards to both FMG and On the Electric car thread have become so cynical I am actually glad he has blocked me, they are not worth reading, the only time I see them is when I forget to log in so they pop up.


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## over9k (8 January 2021)

Value Collector said:


> Frogs claim that China could use its “Huge stockpiles” to smooth a transition to internally sourced iron is just completely false.
> 
> China only holds about 25 days of Iron ore supply, that is hardly “Huge”, and he is dreaming  if he thinks Chinese production can be ramped up to anything like Australian production any time soon if ever.
> 
> I must admit Frogs posts in regards to both FMG and On the Electric car thread have become so cynical I am actually glad he has blocked me, they are not worth reading, the only time I see them is when I forget to log in so they pop up.



I posted the data in my other big post. Their alternatives, if they can even get them online, are 50% more expensive, which would destroy their competitiveness even assuming they can physically supply themselves (which they can't).

I keep saying this: China is a net importer of everything it _needs. _Energy, oil, food, everything. Disrupt the supply of any of those things, and it's in a lot of trouble, hence the sensitivity to political risk.


----------



## qldfrog (8 January 2021)

over9k said:


> You're going to have to back those assertions up with something frog, because china's actually looking at rolling blackouts & factories have panic-bought diesel generators as a result of the lack of australian coal they've had lately.
> 
> Did you not read my other big post?



FFS 
I give up: the overwhelming amount of the coal we export to China is NOT burnt in power station, 95pc of coal used for energy in china is domestic and indonesia on its own can easily fill the banned australian thermal coal gap.
if you feel better believing otherwise, I can do nothing for you.
Look you win, the Chinese are in the black because of the ban.. @over9k said it so it is true
now back to FMS where china is trembling at the prospect of an Australian blocus...


----------



## qldfrog (8 January 2021)

over9k said:


> You're going to have to back those assertions up with something frog, because china's actually looking at rolling blackouts & factories have panic-bought diesel generators as a result of the lack of australian coal they've had lately.
> 
> Did you not read my other big post?



Backing links in other thread about "f.ck china" or any google search on australian coal export and coal ussge in china once people can distinguish between thermal or coking coal.apples and oranges ...


----------



## qldfrog (8 January 2021)

qldfrog said:


> Backing links in other thread about "f.ck china" or any google search on australian coal export and coal ussge in china once people can distinguish between thermal or coking coal.apples and oranges ...



Life is too short...


----------



## basilio (15 January 2021)

Iron Ore prices are still powering on. So naturally FMG SP is responding. It will be interesting to see 6 monthly financial report.









						Iron ore price hits fresh 9-and-half year high
					

Iron ore prices are already up 8% in 2021 after customs data showed Chinese imports hitting a record high of 1.2 billion tonnes.




					www.mining.com


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## over9k (15 January 2021)

Yeah, one thing I've learned not to do is bet against twiggy.

Here's how it compares with the other pie he now has a finger in too, MCR:







I hold both, not selling either.


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## Value Collector (15 January 2021)

basilio said:


> Iron Ore prices are still powering on. So naturally FMG SP is responding. It will be interesting to see 6 monthly financial report.
> 
> 
> 
> ...




Never in my wildest imaginations did I predict Iron Ore would be this strong for this long, definitely looking forward to seeing the 6 monthly and finding out what our dividend is going to be.


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## over9k (15 January 2021)

Just wait until all the various infrastructure packages governments across the entire world are planning get announced


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## over9k (19 January 2021)

Obviously relevant for FMG holders.


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## basilio (22 January 2021)

Twiggy Forest,  Chairman of Fortescue Metals, has been redirecting his energy to producing green hydrogen on a vast scale with the final intention of of producing green steel and revolutionizing Australias energy and steel industry. Just spent 5 months touring the investment centres around the world to create the framework for this nation changing venture.

Twiggy also sees this as an essential part of dealing with CC in the very near future. He is producing the Boyer Lectures on the ABC this year with the theme being  _*Rebooting Australia: How ethical entrepreneurs can help shape a better future**,. *_

Powerful stuff. I will repost this in other relevant threads. 








						'The solution is hydrogen': Andrew Forrest lays out his plan to address climate change
					

Green hydrogen gives Australia an opportunity to slash our emissions — and if we get this right, the impact could be nothing short of nation-building, argues business leader Andrew Forrest.




					www.abc.net.au


----------



## Value Collector (22 January 2021)

basilio said:


> Twiggy Forest,  Chairman of Fortescue Metals, has been redirecting his energy to producing green hydrogen on a vast scale with the final intention of of producing green steel and revolutionizing Australias energy and steel industry. Just spent 5 months touring the investment centres around the world to create the framework for this nation changing venture.
> 
> Twiggy also sees this as an essential part of dealing with CC in the very near future. He is producing the Boyer Lectures on the ABC this year with the theme being  _*Rebooting Australia: How ethical entrepreneurs can help shape a better future**,. *_
> 
> ...




Great article, but I don't understand the need to try and push Elon down to try and lift hydrogen, if you care about the environment and want to push the world towards renewable electricity, why attack Elon?? Elon is correct in that for most of the car industry Battery EV's are better suited that hydrogen, Hydrogen will be niche in vehicles, but still have big applications in storage, industrial and agricultural fertilisers etc.


----------



## basilio (22 January 2021)

FMG highlighted  the first Boyer lecture  by Twiggy on an ASX announcement.

*Also noted that the unaudited net profit after tax for FMG for the first 6 months of 2020/21 will be $4 to 4.1B.  Huge result. *Suggests perhaps double that for the full year.


----------



## jbocker (22 January 2021)

Value Collector said:


> Great article, but I don't understand the need to try and push Elon down to try and lift hydrogen, if you care about the environment and want to push the world towards renewable electricity, why attack Elon?? Elon is correct in that for most of the car industry Battery EV's are better suited that hydrogen, Hydrogen will be niche in vehicles, but still have big applications in storage, industrial and agricultural fertilisers etc.



Agree, good article and maybe the 'push down' it is a ploy to grab attention and announce you are aiming to run in a green energy race.


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## Value Collector (22 January 2021)

basilio said:


> FMG highlighted  the first Boyer lecture  by Twiggy on an ASX announcement.
> 
> *Also noted that the unaudited net profit after tax for FMG for the first 6 months of 2020/21 will be $4 to 4.1B.  Huge result. *Suggests perhaps double that for the full year.



And $940 Million for the month of December alone, the mind boggles.


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## basilio (25 January 2021)

I was surprised  that the market didn't respond well on Friday to the  Twiggy Forrests Boyer  presentation and in particular to the preliminary profit announcement announced through FMG.

Seems like enough people recognized  the relevance  over the weekend.  

SP currently up almost  5% ! Very strong show.


----------



## joeno (26 January 2021)

A case can be made that FMG is overvalued if we take into consideration the % chance that Iron Ore prices crashes (because it's "cyclical").

But when you compare to other companies in the global market, it is still dead cheap. 10 PE? Are you serious? When the market is around 30. 20-30% annual growth. Good margins. Good management. Plans for expansion.

This is the last stock i'd sell in my portfolio atm. I really see FMG becoming a $200B AUD company easy. Even if there's a market crash some time in the future. After all what is a $200B AUD company these days when you have companies hitting the $1TRILLION USD market cap every other month.


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## over9k (26 January 2021)

Yeah, if the banks would give me any money, I would have already bought a ton of dividend stocks with it.


----------



## dat111 (28 January 2021)

Why the 6.4% drop in FMG...7.87% drop in FSUMF(US FMG) ?  I understand that the price of iron ore dropped 2.4% but the quarterly production report is tomorrow and I would expect a good to great report.  I also understand that China usually head fakes all of us (basketball reference)...  Is it time to buy again?


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## Value Collector (28 January 2021)

dat111 said:


> Why the 6.4% drop in FMG...7.87% drop in FSUMF(US FMG) ?  I understand that the price of iron ore dropped 2.4% but the quarterly production report is tomorrow and I would expect a good to great report.  I also understand that China usually head fakes all of us (basketball reference)...  Is it time to buy again?



I don't know what caused the drop, it could be a combination of jitters around Andrew announcing his push into energy and hydrogen making people nervous about whether it might turn into a money pit, and also jitters around the Iron ore price, not to mention we did have a decent run up on the prior trading day so it could have just been some of that coming back.

One constant with markets is that they will fluctuate, these sorts of swings are always bound to happen, FMG tends to attract alot of speculators and short sellers who add to volatility.


----------



## joeno (28 January 2021)

Unfortunately investing in Australia hasn't caught up with the rest of the world. Which is why you see excellent performers like FMG not realising their full stock value potential (let alone being inflated like a lot of US stocks).

There's a lack of investing culture due to poor performance of the ASX in the last 10 years. People are also contrarian and usually pessimistic and overly frugal. I mean people were complaining when prices were $2.

Unlike the US and Europe where it's so easy to find a fee-free broker, the only decent option we have is IB which requires considerable investment and has commissions. Commsec and other brokers are leeches with their crap brokerage rates. This makes it hard for youths to invest their $100s/1000s for the future.

If FMG was listed in the US and "US owned" we'd easily be 3-4x our current market cap. A mining company with the growth, balance sheet, and income stream that FMG has is unheard of.


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## over9k (28 January 2021)

Twiggy's fault for not listing in the 'states. 

RIO & BHP can be bought with ADR's.


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## dat111 (29 January 2021)

over9k said:


> Twiggy's fault for not listing in the 'states.
> 
> RIO & BHP can be bought with ADR's.



There are two ways to buy in the US.  I have bought both ways.  The first way is via FSUMF... I am charged a trading fee for purchasing these shares...

The second is FSUGY...there are no fees associated with trading this stock in the states... it is 2 shares of FMG for each share of FSUGY...

It has only been a couple of years that I have received free trades...


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## joeno (29 January 2021)

Typical large cap US miner:
NYSE: FCX Freeport-McMoran

60 PE this year
Sometimes makes a profit (inconsistent). Sometimes makes a loss.
Lousy 0.7% dividend
Negative revenue growth last 3 years
Negative cash flow last 2 years
Mediocre Debt:Equity (1.1)

But it's American so all the fat hedge funds and pension funds pile in. FMG is treated like it's going to go bust in the next 5-10 years.

If *some people* presented the pros of owning a stock like FMG on Reddit like what happened with $VALE we'd definitely some good good price action upwards. But i'm not saying anybody should cause it's a cop-out and makes this stock seem like it's a pump-and-dump.


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## Value Collector (29 January 2021)

joeno said:


> Unfortunately investing in Australia hasn't caught up with the rest of the world. Which is why you see excellent performers like FMG not realising their full stock value potential (let alone being inflated like a lot of US stocks).
> 
> There's a lack of investing culture due to poor performance of the ASX in the last 10 years. People are also contrarian and usually pessimistic and overly frugal. I mean people were complaining when prices were $2.
> 
> ...



Just remember “Fee free” Brokers can end up being pretty expensive, they should really be called “hidden fee” brokers.


----------



## joeno (29 January 2021)

Value Collector said:


> Just remember “Fee free” Brokers can end up being pretty expensive, they should really be called “hidden fee” brokers.




Robinhood is free commissions for all stock trades and options trades iir. It's just the service can suck sometimes and there's limitations to what you can buy. I don't/can't use it though.

I'm using Trading212 since i moved here in the UK. It's also fee free and you get to use it as an ISA investment account (basically up to £20k a year to invest completely tax-free). $0 trades and tax-free when i sell. I hear it's not as good as Robinhood as there's not that much variety of stocks, but still it's ahead of what Aus has.

I think they can be expensive if you're an atypical investor with more than a few million and buy exotic instruments like CFDs. But for regular folks they should be fine.


----------



## Value Collector (29 January 2021)

joeno said:


> Robinhood is free commissions for all stock trades and options trades iir. It's just the service can suck sometimes and there's limitations to what you can buy. I don't/can't use it though.
> 
> I'm using Trading212 since i moved here in the UK. It's also fee free and you get to use it as an ISA investment account (basically up to £20k a year to invest completely tax-free). $0 trades and tax-free when i sell. I hear it's not as good as Robinhood as there's not that much variety of stocks, but still it's ahead of what Aus has.
> 
> I think they can be expensive if you're an atypical investor with more than a few million and buy exotic instruments like CFDs. But for regular folks they should be fine.



Robin Hood make money on the back end, so in theory they are offering customers slightly worse buy and sell prices that they would get if they bought and sold through a regular broker, but I guess it depends how much stock you are purchasing whether this works out cheaper or more expensive.

its a bit like banks offer travel money cards that don’t have fees, however they make money by giving you an exchange rate that is 3% - 5% worse than other options, that’s why I say these things are hidden fees not zero fees.


----------



## joeno (29 January 2021)

Value Collector said:


> Robin Hood make money on the back end, so in theory they are offering customers slightly worse buy and sell prices that they would get if they bought and sold through a regular broker, but I guess it depends how much stock you are purchasing whether this works out cheaper or more expensive.
> 
> its a bit like banks offer travel money cards that don’t have fees, however they make money by giving you an exchange rate that is 3% - 5% worse than other options, that’s why I say these things are hidden fees not zero fees.




Perhaps you're right. I did get the lowest price for a limit order one time though on Trading212 - as verified by google. IB is definitely legit and won't play with bid asks.

On the topic of FMG again - i'm speechless the market punished FMG due to this article:








						'The solution is hydrogen': Andrew Forrest lays out his plan to address climate change
					

Green hydrogen gives Australia an opportunity to slash our emissions — and if we get this right, the impact could be nothing short of nation-building, argues business leader Andrew Forrest.




					www.abc.net.au
				




- Committing to be green when green energy, renewables, and environmental friendliness is becoming a mandate. Wouldn't be surprised if there's tax credits for being green in the future. And fines for messing around with CO2 emissions.

- Hydrogen energy is growing. AF wants to get into Hydrogen. That's amazing. It's called diversified business model. Like Facebook not having just facebook but also instagram and whatsapp as backup bread-winners (that could eventually be their main bread winner). Or Apple diversifying into phones from computers. Amazon diversifying from selling books to cloud services..

- It looks like he has the interest of society and the environment before profits. Who does that sound like? Elon Musk in the early 2010s talking about how he wasn't aiming to be the biggest car maker but to usher in a new era and enable others to follow his lead. Eventually the market rewards good morals, innovation, and willingness to adapt/listen.

Take the GME fiasco right now: the hedge funds are getting blasted from all corners because
- They lied
- They manipulated the markets
- They don't care about "the people" or society. They just care about making a dirty buck
- Not willing to adapt/listen. Didn't close their shorts even after at risk of a short squeeze of a lifetime


----------



## sptrawler (29 January 2021)

IMO there will be two types of hydrogen, one that is derived through electrolysis from renewables and the other that is derived from using human waste derived gas, to produce hydrogen.
At the moment, we are very much focused on the first, but the second is just as important IMO, the first has center stage but the second increases every day as we eat more and the population grows.


----------



## Value Collector (31 January 2021)

sptrawler said:


> IMO there will be two types of hydrogen, one that is derived through electrolysis from renewables and the other that is derived from using human waste derived gas, to produce hydrogen.
> At the moment, we are very much focused on the first, but the second is just as important IMO, the first has center stage but the second increases every day as we eat more and the population grows.




Almost all human waste goes to land fill, and a lot of landfills capture the methane they generate and make electricity, so we are already using some of the methane produced by our sewage.


----------



## SirRumpole (31 January 2021)

Value Collector said:


> Almost all human waste goes to land fill, and a lot of landfills capture the methane they generate and make electricity, so we are already using some of the methane produced by our sewage.




Where do batteries go when they die ?


----------



## Austwide (31 January 2021)

Melbourne's sewerage plant uses the methane generated to run large V18's to pump away the treated sewer to Bass Straight and as fuel to to generate electricity for their own use. I worked there in the 70's and were doing that then but were limited to 50% power generation as the supply authority wanted to sell some power to cover infrastructure costs. I would assume the 50% limit has now been removed.


----------



## qldfrog (31 January 2021)

SirRumpole said:


> Where do batteries go when they die ?



Leaching toxic rare earth in a slum in India Bangladesh or Africa
So green, reducing both co2 and world population


----------



## Value Collector (31 January 2021)

SirRumpole said:


> Where do batteries go when they die ?



They will be recycled and made into new batteries.


----------



## Value Collector (31 January 2021)

Austwide said:


> Melbourne's sewerage plant uses the methane generated to run large V18's to pump away the treated sewer to Bass Straight and as fuel to to generate electricity for their own use. I worked there in the 70's and were doing that then but were limited to 50% power generation as the supply authority wanted to sell some power to cover infrastructure costs. I would assume the 50% limit has now been removed.



Yep, but only clean clear water is pumped into the ocean, all the rest of the matter is filtered out, compressed and then buried in land fill, where it continues to break down releasing methane and possibly powering more power plants via landfill gas generators.


----------



## Austwide (31 January 2021)

Value Collector said:


> Yep, but only clean clear water is pumped into the ocean, all the rest of the matter is filtered out, compressed and then buried in land fill, where it continues to break down releasing methane and possibly powering more power plants via landfill gas generators.



Yes the treated sewerage water is "Drinkable" when it leaves the plant. Some new housing estates have the treated water supplied to all houses for use in toilets and the garden, charged half the regular water price for it.


----------



## Value Collector (31 January 2021)

Austwide said:


> Yes the treated sewerage water is "Drinkable" when it leaves the plant. Some new housing estates have the treated water supplied to all houses for use in toilets and the garden, charged half the regular water price for it.



In south east Queensland, when the water system gets below 50% storage the treated water passes through an additional treatment and then is put back into our two biggest dams and eventually makes its way back through the system.

When there is no drought it gets used to water sports fields and council land.


----------



## basilio (7 February 2021)

Update from Share Cafe  on Iron Ore prices. Let's enjoy the current returns while we can and look forward to significant changes in FMG activities in response to Chinas direction.
Some significant observations

Current Iron Ore prices falling because of reduced China demand
New China policy in place to ensure a long term reduction in steel demand as part of low carbon initiatives
The new policy will reduce demand for lower quality  iron ore, 58% fines  (mostly Australian source)
And yes China is intending to reduce its dependence on Australian iron ore.









						Poor Start to Feb for Iron Ore – ShareCafe
					

Contrary to historical trends, Iron ore prices are down sharply in February ahead of the Lunar New Year Festival starting February 11.




					www.sharecafe.com.au


----------



## basilio (16 February 2021)

Very significant Change of Management announcement from FMG.
COO Greg Lilleyman has resigned effective immediately as have Don  Hyma,  Director  Projects  and  Manie  McDonald,  Director  Iron  Bridge

Something has gone seriously wrong but there seems to be no further information. Appears as if there are big problems with the Iron Bridge project. 

SP has responded accordingly.



			https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02341908-6A1020523?access_token=83ff96335c2d45a094df02a206a39ff4


----------



## Beaches (16 February 2021)

FMG is currently down over 6% after the announcement
Is this a great buying opportunity prior to the release of the results on Thursday?
Or will the update reveal bigger problems and the current drop today be just the start?


From the announcement:
"The detailed review underway for the Iron Bridge Magnetite project is continuing and an update is expected to be provided with the release of Fortescue’s half year financial results on 18 February 2021 "

Where are all our resident bottom pickers?


----------



## Ferret (16 February 2021)

Sounds bad.  I'm taking some profits.


----------



## basilio (16 February 2021)

Beaches said:


> FMG is currently down over 6% after the announcement
> Is this a great buying opportunity prior to the release of the results on Thursday?
> Or will the update reveal bigger problems and the current drop today be just the start?
> 
> ...




Who knows? There will be an excellent financial result from the previous 6 months. However it's clear something has gone seriously wrong at Iron Bridge, How much impact will it have overall ? My guess is that the development of the site is not going properly and there will be ramifications for the amount and quality of ore being shifted .


----------



## Dark1975 (16 February 2021)

Ferret said:


> Sounds bad.  I'm taking some profits.



Not bad at all, profits is good 👌
I jumped in on the oversold value and was out in 5mins, pitty I missed the buy as it went under $23.00 for 2mins ( my little girl switched off my net 🙈)


----------



## Ferret (16 February 2021)

COO, Director of Projects, Director of Iron Bridge - all resigned with immediate effect.  
Sounds to me like something has gone badly wrong with Iron Bridge.

I'll see what further details come out on 18th.  I'm happy to buy back in if all is well.


----------



## Value Collector (16 February 2021)

basilio said:


> Who knows? There will be an excellent financial result from the previous 6 months. However it's clear something has gone seriously wrong at Iron Bridge, How much impact will it have overall ? My guess is that the development of the site is not going properly and there will be ramifications for the amount and quality of ore being shifted .




I guess we will just have to wait and see what is announced on Thursday, If its just a cost blow out at Iron Bridge of $1 Billion or so, thats only 1 months operating earnings at the moment so no big deal really.

Worst case scenario is a major set back at Iron bridge involving failed technology etc that was covered up until now, because the process involved there is a lot more complex than their other 5 mines.

Saying that though, we have 5 mines that firing on all cylinders, so I can't see the Iron bridge Joint Venture affecting us to badly even if they entire thing had to be written off, however hopefully its just some hidden cost blow out and we will still get the project up and running in the next 2 years or so.

But, in the mean time the market will do what markets do and freak out, and the rumour mill will run wild.

I neither bought nor sold on the news, I am happy to wait and see what is announced.


----------



## basilio (16 February 2021)

The issues seem to be about cost blowouts on the Iron Ridge development  and, perhaps, significant operational problems.
The overarching issue is that the Iron Ridge mine was intended to produce high quality fines that when mixed with other lower quality ore would raise the fines  standard sufficiently to command a premium price.  If it doesn't come on line that objective is stalled.

It seems from the article below that magnetite mines are very tricky beasts to develop.









						Fortescue COO, executives step down amid Iron Bridge review
					

Australia's Fortescue Metals Group Ltd said on Tuesday Chief Operating Officer Greg Lilleyman and two other executives have resigned as part of a review of its Iron Bridge Magnetite project in Western Australia.




					www.reuters.com


----------



## Value Collector (16 February 2021)

basilio said:


> The issues seem to be about cost blowouts on the Iron Ridge development  and, perhaps, significant operational problems.
> The overarching issue is that the Iron Ridge mine was intended to produce high quality fines that when mixed with other lower quality ore would raise the fines  standard sufficiently to command a premium price.  If it doesn't come on line that objective is stalled.
> 
> It seems from the article below that magnetite mines are very tricky beasts to develop.
> ...



No, the Iron Bridge ore was not going to be used in blending, that is the eliwana mine.

The Iron Bridge mine produces low quality magnitite ore, which is crushed made into a slurry, then piped to a processing plant where it is processed and upgraded into a high quality concentrate, the concentrate is then compressed and heated to form high grade pellets.

this is a technical process that many companies have struggled with, but some have made profitable businesses on.

I will link a video later describing the process.


----------



## Value Collector (16 February 2021)

Value Collector said:


> No, the Iron Bridge ore was not going to be used in blending, that is the eliwana mine.
> 
> The Iron Bridge mine produces low quality magnitite ore, which is crushed made into a slurry, then piped to a processing plant where it is processed and upgraded into a high quality concentrate, the concentrate is then compressed and heated to form high grade pellets.
> 
> ...




check out this video from the 3.30 mark, it’s shows how a magnitite mine and processing works.

These mines in the USA ran out of high grade ore decades ago but have been able to continue producing high grade ore by processing taconite rocks and removing the magnitite ore.


----------



## basilio (16 February 2021)

Can't remember exactly where I read it but I believed that a significant element of ensuring continued Chinese purchase of Australian Iron Ore was providing a premium product. In that context my memory was that the high grade fines from Iron Bark could be used to improve the lower quality grades.

Having said that checking out  articles on the net throws up some quite contradictory stories. Certainly not worth dying in ditch for.




__





						ANALYSIS: The complicated growth of the 58% Fe iron ore market
					

The seaborne spot iron ore market has long considered 62% Fe material its benchmark product, after a shift away from annual price negotiations in 2008.




					www.metalbulletin.com


----------



## Value Collector (16 February 2021)

basilio said:


> Can't remember exactly where I read it but I believed that a significant element of ensuring continued Chinese purchase of Australian Iron Ore was providing a premium product. In that context my memory was that the high grade fines from Iron Bark could be used to improve the lower quality grades.
> 
> Having said that checking out  articles on the net throws up some quite contradictory stories. Certainly not worth dying in ditch for.
> 
> ...



Yeah, as I said it’s the eliwana mines output that is going to be used to upgrade the lower quality ores from other mines, but the Iron Bridge ore is going to be a stand alone super high quality product sold at a large premium.

the input ore is low grade 30% but after it’s been processed it will be 65%


----------



## Jackass (17 February 2021)

Does anybody else think that this is p*ss poor form from Fortescue in terms of continuous disclosure? This story was all over various media outlets for a full 24 hrs before they informed the ASX. Also have heard speculation that the story was confirmed form sources within Fortescue itself, which if it is true is not a good look, talking to the media before making an announcement to market. And how was it not market sensitive?


----------



## Value Collector (17 February 2021)

Jackass said:


> Does anybody else think that this is p*ss poor form from Fortescue in terms of continuous disclosure? This story was all over various media outlets for a full 24 hrs before they informed the ASX. Also have heard speculation that the story was confirmed form sources within Fortescue itself, which if it is true is not a good look, talking to the media before making an announcement to market. And how was it not market sensitive?
> 
> 
> 
> ...



I think that is part of the reason that certain people are walking the plank, I honestly think EG and the board have been mislead in some way, and have only just figured out what was happening, hence the forced resignations.


----------



## basilio (18 February 2021)

As anticipated an excellent half year report.  Half yearly dividend raised to $1.47 .  Quite ridiculous results but I don't think anyone is going to send back the bucks.

Wonder how shareholders who sold out earlier this week are feeling ? Particularly if they were stop loss sales ?


----------



## joeno (18 February 2021)

you'd be crazy to sell at these valuations. I don't care if the new mine is a failure and write off (prob isn't as all ambitious projects have growing pains). FMG is worth $60. It's just too profitable. Iron and steel ain't going away for the next 20 years.


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## Ferret (18 February 2021)

basilio said:


> Wonder how shareholders who sold out earlier this week are feeling ?



Wishing I had been away from my computer when the notice came out!

Still, the great run in FMG had me a little bit overweight in it, so I'll try to convince myself that selling some was a sensible re-weighting!


----------



## Value Collector (18 February 2021)

basilio said:


> As anticipated an excellent half year report.  Half yearly dividend raised to $1.47 .  Quite ridiculous results but I don't think anyone is going to send back the bucks.





> Wonder how shareholders who sold out earlier this week are feeling ? Particularly if they were stop loss sales ?




Great result, I am actually a little bit speechless, to think that not to long ago the shares were trading at not much more than this dividend.

I am a very happy holder, FMG proves Ben Grahams saying -
“The stock investor is neither right or wrong because others agreed or disagreed with him; he is right because his facts and analysis are right.”​The Investors best tools will always be sound reasoning, ability to identify facts, patience and most importantly the ability to not panic and be comfortable going against the crowd when the crowd in wrong.


----------



## Value Collector (19 February 2021)

Value Collector said:


> check out this video from the 3.30 mark, it’s shows how a magnitite mine and processing works.
> 
> These mines in the USA ran out of high grade ore decades ago but have been able to continue producing high grade ore by processing taconite rocks and removing the magnitite ore.





Check out this old video from the 1950's, watch it from the 6.50 minute mark you will see them explaining how Minnesota was running out of the "direct shipping ore" as far back as the 1950's, and moved to mining low grade magnetite which they are still mining today 70 years after they ran out of the high grade ore.

This is why FMG is getting on the front foot and investing to develop the Iron Bridge project, because so far BHP, RIO, FMG and the rest of  the WA Iron ore industry has only been focussed on just the High grade direct shipping ore, but eventually in future decades that will run short and they will be forced to begin mining the low grade stuff, by that time FMG will be expert at it, and dominate the market, because they have already taken control of some many low grade tenements the others never bothered to peg out.

The video in my above quote shows them mining the deposits talked about in this 1950's video.

watch from the 6.50 minute mark.


----------



## basilio (5 March 2021)

FMG movement to Green Hydrogen is very substantial.  As noted in their  Final Report they are allocating 10% of their profits to investments in renewable energy and Green Hydrogen.  So while other companies are establishing themselves with plans , ideas and fund raising... FMG has already allocated *$400m  *to making this happen.

Early move in the industry with plenty of cash and the capacity to use the renewable energy product to drive down their current costs of iron ore production even further.  Has to be a very promising future.

Fortescue puts aside $400m for new hydrogen, wind and solar projects​
James Fernyhough 18 February 2021
Share
Tweet
0Share








Fortescue Metals is set to funnel at least $400 million into renewable energy technologies such as wind, solar and green hydrogen, as it ramps up its push to be one of the world’s biggest clean energy companies.

That would come on top of around $100 million of investment this financial year. If the iron ore price remains high, the $400 million figure could be several hundred million dollars higher by the end of the financial year.









						Fortescue puts aside $400m for new hydrogen, wind and solar projects
					

Fortescue to channel 10 per cent of future profits into renewable energy to help meet its green hydrogen ambitions.




					reneweconomy.com.au


----------



## basilio (5 March 2021)

Back in November at the AGM Twiggy outlined the big picture view of where he wanted to take Fortescue.  The funds allocated from the super profits of the current iron ore prices should certainly push this development quickly.









						Fortescue leads “stampede” into green energy with stunning plans for 235 gigawatts of wind and solar
					

Fortescue to lead “stampede” into renewables with stunning plan to build more than 235GW of wind and solar capacity and a green hydrogen industry.




					reneweconomy.com.au


----------



## Knobby22 (5 March 2021)

basilio said:


> Back in November at the AGM Twiggy outlined the big picture view of where he wanted to take Fortescue.  The funds allocated from the super profits of the current iron ore prices should certainly push this development quickly.
> 
> 
> 
> ...



It is interesting. Is it realistic?


----------



## basilio (5 March 2021)

Knobby22 said:


> It is interesting. Is it realistic?




Hard to say.

However when you own 36% of a company making $8b a year profits and the company itself is investing 500M into kicking this project away you have to have some sort of a chance ...

I believe many people and companies are coming quickly to the view that a hydrogen economy makes great economic and environmental sense. Having years of engineering experience in big projects and a very healthy bank balance to  begin staking these ventures will give Twiggy the best start possible.Certainly better I suggest than a multitude of new start ups with a plan and a need to find  all the big bucks required initiate the projects.


----------



## basilio (8 March 2021)

FMG released an update of their joint venture drilling project with Tasmin at Lake Torrens.
Certainly gave TAS a kick along. Be interested to hear what implications there are for FMG future mining opportunities.



			https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02349746-6A1023083?access_token=83ff96335c2d45a094df02a206a39ff4


----------



## Value Collector (8 March 2021)

basilio said:


> Hard to say.
> 
> However when you own 36% of a company making $8b a year profits and the company itself is investing 500M into kicking this project away you have to have some sort of a chance ...
> 
> I believe many people and companies are coming quickly to the view that a hydrogen economy makes great economic and environmental sense. Having years of engineering experience in big projects and a very healthy bank balance to  begin staking these ventures will give Twiggy the best start possible.Certainly better I suggest than a multitude of new start ups with a plan and a need to find  all the big bucks required initiate the projects.




An interesting part of the half year results was their plan for future profits, eg 80% dividends, 10% into mining projects and 10% into green energy.

So it looks to me like their plan is to continue investing and growing their mining projects which will be their main income source, while also developing a growing renewable energy business.


----------



## dat111 (9 March 2021)

Value Collector said:


> An interesting part of the half year results was their plan for future profits, eg 80% dividends, 10% into mining projects and 10% into green energy.
> 
> So it looks to me like their plan is to continue investing and growing their mining projects which will be their main income source, while also developing a growing renewable energy business.



I hope FMG uses government money for the green initiative...only way it makes money...


----------



## Value Collector (9 March 2021)

dat111 said:


> I hope FMG uses government money for the green initiative...only way it makes money...



Why would using government money be the "only way it makes money"?

I mean if they build a wind farm (or something else) for $100 Million, and it produces $10 Million in profits each year after costs and depreciation, why would they need government money?

Fortescue isn't a charity, its a for profit business, they are only going to take on projects that they believe have a decent chance of turning a profit, its going to be no different to their mining operations, eg  the don't green light a new mine unless they expect it to produce an income stream that produces a profit of its life on top of returning the original cash outlaid.


----------



## joeno (9 March 2021)

Government subsidies could be one of the perks. If the Aussie govt has the people's interest at heart then they will support companies like Fortescue with this green initiative.

Also the recent sacking of high-level officers for underperformance is a good thing. No exceptional company will allow their high level executives to sit comfortably on their bums and underperform and face no consequences. Sever any dead weights asap and keep moving forward.


----------



## dat111 (10 March 2021)

Value Collector said:


> Why would using government money be the "only way it makes money"?
> 
> I mean if they build a wind farm (or something else) for $100 Million, and it produces $10 Million in profits each year after costs and depreciation, why would they need government money?
> 
> Fortescue isn't a charity, its a for profit business, they are only going to take on projects that they believe have a decent chance of turning a profit, its going to be no different to their mining operations, eg  the don't green light a new mine unless they expect it to produce an income stream that produces a profit of its life on top of returning the original cash outlaid




Fortescue is committed to taking a leadership position on climate change. We have a proud history of setting stretch targets and during FY20 announced an emissions reduction goal to achieve net zero operational emissions by 2040, positioning us as a leader in addressing the global climate change challenge.

This is what is on their site.  The only way that a wind farm or solar field makes sense is if they are trying to achieve some type of carbon offsets... that is what is being reported as additional costs to make the wind and solar close to the cost of a natural gas power plant.  

I guess what I am thinking is that isn't it a bit hypocritical for Fortescue to come along and say they are going to have zero operational emissions when the product Fortescue produces is being sent to a location that only cares about pollution when it gets so bad that they have to shut down their operations... 

Iron ore futures in Singapore fell 5.8% to hit a three-week low amid concerns that demand in top consumer China is cooling after the country's Tangshan steelmaking hub imposed more production restrictions to combat pollution.


----------



## Value Collector (10 March 2021)

dat111 said:


> Fortescue is committed to taking a leadership position on climate change. We have a proud history of setting stretch targets and during FY20 announced an emissions reduction goal to achieve net zero operational emissions by 2040, positioning us as a leader in addressing the global climate change challenge.
> 
> This is what is on their site.  The only way that a wind farm or solar field makes sense is if they are trying to achieve some type of carbon offsets... that is what is being reported as additional costs to make the wind and solar close to the cost of a natural gas power plant.
> 
> ...




I don’t see the hypocrisy in trying to reduce your carbon emissions, it would be stupid to suggest Fortescue avoid taking action until customers down the line are perfect.

firstly China is actually making massive steps to move towards cleaner energy.

However, even if China didn’t at all care about climate change, why would that be a reason for us not to try and reduce the pollution from the parts of the system that we control? it’s like you are saying Bunnings would be hypocritical for installing solar panels on their store because some of their customers are climate deniers, the fact is Bunnings (and fortescues) emissions are their responsibility, and are separate from their customers.

———————
solar and wind do make economic sense for Fortescue, because over time they will produce more in value than they cost to build, especially because they will be not only offsetting gas but also diesel.


----------



## basilio (10 March 2021)

Value Collector said:


> solar and wind do make economic sense for Fortescue, because over time they will produce more in value than they cost to build, especially because they will be not only offsetting gas but also diesel.




The savings on input costs will be part of their drive to reduce  the base cost of iron ore production. Twiggy knows that when the iron ore price inevitably falls it will be the lowest cost producers who are able to stay in the game the longest.

--------------------------------
Certainly some heavy selling today. Currently 5.77% down. There was pretty apocalyptic analysis posted today on the net by one of teh tea leaf readers.














						Daily iron ore price update (you have been warned)
					

When iron ore prices are so high, this is what can happen. Yesterday Dalian futures were crushed 10% limit down with some minor repair overnight. Spot was crushed as well as steel held up OK: The proximate trigger was three days of further output shutdowns at Tangshan steel mills to combat...




					www.macrobusiness.com.au


----------



## Value Collector (10 March 2021)

basilio said:


> Certainly some heavy selling today. Currently 5.77% down.




FMG has been pretty volatile both up and down recently, with the fantastic operational results of the last couple of years we have seen big share price and dividend growth, while I still believe it is under valued, I think FMG have attracted a large following of shareholders and shorters who are very speculative, and tend to panic sell and create a lot of negative feedback and stop loss triggers etc.

In my opinion its best just to focus on the underlying operational results, FMG is currently valued as if the Iron ore price was about $93, so we are in a very good position provided you are long term focused and willing to ignore this noise.


----------



## dat111 (11 March 2021)

Value Collector said:


> I don’t see the hypocrisy in trying to reduce your carbon emissions, it would be stupid to suggest Fortescue avoid taking action until customers down the line are perfect.
> 
> firstly China is actually making massive steps to move towards cleaner energy.
> 
> ...



From a business standpoint.  Increasing cost to create good will is understandable.  That is what is being done.  Fortescue is going green... Have a slide discussing this on every presentation...  Put the climate folks onto someone else...  

What I am actually saying is that it doesn't make sense for Mt. Piper Power Station to put solar panels on their buildings and claim that they are green or better yet Clarence Colliery coal mine to put solar panels up and claim that they are green.  
​


----------



## qldfrog (11 March 2021)

dat111 said:


> From a business standpoint.  Increasing cost to create good will is understandable.  That is what is being done.  Fortescue is going green... Have a slide discussing this on every presentation...  Put the climate folks onto someone else...
> 
> What I am actually saying is that it doesn't make sense for Mt. Piper Power Station to put solar panels on their buildings and claim that they are green or better yet Clarence Colliery coal mine to put solar panels up and claim that they are green.
> ​



Anyone sane understands that but the narrative is what counts and they could even have these paid by gov tax offsets etc who cares about the actual carbon cost etc
As you say, will send the journos back to Rio crime against humanity ..or Meghan fight against the queen ..can not add LOL.
While BHP is parading its integration transgender female workforce..PR first, that is what counts.I doubt this will be worth anything, as the extremists will never be happy until we are back in caves, eating only some grass and not burning woodfire..see the BLM riot or the Trump business. 
We will see


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## Value Collector (11 March 2021)

dat111 said:


> From a business standpoint.  Increasing cost to create good will is understandable.  That is what is being done.  Fortescue is going green... Have a slide discussing this on every presentation...  Put the climate folks onto someone else...
> 
> What I am actually saying is that it doesn't make sense for Mt. Piper Power Station to put solar panels on their buildings and claim that they are green or better yet Clarence Colliery coal mine to put solar panels up and claim that they are green.
> ​



Fmg’s future Industries business is going to be a profit making business, and their investments into renewable energy are intended to lower their cost over time.


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## basilio (17 March 2021)

FMG is accelerating it's goals  becoming carbon neutral across it's entire division. Now Looking at 2030 - as stretch goal.

It seems Twiggy believes that in time it's green hydrogen/renewable energy/green steel businesses will outstrip the iron ore  components!!






						Fortescue suggests green power may ‘outscale’ iron ore business
					

Fortescue Metals Group has moved its carbon neutrality target forward by 10 years to 2030 as the company advances its emissions reduction projects...




					markets.businessinsider.com


----------



## Sean K (17 March 2021)

basilio said:


> FMG is accelerating it's goals  becoming carbon neutral across it's entire division. Now Looking at 2030 - as stretch goal.
> 
> It seems Twiggy believes that in time it's green hydrogen/renewable energy/green steel businesses will outstrip the iron ore  components!!
> 
> ...




Is FFI going to remain under FMG on the ASX or will they spin it off? I assume get it to a point and then spin it off and make some $$.


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## basilio (18 March 2021)

kennas said:


> Is FFI going to remain under FMG on the ASX or will they spin it off? I assume get it to a point and then spin it off and make some $$.




Will be interesting to see what happens. Almost certainly FMG will retain a substantial investment in the companies. If they do spin them off they automatically capitalise of that shareholder value while retaining an ongoing dividend return.

I suspect Twiggy will want to ensure the various arms of FFI are symbiotic in terms of supporting each others objectives.  For example a strong renewable energy company would supply FMG with power for it's mining operations as a start and then branch out to external markets.

My guess is that Twiggy would be making a big plan for substantial super fund investments in his little family.  It would be based on the strong shareholders returns currently earned by FMG and the opportunity to do some genuine nation building. The fact that FMG will be fronting a minimum of $500M a year in development capital and will be the earliest market for output is an attractive bait.

I think with this vision and  the current flood of  investment funds and opportunities  FMG and its subs will be a completely new ball game in 10 years.


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## sptrawler (18 March 2021)

basilio said:


> It seems Twiggy believes that in time it's green hydrogen/renewable energy/green steel businesses will outstrip the iron ore  components!!
> 
> 
> 
> ...



I'm sure it will, two reasons, the growth in demand for fossil fuel alternatives and China diversifying its supply chain for iron ore.
Twiggy is trying to make FMG into another WES, which isn't a bad thing IMO.


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## basilio (19 March 2021)

FMG announced a 10 year $1.5B bond issue at 4.58% interest. Apparently they were swamped.

So if they decided to invest in their own shares they could get a yield of 13% and pocket the remaining 8.42% interest as pure profit.  

Have to say at current prices it looks remarkably cheap. Iron Ore prices are still over the top and the spare capital, experience and drive to invest in  huge renewable energy projects looks unbeatable. I am surprised that the  overall market is taking a breather at the moment.


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## over9k (19 March 2021)

basilio said:


> FMG announced a 10 year $1.5B bond issue at 4.58% interest. Apparently they were swamped.
> 
> So if they decided to invest in their own shares they could get a yield of 13% and pocket the remaining 8.42% interest as pure profit.
> 
> Have to say at current prices it looks remarkably cheap. Iron Ore prices are still over the top and the spare capital, experience and drive to invest in  huge renewable energy projects looks unbeatable. I am surprised that the  overall market is taking a breather at the moment.



Unless they aren't expecting profits to remain this high...


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## Value Collector (20 March 2021)

basilio said:


> FMG announced a 10 year $1.5B bond issue at 4.58% interest. Apparently they were swamped.
> 
> So if they decided to invest in their own shares they could get a yield of 13% and pocket the remaining 8.42% interest as pure profit.
> 
> Have to say at current prices it looks remarkably cheap. Iron Ore prices are still over the top and the spare capital, experience and drive to invest in  huge renewable energy projects looks unbeatable. I am surprised that the  overall market is taking a breather at the moment.




At these interest rates it is definitely cheaper to pay bond interest rather than share dividends, so it makes sense to buy back stock.

$750 Million of the funds is earmarked to repay the 2022 bonds though, who knows what they will do with the rest, but back makes sense though.


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## over9k (20 March 2021)

Hence my suspicion. Why loan it at such a discounted rate if the dividend yield is so comparably high? It implies a massive risk premium to the stock itself.


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## Value Collector (20 March 2021)

over9k said:


> Hence my suspicion. Why loan it at such a discounted rate if the dividend yield is so comparably high? It implies a massive risk premium to the stock itself.



What do you mean? the stronger the company the lower the bond interest rates will be, not higher. Bond interest rates do not go up as a company gets more profitable, they go down.

When a company sells bonds, the buyers of those bonds will judge the strength of the companies earnings. The stronger and more durable those earnings are the more likely they are to be able to repay those bonds when they come due.

The lower the risk of the bonds, the more institutions will bid for them which lowers their interest rate.

for example when FMG was seen as a risky company 10 years ago, their bonds sold at 10% yields, now it’s less than 5%.


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## joeno (20 March 2021)

basilio said:


> FMG announced a 10 year $1.5B bond issue at 4.58% interest. Apparently they were swamped.



Good. It's the responsible way of getting funded rather than diluting shares with a new offering. Good for FMG, good for the shareholders, and bond holders too. 

Looking forward to how FMG's green energy expansion plans unfold this decade. If it's a bust then it's a bust. I've already received in dividends from Fortescue MANY times more than the price i paid for the shares. Hope we will succeed and be heading towards $200B+ valuation


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## over9k (20 March 2021)

Value Collector said:


> What do you mean? the stronger the company the lower the bond interest rates will be, not higher. Bond interest rates do not go up as a company gets more profitable, they go down.
> 
> When a company sells bonds, the buyers of those bonds will judge the strength of the companies earnings. The stronger and more durable those earnings are the more likely they are to be able to repay those bonds when they come due.
> 
> ...



Which only increases the opportunity cost when you compare it to dividends. 

Why would I loan money to the company at 4.58% if I was confident I could get 11.7% dividend yield by just buying the stock? 

Either one of these things has been mispriced, or the market isn't actually confident of the 11.7% continuing.


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## Value Collector (20 March 2021)

over9k said:


> Which only increases the opportunity cost when you compare it to dividends.
> 
> Why would I loan money to the company at 4.58% if I was confident I could get 11.7% dividend yield by just buying the stock?
> 
> Either one of these things has been mispriced, or the market isn't actually confident of the 11.7% continuing.



It just comes back to risk vs reward.

You lean towards bonds when you put safety of principle as a priority over maximising potential returns.

bond holders have a senior position over shareholders when it comes to income and capital, e.g Take Sydney airport as an example, right now dividends are suspended, but bond holder interest is still being paid, if the airport goes bust all bond holders must receive 100% of their investment back before shareholders receive anything.

There are all sorts of institutions and people that are in certain situations where bonds make sense over shares.

take an insurance company for example that has to pay a group of people disabled in accidents for the rest of their life a fixed amount, the most important thing to them is having safety of the principle they have set aside to make those payments and the steady reliable uninterrupted  income.

however ofcourse shares on average earn more, but they will fluctuate in value and income more, so they appeal to people and institutions that can ride out the ups and downs, and be paid to accept a bit more risk.

both bonds and shares are valuable to a companies capital structure, and both appeal to different groups of long term owners.


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## over9k (20 March 2021)

I'm aware of all of this and you're echoing my point - if FMG's profits were rock solid/of a high confidence, why would you invest in a bond? This goes doubly so when the company is going to use the money to just buy its own stock back. The company's making literal free money at that point and doing it at your expense. 

As I said previously, either something is mispriced, or there's a risk I'm not aware of.


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## Value Collector (21 March 2021)

over9k said:


> I'm aware of all of this and you're echoing my point - if FMG's profits were rock solid/of a high confidence, *why would you invest in a bond?* This goes doubly so when the company is going to use the money to just buy its own stock back. The company's making literal free money at that point and doing it at your expense.
> 
> As I said previously, either something is mispriced, or there's a risk I'm not aware of.



Are you asking why I would invest in FMG bonds? The answer to that is simply that I don’t, I own FMG equity / shares.

But regardless of how strong the equity position is, the Bond will always be safer, share holders assets are a literal buffer for the bond holders assets.

As I explained earlier it’s situational, some investors value safety of principle over higher returns... I’m not sure why you struggle to understand that.

there is actually sometimes negative bond interest rates on some government bonds, where people are basically saying they are happy to give $100 to the government if they can be sure to get paid $99 in the future, compared to that a 5% FMG bond is very profitable.


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## over9k (21 March 2021)

I understand the principles completely, hence why I think what they're doing is idiocy. They're sacrificing a massive amount of return for a tiny, tiny bit of risk difference. 

So either they're idiots, or there's a risk I'm not aware of.


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## Value Collector (21 March 2021)

over9k said:


> I understand the principles completely, hence why I think what they're doing is idiocy. They're sacrificing a massive amount of return for a tiny, tiny bit of risk difference.
> 
> So either they're idiots, or there's a risk I'm not aware of.



Well the short term risk isn’t tiny, the shares will fluctuate in value and if the Iron ore price drops the dividend and share price can be cut in half, but bonds will continue earning interest, not every one is comfortable with that, even Mr Boggle from the video about index funds you posted in the other thread says at the start of the video he is 50% bonds / 50% equity, and he is one of the guys that understands investing more than just about anyone else.

owning equity is more profitable over the long term, but if you are a elderly retiree you need safety of principle more than you do huge returns, and corporate Bonds are a lot better than bank term deposits.

Think of all the people accepting 0.7% interest on Bank term deposits, I would much rather own a bond portfolio than bank deposits.

——————
in fact if you thought that in the future FMG share price might drop, you could but the bonds now and earn interest at a higher rate than banks, and then when the share price drops you could sell the bonds and buy equity.

this is a strategy Ben graham suggests, moving between 25% bonds 75% when the market is cheap and then moving to 75% bonds 25% shares when the market is getting expensive.


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## basilio (22 March 2021)

FMG share price down steeply again today. Reinforces, perhaps, the security angle of the  bond issue.

At the same time of course if Twiggy thinks the current price is a bargain  FMG can purchase stock and improve the value of the remaining shares. (Of which he currently owns 36%)

Has to some nervous nellies out there. Iron ore prices are still exceptionally high and  the three months  of 2021 FMG earnings will easily surpass the last 3 months of 2020 on iron ore prices


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## over9k (22 March 2021)

It's hard to read into a day (or month) when something's just following the same trend as everything else. I'm going to guess it's jitters over the USA & China meeting in Alaska over the weekend but that's just pure guesswork.


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## basilio (22 March 2021)

over9k said:


> It's hard to read into a day (or month) when something's just following the same trend as everything else. I'm going to guess it's jitters over the USA & China meeting in Alaska over the weekend but that's just pure guesswork.




For the foreseeable future - 12 months min -  China needs iron ore as a basic commodity. Australia is the biggest supplier and Brazil our major competitor is still struggling to meet its production targets. Hard to see a substantial collapse in prices but perhaps a return to the $120-$130 a tonne from late last year ?

Down the track supply  might change. But not quickly.


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## over9k (22 March 2021)

Just buy some BRZU as a hedge if that's your concern.


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## Value Collector (22 March 2021)

basilio said:


> FMG share price down steeply again today. Reinforces, perhaps, the security angle of the  bond issue.
> 
> At the same time of course if Twiggy thinks the current price is a bargain  FMG can purchase stock and improve the value of the remaining shares. (Of which he currently owns 36%)
> 
> ...



Yep, share prices will fluctuate, I continue to hold, FMG is worth a lot more than current share price, but fluctuations should always be expected, especially is stocks that have attracted a large following of speculators and shorters over reacting to each other.


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## basilio (22 March 2021)

One thing I did notice was that 7.6 million shares were sold after COB on Friday .  Someone  big wanted out in a hurry.
There has been heightened sales activity today. Perhaps specs and shorters taking profits or just getting out ?

Of course another possibility is some seriously bad news in the wings.  Have* absolutely no inkling *of such but sometimes heavy selling and big falls precede such announcements.


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## Beaches (22 March 2021)

It all comes down to your view on iron ore prices
There are concerns developing in the market that the price of Iron ore is due for a correction. Thats not to say the price will drop but perception is everything sometimes.

FMG down 4%
CIA was down 11% at one stage today on no news
MGX down 5%


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## Value Collector (22 March 2021)

Beaches said:


> It all comes down to your view on iron ore prices
> There are concerns developing in the market that the price of Iron ore is due for a correction. Thats not to say the price will drop but perception is everything sometimes.
> 
> FMG down 4%
> ...




The thing with FMG is though, it’s already priced as if the Iron Ore price is $90, but we have already been accumulating excess profits for the last 3 months that will count to the next dividend at Iron Ore Prices of $160+.

This has happened before, the market over reacts to a potential down turn in Iron Ore price, mean while FMG has strong earnings in the back ground which create a future upward trend.


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## Value Collector (22 March 2021)

Value Collector said:


> The thing with FMG is though, it’s already priced as if the Iron Ore price is $90, but we have already been accumulating excess profits for the last 3 months that will count to the next dividend at Iron Ore Prices of $160+.
> 
> This has happened before, the market over reacts to a potential down turn in Iron Ore price, mean while FMG has strong earnings in the back ground which create a future upward trend.




What I am trying to say is, FMG was recently $25 and based on the earnings of the first half of this year, that equals a 6.8 PE or in other words a 14% Net profit after tax earnings yield and a 16.8% dividend yield (including franking).

So the high Iron ore price was not priced in, it was already trading as if the price of iron or was going to suffer an immediate fall back to $100 or so.

Now the Iron ore price has come off a bit and that’s rattled the bird cage and the share price has dropped back to $19, which factors in and even lower Iron ore price.

—————————
As I mentioned in the discussion about bonds vs shares, shares earnings and prices fluctuate with a violence that not everyone can stomach, hence why some are attracted to the stability and safety of bonds.

Read through the hot copper FMG thread and you will see how fast people turn from greed to fear on a daily basis some times.

this irrational fear and greed cycle is what causes these wild swings, in my opinion FMG was under valued at $25 and it is even more so undervalued at $19.

unless there is some big nasty news that I am unaware of, there is absolutely no need to panic, FMG is in a strong position and it’s share price is along way from being over valued.


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## basilio (30 March 2021)

It did seem ridiculous for FMG to be dropping to $19 given it's current performance and dividend returns.

Twiggy clearly thought this was a bargain and snapped up 10m shares from March 22-26. Total cost $193.3m
Current value of the 10m shares  is  $208m ..  Total current shareholdings now  1,131,365,000 .  
Never loses sight of  a buck .


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## Value Collector (30 March 2021)

basilio said:


> It did seem ridiculous for FMG to be dropping to $19 given it's current performance and dividend returns.




Yep, when you take the time to run the numbers it does look ridiculously under priced, as I mentioned the share price has never risen to a level that reflects $100+ Iron ore, So I can't see any reason to panic when the Iron ore price drops from $170 to $160. Shareholders should be rejoicing everyday the Iron ore price is higher than $100, whether that is $170, $150, $130 or $110 doesn't really matter, the higher the better obviously, but there is no bubble in the FMG share price, its sitting well below a rational valuation.



> Twiggy clearly thought this was a bargain and snapped up 10m shares from March 22-26. Total cost $193.3m
> Current value of the 10m shares is $208m .. Total current shareholdings now 1,131,365,000 .
> Never loses sight of a buck .



Imagine seeing the dividend from a 1.1 Billion shares hitting your account.


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## sptrawler (30 March 2021)

Value Collector said:


> Imagine seeing the dividend from a 1.1 Billion shares hitting your account.



Let alone the franking credit. 😂


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## Value Collector (30 March 2021)

sptrawler said:


> Let alone the franking credit. 😂



I got my CBA $1.50 dividend today, CBA is $85 per share vs FMG at $20 paying $1.47... Virtually the same dividend, but you can buy 4 Fmg shares for each CBA.

I have no idea why people are worried about FMG being over valued, it profits could be smashed and reduced by 75% and it would still be on par with CBA, but in the mean time you enjoy a cashflow 4 times bigger than CBA.


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## basilio (30 March 2021)

Value Collector said:


> Yep, when you take the time to run the numbers it does look ridiculously under priced, as I mentioned the share price has never risen to a level that reflects $100+ Iron ore, So I can't see any reason to panic when the Iron ore price drops from $170 to $160. Shareholders should be rejoicing everyday the Iron ore price is higher than $100, whether that is $170, $150, $130 or $110 doesn't really matter, the higher the better obviously, but there is no bubble in the FMG share price, its sitting well below a rational valuation.
> 
> 
> *Imagine seeing the dividend from a 1.1 Billion shares hitting your account.*



Indeed ! Roughly  *$1.65 Billion.  *Not so hard to drop a lousy $193M towards buying another 10m shares..

Funny thing is the price went south today. 
Almost as if the announcement that Twiggy was in the market for 10m shares  last week has lessened confidence in the company !!

It is crazy however to see the disparity in  perceived value between FMG and other large companies.


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## over9k (30 March 2021)

Value Collector said:


> I got my CBA $1.50 dividend today, CBA is $85 per share vs FMG at $20 paying $1.47... Virtually the same dividend, but you can buy 4 Fmg shares for each CBA.
> 
> I have no idea why people are worried about FMG being over valued, it profits could be smashed and reduced by 75% and it would still be on par with CBA, but in the mean time you enjoy a cashflow 4 times bigger than CBA.



I've been thinking this for a looooong time.

Does the market know something we don't or??




Related: Anyone know anything about the bond sale that I can't find via google? I just found out today that my grandmother actually has a large sum of money that we didn't know about that has been and still is sitting in a term deposit earning damn near nothing and I would genuinely break the term deposit and loan it to FMG if it's still possible.


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## basilio (30 March 2021)

over9k said:


> I've been thinking this for a looooong time.
> 
> Does the market know something we don't or??
> 
> ...




Done and dusted. Announcement was made on March 19th. Oversubscibed  by $750m
Perhaps worth investing a portion of funds in FMG shares ?


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## joeno (31 March 2021)

If trade relations worsen with China, FMG would likely be last to be hit with some sort of export control or sanction. I believe they see what companies around the world "think of them". FMG has been quite fair, hasn't made any rash accusations or decisions. Instead suing for peace and good business. Anything can happen but as it stands it appears to be undervalued and a great great dividend play 👍

It's at 7PE with 20% growth (higher income growth but we'll ignore that). Assuming all being the same, it should be a 20/20 company quite easily. So 200% upside.


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## over9k (31 March 2021)

basilio said:


> Indeed ! Roughly  *$1.65 Billion.  *Not so hard to drop a lousy $193M towards buying another 10m shares..
> 
> Funny thing is the price went south today.
> Almost as if the announcement that Twiggy was in the market for 10m shares  last week has lessened confidence in the company !!
> ...



Preaching to the choir here. 

Again, the question is why.


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## Value Collector (31 March 2021)

over9k said:


> I've been thinking this for a looooong time.
> 
> Does the market know something we don't or??




Maybe the market knows something, but I don't think so. I think the market is just over reacting to the possibility of an Iron Ore price down turn, and how that would affect profitability, So they haven't been willing to bid up the share price to the point that the share price would match current earnings and dividends.

I think the market is correct in believing that the Iron ore price won't be at the current level forever, but I also think they are making a misjudgment about where it will eventually settle and how profitable FMG will be at that level.

Also, a large portion of the markets daily trading volume is from traders that have the idea that they would want to exit if the share price was going to drop by 20%, this causes volatility and wild swings in share prices that can cause strong negative feedback loops especially in companies like FMG, I think this is what caused the recent fall from $25 level to $19, as a longterm holder you can just sit back and ignore that type of thing, and only pay attention when you plan to take advantage of those swings, a bit like Twiggy forrest did recently.



> Related: Anyone know anything about the bond sale that I can't find via google? I just found out today that my grandmother actually has a large sum of money that we didn't know about that has been and still is sitting in a term deposit earning damn near nothing and I would genuinely break the term deposit and loan it to FMG if it's still possible.




I have never bought bonds directly, but I believe they would be traded on market probably in the USA, maybe have a chat to an international broker that deals in bonds, but given that they are denominated in US dollars there is also exchange rate risk which would need to be hedged out, so they may not be suited for your Grandma.

There are bond funds and bonds ETF's that might suit her though if she is looking for something better than Term Deposit, perhaps even something like "Plenti" would be good to park some of her cash in, I use Plenti for amounts I know I need to hold for 3-5 years such as the rolling reserve I keep for Taxes, My wage and Options premiums etc,


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## Value Collector (31 March 2021)

joeno said:


> If trade relations worsen with China, FMG would likely be last to be hit with some sort of export control or sanction. I believe they see what companies around the world "think of them". FMG has been quite fair, hasn't made any rash accusations or decisions. Instead suing for peace and good business. Anything can happen but as it stands it appears to be undervalued and a great great dividend play 👍
> 
> It's at 7PE with 20% growth (higher income growth but we'll ignore that). Assuming all being the same, it should be a 20/20 company quite easily. So 200% upside.




Yep, I am seeing very limited down side risk, as I said earning could drop 75% and the current share price would still be justified, while if these earnings continue at this level or even 50% of this level, then there will be above market dividends in the pipe and potential for an eventual big move upwards in share price.

I sleep easy every night knowing those three ship loaders at our port are filling ships round the clock and every 10 hours another load of Ore is on its way to market, and that each ship will earn me about $670 of dividends at current prices. It's much better than counting sheep to get to sleep hahaha.


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## basilio (31 March 2021)

Always interesting to read the tea leaves. This article notes the  current record value and volume of Australia iron ore sales to China.  (Yeaaah..) Also points out the Chinese/Rio push into Guinea iron ore is at least 6 years away from full production and then will only represent 15-20% of the current Australian output.

Also it seems industrial activity in China is still very strong and  iron ore prices are not coming  off their current very high levels.









						Australia sees record $104bn of iron ore exports this financial year
					

The country’s most valuable economic export is expected to earn more than A$100 billion per year for the next half-decade.




					www.mining.com
				











						Iron ore prices jump on strong industrial activity in China
					

China's industrial profit surged 179% in the first two months from the year-ago period.




					www.mining.com


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## Value Collector (31 March 2021)

basilio said:


> Also points out the Chinese/Rio push into Guinea iron ore is at least 6 years away from full production and then will only represent 15-20% of the current Australian output.



Not to mention that in 6 years, the global economy will be bigger and more productive and consuming more steel, and will probably absorb that supply easily.


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## basilio (25 April 2021)

Came across this transcript of the an investor briefing on FMG last 6 months results and future activity.

Investor and Analyst Call transcript - Fortescue Metals Group​https://www.fmgl.com.au › docs › announcements

PDF
18 Feb 2021 — statement today regarding the Iron Bridge _project_, however I will first focus on the half ... is a significant milestone for the development of our _iron ore_ ... it's been done on the relativity between 67% or _65_% Fe and working in an.


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## joeno (26 April 2021)

Inflation is coming. Looks like we'll be seeing a surge in Chinese manufacturing as evident from a staggering 18% annualised GDP growth in Q1. We should see commodities continue the hike up particularly iron and oil.

+ a lot of uncertainty with Vale. Brazilian government is highly dysfunctional and a huge political risk. Good for Aussie miners.


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## basilio (29 April 2021)

Quarterly production report is out. Excellent results. Production still climbing (with new mine coming online). Profits rise even more sharply than the previous reports because iron ore prices still increasing.

Nonetheless opening price has fallen 2%.  

    29/04/2021 
8:43 am

               March 2021 Quarterly Production Report 


 336KB


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## systematic (30 April 2021)

I really, really want to stay in but (sad to say) I think I’m going to be out of it this week. Not due to anything wrong, just Other opportunities taking priority. I need a good excuse to system override!


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## over9k (1 May 2021)

https://www.smh.com.au/business/com...na-s-steel-mills-run-hot-20210428-p57n2i.html 

Don't go jumping the gun. Systems won't tell you everything.


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## Value Collector (4 May 2021)

Value Collector said:


> Yes, very good results in the last quarter.
> 
> Of particular interest is the fact that these great results are for the quarter ending ending 30th June, and are based on an average Iron Ore price of $93.30 for the quarter, However the Iron Ore price is currently about $110, so for the current period we are logging results that are even better than in this report.
> 
> ...




Update on this, My hunch was correct, The CEO Elizabeth Gaines has confirmed that since Eliwana was first announced as a replacement project for the Firetail mine, more ore bodies around Firetail have been discovered, so production will be continuing at firetail for a while creating a significant over lap between fire tail and eliwana, this will result in higher volumes while this continues.

The future production guidance will be released in June after they have assessed what the mining plan for these additional ore bodies will be, earlier in the year FMG applied for and was approved a larger shipping quoter at the port, I assumed this was for the Iron bridge project that is some time away, but perhaps they raised the shipping quoter to allow the additional production from the combined production of eliwana.

Depending on the mine plan this might raise production to 200 Million tonnes next financial year, up from around 180 current forecast.


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## Value Collector (4 May 2021)

systematic said:


> I really, really want to stay in but (sad to say) I think I’m going to be out of it this week. Not due to anything wrong, just Other opportunities taking priority. I need a good excuse to system override!



Would it help if I said this could be $30 by the end of August


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## systematic (4 May 2021)

Value Collector said:


> Would it help if I said this could be $30 by the end of August




Ha, ha!  Yes, that may well sway me!


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## basilio (4 May 2021)

systematic said:


> Ha, ha!  Yes, that may well sway me!




Systematic if you can find another investment that offers a better value value proposition than FMG at the moment then let us in on the deal. .
Frankly I think everyone  on FMG at the moment are making out like bandits. And it has a ridiculously low PE ratio to boot.


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## basilio (4 May 2021)

Value Collector said:


> Depending on the mine plan this might raise production to 200 Million tonnes next financial year, up from around 180 current forecast.




That will make a very big difference to their profits given the current high prices.


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## over9k (4 May 2021)

Markets are starting to get very concerned with china's baby bust though (finally).


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## Gunnerguy (4 May 2021)

Added some FMG today.
May use some for covered calls in the future


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## systematic (7 May 2021)

I'm out 

I guess finding a reason to override was never going to work...I'm just a 🤖 

Between FMG (21 months) and CIA (19 months) I was >30% of portfolio in iron ore...and that's after offloading another iron ore play at the end of last year. So, I was pretty well weighed down with it all 

I've still got CIA so I'll go see if anyone is on that thread. Long may FMG prosper 🍻


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## Gunnerguy (9 May 2021)

Dear All,

(Posted in the Options Thread also).

Having re read my financial modelling text book and watched several UTube videos on Options trading over the last couple of weeks I am now getting ready to get started with my first Options trade. I hope to place my first trade this week.

Starting simple I plan to place a covered call on a portion of the FMG shares that I hold. I thought I would post my planned trade here in order to see if anyone can see any glaring issues or have any advice on the trade.

*Background*.

I hold FMG shares purchased on 4th May at an average cost of $22.53. I hold more shares than the shares in the options contract I plan to trade.

*The Trade*.

Sell 10 contracts (1,000 shares) of a 17th June FMG call with XP of $24.76. The XP is 7.8% above current SP as on 7th May. 1,000 shares from my account will be ‘held’ as collateral for the trade. The premium is $0.470 ($470) per contract and the contract fee is $35. Total received premium will be $470 - $35 = $435.

*Possible outcomes.*

1. If FMG SP remains below $24.76 up to 17th June the Option will expire and my gain is $435.

2 If FMG SP rises above $24.76 the option will be executed by the purchaser. My shares held as collateral will be sold. At the XP of $24.76, there would be a gain of 9.9% above my original purchase (4th May) cost of the shares ( (24.76-22.53)/22.53 ), plus a share trading fee.

*Other thoughts.*

I want to hold FMG long term, however I also want to see if I can get some ‘income’ from holding them, in addition to the possible healthy dividend. If the SP rises to $24.76, I am happy to sell and get a gain of 9.9% over the 4 weeks.

I am cognisant that the results and dividend will be announced in Mid/End August so I want to complete the trade before then.

I believe, but not sure, that if the contract expires and is not executed, the premium received will be considered ordinary and assessable income for tax purposes. It is not considered a Capital Gain. If the contract is executed then the proceeds, and costs, and premium are all included in the Capital Gain calculation with no 12 month 50% discount.

Any advice or critical comments would be welcomed. Thanks.

Gunnerguy.


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## over9k (9 May 2021)

Unfortunately it's not actually possible for us to _advise _you what to do gunnerguy as it's not technically legal to do that without being a legally qualified financial advisor. 

What I will ask is how you got to these particular numbers and what makes you think you're going to be able to sell the contracts at these prices/strike/expiry date?

I also think some of your calculations are off as 0.47x100=$47. 


I presume you mean you want to sell options for a $4.70 premium with a $24.76 strike price and expiry of the 17th of june?


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## Garpal Gumnut (9 May 2021)

Gunnerguy said:


> Dear All,
> 
> (Posted in the Options Thread also).
> 
> ...



Have you done any paper trading yet?

gg


----------



## Gunnerguy (9 May 2021)

over9k said:


> Unfortunately it's not actually possible for us to _advise _you what to do gunnerguy as it's not technically legal to do that without being a legally qualified financial advisor.
> 
> What I will ask is how you got to these particular numbers and what makes you think you're going to be able to sell the contracts at these prices/strike/expiry date?
> 
> ...



Over9k
Thank you for your comments. I guess my wording was incorrect. Being a Master in Financial Planing graduate myself I am not looking for advice. I know the rules better than most. I am simply wanting any experienced option traders, if interested, to critically assess that my baseline assumptions/calculations are correct and if possible to politely comment.
As explained, maybe not clearly enough, I am looking to sell 10 call contracts (each contract is for the standard 100 shares) at a premium of $0.47. 10 contracts = 1,000 shares, thus 1,000 x $0.47 = $470 premium. I think that is correct or am I missing something Over9K ?
The premium is from the commsec options series available online for COB on Friday. Yes the prices will change in Monday.
I already have an options trading account and the premiums and option series and dates are taken from current market data.
For balance, if you have traded options Over9k I would welcome further comments.
For those who have experience in options trading, I welcome any comments.
Gunnerguy.


----------



## Gunnerguy (9 May 2021)

Garpal Gumnut said:


> Have you done any paper trading yet?
> 
> gg



Garpal
No paper trading in options, however 27 years of monthly/quarterly share trading across multiple International markets. Retired as a result of successful share portfolio management and trading but trying to have some fun and get more income from assets that I already hold.
I’ve done many years of financial modelling but avoided options due to their cost of trading. Now that my share holdings are large enough the cost of option trading is insignificant.
And I want to learn more and grow my knowledge.
Gunnerguy.


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## Value Collector (9 May 2021)

Gunnerguy said:


> Dear All,
> 
> (Posted in the Options Thread also).
> 
> ...



That strategy is perfectly valid if that’s the position you want to take, although as over9k pointed out your original post said $470 per contract which is wrong, it’s $470 in total for all 10 contracts, $47 per contract.

The main thing that you should be thinking about in my opinion is whether this is the best way to get cash out of holding FMG, I mean is $0.47 enough compensation for potentially missing a big upsurge + a $2 dividend in 4 months or so?

—————

The way I look at it is, you are getting paid $0.35 per month for this contract, which is an 18% return per year if you are able to just keep selling contracts at the level, add to that the dividend if you don’t get exercised before the end of August and you are earning a very healthy return.

but you are exposed to two risks,

1, the share price drops and the dividend is cut, meaning your income stream dries up and some of your capital is lost.

2, the share price rockets higher and it turns out the initial $0.47 premium is dwarfed by the capital gain and dividends you would have received if you had just taken a standard buy and hold.

accepting the $0.47 is the lower risk option, because even if scenario 1 happens you have at least extracted an additional $0.47 out of the deal before the price collapsed, so had less money on the table.

But only you can decide if “de-risking” your position by $0.47 / share is worth the opportunity cost of limiting your upside potential.

If all you really want is the $2 capital gain, and want to de-risk your position by $0.35 per month if that gain doesn’t arrive, sell the call.

but if you really want to hold FMG as a dividend payer with a big upside, don’t sell the call.


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## over9k (9 May 2021)

Gunnerguy said:


> Over9k
> Thank you for your comments. I guess my wording was incorrect. Being a Master in Financial Planing graduate myself I am not looking for advice. I know the rules better than most. I am simply wanting any experienced option traders, if interested, to critically assess that my baseline assumptions/calculations are correct and if possible to politely comment.
> As explained, maybe not clearly enough, I am looking to sell 10 call contracts (each contract is for the standard 100 shares) at a premium of $0.47. 10 contracts = 1,000 shares, thus 1,000 x $0.47 = $470 premium. I think that is correct or am I missing something Over9K ?
> The premium is from the commsec options series available online for COB on Friday. Yes the prices will change in Monday.
> ...



Your wording in the post says "$470 per contract" but that would be $4.70 per option, not $0.47, hence my confusion? 

I've never sold an option (and probably never will), only ever bought.


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## Sharkman (10 May 2021)

i don't have a lot of experience trading _FMG_ options so i can't really comment on the specific option series you are targeting, however i noticed a couple of things in your post that you need to be aware of.

firstly the June options have a contract size of 107, not 100. it's a good idea to always check anyway (don't assume the contract size is always 100!), but when the strikes in a particular chain go to weird prices (eg. 24.76, 25.22 etc. instead of 24.50, 25.00), usually the contract size goes to a non-standard number as well. if you happen to have more than 1,070 units to collateralise then it'll probably be nothing more than a nuisance that results in odd lots if assigned, but in a situation where you're looking to write covered calls over your entire holding and you assume it's 100, it could be a bit more serious as a fraction of those calls will be naked.

secondly it looks like you are basing your estimated premium off the last traded price. unlike stocks, for options the last traded price usually doesn't mean much, unless the last trade was literally in the last few minutes or so (and even then it might be quite irrelevant in a fast moving market). otherwise it doesn't indicate what price underlying was at when those options were traded, if the trade was from days ago it would have had more time value etc.

you need to check the spread the market makers are showing the market when it's in session to get a proper idea of the estimated premium. for eg. the Jun 24.76 calls are showing 0.70/1.00 as i type this (because the underlying has rallied strongly today so the delta is probably considerably higher than what it was when those options were traded at 0.47) but the last traded price is still showing as 0.47. if you're looking for something that's ~10% OTM to keep the delta consistent with what you were looking at before, you would now have to look at the Jun 26.59 calls, and those are currently trading at 0.25/0.40, not 0.47.


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## Gunnerguy (10 May 2021)

Value Collector said:


> That strategy is perfectly valid if that’s the position you want to take, although as over9k pointed out your original post said $470 per contract which is wrong, it’s $470 in total for all 10 contracts, $47 per contract.
> 
> The main thing that you should be thinking about in my opinion is whether this is the best way to get cash out of holding FMG, I mean is $0.47 enough compensation for potentially missing a big upsurge + a $2 dividend in 4 months or so?
> 
> ...





Value Collector,

Thank you very much for your post & comments. This is exactly what I was looking for and what I think is/should be one of the primary purposes of the ASF. In response to your valid comments here are my further comments/explanations.

In my original post my costing of the contracts premium was actually correct, however it was the grammar I used that was incorrect. The four hundred and seventy dollars written in the brackets, ($470), should have been entered later in the sentence, or probably omitted to avoid confusion to the readers.

‘The premium is $0.470 ($470) per contract and the contract fee is $35. Total received premium will be $470 - $35 = $435.’

The premium is $0.470 per contract and the contract fee is $35 . The premium for 10 contracts is $470, less the fee ($35) and thus the total received for the sale of 10 contracts (covering 1,000) shares is $435.

‘The way I look at it is, you are getting paid $0.35 per month for this contract, which is an 18% return per year if you are able to just keep selling contracts at the level, add to that the dividend if you don’t get exercised before the end of August and you are earning a very healthy return’

This is exactly what I am trying to achieve. I hope to sell contracts monthly at this level in several companies I hold and do likewise from Ms. Gunnerguy’s holdings. I am potentially looking at one trade a month, in up to 4 companies, for each of me and Ms Gunnerguy. This is 2 trades a week in total (I am retired so I have time). That would be a nice income. Thus, I am only testing it with a ’portion’ or my FMG holding to see if my maths are correct and the strategy works.

Risks.

1. If dividend is cut and share price drops, I should be selling all my FMG shares, however I hope this doesn’t occur. If it does, I could probably still manage to get some premium income from selling covered calls. Maybe a smaller income, but at least something and wait for the recovery or the take over offer on FMG..

2. I fully understand that I am potentially exposed to losing out on some long term gain for FMG. This only really applies to the possible share price gain. I can always buy back just for the dividend if I really want. It depends on the dividend, as yet unknown. However as discussed I am only selling 10 contracts that cover 1,000 shares in FMG. This is ‘only a portion’ of my current FMG holding. I don’t want to say more. Thus I am only ‘limiting an upside’ on a portion of my total holdings. In addition gaining 10% for a 4 week holding for me I consider good. Also this option contract expiration date is 17 June, in 4 weeks or so, well before the dividend is announced in August.

I am keeping the rest (majority) of my FMG holding for the potential capital gain.

‘but if you really want to hold FMG as a dividend payer with a big upside, don’t sell the call.’

I am holding FMG as a dividend payer and long term capital gain, but I am trying to test a strategy to gain additional income from the assets I currently already hold. I have to choose a share from those that I already hold in order to test my attempted income gain from selling covered calls. I have to start somewhere and with selling a call that is 9% above the current SP, valid for 4 weeks, is, I agree, a risk but I think 9% is a long way from the current price to rise within 4 weeks. I will be astonished if FMG rise by 9% in the next 4 weeks, but also happy.

Again Value Collector, thank you for your comments, and questions.

Gunnerguy.


Sharkman said:


> i don't have a lot of experience trading _FMG_ options so i can't really comment on the specific option series you are targeting, however i noticed a couple of things in your post that you need to be aware of.
> 
> firstly the June options have a contract size of 107, not 100. it's a good idea to always check anyway (don't assume the contract size is always 100!), but when the strikes in a particular chain go to weird prices (eg. 24.76, 25.22 etc. instead of 24.50, 25.00), usually the contract size goes to a non-standard number as well. if you happen to have more than 1,070 units to collateralise then it'll probably be nothing more than a nuisance that results in odd lots if assigned, but in a situation where you're looking to write covered calls over your entire holding and you assume it's 100, it could be a bit more serious as a fraction of those calls will be naked.
> 
> ...



Sharkman,
Thanks for your post !
Big gain of 6.6% move at opening today. Options reflect this.

1. Thanks for the heads up if contract size 100/107. I agree that it’s the non standard strike prices I have to keep and eye on the contract size.

2. I understand about the prices and spread. Some ‘last trade prices’ are 2,3,4 weeks old. When I set up a trade I look at the current spread and the latest trade prices generally in the last couple of hours.

With the gain today I would obviously move my strike price higher if I proceed.
Thanks for the heads up and comments. A great help !!

Gunnerguy


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## Value Collector (10 May 2021)

Gunnerguy said:


> but I think 9% is a long way from the current price to rise within 4 weeks. I will be astonished if FMG rise by 9% in the next 4 weeks, but also happy.
> 
> Again Value Collector, thank you for your comments, and questions.



Its up 6% this morning in 3 hours.

I do understand your strategy, and have applied this to some FMG holdings at various stages over the last few years, each time I have regretted it.

I believe this strategy will work best for shares that are already sitting at about their fair value or are slightly over valued, trying it on a stock that is significantly undervalued is a gamble in my opinion if you are trying to get longterm income, but I guess that just comes down to your valuation.

I actually wasn't joking when I mentioned to Systematic a few posts ago that FMG could be at $30 by the end of August, off course I can't predict where the market will go or what the Chinese will do, but it is my sincere belief that FMG will hit $30 in the no to distant future.


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## Gunnerguy (10 May 2021)

Value Collector said:


> Its up 6% this morning in 3 hours.
> 
> I do understand your strategy, and have applied this to some FMG holdings at various stages over the last few years, each time I have regretted it.
> 
> ...



Value Collector,
Yes I can see in the current environment, posts, media, etc that commodities are still on a run. $30 is easily plausible, and more. As we know the market is a combination of all participants and their valuations. I am a long term holder in the current market, just trying to squeeze a few extra bucks. 
Big movements like today make life interesting.
I remember the last commodities boom, and then the decline. If we get a nice run for a year or two it would be nice but there are always risks, China, geopolitics, and Covid resulting in volatility.
Thanks for your comments.
Gunnerguy


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## over9k (10 May 2021)

7% run today


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## Value Collector (10 May 2021)

Gunnerguy said:


> Value Collector,
> Yes I can see in the current environment, posts, media, etc that commodities are still on a run. $30 is easily plausible, and more. As we know the market is a combination of all participants and their valuations. I am a long term holder in the current market, just trying to squeeze a few extra bucks.
> Big movements like today make life interesting.
> I remember the last commodities boom, and then the decline. If we get a nice run for a year or two it would be nice but there are always risks, China, geopolitics, and Covid resulting in volatility.
> ...



Have considered selling puts rather than calls?


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## joeno (10 May 2021)

FMG is still at extremely cheap valuation. It is a company that is perceived to depend on the Chinese markets. (obv not true in the long term but still that is the perception). Chinese stocks & market is currently not doing well even though fundamentals are still strong.

From a technicals perspective, we're seeing a pretty distinct floor at around $20 from which now it has bounced up from. A lot of other stocks have either kept shooting up or crashed down continuously (tech stocks) in the last 2 months.

 I suspect once sentiment increases again and the stock market start to properly rotating towards value stocks - we will stabilize at over $30 like we did at the $10 and $20 price points in the last year and a half


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## over9k (10 May 2021)

They'll pivot over to india long term. I have no idea how much india is self-reliant for minerals but that'll be the next play (and a much more secure one at that). 

They aren't stupid.


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## basilio (10 May 2021)

It's intriguing to see the absolute 180 degree turn in "analysts assessment" of FMG.

I'm sure it was a only a few months back (if that long)  that the predictions for FMG future earnings peaked in 2020 and then sharply dropped.  It seemed to be the rationale behind analysts steadfastly refusing to believe the  sharply increased iron ore prices from 2020 onwards  were more than a transitory bubble.  I clearly remember in 2020 major investment groups were saying FMG was way overvalued at $13-16 and suggested $7.70 as a more realistic  figure.

Check out my post 3001 from August 25th 2020 as the prime example.

I recall that even at the time this seemed a totally unreasonable assessment. (and no one in this thread believed it either..)

Now the projections for FMG in 2021/2 on my Westpac look like this.


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## over9k (10 May 2021)

All that means is that the banks have taken out different positions on it themselves. 

If the analysis from your broker you're getting is free (and it appears to be) then it's because they WANT you to see it. 

Remember, if the product's free, YOU'RE the product.


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## Sharkman (10 May 2021)

a couple of other things that might be useful to consider, in terms of how you're planning on running the position. not so much for the specific trade you've described, but more for covered calls in general.

closing out (buying back) the calls early if they drop to a certain level in terms of the premium originally collected. short calls are a limited reward trade, so if the market gives you a chance to buy back the calls for say 20% of what you originally sold them for, that means you've already collected 80% of the max profit, if you want it. are you comfortable putting that at risk by holding on to try and squeeze out the last 20%, or would you rather take the sure 80% and run?

20% of the original premium is the level that i'll generally close out limited reward positions at, but you don't have to use 20%, some people use 10%, some use 50%. or you could just let it run to expiry no matter what, there's no definitive answer here, it essentially boils down to personal taste. letting it run to expiry probably makes the most sense for your trade, given the high brokerage you're paying, but once you start trading thru a serious options broker like IB that only charges 17c a contract, incurring the extra transaction for closing out early becomes a lot more viable.

secondly, if it does happen to move ITM, what do you plan to do? you could simply let the stock get called away. if you want to protect the stock position eg. to avoid triggering CGT, you may have to buy back the calls (potentially at a loss) on or before expiry. but another alternative which i've generally found quite useful (though it does have its downsides, like everything) is to roll up & out. this involves entering into a combo to buy back the ITM calls and simultaneously sell the same number of calls with a higher strike and a further out expiry. this is where the weird lot sizes can become a real nuisance, if you're short 107 lot size contracts and you want to roll to 100 lot size contracts for eg.

depending on the expiry and strike selected, you might be able to do that at zero cost or even take in a small credit. it protects your stock position for a while longer and allows the stock a bit more room to appreciate. if the stock then pulls back or even if it rises slowly, the new options could expire worthless and you've gotten out of your short call obligations with decent gains (mostly from the original calls). but if the stock continues rallying sharply during the new option's lifetime, the rolled options themselves are going to wind up deep in the red too. and it ties up your collateral for minimal yield (even if you roll for small credit that will be nowhere near the premium collected for the original calls). so it's not an automatic go-to strategy by any means.


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## basilio (10 May 2021)

over9k said:


> All that means is that the banks have taken out different positions on it themselves.
> 
> If the analysis from your broker you're getting is free (and it appears to be) then it's because they WANT you to see it.
> 
> Remember, if the product's free, YOU'RE the product.




I think your being a bit simplistic here Over9k. Last year I took a keen interest in FMG after noting the VC's long term observations of the share and how FMG operated. At the time I  also checked a number of different analysts POV and frankly most catergorised it as overvalued .  The most pessimistic  view was the one I highlighted in post 3001 last August.   I was making an observation about the quality (?) of so called investment analysts.

By the way I'm not sure that Indian iron ore will be the alternative for  China.  I suspect conflicting political views will rule that out. I understand China is trying to develop some big mines in Africa to provide cheaper alternatives to the  current suppliers. But  it seems these options are at least 5 years away.


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## joeno (10 May 2021)

basilio said:


> It's intriguing to see the absolute 180 degree turn in "analysts assessment" of FMG.




Analyst assessments are bogus from my experience. If everyone's shouting doom it's likely already baked in to the current share price, which means it's even more of a steal.

Also Aussie Big 4 don't hold near the same level of clout that they think they do as international banking institutions.


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## Gunnerguy (10 May 2021)

Sharkman said:


> a couple of other things that might be useful to consider, in terms of how you're planning on running the position. not so much for the specific trade you've described, but more for covered calls in general.
> 
> closing out (buying back) the calls early if they drop to a certain level in terms of the premium originally collected. short calls are a limited reward trade, so if the market gives you a chance to buy back the calls for say 20% of what you originally sold them for, that means you've already collected 80% of the max profit, if you want it. are you comfortable putting that at risk by holding on to try and squeeze out the last 20%, or would you rather take the sure 80% and run?
> 
> ...



Sharkman.
Amazing !! Thanks for your ideas. True sharing of ideas to a novice like me. I really appreciate it.
I am taking a close look at IB.
I looked at options many years ago and the cost of trading just didn’t make it worth my while. Now I have years in the market(s), more patience, less emotions, and larger assets/funds to use I am really looking closely at using options as a third stream of returns. The first two being capital growth and dividend income.
This has really helped me understand and learn the nuances of options trading. Thanks.
Gunnerguy.


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## over9k (10 May 2021)

basilio said:


> I think your being a bit simplistic here Over9k. Last year I took a keen interest in FMG after noting the VC's long term observations of the share and how FMG operated. At the time I  also checked a number of different analysts POV and frankly most catergorised it as overvalued .  The most pessimistic  view was the one I highlighted in post 3001 last August.   I was making an observation about the quality (?) of so called investment analysts.
> 
> By the way I'm not sure that Indian iron ore will be the alternative for  China.  I suspect conflicting political views will rule that out. I understand China is trying to develop some big mines in Africa to provide cheaper alternatives to the  current suppliers. But  it seems these options are at least 5 years away.



Oh I didn't think you were talking on that kind of timeline - I just thought you meant the peaks/troughs over the past few months.

Reference india - I meant that FMG will export to india if chinese demand falls.


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## Value Collector (10 May 2021)

Sharkman said:


> a couple of other things that might be useful to consider, in terms of how you're planning on running the position. not so much for the specific trade you've described, but more for covered calls in general.
> 
> closing out (buying back) the calls early if they drop to a certain level in terms of the premium originally collected. short calls are a limited reward trade, so if the market gives you a chance to buy back the calls for say 20% of what you originally sold them for, that means you've already collected 80% of the max profit, if you want it. are you comfortable putting that at risk by holding on to try and squeeze out the last 20%, or would you rather take the sure 80% and run?
> 
> ...




The FMG December contracts are also 107, so they can be used to roll out to, or you can do the roll as two separate legs instead of the combo and just adjust the amount of contracts in each leg to get to roughly the same exposure.

I have used the rolling out and down strategy selling FMG puts with great affect for the last 8 years or so, I have sold huge amounts of puts that have expired worthless, roll out and down most of the others, and built a large portfolio of shares from the contracts that got exercised, using dividends and options premiums to buy the stock.


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## Value Collector (10 May 2021)

Value Collector said:


> The way I value a company like FMG is to look at the cashflows and dividends they will generate under certain circumstances to give me a range of possible valuations, and then I rate which of those range of possibilities is likely to play out in the future and then base my valuation on that.
> 
> One of the most important factors for a company is their return on equity (ROE), and I have a method of valuing a company based on their ROE.
> 
> ...



It’s interesting to look back at this post, I wrote this 9 months ago at the same time the analyst Basilo is talking about said FMG was worth only $7.70.

It seems quaint that I described $33 as a possible “blue sky” valuation because it would require Iron Ore to be over $120 for a long time, while it now is sitting over $200 hahaha.

hence my comment about it maybe hitting $30 soon, especially when I believe a long term 45% return on equity could see a share of $39, I thought 45% was not sustainable but we are currently at close to 70% ROE.

It does make you wonder that if I could work out these basic figures using a simple calculator, the annual reports and a basic understanding of the business, why couldn’t these analysts figure it out?


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## Sharkman (11 May 2021)

Gunnerguy said:


> I looked at options many years ago and the cost of trading just didn’t make it worth my while. Now I have years in the market(s), more patience, less emotions, and larger assets/funds to use I am really looking closely at using options as a third stream of returns. The first two being capital growth and dividend income.




i can definitely identify with that. when i was younger i used to try and make all of my returns from short term options trading, buy & hold just wasn't in my vocabulary. but when my capital grew too big to fit under the SIPC protection limit (i will only trade options thru IB, the brokerage is just too high for my liking otherwise, but i've always been paranoid about the custodian account model and broker/dealer collapses) i decided to gradually transition away from that and pump newly generated funds from investment/trading returns plus my normal job into international ETFs instead. these days i'm mainly focused on capital growth and dividends much like you, my IB account only hovers around 20-25% of total capital (mostly used as collateral for short options).

it's embarrassing to think about those early days now, i was high on the Dunning-Kruger effect and low on actual trading experience, so i'd keep trading these more complex strategies like iron condors, christmas trees, ratio/diagonal spreads and the like, simply because i had a good grasp of the theory behind them, so i figured i might as well put that knowledge to use. i eventually realised that the simple bread & butter covered calls and cash covered puts were the more consistent, steady performers (at least for me) and typically needed less effort to manage the position vs the multilegged strategies, so i mainly stick to those now.


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## Gunnerguy (11 May 2021)

Value Collector said:


> The FMG December contracts are also 107, so they can be used to roll out to, or you can do the roll as two separate legs instead of the combo and just adjust the amount of contracts in each leg to get to roughly the same exposure.
> 
> I have used the rolling out and down strategy selling FMG puts with great affect for the last 8 years or so, I have sold huge amounts of puts that have expired worthless, roll out and down most of the others, and built a large portfolio of shares from the contracts that got exercised, using dividends and options premiums to buy the stock.



Great !!!


----------



## Sharkman (11 May 2021)

Value Collector said:


> The FMG December contracts are also 107, so they can be used to roll out to, or you can do the roll as two separate legs instead of the combo and just adjust the amount of contracts in each leg to get to roughly the same exposure.




i agree that there are ways to work around it, but they'll likely be more inconvenient than if the lot sizes were all 100 to begin with. one might not want to roll all the way out to dec (i normally prefer to roll out a month, two tops, as i like the faster decay of the shorter dated stuff - not saying that's the best way to do it, it's just my own preference) so copping the lot size differential may be unavoidable.

rolling as two separate legs runs the risk of slippage. may or may not turn out to be a big deal in the end, but ideally one shouldn't have to be concerned about slippage when rolling.

in theory you could punch in a combo order with some wacky ratio to try and avoid the slippage, eg. if you have 50 of the 100 lot size contracts and you want to roll to 46 of the 107 lot size contracts (covering 4,922 units of underlying) you could try punching in a combo with a 25:23 ratio. i don't know the inner mechanics of combo orders as well as @cutz does though, so i'm not sure if such a combo would actually get filled - i've only ever booked combos with "standard'ish" ratios eg. 1:2, 2:3, 1:3.

BHP has something similar, it has the odd option chain with 104 lot sizes. these days i just avoid those chains, even if it means i don't get the quicker decay by having to sell longer dated contracts that do have the 100 lot size, i just find it more convenient in practice to run positions off a consistent 100 lot size. YMMV.


----------



## Value Collector (11 May 2021)

Sharkman said:


> i agree that there are ways to work around it, but they'll likely be more inconvenient than if the lot sizes were all 100 to begin with. one might not want to roll all the way out to dec (i normally prefer to roll out a month, two tops, as i like the faster decay of the shorter dated stuff - not saying that's the best way to do it, it's just my own preference) so copping the lot size differential may be unavoidable.
> 
> rolling as two separate legs runs the risk of slippage. may or may not turn out to be a big deal in the end, but ideally one shouldn't have to be concerned about slippage when rolling.
> 
> ...



Yep, all true.


----------



## basilio (11 May 2021)

Value Collector said:


> It does make you wonder that if I could work out these basic figures using a simple calculator, the annual reports and a basic understanding of the business, why couldn’t these analysts figure it out?




It does indeed ? It's not rocket science but very basic investment analysis.

In fact this example really does bring into question the capacity, and perhaps integrity, of many analysts. FMG is not a two bit  outfit but a top tier  high value company. If one is supposedly analysing the market to advise clients on potential quality options then, IMV, the failure to do the simple processes VC highlights   and advise accordingly seems unforgivable.


----------



## Sean K (12 May 2021)

Anyone believe Treasury's forecast of IO dropping to $55 a tn by Mar 22?

Last time IO was around that price FMG was about $4. 

Treasury don't have a great track record with these forecasts I guess.


----------



## qldfrog (12 May 2021)

kennas said:


> Anyone believe Treasury's forecast of IO dropping to $55 a tn by Mar 22?
> 
> Last time IO was around that price FMG was about $4.
> 
> Treasury don't have a great track record with these forecasts I guess.



China has just blocked LNG from Australia, once they feel they have enough stock, IO will be next.that could explain the forecast


----------



## Beaches (12 May 2021)

kennas said:


> Anyone believe Treasury's forecast of IO dropping to $55 a tn by Mar 22?
> 
> Last time IO was around that price FMG was about $4.
> 
> Treasury don't have a great track record with these forecasts I guess.




If Treasury are calling a price of $55 by next year .. the price is likely to be anything else. They will more than likely get the year wrong and the price wrong
Treasury has consistently been the worst forecasters of the IO price.


----------



## sptrawler (12 May 2021)

qldfrog said:


> China has just blocked LNG from Australia, once they feel they have enough stock, IO will be next.that could explain the forecast



China plays the long game, that is how they have achieved so much in 20 years, they will be working on the IO problem of that I'm certain.


----------



## qldfrog (12 May 2021)

Beaches said:


> If Treasury are calling a price of $55 by next year .. the price is likely to be anything else. They will more than likely get the year wrong and the price wrong
> Treasury has consistently been the worst forecasters of the IO price.



True could be $25 in 6 months


----------



## Value Collector (12 May 2021)

kennas said:


> Treasury don't have a great track record with these forecasts I guess.




If you had the skills to predict the Iron Ore price like that, you wouldn’t be working at the treasury.


----------



## Value Collector (12 May 2021)

Beaches said:


> If Treasury are calling a price of $55 by next year .. the price is likely to be anything else. They will more than likely get the year wrong and the price wrong
> Treasury has consistently been the worst forecasters of the IO price.



Imagine if I told you that you had to guess what the Iron Ore price was going to be in 12 months, but if it ended up being higher than your prediction you got a pat on the back ,while if it’s lower you get get publicly humiliated and possibly fired.

What price would you write in the box? Haha, I bet you would low ball your answer rather than try and nail it.


----------



## joeno (12 May 2021)

Beaches said:


> If Treasury are calling a price of $55 by next year .. the price is likely to be anything else. They will more than likely get the year wrong and the price wrong
> Treasury has consistently been the worst forecasters of the IO price.




"In November 1997 the then Treasurer, Peter Costello, shocked some people when he announced he'd signed off on the sale of $2 billion worth of Australian bullion. On the day he announced the sale the price was around $US306.00 an ounce. At the time, according to Mr Costello, gold "no longer plays a significant role in the international financial system"."

Smart bunch.









						Worth its weight in gold
					

It wasn't that long ago gold was on the nose, especially in Australia, but now, everyone wants it.




					www.abc.net.au


----------



## over9k (12 May 2021)

Tony Blair did the same thing. Insanity.

Basilio - the only curveball I'd add is exposure to political risk. You can see the way china's decimated several other products (crayfish, coal et al) but AU obviously has far more leverage when it comes to iron ore (china needs it far more than they need crayfish) so the risk isn't nearly as bad as it is for the crayfish farmers etc. 

It does, nonetheless, remain though.


----------



## over9k (25 May 2021)

China unveils 5 year plan to wean itself off australian iron ore, big miners plummet (and xjo/xao to some extent) as a result.


----------



## Beaches (27 May 2021)

Champion Iron has just lodged its 3 month and 12 month accounts

_Record EBITDA1 of $275.8M for the three-month period ended March 31, 2021, compared to $60.7M for the same period in 2020. Record EBITDA1 of $819.5M for the year ended March 31, 2021, compared to $347.4M for the same period in 2020;_​
Probably a good insight into the sort of numbers to be expected from FMG for the year


----------



## Value Collector (31 May 2021)

FMG released a presentation from the ASA conference today, there is some very interesting slides there, well worth a look for any one interested in FMG or the Steel industry.


----------



## basilio (2 June 2021)

Beaches said:


> Champion Iron has just lodged its 3 month and 12 month accounts
> 
> _Record EBITDA1 of $275.8M for the three-month period ended March 31, 2021, compared to $60.7M for the same period in 2020. Record EBITDA1 of $819.5M for the year ended March 31, 2021, compared to $347.4M for the same period in 2020;_​
> Probably a good insight into the sort of numbers to be expected from FMG for the year




Agree.  We saw what sort of result FMG showed from July-Dec 2020.  Quite amazing.  But ore prices have continued to escalate in the last 6 months.  Costs  per ton would be the same so it's all profit after tax is paid.  

Would not be surprised to see a $2.50 per share dividend for the last 6 months.


----------



## Value Collector (3 June 2021)

The facts presented in this video explain a lot of the reason why we have seen such high steel demand and hence High Iron ore Ore prices since the pandemic took hold.

One of the facts that surprised me is that out of every 100 shipping containers that leaves china bound for the USA only 40 end up returning to china, thats a lot of steel being drained out of china that needs to be replaced with Iron Ore.

Add to that the fact that demand for physical products has risen dramatically as people buy products and do home renovations rather than holiday, and alot of those products contain steel.

Not to mention that as the latest ASA presentation from FMG shows, steel prices inside the USA have risen dramatically much faster than they have in china, so I would think alot of steel is being shipped to the USA to be used in USA based manufacturing, especially with all that pent up demand for vehicles which is being unleashed as the economies awaken.

While I do believe that Iron prices will end up dropping back under $100 (which is fine by me because even $80 - $90 Iron is super profitable for FMG), I think we may see steel demand and Iron Ore prices remain strong for quite some time, if not above $200, at least well above $100 maybe for most of the next financial year.


----------



## basilio (4 June 2021)

The CCP and some other commentators have been pushing the line that China won't stand for the current iron ore price gouging and will create new suppliers and  develop internal rules to force a lowering of prices.

This article suggest that won't happen quickly or easily. Main points

The sheer amount of ore required means quite huge mining and infrastructure development - which can't happen quickly
The sovereign risk factor in African countries is high. No point developing a mine if the country won't pay it's debts
The current Australian ore suppliers are  exceptionally  cost efficient. They can stand lower prices far longer than any up and coming development
In any case Australian miners are rapidly moving to green steel production and diversifying their exports.  And with billions of  windfall dollars at hand this will happen fairly quickly.

From an FMG perspective I think they have a bright future.









						China’s ‘frustrating reality’ cruelly exposed
					

In its race to become the most powerful nation on earth, China has flexed its muscles over the past few weeks with moves that have sent shivers down the backbone of Australia’s economy.




					www.news.com.au


----------



## Value Collector (4 June 2021)

basilio said:


> The CCP and some other commentators have been pushing the line that China won't stand for the current iron ore price gouging and will create new suppliers and  develop internal rules to force a lowering of prices.
> 
> This article suggest that won't happen quickly or easily. Main points
> 
> ...



Also, the best incentive to increase supply is higher prices, so over time higher prices naturally increase supply.

So if you are frustrated by higher prices, the best thing to do is just accept it and wait for the market to correct naturally, if you Bark about artificially restricting prices, all you are going to do is scare off people from investing to increase supply, which will have the opposite effect, and cause prices to stay higher for longer.


----------



## Sean K (15 June 2021)

Shouldn't Twiggy just stick to digging up iron?

Is he going/gone woke? 

How much of FMG's profits are going into changing the weather?


----------



## bk1 (15 June 2021)

Or is it because the deposits in Congo can be mined on a smaller scale with hydro electric power?
Only 14% of the population as of 2017 could count on regular electricity supply, most of it goes to large scale mining operations,  who rebuilt the existing infrastructure after years of war and neglect.
I'm assuming this is all about copper....


----------



## basilio (15 June 2021)

kennas said:


> Shouldn't Twiggy just stick to digging up iron?
> 
> Is he going/gone woke?
> 
> How much of FMG's profits are going into changing the weather?




Or perhaps because Twiggy is well aware that renewable energy is the new industry baseline ?  Why  because -

1) It is  cheaper in both development and running costs than fossil fuels
2) It is far cleaner in  terms of emissions
3) And FMH is  fast tracking  development of these new industries  as profit centres against the day China is able to source it's iron ore needs from another country.

And yes Twiggy absolutely lines up with all the world climate scientists on the urgency of decarbonisaing the world economy ASAP if we are to have any hope of a future beyond the next 30 years.

Have to say I'm surprised  at the dig about being "woke" or trying to change the weather.

I honestly thought even the most confirmed  historical CC deniers had been quietly reassessing their views as the relentless effects of global warming were becoming impossible to ignore .


----------



## Sean K (15 June 2021)

basilio said:


> I honestly thought even the most confirmed  historical CC deniers had been quietly reassessing their views as the relentless effects of global warming were becoming impossible to ignore .




I'm on the Galileo side of that argument. I'll leave that outside of my comments on stocks from now on.


----------



## basilio (15 June 2021)

Even leaving CC considerations aside the  economic rationale behind Twiggy focus on developing renewable energy is compelling.

As a huge energy user himself dropping these costs off his balance sheet goes straight to the bottom line profits and reduces his costs of production on an ongoing basis.  At the same time he is well aware that China is not going to tolerate being under the economic thumb of Australian iron ore miners. So diversifying into a new world wide industry is just astute business sense against the day he can't sell multi millions of tons of iron ore for $200 + a ton.

And Galileo as a prop against  the evidence of global warming ?


----------



## bux2000 (15 June 2021)

kennas said:


> I'm on the Galileo side of that argument. I'll leave that outside of my comments on stocks from now on.




This is probably not the time nor the place but all I will say





__





						The Myth That the Polar Bear Population Is Declining | Jon Miltimore
					

Data from conservation groups and the government show that the polar bear population is roughly five times what it was in the 1950s and three or four times what it was in the 1970s when polar bears became protected under international treaty.



					fee.org
				




And wait to feel the wind in my face      ↪️  🌬️    🚀 



All the best 
bux


----------



## sptrawler (15 June 2021)

basilio said:


> Even leaving CC considerations aside the  economic rationale behind Twiggy focus on developing renewable energy is compelling.
> 
> As a huge energy user himself dropping these costs off his balance sheet goes straight to the bottom line profits and reduces his costs of production on an ongoing basis.  At the same time he is well aware that China is not going to tolerate being under the economic thumb of Australian iron ore miners. So diversifying into a new world wide industry is just astute business sense against the day he can't sell multi millions of tons of iron ore for $200 + a ton.



Isn't the dam that is mentioned, near the area the Chinese want mine the iron ore and where the Australian resource company had its lease revoked?


----------



## Value Collector (15 June 2021)

kennas said:


> Shouldn't Twiggy just stick to digging up iron?
> 
> Is he going/gone woke?
> 
> ...



Fmg is putting 10% of their profits into their Fortescue future industries division, 10% into mining, and 80% as dividends.

There is ship loads of iron ore in the Congo, not to mention copper, but you need energy (and a relationship) to mine.

the Congo is also very centrally located in an energy starved continent, I have spent the past 24 hours learning about the various options to expand the Congo’s electricity exports, it seems like a good opportunity to me.


----------



## Ferret (15 June 2021)

kennas said:


> Shouldn't Twiggy just stick to digging up iron?



I've mentioned before my concerns about FMG moving away from what they do well.  

Add to this all the sovereign risk of a project in Congo and Australian companies' track records in Africa and it's got alarm bells ringing for me.  

I hope Twiggy knows what he's doing...


----------



## Value Collector (15 June 2021)

Check out this video that talks a bit about the exact project FMG are looking at, the video is 6 years old but it is the project, it shows how the industry is hamstrung by lack of energy.


----------



## bux2000 (16 June 2021)

Ferret said:


> I hope Twiggy knows what he's doing...




I have been following the Andrew Forrest Story since FMG was formed. I have recounted his story to many people and found it an inspiration for myself over the years. He has been underestimated so many times and if some recent valuations of FMG are concerned, still is.
I am not sure if this video has been quoted before and it is the best part of an hour...... but it is a great story.




bux


----------



## bux2000 (16 June 2021)

Apologies for my Technical inability you may have to reset the video above to 0.00 manually to get its full impact.

All the best
bux


----------



## Value Collector (16 June 2021)

bux2000 said:


> Apologies for my Technical inability you may have to reset the video above to 0.00 manually to get its full impact.
> 
> All the best
> bux



If you delete your YouTube history it prevents videos doing that.


----------



## basilio (17 June 2021)

bux2000 said:


> This is probably not the time nor the place but all I will say
> 
> 
> 
> ...




Interesting.. Is that just a very cautious, subtle way of perhaps  suggesting  that actually CC is not real or serious ? Sort of tip toeing around it ?
 Frankly one can find plenty of other evidence that polars bears are being affected by rapidly melting polar ice and if they aren't going to fall off the perch tomorrow another 30 years of disappearing ice caps will nail the coffin shut. By that stage we will have far more important things to worry about than lovable ol' polar bears..

But after checking out the rest of the fee.org  website the fate of polar bears is small potatoes.


----------



## basilio (17 June 2021)

But back to the topic - FMG and its development of renewable energy projects.

CSIRO and partners are launching a mission to make hydrogen production commercially viable.  One of the partners is... FMG

*Enabling science and technology *_through investment in breakthrough science, including a* $20m partnership with Fortescue *which focuses on the development and commercialisation of new hydrogen technologies. _






						Fuelling a clean and bright future: CSIRO and partners launch $68M Hydrogen Industry Mission - CSIRO
					






					www.csiro.au


----------



## bux2000 (17 June 2021)

basilio said:


> Interesting.. Is that just a very cautious, subtle way of perhaps suggesting that actually CC is not real or serious ? Sort of tip toeing around it ?



How very perceptive of you   .

I must admit the blast of air straight off the Polar Cap was not as cold as I thought it might be    🎣.

I am a boomer so apparently I am the one that solo handedly fudged the Planet and enjoyed my life so much that the world has spun off its axis   I will not tell you my skin colour  or I will really have to apologise ..........  ooops gave that away 🚣‍♂️



tech/a said:


> What then is it connected to.
> 
> Perhaps it’s a case of selective connection
> When it suits the pundits.
> ...



I Hope @tech/a does not mind me quoting his post

From my 180 degrees and a life starting without a University education and leaving school without a huge friendship of academia, and living in a world  being dominated by the scourge of Funding which again *appears* to turn honest people into dishonest people. 

Just saying ......probably really offended you now 🐳🍀

bux


----------



## Value Collector (17 June 2021)

bux2000 said:


> Just saying ......probably really offended you now 🐳🍀
> 
> bux



I think you are the one that’s offended by something. I am unsure what that rant has to do with anything.


----------



## bux2000 (18 June 2021)

Value Collector said:


> think you are the one that’s offended by something. I am unsure what that rant has to do with anything.



Yes well a good example of a post written when tired and grumpy with the world   for which I apologise.

I will go back to watching the 6 o'clock news and be happy

bux


----------



## qldfrog (18 June 2021)

bux2000 said:


> Yes well a good example of a post written when tired and grumpy with the world   for which I apologise.
> 
> I will go back to watching the 6 o'clock news and be happy
> 
> bux



watching the 6 o'clock brainwash is a sure thing to make me unhappy :-( , luckily, here on the sunshine coast, there is the local weather and surf report ;-)
We can all get cranky, thanks for posting


----------



## basilio (24 June 2021)

Don't know if FMG managed to load a few more ships last month but the overall exports of iron ore to China  jumped to record levels in May.  And the May price averaged $200- 210 plus a ton.









						Australia’s iron ore exports to China have risen by 20 per cent, stunning new figures show
					

It should have been a month that signalled the start of a new era in China’s great escape from Australian exports, but stunning new figures show Beijing is going to have to wait a whole lot longer.




					www.news.com.au


----------



## Gunnerguy (25 June 2021)

Hi all,

With the impending, hopefully, good quarterly results in July for FMG, I am considering placing a Bull Put Credit Spread for FMG. The price has risen nicely in the last couple of days.

The details are.

15 July, 22.5/22.0 Bull Put, 10 contracts. Credit of $68. Max possible loss of -$432, if FMG price goes below $22.0 before 15 July.

I believe it’s unlikely FMG will go below $22.0 before 15 July. If it does I will buy FMG Long.

Not looking for Financial Advice (as no one can provide it here) but would appreciate any comments, suggestions.

Regards

Gunnerguy.

(Amateur options trading learner).


----------



## Sharkman (25 June 2021)

IMHO that is a horrible risk:reward ratio, risking 432 to make 68. unlikely doesn't mean never, plus those 22 puts are actually close to 30 delta, so it's not even all that unlikely in terms of how the market is currently pricing it.

on checking the market however, if you're only taking in 68 you are crossing way too much of the spread - in fact it looks like you're crossing all of it. when i looked a few mins ago, the 22s were showing 0.31/0.405, the 22.50s were showing 0.48/0.58.

the mid on the spread is around 0.17 which would make it a risk 332 to make 168 scenario, seems a fairly reasonable proposition on a vertical credit spread. if i was looking to execute this trade i'd start by sticking in a combo at say 0.20. you never know, occasionally you get lucky and one of the MMs is looking to square up their delta in the opposite direction to you, so you can get filled on your side of the spread every now and then. if you don't get filled at 0.20 (likely), then a few secs later drop it to 0.195, then 0.19, 0.185 etc.

if i got down to 0.16 (2 ticks their side of the spread - my general rule of thumb) without being filled, i'd probably take the order off at that point unless i really badly wanted the position. gotta draw the line somewhere, you can't keep crossing spreads otherwise it will put a huge dent in your portfolio once you're doing hundreds of these a year. there is no way i'd do this at 0.07 (crossing the whole spread on both legs), it's just giving money to the MMs.

that's just how i would go about it though, it's not the "correct" way by any means, there isn't one. everyone has their own individual preferences, i'm sure you'll form your own (which may well differ from mine) once you've done a few trades.


----------



## Gunnerguy (25 June 2021)

Thanks for your thoughts Sharkman. Great comments !!!
I missed the '1', in the PM  Yep $168 for $432 with a delta of .297.
This is what I have at the moment.


HighLowPMLossDelta$22.50$22.00$168.00-$332.000.297$22.00$21.50$108.00-$392.000.084$21.50$21.00$125.00-$432.000.057

The RR of 22.5/22 is nice 168/332,  however as a beginner I am scared of the .297 delta and very close to current prices.
Using 21.5/21 is more attractive to me due to the delta of 0.057, with a RR of 125/432.

Thanks for the tip of strating higher in the bid and moving down. I have already been doing this but thanks for reminding me.
I'm trying to keep the deltas below 0.75, and only generally looking at low $ credits to start.

Gunnerguy
(Options learner, beware)


----------



## basilio (25 June 2021)

It's an interesting exercise gunner guy. Just wondering however if you havn't thought/researched the option of buying FMG shares for the next dividend payout and then selling them  afterwards ?

It seems almost 100%  ceratin that the next dividend will be $2 plus (could easily be $2.50) . It will also be fully franked.

I suggest the medium term outlook for FMG is still strong so there is a high likelihood the shares won't be heading south . Anyone else have a thought ?









						How to play the fine art of 'dividend stripping' – Rivkin
					

With reporting season finally out of the way, now's a good time to contemplate the opportunity for dividend stripping that comes around twice annually when companies reward shareholders with surplus cash during dividend season.




					rivkin.com.au


----------



## Value Collector (25 June 2021)

basilio said:


> It's an interesting exercise gunner guy. Just wondering however if you havn't thought/researched the option of buying FMG shares for the next dividend payout and then selling them  afterwards ?
> 
> It seems almost 100%  ceratin that the next dividend will be $2 plus (could easily be $2.50) . It will also be fully franked.
> 
> ...



Only problem with that as a short term strategy on FMG is that I have noticed over the last couple of dividend cycles that FMG tends to fall by the full dividend+ franking credit after it goes EX.

FMG has seemed to have built up a following from a lot of impatient capital that is very flighty.

saying that I think there is money to be made in puts on FMG if it is part of a long term strategy, provided you have enough capital to cover margins through any times the herd gets spooked.


----------



## Sean K (25 June 2021)

basilio said:


> I suggest the medium term outlook for FMG is still strong so there is a high likelihood the shares won't be heading south . Anyone else have a thought ?




Treasury forecast for IO is for $60 in the next year. FMG's sp should correlate. So, IO was at about $60-75 in 2019 and FMG was between 5 and 10 bucks.


----------



## basilio (25 June 2021)

kennas said:


> Treasury forecast for IO is for $60 in the next year. FMG's sp should correlate. So, IO was at about $60-75 in 2019 and FMG was between 5 and 10 bucks.



I was talking about  short term time span.  Before and after the next dividend. 
Longer term ? There has been discussion about where iron ore prices will sit next year and Treasury always has to take a conservative approach. But i would be amazed if it stayed at the current levels. In fact of course with the explosion of companies reopening mines one should expect the price to drop.

But Twiggy has screwed the cost price of  his iron ore into the ground.  FMG will continue to make a good return at lower prices.


----------



## Gunnerguy (25 June 2021)

basilio said:


> It's an interesting exercise gunner guy. Just wondering however if you havn't thought/researched the option of buying FMG shares for the next dividend payout and then selling them  afterwards ?
> 
> It seems almost 100%  ceratin that the next dividend will be $2 plus (could easily be $2.50) . It will also be fully franked.
> 
> ...



Basilio
I know about the current/future IO price discussions and the FMG dividend potential in August. I hold plenty of FMG in my 'Investment Portfolio', this particular trade is purely to gain premium income for my 'Options trading Portfolio'.
Thanks for the currents and information.

Gunnerguy.
('I'm gonna learn and do this options stuff')


----------



## Sean K (25 June 2021)

basilio said:


> I was talking about  short term time span.




Sorry, I thought you said medium term lifespan. Short term, it's still tied to the IO price I reckon, so if it's going up, it's going up.


----------



## basilio (25 June 2021)

kennas said:


> Sorry, I thought you said medium term lifespan. Short term, it's still tied to the IO price I reckon, so if it's going up, it's going up.



My bad. Medium term is longer than 2-3 months.


----------



## Value Collector (26 June 2021)

kennas said:


> Treasury forecast for IO is for $60 in the next year. FMG's sp should correlate. So, IO was at about $60-75 in 2019 and FMG was between 5 and 10 bucks.



That forecast is meant to be accurate, it's just a conservative number they enter into a box for budgeting purposes.


----------



## Smurf1976 (26 June 2021)

basilio said:


> FMG and its development of renewable energy projects.



They've taken some steps forward with this: 









						Fortescue signs contract with TasPorts progressing 250 MW green hydrogen plant in Bell Bay
					

Tasmania’s port authority has entered into an agreement with Fortescue Future Industries for land and operating access for its proposed 250 MW green hydrogen plant at Bell Bay, in Tasmania's north.




					www.pv-magazine-australia.com
				





> The Tasmanian Ports Corporation, commonly known as TasPorts, today announced it had signed an Option Agreement with Fortescue Future Industries for its export-scale green hydrogen plant planned for Bell Bay in northern Tasmania.




Of potential relevance to any hydrogen producer at Bell Bay is that 100% of natural gas supplied into Tasmania comes in via a pipeline route that's approximately just at the top of the image in the link running from left to right. Can't see it but it's in the ground, that's where it is. That would make it a very easy place to blend a portion of hydrogen into the natural gas supply if someone wanted to do that.

Also possible that the TEMCO smelter, which is immediately to the left of the image shown, and Bell Bay Aluminium (top left) might be interested in it as a heat source for sintering and anode baking respectively if the price was right so another possible local market in addition to exports. 

Any use other than export is however pure speculation on my part, just noting that it's a possibility if the economics stacked up and relevant companies were interested.


----------



## Value Collector (26 June 2021)

Value Collector said:


> That forecast is meant to be accurate, it's just a conservative number they enter into a box for budgeting purposes.



I meant to say, "not meant to be accurate"


----------



## Sean K (26 June 2021)

Value Collector said:


> I meant to say, "not meant to be accurate"




I wouldn't be surprised if they're throwing darts blindfolded for their numbers.


----------



## Value Collector (26 June 2021)

kennas said:


> I wouldn't be surprised if they're throwing darts blindfolded for their numbers.



I think everyone is, no body knows the exact long term price, it’s like the weather, we have a basic idea of what the climate will be within a range based on based the invisible hand of supply and demand, but as for the daily, weekly or monthly weather in the markets, it’s unknown.


----------



## Go Figure (6 July 2021)

Fortescue Future Industries (FFI), the 100 per cent renewable green energy and industry initiative of Fortescue Metals Group Ltd (Fortescue, ASX: FMG), announces it has reached its 30 June 2021 targets for initial decarbonisation projects, announced on 15 March 2021.

FFI’s specialist teams have made ground-breaking progress including:

• Successful combustion of ammonia in a locomotive fuel, with a pathway to achieve completely renewable green fuel
• Completion of design and construction of a combustion testing device for large marine (ship) engines, with pilot test work underway and a pathway to achieve completely renewable green shipping fuel
• Finalised design of a next generation ore carrier (ship) that will consume renewable green ammonia, with the Classification Society giving in principle design approval
• Testing of battery cells to be used on Fortescue haul trucks
• Design and construction of a hydrogen powered haul truck for technology demonstration
complete, with systems testing underway
• Design and construction of a hydrogen powered drill rig for technology demonstration complete, with systems testing underway
• Successful production of high purity (>97%) green iron from Fortescue ores at low temperature in a continuous flow process
• Successful initial trialling to use waste from the green iron process noted above, with other easily sourced materials, to make green cement.


----------



## basilio (6 July 2021)

Go Figure said:


> Fortescue Future Industries (FFI), the 100 per cent renewable green energy and industry initiative of Fortescue Metals Group Ltd (Fortescue, ASX: FMG), announces it has reached its 30 June 2021 targets for initial decarbonisation projects, announced on 15 March 2021.
> 
> FFI’s specialist teams have made ground-breaking progress including:
> 
> ...




Have to say I'm amazed and delighted at the progress that FMG has made on these areas in seemingly a scant few months.  

*In reality I don't believe it has only been a few months work*. I'd be confident that their teams have been on the job for a fair bit longer but it certainly looks good to set a seemingly very ambitious target March 21 and announce it's achievement a bare 3 months later.

So perhaps this is a real life lesson on what can be achieved in terms of decarbonisation with decisive leadership, strong engineering talent, a decent budget and an economic incentive. Obviously the trials, designs and tests need to be built and proven and that time span will be longer than just a few months.  Nonetheless I think this is very encouraging on a number of fronts.

    06/07/2021 
9:58 am

               FFI Delivers on Ambitious Stretch Targets


----------



## over9k (6 July 2021)

I made a post a while back about him looking into another company and also trying to copy adani green. I'll see if I can dig it up.


----------



## Go Figure (12 July 2021)

FMG SP from a solid base is now on an upward trajectory, some key factors include,

June Quarter results due 30/7/21 likely to meet the top end of shipment forecasts.
IO price has averaged over $170 in 2021.  
Super profits to be reported at 30 August for YE2021.
A franked dividend of potentially over $2.00 is possible. 
Demand remains high for Australian Ore and prices remain at exceptionally profitable levels going into FY 2021/2022.
The Iron Bridge is set to commence production of high quality ore in the latter part of 2022, giving FMG customers product variety.
FFI activity and innovation as yet not measurable and or priced in.

Interesting times and important decisions ahead for both board and shareholders.


----------



## sptrawler (12 July 2021)

I'm starting to get a FOMO feeling.


----------



## qldfrog (13 July 2021)

sptrawler said:


> I'm starting to get a FOMO feeling.



Same too so definitively time to be very cautious and scared


----------



## striek (13 July 2021)

I bought 50 call options a week ago for September between 23-26.50. It's run up has been generous the last couple days.

It's future is heavily linked to iron ore prices but I don't think that means its overvalued. I said it in another thread earlier this year but these iron ore companies are priced as if the iron ore price is going to head downhill rapidly in the near future so the risk is very measured.

This time last year FMG paid a dividend yield of 5.3% of the share price before ex-div August 28 2020. Earlier in the year they paid a 6.1% half year dividend based on the sp on 26 Feb.

FMG is widely projected to pay a final dividend between $2-2.50 (and should be on the higher side IMO). That represents 7.9% to 9.9% yield on the current share price of $25.23. Figures before franking credits of course.

Timing for options is tricky and I hope it continues this trend, but long term I think there are a few resource stocks that are heavily undervalued on fundamentals. FMG in particular I think has negative value and sentiment attached for FFI and Iron Bridge due to capital concerns of the former and multiple delays of the latter. Iron Bridge even at long term iron ore prices should offer spectacular returns.

All IMO.


----------



## over9k (13 July 2021)

sptrawler said:


> I'm starting to get a FOMO feeling.



That usually means it's time to sell.


----------



## basilio (15 July 2021)

striek said:


> I bought 50 call options a week ago for September between 23-26.50. It's run up has been generous the last couple days.
> 
> It's future is heavily linked to iron ore prices but I don't think that means its overvalued. I said it in another thread earlier this year but these iron ore companies are priced as if the iron ore price is going to head downhill rapidly in the near future so the risk is very measured.
> 
> ...




FMG has gone on tear this week.  The 6 months earning figures are imminent and, as noted, a franked final dividend of probably $2.50 a share is on the table. I think the $2  jump in SP since last Friday reflects investor interest in this dividend.


----------



## Gunnerguy (15 July 2021)

My August 25.5 covered calls look to be threatened. I could always ladder up and sell some 27 or 28.
Gunnerguy
(slowly slowly catchy monkey)


----------



## striek (15 July 2021)

basilio said:


> FMG has gone on tear this week.  The 6 months earning figures are imminent and, as noted, a franked final dividend of probably $2.50 a share is on the table. I think the $2  jump in SP since last Friday reflects investor interest in this dividend.



Also the fact the iron ore price is still stubbornly trending upwards.

I don't think FMG is the best investment in miners right now. There are a bunch of junior miners that have recently started their first shipments, or are about to, and are not priced appropriately. If IO prices remain elevated many will quickly generate profits equal to many times their EV that they could return to shareholders (ie. timeframes of 1-2 years) whilst still being good value even at lower revenues.

Iron ore prices will go back down eventually. Finding companies early that sit well on the cost curve and hold good tenements for the future will make for long term profitable buy and hold trades.

IMO


Gunnerguy said:


> My August 25.5 covered calls look to be threatened. I could always ladder up and sell some 27 or 28.
> Gunnerguy
> (slowly slowly catchy monkey)



It depends on what your outlook is and if it has changed since you sold the covered calls. If you expect FMG to trade sideways or range-bound you can simply hold and take a profit on assignment or buy back the calls at or near expiry for peanuts as theta decays to nothing. If your opinion has changed significantly and you think it might cross your new covered call targets then rolling for a debit might not be in your best interest and you should buy back your calls and realize a loss.

I had a 22-23.5 bull call spread for July not expecting it to pop so soon. After I realised it had begun I actually bought 24 calls, and later bought back the 23.5 calls last week for a loss (it was almost entirely intrinsic though) so I could let the 22's run further.


----------



## Value Collector (15 July 2021)

basilio said:


> FMG has gone on tear this week.  The 6 months earning figures are imminent and, as noted, a franked final dividend of probably $2.50 a share is on the table. I think the $2  jump in SP since last Friday reflects investor interest in this dividend.



Can I take this opportunity to toot my own horn again and say that all the way back on May 4th I mentioned that I thought FMG would head towards $30 before the end of August before it goes ex Div.


----------



## Value Collector (15 July 2021)

Gunnerguy said:


> My August 25.5 covered calls look to be threatened. I could always ladder up and sell some 27 or 28.
> Gunnerguy
> (slowly slowly catchy monkey)



I did mention to be cautious about selling calls dated before the ex div in august.

maybe roll it puts to September, the share price drop after ex dividend might protect you then.

look for a European style, rather than American so it can’t be exercised early.

the European puts are normally 1cent higher in strike.

eg if American is $25.00 strike, the euro with be $25.01


----------



## Value Collector (15 July 2021)

striek said:


> Also the fact the iron ore price is still stubbornly trending upwards.
> 
> I don't think FMG is the best investment in miners right now. There are a bunch of junior miners that have recently started their first shipments, or are about to, and are not priced appropriately. If IO prices remain elevated many will quickly generate profits equal to many times their EV that they could return to shareholders (ie. timeframes of 1-2 years) whilst still being good value even at lower revenues.
> 
> ...



When iron ore prices are high, the small high cost producers will see the biggest returns as the move from being loss making or  marginally profitable to being decently profitable.

however, when the low prices return these junior players are normally wiped out.

to me it’s always a better strategy to stick to the low cost producers, that become super profitable in good times, while also being able to survive during low prices.


----------



## striek (15 July 2021)

Value Collector said:


> When iron ore prices are high, the small high cost producers will see the biggest returns as the move from being loss making or  marginally profitable to being decently profitable.
> 
> however, when the low prices return these junior players are normally wiped out.
> 
> to me it’s always a better strategy to stick to the low cost producers, that become super profitable in good times, while also being able to survive during low prices.



Couldn't agree more. Thats why I mentioned costs and tenements. Owning a lot of rocks you can ship cheaply is a guaranteed long term winning strategy.


----------



## basilio (15 July 2021)

striek said:


> Couldn't agree more. Thats why I mentioned costs and tenements. *Owning a lot of rocks you can ship cheaply is a guaranteed long term winning strategy.*



Indeed it is   However as VC pointed out it would be surprising if the new smaller miners will have the cost efficiencies  created by, say FMG.  It would be interesting to see their figures on production costs, transport costs in comparison to others.  

I also suspect they would be carrying some decent capital  repayment costs which would weigh on their  profitability.

Having said all that, the small iron ore miners have done exceptionally well in the last 12-18 months in terms of SP so clearly those investments have done very well.


----------



## againsthegrain (15 July 2021)

How does fmg dividend work,  is there paperwork to fill out once the dividend is issued as in to reinvest or have it paid out?  I picked up just under 500 shares 2 or 3 months ago


----------



## Gunnerguy (15 July 2021)

striek said:


> Also the fact the iron ore price is still stubbornly trending upwards.
> 
> I don't think FMG is the best investment in miners right now. There are a bunch of junior miners that have recently started their first shipments, or are about to, and are not priced appropriately. If IO prices remain elevated many will quickly generate profits equal to many times their EV that they could return to shareholders (ie. timeframes of 1-2 years) whilst still being good value even at lower revenues.
> 
> ...



@striek
Thanks for you great comment. This is exactly the wonderful ASF community provides !!
I looked at buying the calls back and incurring a loss but they are very expensive compared to my credit 😔, obviously.
I could just be happy and be assigned, incur the trading costs, but overall with my held shares I would be happy with the profit. I’m gonna just hold a little longer and see what happens.
Thanks
Gunnerguy


----------



## Go Figure (15 July 2021)

againsthegrain said:


> How does fmg dividend work,  is there paperwork to fill out once the dividend is issued as in to reinvest or have it paid out?  I picked up just under 500 shares 2 or 3 months ago




How to Participate
You may elect to participate by completing a Dividend Reinvestment Plan Application or Variation Form (DRP Form) and returning it to the Fortescue Share Registry. Additional DRP Forms may be obtained from the Fortescue Share Registry.
You may participate in the DRP at any time. Your participation will commence with the first dividend paid after receipt of a valid DRP Form. However, the DRP Form must be received before 5:00pm (Perth time) on the first business day following the Record Date to participate in that dividend.

If possible perhaps also notionally consider pocketing the Dividend and Franking Credit and purchase shares Ex Div. 

If IO price averages remain over $150 leading up to Ex Div date, there is certainly a case for a further healthy interim dividend for 21/22 and may not have the dramatic SP drop seen after the interim dividend for 20/21.


----------



## Gunnerguy (15 July 2021)

Value Collector said:


> I did mention to be cautious about selling calls dated before the ex div in august.
> 
> maybe roll it puts to September, the share price drop after ex dividend might protect you then.
> 
> ...



Value Collector,
Thanks for your comment and idea. I have looked at buying some September puts around the current share price. I looked back to see how much the share price has dropped in the past at XD. It seems to vary a bit. If the dividend is 'minimum' $2 then 'conventional theory' would suggest that the share price would drop by the equivalent.
With the SP at 25.72 today. Quarterly results on 29th July, FY results on 30th August, (XD date ??). If SP rises to say, 28 by XD, buying a September 26 ($2.715) put now I guess would be an idea and the SP dropping back down to (28 - 2.5) = 25.5.
Buying a put (Debit, BTO), I presume with the hope the SP goes lower after the XD date and the put value increases and I sell (STC).
Gunnerguy.
(strategy learner)


----------



## againsthegrain (15 July 2021)

Go Figure said:


> How to Participate
> You may elect to participate by completing a Dividend Reinvestment Plan Application or Variation Form (DRP Form) and returning it to the Fortescue Share Registry. Additional DRP Forms may be obtained from the Fortescue Share Registry.
> You may participate in the DRP at any time. Your participation will commence with the first dividend paid after receipt of a valid DRP Form. However, the DRP Form must be received before 5:00pm (Perth time) on the first business day following the Record Date to participate in that dividend.
> 
> ...




thanks for the info,  yes it does seem like a good idea to pocket the dividend then enter when it settles a bit. 

So if I take no action does the dividend come through to my broker?  I assume I need to somehow provide my bank details and tfn

p.s first time I am holding a dividend paying stock,  the time has come to start transforming into a more respectable gentleman as I near my 40s rather then only playing with dirty questionable specs


----------



## Go Figure (15 July 2021)

againsthegrain said:


> thanks for the info,  yes it does seem like a good idea to pocket the dividend then enter when it settles a bit.
> 
> So if I take no action does the dividend come through to my broker?  I assume I need to somehow provide my bank details and tfn
> 
> p.s first time I am holding a dividend paying stock,  the time has come to start transforming into a more respectable gentleman as I near my 40s rather then only playing with dirty questionable specs



If your FMG holdings are valued less than $50,000 you could go to linkmarketservices.com.au follow prompts and have your SRN/HIN: Xxxxxxxxxxxx handy and add or update your TFN or ABN, Bank Details and make a DRP Election if you wish to.


----------



## striek (15 July 2021)

Gunnerguy said:


> Value Collector,
> Thanks for your comment and idea. I have looked at buying some September puts around the current share price. I looked back to see how much the share price has dropped in the past at XD. It seems to vary a bit. If the dividend is 'minimum' $2 then 'conventional theory' would suggest that the share price would drop by the equivalent.
> With the SP at 25.72 today. Quarterly results on 29th July, FY results on 30th August, (XD date ??). If SP rises to say, 28 by XD, buying a September 26 ($2.715) put now I guess would be an idea and the SP dropping back down to (28 - 2.5) = 25.5.
> Buying a put (Debit, BTO), I presume with the hope the SP goes lower after the XD date and the put value increases and I sell (STC).
> ...



I believe he meant roll it out.

If you think the share price will be $25.50 ex-div on Sept 1 then the $26 put will probably be worth about 80 cents by then. Quite a loss.


----------



## againsthegrain (15 July 2021)

Go Figure said:


> If your FMG holdings are valued less than $50,000 you could go to linkmarketservices.com.au follow prompts and have your SRN/HIN: Xxxxxxxxxxxx handy and add or update your TFN or ABN, Bank Details and make a DRP Election if you wish to.




Thanks for that,  will do exactly that.


----------



## frugal.rock (15 July 2021)

againsthegrain said:


> Thanks for that, will do exactly that.



Not sure if you're planning to do DRP, but if you do, there's usually a discount applied to the reinvested money.
You could look back at past announcements to see what approx discount they may give if interested.


----------



## Value Collector (15 July 2021)

Gunnerguy said:


> Value Collector,
> Thanks for your comment and idea. I have looked at buying some September puts around the current share price. I looked back to see how much the share price has dropped in the past at XD. It seems to vary a bit. If the dividend is 'minimum' $2 then 'conventional theory' would suggest that the share price would drop by the equivalent.
> With the SP at 25.72 today. Quarterly results on 29th July, FY results on 30th August, (XD date ??). If SP rises to say, 28 by XD, buying a September 26 ($2.715) put now I guess would be an idea and the SP dropping back down to (28 - 2.5) = 25.5.
> Buying a put (Debit, BTO), I presume with the hope the SP goes lower after the XD date and the put value increases and I sell (STC).
> ...



Sorry, I meant Roll your August Calls to September calls. (I said puts by mistake) by doing that the share price drop after Ex dividend might drop back below your strike, you might also be able to collect a net credit.


----------



## Gunnerguy (15 July 2021)

Value Collector
Thanks for clarifying.
You know .... even having invested in shares for 30 years, being a Math and excel geek, and having 2 types of degrees in finance, this options stuff is still tricky. You have to be a bit Schizophrenic ....... there are credits and debits, calls and puts. You can be on one side of the trade, or the other. You have to look at it from the writers side and the sellers side. What you are 'selling' and how that exposes oneself, and buying if you want to. And then ttheres time decay..........  **** man this takes a twisted brain to work it out. I guess I better put the bottle of red wine away .....
Gunnerguy.
(If it was easy everybody would do it. 5 weeks trading options ....... 5 cases of beer 'realised' so far)


----------



## basilio (16 July 2021)

Gunnerguy said:


> Value Collector
> Thanks for clarifying.
> You know .... even having invested in shares for 30 years, being a Math and excel geek, and having 2 types of degrees in finance, this options stuff is still tricky. You have to be a bit Schizophrenic ....... there are credits and debits, calls and puts. You can be on one side of the trade, or the other. You have to look at it from the writers side and the sellers side. What you are 'selling' and how that exposes oneself, and buying if you want to. And then ttheres time decay..........  **** man this takes a twisted brain to work it out. I guess I better put the bottle of red wine away .....
> Gunnerguy.
> (If it was easy everybody would do it. 5 weeks trading options ....... 5 cases of beer 'realised' so far)




Indeed.  Have to say the game of puts and  calls and options and derivatives and the hundred other ways to play the market look like variations on a roulette wheel or perhaps card counting in baccarat to me.  I'm sure some smart money makes decent coin out of it all but I still suspect the smart money is largely with the bank and the promoters.

*It would be really interesting as a study to see what the outcomes are for ASF posters.* I would believe that this forum would have a higher range of skilled traders than the average punters and there is excellent sharing of knowledge. But in the end wouldn't it be useful to see how profitable these plays are ?

Perhaps a university could be persuaded  to fund a study for it's economics/finance faculty ?


----------



## Value Collector (16 July 2021)

basilio said:


> Indeed.  Have to say the game of puts and  calls and options and derivatives and the hundred other ways to play the market look like variations on a roulette wheel or perhaps card counting in baccarat to me.  I'm sure some smart money makes decent coin out of it all but I still suspect the smart money is largely with the bank and the promoters.
> 
> *It would be really interesting as a study to see what the outcomes are for ASF posters.* I would believe that this forum would have a higher range of skilled traders than the average punters and there is excellent sharing of knowledge. But in the end wouldn't it be useful to see how profitable these plays are ?
> 
> Perhaps a university could be persuaded  to fund a study for it's economics/finance faculty ?



I keep it pretty simple, I sell puts against shares I think are under valued that I would like to buy, and sometimes I sell calls on stuff I own that is over priced that I wouldn’t mind selling.

I have been doing that since 2013, so far my worst year was a profit of about $20k, and last year was my best year a profit of over $800K (that was enlarged due to covid crash towards the end of the 2020 finiancial year, I had to roll a bunch of positions out to later dates, which meant the eventual profits were pushed into 2021 year, which made 2021 look huge but reduced profit for 2020 to $70k).

the fantastic performance of my options portfolio has been mainly due to selling puts against FMG over the last several years, I have been able to regularly sell out of the money puts and collecting premiums that would be equal to about 20% of the face value on an annualised basis.

I then used these premiums I collected to buy shares of FMG, which then earned dividends which allowed me to buy more shares again.

the increasing size of my share portfolio, also then acted as increased collateral, which I was able to use to do more options, and take out a margin loan to cover any positions that got exercised.

I have said before I don’t go in for all the complicated options strategies, because this very simple approach has worked wonders for me.

but at the end of the day it only has worked because my underlying valuation of FMG (and other shares) has proved correct, you need to get the right companies at the right prices to make this system work, if you can’t value businesses, and keep within strict limits, you will blow up.


----------



## basilio (16 July 2021)

Value Collector said:


> I keep it pretty simple, I sell puts against shares I think are under valued that I would like to buy, and sometimes I sell calls on stuff I own that is over priced that I wouldn’t mind selling.
> 
> I have been doing that since 2013, so far my worst year was a profit of about $20k, and last year was my best year a profit of over $800K (that was enlarged due to covid crash towards the end of the 2020 finiancial year, I had to roll a bunch of positions out to later dates, which meant the eventual profits were pushed into 2021 year, which made 2021 look huge but reduced profit for 2020 to $70k).



Great..Sounds clear and simple - and obviously profitable when you make good choices. 
Now I know how you afford your fleet of Teslas  (Totally ignoring FMG..)


----------



## Gunnerguy (16 July 2021)

Value Collector said:


> I keep it pretty simple, I sell puts against shares I think are under valued that I would like to buy, and sometimes I sell calls on stuff I own that is over priced that I wouldn’t mind selling.
> 
> I have been doing that since 2013, so far my worst year was a profit of about $20k, and last year was my best year a profit of over $800K (that was enlarged due to covid crash towards the end of the 2020 finiancial year, I had to roll a bunch of positions out to later dates, which meant the eventual profits were pushed into 2021 year, which made 2021 look huge but reduced profit for 2020 to $70k).
> 
> ...



Great Stuff @Value Collector 
Thanks for letting us know.
For those interested I started with options about 2 months ago through many hours of reading and learning. Ultimately I wanted to generate some income from the shares I already own. Simply getting growth and dividends is nice but I wanted to try to get some additional income. I 'resurrected' another Forum on options in ASF (Options trading in OZ) and have been putting in some of my ideas and learnings of my journey. I plan to update that forum 'regularly', maybe weekly with my possible trade ideas and some of the progress on no. of trades, win/loss etc.
Gunnerguy.


----------



## Fatnana (16 July 2021)

GreatPig said:


> Sometimes the market can be so sadistic
> 
> I bought this stock in early August for $3.06 then sold a week odd ago for $3.00, as it appeared to be dropping off.
> 
> ...



I totally know how you feel. I had 360life, I sold at $4.05 after it had gone up and down around this price or less fit a while. 
it’s now got a target price of over $7!!!


----------



## over9k (16 July 2021)

What type of finance degrees do you have gunner? You should have been doing this type of stuff in them?

You can also just find online calculators for things like black-scholes and just pump the numbers into them and they'll spit you out an answer to save you writing the excel codes etc yourself.


----------



## Gunnerguy (17 July 2021)

over9k said:


> What type of finance degrees do you have gunner? You should have been doing this type of stuff in them?
> 
> You can also just find online calculators for things like black-scholes and just pump the numbers into them and they'll spit you out an answer to save you writing the excel codes etc yourself.



@over9k
MBA in 2005, and Masters in Financial Planning completed in 2019.
Done plenty of finance stuff. Did options in my last Masters, but I found it tricky and wasn’t really interested in that part of the course. Now I am very interested and trying to eek something out if it.

Gunnerguy
(Timing is important, like completing a Masters in Financial Planning right when the Royal Commission is in full flow 😞😞)


----------



## Value Collector (17 July 2021)

over9k said:


> You can also just find online calculators for things like black-scholes and just pump the numbers into them and they'll spit you out an answer to save you writing the excel codes etc yourself.



In my opinion the black and scholes model is not a substitute for doing manual valuations, in fact I believe that the reason I have been able to do so well in options without ever using the black and scholes model is that my competitors relied so heavily on it.

The biggest flaw I see in the B and S model is that it makes a short cut by using Beta as a calculation for risk, which means that in situations where actual risk is low, but volatility is high, long term players can collect premiums that are far higher than they actual risk they are taking.


----------



## over9k (17 July 2021)

Inboxed.


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## basilio (17 July 2021)

Value Collector said:


> but at the end of the day it only has worked because my underlying valuation of FMG (and other shares) has proved correct, you need to get the right companies at the right prices to make this system work, if you can’t value businesses, and keep within strict limits, you will blow up.



That is the point isn't it ? The various ways of maximising value from the share are reliant on the company doing as well as you believe they should. 

I think that is the difference between research and investing vs punting on rising and falling share prices on stock where the actual company is not considered important.


----------



## Value Collector (17 July 2021)

basilio said:


> I think that is the difference between research and investing vs punting on rising and falling share prices on stock where the actual company is not considered important.



This is a great video explaining that, what he says about low cost producers is very relevant to FMG, and what I was saying about high cost producers a few posts back.

At the end he also discusses the difference between risk and volatility and what options traders can beta.

as I said the try and short cut the calculation by using volatility instead of business risk, which saves them time, but also hands real long term investors a free kick.


----------



## over9k (17 July 2021)

Sure but macro conditions will still effect the individual stock basilio, hence why you might need some kind of hedge and/or insurance. 

Simple example: 

Markets are currently tanking because of fears about this delta coronavirus variant. But moderna's stock is screaming because of it - hence holding moderna & selling it/pumping your gains back into a market etf when you think you've reached flipping point is a solid swing play. 


What the equivalent is for FMG I do not know. I can't think of anything that'd spike in response to a market/macro drop in demand for iron ore.


----------



## basilio (18 July 2021)

over9k said:


> Sure but macro conditions will still effect the individual stock basilio, hence why you might need some kind of hedge and/or insurance.
> 
> Simple example:
> 
> ...




I take your point over9k and it seems you have made it clearer than ever that identifying  a stock opportunity  like moderna even in a market slump is a way to go. 

I'm not a market player of stocks.  My reservations are about the turning of market investment vehicles like stock markets into virtual casinos where the biggest game in town is not identifying  a  fair share business opportunity but attempting  to make money from  just moving the price of stocks around.  

Obviously no market is perfect and there are always bad actors. But what is the balance ?


----------



## wayneL (18 July 2021)

Gunnerguy said:


> @striek
> Thanks for you great comment. This is exactly the wonderful ASF community provides !!
> I looked at buying the calls back and incurring a loss but they are very expensive compared to my credit 😔, obviously.
> I could just be happy and be assigned, incur the trading costs, but overall with my held shares I would be happy with the profit. I’m gonna just hold a little longer and see what happens.
> ...



Don't forget the tax implications... Depending how long you have held the shares etc. Whether you want to keep them as a long-term hold etcetera

There are other ways to manage this position that may be more tax effective.


----------



## Gunnerguy (19 July 2021)

wayneL said:


> Don't forget the tax implications... Depending how long you have held the shares etc. Whether you want to keep them as a long-term hold etcetera
> 
> There are other ways to manage this position that may be more tax effective.



Thank @wayneL.
I am fully aware of the CGT timing, 12 months holding , etc and tax issues.
Thanks for reminding me to keep an eye on this though. I have a full  tax management strategy set up between myself and Ms. Gunnerguy. I sell to take profit, pay low tax %, or ‘desired’ losses, and the Ms. GG just buys them back. 
Makaging and using tax losses against winners is nice, and Ms. GG just buys them back.
I don’t really mind paying ‘minimal’ taxes, as it means I’m making a profit, however at the same time my investments are not controlled by my tax. Rather the ‘vehicle’ I use reduces my tax.
Gunnerguy.


----------



## wayneL (19 July 2021)

Gunnerguy said:


> Thank @wayneL.
> I am fully aware of the CGT timing, 12 months holding , etc and tax issues.
> Thanks for reminding me to keep an eye on this though. I have a full  tax management strategy set up between myself and Ms. Gunnerguy. I sell to take profit, pay low tax %, or ‘desired’ losses, and the Ms. GG just buys them back.
> Makaging and using tax losses against winners is nice, and Ms. GG just buys them back.
> ...



Very good. It is a good point for others to consider also, so worth the discussion


----------



## againsthegrain (25 July 2021)

Go Figure said:


> If your FMG holdings are valued less than $50,000 you could go to linkmarketservices.com.au follow prompts and have your SRN/HIN: Xxxxxxxxxxxx handy and add or update your TFN or ABN, Bank Details and make a DRP Election if you wish to.




Finally had time to do this,  went with a full share repurchase plan,  thank you for the link nice and simple


----------



## basilio (25 July 2021)

Gunnerguy said:


> Thank @wayneL.
> I am fully aware of the CGT timing, 12 months holding , etc and tax issues.
> Thanks for reminding me to keep an eye on this though. I have a full  tax management strategy set up between myself and Ms. Gunnerguy. I sell to take profit, pay low tax %, or ‘desired’ losses, and the Ms. GG just buys them back.
> Makaging and using tax losses against winners is nice, and Ms. GG just buys them back.
> ...




That's interesting... and clever.  So how does one set the price for a share sale to Ms Gunnerguy ?  I guess you don't sell through brokers and pay commissions each way ?  Do you just  transfer shares  based on the the most appropriate value for the shares on a particular day.  I assume you would have to keep excellent personal records of such transactions.


----------



## Value Collector (25 July 2021)

basilio said:


> That's interesting... and clever.  So how does one set the price for a share sale to Ms Gunnerguy ?  I guess you don't sell through brokers and pay commissions each way ?  Do you just  transfer shares  based on the the most appropriate value for the shares on a particular day.  I assume you would have to keep excellent personal records of such transactions.



I thought he meant he would sell on the market, and she would buy the same day if they had the opportunity to sell and receive a loss for tax purposes.

not would be illegal to repurchase them himself.


----------



## Gunnerguy (25 July 2021)

Value Collector said:


> I thought he meant he would sell on the market, and she would buy the same day if they had the opportunity to sell and receive a loss for tax purposes.
> 
> not would be illegal to repurchase them himself.



@basilio 
Correct. I sell on the market and Ms.GG buys on the market if ‘we’ want to continue holding.
Gunnerguy


----------



## Joules MM1 (25 July 2021)

Warren is of course referring to investing when he says
"..the stock market is there to serve you, not to instruct you.."

i found the more i moved away from investing the more time i had to spend being instructed
and all the people around me were also under instruction, only, they didnt (and still dont) think so

disparity  -  an amazing thing


----------



## Gunnerguy (27 July 2021)

Looking back at the historical 'Investor Calander' I am trying to work out the exact dates of results, dividend declaration and XD dates.
I have looked at the FMG website and found .....

30th. August Full Year Results.

Last year it seems that the dividend was declared before the FY results came out. Is that possible ?

Does anyone know
1) What date the dividend declared ? Is it in the FY results or before ?
2) What is the XD date ? Is it known already ? 

Doing some research it seems that these dates are not clear.

Apparantly Bell Port estimated (in May) that FMG total dividend could be $4.04. Having already paid $1.47, this may suggest the August dividend could be as high as $2.57.

Thanks
Gunnerguy.
(Working out how high/low above/below the current FMG price I should buy/sell my puts/calls in relateion to the dividend and XD dates).


----------



## striek (28 July 2021)

Anythings possible, but its very unlikely. Last year it was announced on the same day (24 August) as the FY results and that is the norm.

The XD date should be the 6th of September (one week after announcement).


----------



## wayneL (28 July 2021)

Gunnerguy said:


> @basilio
> Correct. I sell on the market and Ms.GG buys on the market if ‘we’ want to continue holding.
> Gunnerguy



Off topic, but kinda reminds me of gst/depreciation fun and games with vehicles.

All above board and why the hell not.


----------



## Value Collector (28 July 2021)

Gunnerguy said:


> Looking back at the historical 'Investor Calander' I am trying to work out the exact dates of results, dividend declaration and XD dates.
> I have looked at the FMG website and found .....
> 
> 30th. August Full Year Results.
> ...



Look under the investor section, they have a list of future “key dates”


----------



## Gunnerguy (28 July 2021)

Value Collector said:


> Look under the investor section, they have a list of future “key dates”



@Value Collector 
Thanks, I have looked but it only has the FY results on 30th August.
I’m looking for dividend announcement and XD dates. I can’t see these dates there.
Gunnerguy


----------



## Value Collector (28 July 2021)

Gunnerguy said:


> @Value Collector
> Thanks, I have looked but it only has the FY results on 30th August.
> I’m looking for dividend announcement and XD dates. I can’t see these dates there.
> Gunnerguy



The dividend will be announced with the FY results. And it will go ex dividend shortly after that.

If this is part of your options planning, I think you can safely assume that August options will expire before the EX Div date, and September will expire After the EX Div date.


----------



## Gunnerguy (28 July 2021)

Value Collector said:


> The dividend will be announced with the FY results. And it will go ex dividend shortly after that.
> 
> If this is part of your options planning, I think you can safely assume that August options will expire before the EX Div date, and September will expire After the EX Div date.



@Value Collector 
Thanks. That’s exactly what I’m thinking.
I was just hoping to see if there were any official published dates, but seems not.
Gunnerguy


----------



## Beaches (28 July 2021)

Previous ExDiv dates for FMG

01/03/2021
31/08/2020
02/03/2020 
02/09/2019 
22/05/2019 
28/02/2019 
31/08/2018
01/03/2018
01/09/2017
02/03/2017
.


----------



## striek (29 July 2021)

Q4 Production report released

Highlights:

*Record iron ore shipments of 49.3 million tonnes (mt) for the quarter and 182.2mt for FY21, exceeding guidance of 182mt
*Record average revenue of US$168/dry metric tonne (dmt) for the quarter, realising 84 per cent of the average Platts 62% CFR Index, and US$135/dmt forFY21
*C1 cost for Q4 FY21 of US$15.23/wet metric tonne (wmt), two per cent higher than the previous quarter, with C1 cost for FY21 of US$13.93/wmt inline with guidance

--

Really good results, was slightly worried about shipments coming in under guidance (Platts suggested they would miss guidance at 174mt!). The dip in realised price is a bit disappointing, but cost control was very good compared to RIO.

The market should react positively this morning. The overnight lead-in for the miners was quite strong.

Its a decent position for me with ~ 100 long call options.


----------



## Value Collector (29 July 2021)

striek said:


> --
> 
> Really good results, was slightly worried about shipments coming in under guidance (Platts suggested they would miss guidance at 174mt!). The dip in realised price is a bit disappointing, but cost control was very good compared to RIO.




I don't think they were in danger of missing guidance, and especially not coming in anywhere near a production rate of 174mt because they are now mining at the eliwana mine site, while they are also still mining at the fire tail mine which eliwana was meant to be replacing.

While Eliwana was under construction, they ended up finding more deposits near by fire tail mine, so they are going to be double dipping for a while.


----------



## Dona Ferentes (29 July 2021)

Gunnerguy said:


> @Value Collector
> Thanks. That’s exactly what I’m thinking.
> I was just hoping to see if there were any official published dates, but seems not.
> Gunnerguy



Reporting Season Calendar​
Reporting Season Calendar August 2021 will be live soon.

...........  _but not yet. _


----------



## Gunnerguy (30 July 2021)

An absolute astonishing day in the Gunnerguy household today. Ms. Gunnerguy (as advised and actioned by her financial advisor,me) bought a large stake in FMG at 26.40 at 10.20am in order to gain from the exhuberant XD predictions for next month.
As a hedge Mr.Gunnerguy bought an equivalent amount of 25.5 September puts hoping to gain from the possible/probable slide in the price after XD date.
These butterfly wings flapping caused a tsunami of selling resulting in a 5% fall in the stock price.

oh what a day.

Gunnerguy.
(Flapping butterfly wings DO cause tsunamis)


----------



## Dona Ferentes (3 August 2021)

Dona Ferentes said:


> Reporting Season Calendar​
> Reporting Season Calendar August 2021 will be live soon



30 August for FMG, according to AFR


----------



## qldfrog (3 August 2021)

Dona Ferentes said:


> 30 August for FMG, according to AFR



hum below 24 as we speak..


----------



## againsthegrain (13 August 2021)

Does anybody know when the cut off date for the coming dividend is?  Picked up a few shares today be nice if they squeezed in for the coming one


----------



## Value Collector (13 August 2021)

againsthegrain said:


> Does anybody know when the cut off date for the coming dividend is?  Picked up a few shares today be nice if they squeezed in for the coming one





againsthegrain said:


> Does anybody know when the cut off date for the coming dividend is?  Picked up a few shares today be nice if they squeezed in for the coming one



Dividend will be announced on the 30th of August, and will be ex dividend some time after that, probably about a week later.


----------



## againsthegrain (13 August 2021)

Value Collector said:


> Dividend will be announced on the 30th of August, and will be ex dividend some time after that, probably about a week later.




Thanx, maybe squeeze in 1 more parcel before then


----------



## Beaches (13 August 2021)

againsthegrain said:


> Thanx, maybe squeeze in 1 more parcel before then




Just be wary of the current negative sentiment on Iron Ore

RIO went ex div on 12 Aug for a $7.60 div
Closed on 11 Aug (cum div) at $129.20
Closed on 12 Aug (ex div) at 120.26 and got down to $118.00 at one point today


----------



## Value Collector (13 August 2021)

Beaches said:


> Just be wary of the current negative sentiment on Iron Ore
> 
> RIO went ex div on 12 Aug for a $7.60 div
> Closed on 11 Aug (cum div) at $129.20
> Closed on 12 Aug (ex div) at 120.26 and got down to $118.00 at one point today



That $7.60 dividend is worth just under $11 including the franking credits, so that drop is pretty standard.


----------



## againsthegrain (13 August 2021)

Beaches said:


> Just be wary of the current negative sentiment on Iron Ore
> 
> RIO went ex div on 12 Aug for a $7.60 div
> Closed on 11 Aug (cum div) at $129.20
> Closed on 12 Aug (ex div) at 120.26 and got down to $118.00 at one point today




because with fmg I am not in for a quick flip lately I am buying on negative sentiment, still pissed at myself for selling last year when the Twitter war was appareny the end of the world for fmg 19 or 20 I sold? then in a week or 2 was back at 25

The funds I have allocated are funds that are rotting in the bank at .25% interest so dividend in itself is worth changing the storage shed


----------



## Beaches (13 August 2021)

Value Collector said:


> That $7.60 dividend is worth just under $11 including the franking credits, so that drop is pretty standard.



Except that it's already down from $135 and I'm not sure it has finished correcting.







I think the IO price will stabilise around the current levels. However the market seems more concerned that its heading south.

I'm only holding FMG as a trade, so currently undecided on whether to sell FMG before or after it goes exdiv. Probably another 2 weeks before a decision needs to be made.


----------



## Beaches (13 August 2021)

againsthegrain said:


> because with fmg I am not in for a quick flip lately I am buying on negative sentiment, still pissed at myself for selling last year when the Twitter war was appareny the end of the world for fmg 19 or 20 I sold? then in a week or 2 was back at 25
> 
> The funds I have allocated are funds that are rotting in the bank at .25% interest so dividend in itself is worth changing the storage shed




I agree, FMG looks good for the future, it's just a matter of how it is likely to play out in the short term.
If it looks like the price will hoid up after the div, I will exit after exdiv and then look for a new entry when the IO sentiment turns up. However, if it looks as though it might drop hard after the div, I will sell before and get a new entry at the  discounted price


----------



## Value Collector (13 August 2021)

Beaches said:


> Except that it's already down from $135 and I'm not sure it has finished correcting.
> 
> View attachment 128994
> 
> ...



with a $7.60 dividend, a drop of $11 on ex dividend date is the same the share price being flat any other day.

If it drops $12 it’s the same as if it only dropped $1.

that’s all I am saying, of course share prices fluctuate for other reasons besides dividends too.


----------



## Ferret (16 August 2021)

This correction for FMG is not showing any signs of bottoming yet.  If it gets close to $20, I might look to add some.


----------



## basilio (16 August 2021)

Ferret said:


> This correction for FMG is not showing any signs of bottoming yet.  If it gets close to $20, I might look to add some.




Getting in to score the current dividend looks attractive. Estimate are around $2.50 fully franked. Current SP is $21.87.

But don't wait too long. Twiggy is always in the wings sniffing for good value   ( He bought 100,000 shares at market in late March after analyst inspired selloff)


----------



## basilio (17 August 2021)

basilio said:


> Getting in to score the current dividend looks attractive. Estimate are around $2.50 fully franked. Current SP is $21.87.
> 
> But don't wait too long. Twiggy is always in the wings sniffing for good value   ( He bought 100,000 (*NO 10 million* )  shares at market in late March after analyst inspired selloff)



Correction.. Twiggy spent $193m + buying 10 million shares in late March. Bit of a brain fade there. 

He is certainly serious about the value of FMG.   At 30th March held 1,131,365,000 shares.


----------



## over9k (17 August 2021)

It'd be worth taking a look at how closely FMG et al track the iron ore spot price. That's been absolutely pounded lately.


----------



## Go Figure (18 August 2021)

IF the IO price sat between US$90-120 (currently approx $159) and the US$ was around .73 an annual fully franked dividend of around $2.85 (including FC) is achievable. Iron Bridge production will bring with it a new revenue stream, further automation and reductions in running costs will serve to stabilise the CURRENT FMG business model and maybe some of the various governments mystical infrastructure spend may actually happen. 

I’m looking forward to 30/8/2021 it’s decision time for the FMG board and PERHAPS an announcement or two of any new ventures and their impact on the group.

DYOR, best of health and luck to ALL during these awfully sad Covid days.

”IT’S ALWAYS DARKEST BEFORE THE DAWN”.


----------



## basilio (19 August 2021)

FMG now below $20.  Almost certainly triggered some stop losses on the way. Looks like VG value (IMO).  I will not be surprised, on earlier  history,  if Twiggy wades into the market as well.

On the other hand - there could be some big  continuing fallouts from Afghanistan and out of control COVID...

And there is an imminent big dividend coming.


----------



## over9k (19 August 2021)

basilio said:


> FMG now below $20.  Almost certainly triggered some stop losses on the way. Looks like VG value (IMO).  I will not be surprised, on earlier  history,  if Twiggy wades into the market as well.
> 
> On the other hand - there could be some big  continuing fallouts from Afghanistan and out of control COVID...
> 
> And there is an imminent big dividend coming.



Is the divvy locked in or are they going to review it?


----------



## basilio (19 August 2021)

over9k said:


> Is the divvy locked in or are they going to review it?




I can't imagine they would "review" it. It will reflect the income generated in the first 6 months of 2021. That has already been booked.

One possibility is that they may change their policy and pay a slightly different % of the net profit as dividend. Currently I understand they pay out  up to 80% of the profit and allocate a further 10% to their future industries portfolio. The balance is retained.









						FMG flags huge dividend as high-grade strategy struggles
					

Fortescue will pay another huge dividend as it pumps large sums into its clean energy subsidiary and struggles to make a switch to high grade iron ore.




					www.afr.com


----------



## divs4ever (19 August 2021)

basilio said:


> I can't imagine they would "review" it. It will reflect the income generated in the first 6 months of 2021. That has already been booked.
> 
> One possibility is that they may change their policy and pay a slightly different % of the net profit as dividend. Currently I understand they pay out  up to 80% of the profit and allocate a further 10% to their future industries portfolio. The balance is retained.
> 
> ...



 ok  you have hooked me 

 i did a quick calculation  of FMG v. WPL  

 and put an order in for FMG @ $20 ( which will probably be lowered tomorrow  , if not  taken today )

 at $20 bucks   a share FMG is the much better company 

 ( IMO )

 cheers


----------



## basilio (19 August 2021)

It will be interesting to see if FMG dips below $20 again in a hurry. I suspect the selling pressure  today would have triggered a number of stop losses that accelerated the falls .

At under $20  with an imminent  large dividend my guess is that everyone from Twiggy down would have wanted a piece of the action.

Current SP is $20.24 and gyrating.


----------



## divs4ever (19 August 2021)

am working on FMG being able to pay $1 twice a year in divs.

 has room and the skills to grow 

 match that with WPL  at roughly the same price or BHP at twice the price 

 and FNG is the obvious near term choice for me 

 ( BTW i added more MGX this morning  , so it is not just Twiggy worship )

 the BIG question ... is there a major war on the horizon


----------



## basilio (19 August 2021)

One point to remember about FMG is there commitment to renewable energy development and  using  the synergies around clean hydrogen production and their iron ore sales. Put simply Twiggy is very interested in producing green steel using  cheap solar generated hydrogen.

That process has already begun OS and will be a critical game changer in terms of addressing sustainability  and carbon reduction worldwide.









						‘Green steel’: Swedish company ships first batch made without using coal
					

Hybrit sends steel made with hydrogen production process to Volvo, which plans to use it in prototype vehicles and components




					www.theguardian.com
				












						FMG Chases Green Dream
					

Disruption is one of the cornerstones of the success of Andrew Forrest's Fortescue Metals Group.




					www.energycouncil.com.au


----------



## basilio (19 August 2021)

divs4ever said:


> am working on FMG being able to pay $1 twice a year in divs.
> 
> has room and the skills to grow
> 
> ...



Agree. I think the dividend estimate is on the mark.

Hopefully the Future industries projects will also prove effective and profitable.
Frankly I don't think *anything* could be as profitable as the last 12 months of iron ore sales. But a healthy return via renewable energy projects?. Yep IMV quite reasonable.


----------



## over9k (19 August 2021)

basilio said:


> *I can't imagine they would "review" it.* It will reflect the income generated in the first 6 months of 2021. That has already been booked.
> 
> One possibility is that they may change their policy and pay a slightly different % of the net profit as dividend. Currently I understand they pay out  up to 80% of the profit and allocate a further 10% to their future industries portfolio. The balance is retained.
> 
> ...



Probably because of this delta outbreak? 

All bets were off with the first round of virus, there's no reason not to assume we might see the same thing with this new variant. 

Everyone are bricking it for a reason.


----------



## Value Collector (19 August 2021)

divs4ever said:


> am working on FMG being able to pay $1 twice a year in divs.



Based on that, that would would be $2.86 per year including Franking credits, So that would be a 10% return if you paid $28 or a 14% return based on todays closing price.


----------



## Value Collector (19 August 2021)

over9k said:


> Probably because of this delta outbreak?
> 
> All bets were off with the first round of virus, there's no reason not to assume we might see the same thing with this new variant.
> 
> Everyone are bricking it for a reason.



The share market in general is higher now than it was before the delta out break, and we aren’t seeing a broad market crash, this is purely an Iron Ore price drop response.

I have said all along as soon as Iron Ore price drops there would be a big market over reaction, this is the over reaction.

If I had to guess, I think this is just a lot of speculators on the bull side panic selling combined with a bunch of short selling if both the shares of the producers and the actual Iron Ore.

I think it will play out in the following order.

1, Iron Ore price will stabilise once the speculators have sold their Ore.

2, The Ore price will recover a little as Mills realise that the Ore price has bottomed and they need to restock.

3, The FMG price will stabilise once the speculators have finished selling, and they realise the Ore price has stabilised.

4, The FMG share price will recover as shorters have to close positions.

Now I don’t claim to know at what point the Iron Ore Price will stabilise, I have said I think it’s fair price is some where in the $90’s, But it might not be ready to drop back to that yet, so it could stabilise well over $100, before returning to $90 some time next year, but every day over $100 is a great day for us holders.


----------



## over9k (19 August 2021)

Iron ore's 25% off peak, FMG's 24% off peak, it's a pretty strong correlation. 

Question is, what's driving the spot price drop? My gut says china.


----------



## divs4ever (19 August 2021)

over9k said:


> Probably because of this delta outbreak?
> 
> All bets were off with the first round of virus, there's no reason not to assume we might see the same thing with this new variant.
> 
> Everyone are bricking it for a reason.



 after last year's div. events   , one should expect ANYTHING

 i had divs trimmed AFTER the declaration  date  , i had divs. withheld /suspended  AFTER the declaration date , or withheld /suspended AFTER the ex-div. date  including one company that changed it's mind ON the div. payment date ( to withhold the div. )

 ( IMO ) there is no reason to believe  extraordinary can't happen again this year 

 good luck trying to  budget using strictly div. income in the last two years 

 BTW that is NOT to say some of those decisions were not wise and prudent .. but if i didn't have a disability pension to fall back on ( and the healthcare card ) life might have been unpleasant .


----------



## divs4ever (19 August 2021)

over9k said:


> Iron ore's 25% off peak, FMG's 24% off peak, it's a pretty strong correlation.
> 
> Question is, what's driving the spot price drop? My gut says china.



 don't just watch the Iron price , the $Aus is sliding and shipping costs are probably rising


----------



## Value Collector (19 August 2021)

over9k said:


> Question is, what's driving the spot price drop? My gut says china.



A couple of things, firstly Iron Ore was never going to stay at all time highs.

But the drop has been pretty hard and fast, which I would put down to the compounded effect of the moves China has made to reduce price, the lock downs in China, and as I said before the scattering of the speculators.


----------



## over9k (19 August 2021)

I swear the news is reading my posts some days.


----------



## basilio (23 August 2021)

It will be interesting to see if Twiggy starts buying more shares with the ongoing fall in prices.  And of course FMG itself has always stated they would buy shares onmarket if it made financial sense.

I suppose one interesting possibility is a late decision by FMG to reduce their % of profits payouts  by a few points and thus lower the dividend as well at retaining additional capital. However if they decide to buyback a few hundred million in shares now they effectively reduce dividend cash outflow  and the they still end up with the same cash situation. 

I think this a unique situation ahead of a big dividend payment.

It is also interesting that RIO and BHP shares are rising ??


----------



## divs4ever (23 August 2021)

well BHP might be rising because it is cum-div. and RIO might be  recovering  after the dip caused by going ex-div.

 but that is just guessing


----------



## Gunnerguy (23 August 2021)

FMG hammered today.
I’m still (Psychologically) long but will be sitting on some heavy losses when the price falls XD next month.
I plan to sell after XD and realise some significant capital tax losses and Ms. Gunnerguy will buy the same amount back for her portfolio.
Cumulative ‘we’ don’t ‘realise’ a loss but the Capital Loss will help my tax return later this year.
I also sold some credit option spreads last month that will give me some net profits on the fall also.
Gunnerguy


----------



## sptrawler (23 August 2021)

divs4ever said:


> BTW that is NOT to say some of those decisions were not wise and prudent .. but if i didn't have a disability pension to fall back on ( and the healthcare card ) life might have been unpleasant .



I have neither and too young for pension, so it was an unpleasant year, luckily we couldn't travel so the half couldn't book anything. If the lockdowns last for another 12 months, it would suit me fine, the div's should be back up by then.


----------



## sptrawler (23 August 2021)

basilio said:


> It will be interesting to see if Twiggy starts buying more shares with the ongoing fall in prices.  And of course FMG itself has always stated they would buy shares onmarket if it made financial sense.
> 
> I suppose one interesting possibility is a late decision by FMG to reduce their % of profits payouts  by a few points and thus lower the dividend as well at retaining additional capital. However if they decide to buyback a few hundred million in shares now they effectively reduce dividend cash outflow  and the they still end up with the same cash situation.
> 
> ...



I would expect Twiggy to keep diversifying, to reduce his exposure to Iron ore.
The Chinese won't want to be dependent on our ore indefinitely, especially if relations sour further, when Taiwan is occupied.


----------



## Austwide (23 August 2021)

@Gunnerguy  "I plan to sell after XD"

MIN (Iron ore) held ground until ex div then dropped 5 x div amount.
Maybe more to it or maybe too many held out for the div

Watch it closely.


----------



## basilio (23 August 2021)

sptrawler said:


> I would expect Twiggy to keep diversifying, to reduce his exposure to Iron ore.
> The Chinese won't want to be dependent on our ore indefinitely, especially if relations sour further, when Taiwan is occupied.




Well he is madly diversifying.  Fortesque Future Industries is the vehicle for creating new renewable energy projects amongst a raft of other activities. But that is already under the FMG umbrella.

The interesting question is whether he buys further into FMG with the current SP slump as he did in March this year.


----------



## sptrawler (23 August 2021)

basilio said:


> Well he is madly diversifying.  Fortesque Future Industries is the vehicle for creating new renewable energy projects amongst a raft of other activities. But that is already under the FMG umbrella.
> 
> The interesting question is whether he buys further into FMG with the current SP slump as he did in March this year.



What did he buy the last parcel at? If the price goes to that and he buys more, it would certainly indicate a floor.
You only have to look at the chart to see that anything is possible, especially with materials, that was why I said Twiggy seems to be looking to diversify.
What was FMG in 2018, 2019, 2020?


----------



## basilio (23 August 2021)

sptrawler said:


> What did he buy the last parcel at?




Twiggy bought 10 million shares from March 22 to March 25,  2021.  The share price went as low as 18.87 and was basically bouncing around the low $19 mark.  $19-19.40.  He spent $193m on shares. The announcement  of the onmarket purchase was made a few days later.

FMG has certainly had a spectacular run since 2018. I think if one looks at VC's analysis of FMG's operations in the past few years you could see the stage was  being set for a very profitable run as debt was retired, capital expenditure completed and  ore prices increasing. The huge unexpected increase in ore price in 2020/21 has meant that SP had to jump accordingly.

It would have been  unrealistic to have a $8-10 share showing  dividends of  $1.14 in 2019,  $1.76 in 2020 and $3.50-$4.00 in 2021 unless there was a clear one off event that was not replicable ie  one off sale of a massive asset.


FMG








               29/03/2021                        4:22:00 PM                        3          



Change of Director's Interest Notice                                (PDF 170.3 KB)


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## sptrawler (23 August 2021)

basilio said:


> Twiggy bought 10 million shares from March 22 to March 25,  2021.  The share price went as low as 18.87 and was basically bouncing around the low $19 mark.  $19-19.40.  He sent $193m on shares. The announcement  of the onmarket purchase was made a few days later.
> 
> 
> FMG
> ...



So I guess we will have to see what happens, if the price goes below that, it seems to be pretty close at the moment.


----------



## basilio (23 August 2021)

Not everyone thinks FMG is good value.









						Dryblower wonders whether FMG is the world's most overvalued mining company
					

Could FMG's sky-high share price easily fund expansion, perhaps into copper?




					www.miningnews.net


----------



## sptrawler (23 August 2021)

basilio said:


> Not everyone thinks FMG is good value.
> 
> 
> 
> ...



I've never looked into them much, but its run up has been very dramatic, as has the run up in iron ore prices. As I've said before I think Twiggy is doing the right thing diversifying, but it will take some time for that to gain traction and break the link between share price and iron ore price, they are no Wesfarmers yet IMO. 
By the way that article is a year old, which is interesting.

I don't hold.


----------



## dat111 (25 August 2021)

Fortescue Metals (OTCQX:FSUMF +1.9%) and China's Tsingshan Holding could invest billions of dollars to build an industrial area for metal smelting on Borneo island, according to Indonesia's minister of maritime affairs.
Fortescue could invest $12B and Tsingshan has the "potential" to add $30B, the minister says.
"Total investment will be $100B, including the dam, and it will be completed in 10 years," the minister says, adding that groundbreaking is planned for October and smelting of iron, nickel and copper ores could start as early as 2023.
Indonesia has big plans to start processing its ample supply of nickel laterite ore used in lithium batteries and eventually become a global hub for producing and exporting electric vehicles.
Following a spectacular ~25% drop in value over the past month, iron ore futures in Singapore rebounded as much as 10% today.


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## divs4ever (25 August 2021)

wowee 

 i hold ATM and FMG there is a tiny chance i am a double winner if this goes through 

 cheers


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## sptrawler (25 August 2021)

dat111 said:


> Fortescue Metals (OTCQX:FSUMF +1.9%) and China's Tsingshan Holding could invest billions of dollars to build an industrial area for metal smelting on Borneo island, according to Indonesia's minister of maritime affairs.
> Fortescue could invest $12B and Tsingshan has the "potential" to add $30B, the minister says.
> "Total investment will be $100B, including the dam, and it will be completed in 10 years," the minister says, adding that groundbreaking is planned for October and smelting of iron, nickel and copper ores could start as early as 2023.
> Indonesia has big plans to start processing its ample supply of nickel laterite ore used in lithium batteries and eventually become a global hub for producing and exporting electric vehicles.
> Following a spectacular ~25% drop in value over the past month, iron ore futures in Singapore rebounded as much as 10% today.



It will be interesting to see how "Green" that will be.


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## basilio (26 August 2021)

sptrawler said:


> It will be interesting to see how "Green" that will be.




Well that is the plan SP. Twiggy went around the world looking for and promoting renewable energy projects for FFI. This seems to be one of them.
The  proposed development will be using a planned Hydro electricity power station close by. The nickel is intended for EV batteries.

I think the most critical green issue will be dealing with mine wastes and ensuring there are no tailings dam disasters.  It would be interesting to see if they can come up with a cleaner way of processing and dealing with wastes.



			https://www.nasdaq.com/articles/indonesia-says-fortescue-tsingshan-to-invest-billions-in-borneo-2021-08-24


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## basilio (26 August 2021)

FMG is also commissioned  to build a huge  $80B Hydro Electric project in the Congo.  I'm guessing they might also piggy back some mining projects alongside. 

These are big deal projects. If they come off there will certainly be some big coin for FMG. As I undersatnd it  FMG will contribute substantial starting funds and have a big interest in the project. However most the development capital will be sourced  inside separate subsidiary companies.









						Fortescue to develop huge Congo hydro project
					

Democratic Republic of Congo's government says it chose Fortescue Metals (FSUMF) to develop a series of dams that could become the world's largest hydroelectric project.The Grand...




					seekingalpha.com


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## basilio (26 August 2021)

Doing my research I came across this very detailed analysis of FMG  from Nov 2020.

It's not a 5 minute read but in IMV highlights the engineering and financial achievements of FMG and their potential to become a a very  big player in developing renewable energy and green engineering .

By the way when this was  published  the iron ore price was  $134 a ton

Fortescue: Reviewing The Past, The Present, And A Glimpse Into The Future​Nov. 30, 2020 9:31 AM ETFortescue Metals Group Limited (FSUGY), FSUMF17 Comments12 Likes
Summary​
It may seem implausible, but I have long considered it will be the miners and oil majors that will lead the way to a world of environmentally-friendly sustainable energy.
Operating in remote locations, without access to nearby base load power and fuel infrastructure, creates fertile ground for innovation with renewable sources of energy.
Applications abound for profitable experimentation with new and developing technologies by organizations steeped in innovation in the physical world of mining and machinery.
All this coincides with massive public relations kudos, and enhanced access to capital, for embattled miners and oil companies who can lead the way toward a world of green energy.
Fortescue is out of the blocks and running, leading the race to a world of environmentally-friendly sustainable energy.
Looking for more investing ideas like this one? Get them exclusively at Dividend Growth Income+ Club. Get started today »
Investment Thesis​
*Fortescue - Iron Ore Producer*

On the surface, Fortescue (OTCQX:FSUGY) (OTCQX:FSUMF) is an iron ore miner, at the mercy of fluctuations in commodity prices, and with all its eggs in one basket, selling close to 95% by value of its ore into the Chinese market in 2020. Dig deeper, and one finds Fortescue has established moats through massive lowering of costs, working toward making its products increasingly indispensable to its customers' production efficiency, and creating a breadth of products for all market cycles. Fortescue will continue to have its highs and lows as market prices for iron ore fluctuate. But, due to the moats it has created and continues to widen, Fortescue will likely be "last man standing" in any sustained and deep downturn in iron ore prices, remaining cash flow and net income positive during even the deepest dips in iron ore prices.









						Fortescue: Reviewing The Past, The Present, And A Glimpse Into The Future (OTCMKTS:FSUGY)
					

It may seem implausible, but I have long considered it will be the miners and oil majors that will lead the way to a world of environmentally-friendly sustainable energy.




					seekingalpha.com


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## syd1 (28 August 2021)

Dumb move I bought FMG shares at $22.60 & I have lost $3,500 so far. Looks like iron ore or FMG prices will keep falling for some time. Anyone knows how long will prices keep falling or how long it'll take for prices to recover? Would it be better so sell at such loss?


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## qldfrog (28 August 2021)

if anyone knew, they would be in the Bahamas smocking cuban cigar with top models around...Not typing on a keyboard for ASF posts


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## againsthegrain (28 August 2021)

I bought some in high 21s then bought in 20s and low 20s again and will buy in 19s fingers crossed in 18s too while pretending to smoke cuban cigars lol


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## Dona Ferentes (28 August 2021)

Next week Fortescue Metals releases what will be a record profit for the year to June and there will be a lot of chest-puffing and boasting about that, but one thing to keep in mind is that the record will be based on an average price for the year of $US135 a tonne (and $US168 a tonne for the final quarter).

At $US122 a tonne at the moment for 58% Fe fines, a repeat record for Fortescue won’t be happening any time soon.


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## basilio (28 August 2021)

syd1 said:


> Dumb move I bought FMG shares at $22.60 & I have lost $3,500 so far. Looks like iron ore or FMG prices will keep falling for some time. Anyone knows how long will prices keep falling or how long it'll take for prices to recover? Would it be better so sell at such loss?




No crystal balls here but there has been some quite excellent analysis of FMG's prospects.
Certainly the last year has  been one of super profits that will result in a an exceptional cash dividend for 20-21. However FMG has been very successful at reducing it's operating costs and will continue to show very good profits and dividends  on iron ore sales  at prices  well below the current levels.
The FMG thread is worth exploring.


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## divs4ever (28 August 2021)

i bought my FMG @ $19.90  and am thinking long term 

 mind you , the global economy could officially implode  , and i will in just as much  in trouble  with the share portfolio as you 

 most of the global economy is in can-kick mode  already , they are just trying to fool you that is the 'new normal' and nothing to worry about


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## tech/a (28 August 2021)

If your question relates to a painful draw-down in your account of $3500 then this is about the $3500 more so than the vehicle that your investing in.
If it was me Id be asking myself what my over all risk plan is on my trades and my portfolio.
If I didn't have one then Id be finding out what I need to know to save myself the anxiety of a $3500 draw down.

But If I dont have one and dont want one and accept that Im going to have draw-downs and sometimes painful ones than
Id have a look at the chart (Others have mentioned that FMG has some great funnimentals). *Its pretty clear whats driving this!
Iron Ore Price.*

I did some analysis a while ago which is still on the chart I've placed a line where it stopped previously (Red Dotted one).
Thought some continuation would be interesting for some.







Its pretty clear that the price of Iron Ore is directly related to performance
The commentary for this chart is very similar in my view.







If the current support low was taken out (By any appreciable amount) then I would be re evaluating.


----------



## Craton (28 August 2021)

syd1 said:


> Dumb move I bought FMG shares at $22.60 & I have lost $3,500 so far. Looks like iron ore or FMG prices will keep falling for some time. Anyone knows how long will prices keep falling or how long it'll take for prices to recover? Would it be better so sell at such loss?



G'day syd1 and welcome to ASF.
Ah, that sinking feeling...

You do know any specific advice can't be given like telling you to sell at such a loss?
Only you and/or your financial adviser can do that.

I can tell you that we have a pandemic but not if the iron ore price will continue to fall or how long it will take prices to recover. I can suggest that this will depend on a plethora of known and unknown details (e.g. what will our biggest iron ore importer do next?)

If I sound a tad harsh, that's probably because this is your first post and you haven't told us much about yourself or your trading style. We can make a pretty good guess as you don't mention, for example, Stop Loss.

Here is a iron ore link that might help you in  feeling not so bad about your paper loss.
All the best on your trading/investment journey.


----------



## over9k (28 August 2021)

But: 






Side by side: 






However: 










The result of all of this is that 95% of my money is no longer in Australian investments and the tiny bit that remains is in pure degen spec plays like DEG. 

India doesn't need Australia's iron ore like china does for a whole multitude of reasons (india is not the world's workshop for one and for two, it can largely mine its own). However, even ignoring that, you still have a massive baby bust in literally the entire rest of the world aside from the USA. 

The *world* has long since passed peak consumption. We're now in what the political spin doctors have decided to dub "post growth economies". 



Not to be awful here but if you don't understand the significance of the charts I've posted above/don't know what they're telling you, then you don't know what you're doing investing. I don't own FMG but I'd want to be pretty bloody confident of where their demand is going to continue to come from because China isn't it.


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## divs4ever (28 August 2021)

syd1 said:


> Dumb move I bought FMG shares at $22.60 & I have lost $3,500 so far. Looks like iron ore or FMG prices will keep falling for some time. Anyone knows how long will prices keep falling or how long it'll take for prices to recover? Would it be better so sell at such loss?



another factor is FMG are liable  to announce a dividend  for the last six months shortly   , 

 now i am hoping for a $1 div. ( fully franked ) but others are suggesting much higher  

 now FMG is looking to diversify  away from solely iron  , and i suspect they will invest more cash in these other projects 


FMGFORTESCUE METALS GRP ORDINARY
Change







Balance DateDividend TypeCents per shareCcyFranked %Ex-Dividend DateBooks Close DatePay Date31/12/2020Interim147.000AUD100.0001/03/202102/03/202124/03/202130/06/2020Final100.000AUD100.0031/08/202001/09/202002/10/202031/12/2019Interim76.000AUD100.0002/03/202003/03/202006/04/202030/06/2019Final24.000AUD100.0002/09/201903/09/201902/10/2019-Special60.000AUD100.0022/05/201923/05/201914/06/201931/12/2018Interim19.000AUD100.0028/02/201901/03/201922/03/201931/12/2018Special11.000AUD100.0028/02/201901/03/201922/03/201930/06/2018Final12.000AUD100.0031/08/201803/09/201802/10/201831/12/2017Interim11.000AUD100.0001/03/201802/03/201805/04/201830/06/2017Final25.000AUD100.0001/09/201704/09/201703/10/201731/12/2016Interim20.000AUD100.0002/03/201703/03/201706/04/2017

 whether you decide  to wait and keep the div.   over sell on any last minute price rise is a decision you must make 

 good luck


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## divs4ever (28 August 2021)

over9k said:


> View attachment 129547
> 
> 
> But:
> ...




 i have been suggesting India was the place to be getting friendly with over the last 5 years

 now we can try  Mexico also  but i think South American sources will win the bulk of that

 Japan is a waning economy  , while South Korea and Vietnam have room to grow ( especially if Korea unifies )

 nobody seems to be watching Pakistan  so you can only guess there

 now where i disagree , i was given the impression  the the Indian iron  is at much lower grades  and needed to be concentrated to be useful for high quality metals  , i remember one trade spat   where Russian was delivering  steel stock to Indian customers cheaper the Tata Steel  could produce it  .. think about that Russia could make AND deliver it thousands on miles away  cheaper than a major producer  could make it and before they added delivery costs

  i briefly  had an investment in a company  that planned to concentrate and pelletize Indian iron ore  , and that company was leveraging the abundant low grade iron-ore deposits ( that few would extract ) and the growing Indian manufacturing needs

 whereas  FMG has plenty of reserves over the 50% Fe  which is still profitable to mine most of the time

 depending on how the Chinese belt and road initiative plays out  China might have a very useful rail link to Russian coal , iron and uranium   , i see the EU becoming less desirable as a trading partner to China

where i do agree is China is less likely to be our most important trading partner in the future for several reasons , one of which will be politics

 cheers


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## tech/a (28 August 2021)

We are buying structural steel from Pakistan


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## Value Collector (28 August 2021)

syd1 said:


> Dumb move I bought FMG shares at $22.60 & I have lost $3,500 so far. Looks like iron ore or FMG prices will keep falling for some time. Anyone knows how long will prices keep falling or how long it'll take for prices to recover? Would it be better so sell at such loss?



I don’t think buying FMG at $22.60 was a dumb move, I actually bought some myself at around that price, although I do think that expecting shares not to fluctuate might be a little silly.

Share prices will fluctuate for all sorts of reasons, at the moment FMG’s share price has dropped because the Iron Ore price has dropped, I believe it’s an over reaction, the Iron Ore price has to be much lower than it is now to justify this price.

I think the best way to find out what to do next is to go back and examine the reasons you bought in the first place, what I mean by that is, were you planning to buy it as a long term investment? or was it a short term trade?  or was is more of a gamble?

Once you figure out the reason you originally bought, make a decision on whether that reason is still a valid reason to hold.

——————
In short the reason I am still happy to hold, and why I am comfortable will the shares I purchased at around $22 is basically that I believe that even if the Iron Ore price only averaged $90, I think the shares are still worth at least $28.

if you like we have discussed FMG’s valuation from a lot of different angles over on the FMG thread.


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## basilio (28 August 2021)

syd1 said:


> Dumb move I bought FMG shares at $22.60 & I have lost $3,500 so far. Looks like iron ore or FMG prices will keep falling for some time. Anyone knows how long will prices keep falling or how long it'll take for prices to recover? Would it be better so sell at such loss?




_I was having a chat with me mate Twiggy the other day _and just like you he was taking a bit of a bath on FMG. In fact, from $22.60 to COT on Friday ($20.00) he saw $3 billion disappear - go up in smoke so to speak !  Bit of a shock to the system but as he said_  "Not to worry. I'm looking forward to a $2.5B plus cheque in the mail in a few weeks from my shares. She'll be right." _


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## divs4ever (28 August 2021)

tech/a said:


> We are buying structural steel from Pakistan



so are we missing out on iron and coal exports ??

 i wouldn't be surprised


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## qldfrog (28 August 2021)

divs4ever said:


> so are we missing out on iron and coal exports ??
> 
> i wouldn't be surprised



I posted ,yesterday or the day before, an article about our coal exports since the de facto chinese boycott of Australian coal.not nice imho...


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## tech/a (28 August 2021)

No 
They aren’t rolling bulk smaller structural beams in Australia.That’s what we buy.
China can’t supply enough for their own use so there is a scarcity there. Many countries roll steel from Chinese billets and strangely store them in bulk in Singapore. At the time of purchasing this lot 4 mths ago we couldn’t get boxes ( Containers )  However we do have some Chinese product now in the pipeline.
it’s not the Chinese not wanting to buy or supply Australia it’s as above.


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## syd1 (28 August 2021)

Thanx so much everyone for your response & explanations. I've read a lot of iron ore news lately, and interesting useful reads here


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## divs4ever (28 August 2021)

well in face to face deals with ( ethnic ) Chinese  , i have found  that making a fair deal ( win/win ) and STICKING to it , works fine.

i assume if you start changing things mid-contract , will bring out  the haggling skills of such Chinese ,  in which case  you might end up with a tilted outcome .

 i guess we will paying the price of extra sophistication ( soon enough )

 i do NOT expect the Chinese to shoot themselves in the leg  during all the recent policy changes , although Australia MIGHT ( except for a few straight arrow companies)


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## Smurf1976 (29 August 2021)

FMG isn't a company I know a huge amount about besides the obvious but one thing I'll say is this.

I never buy a stock without first having worked out what would cause me to sell it.

I mean _precisely_ what would cause me to sell it?

I don't mean "if it falls a lot then I'll sell" but rather I mean "if it falls to $24.28 then I sell immediately", that sort of precise (random figure for example there, not an actual price I've applied to FMG). 

Others will have different approaches but that's mine. I never buy without knowing precisely what would cause me to sell and I always follow that strictly. Just my


----------



## divs4ever (29 August 2021)

things that MIGHT cause me to sell FMG  are

 a management change i don't approve of  ( for example someone like RIO doing a leveraged majority buy-in , that is RIO or someone else making all the decisions but playing with banker's and shareholder's cash  )

 a change in business direction , say give up mining and  moving to aquaculture , or beef cattle 

 now if FMG dropped lower ( say $15 ) i would research WHY the share price dropped  , if it was say more China tensions or just a dropping iron price  i MIGHT be tempted to buy more  , but NOT every reason for the drop would entice me to increase my holding 

 i NORMALLY see a price drop  as a reason to ask myself  is it a good time to buy a few more 

 PLEASE NOTE i rarely buy big parcels  , i am happy to buy smaller ones  and while buy extra if the price continues to drop ( unless there is a reason to look for the exit 
 ( see examples at the top of the post )


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## Value Collector (29 August 2021)

Smurf1976 said:


> FMG isn't a company I know a huge amount about besides the obvious but one thing I'll say is this.
> 
> I never buy a stock without first having worked out what would cause me to sell it.
> 
> ...



I have a similar approach, but before I buy a large amount of stock I write my self a report on an A4 size piece of paper, outlining my valuation for the company, and why I am buying it.

Over time I can refer back to this valuation, and compar my thoughts with how things are playing out, and if things at a fundamental level are still aligning with my original investment thesis I continue to hold, and don’t let the market fluctuations sway me.

I consider selling a stock just because it has fallen by a certain amount, it’s always based on the underlying company performance.


----------



## Value Collector (29 August 2021)

Value Collector said:


> I consider selling a stock just because it has fallen by a certain amount, it’s always based on the underlying company performance.




I meant to say, “I *Never *consider selling a stock just because it has fallen by a certain amount”


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## tech/a (29 August 2021)

Value Collector said:


> I meant to say, “I *Never *consider selling a stock just because it has fallen by a certain amount”




But often falls in stock price 
precede any fundamental reporting. 
There is a very good fundamental reason for FMG to fall 
30% off it’s highs right now


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## Value Collector (29 August 2021)

tech/a said:


> There is a very good fundamental reason for FMG to fall
> 30% off it’s highs right now



Not really, FMG has only fallen in price because the Iron Ore price dropped which has caused the speculators to panic, But the thing is FMG was never trading at a price that was based on $230 Iron Ore to begin with.

If FMG share price really did reflect the $230 Iron Ore price it would have meant FMG should be well over $60 per share, but it wasn’t it was only $26, because people already knew the $230 Iron Ore wouldn’t last, so never bid the stock up to $60.

$26 per share is easily justified by an Iron Ore price of only about $90, So there is no real need to panic as Iron Ore prices return back to more sustainable levels, because the share price never reflected those levels to begin with.


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## Value Collector (29 August 2021)

tech/a said:


> But often falls in stock price
> precede any fundamental reporting.



And more often that, share prices fluctuate to levels not supported by any fundamental changes, In my opinion it’s better to ignore the noise and make the best decisions you can based on facts, no point in following the spoiled cattle off a cliff, I have made my way by doing the opposite to the spooked cattle, not following their lead.

If you know a company well enough, and know what fundamental things will affect it, you don’t need to wait for reports, for example FMG will announce their profits tomorrow, but it’s pretty easy to know that it will be a good report just based on publicly available information.


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## divs4ever (29 August 2021)

Value Collector said:


> And more often that, share prices fluctuate to levels not supported by any fundamental changes, In my opinion it’s better to ignore the noise and make the best decisions you can based on facts, no point in following the spoiled cattle off a cliff, I have made my way by doing the opposite to the spooked cattle, not following their lead.
> 
> If you know a company well enough, and know what fundamental things will affect it, you don’t need to wait for reports, for example FMG will announce their profits tomorrow, but it’s pretty easy to know that it will be a good report just based on publicly available information.



 i would be looking at the FMG outlook and guidance  first  , if thinking of trading /buying on the news 

 i would be AMAZED  if the outlook/guidance  was super positive  .. i am looking for a cautious  ( or no  ) guidance 

 maybe i should throw a cheeky buy order in  say $17.50 to $18 range  , just in case the market is disappointed 

 but don't be  fooled  IF the order gets filled  , i will still hold twice as many BHP shares  ( so am NOT backing up the truck )

 DYOR

 ( remember i am expecting FMG to hold some cash back to fund projects/acquisitions elsewhere  , i do NOT expect a super juicy div. , this time around )


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## tech/a (29 August 2021)

Value Collector said:


> Not really, FMG has only fallen in price because the Iron Ore price dropped which has caused the speculators to panic.
> 
> But the thing is FMG was never trading at a price that was based on $230 Iron Ore to begin with.
> 
> ...




How do you come to that projected Share price of $60 ?
Genuinely interested


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## Value Collector (29 August 2021)

tech/a said:


> How do you come to that projected Share price of $60 ?
> Genuinely interested



There are quite a few metrics that point to that level, but the simplest one is the dividend yield.

If the Iron Ore price was to stay at $230 for ever, annual dividends would be over $5 per share fully franked.

Now, if a company was paying $5 per year in dividends $60 would represent an 8.3% return, which doesn’t seem an unreasonable and is higher than their peers currently get.


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## tech/a (29 August 2021)

But it’s not at $230 and not $27 
at $160 you think it’s fair value at say around $40 
so am I right that if Iron Ore stayed at $160 youd
expect FMG to rise to well over the current high?


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## divs4ever (29 August 2021)

i would expect Brazil to come back to full iron ore production  sooner rather than later ,
 the question is, will iron ore demand  have risen  at that time  , decreasing the downward pressure on iron prices


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## Value Collector (29 August 2021)

tech/a said:


> But it’s not at $230 and not $27
> at $160 you think it’s fair value at say around $40
> so am I right that if Iron Ore stayed at $160 youd
> expect FMG to rise to well over the current high?



What I am saying is that the market never priced in the $230 Iron Ore price to begin with, So it’s not a big deal for the Iron Ore price fall.

If Iron Ore was going to stay at $160, Yes you would expect a share price well over the current high of around $26, so $160 isn’t even priced in.

——————————

I actually don’t believe Iron Ore will stay above $100 forever, So we need to base our FMG valuation on a much lower Iron Ore Price, So let’s look back at 2020 financial year.

In 2020, the Iron Ore Price Averaged $93 and they paid $1.76 in dividends, If we believed that the Iron Ore price was going to Average $93 over the years (some years higher some years lower), then one way to value the company is based on how much we are prepared to pay for these 1.76 in dividends based on our personal required return.

I think most market participants would be very happy with a dividend return of some where around 8%  especially given that the company is retaining 20% of earning which can be used to grow, and inflation should raise the Iron price given a natural hedge against inflation.

So if we want an 8% return, and the share is paying $1.76 fully franked ($2.51 including the franking credit), we can pay up to $31 and we will receive our 8% before tax return.

But, then it gets a little better than that, the share comes with a dividend pre loaded that’s due to go ex dividend in a couple of weeks, so it’s like you will get some of your purchase price refunded shortly after buying it, so you can pay a little more than $31, maybe $33 depending on the dividend announced tomorrow.

But, then it gets even better again, the Iron ore price isn’t at $93 yet, it’s 50% above that and has been for the first 2 months of this current half, you earnings are currently accruing at a rate that will mean dividends will be even higher than your 8% at the next announcement in March, so the share is probably worth even more than $33.

————————

All that being said, I think in its current state even paying a price of up to $28 a share should give you an above market return, at an Iron Ore price of around $90.

So, yeah when I see the Ore price drop from $230 to $150, I am not worried because it was never priced in, in fact I expect it to fall.


----------



## over9k (29 August 2021)

Calculating the correlation and beta between FMG and iron ore would be dead simple too (I can't be bothered on account of not holding the stock personally).

Then we get into the beta changing at different price points and... ugh. It gets really messy really quickly. 

Probably good fun for the kind of person that likes that kind of thing, but I'm not it.


----------



## tech/a (30 August 2021)

Value Collector said:


> What I am saying is that the market never priced in the $230 Iron Ore price to begin with, So it’s not a big deal for the Iron Ore price fall.
> 
> If Iron Ore was going to stay at $160, Yes you would expect a share price well over the current high of around $26, so $160 isn’t even priced in.
> 
> ...




Thanks a very thorough explanation.
But this is where I struggle.
If I buy at $24 and lose 25% then get my 8%
Dividend —- how am I in front why should i
hold?  Ok if I’m in profit - more than ok?


----------



## Value Collector (30 August 2021)

tech/a said:


> Thanks a very thorough explanation.
> But this is where I struggle.
> If I buy at $24 and lose 25% then get my 8%
> Dividend —- how am I in front why should i
> hold?  Ok if I’m in profit - more than ok?



I am talking about buying it as a long term hold.

share prices will fluctuate, but if you buy into FMG and and you are earning 8%+ on your money, and you know that eventually the share price will correct to a higher more rational level, you can just ignore the temporary 25% drop.

——————

Also, at the moment the people that bought in recently are not going to be earning 8%, they will be earning more like 20% in dividends, their income won’t drop to 8% until the Iron Ore price returns to $93.

So yea their share prices will fluctuate, but their cashflow will be super sized for a while, and then eventually return to a lower but still great level, and the share price should be higher too.


----------



## frugal.rock (30 August 2021)

With dividend scalping being an easy trading strategy, there has been a few stocks lately that have had much greater than dividend falls just prior to record date.
I believe there's a lot of "novice" stimulus money in our markets at the moment.

Not saying this is going to happen, however, haven't all analysts from here to timbuktoo been predicting lower iron ore prices as we head towards the end of the year?
Haven't a clue how Brazil is travelling, but I know their not getting much beef exported either.


----------



## frugal.rock (30 August 2021)

My prediction, FMG will have a bumper day... just a gut feeling
lol


----------



## basilio (30 August 2021)

20-21 Financials out this morning. Second half  dividend will be $2.11 per share.

*Record full year performance delivers net profit after tax of US$10.3 billion and a 103 per cent increase in total dividends to A$3.58 per share *

Highlights

• Continued focus on safety contributed to lowest ever Total Recordable Injury Frequency Rate (TRIFR) of 2.0 in the 12 months to 30 June 2021 (FY21), 17 per cent lower than 30 June 2020

• Highest ever annual shipments of 182.2 million tonnes exceeded guidance, with earnings and operating cashflow surpassing any year in Fortescue’s history

 • Underlying EBITDA of US$16.4 billion, 96 per cent higher than FY20 with the Underlying EBITDA margin increasing to 73 per cent

• Net profit after tax (NPAT) of US$10.3 billion, increasing 117 per cent from FY20 and representing a return on equity of 66 per cent. Earnings per share (EPS) was US$3.35 (A$4.48)

• Net cashflow from operating activities of US$12.6 billion and free cashflow of US$9.0 billion after investing US$3.6 billion in capital expenditure

 • Fully franked final dividend of A$2.11 per share, increasing total dividends declared in FY21 to A$3.58 per share, equating to A$11.0 billion and an 80 per cent payout of NPAT

• Cash on hand of US$6.9 billion and net cash of US$2.7 billion at 30 June 2021

• Fortescue Future Industries (FFI) established during FY21 to advance a global green hydrogen and renewable energy portfolio. FFI is a key enabler of Fortescue’s decarbonisation strategy

 • Announced a revised target to achieve carbon neutrality by 2030, ten years earlier than the previous target, with significant progress on decarbonisation stretch targets achieved

.Total global economic contribution of A$30.2 billion in FY21, including A$8.0 billion in taxes and state royalties



			https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02414167-6A1047716?access_token=83ff96335c2d45a094df02a206a39ff4


----------



## basilio (30 August 2021)

It is interesting isn't it ? FMG's 20-21 financial results were essentially an open book. There would be no surprises in the final results simply confirmation of the sales, ore prices and development that had been reported in the past 6 months.

Last well the SP closed at $20  with the "market" being aware of the above facts. This morning the final figures are released and* WOW *SP jumps almost 6% on this great news.  

I suggest this  makes the point that critical analysis of a companies operations makes good investment sense  enabling an early decision rather than reacting to SP happening after the fact. This would apply to avoiding dogs as well as exiting risky investments early and identifying great opportunities early in the piece. (Which is why we are on ASF I guess.. )


----------



## divs4ever (30 August 2021)

looks like i got it partly right  buy grabbing a handful @ $19.90  roughly a week back  , but wrong about  FMG holding on to some extra divs so they could fund more expansion 

 i had been stalking FMG for years  but was hoping for a MUCH lower entry  price 

 maybe i will get to add more later


----------



## spratty84 (30 August 2021)

divs4ever said:


> looks like i got it partly right  buy grabbing a handful @ $19.90  roughly a week back  , but wrong about  FMG holding on to some extra divs so they could fund more expansion
> 
> i had been stalking FMG for years  but was hoping for a MUCH lower entry  price
> 
> maybe i will get to add more later



I'm in the same boat mate, my plan is over time to grab smaller parcels in dips over the coming weeks, months, years. Brokerage costs will suck balls but I missed out early due to concentrating my coin in paying out our home which I completed before my goal of age 35. Then deployed all of my spare cash into the banks last year during the 20 year lows and a couple spec stocks.


----------



## over9k (30 August 2021)

Value Collector said:


> I am talking about buying it as a long term hold.
> 
> share prices will fluctuate, but if you buy into FMG and and you are earning 8%+ on your money, and you know that eventually the share price will correct to a higher more rational level, you can just ignore the temporary 25% drop.
> 
> ...



Mmm I posted why I don't think it's a long term bet though. 

I mean I could be wrong, like I said, I don't hold the stock, but my macro-level analysis says FMG (and this entire country) is in for a whole world of hurt soon.


----------



## Value Collector (30 August 2021)

divs4ever said:


> but wrong about  FMG holding on to some extra divs so they could fund more expansion



With $0 Net Debt and retaining 20% of earnings for growth projects, they don't need to cut into their dividend.

What I see happening is that if there is years where more than 20% of income is needed to fund the projects, they will draw on debt facilities and in years where less than the 20% they retain is required they will pay down debt facilities.


----------



## Value Collector (30 August 2021)

over9k said:


> but my macro-level analysis says FMG (and this entire country) is in for a whole world of hurt soon.



Feel free to post that analysis.

I think the global economy is going to continue to do well especially as we recover from covid, and Iron Ore will continue to be in high enough demand in relation to supply to create a longterm average price where FMG makes decent profits on average, over time.

Sure there will be ups and downs, there always has been.


----------



## againsthegrain (30 August 2021)

So OP with the div + fmg current at ~21 are u close at breaking even now?  If you







over9k said:


> Mmm I posted why I don't think it's a long term bet though.
> 
> I mean I could be wrong, like I said, I don't hold the stock, but my macro-level analysis says FMG (and this entire country) is in for a whole world of hurt soon.




She'll be right, she always is


----------



## over9k (30 August 2021)

Value Collector said:


> Feel free to post that analysis.
> 
> I think the global economy is going to continue to do well especially as we recover from covid, and Iron Ore will continue to be in high enough demand in relation to supply to create a longterm average price where FMG makes decent profits on average, over time.
> 
> Sure there will be ups and downs, there always has been.



I did above. Massive population implosion right across the world, especially in China, the chief customer of australian dirt. 

It also depends what you meam by long term too. I'm looking 10 years out here.


----------



## over9k (30 August 2021)

@Joe Blow Might be worth merging this with the actual FMG thread?


----------



## basilio (30 August 2021)

over9k said:


> Mmm I posted why I don't think it's a long term bet though.
> 
> I mean I could be wrong, like I said, I don't hold the stock, but my macro-level analysis says FMG (and this entire country) is in for a whole world of hurt soon.



Interesting perspective.  

It's certainly possible that the general Australian economy is in for rough economic times. That would then open the question of what investments would still be viable ?

From my POV I see FMG as producing a key resource  at one of the lowest costs of production in the market.  It also has minimum financing costs which would impact the  balance sheet. In practical terms that means  that if there is price pressure on iron ore they will still be profitable well after many competitors have to  go into mothballs.

On top of that I see FMG as having developed a formidable engineering expertise which they are now directing to a host of very big renewable energy/mining projects.  This history and experience is going to be invaluable in gaining external investment so I believe at least a few of them will get off the ground.

They also have enough surplus capital to kick off these projects.  Some of the projects are also internal which in themselves will improve operating efficiencies even further and add an extra  sales component to their bottom line.  Producing green steel for example from their own ore and using their own renewable energy infrastructure.

I'm sure there are other promising investments around. But it is rare IMV to see a mature company that is already producing big dividends also capable of developing such a potentially profitable range of indemand projects.


----------



## over9k (30 August 2021)

basilio said:


> Interesting perspective.
> 
> It's certainly possible that the general Australian economy is in for rough economic times. That would then open the question of what investments would still be viable ?
> 
> ...



Yeah, hence the difference between macro level and company specific. 

Thing is, billionaires are not stupid people. They are acutely aware of the aforementioned population implosions. If I were FMG I'd be doing everything I can to target india (be it as a customer or to set mines up in india itself) but again, I'm not twiggy nor an FMG analyst so this is little more than a musing on my behalf. 

RIO for example has pulled the trigger on the largest copper mine in the world and putting it in the USA, and these things do not take 5 minutes to plan, so they've seen what I'm talking about coming several years out. 

What FMG's plan is I don't know but I'm pretty doubtful they don't have one - I just don't know what it is. 

As I said, I suspect it's india, but that's just a suspicion.


----------



## Value Collector (30 August 2021)

over9k said:


> I did above. Massive population implosion right across the world, especially in China, the chief customer of australian dirt.
> 
> It also depends what you meam by long term too. I'm looking 10 years out here.



I don't think that is an issue, "The World" has a long way to go before it is fully developed, I mean most of Africa, India, Middle East, and South America still have a long way to go before their standard of living and consumption of steel resembles developed nations, These will be booming customers for Chinese made steel products.

Not to mention the demand that will still be coming from developed economies for infrastructure and just general consumption, the global population is still growing quite rapidly, and so is the expectations for standard of living.

--------------------------



> RIO for example has pulled the trigger on the largest copper mine in the world and putting it in the USA




You, have to build the mine where you find the Ore, they didn't "put" it in the USA, that just happens to be where they found the ore, they also have mines in Asia and South America.


----------



## Joe Blow (30 August 2021)

over9k said:


> @Joe Blow Might be worth merging this with the actual FMG thread?




I'll let it run its course as a separate discussion then merge the threads.


----------



## over9k (30 August 2021)

Value Collector said:


> I don't think that is an issue, "The World" has a long way to go before it is fully developed, I mean most of Africa, India, Middle East, and South America still have a long way to go before their standard of living and consumption of steel resembles developed nations, These will be booming customers for Chinese made steel products.
> 
> Not to mention the demand that will still be coming from developed economies for infrastructure and just general consumption, the global population is still growing quite rapidly, and so is the expectations for standard of living.
> 
> ...



Copper. The RIO mine is copper.

The best copper deposits in the world are in Chile, but they didn't put it there. It's worth thinking about why


----------



## Value Collector (30 August 2021)

over9k said:


> Copper. The RIO mine is copper.
> 
> The best copper deposits in the world are in Chile, but they didn't put it there. It's worth thinking about why



Yes Copper *Ore *is what I was referring to, it is what you pull out of the ground in a copper mine. As I said Rio already mines copper ore in Chile and Mongolia and will mine it where ever they can find it.

Each new mine would be based on economics and political stability of the host country, it’s pretty easy to move shipping containers full of copper concentrate around the globe, it’s not necessary to have a mine next to a factory.


----------



## over9k (30 August 2021)

Value Collector said:


> Yes Copper *Ore *is what I was referring to, it is what you pull out of the ground in a copper mine. As I said Rio already mines copper ore in Chile, Mongolia and will mine it where ever they can find it.



Again, so why not just mine more in Chile (or wherever else)? 

What I'm getting at here is they didn't start the mine in the USA because it was the only place to do it. There were other options available but they went with USA. 

Again, there is a reason.


----------



## Value Collector (30 August 2021)

over9k said:


> Again, so why not just mine more in Chile (or wherever else)?
> 
> What I'm getting at here is they didn't start the mine in the USA because it was the only place to do it. There were other options available but they went with USA.
> 
> Again, there is a reason.



Do they have mining rights to a virgin deposit of equal quality waiting to be mined in Chile?
I don’t know, but would say economic factors and political stability are their major concern, distance from end user just comes down to shipping costs, which are not large.

Rio would be green lighting projects based on which one offers the best return on capital, in their words their projects “compete for capital”, eg if project A promises a 15% return and project B promises a 25% return, then project B will get the green light.

As I said shipping containers of concentrate or metal are pretty easy to move, it just comes down to cost.


----------



## over9k (30 August 2021)

Value Collector said:


> Do they have mining rights to a virgin deposit of equal quality waiting to be mined in Chile?
> I don’t know, but would say economic factors and political stability are their major concern, distance from end user just comes down to shipping costs, which are not large.
> 
> Rio would be green lighting projects based on which one offers the best return on capital, in their words their projects “compete for capital”, eg if project A promises a 15% return and project B promises a 25% return, then project B will get the green light.
> ...



Unless you're expecting your market a decade from now to look VERY different to your market now  


The reason why RIO have opened up this mine in the USA is the same reason why car manufacturers are opening plants in mexico and chip manufacturers are building plants in arizona: Anticipation of what their future market will look like (and where it will be). 

When you think about how many people are in asia vs usa, it doesn't make sense to ship the chips across the pacific to get to your target market does it? 

Unless, of course, asia isn't going to be your target market.


----------



## divs4ever (30 August 2021)

since we are in ' uncharted territory ' i have NO idea what the market will look like in 10 years 

 i can guess  , but there is some chance i don't even go close 

 our biggest customer  might well be Vietnam , India ,  less likely Mexico , and Pakistan  , over maybe even Indonesia which MIGHT become  a center for metal smelting , and then on-selling bar-stock or ingots


----------



## over9k (30 August 2021)

divs4ever said:


> since we are in ' uncharted territory ' i have NO idea what the market will look like in 10 years
> 
> i can guess  , but there is some chance i don't even go close
> 
> our biggest customer  might well be Vietnam , India ,  less likely Mexico , and Pakistan  , over maybe even Indonesia which MIGHT become  a center for metal smelting , and then on-selling bar-stock or ingots



Baby bust = economic armageddon. 

Any country with an inverted population pyramid has no choice but to export to markets as it essentially doesn't have an internal one (or at least, nothing near what it otherwise would be). It is for this reason why countries like japan or south korea didn't fall over years ago. 

But with the whole world having a baby bust, there's vanishingly few young people to even export to, with three notable exceptions of USA, Mexico, India. 


And it makes so, so, _so _much more sense to build where you sell (if you can).


----------



## divs4ever (31 August 2021)

China is trying to reverse that baby drought ( that it actually deliberately created )

 so let's add China as a 'maybe '

 and that China policy will be one for younger members to watch  , because as sure as heck someone else will try it later (  whether it is a success or not )

 time will tell if sense returns to this world , because it sure isn't common at the moment


----------



## divs4ever (31 August 2021)

South Korea still has a lifeline  with a North Korea unification ( but do NOT expect that unification to be simple or painless )

 think Germany after the fall of the Berlin Wall  but several times worse


----------



## over9k (31 August 2021)

divs4ever said:


> China is trying to reverse that baby drought ( that it actually deliberately created )
> 
> so let's add China as a 'maybe '
> 
> ...



Takes 25 years (and 9 months) to make a 25 year old.


----------



## divs4ever (31 August 2021)

yes but that pause in population increase  , might be just what China needed ( or they have stuffed it up big time ) 

maybe enough to lose No. 1 spot to India well before expected 

but currently the US is allegedly No. 1 and working damn hard to lose that spot


----------



## Smurf1976 (31 August 2021)

over9k said:


> There were other options available but they went with USA.
> 
> Again, there is a reason.



The USA has a lot of advantages over many other countries. Some that come to mind, in no particular order:

1. Economical and in most cases reliable infrastructure in particular energy and transport.

2. Relative political stability at all levels.

3. Moderate levels of taxation.

4. Large and growing domestic market. Make it where you sell it is the new trend.

5. Established diverse economy - finding someone who can do x is not overly difficult whereas it may actually be impossible in some countries.


----------



## qldfrog (31 August 2021)

Smurf1976 said:


> The USA has a lot of advantages over many other countries. Some that come to mind, in no particular order:
> 
> 1. Economical and in most cases reliable infrastructure in particular energy and transport.
> 
> ...



Sadly,it is trying very hard to destroy its advantages
Freedom and taxes first, abysmal education and health systems, law system getting very much not only very unfair but also very counterproductive with litigation.
Add removal of the american miracle with both old money and social/racist criteria locking your ascention there: better not be male and white/asian if you are not son of.....
And with now open borders,killing its emigration advantage:
Piling up on uneducated workforce it doesn't need anymore while at the same time being less attractive to world PhDs and scientists engineers.
Stiil speaking English .for how long? And the best place for entrepreneurs
Not good now but with a proper economic recession ,góod state policies and a reset But NOT the Reset, it could be a Phoenix.just remember the US under Carter...
EU was gloating the fall of the capitalist fortress and how  France Germany Italy and Spain were better with their socialist model and union.I was there and travelled the US then.
.Fast forward 40y.....
So they can still have a chance if China **** up...which is not impossible,.but unlikely IMHO.
And China first is key for FMG/iron ore.
The issue i have with the optimistic view is that China has taken over Africa, with a state capitalist view there,so China will both secure the place and build infrastructure to enable its companies to secure the mineral and agricultural resources there.
In direct competition with us...
We'd better pray that India can sort its ****.....but i am not an optimistic by nature


----------



## over9k (31 August 2021)

Smurf1976 said:


> The USA has a lot of advantages over many other countries. Some that come to mind, in no particular order:
> 
> 1. Economical and in most cases reliable infrastructure in particular energy and transport.
> 
> ...



Sure, but they already had the chile mine BEFORE they had the U.S one. Why not just dig another one in chile? It was clearly the better option. 

Right?


----------



## Value Collector (31 August 2021)

over9k said:


> Unless you're expecting your market a decade from now to look VERY different to your market now
> 
> 
> The reason why RIO have opened up this mine in the USA is the same reason why car manufacturers are opening plants in mexico and chip manufacturers are building plants in arizona: Anticipation of what their future market will look like (and where it will be).
> ...



It comes back to cost of production, they will mine where ever they believe the cost of production will be the lowest over the life of the mine.

The cost of shipping mine products to market is a very small part of the over all cost.

The USA would actually have some significant advantages to Chile is the cost of production.


----------



## Value Collector (31 August 2021)

over9k said:


> Sure, but they already had the chile mine BEFORE they had the U.S one. Why not just dig another one in chile? It was clearly the better option.
> 
> Right?



Rio’s Chile mines are a 50/50 Joint venture with BHP I believe.

but as I said before, do you know if they have a large virgin deposit of equal size and quality to the USA one?


----------



## joeno (31 August 2021)

over9k said:


> View attachment 129547
> 
> 
> But:
> ...




Oversimplified insights from someone who has an extremely pessimistic view of China from memory. You could've posted the same thing 20 years ago when there was minimal Chinese demand and said that it was going to be going nowhere. It is misleading and taking into your own political persuasions and emotional charges biases. This is evidenced in the times you accused me of being a China fanboy when I simply questioned your logic.

You need to understand the value of iron ore. Not iron ore demand. Iron / steel is valuable from the PoV of elements in the soil of Earth and in terms of its place on the periodic table. It is used to build buildings taller than a couple of stories and is used for cars, machinery, utensils etc. For what it does and it's intrinsic chemical value, a kg of iron is a bargain.

I bought in at $1.70. There were haters then who said $2 was too much. Now $20 is too little


----------



## divs4ever (31 August 2021)

** I bought in at $1.70. There were haters then who said $2 was too much. Now $20 is too little   **

 fair enough you have got me on that one


 good stock picking though 

 cheers


----------



## basilio (31 August 2021)

After the record profit announcment Twiggy is totally adamant that FMG is pivoting to being a world leader in renewable energy. He is asking all political parties to set stretch targets for zero emissions.  FMG wants to do this by 2030. Also "demands" other leading mining companies follow  suit.

He sees FMG engineering skills, massive industrial base and large cash reserves as the fuel to demonstrate green industry, reduce FMG costs and attract international partners for his Fortesque Future Industries projects
No shrinking violet either...









						Fortescue says government action on climate ‘critical’
					

Fortescue chairman Andrew Forrest has challenged the Morrison government to set the sort of ambitious targets seen in corporate Australia.




					www.afr.com


----------



## basilio (31 August 2021)

Further details of FMG's renewable energy program









						Fortescue to invest another $1 billion in renewables, green hydrogen after windfall profit
					

Fortescue Metals to invest another $1 billion in its renewables division, and will push customers to tackle their 250 million tonne emissions footprint.




					reneweconomy.com.au


----------



## basilio (31 August 2021)

This is another of FFI projects.  Appears to have grown another leg.









						Sun Cable: World’s biggest solar and battery project is about to get a lot bigger
					

Sun Cable is to announce a significant expansion to what is already the world’s biggest solar and battery project, and will deliver first output to Darwin in 2026.




					reneweconomy.com.au
				




The Sun Cable project, backed by  billionaires Mike Cannon-Brookes and Andrew Forrest, started out as a 10GW solar project in 2019, before increasing its planned capacity to 14GW, as well as between 20 and 30 gigawatt-hours of battery storage.

...Griffin wouldn’t say so, but the expansion and the mention of load profiles suggests that green hydrogen and/or green ammonia could be part of that expanded plan, given the massive push – by Forrest, in particular – towards green hydrogen as the major new component of green industry in the coming decades.

Forrest has spoken of his ambitions to have 20 million tonnes of green hydrogen production by the end of the decade, an amount that would require tens if not hundreds of gigawatts of renewable energy projects.


----------



## divs4ever (31 August 2021)

indeed , definitely  NOT hiding in the   bunker with the hard hat on ,

 i would have expected him to have a little cash on the side in case a tasty morsel  popped up 

 but he has been  making it happen so far , and that is better than many companies 

 the flip-side is a get a better div. than expected  , i guess it is up to me  to park that money wisely , now


----------



## basilio (31 August 2021)

divs4ever said:


> i would have expected him* to have a little cash on the sid*e in case a tasty morsel popped up




Divs Twiggy has more cash than Croesus. He swims in the stuff.

Facts are that FMG is in the market for* truly big * renewable energy/green industry projects. Talking of nation building projects here. A number have already been highlighted on ASF. Congo, Indonesia, Sun cable etc.

Any "smaller morsels" ie less than nation building are  too small for FMG. Makes total sense when one consider that there is finite management and engineering capacity and FMG would  therefore focus on big projects.

However the small tasty fish can be gobbled up by Twiggys private business consortium. Essentially he has taken his billions of dividends and is always looking around for opportunities .  And of course there is an opportunity for public shareholders in these enterprises as well. The holding company is Tatterang





__





						Tattarang
					






					www.tattarang.com


----------



## Smurf1976 (31 August 2021)

over9k said:


> Sure, but they already had the chile mine BEFORE they had the U.S one. Why not just dig another one in chile? It was clearly the better option.
> 
> Right?




The new mine is a new investment and the decision will reflect circumstances prevailing at the time.

There's countless examples of "big" projects such as mines, factories and so on that would never be built today but, since they already exist, will operate until the ore runs out or the factory ceases to be profitable and then it's over. At the time they were originally built they seemed like the best option and in many cases they were indeed the best for many years thereafter but they're not now.

As of right now Rio Tinto seems to have concluded that the US is a better option than expanding in Chile. Simple as that. The Chile operation remains because it's already built and can't be unbuilt, the capital can't be recovered and with that considered a sunk cost it's profitable to continue but that doesn't automatically make it the best option for new investment.

Just about everyone does a small version of that in their own life. There's countless things most people own that they continue using because they already have them but no chance they'd buy the exact same product new today.


----------



## over9k (31 August 2021)

joeno said:


> Oversimplified insights from someone who has an extremely pessimistic view of China from memory. You could've posted the same thing 20 years ago when there was minimal Chinese demand and said that it was going to be going nowhere. It is misleading and taking into your own political persuasions and emotional charges biases. This is evidenced in the times you accused me of being a China fanboy when I simply questioned your logic.
> 
> You need to understand the value of iron ore. Not iron ore demand. Iron / steel is valuable from the PoV of elements in the soil of Earth and in terms of its place on the periodic table. It is used to build buildings taller than a couple of stories and is used for cars, machinery, utensils etc. For what it does and it's intrinsic chemical value, a kg of iron is a bargain.
> 
> I bought in at $1.70. There were haters then who said $2 was too much. Now $20 is too little



Are you that crank that was carrying on like an utter loon over in the china thread? 


I don't even know where to start with what you've posted. Literally every single thing you said is wrong. I would have to write an essay to explain why on every point. 

Maybe start with the fact that what I've asserted is not unique to china and work your way out from there. My point, like with value collector, has clearly gone clean over your head. 

Emotion has nothing to do with it. I don't even know what you're basing that assertion on. 



I'll try this REAL simple for you guys: There are some products which depend on expansion in order to sell. Buildings, for example. There's no need to build houses if there's nobody to live in them (no demand for them) is there? 

If you have a baby bust, you no longer have expansion. You have to sell (export) your stuff to someone else. Japan and south korea have been doing this very well with cars etc for quite some time. But if someone else has a baby bust too, there's nobody left to sell to overseas, and nobody left to sell to (no expansion) within your borders either. 

In short, your markets literally no longer exist on account of having *never been born. *

This is the same question of why a nightclub owner might be concerned about a lack of 18-25 year olds or gerry harvey selling furniture worrying about 25-35 year olds but taken to a macro level. When your target market was literally never born, your target market thus no longer exists. Demand for your product drops. 


This alone is a big problem for an economy, but it doesn't happen in a vacuum. Old farts are expensive. In fact, the more old farts:young people your economy has, the more deadweight it has. Those old farts have to be paid for by the young if a nest egg (sovereign wealth fund) is not put away in the decades prior, which, news flash, it hasn't been. 

This means that, if you haven't been saving the money, you have to start doing things like raising taxes on the young in order to pay for the old. This reduces the amount of demand from the young (the people who do the overwhelming majority of the buying of the stuff) even further. 


*This is not unique to china,* I just bring it up in this context because of the amount of rocks/dirt that china buys. 

What you guys should be thinking is "Why would the chinese keep buying it? What would they be making with it? Who would they be selling whatever they make with it to?" 

If you can't answer those questions, you should be very very worried. 



It is abundantly clear that neither of you have any kind of actual background in economics whatsoever. You're those "self taught" types that think they know better than those who have spent several years being trained in something. 

You don't.


----------



## over9k (31 August 2021)

Smurf1976 said:


> The new mine is a new investment and the decision will reflect circumstances prevailing at the time.
> 
> There's countless examples of "big" projects such as mines, factories and so on that would never be built today but, since they already exist, will operate until the ore runs out or the factory ceases to be profitable and then it's over. At the time they were originally built they seemed like the best option and in many cases they were indeed the best for many years thereafter but they're not now.
> 
> ...



I've never said otherwise. What I keep alluding to is _why. _It is the same reason why multi-billion-dollar car and chip manufacturing companies have literally dozens of multi-billion-dollar new manufacturing plants planned/approved/under construction in the USA & mexico rather than, say, china, which was the place that absolutely everyone wanted to be in previous years.  

There is a reason.


----------



## over9k (31 August 2021)

Honestly, I feel like I am talking to children here. None of you have spent one _syllable _thinking about the demand side of this particular equation. Not one. All I get is stuff about production costs or what have you. 

I mean, ****, do ANY of you think that there MIGHT be just a little bit more to it? Even just a little bit? 


I have seen econ101 students perform better analysis than this.


----------



## sptrawler (31 August 2021)

over9k said:


> Sure, but they already had the chile mine BEFORE they had the U.S one. Why not just dig another one in chile? It was clearly the better option.
> 
> Right?



My guess and adding to @Smurf1976  post :
The USA has a lot of advantages over many other countries. Some that come to mind, in no particular order:

There has obviously been a massive clash of ideologies, the Chinese wanting to bring their poor into a first World standard of living (which they IMO have done an exceptional job of so far), as opposed to the U.S ideology of paying the "high achievers" high wages and holding the sceptre of off shoring to to keep the middle class on the treadmill and the poor don't even rate.

So IMO the next few years is going to be a massive reset for the USA, Trump started it with lets make America great again, but it clashed with the multi nationals still believing it would decimate their bottom line, having to manufacture their stuff in the U.S as opposed to China.

Now along comes the virus and highlights the problem with 100% dependency, on what really is an opposite ideology.
The U.S really has funded China's resurgence at the expense of its own middle class, to turn that around, they can't expect China to help them.
So the only option while they are the powerhouse, is to focus inwardly and be able to compete with China, that is a huge transformation and cultural change.
Also the very change the Trump with all his bumbling was talking about, the guy was a goose, the multi nationals and the media cooked him.
Now they are finding he was right in his basic belief, they have to be able to compete with China and bring manufacturing home, or they have to start teaching mandarin at schools.


----------



## Smurf1976 (31 August 2021)

over9k said:


> It is the same reason why multi-billion-dollar car and chip manufacturing companies have literally dozens of multi-billion-dollar new manufacturing plants planned/approved/under construction in the USA & mexico rather than, say, china, which was the place that absolutely everyone wanted to be in previous years.
> 
> There is a reason.




The US is a big market and 



Smurf1976 said:


> Make it where you sell it is the new trend.




That thing known as "globalisation" has largely run its course so far as I can work out. That doesn't mean the end of trade but it means it's tapped out as a driver of growth and won't be a focus going forward.

If you want to sell goods in the USA then you'll be wise to make them in the USA or at least an allied country.

If you want to make goods in China then that's because you intend selling them in China or an allied country.

Allied country in that sense means one with similar business costs, economic structure and so on. One where production doesn't gain a cost advantage by means of cheap labour, lack of regulation and so on and any advantage is genuinely due to efficiency and so on.

Etc. That's my perception at least, trade isn't finished but the concept that it ought be unregulated has reached its end.


----------



## Smurf1976 (31 August 2021)

over9k said:


> None of you have spent one _syllable _thinking about the demand side of this particular equation.



Demand within the USA is only relevant in the context of the point being made that "globalisation" has effectively peaked. 

In a world of "free" trade, production goes to wherever it's cheapest and if that's some place with basically zero domestic demand then it's irrelevant. Ship the goods to where demand exists.

In a world of restricted trade, you make it where demand exists or you're stuffed as soon as someone else does.

That's the real shift going on. Not simply the location of demand but that production needs to be located where demand exists, goods aren't to be simply made where it's cheapest as that era has now passed its peak.


----------



## over9k (1 September 2021)

Smurf1976 said:


> Demand within the USA is only relevant in the context of the point being made that "globalisation" has effectively peaked.
> 
> In a world of "free" trade, production goes to wherever it's cheapest and if that's some place with basically zero domestic demand then it's irrelevant. Ship the goods to where demand exists.
> 
> ...



Again, only half the story.

Baby bust = demand crash (economic armageddon) _internally _for any country in which it has occurred.


Hence why japan, korea, germany et al have had to run as export led countries. But when there's not even someone to export to any more...


It's not just build where you sell, it's build where there's actually a market to sell _to. _


----------



## Smurf1976 (1 September 2021)

over9k said:


> Again, only half the story.
> 
> Baby bust = demand crash (economic armageddon) _internally _for any country in which it has occurred.
> 
> ...



Agreed it's only half the story.

In a "free trade" world however, demographics is also global so far as goods are concerned since even physically large items can be shipped quite easily and cheaply. Same with many services, they can be offshored.

Restrict trade however, or even give a firm hint that it's going to happen, and that becomes a huge incentive for domestic production since it's that or nothing. 

It's not just the US. The EU is coming up with reasons to put tariffs in place for another example. Ostensibly for environmental reasons but ultimately it's saying no to goods from anywhere that doesn't meet EU standards not for the product itself but for the means of production.


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## over9k (1 September 2021)

Smurf1976 said:


> Agreed it's only half the story.
> 
> In a "free trade" world however, demographics is also global so far as goods are concerned since even physically large items can be shipped quite easily and cheaply. Same with many services, they can be offshored.
> 
> ...



Precisely. Hence all the stuff opening up in the USA, not china.


----------



## Value Collector (1 September 2021)

Smurf1976 said:


> The new mine is a new investment and the decision will reflect circumstances prevailing at the time.
> 
> There's countless examples of "big" projects such as mines, factories and so on that would never be built today but, since they already exist, will operate until the ore runs out or the factory ceases to be profitable and then it's over. At the time they were originally built they seemed like the best option and in many cases they were indeed the best for many years thereafter but they're not now.
> 
> ...



I agree with everything you said, what I would say though is that the copper mines in Chile are not in that catergory, they are very profitable, and are undergoing further investment to expand and extend life.


----------



## Value Collector (1 September 2021)

over9k said:


> Precisely. Hence all the stuff opening up in the USA, not china.



Some of that is because recently trade has become less free, eg tariffs etc incentivise or punish certain regions, what this means is that manufacturing might move to certain areas that wouldn’t have natural compatible advantages not because of natural market conditions, but because of taxes.


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## over9k (1 September 2021)

Value Collector said:


> Some of that is because recently trade has become less free, eg tariffs etc incentivise or punish certain regions, what this means is that manufacturing might move to certain areas that wouldn’t have natural compatible advantages not because of natural market conditions, but because of taxes.



Contributing factor, yes. Primary factor? I'm doubtful.

Mexico has a very young population. Young people = plenty of labour. China's the opposite, and has a whole stack of old farts that'll need caring for soon (think massive demand for healthcare personnel).

Mexican labour is actually cheaper than chinese labour even _now. _It's going to be WAY cheaper 5-10 years from now.


----------



## Value Collector (1 September 2021)

over9k said:


> Contributing factor, yes. Primary factor? I'm doubtful.
> 
> Mexico has a very young population. Young people = plenty of labour. China's the opposite, and has a whole stack of old farts that'll need caring for soon (think massive demand for healthcare personnel).
> 
> Mexican labour is actually cheaper than chinese labour even _now. _It's going to be WAY cheaper 5-10 years from now.



I think that is why China is moving sweat shops to Africa, the move in China is definitely towards capital intensive rather than labour intensive, which is a good thing, especially for materials companies that supply the steel and copper for the capital investments.

Also, it’s important not to over estimate the effect of an aging population, these things take decades to play out, and over that time a lot changes, I mean it wasn’t that long ago that 90% of the population was working on farms, now less than 1% of the population of developed economies work on farms.


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## frugal.rock (1 September 2021)

Some loose facts.
China changed from 1 child policy to 2 child somewhere around 10? years ago.
More recently (maybe 2 years ago?), they have changed again to up the rate to 3 or more.

For China, that's a fairly quick change in policy shift and it was quite obvious the 1 child policy was hurting.
The single child kids were/ are being spoil rotten by parents and cultural preferences dictated males were the dominant sex preferred in children.

Also, and perhaps little mentioned for obvious reasons, is the fact that national conscription started again in the last few years.

Tie that together with the cost of living and property costs  now being very close to, or equal to Western fully developed states.
Property cost in Beijing is well above similar comparisons (units) of those in greater Sydney, for example.
Theres a bigger divide than ever between middle and lower classes, with real wages of lower class keeping them at poverty levels.

Would like to get back to Beijing sometime, but a lot has to change before that can happen.
I don't expect to ever see the parents in law again, due to ageing. 😔


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## qldfrog (1 September 2021)

frugal.rock said:


> Some loose facts.
> China changed from 1 child policy to 2 child somewhere around 10? years ago.
> More recently (maybe 2 years ago?), they have changed again to up the rate to 3 or more.
> 
> ...



FR, it seems that the OZ gov is releasing a  bit  their iron curtain: Glasnost in Australia?
getting easier it seems last week to be able to get OUT.
As coming back is still mission impossible, it is a one way trip with maybe possible return so no quick jump in a plane

I know hope to see Dad and in laws alive one last time, they have to hang on  6 months or so


----------



## divs4ever (5 September 2021)

18 Share Tips – 6 September 2021​








						18 Share Tips – 6 September 2021
					

John Athanasiou, Red Leaf Securities BUY RECOMMENDATIONS Flight Centre Travel Group (FLT)  Trade These Shares The progress of corporate and leisure travel in the northern hemisphere has been most encouraging. Flight Centre is poised to be one of the biggest beneficiaries of this encouraging...




					thebull.com.au
				




 i notice two brokers have a sell recommendation  on FMG

 bearing FMG goes ex-div. on the 6th ( tomorrow  )

 is this a potential buy opportunity  ??

 ( after all  i was factoring in a $1 div twice a year  , when i bought recently  )

 DYOR


----------



## Miner (6 September 2021)

divs4ever said:


> 18 Share Tips – 6 September 2021​
> 
> 
> 
> ...



FMG dived down more than 10 pc or almost equal to the dividend paid .
Did you jump ? I did not as was busy at work without having a chance to check stocks today  until now late evening.


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## qldfrog (6 September 2021)

Miner said:


> FMG dived down more than 10 pc or almost equal to the dividend paid .
> Did you jump ? I did not as was busy at work without having a chance to check stocks today  until now late evening.



Would be positive for FMG if it just fall by div.
If i was to buy it, i would want more fall than that.and many would be seller can expect to off load now


----------



## divs4ever (7 September 2021)

Miner said:


> FMG dived down more than 10 pc or almost equal to the dividend paid .
> Did you jump ? I did not as was busy at work without having a chance to check stocks today  until now late evening.



not yet . 

 i have a buy order in a little lower than the intra-day low 

it dropped closer to 11% early 
i was hoping iron ore and a US holiday ( tonight ) would let it slip more


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## divs4ever (7 September 2021)

qldfrog said:


> Would be positive for FMG if it just fall by div.
> If i was to buy it, i would want more fall than that.and many would be seller can expect to off load now



 i am thinking FMG will be a little bit softer 

 will be interesting if Twiggy grabs a few more if it does ( although surely he has his mind on other projects currently )


----------



## Value Collector (7 September 2021)

Miner said:


> FMG dived down more than 10 pc or almost equal to the dividend paid .
> Did you jump ? I did not as was busy at work without having a chance to check stocks today  until now late evening.



Fmg was down $2.22, compared to the dividend and franking of $3.

So that was actually a good result, investors that held over the ex date are now $0.78 per share better off.


----------



## divs4ever (7 September 2021)

lifted from Commsec​​Trade History​Download CSV
Trade History table

SORTDATE IN ASCENDING ORDERSORTOPEN $IN ASCENDING ORDERSORTHIGH $IN ASCENDING ORDERSORTLOW $IN ASCENDING ORDERSORTCLOSE $IN ASCENDING ORDERSORTCHANGE $IN ASCENDING ORDERSORTCHANGE %IN ASCENDING ORDERSORTVOLUMEIN ASCENDING ORDER06/09/202118.74019.17018.50018.570-2.280-10.9422,212,797

now this morning  Bell's trading ideas  is calling FMG a double top  with a range of $10.50 to $12 

 now while i would be very surprised to see FMG drop below $12 ( unless the entire market has crashed as well  ) i would probably also delighted to grab some more in that price range 

 meanwhile i do have an order in today @ $17  but am not expecting for that to get filled  today  but it has a month to run , maybe i will be lucky 

 DYOR


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## over9k (7 September 2021)

China's announced some output cuts etc. Jitters.


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## DrBourse (7 September 2021)

Hi Grey, agree with the $18.00, that line (or a bit lower), is very interesting as FMG's IV is abt $23 atm - for me, Candles & a ST CCI indicator will call the tune at that level.
Would love to get back in ASAP, I feel that the "Double Top & the $12 call" is a bit "out of the ball park."

As mentioned in my previous posts, was never going to get involved like this again, so this is an experiment.
CYA


----------



## divs4ever (7 September 2021)

FMG currently  around $18.15  with a intra-day low of $18.12 

take care


----------



## over9k (7 September 2021)

Result: 







Pretty obvious downtrend, and the northern hemisphere is heading into winter too.


----------



## divs4ever (7 September 2021)

popped down to $17.97 briefly

 back above $18 now

 took a deep breath and moved the order up to $17.70 , just in case , i get lucky today

 PS this is NOT a big buy  , only a modest size one


----------



## basilio (7 September 2021)

divs4ever said:


> popped down to $17.97 briefly
> 
> back above $18 now
> 
> ...




If your expectations are $2 per year dividends and your comfortable that FGM can deliver those results at ore prices from $80 p/tonne then $18 plus a share is excellent value


----------



## divs4ever (7 September 2021)

i am expecting the Australian dollar to stay soft enough  to make  FMG profitable at a lesser price 

 so $1 Australian per six months shouldn't be difficult  as long as they can ship to a customer  ( and these day that can't be certain either )


----------



## divs4ever (7 September 2021)

RecommendationPerformance

06/09/2021ReduceFair Value *$15.10* Liquidity *HighReduce*on 03/09/2021

*Morningstar™ Premium*Lowering Our Fair Value...


now obviously i am not operating on Morningstar  advice  , but just to show there is the odd pessimist out there


----------



## basilio (7 September 2021)

Took my own advice and topped up at $18. 

Certainly some nervous nellies out there.


----------



## DrBourse (7 September 2021)

Todays CCI is showing the 1st Buy signal, but will we get the other 4 signals over the next few days, or will it be FMG punters firing yet another Blank.
And will the MFI offer the required Confirmation signals??









The 5th Signal is missing - Correct, thats for you to work out.


----------



## divs4ever (7 September 2021)

basilio said:


> Took my own advice and topped up at $18.
> 
> Certainly some nervous nellies out there.



i am betting a lot of that nervousness is coming from factors outside FMG  ( unlike a share such as AMP or MYR )


----------



## againsthegrain (7 September 2021)

I give myself Thu-Fri for my next top up parcel,  let the dice roll


----------



## over9k (7 September 2021)

basilio said:


> If your expectations are $2 per year dividends and your comfortable that FGM can deliver those results at ore prices from $80 p/tonne then $18 plus a share is excellent value



I'm not, but:


divs4ever said:


> i am expecting the Australian dollar to stay soft enough  to make  FMG profitable at a lesser price
> 
> so $1 Australian per six months shouldn't be difficult  as long as they can ship to a customer  ( and these day that can't be certain either )



An AUD tank is a major factor in competitiveness. 


divs4ever said:


> i am betting a lot of that nervousness is coming from factors outside FMG  ( unlike a share such as AMP or MYR )



My thoughts exactly. 

The company itself is great, it's the actual sector/industry itself that I'm worried about.


----------



## over9k (7 September 2021)

AUD's just run in response to this: 






AU's heading into summer too so a drop in the exchange rate is looking iffy.


----------



## divs4ever (7 September 2021)

MorningstarTM Premium
05 Sep 2021
More details about Morning Star Premium
Reduce
Fair value *$13.00*
Lowering Our Fair Value Estimate for Fortescue Post the Massive Dividend
Was *Reduce* on 02 Sep 2021

 ( changed since this morning )

  ** My thoughts exactly.

The company itself is great, it's the actual sector/industry itself that I'm worried about.  **



> Chronos-Plutus said:





 yes i am more an investor  than a trader  , so in my mind i am buying a part of a company  ( not renting a quick trip to another price destination )

 but goodness  how much worse can global manufacturing fall before chaos ensues 

 what will be worth watching is if FMG can profit from mutual respect with China  ( compared to some who are busy  trying to gouge an extra edge ) ( some like RIO and BHP might easily shoot themselves in the foot )

 remember China was credited with saving Australia from the worst of the GFC


----------



## tech/a (7 September 2021)

DrBourse said:


> Todays CCI is showing the 1st Buy signal, but will we get the other 4 signals over the next few days, or will it be FMG punters firing yet another Blank.
> And will the MFI offer the required Confirmation signals??
> 
> View attachment 129943
> ...




Attempting to anticipate a bottom from any indicator or number of indicators is as accurate as an archer on ICE.

I expect FMG to find a bottom closer to $14. Too busy to mark a chart but can do.


----------



## over9k (7 September 2021)

divs4ever said:


> MorningstarTM Premium
> 05 Sep 2021
> More details about Morning Star Premium
> Reduce
> ...



If you take a look over in the virus thread I made a post showing how demand has dropped significantly too.

Once all the tv's, playstations, couches, desks etc are bought they don't need to be bought again for quite a while. Then you get seasonality slowing things as we head into winter (not going to do a lot of construction work in the snow if you can help it) and so on and so forth...


It looks like this winter is going to be much more like we were expecting the last one to be before all the vaccines were announced.


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## DrBourse (7 September 2021)

tech/a said:


> Attempting to anticipate a bottom from any indicator or number of indicators is as accurate as an archer on ICE.
> 
> I expect FMG to find a bottom closer to $14. Too busy to mark a chart but can do.



Agreed, but I'm not "Attempting to anticipate a bottom" - and I don't have the time to explain how indicators produce entry signals to you.


----------



## over9k (7 September 2021)

DrBourse said:


> Agreed, but I'm not "Attempting to anticipate a bottom" - and I don't have the time to explain how indicators produce entry signals to you.



Trading based on technicals is playing with fire in this market IMO.


(Also, probably worth thinking about who you were being sharp with, tech/a has written numerous guides on technicals trading...)


----------



## DrBourse (7 September 2021)

over9k said:


> Trading based on technicals is playing with fire in this market IMO.
> 
> 
> (Also, probably worth thinking about who you were being sharp with, tech/a has written numerous guides on technicals trading...)



Hi over9k - I have never traded anything based on just Technicals - as a Technimental Trader my Stock Selection is based on 60% Financial Analysis and 40% Technical Analysis - If a stock does not meet my FA criteria then I do not bother with its TA - Once I locate a Financially Sound Stock, then I proceed to look at its TA.
FMG's IV is about $23.00, so proceeding to the TA stage is warranted.

PS, I've also written & published a lot of TA Guides and Manuals, and conducted numerous Public Seminars on the subject of TA.


----------



## over9k (7 September 2021)

DrBourse said:


> Hi over9k - I have never traded anything based on just Technicals - as a Technimental Trader my Stock Selection is based on 60% Financial Analysis and 40% Technical Analysis - If a stock does not meet my FA criteria then I do not bother with its TA - Once I locate a Financially Sound Stock, then I proceed to look at its TA.
> FMG's IV is about $23.00, so proceeding to the TA stage is warranted.



Mm but what I was saying was that there's far more going on than the usual rules at the moment (See: ridiculous sums of money being printed, demographic cliffs being reached, massive debt chickens coming home to roost, trade wars...) 

As I mentioned above, FMG as a company is bloody brilliant, but the actual mining business/iron ore market itself has me more than a little jittery and it would appear I'm not the only one. 

I like talking to guys like you as the actual nuts & bolts (bean counting) of specific company financial analysis etc I find to be utterly mind numbing so we usually both know something that the other doesn't. 


Anyways, point is, are you confident not of FMG itself but rather, the bigger iron ore/mining business picture? Because I'm, er, not.


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## tech/a (7 September 2021)

DrBourse said:


> Agreed, but I'm not "Attempting to anticipate a bottom" - and I don't have the time to explain how indicators produce entry signals to you.




when you get a chance


----------



## DrBourse (7 September 2021)

over9k, I'm confident in Facts and FMG's Financials, *BUT* all sorts of Ramps, Rumours and Innuendos are irrelevant IMO.
FMG's TA atm is interesting, and could go either way.
Pullbacks & Spikes come and go, Facts & Financials, when properly verified/confirmed are what interest me more.
I joined into this FMG Forum with what most would consided a logical and well informed post, I also started 3 Froums within the Beginners Lounge, the initial reactions by some chatters does not really surprise me, guess I have to decide if my input here within ASF should continue, as I have better things to do rather than be a Target.
Disagree with me, definately, but try to do it politely, I'm not here to invade anybody turf, just thought a different approach to a stale old subject like FA & TA may have helped Newbies & Beginners, experienced traders will always be at odds with what I present, so I expect educated flack, I just object to the uneducated flack.
Lets see where we go from here on.


----------



## basilio (7 September 2021)

over9k said:


> Mm but what I was saying was that there's far more going on than the usual rules at the moment (See: ridiculous sums of money being printed, demographic cliffs being reached, massive debt chickens coming home to roost, trade wars...)
> 
> As I mentioned above, FMG as a company is bloody brilliant, but the actual mining business/iron ore market itself has me more than a little jittery and it would appear I'm not the only one.
> 
> ...




I can (just) see some points over9k in your concern about FMG/mining industry. But frankly I think they are overblown and miss some critical issues.

1) *If we have any sort of industrial society there will be a substantial ongoing demand for steel and thus iron ore.* FMG has a mature low cost iron ore business and at a micro level has developed excellent  commercial relations with it's major Chinese industrial customers. One can  believe that current iron ore prices will not hold but FMG is a soundly profitable company at prices down to levels that will cause many other suppliers to  be unviable.

2)* FMG is rapidly diversifying into a renewable energy company. * Twiggy has made it clear by word, deed and big capital investment that FMG will be building massive renewable energy projects around the world. The initial investments will be incorporated  into FMG's current iron ore business and make that even more competitive and thus profitable. The engineering skills  they develop should make them a company of choice for a huge boom in renewable energy projects.

*IF *the world goes to hell in a hand basket then of course all bets are off. But frankly in that scenario I just don't see which major industries one could successfully invest in.


----------



## over9k (7 September 2021)

basilio said:


> I can (just) see some points over9k in your concern about FMG/mining industry. But frankly I think they are overblown and miss some critical issues.
> 
> 1) *If we have any sort of industrial society there will be a substantial ongoing demand for steel and thus iron ore.* FMG has a mature low cost iron ore business and at a micro level has developed excellent  commercial relations with it's major Chinese industrial customers. One can  believe that current iron ore prices will not hold but FMG is a soundly profitable company at prices down to levels that will cause many other suppliers to  be unviable.
> 
> ...



Points 2 & 3 are the relevant ones here. 

Totally hearing you about the renewable energy stuff - with that in mind, one has to wonder why he's actually doing it? If the iron ore business was going to continue to be so good, why get into renewable energy? Why not just stick with rocks/dirt? 

Does twiggy perhaps think, like I do, that the rocks/dirt business of the future is not going to be what it is now, hence the movement to green energy? 


Reference hell in a hand basket - this is precisely what I'm anticipating. There are some very rough economic seas ahead for a lot of the world IMO, and china's not a ship I'd want to be on in said seas. 

90% of my money is in U.S assets for a reason. NIO & DEG are basically my only other holdings and they're pure degen plays.


----------



## bux2000 (7 September 2021)

divs4ever said:


> RecommendationPerformance
> 
> 06/09/2021ReduceFair Value *$15.10* Liquidity *HighReduce*on 03/09/2021
> 
> ...




It is interesting that I had been accumulating more FMG in March 2020 at $10.60 when I read a recommendation by said "Morningstar Premium" being $8 and Simply Wall St similar, so I got cold feet and sold those I had accumulated in May 2020 at $11.81 ......... like you am not that convinced using Brokers recommendations alone is the answer, and Andrew Forrest is a unique individual.









						Mining magnate Andrew Forrest upgrades  to $98million private jet
					

Perth mining magnate Andrew 'Twiggy' Forrest celebrated Easter with the highly-anticipated arrival of his Bombardier Global Express 7500, which can fly around the world without stopping.




					www.dailymail.co.uk
				



All the best
bux


----------



## basilio (7 September 2021)

over9k said:


> *Totally hearing you about the renewable energy stuff - with that in mind, one has to wonder why he's actually doing it? *If the iron ore business was going to continue to be so good, why get into renewable energy? Why not just stick with rocks/dirt?
> 
> Does twiggy perhaps think, like I do, that the rocks/dirt business of the future is not going to be what it is now, hence the movement to green energy?




*CLIMATE XXXXXXX CHANGE . *Global warming. Cooking our earth to a crisp. Catastrophe.

There is no other way of putting it. Twiggy  understands the reality of CC.  He is acutely aware that we must move at warp speed to a no carbon renewable energy society if we are to have any chance of averting a total  environmental catastrophe. This is a key basis for his determination to move very quickly to  have  FMG run on renewable energy.

On top of that he is also aware that  the need for renewable energy around the world is practically limitless. So using the engineering skills, experience and billion dollar capital bank he has at hand he intends to make FMG a leader in this field. 

With regard to the future of mining. Again he is no fool. He realises well enough that China is now determined to control it's iron ore sources as quickly as possible.  He can see that 4-8 years ahead there is a strong chance China will have developed it's own mines in other countries. So now is the time to diversify.

And certainly the last point is critical. The consequences of  CC pressures on our world are becoming apparent. There is a risk that this issue alone will result in breakdowns across the world. In that  future I'm not sure what investments are going to be profitable. It may well be a secure house, a decent food and water supply, good friends and the kindest climate still around.


----------



## basilio (7 September 2021)

This  presentation reflects Twiggy's view on CC and the direction he is taking FMG. 

Twiggy Forrest’s green hydrogen ambitions will require renewables at 3x Australia’s total energy consumption​In a campaign style speech, Andrew ‘Twiggy’ Forrest, founder of Fortescue Metals and one of Australia’s richest men, outlined his ambition of producing mammoth quantities of green hydrogen, a task he sees as imperative to stop the “planet cooking” while also cornering a market he believes will soon be worth trillions.









						Twiggy Forrest’s green hydrogen ambitions will require renewables at 3x Australia’s total energy consumption
					

In a campaign style speech, Andrew ‘Twiggy’ Forrest, founder of Fortescue Metals and one of Australia’s richest men, outlined his ambition of producing mammoth quantities of green hydrogen, a task he sees as imperative to stop the “planet cooking” while also cornering a market he believes will...




					www.pv-magazine-australia.com


----------



## over9k (7 September 2021)

basilio said:


> This  presentation reflects Twiggy's view on CC and the direction he is taking FMG.
> 
> Twiggy Forrest’s green hydrogen ambitions will require renewables at 3x Australia’s total energy consumption​In a campaign style speech, Andrew ‘Twiggy’ Forrest, founder of Fortescue Metals and one of Australia’s richest men, outlined his ambition of producing mammoth quantities of green hydrogen, a task he sees as imperative to stop the “planet cooking” *while also cornering a market he believes will soon be worth trillions.*
> 
> ...



There you go.


----------



## Austwide (7 September 2021)

I see IO profits declining in the next few years (could easily be wrong).
If that happens I don't see where FMG will be able to fund the divs that shareholders are hoping for and develop large scale renewable energy sources and green steel if that proceeds. 

Twigg may outside of FMG?

Do not hold currently


----------



## divs4ever (7 September 2021)

bux2000 said:


> It is interesting that I had been accumulating more FMG in March 2020 at $10.60 when I read a recommendation by said "Morningstar Premium" being $8 and Simply Wall St similar, so I got cold feet and sold those I had accumulated in May 2020 at $11.81 ......... like you am not that convinced using Brokers recommendations alone is the answer, and Andrew Forrest is a unique individual.
> 
> 
> 
> ...




 i look at the brokers as a signal the share price MIGHT move in a direction  i can take advantage of   , i didn't look hard at FMG until $8 was gone  , maybe i was jaded by over-promising CEOs elsewhere

 regarding FMG i have confidence in the business ( currently ) i do NOT have confidence in the local currency  ( which creates an extra minor tailwind  for FMG  )

 now elsewhere here , i have stated my view that we are not in a real boom  ( straight demand out-stripping supply )  what seems to be 'demand' is shortages created by bottlenecks and reflecting on the futures/spot market  and the real boom is still a few years away ( assuming we don't slump into a global recession .)

 and i agree Andrew Forrest  is a rare ( but not unique ) CEO that stands out from the crowd , by delivering more often than he disappoints   time will tell if  his battery minerals play is the correct one , he might have taken a leaf out of MCR's book and explored to see if his current leases hold more than iron , first   ( would be right handy if he had  say gold or silver   on his leases and some equipment and staff already on site  ready to assess any deposits found


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## basilio (7 September 2021)

Austwide said:


> I see IO profits declining in the next few years (could easily be wrong).
> If that happens I don't see where FMG will be able to fund the divs that shareholders are hoping for and develop large scale renewable energy sources and green steel if that proceeds.
> 
> Twigg may outside of FMG?
> ...




I don't believe anyone  thinks the level iron ore profits of 20-21 will continue. Having said that all analysis indicates that if iron ore prices stay around the $80-100 ton mark then  dividends of $2 per share a year would be obtainable.

FMG has allocated 10% of its net profits as seed money for the development of it's renewable energy projects. In the last two years that was worth at least $1Billion.  It was always clear that there would be other off balance sheet investors.















						Australia's Fortescue plans global green energy drive
					

Australian mining magnate Andrew Forrest outlined ambitious plans on Wednesday to build a renewable energy business, aiming to compete with oil giants to provide low-cost green energy globally.




					www.reuters.com


----------



## divs4ever (7 September 2021)

over9k said:


> There you go.



 yep , 

 and that is why i prefer boring minerals like silver , copper , iron , zinc    ( maybe even uranium , if those damn governments would just get out of the way )

 so far 'green' doesn't translate to energy efficient , it merely shifts the resultant pollution elsewhere 

 ALTHOUGH SXE ( i hold ) has be doing OK , on converting mine power generation  to 'less harmful ' fuels


----------



## basilio (7 September 2021)

divs4ever said:


> * so far 'green' doesn't translate to energy efficient , it merely shifts the resultant pollution elsewhere  ??*
> 
> ALTHOUGH SXE ( i hold ) has be doing OK , on converting mine power generation  to 'less harmful ' fuels



Not quite sure  what your getting at here Div. There are a number of  rationales for renewable energy 

1) *Renewable energy is now far more economical than fossil fuel sources. *The  ongoing energy source is free and the capital cost has now fallen below comparable fossil fuel generated power  even when additional battery storage is taken into account

2) *Electric vehicles  are inherently more efficient than ICE cars.* They don't waste a huge chunk of energy in surplus heat and braking losses. They are also simpler to produce and will last much longer than ICE cars.

3) *The replacement of fossil fuel power plants with renewable energy plants takes millions of tons of pollutants out of the atmosphere. The reduction in green house gases is also critical in tacking climate change.*

Points 1 and 2 alone would be powerful economic drivers for rapid replacement of fossil fuel generators with renewable alternatives.

Point 3 - the urgent need to tackle Climate Change,  takes the  urgency of the argument to whole new level.

Twiggy has twigged to the economic and environmental value of  a vastly accelerated development of renewable energy . He has decided to take FMG in that direction and reap the rewards. The fact that he has a multi billion dollar enterprise that can seed finance and be first user of his new  energy toys is icing on the cake as well as a whole new basket of goodies.!


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## divs4ever (7 September 2021)

the best argument for renewables is cost efficiency  , however those driving the agenda are using the baseball bat  approach  , hitting you with new penalties  until you change , regardless of resource efficiency  , think of  all the extra aluminum needed  in partially useful  solar panels  , the extra rare earths needed for quality wind turbines 

 that tends to be counterproductive as  willing explorers in renewables tech  will create and tweak to a better mouse-trap  INSTEAD they are buried with extra compliance and paperwork .

 you will never have good innovation  by a tax, tax. tax policy  the most likely outcome will be more creative tax evasion

 people are flying today because of two bicycle mechanics ( not a Ph. D in applied engineering  , or a bureaucrat overseeing mass transport )

 and then you could go to 'ignorant' Henry Ford  as the dreamer who saw  faster car production 

 and do you know what  , solar panels have a limited lifespan , ( as do there electronics ) and wind turbines wear out  ( and batteries so far don't last forever either ) so currently renewable , isn't always  so environmentally friendly 

  the flaw in the policy is the top down approach 

 BTW who is going to recover all those solar panels floating around in space  , or do we have to wait and see which ones hit us on the head


----------



## Value Collector (7 September 2021)

over9k said:


> There you go.



Interestingly The Pilbara miners already produces more than 20 x the amount of IRON ORE as Australia consumes, No reason why some one couldn't scale up the energy business in a similar way, our energy market is tiny by global standards, but our potential renewable resources are huge.


----------



## Value Collector (7 September 2021)

divs4ever said:


> solar panels have a limited lifespan , and wind turbines wear out




As do oil wells and gas turbines, and coal mines and coal fired power stations.

Yes, you have to invest materials to build renewables harvest wind and solar, But you have to invest pretty much the same types of material to harvest fossil fuels too.


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## divs4ever (7 September 2021)

basilio said:


> *CLIMATE XXXXXXX CHANGE . *Global warming. Cooking our earth to a crisp. Catastrophe.
> 
> There is no other way of putting it. Twiggy  understands the reality of CC.  He is acutely aware that we must move at warp speed to a no carbon renewable energy society if we are to have any chance of averting a total  environmental catastrophe. This is a key basis for his determination to move very quickly to  have  FMG run on renewable energy.
> 
> ...



 yes you have under-explored Afghanistan  , Mongolia  probably have useful resources  , and Russia and it's allies  will soon  be only a rail-link away  , and probably willing to deal outside of the US Petrodollar  , and then again China has developed a few trading partners in Africa , and Brazil MIGHT decide China is  a viable trading partner 

 so yes  moving away from China-dependency looks wise ( but might be unwise to burn that bridge completely )


----------



## DrBourse (8 September 2021)

DrBourse said:


> Todays CCI is showing the 1st Buy signal, but will we get the other 4 signals over the next few days, or will it be FMG punters firing yet another Blank.
> And will the MFI offer the required Confirmation signals??
> 
> View attachment 129943
> ...



FMG - Well "Shock & Horror" The CCI on FMG has given us an early morning 2nd Signal, AND the MFI has given a Very Weak Change of direction - Only 3 more Entry Signals to go before this may become a trade - HOWEVER, FMG could still go either way, that's why we need the remaining 3 CCI Signals and more +ive signal from the MFI.


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## over9k (8 September 2021)

Next resistance is at about the 16.50 mark.


I don't hold (any more).


----------



## tech/a (8 September 2021)

over9k said:


> Next resistance is at about the 16.50 mark.




You mean Support?

Nothing much to see here in FMG.
Worth sticking in the knife draw.


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## over9k (8 September 2021)

tech/a said:


> You mean Support?
> 
> Nothing much to see here in FMG.
> Worth sticking in the knife draw.



Yes. Derp.


----------



## basilio (8 September 2021)

I think the next big stories from FMG will be

1) *Where does the price and volume of iron ore sales stabilise?*  Will it be $140, 120, 100, $80 a tonne? Or will it drop far lower ?  Then do the calculations on  net profit with the new prices.

2) *Firm announcements on big renewable energy projects. *They have many irons in the fire. Concrete contracts and an outline of potential profits from such projects will cause a reappraisal of risk and return.


----------



## DrBourse (9 September 2021)

DrBourse said:


> FMG - Well "Shock & Horror" The CCI on FMG has given us an early morning 2nd Signal, AND the MFI has given a Very Weak Change of direction - Only 3 more Entry Signals to go before this may become a trade - HOWEVER, FMG could still go either way, that's why we need the remaining 3 CCI Signals and more +ive signal from the MFI.
> View attachment 130002




4.30pm Thursday 9/9/21 - The CCI, although still showing a +ive Uptrend for FMG, did not give any additional signals today – the MFI continued it’s ST downward trend.


----------



## DrBourse (10 September 2021)

DrBourse said:


> 4.30pm Thursday 9/9/21 - The CCI, although still showing a +ive Uptrend for FMG, did not give any additional signals today – the MFI continued it’s ST downward trend.
> View attachment 130095



5.18am Friday 10/9/21 And Overnight the US FSUGY (ADR) CCI is showing improvement and is giving our CCI the lead for todays trade here in Aust - while the US FSUGY (ADR) MFI is obviously still in a ST Downtrend.


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## DrBourse (10 September 2021)

10.30am Friday 10/9/21 Todays CCI on FMG has (at this early stage of the day) given us the 2nd & 3rd signals, ie crossing up through the -100 Oversold Line, and WMA.

And the MFI has begun to rise again. – The obvious Q is “will it continue to rise?”, tomorrow will tell. And if it does continue to rise the SP has to contend with the Gaps Minor & Major Resistance Lines.


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## tech/a (10 September 2021)

Lovely.
So is it a Buy ,Sell, Add or Procrastinate?


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## DrBourse (10 September 2021)

Why the Agro and uneducated comments, Dunno if I want to continue with this saga.

Patience young lad, take a deep breath.

What would you do Huh


----------



## waterbottle (10 September 2021)

DrBourse said:


> Patience young lad, take a deep breath.
> What would you do Huh



Probably wait given the downtrend for iron ore prices, expectation of increasing brazilian iron ore output and continued suppression of Chinese steel output. That's a recipe for a sustained down trend IMO


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## tech/a (10 September 2021)

My position on FMG  is un changed from my first post on it 
I see no reason at this stage to change it


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## DrBourse (10 September 2021)

Bingo waterbottle !

t/a that's pretty much limited thinking - we should all be open to every opportunity that may present itself.


----------



## againsthegrain (10 September 2021)

one of the directors bought a whopping $5.9k of shares yesterday.. not sure if that is a show of confidence or perhaps the opposite


----------



## DrBourse (10 September 2021)

againsthegrain said:


> one of the directors bought a whopping $5.9k of shares yesterday.. not sure if that is a show of confidence or perhaps the opposite



don't let t/a know abt that


----------



## waterbottle (10 September 2021)

againsthegrain said:


> one of the directors bought a whopping $5.9k of shares yesterday.. not sure if that is a show of confidence or perhaps the opposite



Like a waterbottle to a bushfire


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## basilio (10 September 2021)

One thing I would be interested in due course is  how far Twiggy and other directors took part in the dividend re investment plans.

Twiggy has around 1.3Billion  shares already and always seems keen to increase his holding. I struggle to see what he will do with almost $2.8 billion cash from his last dividend payout. Curious to know.


----------



## tech/a (10 September 2021)

DrBourse said:


> Why the Agro and uneducated comments, Dunno if I want to continue with this saga.
> 
> Patience young lad, take a deep breath.
> 
> What would you do Huh




Would you mind pointing out the Agro in my post?

To be honest commenting on every wiggle in your oscillators with baited breath is basic beginners stuff.


----------



## Value Collector (10 September 2021)

basilio said:


> One thing I would be interested in due course is  how far Twiggy and other directors took part in the dividend re investment plans.
> 
> Twiggy has around 1.3Billion  shares already and always seems keen to increase his holding. I struggle to see what he will do with almost $2.8 billion cash from his last dividend payout. Curious to know.



Also, another interesting point about FMG reinvestment plan is that the shares issued are purchased on market, not newly created shares like some companies which create dilution.


----------



## basilio (10 September 2021)

Value Collector said:


> Also, another interesting point about FMG reinvestment plan is that the shares issued are purchased on market, not newly created shares like some companies which create dilution.




That is interesting.  I'm wondering how that is achieved and also how many shares are in effect bought back.  

I'm aware they have had provision to buy back shares but Is there any notification of how many shares have been effectively transferred through the div reinvestment program ?


----------



## DrBourse (10 September 2021)

DrBourse said:


> Hi Grey, agree with the $18.00, that line (or a bit lower), is very interesting as FMG's IV is abt $23 atm - for me, Candles & a ST CCI indicator will call the tune at that level.
> Would love to get back in ASAP, I feel that the "Double Top & the $12 call" is a bit "out of the ball park."
> 
> As mentioned in my previous posts, was never going to get involved like this again, so this is an experiment.
> CYA



Grey, I was right, should not have continued this FMG blow by blow experiment/explanation on how to trade using Indicators - That's it, No more, this is not the right environment for me to post anything I have to offer.
My apologies Joe & Skate.


----------



## Go Figure (10 September 2021)

againsthegrain said:


> one of the directors bought a whopping $5.9k of shares yesterday.. not sure if that is a show of confidence or perhaps the opposite



There are rules requiring all directors sales or purchases of shares be openly declared, this serves to maintain transparency for both the shareholders and the market in general. The director in question now holds 15,996 shares in FMG.


----------



## qldfrog (10 September 2021)

Go Figure said:


> There are rules requiring all directors sales or purchases of shares be openly declared, this serves to maintain transparency for both the shareholders and the market in general. The director in question now holds 15,996 shares in FMG.



That's quite small in the scale of things


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## Value Collector (10 September 2021)

basilio said:


> That is interesting.  I'm wondering how that is achieved and also how many shares are in effect bought back.
> 
> I'm aware they have had provision to buy back shares but Is there any notification of how many shares have been effectively transferred through the div reinvestment program ?



I believe the way it works is that they know how many shares need to be issued, because they know who has the reinvestment plan activated, but they don’t announce the price the shares will be issued at for 9 days after ex dividend,  over those nine days they purchase the shares needed on market, and then issue them at the average price paid.


----------



## divs4ever (10 September 2021)

Go Figure said:


> There are rules requiring all directors sales or purchases of shares be openly declared, this serves to maintain transparency for both the shareholders and the market in general. The director in question now holds 15,996 shares in FMG.



 directors  are no longer 'glued to their seats '( and in some cases i wish SOME were )

 there is a modern trend of board refreshes , and while they can be good on poorly performing companies , one can only hope Twiggy is recruiting more TALENT and not just 'diversity ',

 so a relatively new  director buying a few extra shares probably won't excite anyone but that director 

 BTW i am all in favour of that 'transparency ' sometimes it gives a useful hint into the company


----------



## divs4ever (10 September 2021)

Value Collector said:


> I believe the way it works is that they know how many shares need to be issued, because they know who has the reinvestment plan activated, but they don’t announce the price the shares will be issued at for 9 days after ex dividend,  over those nine days they purchase the shares needed on market, and then issue them at the average price paid.



there should be a notice ( already or soon ) on the DRP which SHOULD state whether the shares were issued  , bought on-market , or any other way the DRP was filled ( like an off-market buy-back )

 in some companies that is not a big deal , but companies where the directors own more than 20% of the company ( combined ) it can be  

 FMG seems to be better than most  at dotting Is and crossing Ts , so let's see


----------



## Value Collector (11 September 2021)

divs4ever said:


> directors  are no longer 'glued to their seats '( and in some cases i wish SOME were )
> 
> there is a modern trend of board refreshes , and while they can be good on poorly performing companies , one can only hope Twiggy is recruiting more TALENT and not just 'diversity ',
> 
> ...



I think the job of most directors at FMG is vote yes, or say “I resign”, when the chairmen holds 35% of the voting shares, you probably aren’t there to disagree with him, you are probably there for advice in your field eg if you are a lawyer, engineer, financier etc but not make big calls as to the direction of the ship.


----------



## Value Collector (11 September 2021)

divs4ever said:


> there should be a notice ( already or soon ) on the DRP which SHOULD state whether the shares were issued  , bought on-market , or any other way the DRP was filled ( like an off-market buy-back )
> 
> in some companies that is not a big deal , but companies where the directors own more than 20% of the company ( combined ) it can be
> 
> FMG seems to be better than most  at dotting Is and crossing Ts , so let's see



The drp announcement states all shares will be purchased on market.


----------



## divs4ever (11 September 2021)

the board are NOT there to automatically disagree ( unless you are forced to have those pesky 'activist representatives ' on the board )

 they are there  to add sensible critique  ,  of plans and visions  , and help remedy interference to a smooth path in a timely manner 

 now of course a board full of 'agreeniks ' when the plan has all sorts of foreseeable issues is different ( and sadly common on the ASX )

 but that is harder to fix especially when the 'two-strike' rule isn't as effective as it could be 

 PS have mixed feelings on on-market DRP buying especially in a company with solid growth plans  ( it is a cheap way to increase capital reserves )

for me it depends on the company  operating the DRP plan ( i do NOT automatically sign up to an active DRP , i make each decision individually )


----------



## Value Collector (11 September 2021)

divs4ever said:


> PS have mixed feelings on on-market DRP buying especially in a company with solid growth plans  ( it is a cheap way to increase capital reserves )



I prefer on market DRP purchases, otherwise they are technically capital raisings, which if a company required more capital I would just prefer them to pay a smaller dividend.

If I believe a company is under valued, which in FMG’s case I do think they are under valued, I would hate them  to be issuing cheap shares to DRP participants at the expense of diluting me.

How ever, with the drp being on market, it has no effect on my holdings, so I am all for it, infact right now it’s very good, because the DRP is soaking up some of the shares short sellers have sold, and putting them in the hands of long term owners.


----------



## divs4ever (11 September 2021)

my holdings are normally  tiny compared to the company issued share base , so only rarely does my voting power matter ( even when i had a fair slab of WOW )



 it should be noted some of those Institutional holders looked at as a positive influence are the same managers that are lending out those shares for extra returns 

it MIGHT be worth your time to peruse  the change of holding releases to help detect  which 'rent shares ' and which don't


----------



## Value Collector (11 September 2021)

divs4ever said:


> my holdings are normally  tiny compared to the company issued share base , so only rarely does my voting power matter ( even when i had a fair slab of WOW )
> 
> 
> 
> ...



it’s not about voting power, it’s about diluting the earning power of the DRP/capital raising is done at a price lower than fair value.

I don’t have anything against the act of short selling, I would rent my shares to them if I could and it increased my income from my long term position, short sellers can’t really hurt long term holders in any way, they have to buy their shares back eventually, and in the mean time they may lower prices which helps longer term holders get into the stock at a cheaper price.

but saying that, I don’t mind watching the short sellers get burned when they bet against me and get it wrong  and if the on market DRP helps squeeze them a bit tighter, I am all for it.


----------



## divs4ever (11 September 2021)

some companies use the cash saved  by issuing the extra shares wisely , and some DON'T

 so a lot of the time  i do the extra thinking when deciding IF ( and how much ) i participate in the DRP 

 i don't particularly hate short-sellers , sometimes their activities give me an extra bonus if i am already interested in buying what they are selling short  WHAT I DO HATE  is a fund manager using shares held in 'trust ' to act against my wishes and interests


----------



## Value Collector (11 September 2021)

divs4ever said:


> some companies use the cash saved  by issuing the extra shares wisely , and some DON'T



Before raising capital by selling equity, I would rather my companies exhaust other options 

1, retaining earnings (dividend policy based on estimated future capital needs)

2, using debt (within safe limits and sensible interest rates)

Only once those and other potential sources or capital are exhausted would I be ok with a capital raising, and only if the current share price used for the capital raising was above my estimate of fair value.

Also, I would want it to be an actual capital raising, not a DRP, especially not an underwritten DRP.

—————————

Ofcourse none of this applies to FMG, Because their DRP shares are purchased on market, so it’s not a capital raising.


----------



## divs4ever (12 September 2021)

you might have noticed SOME companies lack discipline  ,  and personally i would rather have seen FMG pay a smaller div.  and use the extra cash reserves wisely  , i suspect there  will be wild times ahead ,  whether they diversify from iron or not 

 now some companies ( especially REITs like their gearing , but need to snap up opportunities  at relatively short notice )

 WOW seems to get mostly fizzle for their retained divs , while spin-off SCP seems to do better with the extra cash 

 i guess time will tell  and we will see if FMG needs to raise more cash in the next two years


----------



## Value Collector (12 September 2021)

divs4ever said:


> you might have noticed SOME companies lack discipline  ,  and personally i would rather have seen FMG pay a smaller div.  and use the extra cash reserves wisely  , i suspect there  will be wild times ahead ,  whether they diversify from iron or not
> 
> now some companies ( especially REITs like their gearing , but need to snap up opportunities  at relatively short notice )
> 
> ...



That’s where I would have to disagree, I think FMG handing over the cash to the owners of the company actually shows huge discipline.

They retained more profits in the past and used it wisely to clear debt and fund growth, but now they have no net debt, and their growth projects are easily covered by the 20% of profits they do retain.

So handing the excess capital back to the owners is the best thing to do, and each share holder can decide whether they want to use it to diversify or not themselves.


----------



## basilio (12 September 2021)

Value Collector said:


> That’s where I would have to disagree, I think FMG *handing over the cash to the owners of the company* actually shows huge discipline.




In theory the concept of the managers of a company handing over profits to the owners as dividends is very sound. Plenty of companies where the managers just want to burn cash on almost anything except dividends.

FMG's situation is a  bit different because the biggest shareholder is the founder and Chairman who is very happy to see maximum dividends to _moi. _He doesn't take any salary - just dividends.

I also note Twiggy reviewed executive bonuses because the last years  super profit results made them too big in his view.









						Fortescue posts record profit, dividend but cuts management bonuses
					

Fortescue Metals Group Ltd reported its highest ever annual profit and dividend on Monday due to sky-high iron ore prices but senior management received a surprise cut to bonus payments.




					www.reuters.com


----------



## Value Collector (12 September 2021)

basilio said:


> In theory the concept of the managers of a company handing over profits to the owners as dividends is very sound. Plenty of companies where the managers just want to burn cash on almost anything except dividends.
> 
> FMG's situation is a  bit different because the biggest shareholder is the founder and Chairman who is very happy to see maximum dividends to _moi. _He doesn't take any salary - just dividends.
> 
> ...



Yep, Andrew has charities and other business interests to invest in outside Fortescue, so as long as FMG has enough liquidity inside to keep its projects funded then there is little point keeping cash in the business bank account earning 0.5% 

Many claim FMG should be spending their owners earnings on big diversification M&As, but if they pay big dividends, then the owners can diversify themselves into any assets they choose themselves.

Over the years my FMG dividends have helped me buy into Airports, electric car factories, film studios, industrial real estate, farmland, banks, smart phone makers, Themeparks and many more, so I don’t need FMG to diversify, their dividends allow me to diversify my own portfolio into exactly the industries I want.


----------



## dat111 (13 September 2021)

Value Collector said:


> Yep, Andrew has charities and other business interests to invest in outside Fortescue, so as long as FMG has enough liquidity inside to keep its projects funded then there is little point keeping cash in the business bank account earning 0.5%
> 
> Many claim FMG should be spending their owners earnings on big diversification M&As, but if they pay big dividends, then the owners can diversify themselves into any assets they choose themselves.
> 
> Over the years my FMG dividends have helped me buy into Airports, electric car factories, film studios, industrial real estate, farmland, banks, smart phone makers, Themeparks and many more, so I don’t need FMG to diversify, their dividends allow me to diversify my own portfolio into exactly the industries I want.



Exactly,  As an investor we have a choice to reinvest in the company who paid the dividend or to use the money to buy something else...until we need the money for something else.


----------



## basilio (17 September 2021)

Excellent analysis of the iron ore industry with the current sharp falls in iron ore prices.

_First, it’s important to note that BHP, Rio Tinto and FMG are businesses built to withstand a much lower iron ore price than we see now, and an impressive period of operational discipline during the past five years has left cash costs at the trio in the range of $US15 to $US20 a tonne.

As such, these miners will remain fantastically profitable at $US130 a tonne, and handily profitable at the long-term average iron ore price of $US70 a tonne.

Where their share prices should sit under those price scenarios is a different question, of course._









						The D-Day looming for iron ore investors
					

After banking fat dividends from BHP, Rio Tinto and Fortescue, investors will need to make a call on the weaker outlook for the commodity.




					www.afr.com


----------



## divs4ever (17 September 2021)

have an order in for $15 ( which i MIGHT move lower next week ) after buying some yesterday  @ $17.60

 and on order in for more MGX @ 44c 

remember i believe  the recent commodity highs ( except PMs ) have been out of cycle  and the real demand boom is still a few years away


----------



## againsthegrain (17 September 2021)

divs4ever said:


> have an order in for $15 ( which i MIGHT move lower next week ) after buying some yesterday  @ $17.60
> 
> and on order in for more MGX @ 44c
> 
> remember i believe  the recent commodity highs ( except PMs ) have been out of cycle  and the real demand boom is still a few years away




Looking back I feel like my orders at 19 18 and 17 were rushed,  as much as my emotion is saying buy buy now im going to wait a week or 2, 15 does seem like a great deal tho


----------



## DannyB0000 (17 September 2021)

Reading an autobiography on Warren Buffett, his book suggests investors who get to emotional about stocks and their performance end up losing money.  I think FMG is a Hold at the moment, it’s definently on my watch list now.  The share price has fallen off a cliff and I would wait until the selling stops before buying into it, wait until the share price starts to stabilise first.


----------



## divs4ever (17 September 2021)

i don't consider mine rushed  , but opportunistic  , i work on what i consider a fair price ( some companies i would not buy at any price )

 but i DO buy affordable parcels  , so i can buy multiple parcels should i wish to ( even on the same day )

 i am NOT one to 'back up the truck ' ( well not since the middle of 2011 )

 but interesting to see the beat-down of FMG , considering the company  is more ESG-friendly than most miners


----------



## basilio (17 September 2021)

divs4ever said:


> have an order in for $15 ( which i MIGHT move lower next week ) after buying some yesterday  @ $17.60
> 
> and on order in for more MGX @ 44c
> 
> remember i believe  the recent commodity highs ( except PMs ) have been out of cycle  and the real demand boom is still a few years away




That would be a bargain (I think..) ( I clearly didn't get it right.  Topped up way to early... )

I'm wondering if the sharp drop  today is triggering a series of stop losses ?

I 'm sure if the iron ore price stabilises at $90-100 FMG will still be a very tidy earner.


----------



## waterbottle (17 September 2021)

Down 10% today alone. Wow.... What's going on in China?


----------



## tech/a (17 September 2021)




----------



## divs4ever (17 September 2021)

maybe this 

 WHY THE EVERGRANDE COLLAPSE MATTERS...BY LYNETTE ZANG



 although i would argue  we ( the world in general ) have been in serious debt madness since the middle of 2018 , and that is why  i had almost completely fled  debt securities ( bonds, hybrids, notes ) , this has been just a long time coming


----------



## divs4ever (17 September 2021)

Nuclear Subs, Evergrande, and the Iron Ore Conundrum​








						Nuclear Subs, Evergrande, and the Iron Ore Conundrum
					

Keep up-to-date with all the latest ASX news with Money Morning Australia.



					www.moneymorning.com.au
				




 DYOR


----------



## basilio (17 September 2021)

The Evergrande collapse is very big.  Is this  part of the reason for the current collapse ?  I could see that.

Frankly if it does turn out to be a contagious  financial disaster the there are plenty of other dominos on the table as well.


----------



## tech/a (17 September 2021)

basilio said:


> The Evergrande collapse is very big.  Is this  part of the reason for the current collapse ?  I could see that.
> 
> Frankly if it does turn out to be a contagious  financial disaster the there are plenty of other dominos on the table as well.




Have a read and never concern yourself about a sovereign debt ever again

Also on audible.


----------



## frugal.rock (17 September 2021)

I've never bought any FMG...
But just did !
$15.33

Does everyone know that Twiggy put tenement applications in for an absolutely staggering amount of ground all around that other company that has great hydrogen prospects...?

Csnt remember the name of it now, but someone's posted a snapshot of it in the stock thread.

Dagnamit, what's that stock?
Possibly Gascoyne area? WA

Edit, Province Resources
ASC ticker PRL... huge ground.

I don't think it's been announced yet by FMG ?
Or has it?


----------



## frugal.rock (17 September 2021)

From PRL thread.
There's more posts about it that thread. 
A massive hydrogen hub!
That's a staggering amount of ground... I'm sure FMG know what there doing here...


----------



## divs4ever (17 September 2021)

describe 'contagious '

while the building industry will certainly be rattled , think of all those extra people wary of buying 'off-the-plan ' , contractors who don't get paid in full ( not to mention insurance premiums hiked )

what about the corporate bond  market ( including all those 'sausage-debt ' EFTs )  , what about the derivative market , as sure as apples someone will have credit-default swaps  on this debt 

 we will probably never know the true outstanding debt of Evergrande , let alone who discreetly lost money on this


----------



## basilio (17 September 2021)

frugal.rock said:


> From PRL thread.
> There's more posts about it that thread.
> A massive hydrogen hub!
> That's a staggering amount of ground... I'm sure FMG know what there doing here...
> ...



Very interesting.  We know that FFI  (Fortesque Future Industries )  is the vehicle for FMG's move to mass renewable energy. This all about Green Hydrogen.  Don't be surprised in FFI becomes a partner with PRL - or takes it over.

Found some further background information.









						Australia’s Richest Man Grabs Outrageous Amount of Land Surrounding PRL
					

In the last few days Andrew "Twiggy" Forrest's FMG Resources has put in applications on all of the land surrounding Province Resources (ASX:PRL) proposed green hydrogen project in the Shire of Carnarvon




					www.nextsmallcap.com


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## sptrawler (17 September 2021)

FMG has finally hit my watch list, now becomes a case of watching falling knives.


----------



## basilio (17 September 2021)

FFI website.

Interestingly I couldn't find any mention of the land applications around PRL's project.  









						News | Fortescue Future Industries
					

'I can assure you there is enough renewable energy to economically supply mankind, from this time forth.' - Dr Andrew Forest AO




					ffi.com.au


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## basilio (17 September 2021)

Perhaps this is  part of the reason why the bottom has fallen out of FMG.

It seems some senior executives have decided to jump.









						Mass exodus: Twiggy’s FMG scrambles to fill top jobs
					

Andrew Forrest’s Fortescue Metals Group is scrambling to fill key management positions after a mass exodus of senior staff in recent weeks.




					thewest.com.au
				




https://thewest.com.au/business/min...nt-positions-after-mass-exodus-ng-b882006903z
*Andrew ‘Twiggy’ Forrest’s Fortescue Metals Group scrambles to fill key management positions after mass exodus*

Stuart McKinnonThe West Australian
Thu, 16 September 2021 2:00PM
Stuart McKinnon

_Fortescue Metals chairman Andrew Forrest, with CEO Elizabeth Gaines, right, and deputy CEO Julie Shuttleworth.Credit: Nic Ellis/The West Australian_

Andrew Forrest’s Fortescue Metals Group is scrambling to fill a raft of key management positions after a mass exodus of senior staff.

The iron ore giant’s chief executive Elizabeth Gaines revealed in an internal memo obtained by The West Australian that Pilbara operations director Fernando Pereira had resigned to pursue other opportunities.

His departure follows the recent resignation of health and safety director Rob Watson after 10 years.
Ms Gaines — in a statement after The West contacted the company about the departures — thanked both men for their “outstanding contributions to Fortescue”.
“They leave with our best wishes for the future, and the search process for replacement of their roles is progressing,” she said.

The two high-profile exits follow last month’s resignation of Tim Langmead, Fortescue’s community, environment and government director.

The company also had three key staff depart in February — chief operating officer Greg Lilleyman as well as project directors Don Hyma and Manie McDonald — following a $US400 million ($516 million) cost blowout on its Iron Bridge magnetite project.

The resignations of Mr Pereira and Mr Watson come after Fortescue last month unveiled a 117 per cent jump in annual profit to a record $US10.3 billion.


_Fortescue Metals Group CEO Elizabeth Gaines. Credit: Jackson Flindell/The West Australian_

The stunning results included a record $2.11-a-share final dividend, which will deliver the company’s billionaire founder and chairman Mr Forrest a payout of $2.35 billion later this month.

Having posted the windfall profit, Fortescue’s board intervened to ensure senior executives didn’t bank “excessive” bonuses because of the iron ore miner’s recent share price surge.

The company disclosed in its annual report last month it had capped share rewards flowing from a 2019 executive bonus scheme to balance “rewarding management effort and the tailwinds driving up iron ore prices”.

The performance-linked scheme would have allowed about 30 eligible executives pocket millions of dollars in profit on the vesting of shares that were issued at just $4.35 in 2019 but were worth more than $23 when the bonus plan matured at the end of the financial year.
Instead, just 28 per cent of the shares will vest with the executives after Fortescue capped the scheme by ruling they could benefit from only half of the price rise to prevent them receiving “a windfall gain as a result of unprecedented growth in Fortescue’s share price”.

Sources told The West Australian yesterday the board’s decision had embittered some mid-level executives, who had been expecting to be rewarded more handsomely after the record year.

The head of the company’s remuneration committee, Jen Morris, said in the annual report the board was “cognisant of the company and shareholder views on executive pay and the circumstances where executives may benefit from windfall gains in vesting”.

“The intent of the long-term incentive plan is to ensure no windfall gains or undue penalty,” she said.
“In reviewing these exceptional outcomes under the financial year LTIP, the board determined that strong share price growth has been driven, in part, by strong iron ore prices which are outside the control of management.”


----------



## over9k (17 September 2021)

Australian sharemarket sinks into the red as iron ore miners tumble on commodity price collapse​








						ASX in the red as iron ore miners tumble on commodity price collapse
					

The Australian sharemarket was dragged down by the ongoing iron ore price plunge weighing heavily on miners, while a tech firm sank after being left at the altar.




					www.news.com.au
				






And people laughed at me for pointing out how close to the edge china was:



over9k said:


> I'm not, but:
> 
> An AUD tank is a major factor in competitiveness.
> 
> ...






over9k said:


> Points 2 & 3 are the relevant ones here.
> 
> Totally hearing you about the renewable energy stuff - with that in mind, one has to wonder why he's actually doing it? If the iron ore business was going to continue to be so good, why get into renewable energy? Why not just stick with rocks/dirt?
> 
> ...










			Bloomberg - Are you a robot?
		












I wouldn't be surprised if this is china's lehmann brothers' moment.


----------



## againsthegrain (17 September 2021)

How ironic if china now creates a global crash after creating a global pandemic,  all that is left is a global war if things come in 3s


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## over9k (17 September 2021)

againsthegrain said:


> How ironic if china now creates a global crash after creating a global pandemic,  all that is left is a global war if things come in 3s



How do you fight a war if you're bankrupt?


----------



## againsthegrain (17 September 2021)

over9k said:


> How do you fight a war if you're bankrupt?




When bankrupt and backed into a corner fighting a war might be the only thing left, don't know how Stalin did it


----------



## Austwide (17 September 2021)

Didn't WW1 and WW2 follow depressions


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## over9k (17 September 2021)

Sure but there's been plenty of depressions that didn't precede wars. 


We aren't going to have WW3 with china guys, jesus christ...


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## againsthegrain (17 September 2021)

Austwide said:


> Didn't WW1 and WW2 follow depressions




unemployment and inflation were key features too, sounds familiar


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## divs4ever (17 September 2021)

Austwide said:


> Didn't WW1 and WW2 follow depressions



 before WW2 , absolutely  both my  parents  grew up in  The Great Depression  , 
 before WW1 am not so sure  but there were has times  from what i have read 

  BUT are we already in WW3  a war against the middle class , looks a valid struggle and a largely global one at that 

 add in a possibly manufactured virus   etc etc


----------



## sptrawler (17 September 2021)

over9k said:


> How do you fight a war if you're bankrupt?



You sign a lend lease and print money. 








						Lend-Lease - Wikipedia
					






					en.wikipedia.org
				




I think the U.K was the only country to pay it back.





__





						Britain pays off final instalment of US loan - after 61 years
					

Britain will today make the final payment on a multi-billion-dollar loan it took out in 1945 to refinance the country in the wake of the Second World War.




					www.independent.co.uk
				




What is the old saying? The more things change, the more they stay the same.
What it really means is, future generations just repeat the same things, the earlier generations did.


----------



## sptrawler (17 September 2021)

divs4ever said:


> before WW2 , absolutely  both my  parents  grew up in  The Great Depression  ,
> before WW1 am not so sure  but there were has times  from what i have read
> 
> BUT are we already in WW3  a war against the middle class , looks a valid struggle and a largely global one at that
> ...



WW1, the "Great War", the war to end all wars.

WW2, the war Germany had to have, because they were punished heavily for WW1.

WW3, maybe because we have too many people, wanting so much, from a finite resource?

Time will tell.


----------



## divs4ever (17 September 2021)

the population was already declining in several modern nations to the extent   where extra immigration is desired 

so that is a straw-man  , nature adjusts human populations at it's own discretion , usually thinning out over-dense populations 

 now the resources MIGHT be finite or we might not be investing  in utilizing them effectively ( i suggest the latter )

 and while i see greed as good ,  i see uncontrolled greed as self-destructive ( if i didn't believe in greed i would never invest )

 i suggest WW3 is in progress and it is a ( near ) global class war ( but sometimes dressed up as racial clashes and religious divides  )


----------



## frugal.rock (17 September 2021)

You lot are unreal !

I buy FMG for the first time in my life and then you bloody lot start discussing WW III in the FMG thread ?
Absolute degenerates 😂

If you's are gonna plonk yaselves down and git on the goon n yabber crap, yous can at least invite me eh bloke? 👣🔥🍻

Now, back to the hydrogen discussions....👻


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## divs4ever (17 September 2021)

buying FMG is so yesterday ( for me )

 and wars NORMALLY means extra iron demand 

 now while some are very excited about hydrogen  .. where will it be used 

 remember the WEF agenda is to crush the middle class ( so forget owning those nice cars and houses )

 ' you will own NOTHING  ( rent EVERYTHING ) and be happy '


----------



## sptrawler (17 September 2021)

frugal.rock said:


> You lot are unreal !
> 
> I buy FMG for the first time in my life and then you bloody lot start discussing WW III in the FMG thread ?
> Absolute degenerates 😂
> ...



Well what do you expect, we have been reading endlessly for the last 5 pages of FMG, how the sky is the limit YO $100 here we come.
Now we are all feeling deflated and morbid, because the bubble bursts, of course there will be some melancholy.
My apologies, I should have said 20 pages.


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## frugal.rock (17 September 2021)

divs4ever said:


> now while some are very excited about hydrogen .. where will it be used



Massive hydrogen hub in WA at Gascoyne.
It's gonna power processing plants and smelters as well as power WA.

Failing that, Hindenburg II, III, IV, V
and lots of bloody hydrogen boms


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## divs4ever (17 September 2021)

won't  be many customers for long it they start using  H bombs 

 now IF you had of said space exploration  ,  yes you might have something  apart from  a MUCH bigger debt problem


----------



## over9k (17 September 2021)

Oh dear.


----------



## finicky (17 September 2021)

Just idle speculation but do you think FMG might get down to the $12 zone?  The argument, if it merits the term, would be:
- the double top at $26 with the trough $19 that gives a measured target of 7 down from the trough which would be $12. The 62% fib should be around $12 too (measuring the bull run as $4 to $26)
Doubt I'll bother to buy even if that's an outcome because of general market pessimistic sentiment.


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## over9k (17 September 2021)

I hate to rub the salt in, but after doing $6000USD on a degenerate 3LNI trade a couple of weeks ago to have it fully rebound after my sale in less than a morning:






I am so freaking glad I didn't buy any FMG when I was thinking I really should grab at least one value stock:







Pure gamble/degen trade from here IMO and with the U.S markets in the red tonight too I can't help but think we haven't seen a bottom yet. 

I mean I could be wrong, but I'm not touching this thing with a bargepole.


----------



## over9k (17 September 2021)




----------



## sptrawler (17 September 2021)

Going back to basics, pre the run up in iron ore prices, what was the average FMG price?
What has changed between then and now with FMG to value it above the pre iron ore price boom? Has it improved its recovery costs? Has it diversified its market? Has it diversified its product? Has it increased its market share?

If not, why wouldn't it go back to its long term average price to iron ore price ratio?


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## divs4ever (17 September 2021)

** Just idle speculation but do you think FMG might get down to the $12 zone? **

maybe 

 the other thing to watch is COSTS  , watch out for profit margin squeeze 

 after the market  today  , i lowered  my FMG buy order BELOW $15 (  and will be watching to see if shaving a few more cents off the limit price is worthwhile )


 to my mind this is still the consolidation phase of the cycle ( when more buy-outs should occur )

 take care  , but don't panic


----------



## over9k (17 September 2021)

sptrawler said:


> Going back to basics, pre the run up in iron ore prices, what was the average FMG price?
> What has changed between then and now with FMG to value it above the pre iron ore price boom? Has it improved its recovery costs? Has it diversified its market? Has it diversified its product? Has it increased its market share?
> 
> If not, why wouldn't it go back to its long term average?



China.


----------



## sptrawler (17 September 2021)

over9k said:


> China.



Well if you are bullish China paying more for the ore, then FMG will go up, if you think China will pay less for the ore, then FMG will go down.
Easy
I think China will pay less, time will tell.


----------



## againsthegrain (17 September 2021)

short selling and panic seems to be ruling the market at the moment, perfect time to.....


----------



## sptrawler (17 September 2021)

againsthegrain said:


> short selling and panic seems to be ruling the market at the moment, perfect time to.....



Wet yourself,  if you're over exposed. 🤣


----------



## divs4ever (18 September 2021)

and what if you are bearish on the Australian dollar ( and not bullish on the US dollar )

 but yes the FMG focus on China as a customer  might take the shine off the share price ( which is not discouraging to me )

 there is a TINY chance Glencore would throw in an offer  but i suspect 'mini-Ivan' still prefers RIO ( which might boost the FMG share price anyway )


----------



## frugal.rock (18 September 2021)

A couple of observations,
today was the biggest volume day and one day drop, in over a year. (not including dividend scalp drop days, but not far from the last divvy.)

From around the 2nd of August, average volume clicked to approx' double time, with all of that volume pretty much selling pressure.

Intraday day chart today shows 2 distinct plateau consolidation levels.

Volume on close bar alone, was around a standard full average days trade!

Refer to charts for observations...

Im not saying the bottom is in, but gee, it seems to be close.

Twiggy, with his huge recent dividend, may already be at the masquerade ball, and buying.

After all, it's no surprise iron ore price was going to fall.

Investors haven't really heard anything about the staggering amount of ground with applications in for Hydrogen exploration, so how can the market factor that into the price?
That's yet to happen, imo.

Sooner or later they will announce something about that...

Intraday chart







Daily






The amount of prospective hydrogen  map again... applications went in somewhere around June/July this year.


----------



## over9k (18 September 2021)

frugal.rock said:


> A couple of observations,
> today was the biggest volume day and one day drop, in over a year. (not including dividend scalp drop days, but not far from the last divvy.)
> 
> From around the 2nd of August, average volume clicked to approx' double time, with all of that volume pretty much selling pressure.
> ...



Yeah but it closed at session lows and then the U.S markets are deep into the red tonight and still dropping as I write this (sp500 is down 0.77 as of this moment) after futures were pretty much flat all day today.

So, it closed at session lows with U.S futures flat and now the U.S markets have plunged which wouldn't have been factored in to AU markets today on account of the fact that the futures didn't suggest its occurrence, and it STILL closed at session lows even ignoring that.

So pretty likely that monday will be deep into the red.


Sorry I couldn't be the bearer of any good news rock


----------



## over9k (18 September 2021)

ADR's are down 10.7% as of 12.49 AU eastern time and have flattened out vs FMG being down 11.48% for the day on the ASX so there might be some exchange rate movement in FMG's favour (drop in the AUD). Little good news else I can find I'm sorry.


----------



## over9k (18 September 2021)

Iron ore all over the news tonight: 






Talking heads that trade european miners and commodities are mentioning a $75 iron ore price coming as an overshoot/bottom and fundamental support level before a level out around the $90 mark. Consume with salt.


----------



## divs4ever (18 September 2021)

$75  ( a tonne for iron ore ) would imply a glut ( perhaps,  Brazil coming back to full production ) OR a wider down-turn in manufacturing and construction ( say  ,a global economic meltdown )

 while either is possible  , what is likely 

 good luck 

DYOR


----------



## over9k (18 September 2021)

divs4ever said:


> $75  ( a tonne for iron ore ) would imply a glut ( perhaps,  Brazil coming back to full production ) OR a *wider down-turn in manufacturing and construction* ( say  ,a global economic meltdown )
> 
> while either is possible  , what is likely
> 
> ...



bingo


----------



## over9k (18 September 2021)

U.S steel has also plummeted:






Which, to state the obvious to the new players out there, means there is a demand drop driving this plummet in FMG.

Remember, you'd expect steel producers to go UP if their input costs had dropped but demand hadn't.


----------



## qldfrog (18 September 2021)

divs4ever said:


> $75  ( a tonne for iron ore ) would imply a glut ( perhaps,  Brazil coming back to full production ) OR a wider down-turn in manufacturing and construction ( say  ,a global economic meltdown )
> 
> while either is possible  , what is likely
> 
> ...



Or Africa coming on market with chinese producers in chinese controlled local governments.
Iron is far too common on earth to justify these sky high prices IMHO..
Just a matter of time, actually surprise me it took so long for IO to even start falling.i was wrong .   or right 10y too early🤣


----------



## frugal.rock (18 September 2021)

over9k said:


> Sorry I couldn't be the bearer of any good news rock



That's ok.
Thanks for all the bad news... much obliged.😅

Luckily, Dr Twiggy has been planning other things for quite some time.
I hadn't really gone looking for hydrogen stocks lately when they have been on the rise.

Are investors still looking at Fortescue as a iron miner?

I'm thinking, if markets are forward pricing, it's about time the markets start pricing in the future growth potential of the hydrogen business of FMG.

Twiggy at Boyer Lecture.
Started watching last night, will finish today.
From what I saw, it's a real eye opener, as I haven't delved into hydrogen before now.
Very much worth watching, imo.
Skip to 1:18 to avoid Ita Butttrose...



I'm going to attempt to make myself a little learned about hydrogen this weekend.
Long over due.

In thinking about the future with iron ore prices dropping, FMG, WA AND AUSTRALIA as a nation, should be getting behind this hydrogen project.
Almost rubber stamping it if you will...imo, the hydrogen prospects/ tenements applications should be fast tracked due to sovereign benefit.

The foremost and pressing concern would be incomes and jobs going ahead, but there's also the green environmental aspects, which are probably more important down the track as the world pushes to be carbon neutral.


----------



## Austwide (18 September 2021)

Home sales in China slumped 20%, according to Bloomberg calculation, and one of the biggest property developers Evergrande is on the brink of default.

_Brazilian iron ore_ supply is increasing

Iron ore production increasing with demand falling, lower IO prices.

Hydrogen projects I’m guess are a few years away from producing if funding is available.

IO is about $100 now.


When IO was around $75, FMG was around $5.


Can’t happen………………………………………can it?


----------



## KevinBB (18 September 2021)

Austwide said:


> When IO was around $75, FMG was around $5.



The other thing to note about this time (FMG @ $5) is that investors were just starting to realise that FMG was capable of completely removing its debt burden. I remember FMG's debt being talked about, both in the media and by analysts, as being too large for the company.

I didn't believe that FMG was a good investment at the time, solely because of the debt burden. But ... Andrew Forrest knew better.

I'm sure that the debt burden had quite an influence on FMG's share price at the time.

KH


----------



## Value Collector (18 September 2021)

Austwide said:


> Home sales in China slumped 20%, according to Bloomberg calculation, and one of the biggest property developers Evergrande is on the brink of default.
> 
> _Brazilian iron ore_ supply is increasing
> 
> ...



FMG was severely undervalued when it was $5, I wouldn’t compare prior share prices and prior Iron ore prices.

it’s better to work out how much profit FMG will make a various iron prices and work you valuation off that.

for example one simplistic valuation is to look at 2020. Iron Ore averaged $93 for that year (some months less, some months more), but when Iron Ore averaged $93, they were able to pay $1.76 in dividends that year.

Now what would the share price be if the dividend yield was 5% on that $1.76 of dividends? The answer is $35.

As you would realise, even though the last dividend by itself was $2.11 for just 6 months, FMG has not ever come close to $35 yet, this is a clear sign that the super high Iron Ore prices of 2021 were never really priced in, because the market already suspected the Iron Ore price would fall, the $93 Iron Ore price of 2020 wasn’t even really factored in.

people will always over reacted when a commodities companies product price falls, but you don’t have to let yourself get swept away with it.


----------



## againsthegrain (18 September 2021)

A couple of observations,
today was the biggest volume day and one day drop, in over a year


The obvious is, somebody was still buying, found it a good deal.  Not to sound like a broken record but hardly many places to park money for a good % return these days.  If property drops a few % with 1-2% rental returns where else do you park your stash


----------



## qldfrog (18 September 2021)

KevinBB said:


> The other thing to note about this time (FMG @ $5) is that investors were just starting to realise that FMG was capable of completely removing its debt burden. I remember FMG's debt being talked about, both in the media and by analysts, as being too large for the company.
> 
> I didn't believe that FMG was a good investment at the time, solely because of the debt burden. But ... Andrew Forrest knew better.
> 
> ...



Indeed that was my concern so i was more Rio than FMG..but andrew must have guessed negative interest rate were coming and debt was the way to go


----------



## tech/a (18 September 2021)

Well you don’t park it in heavily falling investments 

No amount of dividends are going to cover a fall in the asset 
of 40+%. Nor will reams of paper work or hours of video.
Liquid assets can help by being nimble —— no point in
having the ability and not having a strategy to use it.

I just don’t understand why people literally stand back and let
others control their financial situations. I came in on the FMG 
show at around $23 there is an $8000 saving / 1000 shares 
right there. It’s not about being a smart arse it’s about mitigating risk.

I don’t care if you bought 10000 at $10 bucks sitting on your hands
cost &80k now ____ which could be in your pocket ready to buy perhaps
again or something else.

Hard to swallow.I’d fire any financial guy who sat on his hands!


----------



## DannyB0000 (18 September 2021)

Screenshot of Iron Ore prices, totally fallen off a cliff. More heavy selling for FMG next week I suspect


----------



## over9k (18 September 2021)

@Joe Blow probably time to add this to the FMG thread as it is indeed the demand side that has sent iron ore and with it, fmg, tumbling.


----------



## divs4ever (18 September 2021)

againsthegrain said:


> A couple of observations,
> today was the biggest volume day and one day drop, in over a year
> 
> 
> The obvious is, somebody was still buying, found it a good deal.  Not to sound like a broken record but hardly many places to park money for a good % return these days.  If property drops a few % with 1-2% rental returns where else do you park your stash



 well i did buy on Thursday  , but not Friday , and  i haven't stopped placing orders yet 

 but another tiny facet to consider is FMG  is putting growth strategies into place  while some large rivals are divesting 'non-core assets '

 currently i hold half the number of FMG shares as i do in BHP but that is  liable to change over time ( my preferred  top up price for BHP is sub $25  it has been messing around with potash for years  and is apparently still years away from production )

 interesting times ahead


----------



## over9k (18 September 2021)

frugal.rock said:


> That's ok.
> Thanks for all the bad news... much obliged.😅
> 
> Luckily, Dr Twiggy has been planning other things for quite some time.
> ...




I'm mulling a degen buy on monday so if it keeps dropping I'll be losing money with you if that makes you feel any better?


----------



## tech/a (18 September 2021)

*For a technical view

No body asked---but hey.






*

Think we are close to a shorter term capitulation ($14-15.20)
followed by a dead cat bounce rally to the gap ( $16-17.)
Then  (If price action behaves itself and the crowd remain
predictable.) To $8-10. 

Impossible??


----------



## qldfrog (18 September 2021)

tech/a said:


> *For a technical view
> 
> No body asked---but hey.
> 
> ...



I like your tech analysis, the extra factor is international situation
FMG is seen as a China economy proxy, and so every China heavy news will influence FMG SP as well as IO and obviously nyse up and down.
I believe as well that commodities are the last sector to boom but IO is not really a commodity, too common, it is just the cheapest way to dig dirt somewhere and ship it to a smelter.
Rarity is what should make price, higher and higher for copper nickel cobalt RE and of course PM..
My view only and i have been very wrong in the past
Fmg at $9 to $10 and i would start buying..
Remember we are also talking 2021 and so losing not far from 50% from 2000s value 
$5 then is $10 now, with some lost/used resources but also some established assets and know how, infrastructure...


----------



## finicky (18 September 2021)

tech/a said:


> For a technical view
> 
> No body asked---but hey




But they already have mine


----------



## tech/a (18 September 2021)

finicky said:


> But they already have mine




Ha

They have too and it looks pretty good to!
Great minds!


----------



## over9k (18 September 2021)

tech/a said:


> *For a technical view
> 
> No body asked---but hey.
> 
> ...



I was thinking about a degen buy order at 14.01 too tech so you're music to my ears with this. 

(still probably not going to do it though)


----------



## tech/a (18 September 2021)

over9k said:


> I was thinking about a degen buy order at 14.01 too tech so you're music to my ears with this.
> 
> (still probably not going to do it though)




I personally wouldn't be fixated on attempting to purchase FMG at a perceived bargain.
Id be and am looking for continuation of winning stocks.


----------



## basilio (18 September 2021)

So tech/a.  Is this your opportunity to do a huge short sell on FMG ? The charts seem to be telling the story .

-----------------------------------------------------------------------------------------
On the macro picture there are some serious issues.  The Evergrande debt problem could  quite conceivably cause a major financial crisis. That would precipitate a crash in Chinese demand for iron ore and the price could indeed fall to even half the current price. 

At $50-60 a tonne FMG would still be profitable with minimal debt and a fully developed mine and transport structure. But i'm not sure how many other major businesses could say the same in those circumstances.  So I wonder what would be the winning stocks in a time of financial and  industrial meltdown?


----------



## over9k (18 September 2021)

basilio said:


> So tech/a.  Is this your opportunity to do a huge short sell on FMG ? The charts seem to be telling the story .
> 
> -----------------------------------------------------------------------------------------
> On the macro picture there are some serious issues.  The Evergrande debt problem could  quite conceivably cause a major financial crisis. That would precipitate a crash in Chinese demand for iron ore and the price could indeed fall to even half the current price.
> ...



Inverse etf's and puts. 

FMG might be the best of a bad bunch, but a bad bunch is still a bad bunch.


----------



## divs4ever (18 September 2021)

that bad bunch is the whole Australian economy but MIGHT be still better than most of the G7

 assuming self-sufficient Russia is now excluded from the G7


----------



## tech/a (18 September 2021)

basilio said:


> So tech/a.  Is this your opportunity to do a huge short sell on FMG ? The charts seem to be telling the story .
> 
> -----------------------------------------------------------------------------------------
> On the macro picture there are some serious issues.  The Evergrande debt problem could  quite conceivably cause a major financial crisis. That would precipitate a crash in Chinese demand for iron ore and the price could indeed fall to even half the current price.
> ...




That short opportunity sailed a long time ago.


----------



## spratty84 (18 September 2021)

Value Collector said:


> FMG was severely undervalued when it was $5, I wouldn’t compare prior share prices and prior Iron ore prices.
> 
> it’s better to work out how much profit FMG will make a various iron prices and work you valuation off that.
> 
> for example one simplistic valuation is to look at 2020. Iron Ore averaged $93 for that year (some months less, some months more), but when Iron Ore averaged $93, they were able to pay $1.76 in dividends






Value Collector said:


> FMG was severely undervalued when it was $5, I wouldn’t compare prior share prices and prior Iron ore prices.
> 
> it’s better to work out how much profit FMG will make a various iron prices and work you valuation off that.
> 
> ...



It would be interesting to know what dividends they will still dish out at a price of tanked low of $50 to $60. I would like to think they would still pay out 80 percent but they do have great ambitions that will need to be funded. Firstly i like the green steel idea as it will value add to the iron ore and make a product that will be unique and should be soughted after. Secondly of course the renewables and hydrogen that will be needed to decarbonise the operations and hopefully supply of hydrogen to a potential expanding market. The main concern for me is at what stage in the future will china chop our cockles off and drastically reduce the need for our Australian iron ore.


----------



## Value Collector (18 September 2021)

spratty84 said:


> It would be interesting to know what dividends they will still dish out at a price of tanked low of $50 to $60. I would like to think they would still pay out 80 percent but they do have great ambitions that will need to be funded. Firstly i like the green steel idea as it will value add to the iron ore and make a product that will be unique and should be soughted after. Secondly of course the renewables and hydrogen that will be needed to decarbonise the operations and hopefully supply of hydrogen to a potential expanding market. The main concern for me is at what stage in the future will china chop our cockles off and drastically reduce the need for our Australian iron ore.



Dividends would be around $0.69 if Iron Ore averaged $60 for 12 months.


----------



## spratty84 (18 September 2021)

Value Collector said:


> Dividends would be around $0.69 if Iron Ore averaged $60 for 12 months.



Cheers mate thanks for sharing your knowledge its appreciated. I have to sit down and think about my strategy, the price correction has happened a lot faster than i had anticipated a few weeks ago.


----------



## over9k (18 September 2021)

spratty84 said:


> Cheers mate thanks for sharing your knowledge its appreciated. I have to sit down and think about my strategy, the price correction has happened a lot faster than i had anticipated a few weeks ago.



Yeah, the chinese government have brought a ton of regulations in cracking down on basically everything you can think of - tech companies, casino's, nuking bitcoin mining, you name it, right as the economy was reaching a tipping point. 

E.g: 






Question is, how much is left? There will undoubtedly be more, but how much more... 


Mush of the short selling ship has already sailed IMHO. Is there still some left? Yeah, probably. 

Is it worth the risk though...


----------



## over9k (18 September 2021)

Here's the china bull 3x etf vs the bear 3x etf (short position):






As you can see, the bear etf has almost exactly doubled whereas the bull etf has, on account of these being 3x etf's, thus dropped 2/3rds.


I spent a very long time wondering why on earth FMG et al hadn't nosedived along with the rest of the chinese market but I guess the crackdowns were only on coin mining, tech companies etc so it remained insulated. It needed the real estate market to go (so this is obvious contagion from evergrande) in order to tumble just like everything else already had. I made a lot of posts in another thread talking about what an absolute state china was actually in and people mostly just ridiculed me.

Anyways, FMG tumbling is easy to predict if you knew evergrande was to go, but you'd have to actually know evergrande was going to go before you knew what would happen as a result of said evergrande collapse.


----------



## sptrawler (18 September 2021)

What if China starts putting embargoes on exporting white goods and parts to specific countries, ala the U.S to North Korea, Iran etc?
Just a thought.


----------



## Miner (18 September 2021)

over9k said:


> Here's the china bull 3x etf vs the bear 3x etf (short position):
> 
> View attachment 130456
> 
> ...



which one next outcome for evergrande now ?









						Evergrande Group - Wikipedia
					






					en.wikipedia.org


----------



## over9k (18 September 2021)

sptrawler said:


> What if China starts putting embargoes on exporting white goods and parts to specific countries, ala the U.S to North Korea, Iran etc?
> Just a thought.



Pure bluff. Their economy is on a knife-edge as it is, not to mention how much global supply chains are being undone and moved to a build-where-you-sell model and have been for 5+ years now. 

If china did a saddam and took taiwan and KO'd half the world's microchip supply that would be a different story, but that really would start ww3 except it would be china vs the entire planet and they wouldn't stand a chance, not least of all because of the fact that they are massive net importers of both energy AND food. 

The whole thing would be over in days. 



We have been over this in two other threads now.


----------



## over9k (18 September 2021)

Miner said:


> which one next outcome for evergrande now ?
> 
> View attachment 130461



I'm not overstating things when I say this might be china's lehmann brothers' moment.

Markets are very very jittery (and have already sold off massively) for a reason.


This is not just a "buy the dip" moment.


----------



## divs4ever (18 September 2021)

plenty of sanctioned nations for China to sell to if it gets tagged as a 'bad guy ' 

 Afghanistan , Iran . Yemen , Cuba , Syria , North Korea  the train-wrecks in Africa and South America  after all China will do direct goods swaps ( no US dollars or gold needed )


----------



## Miner (18 September 2021)

over9k said:


> I'm not overstating things when I say this might be china's lehmann brothers' moment.
> 
> Markets are very very jittery (and have already sold off massively) for a reason.



Noted. Technically the domino effect will fall on all resource stocks - iron ore, gold etc - long shot then our education industry. GDP, jobs - Australia being a car selling country now (after killing all manufacturing bases) will be like Venezuela . Sad commentary


----------



## divs4ever (18 September 2021)

but China needed to slow and consolidate  , if the rest of the world ( all the big players ) are a wreck as well it will not lose bargaining power  the one to watch will be India who could easily creep closer to the top of the heap 

 am not as worried  about China as to where all those bloody US dominated bonds went  , there are a LOT of desperate pension funds out there   will they get smacked again  , this might still hit the West badly , and China will print their way out of local trouble ( they aren't in as massive a debt hole as the US , EU  , and maybe not even Japan deep )


----------



## over9k (18 September 2021)

Miner said:


> Noted. Technically the domino effect will fall on all resource stocks - iron ore, gold etc - long shot then our education industry. GDP, jobs - Australia being a car selling country now (after killing all manufacturing bases) will be like Venezuela . Sad commentary



There's a reason for this big submarine deal with the yanks that they just announced.

Policy makers should have been (should have been) diverting australia's strategic trade and military ties to the USA for years now.



Here's a simple example of what the smart money has been paying attention to:

You know all this carryon about how everyone are going to build out renewable infrastructure this and electric cars that and blah blah blah?

Well, china's actually been very quietly building out coal, not renewable energy, but COAL powered plants like there's no tomorrow over the past few years. The smart money knew about this and called it months and months ago but fossil fuels just aren't fashionable like solar panels are.

HOWEVER... recently, a fair bit of that same smart money started pouring into coal stocks as the smart money did indeed realise just what IS going on with all of this.

Check this out, peabody energy, australia's 5th largest coal producer:







See how aside from the last few days, it's absolutely screamed, being a 19 bagger and change at its peak if you'd bought back in the november trough?

Now china nearly entirely uses coal in its blast furnaces to make steel. If real estate goes, steel demand goes, and thus a lot of coal (and iron ore) demand goes.

HOWEVER...

China has nearly 250 gigawatts (GW) of coal-fired power now under development, *more than the entire coal power capacity of the United States.* So when Xi says China will peak…what he is preparing us all for is a massive (they never stopped) and continued investment.

Our Chinese friends now have 97.8 GW of coal-fired power under construction, and another 151.8 GW at the planning stage. And so while some poor sap was penning Xi’s carefully crafted speech to the UN, Xi and his underlings were busy. Busy financing and building out what is likely to be the worlds most impressive global energy infrastructure.

Just this year plants accounting for some 17 GW began construction in China. To put this into context this is *more than the total amount approved during the previous two years*. But they are not only investing in their backyard. Nope… according to a Boston University database they have made more than $244 billion in energy investments abroad since 2000 with the bulk of that in recent years going into oil and gas.

These Chinese corporations are building or planning to build more than 700 new coal plants at home and around the world, some in countries that today burn little or no coal, according to tallies compiled by Urgewald, an environmental group based in Berlin. Many of the plants are in China, but by capacity, roughly a fifth of these new coal power stations are in other countries. In total there are 1,600 new coal-fired plants planned or under construction in 62 countries, according to Urgewald’s tally, which uses data from the Global Coal Plant Tracker portal. The new plants would expand the world’s coal-fired power capacity by *43 percent.*






In short, whilst we here in the west have been trying to get off of oil (arab) dependence by moving to renewables, china's realised the fool's errand absolute idiocy that renewables actually are in their current state and pivoted (at least, as much as it can) to the MUCH smarter, more secure, reliable etc etc COAL (and here's an example of europe learning this lesson about renewables right now):

https://au.finance.yahoo.com/news/europe-energy-crunch-forcing-u-224255590.html

https://www.bloomberg.com/news/arti...runch-helps-push-u-s-power-to-seven-year-high









And yet, meanwhile:










So the bottom line here is that not only is australia's only real remaining industry f***ed, but the only thing that will remain after it are coal and uranium exports, and natural gas if we can get a bit more of that moving (but gas is only something you use if you have no other choice on account of it being unbelievably difficult/expensive to actually move from one place to another, so that is never going to become a mainstay/staple of export).

Can you imagine if the greenies ever manage to torpedo those?

We are literally now headed to an economic situation where the only two pillars of export/income that remain will be the two most unpopular, most hated, most loathed, #1-on-the-****-list products of the entire political left.



In short, BTU (and other coal miners along with uranium miners too) are a buy-the-dip moment because they actually have some long term tailwinds.

Iron ore does not, and neither does this country, and God help us if the left ever gets into power.


----------



## Miner (19 September 2021)

over9k said:


> There's a reason for this big submarine deal with the yanks that they just announced.
> 
> Policy makers should have been (should have been) diverting australia's strategic trade and military ties to the USA for years now.
> 
> ...



Excellent share.
Lots I did not know.
Now like to read and learn more.
Thanks a lot mate@over9k


----------



## waterbottle (19 September 2021)

over9k said:


> There's a reason for this big submarine deal with the yanks that they just announced.
> 
> Policy makers should have been (should have been) diverting australia's strategic trade and military ties to the USA for years now.
> 
> ...



What's your source for China abandoning renewable energy? 
If they truly didn't "believe" in renewable s then why build nuclear infrastructure instead of coal?


----------



## qldfrog (19 September 2021)

waterbottle said:


> What's your source for China abandoning renewable energy?
> If they truly didn't "believe" in renewable s then why build nuclear infrastructure instead of coal?



Ahh nuclear is for green energy and renewable?..well done Mr Narrative .
Not a swipe at you @waterbottle , this is indeed what we are told.
Thanksfully i benefit from the narrative via uranium stock
nuclear=weapon, then a side business of power and medical industrial uses;
would be interesting to see a factual nuclear power carbon cost inc waste treatment...
the woke answer to that is usually: but coal leaves radioactive wastes. Which it does.
but no, China does not believe in CO2 causing global warning,and so just go for efficiency and cost.if solar is cheaoer,they go solar. Why not.
but not on abstract moral or dubious sciences


----------



## qldfrog (19 September 2021)

qldfrog said:


> Ahh nuclear is for green energy and renewable?..well done Mr Narrative .
> Not a swipe at you @waterbottle , this is indeed what we are told.
> Thanksfully i benefit from the narrative via uranium stock
> nuclear=weapon, then a side business of power and medical industrial uses;
> ...



Which bring us back to steel and China does not care if it is green steel or not 
If the west wants to pay a premium for clean steel, they will sell clean steel .usually by printing a sticker, putting it on and saying so... probably already rubbing their hands at the idea😊


----------



## divs4ever (19 September 2021)

yes it is a very interesting ( global ) policy shift 

 when i was young ( in the Hippy era ) the Greens were very  anti-uranium  , they might not have loved fossil fuels  , but tolerated them  as a better alternative to turning the Earth 'into a radio-active waste dump '  , now the world is moving towards uranium ( instead of past uranium ) towards  ' a less polluted planet' ( aka  an extra level of taxation/regulation )

 China will soon be the most powerful nation on the planet ( if it isn't already ) but that is liable to be a temporary thing  ( maybe a century ) until India overtakes China 

 BTW last i heard China is making more nuclear power plants than anyone else  both for local use and international customers  , which means more coal for them and their steel mills ,

 but can we blame China ,  i would suggest not  because many Western nations smugly offloaded manufacturing to China  over the last 30 years in the name of 'a cleaner environment ' ( at home )


----------



## over9k (19 September 2021)

waterbottle said:


> What's your source for China abandoning renewable energy?
> If they truly didn't "believe" in renewable s then why build nuclear infrastructure instead of coal?



Uhhh nuclear isn't considered a renewable? The tree huggers won't touch it


----------



## Value Collector (19 September 2021)

over9k said:


> Uhhh nuclear isn't considered a renewable? The tree huggers won't touch it



It’s not renewable, but it can basically be considered infinite.


----------



## divs4ever (19 September 2021)

as is the toxic waste  , currently 

 which asks the question , what research is being done to re-purpose that waste ( apart from turning it into armor-piercing projectiles )

 we have been aware of this issue for 40 years


----------



## sptrawler (19 September 2021)

divs4ever said:


> as is the toxic waste  , currently
> 
> which asks the question , what research is being done to re-purpose that waste ( apart from turning it into armor-piercing projectiles )
> 
> we have been aware of this issue for 40 years



It is a bit off topic, but with nuclear, they are working on thorium reactors and nuclear fusion.


----------



## divs4ever (19 September 2021)

the problem will always be cost efficiency , currently there is a tax/regulation agenda , and i assert that is the wrong way of doing things 

 a positive incentive always works very well for me  

 FMG has tried to do the right thing more often than some rivals , surely you would try encouragement first  , for such a company 

 maybe the problem is the various levels of government


----------



## over9k (19 September 2021)

Value Collector said:


> It’s not renewable, but it can basically be considered infinite.



I was talking to how it's referred to. 

Just what the tree huggers like vs don't like, basically.


----------



## sptrawler (19 September 2021)

divs4ever said:


> the problem will always be cost efficiency , currently there is a tax/regulation agenda , and i assert that is the wrong way of doing things
> 
> a positive incentive always works very well for me
> 
> ...



FMG and twiggy are doing a great job, especially with regard trying to diversify into renewables, it should eventually improve their bottom line as fuel is a big cost.
As for tax, I doubt FMG are taxed any differently than BHP, Rio or any other miner.
The thing is, it is always difficult to get into the big league it costs a huge amount of money, but FMG has got there. 
Now the trick is to become a diversified miner, rather  than a one trick pony. 
Only selling one commodity, when it cycles, so do you.


----------



## Smurf1976 (20 September 2021)

On the question of the world and China's electricity production, I'll let the data speak for itself:











Looking ahead, yes China is building more nuclear but it's by no means the backbone of the nation's energy strategy given that, for electricity generation, coal and hydro are both being pursued far more enthusiastically in terms of scale and are both already far larger than is nuclear.

China's total energy consumption, all purposes not just electricity:






I wouldn't count on making a fortune in the Chinese nuclear industry anytime soon.

My personal opinion FWIW is that China would almost certainly use more gas if they could obtain it. Natural gas, hydrogen, any gas really as long as they can physically obtain it at an economical price. There's a huge potential market for it as a direct heat source in industry, displacing coal in situations where pollution is most problematic (eg in cities). In that context hydrogen or hydrogen carriers (eg ammonia) produced by FMG or others are possible candidates subject to price and infrastructure at the Chinese end.

At present China's using coal for industrial purposes, that is as a heat source not for electricity generation or making steel, in situations that make sense only due to the lack of workable alternatives. Situations that countries with greater access to gas, of whatever type, generally wouldn't do. Think "factories in the suburbs" type operations - you don't burn coal in the boiler by choice, you do it because you've got no choice.


----------



## divs4ever (20 September 2021)

China if it wanted to , can buy  plenty of weapons grade uranium from Russia  as it decommissions  it's old nuclear missiles 

 previously  Russia was selling it to the US , but as far as i know  the deal has been canceled


----------



## over9k (20 September 2021)

Smurf1976 said:


> On the question of the world and China's electricity production, I'll let the data speak for itself:
> 
> View attachment 130500
> 
> ...



Gas is *the* ideal energy source if you can get it. Problem is, it's so, so, SO difficult to move that it's generally not used unless you have no other choice. 

The only exception is when you don't need to transport it. Then, then it's the best thing in the world. Gas is actually the biggest reason for how big of a deal that shale is, not oil


----------



## Sean K (20 September 2021)

divs4ever said:


> as is the toxic waste  , currently
> 
> which asks the question , what research is being done to re-purpose that waste ( apart from turning it into armor-piercing projectiles )
> 
> we have been aware of this issue for 40 years




All the nuclear waste ever produced could be stored on a footy field. It's one of the only forms of energy (maybe the only) where the waste is fully contained and does not get into the environment. 

Finland have a good plan for storage that is a good model. Plenty of countries would have the right geological setting to copy this.


----------



## divs4ever (20 September 2021)

in that case could we have it stored under parliament house in Canberra and put the land to good use


----------



## qldfrog (20 September 2021)

kennas said:


> All the nuclear waste ever produced could be stored on a footy field. It's one of the only forms of energy (maybe the only) where the waste is fully contained and does not get into the environment.
> 
> Finland have a good plan for storage that is a good model. Plenty of countries would have the right geological setting to copy this.



As someone who has actually visited La Hague where nuclear waste is processed, may i tell you that a footy field is far from being enough unless you pile it up to the moon ?, that you can not put waste blocks next to each others..and that their vitrified containers have to be cooled down in a magnificent blue water pool 24/7 for the next couple of thousand years... 
Yes it is small in volume but the equivalent of a grapefruit of plutonium is enough to poison..chemically..not via radiation..the whole of mankind..from my uni years where i studied nuclear physics..doubt this has changed in the last 30y.
Considering the abysmal level of scientific knowledge shown here with covid, i would not be that keen to live by an Australian approved nuclear facility..she'll not be right mate


----------



## qldfrog (20 September 2021)

qldfrog said:


> As someone who has actually visited La Hague where nuclear waste is processed, may i tell you that a footy field is far from being enough unless you pile it up to the moon ?, that you can not put waste blocks next to each others..and that their vitrified containers have to be cooled down in a magnificent blue water pool 24/7 for the next couple of thousand years...
> Yes it is small in volume but the equivalent of a grapefruit of plutonium is enough to poison..chemically..not via radiation..the whole of mankind..from my uni years where i studied nuclear physics..doubt this has changed in the last 30y.
> Considering the abysmal level of scientific knowledge shown here with covid, i would not be that keen to live by an Australian approved nuclear facility..she'll not be right mate



But fmg is not yet in nuclear materials resources?


----------



## divs4ever (20 September 2021)

by the way picking up some extra  FMG sub $15 wasn't as hard as i expected ( bought some at open for $14.20 )

 i think one of the chartists here should take a little bow 

 thanks for the heads up 

 cheers


----------



## over9k (20 September 2021)

Odd, commsec shows a bottom of 14.43 for me?


----------



## over9k (20 September 2021)

I'm closely watching this and the iron ore price as BTU is more my jam than FMG. 

Degen 14.01 buy hasn't filled.


----------



## divs4ever (20 September 2021)

Open$14.200
High$14.880
Low$14.200
 according to Commsec for me 

 but the confirmation note still hasn't been posted ( nearly one hour later ) ( but the order is gone 

 it could be broken once again  ( and no Commsec Community to double check in )


----------



## KevinBB (20 September 2021)

divs4ever said:


> but the confirmation note still hasn't been posted ( nearly one hour later ) ( but the order is gone
> 
> it could be broken once again  ( and no Commsec Community to double check in )



I think its all a bit slow this morning. I bought some other stuff this morning (according to plan), and NABTrade took ages to send the confirmation, not that this is unusual.

Check your portfolio, it should have been updated.

KH


----------



## Sean K (20 September 2021)

qldfrog said:


> As someone who has actually visited La Hague where nuclear waste is processed, may i tell you that a footy field is far from being enough unless you pile it up to the moon




About 50ft high, it would be.

Onkalo does sound like a solution and will be there long after humans have left this planet. Just need some intergalactic signs of danger to put on the entrance.


----------



## divs4ever (20 September 2021)

still no confirmation  note nor whiny message about the platform being busy


----------



## divs4ever (20 September 2021)

in the actual portfolio they are there  , but not change in average SP that is supposedly automatic ( and no confirmation note )

however that is not completely rare with Commsec 

 no similar issues with Bell Direct on the RRL  which was filled later ( about ten minutes after the open completed ) contract note in the website AND emailed 

 one of those days i guess 

 meanwhile have a part-filled EVN  with the price climbing at least the share value was more than the brokerage this time


----------



## frugal.rock (20 September 2021)

over9k said:


> Degen 14.01 buy hasn't filled.



Oh well, keep it in there.
It needs every $500 of support it can get ATM... 🙈
Probably get hit soon enough 😂


----------



## againsthegrain (20 September 2021)

over9k said:


> I'm closely watching this and the iron ore price as BTU is more my jam than FMG.
> 
> Degen 14.01 buy hasn't filled.




you got your degen I put a dog at 13.90


----------



## tech/a (20 September 2021)

So Pesky----Technical Trader comment.

Long term holders could have easily
sold in the $20s and re purchase *MORE*
later and* STILL* received the dividend.
In-fact more dividend return.

These lofty heights may take a very very
long time to be re visited.

Do many long term holders do this *OR* is it
just not heard of?


----------



## frugal.rock (20 September 2021)

againsthegrain said:


> you got your degen I put a dog at 13.90



Hope it's a bloody St Bernard with a keg around its neck...


----------



## divs4ever (20 September 2021)

not me  ( not yet anyway ) i originally bought at $19.90  shortly before the recent  results   , bought  some more last Thursday @ $17.60  and more today @ $14.20    , all in the one month 

 but i am not unhappy  i originally bought HOPING for a $1 div. twice a year  , that has been exceeded so far 

 time will tell if i got it right ( rather than perfect ) or not


----------



## againsthegrain (20 September 2021)

tech/a said:


> So Pesky----Technical Trader comment.
> 
> Long term holders could have easily
> sold in the $20s and re purchase *MORE*
> ...




Depends how long you plan to hold and how long you have been holding.  In the past I passed on selling and buying dips on certain shares in the face of giving up 50% cgt discount when holding for over a year


----------



## basilio (20 September 2021)

divs4ever said:


> by the way picking up some extra  FMG sub $15 wasn't as hard as i expected ( bought some at open for $14.20 )
> 
> i think one of the chartists here should take a little bow
> 
> ...



Congratulations !! $14.20 at open was bottom. A lot of people getting out.  Bit of  a rout at the moment.


----------



## divs4ever (20 September 2021)

the bottom .. so far  still more than three hours of trading to go  and the XJO is certainly not rallying , down roughly 120 points currently


----------



## basilio (20 September 2021)

It is certainly true that I and many other FMG holders could have sold out at $22-23-24 and bought back in at current prices. Would have absolutely made a mint.

Was it possible to predict such a scenario? Maybe.. Always easier in hindsight I think.

One of the ways stock market gurus  try to persuade  punters to sign up is to run the argument that they can pick highs and lows and  then produce  graphs to show just how that could have been achieved.  

But always in hindsight.
---------------------------------------------------------

There is a case for saying the world stock markets are looking very vulnerable at the moment. The Evergrande saga is still to unwind and could have a devastating impact on the world economy. The US is going into another debt ceiling crisis which unless resolved quickly will undermine confidence in the US dollar.

I can see a case for going to cash.  But having said that I think FMG is still a debt free company selling an essential product and capable of still turning a profit after many competitors are uneconomic.  But we'll see won't we ?


----------



## tech/a (20 September 2021)

Thanks for the reply AG

I can see that that can have a bearing and its
not possible unless in hindsight to be certain that
your going to see a 50% fall. Even so Holding for
Dividend and tax discount can be very expensive

In my example above Selling at $23 and buying at
$14.20 you get another another 620 Shares and
their dividends/ 1000  V buying at $10 and still holding
That's a lot of tax to the market!




> It is certainly true that I and many other FMG holders could have sold out at $22-23-24 and bought back in at current prices. Would have absolutely made a mint.
> 
> Was it possible to predict such a scenario? Maybe.. Always easier in hindsight I think.
> 
> ...




I may have fluked it but Im just a builder---no guru.
and it wasn't in hindsight. Im only making a point nothing more
in the hope that in the future some may consider it. Particularly when there is and
was a very good fundamental reason for FMG to come off hard---Iron Ore price.


----------



## againsthegrain (20 September 2021)

tech/a said:


> Thanks for the reply AG
> 
> I can see that that can have a bearing and its
> not possible unless in hindsight to be certain that
> ...




Yes if it works its great but for example last year around this time I bought a parcel at around 18 then China put up that fake Photoshop picture of a Australian soldier killing a Afghan child and it was the end of the world, everybody panicked I sold out at 19...  we were back at 20+ in a few weeks.  Id be pissed if I lost my cgt discount and jumped back higher then I sold


----------



## tech/a (20 September 2021)

againsthegrain said:


> Yes if it works its great but for example last year around this time I bought a parcel at around 18 then China put up that fake Photoshop picture of a Australian soldier killing a Afghan child and it was the end of the world, everybody panicked I sold out at 19...  we were back at 20+ in a few weeks.  Id be pissed if I lost my cgt discount and jumped back higher then I sold




Sometimes there is a cost of doing business.
Which cost is greater. As You say a personal
decision.

Im not afraid of taking Profit and paying tax 
Im allergic to perceived avoidable loss even when
Im wrong as I was buying back into stock late Friday.


----------



## basilio (20 September 2021)

tech/a said:


> I may have fluked it but Im just a builder---no guru.
> and it wasn't in hindsight. Im only making a point nothing more
> in the hope that in the future some may consider it. Particularly when there is and
> was a very good fundamental reason for FMG to come off hard---Iron Ore price.




Absolutely.  Your not spruiking. Just analysis.

There was always a case for seeing FMG  share price fall with the (inevitable) fall  in iron ore price. I think VC's analysis of the dividend return on FMG at various  iron ore prices gives me confidence in the  overall value of the company.  I also think the longer term developments in renewable energy will add essential flexibility to the companies activities.

The sharemarket isn't totally rational however.  Always plenty of greed and fear around. As I said overriding the fall back in iron ore price there are bigger fears about what could be around the corner.


----------



## divs4ever (20 September 2021)

by the way FMG touched $14.15 not so long back ( this afternoon )

 if the slide continues  i will have to think of the next target price 

 i remember one broker recommendation of $13  , but is that low enough to tempt me again ( i don't want to  ears deep in FMG  after all )


----------



## over9k (20 September 2021)

Pulled my degen order. Here's why: 







China: massacre 

Iron ore: even bigger massacre 

XAO: massacre

sp500 futures: the best of a bad bunch, but still horrific

Yank futures have been dropping precipitously all day and are still going, and the XAO looks like closing at session lows:







Everyone are bricking it. We're very nearly at panic point. This will probably hit the normie news tonight and all the new normie day traders that got their ends wet/made some easy cash in the pandemic sht themselves and panic sell tomorrow and/or for the rest of the week.  


Looks like my monday bloodbath call over the weekend was at least accurate.


----------



## over9k (20 September 2021)

Here's evergrande for the day for some context


----------



## againsthegrain (20 September 2021)

over9k said:


> Pulled my degen order. Here's why:
> 
> View attachment 130525
> 
> ...




Construction workers not happy in Melbourne might be nothing or might be something brewing up in industry. 
Perfect storm you say? 
Ill double down two poodles on 12.69 see if they get any bites till the end of the week


----------



## over9k (20 September 2021)

https://www.forexlive.com/news/!/aud-shorts-at-high-levels-last-seen-march-2020-20210920 

AUD shorts now at highest levels since the march crash of last year


----------



## againsthegrain (20 September 2021)

Closed sightly up from the 14.20 bottom,  is this the dead cat bounce techa mentioned? I feel like late in the week will be more knifes to lose fingers on


----------



## sptrawler (20 September 2021)

againsthegrain said:


> Closed sightly up from the 14.20 bottom,  is this the dead cat bounce techa mentioned? I feel like late in the week will be more knifes to lose fingers on



I agree with you,  don't think materials turn around really quickly, so the ore price has to stop going down first.
Then people can decide what is a fair value for the company, hard to value a company when what it sells, is in a price freefall.


----------



## joeno (20 September 2021)

Market overreaction to some instabilities in China but which are not related to iron ore directly. collected around $6 worth of divs over the years. Unless the iron ore / steel market will collapse - we will be fine.


----------



## frugal.rock (20 September 2021)

Well, I pulled my head in and sold.
When Twiggy finally starts doing invisible flame hydrogen farts through FMG, I may be interested again.



tech/a said:


> Im wrong as I was buying back into stock late Friday.




I had a 2 week plan to be moving to near majority cash, that two week plan was supposed to end last Friday. 
It was originally only going to be 1 week, but after reeassement at end of week 1,  I figured had another week, most likely.
Then stupidly entered a dud or two on Friday, instead of getting the job done..



joeno said:


> Market overreaction



Yep, that's what crashes are...


----------



## over9k (20 September 2021)

If it's any consolation rock, I don't know how much you did on this, but I did $6k USD on 3LNI a couple weeks back


----------



## basilio (20 September 2021)

joeno said:


> Market overreaction to some instabilities in China but which are not related to iron ore directly. collected around $6 worth of divs over the years. Unless the iron ore / steel market will collapse - we will be fine.




I think we could easily see a continuing drop in iron ore prices as Evergrande unwinds and there is an immediate impact on the construction industry in China. The next question will be  "what  will be the real demand  for steel in China and around the world "?   In the end  we still need steel and iron ore.  It will come back to best value producers and marketing connections with buyers.

One of FMG's skills is directly dealing with Chinese steel mills to make iron ore mixes specifically for their needs.  (It's possible other companies have similar relationships. )

It does come back to the dollars. At $100 a ton FMG is still very profitable.  VC  calculated earlier that selling ore at $60 a ton would yield 69c dividend per share. At  $14 a share that is a 5%  yield. Not  brilliant but not shabby.

_Dividends would be around $0.69 if Iron Ore averaged $60 for 12 months. post  3714_


----------



## sptrawler (20 September 2021)

Just a quick question @basilio , wouldn't that equation depend on how much ore you sold, as well as what price it is sold for?


----------



## waterbottle (20 September 2021)

Ap


basilio said:


> I think we could easily see a continuing drop in iron ore prices as Evergrande unwinds and there is an immediate impact on the construction industry in China. The next question will be  "what  will be the real demand  for steel in China and around the world "?   In the end  we still need steel and iron ore.  It will come back to best value producers and marketing connections with buyers.
> 
> One of FMG's skills is directly dealing with Chinese steel mills to make iron ore mixes specifically for their needs.  (It's possible other companies have similar relationships. )
> 
> ...



Agreed RE: thesis that iron will still be required. The US is already planning massive infrastructure spending and given the newly formed AUKUS triad, may look upon Australian iron ore movers favorably. Although I don't go happen anytime soon.


----------



## dat111 (20 September 2021)

sptrawler said:


> It is a bit off topic, but with nuclear, they are working on thorium reactors and nuclear fusion.



They have been working on Thorium Reactors and such for over 50 years.


----------



## dat111 (20 September 2021)

sptrawler said:


> FMG and twiggy are doing a great job, especially with regard trying to diversify into renewables, it should eventually improve their bottom line as fuel is a big cost.
> As for tax, I doubt FMG are taxed any differently than BHP, Rio or any other miner.
> The thing is, it is always difficult to get into the big league it costs a huge amount of money, but FMG has got there.
> Now the trick is to become a diversified miner, rather  than a one trick pony.
> Only selling one commodity, when it cycles, so do you.



Renewables are currently more expensive than fossil fuels unless the government is involved.... That is one of the reasons China is kicking the rest of the worlds buttocks


----------



## sptrawler (20 September 2021)

dat111 said:


> Renewables are currently more expensive than fossil fuels unless the government is involved.... That is one of the reasons China is kicking the rest of the worlds buttocks



Yes I know, but the penny hasn't dropped with many.
However whether you or I like it, it is the trajectory the media has decided Australia will take, so whether it is sensible or logical is a mute point.
That is the thing with investing, you have to see where the herd is being taken by the nose and get there first.
Cheers.


----------



## dat111 (20 September 2021)

divs4ever said:


> China if it wanted to , can buy  plenty of weapons grade uranium from Russia  as it decommissions  it's old nuclear missiles
> 
> previously  Russia was selling it to the US , but as far as i know  the deal has been can






kennas said:


> All the nuclear waste ever produced could be stored on a footy field. It's one of the only forms of energy (maybe the only) where the waste is fully contained and does not get into the environment.
> 
> Finland have a good plan for storage that is a good model. Plenty of countries would have the right geological setting to copy this.



Not true...There is low-level waste, transuranic waste and high level waste.  Look at the Waste Isolation Pilot Plant in New Mexico, Nevada Test Site for low-level waste and also what was planned for high level waste at Yucca Mountain also in Nevada.  Those were the three government run repositories for radioactive waste not including Department of Defense and Department of Energy facilities.  There are also private disposal facilities in the US for low-level waste.


----------



## over9k (20 September 2021)

sptrawler said:


> Yes I know, but the penny hasn't dropped with many.
> However whether you or I like it, it is the trajectory the media has decided Australia will take, so whether it is sensible or logical is a mute point.
> That is the thing with investing, you have to see where the herd is being taken by the nose and get there first.
> Cheers.



Perfect post to respond to: 










So is this actual forecast or market manipulation? 

Thing is, either MS expects the market to drop (and thus have positioned in expectation of it) or they are trying to make it drop (because they have positioned in the hopes that it will). 

Either way, bad juju.


----------



## sptrawler (21 September 2021)

It isn't really rocket science, it has become a pizzing game, the U.K, U.S has decided China is going to become the major player.
The problem China has is it is dealing with a very wobbly over extended population, the difference between the lower class and the upper class, is 1,000,000 times worse than the U.S.
So the haves and the have nots are really becoming obvious, and why the crackdown on the mega rich, an interesting dynamic that could turn sour for China, if not controlled.
So now we are entering a phase where China wants to control its inputs, eg the price of production (raw materials), to do that they have to become less dependent on them, so we as investors have to make money from that. 🤣
The key to investing, is not to be emotional about it. 
Most of my bad decisions, regarding investment, have been emotionally driven.
e.g bought 2,000 CSL at $27 and sold them not long after because I had to retire and thought I might need the cash, sold at $30.🤣
Have a plan based on the reason for buying the stock, stick to the plan, review the plan and only dump the plan when it turns to poo. 
Which is what really good chartists do. lol
My rant for the month, stressful family issues.


----------



## over9k (21 September 2021)

For the technical traders: 


The 50DMA's have just been busted, 100DMA up next. 

R2K already through the 200DMA and still dropping. 

Even gold has sold off.


----------



## joeno (21 September 2021)

basilio said:


> I think we could easily see a continuing drop in iron ore prices as Evergrande unwinds and there is an immediate impact on the construction industry in China. The next question will be  "what  will be the real demand  for steel in China and around the world "?   In the end  we still need steel and iron ore.  It will come back to best value producers and marketing connections with buyers.
> 
> One of FMG's skills is directly dealing with Chinese steel mills to make iron ore mixes specifically for their needs.  (It's possible other companies have similar relationships. )
> 
> ...




Yep. Evergrande impacting FMG is a long shot imo.
FMG <- China Buying Iron Ore <- Construction industry <- Evergrande.

Each one of these links is not a strong link IMO. 
Evergrande is just one of many property developers. Others will gladly pick up the slack they've left.
Construction industry crash does not mean Iron Ore crash (or low iron ore demand from China)
Iron Ore crash does not mean FMG as a company is in the sh*tter as long as their cost/t is low and competitive


----------



## over9k (21 September 2021)

Oh dear, it's getting worse: 






Dow at -2 and still going.


At least BTU seems to have found some kind of a bottom: 






But still miles off its peak:


----------



## dat111 (21 September 2021)

sptrawler said:


> Yes I know, but the penny hasn't dropped with many.
> However whether you or I like it, it is the trajectory the media has decided Australia will take, so whether it is sensible or logical is a mute point.
> That is the thing with investing, you have to see where the herd is being taken by the nose and get there first.
> Cheers.





sptrawler said:


> Yes I know, but the penny hasn't dropped with many.
> However whether you or I like it, it is the trajectory the media has decided Australia will take, so whether it is sensible or logical is a mute point.
> That is the thing with investing, you have to see where the herd is being taken by the nose and get there first.
> Cheers.



The penny will never drop in China... If you haven't noticed they are quadrupling down on coal fired power plants... and laughing at the rest world who believe they can solve climate change...  Climate change cannot be fixed as long as the rest of the world is willing to transfer their manufacturing to other countries...


----------



## Smurf1976 (21 September 2021)

dat111 said:


> Climate change cannot be fixed as long as the rest of the world is willing to transfer their manufacturing to other countries...



So far as FMG is concerned though what matters is that there's a market for their hydrogen and iron ore and it's profitable.

Probably 90% of all things sold arguably don't make sense in one way or another but if there's a buyer at a profitable price well that's what matters so far as the supplier is concerned.


----------



## tech/a (21 September 2021)

Morning 
Ready for some climatic action. 
Buckle  up your Superfunds.


----------



## qldfrog (21 September 2021)

tech/a said:


> Morning
> Ready for some climatic action.
> Buckle  up your Superfunds.



thanksfully was done a week ago, FMG is really a canary in the mine, and in a way, a very useful one


----------



## qldfrog (21 September 2021)

sptrawler said:


> It isn't really rocket science, it has become a pizzing game, the U.K, U.S has decided China is going to become the major player.
> The problem China has is it is dealing with a very wobbly over extended population, the difference between the lower class and the upper class, is 1,000,000 times worse than the U.S.
> So the haves and the have nots are really becoming obvious, and why the crackdown on the mega rich, an interesting dynamic that could turn sour for China, if not controlled.
> So now we are entering a phase where China wants to control its inputs, eg the price of production (raw materials), to do that they have to become less dependent on them, so we as investors have to make money from that. 🤣
> ...



hope you will be ok, stressful times on all subjects


----------



## tech/a (21 September 2021)

Have exposure in superfund self managed 
Only a portion in Stock rest in property and cash. 
a bit in my discretionary trades


----------



## basilio (21 September 2021)

sptrawler said:


> Just a quick question @basilio , wouldn't that equation depend on how much ore you sold, as well as what price it is sold for?




True.  As I said I was re quoting VC.  My guess is he assumed similar ore tonnages sold as previously. Other important factors would be the US dollar rate.

These figures come from the March 2021 Financial statements.  

_•* Average revenue of US$143/dry metric tonne (dmt) i*ncreased 17 per cent compared to the previous quarter with revenue realisation at 86 per cent of the average Platts 62% CFR Index 

•* C1 cost of US$14.90/wet metric tonne (wmt) i*ncreased 16 per cent compared to Q2 due to seasonally lower volumes and the strength of the Australian dollar, *with year-to-date C1 cost of US$13.45/wm*_


----------



## tech/a (21 September 2021)

Pretty soft I think.
My Discretionary portfolio is green
(Was Bleeding yesterday)


----------



## basilio (21 September 2021)

Stockhead offers an analysis of the iron ore market.  Covers a range of suppliers and scenarious.

China pushed iron ore below US$100/t and took the ASX resources sector with it. When will we hit the bottom?​Investors in iron ore companies who’ve seen prices tumble from record highs to under US$100/t could be in for more pain in the coming months as the rout intensifies for Australia’s most valuable commodity.

But opportunities could emerge after a six-month window as steel factories end their buyer’s strike and Chinese customers restock on Australia’s prized Pilbara dirt









						China pushed iron ore below US$100/t and took the ASX resources sector with it. When will we hit the bottom? - Stockhead
					

A volatile iron ore price approached US$100/t yesterday taking the rest of the resources sector with it. When will the rout end?




					stockhead.com.au


----------



## basilio (21 September 2021)

With regard to FMG's new direction.  Twiggy came out with all guns blazing at the Clean Energy Council meeting last month. IMV made a lot of sense with regard to

1) The urgency around moving to renewable energy 
2) The effectiveness of having a high stretch target to put a rocket under business , Governments and the community
3)  Calling out the BS around "Blue Hydrogen" 





Pic: Clean Energy Council/FMG

Green Energy: ‘Clean hydrogen like healthy smoking’ says Andrew Forrest as Fortescue expands green hydrogen ambitions​
Andrew Forrest has launched a searing attack on the oil and gas sector and Australian Government’s favoured low emissions technologies, hinting a national net zero target is needed to galvanise the energy sector to take real action on climate change.

He has also accused energy companies of using colour coded hydrogen as a ‘smokescreen’ to keep their oil and gas assets in production as the world shifts towards renewables.

*“Blue, yellow, pink, grey hydrogen is not renewable green hydrogen, they are made from fossil fuels, and studies now confirm they are more carbon emitting than if they were simply burnt as fossil fuels,” he said, comparing technologies favoured by the Morrison Government like blue hydrogen and carbon sequestration as being like ‘healthy smoking’.*

“That is why the fossil fuel sector has quickly flipped to using a colour code and the new term `clean hydrogen’, this has as much accuracy as ‘clean coal’ or ‘healthy smoking’ — and don’t get me started on the smokescreen of sequestration,” he said.

“The most recent argument that hydrogen made from fossil fuel — where carbon emissions have attempted to be sequestered buried in the ground — is the new green is false.”

“Regardless of the success of sequestration – it normally fails – there are huge carbon emissions emitted in its process anyway. If it’s not renewable green don’t be fooled by any other coloured spin.”

In his wide-ranging keynote speech for the Clean Energy Council this morning, the Fortescue Metals Group founder said his new Fortescue Future Industries arm has set an ambitious target to become a hydrogen production and export powerhouse by producing 15Mtpa of green hydrogen by 2030 and ramping up to 50Mtpa.

That would make FFI comparable, Twiggy said, to some of the world’s biggest oil and gas companies.

*He said driving the investment to reach “net zero” in Australia would require ambitious ‘stretch targets’ like those employed at FFI, suggesting a national direction was needed to galvanise industry to act.*

“Net zero for Australia is simply one big project, a compilation of national and State projects driven by businesses who are most motivated,” he said.

“To crystallise that motive the nation needs a target.

“While renewable green hydrogen is not the only answer to get us there, it will make the biggest difference and allow the Australian Government to confidently state a national target of 2050 net zero.

“Giving us that target allows success to be driven by business and I, for one, will work tirelessly to lead that change.”

Forrest said Australia had a big opportunity to grab a share of a hydrogen market which could be as big as US$12 trillion by 2050, dwarfing the scale of its $150 billion a year iron ore export industry.









						Green Energy: 'Clean hydrogen like healthy smoking' says Andrew Forrest as Fortescue expands green hydrogen ambitions
					

Andrew Forrest has hinted at the need for a national net zero target as he discussed plans for FMG to produce up to 50Mtpa of green hydrogen beyond 2030.




					stockhead.com.au


----------



## over9k (21 September 2021)

He's copying adani:






I've been saying for a while that a pivot to india has been on the cards. This renewable energy etc stuff is how he's doing it.

Why do you think he bought all the land @frugal.rock mentioned where he did?

See:






There's plenty over in QLD etc but nope, he bought the rights on the W.A coastline.

Twiggy is actually quite a bit behind adani energy on this, but that doesn't mean his head isn't still well & truly in the game.



Iron ore to china isn't the future, but coal to china and whatever india wants to india IS


----------



## divs4ever (21 September 2021)

Twiggy probably looked at all the help Adani got in QLD and decided WA  has a better place to start from  , in his pursuit of renewables  and energy innovation  , but of course he may have talked the Peter Bond , or Clive Palmer   and just got a basic feel of political risk on the East Coast


----------



## basilio (21 September 2021)

over9k said:


> Twiggy is actually quite a bit behind adani energy on this, but that doesn't mean his head isn't still well & truly in the game. * ???*




Not sure about these points Over9K

1)  *When I checked  out the net it seems that Adanis big announcement  was literally just made today. * Twiggy flagged this comprehensive new renewable energy program from mid 2020.  The company infrastructures are developed.  The short and longer term strategy plans  are in place. He spent most this year looking for  suitable international projects and partners *and *focused FMG's engineering team on a range of renewable energy projects that would be integrated into his current iron ore activities.

2)* The rationale behind the focus on WA for renewable energy is because he intends to integrate them into his iron ore business.*  Bit hard to do that from Queensland. That doesn't mean he isn't interested in doing projects elsewhere in Australia.  There  just has to be a good business partner in the deal.

I'm pretty cautious about Adani as well. I think that have a lot of baggage in terms of dodgy governance and capacity to execute plans.

https://www.fmgl.com.au/  Check out Climate Change report









						Adani Group: Sebi, DRI probing Adani Group companies, government tells Lok Sabha | India Business News - Times of India
					

India Business News: Market regulator Sebi and the Directorate of Revenue Intelligence (DRI) are investigating companies belonging to the Adani group for violations of som




					timesofindia.indiatimes.com


----------



## over9k (21 September 2021)

basilio said:


> Not sure about these points Over9K
> 
> 1)  *When I checked  out the net it seems that Adanis big announcement  was literally just made today. * Twiggy flagged this comprehensive new renewable energy program from mid 2020.  The company infrastructures are developed.  The short and longer term strategy plans  are in place. He spent most this year looking for  suitable international projects and partners *and *focused FMG's engineering team on a range of renewable energy projects that would be integrated into his current iron ore activities.
> 
> ...









I briefly worked for Guatam Adani's personal banker here, his australian money man, so the guy that actually had to figure out how to and then execute the way in which Guatam Adani got his money into australia for his australian based operations.

I kick myself every day for not buying some (a lot of) adani green way back.

Problem is, doing so would actually genuinely be getting into insider trading territory. It would be ridiculously easy for asic to prove a connection seeing as I literally worked for his money man.


True story.


----------



## frugal.rock (21 September 2021)

over9k said:


> If it's any consolation rock, I don't know how much you did on this, but I did $6k USD on 3LNI a couple weeks back



I did around $600 AUD... would be less if I sold today obviously, but I don't seem to be able to get a free live commodity iron price chart...
made it all (x3) back today though and am over 50% cash now.

And no, it's no consolation that you blew 6k, I find that even more disturbing,.. however, is that where your nick comes from? 😂


----------



## over9k (21 September 2021)

frugal.rock said:


> I did around $600 AUD... would be less if I sold today obviously, but I don't seem to be able to get a free live commodity iron price chart...
> made it all (x3) back today though and am over 50% cash now.
> 
> And no, it's no consolation that you blew 6k, I find that even more disturbing,.. however, is that where your nick comes from? 😂



Nah, over9k is an internet meme from waaaaaaay back. 

What'd you make it back on?


----------



## frugal.rock (21 September 2021)

over9k said:


> What'd you make it back on?



Choppity chop chop chop...
AXE man 😅


----------



## basilio (21 September 2021)

over9k said:


> View attachment 130584
> 
> 
> I briefly worked for Guatam Adani's personal banker here, his australian money man, so the guy that actually had to figure out how to and then execute the way in which Guatam Adani got his money into australia for his australian based operations.
> ...




Ha Ha  !! Yep  Adani Green Energy has certainly gone through the roof hasn't it .   I suppose that must indicate some substantial activity well before todays announcement.

I do have a prejudice against Adani.  My limited understanding of their operations have been that they sailed very close to the wind with their governance.  The Queensland coal mine operation has been one such example.

Interesting about your connection though.  Suggests you have a far more informed knowledge of their operation.


----------



## qldfrog (21 September 2021)

tech/a said:


> Pretty soft I think.
> My Discretionary portfolio is green
> (Was Bleeding yesterday)



Went from very green to a shade of green at close time.
Was heamorraging yesterday...
Not sure if BTD was already cooling down or my usual move down from open to close


----------



## dat111 (21 September 2021)

joeno said:


> Yep. Evergrande impacting FMG is a long shot imo.
> FMG <- China Buying Iron Ore <- Construction industry <- Evergrande.
> 
> Each one of these links is not a strong link IMO.
> ...



Evergrande is an indicator for what is going on in the property development industry.  Evergrande, not too long ago was a money making machine with their business model.  External forces changed their business model but Evergrande did not take appropriate measures to stay whole.  If Evergrande has to divest their assets quickly it will trickle to the rest of the property development industry and put financial pressure on those companies.  Usually when a company has this much problem this fast, the problems come from government regulatory changes which put pressure on the entire industry also.  So it is the snowball effect.


----------



## dat111 (21 September 2021)

Smurf1976 said:


> So far as FMG is concerned though what matters is that there's a market for their hydrogen and iron ore and it's profitable.
> 
> Probably 90% of all things sold arguably don't make sense in one way or another but if there's a buyer at a profitable price well that's what matters so far as the supplier is concerned.



Unfortunately a business model that depends upon someone wanting something because the government currently wants it to happen is perilous in the infancy stages.  The government can redirect the rules at a whim causing the capital invested to be worthless.  That is my take on hydrogen this early.  There is not need for Fortescue to create an additional 15 Metric Tons of Hydrogen per year by 2030 when the world is only using 87 million Metric Tons and the majority being created is for oil refineries.  If China and other countries don't get away from carbon based fuels all that we are doing is driving our wealth to other countries.  
Iron ore has an outlet and has been used since the bronze age.  I understand building a better mouse trap and supply and demand...


----------



## over9k (21 September 2021)

basilio said:


> Ha Ha  !! Yep  Adani Green Energy has certainly gone through the roof hasn't it .   I suppose that must indicate some substantial activity well before todays announcement.
> 
> I do have a prejudice against Adani.  My limited understanding of their operations have been that they sailed very close to the wind with their governance.  The Queensland coal mine operation has been one such example.
> 
> Interesting about your connection though.  Suggests you have a far more informed knowledge of their operation.



A lot of the stuff we're seeing at the moment was set in motion years ago when the smartest money of all realised what shale oil was going to do to the entire planet. 

I know I've posted this around here before but here's a presentation from way back in *2014 *talking about what had just been set in motion at the time:


----------



## over9k (22 September 2021)

Ahahaha oh my god: 






So who else is up for this rollercoaster?


----------



## joeno (22 September 2021)

dat111 said:


> Evergrande is an indicator for what is going on in the property development industry.  Evergrande, not too long ago was a money making machine with their business model.  External forces changed their business model but Evergrande did not take appropriate measures to stay whole.  If Evergrande has to divest their assets quickly it will trickle to the rest of the property development industry and put financial pressure on those companies.  Usually when a company has this much problem this fast, the problems come from government regulatory changes which put pressure on the entire industry also.  So it is the snowball effect.




If the Chinese property market crashes it won't be because of Evergrande. It will be because the property market is overvalued.

Companies rise and fall all the time.  *shrug* Evergrande is no exception and tbh they aren't even *that* big. It's just a property developer in China.


----------



## dat111 (22 September 2021)

joeno said:


> If the Chinese property market crashes it won't be because of Evergrande. It will be because the property market is overvalued.
> 
> Companies rise and fall all the time.  *shrug* Evergrande is no exception and tbh they aren't even *that* big. It's just a property developer in China.



There is more to it than that... Things are worth what someone else is willing to pay for it... In China the saying is a little different.. Things are worth what communist China will allow you to pay for it through borrowing...  China introduced rules to rein in the borrowing costs last year for developers. Those measures place a cap on debt in relation to a firm’s cash flows, assets and capital levels.  Evergrande did not sufficiently adjust to those new rules.  Who knows whether the rest of the developers made the necessary adjustments.  Evergrande was simply the most indebted of the developers. 

Evergrande owns more than 1,300 real estate projects in over 280 cities in China.
Its property services management arm is involved in nearly 2,800 projects across more than 310 cities in China.
The company has seven units dabbling in a wide range of industries, including electric vehicles, health-care services, consumer products, video and television production units and even a theme park.
The firm says it has 200,000 employees, but indirectly creates more than 3.8 million jobs every year, according to its website.
Evergrande’s shares and bonds are included in indexes across Asia.


----------



## dat111 (22 September 2021)

dat111 said:


> Unfortunately a business model that depends upon someone wanting something because the government currently wants it to happen is perilous in the infancy stages.  The government can redirect the rules at a whim causing the capital invested to be worthless.  That is my take on hydrogen this early.  There is not need for Fortescue to create an additional 15 million Metric Tons of Hydrogen per year by 2030 when the world is only using 87 million Metric Tons and the majority being created is for oil refineries.  If China and other countries don't get away from carbon based fuels all that we are doing is driving our wealth to other countries.
> Iron ore has an outlet and has been used since the bronze age.  I understand building a better mouse trap and supply and demand...


----------



## joeno (22 September 2021)

dat111 said:


> There is more to it than that... Things are worth what someone else is willing to pay for it... In China the saying is a little different.. Things are worth what communist China will allow you to pay for it through borrowing...  China introduced rules to rein in the borrowing costs last year for developers. Those measures place a cap on debt in relation to a firm’s cash flows, assets and capital levels.  Evergrande did not sufficiently adjust to those new rules.  Who knows whether the rest of the developers made the necessary adjustments.  Evergrande was simply the most indebted of the developers.
> 
> Evergrande owns more than 1,300 real estate projects in over 280 cities in China.
> Its property services management arm is involved in nearly 2,800 projects across more than 310 cities in China.
> ...




200,000 might sound like a lot. But for the population it isn't. CBA for example employs 40,000 in Australia. Adjusted for population, that would be like a company in China employing over 2,000,000. Which is not so crazy since there are companies that employ 1,000,000 in China.

Back to topic - Evergrande is just a big construction company. Not the biggest even. Its downfall will hurt the industry from a supply perspective but it is not a systematically important company from what i understand so it shouldn't affect Iron Ore demand much overall outside of perhaps the very short term.


----------



## over9k (22 September 2021)

Evergrande's been given a bailout. Repaying bond interest on the 23rd. Futures all flipped on the news, so has ASX et al.


----------



## KevinBB (22 September 2021)

over9k said:


> Evergrande's been given a bailout. Repaying bond interest on the 23rd. Futures all flipped on the news, so has ASX et al.



News source? I've been trying to find something since markets started to move about 20 mins ago.

KH


----------



## over9k (22 September 2021)

However, here's a bit more context: 






This wasn't just a hiccup or speed bump in an otherwise bull chinese market.


----------



## over9k (22 September 2021)

KevinBB said:


> News source? I've been trying to find something since markets started to move about 20 mins ago.
> 
> KH



Bloomberg. Just broke/came across the screen. Announced 5 mins before the china open, so everyone are scrambling. CSI300's still opened ~2% into the red though.

Edit: 






OMO = Open Market Operations for any newbies out there too embarrassed to ask


----------



## KevinBB (22 September 2021)

ok, thanks.


----------



## over9k (22 September 2021)

Now, who's brave enough to buy on the bounce...

Like I said, there's some serious long term headwinds for china as a whole. Will it keep moving up a bit for the meantime?

It's one of those "definite maybe's".

Then you have the inevitable further crackdowns by the chinese government we are no doubt going to see more of... 


See where I'm going with this? 

There's probably some short term money to be made if you're brave, but you would have to be brave.


----------



## basilio (22 September 2021)

over9k said:


> There's probably some short term money to be made if you're brave, but you would have to be brave.




Very courageous indeed ..
Perhaps we should wait until the US settles it's  current debt ceiling issues ? Otherwise the US is defaulting on it's bonds in a few weeks.


----------



## Sharkman (22 September 2021)

over9k said:


> Now, who's brave enough to buy on the bounce...




maybe not buying outright, but i'm getting very tempted by something like a sep 30 $15.50 - jan '22 $19 diagonal call spread today, the market is suggesting that can be done at zero cost or even a small (eg. 5c) credit if the MMs give a decent fill at the mids. there is significant skew here (near dated ATM selling at 60 vol, jan '22 ~25 delta selling at 42 vol), it's nowhere near as steep as the skews seen during the full blown panic mid last year, but significant nonetheless.

at worst it's a $3.50 max loss, but unless it shoots up in almost a straight line over the next 8 days and keeps going up thereafter, that max loss won't eventuate as near dated ATM contracts can continue to be sold (probably still at elevated vol) against the jan '22 calls to chip away at any loss taken on assignment of the front leg by collecting decay. whilst if the weeklies expire OTM, that far leg becomes a free punt on the house for a jan recovery.


----------



## Sharkman (22 September 2021)

Sharkman said:


> sep 30 $15.50 - jan '22 $19 diagonal call spread




tried to put this trade on with the underlying around 15.50, mid was around 4-5c (credit) at the time but MMs wouldn't bite even when i dropped to 1c, so i took the order off. have to draw the line somewhere and with this sort of strategy i find keeping it slightly in credit (however small) is a useful psychological aid in managing the position, so i didn't feel like giving in to the MMs and crossing even more of the spread. once it pulled back slightly to below 15.40 zero cost was no longer possible. looks like the MMs are keen to sell 1 week gamma at elevated vols but not so keen to buy at the same vol.


----------



## over9k (22 September 2021)

basilio said:


> Very courageous indeed ..
> Perhaps we should wait until the US settles it's  current debt ceiling issues ? Otherwise the US is defaulting on it's bonds in a few weeks.



0% probability


----------



## over9k (22 September 2021)

Sharkman said:


> maybe not buying outright, but i'm getting very tempted by something like a sep 30 $15.50 - jan '22 $19 diagonal call spread today, the market is suggesting that can be done at zero cost or even a small (eg. 5c) credit if the MMs give a decent fill at the mids. there is significant skew here (near dated ATM selling at 60 vol, jan '22 ~25 delta selling at 42 vol), it's nowhere near as steep as the skews seen during the full blown panic mid last year, but significant nonetheless.
> 
> at worst it's a $3.50 max loss, but unless it shoots up in almost a straight line over the next 8 days and keeps going up thereafter, that max loss won't eventuate as near dated ATM contracts can continue to be sold (probably still at elevated vol) against the jan '22 calls to chip away at any loss taken on assignment of the front leg by collecting decay. whilst if the weeklies expire OTM, that far leg becomes a free punt on the house for a jan recovery.



I've been thinking this too. Some kind of degen call purchase and just see. I haven't even looked at the option chain yet though so it's not like I've thought hard.


----------



## divs4ever (22 September 2021)

now  one POSSIBILITY is  a stalemate that would force a 'government shutdown ' ( remember they have done them before ) and use that as a distraction to retrench all those vaccine hesitant government employees ( both sides are in favour of the vaccine  but one side pretends it is pro-choice  , but both are indebted to big pharma )

 NORMALLY a shut-down would be suicidal ahead of the mid-term elections  , but after 2020  it seems any election can be rigged no matter how outrageously  , so the incumbents probably feel immortal 

 so what if the US defaults  anyone with exposure to their bonds  , has to be uneducated , or too greedy for their own good ( and even dumber if you leveraged them 4 or 5 times over )

 IMO the main danger with FMG is that Twiggy will judge it prudent to delay expenditure in the new projects , disappointing the ESG folks 

 ( but heck i originally planned to wait for $8  , the worst that can happen is i look impatient )


----------



## over9k (23 September 2021)

And markets have now screamed in rebound (so the bailout package has worked). 

Was anyone brave enough to buy yesterday? I sold ~30% last week, have held right through since (so didn't sell in the dip but didn't buy either).


----------



## over9k (23 September 2021)

The dow pulled hard tonight but there was a big selloff into the close. This suggests we've seen the bounce we're going to see for now.


----------



## basilio (24 September 2021)

There was an announcement re. 4 new senior appointments.  It reinforced the change in FMG's direction from being a pure iron ore play to a renewable energy/ green iron ore company.  They certainly bring a new skill set to the company.

A separate announcement noted that Elizabeth Gaines sold  640 k   ($9.4 m) of shares to fund her tax bill.  As CEO of FMG  I thought that was a bit interesting.

Change of Director's Interest Notice 

               Executive Appointments


----------



## Value Collector (24 September 2021)

basilio said:


> There was an announcement re. 4 new senior appointments.  It reinforced the change in FMG's direction from being a pure iron ore play to a renewable energy/ green iron ore company.  They certainly bring a new skill set to the company.
> 
> A separate announcement noted that Elizabeth Gaines sold  640 k   ($9.4 m) of shares to fund her tax bill.  As CEO of FMG  I thought that was a bit interesting.
> 
> ...



Elizabeth’s sale is just the performance rights that recently vested, when you earn an income like her, and the government wants you to hand 50% of it over in tax, I guess you need to find the money some where.


----------



## joeno (24 September 2021)

basilio said:


> There was an announcement re. 4 new senior appointments.  It reinforced the change in FMG's direction from being a pure iron ore play to a renewable energy/ green iron ore company.  They certainly bring a new skill set to the company.




It's the right call to make. All great companies adapt with the times and are able to innovate and diversify their products.


----------



## tech/a (29 September 2021)

In my view the Cat is dead.
Falls below $14 are now highly likely.


----------



## notting (29 September 2021)

FMG is fully dependent on China.
Evergrande is a huge bust.
I guess we should see what happens to IO exports after the China housing collapse before buying.


----------



## againsthegrain (29 September 2021)

I have a order at 14.10 maybe get lucky


----------



## qldfrog (29 September 2021)

againsthegrain said:


> I have a order at 14.10 maybe get lucky



Hum that's daring.a bit high.will check on friday


----------



## over9k (29 September 2021)

Evergrande is up premarket. Looks like it's going to bounce (currently 3 mins from china open). 

Still have the energy crunch to worry about though.


----------



## over9k (29 September 2021)

Yeah the PBOC has just pumped another couple of dozen billion yuan into OMO. Evergrande's bounced: 










However, chinese markets are way down on account of the energy crunch. 

Here's @tech/a 's previous prediction coming to pass:






So uh, yeah, I'm not buying.


----------



## basilio (29 September 2021)

A few thoughts about FMG
1) I don't think the longer term price of iron ore will fall below $100 US.  I raed an analysis which pointed out that China has it's own relatively poor quality iron ore to mine which it does and will continue to do so . However the break even cost of this ore is the $100 mark so if the offshore iron is much below this price they would be subsidising the local mines even further

2) The steel industry is making good coin. So it seems they can pass the price on and still be profitable. Of course the issues of local steel demand are in question. How much goes into building ? What about car production ? Or export ?

3) FMG is  quickly diversifying into massive renewable energy projects.  These will further improve the value of their iron ore production and conceivably add a green steel component to their bow.  In any case given the engineering skills,  available capital and demand/need for massive renewable energy sources I think they will show some good returns 

I don't believe the last 12 months of iron ore prices are going to be replicated.  But if the price holds at approx $100 US they will still do very well.


----------



## basilio (29 September 2021)

This analysis of the future of iron ores price is a long story. I have quoted the relevant rationale of the $100 a ton price China will accept .

_..the state has continued to support domestic production of mostly low-grade ore bodies that require extensive beneficiation to bring the concentrate up to a grade that is useful in steel mills.

The specific numbers do not matter overly much, as there is two-way battle axe traffic in this present-day Clash of the Titans, but most analysts, of the long lunch era, would say: $100.

It is a round number, a good number, and one to hang your hat on. There is no point wasting valuable nosh time arguing the fine detail of a number whose average is around $100.

China probably needs iron ore prices at or above $100 USD/tonne to make the great bulk of their marginal grade industry sustainable. Otherwise, they are simply paying away in a massive subsidy to keep the industry alive, with little hope of tempering Australian dominance_.









						Where's iron ore headed from here?
					

Here we are once more in the teeth of the great "super-cycle" debate as iron ore probes daily new lows in the reach for a China-Crisis clearing price. This is my first Livewire post, representing my firm Jevons Global, so I will use this opportunity to frame my contribution to...




					www.livewiremarkets.com


----------



## notting (29 September 2021)

basilio said:


> This analysis of the future of iron ores price is a long story. I have quoted the relevant rationale of the $100 a ton price China will accept .
> 
> _..the state has continued to support domestic production of mostly low-grade ore bodies that require extensive beneficiation to bring the concentrate up to a grade that is useful in steel mills.
> 
> ...



WTF are you talking about. China imports it's IO and wants lower prices.


----------



## basilio (29 September 2021)

notting said:


> WTF are you talking about. China imports it's IO and wants lower prices.



Yes...and No.  China  does have significant iron ore mines.  In fact they made a point of having a go at Australia for the huge prices earlier this year and specifically focused on encouraging their mines to go harder. They currently supply around 20% of their requirements. China is also attempting to source scrap iron

But the  economic facts are that China's mines are not as easy or profitable to work as Australia's. That is why the analysis I quoted noted that $100 US a tonne was about the break even point  in terms of value.









						Why Beijing’s ‘Made in China’ iron ore strategy is an empty threat
					

China has told its companies to produce more domestic iron ore as commodity prices hit record highs, but analysts say this will not reduce its reliance on Australian exports.




					www.afr.com
				








__





						Seven countries with the largest iron ore reserves in the world in 2019
					

From Australia and Brazil to Ukraine and India, just a handful of countries claim the biggest iron ore reserves to be found around the world.




					www.nsenergybusiness.com


----------



## waterbottle (30 September 2021)

Abc reporting some sort of incident halting work at solomon mine...


----------



## againsthegrain (30 September 2021)

waterbottle said:


> Abc reporting some sort of incident halting work at solomon mine...



Police involved too


----------



## divs4ever (30 September 2021)

SIGNIFICANT INCIDENT AT THE SOLOMON HUB

Fortescue Metals Group Ltd (Fortescue, ASX: FMG) advises that a significant incident involving an
employee has occurred at the Solomon Hub this morning.
Site operations at Solomon have been temporarily suspended, pending a full investigation into the
incident. Fortescue is working closely with the WA Police and WA Department of Mines, Industry
Regulation and Safety.
Fortescue Chief Executive Officer Elizabeth Gaines said, “The safety and wellbeing of our team
members is our highest priority and at this time our focus is on ensuring that support is being
provided to our employees and contractors.”

DYOR

i hold FMG


----------



## greggles (30 September 2021)

Reading between the lines, it sounds like a serious injury that has not yet led to a death, but might.


----------



## divs4ever (30 September 2021)

UPDATE ON SOLOMON HUB MINING INCIDENT 

Further to the announcement this morning, Fortescue Metals Group Ltd (Fortescue, ASX: FMG) regrets to advise that there has been a fatality as a result of the incident at its Solomon Hub mining operations. Fortescue Chief Executive Officer Elizabeth Gaines expresses the Company’s deepest sympathy to the team member’s family, friends and colleagues. “This is a very sad day for Fortescue and all our thoughts are with his family as we provide our full support to them at this very difficult time. The wellbeing of the entire Fortescue family is our priority with a range of support services available across our sites, including the Fortescue Chaplains and Employee Assistance Program,” Ms Gaines said. The incident occurred when there was a collapse of ground and Fortescue is working closely with all relevant authorities. Mining operations at Solomon remain temporarily suspended.


DYOR

i hold FMG

 involves a fatality  , now


----------



## againsthegrain (30 September 2021)

So is the cat still bouncing or it rebounded?


----------



## over9k (30 September 2021)

China's manufacturing PMI just dipped below 50, signalling contraction: 

https://www.bloomberg.com/news/arti...-contract-for-first-time-since-pandemic-began 

Beyond that, Beijing is signaling that it wants highly energy-intensive producers, like steel and chemical factories, to reduce output for the rest of the year, as it tries to meet environmental targets. 

And then you have evergrande, china's debt leviathan, the population crunch... 


There might be some bucks to be made short term but long term I am NOT a bull here.


----------



## frugal.rock (30 September 2021)

How about a 24 hour thread silence? out of respect for the man who went to work today, but isn't ever going home again.

My heart goes out to loved ones, family, friends and colleagues.


----------



## waterbottle (30 September 2021)

over9k said:


> China's manufacturing PMI just dipped below 50, signalling contraction:
> 
> https://www.bloomberg.com/news/arti...-contract-for-first-time-since-pandemic-began
> 
> ...



Environmental targets or is this colateral damage from failing to meet energy demand?


----------



## over9k (30 September 2021)

frugal.rock said:


> How about a 24 hour thread silence? out of respect for the man who went to work today, but isn't ever going home again.
> 
> My heart goes out to loved ones, family, friends and colleagues.



The same could be said for the squillions killed by the virus every day. There's been no shortage of days where I've just gone "Yes, more people died today, that means my investments are going to go up".

I take your point, but this is not a business/activity you can let your heart into. It's best to keep all of that out of it completely (good, bad and everything in between) IMHO.

You notice I never make any commentary about this kind of stuff either way - it's purely markets and nothing else.


----------



## over9k (30 September 2021)

waterbottle said:


> Environmental targets or is this colateral damage from failing to meet energy demand?



It's actually largely an air quality thing over there. 

They couldn't give two sh!ts about global warming or whatever other nonsense they come out with. It's pure energy security & air quality.


----------



## divs4ever (1 October 2021)

air quality , and the pollution  during the Winter Olympics ( apparently in China ) sound reasonable  , China taking advantage of any extra consequences  , why not most of the world is in a Cold War with China  , why be nice to people fighting you


----------



## tech/a (1 October 2021)

Ill post a chart on the weekend but I think that FMG is in a consolidation Phase.
There is certainly opportunity to take positions with little risk currently.
Unless iron ore plummets.


----------



## Wedgy (1 October 2021)

Was a bit slow in cancelling DRP on FMG, would of preferred the cash but missed the deadline by a couple of days for change and ended up with new shares at $18.09 each, with the current SP of  $14.59 not a good deal. But I am confident in the long term prospects of FMG particularly with its future industries subsidiary.


----------



## tech/a (2 October 2021)

Ok Further to @notting suggestion that I mark up a chart I place these up for consideration.

Its actually how I trade my long term trades in one of my Super Portfolio's
This chart is not marked up 100% accurately its back of the drink coaster
but accurate enough to show why Im shaking my head with @Value Hunter
buying and just sitting.

Now Im going to get --yeh but your a trader and Trading it.
Truth is Im proactive in my investment,Im not passive.
I hope you can see why with this example.

So Very Simple Basic rules In Radges "Un Holy Grails.
*Sell on a 20% down tern from Recent high.
Buy on a 20% increase from a Recent low.*

Consolidations are a pain but ---let the charts explain.
Remember starting capital $600,000 and 200000 Shares.
(May not reflect Value hunters period ---but you'll get the idea)

I've split the charts up for clarity.

*Ive not included DIVIDENDS but think they would go a long way to
mitigate tax issues*.


----------



## over9k (2 October 2021)

Option two, because I'm an economics/macro guy, not a chartist: 

Buy, sit, hold, see the stuff with evergrande, realise that at a macro level, china and thus iron ore and thus FMG are in a world of hurt, bail. 

The chinese government has just announced that it's going to allow wholesale electricity prices to be increased to avoid the rolling blackouts etc. That drives up the input costs of steel production, which thus drives up the cost of steel, which thus reduces sales. 

So, more pain ahead.


----------



## Value Collector (2 October 2021)

over9k said:


> The chinese government has just announced that it's going to allow wholesale electricity prices to be increased to avoid the rolling blackouts etc. That drives up the input costs of steel production, which thus drives up the cost of steel, which thus reduces sales.
> 
> So, more pain ahead.




Higher electricity prices will mainly effect electric arc furnaces, which are used to recycle scrap, which means it will increase the cost of recycled steel, making steel from virgin Iron Ore more attractive.

Also, if this prevents the rolling blackouts it means the factories consuming steel to make the million different widgets China makes will continue to demand steel.

So Basically the daily consumption of steel will continue to draw down on the inventories of finished steel, and mills that use electric arc furnaces to melt scrap will be less competitive, or perhaps shut down completely, so unless China wants to run out of steel they will have to continue importing Iron Ore.

stock piles of finished steel have already been dropping each week, and now sit at the lowest point this year.

https://www.mysteel.net/article/5025994-0503/WEEKLY--China-mills-steel-stocks-down-to-years-low.html


----------



## over9k (2 October 2021)

Value Collector said:


> Higher electricity prices will mainly effect electric arc furnaces, which are used to recycle scrap, which means it will increase the cost of recycled steel, making steel from virgin Iron Ore more attractive.
> 
> Also, if this prevents the rolling blackouts it means the factories consuming steel to make the million different widgets China makes will continue to demand steel.
> 
> ...



You sound like frugal rock with the rose-coloured glasses. There's a little more to it.


----------



## Joe Blow (3 October 2021)

I have moved the discussion related to buy and hold vs. active portfolio management to its own thread as I feel it is a worthy discussion on its own and isn't really about FMG. Please continue that discussion over in the new thread and continue the discussion of FMG here.


----------



## basilio (4 October 2021)

Twiggy is back in the news again.

Angus Taylor has announced the Federal Government is going to award carbon credits  (subsidies..) worth $250m to carbon capture technologies. Twiggy says this is a great sound bite  but essentially  zissing money into the pockets of the fossil fuel industry.

The abject failure of previous carbon capture projects at massive public expense is on the record.

Twiggy is  leading industry into  massive  clean renewable energy ventures - not propping up dead end fossil fuel projects with expensive, dodgy bandaids.

Andrew Forrest criticises use of carbon capture and storage saying it fails ‘19 out of 20 times’​As the Morrison government invests $250m in the technology, the Fortescue metals chief says ‘it’s a good soundbite but it doesn’t work’

Get our free news app; get our morning email briefing






Fortescue Metals Group head Andrew Forrest says carbon capture storage technology is a failure and you can’t ‘wave a wand’ to make it work. Photograph: Maksim Konstantinov/SOPA Image/REX/Shutterstock

Lisa Cox
Mon 4 Oct 2021 01.17 EDT
Last modified on Mon 4 Oct 2021 01.48 EDT



Fortescue Metals Group boss Andrew Forrest has criticised “failed” carbon capture and storage technology and said the general population is entitled to feel sceptical about its use.
As the Morrison government moves to award carbon credits to fossil fuel projects that promise to capture and store carbon dioxide, the mining billionaire has told a podcast such projects had failed “19 out of 20 times”.

Speaking to the Good Will Hunters podcast, Forrest pointed to his home state of Western Australia, where Chevron’s CCS facility at its Gorgon liquefied natural gas development failed to meet a requirement to capture and bury at least 80% of the project’s emissions during its first five years.









						Andrew Forrest criticises use of carbon capture and storage saying it fails ‘19 out of 20 times’
					

As the Morrison government invests $250m in the technology, the Fortescue metals chief says ‘it’s a good soundbite but it doesn’t work’




					www.theguardian.com
				












						Gas and coal companies among recipients of $50m in Coalition grants from carbon capture fund
					

Santos liquified natural gas scheme among six projects to receive public support




					www.theguardian.com
				












						‘A shocking failure’: Chevron criticised for missing carbon capture target at WA gas project
					

The Western Australian environment minister is seeking an explanation after the energy company fell short of its five-year target




					www.theguardian.com


----------



## qldfrog (4 October 2021)

I think it is now a decent bet : picked a decent parcel at $14.58
wait and see


----------



## sptrawler (5 October 2021)

qldfrog said:


> I think it is now a decent bet : picked a decent parcel at $14.58
> wait and see



I'm still keeping my powder dry, I bet you are right. 🤣


----------



## tech/a (5 October 2021)

It’s not a big risk to the point that you will
know that your likely wrong. Dont know that it’s an obvious trade.
Either way your on it!


----------



## over9k (5 October 2021)

Everything's fine. What are you worried about?


----------



## over9k (5 October 2021)

This is fine. Nothing to see here, nothing to do with iron ore/fmg here at all. Nope.


----------



## qldfrog (5 October 2021)

tech/a said:


> It’s not a big risk to the point that you will
> know that your likely wrong. Dont know that it’s an obvious trade.
> Either way your on it!



Définitively not an obvious trade.
My SL got me out of S32 and other major commodity players lately.wanting to reenter, i thought  better to go to established but lower price FMG.
As the US market is crashing, that was probably a mistake..


----------



## basilio (5 October 2021)

FMG announced it's goals to achieve Scope 3 net zero emissions by 2040. Involves massive changes to their operations and  supplying the green hydrogen and developing the technologies that will enable other industries  to become carbon neutral.
The intention  to enable crude steel manufacturing  to become green within 20 years is breath taking.

*FORTESCUE ANNOUNCES TARGET TO ACHIEVE NET ZERO SCOPE 3 EMISSIONS  *

*Green hydrogen supplied by Fortescue Future Industries (FFI) the key enabler *

Fortescue Metals Group Ltd (Fortescue, ASX: FMG) has today announced an industry leading target to achieve net zero Scope 3 emissions by 2040, addressing emissions across Fortescue’s entire global value chain, including crude steel manufacturing which accounts for 98 per cent of the Company’s Scope 3 emissions.

 Fortescue’s approach to reducing Scope 3 emissions is to develop projects and technologies with a focus on reducing emissions from iron and steel making and to work with current and prospective customers on the application of the technology and the supply of green hydrogen and ammonia from FFI. Fortescue will also prioritise the decarbonisation of its own fleet of eight ore carriers and engage with shipping partners to reduce, and aiming to eliminate, emissions from shipping.

 FFI is targeting the production of 15 million tonnes of green hydrogen annually by 2030, which will underpin opportunities to work with customers and shipping partners on emissions reduction and elimination projects. In addition to the long-term goal to achieve net zero Scope 3 emissions by 2040, the following medium-term targets have been set:
• Enable a reduction in emissions intensity levels from the shipping of Fortescue’s ores by 50 per cent by 2030 from FY21 levels
• Enable a reduction in emissions intensity levels from steel making by Fortescue’s customers of 7.5 per cent by 2030 from FY21 levels, to 100 per cent by 2040.

 Fortescue Chief Executive Officer, Ms Elizabeth Gaines, said, “Climate change is the most pressing issue of our generation and at Fortescue, setting stretch targets is at the core of our culture and Values and we are proud to set this goal to tackle emissions across our value chain.

“Fortescue has commenced its transition from a pure play iron ore producer to a green renewables and resources company, underpinned by the world’s first major carbon emission heavy industry operation to set a target to achieve carbon neutrality by 2030. This Scope 3 target is consistent with this transition and complements our targets for Scope 1 and 2 emissions reduction.

*“Collaboration is integral to driving the rapid transition to green energy, and we remain committed to actively engaging with our customers, suppliers and other key industry participants to facilitate the reduction of emissions*. This includes the development of technologies and the supply of green hydrogen and ammonia through FFI, which will provide significant opportunities for the steel, cement and land and sea transport industries to decarbonise,” Ms Gaines said.

To achieve the target, Fortescue and FFI are focused on accelerating a number of key initiatives:
• Conversion of existing maritime vessels, including Fortescue’s fleet of ore carriers, to be fuelled by green ammonia
 • Supporting the adoption of green ammonia in new vessel construction
• Pursuing opportunities for emissions reduction and elimination in iron and steel making, facilitated by the use of renewable energy and green hydrogen
 • Research and development work to produce green iron and cement from Fortescue ores at low temperatures without coal.

FFI Chief Executive Officer, Ms Julie Shuttleworth, said, “Our investments in technologies and research and development are focused on demonstrating that the production of iron ore, cement, iron and steel can operate with renewable energy.

 “Our work to decarbonise Fortescue’s iron ore operations will position Fortescue as the first major supplier of green iron ore in the world, paving the way for production of green iron and a new green steel industry,” Ms Shuttleworth said.


----------



## qldfrog (5 October 2021)

qldfrog said:


> Définitively not an obvious trade.
> My SL got me out of S32 and other major commodity players lately.wanting to reenter, i thought  better to go to established but lower price FMG.
> As the US market is crashing, that was probably a mistake..



-2.8%, so far relatively wide SL in place


----------



## qldfrog (5 October 2021)

qldfrog said:


> -2.8%, so far relatively wide SL in place



https://www.smh.com.au/business/com...bon-target-for-customers-20211005-p58xa6.html
With all the woke bright investors behind, the sky is the limit🙄


----------



## dat111 (5 October 2021)

basilio said:


> Twiggy is back in the news again.
> 
> Angus Taylor has announced the Federal Government is going to award carbon credits  (subsidies..) worth $250m to carbon capture technologies. Twiggy says this is a great sound bite  but essentially  zissing money into the pockets of the fossil fuel industry.
> 
> ...



You do realize that 250m is nothing...  Twiggy received 7 times this amount in dividends last month...


----------



## divs4ever (6 October 2021)

$250 million is probably more than i can waste in the rest of my lifetime  , but if Twiggy can spend some of that on successful projects  , it probably hasn't been wasted 

 and Twiggy  has earned those divs , just like any other shareholder  , good for him


----------



## basilio (6 October 2021)

dat111 said:


> You do realize that 250m is nothing...  Twiggy received 7 times this amount in dividends last month...




Dat I suggest your comment misses the point.  Twiggy was noting the engineering and environmental  stupidity of supporting Carbon Capture as a response to reducing CO2 emissions. He is one of the few industry leaders who  understands how serious the CC problem is and the need for super fast action *in the right directions.  *He and everyone else in the power industry  realise that :

1) Carbon Capture programs have had serious engineering problems to date
2) In almost all case the additional cost to production  just makes the whole process economically nonviable.  It is simply far more effective to build a wind/solar plus storage facility

There may be a few industries  that can catch and store CO2 in a viable way. But not the ones being supported.


----------



## sptrawler (6 October 2021)

Another Chinese property developer in trouble, could this be China's way of reducing demand for iron ore, or just all a coincidence?








						China’s property sector in turmoil as another developer hits trouble
					

A missed bond payment by Chinese developer Fantasia has reignited investor angst about the health of the nation’s property sector.




					www.theage.com.au
				




It would be interesting to know how much of China's residential property is under utilised, or have all the empty cities been filled with the urbanisation project.


----------



## over9k (6 October 2021)

Domino #2 is now going:


----------



## UMike (6 October 2021)

Just as I am having my first dabble.


----------



## over9k (6 October 2021)

Yank futures are deep into the red after yesterday's bounce too. 

I've said many times this was not a buy the dip play and aside from a quick & dirty scalp of LNAS the other day I haven't bought back in to anything. Still holding my energy and bank stocks, that's all. Mostly cash & bitcoin now.


----------



## sptrawler (6 October 2021)

over9k said:


> Yank futures are deep into the red after yesterday's bounce too.
> 
> I've said many times this was not a buy the dip play and aside from a quick & dirty scalp of LNAS the other day I haven't bought back in to anything. Still holding my energy and bank stocks, that's all. Mostly cash & bitcoin now.



I think you might be right, this could be the start of removing some of that stimulus overhang.


----------



## tech/a (6 October 2021)

over9k said:


> Yank futures are deep into the red after yesterday's bounce too.
> 
> I've said many times this was not a buy the dip play and aside from a quick & dirty scalp of LNAS the other day I haven't bought back in to anything. Still holding my energy and bank stocks, that's all. Mostly cash & bitcoin now.




This is typical un winding of larger positions. Selling into strength.


----------



## over9k (6 October 2021)

sptrawler said:


> I think you might be right, this could be the start of removing some of that stimulus overhang.



Inflation fears, all supply-side. You can't just turn the heaters off in winter and a lot of the people that drive the food delivery trucks, maintain electricity grids etc etc still aren't vaccinated, so you have a restriction in the supply of energy, food and so forth. 

Considering you can't just turn people's heaters off you thus have to shut the factories down and print their paycheques instead, only exacerbating the inflation problem. 


Bit of a bind, isn't it?


----------



## over9k (6 October 2021)

tech/a said:


> This is typical un winding of larger positions. Selling into strength.



I think we're well past the tipping point though, don't you?

I bailed on the first jitters with the evergrande stuff. Sold TQQQ at $144, haven't rebought. 

I bought GUSH, NRGU, DPST, BNKU months ago though (my first positions were actually more than a year ago before the vaccines were even announced but I've ben in & out a few times since) and still holding.


----------



## tech/a (6 October 2021)

over9k said:


> I think we're well past the tipping point though, don't you?



 Yes i think we are off the chair lift staring down at the bottom.
upside is minimal down side is pretty steep.
closed everything including long term SM super positions a while ago.


----------



## over9k (6 October 2021)

So is anyone in this thread still holding aside from value collector?


----------



## againsthegrain (6 October 2021)

over9k said:


> So is anyone in this thread still holding aside from value collector?




picked up another 5k at 14.05 today 🤪

ps. dollars not number of shares im a small cat


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## sptrawler (6 October 2021)

againsthegrain said:


> picked up another 5k at 14.05 today 🤪



That's serious bickies, obviously a vote of confidence, or a long term horizon.  
I will hang off, as I don't have any, so dollar cost averaging isn't an issue.
But I do intend to get some, I like the way twiggy is thinking, as long as he doesn't step on too many toes, it should be all good.


----------



## againsthegrain (6 October 2021)

sptrawler said:


> That's serious bickies, obviously a vote of confidence, or a long term horizon.
> I will hang off, as I don't have any, so dollar cost averaging isn't an issue.
> But I do intend to get some, I like the way twiggy is thinking, as long as he doesn't step on too many toes, it should be all good.




I meant 5k worth not 5k shares... id be shiting some serious bickies otherwise.

I never get the bottom so expect to see 13 tomorrow,  got another 5k waiting if 12-13 comes


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## over9k (6 October 2021)

Yank futures have just kept dropping all day and europe's opened into a bloodbath with U.S futures just still dropping by the hour (Nasdaq now 1.4% and still going) so yeah, I wouldn't expect any green tomorrow.

You're in falling knife territory IMO.


----------



## againsthegrain (6 October 2021)

over9k said:


> Yank futures have just kept dropping all day and europe's opened into a bloodbath with U.S futures just still dropping by the hour (Nasdaq now 1.4% and still going) so yeah, I wouldn't expect any green tomorrow.
> 
> You're in falling knife territory IMO.




Basically yeah, got 2 or 3 fingers left


----------



## sptrawler (6 October 2021)

I tend to work on long term averages, so looking at the long term trend, nothing much has happened apart from the virus.
Working on the principle, that the market had already factored in the debt paydown, I'm hoping on an entry between $9 and $12.


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## divs4ever (6 October 2021)

over9k said:


> So is anyone in this thread still holding aside from value collector?



 yes i am , but i have only started buying in recently 

 YES there are liable to be some nasty bumps ( more likely global issues than management  , here )

 i will consider   each move  as they  arrive   buy or hold in a dip  , reduce or hold in a rally  etc etc 

so far i am planning to hold ( but adjust if sensible )  for the long term


----------



## basilio (6 October 2021)

Still in and not leaving.  I think the short/medium term  profit outlook with iron ore will be very, very good if the price holds at around $100 a ton and still good value down to $60  a ton.

In the medium-longer term I'd like to believe that the moves into massive renewable energy projects, green hydrogen and green steel will be successful, nation building projects and  quite profitable. 

Of course if war breaks out  between China and Taiwan all bets are off.  But then I reckon there will be a lot of blood on the street from a thousand other companies. Ce La Vie.

In any case it's going to break me.


----------



## divs4ever (6 October 2021)

sptrawler said:


> I tend to work on long term averages, so looking at the long term trend, nothing much has happened apart from the virus.
> Working on the principle, that the market had already factored in the debt paydown, I'm hoping on an entry between $9 and $12.



 that price range would tempt me to add to my holding 

 i see the virus as a distraction from bigger underlying issues ( outside of FMG )


----------



## spratty84 (6 October 2021)

I am holding a small amount and hoping to add few more parcels if it drops around $12 or under


----------



## basilio (6 October 2021)

If we wanted to be seriously worried about someting that would certainly have a major impact on our lives what about this for a starter ?
Our cities. Our homes. Our  national infrastructure. The insurance industry. 

I note it here because FMG's new business direction attempts to lead industry and the Governments into tackling   CC as the critical issue it is in Australia and the world.









						‘Eye-watering’: climate change disasters will cost Australia billions each year, study finds
					

Catastrophes like fires and floods could set the economy back more than $1.2tn by 2060, even if action is taken




					www.theguardian.com


----------



## Sharkman (6 October 2021)

over9k said:


> So is anyone in this thread still holding aside from value collector?




not directly, but i did take a punt on a mid term recovery using a diagonal call spread, though not the one i described earlier, MMs just wouldn't give me a good fill on that one. ended up selling the oct 7 $15.50 weeklies & buying jan '22 $19s for a 10c credit. even that wasn't a good fill either as it was several ticks their side of the mid, but pushing the near leg out a week meant that it could be done at modest credit, which i find psychologically important for this sort of spread.

not a lot of action on the jan contracts at the moment, it seems that i still hold the entire open interest on the jan $19s, which, barring a surprise massive rally, will be on the house after tomorrow's close. near leg is quite a bit further OTM than i'd like, but if we get another bounce like the one sep 21-22-23, i might stick on another similar spread, maybe push the far leg out to feb if there's liquidity out there. delta and tenor skews are still very much in effect, 3-4 month ~25 delta calls trading in the low 40s, weekly/2 weekly ATMs mid-high 50s.

i don't have all that much confidence in a strong recovery TBH, but hey if i can eke out some free bets like these, might as well take them and see what happens.


----------



## UMike (6 October 2021)

sptrawler said:


> I tend to work on long term averages, so looking at the long term trend, nothing much has happened apart from the virus.
> Working on the principle, that the market had already factored in the debt paydown, I'm hoping on an entry between $9 and $12.



I'm guessing the accident causing one mans death is a factor as well.


----------



## over9k (6 October 2021)

Sharkman said:


> not directly, but i did take a punt on a mid term recovery using a diagonal call spread, though not the one i described earlier, MMs just wouldn't give me a good fill on that one. ended up selling the oct 7 $15.50 weeklies & buying jan '22 $19s for a 10c credit. even that wasn't a good fill either as it was several ticks their side of the mid, but pushing the near leg out a week meant that it could be done at modest credit, which i find psychologically important for this sort of spread.
> 
> not a lot of action on the jan contracts at the moment, it seems that i still hold the entire open interest on the jan $19s, which, barring a surprise massive rally, will be on the house after tomorrow's close. near leg is quite a bit further OTM than i'd like, but if we get another bounce like the one sep 21-22-23, i might stick on another similar spread, maybe push the far leg out to feb if there's liquidity out there. delta and tenor skews are still very much in effect, 3-4 month ~25 delta calls trading in the low 40s, weekly/2 weekly ATMs mid-high 50s.
> 
> i don't have all that much confidence in a strong recovery TBH, but hey if i can eke out some free bets like these, might as well take them and see what happens.



Oh yeah the IV would be absolutely savage now, once the EMA's, MACD etc have been busted the plummet is well & truly priced in.


----------



## dat111 (6 October 2021)

qldfrog said:


> https://www.smh.com.au/business/com...bon-target-for-customers-20211005-p58xa6.html
> With all the woke bright investors behind, the sky is the limit🙄






divs4ever said:


> $250 million is probably more than i can waste in the rest of my lifetime  , but if Twiggy can spend some of that on successful projects  , it probably hasn't been wasted
> 
> and Twiggy  has earned those divs , just like any other shareholder  , good for him



Absolutely... Twiggy earned those divs... but he was all whinging about carbon capture and the spending of 250M dollars for the technology...by the government...


----------



## dat111 (7 October 2021)

basilio said:


> Dat I suggest your comment misses the point.  Twiggy was noting the engineering and environmental  stupidity of supporting Carbon Capture as a response to reducing CO2 emissions. He is one of the few industry leaders who  understands how serious the CC problem is and the need for super fast action *in the right directions.  *He and everyone else in the power industry  realise that :
> 
> 1) Carbon Capture programs have had serious engineering problems to date
> 2) In almost all case the additional cost to production  just makes the whole process economically nonviable.  It is simply far more effective to build a wind/solar plus storage facility
> ...



Wait a second.. He is talking about making Ammonia or Hydrogen using solar power...have you studied those costs...  There are serious engineering problems.  The cost to make ammonia or hydrogen using solar power is also economically nonviable.  Having the dream to create green steel is wonderful but creating a product that costs a great deal more than what other people will be producing the same product for is bad business.


----------



## Sharkman (7 October 2021)

near term vol has actually eased off slightly, 1 week/2 week ATM was above 60 when i put on my call diagonal on sep 24, it was around 55-56 today. maybe a possible indication that the MMs think it's stabilising somewhat, but that would be a tenuous link at best, 55 does still seem fairly elevated.


----------



## dat111 (7 October 2021)

over9k said:


> So is anyone in this thread still holding aside from value collector?



I am still holding and accumulating.  I very rarely sell any stocks that I purchase.  I originally purchased FMG in 2004 and have been accumulating ever since.  Prior to last month I purchased 3/9/2020 at $5.41/share... My average cost prior to the purchase last month was $2.88/share... US...  I am only purchasing additional shares with dividend money... meaning I may purchase more when the price goes down an additional 15%-20% with this last dividend payout...  I purchase as FSUMF and FSUGY in US dollars.  I am not at a full position of FMG as I will not put more than 5% of my net worth in any single company...


----------



## over9k (7 October 2021)

Look into dividend reinvestment plans dat111, you can probably save yourself a mint on taxes if you play things right


----------



## divs4ever (7 October 2021)

is carbon capture the best way  forward  , i  believe in more efficiency of energy  use ( not wasting the excess ) is the better way  , energy generation costs are liable to rise  , unless some develops a new technology   , solar and wind   are nice  but not 100% reliable  , wave technology is still not up to the task  for heavy need  , nuclear  is still fairly expensive to build the plant 

imo there is still room for research and development  especially in remote areas where  demand cycles can be estimated accurately 

 so if any of the billionaires  have a better way to generate energy  let them research ( and let them have the usual tax breaks for it ) got to be better than government wasting energy and time with more regulations ( that often never get enforced anyway


----------



## dat111 (7 October 2021)

over9k said:


> Look into dividend reinvestment plans dat111, you can probably save yourself a mint on taxes if you play things right



I pay taxes in the US... I pay 20% in taxes regardless whether I DRIP or I reinvest the dividends.  I used to always DRIP before I could purchase shares for free... but since I can purchase shares for free and I noticed that different brokerage accounts DRIP at different purchase prices and the spreadsheet I built showed that I could do better... I purchase my dividends on my own now...


----------



## dat111 (7 October 2021)

divs4ever said:


> is carbon capture the best way  forward  , i  believe in more efficiency of energy  use ( not wasting the excess ) is the better way  , energy generation costs are liable to rise  , unless some develops a new technology   , solar and wind   are nice  but not 100% reliable  , wave technology is still not up to the task  for heavy need  , nuclear  is still fairly expensive to build the plant
> 
> imo there is still room for research and development  especially in remote areas where  demand cycles can be estimated accurately
> 
> so if any of the billionaires  have a better way to generate energy  let them research ( and let them have the usual tax breaks for it ) got to be better than government wasting energy and time with more regulations ( that often never get enforced anyway






divs4ever said:


> is carbon capture the best way  forward  , i  believe in more efficiency of energy  use ( not wasting the excess ) is the better way  , energy generation costs are liable to rise  , unless some develops a new technology   , solar and wind   are nice  but not 100% reliable  , wave technology is still not up to the task  for heavy need  , nuclear  is still fairly expensive to build the plant
> 
> imo there is still room for research and development  especially in remote areas where  demand cycles can be estimated accurately
> 
> so if any of the billionaires  have a better way to generate energy  let them research ( and let them have the usual tax breaks for it ) got to be better than government wasting energy and time with more regulations ( that often never get enforced anyway



I graduated with a BS in Chemical Engineering in 1989... During our senior year one of our classes was plant design.  My year our task was to design a Methanol plant using the flue gas from a coal fired power plant...  That is carbon capture at its finest....


----------



## Value Collector (7 October 2021)

over9k said:


> Look into dividend reinvestment plans dat111, you can probably save yourself a mint on taxes if you play things right



How does the dividend reinvestment plan save tax?


----------



## basilio (7 October 2021)

dat111 said:


> Wait a second.. He is talking about making Ammonia or Hydrogen using solar power...have you studied those costs...  There are serious engineering problems.  The cost to make ammonia or hydrogen using solar power is also economically nonviable.  Having the dream to create green steel is wonderful but creating a product that costs a great deal more than what other people will be producing the same product for is bad business.




Perhaps not ?  And frankly Twiggy Forest is probably  the last person on earth to go into a venture that won't make a buck. More importantly he has a health realisation that there is new technology available that can achieve these outcomes. He will be prepared to commercialise it.









						Green ammonia breakthrough a potential boon for solar-powered exports
					

Scientists from the University of New South Wales and the University of Sydney have made a breakthrough in the development of green ammonia. Their findings could alter the global industry with the help of solar to produce green ammonia for export to countries like Japan and Germany, instead of...




					www.pv-magazine.com
				











						Will 'green hydrogen' live up to the hype, or is it all a load of hot air?
					

It's been identified as the clean energy source that could help bring the world to net-zero emissions, but green hydrogen's future is not yet assured.




					www.abc.net.au


----------



## divs4ever (7 October 2021)

basilio said:


> Perhaps not ?  And frankly Twiggy Forest is probably  the last person on earth to go into a venture that won't make a buck. More importantly he has a health realisation that there is new technology available that can achieve these outcomes. He will be prepared to commercialise it.
> 
> 
> 
> ...



depends on how solar is used 

 most think of solar as in solar panels , but you also have reflectors  which are used less often but still used  , and other ways MIGHT  be capable of commercial applications  ( say generating intense heat  but not converting to electricity first )

 with solar the persistent problem is the cyclical patterns ( unless you are collecting from space )  and that might be inconvenient


----------



## qldfrog (7 October 2021)

divs4ever said:


> depends on how solar is used
> 
> most think of solar as in solar panels , but you also have reflectors  which are used less often but still used  , and other ways MIGHT  be capable of commercial applications  ( say generating intense heat  but not converting to electricity first )
> 
> with solar the persistent problem is the cyclical patterns ( unless you are collecting from space )  and that might be inconvenient



you can superheat water in classic thermal power station with solar before actual gas/coal combustion and that's a nice easy way to gain a bit of efficiency/retrofit some existing coal stations


----------



## divs4ever (7 October 2021)

yes there are some interesting ways  .. the hard bit is to make it cost efficient  for the task you want achieved 

 but Twiggy should have some smart engineers  already in the company   ,  i am sure he will  cull the unworthy techniques


----------



## Smurf1976 (7 October 2021)

divs4ever said:


> Twiggy should have some smart engineers already in the company , i am sure he will cull the unworthy techniques



Something to always remember is that so long as it does work, efficiency isn't a barrier to adoption if it can be done profitably.

Countless things are woefully inefficient from a purely technical perspective but they work as such, they do what they're supposed to do, and the market's willing to buy them which makes for a viable business.

As one example, gold mining involves digging up huge amounts of ore and throwing 99.999% of it away in order to get a tiny bit of gold out of it. It's still a very workable business though despite that huge inefficiency of moving waste rock around and processing it.

Same goes for hydrogen. From a business perspective, so long as it can be produced at a price that enables it to be profitably sold then as a business it's viable even if it's inefficient in a technical sense.


----------



## qldfrog (7 October 2021)

Smurf1976 said:


> Something to always remember is that so long as it does work, efficiency isn't a barrier to adoption if it can be done profitably.
> 
> Countless things are woefully inefficient from a purely technical perspective but they work as such, they do what they're supposed to do, and the market's willing to buy them which makes for a viable business.
> 
> ...



And once you bring narrative based taxfunded money, efficiency has no role....
In the past decades, wood pellet burner were subsidized in France to rrplace oil burners..heating in winter..but a no go now, so subsidies for electrical heating...nuclear..and would not be surprised to find than "clean" gas is still pushed..gov agencies being often a war late....is it just in France? 😊


----------



## divs4ever (7 October 2021)

i equate  efficiency  with  profitability  , sure i might be twisted  

and sure given time and thought an even better way might be discovered 

 now WHEN ore extraction becomes almost perfect  you might wonder  when the 'waste' might be put to better use as well ( roads ,  drainage ,  etc etc  ... )

 of course if the world proceeds on it's current Communist/Socialist  trajectory  all this will become   a redundant  discussion


----------



## dat111 (7 October 2021)

basilio said:


> Perhaps not ?  And frankly Twiggy Forest is probably  the last person on earth to go into a venture that won't make a buck. More importantly he has a health realisation that there is new technology available that can achieve these outcomes. He will be prepared to commercialise it.
> 
> 
> 
> ...



Have you looked at the chemistry and math?  It is wonderful to think that new technology is going to become available but chemistry, physics and math pretty much dictate what is possible.  It is not possible to take the sun's energy, turn it into electricity, then convert this electricity to hydrogen...cheaper than what is currently being done unless the government is forcing the issue...  Twiggy is playing politics to force the government into a position that he can make more money at... and if you go back to what I commented on is the thought that Twiggy is complaining about the government putting $250M into carbon capture...


----------



## qldfrog (8 October 2021)

dat111 said:


> Have you looked at the chemistry and math?  It is wonderful to think that new technology is going to become available but chemistry, physics and math pretty much dictate what is possible.  It is not possible to take the sun's energy, turn it into electricity, then convert this electricity to hydrogen...cheaper than what is currently being done unless the government is forcing the issue...  Twiggy is playing politics to force the government into a position that he can make more money at... and if you go back to what I commented on is the thought that Twiggy is complaining about the government putting $250M into carbon capture...



Yes sometimes nature and physic tend to not understand Narrative
Like carbon capture..a concept who every year 12 ,even bad at math can debunk...
1billion so far of taxpayer money wasted so far,and counting in Qld


----------



## qldfrog (8 October 2021)

qldfrog said:


> Yes sometimes nature and physic tend to not understand Narrative
> Like carbon capture..a concept who every year 12 ,even bad at math can debunk...
> 1billion so far of taxpayer money wasted so far,and counting in Qld



But FMG is i think playing well..more narrative than acts..better than BHP who actually sell its assets in oil and gas just as they are going to make a killing.dumb and dumber,but a trademark..


----------



## SyBoo (8 October 2021)

dat111 said:


> Have you looked at the chemistry and math?  It is wonderful to think that new technology is going to become available but chemistry, physics and math pretty much dictate what is possible.  It is not possible to take the sun's energy, turn it into electricity, then convert this electricity to hydrogen...cheaper than what is currently being done unless the government is forcing the issue...  Twiggy is playing politics to force the government into a position that he can make more money at... and if you go back to what I commented on is the thought that Twiggy is complaining about the government putting $250M into carbon capture...




The UNSW crews new hybrid plasma-electrochemical tech is about being a greener method than the Haber-Bosch method, as their tech does not produce CO2.  (It's lab-scale research.)   Here's a link to their Journal Article; A hybrid plasma electrocatalytic process for sustainable ammonia production - Energy & Environmental Science (RSC Publishing) (sorry it's pay-walled, supplementary info is free and somewhat interesting)

As this a FMG thread I best say something iron orey. I wouldn't be surprised if the iron ore price drops down to 75 USD/T or lower over the next few months, winter cycle in china and all that jazz. Also congrats to Fortescue  on buying into High yield Energy Technologies (HyET) Group.


----------



## divs4ever (8 October 2021)

iron ore demand  down  ( unless there is a a major hot war  , not that i want one , but SOME do ) yes i agree with that
  if Evergrande is the signal  for a wider construction industry  downturn  , that would double your chances of being correct

 i am still watching for Brazil to come back online with full  iron-ore production  just to add more pressure on the iron price

 now to my mind the recent price peaks  are an extraordinary glitch in the usual resource investment cycle  , now sure  the falling purchasing power of ( most ) currencies  has been a big help  to prices .

 however  i am still interested in adding more FMG cheaper ( because i wasn't buying years back  , like the Twiggy faithful were )

 so a seasonal downturn  will not be totally bad for me , if it happens  .. and last i heard  FMG  can export iron ore at a rather low price and remain profitable , especially if the Australian dollar stays weak  compared to the $US dollar .


----------



## dat111 (8 October 2021)

SyBoo said:


> The UNSW crews new hybrid plasma-electrochemical tech is about being a greener method than the Haber-Bosch method, as their tech does not produce CO2.  (It's lab-scale research.)   Here's a link to their Journal Article; A hybrid plasma electrocatalytic process for sustainable ammonia production - Energy & Environmental Science (RSC Publishing) (sorry it's pay-walled, supplementary info is free and somewhat interesting)
> 
> As this a FMG thread I best say something iron orey. I wouldn't be surprised if the iron ore price drops down to 75 USD/T or lower over the next few months, winter cycle in china and all that jazz. Also congrats to Fortescue  on buying into High yield Energy Technologies (HyET) Group.



The SMR process _before_ the H-B process, however, emits CO2 when converting CH4 + H2O into CO2 + H2.

They now use an electrolytic process to wrestle hydrogen free from oxygen in water to give to the nitrogen - as well as to react with the Ox attached to it.

This pretty much corresponds to electrolysis of water to make free hydrogen.

What they have really devised is a way of separating nitrogen out of air using plasma activation. And it remains to be seen whether this is more efficient than cryogenic air separation...

Their process: 1836 kJ/mol for the electrolysis.
Energy loss (from hydrogen) in H-B process: 46 kJ/mol NH3
Additional energy consumption to produce the hydrogen: 550 kJ/mol NH3

I'm afraid I fail to see how this is an improvement let alone a method to produce hydrogen energy that is more efficient than fossil fuels.  We all must realize that unless all countries go green the ones that don't are going to be where the wealth is going to be transferred.   The countries who think they are going to be saving the world are not going to save the world and destroy themselves...


----------



## qldfrog (8 October 2021)

dat111 said:


> The SMR process _before_ the H-B process, however, emits CO2 when converting CH4 + H2O into CO2 + H2.
> 
> They now use an electrolytic process to wrestle hydrogen free from oxygen in water to give to the nitrogen - as well as to react with the Ox attached to it.
> 
> ...



a little trip to China economic powerhouse areas would be beneficial to our Greta fans to have a clue; you can save next door stream with local action, you do not save the world by cycling to work.
luckily CO2 is a distraction so that does not matter much, just destroy the west; but more issues are killing our planes and sadly,same principle is still true, we can do not much alone


----------



## divs4ever (8 October 2021)

qldfrog said:


> a little trip to China economic powerhouse areas would be beneficial to our Greta fans to have a clue; you can save next door stream with local action, you do not save the world by cycling to work.
> luckily CO2 is a distraction so that does not matter much, just destroy the west; but more issues are killing our planes and sadly,same principle is still true, we can do not much alone



pessimist 

 you are as powerful as the money you spend ( or don't )

 shouting and signs MIGHT work  , but money is power


----------



## qldfrog (8 October 2021)

divs4ever said:


> pessimist
> 
> you are as powerful as the money you spend ( or don't )
> 
> shouting and signs MIGHT work  , but money is power



True and when you are in china, you know where money is.
 Do not be fooled by the exchange rate..see the wealth in and the wealth out, the change of wealth between countries along the last decades.
World problem #1 is overpopulation,rest is distraction and how i spend my cash has no bearing on this..


----------



## sptrawler (8 October 2021)

qldfrog said:


> True and when you are in china, you know where money is.
> Do not be fooled by the exchange rate..see the wealth in and the wealth out, the change of wealth between countries along the last decades.
> World problem #1 is overpopulation,rest is distraction and how i spend my cash has no bearing on this..



Absolutely frog, more population equals more consumption, more consumption equals more use of finite resources and finite energy. Eventually we go the way of the dinosaurs. Lol


----------



## qldfrog (8 October 2021)

qldfrog said:


> True and when you are in china, you know where money is.
> Do not be fooled by the exchange rate..see the wealth in and the wealth out, the change of wealth between countries along the last decades.
> World problem #1 is overpopulation,rest is distraction and how i spend my cash has no bearing on this..



And Australia massive wealth gain on the last decades is riding the wave of iron coal... thanksfully without the Gretas around to close the mines then


----------



## basilio (10 October 2021)

One of the many steps Fortescue Future Industries is taking to build a massive national/international hydrogen economy. Be interesting to see how the  stock market responds and at what stage the returns from the venture are outlined.

FMG has allocated a further $1B seed money for it's wide ranging renewable energy projects.

----------------------------------------
FMG could have distributed an extra 10% on it's recent dividends if it didn't go down this road. I for one am delighted to see this investment for my own sake and the bigger picture.

New $1 billion-plus project in Queensland to double world's green hydrogen production capacity​By Phoebe Hosier
Posted 32m ago32 minutes ago, updated 25m ago25 minutes ago





  Fortescue Future Industries founder Dr Andrew Forrest and Queensland Premier Annastacia Palaszczuk announcing the project in Gladstone.(
ABC News: Katrina Beavan
)
Help keep family & friends informed by sharing this article

Fortescue Future Industries (FFI) will build the world's largest green energy hydrogen manufacturing facility in Central Queensland, mining billionaire and company founder Andrew "Twiggy" Forrest says.
Key points:​
Fortescue Future Industries' new facility is expected to double the world's green hydrogen capacity
The $1 billion-plus investment is expected bring thousands of jobs to regional Queensland
When completed, its green hydrogen manufacturing facility will be the biggest of its kind in the world
The first step in the project — a multi-million-dollar manufacturing facility set to be built in Aldoga, west of Gladstone — is expected to double the world's green hydrogen production capacity and bring thousands of jobs to Queensland’s energy industry for years to come.
The plant will be manufacturing green energy infrastructure and equipment — such as electrolysers, cabling and wind turbines — to create green hydrogen that will be exported across the world.

Mr Forrest said the announcement marked the first stage of a "billion-plus dollar", six-step operation.
The first stage of the operation — which is expected to be completed early next year, has been valued at $115 million — is set to create 120 construction jobs and 53 operational jobs.









						Australia will soon be home to the world's largest green energy hydrogen manufacturing facility
					

Australian mining billionaire Andrew "Twiggy" Forrest unveils plans to build the world's largest green energy hydrogen manufacturing facility in Central Queensland.




					www.abc.net.au
				












						Fortescue to invest another $1 billion in renewables, green hydrogen after windfall profit
					

Fortescue Metals to invest another $1 billion in its renewables division, and will push customers to tackle their 250 million tonne emissions footprint.




					reneweconomy.com.au


----------



## basilio (10 October 2021)

Andrew Forrest's First Boyer lecture in January 2021 on why FMG is going hydrogen with a rush.  
Reads passionately and well.









						'The solution is hydrogen': Andrew Forrest lays out his plan to address climate change
					

Green hydrogen gives Australia an opportunity to slash our emissions — and if we get this right, the impact could be nothing short of nation-building, argues business leader Andrew Forrest.




					www.abc.net.au


----------



## finicky (10 October 2021)

This Fortesque Future Industries, for someone who doesn't follow FMG and mistrusts 'Twiggy', - is this  a subsidiary of FMG and will it therefore leach capital out of FMG? It has a sniff of overreach, hubris and something that could fall flat on its face. I'd be concerned if I were a holder of FMG because it is an iron ore miner. Then again, if an FMG holder I would read up on it.


----------



## basilio (10 October 2021)

I suggest this could be one of the  internationalFMG projects that will be using the electrolysers ect produced at Gladstone.








						Fortescue to build second hydrogen plant - Australian Mining
					

Fortescue Metals Group is set to develop a green hydrogen plant in Brazil as part of a company plan to remove diesel reliance from mining equipment.




					www.australianmining.com.au


----------



## basilio (10 October 2021)

finicky said:


> This Fortesque Future Industries, for someone who doesn't follow FMG and mistrusts 'Twiggy', - is this  a subsidiary of FMG and will it therefore leach capital out of FMG? It has a sniff of overreach, hubris and something that could fall flat on its face. I'd be concerned if I were a holder of FMG because it is an iron ore miner. Then again, if an FMG holder I would read up on it.




It is a subsidiary of FMG.  FMG has allocated substantial funds to enable FFI to begin these projects.
However FFI will  have external partners and funding to enable full completion of the projects. The liability for these  funds and projects will stay with FFI and this shields FMG from any further downside. 

All the upside however goes to FMG.


----------



## bk1 (10 October 2021)

Do yourself a favour and read up on Murrin Murrin and Anaconda.
There is nothing this man can't sell.


----------



## basilio (10 October 2021)

finicky said:


> This Fortesque Future Industries, for someone who doesn't follow FMG *and mistrusts 'Twiggy',*




Just out of interest finicky what do you mistrust about Andrew Forrest ? Are there things he has done that others should be aware of in evaluating his business accumen ? 

I do agree on principle that an investor should be careful about the capacity and integrity of the leaders of companies we invest in. (Can think of far too many examples of sharp and dishonest operators interested largely in lining their pockets..)


----------



## basilio (10 October 2021)

bk1 said:


> Do yourself a favour and read up on Murrin Murrin and Anaconda.
> There is nothing this man can't sell.




Indeed.  That was an expensive and spectacular  crash.
I found a 4 Corners transcript from 2002 that highlighted the rise and fall of Anaconda. There was a real cast of characters in that show. Rodney Adle, Joe Gutnick.

The failure seemed to be having faith in a fiendishly complex expensive HUGE  and untried industrial complex - that that then came spectacularly unstuck.  

I take that on board.  There is a chance that FFI doesn't come through with everything it proposes. However many of the projects are smaller bite size deals that are within the  financial and engineering capacity of FFI/FMG and not anywhere near as ambitious technically. 

But a key element in my mind is the  financial separation of FFI from FMG. As I said earlier FFI gets an initial stake and then carries the risks of raising partners, capital and development. Their first client will be FMG and FMG will take the profits - but not the losses. If it all l goes to hell in  a hand basket FFI goes bankrupt and it's debts die there.

IMV I think FMG is immeasurably  stronger than anything Forrest previously ran.  I would also be  very confident other stakeholders would be determined that the downside financial risks are well controlled. And Twiggy would also want to protect his immense wealth base.

Essentially FMG is investing 10% of it's profits in these new ventures.  More significantly it is distancing itself from asny potential finacial disaster by setting up the subsidary company as the vehicle for the developments.









						Follow the money in nickel and the man ‘Twiggy’
					

With a price moving back towards US$20,000 a tonne, nickel has shrugged off the worst of a 20% crash in February and become an investment opportunity where you can follow the money – and “the man”.




					smallcaps.com.au
				







__





						Anaconda -- Four Corners Transcript
					

TV PROGRAM TRANSCRIPTLOCATION: abc.net.au > Four Corners > ArchivesURL: http://www.abc.net.au/4corners/stories/s646784.htmBroadcast: 12/8/2002 The Mine...




					hotcopper.com.au


----------



## sptrawler (10 October 2021)

Nothing wrong with Twiggy wanting to become the Elon Musk of green hydrogen, whether he pulls it off is yet to be seen, IMO right place, right time.
But enthusiasm, doesn't mean a guarantee of success, I certainly hope he does succeed. 
The transition to clean energy IMO, definitely includes a lot of hydrogen and the amount required can't be supplied by taxpayer funding, it has to be driven by industry.


----------



## rnr (10 October 2021)

tech/a said:


> Ok Further to @notting suggestion that I mark up a chart I place these up for consideration.
> 
> Its actually how I trade my long term trades in one of my Super Portfolio's
> This chart is not marked up 100% accurately its back of the drink coaster
> ...




Hi tech/a,

I was just wondering, out of interest, whether you trade Nick's 20% Flipper with the same parameters as used in the back-test results published in "Unholy Grails"?

Cheers, Rob


----------



## finicky (10 October 2021)

basilio said:


> Just out of interest finicky what do you mistrust about Andrew Forrest ? Are there things he has done that others should be aware of in evaluating his business accumen ?



@basilio he strikes me as a high stakes gambler, while admitting his success as an entrepreneur with FMG albeit not that Nickel venture Anaconda. Even with FMG, it always seemed unusually high risk: taking on the majors with a single commodity business and using I believe a lot of debt? Ok, it paid off, but maybe luck was with him?
He has rewarded FMG investors well but as an Australian he has shown himself a China CCP apologist and willing to support CCP propaganda and aggression in the interest of his business. So I wouldn't trust him as a steward of capital or as an Australian fwiw.








						Greg Hunt blindsided as Chinese consul-general crashes press conference
					

Australian Health Minister Greg Hunt was blindsided by a mining billionaire decision to invite a top Chinese diplomat to speak at their press conference.




					www.smh.com.au


----------



## Value Collector (11 October 2021)

finicky said:


> This Fortesque Future Industries, for someone who doesn't follow FMG and mistrusts 'Twiggy', - is this  a subsidiary of FMG and will it therefore leach capital out of FMG? It has a sniff of overreach, hubris and something that could fall flat on its face. I'd be concerned if I were a holder of FMG because it is an iron ore miner. Then again, if an FMG holder I would read up on it.



10% of FMG’s profits are being dedicated to building FFI, 10% will go to mining and 80% gets paid as dividend.

it’s possible it could be a massive cash hole, like when Woolies did Masters and lost a few Billion. But who knows he might just know what he is doing and we end up with a new vertical to invest in with a great return on equity.


----------



## qldfrog (11 October 2021)

I think we are all confused..or at least i was.
I thought fmg was going to be a major H2 player by producing and using H2 but based on https://www.brisbanetimes.com.au/na...reen-hydrogen-hub-in-qld-20211010-p58yqb.html
not exactly....
Fmg will build power to H2 "plants"..and hopefully use some of them.
Similar as saying we will produce xx MW solar...and build a solar panel factory.
And sorry but the chance of a Qld based manufacturing hub success is zip.
There is no high tech in electrolysis..i was doing it at 9 with 12v batteries
So any qld based unit ,even with taxpayer money help will cost what ? 3 times to 5 times a chinese made similar unit and twice a similar unit made in the US of A?
I hope this FMG Future company is not linked to FMG financially,and will be just an r&d credit,subsidies burning structure.
Good for narrative..even providing below costs H2 units to mothership FMG .
Remember that around 1 billion has been spent by Qld on CCS..carbon capture and storage..and 4 billions to date..yeap was scared :
As carbon capture, storage commitments near $4b, what are the options for heavy industry? - ABC News https://www.abc.net.au/news/2021-08-21/taxpayer-bill-for-carbon-capture-and-storage-hits-4-billion/100375854
So is the H2 hub the new feel good, max cost white elephant?


----------



## tech/a (11 October 2021)

rnr said:


> Hi tech/a,
> 
> I was just wondering, out of interest, whether you trade Nick's 20% Flipper with the same parameters as used in the back-test results published in "Unholy Grails"?
> 
> Cheers, Rob




Hi Rob

No I don’t 
I used it as an example in response to Nottings request in the FMG thread.Was quick and easy and made a point.
I do use “ Some“ of the metrics in my SMSF trading.


----------



## divs4ever (11 October 2021)

qldfrog said:


> I think we are all confused..or at least i was.
> I thought fmg was going to be a major H2 player by producing and using H2 but based on https://www.brisbanetimes.com.au/na...reen-hydrogen-hub-in-qld-20211010-p58yqb.html
> not exactly....
> Fmg will build power to H2 "plants"..and hopefully use some of them.
> ...



 yes there is a company dreaming of a battery manufacturing plant in Nth. Queensland as well  , that seems to be dragging as well


----------



## basilio (11 October 2021)

SP jumped today by 5%.  Three significant announcements

1) Iron ore up 5% after the Chinese holdiday. Steel makers back in business..
2) Announcement on Friday of major Queensland investment  by FFI (FMG renewable energy subsidiary) in manufacture of  Hydrogen electrolizers.
3) Another announcement this morning that FFI is developing a pilot plant with Incitiec Pivot to produce green ammonia









						'Green industrial revolution': Queensland announces plans to mass produce green ammonia
					

Speaking at Incitec Pivot's Gibson Island facility, CEO Jeanne Johns said a feasibility trial would be conducted in the state to turn green hydrogen into green ammonia, with the potential to secure 400 jobs for "decades".




					www.abc.net.au
				











						Queensland will soon be a 'renewable energy superpower'. What could that mean?
					

Queensland is soon to be home to the world's largest hydrogen manufacturing facility. So what actually is green hydrogen? And how does it work?




					www.abc.net.au
				











						Iron ore price rises as China markets reopen after holiday
					

Dalian iron ore scaled one-month high on China demand optimism.




					www.mining.com


----------



## basilio (13 October 2021)

Overview of FFI current renewable e energy projects (Assuming Motley Fool has got it right.)









						It's building hydrogen equipment, but what else does Fortescue (ASX:FMG) Future Industries do?
					

Fortescue Future Industries has been on the lips of many ASX market watchers this week, but there's still some confusion over what is does.




					www.fool.com.au


----------



## basilio (14 October 2021)

Twiggy is certainly  showing some leadership on rapid development of green hydrogen as the next industry and export fuel story.
It's interesting that he highlights  the current workers in fossil fuel industries are the ones he is looking for  to run new  green energy plants.

Frustrated mining magnate Andrew "Twiggy" Forrest has lashed out at Nationals politicians who he says are "capable of hearing the facts" on the coal industry, but have chosen to ignore them to chase votes.









						Mining magnate 'Twiggy' Forrest accuses Nationals of 'scaring Australians' over move to renewable energy
					

Billionaire mining magnate Andrew Forrest says "people like him" need to change and lead the country away from coal, but that "fearmongering" Nationals politicians are scaring Australians to save their own jobs.




					www.abc.net.au
				



Key points:​
Andrew Forrest says Nationals MPs are scaring Australians with false information about coal jobs
Mr Forrest is pushing for large-scale adoption of green hydrogen technology
He says it will provide jobs, but the government won't listen
Mr Forrest, the chair of Fortescue Metals, yesterday stood beside the New South Wales government as it announced a $3 billion green hydrogen plan backed by the billionaire.

He said the production of green hydrogen fuel using renewable energy could provide jobs for people currently working in coal, oil and gas, as the country moves away from fossil fuels.

"We need all those skills from coal miners, from oil and gas ... they are the exact careers we need right now to build our green hydrogen future," Mr Forrest told the ABC.


----------



## sptrawler (14 October 2021)

basilio said:


> Twiggy is certainly  showing some leadership on rapid development of green hydrogen as the next industry and export fuel story.
> It's interesting that he highlights  the current workers in fossil fuel industries are the ones he is looking for  to run new  green energy plants.
> 
> Frustrated mining magnate Andrew "Twiggy" Forrest has lashed out at Nationals politicians who he says are "capable of hearing the facts" on the coal industry, but have chosen to ignore them to chase votes.



Twiggy has a lot of skin in the game, so any leverage he can get in the media is free publicity, can't blame him, but must be taken in context.
The reality is for the coal workers, there isn't a switch that can be thrown and one day people have a job in a coal related business, the next they start work in a hydrogen related industry.
To Twiggy it is zero's on a spreadsheet, to the coal workers it is their livelihood, the politicians are probably trying to represent their constituency, which is what they are elected to do.

I like Twiggy's direction, I'm beginning to dislike his method.


----------



## waterbottle (14 October 2021)

sptrawler said:


> Twiggy has a lot of skin in the game, so any leverage he can get in the media is free publicity, can't blame him, but must be taken in context.
> The reality is for the coal workers, there isn't a switch that can be thrown and one day people have a job in a coal related business, the next they start work in a hydrogen related industry.
> To Twiggy it is zero's on a spreadsheet, to the coal workers it is their livelihood, the politicians are probably trying to represent their constituency, which is what they are elected to do.
> 
> I like Twiggy's direction, I'm beginning to dislike his method.



I don't think it's true to say those in the coal industry will not have jobs in other industries - skills are often, although not totally, transferable. 
I don't think anyone credible is asking for coal to be switched off overnight, rather it should be phased out to prevent any further new employment dependent on coal and to provide an opportunity for those currently employed to transfer elsewhere.


----------



## sptrawler (14 October 2021)

waterbottle said:


> I don't think it's true to say those in the coal industry will not have jobs in other industries - skills are often, although not totally, transferable.
> I don't think anyone credible is asking for coal to be switched off overnight, rather it should be phased out to prevent any further new employment dependent on coal and to provide an opportunity for those currently employed to transfer elsewhere.



Agreed, I was more referring to Twiggys aggressive stance in pushing his initiative, not the actual realities of people changing jobs.
People will change jobs if they have to, we have all done it, to keep bread on the table.
I was indicating that the people in those industries will be anxious and the politicians that represent them will be attempting to put their concerns forward.
Twiggy attacking those politicians for doing so, isn't a good look IMO and I can't see it furthering his cause.
It may help with advertising the cause, but allienating a section of Government is a risky business IMO, he may need to call on their support at a later date. 
Apologies if I didn't explain it well, or offended you, it wasn't intended and I am hoping to buy FMG.


----------



## waterbottle (14 October 2021)

sptrawler said:


> Agreed, I was more referring to Twiggys aggressive stance in pushing his initiative, not the actual realities of people changing jobs.
> People will change jobs if they have to, we have all done it, to keep bread on the table.
> I was indicating that the people in those industries will be anxious and the politicians that represent them will be attempting to put their concerns forward.
> Twiggy attacking those politicians for doing so, isn't a good look IMO and I can't see it furthering his cause.
> ...



No offense at all. 

It's actually refreshing to see someone in power take a stance.
Australia is flooded with retired politicians who have sat on the fence throughout their time in office, only to lament their missed opportunity at having been more aggressive with the policies that wanted to pass. 
Forrest isn't a politician, but he understands his contribution to Australia's budget and is leveraging it accordingly, thankfully for a good cause. 
It seems to be working too given the recent announcements by QLD and NSW.


----------



## frugal.rock (14 October 2021)

Dr Twig on National Press Club address today.









						National Press Club Address: Andrew Forrest
					

Dr Andrew Forrest, Chairman and Founder of Fortescue Metals Group, Fortescue Future Industries, Minderoo Foundation, and Tattarang, addresses the Press Club on the topic 'Green Hydrogen: The Power of Now'.




					iview.abc.net.au
				




WA is dragging it's heels.... get the rubber stamp out McGowan.


----------



## sptrawler (14 October 2021)

frugal.rock said:


> Dr Twig on National Press Club address today.
> 
> 
> 
> ...



I think W.A is going less haste, more speed route.
Which is the technically efficient way IMO.

I didn't listen to the webcast, as I'm on limited mobile data, but I assume Twiggy is applying pressure on the W.A Government, the same as he is on the National Party Reps.
If so, like I said earlier, I like the direction he is taking, but I'm nervous about his method, the barrage could be seen as a bit panicked IMO.
It will be interesting to see how the market views, Twiggys views.


----------



## Value Collector (14 October 2021)

sptrawler said:


> Twiggy has a lot of skin in the game, so any leverage he can get in the media is free publicity, can't blame him, but must be taken in context.
> The reality is for the coal workers, there isn't a switch that can be thrown and one day people have a job in a coal related business, the next they start work in a hydrogen related industry.
> To Twiggy it is zero's on a spreadsheet, to the coal workers it is their livelihood, the politicians are probably trying to represent their constituency, which is what they are elected to do.
> 
> I like Twiggy's direction, I'm beginning to dislike his method.



The coal industry isn’t stopping over night, and the hydrogen industry isn’t going to be at full steam over night, the tradition will be slow.

a lot of the jobs will have cross over, eg if you operate tug boats for coal ships, you operate tug boats for hydrogen ships, same with many other aspects eg electricians, Concretor, catering, transport, plant operators, and many others that I can’t think of.

“miners” eg people at the actual coal face only make a very small number of the people employed in the industry,


----------



## sptrawler (14 October 2021)

Value Collector said:


> The coal industry isn’t stopping over night, and the hydrogen industry isn’t going to be at full steam over night, the tradition will be slow.
> 
> a lot of the jobs will have cross over, eg if you operate tug boats for coal ships, you operate tug boats for hydrogen ships, same with many other aspects eg electricians, Concretor, catering, transport, plant operators, and many others that I can’t think of.
> 
> “miners” eg people at the actual coal face only make a very small number of the people employed in the industry,



Mate I worked in the power generation industry, my working life and I'm 65, so I do know how it works.
I also have my marine engineers qualifications, so the tug boat stuff was nice, but unnecessary.
But thanks for the heads up, by the way I started as an electrician, finished up in management. 

Maybe if you read my response to Waterbottle at post 3945, it might explain what I was referring to. 👍


----------



## basilio (15 October 2021)

US company  Plug Power is the partner for FFI massive Hydrogen project in Queensland. Neat arrangement.
Certainly ambitious and nation  re-building.  Seems like Twiggy is intent on  effectively rebuilding most  basic industrial industries in Australia and having a piece of the action.

T_he scale of Forrest’s ambition was revealed in a speech to the National Press Club on Thursday, where – apart from slamming the “fear mongers” and Chicken Littles” in the federal government for resisting the green energy transition, and even a net zero target by 2050 – Forrest spoke of the scale of his plans.

“So far, Fortescue Future Industries, or FFI, has secured 300GW of renewable resources in Africa, Australia, Asia, Central Asia, Europe, Latin America and New Zealand – over four times Australia’s current capacity,” Forrest said.

And he said the new manufacturing centre planned for Queensland would be replicated at multiple sites across the country.
_
*“We are taking the Green Energy Manufacturing centre at Gladstone and replicating it across Australia, at tens of sites all over the country – creating the foundation for new industries in green ammonia, green iron, green steel, green fertiliser and green cement, with thousands of jobs at each location.”
*
_The agreement with the two companies will also see FFI purchase 250MW of Plug Power’s electrolyzer solutions, which are used to create hydrogen and oxygen from water, for its Australian projects.
_








						Forrest signs up Plug Power for world’s biggest hydrogen electrolyser Gigafactory
					

Andrew Forrest chooses US based Plug Power to build massive hydrogen Gigafactory in Queensland, the first of “tens” of such projects planned for Australia.




					reneweconomy.com.au


----------



## basilio (15 October 2021)

Excellent analysis of Twiggy Forrest drive to become the Green Hydrogen leader of the world.
Clear sense of history and proportion in the story. Yes this is unbelievably huge in concept.  If it comes off it would be many times more profitable than  FMG. A key element will be how Twiggy manages to rope in Government support for his ventures.

The critical part for FMG investors is ensuring that the FFI subsidiary only costs 10% of the FMG profits and if FFI does fall over there is no recourse to FMG. That also assumes that the iron ore industry continues to be profitable at least at levels from 2020.









						Ambition isn't in short supply for Andrew Forrest, but will science and economics bring his green hydrogen projects back to earth?
					

Andrew Forrest went on a green hydrogen blitz this week, standing alongside premiers in NSW and Queensland to announce multi-billion-dollar plans for renewable energy exports. Ian Verrender looks at just how feasible these grand plans are.




					www.abc.net.au


----------



## sptrawler (15 October 2021)

basilio said:


> Excellent analysis of Twiggy Forrest drive to become the Green Hydrogen leader of the world.
> Clear sense of history and proportion in the story. Yes this is unbelievably huge in concept.  If it comes off it would be many times more profitable than  FMG. A key element will be how Twiggy manages to rope in Government support for his ventures.
> 
> The critical part for FMG investors is ensuring that the FFI subsidiary only costs 10% of the FMG profits and if FFI does fall over there is no recourse to FMG. That also assumes that the iron ore industry continues to be profitable at least at levels from 2020.
> ...



As everyone knows, I'm a big fan of hydrogen, Twiggy's plan is big, bold a nd ballsie, whether he pulls it off is still questionable, as the article explains.
As I said he needs to be careful he doesn't bite the hand that will feed him, from a hydrogen perspective, even if he only gets one project off the ground it will set the wheels in motion for a hydrogen future IMO.
Still haven't bought in, starting to wonder if the bottom is in though.


----------



## sptrawler (15 October 2021)

waterbottle said:


> No offense at all.
> 
> It's actually refreshing to see someone in power take a stance.
> Australia is flooded with retired politicians who have sat on the fence throughout their time in office, only to lament their missed opportunity at having been more aggressive with the policies that wanted to pass.
> ...



Again I agree completely with you sentiments, with respect to Queensland and NSW they are both a bit wedged, NSW because it is committing to a renewable future in the near future, without much of a plan and with Queensland they need something to be able to pacify an agitated coal sector.
So Twiggy as is his way, has come charging in when the opportunity has presented, clever move.


----------



## basilio (16 October 2021)

Twiggy's "crash through" approach to near term, massive green hydrogen projects is creating plenty of analysis.  Interestingly enough most comment seems very supportive. "It's a great idea. It's well needed.  It will work. Glad to see someone getting on with it "









						What is green hydrogen, how does green ammonia fit in, and could they pave Australia's way to a renewable future?
					

One of Australia's richest men is betting on green hydrogen to make Australia a world leader in renewable energy while creating jobs in the process.




					www.abc.net.au


----------



## basilio (18 October 2021)

The New York Times article  on Twiggy offers some useful insight into the drive that he has generated in FMG to become a leader in making industry green and profitable. It's very clear that the solutions to the many issues they face will be resolved (or not..) by the research and engineering teams they have built. So they aren't simply importing problem solvers.

To that end they have already made  big strides.

_The most groundbreaking developments have come from a small room at the University of Western Australia, Dr. Forrest’s alma mater, where the company’s electrochemists have found a new route to what’s known as green iron and steel.
Nearly 90 percent of the carbon released by the steel-making process comes from reducing it to “pig iron” in a blast furnace or smelter powered by fossil fuels. Fortescue’s engineers have built a miniature mill that they said could do the same thing with electrodes and a pressurized brew of metals and other materials. Sitting on a counter, it resembled a water heater crossed with an espresso machine.

At least one other company, Boston Metal, which counts Bill Gates as an investor, has found a way to do something similar. But Fortescue’s scientists say they’ve figured out a process that works at lower temperatures (no hotter than a cup of coffee), allowing for easy on and off cycles with intermittent, renewable energy.

The group’s design, secret until now, recently received provisional patent protection.









						Can a Carbon-Emitting Iron Ore Tycoon Save the Planet?
					

Andrew Forrest made a mining fortune. Now he wants to lead a climate change revolution — and beat the fossil fuel giants along the way.




					www.nytimes.com
				



_


----------



## orr (19 October 2021)

The gobal  demand for HVDC cable on the immediate horizon is there for the taking... The 'Sun Cable' alone is years of current world production.
Gladstones got a future.
Ahh ..... the  'imaganitive' nimrods of the 'Nats' ...back on ya mower Bridget...


----------



## sptrawler (19 October 2021)

Oh well had a nibble today, now for the drop.


----------



## BlindSquirrel (19 October 2021)

I'm getting interested here as well:
Near previous ATH which should provide some support, 0.5 and 0.618 fibs line up around here depending on which base you start from.


----------



## basilio (19 October 2021)

sptrawler said:


> Oh well had a nibble today, now for the drop.




Always feel like that doesn't it ?  I (confidently ... ) re entered at $18 .Clearly should have held my powder dry.


----------



## sptrawler (19 October 2021)

BlindSquirrel said:


> I'm getting interested here as well:
> Near previous ATH which should provide some support, 0.5 and 0.618 fibs line up around here depending on which base you start from.
> View attachment 131671



Yes it seems to have settled and if there is a drop, I wouldn't expect it to be too far and then could average.


----------



## basilio (20 October 2021)

Motley Fool is almost daily sprouting it's latest  views on FMG.  Todays' oracle quotes the latest  analysis of Bell Potter on FMG.  It will be interesting to see the results  of the  last quarter production and sales. We know July was excellent. August featured sharp falls. September was around  $120 a tonne.  

Also be interested in volumes being shipped.

_According to a recent note out of Bell Potter, its analysts have a buy rating and $20.87 price target on the mining giant’s shares.

Based on the current Fortescue share price of $14.56, this implies potential upside of 43% for investors before dividends.

In addition, its analysts are forecasting a $3.33 per share fully franked dividend in FY 2022. This represents a massive 23% yield at current prices, which brings the total potential return to 66%._

_What did the broker say?_​_The note reveals that Bell Potter has been running a range of iron ore price scenarios and concludes that the sharp pullback by the Fortescue share price looks overdone.

It commented: “Undoubtedly a brutal move that has done serious technical damage to FMG’s share price and sentiment, i*t should be taken in the context of a business that is making industry leading margins, has an excellent operational track record, costs among the lowest in the industry, is funded for its ongoing capital requirements for replacement and growth and has an exceptionally strong balance sheet.”*_

_“FMG is in a completely different position than in 2015, the last occasion on which we had a major iron ore price correction. While the share price currently looks like a falling knife, we are of the view that it remains a robust and attractive long-term investment and the current market valuation is an opportunity to build exposure,” it added.









						Why the Fortescue (ASX:FMG) share price could be dirt cheap
					

The Fortescue Metals Group Limited (ASX:FMG) share price has fallen heavily in recent months. This brokers thinks it could be dirt cheap...




					www.fool.com.au
				



_


----------



## sptrawler (31 October 2021)

A small step for FFI, but a step in the right direction, you can't criticise Twiggy for lack of enthusiasm.









						Fortescue to supply green hydrogen to UK after deal with JCB
					

Fortescue Future Industries will become the biggest supplier of green hydrogen to the UK after signing a deal with construction equipment company JC Bamford Excavators and distributor Ryze Hydrogen.




					www.smh.com.au


----------



## Sean K (8 November 2021)

Interesting piece in The Oz. Are all FMG shareholders behind the use of FMG's balance sheet to front FFI? Any rumblings?

Andrew Forrest’s green energy promises hit $200bn​
Fortescue Metals Group would need to find about $195bn to make good on all of the promises made so far by chairman Andrew Forrest on his global green energy spree.

Figures compiled by The Australian show the iron ore major’s green energy subsidiary, Fortescue Future Industries, has inked agreements for hydrogen and renewable energy projects in more than 20 countries over the last 18 months.

While cost estimates are available for only about half of those projects, the total likely cost still comes to a hair-raising $US145.5bn ($195bn).

And that figure is likely to be only a small fraction of the cash needed to make good on Fortescue’s objective of producing 15 million tonnes of hydrogen a year by 2030, with the $US8.4bn cost of a recently announced Argentinian project, producing 250,000 tonnes of hydrogen a year, suggesting the final total could balloon past $US500bn.

The amount of capital needed to make good on the projects where estimates exist underlines growing concerns among Fortescue’s major investors and financial analysts about the speed and scale of FFI’s global commitments as well as the projected return on investment.

Fortescue has been keen to note that no final investment decisions have been made on any of the projects in its stable, and chief executive Elizabeth Gaines told The Australian the company had “clearly articulated its capital allocation framework and has guided to FFI expenditure in the range of $US400m to $US600m for FY22”.


----------



## sptrawler (8 November 2021)

FMG has to diversify, all the money around the world is currently chasing green projects to invest in, I guess Twiggy is trying to catch the wave.
One would hope FFI will be selective about which ones, if any they put shareholders money in, it isn't like the Government where the taxpayer just gets hit up for more money when it goes pear shaped.
Maybe Twiggy is trying to become the Elon Musk of H2?


----------



## basilio (8 November 2021)

To date the financial committment of FMG is 10% of it's profits as seed and operating capital for FFI.  That to date is $1B plus. The  direct return to FMG will be in creating operating efficiencies for the iron ore business in shipping, mining and transport costs. Wiping out all their fuel costs would be worth a bit.

The other big value FMG offers is demonstrated engineering expertise. Those skills mean the difference between success and failure in most projects.

The projects being planned will always be joint ventures with Governments, other partners and financiers. Twiggy is determined that his vision will be supported by Governments, financed by  sympathetic supporters and created by him and FMG engineers.

And FMG would take the lions share of the profit.

I agree with SP. If I had to see a parallel I would look at Elon Musk and the development of Tesla. For Elon to jump into the world wide car market with a vision of electric cars as something more than a side niche was "courageous".  Ten years later Teslas has created a whole new technology around building cars and using batteries and electric motors as the drive. Elon is also driven by both money and concern about CC caused by CO2 emissions.


----------



## Gunnerguy (8 November 2021)

I’m looking at selling some Feb22 14/19 bull put credit spreads. RR looks good. I hold some shares in my Investment portfolio and am bullish on them.100 DTE some plenty of time to pull out if the World goes to hell in the mean time.
I won’t get the same dividends as this year but I think it’s a worthwhile play.
Any critics would be welcome.
Gunnerguy


----------



## Value Collector (9 November 2021)

basilio said:


> To date the financial committment of FMG is 10% of it's profits as seed and operating capital for FFI.  That to date is $1B plus. The  direct return to FMG will be in creating operating efficiencies for the iron ore business in shipping, mining and transport costs. Wiping out all their fuel costs would be worth a bit.
> 
> The other big value FMG offers is demonstrated engineering expertise. Those skills mean the difference between success and failure in most projects.
> 
> ...



FMG put out an announcement today outlining their funding framework for FFI.


----------



## sptrawler (9 November 2021)

Thanks for the heads up VC, here it is.


			https://www.fmgl.com.au/docs/default-source/announcements/fortescue-announces-sustainability-financing-framework.pdf?sfvrsn=27b21a22_4


----------



## Sharkman (10 November 2021)

Gunnerguy said:


> I’m looking at selling some Feb22 14/19 bull put credit spreads. RR looks good. I hold some shares in my Investment portfolio and am bullish on them.100 DTE some plenty of time to pull out if the World goes to hell in the mean time.
> I won’t get the same dividends as this year but I think it’s a worthwhile play.
> Any critics would be welcome.
> Gunnerguy




you may have a hard time getting a good fill on the 19 puts. they are way ITM, when i checked the market today the MMs were not even posting spreads for the 17.50s, let alone the 19s.

i don't think doing it this way is particularly good tax optimisation - you are taking in a lot of up front premium (about 4.60 for the 19 puts minus about 0.90 for the bought 14 puts so about 3.70 net) and you're going to get taxed on that this FY, but you do get to lower your CGT liability by putting the stock position onto your books at 19 if it gets assigned.

if you plan on taking delivery and holding for the medium term, the synthetically equivalent call debit spread (buy the 14 calls, sell the 19 calls) seems better for tax purposes. you take an up front debit of about 1.30 (pay 1.40 for the 14 calls, receive 0.10 for the 19 calls) which can be used to offset premium received from other trades like covered calls. if you take delivery it does put the stock onto your books at 14 instead of 19, but you don't pay tax on that until selling those units and if you hold for 12 months that tax is going to be halved anyway.

maybe the former works better for you if you expect your taxable income to be low this FY and higher in subsequent FYs, in which case you might want to take the gain up front instead of putting a bigger CGT liability onto your books. but i generally try to defer the tax hit as long as possible, and the call debit spread is more suited to that.

delta skew does not favour this spread, at a 19 strike you'd be selling cheap gamma to the MMs, for feb expiry IV at 14 is around 40, at 19 it's only 33 or so. at < 10 delta on the 19 calls, i don't think those are worth selling, they are far too cheap (both in $ and IV terms) and you're giving up potential gains if there's a huge blowup to the topside.

if i was looking to make a long gamma bullish bet, i'd probably consider either buying near the money calls straight up, shortening the distance between the strikes so the upper strike is maybe 25-30 delta (which should fetch a better IV and offset a more meaningful chunk of the bought leg) or try to obtain some calls "on the house" by maybe using a super calendar (where you keep rolling the front leg, probably by using the weeklies to grab as much theta as you can, until the combined front leg premiums have completely paid for the back leg, this does need the stock to not move too much in the near term though).

that's just me though, plenty of different ways to go about it, there's no singular correct approach.


----------



## over9k (10 November 2021)

FMG now almost halved. I wonder if value collector is still holding?


----------



## tech/a (11 November 2021)

POP

There's your sign!!!

Even grabbed a few myself


----------



## waterbottle (11 November 2021)

Fmg transforming into more than just an iron ore miner. 
Exciting.


----------



## Garpal Gumnut (11 November 2021)

It is all happening.

gg


----------



## over9k (11 November 2021)

Good news out of china - government to the rescue. Even evergrande has bounced.


----------



## UMike (11 November 2021)

"Fortescue rose as 11% to a 6-week high of $15.79 on short covering," The Australian.

Rubbish. There must be more to it.


----------



## waterbottle (11 November 2021)

over9k said:


> Good news out of china - government to the rescue. Even evergrande has bounced.




Xi played chicken with the market Nd the market won? Looks like evergrande got bailed out.... 
Is this the standard now?


----------



## finicky (11 November 2021)

Looking much better for holders now. I was assuming $14 would break. When I look at the daily chart though, it's been basing for almost 2 months.

Daily


----------



## peter2 (11 November 2021)

Wow, one little high volume bullish bar and the forum goes crazy for *FMG*. Has the price of iron ore gone up significantly? 
@finicky are you declaring another bouncy, bouncy setup? You haven't got Mr. R.N. Elliott behind you this time.


----------



## Value Collector (11 November 2021)

peter2 said:


> Wow, one little high volume bullish bar and the forum goes crazy for *FMG*. Has the price of iron ore gone up significantly?
> @finicky are you declaring another bouncy, bouncy setup? You haven't got Mr. R.N. Elliott behind you this time.



The Iron Ore price doesn’t actually need to go up to justify a significantly higher share price.

Last time Iron Ore Averaged $90 for the year was 2020 financial year, and FMG paid $1.76 in dividends that year, now if that $1.76 was translated into a dividend yield of 5% (which is highish these days on the ASX), that would mean a share price of $35.

But I think what has caused a pop today is several things.

1, Iron Ore is up today
2, Global coverage of FMG’s hydrogen plans might be attracting a new group of investors.
3, value investors sitting on the sidelines probably also jumped in because of FOMO, (I bought another 15,000 FMGSO2 today).


----------



## finicky (11 November 2021)

🎶 Bouncy bouncy calls are at the apex of my system and only appear on rare (even grand) occasions. As such I cannot promise that such a call will occur again within our lifetimes (sadly)


----------



## qldfrog (11 November 2021)

but seriously, is that greenwashing infection? world as it was 2 days ago, Cold war 2 going on, Iron ore as plentiful in 2021 than it was 50y ago or will be in 50y, China reducing its building program..
No real reason to pop the champagne yet IMHO


----------



## Garpal Gumnut (12 November 2021)

Good ole Dr. Twiggy.

Over $16 now and with a few gaps to be filled it is possible it may hit $20 before the end of the month/next week/day/hour. 

It would appear FMG is a Green Company now with earnings from a turnaround in Fe futures coming in as well.

Everyone from Manhattan to Muttaburra will be poking a few kopeks in.

gg


----------



## againsthegrain (12 November 2021)

Garpal Gumnut said:


> Good ole Dr. Twiggy.
> 
> Over $16 now and with a few gaps to be filled it is possible it may hit $20 before the end of the month/next week/day/hour.
> 
> ...



slow and steady wins the race


----------



## over9k (12 November 2021)

Garpal Gumnut said:


> Good ole Dr. Twiggy.
> 
> Over $16 now and with a few gaps to be filled it is possible it may hit $20 before the end of the month/next week/day/hour.
> 
> ...



Again, china driven today too. Take a look at chinese markets and real estate developers.


----------



## Sean K (12 November 2021)

Any problems with FMG keeping their promises to fund FFI plans into the future?

They seem to be making a lot of future investments on the 10% of FMG projected earnings.

I remember saying at one point in this thread, or the IO thread, that the last time IO was at $60 (RBA long term price) that FMG was at $4. Lot's happened since then, and they're cashing in, but, I'm a bit vexed.


----------



## Value Collector (12 November 2021)

Sean K said:


> Any problems with FMG keeping their promises to fund FFI plans into the future?
> 
> They seem to be making a lot of future investments on the 10% of FMG projected earnings.
> 
> I remember saying at one point in this thread, or the IO thread, that the last time IO was at $60 (RBA long term price) that FMG was at $4. Lot's happened since then, and they're cashing in, but, I'm a bit vexed.



They plan is that each of the large FFI projects will be mainly funded through the sale of “green bonds” and other debt instruments, with FFI funding the equity component via their 10% profit allocation.

Most large infrastructure investments are funded this way, with several layers of financing.

Eg, An $1 Billion project might be funded by, $800 Million (80%) in green bonds or other debt, and $200 Million from FFI.

Let’s say the project once it’s operating returns a 10% return on invested capital, it would be producing $100 Million a year in gross profit.

If the bonds have an interest rate of 4%, then we have to send $32 Million to the green bond holders as interest, and FFI keeps $68 Million profit.

because FFI only invested $200 Million, the $68 Million profit represents a return on investment of 34%.

of course if the project fails FFI lose their $200 Million equity investment and the bond holders may lose some of theirs, but the financing won’t be secured by FMG, it will be non recourse debt, secured by the project itself.


----------



## Value Collector (12 November 2021)

When FMG and in particular Andrew were developing their first mine, port and rail infrastructure in the Pilbara they proved them selves to be very good and finding financing for their projects.

Not only did they convince bond holders to provide most of the finance, but also Chinese steel mills provided funding in the form of pre purchased Ore, meaning they paid up front for Ore that hadn’t even been proved up yet.

these pre payments helped fund the development, Telsa did a similar thing when they collected 400,000 $1000 deposits on the model 3, which that $400 Million was used to help fund building the model 3 factory.

there are lots of options in business if you are skilled at putting deals together, which Andrew is.


----------



## basilio (13 November 2021)

Value Collector said:


> They plan is that each of the large FFI projects will be mainly funded through the sale of “green bonds” and other debt instruments, with FFI funding the equity component via their 10% profit allocation.
> 
> Most large infrastructure investments are funded this way, with several layers of financing.
> 
> ...




Great simple explanation of how the FFI projects will be funded and the risks/rewards for FMG shareholders. 

IMV a big part of Twiggy's  public promotion of the various Hydrogen projects is aimed at the Super funds and Green investment groups that are looking for well managed, effective projects that can tackle CC in the heavy industry sector.  The issue of how they will manage  these investments is also addressed by FMG.
Sustainable Finance Framework​








						Sustainable Finance Framework - Fortescue Metals Group (ASX:FMG)
					

Read the latest Periodic Report General news from Fortescue Metals Group (ASX:FMG)



					www.listcorp.com


----------



## basilio (22 November 2021)

A slew of announcements  and joint ventures by FMG in the past week. They have planning approval for their electrolyser factory in Gladstone.  This will begin construction in Feb 2022 and be producing electrolysers in2023





__





						Fortescue Future Industries (FFI) First Global Green Energy (GEM) Manufacturing Centre gets green light on planning approval | Fortescue Metals Group Ltd
					






					www.fmgl.com.au


----------



## basilio (22 November 2021)

Also a joint venture with Universal Hydrogen in the US to produce hydrogen for aeroplanes  and decarbonise aviation .

Under the Memorandum of Understanding (MOU) signed today, FFI and Universal Hydrogen have agreed to: 

Negotiate a global offtake arrangement whereby FFI will supply green hydrogen to Universal Hydrogen to power regional and other aviation sectors until 2035;
Conduct a scoping study to develop green hydrogen production and logistics hubs in Iceland, New Zealand and Southeast Queensland; and
Evaluate future green hydrogen demand in the aviation industry on a region-by-region basis to identify and promote green hydrogen adoption and uptake.





__





						FFI and Universal Hydrogen join forces to decarbonise aviation | Fortescue Metals Group Ltd
					






					www.fmgl.com.au


----------



## basilio (22 November 2021)

Finally another announcement attempting to drive and lead the shipping industry to reach net zero by 2040.

Fortescue Future Industries calls for net zero target for shipping by 2040 and announced a green ship at sea in 2022​
Fortescue Future Industries’ (FFI) Chairman Dr Andrew Forrest AO today called for a net zero 2040 target to be embraced by the entire shipping industry during an address for ‘Transport Day’ at COP26, while providing the technical leadership in large shipping to support the target.
*
FFI’s Green Fleet Team is moving quickly to convert the 75 metre vessel, the “MMA Leveque”, in collaboration with MMA Offshore Limited, over the next 12 months so it can run almost totally on green ammonia. *

This brings the shipping industry much closer to becoming carbon neutral well before 2040 with only entrenched industry practices slowing global progress of carbon neutral shipping.

The MMA Leveque will run on green fuel and is part of Fortescue Metal Group’s broader fleet of trucks, locomotives and ships all undergoing technical transition to operate on green fuels. 
*
Speaking from ‘Transport Day’ at COP26, Dr Forrest said, “This vessel will show the shipping industry the power of a vessel fueled by green ammonia in real world conditions.

“We are investing heavily in research and development to transform our trains, trucks and ships on the road, rail and sea with zero pollution fuels as soon as possible.

“It is world leading technology and will assist in providing the shipping industry with the practical knowhow to decarbonise completely. * 

Earlier this year, FFI’s Green Fleet Team achieved the successful combustion of blended ammonia fuel in a locomotive, paving the way to achieve a renewable locomotive operation using one hundred per cent green ammonia.






						Fortescue Future Industries calls for net zero target for shipping by 2040 and announced a green ship at sea in 2022 | Fortescue Metals Group Ltd
					






					www.fmgl.com.au


----------



## basilio (22 November 2021)

One of the interesting questions to consider with FMG's push into fast tracking green hydrogen and renewable energy will be allocation of capital spending.

For example the efforts to improve the cost structure of FMG's mining operation by eliminating fossil fuel cost in mining and transportation  represents development programs for FFI but also capital investment projects for  the mining operations. My guess is these costs will be subsumed in FMG's capital investment programs and end up representing a valuable component of FFI's green energy portfolio.

A very elegant solution IMV


----------



## DrBourse (23 November 2021)

Some Personal TA Observations that maybe of interest to FMG Punters - Note: I do NOT hold FMG atm.


----------



## tech/a (23 November 2021)

At last some sustained movement.
Very nice. I may join you longer term for a while @Value Collector


----------



## Sharkman (23 November 2021)

DrBourse said:


> Some Personal TA Observations that maybe of interest to FMG Punters - Note: I do NOT hold FMG atm.




agree with your commentary, i saw resistance at $19 as well (looking back to aug '20 + mar '21 + the gap you highlighted seems like resistance turned support turned resistance), it's why i picked that strike to try threading the needle and finesse out some longer dated calls on the house back in late sept. i figured the Jan '22 contracts could give it sufficient time to blow thru that resistance level, or if it gets rejected there and stalls around that area with 2-4 weeks to expiry, it could be transformed into a call calendar (sell 2x Jan '22 $19 calls, buy 1x Mar '22 $19 calls) possibly taking in small credit and giving it a bit more time to break thru.

also agree with the basing, been selling $14 puts for the last few weeks (initially the weeklies, switched to the Dec monthlies after the big bullish candle on Nov 11 which left the weeklies too far OTM to collect any sort of meaningful premium). buying the stock straight up at $14 would've done better, but obviously that's with the benefit of hindsight. i opted for a repeated put selling strategy as i thought it would remain stuck in that $14-$15 range a while longer, i had the long $19 call position to cover the scenario where it did break out, and the market was offering solid IVs of around 50 - not bad considering those $14 puts were around 40-50 delta at the time - which i thought were conducive to selling gamma.


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## DrBourse (24 November 2021)

Some punters have expressed an interest in how I trade – Some others rubbished my earlier posts here in the “FMG Forum” and in my 3 “DrBourse Help for Beginners Forums”..


*SO*


For those interested parties, Here it is – And for those who are not interested, who gives a S#?t.


FMG’s ADR “FSUGY” was up 7.45% Overnight on the US Markets – So, after buying into FMG B4 Close 23/11 (see my previous post), it looks +ive for today, PROVIDED todays open is a Green Candle of $17.35 or better – The Gap Up Yesterday provides Minor & Major Support Lines - ST Ind’s, CCI MFI & LR are all looking good – Will have Sell Screens loaded and ready to go if the unexpected happens.


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## DrBourse (24 November 2021)

It's now 1 hour Since Open, I have been watching my normal Chart Template (above) and "Market Depth", and a "1 Day 3 Minute Candlestick Chart" in an attempt to gauge todays trend for FMG - Cannot see any reason to exit this trade yet.

This is the ceuuent Mkt Depth Stack.





Remember that FMG's Balance Sheet has been rated as Very Good and their IV has been approx $25.00 for the past 2 years.


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## joeno (24 November 2021)

some nice happy movements up  holding for the long run. Like what FMG's been doing lately with green energy. Iron is a fundamental resource in modern society. There's no cars, computers, tall buildings without iron.


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## DrBourse (24 November 2021)

FMG SP is now $17.60, so 3001 shares purchased @ $17.35 gives me a Very ST profit of $690.35 or 1.33% - some Day Traders will exit when they have a $500.00+ Profit Magin, I will hold.




So there may be a ST pullback over the next hour or so.


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## DrBourse (24 November 2021)

Note the CCI  "Significantly Higher High" on the 11/11/21 (page 108) - that may come into play over the next few weeks - I certainly hope so.


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## DrBourse (24 November 2021)

Now that the "$500 Traders" have dropped out of the contest (the SP dropped 0.02c over the past few minutes), the FMG Rise should continue.


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## DrBourse (24 November 2021)

Gawd ! this is time consuming, have not done a "Running Commentary on a Trade", in a very looong time.

The main thing I am looking for now is "When to Exit" - most punters will have their own ideas on the Kenny Rogers line of "Know when to
 Hold Em and know when to Fold Em".
So perhaps anyone following this saga should do just that.
The SP now is $17.585.


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## sptrawler (24 November 2021)

DrBourse said:


> Now that the "$500 Traders" have dropped out of the contest (the SP dropped 0.02c over the past few minutes), the FMG Rise should continue.



This day trading sounds like hard work and bloody time consuming, how would I ever get my jobs done. 😂
I sold AWC on 18/10 at $2.29, bought FMG on 21/10 at $14.57, bought PDN 9/11 at 0.83c, topped up VML 12/11at .055c and I found that hard work.
The dates are settlement dates by the way, not the purchase date, that is a few days before.
Do day traders take toilet breaks?


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## DrBourse (24 November 2021)

*NEVER !

You need to master the art of "Crossing Everything"*, legs first, then cross your fingers and hope for the best, then when you realise that PAIN has given you "Crossed Eyes" you know then that you are in the wrong profession.


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## DrBourse (24 November 2021)

I did not really want to complicate this Day Trading Profession, because I know it interfeeres with sptrawlers Bodily Functions, so I did not mention that, as I suggested, I sold @ 17.585, took my profits, waited a while then bought back in @ $17.25213.


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## Ann (24 November 2021)

sptrawler said:


> This day trading sounds like hard work and bloody time consuming, how would I ever get my jobs done.




So true sp, I like my profits to come at a leisurely pace, too old for all the inning and outing. Leave it for the youngsters, but it seems very exciting for those with the energy!

@DrBourse I am guessing you use an intraday chart to day trade, what is your time setting. I like 10 mins. Also, do you use any indicators during the day and what are their setting, could you give us a screenshot, it would be very interesting?


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## DrBourse (24 November 2021)

Hi Ann,

As I've mentioned in a few recent posts (probably in the DrB Beginners Forum), Indicators work on any chart using any terms you wish to use.
As you can see from the below snapshot, sometimes I use a 1 day 5min chart with my normal CCI 10, MFI 30 & LR settings.
All the same principles apply.





Whereas my normal Daily Chart Template is set with the sam Inds but on a YTD Chart as shown in some of my previous posts.


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## Ann (24 November 2021)

DrBourse said:


> As I've mentioned in a few recent posts (probably in the DrB Beginners Forum), Indicators work on any chart using any terms you wish to use.



Thanks DrBourse, sorry, I just noticed your posts today. I now see my chart package will not display indicators intraday, probably because I am too cheap to spend the money on anything other than a 12-midnight delay package! 

While I am here I will shove up a delayed chart over a two-year time frame. I am wondering if I am seeing a flat head and shoulders pattern forming. Plus there is a falling Twiggs money flow. If I was looking to enter this, I might be tempted to wait a bit. However, I am only speaking as a lazy longer-term holder when I say this.


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## DrBourse (24 November 2021)

Ann said:


> Thanks DrBourse, sorry, I just noticed your posts today. I now see my chart package will not display indicators intraday, probably because I am too cheap to spend the money on anything other than a 12-midnight delay package!
> 
> While I am here I will shove up a delayed chart over a two-year time frame. I am wondering if I am seeing a flat head and shoulders pattern forming. Plus there is a falling Twiggs money flow. If I was looking to enter this, I might be tempted to wait a bit. However, I am only speaking as a lazy longer-term holder when I say this.
> 
> View attachment 133347



Hello Ann,

A lot of chatters in ASF use https://www.tradingview.com/ .
I use it because it is easy to work with, and its FREE, and it has the TA Tools that I need.
Trading View also has different levels of access for a FEE, I notice that some in here use the Paid versions.
Incredible Charts is pretty basic IMO.

If you do want to look at Trading View just make sure you opt for the FREE Version.
And Try using Candlesticks, they give you so much more information about a days trade.

Cheers


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## Ann (24 November 2021)

DrBourse said:


> A lot of chatters in ASF use https://www.tradingview.com/ .
> I use it because it is easy to work with, and its FREE, and it has the TA Tools that I need.
> Trading View also has different levels of access for a FEE, I notice that some in here use the Paid versions.
> Incredible Charts is pretty basic IMO.
> ...



Bless you, DrBourse, I haven't seen Trading View before. I have often thought a second charting system would be handy to have in the back pocket.

Granted, IC charts look a bit clunky but they are a dream to use, they have my favourite mug punter indicator, the Positive Volume Index, as well as Twiggs Money Flow and added to that I have been using them for twenty years and have a lifetime of trading notes and information on them. When I view a chart with a long term timeframe I set it to EOD because I can draw the most precise trendlines on them. On shorter time frames I do have them set on candlesticks unless I want to draw a trendline of course.


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## Joules MM1 (24 November 2021)

Ann said:


> Bless you, DrBourse, I haven't seen Trading View before. I have often thought a second charting system would be handy to have in the back pocket.
> 
> Granted, IC charts look a bit clunky but they are a dream to use, they have my favourite mug punter indicator, the Positive Volume Index, as well as Twiggs Money Flow and added to that I have been using them for twenty years and have a lifetime of trading notes and information on them. When I view a chart with a long term timeframe I set it to EOD because I can draw the most precise trendlines on them. On shorter time frames I do have them set on candlesticks unless I want to draw a trendline of course.




beware the free charting for Aus stocks does not print the SPA on tradingview, it annotates the closing, the free feed stops at 4pm, so if you take the highs and lows into account from a technical levels perspective double check the time the highs n lows print, the asx data feed (fee) is on top of the subscription (which theyre having a large sale on at the mo)


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## Ann (24 November 2021)

Joules MM1 said:


> beware the free charting for Aus stocks does not print the SPA on tradingview, it annotates the closing, the free feed stops at 4pm, so if you take the highs and lows into account from a technical levels perspective double check the time the highs n lows print, the asx data feed (fee) is on top of the subscription (which theyre having a large sale on at the mo)



Thanks, Joules! I have just had a bit of a play with Trading View. Very handy for emergency use but IC charts are head and shoulders better even if they look somewhat old school, the programme is awesome to use. The freeware is fine as well just does not have the Twiggs indicators in the free version. You can't get my el-cheapo 12 midnight delay subscription anymore, it was phased out some years ago but they let me continue with it, the kind souls!


Let's get this thread back on track. I am wondering why FMG might fall, if it does, may not of course. I am betting it is more likely to be related to the hydrogen story than anything else. Thoughts anyone?


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## DrBourse (24 November 2021)

Hi Joules.
Thnx for that info


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## Garpal Gumnut (24 November 2021)

Ann said:


> Thanks, Joules! I have just had a bit of a play with Trading View. Very handy for emergency use but IC charts are head and shoulders better even if they look somewhat old school, the programme is awesome to use. The freeware is fine as well just does not have the Twiggs indicators in the free version. You can't get my el-cheapo 12 midnight delay subscription anymore, it was phased out some years ago but they let me continue with it, the kind souls!
> 
> 
> Let's get this thread back on track. I am wondering why FMG might fall, if it does, may not of course. I am betting it is more likely to be related to the hydrogen story than anything else. Thoughts anyone?



I can see FMG retracing but not below recent lows. However this seems to me less likely than a continuing rise or a move sideways. 

Iron ore, investors are realising, is not going away in the rush to carbon neutrality. Its use in buildings and infrastructure is vital to the political necks of the leaders of all countries, monsters and otherwise. I believe IO futures are on the rise this week. 

Twiggy is a smart cookie and my SMSF last week decided to join the ride with him by buying FMG. 

Hydrogen and COP were good advertising for the ole Twiggs. Mining FMG's ore using less diesel and more earth friendly methods will be copied.

I may be wrong. I do not believe I am at this juncture. 

gg


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## sptrawler (24 November 2021)

Ann said:


> Let's get this thread back on track. I am wondering why FMG might fall, if it does, may not of course. I am betting it is more likely to be related to the hydrogen story than anything else. Thoughts anyone?



I'm a big believer in hydrogen, but I'm also a realist, it is a huge cost, it is a huge timeframe and you know it don't come easy.

So I'm with you, there will be some huge stuff ups along the way, as so many things can affect the installation. Woodside building a blue H2 plant is a safe play, that can be converted to green H2 as it becomes practical.

Twiggy jumping in the deep end is the way he rolls, but it isn't without risk, McGowan is trying to smooth the access to the land required, but Bob Brown and the boys are yet to get involved.
Once they do it is then the real battle starts, native title, baby wrens, waggles and rainbow serpents, sitting on top of sacred caves and rivers which flow underground carrying the earths life blood.

So @Ann I agree with you, MOU are great, actually getting something built, up and running and then proving it profitable is a long way down Twiggies yellow brick road.


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## DrBourse (24 November 2021)

DrBourse said:


> I did not really want to complicate this Day Trading Profession, because I know it interfeeres with sptrawlers Bodily Functions, so I did not mention that, as I suggested, I sold @ 17.585, took my profits, waited a while then bought back in @ $17.25213.



Have attached a snapshot of the chart I was looking at for my Exit ($17.585 & Re-entry @ $17.25213).
Not sure if anyone is really interested - but it's there for all to see.




Now we wait to see WTF is gunna happen tomorra.
I have pocketed $645.33 today, wunda wat tomorra will give me ??

From previously posted FMG Charts I can see that $19.17 is the next Gap Down Minor Res Line that FMG has to negotiate.
The next one above that is @ $20.57, and that is a MAJOR Gap Down Resistance Line.
Tonights ADR will provide the guidance I need, be it GOOD or BAD.

Cheers.
DrB


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## DrBourse (24 November 2021)

Is anyone REALLY interested in me continuing with this FMG saga - I've made some moolah, so I'm happy to stop posting progress reports now, particularly if there in no interest in my ramblings??

However,I will continue with this trade, I'm just not sure I should continue with the Blow by Blow updates.

Just keep "The Duck" away from me, the only vibes *it* had were -ive, and I'm not interested in -ive.

Cheers.
DrB.


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## Gunnerguy (24 November 2021)

DrBourse said:


> Is anyone REALLY interested in me continuing with this FMG saga - I've made some moolah, so I'm happy to stop posting progress reports now, particularly if there in no interest in my ramblings??
> 
> However,I will continue with this trade, I'm just not sure I should continue with the Blow by Blow updates.
> 
> ...



Please keep going Dr.
I have held FMG for about 3 years and is my largest holding.
I also started trading FMG options in July. I personally find you ‘daily ramblings’ both interesting to me and useful to help me judge my trades and atune my FMG strategy.
Keep going !!
Gunnerguy.


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## Value Collector (24 November 2021)

sptrawler said:


> I'm a big believer in hydrogen, but I'm also a realist, it is a huge cost, it is a huge timeframe and you know it don't come easy.
> 
> So I'm with you, there will be some huge stuff ups along the way, as so many things can affect the installation. Woodside building a blue H2 plant is a safe play, that can be converted to green H2 as it becomes practical.
> 
> ...



FMG’s exisiting Iron Ore business is easily worth more than $28 a share, so you are essentially getting what ever hydrogen business grows out of it for free if you buy in under $28.


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## basilio (24 November 2021)

Value Collector said:


> FMG’s exisiting Iron Ore business is easily worth more than $28 a share, so you are essentially getting what ever hydrogen business grows out of it for free if you buy in under $28.




I think VC has made the key point about FMG.  The iron ore business is not going away. They are improving ore quality and reducing COP at a rapid rate of knots so net profits will improve in that business. The financing of FFI is 10% of FMG  net profits and any dramas with FFI will stay with FFI so there seems little downside with  FMG iron ore beyond concerns about competition.

There are  clearly a multitude of engineering and energy projects associated with FFI. It will take some serious management skill to ensure they have sufficient engineering and financial capacity to keep the balls in the air.  However the decision to make the  Gladstone hydrogen electrolyser project the first funded project  is very strategic.  Obviously the product from this plant will form the capital basis for  many other hydrogen projects.  There will be some interesting pricing schedules I think  when various FMG projects start buying plant  from other FMG entities.

As far as I can see  no one is putting  a value on the hydrogen projects. However in couple of years this could/should radically change as the electroyser project is completed and comes on line and other hydrogen/renewable energy  projects also go into construction mode. In that context FMG would be substantially revalued to reflect projected incomes.


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## sptrawler (24 November 2021)

Value Collector said:


> FMG’s exisiting Iron Ore business is easily worth more than $28 a share, so you are essentially getting what ever hydrogen business grows out of it for free if you buy in under $28.



And is exactly the reason I bought in to FMG at $14.57, I have never held FMG before, but I like the change of direction.


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## over9k (24 November 2021)

sptrawler said:


> And is exactly the reason I bought in to FMG at $14.57, I have never held FMG before, but I like the change of direction.



I was just about to ask if anyone bought in at the 14.xx point when all our trigger fingers were getting itchy.


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## basilio (24 November 2021)

over9k said:


> I was just about to ask if anyone bought in at the 14.xx point when all our trigger fingers were getting itchy.



It was too good to miss. I did top up again.( Just wished I had held my fire at $18.. but 14.01 was good)


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## dat111 (25 November 2021)

over9k said:


> I was just about to ask if anyone bought in at the 14.xx point when all our trigger fingers were getting itchy.



I bought another 1250 shares


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## Gunnerguy (25 November 2021)

basilio said:


> I think VC has made the key point about FMG.  The iron ore business is not going away. They are improving ore quality and reducing COP at a rapid rate of knots so net profits will improve in that business. The financing of FFI is 10% of FMG  net profits and any dramas with FFI will stay with FFI so there seems little downside with  FMG iron ore beyond concerns about competition.
> 
> There are  clearly a multitude of engineering and energy projects associated with FFI. It will take some serious management skill to ensure they have sufficient engineering and financial capacity to keep the balls in the air.  However the decision to make the  Gladstone hydrogen electrolyser project the first funded project  is very strategic.  Obviously the product from this plant will form the capital basis for  many other hydrogen projects.  There will be some interesting pricing schedules I think  when various FMG projects start buying plant  from other FMG entities.
> 
> As far as I can see  no one is putting  a value on the hydrogen projects. However in couple of years this could/should radically change as the electroyser project is completed and comes on line and other hydrogen/renewable energy  projects also go into construction mode. In that context FMG would be substantially revalued to reflect projected incomes.


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## Gunnerguy (25 November 2021)

I STO some 16 Dec 13.5P 14 days ago as a covered call and looking good to keep the premium.
I also BTO April22 15.13C about 10 days ago (too much wine to remember) so looking good.
I have a long term holding and playing on some options to get more income.
Gunnerguy


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## Smurf1976 (25 November 2021)

over9k said:


> I was just about to ask if anyone bought in at the 14.xx point when all our trigger fingers were getting itchy.



I bought some but I paid $15.xx not $14.xx 

Those who bought at $14 were a bit sharper there....


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## over9k (25 November 2021)

Yeah, I'm now getting FOMO which has historically been a pretty good sell signal for me


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## spratty84 (25 November 2021)

over9k said:


> I was just about to ask if anyone bought in at the 14.xx point when all our trigger fingers were getting


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## spratty84 (25 November 2021)

I bought 800 at 14.52


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## againsthegrain (25 November 2021)

Looking at my account averaged down 3 times at 14s

Avg:14.0950    290
Avg:14.8800    368
Avg:14.0500    355


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## joeno (25 November 2021)

I had limit buy order at $12 which never hit  but no regrets. Still got most of my shares from 2015. Buy-n-hold. 

Mining is Australia's most important industry and our "competitive advantage" in the world. Not banks or tech.

FMG should be a top 3 ASX company (with BHP and Rio) by the mid 2020s. With a small chance of being the Top 1 ASX company.


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## DrBourse (25 November 2021)

As expected FMG is continuing its ST Upward Trend, SP is currently just above $18.00.
MFI (p 95) is continuine upward, CCI (p 108 & 109) should begin to rise again later this afternoon on tomorrow at the latest.





Remember, that could change at any time, I will be watching my Daily & Tick Charts looking for any obvious signs of a pullback.




I could take some more profits about now, but I doubt that the "$500 Traders" will hit FMG again today, so it's a hold for me atm.
Market Depth is in Holders favour.




So, I will prob bail @ $18.85.
Cheers.
DrB


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## DrBourse (25 November 2021)

From the Chart below you can see that Profit Takers are hitting just after each new High.
Next High I will join them, taking just over $2500 profit, the rejoin the feast on the following LOW.


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## DrBourse (25 November 2021)

I'd forgotten how difficult it is to trade & to document each move, the trade eventually slips out of my control.
Next time, and that's IF there is a next time, it will be a 'paper trade' only


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## DrBourse (25 November 2021)

Did you realise that the Market Depth can also show Support & Resistance levels.
This next snapshot shows Support @ $18.00 & Resistance @ $18.12.


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## DrBourse (25 November 2021)

DrBourse said:


> From the Chart below you can see that Profit Takers are hitting just after each new High.
> Next High I will join them, taking just over $2500 profit, the rejoin the feast on the following LOW.
> View attachment 133376



Nah, Missed it, I was one New High too slow.
Remember my Buy Price was $17.25213, and the current SP is $17.90 .


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## Sharkman (25 November 2021)

don't know how i missed this earlier, but that gap from 3 sep - 6 sep is purely from it going ex that huge 2.11 div ie. if it weren't for the div, the 6 sep open would have been right on the 3 sep close. does it still carry the same weight that a non-ex div gap otherwise would, given that it's caused by a known and predictable event, rather than from a shift in sentiment or an unexpected news event?

genuine question... i don't consider myself much of a chartist, and i'm not really a day trader either (i mostly sell weekly to monthly options) so i'd be interested to hear how others would interpret it.


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## DrBourse (25 November 2021)

Hi Shark,
M8, A Gap is still a Gap regardless of the reasons - in fact a Gap caused by a Dividend probably caries more weight than a Gap caused by a rogue trade, or a sell-off/spike caused by rumours, or as you mentioned, an unexpected news event. 
I will mention however, that an Ex Div Gap probably won't take long to fill, unless there are other underlying issues.
see pages 203 to 212.

Remember that not all stocks have a SP Drop on Dividend Ex Dates.

Cheers.
DrB


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## wayneL (25 November 2021)

DrBourse said:


> Hi Shark,
> M8, A Gap is still a Gap regardless of the reasons - in fact a Gap caused by a Dividend probably caries more weight than a Gap caused by a rogue trade, or a sell-off/spike caused by rumours, or as you mentioned, an unexpected news event.
> I will mention however, that an Ex Div Gap probably won't take long to fill, unless there are other underlying issues.
> see pages 203 to 212
> ...



Can you explain, apart from sheer randomness, why a gap should fill?


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## DrBourse (25 November 2021)

It's called the "Sheep Effect" - There is no explanation for what Sheep Do.
First of all it's probably an unspectacular event that the Sheep Misinterpret that causes the Gap in the 1st place, then Sheep Mentality sets in and they restore the Status-Quo.

A really "Good Sheep Indicator" may help us all understand the Sheep Effect a bit better.


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## basilio (25 November 2021)

Sharkman said:


> don't know how i missed this earlier, but that gap from 3 sep - 6 sep is purely from it going ex that huge 2.11 div ie. if it weren't for the div, the 6 sep open would have been right on the 3 sep close. does it still carry the same weight that a non-ex div gap otherwise would, given that it's caused by a known and predictable event, rather than from a shift in sentiment or an unexpected news event?
> 
> genuine question... i don't consider myself much of a chartist, and i'm not really a day trader either (i mostly sell weekly to monthly options) so i'd be interested to hear how others would interpret it.




I think your observation is spot on. By definition the share value of FMG pre and post dividend is affected by the access to the $2.11 dividend. All analysts seem to agree that, everything else being equal, a SP will fall by the value of a dividend that is being declared. Of course if the dividend is small potatoes then the this could be easily overrun by other factors.

$2.11 was not small potatoes. I am very surprised that Dr Bourse appears to think otherwise.


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## DrBourse (25 November 2021)

I guess that the LOGICAL explanation is that - we as Traders, Trade with the expectation that an Ex Div Date, or an Announcement, or some news event, increasing or decreasing a SP.
So I guess you could blame all Gaps on ourselves.


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## wayneL (25 November 2021)

So a self fulfilling prophecy, in your opinion?


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## DrBourse (25 November 2021)

Hi basilio,

Personally I do not trade for dividends, Dividends to me are an unwanted problem.
If ever I get a dividend payout it's because I mucked up my research.
And besides that, the ATO absolutely love punters that get lotsa Dividends - it's a situation I can do without.
I prefer to enter a trade from AFTER the Ex Div Date drop has occurred - that way in effect, I get the same $2.11 that you received but it takes a few days/weeks for the SP to return to where it was Pre Ex Div Date, AND I don't end up in the ATO's sights.
We are all different, guess I'm just a bit more so, but I've been in this profession a long time now, and ya cannot teach us old folks new tricks, we are just not interested.


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## basilio (25 November 2021)

DrBourse said:


> I guess that the LOGICAL explanation is that - we as Traders, Trade with the expectation that an Ex Div Date, or an Announcement, or some news event, increasing or decreasing a SP.
> *So I guess you could blame all Gaps on ourselves.  ???*



I don't follow this Dr Bourse. The change in company value pre and ex dividend is black and white.  One day the company has $2billion in cash in its accounts which are reflected in the share value and the next day those funds have been transferred to the individual  shareholders and are no longer on the companies books.  The arbitrage opportunities around  pre and post dividend are legendary. 

If the dividend is  relatively small in relation to the companies worth then there will be only a small variation.  This was not the case this year for FMG, RIO or BHP who all declared massive dividends. And naturally all shares fell  by this amount ex dividend.


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## DrBourse (25 November 2021)

Very few people in this world really understand Balance Sheets and the associated Ratio's, Margins of Safety, etc., and the "smoke'n'Mirrors" games that are played out - They are way too complicated to explain here, even if I understood it all, and I don't.


I feel you are confusing the “change in company value ( which you suggest is the Share Value/Share Price)”, with the Company Balance Sheet – they are 2 entirely different things.


The SV/SP of any stock, at any given time is an abstract thing – The SV/SP is something that Brokers try to calculate with their yearly Guesstimates, then they tell the public of that Mythical Figure, then the public go forth and buy up to that mythical amount. - The SV/SP is not dictated by billions of $$ in cash, The SV/SP is decided by US and The Sheep, The SV/SP is derived from what we, the public, are prepared to pay for that share.


The Balance Sheet, supposedly represents the Companys INTRINSIC VALUE.


*NOW TO EXPLAIN*

An Intrinsic Value is not a TA call - Intrinsic Value Per Share is not a call on where the Share Price will go to - Intrinsic Value is basically what the company is worth Per Share, based on the company’s published Financial Statements - Basically if the company was ‘wound up’, then each shareholder should get that Intrinsic amount - they would not necessarily get the current Share Price.......

So an *Intrinsic Value* Call of $2.00 is saying, “are you sure you want to pay $5.53 (the current share price) for a share that is only worth $2.00”. Those people that know what ‘Intrinsic Value” is, understand what is insinuated, - those people that later call us idiots just because the Share Price did not reach that Intrinsic Value are the ones showing their ignorance on the topic…..

Hundreds of times over the past years I’ve made *Intrinsic Value* calls - which are usually close to the mark - only to be told that I’m an idiot because the Share Price will never get to those values - No one really expects the Share Price to reach those Intrinsic Values, so I usually don’t bother trying to explain it…..

From my perspective if a Company has an Unfavourable IV (as explained above),* then I do not proceed any further*....

As a "Technimental Trader" the IV Test is "The First of several Analysis Processes" for me, and it is only a Minor Test.....

An IV can be calculated in numerous different ways – A correct and Valid IV relies a lot on what formulas are used, such as, DCFM, DDM, DDMF, PRESVAL, RIV, IVRR, NROE, CGVI, GIVF, BIVF – and there are numerous others - MAKE SURE YOU UNDERSTAND WHICH FORMULAS ARE BEING USED and what the implications are relating to each formula...Remember the old saying, “Garbage in = Garbage out”.......

DCFM = Discount Cash Flow Method, DDM = Dividend Discount Method, DDMF =Dividend Discount Method (Forward Return on Equity), PRESVAL = Calculates the Present Value of the Discounted Future Cash Flow per Share, RIV = Residual Income Valuation, IVRR = Intrinsic Value by Rate of Return, NROE = Normalised Return on Equity, CGVI = Comparative Growth & Value Indicator, GIVF = Grahams IV Formula, BIVF = Buffetts Balance Sheet IV........

Each Analyst/Broker has their own versions of “how to calculate an IV”.....for example –the Morgan Stanley ModelWare is a proprietary analytic framework that helps clients uncover value, adjusting for distortions and ambiguities created by local accounting regulations....... In ModelWare, EPS adjusts for one-time events, capitalizes operating leases (where their use is significant), and converts inventory from LIFO costing to a FIFO basis. ModelWare also emphasizes the separation of operating performance of a company from its financing for a more complete view of how a company generates earnings.......



BOTTOM LINE HERE IS --- To use an IV correctly you MUST understand how it is calculated..... Personally, I have an Excel Spreadsheet that incorporates most of the above formulas...



That’s all a bit long winded, but it’s a complicated subject.

Hope you can follow all that.


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## Value Collector (25 November 2021)

DrBourse said:


> I prefer to enter a trade from AFTER the Ex Div Date drop has occurred - that way in effect, I get the same $2.11 that you received but it takes a few days/weeks for the SP to return to where it was Pre Ex Div Date, AND I don't end up in the ATO's sights.
> We are all different, guess I'm just



Actually FMG holders that owned the share before the EX dividend were 78 cents better off per share than those that purchased on ex date Because they also received a franking credit worth 90cents.

I expect you are trading to generate a profit, so aren’t you going to “end up in the auto’s sights” anyway, regards of whether you earned a dividend or not, how does avoiding dividends assist you?


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## Value Collector (25 November 2021)

basilio said:


> I don't follow this Dr Bourse. The change in company value pre and ex dividend is black and white.  One day the company has $2billion in cash in its accounts which are reflected in the share value and the next day those funds have been transferred to the individual  shareholders and are no longer on the companies books.  The arbitrage opportunities around  pre and post dividend are legendary.
> 
> If the dividend is  relatively small in relation to the companies worth then there will be only a small variation.  This was not the case this year for FMG, RIO or BHP who all declared massive dividends. And naturally all shares fell  by this amount ex dividend.



I agree,

We can all have different opinions on exactly how much a money box is worth, but we all agree it’s worth $10 less when you remove a $10 note from it.

We also should be able to agree that it’s worth a little more each day as coins are added, but we might all have different estimates to exactly how many coins will be added each day.


----------



## Value Collector (25 November 2021)

DrBourse said:


> Very few people in this world really understand Balance Sheets and the associated Ratio's, Margins of Safety, etc., and the "smoke'n'Mirrors" games that are played out - They are way too complicated to explain here, even if I understood it all, and I don't.
> 
> 
> I feel you are confusing the “change in company value ( which you suggest is the Share Value/Share Price)”, with the Company Balance Sheet – they are 2 entirely different things.
> ...



I would say you are confusing intrinsic value with book value.


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## DrBourse (25 November 2021)

Warren would love to hear you say that VC - surely you are joking!
IV has nothing to do with BV.


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## Value Collector (25 November 2021)

DrBourse said:


> Warren would love to hear you say that VC - surely you are joking!
> IV has nothing to do with BV.



I didn’t say IV has anything to do with BV, they are completely different things, I said you we’re confusing the two eg when you described what you called IV you were describing BV, you said IV was the winding up value, which it’s not, for most companies that aren’t dying IV will be the value of the going concern not what would be returned to shareholders if it was liquidated.

but I will re read your post to make sure I haven’t read it wrong.


----------



## Value Collector (25 November 2021)

DrBourse said:


> The Balance Sheet, supposedly represents the Companys INTRINSIC VALUE.
> 
> 
> *NOW TO EXPLAIN*
> ...



This is what I am talking about-

You are not describing Intrinsic Value here, you are describing book value.

Unless I am reading it wrong, or you are describing it poorly, it sounds to me like you are saying the Intrinsic value, is what the financial statements say the companies net assets are, this is not what IV is.

“Intrinsic Value” can only ever really be estimated, and it is an estimate of what a company is worth, and would represent a fair value for the share, based on its earning power over time.

As I said in a post above, we might all have different estimates of what a money box is worth, but we all know is worth $10 less if we remove a $10 note from it, this is how shares work, so basillo was correct, when a dividend is paid a companies intrinsic value declines that day, but it regrows over time as the cash pile regrows as the earnings come in.


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## DrBourse (25 November 2021)

Well all I can say is that I tried my best to explain Warren Buffet & Ben Grahams Intrinsic Value is, so I guess your next post should be to tell them both that they are wrong - Good Luck with that.
And by the way you had better tell Warren that most of his books are wrong also.

You have your opinions and I have mine, lets just leave it at that.


----------



## Value Collector (25 November 2021)

DrBourse said:


> Well all I can say is that I tried my best to explain Warren Buffet & Ben Grahams Intrinsic Value is, so I guess your next post should be to tell them both that they are wrong - Good Luck with that.
> And by the way you had better tell Warren that most of his books are wrong also.
> 
> You have your opinions and I have mine, lets just leave it at that.



As some one who has read every single book Graham has written, I can tell you that you didn’t actually explain Intrinsic Value, you explained book value.

As for Warren, he hasn’t written any books, how ever I have read every single annual letter he has written to share holders since 1977 and all the buffet partnership letters written before that in the 60’s and 70’s, and watched every single interview, talk and meeting I can find of Buffett on you tube, and I can also tell you his definition of Intrinsic value is nothing like your book value description either.

But you do you, if you want to call book value intrinsic value good right ahead, what ever works for you.


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## wayneL (25 November 2021)

This is why I like technical analysis. 

in almost every case where I have tried to understand and apply fundamental analysis to stocks I just can't accept the current valuation. 

Furthermore I think that stock prices _in toto_are merely a derivative of the bond market, and to a lesser extent energy prices and currency valuations.

I don't profess to be any sort of an expert in this regard, but by the bond market we can track the flow of money. With technical analysis and with am I on those other factors above we can also attempt to track the flow of money in the stock market.

In these posts reality days and the cantillon effect, that is by far the most effective way to get an edge.

Of course there are individual fundamental and sentiment factors such as in the case of Fortescue.

All the other stuff, BV, IV, hand all the ratios and whatnot, are very much a dismal science.

But, I only know enough to be dangerous.


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## sptrawler (25 November 2021)

@DrBourse and @Value Collector you both have more idea, than I ever will, so as long as you both keep posting your thoughts on stocks I'm exceedingly happy.


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## DrBourse (25 November 2021)

This is a quote from The Warren Buffett Way.

*Please make sure you take note of the sentences in the middle of the snapshot below:- *
_*Originally,* Intrinsic Value was thought to be the same as a company's Book Value, or the sum of it's real assets minus obligations.
However, analysts came to know that the value of a company was not only its Net Real Assets but, additionally, the value of the earnings these assets produced._






======================================

The following is a snapshot from a Google Search
https://www.quora.com/What-is-the-difference-between-the-book-value-and-intrinsic-value-of-a-company 
*Niels Andersen*
, Strategy Consultant, CEO and startup founder
Answered 1 year ago
Here is a quick definition of the two, which is followed by an example.
In very rough terms, it can be seen like this:
*Book value* is the amount of money the company would be left with if it sold all assets and paid all debt. This is the asset value minus liabilities you would see in their financial report.
*Intrinsic value* is the value of all the company's future cash flows to its owners (investors). This includes dividends and the eventual sale of the company to another owner (investor).
*The difference is then*, that the amount of money the owner(s) would get if the company was closed today is the book value, whereas the intrinsic value is the sum of all future distributions of dividends to the owner(s) plus the value of the company when sold sometime in the future.

Let's take an example below.
Company XYZ is a wholesaler of flour. They own a fleet of trucks for delivery, which they paid 10 million for through 5 million of their own money and 5 million borrowed money. The fleet would net them 6 million if sold, and they haven't repaid any of their debt yet. They also own a warehouse worth 10 million if sold, which they paid for themselves entirely.
The company is expected to earn and distribute 2 million to its shareholders annually through dividends for the next 10 years, and after the company will be sold for 12 million.
The company’s *book value* is then:
Book value = Warehouse value + Fleet value - Debt = 10 + 6 - 5 = 11 million
The company’s *intrinsic value* to the owner (investor) is then:
Intrinsic value = annual dividend * years + value of sale of company = 2 * 10 + 12 = 32 millions

I hope this was helpful.
Note: If you actually go and liquidate a company, there are of course some expense to do so, and the amount of money you’d be able to recover from this after these expenses is the liquidation value, not the book value. In the above example, the way the company values its assets is based on, what they would be able to get if sold. If other practices are used by a company, which they usually are, the book value can vary considerably from this.
==========================================

And here are some of the Formulas used to determine the IV




*AND*




*AND*




*AND*





*AND,*There just happens to be more - such as:-
An IV can be calculated in numerous different ways – A correct and Valid IV relies a lot on what formulas are used, such as, DCFM, DDM, DDMF, PRESVAL, RIV, IVRR, NROE, CGVI, GIVF, BIVF – and there are numerous others - MAKE SURE YOU UNDERSTAND WHICH FORMULAS ARE BEING USED and what the implications are relating to each formula...Remember the old saying, “Garbage in = Garbage out”.......
DCFM = Discount Cash Flow Method, DDM = Dividend Discount Method, DDMF =Dividend Discount Method (Forward Return on Equity), PRESVAL = Calculates the Present Value of the Discounted Future Cash Flow per Share, RIV = Residual Income Valuation, IVRR = Intrinsic Value by Rate of Return, NROE = Normalised Return on Equity, CGVI = Comparative Growth & Value Indicator, GIVF = Grahams IV Formula, BIVF = Buffetts Balance Sheet IV........
==========================================
Hope that clarifies where I'm comming from.

Cheers.
DrB


----------



## DrBourse (25 November 2021)

And if you have a look at the Forum "MND - Monadelphous", page 18 you will see the last IV publication showing how most of us calculate the IV.
Those formulas shown above are basically what Brokers & Analysts like myself use.

Remember that Book Value, although referred to in todays climate, it is very much Old Hat, since Warren Ben proved it was NOT representative of a Stock Valuation/IV.


----------



## Gunnerguy (25 November 2021)

sptrawler said:


> @DrBourse and @Value Collector you both have more idea, than I ever will, so as long as you both keep posting your thoughts on stocks I'm exceedingly happy.



..... and that they don’t deteriorate in to an argument that unfortunately is not uncommon in ASF.
GG


----------



## Value Collector (25 November 2021)

DrBourse said:


> This is a quote from The Warren Buffett Way.
> 
> *Please make sure you take note of the sentences in the middle of the snapshot below:- *
> _*Originally,* Intrinsic Value was thought to be the same as a company's Book Value, or the sum of it's real assets minus obligations.
> ...



Yep, I read the book “the Warren Buffett way” I have a copy in my book shelf, What it describes is my definition of intrinsic value, not what you originally described based on the balance sheet.

Now go back and look at the original paragraph you wrote that I quoted, and you will see that is not what you were describing, you were describing book value.

take your pick of any of these Buffet style books I just pulled from my book shelf, you won’t find your original description of IV in any of them, but I do note that your latest description doesn’t match your original description, which is the one I was saying was book value.


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## UMike (25 November 2021)

DrBourse said:


> I did not really want to complicate this Day Trading Profession, because I know it interfeeres with sptrawlers Bodily Functions, so I did not mention that, as I suggested, I sold @ 17.585, took my profits, waited a while then bought back in @ $17.25213.



Bought 2g at $14.2 and $13.91. Never held it before.

Not sure it will hit $19 but not really a day trader. Follow this with interest.


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## Value Collector (25 November 2021)

DrBourse said:


> Remember that Book Value, although referred to in todays climate, it is very much Old Hat, since Warren Ben proved it was NOT representative of a Stock Valuation/IV.



I agree book value is of limited value by itself, but as I keep saying the paragraph I quoted you are literally describing book value, that why I mentioned that you were confusing IV with book value.

But either way, as I said you do you, it doesn’t bother me what you personally think IV is, and the stuff you quoted from the buffet way is IV, but that’s just not what you were saying originally.

so in the interests of not clogging up this thread I will leave you to it.


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## DrBourse (25 November 2021)

Yes I agree we've hijacked this forum, sorry about that Joe, we all got a bit sidetracked.

And I've lost track of my FMG Trade - I will try to make an appearance tomorrow and continue the running commentary.


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## DrBourse (27 November 2021)

Hi VC,

May have discovered why we differ on a few minor points of Buffett’s Theories.

We are reading different editions of The Warren Buffett Way.

The following explains the differences.
We are obviously ‘on the same page’ but with a few variations involved, your definition is based on v3, mine is based on v1.






Have attached a snapshot of page 296 from v1, that is not in your v3.




From the info on page 296, and from the other missing 45 pages, it is relatively easy to understand how to calculate the Owners Earnings, and then where the IV comes from.

IV takes into account, Best & Worst Growth Rates, Bond Rate, Capitalisation Rate, Number of Shares Outstanding, NPBA, Depreciation, Amortisation, Capital Spending, Required Return (Roger Montgomery’s “Valuable” explains that very well), Forward ROE (Over 2 periods), Payout Ratio (Over 2 periods), Free Cash Flow, Earnings Growth Rates (Over 2 periods), Discount Rates, Cash Earnings, Discounted Dividends, Future Currency Discount Rates, Future Distribution of Dividends, and few other items.



Book Value Definition: Formula & Calculation (investopedia.com) explains Book Value as:- 
“Book value is equal to the cost of carrying an asset on a company's balance sheet, and firms calculate it netting the asset against its accumulated depreciation. As a result, book value can also be thought of as the net asset value (NAV) of a company, calculated as its total assets minus intangible assets (patents, goodwill) and liabilities. For the initial outlay of an investment, book value may be net or gross of expenses such as trading costs, sales taxes, service charges, and so on.
_The formula for calculating book value per share is the total common stockholders' equity less the preferred stock, divided by the number of common shares of the company. Book value may also be known as "net book value" and, in the U.K., "net asset value of a firm."_

Intrinsic Values usually calculates out to be double the Book Value.

Hope that clarifies where I’m coming from.

Cheers
DrB


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## Garpal Gumnut (27 November 2021)

DrBourse said:


> Yes I agree we've hijacked this forum, sorry about that Joe, we all got a bit sidetracked.
> 
> And I've lost track of my FMG Trade - I will try to make an appearance tomorrow and continue the running commentary.





DrBourse said:


> Hi VC,
> 
> May have discovered why we differ on a few minor points of Buffett’s Theories.
> 
> ...



Mate.

I don't think you have hijacked this thread.

You have flown it to a desert outside Amman and blown the ******* thing up. 

gg


----------



## Country Lad (29 November 2021)

Too far back to see where the last comment was on FMG, so suffice to say up on a down day which isn't turning down as far as most thought.  Commonsense on the new Omircron strain seems to be kicking in.


----------



## basilio (8 December 2021)

Turning old coal to Green Hydrogen.

'Twiggy' Forrest, AGL partner to explore hydrogen option for Hunter Valley coal plants​Key points:​
AGL and Fortescue Future Industries have signed a MOU to explore a hydrogen hub in the Hunter Valley
A feasibility study will look at building the hub on the site of two coal-fired power stations
The study will take 12 months to be completed









						Forrest says hydrogen will 'dwarf' coal as he unveils Hunter Valley energy project
					

The mining billionaire partners with the energy giant to explore the feasibility of building a green hydrogen hub on the site of the Liddell and Bayswater coal-fired power stations.




					www.abc.net.au


----------



## sptrawler (8 December 2021)

basilio said:


> Turning old coal to Green Hydrogen.
> 
> 'Twiggy' Forrest, AGL partner to explore hydrogen option for Hunter Valley coal plants​Key points:​
> AGL and Fortescue Future Industries have signed a MOU to explore a hydrogen hub in the Hunter Valley
> ...



Great move IMO, developing clean energy, especially hydrogen generation on the sites of old power stations, is a no brainer.
Having the switchyard and associated equipment in place reduces the overall project costs massively.
If they can install an electrolyzer and enough renewables to feed it, it will only be a matter of installing optimum size gas turbines as the old station is progressively decommissioned and removed, working with AGL is a game changer two companies one with a stranded asset and the other with the money to help save it.
It may actually save AGL's ar$e IMO. I will put them on the watchlist even though I've never been a fan of utilities, but this plan has legs.lol
Magic move.


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## Value Collector (8 December 2021)

sptrawler said:


> Great move IMO, developing clean energy, especially hydrogen generation on the sites of old power stations, is a no brainer.
> Having the switchyard and associated equipment in place reduces the overall project costs massively.
> If they can install an electrolyzer and enough renewables to feed it, it will only be a matter of installing optimum size gas turbines as the old station is decommissioned and removed, working with AGL is a game changer two companies one with a stranded asset and the other with the money to help save it.
> It may actually save AGL's ar$e IMO. I will put them on the watchlist even though I've never been a fan of utilities, but this plan has legs.lol
> Magic move.



Also, the power station sites sits right on and is connected to the high voltage transmission system, and will be able to import cheap power when it’s available on the grid, when it’s windy at night or sunny during the day.


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## sptrawler (8 December 2021)

Value Collector said:


> Also, the power station sites sits right on and is connected to the high voltage transmission system, and will be able to import cheap power when it’s available on the grid, when it’s windy at night or sunny during the day.



Yeh that's what I was saying, with having the switchyard and associated plant already in situ, the switchyard is where all the high voltage transmission equipment is located.
Being able to use the power is a small component, already having the groundworks, the cable tunnels, the switchgear, the protection equipment etc already in place and being of a know size and ratings saves a massive amount of engineering and earthworks, design and procurement of equipment, it is massive plus. Add to that not having to procure transmission easement, it is a mind boggling saving.
Even from an AGL perspective, they could now plan which unit is realistically the best to remove to enable removal and replacement, with a longer term plan of the next step.
Rather than just removing whichever unit is the biggest pain in the ar$e first, in the scheme of things it might now actually be the last one to be removed, if it suits the end game.
Just a brilliant move by Twiggy IMO.
This is the exact reason the big private equity firms are interested in the old power station sites.


----------



## basilio (8 December 2021)

Twiggy has noted that FMG intends to develop cost effective processes to run ships on hydrogen. 

I came across this development which use low grade hydrogen from ammonia to power electric fuel cells for cargo ships.

Exclusive: AFC Energy CEO discusses the company’s hydrogen fuel cell and ammonia cracker solution and its fit in the maritime industry​
By  Molly Burgess  on Dec 01, 2021
  Translate
 News   Exclusive 




HyPoint - Official Sponsors of H2 View's Technology Content

A new zero-emissions ship will soon be hitting Norwegian waters – and AFC Energy’s hydrogen fuel cell and ammonia cracker technology has been selected to power the landmark vessel development.

Marking a milestone moment for both the UK-based business and the maritime industry, AFC Energy’s hydrogen fuel cell and ammonia cracker was today (Dec 1) awarded approval in principle (AiP) status for the ZeroCoaster ammonia fuelled cargo ship.

Although perhaps not the most commonly used technology for green transportation, AFC Energy’s alkaline fuel cell with ammonia cracker is set to open up a number of opportunities due to its ultra-high-power density which surpasses alternative technologies on the market today.

To find out more about the technology and AFC Energy’s involvement in the maritime industry, H2 View earlier caught up with Adam Bond, CEO of AFC Energy. “The hugely carbon intensive maritime industry is one of the major markets that is best placed to benefit from AFC Energy’s zero-emission power systems,” he said.

“AFC Energy’s S-Series fuel cell system utilises an alkaline fuel cell technology, which entails the electrochemical combination of hydrogen and oxygen in a non-combustion process to, essentially, convert chemical into electrical energy.

“A key and unique advantage of AFC Energy’s fuel cell technology is its ability to utilise low grade – and therefore, low-cost – hydrogen fuel, such as that derived from ammonia. Ammonia, as a liquid inorganic carrier possessing no carbon-hydrogen bonds, can be ‘cracked’ upon end-point arrival to produce hydrogen and nitrogen, producing only heat and water as reactive by-products – hence, zero emissions.
“The S-Series fuel system, therefore, can provide a current density which surpasses alternative high-power density cells in the market today, without the need for costly, ultra-high purity hydrogen. This technology will provide the ship with 1.2MW of capacity.”









						Exclusive: AFC Energy CEO discusses the company’s hydrogen fuel cell and ammonia cracker solution and its fit in the maritime industry
					

A new zero-emissions ship will soon be hitting Norwegian waters – and AFC Energy’s hydrogen fuel cell and ammonia cracker technology has been selected to...




					www.h2-view.com


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## sptrawler (8 December 2021)

basilio said:


> . This technology will provide the ship with 1.2MW of capacity.”



That is a very small ship, sounds more ferry, but hey it all has to start somewhere. Twiggy is picking clever targets, rather than jumping in the deep end IMO.
For example the Saphire Princess cruise ship, I think has four 9.5 MW propulsion motors, it doesn't carry a very heavy cargo, well some of the passengers are very heavy but nothing like an iron ore carrier.
Here is a good article on the cleaning up of cargo ship emissions.








						The Struggle to Make Diesel-Guzzling Cargo Ships Greener
					

How these emission-belching behemoths will transition to batteries and fuel cells




					spectrum.ieee.org


----------



## dat111 (10 December 2021)

In order to be balanced on the green initiative from an investment standpoint... I think the following article would be helpful to put the green initiative into perspective. 









						The "New Energy Economy": An Exercise in Magical Thinking | Manhattan Institute
					

Progressive policymakers promote the idea that America is on the verge of a green revolution that will eliminate hydrocarbon use within the near future—but in reality, this is not possible.




					www.manhattan-institute.org


----------



## Greynomad99 (10 December 2021)

DrBourse said:


> Hi Shark,
> M8, A Gap is still a Gap regardless of the reasons - in fact a Gap caused by a Dividend probably caries more weight than a Gap caused by a rogue trade, or a sell-off/spike caused by rumours, or as you mentioned, an unexpected news event.
> I will mention however, that an Ex Div Gap probably won't take long to fill, unless there are other underlying issues.
> see pages 203 to 212.
> ...



Hi Dr B - I've never been a huge fan of FMG but I'm in it at the moment and it seems to be powering along. Price has made a small resistance break pattern recently suggesting price will move up to $19. However, price is largely driven by iron ore prices rather than the company's historical performance - and with China seemingly sucking lemons lately when it comes to Australia, anything is possible.


----------



## DrBourse (10 December 2021)

Hi GN,
As usual, our TA is similar, I cannot see any TA roadblocks ATM, Yep as I suggested some weeks back abt $19.00 is the next point for "profit takers", However, I don't think the Shorts will hit FMG just yet, so at the next level of abt $20.00 I feel we need to be cautious, and run with a Very Very tight stop, then personally I will be OUT sometime B4 $21.00 - in the lead up to $21.00 FMG's Candles will form what's known as an "Equal & Opposite (page 28) or a Symetric V", the number of Red Candles between $20.00 & $21.00 will produce enough signals to pick my Exit Point.

FMG's IV is between $22.89 & $23.89 - and their Financials (Ratios & MOS) mostly rate as Very Good.





Cheers M8


----------



## divs4ever (10 December 2021)

FMG CEO to leave post but remain on board​








						FMG CEO to leave post but remain on board
					

SYDNEY, AAP – Fortescue Metals Group CEO Elizabeth Gaines is leaving her post as the company transitions from an iron ore and metals explorer play to a green energy and resources group. But she will remain on the board as a non-executive director, FMG said in a statement to the Australian...




					thebull.com.au
				




 DYOR

 i hold FMG


----------



## Garpal Gumnut (11 December 2021)

Interesting negative articles, well mildly negative, on the change of CEO and Twiggy's looser style of control over the H2 side of FMG's business.

I'd ignore them if you see them.

New energy startups require a different hand than old style pick n shovelling.

Unless... Unless FMG starts going a-up. 

Even then the ole Twiggs will be ruthless.

gg


----------



## basilio (11 December 2021)

I think the decision to look for a new CEO and additional senior staff  to take FMG in the green energy direction is inspired and essential.

This is a huge move and finding the very best key executives to guide and manage the multiple projects will be essential to keeping all the balls in the air.

Elizabeth Gaines has been an excellent CEO for FMG.  She is still staying on board.  I think the advertisment of these positions will  inspire some of the very best international talent to throw their hat into the ring. The fact that she will be on the selection committee speaks well of her position and ongoing role. It's clear from the Press Release they are looking for multiple talent.









						Australia's iron lady driving FMG in a new direction
					

Growing up in Western Australia's remote Kimberley has left its mark on how Fortescue boss Elizabeth Gaines sees the world and runs the company.




					www.abc.net.au
				












						Fortescue's iron lady Elizabeth Gaines steps down as CEO
					

The first female CEO of Andrew Forrest's Fortescue Metals Group will stand down, but remain on the board, as the company transitions away from a pure play iron ore miner.




					www.abc.net.au
				





			https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02465205-6A1068040?access_token=83ff96335c2d45a094df02a206a39ff4


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## divs4ever (11 December 2021)

but what is the talent pool like in 'green energy '  maybe one of the previous CEOs  could  improve their skill-set  ,  after all FMG is no tiny company even now , wouldn't  know the current company well but ready to learn more be a good fit as well 

 this isn't like   starting to chase gold production and poaching an exec from Newmont or Barrick  , 'green energy ' is a very steep learning curve as the area develops  and morphs


----------



## basilio (11 December 2021)

divs4ever said:


> but what is the talent pool like in 'green energy '  maybe one of the previous CEOs  could  improve their skill-set  ,  after all FMG is no tiny company even now , wouldn't  know the current company well but ready to learn more be a good fit as well
> 
> this isn't like   starting to chase gold production and poaching an exec from Newmont or Barrick  , 'green energy ' is a very steep learning curve as the area develops  and morphs




I disagree. The areas they are developing are quite different to their traditional iron ore exploration. mining and transport.  It's worth checking out the scope of FFI and the range of projects they intend to successfully develop.  From what I can gather FMG wants to develop the projects with its own mangement and workforce rather than pulling in outsiders.  I'm sure there will be an opportunity for current staff to reskill.

I believe it will take quite special skills to ensure the technical development of quite new technologies inside the financial and time strictures Twiggy will be demanding. The most apt comparison would be Elon Musk solving multiple new issues with car manufacturing and ensuring all the balls stay in the air.









						News | Fortescue Future Industries
					

'I can assure you there is enough renewable energy to economically supply mankind, from this time forth.' - Dr Andrew Forest AO




					ffi.com.au


----------



## divs4ever (11 December 2021)

but i have been burned previously  by established companies striving into new directions but leaving the cash cow ( core business )  to carry on neglected  , but having the kitty and credit rating plundered 

 now sure FMG might be different , but it has happened before , so it might happen again ( to a stock i hold )


 i had lots of dreams over the last 65 years  and have lots of bite-marks from reality 

 ( unlike many long term FMG  holders i am not in massive profits on FMG  , so watching and worrying is obligatory here  while i still have a graceful exit opportunity , to take  if desired )


----------



## bk1 (12 December 2021)

basilio said:


> From what I can gather FMG wants to develop the projects with its own mangement and workforce rather than pulling in outsiders.




Let me get this right, FMG are secretly turning Iron Ore miners into hydrogen engineers? Solar panel fitters? Ship builders?

Your comparison to Musk is laughable, normally i would let this type of drivel pass, but on this occasion i felt obliged to comment.
Forrest is a *placeholder* for the any hydrogen revolution. He is buying into companies that have technology and presumably the associated IP. He will then seek to leverage that to get first mover advantage when and if he finds customers for green hydrogen in this country. 









						Fortescue buys into Dutch energy tech business
					

Fortescue’s green hydrogen arm has bought a 60 per cent stake in Netherlands-based High yield Energy Technologies Group (HyET).




					www.businessnews.com.au


----------



## Value Collector (12 December 2021)

bk1 said:


> Let me get this right, FMG are secretly turning Iron Ore miners into hydrogen engineers? Solar panel fitters? Ship builders?
> 
> Your comparison to Musk is laughable, normally i would let this type of drivel pass, but on this occasion i felt obliged to comment.
> Forrest is a *placeholder* for the any hydrogen revolution. He is buying into companies that have technology and presumably the associated IP. He will then seek to leverage that to get first mover advantage when and if he finds customers for green hydrogen in this country.
> ...




Fmg employs alot more people that simply Iron Ore miners, I think you are forgetting that FMG built their entire company from scratch, which included building massive amounts of infrastructure, including power plants, electric transmission systems, gas pipelines, processing plants, railways lines, ports, ships, airport, and many other parts.

This all takes a lot of skills which are transferable, not to mention the financing and deal making side of things which FMG has proved to be highly capable at.

But, also as has just been announced they are looking to employ some new top management with specialised skills in the area of renewables.

——————————-
watch the short interview at the 43.11 minute mark of this video, it only goes for 1 minute, and you will see that FMG does have a history of moving talent to different fields.


----------



## divs4ever (12 December 2021)

i am reasonably sure FMG are looking to add staff ,  the existing iron ore business  ( and port facilities ) have a few years of operation left in them  , while some engineers MIGHT be switched to the new area  , i am guessing  many will need to be hired or trained 

 now sure management  has create a successful iron ore business  , but this hydrogen  path  is relatively new   at will face unpredicted  costs and so far unwritten regulations , SOMETIMES  first-mover is not the path to success  but only a stepping-stone for those who come later 

 mankind has been making ( and using )  hydrogen for around 100 years  ( it was what was in the Hindenburg )   the question is can it be made in bulk at a profit  in the new world of ever-increasing regulations   
 now another sobering fact to face is iron ore prices are unusually high for this phase of the mining cycle ,  how many years can the iron price hold up to finance the new direction  BECAUSE i do NOT see endless easy credit  for decades ( years maybe ) but will hydrogen be a profitable venture  by the time the the money machine goes for a rest .


----------



## basilio (12 December 2021)

Value Collector said:


> Fmg employs alot more people that simply Iron Ore miners, I think you are forgetting that FMG built their entire company from scratch, which included building massive amounts of infrastructure, including power plants, electric transmission systems, gas pipelines, processing plants, railways lines, ports, ships, airport, and many other parts.
> 
> This all takes a lot of skills which are transferable, not to mention the financing and deal making side of things which FMG has proved to be highly capable at.
> 
> ...





That analysis reflects the more nuanced approach I believe FMG is taking in this  expansion of the companies operations.

FMG's iron ore projects are largely  mature,. The most significant new development will be the magnetite project which hopefully comes on line end of 2023. In that context the company and shareholders can anticipate steady revenue streams for the foreseeable future. If iron ore prices stay around $100 a tonne then dividends should be around $2 per share a year.  

Changes to the iron ore section of FMG will be in* lower costs *as a result of renewable energy replacing fossil fuels and associated maintenance costs in mining, cartage and transport to markets.

The development of whole new industries in hydrogen production, solar energy, re engineering of ships, trains and other transport will require much new talent and capital.  It will be interesting to see if they decide to increase the current 10% allocation net profits to FFI. Might be cleverer to just absorb some FFI capital works into the overall capital expenditure costs.


----------



## Value Collector (12 December 2021)

basilio said:


> That analysis reflects the more nuanced approach I believe FMG is taking in this  expansion of the companies operations.
> 
> FMG's iron ore projects are largely  mature,. The most significant new development will be the magnetite project which hopefully comes on line end of 2023. In that context the company and shareholders can anticipate steady revenue streams for the foreseeable future. If iron ore prices stay around $100 a tonne then dividends should be around $2 per share a year.
> 
> ...



I think the energy developments directly related to their mining business should come from general capital expenditure, and the 10% figure should be what is but in as equity into the large stand alone businesses separate from the mining business.

Once the concept is proven, and FFI have large pipeline of possible projects based on proven concepts, I would be happy if it just became a free for all, and all available capital went towards which ever projects promised decent returns.


----------



## Value Collector (12 December 2021)

I tried to find a video I watch a while back that showed how Fortescue designed all their Ore processing facilities and other infrastructure in house, which allowed them to Create really efficient mine to port outcomes, but I can’t find it, it showed that there is a lot of talent in fmg, more than most people give them credit for.

—————

In the process of looking for the other video I found this video I remember seeing years ago, it sounds like complete propaganda, the awesome part is though that FMG did everything they said they would in this video.


----------



## divs4ever (12 December 2021)

basilio said:


> That analysis reflects the more nuanced approach I believe FMG is taking in this  expansion of the companies operations.
> 
> FMG's iron ore projects are largely  mature,. The most significant new development will be the magnetite project which hopefully comes on line end of 2023. In that context the company and shareholders can anticipate steady revenue streams for the foreseeable future. If iron ore prices stay around $100 a tonne then dividends should be around $2 per share a year.
> 
> ...





 yes $2 a year  in divs is what i  calculated  when buying into FMG and the iron ore projects are mature rather than aging  , so iron price should be a  more immediate concern than mine life 

 am not sure the renewable energy will REDUCE costs (  only those harvesting hydro energy  not wave ) have been good for me investment wise  , but let's say  resist increasing costs in traditional  supplies  , because FMG will still have to put plenty into R&D 

 another possible issue is will future government  cut down on R&D tax breaks ( there is a LOT of money already loaded onto future taxpayers  , and without migration our population is shrinking )

 FMG has delivered ambitious plans  before  but boy-o-boy going forward  there is a lot of uncertainty ahead ( even the global benchmark currency  is under pressure )


----------



## sptrawler (12 December 2021)

From what I have read between the lines, the main driver for Twiggy is H2, the reason being he wants to produce green steel, that would be a Tesla event if he could manage it.
If he can put blast furnaces and steel furnaces in the Pibara, that don't require coal, that would be a game changer. Then steel could be shipped out as pre rolled to spec, or as ignots and then remelted in electric arc furnaces at destination and rolled to spec there.


----------



## qldfrog (12 December 2021)

But why would it be game changer? Stop for a sec.we can already buy lower emission greener steel from non China origin, but their dirty cheaper steel has and is still closing steel mills everywhere.
Unless cheaper, steel is steel..and whatever the green economy dreams of, the market for steel remains in China, India and developing countries.
So will H2 steel be cheaper?
That is the only question


----------



## divs4ever (12 December 2021)

personally  i think 'green aluminum ' ( alloys )  is the way to go  , aluminum creation  is a big emissions tax target 
aluminum  should have a big future IF you can cut production costs  , slashing tax liabilities would be a big help 

 but TF with his profitable iron ore project  would see his ideas  as 'value-adding ' on an existing asset


----------



## Value Collector (12 December 2021)

divs4ever said:


> yes $2 a year  in divs is what i  calculated  when buying into FMG and the iron ore projects are mature rather than aging  , so iron price should be a  more immediate concern than mine life
> 
> am not sure the renewable energy will REDUCE costs (  only those harvesting hydro energy  not wave ) have been good for me investment wise  , but let's say  resist increasing costs in traditional  supplies  , because FMG will still have to put plenty into R&D
> 
> ...



Fmg are currently building a hybrid electricity system in the Pilbara to run their mines, because lowering their energy costs has been a consistent goal for them.

6 years ago FMG’s electricity came from diesel generators, then they built a gas pipeline,  gas powered power station and electricity transmission networkto get rid of the diesel and reduce costs.

Now they are adding in solar, wind and batteries to reduce the number of hours a day they have to burn natural gas.

Net step is to keep adding renewables to the system, and produce hydrogen from which they can make ammonia to eliminate diesel fuel from their trains and ships.


----------



## sptrawler (12 December 2021)

qldfrog said:


> But why would it be game changer? Stop for a sec.we can already buy lower emission greener steel from non China origin, but their dirty cheaper steel has and is still closing steel mills everywhere.
> Unless cheaper, steel is steel..and whatever the green economy dreams of, the market for steel remains in China, India and developing countries.
> So will H2 steel be cheaper?
> That is the only question



It depends on how much carbon tax is added to 'dirty' steel, the EU is pushing for a universal carbon tax, it looks as though the U.S will follow suit.
If that happens why would you buy Chinese steel, if it is dearer due to the tax.
So if China say, we will just drop the price,then all that happens is the tax is increased.
Eventually the only market China has got for dirty steel, is the domestic market, you have to remember the only reason countries buy Chinese steel is price, if it isn't cheaper then the decision will be do we install our own electric arc furnaces and rolling mills, or just buy pre rolled.
The EU with its abundance of renewables may decide to go that way and re establish its own steel industry a again.









						Swedish Steelmaker Uses Hydrogen Instead Of Coal To Make Fossil-Free Steel
					

Swedish company HYBRIT hopes to decarbonize an industry responsible for some 5-8% of the globe’s carbon dioxide emissions.




					www.forbes.com
				



From the article:
_A number of Europe’s steel companies, as well as several ventures in the U.S., Canada and elsewhere, are testing methods to decarbonize steel, demand for which is set to rise around the world, potentially drastically. But HYBRIT is arguably the leader in the space: company executives are eager not to be castigated by millions of Swedes if their belching steel plants are the reason Sweden fails to meet its 2045 deadline to achieve carbon neutrality_.


Right now add to that, in the Pilbara we have the ability to make copious amounts of H2 and have massive amounts of iron ore ka ching. 
It's all just speculation, but very interesting, the main issue will be who can make the green H2 cheapest and in the biggest quantities IMO.


----------



## dat111 (14 December 2021)

divs4ever said:


> but what is the talent pool like in 'green energy '  maybe one of the previous CEOs  could  improve their skill-set  ,  after all FMG is no tiny company even now , wouldn't  know the current company well but ready to learn more be a good fit as well
> 
> this isn't like   starting to chase gold production and poaching an exec from Newmont or Barrick  , 'green energy ' is a very steep learning curve as the area develops  and morphs



What is needed for a Green Energy CEO is someone who is void of scientific understanding or willing to ignore it and still look themselves in the mirror and preach the lie to take in government money.


----------



## divs4ever (14 December 2021)

dat111 said:


> What is needed for a Green Energy CEO is someone who is void of scientific understanding or willing to ignore it and still look themselves in the mirror and preach the lie to take in government money.



 WOW !! 

 that could be a long line of candidates , but would Twiggy be OK with that   ( some other boards  would be fine and only need to search internally )


----------



## dat111 (16 December 2021)

divs4ever said:


> WOW !!
> 
> that could be a long line of candidates , but would Twiggy be OK with that   ( some other boards  would be fine and only need to search internally )



Unfortunately, Elizabeth Gaines is not one of them...


----------



## divs4ever (16 December 2021)

time will tell  , i have been crippled ( profit-wise ) by 'rock-star  imports ' before  ( all reputation and no performance when there is a 'bare-earth project ' to build )

 be half ready  for a period of revolving door  directors


----------



## Country Lad (16 December 2021)

*Fortescue and Alinta switch on Australia’s biggest solar farm outside of main grids*

_Iron ore producer Fortescue Metals Group and Alinta Energy have formally opened the country’s biggest solar farm outside of the country’s main electricity grids, the 60MW Chichester Hub solar farm that will help power two big mines._
_Alinta Energy managing director and CEO Jeff Dimery says the opening is a giant leap forward in the race to a low carbon energy future.
“We took an ambitious brief from Fortescue, who wanted to dramatically slash their emissions, and made it a reality in just three years,” Dimery said in a statement._
_“I can’t understate the engineering challenge of designing and building a renewable solution on this scale, in a harsh environment like the Pilbara, to meet the reliability standards of mines like these.”_









						Fortescue and Alinta switch on Australia’s biggest solar farm outside of main grids
					

Alinta and Fortescue open largest solar farm outside of the main grids, and it accounts for 100 pct of daytime electricity needs of two nearby mines.




					reneweconomy.com.au


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## Country Lad (16 December 2021)

We seem to be posting more on FFI stuff here now because there is not much news about the boring iron ore company. I thought it may be an idea if we separate the 2 so I will start an FFI thread for all this new stuff. Use it or not as you see fit.
I hope that is OK @Joe Blow seeing it is not listed


----------



## Garpal Gumnut (16 December 2021)

Country Lad said:


> We seem to be posting more on FFI stuff here now because there is not much news about the boring iron ore company. I thought it may be an idea if we separate the 2 so I will start an FFI thread for all this new stuff. Use it or not as you see fit.
> I hope that is OK @Joe Blow seeing it is not listed



No problems really but FFI is intrinsic to FMG.

I guess it will give the “ I’m sorry if I seem to be hijacking this thread “ mob somewhere to post.

gg


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## DrBourse (16 December 2021)

Today is 16/12/21 abt 1PM - ON Thursday 16/12/21, was going to hold FMG till $20/$21 – BUT TODAY there are Sell Divergences (pages 45 & 177) appearing on several ST Indicators, my CCI is just one of them AND the MFI (page 95) is beginning to look Toppy.

FMG SP is at the top Band of the Linear Regression (pages139-142), and is just below the next Gap Down Minor Resistance Line (pages203-212), and FMG’s recent Green Candles are showing signs of “Loss of Momentum”.







As I mentioned on 16/12/21 I was gunna hold – But there are enough TA Signals now for me to BAIL.

I was in @ $17.35 on 23/11/21, I’m Out NOW @ $18.98 – will wait to see what happens next B4 I jump back onto FMG.

Looks like the Duck missed out on this one - that's what happens to anyone that Ducks out via the Ignore Button.

Remember to DYOR.

Cheers.
DrB


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## divs4ever (16 December 2021)

i wouldn't be totally heart-broken to see FMG  slide into the $14 range again  ( but  i suspect it won't near-term )

 but take care just the same , there are a lot of distractions out there


----------



## Garpal Gumnut (16 December 2021)

Just some thoughts on FMG's recent run up from the $14 mark which I was fortunate enough to get on early, never having held FMG and missing the run up some years ago from $8 or so. 

On the charts it seems to have slowed its rise, the daily volume is falling and it is nudging the previous gap circled just below $20, but the upward trend is flattening and the RSI is overbought.  

I have the feeling it will continue its march towards previous highs and have put a cheeky limit order in the recent gap above $16. 

I also intend to take a Life Policy out on the ole Twiggy, just in case. Because apart from the price of iron ore the reason this little piglet is moving is all down to him. 






gg


----------



## Country Lad (16 December 2021)

It is at an interesting point. It could be said it is a symmetrical top triangle indicating a downward direction from here, but this is the sort of P&F pattern I like as positive and it didn't keep to the songbook at bottom triangle.  Although the volume is decreasing the momentum still seems to be there.  So, my guess is that technically it should retrace but my gut and P&F says it won't. Sorry @Garpal Gumnut but I don't believe in the gap theory.


----------



## DrBourse (17 December 2021)

Hi Country Lad,

Triangles are Tricky Little Suckers, Symetric, Ascending & Descending Triangles can go either way, depending on the Candle Construction within each Triangle.

Your P&F Example reinforces that fact, particularly the one for Aug on your P&F Chart.

Pages 187 to 192 (below) explain the theory.
























Cheers.
DrB


----------



## Country Lad (17 December 2021)

Thanks @DrBourse but too much information for a simple country lad like myself. After nearly 40 years of charting I have a reasonable idea of patterns.  The August triangle to which you refer was always going to be a descending one - never in doubt.


----------



## Value Collector (17 December 2021)

Maybe we should have kept the FMG and FFI threads together because FFI is just part of FMG, But split of another thread to talk about FMG Tech Analysis.


----------



## divs4ever (17 December 2021)

BUT are they likely to split ( list separately ) in the future 

 given FFI  is heavily into research and investing in new infrastructure  , i think a split is a logical option ( so cash can be raised from the public ) , but only time will tell 

 now if it was a divestment/IPO Twiggy could keep a controlling interest and have some flexible funding options


----------



## Garpal Gumnut (17 December 2021)

Value Collector said:


> Maybe we should have kept the FMG and FFI threads together because FFI is just part of FMG, But split of another thread to talk about FMG Tech Analysis.



It is my belief that if people just kept to the topic there would be plenty of interesting conversation about FMG and its subsidiary FFI. 

There is a disturbing trend from some recent posters on this and other stock threads to discuss.

Other stocks they have bought completely unrelated to FMG or Iron stocks.
Their investing/profit prowess which is boring me to ****.
The size of their jock straps and/or their bras.
Other stuff that nobody who knows them would listen to and they can inflict on ASF.
Nobody cares. OK.

Just discuss FMG + or - FFI. 

Technical AND Fundamental Analysis imo is one of the attractions of ASF. To divide the two would not be helpful imo.

Peace be with you all. 

gg


----------



## Value Collector (17 December 2021)

divs4ever said:


> BUT are they likely to split ( list separately ) in the future
> 
> given FFI  is heavily into research and investing in new infrastructure  , i think a split is a logical option ( so cash can be raised from the public ) , but only time will tell
> 
> now if it was a divestment/IPO Twiggy could keep a controlling interest and have some flexible funding options



I highly doubt they will split, FFI will be like BHP's oil and gas eg just another part of the business that brings diversification of revenue.

And before you point out that BHP is in the process of getting rid of their OIL gas business, keep in mind that is only because they don't want exposure to fossil fuels, but for 60 years they have been happy to have an energy business inside their company.


----------



## Value Collector (17 December 2021)

Garpal Gumnut said:


> It is my belief that if people just kept to the topic there would be plenty of interesting conversation about FMG and its subsidiary FFI.
> 
> There is a disturbing trend from some recent posters on this and other stock threads to discuss.
> 
> ...



I would be happy to keep this thread as a commentary and discussion about the entire business from a fundamental perspective which obviously would include FFI, and split off the TA stuff (or keep the TA stuff here too, I don't care)

But it does seem weird for FFI to have its own thread, I don't see how it makes sense at all, I mean this isn't an IRON Ore thread, its an FMG thread.

But it does seem to me that the TA stuff can date and become irrelevant fairly quickly, where as some of the discussions on fundamentals are relevant for quite a long time, but will be lost into the never never if multiple daily TA updates (that are meaningless in 2 weeks) fill up the thread.

So I am happy for the TA stuff to stay if people think its good, but as I said I think it could be more valuable to split the two, but keep FFI here.

Just my opinion though.


----------



## basilio (19 December 2021)

Value Collector said:


> But it does seem to me that the TA stuff can date and become irrelevant fairly quickly, where as some of the discussions on fundamentals are relevant for quite a long time, but will be lost into the never never if multiple daily TA updates (that are meaningless in 2 weeks) fill up the thread.




I suggest that is the salient point. As I see it people who see themselves as share traders are focused on graphs that they believe will indicate an immediate selling or buying opportunity to turn a buck  Longer term investors however are trying to assess the strength of the company and it's prospects of delivering longer term value to shareholders. In that context discussions on development projects, capacity to perform and the expected value of these projects are the important points.

I have no problem with people make a buck on trading shares. But I agree with VC that diverting discussion from the fundamentals of the business is counter productive to the intention of  a thread about the company.


----------



## Garpal Gumnut (19 December 2021)

basilio said:


> I suggest that is the salient point. As I see it people who see themselves as share traders are focused on graphs that they believe will indicate an immediate selling or buying opportunity to turn a buck  Longer term investors however are trying to assess the strength of the company and it's prospects of delivering longer term value to shareholders. In that context discussions on development projects, capacity to perform and the expected value of these projects are the important points.
> 
> I have no problem with people make a buck on trading shares. But I agree with VC that diverting discussion from the fundamentals of the business is counter productive to the intention of  a thread about the company.





Value Collector said:


> I would be happy to keep this thread as a commentary and discussion about the entire business from a fundamental perspective which obviously would include FFI, and split off the TA stuff (or keep the TA stuff here too, I don't care)
> 
> But it does seem weird for FFI to have its own thread, I don't see how it makes sense at all, I mean this isn't an IRON Ore thread, its an FMG thread.
> 
> ...



May I say in a friendly way that I think there are equal amounts of wisdom and hogwash in both your posts. 

Stock threads have traditionally tolerated TA and FA in tandem in their commentary and I for one use both in deciding whether to trade, buy or sell stocks. So I would see it as a futile exercise to restrict one or the other on the FMG thread. 

As for the FFI thread, it will live or die by the amount of posts it receives and not by dictat or rule-making, as will the FMG thread whether it be TA or FA posts.

Perhaps one day if FFI is spun out of FMG, it may have a dedicated thread of its own.

For now FMG is an iron play with a Hydrogen spruiker at its head selling to a hungry public. It may change. Who knows.   

Whenever anyone asserts the longevity of fundamental over technical analysis, AMP and a few other fundamental disasters often come to mind, when the charts said SELL. 

gg


----------



## over9k (22 December 2021)

You know when something hits the news that it's time to act.


----------



## UMike (22 December 2021)

Out today @ over $20.
Really never thought it'd get there.

Be in again at next Dip.


----------



## over9k (22 December 2021)

UMike said:


> Out today @ over $20.
> Really never thought it'd get there.
> 
> Be in again at next Dip.



Same here but not at the $20 mark, I was skeptical it'd crack the psychological barrier so flogged at just under. 

We can all expect it to moon now.


----------



## divs4ever (22 December 2021)

no i wasn't but since i as still holding  , it might help boost my ego ( whereas a drop may have tempted me to buy extra )


----------



## eskys (22 December 2021)

I'm trying to make sense of the word 'moon' here when used as a verb. Is it waning or waxing? Or is this a transitive verb? In which case, I get the message.


----------



## divs4ever (22 December 2021)

it might mean  bare buttocks as well ( making ridicule  of you )

 as long as the company stays stable and sensible , the share price can move wherever  , and i'll make decisions based on the share-price at the time


----------



## eskys (22 December 2021)

divs4ever said:


> it might mean  bare buttocks as well ( making ridicule  of you )
> 
> as long as the company stays stable and sensible , the share price can move wherever  , and i'll make decisions based on the share-price at the time



Hi divs, I wasn't sure if it was meant to be setting, and thought it could be that seeing the sp going red. By the way, (excuse me folks, I'm off subject here) how do I find the thread we were on yesterday? I seem to have lost it


----------



## divs4ever (22 December 2021)

last i  looked today the FMG SP was  down ( but not enough to  tempt me )

  but i interpreted 'moon' as to go to the Moon  , after folks had taken precautionary profits  (  that happened to me a couple of times in early in my investing  adventure   , so developed a strategy  to NEVER completely exit a holding  , unless i intend that exit to be permanent )

and let's face it if FMG doesn't spin-off FFI  ( but i think it will  to drag in some R&D cash , later ) FMG could easily become an ESG  darling ( a must-have' in every 'socially caring ETF ' ) .. or a thousand cuts by predatory fund-managers ( running ESG funds )


----------



## eskys (22 December 2021)

This article popped up on my screen this afternoon. I didn't read it cos I'm out of Fe  


Iron Ore’s Heady Days Are Fading as China’s Growth Engine Cools​
_




_Commodities7 hours ago (Dec 21, 2021 04:18PM ET)


----------



## divs4ever (22 December 2021)

nope am still very exposed to Fe  , but then i have been bemused by the unusual commodity cycle this time  ,  i was expecting   a consolidation phase ( mines to wind down  , repairing , upgrading  as needed  and those with surplus  cash  or credit to pick up distressed  assets )

 so this has been a pleasant surprise to me

 AND China needed to cool the rate of growth  even before September 2019 ( excessive , continuous growth is often called a cancer )

 the world  economy is more  at risk from  from  a slowing China , than to China itself


----------



## basilio (29 December 2021)

FMG is using it's considerable engineering talent in the green hydrogen direction. T

Fortescue Future Industries designs and builds its own electrolyser​
Dec 23, 2021


Fortescue Future Industries (FFI) has achieved another ambitious target, making hydrogen using an electrolyser designed and built by the FFI team.

A small team from FFI’s manufacturing arm developed the innovative electrolyser in their Western Australia facility, producing industrial grade hydrogen for the first time *e*arlier this week.

FFI has developed a number of new electrolyser technologies that will form part of their electrolyser patent family.

The outcomes of these projects will inform FFI’s electrolyser technology selection going forward, as FFI works towards its target to produce 15 million tonnes of green hydrogen per year by 2030.

FFI Chief Executive Officer Julie Shuttleworth said, “This is another outstanding achievement from our FFI in-house scientists and engineers – who are continuing to break new ground.

“The FFI team has designed and operated our own electrolyser system which will be key to developing FFI’s green hydrogen production into the future,” Ms Shuttleworth said.

FFI Chairman, Dr Andrew Forrest AO said, “This electrolyser was internally designed, built and commissioned by a small, dedicated team of experts – an impressive achievement that is representative of the hard work that is happening across the whole of FFI.

“The team spent thousands of hours on this project, facing setbacks along the way, but they pushed forward and managed to produce hydrogen before their stretch target date – something they should be incredibly proud of.

“This is not the first time FFI’s team of experts have beaten their stretch targets. *Earlier this year, FFI retrofitted a huge mining haul truck to run on hydrogen, producing only steam, in just 130 days,” Dr Forrest said.*

FFI is in the process of installing solar panels at FFI’s Dawson Road facility which will mean the electrolyser will be able to produce green hydrogen in 2022.

The stack that produced the hydrogen is a pressurised alkaline system. The internally designed supporting hydrogen gas management system is fully operational and will be used to test all of FFI’s prototypes and designs.

*Editors’ note*: Please find images of the FFI team working on the electrolyser here.





__





						Fortescue Future Industries designs and builds its own electrolyser | Fortescue Metals Group Ltd
					






					www.fmgl.com.au


----------



## basilio (29 December 2021)

On a practical cost reduction basis FMG has just commissioned a Solar/Gas project that will power their Chrichster Hub enterprise.

It will replace around 100million litres a year of diesel fuel

Fortescue’s Chichester Hub daytime operations powered by renewable solar energy​
Dec 15, 2021

Fortescue’s Chichester Hub operations are now being powered by solar energy following the completion of the 60-megawatt Alinta Energy Chichester Solar Gas Hybrid Project in Western Australia’s Pilbara region.

Completion of the project with Alinta Energy marks a major milestone in the delivery of Fortescue’s decarbonisation strategy, as the Company works towards its ambitious target of being carbon neutral by 2030 for Scope 1 and 2 emissions.

*The solar farm will power up to 100 per cent of daytime operations at Fortescue’s Christmas Creek and Cloudbreak sites, displacing around 100 million litres of diesel every year.* The remaining power requirements will be met through battery storage and gas generation at Alinta Energy’s Newman Power Station.





__





						Fortescue’s Chichester Hub daytime operations powered by renewable solar energy | Fortescue Metals Group Ltd
					






					www.fmgl.com.au


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## Mr Flibble (30 December 2021)

Hopefully there are no more cost blowouts from Iron Bridge and it starts production in late 2022 as per forecast. The higher grade will help the bottom line. The soothsayers have ore prices falling during 2022, which may be the case, but I think it's overstated. FMG have a very efficient operation and FFI is doing good things.


----------



## Garpal Gumnut (30 December 2021)

FMG is a pick for me in the CY22 Competition, as it is for many others. 

It is doing everything right, good cash flow, forward looking and in to clean energy and hydrogen. 

gg


----------



## basilio (1 January 2022)

Garpal Gumnut said:


> FMG is a pick for me in the CY22 Competition, as it is for many others.
> 
> It is doing everything right, good cash flow, forward looking and in to clean energy and hydrogen.
> 
> gg




As per GG I'm backing FMG  in the CY22 competition to do well .  I think it's underpriced for just its iron ore business and '22 should see some  concrete results for it's clean energy projects starting with the electrolyser factory in Queensland.

I also believe the reduction in running costs in the iron ore operations with solar power replacing diesel will improve profits to a degree.


----------



## Ann (2 January 2022)

Just chucking up a chart for FMG. I am bearish unless it gets above $20 and then I would want to wait to see if the Iron Ore price rises above an upcoming trendline and a couple of overhead resistance lines on the Iron Ore chart.






and the Iron Ore chart..


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## divs4ever (2 January 2022)

the Chinese go on their Festive Season  soon  i would expect the iron price to be subdued for a couple of months ,

 after that  well good luck


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## Wedgy (2 January 2022)

One of my top 4 tips to do well in 2022, FFI (100% subsidiary of FMG) is the major reason. I am expecting continued good news and growth with FFI green hydrogen plans, a lot faster than most people think, hopefully in partnership with another of my top tips (AGL), wishful thinking. I am also not convinced that we have seen the end of high iron prices as the world transitions to post covid growth and less reliance on China.


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## bux2000 (3 January 2022)

I too have put *FMG *in my four picks for the CY 2022 competition. 
There has to be so much going for FMG into the future as @Wedgy  has spoken of so eloquently above.
Andrew Forrest's story is one that has been told many times in this thread and is very inspirational for anyone who has experienced a problem that at the beginning appears insurmountable and only overcome with persistence and tenacity. 

There appears to be so much more to be told in the future book that tells  the FMG story and hope 2022 writes another successful chapter.

bux


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## jamezo10 (4 January 2022)

I really believe FMG is going to continue growing strength to strength. This is another of my picks for this year. Twiggy is a smart guy and with Hydrogen coming into play it’s very exciting for the company. One to keep adding too imo.


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## basilio (5 January 2022)

FMG is not forgetting it's iron ore business.  Just before Christmas they announced a 36 month assessment of a potentially huge new iron ore project in Gabon. Obviously down the track but  could be anything.

*EXCLUSIVITY PERIOD TO STUDY THE BELINGA IRON ORE PROJECT IN GABON *

Fortescue Metals Group Ltd (Fortescue, ASX: FMG) advises that it has entered into an agreement with the Government of the Republic of Gabon to study the opportunity to develop the Belinga Iron Ore Project in Gabon, West Africa. The agreement comprises a 36 month exclusivity period over an area totalling approximately 5,500 square kilometres to study and negotiate a Mining Convention for the development of the Belinga Iron Ore Project. A separate Gabon mining company will be established to enter into the Mining Convention and to hold the mining tenure over the Belinga Iron Ore Project. The mining company will be established by an incorporated joint venture which will be owned 80 per cent by Fortescue and 20 per cent by the Africa Transformation and Industrialisation Fund, an Africa-focused investment fund incorporated in Abu Dhabi. The joint venture will initially focus on exploration works to determine the potential size and grade of the Belinga iron ore deposit and logistics solutions during the 36 month exclusivity period.

Gabon’s Minister for Petroleum, Gas, Hydrocarbons and Mines, Mr Vincent de Paul Massassa, said “This is a highly significant announcement for the future growth and development of our economy. We know that the Belinga deposit is one of the world’s largest high grade iron ore deposits and the opportunity to work with an established mining company with the track record and reputation of Fortescue will allow us to fully explore the potential that we know exists in the project.” “Following successful completion of the initial exploration and due diligence work with Fortescue, our aim is to put the Belinga project back on track, building the mining sector’s contribution to our economy and delivering training, jobs and skills,"

 Fortescue Chairman and Founder, Dr Andrew Forrest AO, said “We welcome this important agreement and opportunity to work with the Gabon Government on a project with huge potential for Gabon’s future economic growth and development. Fortescue began as a world-class exploration business and we believe that the Belinga Iron Ore Project is potentially one of the world’s largest undeveloped, high grade hematite deposits



			https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02467069-6A1068779?access_token=83ff96335c2d45a094df02a206a39ff4
		










						Monsters of Rock: Andrew Forrest finds his own 'Simandou-like' iron ore project - Stockhead
					

Fortescue Metals Group has announced and exclusive deal to study an iron ore project in Gabon in a bid to boost high grade production.




					stockhead.com.au


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## basilio (6 January 2022)

FMG has put its skates on in the past few days. Currently sitting at $20.41.

The financials for the last 6 months will be out imminently.  After all the strum and angst over "collapsing" iron ore prices I think they will still show a very tidy profit and dividend.


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## basilio (10 January 2022)

FMG announced the purchase of 2 new battery electric locomotives to power their ore trains.

Interesting really. They have been diligently working on  devising  drive systems that use green ammonia and, I guess, a hydrogen fuel cell system. Now they are (also) buying in an off the shelf train from Brazil. 

They note that the purchase will reduce fuel costs and maintenance.

https://www.fmgl.com.au/in-the-news...chase-of-two-new-battery-electric-locomotives


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## sptrawler (10 January 2022)

basilio said:


> FMG announced the purchase of 2 new battery electric locomotives to power their ore trains.
> 
> Interesting really. They have been diligently working on  devising  drive systems that use green ammonia and, I guess, a hydrogen fuel cell system. Now they are (also) buying in an off the shelf train from Brazil.
> 
> ...



It just shows they aren't being single minded in their approach, actually a very sensible decision IMO, locking into one outcome usually ends up with a very expensive result that isn't always the best.


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## JohnDe (10 January 2022)

basilio said:


> FMG announced the purchase of 2 new battery electric locomotives to power their ore trains.
> 
> Interesting really. They have been diligently working on  devising  drive systems that use green ammonia and, I guess, a hydrogen fuel cell system. Now they are (also) buying in an off the shelf train from Brazil.
> 
> ...




It takes more energy to produce less hydrogen, until FMG are able to create more renewable energy than required to produce green hydrogen they will be looking at 'off the shelf' equipment to help bring their carbon footprint down so as to keep their promises and the market happy.



> Considering the industrial production of hydrogen, and using current best processes for water electrolysis (PEM or alkaline electrolysis) which have an effective electrical efficiency of 70–82%, producing 1 kg of hydrogen (which has a specific energy of 143 MJ/kg or about 40 kWh/kg) requires 50–55 kWh of electricity.




Easier to use renewable electricity to charge a couple of trains, while the science works out the hydrogen production & storage problems.


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## Value Collector (10 January 2022)

JohnDe said:


> It takes more energy to produce less hydrogen, until FMG are able to create more renewable energy than required to produce green hydrogen they will be looking at 'off the shelf' equipment to help bring their carbon footprint down so as to keep their promises and the market happy.
> 
> 
> 
> Easier to use renewable electricity to charge a couple of trains, while the science works out the hydrogen production & storage problems.



I agree, a battery powered train (just like a battery car) is a more efficient use of the electricity, hydrogen/green ammonia will be good for systems that have to operate away from electrical grids or for transporting energy internationally where the convenience of liquid fuel out ways the energy losses.


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## spratty84 (10 January 2022)

Is anyone else going to participate in the drp this coming mid year reporting season. I am planning to participate for the medium term unless there is a major change for the worst as i missed out on those cheap years and only just bought a parcel when it was discounted a few months ago. I will definitely buy again when the opportunity arises and it will be interesting to see what the returns will be as i am hoping to build up a decent holding for my longer term divy portfolio.


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## Wedgy (10 January 2022)

JohnDe said:


> It takes more energy to produce less hydrogen, until FMG are able to create more renewable energy than required to produce green hydrogen they will be looking at 'off the shelf' equipment to help bring their carbon footprint down so as to keep their promises and the market happy.
> 
> 
> 
> Easier to use renewable electricity to charge a couple of trains, while the science works out the hydrogen production & storage problems.



That is true, i guess the plan is to use renewables, solar and wind, when the sun shines and wind blows. It is a way of storing green energy when you can, even if it is using more energy than the energy stored. Of course I suspect they will use gas if they have to, to keep hydrogen/ammonia production plants running.


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## divs4ever (10 January 2022)

spratty84 said:


> Is anyone else going to participate in the drp this coming mid year reporting season. I am planning to participate for the medium term unless there is a major change for the worst as i missed out on those cheap years and only just bought a parcel when it was discounted a few months ago. I will definitely buy again when the opportunity arises and it will be interesting to see what the returns will be as i am hoping to build up a decent holding for my longer term divy portfolio.



 i bought some FMG  in August and September 2021  but haven't applied to participate in the DRP yet ( the first parcel  was  carrying a div. )

 i am still considering  IF i should join  , since i am already retired  , the cash income  is equally tempting   compared to  the increasing share-holding ( which would have had more appeal for me  , if i was still in the 'accumulation phase ' )

 i have a similar quandary over the BHP divs since they have recently implemented a DRP plan 

 IMO very much a personal choice  on this 

 good luck


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## againsthegrain (10 January 2022)

I picked up a full drp parcel last divy, got my shares allocated at 18, yeah if I had a crystal ball would of taken the cash and loaded at 14 but easily said now. Still letting it ride for another full drp allocation on the coming divy


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## Value Collector (10 January 2022)

divs4ever said:


> i bought some FMG  in August and September 2021  but haven't applied to participate in the DRP yet ( the first parcel  was  carrying a div. )
> 
> i am still considering  IF i should join  , since i am already retired  , the cash income  is equally tempting   compared to  the increasing share-holding ( which would have had more appeal for me  , if i was still in the 'accumulation phase ' )
> 
> ...



You could always do half and half, Most DRP plans allow you select a percentage you want to participate.

collecting something like 80% in cash and 20% DRP might be a good balance so you have some walking around  money, but still feel like you are letting your investment compound a bit in the back ground to.


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## divs4ever (10 January 2022)

Value Collector said:


> You could always do half and half, Most DRP plans allow you select a percentage you want to participate.
> 
> collecting something like 80% in cash and 20% DRP might be a good balance so you have some walking around  money, but still feel like you are letting your investment compound a bit in the back ground to.



 i have  partially participated  in DRPs  in other selected shares (  normally i fully participate in available DRPs )

 however my original plan  was to reduce  DRP participation ( as needed  once i retired ), anticipating  increased inflation in my later years , instead of drawing  down regularly on the portfolio 

 so  i MIGHT participate  in the FMG DRP , but reduce participation in MQG  or WES ( or both ) 

 given the cloudy near term economic climate  , i am still  considering the options  ( especially if real inflation is around 6% and likely to climb higher


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## sptrawler (10 January 2022)

divs4ever said:


> i have  partially participated  in DRPs  in other selected shares (  normally i fully participate in available DRPs )
> 
> however my original plan  was to reduce  DRP participation ( as needed  once i retired ), anticipating  increased inflation in my later years , instead of drawing  down .



It does become an issue wben retired, especially in these times of low returns, the drawdown requirement increases, whether the dividends increase or not.
So unless you have a  cash buffer, it requires the selling of shares to cover the pension withdrawl.
During covid, the pension drawdown requirement has been halved, which has helped a lot.


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## divs4ever (10 January 2022)

againsthegrain said:


> I picked up a full drp parcel last divy, got my shares allocated at 18, yeah if I had a crystal ball would of taken the cash and loaded at 14 but easily said now. Still letting it ride for another full drp allocation on the coming divy



 yes hindsight can be very educational  ( in my case the timeline to participate in the last DRP was just too tight for me )

 in SOME DRPs  participation is a no brainer  ,  in others it is just convenient  for some


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## divs4ever (10 January 2022)

sptrawler said:


> It does become an issue wben retired, especially in these times of low returns, the drawdown requirement increases, whether the dividends increase or not.
> So unless you have a  cash buffer, it requires the selling of shares to cover the pension withdrawl.
> During covid, the pension drawdown requirement has been halved, which has helped a lot.



 some holdings have never had a DRP .. like BHP , until recently  ,  or a normally suspended DRP , like APE , some there was SOME cash trickling back , anyway , but will that be enough in say 2024 or 2025  , i don't have a yacht or personal jet to sell  , if things get tight 

 i am hoping to be able to resist drawing down  on the portfolio  , but who wants to guess at inflation for the next 5 years


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## spratty84 (10 January 2022)

Thanks for the replies it is interesting to hear peoples perspectives and different stages of life. At my stage of being 37 (debt free,own my house outright equity in a unit, wifes a clinical nurse on good money and just the one child). I am trying to build a reasonable divy portfolio over the next 10 years as years of manual labour have already buggered my body so will get worse over time. The covid bust was good timing and deployed 80k into the banks at 20 year lows which has been a great start as well a couple species that have been winners (banks i dont drp due to needing to diversify). Main issue is trying to find good companies at an attractive price at the moment. So when i look a great run profitable company like fmg and its future prospects its something i want to accumulate.


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## basilio (10 January 2022)

FMG decision to buy a couple of electric locomotives follows Gina Rineharts similar decision back in September last year.  In fact the race to electrify  heavy rail haulage  across all areas is picking up.

Excellent analysis below on how relatively simple the process will be and the advantages/opportunities for rail freight to go battery electric.









						Battery-Electric Freight Trains Could Happen, Eventually
					

New battery-electric freight trains are beginning to hit the rails, and they could soon be joined by electrified diesel locomotives, too.




					cleantechnica.com
				











						Gina Rinehart’s Roy Hill to make history with first battery-powered electric locomotive to operate in Pilbara - Roy Hill
					

Roy Hill is set to be the first Pilbara miner to use a battery-powered electric locomotive to transport its iron ore to port. The Gina Rinehart-controlled company has bought the newest version of the FLXdrive battery-electric locomotive which has an energy capacity of 7 megawatt hours from...




					www.royhill.com.au


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## Value Collector (10 January 2022)

basilio said:


> FMG decision to buy a couple of electric locomotives follows Gina Rineharts similar decision back in September last year.  In fact the race to electrify  heavy rail haulage  across all areas is picking up.
> 
> Excellent analysis below on how relatively simple the process will be and the advantages/opportunities for rail freight to go battery electric.
> 
> ...



It’s not to big of a stretch really, the loco’s almost everyone uses (including FMG) are already electric, they are just run by on board diesel generators, so you just have to have batteries to power the electric motor instead of the diesel generator and fuel tanks.

When you think of it, FMGs trains are already 3 kms long pulling hundreds of wagons, so even if they had to hitch a couple of battery wagons to the train for long distance trips it would be doable. 

Then when the train slows right down during loading and unloading, they could recharge it from over head wires like a regular electric train, so it wouldn’t have to “plug in”, and you could put a couple of km’s of over head wires over the track at various parts where the rails come close to existing electricity networks to recharge the train on the move.


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## divs4ever (10 January 2022)

spratty84 said:


> Thanks for the replies it is interesting to hear peoples perspectives and different stages of life. At my stage of being 37 (debt free,own my house outright equity in a unit, wifes a clinical nurse on good money and just the one child). I am trying to build a reasonable divy portfolio over the next 10 years as years of manual labour have already buggered my body so will get worse over time. The covid bust was good timing and deployed 80k into the banks at 20 year lows which has been a great start as well a couple species that have been winners (banks i dont drp due to needing to diversify). Main issue is trying to find good companies at an attractive price at the moment. So when i look a great run profitable company like fmg and its future prospects its something i want to accumulate.



 i would suggest you SELECTIVELY DRP .. some plans are a good deal  and you can always cancel or reduce participation later 

 in the case of WOW  i sold about over 80% of the holding  but kept the DRP going  ( depending on how you do the math the remaining holding  is almost entirely DRP shares accumulated over the last 10 years ) whereas with MQG  i would be more likely to withdraw from the DRP (  @ $200 a share the DRP  doesn't grow so fast  , compared to say AST )

 but yes investing for the future  , is a tricky balancing act 

 by the way about your buggered body  , think about a FULL medical ( by a quality doctor )  at the worst  it will give you  a clearer investing time-frame  , ( do you need to be more or less aggressive in your investing bias )

 remember SOME growth stocks pay divs as well  ( and some that  pay divs are  running out of places to grow )

 now i don't know if FMG  will spin-off it's 'clean energy arm '  , but keep that in your mind as a possibility  ,  for example BHP has a history  of restructuring it's assets  ( WES as well )

 BTW you can DRP , and buy extra parcels on the way ( that can work well if there are plenty of dips  , say a share like QBE )


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## spratty84 (10 January 2022)

divs4ever said:


> i would suggest you SELECTIVELY DRP .. some plans are a good deal  and you can always cancel or reduce participation later
> 
> in the case of WOW  i sold about over 80% of the holding  but kept the DRP going  ( depending on how you do the math the remaining holding  is almost entirely DRP shares accumulated over the last 10 years ) whereas with MQG  i would be more likely to withdraw from the DRP (  @ $200 a share the DRP  doesn't grow so fast  , compared to say AST )
> 
> ...



My overall strategy is seeking out growth stocks, solid divy stocks and the odd speckie that tickles my fancy but all at a reasonable value. Im naturally very frugal and dont like over paying for anything. As for my body i have a family history with arthritis and due to wear and tear from work and bloody footy my knees, shoulders and neck are not in the best, but to be honest most tradies are not in much better shape by late 30s to 40s. I have seen my farther an ex farmer who is totally crippled by pain at 60 by working longer than he should have. So i made a lifestyle decision a couple years ago and got a job on a local council to preserve my body as well have a better work life balance.


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## divs4ever (10 January 2022)

i am not condemning your decision  , or your early planning  , just hoping  we can get you in a ( financially ) comfortable  position  early , because life is full of surprises  .. but watch the strong  pain-killers   i was on  them  and they ate a hole in my stomach ( something the GP hasn't even thought about asking about yet  , despite  the  various scans  showing right shoulder damage  , seems nothing medically important happened before July 2016   to me )

 using our big 4 banks  , the two major food retailers  and our two largest mining companies as a guide ( i could add the two  major utility companies as well )  finding   a good SOLID company is hard , especially if they start 'refreshing  the board '  for various reasons  , you might need to keep a little bit flexible


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## sptrawler (10 January 2022)

spratty84 said:


> My overall strategy is seeking out growth stocks, solid divy stocks and the odd speckie that tickles my fancy but all at a reasonable value. Im naturally very frugal and dont like over paying for anything. As for my body i have a family history with arthritis and due to wear and tear from work and bloody footy my knees, shoulders and neck are not in the best, but to be honest most tradies are not in much better shape by late 30s to 40s. I have seen my farther an ex farmer who is totally crippled by pain at 60 by working longer than he should have. So i made a lifestyle decision a couple years ago and got a job on a local council to preserve my body as well have a better work life balance.



I was in exactly the same situation, did exactly what you are doing, it worked out fine.
Replaced knees and hip in my 50's retired at 56 self funded, always worked for wages  it can be done if you play the long game and stick to the plan.
I always found having a line of credit ready for those once in a lifetime occassions, that happen every 7 to 10 years was handy. No point if opportunity presents and having no money available.


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## spratty84 (10 January 2022)

sptrawler said:


> I was in exactly the same situation, did exactly what you are doing, it worked out fine.
> Replaced knees and hip in my 50's retired at 56 self funded, always worked for wages  it can be done if you play the long game and stick to the plan.
> I always found having a line of credit ready for those once in a lifetime occassions, that happen every 7 to 10 years was handy. No point if opportunity presents and having no money available.



Great to hear mate, i have kept a redraw open on my home for that exact reason i dont want to be short when a rare opportunity arises.


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## sptrawler (11 January 2022)

spratty84 said:


> Great to hear mate, i have kept a redraw open on my home for that exact reason i dont want to be short when a rare opportunity arises.



Absolutely spot on, the dividend is what replaces your wages, when the species do well, use the profit to buy more dividends.


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## Value Collector (11 January 2022)

sptrawler said:


> Absolutely spot on, the dividend is what replaces your wages, when the species do well, use the profit to buy more dividends.



Also, nothing wrong with taking out capital too once you are in the fourth quarter of the game, you don’t want to die leaving to much money on the table, especially when the age pension is there as a back up for those final slow years.


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## Country Lad (11 January 2022)

Country Lad said:


> It is at an interesting point. It could be said it is a symmetrical top triangle indicating a downward direction from here, but this is the sort of P&F pattern I like as positive ........



Still positive.  Approaching resistance, but if it goes according to the script, may not be a problem.


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## Garpal Gumnut (11 January 2022)

Country Lad said:


> Still positive.  Approaching resistance, but if it goes according to the script, may not be a problem.
> 
> View attachment 135580



Thanks @Country Lad .

The daily OHLC is similar after bottoming and the shake out on large volume in Sept 21, with a sideways movement until the trend up began Nov. 2021. 

The trend is your friend.






gg


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## Sharkman (20 January 2022)

Sharkman said:


> i don't have all that much confidence in a strong recovery TBH




well, looks like i got that badly wrong!



Sharkman said:


> ended up selling the oct 7 $15.50 weeklies & buying jan '22 $19s for a 10c credit. even that wasn't a good fill either as it was several ticks their side of the mid, but pushing the near leg out a week meant that it could be done at modest credit, which i find psychologically important




but it's exactly why i like zero cost/small credit diagonal call strategies. had i bought the jan $19 calls outright, i likely stop out back in early nov when it dropped under half the original premium paid, given my lack of conviction. whereas having an unlimited reward position on your books for free makes it that much easier to simply hold on and just see what happens.

i would be the first to admit that i don't have a particularly deep knowledge of this company, but after reading thru the excellent posts above by people who do, i've decided to let the calls auto-exercise today, become an FMG shareholder for the first time ever and join in for the ride.

now comes the hard part, having to scrounge up the cash to take delivery. never ended up setting aside the funds for it, as the original plan was to sell back the calls for whatever intrinsic they had on expiry day. times like these i really lament the loss of margin at IB Aust.


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## basilio (23 January 2022)

Signiciant after market announcement by FMG on Frday. 

Fortescue (ASX:FMG) share price on watch amid Sinosteel Oakajee agreement​Fortescue’s shares will be on watch on Monday. Here’s why…





James Mickleboro❯
Published January 21, 6:45pm AEDT

  
 *FMG*





Key points

Fortescue has signed an agreement with China’s Sinosteel
The two parties will assess Sinosteel’s Midwest Magnetite Project in Western Australia
Fortescue sees opportunities for Fortescue Future Industries’ green energy objectives
The *Fortescue Metals Group Limited* (ASX: FMG) share price will be one to watch on Monday.
This follows the release of an announcement after the market close on Friday.
Why is the Fortescue share price on watch?​Investors may want to keep an eye on the Fortescue share price on Monday after it announced an agreement with China’s state-owned Sinosteel.

According to the release, the two parties have signed a binding Memorandum of Understanding (MoU) to complete a rapid project assessment of Sinosteel’s Midwest Magnetite Project in Western Australia. The assessment will include a rail and port development at Oakajee.

Following the conclusion of the 12 month rapid project assessment and subject to the outcome of that process, Fortescue will have the option to acquire up to 50% of the Midwest Magnetite Project and up to 100% of the proposed port and rail infrastructure project.

Fortescue’s Chief Executive Officer, Elizabeth Gaines, said: “For over three decades, Sinosteel has demonstrated their strong performance and ability to deliver mining projects in Australia including their Channar Mine in the Pilbara. The signing of this MoU demonstrates Fortescue’s commitment to our strategic pillars of investing in the long-term sustainability of our iron ore business, expanding into new regions and continuing to deliver strong returns to our stakeholders.”

Ms Gaines also sees opportunities for its highly divisive Fortescue Future Industries business to leverage the operation.
She said: “We look forward to working with Sinosteel on the next steps for this important project for Western Australia which, in addition to the magnetite and infrastructure development, offers the opportunity for a co-ordinated project combining Fortescue’s iron ore and infrastructure pedigree with Fortescue Future Industries’ green energy objectives.”

“Future development including a renewable, green hydrogen hub in the Midwest region at Oakajee would deliver a large-scale resources and renewables project for Western Australia, further underpinning our enduring relationship with China,” Ms Gaines added.




			https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02477909-6A1073250?access_token=83ff96335c2d45a094df02a206a39ff4


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## Garpal Gumnut (24 January 2022)

basilio said:


> Signiciant after market announcement by FMG on Frday.
> 
> Fortescue (ASX:FMG) share price on watch amid Sinosteel Oakajee agreement​Fortescue’s shares will be on watch on Monday. Here’s why…
> View attachment 136398
> ...



It will be interesting to see how the Iron ore stocks particularly FMG weather this mooted week of instability.

I usually find that when everyone is saying the world is going to fall in that the week is as boring as all sh*t.

gg


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## divs4ever (24 January 2022)

ACQUISITION OF UK-BASED WILLIAMS ADVANCED ENGINEERING

 Leading provider of high-performance battery and electrification technologies Fortescue Metals Group Ltd (Fortescue, ASX: FMG), has entered into a share sale and purchase agreement to acquire 100 per cent of Williams Advanced Engineering Limited (WAE) from private equity firm EMK Capital and Williams Grand Prix Engineering Limited for £164 million (approximately US$223 million). The transaction is expected to conclude by the end of March 2022, subject to the satisfaction of customary conditions precedent including United Kingdom foreign investment approval. WAE will be vertically integrated into Fortescue’s diversified resources and green energy business and will be managed via Fortescue Future Industries (FFI), Fortescue’s green energy and green technology division. 
Fortescue has worked closely with WAE since early 2021 to design and build a prototype battery system to power an electric mining haul truck, an important first step in the decarbonisation of Fortescue's mining haul fleet. The acquisition of WAE provides critical technology and expertise in high-performance battery systems and electrification and will enable Fortescue to accelerate and support the decarbonisation of Fortescue’s mining operations as well as establishing an important new business growth opportunity. Together, Fortescue and WAE will develop battery electric solutions for Fortescue’s rail, mobile haul fleet and other heavy mining equipment, to accelerate the rapid abatement of diesel usage to achieve the decarbonisation of Fortescue’s mining operations by 2030. In addition, Fortescue and WAE will work together to grow WAE’s world-leading green technology and engineering business. One of the first major projects to be developed will be a world leading battery electric train concept. 
Fortescue and FFI will announce further details on this early in 2022. WAE has a demonstrated track record of success working with Tier 1 customers in advanced engineering across the premium automotive and motorsports sectors with revenue of approximately US$84 million in CY21 (unaudited basis). WAE will bring speed, precision and cutting-edge technology from the racetrack to heavy industry. Fortescue, as a foundation customer, will support the development and manufacturing of battery electric and hydrogen fuel cell power units with the goal for WAE to become a major player in the growing global market for heavy mobile equipment and rail. Fortescue Founder and Chairman Dr Andrew Forrest AO said, “This is a major milestone in the future of our Company as we welcome WAE to the Fortescue family. FFI and WAE will work together to decarbonise Fortescue - and in turn the global heavy industry and hard to abate sectors - for the good of our planet, and the benefit of our shareholders. Fortescue Metals Group Ltd ABN 57 002 594 872 Level 2, 87 Adelaide Terrace, East Perth, Western Australia 6004 PO Box 6915, East Perth, Western Australia 6004 P +61 8 6218 8888 E fmgl@fmgl.com.au W www.fmgl.com.au Page 2 of 3 “Today’s announcement builds on our commitment to remove fossil fuel powered machinery from our operations and to replace it with zero carbon emission technology, powered by FFI green electricity, green hydrogen and green ammonia. “For decades, Sir Frank Williams’ F1 racing business was at the forefront of innovation in engineering and I thank him for his pioneering vision in founding WAE over a decade ago. I was sorry to hear of his passing last year and I pay tribute to him. I have huge respect for him, his family and the Williams’ business,” Dr Forrest said. Fortescue Chief Executive Officer, Elizabeth Gaines said, “Fortescue and WAE share strong cultural alignment with a focus on technology and innovation to support carbon neutrality, with both companies being leaders in their respective industries. We look forward to working together to apply this technology-first strategy to our emissions reduction pathway while also empowering the highly capable WAE team to achieve growth opportunities in new products, services and markets. The potential global market for WAE is significant and will extend beyond the decarbonisation of Fortescue, further demonstrating our commitment to the diversification of Fortescue to a renewable energy and resources company.” Craig Wilson, WAE Chief Executive Officer, said, “High performance battery and electrification systems are at the core of what we do at WAE and this acquisition and investment will facilitate the company’s further growth to support the delivery of zero emission products and services across existing sectors – such as automotive, motorsport and off-highway – and new sectors too. This will benefit all of our stakeholders along with current and future customers who are very important to us. My thanks also to EMK Capital for their support during the past two years that has enabled us to accelerate the successful progress of WAE and development of technologies to help tackle climate change. “We are delighted to play a key role in Fortescue’s decarbonisation strategy, contributing to the delivery of their emissions reduction targets through high performance battery systems, green hydrogen and related technologies. We will also be focusing on addressing the sector-wide challenges in the off-highway sector. Both companies have a shared culture of innovation, setting and achieving stretch targets and a genuine commitment to creating a sustainable future.” Under Fortescue’s ownership, WAE will continue to service its customers while rapidly expanding its electrification technologies, engineering and manufacturing offerings. As part of this, Fortescue will establish an Advisory Board to guide and empower WAE to achieve its targets. Fortescue’s Lead Independent Director and Deputy Chairman, Mr Mark Barnaba AM, will serve on the Advisory Board. The acquisition will be funded from Fortescue’s existing liquidity sources, with the consideration payable on close subject to customary working capital adjustments. Fortescue Metals Group Ltd ABN 57 002 594 872 Level 2, 87 Adelaide Terrace, East Perth, Western Australia 6004 PO Box 6915, East Perth, Western Australia 6004 P +61 8 6218 8888 E fmgl@fmgl.com.au W www.fmgl.com.au Page 3 of 3 

ABOUT WAE WAE is a world-leading technology and engineering services business delivering pioneering innovation to improve performance, efficiency and sustainability to a global customer base. Combining cutting-edge technological advances and the industry’s best engineers with precision and speed to market derived from the ultra-competitive environment of motorsport, WAE’s capabilities cover a wide range of disciplines. The Company provides ground-breaking innovation covering advanced battery and electrification technologies and product development; aided by advanced simulation, testing, rapid prototyping and volume manufacturing. Working in close collaboration with our customers, WAE remains committed to meeting the continued sustainability challenges of the 21st Century. WAE can trace its foundations back to 2010 when Williams Grand Prix Engineering Limited began diversifying its operations; a division which later became WAE. In December 2019, Williams Grand Prix Engineering (which is owned by private investment firm Dorilton Capital) sold a majority equity stake in WAE to EMK Capital. WAE has grown from an embryonic business in 2010 to a company which employs approximately 400 people engaged in leading-edge and transformative technologies for a growing list of Tier 1 clients. Following the acquisition by Fortescue Metals Group, WAE will continue to service its existing customers and commercialise new technology opportunities, in addition to playing a key role in supporting Fortescue’s decarbonisation strategy. 

DYOR

 i hold FMG

 let's see how the market reacts to this


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## basilio (24 January 2022)

divs4ever said:


> ACQUISITION OF UK-BASED WILLIAMS ADVANCED ENGINEERING
> 
> Leading provider of high-performance battery and electrification technologies Fortescue Metals Group Ltd (Fortescue, ASX: FMG), has entered into a share sale and purchase agreement to acquire 100 per cent of Williams Advanced Engineering Limited (WAE) from private equity firm EMK Capital and Williams Grand Prix Engineering Limited for £164 million (approximately US$223 million). The transaction is expected to conclude by the end of March 2022, subject to the satisfaction of customary conditions precedent including United Kingdom foreign investment approval. WAE will be vertically integrated into Fortescue’s diversified resources and green energy business and will be managed via Fortescue Future Industries (FFI), Fortescue’s green energy and green technology division.
> Fortescue has worked closely with WAE since early 2021 to design and build a prototype battery system to power an electric mining haul truck, an important first step in the decarbonisation of Fortescue's mining haul fleet. The acquisition of WAE provides critical technology and expertise in high-performance battery systems and electrification and will enable Fortescue to accelerate and support the decarbonisation of Fortescue’s mining operations as well as establishing an important new business growth opportunity. Together, Fortescue and WAE will develop battery electric solutions for Fortescue’s rail, mobile haul fleet and other heavy mining equipment, to accelerate the rapid abatement of diesel usage to achieve the decarbonisation of Fortescue’s mining operations by 2030. In addition, Fortescue and WAE will work together to grow WAE’s world-leading green technology and engineering business. One of the first major projects to be developed will be a world leading battery electric train concept.
> ...




I think it is an excellent investment decision that will bring advanced battery technology skills directly into their future green energy market.

The share market is not going to respond to the purchase in the short term.  Sentiment is poor overall.


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## Wedgy (24 January 2022)

I have to admit I didn't think batteries could be used for ore trains and mining haul trucks, not enough power for such heavy work. Looks like I was wrong, its a game changer for me. But of course they will need to be able to generate a lot of electricity to charge them, which is the next issue. The one thing I like about Twiggy and FMG is they don't muck around, if they say they are going to do something, they do it, fast.


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## qldfrog (24 January 2022)

Wedgy said:


> I have to admit I didn't think batteries could be used for ore trains and mining haul trucks, not enough power for such heavy work. Looks like I was wrong, its a game changer for me. But of course they will need to be able to generate a lot of electricity to charge them, which is the next issue. The one thing I like about Twiggy and FMG is they don't muck around, if they say they are going to do something, they do it, fast.



Dragline and the whole line of Komatsu hauling trucks have been electric for decades.
I so imagine Komatsu is well placed to go ev , just replacing the on board diesel generator..as this is what it is..by battery
Developing new giant hauling ev trucks from scratch by a new company..no way..
But if i was still interested in doing business in Oz,in my old mining battlefield, i see the feasibility of autonomous small ev hauling truck swarms.
Anyone reading this and tempted,pm me...


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## sptrawler (24 January 2022)

qldfrog said:


> Dragline and the whole line of Komatsu hauling trucks have been electric for decades.
> I so imagine Komatsu is well placed to go ev , just replacing the on board diesel generator..as this is what it is..by battery



Trains running on purpose built lines, where the terrain is levelled with cuttings and bridges, is a lot different from trucks going up steep inclines carrying a hell of a load on the back.
It will be interesting, to see where they put a battery big enough for the job, on a truck, maybe a swap out system like the power tools, have the battery plug in where the diesel is at the moment.
It isn't such an issue with a train, you could even have dedicated battery carriages, that could be stored along the line at recharge stations. When you have iron ore trains, pulling over 200 carriages, a few more battery carriages is neither here nor there.


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## qldfrog (24 January 2022)

sptrawler said:


> Trains running on purpose built lines, where the terrain is levelled with cuttings and bridges, is a lot different from trucks going up steep inclines carrying a hell of a load on the back.
> It will be interesting, to see where they put a battery big enough for the job, on a truck, maybe a swap out system like the power tools, have the battery plug in where the diesel is at the moment.
> It isn't such an issue with a train, you could even have dedicated battery carriages, that could be stored along the line at recharge stations. When you have iron ore trains, pulling over 200 carriages, a few more battery carriages is neither here nor there.



whether we like it or not, the energy density per kg of diesel (*45.5 megajoules per kilogram*) is not easily replaceable by these lithium batteries.."A lithium-ion battery pack has *about 0.3 MJ/kg* "
so *1l * diesel roughly  replaced by *150kg of battery*, 
worse that l of diesel once consumed is gone and does not have to be carried along as a dead weight , your truck is even lighter
whereas your empty battery is still as heavy as when full;
sure the diesel engine is a bit less efficient than your electric motor but just that dead weight issue would be a killer in any comparison ..issue which will be conveniently forgotten in your next glossy leaflet on EV;


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## qldfrog (24 January 2022)

qldfrog said:


> whether we like it or not, the energy density per kg of diesel (*45.5 megajoules per kilogram*) is not easily replaceable by these lithium batteries.."A lithium-ion battery pack has *about 0.3 MJ/kg* "
> so *1l * diesel roughly  replaced by *150kg of battery*,
> worse that l of diesel once consumed is gone and does not have to be carried along as a dead weight , your truck is even lighter
> whereas your empty battery is still as heavy as when full;
> sure the diesel engine is a bit less efficient than your electric motor but just that dead weight issue would be a killer in any comparison ..issue which will be conveniently forgotten in your next glossy leaflet on EV;



in my opinion, this is where you need G2 fuel cells:
hydrogen has an energy density of *approximately 120 MJ/kg*, almost three times more than diesel or gasoline.
Why would anyone with even half a brain consider lithium battery truck is beyond me..but hey we got CO2 creating CC...


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## basilio (25 January 2022)

December production report came out this morning. Record shipments of iron ore. Many announcements. Well worth a read.
Will be interesting to see the financials in February.  Gross profits seem to be around $59 US a ton

*Strong December quarter performance and record half year shipments Quarterly summary*

 • Total Recordable Injury Frequency Rate (TRIFR) of 1.8 for the 12 months to 31 December 2021, a 14 per cent improvement on 2.1 at 31 December 2020
• Iron ore shipments of 47.5 million tonnes (mt) contributed to shipments of 93.1mt for H1 FY22, three per cent higher than H1 FY21 and a record for a half year
• Average revenue of US$74.36/dry metric tonne (dmt) representing revenue realisation of 68 per cent of the Platts 62% CFR Index for the quarter
• C1 cost of US$15.31/wet metric tonne (wmt) in line with the previous quarter
• Net debt of US$1.7 billion at 31 December 2021 after payment of the FY21 final tax instalment of US$915 million and capital expenditure of US$744 million in the quarter
• Sustainability Financing Framework established to enable the future issuance of Green and Social debt instruments that will support investments in eligible projects
• On 24 January 2022, announced the acquisition of UK-based Williams Advanced Engineering (WAE) for £164 million (approximately US$223 million) to provide critical technology and expertise in high-performance battery systems and electrification
 • Entered exclusivity agreement with the Government of the Republic of Gabon to study the opportunity to develop the Belinga Iron Ore Project in Gabon, West Africa
 • Fortescue Future Industries (FFI) continued to rapidly advance a global portfolio of green energy projects and decarbonisation technologies
 • Guidance for FY22 shipments of 180 - 185mt and C1 cost of US$15.00 - US$15.50/wmt. Cost guidance is based on a revised average exchange rate assumption of AUD:USD 0.72
• FY22 capital expenditure (excluding FFI) is increased by US$200 million to US$3.0 - US$3.4 billion after incorporating the acquisition of WAE.

 Fortescue Chief Executive Officer, Elizabeth Gaines, said “The Fortescue team has again delivered an outstanding performance for the first half of FY22 with mining, processing, rail and shipping combining to deliver record second quarter shipments of 47.5 million tonnes, contributing to record performance for a half year of 93.1 million tonnes. “Our C1 cost was in line with the previous quarter, reflecting our strong focus on cost management to mitigate inflationary pressures associated with strong demand for labour and resources, as well as supply chain constraints due to COVID-19. We are proud of the entire Fortescue family who continue to deliver record operating performance and achieve key project milestones



			https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02478644-6A1073599?access_token=83ff96335c2d45a094df02a206a39ff4


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## basilio (25 January 2022)

Excellent story of FMG's determination  to eliminate all diesel fuel use  in it's operations by 2030. The acquisition of WAE is one of the many parts of this project. FMG has been working with WAE for a year on developing electric haul trucks. Twiggy decided that WAE techmology and skills were too critical to leave to chance. Buying the company meant they have them in their pocket.

From a business perspective the successful development of electric trucks, trains and ships offers a great business opportunity to sell  a well prove product to all other mining companies. A very compelling picture IMV.
Andrew Forrest's FMG acquires Williams Advanced Engineering in shift away from diesel​Key points:​
Fortescue Metals Group has announced the acquisition of British firm Williams Advanced Engineering
FMG says the acquisition will fast-track its plan to remove all diesel vehicles from its mining fleet by 2030
The two companies are set to announce further detail on a "world-leading battery electric train concept" this year









						FMG announces plan to eliminate diesel from operations by 2030
					

Fortescue Metals Group acquires British tech and engineering company Williams Advanced Engineering to help fast-track its transition to renewables.




					www.abc.net.au


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## Value Collector (27 January 2022)

sptrawler said:


> Trains running on purpose built lines, where the terrain is levelled with cuttings and bridges, is a lot different from trucks going up steep inclines carrying a hell of a load on the back.
> It will be interesting, to see where they put a battery big enough for the job, on a truck, maybe a swap out system like the power tools, have the battery plug in where the diesel is at the moment.
> It isn't such an issue with a train, you could even have dedicated battery carriages, that could be stored along the line at recharge stations. When you have iron ore trains, pulling over 200 carriages, a few more battery carriages is neither here nor there.



If there is hills it will use more energy on the way up and recover power on the way down, Ev trucks will deal with it better than diesels. 

There is actually electric mining truck in Europe that has been running for years without needing to be charged, because the mine in uphill of where it drops it’s load off, it charges as it brings the load down hill using regen braking, and uses less energy on the up hill when it’s empty.


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## notting (27 January 2022)

26/01/2021
Fortescue was plagued by significant price penalties through 2017 and 2018, and the trend appears to be returning amid abundant supply of lower-grade iron ore and astronomical coking coal prices,that cook it.
Price realisations have been steadily declining since Fortescue received 91 per cent of the benchmark iron ore price in the final three months of 2020.
The company received 86 per cent in the first three months of 2021 then 84 per cent in the three months ended June 30.
This is likely to continue.
The industry’s preferred price provider, S&P Global Platts, said ore with 58 per cent iron was fetching $US75.75 per tonne on Wednesday; a price that was 63.3 per cent of the benchmark iron ore price.
They are still making great margins at present if you compare to most mining products but still, share price did not like this last time and shipping costs are higher now.  AU$ appreciation would be an issue to.
Not much debt to speak of but not quite the money printer it has been recently.
Chinas collapsing housing ponzi scheme upon the people could savage demand unless there is a plethora of 'affordable housing' buids.  Hard to see how that will happen given there will be no motive for the giant pyramid schemes to build any more.
FMG should look for some more customers!!


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## divs4ever (27 January 2022)

notting said:


> FMG should look for some more customers!!



 yes , but that has been one of my criticisms of Australia generally for over a decade

 anyone watch the movie Minions .. to me Australia behaves just like one of those


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## Sean K (27 January 2022)

LOL


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## Garpal Gumnut (27 January 2022)

Sean K said:


> LOL
> 
> View attachment 136627



Thank goodness for that.

I was thinking that with all this Hydrogen hoohah, that FMG might not have been sticking to it's onions in its digging endeavours. 

gg


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## Value Collector (29 January 2022)

Sean K said:


> LOL
> 
> View attachment 136627



Well apparently Rome wasn’t built in a day either, some things take time, I tend to think that where you are is less important than where you are heading.


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## Sean K (29 January 2022)

Value Collector said:


> Well apparently Rome wasn’t built in a day either, some things take time, I tend to think that where you are is less important than where you are heading.




Agree, this is a long transition. I only posted that as I find it a touch ironic that Twiggy owns a company with low ESG credentials.


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## divs4ever (29 January 2022)

Sean K said:


> LOL
> 
> View attachment 136627



 give a Leftie a millimeter  and they will take an empire ( and carve it up for themselves in the name of 'equality' )

 let's see how expensive this lesson will be  because it WILL cost and cost 

 for amusement wait and see who get high scores


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## Garpal Gumnut (29 January 2022)

Sean K said:


> Agree, this is a long transition. I only posted that as I find it a touch ironic that Twiggy owns a company with low ESG credentials.



Twiggy is smart.

Beads in Rome. 

Bum in Canterbury.

Mat in Riyadh.

gg


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## divs4ever (29 January 2022)

Sean K said:


> Agree, this is a long transition. I only posted that as I find it a touch ironic that Twiggy owns a company with low ESG credentials.



i see it as an early warning to the unenlightened


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## Value Collector (29 January 2022)

Sean K said:


> Agree, this is a long transition. I only posted that as I find it a touch ironic that Twiggy owns a company with low ESG credentials.



Andrew’s titled his Boyer lecture speech last year “confessions of a carbon emitter” so he is definitely not trying to hide Fortescues current impact.

It’s just a fact of life that with current technology, moving 180 million tonnes of Iron around the planet uses a lot of energy, and that energy releases carbon.

But, it’s something that he is wanting to change, and has  taken responsibility for more than most.


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## basilio (2 February 2022)

Another innovative Hydrogen purchase by FFI.


FMG has taken a stake in  innovative hydrogen producer Starc.

Fortescue (ASX:FMG) Future Industries to buy stake in Sparc Hydrogen​






















            Full Screen         


Key points​
Fortescue Future Industries is buying into a joint venture project to develop green hydrogen
If successful, this method of making hydrogen wouldn’t need renewable energy or electrolysers
The Fortescue share price is up around 3% in morning trading
 
The *Fortescue Metals Group Limited* (ASX: FMG) share price is up this morning. Fortescue Future Industries (FFI) is going to buy a stake in Sparc Hydrogen alongside *Sparc Technologies Ltd *(ASX: SPN) and the University of Adelaide.

*Green hydrogen joint venture*​
Sparc announced to the ASX today that binding agreements have been executed between Sparc Technologies, Future Fortescue Industries and the University of Adelaide, forming the Sparc Hydrogen Joint Venture.

FFI will subscribe for shares in Sparc Hydrogen under a subscription agreement. Sparc Technologies intends to issue and complete the share issue imminently.

A shareholders agreement has been executed and includes provisions for things like governance and funding provisions.

FFI is going to pay $1.8 million to earn a 20% stake after the stage 1 funding close. It will pay an additional $1.475 million to buy an additional 16% stake. That will leave it with ownership of 36% of the joint venture. Sparc will also end up with 36% after the two stages, whilst the University of Adelaide will own 28%.

*What is the green hydrogen project?*​
As reported by my colleague Brooke Cooper this week, the Sparc Hydrogen joint venture is aiming to create “ultra-green” hydrogen by utilising solar power.

It will seek to further develop a process known as thermo-photocatalysis which will turn water into hydrogen and oxygen.

Adopting this process to produce green hydrogen means that renewable energy from wind farms and/or solar panels and electrolysers are not needed. Due to that, capital and operating expenditure is expected to be significantly lower than electrolysis and other forms of hydrogen production currently in use. Fortescue Future Industries is currently working on projects involving renewable energy and electrolysers.

This thermo-photocatalysis technology can potentially be adopted remotely and for onsite use, therefore reducing the reliance on long distance hydrogen transportation and/or electricity transmission.

Stage one of the project, in the first 2.5 years, will include steps like optimising thermo-photocatalytic reactor conditions, constructing a new reactor for full solar simulation, testing it (including the longevity and durability) and designed a prototype scale reactor for on-sun operation.

Stage two, over the following two years, will involve the installation and commissioning of the prototype reactor. It will also include the pre-commercial pilot scale system design, procurement, installation, commissioning and operation of a thermo-photocatalytic reactor.

*Comments from management*​
The Fortescue Future Industries CEO Julie Shuttleworth said:



> There is irrefutable scientific evidence that the planet is warming. Green hydrogen is a practical, implementable solution to decarbonise hard to abate sectors, including heavy industry. The research being undertaken by Sparc Hydrogen is important for FFI’s growing technology portfolio as we develop technologies to lower emissions globally. We are excited to enter into this agreement and to support this critical research into green hydrogen.





			Fortescue (ASX:FMG) Future Industries to buy stake in Sparc Hydrogen
		


​


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## Garpal Gumnut (2 February 2022)

basilio said:


> Another innovative Hydrogen purchase by FFI.
> 
> 
> FMG has taken a stake in  innovative hydrogen producer Starc.
> ...



I believe the main driver of the FMG price is the Iron Ore price. 

Now Twiggy may be correct about Hydrogen, but many of the Engineering drinkers at the pub and In particular all of the Energy Committee feel that Hydrogen is not a goer.

Now I just go with Twiggy but I have my eye firmly on the road ahead and not on all the hoo ha around alternative energies in the bushes. 

I'll stay with the concept of FFI, but just ask yourself what would be the price of a stock such as FMG, without Iron Ore?

gg


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## sptrawler (2 February 2022)

But @Garpal Gumnut how much money has also been made, on selling the dream and we are at the very early stages of the h2 road.
When PC's came out in the late 70's, a lot of people said what a waste of money, since then how much money has been made on the back of computer based tech?
The H2 wave hasnt even formed yet, maybe twiggy is paddling out to wait for the wave and maybe he will bail out when he has riden it for a while, who knows? It is a gamble IMO but with their spare cash, I think the odds are pretty good, as long as they are selective and dont buy companies that are based on tarot teadings and crystal gazing.
Just my thoughts.


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## bk1 (2 February 2022)

Hydrogen will be a niche industry for a long time. 



basilio said:


> Adopting this process to produce green hydrogen means that renewable energy from wind farms and/or solar panels and electrolysers are not needed.




Now why would that be important, eh?
Just for one minute give it a thought.

Energy is produced from one source (wind) and another (solar), which are both *Variable *sources of power, then turned into potential energy by a battery farm to feed an electrolyzer (I'm assuming it would need to operate constantly) and then the output would be your blessed green hydrogen power.
People are trying to bend the laws of physics to align with their ideals with no forethought for conversion efficiency factors or variable electricity procurement costs (among a host of others i have forgotten to mention).


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## basilio (2 February 2022)

Garpal Gumnut said:


> I believe the main driver of the FMG price is the Iron Ore price.
> 
> Now Twiggy may be correct about Hydrogen, but many of the Engineering drinkers at the pub and In particular all of the Energy Committee feel that Hydrogen is not a goer.
> 
> ...




Without iron ore FMG wouldn't exist - clearly. It has vast multi billion dollar mining  business with no effective debt that is returning anything between 5 and 20 Billion a year in profits. 

Renewable energy development  and  Green Hydrogen reflect a few things
1) Twiggy recognises with  *absolute certainty* that CC is real and must be addressed post haste if any business is going to actually survive in the medium term future. It is that big an issue

2) His response is to marry FMG self interest in energy reduction with a determination to reshape all mining companies to totally clean renewable energy to make the maximum impact on CC .  On the way he wants to make a  big buck for FMG as the supplier of that technology and energy. IMV I can't see the renewable energy side making the returns currently  offered by the iron ore segment but it should still be considerable.

3) He recognises that China's interests lay in reducing their dependence on current iron ore suppliers and thus are looking for alternative iron ore investments that they can control.  In that context developing alternative profit making centres makes sound business sense.


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## sptrawler (2 February 2022)

@bk1 firstly, I don't disagree with your thoughts, because  what you are stating is acurate.
But the problem as you say is renewables are variable, the issue that brings up is storage, to store the energy so that it can be used at a later date.
Right storage has its own problems, if you want to use that stored energy in medium that can be transported, then the issue becomes more complex, batteries would need to be huge to carry enough energy to make transporting it worthwhile. Obviously pumped hydro cant be transported, other than by being connectdd to the grid.
So what is required is something that can be produced by renewable energy, that is compact and can be transported and has the highest possible energy density by volume.
So hydrogen even though inefficient to produce, ticks the other two boxes, so a lot of money will be spent trying to get the first box ticked.


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## Garpal Gumnut (2 February 2022)

sptrawler said:


> But @Garpal Gumnut how much money has also been made, on selling the dream and we are at the very early stages of the h2 road.
> When PC's came out in the late 70's, a lot of people said what a waste of money, since then how much money has been made on the back of computer based tech?
> The H2 wave hasnt even formed yet, maybe twiggy is paddling out to wait for the wave and maybe he will bail out when he has riden it for a while, who knows? It is a gamble IMO but with their spare cash, I think the odds are pretty good, as long as they are selective and dont buy companies that are based on tarot teadings and crystal gazing.
> Just my thoughts.



I'm not too sure about that. @sptrawler .But agree it would be good if Twiggy got it up.

Like you I thought H might be a goer despite many experienced Engineer friends poopooing the idea saying it had been tried in the past and that the only way to make it profitable was not a green one. 

Now I'm a simple fellow and not an engineer so I go on Mr. Market who says at least on the NYSE/NASDAQ that it is not a goer. I traded some of them and made a bit and lost a bit, but the H market is not one I'd be rushing in to atm.

As to PC's and other technology you may be discussing survivor bias, i.e. looking at the concepts that were ridiculed that have gone on to make billions. For every AAPL there would be ten thousand failures, if not more.

I would like to see a Green solution to energy but oil, gas and coal have a way to go before they are superceded imo. 

I hold FMG because of Twiggy and Fe Ore, and sure I'd like to see H get up, but my mates say I'm a Galah for thinking like that. And we don't want two galahs on ASF. @IFocus .

gg


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## sptrawler (2 February 2022)

@Garpal Gumnut dont get me wrong, Im electrical background, so I do know the issues and Im not jumping in at all, my exposure is only to HZR at about 20cents, so absolutely nothing. Im in no way banging the hydrogen drum, the whole renewable space, is in its infancy.

Im just stating the fact that to transport energy, from one part of the globe that has plenty of it, to another part of the globe that doesnt have it, requires converting it into something that can be transported that has the lowest cost, smallest volume and the highest energy density plus of course availability.
At the moment the front runner by a huge margin, given the above parameters is , nuclear, second is fossil fuel, third is hydrogen. IMO.
Once you narrow the criteria down to, the energy stored for transport, must be lroduced by renewable electricity, well that narrows it down somewhat, then there arent a lkt of options.
So it really isnt about how efficient it is, it is more about how serious is everybody about going green and stopping the use of fossil fuel and nuclear fuel, if they are really serious cost and the efficiency of the conversion to h2 doesnt come into it.

I think nuclear is the only viable option currently, but in 50 years who knows and as I said years ago, nuclear running flat chat complimenting renewables is the answer IMO. 
when the renewables crank up with the sun and wind, have the nuclear producing hydrogen flat chat, when the renewables fade, the nuclear power station supllies the load and stops making hydrogen rinse,wash, repeat.
Whether twiggy has made his run too early, time will tell, but sooner or later H2 will be a major fuel source.
I personally think it is 30 years away.
I bought my first PC in 1981 for $1500, it was a waste of money, the internet wasnt even dreamt of, but 20 years later in 2001 wow.


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## Garpal Gumnut (2 February 2022)

sptrawler said:


> @Garpal Gumnut dont get me wrong, Im electrical background, so I do know the issues and Im not jumping in at all, my exposure is only to HZR at about 20cents, so absolutely nothing. Im in no way banging the hydrogen drum, the whole renewable space, is in its infancy.
> 
> Im just stating the fact that to transport energy, from one part of the globe that has plenty of it, to another part of the globe that doesnt have it, requires converting it into something that can be transported that has the lowest cost, smallest volume and the highest energy density plus of course availability.
> At the moment the front runner by a huge margin, given the above parameters is , nuclear, second is fossil fuel, third is hydrogen. IMO.
> ...



Thanks @sptrawler .

I've taken what you say on board. It makes sense. 

gg


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## sptrawler (2 February 2022)

Garpal Gumnut said:


> Thanks @sptrawler .
> 
> I've taken what you say on board. It makes sense.
> 
> gg



Appologies for the spelling, small key pad on the phone and hands like feet. Lol
As long as you can follow the gist.


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## dat111 (3 February 2022)

Garpal Gumnut said:


> I believe the main driver of the FMG price is the Iron Ore price.
> 
> Now Twiggy may be correct about Hydrogen, but many of the Engineering drinkers at the pub and In particular all of the Energy Committee feel that Hydrogen is not a goer.
> 
> ...




Twiggy is playing games to make headlines...

"FFI is going to pay $1.8 million to earn a 20% stake after the stage 1 funding close. It will pay an additional $1.475 million to buy an additional 16% stake. That will leave it with ownership of 36% of the joint venture. Sparc will also end up with 36% after the two stages, whilst the University of Adelaide will own 28%.

So Twiggy is shelling out $3.275 million for a 36% stake in this venture...  He gets a feel good article and more government money...


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## Smurf1976 (3 February 2022)

Value Collector said:


> I tend to think that where you are is less important than where you are heading.



The trouble with analysts like that is they're basically telling you what the weather's like right now, something anyone could discover simply by going outside.

What they're not doing is providing a meaningful forecast of where the business is heading.


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## basilio (3 February 2022)

dat111 said:


> Twiggy is playing games to make headlines...
> 
> "FFI is going to pay $1.8 million to earn a 20% stake after the stage 1 funding close. It will pay an additional $1.475 million to buy an additional 16% stake. That will leave it with ownership of 36% of the joint venture. Sparc will also end up with 36% after the two stages, whilst the University of Adelaide will own 28%.
> 
> So Twiggy is shelling out $3.275 million for a 36% stake in this venture...  He gets a feel good article and more government money...




Exactly.  $3.2M for FFi is barely spare change. But for that they have a 36% stake in the development and commercialisation of  a hydrogen production process that would reduce the cost of green hydrogen many fold.

Twiggy would have sussed out the state of play of the technology and has decided that  it is well worth  a $3m punt.  But more significantly he has the resources and drive that could make or break this process.

As for Sparc ? Frankly I think Twiggy will effectively over run the current management if this technology proves commercially effective. They will be dealing with him. Not vica versa.



			https://www.investi.com.au/api/announcements/spn/f1551678-d97.pdf


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## divs4ever (3 February 2022)

basilio said:


> Frankly I think Twiggy will effectively over run the current management if this technology proves commercially effective. They will be dealing with him.




 i would have thought  the reverse , while it is achieving goals   , FFI will sit and watch , if things get turbulent  , well then ( FFI ) sleeves will be rolled up  , after all Twiggy would have seen enough  in this to make it worthwhile buying the assets from the administrators  ( if the opportunity arose )  before the investment


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## basilio (3 February 2022)

divs4ever said:


> i would have thought  the reverse , while it is achieving goals   , FFI will sit and watch , if things get turbulent  , well then ( FFI ) sleeves will be rolled up  , after all Twiggy would have seen enough  in this to make it worthwhile buying the assets from the administrators  ( if the opportunity arose )  before the investment



Who knows?  Frankly I don't believe Twiggy is going to finesse such a situation for the sake of a few million.

I believe investors should be clear about the nature of this buy in. 

Traditionally, in fact in most cases of buyouts of promising new technology, the new owner does *not want the process to succeed. *In almost all cases the buyer has substantial investment in the current industry. Their financial interest lies in protecting their current investment from the threat of new more competitive technology. To cut a long story short most of these innovations are quietly killed or starved. At some later stage the technology may be used - when it suits the companies interest.

In fact there is small thriving industry around innovative people who develop a new beaut process/technology for an industry - and then swiftly sell out to their competitors. They are clear eyed enough to know they won't be allowed to successfully compete and that their payoff is the $10-20m they take to quietly disappear.

*But this is not Twiggys aim.  *He is absolutely determined to make cheap green hydrogen a goer. His stakeholder interest is intended to drive commercialisation of this cheap new hydrogen production process and protect the company from other parties that would cheerfully strangle this at birth. And of course to be the final owner of the technology.

It will be an interesting ride.


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## Humid (3 February 2022)

Value Collector said:


> If there is hills it will use more energy on the way up and recover power on the way down, Ev trucks will deal with it better than diesels.
> 
> There is actually electric mining truck in Europe that has been running for years without needing to be charged, because the mine in uphill of where it drops it’s load off, it charges as it brings the load down hill using regen braking, and uses less energy on the up hill when it’s empty.




Plenty of diesel/electric haulpaks in operation even at twiggys


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## Value Collector (3 February 2022)

Humid said:


> Plenty of diesel/electric haulpaks in operation even at twiggys



Yep, but the full electrics will have the added benefit of regen braking.


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## Smurf1976 (3 February 2022)

On all this stuff I think Twiggy's really just a pragmatic businessman and a pretty successful one at that.

Yes he's keen on hydrogen and everything associated with it.

But then he's put $250 million into an LNG import terminal in NSW and since the core component is floating, being literally a ship, it could simply be disconnected and sailed away under its own power should the local market no longer require it or politicians become difficult. It's an investment with a means of escape and recovering at least part of the cost should the need arise.

So overall he's got a finger in many pieces of the pie.


----------



## Country Lad (8 February 2022)

Country Lad said:


> Still positive.  Approaching resistance, but if it goes according to the script, may not be a problem.
> 
> View attachment 135580



Just goes to show - have faith in your charts. Maybe it wasn't a problem, just a test of resolve. Update on previous chart.


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## sptrawler (8 February 2022)

Humid said:


> Plenty of diesel/electric haulpaks in operation even at twiggys



Absolutely, that isn't new technology, @IFocus and myself were working on haulpak electric wheels back in the mid 1970's. 
Well I was IFocus was still in short pants. 🤣


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## divs4ever (9 February 2022)

interesting to see FMG currently down 

Last Price (AUD)$21.395

Today's Change Down $0.835 (3.76%)

 now i have a top up order in @ $18.50  ,  which  i nearly canceled yesterday  .. can i get $18.50  cum dividend ??

 DYOR

 ( am stilling GUESSING it will pay a $1 div. this time around )


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## basilio (9 February 2022)

There was a very sharp change in sentiment across FMG, BHP and RIO from about midday. Not sure what happened to spook the market.  I wonder if COVID infections have compromised mining operations ?


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## IFocus (9 February 2022)

sptrawler said:


> Absolutely, that isn't new technology, @IFocus and myself were working on haulpak electric wheels back in the mid 1970's.
> Well I was IFocus was still in short pants. 🤣





I was couldn't afford long ones $28 a week at F&R Tulks.


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## basilio (9 February 2022)

View attachment 137259


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## againsthegrain (9 February 2022)

divs4ever said:


> interesting to see FMG currently down
> 
> Last Price (AUD)$21.395
> 
> ...




What is the very latest day to pick some up to count for the coming divy?

Don't want to spoil my average down price of 17 but hell getting ripped off on bank interest


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## divs4ever (9 February 2022)

againsthegrain said:


> What is the very latest day to pick some up to count for the coming divy?
> 
> Don't want to spoil my average down price of 17 but hell getting ripped off on bank interest



 looks like it goes ex-div.  around the 1st of March  BUT it will have to declare the div. first   so , that should be SOON 

 from the January Quarterly 

• Guidance for FY22 shipments of 180 - 185mt and C1 cost of US$15.00 - US$15.50/wmt. Cost guidance is based on a revised average exchange rate assumption of AUD:USD 0.72

 so am not sure what  the gossip is about an iron ore price collapse  ( i think BHP digs it up at closer to $US 20 a  metric tonne )


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## Country Lad (11 February 2022)

basilio said:


> There was a very sharp change in sentiment across FMG, BHP and RIO from about midday. Not sure what happened to spook the market.  I wonder if COVID infections have compromised mining operations ?



Appears that there were rumours of Covid infections amongst the workforce, disrupting production. Obviously not true seeing it is going up  against the market today.


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## basilio (13 February 2022)

FMG announced plans to develop a massive renewable energy hub to power to mining operations. Totally overshadows all the current PV/Wind projects currently in operation in WA.

I think the next cab off the ranks will be some sort of green bond investment program to finance these projects. Estimates are that the  Pilbara build will cost $10Billion.

Fortescue unveils plans for massive 5.4 GW renewable energy project in Pilbara​Mining giant Fortescue Metals Group has unveiled details of a massive 5.4 GW solar PV, wind and battery energy storage project it plans to build to power its iron ore mining operations in Western Australia’s north-west.









						Fortescue unveils plans for massive 5.4 GW renewable energy project in Pilbara
					

Mining giant Fortescue Metals Group has unveiled details of a massive 5.4 GW solar PV, wind and battery energy storage project it plans to build to power its iron ore mining operations in Western Australia’s north-west.




					www.pv-magazine-australia.com


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## sptrawler (13 February 2022)

Good article @basilio , it also supports what has been suggested in the power generation thread, that to have a sustainable power supply from renewables approx twice as much storage than generation is required.
By the way 9GW of batteries, on current prices, would be really expensive. So $10billion, wouldn't be out of the ballpark, that's for sure.

_ The proposal is to construct and operate a renewable energy hub comprising an enormous 3.33 GW solar farm and a 2.04 GW wind farm spread across approximately 10,000 hectares. The hub would also include a battery with a storage capacity of 9.1 GWh_.


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## Value Collector (13 February 2022)

basilio said:


> FMG announced plans to develop a massive renewable energy hub to power to mining operations. Totally overshadows all the current PV/Wind projects currently in operation in WA.
> 
> I think the next cab off the ranks will be some sort of green bond investment program to finance these projects. Estimates are that the  Pilbara build will cost $10Billion.
> 
> ...



I don’t think this project would require the Green Bonds,  it mentions work will progress over several years, so I think they could pretty easily cashflow the capital spending required from retained earnings and utilise some of their existing undrawn debt facilities if additional cash is required.

Where I think they will use green bonds and other funding will be any of the large stand alone green energy projects that is separate from their mining operations.

They say they will commit 10% of their earnings to mining projects and 10% to energy investments (other 80% dividends), but this project is technically both because it’s an add on to their exisiting mining infrastructure, so they could commit all retained earnings to it for now.


----------



## Value Collector (13 February 2022)

sptrawler said:


> Good article @basilio , it also supports what has been suggested in the power generation thread, that to have a sustainable power supply from renewables approx twice as much storage than generation is required.
> By the way 9GW of batteries, on current prices, would be really expensive. So $10billion, wouldn't be out of the ballpark, that's for sure.
> 
> _ The proposal is to construct and operate a renewable energy hub comprising an enormous 3.33 GW solar farm and a 2.04 GW wind farm spread across approximately 10,000 hectares. The hub would also include a battery with a storage capacity of 9.1 GWh_.



Yep, the more storage you have the less you will need to rely on gas generation for back up, and the less you will have to idle back generation when the wind and the sun are both producing.


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## qldfrog (14 February 2022)

sptrawler said:


> Good article @basilio , it also supports what has been suggested in the power generation thread, that to have a sustainable power supply from renewables approx twice as much storage than generation is required.
> By the way 9GW of batteries, on current prices, would be really expensive. So $10billion, wouldn't be out of the ballpark, that's for sure.
> 
> _ The proposal is to construct and operate a renewable energy hub comprising an enormous 3.33 GW solar farm and a 2.04 GW wind farm spread across approximately 10,000 hectares. The hub would also include a battery with a storage capacity of 9.1 GWh_.



And 9 GWH is really on the light side of things, after a windless night or 2 you are running empty.
There is an optimal economic return on storage capacity and that's probably it, but that would be too light to provide continuous operation which is hugely different.
Make sense economically/as a business as long as not sold as 100%renewable energy 
aka  we can stop the coal/gas power stations as we do not need them 😊


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## Sean K (15 February 2022)

What's going on over at FMG? They seem to be losing senior manager after senior manager the past 6 months or so.


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## divs4ever (15 February 2022)

yes holders will have to be careful about that  ,  sure SOME will not be so desperately needed at FMG   now the iron project is toddling along just nicely , and other skills/expertise needed 

 but yes the brain drain should be watched carefully ( several other big rivals will be after accomplished management )


----------



## sptrawler (15 February 2022)

divs4ever said:


> yes holders will have to be careful about that  ,  sure SOME will not be so desperately needed at FMG   now the iron project is toddling along just nicely , and other skills/expertise needed
> 
> but yes the brain drain should be watched carefully ( several other big rivals will be after accomplished management )



Good points div4, as you say the skill set once everything is running is quite different to those when building up. 
Also the skills required in the renewable space, will be different from those in raw materials development, a geological background isn't overly useful in an electrical power flow analysis.
So as you say, it will be interesting to watch, the skill sets employed to fill the vacated positions, if they are filled at all.


----------



## Austwide (15 February 2022)

Last year Twiggy didn't pay the expected bonuses, reckoning the big profits were due to IO prices and not management skills.

So as contracts ends or other jobs come along, I would expect a few to move on.


----------



## finicky (15 February 2022)

> Twiggy is trying to lock down hundreds of agreements around the world to develop renewable energy projects to be funded by hundreds of *billions* in debt deals ..



Hundreds of *billions* of debt - is that a  typo?
He's a risk it all gambler and he looks like he enjoys a drink; there's key man risk along with concept to realisation risk and then starting off with mountains of debt again. I reckon he had some luck with the sustained price of iron ore when FMG was in debt. I assume FMG will be cordoned off from debt recourse?


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## divs4ever (16 February 2022)

maybe,   remember some of these are long term  plans AND a billion in ten years time could easily be the current equivalent of a million 

remember back when a TRILLION was a jaw-dropping number  .. well currently the US national debt is over $30 TRILLION  and jaws are NOT welded to the floor


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## divs4ever (16 February 2022)

Record half year shipments contribute to net profit after tax of US$2.8 billion and a fully franked interim dividend of A$0.86 per share Highlights 
• Ongoing improvement in safety with the Total Recordable Injury Frequency Rate (TRIFR) of 1.8 for the 12 months to 31 December 2021, 14 per cent lower than 31 December 2020 • Strong operating performance across the supply chain contributed to record half year iron ore shipments of 93.1 million tonnes (mt), three per cent higher than H1 FY21 
• Underlying EBITDA of US$4.8 billion for the six months ending 31 December 2021 (H1 FY22), with an Underlying EBITDA margin of 59 per cent 
• Net profit after tax (NPAT) of US$2.8 billion and earnings per share (EPS) of US$0.90 (A$1.24) 
• Net cashflow from operating activities of US$2.1 billion after payment of the FY21 final tax instalment of US$915 million
 • Capital expenditure of US$1.5 billion, inclusive of US$589 million investment in the Iron Bridge growth project and the Pilbara Energy Connect decarbonisation project 
• Fully franked interim dividend declared of A$0.86 per share, representing a 70 per cent payout of H1 FY22 NPAT 
• Strong balance sheet maintained with net debt of US$1.7 billion at 31 December 2021, inclusive of cash on hand of US$2.9 billion
 • Announced an industry leading target to achieve net zero Scope 3 emissions by 2040 
• Recognised for outstanding corporate sustainability performance with the inclusion in the 2022 S&P Global Sustainability Yearbook with a Gold Class Sustainability Award
 • Fortescue Future Industries continues to rapidly advance a global portfolio of green energy projects and decarbonisation technologies
 • Guidance for FY22 shipments, C1 cost and capital expenditure is unchanged. 
Fortescue Chief Executive Officer, Elizabeth Gaines, said “Fortescue’s performance for the first half of FY22 has been outstanding and we are proud of the entire team who have delivered record half year shipments and contributed to net profit after tax of US$2.8 billion, the third highest in Fortescue’s history. “Safety is our number one priority and the team’s continued focus resulted in further improvement in our TRIFR safety performance while managing the ongoing challenges resulting from COVID19. 
We have a robust COVID-19 management plan in place to prioritise the health and safety of our team and the communities in which we operate, and this is constantly reviewed considering Commonwealth and State health requirements.
 Fortescue Metals Group Ltd ABN 57 002 594 872 Level 2, 87 Adelaide Terrace, East Perth, Western Australia 6004 PO Box 6915, East Perth, Western Australia 6004 P +61 8 6218 8888 E fmgl@fmgl.com.au W www.fmgl.com.au Page 2 of 7 “We have continued to reinvest in the business and invest in growth. Our major project, Iron Bridge is progressing well with first production scheduled in December 2022. We remain focused on managing industry cost pressures and challenges posed by Western Australia’s ongoing border restrictions, and we are working closely with the Western Australian Government and relevant authorities to ensure we have access to the specialist skills required. “During the half, Fortescue Future Industries continued to advance a portfolio of renewable energy and green hydrogen project opportunities, while growing its green technology capabilities. As Fortescue continues its transition to a vertically integrated green energy and resources company, Fortescue Future Industries will be a key enabler of our industry-leading targets to decarbonise our operations by 2030 and to remove net emissions from our entire value chain by 2040. “Guided by our unique culture and Values, Fortescue is strongly positioned to deliver on our strategic priorities of optimising returns from our mining operations and investing in growth and green energy, supported by our strong balance sheet and disciplined capital allocation framework.
 Our commitment to ESG leadership continues to gain recognition, including the recent distinction of a Gold Class award in the S&P Global Corporate Sustainability Assessment. “The strength of our financial and operating performance, together with our ongoing commitment of delivering returns to shareholders, has resulted in the Board declaring a fully franked interim dividend of A$0.86 per share, representing a 70 per cent payout of the first half net profit after tax. We have had a strong start to the second half which positions us well to deliver on our guidance for the full year,” Ms Gaines said. Sustainability
 • Health and safety is Fortescue’s highest priority, and the Fortescue family were devastated by the death of team member David Armstrong on 30 September 2021. The Company continues to work with authorities to investigate the incident as well as making support available to his team members and family.
 • A continued focus on safety contributed to a Total Recordable Injury Frequency Rate (TRIFR) of 1.8 for the 12 months to 31 December 2021, a 14 per cent improvement on 31 December 2020.
 • Fortescue’s comprehensive COVID-19 management plan remains in place to safeguard Fortescue team members and communities. In response to the increase in COVID-19 community transmission in Western Australia, Fortescue has recently introduced enhanced screening and testing, and is investing in business continuity measures.
 • During the half year, a Workplace Integrity Review was conducted together with an independent assessment of site security and safety measures. As a result, a number of initiatives to enhance the safety, culture and experience of working at Fortescue were implemented. All team members are strongly encouraged to Speak Up, in line with Fortescue’s Values and a zerotolerance approach to harassment, bullying and intimidation. 
• Fortescue is progressing a range of initiatives to decarbonise its operations by 2030. An important milestone was achieved in the period with the completion of the 60MW Alinta Energy Chichester Solar Gas Hybrid project, which will displace about 100 million litres of diesel annually. The Company announced an industry leading target to achieve net zero Scope 3 emissions by 2040, addressing emissions across its entire value chain. 
• Consistent with Fortescue’s commitment to protect places of cultural significance, engagement with Native Title partners remains a priority. In September 2021, Fortescue established a groundbreaking co-management framework with members of the Wintawari Guruma Aboriginal Corporation to oversee the development of new mining areas at the Solomon Hub operations.
 • In December 2021 the Aboriginal Cultural Heritage Bill 2021 passed the Western Australian Parliament and was proclaimed into law. Fortescue supports the modernisation of Western Australia’s Aboriginal heritage legislation and will actively engage in contributing to the co-design of the important regulations and guidance which will shape the transition from the 1972 Act. Fortescue Metals Group Ltd ABN 57 002 594 872 Level 2, 87 Adelaide Terrace, East Perth, Western Australia 6004 PO Box 6915, East Perth, Western Australia 6004 P +61 8 6218 8888 E fmgl@fmgl.com.au W www.fmgl.com.au Page 3 of 7 
• Fortescue’s commitment to sustainability continues to generate recognition, with the Company achieving industry leading status in the MSCI ESG ratings, a Gold Class award in the S&P Global Corporate Sustainability Assessment and membership of the Australian, Asia Pacific and World Dow Jones Sustainability Indices. Fortescue Future Industries
 • Fortescue Future Industries (FFI) is taking a global leadership position in green energy and green technology, leading the effort to decarbonise hard-to-abate sectors. 
• FFI is investing to create a global portfolio of green energy projects to supply 15 million tonnes per year of renewable green hydrogen by 2030. 
• In November 2021 FFI received planning approval from the Queensland Government for the Global Green Energy Manufacturing Centre in Gladstone, Queensland. The first stage development is an electrolyser manufacturing facility with initial capacity of two gigawatts per annum with investment of up to US$83 million. 
• FFI has successfully completed the first phase of studies with Incitec Pivot Limited to convert the Gibson Island ammonia production facility to be powered by green hydrogen. The next phase is to progress the project to a Front End Engineering Design study to refine cost, schedule, permitting and commercial agreements. 
• In January 2022 Fortescue announced it had entered into an agreement to acquire Williams Advanced Engineering Limited (WAE). WAE will be vertically integrated into Fortescue and will be managed via FFI. FFI will utilise WAE’s critical technology and expertise in high-performance battery systems and electrification to accelerate the decarbonisation of Fortescue’s iron ore operations.
 • FFI progressed rail decarbonisation initiatives with the arrival of two additional four stroke locomotives for testing on a blended ammonia fuel system; and in January 2022 announced the purchase of two battery electric locomotives for delivery in 2023. 
• Fortescue’s capital allocation policy includes the allocation of 10 per cent of NPAT to fund FFI. As at 31 December 2021, the unutilised funding commitment is US$651 million after H1 FY22 operating and capital expenditure of US$242 million. 
• FFI’s FY22 anticipated expenditure is US$400 - US$600 million, inclusive of US$100 - US$200 million of capital expenditure and US$300 - US$400 million of operating expenditure. Operational and financial performance 
• The strong operating performance across Fortescue’s supply chain, together with the successful integration of Eliwana, contributed to record first half iron ore shipments and ore processed. 
• Revenue of US$8.1 billion in H1 FY22 decreased 13 per cent on H1 FY21. Average revenue of US$96/dry metric tonne (dmt) represented a 70 per cent realisation of the average Platts 62% CFR Index (H1 FY21: US$114/dmt, 90 per cent realisation). 
• C1 cost of US$15.28/wet metric tonne (wmt) was 20 per cent higher than H1 FY21 as a result of price escalation of key input costs, including diesel, other consumables and labour rates, the integration of Eliwana as well as mine plan driven cost escalation. • Underlying EBITDA of US$4.8 billion was 28 per cent lower than H1 FY21 with an Underlying EBTIDA margin of 59 per cent (H1 FY21: US$6.6 billion, 71 per cent margin).
 • NPAT of US$2.8 billion decreased by 32 per cent compared to H1 FY21 (US$4.1 billion). Earnings per share was US$0.90 (A$1.24).

 DYOR

 i hold FMG 

 GAME ON !!

 i was hoping for a $1 div.  but still have a top up order in around $18.80


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## basilio (16 February 2022)

The market has sold down FMG after the announcement. I'm sure some people are disappointed in the dividend fall. However last years result was totally exceptional and non one expected it to continue at anywhere near the same levels

The dividend payout was also lowered to 70% of profits to reflect the  need to support a range of  new investments across the whole span of FMG activity.

Taking a broader perspective FMG is  still showing a fully franked yield of 8-9% while creating a raft of  hopefully new profit generating projects.  I'm happy.


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## divs4ever (16 February 2022)

am not unhappy  with the results  , but will be a tiny bit happier if that top-up order is hit 

 but let's face  it ,  i got more div. than i hoped for  ( full the WHOLE ) year  last half  , so am not particularly bitter


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## Value Collector (16 February 2022)

basilio said:


> Taking a broader perspective FMG is  still showing a fully franked yield of 8-9% while creating a raft of  hopefully new profit generating projects.  I'm happy.




If some bought their shares at $22.50, an $0.86 dividend franked dividend for 6 months is equal to earning bank interest of 11%, what is not to like about that, 

So even if the dividends stayed at this level, you still have your money earning 11%, plus as you mentioned you have the 30% retained earnings that is being used to build even more income assets for you that will show results over time, 

The Iron ore price is stronger in the current half, so the next dividend will probably be higher, (unless the payout ration is changed)


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## Value Collector (16 February 2022)

divs4ever said:


> but let's face  it ,  i got more div. than i hoped for  ( full the WHOLE ) year  last half  , so am not particularly bitter




Yep, lets face it if you count the last two dividends together (inc franking)  its over an 18% return if you bought your shares for $22.50 not a bad capital allocation in my view, better than holding cash in the bank, and its a lot higher if you bought for less. 

Not to mention that if you bought your shares for $3 when I first started posting on here about FMG, the last 12 months has been a 140% dividend yield (inc franking), which still blows my mind.


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## Value Collector (16 February 2022)

finicky said:


> Hundreds of *billions* of debt - is that a  typo?
> He's a risk it all gambler and he looks like he enjoys a drink; there's key man risk along with concept to realisation risk and then starting off with mountains of debt again. I reckon he had some luck with the sustained price of iron ore when FMG was in debt. I assume FMG will be cordoned off from debt recourse?



Yeah, most of the debt will be non recourse bonds secured by the underlying project, 

eg, if they decide to build a hydro power scheme in PNG, the will put in some of the equity, and then sell green bonds for that project, but the project will be its own entity, the green bonds will be a long term part of the capital structure.


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## divs4ever (16 February 2022)

i only started buying since August last year  and the average is $17.05 ( because i bought more  ex. div.  in the slide after )

but i have held GRR  since 2012  after with a little bit of effort  that has been a very nice consolation prize ( up 290%  and paid a few divs as well 

but the trick in shares  is buying at the better times  ( and not be forced to sell )

 so if i miss these cum. div.  , i will CONSIDER  lowering the buy price and waiting ex-div. 

 no hurry for me


----------



## Value Collector (16 February 2022)

divs4ever said:


> i only started buying since August last year  and the average is $17.05




Thats a 14% annual rate dividend for you then at $0.86 franked per 6 months. (including franking)

+ a nice capital gain for you.


----------



## sptrawler (16 February 2022)

Value Collector said:


> Thats a 14% annual rate dividend for you then at $0.86 franked per 6 months. (including franking)
> 
> + a nice capital gain for you.



Yes I must thank the ASF members like yourself @basilio ,@divs4ever etc for the input on the FMG thread, I really hadn't followed them much in the past, but you members got me in at $14.57 on 19/10/21. 
So cheers everyone keep up the good input and robust debate.


----------



## basilio (16 February 2022)

sptrawler said:


> Yes I must thank the ASF members like yourself @basilio ,@divs4ever etc for the input on the FMG thread, I really hadn't followed them much in the past, but you members got me in at $14.57 on 19/10/21.
> So cheers everyone keep up the good input and robust debate.



Indeed.  To be fair as far as I can see it was VC's long term analysis that  has been the  major driver of ASF investors.  It certainly turned my head and I have continued to  follow it carefully. And getting back in at $14 plus  late last year was a fantastic opportunity.

So far so good.


----------



## divs4ever (16 February 2022)

i have found my calculator has been an invaluable friend  , sometimes the maths are compelling  ( but you still have to guess the risk you are taking on )

  i think FMG will be the topic of gossip ( discussion ) for another couple of years at least  
all those worry-warts ( like me ) looking at those huge complex projects , wondering if they can pull off a second massive project 

 but stay tuned the short-sellers are attracted to FMG as well ( they might still give us a bargain or two )


----------



## Country Lad (16 February 2022)

sptrawler said:


> Yes I must thank the ASF members.



I must thank a non member here (fastoy on another forum many moons ago) with whom I had debates about GRR or FMG. He convinced me on FMG in the end.


----------



## dat111 (17 February 2022)

Value Collector said:


> Yep, lets face it if you count the last two dividends together (inc franking)  its over an 18% return if you bought your shares for $22.50 not a bad capital allocation in my view, better than holding cash in the bank, and its a lot higher if you bought for less.
> 
> Not to mention that if you bought your shares for $3 when I first started posting on here about FMG, the last 12 months has been a 140% dividend yield (inc franking), which still blows my mind.



I have been buying since 2004 and my lowest purchase price is $1.5 USD on 11/11/2008 my highest purchase price was $10.98 USD on 9/17/2021...  My first purchase was for $44.10 USD which was prior to the 1 for 10 split....


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## basilio (18 February 2022)

If you can get this story on AFR it is well worth a read.

Analyses the  why the drive to creat a renewable energy based FMG  will result in a more competitive and profitable FMG as well as offering  a whole new external profit centre.

Also points out how the risks of FFI are kept within the subsidiary company  and thus will not represent  a threat to the profits of the iron ore investments.

Worth checking out if someone  else can copy more onto the thread. (I was able to read it on my phone but not the computer)










						What Australia’s best funded start-up means to Fortescue
					

It makes sense for Andrew Forrest to fund his green hydrogen ambitions through FMG because of the risk mitigation from China sourcing its iron ore elsewhere.




					www.afr.com


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## Skate (19 February 2022)

basilio said:


> Worth checking out if someone else can copy more onto the thread. (I was able to read it on my phone but not the computer)




What Australia’s best-funded start-up means to Fortescue (Feb 16, 2022)​It makes sense for iron ore billionaire Andrew Forrest to fund his green hydrogen ambitions through FMG because of the risk mitigation from China sourcing its iron ore elsewhere.

During its short life, Fortescue Future Industries has attracted more than its fair share of critics, including those who claim it should not be funded by Fortescue Metals Group.

The purist iron ore investors, who bought FMG for its strong cash flow generation and its capacity to pay market-leading dividends, object to 10 per cent of FMG’s profits going to FFI each year. FMG chief executive Elizabeth Gaines says the company’s hydrogen strategy will have no shortage of funding. 

The argument against FFI being inside FMG is framed as a governance problem for the FMG board because of the conflict of interest between Andrew Forrest’s green hydrogen ambitions and the interests of FMG shareholders.
Safety net​What this ignores is the scale of the green energy growth option being shared with FMG shareholders and the benefits that will flow to FMG’s iron ore business from FFI achieving its objectives.

Forrest, who is chairman of FMG and FFI, could have funded the green hydrogen project through his private company by cranking up FMG’s dividend payout ratio. But by keeping FFI under the FMG umbrella, he protects the company against the threat of China finding alternative sources of iron ore over the next decade.

FMG’s outgoing chief executive, Elizabeth Gaines, says the market fails to understand the financial upside for FMG shareholders from having a symbiotic relationship with FFI. “Our view is that the market is recognising that there is a genuine value that’s being created by FFI and the ambitions that we have,” she says. “We’re seeing interest, certainly from our offshore investors, in the activities of FFI, the strategy that we will deliver on by 2030, and the efforts to decarbonise Fortescue.

“A lot of analysts are putting in the capital for decarbonising iron ore operations. They’re doing that for us and our competitors. They’re putting in the costs, but they’re not actually modelling the benefits.

“The benefits will be lower energy costs, better ESG outcomes and lower emissions. We won’t have to rely on expensive offsets. There are genuine benefits, and I think there is still a disconnect between the cost versus the value that’s created.”

FMG’s half-year results included increased transparency of FFI’s funding and expenditure.

FFI’s expenses rose by $US152 million ($212.4 million) to $US174 million in the six months to December 31, “due to the ramp-up in personnel supporting an increase in project assessments and feasibility studies for FFI initiatives”.
Green credentials​The company said FFI’s expenses were “associated with studies for key projects and expenditure on emerging technologies to develop green electricity, green hydrogen and green ammonia projects in both Australia and globally”.
FFI, which aims to produce 15 million tonnes of green hydrogen by 2030, had $US651 million sitting in the bank as of December 31, after the first-half operating and capital expenditure of $US242 million.

For this fiscal year, FFI’s expenditure is expected to be between $US400 million and $US600 million, inclusive of $US100 million to $US200 million of capital expenditure and $US300 million to $US400 million of operating expenditure.

It is pretty obvious that FFI is the best funded start-up in Australia and will remain so if FMG continues to tip 10 per cent of net profits into the company.

The funding formula means FFI should receive another $US1.8 billion in funding over the next five years, based on the consensus earnings forecasts published by S&P Global Market Intelligence.

Gaines is quick to point out that the bulk of the capital expenditure for green hydrogen projects undertaken by FFI will come from third parties or financial markets and not FMG shareholders.

“FFI will need a source of funding for those projects ... that might be specific project financing, it could be green-related financing, a green and social investment, or it might be partnering with others – there’s a range of opportunities.

“They’ll be assessed on a project-by-project basis. But we’re very disciplined in protecting Fortescue’s balance sheet and the investment-grade credit metrics. “At the same time, we’re committed to decarbonise because it’s the smart thing to do, and it will actually grow value for our stakeholders in our mining operations.”

Skate.


----------



## Sean K (19 February 2022)

Skate said:


> What Australia’s best-funded start-up means to Fortescue (Feb 16, 2022)​It makes sense for iron ore billionaire Andrew Forrest to fund his green hydrogen ambitions through FMG because of the risk mitigation from China sourcing its iron ore elsewhere.
> 
> During its short life, Fortescue Future Industries has attracted more than its fair share of critics, including those who claim it should not be funded by Fortescue Metals Group.
> 
> ...




Skate, or anyone, how does this work?



> But by keeping FFI under the FMG umbrella, he protects the company against the threat of China finding alternative sources of iron ore over the next decade.




Why would keeping FFI within FMG be motivation for China not to look for better quality or cheaper IO elsewhere? Green credentials? Would that really be a commercial factor for China?

And this:



> the market fails to understand the financial upside for FMG shareholders from having a symbiotic relationship with FFI.




It's going to be years, perhaps a decade or more before any of these green projects get up and running. Changing their trucks and trains to run on ammonia is not financial upside really. And 'symbolic relationship', how does that generate cash? 

The way it looks at the moment, FMG will have put about $1b into FFI shortly, and maybe up to $7b by the end of the decade, and massively increased their human resources expenditure without having any of their proposed projects anywhere near making a profit for a couple more decades.


----------



## Value Collector (19 February 2022)

Sean K said:


> Skate, or anyone, how does this work?
> 
> 
> 
> ...



The green projects won’t take a decade to show results, many will producing results incrementally as different stages are completed, for example FMG already have 60MW of solar installed and producing, which is directly offsetting the consumption of natural gas.

As they continue to roll out gigs watts of solar, wind and batteries, they won’t be waiting till it’s 100% complete before linking it up to their grid, they will link it up in stages.

Your comment also reminds me of a conversation I had with my Dad back in 2009, a Gas company we were invested in was planning to build Australia’s first LNG export plant, but it wasn’t going to be complete until 2013, I was excited about project, but Dad couldn’t be fussed about it because 2013 was 4 years away.

But, now it’s 2022 and that LNG plant has been making money for 9 years, and the projects 4 year time frame seems like nothing.(our company got taken over before the plant was completed, and me made a lot of money)

My point is time will pass anyway, you may as well be investing in long term projects if the end result having stronger cash flows in the future, and especially if as in FMG’s case holding the company provides you will above average income returns in the mean time anyway.


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## divs4ever (19 February 2022)

Value Collector said:


> The green projects won’t take a decade to show results, many will producing results incrementally as different stages are completed, for example FMG already have 60MW of solar installed and producing, which is directly offsetting the consumption of natural gas.
> 
> As they continue to roll out gigs watts of solar, wind and batteries, they won’t be waiting till it’s 100% complete before linking it up to their grid, they will link it up in stages.
> 
> ...



 now i am not pretending to mind read your dad  on the LNG plant  , but i would have held back as well not just 4 years  away ( plus whatever delays  that might happen ) but say 5 or 6 years  before it started paying divs  , i could  have probably taken less risk elsewhere  ( say a company like CSR  ) got returns and some growth 

 now don't get me wrong  , i am delighted  your bet worked out for you  but i certainly  wouldn't beaten myself up about missing that opportunity 

 just like my late  ( only last year ) entry into FMG i was watching and watching  i would have been tempted to buy some bonds in the FMG port project if they had of been offered in Australia to Australians  but as far as i am concerned i bought FMG shares at the right time for ME  ( and all you folk  who got in earlier and were rewarded  .. good for you )

 and  4 years  currently  at my stage of life  is a very long time away ( i MIGHT be doing better in the corporate bond market by then  , instead of having almost no exposure currently )


----------



## Sean K (19 February 2022)

Value Collector said:


> The green projects won’t take a decade to show results, many will producing results incrementally as different stages are completed, for example FMG already have 60MW of solar installed and producing, which is directly offsetting the consumption of natural gas.
> 
> As they continue to roll out gigs watts of solar, wind and batteries, they won’t be waiting till it’s 100% complete before linking it up to their grid, they will link it up in stages.
> 
> ...




Are the examples you've provided FFI projects, or just FMG adjusting how they provide power to their own IO projects?

I thought FFI was more about green power to be exported or supporting and developing projects other than those that simply power their own trucks and trains. Things like hydro in PNG, hydrogen in Jordon, electrolyser in Gladstone,  green hydrogen in the UK, the list goes on. These are not 1-5 year projects that will cost billions and won't turn a profit for a very long time. The financial upside for shareholders is a very long way off. It's almost like investing in an exploration company, inside an iron ore operation.


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## Value Collector (19 February 2022)

Sean K said:


> Are the examples you've provided FFI projects, or just FMG adjusting how they provide power to their own IO projects?
> 
> I thought FFI was more about green power to be exported or supporting and developing projects other than those that simply power their own trucks and trains. Things like hydro in PNG, hydrogen in Jordon, electrolyser in Gladstone,  green hydrogen in the UK, the list goes on. These are not 1-5 year projects that will cost billions and won't turn a profit for a very long time. The financial upside for shareholders is a very long way off. It's almost like investing in an exploration company, inside an iron ore operation.



I think it’s both, it’s a $9 Billion mega project, that will be used to provide energy to its operations as it scales up, and obviously be also incrementally added and eventually used to make and export hydrogen too.

some of their projects will be 1-5 years, others longer buts that’s the same with all big green field mining projects any way, it’s kind of they way they normally operate, I am sure some people would have thought investing in FMG in 2003 and knowing the company wouldn’t be fully set up with four mines operating until 2013 would have seemed such a long time, but now it’s 2022.

https://www.pv-magazine-australia.c...e-5-4-gw-renewable-energy-project-in-pilbara/


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## Value Collector (19 February 2022)

divs4ever said:


> now i am not pretending to mind read your dad  on the LNG plant  , but i would have held back as well not just 4 years  away ( plus whatever delays  that might happen ) but say 5 or 6 years  before it started paying divs  , i could  have probably taken less risk elsewhere  ( say a company like CSR  ) got returns and some growth
> 
> now don't get me wrong  , i am delighted  your bet worked out for you  but i certainly  wouldn't beaten myself up about missing that opportunity
> 
> ...




The company already owned lots of operating gas wells, and some gas fired power stations, and paid a decent dividend, the 4 year LNG plant was just a cherry on top (remind you of FMG).

So I was already excited to own the company, But I could see that the LNG plant was going to allow them to pump a lot more gas and sell it at much higher prices, and it was only 4 years away.

but as I said an international company swooped in 6 months later and took over the company, which produced a decent return for share holders, obviously the 4 year wait didn’t bother them.


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## Value Collector (19 February 2022)

The way I think about companies like FMG (and BHP, BP, Rio and others that have a lot of large projects in different stages of development) is that they have a list of exisiting assets income producing assets with different life spans, and they have a list projects under at different stages of completion going all that will grow that list of income producing assets or replace some of the assets who’s life span ends.

I think of that list of developments as a pipeline, where projects enter the pipeline when they are started, and pop out a few years later when completed.

What FMG/FFI is doing now is loading up/priming that development  pipeline, some projects will take longer than others to work their way through the pipe what will happen is eventually just like a water pipeline, we will see a steady flow of completed developments coming out the end.

The Iron Bridge development will pop out earlier next year, different stages of the Pilbara energy project will be piping out over the next several years.

What will be good for FMG is if they have a strong team producing a list of possible developments that compete for capital, and as each one gets capital allocated it enters the pipe.


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## Sean K (19 February 2022)

Value Collector said:


> I am sure some people would have thought investing in FMG in 2003 and knowing the company wouldn’t be fully set up with four mines operating until 2013 would have seemed such a long time, but now it’s 2022.




I was certainly one of those people who thought Twiggy was dreaming back then. Egg on face emoji here.


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## Value Collector (19 February 2022)

Sean K said:


> I was certainly one of those people who thought Twiggy was dreaming back then. Egg on face emoji here.



I too have egg on face, I doubted Tesla even though I loved the concept and had ordered a car, and followed Elons progress, I was still worried they would run out of money, I could have been worth about $13 Million dollars more today if I had more faith in Elon hahaha.

But that is one of the Great things in my opinion about FMG, you can buy it today for less than what it’s existing producing assets are worth, and you get this potentially huge development pipeline for free.


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## basilio (19 February 2022)

What would happen to FMG and Andrew Forrests vision if he fell under the proverbial bus ? To put that in perspective he has already beat  COVID and just managed to avoid a terrorist attack on one of his round the world trips  in 2020.

Just wonder who would pick up the baton with the same drive ?  It's a serious question. Key man issues with major companies are always critical.  I think probably more so with FMG.

Found a story that explores the challenges to FMG's desire to be carbon neutral by 2030.








						Ten hurdles to Twiggy's green vision for FMG
					

Andrew Forrest has put his iron ore miner FMG on a fast track to net-zero emissions by 2030. Achieving high speed on a rocky road will not be easy.




					www.boilingcold.com.au
				











						Forrest, FMG team dodge deadly terrorist attack
					

Australia's richest man, Andrew Forrest, was in Afghanistan when his key contact was targeted by terrorists who blew up 10 people.




					www.afr.com


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## sptrawler (19 February 2022)

basilio said:


> What would happen to FMG and Andrew Forrests vision if he fell under the proverbial bus ? To put that in perspective he has already beat  COVID and just managed to avoid a terrorist attack on one of his round the world trips  in 2020.
> 
> Just wonder who would pick up the baton with the same drive ?  It's a serious question. Key man issues with major companies are always critical.  I think probably more so with FMG.
> 
> ...



I think more of a worry for FMG, is if the top end of town is expected to repair the budget, the banks already have a surcharge tax.
So really Twiggy getting taken by a shark, or being run over by a bus, is probably less of an issue IMO.


----------



## Value Collector (19 February 2022)

basilio said:


> What would happen to FMG and Andrew Forrests vision if he fell under the proverbial bus ? To put that in perspective he has already beat  COVID and just managed to avoid a terrorist attack on one of his round the world trips  in 2020.
> 
> Just wonder who would pick up the baton with the same drive ?  It's a serious question. Key man issues with major companies are always critical.  I think probably more so with FMG.
> 
> ...



Sometimes I think Key man issues are over stated, especially where they have built a strong company culture.

Apple is bigger and stronger even though Steve is dead.

The Walt Disney company is far larger and stronger even though Walt Disney is dead.

Walmart continued growing after Sam died.

Mc Donald’s never stopped growing even though Ray Kroc died.
Every where you look there is examples of companies that have gone from strength to strength even after their founder passes away unexpectedly.


----------



## Value Collector (19 February 2022)

sptrawler said:


> I think more of a worry for FMG, is if the top end of town is expected to repair the budget, the banks already have a surcharge tax.
> So really Twiggy getting taken by a shark, or being run over by a bus, is probably less of an issue IMO.



Ben Graham mentions in the 1940 edition of Security Analysis that extraordinary profit margins can not last forever, either competition will step in and erode it, or government will step in with special taxes, I read that just as the the mining super taxes were being considered and I couldn’t believe how right he was.


----------



## sptrawler (19 February 2022)

Value Collector said:


> Ben Graham mentions in the 1940 edition of Security Analysis that extraordinary profit margins can not last forever, either competition will step in and erode it, or government will step in with special taxes, I read that just as the the mining super taxes we being considered and I couldn’t believe how right he was.



Absolutely.
Profits are fleeting, taxes should be able to stand on a sustainable footing, not be applied just because a commodity has its time in the sun IMO.
Nickel would be a good example of that, it has very high recovery and exploration costs, they shouldn't just throw a tax on it because it has a great 3 year run as happened in mid 2010 era.
It would be far better IMO, to benchmark Australian nickel against competing countries and when all things are considered apply a tax on volume, if appropriate when everything is considered.
It shouldn't stifle exploration or profitability, but should take a cut due to it being a finite resource or it having an advantage due to low extraction costs. Eventually both of those come to an end, so selling it at near cost, doesn't in any way help Australia.
Just my thoughts.


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## divs4ever (20 February 2022)

sptrawler said:


> I think more of a worry for FMG, is if the top end of town is expected to repair the budget, the banks already have a surcharge tax.
> So really Twiggy getting taken by a shark, or being run over by a bus, is probably less of an issue IMO.



 yes , State and Federal Governments seeing a pot of money  IS a large risk ( and an ongoing disaster at that ) Twiggy today , Gina next week and then a crack at BHP and RIO ( and others )


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## divs4ever (20 February 2022)

sptrawler said:


> Absolutely.
> Profits are fleeting, taxes should be able to stand on a sustainable footing, not be applied just because a commodity has its time in the sun IMO.
> Nickel would be a good example of that, it has very high recovery and exploration costs, they shouldn't just throw a tax on it because it has a great 3 year run as happened in mid 2010 era.
> It would be far better IMO, to benchmark Australian nickel against competing countries and when all things are considered apply a tax on volume, if appropriate when everything is considered.
> ...



politicians only think until the next election  while civil servants only plan for their retirement  ( fund )

 there may be long-term thinkers in Australia but i can tell two places they AREN'T ( with the possible exception of Peter Costello )


----------



## sptrawler (20 February 2022)

divs4ever said:


> politicians only think until the next election  while civil servants only plan for their retirement  ( fund )
> 
> there may be long-term thinkers in Australia but i can tell two places they AREN'T ( with the possible exception of Peter Costello )



The best thing Costello did was to start the future fund and step down from politics to run it.
An understated legend of our time, history will give him credit, one of our best treasurer's IMO.
If he had become PM, it would have been a poison chalice.


----------



## divs4ever (20 February 2022)

that Future Fund gig isn't so easy now either  , too many trough-feeders cashing in early , will be interesting to see if the retirees  break it completely


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## Value Collector (20 February 2022)

sptrawler said:


> Absolutely.
> Profits are fleeting, taxes should be able to stand on a sustainable footing, not be applied just because a commodity has its time in the sun IMO.
> Nickel would be a good example of that, it has very high recovery and exploration costs, they shouldn't just throw a tax on it because it has a great 3 year run as happened in mid 2010 era.
> It would be far better IMO, to benchmark Australian nickel against competing countries and when all things are considered apply a tax on volume, if appropriate when everything is considered.
> ...



Agreed, considering both royalties and company income tax are both based on percentages, taxes already increase as profits increase, so extra taxes I see as being nothing more than cash grabs, especially when you work out the average profitability through the cycle is not an “extraordinary profit” but just a decent return on capital.


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## Value Collector (20 February 2022)

sptrawler said:


> The best thing Costello did was to start the future fund and step down from politics to run it.
> An understated legend of our time, history will give him credit, one of our best treasurer's IMO.
> If he had become PM, it would have been a poison chalice.



Also I think the government debt was paid off when he stepped down wasn’t it?


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## Humid (20 February 2022)

Got a good price for that gold too


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## divs4ever (20 February 2022)

Value Collector said:


> Also I think the government debt was paid off when he stepped down wasn’t it?



am not sure on that  , but am absolutely certain he left it in better condition than it is  currently


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## divs4ever (20 February 2022)

Humid said:


> Got a good price for that gold too



 but that still might have been a mistake , since there is demand for our minerals , energy and food exports  maybe not a face-plant blunder  , assuming we can still vacuum up the gold currently being mined if the needs arises ( some gold producers  have significantly hedged forward production  , so some will not be easily available to acquire )


----------



## Humid (20 February 2022)

divs4ever said:


> am not sure on that  , but am absolutely certain he left it in better condition than it is  currently



Depends on what version you want to believe I guess





__





						We really must talk about the Howard and Costello economic disaster
					

According to the LNP and their old media campaign team, Howard and Costello were brilliant economic managers; Alan Austin debunks this obvious furphy decisively.




					independentaustralia.net


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## Humid (20 February 2022)

divs4ever said:


> but that still might have been a mistake , since there is demand for our minerals , energy and food exports  maybe not a face-plant blunder  , assuming we can still vacuum up the gold currently being mined if the needs arises ( some gold producers  have significantly hedged forward production  , so some will not be easily available to acquire )



In November 1997 the then Treasurer, Peter Costello, shocked some people when he announced he'd signed off on the sale of $2 billion worth of Australian bullion. On the day he announced the sale the price was around $US306.00 an ounce. At the time, according to Mr Costello, gold "no longer plays a significant role in the international financial system".


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## sptrawler (20 February 2022)

Humid said:


> In November 1997 the then Treasurer, Peter Costello, shocked some people when he announced he'd signed off on the sale of $2 billion worth of Australian bullion. On the day he announced the sale the price was around $US306.00 an ounce. At the time, according to Mr Costello, gold "no longer plays a significant role in the international financial system".



Nothing has really changed, gold still no longer plays a significant role in financial systems, it is just people like hoarding it. No different to bitcoin, diamonds, rubies etc,  really only worth what someone will give you for them.
It isn't like resources, that are actually consumed to make make something.
Every bit of gold that has ever been dug up, is still sitting there, I've never bought in.
Also at the same time the U.S and a lot of European countries were unloading gold, as it had no intrinsic value in the fiat system.
But people being people, keep cranking it up, bit like gambling really just not my bag.
They may go back to a gold reserve, then I will get interested, until then there is plenty of other things to spend money on.IMO


----------



## divs4ever (20 February 2022)

Humid said:


> In November 1997 the then Treasurer, Peter Costello, shocked some people when he announced he'd signed off on the sale of $2 billion worth of Australian bullion. On the day he announced the sale the price was around $US306.00 an ounce. At the time, according to Mr Costello, gold "no longer plays a significant role in the international financial system".



 now i would have called that a mistake ( but remember there are bigger creatures pulling political strings here ) , BUT we still actively mine gold in Australia  so we COULD replenish , some nations mine very little gold or silver ( for them that would be a major blunder selling the gold reserves )

personally i have less faith in  the international financial system  ( even back then  )  than gold/silver  , but unfortunately Costello has yet to be replaced  by a better financial manager ( Australia was not unique in off-loading their gold at that time )


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## Value Collector (20 February 2022)

divs4ever said:


> am not sure on that  , but am absolutely certain he left it in better condition than it is  currently



https://www.theaustralian.com.au/ne...t/news-story/33f22c455274d6de1f85957b208f600a


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## Value Collector (20 February 2022)

Value Collector said:


> https://www.theaustralian.com.au/ne...t/news-story/33f22c455274d6de1f85957b208f600a



Sorry the article has a pay wall when accessed through a link, but it confirms the Howard government did leave office with australia debt free and with a budget surplus.


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## divs4ever (20 February 2022)

sptrawler said:


> Nothing has really changed, gold still no longer plays a significant role in financial systems, it is just people like hoarding it. No different to bitcoin, diamonds, rubies etc,  really only worth what someone will give you for them.
> It isn't like resources, that are actually consumed to make make something.
> Every bit of gold that has ever been dug up, is still sitting there, I've never bought in.
> Also at the same time the U.S and a lot of European countries were unloading gold, as it had no intrinsic value in the fiat system.
> But people being people, keep cranking it up, bit like gambling really just not my bag.



 actually that also applies to those crappy promissory  notes  , ALL  currency is a unit of exchange ( for stuff you really want ) and gold  does absolutely nothing ( which has proven to be a GOOD thing )

 Costello sold at $US 306   today  you would pay $US 1,800 ( plus )  and gold has not changed  it hasn't been upgraded ,  no new accessories added   so you can see the $US   has devalued markedly in just 25 years  ( a fall of more than 80% )

 BTW some gold is used  , some in dental fillings  , more in quality audio/video gear ( on the connectors ) and some  in the various computers   and electronic gear  , and in some cases bathroom fittings etc etc ( for those who love to flaunt their wealth )

 i would suggest that any currency system  that has no intention  of fiscal restraint  is effectively worthless ( the people issuing sure as heck don't value it )


----------



## divs4ever (20 February 2022)

Value Collector said:


> Sorry the article has a pay wall when accessed through a link, but it confirms the Howard government did leave office with australia debt free and with a budget surplus.



that was probably  financial trickery  , but tragically not unique  even back then  , but SOME before and after  didn't ( or couldn't ) hide that imbalance  ( remember we keep buying war machines at exorbitant prices  )


----------



## sptrawler (20 February 2022)

divs4ever said:


> i would suggest that any currency system  that has no intention  of fiscal restraint  is effectively worthless ( the people issuing sure as heck don't value it )



Which gives credibility to a digital system where every bit can be traced, rather than just printed, probably another thread.


----------



## Humid (20 February 2022)

Spent the surplus electioneering and lost his seat from memory


----------



## Humid (20 February 2022)

Value Collector said:


> Sorry the article has a pay wall when accessed through a link, but it confirms the Howard government did leave office with australia debt free and with a budget surplus.







__





						Surplus was due to Howard selling assets
					

After carefully considering Jack Lyons’ letter “Gillard and Swan have country drowning in debt” and comment from Allen...




					www.bendigoadvertiser.com.au


----------



## divs4ever (20 February 2022)

sptrawler said:


> Which gives credibility to a digital system where every bit can be traced, rather than just printed, probably another thread.



no it is the intent and follow through  , of limiting the resource ( asset ) as soon as your realize they will print more than they can ever repay ( or even service the interest on the debt ) it is game over  , serious investors will shun it with malice 

 tracing it is irrelevant  , if you can just go back and make more anytime you like ( without repaying existing debt loads )

i could borrow 80% of the value  of a building IF the lender thinks i way repay the capital lent in a timely manner  , some will even lend if they think i can repay the interest  and then extend ( roll-over ) the loan  , but no smart lender will give you the loan if they are sure you can not keep up with the interest payments ( unless they are certain the property value will be much greater when you default )

 with currency (  in the West currently ) someone just taps on a keyboard   , with no care about   balancing out past obligations ( it doesn't matter so much where it is , rather will it come back in a timely manner )

 otherwise  your credibility is just rubbish


----------



## divs4ever (20 February 2022)

Humid said:


> Spent the surplus electioneering and lost his seat from memory



as politicians often do  ( sadly ) ( waste the healthy balance sheet )


----------



## Country Lad (20 February 2022)

I am of the understanding that Fortescue mines iron ore.


----------



## sptrawler (20 February 2022)

Humid said:


> Spent the surplus electioneering and lost his seat from memory



I thought he put some of it, into starting the Future fund, Australia's first sovereign wealth fund, but I could be wrong.
Thought it was still going and actually travelling o.k.








						Future Fund assets hit $196.8b, after record 10pc quarter
					

The Future Fund’s assets are just shy of $200 billion after returning 22 per cent over 12-months, and over 10 per cent during the quarter.




					www.afr.com


----------



## sptrawler (20 February 2022)

Country Lad said:


> I am of the understanding that Fortescue mines iron ore.



Yes that's true, we're side tracked again, wish politics stayed over in general chat. 
Maybe @Joe Blow wouldn't mind moving or deleting the posts, if he has time.


----------



## Garpal Gumnut (20 February 2022)

Country Lad said:


> I am of the understanding that Fortescue mines iron ore.





sptrawler said:


> Yes that's true, we're side tracked again, wish politics stayed over in general chat.
> Maybe @Joe Blow wouldn't mind moving or deleting the posts, if he has time.





Mate, if you want to see a thread go off topic quickly visit the FMG thread.

Gold, Australian history, members' haemorrhoids, politics. 

It is all here. I've had to block some of the main culprits. 

Can we stick to FMG on the FMG thread or at least Iron and Hydrogen and could those who want to discuss something else just f*** off to the relevant thread. 

gg


----------



## Value Collector (20 February 2022)

Humid said:


> __
> 
> 
> 
> ...



The asset sales helped reduce the debt, but the budget surplus wasn’t due to asset sales.


----------



## Value Collector (20 February 2022)

Country Lad said:


> I am of the understanding that Fortescue mines iron ore.



Yep, and what size piece of that iron ore pie goes towards shareholders vs the government is a pretty relevant topic.


----------



## Humid (20 February 2022)

I'm out


----------



## Garpal Gumnut (20 February 2022)

FMG like many stocks in it's sector is at a cross roads. A Materials company with a change of focus causing distress to some and some glimmer of opportunity to others. 

We live in exciting times with some chance of respite from the plague with however the cousins in Russia and China asserting their military might. The latter is Australia's best customer for iron ore.

The esoterics tell us we need to move to alternate energies as well and FMG would appear to be the best funded Hydrogen stock in Australia via it's FFI outfit. An untested division with high hopes which I share.  

War is about and the markets are selling down so it is no surprise to see FMG fall on some volume after the announcement of a reduced divi a few days ago. Some want FMG to be a pure iron company, others such as I would be comfortable to wait, to a point. 

Fortune shone with my entry last year purely on a rising RSI in a consolidation and I added on the first retracement. I had missed the run up from $8 some years before, so I was pleased to see it move to $23 or so. It is now testing a significant support/resistance line under $20.  

Will I lose my winnings which is at times my lot? Will I sit? Will I get out? Would it be mad to add?

A chart. 







gg


----------



## sptrawler (20 February 2022)

@Garpal Gumnut I always live by the saying allow for the worst and hope for the best, another saying with a similar sentiment I also try to live by (but you can't have too many or you start sounding like a nutcase) is, change what you can accept what you can't.

If a war does happen, all our lives, all our savings, all our plans, go out the window, the Arnage ends up with a Chinese flag fluttering on the bonnet.

So getting back to FMG, IMO for several years iron ore and steel making will be booming, however recycling will over the next 20 years increase, as we do two things one get rid of ICE cars which is a lot of recycled steel and two move toward more and more renewable E.V's.

What I mean by that, I have mentioned before, as technology improves AI improves and autonomous driving vehicles improve, the need to make them out of high metal content decreases, because safety and structural strength becomes obsolete as accidents are avoided.

So all the current vehicles in the world become food for electric arc steel furnaces and the new vehicles wont require new steel to make them. 
So the current demand for iron ore may decline, our good friend Twiggy over a couple of cans of W.A emu export, probably thought hey we need to diversify and as the evening moved on the plan became clearer.
With that, put me down for pre selection at the Ross River Resort, you can pick me up in the Arnage, if my good friend Marcus McGowan will allow me to travel.


----------



## dat111 (22 February 2022)

Sean K said:


> Skate, or anyone, how does this work?
> 
> 
> 
> ...



Someone came out and said that purchasing the batteries alone would cost $8B... How much diesel fuel is $8B... Heck the total operating cost was reported as $15.28/wmt... If all of the operating cost was for batteries it would take 3 years worth of operating costs to purchase the batteries if FMG continued to produced 93.1 million wmt like the for 2022 First Half.... I have not looked at the income statement but I would think the cost of diesel/year is probably $100M at most...  The money needs to be free from the government for this to even come close to having this make sense...


----------



## divs4ever (22 February 2022)

Humid said:


> I'm out



 not me  , i am doubling down ( OK not ACTUALLY doubling  more  carefully accumulating in the dips  )

 BUT CAUTIOUSLY  , these are grandiose plans  , but Twiggy has come up with the goods before  , and IMHO  deserves   a careful vote of support  ( at least until he makes a major blunder )


----------



## basilio (24 February 2022)

SP falling to $18.69.  And the overall market is still in free fall.  Looks ugly all  round. And not a shot has been fired..


----------



## Value Collector (24 February 2022)

dat111 said:


> Someone came out and said that purchasing the batteries alone would cost $8B... How much diesel fuel is $8B... Heck the total operating cost was reported as $15.28/wmt... If all of the operating cost was for batteries it would take 3 years worth of operating costs to purchase the batteries if FMG continued to produced 93.1 million wmt like the for 2022 First Half.... I have not looked at the income statement but I would think the cost of diesel/year is probably $100M at most...  The money needs to be free from the government for this to even come close to having this make sense...



The total project is $9 Billion, that includes solar farms, wind turbines and batteries.

it will offset more than just diesel, it will also offset natural gas usage, and once the project is fully complete it will produce more than energy than FMG require to run their mines, which means they will have excess electricity to sell to other miners to offset their diesel and natural gas, or produce hydrogen etc.

there are already electric utility companies building wind, solar and batteries on the east coast that are economically producing energy for the national grid, the mining companies in the Pilbara have higher energy costs than the grid so the same investments that make sense for the east coast grid make even more sense for the Pilbara.

not to mention that the thing will be built in stages, and each stage will prove the viability of the next stage, they don’t have to commit all at once, in fact they have already built solar into their network that’s running now, I would suggest that they are seeing the benefits of this and that is why they are going big with it.


----------



## UMike (24 February 2022)

basilio said:


> SP falling to $18.69.  And the overall market is still in free fall.  Looks ugly all  round. And not a shot has been fired..



Got a low ball order at $18.5.

Not going higher but not cancelling it either.
Not that big on other people opinions but..........


----------



## basilio (25 February 2022)

UMike said:


> Got a low ball order at $18.5.
> 
> Not going higher but not cancelling it either.
> Not that big on other people opinions but..........
> View attachment 138043



Fascinating isn't it ?  All the big guys say sell.  Valuations down to $11.70 

I just don't get it.  I'm not going to say this will be some huge money spinner (although it could well be ) but I would have thought the runs on the board, the strong cash flow with dividends and iron ore business alone were worth at least the current price let alone 20-40% discounts.

Anyway I'm comfortable with my investment.  It might still fall temporarily  with the current political situation  but on balance  IMV it's still good.


----------



## divs4ever (25 February 2022)

i d


basilio said:


> Fascinating isn't it ?  All the big guys say sell.  Valuations down to $11.70
> 
> I just don't get it.  I'm not going to say this will be some huge money spinner (although it could well be ) but I would have thought the runs on the board, the strong cash flow with dividends and iron ore business alone were worth at least the current price let alone 20-40% discounts.
> 
> Anyway I'm comfortable with my investment.  It might still fall temporarily  with the current political situation  but on balance  IMV it's still good.



 i don't understand their  figures  either but got some more @ $18.45  today  ( cum. dividend )

 i remember when stuff like that happened to HVN like that  ( thanks guys , it made accumulating cheaper )

 the downside is short-term  i will have to be careful deploying the cash reserves  ( so not so many ex-div. buys )


----------



## sptrawler (25 February 2022)

divs4ever said:


> i d
> 
> i don't understand their  figures  either but got some more @ $18.45  today  ( cum. dividend )
> 
> ...



Maybe the market thinks we are long way from building battery operated tanks and helicopters, the money may well be moving to other resources, then FMG goes back to an iron ore play.
Well unless Vlad and Xi settle down, then we go back to kumbaya and all the green stuff and the run starts again.
Don't bet against the narrative IMO, I'm pleased my buy in was mid $14's and I wont be buying till it all settles down. 
Having cash available, is definitely king ATM, there is nothing on the horizon that indicates blue sky IMO.
Just my opinion and I have been wrong often, hopefully this time as well.


----------



## Value Collector (26 February 2022)

sptrawler said:


> Maybe the market thinks we are long way from building battery operated tanks and helicopters, the money may well be moving to other resources, then FMG goes back to an iron ore play.
> Well unless Vlad and Xi settle down, then we go back to kumbaya and all the green stuff and the run starts again.
> Don't bet against the narrative IMO, I'm pleased my buy in was mid $14's and I wont be buying till it all settles down.
> Having cash available, is definitely king ATM, there is nothing on the horizon that indicates blue sky IMO.
> Just my opinion and I have been wrong often, hopefully this time as well.



Did some one say blue skys?

Baby Groot listening to blue skys basically sums up my attitude to investing during all these turmoils.


----------



## sptrawler (26 February 2022)

Value Collector said:


> Did some one say blue skys?
> 
> Baby Groot listening to blue skys basically sums up my attitude to investing during all these turmoils.



They were good movies.
Investing in these times are the same as investing at any time, carefully and by applying common sense.IMO


----------



## divs4ever (26 February 2022)

so far  , i am buying FMG as an iron ore miner  ,  now sure the other projects might be winners  , but they are not earning ( or saving ) money yet .


----------



## Value Collector (26 February 2022)

Sean K said:


> Skate, or anyone, how does this work?
> 
> 
> 
> ...



I was thinking about what your concerns that these FFI long term projects won’t be generating cash for a long period, but will be requiring large cash outflows over their development period, and it got me thinking about other industries that have long routine periods to generate cash.

One that came to mind was the Timber industry, if you go down to Bunnings today, you will find plantation Timber that was planted in the year 2000, some one bought or leased land then planted a seed and then pruned and protected the tree for 20 years before they produced any cash flow.

They may have even spend money planting seed every year for twenty years, and now have 20 years of trees with a group maturing each year ready for harvest, they have a pipeline of trees.

Even trees like mango, almonds, oranges etc etc can take 7 years before producing their first decent fruit crops.

if you built a whisky distillery today it would take many years before the whisky you produced was aged and could be sold.

It took over  decade for Tesla to become an overnight success and produce profits but still pays no dividend, but imagine getting in on the ground level you would be very wealthy even with just a modest investment.

So many investments that built and keep the economy running take many years from start to cashflow, it seems weird to me that as investors people are out off by that, to me that’s the very foundation of why investors exist, we are meant to be the class of people willing to make those capital allocations, that’s literally why we get paid the big bucks,


----------



## basilio (28 February 2022)

FMG went ex dividend today and, not surprisingly, the market dropped around 90c matching the 86c dividend.

Currently the  SP  price has recovered  significantly.  Be interesting to see where it ends up given the geo political turmoil.


----------



## InsvestoBoy (28 February 2022)

Value Collector said:


> to me that’s the very foundation of why investors exist, we are meant to be the class of people willing to make those capital allocations, that’s literally why we get paid the big bucks,




I hear you VC and generally agree with your comments but let's face it, buying FMG shares on the secondary market has nothing to do with that. Fortescue doesn't get the dollar you spent on the shares, so this isn't exactly right.

Some other investor stumped up the bucks for the stuff in a primary share or bond offering, players in the secondary market are just evaluating the possibility of it succeeding at a certain price.


----------



## basilio (28 February 2022)

InsvestoBoy said:


> I hear you VC and generally agree with your comments but let's face it, buying FMG shares on the secondary market has nothing to do with that. Fortescue doesn't get the dollar you spent on the shares, so this isn't exactly right.
> 
> Some other investor stumped up the bucks for the stuff in a primary share or bond offering, players in the secondary market are just evaluating the possibility of it succeeding at a certain price.




I don't think it works like that at all Insevesto boy. When one invests in a company the one certainty you want is the capacity to  realise your profits through selling the investment when/if it succeeds. A sharemarket or other sale mechanism is essential for that process.

Companies are always in evolution. Investors buy or sell into companies as they observe it's progress. FMG is at a critical junction where it intends to invest heavily in renewable energy to both reinforce it's current business and create a whole new operation.  So current investors are evaluating these possibilities.


----------



## Value Collector (28 February 2022)

InsvestoBoy said:


> I hear you VC and generally agree with your comments but let's face it, buying FMG shares on the secondary market has nothing to do with that. Fortescue doesn't get the dollar you spent on the shares, so this isn't exactly right.
> 
> Some other investor stumped up the bucks for the stuff in a primary share or bond offering, players in the secondary market are just evaluating the possibility of it succeeding at a certain price.



When you buy a share in Fortescue, you are buying the equity of the business that was invested by the holders before you (both the initial capital and all the retained earnings over time) and become part owner in all the operating and growth projects.

Also, while you are holding it, the company is continually investing more retained earnings on your be half, that are accrued during your holding period, which my be decades.

———————————
for example, Fortescue doesn’t have to invest 30% of its earnings and only pay us 70% as a dividend like it did recently.

It could pay out 100% of earnings to us and Only spend sustaining capital to keep its mines going until they scratch bottom and then shut down the company.

but, they aren’t going to do that, they will keep retaining our earnings and reinvesting it, and all those new investments are funded by investors retained earnings.


----------



## Value Collector (28 February 2022)

basilio said:


> I don't think it works like that at all Insevesto boy. When one invests in a company the one certainty you want is the capacity to  realise your profits through selling the investment when/if it succeeds. A sharemarket or other sale mechanism is essential for that process.
> 
> Companies are always in evolution. Investors buy or sell into companies as they observe it's progress. FMG is at a critical junction where it intends to invest heavily in renewable energy to both reinforce it's current business and create a whole new operation.  So current investors are evaluating these possibilities.



Yep, Fortescue raised its first funds from the initial investors in 2003, thats 19 years ago, now the majority of those investors have probably wanted to get their capital out by now.

If the share market wasn’t there to facilitate the sale of their ownership interest in the company to another person that wants to replace them, then the only of ways for them to get their money back would be

1, have FMG pay the investor back their initial investment and all the earnings with cash from their balance sheet, which would mean FMG would never have been able to grow as it has

2, sell the entire company to some one and pay out all existing share holders at once.

3, do as I said before, cancel all new projects and pay out 100% of earnings till the company’s mines are exhausted then shut up shop.

———————————

How ever luckily the share market does exist, and owners of the company can sell their parcels of ownership to new owners when ever they want,

which allows the company to keep share holders equity working in the business undisturbed and makes shareholders comfortable with having part of their earnings retained and reinvested in new projects each year.


----------



## InsvestoBoy (28 February 2022)

Value Collector said:


> How ever luckily the share market does exist, and owners of the company can sell their parcels of ownership to new owners when ever they want,




Exactly. The primary funders, the ones who actually made the "capital allocation" decision can sell their shares into the secondary market.

Those shares can and do circulate infinitely until retired. But secondary investors shouldn't fool themselves into thinking they are making a capital allocation decision in the vein of planting a mango tree or whatever. 

The tree is planted, all *we* do is haggle over the price.


----------



## Value Collector (28 February 2022)

InsvestoBoy said:


> Exactly. The primary funders, the ones who actually made the "capital allocation" decision can sell their shares into the secondary market.
> 
> Those shares can and do circulate infinitely until retired. But secondary investors shouldn't fool themselves into thinking they are making a capital allocation decision in the vein of planting a mango tree or whatever.
> 
> The tree is planted, all *we* do is haggle over the price.



Fortescue is continually making capital allocations with shareholders retained earnings, as I said each time the company earns money it has to make a decision to either pass it along to owners as a dividend or maybe a share buy back or to reinvest it in new projects.

The New growth projects being carried out now are being funded by the retained earnings that are being earned now, and reinvested on behalf of current investors.

The original tree is planted and bearing fruit, but the new trees that are being planted are funded by the retained earnings that belong to current shareholders, regardless of whether you bought your shares in the secondary market or not, you are constantly investing new funds via retained earnings.

we haggle over the price of what we want to buy or sell that company equity for, but that doesn’t mean we aren’t constantly investing new equity into growth projects.

Ask yourself this, can FMG carry out these growth projects if it paid shareholders 100% of their earnings as a dividend? The answer is a clear no, it relies on shareholders being willing to accept that part of their earnings is being retained at each reporting cycle.

And should be even more clear that FMG could not afford the growth projects if it had to return the initial capital to investors from its balance sheet, rather than have a new investor step in and take over the equity position and pay out the other investor.


----------



## basilio (28 February 2022)

Twiggy has pulled the plug on his green hydrogen/renewable energy projects in Russia. This follows BP's exit and Norways decision to divest it's sovereign energy fund of Russian interests.

Twiggy also made a chilling observation about Vladimir  Putin. If Russia is going to be turned around it won't be with Putin at the helm.

_Mr Forrest said he had met with Mr Putin on previous trips to Moscow, and described him as someone who would not be rattled by Western sanctions.

"He's an incredibly intelligent person, not to be underestimated in any way. And tough, very tough," Mr Forrest said.









						Forrest pulls back on Russian investments, while BP may take $US25 billion hit to exit the country
					

Russia is being dealt more financial blows, with Australian billionaire Andrew Forrest pulling back on hydrogen investments there, while oil giant BP and Norway's sovereign wealth fund are also divesting from the country.




					www.abc.net.au
				



_


----------



## dat111 (1 March 2022)

Value Collector said:


> The total project is $9 Billion, that includes solar farms, wind turbines and batteries.
> 
> it will offset more than just diesel, it will also offset natural gas usage, and once the project is fully complete it will produce more than energy than FMG require to run their mines, which means they will have excess electricity to sell to other miners to offset their diesel and natural gas, or produce hydrogen etc.
> 
> ...



Have you read anywhere what the increased cost to operate will be... Have you read anywhere what the payoff will be for the $9M investment.


----------



## qldfrog (1 March 2022)

dat111 said:


> Have you read anywhere what the increased cost to operate will be... Have you read anywhere what the payoff will be for the $9M investment.



You are so last century @dat111...payoff? Money is illimited, narrative is precious 😂


----------



## Value Collector (1 March 2022)

dat111 said:


> Have you read anywhere what the increased cost to operate will be... Have you read anywhere what the payoff will be for the $9M investment.



It shouldn’t increase operating costs it will lower operating costs because it will be offsetting diesel and gas, they know what they are doing, they already have two other solar projects going. 

As I mentioned, if building solar, wind and batteries is viable in east coast markets where the electricity out put is being sold on to the market and competing with low cost coal power plants etc and still turning a profit, then it should be quite easy for them to compete with diesel fueled generators and gas power stations in the Pilbara.

A wind or solar farm on the east coast can operate  between 8%-12% return on capital invested, and that’s when the electricity is just sold into the grid at east coast market prices.

But the price paid to run diesel generators is much higher than the east coast grid average wholesale prices, so the return on investment would be higher than the 8%-12%

Not to mention that if the electricity ends up being converted into other green fuels etc in the future.


----------



## Smurf1976 (1 March 2022)

basilio said:


> Mr Forrest said he had met with Mr Putin on previous trips to Moscow



Wow.

I knew Forrest had some influence, didn't think it was to the extent he'd get a meeting with Putin though.

I wonder if he had to shout across that really long table?


----------



## qldfrog (1 March 2022)

Onl


Smurf1976 said:


> Wow.
> 
> I knew Forrest had some influence, didn't think it was to the extent he'd get a meeting with Putin though.
> 
> I wonder if he had to shout across that really long table?



Only if he refuses to get tested in case Putin steals his DNA....as Macron did  ROL


----------



## basilio (1 March 2022)

New announcement from FMG on completion of the WAE purchase and development of a Zero Emission "Infinity Train"

Basically an electric train that  scavenges all the down hill momentum of the ore trains and substantially reduce the need for renewable energy input. 

*ZERO EMISSION INFINITY TRAIN.*

 WAE has significant industrial battery technology that has already added considerable value to Fortescue. FFI and WAE have also commenced development of a regenerating battery electric iron ore train project (Infinity Train) to support the delivery of Fortescue’s industry-leading target to achieve net zero Scope 1 and Scope 2 emissions by 2030. In a world first development, the Infinity Train will utilise the gravitational energy generated on the downhill loaded sections of Fortescue’s rail network to recharge its battery electric systems, without any additional charging requirements for the return trip to reload. 

The self-sustaining system will increase operational efficiency, lower maintenance costs, and eliminate diesel and the associated CO2 emissions from Fortescue’s iron ore trains. The regenerative capability will remove the requirement for investment in recharging infrastructure and additional renewable energy generation capacity.

 Fortescue’s current rail operations include 54 operating locomotives that haul 16 train sets, together with other on-track mobile equipment. Each train set is about 2.8 kilometres in length and has the capacity to haul 34,404 tonnes of iron ore in 244 ore cars. Fortescue’s rail operations consumed 82 million litres of diesel in financial year 2021 accounting for 11 per cent of Fortescue’s Scope 1 emissions. This diesel consumption and associated emissions will be eliminated once the Infinity Train is fully implemented across Fortescue’s operations, significantly contributing to Fortescue’s target to be diesel free by 2030.

Fortescue’s studies and development costs for the Infinity Train are expected to be US$50 million over the next two years and will be classified as operating cost efficiencies, with the studies to refine the capital estimate and schedule. The technology, to be jointly developed by Fortescue and WAE, will address the reduction in emissions in the hard to abate heavy industry sector with significant opportunities for this technology to be commercialised on a global basis.

WAE Completion and Infinity Train


----------



## Garpal Gumnut (1 March 2022)

basilio said:


> New announcement from FMG on completion of the WAE purchase and development of a Zero Emission "Infinity Train"
> 
> Basically an electric train that  scavenges all the down hill momentum of the ore trains and substantially reduce the need for renewable energy input.
> 
> ...



Twiggy has always been ahead of the curve. 

Other companies in the Materials sector are watching his moves carefully. 

Proper ESG rather than the present lip-service from lightweight sectors will start in our ore mines and energy companies.

gg


----------



## divs4ever (1 March 2022)

qldfrog said:


> You are so last century @dat111...payoff? Money is illimited, narrative is precious 😂



embarrassingly  correct 

 good luck believing in fairy stories


----------



## basilio (1 March 2022)

divs4ever said:


> embarrassingly  correct
> 
> good luck believing in fairy stories




Che ? Not sure what you are referring to Divs. Care to clarify ?


----------



## divs4ever (1 March 2022)

the narrative   ....   starting to seem even less credible than  RBA inflation rate predictions  ( maybe i will see the tooth fairy  before to RBA gets the next guess  correct )


----------



## Value Collector (1 March 2022)

divs4ever said:


> the narrative   ....   starting to seem even less credible than  RBA inflation rate predictions  ( maybe i will see the tooth fairy  before to RBA gets the next guess  correct )



I am still confused about what you are referring to


----------



## divs4ever (1 March 2022)

narratives like the economy is fine ( except for those nasty Russians and their hundreds of tonnes of gold )  narratives  like human energy use is killing the planet ( outside of war-time activities )  etc , etc , etc


----------



## Value Collector (1 March 2022)

divs4ever said:


> narratives like the economy is fine ( except for those nasty Russians and their hundreds of tonnes of gold )  narratives  like human energy use is killing the planet ( outside of war-time activities )  etc , etc , etc



Ok, I still don’t quite understand what you are talking about.

but anyway, FMG’s “Infinity Train” will be an electric train that never needs charging, because as it’s travelling down hill from the mine to the port fully loaded it will generate more electricity via regen braking, than it will consume on the return in hill trip when the wagons are empty.

this concept has already been done with a mining truck in Switzerland as shown in the video I linked below, FMG is basically going to be doing this same principle but with trains.


----------



## dat111 (2 March 2022)

qldfrog said:


> You are so last century @dat111...payoff? Money is illimited, narrative is precious 😂



How do I get my accounts to be illimited...  I would buy that book....


----------



## dat111 (2 March 2022)

Value Collector said:


> It shouldn’t increase operating costs it will lower operating costs because it will be offsetting diesel and gas, they know what they are doing, they already have two other solar projects going.
> 
> As I mentioned, if building solar, wind and batteries is viable in east coast markets where the electricity out put is being sold on to the market and competing with low cost coal power plants etc and still turning a profit, then it should be quite easy for them to compete with diesel fueled generators and gas power stations in the Pilbara.
> 
> ...



OK it will not increase operating costs because it will be a capital expenditure that has to be paid back.  How long will it take to pay back the capital expenditure.  In the US I have studied wind and solar.  The government has been funding these projects since the early 00s.  It is government money grab done as crony capitalism where the wind and solar companies do OK when the government pumps money into them.  When the government does not pump money into them... they declare bankruptcy and stick the citizens.  If these companies could truly make money and be sustainable... they would not declare bankruptcy when the government stops handing checks.


----------



## Value Collector (2 March 2022)

dat111 said:


> OK it will not increase operating costs because it will be a capital expenditure that has to be paid back.  How long will it take to pay back the capital expenditure.  In the US I have studied wind and solar.  The government has been funding these projects since the early 00s.  It is government money grab done as crony capitalism where the wind and solar companies do OK when the government pumps money into them.  When the government does not pump money into them... they declare bankruptcy and stick the citizens.  If these companies could truly make money and be sustainable... they would not declare bankruptcy when the government stops handing checks.



As I said they will produce about 8%-12% minimum return on investment probably higher when you factor in the expensive energy sources they are replacing they are assets with 20 to 30 year life cycles.

“Pay back period” is not really the right way to be thinking about it, think of it more in terms of return on invested capital and return on equity.

Also there is energy security, when diesel prices spike like they are now, the projects internal rate of return goes up, because the savings relative to the price you would have had to pay for energy had you stuck to traditional energy sources goes up, there is also inflation hedging, eg you build your project today, and as inflation raises the price of oil, your investment you made 10 years ago looks like it’s producing an amazing return vs what you would be paying otherwise.

Big renewable projects can also qualify for accelerated tax write offs etc, which means you can write the cost of the project off and pay less taxes in the short term.


----------



## qldfrog (2 March 2022)

dat111 said:


> How do I get my accounts to be illimited...  I would buy that book....



Not yours silly boy/girl, the government ones😂


----------



## waterbottle (8 March 2022)

Airbus strikes deal with Australia's Fortescue as airlines seek hydrogen boost
					

European planemaker Airbus chose the Australian miner Fortescue Metals Group Ltd's hydrogen unit to help it reduce CO2 emissions from flying, Fortescue Future Industries (FFI) said in a statement on Tuesday.




					www.reuters.com
				




Interesting opportunity for Fmg here now that Russia and Ukraine are at war. Europe is looking for another iron ore supplier and alternative energy sources.


----------



## sptrawler (11 March 2022)

Reserve bank member to join FFI, this will open a lot of doors IMO and also give a lot of financial insight for FFI.








						RBA deputy governor Guy Debelle to join Fortescue's renewable energy push
					

Reserve Bank deputy governor Guy Debelle is leaving the bank to join Andrew Forrest's renewable energy business, Fortescue Future Industries.




					www.abc.net.au
				




Ahead of the looming federal election, Dr Debelle has announced his resignation from the RBA to join billionaire mining magnate Andrew Forrest's Fortescue Future Industries (FFI) as its chief financial officer.

It is a surprise announcement given Dr Debelle was only reappointed deputy last year and was seen by many as being the front runner to be appointed the next RBA governor.


----------



## divs4ever (11 March 2022)

i see it as a red flag 

 a will be keeping a watchful distance from the buy ( extra ) button  for an extended  time now 

 this is one of the few times i would have preferred  an experienced corporate banker  ( from say Macquarie or UBS  etc etc )


----------



## Country Lad (11 March 2022)

divs4ever said:


> this is one of the few times i would have preferred  an experienced corporate banker  ( from say Macquarie or UBS  etc etc )




I think they have plenty of access to top bankers without the need to employ one.




sptrawler said:


> Reserve bank member to join FFI, this will open a lot of doors IMO and also give a lot of financial insight for FFI.




Yep, that is likely why he will be there, after all it is as the CFO.

_Dr Debelle joined the RBA in 1994. He has also worked at the International Monetary Fund, Bank for International Settlements, Australian Treasury and as a visiting professor in economics at the Massachusetts Institute of Technology (MIT). He graduated from the University of Adelaide with an honours degree in economics and gained his PhD in economics at MIT under Stanley Fischer and Rudi Dornbusch. Dr Debelle is well regarded in the central banking community, financial markets and the Australian business community._


----------



## sptrawler (11 March 2022)

divs4ever said:


> i see it as a red flag
> 
> a will be keeping a watchful distance from the buy ( extra ) button  for an extended  time now
> 
> this is one of the few times i would have preferred  an experienced corporate banker  ( from say Macquarie or UBS  etc etc )



That is an interesting take divs, I see it as a huge plus, the push to hydrogen is going to require a lot of Government influence, it really is difficult to justify on a financial basis alone IMO.
So having someone with a working knowledge of the Government financial structures and their limitations, protocols etc I would have thought would be a huge plus.
Certainly a big call by Twiggy and I guess it would have been an offer hard to refuse.
I'm hoping that FMG hit the mid $14's again, so I can pick up more.


----------



## divs4ever (11 March 2022)

sptrawler said:


> That is an interesting take divs, I see it as a huge plus, the push to hydrogen is going to require a lot of Government influence, it really is difficult to justify on a financial basis alone IMO.
> So having someone with a working knowledge of the Government financial structures and their limitations, protocols etc I would have thought would be a huge plus.
> Certainly a big call by Twiggy and I guess it would have been an offer hard to refuse.
> I'm hoping that FMG hit the mid $14's again, so I can pick up more.



 i would have thought Twiggy  had generated  sufficient  respect and goodwill by now  , not to need   anyone to do PR  , because that is all i can see here .

 get too deeply entangled in governments ( and bureaucrats  ) and they tend to think they  own you , and THAT was the personal  opinion of a former senior banker . 

 i will be watching VERY CAREFULLY from now on


----------



## divs4ever (11 March 2022)

Country Lad said:


> I think they have plenty of access to top bankers without the need to employ one.
> 
> 
> 
> ...



 and how has Guy done at the RBA in all those years  , and he certainly didn't torpedo MMT    at MIT either 

 i would say Twiggy has done much more for the Australian economy ( and balance of payments ) already


----------



## Country Lad (11 March 2022)

divs4ever said:


> and how has Guy done at the RBA in all those years  , and he certainly didn't torpedo MMT    at MIT either



No idea, I don't know him, never met him so unlike yourself, I am not in a position to bag or praise him.  Others better qualified that I have him in high regard so I will look forward to seeing results from the whole team at FFI.


----------



## Garpal Gumnut (21 March 2022)

Some " warming the cockles of one's heart " news from my good friends at RenewEconomy on FMG.

Basically Twiggy's green energy Hydrogen targets once thought to be pie in the sky just 12 months ago are now achievable within FFI. 

There is a summary and a link to an interview with Julie Shuttleworth. 









						Fortescue says its “very stretch” 15m tonne green hydrogen targets now very achievable
					

Fortescue CEO admits 15 million green hydrogen target by 2030 was “very stretch”, but now seems very achievable given developments over last 12 months.




					reneweconomy.com.au
				




gg


----------



## systematic (22 March 2022)

systematic said:


> I'm out
> 
> I guess finding a reason to override was never going to work...I'm just a 🤖
> 
> ...




Not quite a year...I'm back in as of yesterday.


----------



## Ann (22 March 2022)

Wuk-a-duk I have just seen an island bottom on FMG. Everywhere I am looking I am seeing amazing opportunities for price rises. I need a doggy bag!


----------



## Ann (22 March 2022)

Just wacked in a bid for $18.15. See if I get it. May not, don't care!


----------



## Ferret (28 March 2022)

An interesting question about FMG at the AFIC briefing today.

Asked why AFIC holds BHP and RIO but not FMG, AFIC cited the diversification and higher ore quality of BHP & RIO.  

They also expressed some concern of the money being thrown at FFI.  They are not yet convinced that this will be money well spent.


----------



## divs4ever (28 March 2022)

Ferret said:


> An interesting question about FMG at the AFIC briefing today.
> 
> Asked why AFIC holds BHP and RIO but not FMG, AFIC cited the diversification and higher ore quality of BHP & RIO.
> 
> They also expressed some concern of the money being thrown at FFI.  They are not yet convinced that this will be money well spent.



 interesting   , but cautious  , however as a former holder of RIO ( sold several years back ) and current holder of BHP and FMG  ( FMG bought the last half of 2021 )   i would have preferred FMG ( better growth potential  ) over RIO 

 given recent investments by BHP ( say the oil/shale gas investments/divestments ) one might ask the same question of BHP as well 

so are AFI going for ore quality over management quality ??


----------



## Dona Ferentes (28 March 2022)

Ferret said:


> An interesting question about FMG at the AFIC briefing today.
> 
> Asked why AFIC holds BHP and RIO but not FMG, AFIC cited the diversification and higher ore quality of BHP & RIO.



and also mentioned the likelihood of Guinea ore (Simandou) arriving on market soon This will be high Fe content, which attracts the higher price. Implied will be lower prices than currently





Ferret said:


> They also expressed some concern of the money being thrown at FFI.  They are not yet convinced that this will be money well spent.



Yes they did. "_Our research process is built on observing the key characteristics of a company that our experience indicates will produce strong investment returns_."


----------



## Value Collector (28 March 2022)

Ferret said:


> An interesting question about FMG at the AFIC briefing today.
> 
> Asked why AFIC holds BHP and RIO but not FMG, AFIC cited the diversification and higher ore quality of BHP & RIO.
> 
> They also expressed some concern of the money being thrown at FFI.  They are not yet convinced that this will be money well spent.



BHP and Rio are not that diversified really, Iron Ore makes a part of both of their businesses, and Bhp is in the process of getting rid of its Oil business.

So I don’t see the benefit of paying a substantial premium for BHP and RIO for “diversification” when you they are getting 2 thirds of their profit from Iron Ore anyway.

Paying a high price for a diversified company is probably not worth it if you can build a diversified portfolio of cheap non diversified companies yourself.


----------



## divs4ever (28 March 2022)

Value Collector said:


> BHP and Rio are not that diversified really, Iron Ore makes a part of both of their businesses, and Bhp is in the process of getting rid of its Oil business.
> 
> So I don’t see the benefit of paying a substantial premium for BHP and RIO for “diversification” when you they are getting 2 thirds of their profit from Iron Ore anyway.
> 
> Paying a high price for a diversified company is probably not worth it if you can build a diversified portfolio of cheap non diversified companies yourself.



 yes currently ( especially after BHP divests  the petroleum arm )   i would have to agree there 

 now i was buying BHP BEFORE the S32 demerger   so on the surface i look to have gotten 'good value '  and hopefully AFIC was buying then , and earlier  , i struggle to determine a $50 BHP good value  ( but was happily buying sub $20  around the end of 2015 )

 whereas  the numbers crunched attractively for me in the last half year  on FMG  , but yes i have small  holding in several junior miners ( and S32 ) to diversify  risk and commodity exposure , allowing plenty of room for 'cherry-picking '

 but then AFIC has to balance administration costs  with income received  , so a pragmatic balancing act , while  a 'hands-on' small investor  can be more agile and flexible


----------



## Garpal Gumnut (28 March 2022)

Ferret said:


> An interesting question about FMG at the AFIC briefing today.
> 
> Asked why AFIC holds BHP and RIO but not FMG, AFIC cited the diversification and higher ore quality of BHP & RIO.
> 
> They also expressed some concern of the money being thrown at FFI.  They are not yet convinced that this will be money well spent.



The other simple reason for AFIC's reasoning is that they may have missed out on FMG at $14 when BHP was a bargain. 

Bigger pots have to make bigger decisions and have bigger regrets. 

Like us all AFIC have to justify their regrets. 

gg


----------



## Value Collector (28 March 2022)

Dona Ferentes said:


> and also mentioned the likelihood of Guinea ore (Simandou) arriving on market soon This will be high Fe content, which attracts the higher price. Implied will be lower prices than currently
> 
> 
> 
> ...



FMG have Iron Bridge which will be one of the highest FE content in the world when it starts production, and there is the possibility that they can blend the Iron Bridge production with their other ores to upgrade the lower grade ores.

When it comes to diversification, FMG may end up being very successful in their FFI developments and be a diversified materials and energy business, at which point if they started trading at the same PE of the diversified companies their would be a massive share price upgrade, and $40 or $50 per share wouldn’t be out of the question.


----------



## Dona Ferentes (30 March 2022)

Garpal Gumnut said:


> Some " warming the cockles of one's heart " news from my good friends at RenewEconomy on FMG.
> 
> Basically Twiggy's green energy Hydrogen targets once thought to be pie in the sky just 12 months ago are now achievable within FFI.



In trading halt.
..... It is _thought to be related to further detail and clarification around the hydrogen supply deal announced on Tuesday in Europe_.

They have announced plans to supply 5 million tonnes per year of green hydrogen to Europe by 2030 in a partnership with giant European energy retailer E.on.


----------



## Ann (30 March 2022)

Dona Ferentes said:


> In trading halt.
> ..... It is _thought to be related to further detail and clarification around the hydrogen supply deal announced on Tuesday in Europe_.
> 
> They have announced plans to supply 5 million tonnes per year of green hydrogen to Europe by 2030 in a partnership with giant European energy retailer E.on.



Thanks Dona, I noticed the halt today. Hopefully, it will mean some more upside after it created the lovely unchallenged Island Bottom pattern recently. I gave up trying to get in cheaper and bought in once it leapt the 200 boundary fence. Temptation of an Island Bottom was too great for me!


----------



## againsthegrain (30 March 2022)

Got my shares part or the drp today,  can anybody enlighten me why my average price shows as lower now?

My average buy in was ~17c previously, got my drp allocation today at ~18c,  and my average shows as ~16c through my online broker.

Shouldn't my average go up now instead of down since drp allocation was higher then my average buy in?

I know I am not understanding something here,  perhaps to do with franking credits?


----------



## Value Collector (30 March 2022)

againsthegrain said:


> Got my shares part or the drp today,  can anybody enlighten me why my average price shows as lower now?
> 
> My average buy in was ~17c previously, got my drp allocation today at ~18c,  and my average shows as ~16c through my online broker.
> 
> ...



I am not sure I understand your question, are you saying your average buy in was only $0.17

which platform are you using?


----------



## againsthegrain (30 March 2022)

Value Collector said:


> I am not sure I understand your question, are you saying your average buy in was only $0.17
> 
> which platform are you using?



sorry $ not c,  not sure what I was thinking

cmc markets as a default broker through Anz


----------



## divs4ever (30 March 2022)

17 March 2022 DIVIDEND REINVESTMENT PLAN ALLOCATION PRICE

On 16 February 2022, Fortescue Metals Group Ltd (Fortescue, ASX: FMG) announced a fully franked interim dividend of A$0.86 per share with a Record Date of 1 March 2022, payable on 30 March 2022.
The allocation price for shares to be issued to participants in the Dividend Reinvestment Plan (the Plan) for the 2022 interim dividend is $18.524.
The allocation price has been calculated in accordance with the Plan rules as the average of the daily volume weighted average market price of all Fortescue shares traded on the Australian Securities Exchange during the period of ten trading days commencing on the second trading day after the Record Date.

Shares are expected to be issued to participants on 30 March 2022.

 cheers


----------



## Value Collector (31 March 2022)

againsthegrain said:


> sorry $ not c,  not sure what I was thinking
> 
> cmc markets as a default broker through Anz



I am not familiar with that platform, but some platforms allow you to edit the price so you might be able to work it out manually and correct it.


----------



## againsthegrain (31 March 2022)

Value Collector said:


> I am not familiar with that platform, but some platforms allow you to edit the price so you might be able to work it out manually and correct it.




Ok thanx for the tip,  will have to do that nobody wants to pay more cgt then they owe, not that I plan on selling anytime soon


----------



## Value Collector (31 March 2022)

againsthegrain said:


> Ok thanx for the tip,  will have to do that nobody wants to pay more cgt then they owe, not that I plan on selling anytime soon



To work out capital gains it’s best to use the actual buy contracts.

Keep either a physical or digital copy of your buy contracts and use them when working out the capital gains.

That way you have exact records of all costs including brokerage, and dates to work out if you qualify for the 50% discount.

Also, you can decide exactly which shares you sold, eg use the older buy contracts if you want the 50% discount, or the ones with the highest or lowest price, depending if you want to have a larger or smaller capital gain.

If I sell only some of the shares of a particular buy contract I mark to say X number of shares from this contract have been sold.


----------



## sptrawler (12 April 2022)

Interesting idea by Twiggy.
Forrest floats US coal plant buy​The mining billionaire said he was considering investing in as many as 22 power stations in coal-dependent West Virginia which could be converted to use renewable energy.


----------



## qldfrog (12 April 2022)

sptrawler said:


> Interesting idea by Twiggy.
> Forrest floats US coal plant buy​The mining billionaire said he was considering investing in as many as 22 power stations in coal-dependent West Virginia which could be converted to use renewable energy.



How much expected green subsidies


----------



## sptrawler (12 April 2022)

qldfrog said:


> How much expected green subsidies



Milk it while you can Twiggy.


----------



## UMike (13 April 2022)

Don't expect the dems to get another term!


----------



## basilio (28 April 2022)

Quarterly production figures out.  A very good result overall. Production up. Prices up. Some cost blow outs but in the overall scene a very good result. Making $100 a ton vs  $15.78c costs of production.
Market has responded strongly.

*Record third quarter operating performance contributes to strong cashflow generation and upgraded guidance for full year shipments *

Quarterly summary

• Total Recordable Injury Frequency Rate (TRIFR) of 1.8 for the 12 months to 31 March 2022, an 18 per cent improvement on 2.2 at 31 March 2021

•* Iron ore shipments of 46.5 million tonnes (mt) for Q3 FY22, 10 per cent higher than Q3 FY21, contributing to record shipments for the nine months to 31 March 2022 of 139.5mt*

 •* Average revenue of US$100/dry metric tonne (dmt) representing revenue realisation of 70 per cent of the Platts 62% CFR Index for the quarter (68 per cent in Q2 FY22)*

 • C1 cost of US$15.78/wet metric tonne (wmt), three per cent higher than the previous quarter

 • Net debt of US$2.4 billion at 31 March 2022 after payment of the interim dividend of US$2.0 billion and capital expenditure of US$830 million in the quarter

• Successful completion of US$1.5 billion offering of Senior Notes on 7 April 2022, including Fortescue’s inaugural US$800 million Green Senior Note issue

• Completed the acquisition of Williams Advanced Engineering for US$221 million and announced the development of the zero emission Infinity Train

 • Fortescue Future Industries (FFI) commenced construction of the Green Energy Manufacturing Centre in Gladstone, Queensland and continued to advance a portfolio of projects and technologies

 •* Based on the strong operating performance in the nine months to 31 March 2022, guidance for FY22 shipments is upgraded to 185 - 188mt (previously 180 - 185mt) *

• Guidance for FY22 C1 cost is revised to US$15.75 - US$16.00/wmt (previously US$15.00 - US$15.50/wmt)

• Guidance for FY22 capital expenditure (excluding FFI) is amended to US$3.0 - US$3.2 billion (previously US$3.0 - US$3.4 billion)

• *The Iron Bridge Magnetite project capital estimate has been revised to US$3.6 - US$3.8 billion (previously US$3.3 billion – US$3.5 billion).



			https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02514483-6A1088582?access_token=83ff96335c2d45a094df02a206a39ff4
		

*


----------



## Value Collector (29 April 2022)

Some good info on hydrogen


----------



## basilio (5 May 2022)

Dona Ferentes said:


> In trading halt.
> ..... It is _thought to be related to further detail and clarification around the hydrogen supply deal announced on Tuesday in Europe_.
> 
> They have announced plans to supply 5 million tonnes per year of green hydrogen to Europe by 2030 in a partnership with giant European energy retailer E.on.



Further to Dona's article.
5 Million tons of hydrogen at (say) $2 a kilo equals *$10B a year .*  How does this compare to recent iron ore income ?





FFI targets 5 million tons of European hydrogen exports by 2030​ 
 





*                     Brandon How                     * 
Reporter

                                                   31 March 2022        



Share

*Fortescue Future Industries has* signed a memorandum of understanding with a European utility company to distribute its green hydrogen to the continent.

Working with German utility company E.ON, Fortescue Future Industries (FFI) plans to export up to five million tonnes of green hydrogen to Europe by 2030. This is equivalent to about one third of the energy imported from Russia to Germany. Fortescue founder Andrew Forrest said that reaching FFI’s targets could cost up to $50 billion.

The commitment was signed by Mr Forrest and E.ON chief operating officer Patrick Lammers at a press conference on Tuesday. The companies will engage in a research and study partnership with more detailed supply plans to be completed in the future.

Mr Forrest said that shipments to Europe would  initially be in the form of green ammonia and split into hydrogen upon arrival. However, Mr Forrest also wants to eventually ship liquefied hydrogen to Europe.









						FFI targets 5 million tons of European hydrogen exports by 2030
					

Fortescue Future Industries has signed a $50 billion agreement with a European utility company to distribute its green hydrogen to the continent. Working with German utility company E.ON, Fortescue Future Industries (FFI) plans to export up to five million tonnes of green hydrogen to Europe by...




					www.innovationaus.com


----------



## basilio (5 May 2022)

On a more immediate scale FMG is looking at a committed project in 2023.
Australia's Fortescue targets 2023 go-ahead for first green hydrogen project​By Sonali Paul


2 minute read










MELBOURNE, May 4 (Reuters) - Fortescue Metals Group (FMG.AX) hopes to make a final investment decision in 2023 on a green hydrogen project in Australia that would be its first to generate revenue, Chief Executive Elizabeth Gaines said on Wednesday.

The Gibson Island project in the northeastern state of Queensland is one of many tentative deals and studies unveiled by the world's fourth-largest producer of iron ore over the last 18 months as it strives to become a major green energy supplier.


"From a revenue perspective the most advanced would be the Gibson Island project ... Hopefully a final investment decision (FID) in 2023," Gaines told the Macquarie Australia Conference in Sydney, when asked which of its hydrogen projects would be the first to produce revenue.

First-phase feasibility studies were completed in December on using electrolysis powered by renewable energy to produce 50,000 tonnes a year of hydrogen to feed a reopening of the Gibson Island ammonia plant owned by Australia's top fertiliser producer Incitec Pivot (IPL.AX).









						Australia's Fortescue targets 2023 go-ahead for first green hydrogen project
					

Fortescue Metals Group hopes to make a final investment decision in 2023 on a green hydrogen project in Australia that would be its first to generate revenue, Chief Executive Elizabeth Gaines said on Wednesday.




					www.reuters.com


----------



## divs4ever (5 May 2022)

will there be a Europe  in 2030 ( and will they have an economy worth trading with )


----------



## basilio (5 May 2022)

divs4ever said:


> will there be a Europe  in 2030 ( and will they have an economy worth trading with )




If there isn't a "Europe" in 2030 then really we won't be in any great shape.  
Frankly the way things are playing out in Ukraine 2023 looks doubtful.


----------



## Country Lad (5 May 2022)

_Fortescue green hydrogen goal needs 450GW of wind and solar by 2030_​_Andrew Forrest’s Fortescue Future Industries has revealed some of the extraordinary numbers behind its hugely ambitious goal to deliver 15 million tonnes of green hydrogen production a year by 2030.

It will require, according to FFI’s head in NSW Joshua Moran – some 150GW of hydrogen electrolysers and a phenomenal 450GW of renewable capacity, namely wind and solar.

That, to put in context, is around nine times the current capacity of large scale generation in Australia’s National Electricity Market. Global electrolyser production is currently around 1GW, although FFI plans to double that with a new factory it is building at Gladstone.

“That gives you an idea of what is required to achieve this ambition,” Moran told the Smart Energy Expo on Thursday.

FFI’s targets have been dismissed as “pie in the sky” by many commentators, and FFI itself has admitted it was a “very” stretch target when first unveiled.

But it is now confident that target is “very achievable” , according to CEO Julie Shuttleworth, given the growing demand, falling costs, and the accelerated switch to green alternatives to fossil fuels driven by Russia’s invasion of Ukraine._


----------



## dat111 (5 May 2022)

Country Lad said:


> _Fortescue green hydrogen goal needs 450GW of wind and solar by 2030_​_Andrew Forrest’s Fortescue Future Industries has revealed some of the extraordinary numbers behind its hugely ambitious goal to deliver 15 million tonnes of green hydrogen production a year by 2030.
> 
> It will require, according to FFI’s head in NSW Joshua Moran – some 150GW of hydrogen electrolysers and a phenomenal 450GW of renewable capacity, namely wind and solar.
> 
> ...



So an onshore windmill can generae about 2.5-3 MW of electricity... 450GW is 450000MW...  So it will take 180,000-150,000 windmills...  

India's Bhadla Solar Park is the largest solar park in the world it is 160 square kilometers in size and produces 2700 MW... So to produce 450 GW one would need 167 ..  construction cost was $1.3B US ... 

What is more than likely to happen if this actually does happen is that a portion of the hydrogen production will be done by wind and solar but the majority of the ammonia or hydrogen will be made out of natural gas...

Heck the European Commission has decided that power plants burning natural gas* can be considered generators of green energy.*


----------



## divs4ever (5 May 2022)

basilio said:


> If there isn't a "Europe" in 2030 then really we won't be in any great shape.
> Frankly the way things are playing out in Ukraine 2023 looks doubtful.



 well  ( September ) 2019  made me worry , the virus response  made me concerned  ,  and i am looking everywhere   where comparatively smooth waters  ( a nibble at a PNG company , a dabble in Zimbabwe group , an ETF and a LIC with India exposure 

 i think things could get really messy in many places


----------



## Value Collector (5 May 2022)

dat111 said:


> So an onshore windmill can generae about 2.5-3 MW of electricity... 450GW is 450000MW...  So it will take 180,000-150,000 windmills...
> 
> India's Bhadla Solar Park is the largest solar park in the world it is 160 square kilometers in size and produces 2700 MW... So to produce 450 GW one would need 167 ..  construction cost was $1.3B US ...
> 
> ...



I think we are all going to be surprised by just how much renewable energy projects are completed in the next 10 years.

One thing to remember is that loads of solar is being installed everywhere across Australia, which means often for a few hours a day the total production of solar spikes that it causes prices to go negative, during these times hydrogen producers could be pulling the excess power straight out of the grid, same story with wind production in the middle of the night.

So a hydrogen producer won’t have to use only their own wind and solar infrastructure, they can be buying the excess on the market, which is good because it would help keep the price people sell their solar production for higher, which encourages more people to keep installing solar panels, it’s like a positive feedback loop.

Also, on days where the grid is struggling to keep up with demand and the grid price for electricity rises, the hydrogen producers can divert their wind and solar assets to feed the grid instead of their electrolyses when ever the price of high enough, this would help cap grid wholesale price surges.

The biggest barrier at the moment to companies installing more wind and solar is the periods of low wholesale electricity pricing, having a hydrogen production market to put a floor under the wholesale electricity price will cause a boom in investment in renewable projects.


----------



## dat111 (5 May 2022)

Value Collector said:


> I think we are all going to be surprised by just how much renewable energy projects are completed in the next 10 years.
> 
> One thing to remember is that loads of solar is being installed everywhere across Australia, which means often for a few hours a day the total production of solar spikes that it causes prices to go negative, during these times hydrogen producers could be pulling the excess power straight out of the grid, same story with wind production in the middle of the night.
> 
> ...



A quick google for how many windmills are in the US yielded a result of 70,800...This project will need double this number just for FFI...

As of 2021, Australia's over* 3.04 million* solar PV installations had a combined capacity of 25,321 MW photovoltaic (PV) solar power, of which at least 4,613 MW were installed in the preceding 12 months.... so if 4613 MW are constructed each year it will take an additional 97 years of solar production to reach the 450,000 MW needed for this FFI project.


----------



## qldfrog (6 May 2022)

dat111 said:


> A quick google for how many windmills are in the US yielded a result of 70,800...This project will need double this number just for FFI...
> 
> As of 2021, Australia's over* 3.04 million* solar PV installations had a combined capacity of 25,321 MW photovoltaic (PV) solar power, of which at least 4,613 MW were installed in the preceding 12 months.... so if 4613 MW are constructed each year it will take an additional 97 years of solar production to reach the 450,000 MW needed for this FFI project.



@dat111 , you seem to forget the power of narratives


----------



## Value Collector (6 May 2022)

dat111 said:


> A quick google for how many windmills are in the US yielded a result of 70,800...This project will need double this number just for FFI...
> 
> As of 2021, Australia's over* 3.04 million* solar PV installations had a combined capacity of 25,321 MW photovoltaic (PV) solar power, of which at least 4,613 MW were installed in the preceding 12 months.... so if 4613 MW are constructed each year it will take an additional 97 years of solar production to reach the 450,000 MW needed for this FFI project.



Ok, so you are missing a few key points here.

1, its not just Australia, they are planning constructing energy projects around the world.

2, it’s not just solar and wind, they are also exploring options for massive hydro and geothermal projects, check out this link
https://www.fmgl.com.au/in-the-news...rgy-and-hydrogen-projects-in-papua-new-guinea

3, As I mentioned the low whole sale price of electricity has slowed development of solar and wind, for example a company I invest in (APA) says they would love to be developing more large scale solar but the low prices in the peak production times makes it not worthwhile, but having hydrogen producers step in and buy during those times puts a floor under the price, and would encourage (APA) and many other companies to invest more.

3, FMG themselves are building a factory to produce their own solar cells, and are going to massively ramp up production, so current installation rates don’t really provide an accurate figures of what the future will look like.


And finally, these are just targets, if they miss the them there is no penalty, but aiming for the target does mean they will achieve alot in the mean time.

They main point is that they are building electrolisers and green energy projects as fast as they can, and have set some big targets.

Remember no one believed they would build their Iron Ore business like they did either, but they proved everyone wrong.


----------



## basilio (6 May 2022)

Value Collector said:


> Ok, so you are missing a few key points here.
> 
> 1, its not just Australia, they are planning constructing energy projects around the world.
> 
> ...




The rate of improvements in solar and wind technology is also accelerating. I'm not sure where DAT got his figures from but we know that the efficiencies of new and forecast wind/solar technologies have changed the costs, returns and construction times of these plants.

Care to show the source for figures on solar/wind replacement DAT ?

In any case we don't actually have a choice about rapidly decarbonising our economies and moving to a  renewable energy future. The acceleration of global warming  as a result of  massive GG emissions underpins the need to make this work.









						Advancements in Wind Turbine Technology: Improving Efficiency and Reducing Cost
					

Wind power capacity has increased dramatically in the U.S. recently — and accompanying that, the turbines that produce it have become more powerful, more efficient and more affordable for power producers.




					www.renewableenergyworld.com
				






https://www3.weforum.org › docs › WEF_Wind_and_Solar_2030.pdf
Energy Technologies 2030 Wind and solar PV will keep ...​performance *improvements* will continue. Costs of *solar* PV energy will decrease by 50% while onshore and offshore *wind* energy costs will fall by 25 and 50%, respectively, driven by technological *improvements* *and* economies of scale. *Wind* *and* *solar* PV industries have demonstrated their ability to lower energy costs drastically in the last 10 years, while increasing efficiency.4 Declining costs ...


----------



## JohnDe (6 May 2022)

Time to buy? 

With markets dropping like the Titanic, there is going to be buying opportunities. I don't own FMG but have kept an eye on it for a couple of years, I like the Forrest's. 









						Australian Story: Series 2022 The Undercover Billionaire - Nicola Forrest
					

What would you do if you were a billionaire? Motivated by the loss of her daughter, Nicola Forrest, with her husband Andrew, has pledged to give away the "vast majority" of their $25 billion mining fortune.




					iview.abc.net.au


----------



## Value Collector (6 May 2022)

JohnDe said:


> Time to buy?
> 
> With markets dropping like the Titanic, there is going to be buying opportunities. I don't own FMG but have kept an eye on it for a couple of years, I like the Forrest's.
> 
> ...



If any one doesn’t know the history of Fortescue, or understand the challenges that they over came to build the company and the grit and determination the team has or the skills in finance, engineering and construction they have accrued, you should watch this.

Even the first 5 mins is pretty amazing


----------



## dat111 (6 May 2022)

basilio said:


> The rate of improvements in solar and wind technology is also accelerating. I'm not sure where DAT got his figures from but we know that the efficiencies of new and forecast wind/solar technologies have changed the costs, returns and construction times of these plants.
> 
> Care to show the source for figures on solar/wind replacement DAT ?
> 
> ...



Number of Windmills installed in US...   As of January 2022, the U.S. Wind Turbine Database (USWTDB) contains* more than 70,800* turbines.





__





						How many wind turbines are installed in the U.S. each year? | U.S. Geological Survey
					

The number of turbines installed in the U.S. each year varies based on a number of factors, but on average 3,000 turbines have been built in the U.S. each year since 2005.   Learn more:   	Wind Energy 	U.S. Wind Turbine Database




					www.usgs.gov
				




This comes from wikipedia... I usually look at Wikipedia with a grain of salt but for something like this that is so far off.. it is interesting...especially when it falls in line with other articles for solar generation... 

*Solar power in Australia* is a fast growing industry. As of 2021, Australia's over 3.04 million solar PV installations had a combined capacity of 25,321 MW photovoltaic (PV) solar power,[1] of which at least 4,613 MW were installed in the preceding 12 months









						Solar power in Australia - Wikipedia
					






					en.wikipedia.org
				




This comes from wikipedia... I usually look at Wikipedia with a grain of salt but for something like this that is so far off... the logic train... I don't look too much futher expecially when it is confirmed by other interesting items such as largest solar farm in the world queries that show stuff in the 2,245 MW...  when Fortesque needs 450.000 MW...









						The 20 Largest Solar Power Plants in the World - SolarPower.Guide - Infographic
					

The global solar energy movement is supported by the incredible, expansive solar farms that are being built around the globe.



					solarpower.guide


----------



## dat111 (6 May 2022)

Value Collector said:


> If any one doesn’t know the history of Fortescue, or understand the challenges that they over came to build the company and the grit and determination the team has or the skills in finance, engineering and construction they have accrued, you should watch this.
> 
> Even the first 5 mins is pretty amazing




There is a big difference between developing a mining operation and building more expensive new technolgy based upon the religion of global warming.  My experience on this planet has shown that people are selfish... They are more worried about their lifestyle today than some possible outcome far into the future.  People expecially today are not interesting in mitigating problems that could occur 100s or 1000s of years from now...  People will adapt to problems that occur that has been what the human race has done for ever...


----------



## Value Collector (6 May 2022)

dat111 said:


> Number of Windmills installed in US...   As of January 2022, the U.S. Wind Turbine Database (USWTDB) contains* more than 70,800* turbines.
> 
> 
> 
> ...



Remember though the USA has a lot of these older wind farms made up of hundreds on small turbines, so don’t confuse them with the large modern ones that are being build today, a huge modern wind turbine is equal to dozens of the small ones.

Driving through California you can come across hill sides covered with hundreds of small turbines, where today they would just build 10 big ones.


----------



## Value Collector (6 May 2022)

dat111 said:


> There is a big difference between developing a mining operation and building more expensive new technolgy based upon the religion of global warming.  My experience on this planet has shown that people are selfish... They are more worried about their lifestyle today than some possible outcome far into the future.  People expecially today are not interesting in mitigating problems that could occur 100s or 1000s of years from now...  People will adapt to problems that occur that has been what the human race has done for ever...



It’s not that different really, all the pieces of their planned energy infrastructure basically exist, eg wind turbines, solar panels, hydro dams, electrolisers, they just need to plan, engineer and build the things to put it all together.


----------



## dat111 (7 May 2022)

Value Collector said:


> Remember though the USA has a lot of these older wind farms made up of hundreds on small turbines, so don’t confuse them with the large modern ones that are being build today, a huge modern wind turbine is equal to dozens of the small ones.
> 
> Driving through California you can come across hill sides covered with hundreds of small turbines, where today they would just build 10 big ones.
> 
> ...



OK let's use your futurinstic wind turbine that produces 20000kW (20 MW)...  Instead of the number of turbines needed as 180,000-150,000... The number now becomes 22,500 of the largest futuristic wind turbine...  if the smaller futuristic turbine is used... it will be 45,000 wind turbines needed.


----------



## Value Collector (7 May 2022)

dat111 said:


> OK let's use your futurinstic wind turbine that produces 20000kW (20 MW)...  Instead of the number of turbines needed as 180,000-150,000... The number now becomes 22,500 of the largest futuristic wind turbine...  if the smaller futuristic turbine is used... it will be 45,000 wind turbines needed.



Yeah, if you are ignoring the fact that they will also be using solar and hydro.

But even your number of 22,500 doesn’t seem to crazy, as you said the USA installs 3000 per year, over 10 years that’s 30,000.


----------



## basilio (7 May 2022)

dat111 said:


> There is a big difference between developing a mining operation and building more expensive new technolgy based upon the religion of global warming.  My experience on this planet has shown that people are selfish... They are more worried about their lifestyle today than some possible outcome far into the future.  People expecially today are not interesting in mitigating problems that could occur 100s or 1000s of years from now...  People will adapt to problems that occur that has been what the human race has done for ever...




Well DAT if  that is your level of understanding about how* immediately dangerous *global warming is to human civilization then there is little point discussing ways to get out of the situation.

World wide forest fires in the Arctic regions ?   Murderous heatwaves in India/Pakistan - now. Imminent (10-20years)  collapse of ice shelfs that will raise sea levels by metres. ?

*"Some possible outcomes ....that could occur 100's/1000's of years from now " *


----------



## qldfrog (10 May 2022)

What's happening with fmg?
Too much hot air in windmills?


----------



## divs4ever (10 May 2022)

basilio said:


> Well DAT if  that is your level of understanding about how* immediately dangerous *global warming is to human civilization then there is little point discussing ways to get out of the situation.
> 
> World wide forest fires in the Arctic regions ?   Murderous heatwaves in India/Pakistan - now. Imminent (10-20years)  collapse of ice shelfs that will raise sea levels by metres. ?
> 
> *"Some possible outcomes ....that could occur 100's/1000's of years from now " *



 the IMMEDIATE danger is an escalation in tensions with China and Russia  , trouble could easily come at hyper-sonic speed  , and there will be few left to worry about pollution OR climate change


----------



## eskys (10 May 2022)

qldfrog said:


> What's happening with fmg?
> Too much hot air in windmills?





Air too thick with covid in China, qldfrog. I would guess their immediate needs are to contain the virus and  ensure the supply of food? Won't be looking at metals for now. Humans are animals with strong survival instincts, otherwise we would perish............by the way, iron ore last night.................










CommSec

@CommSec
·
2h

Good morning, the iron ore futures price fell by US$6.45 or 4.7% to US$131.99 a tonne yesterday. #ausbiz #ausecon #commsec


----------



## eskys (10 May 2022)

JohnDe said:


> Time to buy?
> 
> With markets dropping like the Titanic, there is going to be buying opportunities. I don't own FMG but have kept an eye on it for a couple of years, I like the Forrest's.
> 
> ...



Markets have been dropping for weeks now, we'll get some reprieve tonight? VIX up


----------



## qldfrog (10 May 2022)

eskys said:


> Markets have been dropping for weeks now, we'll get some reprieve tonight? VIX up



yes BTD ROL


----------



## sptrawler (10 May 2022)

Best way to reduce demand for raw materials, have a lockdown.


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## eskys (10 May 2022)

Markets suffering from diarrhoea, our 200 has broken below 7000.... tonight's future's red


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## JohnDe (10 May 2022)

eskys said:


> Markets have been dropping for weeks now, we'll get some reprieve tonight? VIX up




I am watching closely, trying to assess when and if there will be a good entry point soon


----------



## Value Collector (10 May 2022)

sptrawler said:


> Best way to reduce demand for raw materials, have a lockdown.



Best way to recover economy from lock downs, infrastructure spending  

Not to mention all the pent up demand caused by multiple supply chain interruptions globally.

I might be going out on a limb here, but I think once these short term situations begin to clear, we are going to see the global economy thriving for a while just based on pent up demand.


----------



## divs4ever (10 May 2022)

UMMM did anyone  notice an Ebola outbreak in the US ??  yes it looks little small beans BUT it just so happens  someone is trialing an Ebola vaccine 

 DYOR

 i think i need $17.50 before adding more FMG


----------



## eskys (10 May 2022)

Look at our graph,  200 above 7000, and FMG has come a long way since it's low today (not an indication to buy, just a mention by observation what's happening now. Pre dow green at the moment, VIX too)


----------



## Garpal Gumnut (18 May 2022)

Well it sounds as if Twiggy finally realises like many others that Hydrogen is not as easy to sell as a near term prospect as he thought. 

He will resume his position as CEO of Iron Ore which is overdue. 

I'm glad I got out of FMG when I did. 

From the AFR. 



> _Barcelona_ | Andrew Forrest will directly run his Fortescue Metals Group’s iron ore business for the first time since 2005, as part of a wide-ranging C-suite shake-up that has also installed a new boss at his ever-expanding green-energy business Fortescue Future Industries.
> 
> Talismanic FFI boss Julie Shuttleworth will step aside into a yet-to-be-defined “very senior executive leadership role”, making way for former GE executive Mark Hutchinson to become FFI’s new CEO with a more explicitly global remit.
> 
> Mr Forrest will become “executive chairman”, a more hands-on role in which both Fortescue CEOs – FFI’s Mr Hutchinson and FMG’s departing boss Elizabeth Gaines –- will report to him and the board.




gg


----------



## JohnDe (18 May 2022)

Garpal Gumnut said:


> Well it sounds as if Twiggy finally realises like many others that Hydrogen is not as easy to sell as a near term prospect as he thought.
> 
> He will resume his position as CEO of Iron Ore which is overdue.
> 
> ...






> The move gives Dr Forrest total control of Fortescue, both as its biggest shareholder with more than 30 per cent of its stock, and as its most senior executive. Both Dr Hutchinson and a yet-to-be appointed iron ore chief executive will eventually report directly to Dr Forrest.
> 
> Fortescue has been looking for a replacement for Ms Gaines since she announced her intention to resign in December 2021, with Ms Gaines telling reporters at the company’s March quarter production report the Fortescue board was then considering a short list of candidates.
> 
> ...


----------



## JohnDe (18 May 2022)

> Energy security fears spark oil and gas supply pledge​
> Chevron also took a swipe at iron ore producer Fortescue Metals after its chairman Andrew Forrest attacked the oil and gas industry for relying on carbon capture schemes to cut emissions.
> 
> Dr Forrest slammed carbon capture as unreliable and questioned whether a mass rollout of the technology was going to solve the industry’s pollution problems.
> ...


----------



## divs4ever (18 May 2022)

Garpal Gumnut said:


> Well it sounds as if Twiggy finally realises like many others that Hydrogen is not as easy to sell as a near term prospect as he thought.
> 
> He will resume his position as CEO of Iron Ore which is overdue.
> 
> ...



 am still content i bought in and stayed  , but VERY HAPPY i didn't 'back up the truck ' and buy a very large position 

 if the price tumbles  i will CONSIDER buying more cheaper 

 but yes making profits from this 'green energy ' IS harder than it looks


----------



## Value Collector (18 May 2022)

Garpal Gumnut said:


> Well it sounds as if Twiggy finally realises like many others that Hydrogen is not as easy to sell as a near term prospect as he thought.
> 
> gg





What makes you think that? To me the leadership changes have been entirely about putting more focus on FFI.


----------



## sptrawler (18 May 2022)

Value Collector said:


> What makes you think that? To me the leadership changes have been entirely about putting more focus on FFI.



I agree with you, it is a huge undertaking and Twiggy has made it a high profile undertaking, which invites a huge amount of speculative money and it will have a lot of moving parts. 
Twiggy has the most skin in the game, both financially and personally, he has to take control, you can delegate responsibility but if it goes pear shaped you can't delegate accountability.
I think him taking over and having everyone report to him, makes absolutely perfect sense a bit like Kerry Packer he didn't delegate responsibility, what has happened since he left?


----------



## Garpal Gumnut (18 May 2022)

divs4ever said:


> am still content i bought in and stayed  , but VERY HAPPY i didn't 'back up the truck ' and buy a very large position
> 
> if the price tumbles  i will CONSIDER buying more cheaper
> 
> but yes making profits from this 'green energy ' IS harder than it looks





Value Collector said:


> What makes you think that? To me the leadership changes have been entirely about putting more focus on FFI.




I'm a great admirer of Twiggy, but he is a player, and he plays hard. 

If he is becoming hands on with FMG Iron as CEO and giving the flip to the FFI leadership it means only two things. 

1. FMG Iron is not being run to extract maximum bang for bucks. 

2. FFI which is really a large room full of people with big ideas and no life experience needs to be pulled back in to the real world of expected earnings, timelines and results. 

FFI depends on FMG for funding. FMG results and bottom line will be diluted by keeping the Silicon Valley of Digging going. 

Also, and it has to be said, Hydrogen as a fuel has yet to be proven to be a cost effective way to replace fossils. Many of the members of the Engineer Table here at the pub are impossible to engage on the future of Hydrogen. I can hardly get a word out of them for their laughing. And as you know engineers rarely laugh. They say it is not possible to have green Hydrogen efficiently and even as a non green byproduct it is "difficult". 

So the old Twiggy is back on deck. 

FMG went up 2.1% today, although RIO is up 2.6% and BHP 3.4% , so the market agrees with me. 

I reckon it will be a pump and dump once the oxygen meets hydrogen and the mist of Twiggy's return evaporates. 

I'll be with @divs4ever and wait for a lower price. 

gg


----------



## Value Collector (18 May 2022)

sptrawler said:


> I agree with you, it is a huge undertaking and Twiggy has made it a high profile undertaking, which invites a huge amount of speculative money and it will have a lot of moving parts.
> Twiggy has the most skin in the game, both financially and personally, he has to take control, you can delegate responsibility but if it goes pear shaped you can't delegate accountability.
> I think him taking over and having everyone report to him, makes absolutely perfect sense a bit like Kerry Packer he didn't delegate responsibility, what has happened since he left?



It says his new role is executive chairman, I would say that is pretty much always been his role.

Also, he is taking the reins of the Iron Ore business in the mean time between Elizabeth moving to a new role and when they can find some one new.

It sounds like they are just freeing up management to focus on the growth projects in FFI, while Twiggy baby sits the Daily runnings of the Iron Ore business, which is a much easier job.

But of course twiggy will be involved on both sides.


----------



## Value Collector (18 May 2022)

Garpal Gumnut said:


> I'm a great admirer of Twiggy, but he is a player, and he plays hard.
> 
> If he is becoming hands on with FMG Iron as CEO and giving the flip to the FFI leadership it means only two things.
> 
> ...





Garpal Gumnut said:


> I'm a great admirer of Twiggy, but he is a player, and he plays hard.
> 
> If he is becoming hands on with FMG Iron as CEO and giving the flip to the FFI leadership it means only two things.
> 
> ...



People were saying the same things about twiggy’s idea of mining the sheet Iron ore deposits that built FMG too.

But when you break down the FFI project, they are basically large renewable energy businesses producing electricity, that they plan to convert to Hydrogen based fuels which there are many forms off.

But let’s say the hydrogen plans don’t turn out to be as profitable, FMG is still left with large renewable electricity projects that can be plugged into the national grid and be used to offset coal, and these alone will be profitable.

So it’s not a big win or lose bet, it’s a group of investments in stages that many end in having a large profitable hydrogen business, but if they get half way, they will still have a decent renewable energy business, and big fuel savings at their mines.


----------



## Garpal Gumnut (18 May 2022)

Value Collector said:


> It says his new role is executive chairman, I would say that is pretty much always been his role.
> 
> Also, he is taking the reins of the Iron Ore business in the mean time between Elizabeth moving to a new role and when they can find some one new.
> 
> ...





Value Collector said:


> People were saying the same things about twiggy’s idea of mining the sheet Iron ore deposits that built FMG too.
> 
> But when you break down the FFI project, they are basically large renewable energy businesses producing electricity, that they plan to convert to Hydrogen based fuels which there are many forms off.
> 
> ...



I basically agree with both of you, however it is the timing and speed of Twiggy's move on his Fe and H2 interests that intrigues me. 

My guess is that there are quite a number of known unknowns happening in FMG atm. 

And Twiggy doesn't run his show like a long running musical where people are waiting to take up different parts. 

At FMG you either perform or you are out. Nobody sits in the wings on full pay. 

gg


----------



## divs4ever (18 May 2022)

FMG  was No. 9 ( by $value ) in my portfolio  at the beginning of the month  , so i have a few FMG 

 BHP was  No. 4  at the same time 

 assuming BHP will slide a little after the demerger  , i would be happy  to bring FMG up to equal ( to the incredible shrinking  ) BHP at the right price 

 one company has a recent record  of getting projects over the line  , and the other of reversing  decisions 

 as far as i can work it out Hydrogen  ( isolation )  requires power  , and power is getting more expensive  ( even solar ) , i have been watching the energy companies in NZ ( who have various sources  of renewable energy )  and SO FAR  , geothermal  seems to be the most reliable for industrial applications  ( and should be more resistant the cost increases )

 however Australia doesn't have much in  current geothermal  resources ( but they might be developed artificially  in the future )


----------



## divs4ever (18 May 2022)

Value Collector said:


> People were saying the same things about twiggy’s idea of mining the sheet Iron ore deposits that built FMG too.
> 
> But when you break down the FFI project, they are basically large renewable energy businesses producing electricity, that they plan to convert to Hydrogen based fuels which there are many forms off.
> 
> ...



 from memory  NST  has a big coal  deposit( about Maules Creek size  at  at early assays )  ( not especially high quality  , to be sure )  right next to FMG tenements   ,

 now NST is not particularly attracted to coal mining  , but would probably do a royalty deal with FMG if Twiggy wanted the coal   

 but near term Twiggy's main problem will be   , what if , someone triggers a hot war with China


----------



## basilio (18 May 2022)

I was impressed with Twiggys decision to directly oversee the iron ore side of FMG as well as going full bore on Green Hydrogen production. But it won't happen overnight. Indeed the iron ore business took many years to come to fruition

IMV it highlights his pragmatism about the current operations and his vision for the future.
As far as making serious money from renewable energy and hydrogen I believe VC's analysis is on the money. At the very minimum FMG will drastically reduce energy costs in their operation which will go to the  iron ore bottomline.

At the next level they will create valuable renewable energy projects that would  generate income from the local energy  grid.

But finally if/when all the parts come together, the massive investment in renewable energy and hydrogen electrolyers will result in a huge hydrogen market both here and overseas that will revolutionise the steel industry and play an important role in slowing down global warming and fossil fuel pollution.  And of course offer an excellent return to  shareholders.


----------



## Country Lad (18 May 2022)

I see it as very logical with  Twiggy changing from non executive chairman to executive chairman and it would not necessarily mean that the iron ore part of the business is underperforming.
Until now, with Twiggy being non-executive, the CEO level reports to the board (and not directly to the chairman on a day to day basis) which is normal when you have experienced and proven people at CEO level.  

With all the changes and the new people who would normally report to the board, (and also first reports) coming in, there needs to be more of a day to day interaction and thus they will report directly to Twiggy. This arrangement is not unusual, I have been involved in such on a number of occasions.  It doesn't mean Twiggy is running the show, just making sure everybody settles in to their new role and ensuring correct day to day decisions are being made.  I would expect Twiggy going back to non executive when the new guys are performing in their roles.


----------



## dat111 (26 May 2022)

Value Collector said:


> Yeah, if you are ignoring the fact that they will also be using solar and hydro.
> 
> But even your number of 22,500 doesn’t seem to crazy, as you said the USA installs 3000 per year, over 10 years that’s 30,000.



OK the cost of building a wind Turbine averges ~$1.3-$2.2M/MW... so if we need 450,000 MW it would cost...
 $558 Billion Dollars - $990 Billion Dollars US... 









						How much do wind turbines cost?
					






					www.windustry.org
				





For comparison the largest solar park in the world is the Bhadla Solar Park which cost $1.3B US and generates 2,245 MW...  So the cost to generate 450000 MW... would be $260 Billion Dollars USD if the plant was built under the same constraints in India...  I don't think that Australia costs are the same as India costs...









						Bhadla Solar Park - Wikipedia
					






					en.wikipedia.org


----------



## Value Collector (26 May 2022)

dat111 said:


> OK the cost of building a wind Turbine averges ~$1.3-$2.2M/MW... so if we need 450,000 MW it would cost...
> $558 Billion Dollars - $990 Billion Dollars US...
> 
> 
> ...



What is your point? Are you worried the world doesn’t have that kind of capital to deploy over 10years?

Wind turbines are already being installed all over the world including in Australia and making a profit by selling the electricity into the market, so their upfront cost is obviously a deterrent of the revenue they generate over their lives covers that cost plus a decent profit margin.

If FMG are able to set up hydrogen electrolisers and are able to convert the electricity to hydrogen, Ammonia or other higher value liquid fuels, then it might even increase the revenue they get for the electricity generated and their turbines, solar panels, hydro etc could be even more profitable than ones that just sell electricity into the grid.

Don’t let big numbers discourage you, there is a lot of money sloshing around the world looking for a long term home, and if you have a way to deploy billions of dollars into assets that generate say 10%-12% return, you will do very well, and loads of institutions will be happy to buy your bonds if you promise them 6% for a senior position, especially if it’s “Green”.


----------



## Value Collector (26 May 2022)

Value Collector said:


> What is your point? Are you worried the world doesn’t have that kind of capital to deploy over 10years?
> 
> Wind turbines are already being installed all over the world including in Australia and making a profit by selling the electricity into the market, so their upfront cost is obviously a deterrent of the revenue they generate over their lives covers that cost plus a decent profit margin.
> 
> ...



Oops, I meant to say their upfront cost is NOT a deterrent.


----------



## wayneL (26 May 2022)

Value Collector said:


> Oops, I meant to say their upfront cost is NOT a deterrent.



Yes but however the upfront and ongoing environmental cost should be.


----------



## Value Collector (26 May 2022)

wayneL said:


> Yes but however the upfront and ongoing environmental cost should be.



Obviously you compare it to the alternatives and make a decision, there is no doubt that solar, wind and hydro are better in most cases than coal, oil and gas especially when you factor in the modern version of wind and solar are being made more and more recyclable.


----------



## dat111 (1 June 2022)

Here is some interesting math.  14420 Mtoe (Million tonnes of oil equivalents) was reported as being used in the world... 
1 Mtoe = 11.63 TW...
1 TW = 1,000,000 MW.  So 1.677X 10^11 MW is how many MW the world uses...  About 11% of the world energy production is renewable... So 1.49X10^11 MW of additional renewable energy is needed.  If it costs $260 billion for 450 MW... Then $86,237,432 Billion ($86,237 trillion) would be needed to go all renewable energy...   The gross world product is $75.59 Trillion dollars... If all of the gross world product would be used to convert to renewable energy, it will take 1140.85 years....  

The human race better learn how to adopt to a greener earth with more water and more plant life if CO2 is that detrimental...


----------



## divs4ever (1 June 2022)

did you know  plants breathe in CO2 during daylight  , maybe all we need to do is stop cutting down so many trees  for useless things ( like car parks , and newspaper , and paper bags )


----------



## Value Collector (1 June 2022)

dat111 said:


> Here is some interesting math.  14420 Mtoe (Million tonnes of oil equivalents) was reported as being used in the world...
> 1 Mtoe = 11.63 TW...
> 1 TW = 1,000,000 MW.  So 1.677X 10^11 MW is how many MW the world uses...  About 11% of the world energy production is renewable... So 1.49X10^11 MW of additional renewable energy is needed.  If it costs $260 billion for 450 MW... Then $86,237,432 Billion ($86,237 trillion) would be needed to go all renewable energy...   The gross world product is $75.59 Trillion dollars... If all of the gross world product would be used to convert to renewable energy, it will take 1140.85 years....
> 
> The human race better learn how to adopt to a greener earth with more water and more plant life if CO2 is that detrimental...



If you looked back 120 years, and tried to tell people that we are going to get rid of horses and replace them with cars, and to do it we were going to have to build massive oil production, oil refining and refueling infrastructure all around the globe, some people would have done similar math to you and said it was impossible.

But we did build that infrastructure and at the same time we also spent even more building the electric grids around the world, not to mention the roads and highways system too that didn’t exist 120 years ago.


----------



## Value Collector (1 June 2022)

divs4ever said:


> did you know  plants breathe in CO2 during daylight  , maybe all we need to do is stop cutting down so many trees  for useless things ( like car parks , and newspaper , and paper bags )



Trees take in CO2 and use it build them selves, plants and animals are literally made of Carbon when that plant or animal dies it releases CO2 back into the atmosphere as it breaks down.

The problem with Burning fossil fuels is that they are made out of plants and animals that died millions of years ago, whos CO2 had been locked away for millions of years, so by burning them at the rate we are we are adding much more CO2 into the atmosphere than the world as it is now evolved to live with.

Sure planting a few more trees and letting them grow will soak up some CO2, but it can’t soak up millions of years of stored CO2 in the next 50 years.


----------



## Dona Ferentes (1 June 2022)

Value Collector said:


> If you looked back 120 years, and tried to tell people that we are going to get rid of horses and replace them with cars, and to do it we were going to have to build massive oil production, oil refining and refueling infrastructure all around the globe, some people would have done similar math to you and said it was impossible.
> 
> But we did build that infrastructure and at the same time we also spent even more building the electric grids around the world, not to mention the roads and highways system too that didn’t exist 120 years ago.



It is a very interesting time; the mobilisation of capital for energy transition is only just getting organised.


----------



## Value Collector (1 June 2022)

Dona Ferentes said:


> It is a very interesting time; the mobilisation of capital for energy transition is only just getting organised.



Yep, and not to mention that once the transition is going and the market totally accepts that this is the direction we are heading, the replacement capital from the fossil fuel sector will start flowing to green energy too.

Eg, it takes billions of dollars of spending every year to keep the fossil fuels flowing, eg drilling new oil and gas wells as the old one deplete, starting new coal mines and the old ones empty, replacing sections of oil refineries or building new ones, replacing oil tanks, and oil gathering lines etc etc.

As this old infrastructure depletes and wears out, the money that would normally be spent replacing it each year can flow to new types of infrastructure.


----------



## divs4ever (1 June 2022)

Value Collector said:


> Trees take in CO2 and use it build them selves, plants and animals are literally made of CO2, when that plant or animal does it releases CO2 back into the atmosphere as it breaks down.
> 
> The problem with Burning fossil fuels is that they are made out of plants and animals that died millions of years ago, whos CO2 had been locked away for millions of years, so by burning them at the rate we are we are adding much more CO2 into the atmosphere than the world as it is now evolved to live with.
> 
> Sure planting a few more trees and letting them grow will soak up some CO2, but it can’t soak up millions of years of stored CO2 in the next 50 years.



 well we could start be cutting fewer trees/shrubs down in the first place ( and yes that will mean less coal in a million years time  , but we might have better energy generation by then )

 imagine less newspapers and paper straws  just a tiny step , but it is a step forward


----------



## divs4ever (1 June 2022)

Value Collector said:


> Yep, and not to mention that once the transition is going and the market totally accepts that this is the direction we are heading, the replacement capital from the fossil fuel sector will start flowing to green energy too.
> 
> Eg, it takes billions of dollars of spending every year to keep the fossil fuels flowing, eg drilling new oil and gas wells as the old one deplete, starting new coal mines and the old ones empty, replacing sections of oil refineries or building new ones, replacing oil tanks, and oil gathering lines etc etc.
> 
> As this old infrastructure depletes and wears out, the money that would normally be spent replacing it each year can flow to new types of infrastructure.



 the money MIGHT , but history suggests it won't be


----------



## Value Collector (1 June 2022)

divs4ever said:


> the money MIGHT , but history suggests it won't be



Well what I am saying is that once the transition is under way and companies are no longer looking to invest in new fossil fuels (just like no new coal plants are getting built in australia now) The bond holders and bankers etc will still want to be investing money some where, and they will be looking to the new infrastructure investments to soak up that cash.


----------



## Value Collector (1 June 2022)

divs4ever said:


> well we could start be cutting fewer trees/shrubs down in the first place ( and yes that will mean less coal in a million years time  , but we might have better energy generation by then )
> 
> imagine less newspapers and paper straws  just a tiny step , but it is a step forward



Cutting less tree down is obviously good, but as I said it won’t soak up the Billions of tonnes of Carbon we are adding to the atmosphere every year by burning coal and oil.

For example the average family home burns about 10 tonnes worth of carbon a year, but It is very unlikely that their trees in their back yard will be putting on 10 tonnes of weight in new wood growth a year.

Their trees would be lucky to put enough weight on to offset the carbon used to run their lawn mower and whipper snipper.

Trees only soak up so much, and once a Forrest is established the growing trees barely soak up enough carbon to offset the carbon released by the dead and rotting trees.

There is no way around it except to slow down and eventually stop burning the stored carbon in fossil fuels.

———————
But yes there is already lots of groups and carbon neutralising companies planting more trees.


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## divs4ever (1 June 2022)

Value Collector said:


> Well what I am saying is that once the transition is under way and companies are no longer looking to invest in new fossil fuels (just like no new coal plants are getting built in australia now) The bond holders and bankers etc will still want to be investing money some where, and they will be looking to the new infrastructure investments to soak up that cash.



 well there is an agenda  to discourage investment in fossil fuels ( to parallel the ESG trend )

 currently corporate bond offerings don't  have a high enough reward factor to attract me , but maybe that will change ( since they have made it harder to buy bank hybrids )

 a possible outcome is only minnows ( like me ) and vultures will invest in fossil fuel projects ( and exploration ) , 

 good luck if you invest in the ESG  stuff they seem to have thrown corporate governance under the bus


----------



## Value Collector (1 June 2022)

divs4ever said:


> well there is an agenda  to discourage investment in fossil fuels ( to parallel the ESG trend )
> 
> currently corporate bond offerings don't  have a high enough reward factor to attract me , but maybe that will change ( since they have made it harder to buy bank hybrids )
> 
> ...



I invest in both fossil fuels and renewable energy, because I understand that we are moving towards green energy, but in the mean time we will still need oil and gas, and that gas will play a big part in transitioning off coal.

So the way I see it playing out is that energy coal will be the first energy source to see major declines, followed years later by oil, however natural gas especially sea Bourne LNG will actually grow for a while to fill some of the gap coal leaves, before stabilising and then eventually declining in the 2040’s

eventually probably some time in the late 2030’s new gas field development will slow and eventually stop, and natural gas supply will shrink as the existing fields deplete into the 2040’s

Over this time all the dollars that would have had to flow into fossils will flow into renewables, for example at some stage Woodside will have to make the choice between investing a few billion into a new gas fields with a 25 year life, or investing those billions into some renewable infrastructure that by that time will probably be tried and tested and they know it is profitable.


----------



## divs4ever (1 June 2022)

Value Collector said:


> I invest in both fossil fuels and renewable energy, because I understand that we are moving towards green energy, but in the mean time we will still need oil and gas, and that gas will play a big part in transitioning off coal.
> 
> So the way I see it playing out is that energy coal will be the first energy source to see major declines, followed years later by oil, however natural gas especially sea Bourne LNG will actually grow for a while to fill some of the gap coal leaves, before stabilising and then eventually declining in the 2040’s
> 
> ...



 and how long will those renewable energy generators last  , i have two solar arrays ( out of three ) that says  about 5 years until  extra major expenditure ( i wonder about the carbon footprint to replace those parts ) and the wind turbines have their wear issues as well  , meanwhile California has found out hydro can have issues ( and foreseeable ones if you believe in climate change )


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## UMike (1 June 2022)

Can we stop this Green scam propaganda (esp on this thread) and get back to the reality of FMG exporting, highly in demand, Iron Ore that will not cease no matter how much the alarmists dream it will.


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## Value Collector (1 June 2022)

divs4ever said:


> and how long will those renewable energy generators last  , i have two solar arrays ( out of three ) that says  about 5 years until  extra major expenditure ( i wonder about the carbon footprint to replace those parts ) and the wind turbines have their wear issues as well  , meanwhile California has found out hydro can have issues ( and foreseeable ones if you believe in climate change )



Solar and wind is 20-30 years
Hydro can be over 100 years.

Of course you have to spend a little to maintain them over that time, but you also have to maintain oil and gas rigs, and coal mining equipment and of course the actual power stations and refineries.

If your solar system lasted only 5 years, and was covered by a warranty I think you were sold some dodge equipment.


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## Garpal Gumnut (1 June 2022)

UMike said:


> Can we stop this Green scam propaganda (esp on this thread) and get back to the reality of FMG exporting, highly in demand, Iron Ore that will not cease no matter how much the alarmists dream it will.



Mate I'd agree.

I've never seen a thread that attracts the Green vs Green vs H2 vs Battery vs EV vs ICE vs ... you name it, such as the FMG thread. 

A chart of FMG. It is still in a fight between the bulls and the bears around $20, up a bit, down a bit. 

The Twiggy effect is is at work. Until the Chinese take the nails out of their citizens locked doors and windows I doubt if Iron ore will advance to a huge degree and FMG lives or dies on Iron ore. 







gg


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## UMike (1 June 2022)

Yea. Can't work out whether to buy the dip or hope it gets close to my (personal) target again of $22.8 and sell my March parcel. Haven't traded (anything) in aver a month. Strange times.


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## dat111 (1 June 2022)

Value Collector said:


> If you looked back 120 years, and tried to tell people that we are going to get rid of horses and replace them with cars, and to do it we were going to have to build massive oil production, oil refining and refueling infrastructure all around the globe, some people would have done similar math to you and said it was impossible.
> 
> But we did build that infrastructure and at the same time we also spent even more building the electric grids around the world, not to mention the roads and highways system too that didn’t exist 120 years ago.



Wow... have you ever taken care of a horse?  Have you ever lived without air conditioning or had to split wood or constantly feed a fire with coal?  Oil production, oil refining and refueling were all items that were value added to peoples lives... people wanted their lives to change for these improvements.  What people are waking up to in the US is that going green means going broke.  The quality of life for voters is going down with the push for green alternatives.  

 Oh by the way oil and gas is reported as 8% of the gross world product...  So if the money spent on oil and gas would be used to fund production of green energy replacement... it would take 14,260 years....


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## dat111 (1 June 2022)

UMike said:


> Can we stop this Green scam propaganda (esp on this thread) and get back to the reality of FMG exporting, highly in demand, Iron Ore that will not cease no matter how much the alarmists dream it will.



If you own FMG you are investing in green energy...


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## Value Collector (1 June 2022)

dat111 said:


> Wow... have you ever taken care of a horse?  Have you ever lived without air conditioning or had to split wood or constantly feed a fire with coal?  Oil production, oil refining and refueling were all items that were value added to peoples lives... people wanted their lives to change for these improvements.  What people are waking up to in the US is that going green means going broke.  The quality of life for voters is going down with the push for green alternatives.
> 
> Oh by the way oil and gas is reported as 8% of the gross world product...  So if the money spent on oil and gas would be used to fund production of green energy replacement... it would take 14,260 years....



How much of the 1920’s gdp do we currently spend on oil?

I really don’t see what your issue is, as I asked before do you really think the world is going to run out of money? 

FMG will will make as many investments as it can based on its retained earnings + what ever it can get from capital partners and bonds whether that 1 project, 10 projects or 100 projects doesn’t really matter, all share holders want is for retained earnings to be invested in things that produce suitable returns, you macro predictions on cost and scale are totally irrelevant in my opinion.

If green energy takes longer than expected to scale up, we will just keep pumping out fossil fuels and take what ever hit comes with that (which could be bad), but green energy is really ramping up, and I don’t see any reason it won’t continue ramping up, and then the fossil fuel companies will exit the scene over time.


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## divs4ever (2 June 2022)

Value Collector said:


> Solar and wind is 20-30 years
> Hydro can be over 100 years.
> 
> Of course you have to spend a little to maintain them over that time, but you also have to maintain oil and gas rigs, and coal mining equipment and of course the actual power stations and refineries.
> ...



Origin is debating that now despite the fact an extended 10 year warranty  was taken out  , and BTW best of luck accessing the ombudsman  when trying to assist the resolution of issues 

 one problem is the way it was wired , one panel ( or more ) fail and the system goes down ( and the technician has no easy way to determine which one/s have failed  , since there is no obvious hail or tree damage  )
 the other one  was a fan failure  causing the inverter board to fry , that may have been partly caused  by placing it for ease of meter reading rather than weather/sun protection  , luckily the inverter overheat did not start a fire to the weatherboard home  ( something  for those new to solar systems to consider )


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## Value Collector (2 June 2022)

divs4ever said:


> Origin is debating that now despite the fact an extended 10 year warranty  was taken out  , and BTW best of luck accessing the ombudsman  when trying to assist the resolution of issues
> 
> one problem is the way it was wired , one panel ( or more ) fail and the system goes down ( and the technician has no easy way to determine which one/s have failed  , since there is no obvious hail or tree damage  )
> the other one  was a fan failure  causing the inverter board to fry , that may have been partly caused  by placing it for ease of meter reading rather than weather/sun protection  , luckily the inverter overheat did not start a fire to the weatherboard home  ( something  for those new to solar systems to consider )



Next time spend a few extra dollars and get a micro inverter system, each panel then has its own inverter, so if a panel or inverter fails only that one stops, the rest keep working

Also micro inverters have a 25 year warranty.


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## Garpal Gumnut (2 June 2022)

Many years ago there was a good punt one could do with AMP on a medium term basis buying at $4 and selling above $6, from memory, it went on for some time. 

I just wonder whether with all the kerfuffle about the world pushing commodities potentially down and Twiggy spruiking FMG up, one could not "do an AMP" with Fortescue Metals Group. 

From the chart it has oscillated over the last 3 years between $15 and $25. 

I'm not greedy so I'll re-enter at $16 or so and sell at $23. 

That RSI and fall off in up volume and decrease on the down does not bode well for FMG. 

And I would bet that similar to the ASF thread on ASF, at FFI there are similar "going off topic" "conversations" about energy occurring when they should be working to make FMG a bigger and better company. 






gg


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## UMike (2 June 2022)

dat111 said:


> If you own FMG you are investing in green energy...



And will invest in more Green energy.
Climate calamity is a scam.... May as well make some money off it as Govt subsidizes it.


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## Value Collector (2 June 2022)

Garpal Gumnut said:


> Many years ago there was a good punt one could do with AMP on a medium term basis buying at $4 and selling above $6, from memory, it went on for some time.
> 
> I just wonder whether with all the kerfuffle about the world pushing commodities potentially down and Twiggy spruiking FMG up, one could not "do an AMP" with Fortescue Metals Group.
> 
> ...



Markets will of course fluctuate but I think FMG is so undervalued that when the market finally recognises its true value it will be rerated a lot higher.

So there is a chance that FMG will never hit $16 again, and also if you sold at $23 you may end up regretting it when it hits $35.

Of course I could be wrong, but only time will tell I guess, in the mean time the dividends alone make the buy and hold route very attractive, and the eventually long pull pay off should be sweet to, so I don’t bother trading FMG, I do sell put options on it regularly though.


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## Garpal Gumnut (2 June 2022)

Value Collector said:


> Markets will of course fluctuate but I think FMG is so undervalued that when the market finally recognises its true value it will be rerated a lot higher.
> 
> So there is a chance that FMG will never hit $16 again, and also if you sold at $23 you may end up regretting it when it hits $35.
> 
> Of course I could be wrong, but only time will tell I guess, in the mean time the dividends alone make the buy and hold route very attractive, and the eventually long pull pay off should be sweet to, so I don’t bother trading FMG, I do sell put options on it regularly though.



One can buy and sell FMG and collect every divi as well, is another way to look at it. 

Another way to go.

I hear what you are saying, I'm usually buy for medium-long term in my SMSF.

FMG is what it is, and good luck to us all if Twiggy pulls it off. 

gg


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## dat111 (3 June 2022)

UMike said:


> And will invest in more Green energy.
> Climate calamity is a scam.... May as well make some money off it as Govt subsidizes it.



Until the government decides they can no longer continue to keep the subsidizes going and they mothball the whole thing sticking those folks who invested... For example the following lists some of the faltering or bankrupt green-energy companies when the House and the Senate pulled the plug:


Evergreen Solar ($24 million)*
SpectraWatt ($500,000)*
Solyndra ($535 million)*
Beacon Power ($69 million)*
AES’s subsidiary Eastern Energy ($17.1 million)
Nevada Geothermal ($98.5 million)
SunPower ($1.5 billion)
First Solar ($1.46 billion)
Babcock and Brown ($178 million)
EnerDel’s subsidiary Ener1 ($118.5 million)*
Amonix ($5.9 million)
National Renewable Energy Lab ($200 million)
Fisker Automotive ($528 million)
Abound Solar ($374 million)*
A123 Systems ($279 million)*
Willard and Kelsey Solar Group ($6 million)
Johnson Controls ($299 million)
Schneider Electric ($86 million)
Brightsource ($1.6 billion)
ECOtality ($126.2 million)
Raser Technologies ($33 million)*
Energy Conversion Devices ($13.3 million)*
Mountain Plaza, Inc. ($2 million)*
Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million)*
Range Fuels ($80 million)*
Thompson River Power ($6.4 million)*
Stirling Energy Systems ($7 million)*
LSP Energy ($2.1 billion)*
UniSolar ($100 million)*
Azure Dynamics ($120 million)*
GreenVolts ($500,000)
Vestas ($50 million)
LG Chem’s subsidiary Compact Power ($150 million)
Nordic Windpower ($16 million)*
Navistar ($10 million)
Satcon ($3 million)*


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## divs4ever (3 June 2022)

Value Collector said:


> Markets will of course fluctuate but I think FMG is so undervalued that when the market finally recognises its true value it will be rerated a lot higher.
> 
> So there is a chance that FMG will never hit $16 again, and also if you sold at $23 you may end up regretting it when it hits $35.
> 
> Of course I could be wrong, but only time will tell I guess, in the mean time the dividends alone make the buy and hold route very attractive, and the eventually long pull pay off should be sweet to, so I don’t bother trading FMG, I do sell put options on it regularly though.



 well i didn't sell those FMG  i bought at several prices under $20 ( i thought sub-$20 was fair value for FMG and unless there is a major change  , i think i will stick to them )

now i think the world still has a few more moments of 'CRAZY ' left  and say $16  is possible for those patient but alert ( but since i have a comfortable amount of FMG i will not be heart-broken  if i miss an opportunity or two )


----------



## dat111 (3 June 2022)

Value Collector said:


> How much of the 1920’s gdp do we currently spend on oil?
> 
> I really don’t see what your issue is, as I asked before do you really think the world is going to run out of money?
> 
> ...



My job as an investor is to figure out how to make money while I am investing.  I must use the information around me to make the best decisions that I can...  I do not think Australia and the world has enough money to go green during my investment time horizon.  I think governments will continue to push to go green for awhile longer but before my investment time horizon ends, governments will change their strategy and go back to fossil energy friendly policies which will drive down the value of green stocks.  I don't want FMG to invest in something that is propped up by the government because the government doesn't care as much as I do about making money...


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## divs4ever (3 June 2022)

dat111 said:


> My job as an investor is to figure out how to make money while I am investing.  I must use the information around me to make the best decisions that I can...  I do not think Australia and the world has enough money to go green during my investment time horizon.  I think governments will continue to push to go green for awhile longer but before my investment time horizon ends, governments will change their strategy and go back to fossil energy friendly policies which will drive down the value of green stocks.  I don't want FMG to invest in something that is propped up by the government because the government doesn't care as much as I do about making money...



 they have plenty of money  , they will just print it ( and steal it from the taxpayers of the future )

 didn't you know fiscal responsibility has been  abandoned ( in many places  )

 i understand how you feel , but we are in the new age of irrationality  , where QT is more feared than smallpox or ebola


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## Value Collector (3 June 2022)

dat111 said:


> My job as an investor is to figure out how to make money while I am investing.  I must use the information around me to make the best decisions that I can...




If that’s your goal you are going about it the wrong way, instead of trying to figure out whether the world can afford to go 100% green energy and using the numbers you are, you should be simply trying to figure out whether FMG will earn an acceptable return each time they deploy cash into these sorts of projects.

It doesn’t matter how many trillion it will take for the world to go 100% green, all that matters is whether each FMG project will earn more than say 8% - 10% on the invested capital.


----------



## Value Collector (3 June 2022)

dat111 said:


> Until the government decides they can no longer continue to keep the subsidizes going and they mothball the whole thing sticking those folks who invested... For example the following lists some of the faltering or bankrupt green-energy companies when the House and the Senate pulled the plug:
> 
> 
> Evergreen Solar ($24 million)*
> ...



Fmg doesn’t rely on government funding, they earn billions in profit each year, and have already been steadily investing in green energy, for example in the Pilbara they already have invested in solar projects which are being used to run the Iron Ore mines and producing massive savings in diesel and gas, especially based on current diesel and gas prices.

I think that is what you are not understanding, you are looking at the whole thing back to front, think smaller and instead of looking at it from what the whole world needs, just look at it from FMGs perspective where they are just making incremental capital allocations into green  energy both to create savings for themselves by offsetting their own energy usage, and also selling energy into the market.


----------



## divs4ever (3 June 2022)

Value Collector said:


> If that’s your goal you are going about it the wrong way, instead of trying to figure out whether the world can afford to go 100% green energy and using the numbers you are, you should be simply trying to figure out whether FMG will earn an acceptable return each time they deploy cash into these sorts of projects.
> 
> It doesn’t matter how many trillion it will take for the world to go 100% green, all that matters is whether each FMG project will earn more than say 8% - 10% on the invested capital.



 that was what i am hoping for when i invested in the first parcel in August  2021  , my average share price is $17.90  so maybe i can even get 11% some years


----------



## dat111 (3 June 2022)

divs4ever said:


> they have plenty of money  , they will just print it ( and steal it from the taxpayers of the future )
> 
> didn't you know fiscal responsibility has been  abandoned ( in many places  )
> 
> i understand how you feel , but we are in the new age of irrationality  , where QT is more feared than smallpox or ebola



It is somewhat OK to print money if you have methods of providing the items at the same or reduced cost...but when it is not possible to provide the item at the same or reduced cost and the cost to manufacture goes up then prining money will cause inflation to be at a rate that will eventually cause austerity measurers to occur.  the price o cost of the item increases and the


Value Collector said:


> Fmg doesn’t rely on government funding, they earn billions in profit each year, and have already been steadily investing in green energy, for example in the Pilbara they already have invested in solar projects which are being used to run the Iron Ore mines and producing massive savings in diesel and gas, especially based on current diesel and gas prices.
> 
> I think that is what you are not understanding, you are looking at the whole thing back to front, think smaller and instead of looking at it from what the whole world needs, just look at it from FMGs perspective where they are just making incremental capital allocations into green  energy both to create savings for themselves by offsetting their own energy usage, and also selling energy into the market.



*Fortescue Future Industries has* signed a memorandum of understanding with a European utility company to distribute its green hydrogen to the continent.

Working with German utility company E.ON, Fortescue Future Industries (FFI) plans to export up to five million tonnes of green hydrogen to Europe by 2030. This is equivalent to about one third of the energy imported from Russia to Germany. Fortescue founder Andrew Forrest said that reaching FFI’s targets could cost up to $50 billion.

The commitment was signed by Mr Forrest and E.ON chief operating officer Patrick Lammers at a press conference on Tuesday. The companies will engage in a research and study partnership with more detailed supply plans to be completed in the future.

Mr Forrest said that shipments to Europe would initially be in the form of green ammonia and split into hydrogen upon arrival. However, Mr Forrest also wants to eventually ship liquefied hydrogen to Europe.

This is where the 450,000 MW of electricity is going to be needed....that led to the 100s of billions of dollars needed to fund this simply excercise to make hydrogen...


----------



## Value Collector (3 June 2022)

dat111 said:


> It is somewhat OK to print money if you have methods of providing the items at the same or reduced cost...but when it is not possible to provide the item at the same or reduced cost and the cost to manufacture goes up then prining money will cause inflation to be at a rate that will eventually cause austerity measurers to occur.  the price o cost of the item increases and the
> 
> *Fortescue Future Industries has* signed a memorandum of understanding with a European utility company to distribute its green hydrogen to the continent.
> 
> ...



Yep, firstly Forrest says it’s $50 Billion not $100’s of Billions.

But what is your point, I read that announcement the day it was released, it’s a non binding MOU, they aren’t locked into anything. Both companies are just saying they will work with each other towards the goal of shipping hydrogen from Australia to Europe. If 2030 comes and FMG is only shipping 1 million tonnes instead of 5 million tonnes there is no penalty.

As I said FMG will just crunch the numbers on each project, line them up in order of most profitable, and start working on them, and as long as each one produces decent returns on capital FMG will do very well and financing them will be easy.

But, there is no penalty if they don’t achieve all projects they can dream up in the next 10 years, a big part of a company like FMG, BHP, RIO etc etc is lining up as many possible projects as you can and then have them compete for capital, and you allocate capital to each project based on its merit, when you have the funding to do it.


----------



## divs4ever (3 June 2022)

Value Collector said:


> Yep, firstly Forrest says it’s $50 Billion not $100’s of Billions.
> 
> But what is your point, I read that announcement the day it was released, it’s a non binding MOU, they aren’t locked into anything. Both companies are just committing to work with each other towards the goal of shipping hydrogen from Australia to Europe. If 2030 comes and FMG is only shipping 1 million tonnes instead of 5 million tonnes there is no penalty.
> 
> ...



 i am expecting  finance to become scarce  and very predatory  , now FMG has a fair chance of being self-funding from here , so maybe down-sized future projects  should be factored in ( and you can be delighted by any over-achievement )


----------



## Value Collector (3 June 2022)

divs4ever said:


> i am expecting  finance to become scarce  and very predatory  , now FMG has a fair chance of being self-funding from here , so maybe down-sized future projects  should be factored in ( and you can be delighted by any over-achievement )



Well we will have to see I guess, I think there will still be a very active corporate bond market in the USA and Europe, interest rates will probably return to more normal levels, but there will be no change to the old system of financing companies and projects with both equity and bonds.

If worst comes to worst FMG can just increase the amount of equity in each projected if needed.


----------



## divs4ever (3 June 2022)

yes FMG  has the ability to say slash the div. payout to say 40% and progress  these new projects 

  but maybe you need to watch the discussions  in the recent WEF   meeting  , the gathering of senior bankers ( and former bankers ) including Mark Carney  , on the planning of future finance and 'net-zero'


----------



## Value Collector (3 June 2022)

divs4ever said:


> yes FMG  has the ability to say slash the div. payout to say 40% and progress  these new projects
> 
> but maybe you need to watch the discussions  in the recent WEF   meeting  , the gathering of senior bankers ( and former bankers ) including Mark Carney  , on the planning of future finance and 'net-zero'



If needed they could do that, but nothing fundamental about the investment world is going to change, there will still be loads of people looking to invest money and earn a return, and if they don’t want to do so by investing in bonds, then they will do so by investing in equity, and there is nothing stopping FMG bringing on equity partners if they needed to.

But the old rule will always be true, a certain sector of the investment world will want a certain degree of capital protection and stable income (insurance companies, pension funds, Banks, endowment funds etc) these groups will be attracted to bonds, especially so when interest rates return to more normal levels.

Then you will have others that are happy to take a bit more risk and have capital and income fluctuate, while getting a better average return over time, these groups will be attracted to investing in equity.

That’s not going to change.


----------



## Value Collector (4 June 2022)

FMG’s latest corporate video.


----------



## Value Collector (5 June 2022)

Andrew lays down a challenge to the fossil fuel industry.


----------



## divs4ever (5 June 2022)

Value Collector said:


> Andrew lays down a challenge to the fossil fuel industry.




maybe  , time will tell 

 maybe that is just me because my parent and grand-parents were grateful for they coal the found near the train-tracks in the Great Depression


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## Value Collector (5 June 2022)

divs4ever said:


> maybe  , time will tell
> 
> maybe that is just me because my parent and grand-parents were grateful for they coal the found near the train-tracks in the Great Depression



Not sure what your point is there, in the video I posted Andrew says he is also grateful for what the fossil fuels have provided over the last couple of hundred years, but it’s time to change, nostalgia over stories of relatives finding spilled coal won’t bring our economy into the future.

Check out this video if you want to see some of what is actually happening at Fortescue.


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## divs4ever (5 June 2022)

i think coal's demise  has been forecast prematurely , 

 but time will tell  , i also think Twiggy will regret this as there is a rather large untapped coal deposit  right next door on the NST lease


----------



## Value Collector (5 June 2022)

divs4ever said:


> i think coal's demise  has been forecast prematurely ,
> 
> but time will tell  , i also think Twiggy will regret this as there is a rather large untapped coal deposit  right next door on the NST lease



I don't know about that, energy coal use has been in decline everywhere except Asia, and in Asia it has plateaued and looks like it’s about to begin declining to.


----------



## basilio (6 June 2022)

dat111 said:


> Here is some interesting math.  14420 Mtoe (Million tonnes of oil equivalents) was reported as being used in the world...
> 1 Mtoe = 11.63 TW...
> 1 TW = 1,000,000 MW.  So 1.677X 10^11 MW is how many MW the world uses...  About 11% of the world energy production is renewable... So 1.49X10^11 MW of additional renewable energy is needed.  If it costs $260 billion for 450 MW... Then $86,237,432 Billion ($86,237 trillion) would be needed to go all renewable energy...   The gross world product is $75.59 Trillion dollars... If all of the gross world product would be used to convert to renewable energy, it will take 1140.85 years....
> 
> The human race better learn how to adopt to a greener earth with more water and more plant life if CO2 is that detrimental...



That sounds rather amazingly excessive doesn't  ? That "somehow" the cost of the world  going totally renewable will be *$86,237 Trillion dollars.* Particularly when the figure for the whole world GDP is $75.59 trillion dollars.

This is an impossible figure. Just common sense would cause one to reject the figure as clearly a mistake. Do you want to recheck your figures dat 111111111.. ?

For a more realistic appraisal check this out.  (But lets stick to FMG ok ?)









						Renewable energy is cheaper than previously thought, says a new report - and could be a gamechanger in the climate change battle.
					

Technological innovation has led to dramatic price reductions of wind and solar energy and helped to boost demand. But will prices continue to fall?




					www.weforum.org


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## divs4ever (6 June 2022)

basilio said:


> That sounds rather amazingly excessive doesn't  ? That "somehow" the cost of the world  going totally renewable will be *$86,237 Trillion dollars.* Particularly when the figure for the whole world GDP is $75.59 trillion dollars.
> 
> This is an impossible figure. Just common sense would cause one to reject the figure as clearly a mistake. Do you want to recheck your figures dat 111111111.. ?
> 
> ...



 it might be worth considering that we are on the edge of runaway inflation  , $US  86 trillion might be Australia's national debt  by 2032  , interest rates of 20%  p.a. are not unheard of even in the developed world  ( go back to the 1970's )


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## Value Collector (6 June 2022)

basilio said:


> That sounds rather amazingly excessive doesn't  ? That "somehow" the cost of the world  going totally renewable will be *$86,237 Trillion dollars.* Particularly when the figure for the whole world GDP is $75.59 trillion dollars.
> 
> This is an impossible figure. Just common sense would cause one to reject the figure as clearly a mistake. Do you want to recheck your figures dat 111111111.. ?
> 
> ...



Dat1111111111 is going to freak out when he realises that if everyone in the world bought a $5 Starbucks every day for a year it’s going to cost the world $14 Trillion dollars, and between now an 2032 that’s going to be $140 Trillion dollars, the world can’t possibly afford that many pumpkin spiced lattes, there fore Star bucks business model must be bunk.

Sell your Star Bucks shares before it’s to late people, they are going to send the world bankrupt.


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## divs4ever (6 June 2022)

i don't  have any Starbucks shares   and am trying to think back ... maybe i have bought one Starbucks coffee in my life  , i guess i won't be helping them stay solvent


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## basilio (6 June 2022)

divs4ever said:


> it might be worth considering that we are on the edge of runaway inflation  , $US  86 trillion might be Australia's national debt  by 2032  , interest rates of 20%  p.a. are not unheard of even in the developed world  ( go back to the 1970's )



Divs, imagine you go to a supermarket and fill up your trolley as per normal.  You know that  normally the ticket would be $140-$180.

The checkout assistant punches out a bill for  $823.55c  or ,say, $1506.80 or $10,643.55.  You don't need a maths degree to realise there is something seriously wrong with the bill.  Your sense of what a basket of groceries should cost is enough for you to say "please recount" - even if the assistant insists that the till never makes a mistake.

The analysis and calculations offered by Div are similarly ludicrous. There is no universe in which replacing the worlds current energy supply with renewables will cost S86,237 trillion dollars (in current value).  Going back to the supermarket example it is the equivalent of the checkout operator insisting that the $10k bill is right because the till says so. I offered a competent source which illustrates how  much cheaper renewable energy is that any fossil fuel based system.

Perhaps Dat can recheck his calculations and discover where he made a thousand fold mistake - and thats only in the arithmetic


----------



## divs4ever (6 June 2022)

and yet we live in clown world  where even the Australian version of Bernie Sanders  just became Prime Minister  on a vote of less than 40% ( of first preferences )

 i HOPE Dat111 is wrong  , but look at the world around us


----------



## Value Collector (6 June 2022)

basilio said:


> Divs, imagine you go to a supermarket and fill up your trolley as per normal.  You know that  normally the ticket would be $140-$180.
> 
> The checkout assistant punches out a bill for  $823.55c  or ,say, $1506.80 or $10,643.55.  You don't need a maths degree to realise there is something seriously wrong with the bill.  Your sense of what a basket of groceries should cost is enough for you to say "please recount" - even if the assistant insists that the till never makes a mistake.
> 
> ...



Also, Inflation isn't an argument against investing in infrastructure at all, given that the price you could sell the energy for over the next 30 years would be increasing with inflation, then such an investment would be an awesome inflation hedge, much like someone that bought a house in 1990 for $70,000 is now renting it out for $20,000 per year, its much better than a term deposit or holding cash.


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## Joe Blow (6 June 2022)

This thread is drifting off-topic. Please ensure that the discussion is limited to information, opinions and analysis that directly relates to FMG.

Thank you for your co-operation.


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## UMike (7 June 2022)

True.... FMG is an IRON ORE play.


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## Value Collector (7 June 2022)

UMike said:


> True.... FMG is an IRON ORE play.



With a start-up energy business attached.


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## basilio (18 June 2022)

New, very clever,  electric  dump truck technology being introduced by FMG.

FMG will be buying in dump truck shells from Liebheer and fitting them out with the  propriety electric drive trains they have developed through Williams Advanced Engineering. They will turnover their 120 dump trucks over the next few years as well as selling electric dump trucks to other miners.

Given that the trucks work day in /day out the payback on diesel costs will be swift. Currently the trucks use 200Mllion liters of fuel a year.
Partnership with Liebherr to supply green mining haul trucks incorporating Fortescue’s proprietary-owned zero emission power system​
Jun 15, 2022

Fortescue Metals Group Ltd (Fortescue, ASX: FMG) today announced a partnership with multi-national equipment manufacturer Liebherr for the development and supply of green mining haul trucks for integration with the zero emission power system technologies being developed by Fortescue Future Industries (FFI) and Williams Advanced Engineering (WAE). This is a major step towards transitioning Fortescue’s diesel mining fleet to a green mining fleet before 2030 and accelerates the opportunity to commercialise zero emission power system technologies in heavy industry applications.

The agreement advances the decarbonisation of Fortescue’s mobile fleet through this partnership with one of the world’s leading manufacturers of mining equipment. Utilising WAE’s unique proprietary technology and expertise in high-performance battery systems, the partnership secures a pathway for Fortescue to become a zero emission power system supplier to a tier one original equipment manufacturer and accelerates technology commercialisation.

Under the partnership, Fortescue will purchase a fleet of 120 haul trucks from Liebherr, with delivery aligned to its fleet replacement and sustaining capital expenditure forecast. The commitment represents approximately 45 per cent of the current haul truck fleet at Fortescue’s operations. Truck haulage consumed approximately 200 million litres of diesel in FY21 and accounted for 26 per cent of Fortescue’s Scope 1 emissions.





__





						Partnership with Liebherr to supply green mining haul trucks incorporating Fortescue’s proprietary-owned zero emission power system | Fortescue Metals Group Ltd
					






					www.fmgl.com.au
				




The phased supply of haul trucks is anticipated to commence following a two year joint development period enabling the development and integration of Fortescue’s proprietary-owned power system into Liebherr’s proprietary-owned base truck. Liebherr will supply mining haul trucks to Fortescue in both battery electric truck and fuel cell electric truck configurations, in accordance with Fortescue’s requirements.


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## basilio (18 June 2022)

Partnership with CSIRO in developing process to use and transport hydrogen as a fuel.

_The CSIRO have developed metal membrane technology (MMT) that enables ammonia to be used as a carrier material for hydrogen storage and transport, making the transportation of low emissions hydrogen economically viable. We see potential for this technology to establish bulk export market opportunities with further research required to determine if MMT can be developed on a commercial scale.

By combining CSIRO’s global leading research and development with Fortescue’s capability to rapidly develop new technologies, we will firmly establish our position in the global hydrogen industry, the low emission fuel of the future






						CSIRO and Fortescue; next generation collaboration | Fortescue Metals Group Ltd
					






					www.fmgl.com.au
				



_


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## Garpal Gumnut (20 June 2022)

I have huge respect for Twiggy. Although FMG is dropping more than its peers today. 

Good ideas on renewables even BHP are looking at green kit in their mines. 

He needs to get some mug to buy FFI and stick to his onions though. 

If it doesn't hold at $16.40 it is back down to $14 imo. 







gg


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## basilio (20 June 2022)

Anyone taking the "buying opportunity" for FMG ?  Could be the bargain of the year at the moment. 

Currently $17.38.


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## divs4ever (20 June 2022)

i have a top up order in a whisker above $17

 but just a nibble


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## basilio (20 June 2022)

I'm guessing there is a significant amount of stop loss selling happening at the moment.  Be interesting to see where it stops.

As far as I can see  the first 6 months of 2022 will  return very good dividends for shareholders. Iron ore prices have averaged at  least as  well as the last 6 months of 2021. Tonnage is up. The financials will be sound.


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## waterbottle (20 June 2022)

Are dividends expected to remain >10%? I would expecting income to fall given recurrent China lockdown + expenses to rise thanks to price of oil. 
Doesn't look great in the short term.


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## divs4ever (20 June 2022)

waterbottle said:


> Are dividends expected to remain >10%? I would expecting income to fall given recurrent China lockdown + expenses to rise thanks to price of oil.
> Doesn't look great in the short term.



 i am thinking NOT , Twiggy is spending some cash on pet projects  , but i suspect the margins from the iron will be okay  for the next half  , and possibly the one after that .

 one might also think Twiggy has hedged at least some of the fuel costs ( maybe a whole years worth )

 but they are hopefully going to be above 6% this year


----------



## sptrawler (20 June 2022)

basilio said:


> Anyone taking the "buying opportunity" for FMG ?  Could be the bargain of the year at the moment.
> 
> Currently $17.38.



I would like to, but just blew my pot on CXL, IGO and NMT.


----------



## JohnDe (20 June 2022)

Garpal Gumnut said:


> I have huge respect for Twiggy. Although FMG is dropping more than its peers today.
> 
> Good ideas on renewables even BHP are looking at green kit in their mines.
> 
> ...




Looks like it will get close to your low call. The world has only just learnt that there may be a recession around the corner, no one is going to buy large chunks of anyone's shares. Not until there is some sustained good news.

Lets look at the news so far -

Russia - Ukraine war.​Food shortages​Price rises​Fuel cost​Retail sales slowing​Builders going bust​Interest rates increasing.​USA on the verge of recession.​Europe on the verge of recession​Consumer confidence at its lowest in decades.​
I like FMG, but I', waiting for a lower price.


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## Craton (20 June 2022)

Just my


----------



## Sharkman (20 June 2022)

basilio said:


> Anyone taking the "buying opportunity" for FMG ?  Could be the bargain of the year at the moment.
> 
> Currently $17.38.




just holding on to what i have, fairly happy with my portfolio weights so not really looking to add more right now. i did sell covered calls over half my holding last week though, purely to collect premium. the IVs are insane, well above 50, slightly OTM fetched over 5% of the stock price in premium for a 1 month expiry. if it gets back above $20 in a month's time i'll probably look to roll or close out the calls, as i do want to hang on to the stock longer term, but it was too hard to resist gobbling up that premium with these sorts of IVs on offer.


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## Garpal Gumnut (5 July 2022)

Just an update on FMG share price. 

It has underperformed RIO and BHP over the last 12 months. 

On a zero basis from 12 mo. ago 

FMG is down : 23.53%
RIO is down.  : 17.78%
BHP is down  :   3.79%

Many punters are awaiting a lower price before committing to FMG, even the dopey analysts. 






gg


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## divs4ever (5 July 2022)

Garpal Gumnut said:


> Just an update on FMG share price.
> 
> It has underperformed RIO and BHP over the last 12 months.
> 
> ...



i already have a comfortable amount of FMG ( av. SP  $17.85 )   

 i am looking for a $16 ( or even $15 ) handle before reaching for the calculator once again 

 am in no hurry


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## KevinBB (5 July 2022)

Garpal Gumnut said:


> Many punters are awaiting a lower price before committing to FMG, even the dopey analysts.



If the dopey analysts are waiting, then now is the time!
KH


----------



## Country Lad (5 July 2022)

*FFI strikes partnership with Djibouti to explore potential green hydrogen industry*

Fortescue Future Industries says it has struck a partnership with the Government of the Republic of Djibouti to undertake studies into the potential development of a green hydrogen industry.

Djibouti, which is located on the east coast of Africa, is perhaps an intriguing choice for Fortescue with the country’s president, Ismaïl Omar Guelleh, often considered a dictator.

FFI CEO Julie Shuttleworth said Djibouti had the potential to emerge as a leading global supplier of green hydrogen, given its access to quality renewable energy resources and established port infrastructure.


----------



## UMike (5 July 2022)

Country Lad said:


> *FFI strikes partnership with Djibouti to explore potential green hydrogen industry*
> 
> Fortescue Future Industries says it has struck a partnership with the Government of the Republic of Djibouti to undertake studies into the potential development of a green hydrogen industry.
> 
> ...



What.... And not put their hand out for Squilllions of Govt Subsities?????


----------



## Captain_Chaza (5 July 2022)

Country Lad said:


> *FFI strikes partnership with Djibouti to explore potential green hydrogen industry*
> 
> Fortescue Future Industries says it has struck a partnership with the Government of the Republic of Djibouti to undertake studies into the potential development of a green hydrogen industry.
> 
> ...



*Where on Earth is  "Djibouti  ? "*


----------



## Value Collector (5 July 2022)

Captain_Chaza said:


> *Where on Earth is  "Djibouti  ? "*




Centrally located between two of the worlds biggest energy import markets.


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## moXJO (5 July 2022)

How big is the threat to iron ore price will Simandou mine be?


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## qldfrog (5 July 2022)

moXJO said:


> How big is the threat to iron ore price will Simandou mine be?



Interesting question or anywhere on earth whete geo political games push miners...iron ore is very..too..common


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## basilio (21 July 2022)

One of the purchases FMG made last year was a 60% stake in the Dutch renewable energy company HyEt. 
HyEt has a very promising suite of technologies that would underpin FMG's drive to produce 15Millions tones of green hydrogen. 
In particular they have a low cost continuous role solar panel that will be much cheaper and far easier to install than current glass panels.

Implications for FMG and HyEt
1)  FMG could be the biggest purchaser of HyET products.  Be interesting to see the related transactions  charges in play
2)  HyET already has a large range of commercial products as well as the technical skills that produced them. These are now in  FMG/FFI  control
3) The costs for the massive solar installations should drop substantially
4) HyEt also has Hydrogen technology that will mesh in with FMG's need for massive electrolysis capacity
5) FMG has an opportunity through HyEt to aggressively promote and profit from the solar technologies it offers.

I also understand that FMG will float HyEt on the stock market.  Could be a valuable investment









						Fortescue Future Industries invests in Dutch thin-film solar and H2 firm HyET
					

October 8 (Renewables Now) - Australia’s Fortescue Future Industries (FFI) has taken a 60% stake in Dutch company High yield Energy Technologies (HyET) Gro




					renewablesnow.com
				











						HyET Group | High Yield Energy Technologies
					

High Yield Energy Technologies…




					www.hyetgroup.com
				








						HyET Group | HyET Solar
					






					www.hyetsolar.com


----------



## basilio (21 July 2022)

Overview of HyEt technologies (Now FMG)




About the High yield Energy Technologies (HyET) group​ 

The companies that form part of the HyET group create technologies that enable commercially viable, large scale access to decentral renewable energy sources. The primary objective of the HyET group is to develop a sustainable and profitable business based on the above objective. At the same time the HyET group pursues an active policy to develop applications of its technologies that support an environmentally sustainable economic development and rural poverty reduction.

Examples are large scale buffering of discontinuously generated renewable energy (e.g. from solar or wind mill parks) using high pressure hydrogen or very low cost building materials: roofing sheets with integrated solar modules.

Downloads:
HyET Solar BV (pdf)
HyET Hydrogen BV (pdf)
HyET NoCarbon BV (pdf)
HyET HyLab BV (pdf)
HyET Pro2NL BV (pdf)
HyET Lithium BV (pdf)
HyET E-Trol BV (pdf)

https://www.hyetgroup.com/about-hyet/


----------



## basilio (23 July 2022)

One thing I don't quite understand about the purchase of HyET by FMG.  It doesn't seem to appear in the news stories on FMG. There is a three line mention of the purchase of the 60% stake in the company in the Dec 21 half year report.  They also note that FMG is the major capital contributor to an expanded PV production facility.

For a company that thrives on promotion of its new renewable energy projects this seems like hiding your light under a bush.


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## divs4ever (23 July 2022)

basilio said:


> One thing I don't quite understand about the purchase of HyET by FMG.  It doesn't seem to appear in the news stories on FMG. There is a three line mention of the purchase of the 60% stake in the company in the Dec 21 half year report.  They also note that FMG is the major capital contributor to an expanded PV production facility.
> 
> For a company that thrives on promotion of its new renewable energy projects this seems like hiding your light under a bush.



 might be more in the planning  than in the profit-making stage  , some of these  'green technologies '  suck in a LOT  of cash and research 

 if they float HyET don't expect me to be at the front of the queue


----------



## basilio (25 July 2022)

divs4ever said:


> might be more in the planning  than in the profit-making stage  , some of these  'green technologies '  suck in a LOT  of cash and research
> 
> if they float HyET don't expect me to be at the front of the queue




Don't think so at this stage.  The PV technology is proven. The expansion into large scale production will offer an opportunity to capitalise on the low cost,  roll out  PV panels that HyET has developed.  As I mentioned FMG could be one of the earliest users of the panels in their massive plans to develop large scale renewable energy facilities in Gladstone to power a Hydrogen electrolyser industry.


----------



## basilio (28 July 2022)

Quarterly production results posted.  Short story posted below. Record production, $100 US a tonne return over  FY22. Looking healthy.

*Strong June Quarter performance contributes to record shipments of 189 million tonnes for FY22*

Quarterly summary
• Continued focus on safety contributed to a Total Recordable Injury Frequency Rate (TRIFR) of 1.8 in the 12 months to 30 June 2022 (FY22), 10 per cent lower than 30 June 2021

• Record iron ore shipments of 49.5 million tonnes (mt) for the quarter and 189.0mt for FY22, exceeding full year guidance

• Average revenue of US$108/dry metric tonne (dmt) for the quarter, realising 78 per cent of the average Platts 62% CFR Index, and average revenue of US$100/dmt in FY22

• C1 cost of US$17.19/wet metric tonne (wmt) for Q4 FY22 and US$15.91/wmt in FY22

• Strong cash flow generation contributed to cash on hand of US$5.2 billion and net debt of US$0.9 billion at 30 June 2022, compared to net debt of US$2.4 billion at 31 March 2022

• Total capital expenditure for FY22 of US$3.1 billion, including the investment in the Iron Bridge Magnetite and Pilbara Energy Connect (PEC) projects

• Significant progress to decarbonise Fortescue’s mining fleet through the strategic partnership with Liebherr for the development and supply of green mining haul trucks

• FY23 guidance for shipments of 187 - 192mt inclusive of approximately 1mt from Iron Bridge and C1 cost for hematite of US$18.00 - US$18.75/wmt

• FY23 capital expenditure guidance (excluding FFI) of US$2.7 - US$3.1 billion, inclusive of sustaining and development capital, exploration and studies, decarbonisation and major projects

• FFI is progressing a portfolio of green energy projects, manufacturing initiatives and technology developments with FY23 expenditure anticipated to be US$600 - US$700 million.



			https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02546348-6A1101567?access_token=83ff96335c2d45a094df02a206a39ff4


----------



## Value Collector (28 July 2022)

basilio said:


> Quarterly production results posted.  Short story posted below. Record production, $100 US a tonne return over  FY22. Looking healthy.
> 
> *Strong June Quarter performance contributes to record shipments of 189 million tonnes for FY22*
> 
> ...



I haven’t had a chance to read the report throughly yet, but I gave it a quick scan and was impressed with the cash generation, the dividend should be higher than 1st half. Of course the amount of the dividend does depend on exactly what the pay out ratio is, given that their policy is to pay out between 50% - 80% we don’t know exactly what portion of that strong cashflow will be paid out as a dividend.

But if they decide to end the year with a payout ratio of 80% that’s going to be a solid divvy.


----------



## basilio (30 July 2022)

Came across another analysis of FMG.  The headline screams  a  $6Billion Revenue hole.  My God run away or *sell  up NOW* and find something else to invest in.

I thought it was a a very biased and blinkered analysis. Every investor understood the 2021 results on a back of $200 a ton plus iron ore prices was a one off. Take the divvies sure.  But don't expect those sort of prices to continue. However this analysis suggest a serious financial problem when that simply isn't true.

I also noted that there is not a single acknowledgment that the FMG renewable energy programs will *certainly *improve the bottom line via cost reductions and hopefully result in more profits in future years. 

Meanwhile the company and shareholder have a very successful operation moving 185-190m tonnes of iron at roughly  $100 Us a ton with operating costs around $17 a ton.  What a problem..

Fortescue’s $6 billion Revenue Hole​ 
            By Glenn Dyer | More Articles by Glenn Dyer 
MORE FORTESCUE METALS GROUP LTD CONTENT 








What Twiggy Forrest’s Fortescue Metals Group didn’t tell you in its June quarter and 2021-22 production report on Thursday was the $US6 billion hole in its annual revenue line.









						Fortescue's $6 billion Revenue Hole – ShareCafe
					

What Twiggy Forrest’s Fortescue Metals Group didn’t point out or explain in its June quarter and 2021-22 production report on Thursday was the $US6 billion hole in its annual revenue line.




					www.sharecafe.com.au


----------



## bk1 (30 July 2022)

Opinions, eh...


----------



## basilio (30 July 2022)

bk1 said:


> Opinions, eh...



Indeed !! Only 1 "Buy"  9 "Sell" .  If you followed the analysts you'd be a mug to be in FMG.

Frankly, IMV,  if one followed the analysts you would be a mug full stop. I believe most if not all of the analysts have misjudged FMG on a number of factors

1) They are not taking seriously the drive by FMG to create a massive new renewable energy company. In that context they totally undervalue the drive, financial clout, proven engineering capacity and marketing capacity of the company.  They are also gravely underestimating  the urgency of such a program and the opportunity for successful companies to be quite profitable.

2) I believe they undervalue FMG's capacity to protect its iron ore markets.  As far as I can see FMG takes great care to ensure it's product meets the needs of its customers.  The proof is in the current ore sales which are at record levels despite economic pressures.

3) Finally I think they are disrespecting the basic value of the FMG iron ore operations . They have excellent cost control which will only get better as they strip energy costs out of their budget.  They will make a decent profit selling ore at $50 a ton.  Yet current returns are still around $100 a ton. The predictions of crashing iron ore prices are just that..


----------



## Value Collector (30 July 2022)

bk1 said:


> Opinions, eh...



When FMG was $1.80 the consensus opinion of the analysts was the same, I say follow their opinions at your own peril.


----------



## basilio (5 August 2022)

Brief overview of FMG Diggers and Dealers mining conference presentation.
Essentially CEO Elizabeth Gaines said the green energy push was well on track and would return shareholder value . She highlighted a number of contracts that have  already been signed.
*CEO comments*​Gaines said:



> We’re all facing significant inflationary pressures which impacts our margins — and, in fact, this could get even worse given the current geopolitical environment. So, it’s imperative for all of us to accelerate our transition to green energy and reduce our reliance on fossil fuels, so that we can protect and maintain our cost and our margins.
> 
> For our size and scale, there is no other mining company in the world that is taking the action we are to eliminate emissions.
> 
> ...




She also commented how removing its reliance on fossil fuels makes long-term business sense. This could be helpful for the Fortescue share price. It’s developing an ‘infinity train’ that will use gravitational energy to recharge its battery electric systems without any additional charging requirements.

These efforts will “accelerate Fortescue’s race to reach net zero emissions by 2030” and lower “operating costs, creating maintenance efficiencies, and generating productivity improvements.”









						'World's greatest concern': Can Fortescue really help the planet AND its profit margin?
					

Fortescue Metals Group Limited (ASX:FMG) shares are in focus after the CEO spoke at the Diggers & Dealers Mining Conference.




					www.fool.com.au


----------



## Garpal Gumnut (5 August 2022)

basilio said:


> Brief overview of FMG Diggers and Dealers mining conference presentation.
> Essentially CEO Elizabeth Gaines said the green energy push was well on track and would return shareholder value . She highlighted a number of contracts that have  already been signed.
> *CEO comments*​Gaines said:
> 
> ...



From my reading of it FFI has not spent one brass razoo on anything approaching a Hydrogen platform for FMG and the former is presently about setting up a corporate structure foreign to that of an Iron Ore Company which is the latter. 

Good luck with that. FMG will bleed money in to FFI. 

Good intentions I favour, it is the execution that is problematic for FMG. 

gg


----------



## Value Collector (6 August 2022)

Garpal Gumnut said:


> From my reading of it FFI has not spent one brass razoo on anything approaching a Hydrogen platform for FMG and the former is presently about setting up a corporate structure foreign to that of an Iron Ore Company which is the latter.
> 
> Good luck with that. FMG will bleed money in to FFI.
> 
> ...



Before they can begin making large scale hydrogen, they first need to be producing large scale renewable energy.

So the first step is to build wind and solar infrastructure, which they are already doing and some of which is already operating.

Then ofcourse once their solar and wind projects begin to come online, they don’t immediately start producing hydrogen, the first sensible step is to use this renewable electricity to offset the electricity the y normally get by burning gas and diesel, and this is exactly what they are doing now.

FFI’s main job at the moment is to get the hydrogen technology right, which they are doing with their small scale tests and experiments, and in the mean time continue to roll out wind and solar. Then by the time they are producing more green electricity than their operations can soak up, they should be ready to starting feeding the excess into making hydrogen and hydrogen based fuels, to both use themselves and to sell.


----------



## sptrawler (9 August 2022)

Well the FMG, FFI and AGL joint venture is moving along, time will tell.








						AGL and Fortescue Future Industries' green hydrogen feasibility study underway in the Hunter
					

AGL Energy  today announced an expanded feasibility study with additional partners is underway to explore the development of a green hydrogen and ammonia production facility at AGL’s Hunter Energy Hub.




					www.agl.com.au
				



AGL Energy (AGL) today announced an expanded feasibility study with additional partners is underway to explore the development of a green hydrogen and ammonia production facility at AGL’s Hunter Energy Hub.

Independent technical consultancy GHD Advisory is carrying out the feasibility study for AGL as the hub provider and Fortescue Future Industries (FFI) as the exclusive producer of green hydrogen at the site. 

The feasibility study, which is mapping key operational and commercial plans for the project as well as developing a production timeline, is also leveraging the input of additional key industry and consortium partners across multiple sectors which have signed Memorandums of Understanding related to the project:


APA Group – a leading Australian energy infrastructure business
INPEX CORPORATION – a global energy exploration and production company
Jemena – a leading owner and operator of a diverse portfolio of energy infrastructure assets across Australia
Osaka Gas Australia – a wholly-owned subsidiary of Osaka Gas Co Ltd – global natural gas and power company.
AGL Chief Operating Officer, Markus Brokhof said the feasibility study, due for completion by the end of the year, was another big step forward in AGL’s vision for an industrial low carbon energy hub at the site of Liddell and Bayswater power stations.

“As we create our Hunter Energy Hub, our aim is to develop strong partnerships that enable an efficient ecosystem and create a circular economy,” Mr Brokhof said.

“By working hand in hand with Fortescue Future Industries, we will be supporting Australia’s emerging green hydrogen industry and bringing our expertise in large-scale renewable generation to the fold.”

“Early estimates suggest the site can support a hydrogen facility of up to 2GW in scale, but we will also test critical inputs including renewable energy costs, firming requirements, electrolyser capital costs, logistics and utilisation.”


----------



## Value Collector (29 August 2022)

FMG announced a FY 2022 final dividend of $1.21 which is a very solid result. 

I was working out the yield the dividend represents based on certain entry levels, and I realised that even if you purchased your FMG shares right at the peak of $26 18 months ago, you have been earning 15% dividend (including franking) over that 18 months, not a bad income return while you wait for FMG’s true value to be recognised.

Of course if you purchased sub $20 your dividend return has be amazing.


----------



## InsvestoBoy (29 August 2022)

Value Collector said:


> FMG announced a FY 2022 final dividend of $1.21 which is a very solid result.
> 
> I was working out the yield the dividend represents based on certain entry levels, and I realised that even if you purchased your FMG shares right at the peak of $26 18 months ago, you have been earning 15% dividend (including franking) over that 18 months, not a bad income return while you wait for FMG’s true value to be recognised.
> 
> Of course if you purchased sub $20 your dividend return has be amazing.




What was your entry again VC? $2.something? 

Gonna give us your true value estimate?


----------



## Value Collector (29 August 2022)

InsvestoBoy said:


> What was your entry again VC? $2.something?
> 
> Gonna give us your true value estimate?



The cheapest I bought was $1.80, but I started accumulating before that at $4.23 and bought a few parcels on the way down to $1.80, and have bought multiple parcels over time on the way up, the most I have paid was about $22.50 that I remember, that was a put option that was exercised. 

As far as what I think they are worth, I think $28 would be the bare minimum potentially much higher.

Basically there is a lot more to my calculations than just dividend yield, but I think a 7% yield shouldn’t be to much to ask for a company like FMG if it’s paying out 80% of its earnings, and with franking credits it only needs to be paying out an average of around 68cents in dividends every 6 months. So I see $28 as a very reasonable valuation, with a lot of potential upside beyond that.

Of course markets will fluctuate though, and FMG seems to be subject to constant worry about iron ore price, China relations, recession fear etc etc, but as I said earlier I feel the long term holder will be well rewarded via high dividends while they wait for the eventual revaluation to a much higher level.


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## Garpal Gumnut (29 August 2022)

The only problem I see with FMG is someone like Hu Flung Dung in a radar control tower on the Western side of the Taiwan Strait getting his p's and q's mixed up with the American cousins playing a Boxing Day Syd-Hob in the Strait and pulling a pin so's the Chinese cousins become warry, fling dung and FMG is collateral damage. 

I was looking at buying today for the divi but nobody else seemed to be, as it dropped nearly 5%, so I didn't. 

The divi is not inconsequential and good luck to the long term holders. 




So it's a divi of $1.21 ff vs a drop of $0.98 with a way to go before it gets paid and in between some news on the Gladstone effort. And other Iron Ore companies run the same risk with a lesser divi though BHP and RIO are more diversified. 

I should have bought at $14 in Nov 21, too greedy I was, and again good luck to those who bought at $2 and $4.






gg


----------



## Sean K (29 August 2022)

I wonder if ASIC are going to ask for some real justification for this claim? I think last FY FFI paid itself more in administration costs than operations. Any income?


----------



## Value Collector (29 August 2022)

Garpal Gumnut said:


> The only problem I see with FMG is someone like Hu Flung Dung in a radar control tower on the Western side of the Taiwan Strait getting his p's and q's mixed up with the American cousins playing a Boxing Day Syd-Hob in the Strait and pulling a pin so's the Chinese cousins become warry, fling dung and FMG is collateral damage.
> 
> I was looking at buying today for the divi but nobody else seemed to be, as it dropped nearly 5%, so I didn't.
> 
> ...



It’s a $1.72 dividend including the franking.

Yeah the share price dropped today, but it’s still higher than it was last Wednesday, don’t let the swings and round about’s of market fluctuations get to you.

Buy Value when you see it, yep you should have bought at $14, you may get another chance who knows, but maybe take an each way bet and buy some before we get there, because we may not get there.


----------



## Value Collector (29 August 2022)

Sean K said:


> I wonder if ASIC are going to ask for some real justification for this claim? I think last FY FFI paid itself more in administration costs than operations. Any income?
> 
> View attachment 146083



FFI is basically a renewable energy start up, with a ship load of funding behind it, it’s totally possible if it was a Silicon Valley based company listed on the nasdaq it would get a super high valuation.


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## Country Lad (29 August 2022)

Value Collector said:


> FFI is basically a renewable energy start up, with a ship load of funding behind it, it’s totally possible if it was a Silicon Valley based company listed on the nasdaq it would get a super high valuation.



Forrest on why FFI might already be worth $US20 billion​_“Fortescue can and will lead the green energy revolution,” Forrest said. “Energy must change. We have no choice. I mean, if you’re advocating for anything else, then you’re either economically or scientifically ignorant, or both._
_
He later added: “We chop through, like all the others, a few billion dollars a year in fossil fuels. We literally smoke it. It will be a great day, and I think it’s serious revenue and margin improving day, when we can make all our own fuels.”

Forrest told analysts that *informal discussions with global funds managers indicated a potential value of $US20 billion ($A29 billion)* for its Fortescue Future Industries offshoot, which is leading the company’s charge into green energy.
_
_That, of course, is a notional valuation, and Forrest says he currently has no intention of separately listing the subsidiary._


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## Value Collector (29 August 2022)

Country Lad said:


> Forrest on why FFI might already be worth $US20 billion​_“Fortescue can and will lead the green energy revolution,” Forrest said. “Energy must change. We have no choice. I mean, if you’re advocating for anything else, then you’re either economically or scientifically ignorant, or both._
> 
> _He later added: “We chop through, like all the others, a few billion dollars a year in fossil fuels. We literally smoke it. It will be a great day, and I think it’s serious revenue and margin improving day, when we can make all our own fuels.”
> 
> ...



That’s a great point, FMG buys 100’s of Millions of dollars worth of fuel and electricity each year, what other renewable energy start up can say they have a customer lined up that will not only take $100’s of millions of dollars worth of fuel, while also helping to fund the construction of their infrastructure?

FFI will have the benefit of as much funding as they need to get started, while also have a patient customer ready to offtake their products as they prove their concept.

By they time they need to sell their products to the out side world they will already have large scale and efficiency.


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## divs4ever (29 August 2022)

Value Collector said:


> FMG announced a FY 2022 final dividend of $1.21 which is a very solid result.
> 
> I was working out the yield the dividend represents based on certain entry levels, and I realised that even if you purchased your FMG shares right at the peak of $26 18 months ago, you have been earning 15% dividend (including franking) over that 18 months, not a bad income return while you wait for FMG’s true value to be recognised.
> 
> Of course if you purchased sub $20 your dividend return has be amazing.




 yes , i bought in , on the hope FMG could maintain  a 2 x $1 divs. ( per year ) ( most years )

 and i probably should have been more aggressive  in my dip buying while sub $20  , but how much FMG do you hold  ( compared to other stocks and sectors ) ??

 on the flip side  i may not be alive to see 'FMGs true value '  but 10% plus returns are pretty good , thanks very much


----------



## qldfrog (29 August 2022)

divs4ever said:


> yes , i bought in , on the hope FMG could maintain  a 2 x $1 divs. ( per year ) ( most years )
> 
> and i probably should have been more aggressive  in my dip buying while sub $20  , but how much FMG do you hold  ( compared to other stocks and sectors ) ??
> 
> on the flip side  i may not be alive to see 'FMGs true value '  but 10% plus returns are pretty good , thanks very much



Will see, i still have buys but lower than today's


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## divs4ever (29 August 2022)

no FMG orders in for me ( YET ) will watch the US overnight  to see if it is worth the effort


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## divs4ever (29 August 2022)

my av. SP is just over $17.85  with my lowest buy at $14.20 ( and my highest at $19.90 )

 so MAYBE sub $17 will tempt me to nibble some more , but no guarantees on that


----------



## Value Collector (29 August 2022)

divs4ever said:


> and i probably should have been more aggressive  in my dip buying while sub $20  , but how much FMG do you hold  ( compared to other stocks and sectors ) ??




I am about 50% FMG, as FMG grew in value it has ballooned to a major holding in my portfolio, so I am not actively adding to my FMG holding any more, but am happy to hold and am not selling.

75% of the after tax dividends go towards my spending money, and 25% is used to grow my portfolio in other areas.


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## Value Collector (29 August 2022)

divs4ever said:


> my av. SP is just over $17.85  with my lowest buy at $14.20 ( and my highest at $19.90 )
> 
> so MAYBE sub $17 will tempt me to nibble some more , but no guarantees on that



So if you have held for the last two dividends, your $17.85 per share has been earning you 16.5% dividend (inc franking), you have to be happy with that.


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## divs4ever (30 August 2022)

Value Collector said:


> So if you have held for the last two dividends, your $17.85 per share has been earning you 16.5% dividend (inc franking), you have to be happy with that.



 happy with FMG  so far , a little apprehensive of them rushing FFI investment  ( it is easy to do )


Value Collector said:


> I am about 50% FMG, as FMG grew in value it has ballooned to a major holding in my portfolio, so I am not actively adding to my FMG holding any more, but am happy to hold and am not selling.
> 
> 75% of the after tax dividends go towards my spending money, and 25% is used to grow my portfolio in other areas.



 FMG  is less than 5% of a very diverse portfolio  so have room to add if the price is right  , but then again  FMG isn't the only solid stock in town ( there are a few ,  but not a plague of them )

 the trick is to have a different stock doing the heavy lifting  when iron profits are down ( as rising costs will surely  cause )


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## Value Collector (30 August 2022)

divs4ever said:


> happy with FMG  so far , a little apprehensive of them rushing FFI investment  ( it is easy to do )
> 
> FMG  is less than 5% of a very diverse portfolio  so have room to add if the price is right  , but then again  FMG isn't the only solid stock in town ( there are a few ,  but not a plague of them )
> 
> the trick is to have a different stock doing the heavy lifting  when iron profits are down ( as rising costs will surely  cause )





divs4ever said:


> happy with FMG  so far , a little apprehensive of them rushing FFI investment  ( it is easy to do )
> 
> FMG  is less than 5% of a very diverse portfolio  so have room to add if the price is right  , but then again  FMG isn't the only solid stock in town ( there are a few ,  but not a plague of them )
> 
> the trick is to have a different stock doing the heavy lifting  when iron profits are down ( as rising costs will surely  cause )



Yep, I agree diversification is important, I own a range of different investments outside FMG including the VAS and VGS which provide a lot of diversification.


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## Garpal Gumnut (2 September 2022)

To buy or not to buy, that is the question. 

3.25 pm 2/9/2022

gg


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## dat111 (2 September 2022)

Garpal Gumnut said:


> To buy or not to buy, that is the question.
> 
> 3.25 pm 2/9/2022
> 
> gg



I look at purchasing each year with the dividends that I received since the last time that I purchased.  I would figure that FSUMF will retest last year's low of $10.25 before the end of the year.   If it does not... I add the dividend money into the next year.  Investing is not a race.  I have been accumulating FMG since 2004.  The most that I paid was $41.29 which underwent a 10-1 split.  The least I have paid is $1.5.  I would expect the price this year to be less than $10.25 as the exchange rate is 9% greater.  All amounts are in US dollars.  My expectation is that FMG will trade between $15.00 - $13.50 (AUD) after dividend is paid within the next year...  So my plan is to purchase half of the dollar amount at the $15.00 (AUD)... then 25% at $14.75 (AUD) and then the balance at $13.50 (AUD)...  I might not purchase this year but the dividend money will be moved to the future so I will eventually purchase.


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## UMike (3 September 2022)

Garpal Gumnut said:


> To buy or not to buy, that is the question.
> 
> 3.25 pm 2/9/2022
> 
> gg



Still have time. Can't see any amazing news that will cause it to jump in value.


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## rcw1 (3 September 2022)

Good morning
Article published yesterday 02/09/22 by Prashant Mehra for finder; 1 minute read  about FMG dividend, financials, demand and supply and a line about renewable energy.  








						Have you locked in the Fortescue (FMG) dividend yet? | finder.com.au
					

Shares in the iron ore exporter are down nearly 8% so far in 2022.




					www.finder.com.au
				




Kind regards
rcw1


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## Garpal Gumnut (12 September 2022)

Garpal Gumnut said:


> To buy or not to buy, that is the question.
> 
> 3.25 pm 2/9/2022
> 
> gg



Well I did. 

FMG is advancing again in spite of a tasty dividend. 

Twiggy Forrest ! 

Always follow the mad and the dreamers is what I say.

gg


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## Telamelo (12 September 2022)

Garpal Gumnut said:


> Well I did.
> 
> FMG is advancing again in spite of a tasty dividend.
> 
> ...



Helps that Iron Ore futures are soaring as BHP gained +3.41% as well  

Great day for the big miner's.


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## Value Collector (12 September 2022)

UMike said:


> Still have time. Can't see any amazing news that will cause it to jump in value.



Just shows you picking entry and exit levels are hard.

That’s why I don’t bother with market timing or following the news, I just buy value and hold.


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## sptrawler (12 September 2022)

Telamelo said:


> Helps that Iron Ore futures are soaring as BHP gained +3.41% as well
> 
> Great day for the big miner's.



There is one thing always in high demand, when an arms race is pending.


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## qldfrog (12 September 2022)

sptrawler said:


> There is one thing always in high demand, when an arms race is pending.



Nickel


----------



## divs4ever (12 September 2022)

Value Collector said:


> Just shows you picking entry and exit levels are hard.
> 
> That’s why I don’t bother with market timing or following the news, I just buy value and hold.



have no reason to sell ( yet )

 however timing additional parcel buys  is still on the agenda


----------



## sptrawler (13 September 2022)

FMG's Williams racing acquisition is getting a bit of airplay.









						Williams Advanced Engineering: Australian-owned company reveals 1650kW electric hypercar chassis
					

Williams Advanced Engineering has unveiled the basis of a new 1650kW electric hypercar, with the Australian-owned firm targeting established car makers as its key clients.




					www.drive.com.au
				



UK-based firm *Williams Advanced Engineering* (WAE) – owned by Australian iron ore mining company *Fortescue Metals Group *(FMG) – has revealed a new electric hypercar platform, set to enter production in 2024.
Williams Advanced Engineering is a former subsidiary of the Williams Formula One racing team, and was acquired by FMG earlier this year for $310 million.
The WAE *EVR* is a ready-built electric-car platform which car makers of any size can purchase from the engineering company, rather than investing in the development of their own bespoke architectures – similar to the company's EVX platform revealed last year.


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## qldfrog (18 September 2022)

Like that article: https://www.afr.com/companies/mining/meet-the-forrest-young-gun-who-shot-down-bhp-20220906-p5bfus
Also shows how BHP model is flawn... 
Agile vs old style corporate.....


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## rcw1 (18 September 2022)

qldfrog said:


> Like that article: https://www.afr.com/companies/mining/meet-the-forrest-young-gun-who-shot-down-bhp-20220906-p5bfus
> Also shows how BHP model is flawn...
> Agile vs old style corporate.....



Good morning qldfrog
Are you able to cut and paste this article please?

Kind regards
rcw1


----------



## qldfrog (18 September 2022)

rcw1 said:


> Good morning qldfrog
> Are you able to cut and paste this article please?
> 
> Kind regards
> rcw1



For whatever reason i was able to read the article in full this very morning but behind firewall now?
i am not a subscriber so can not cut and paste extracts either now.
Any afr subscriber able to put some meaningfull extracts?


----------



## Skate (18 September 2022)

qldfrog said:


> i am not a subscriber so can not cut and paste extracts either now.
> Any afr subscriber able to put some meaningfull extracts?




@qldfrog I'm not a subscriber either. If I want to read an article behind a paywall I copy & paste the heading into Google as it's most likely been syndicated to other sites. Below is the article in question

*# START*
Meet the Forrest young gun who shot down BHP​Luca Giacovazzi is a rising star in the Andrew Forrest business empire and boss of Wyloo Metals which stared down BHP in the bidding war for green minerals deposits in Canada. Wyloo Metals wunderkind Luca Giacovazzi has made a lot of money for Andrew Forrest since making his first big pitch to the iron ore billionaire, and he might end up costing BHP plenty.

Giacovazzi, then just 27, called his first presentation slide pack _Nickel: Get its mojo back_ in what was a risky move given Forrest’s painful memories from his Anaconda Nickel venture.







Luca Giacovazzi in his house that was the former home and design studio of Perth architect Iwan Iwanoff.  

In the 3½ years since, Giacovazzi has won a bruising takeover battle with BHP over Noront Resources and done a heap of strategic and capital creative deals in green minerals and gold-copper. There’s a heavy weighting to key battery ingredient nickel and big plans for rare earths as Wyloo emerges as the green minerals cousin to Forrest’s hydrogen business being spawned out of Fortescue Metals Group in an ambitious assault on the global decarbonisation challenge.

Wyloo, part of the Forrest family’s private investment arm Tattarang, started with a mixed bag of assets valued at $15 million. It is estimated the value of the portfolio is now about $700 million and that excludes Noront, which – if all goes to plan for Wyloo in Ontario, Canada – could become a multibillion-dollar asset.
Shaking every tree​A piece of advice from Forrest that has stuck with Giacovazzi is you do the deal on the way in, not on the way out. What that boils down to is “buy well”. Wyloo did a great deal on its way into Toronto Stock Exchange-listed Noront and that is what ultimately led to its underdog victory against a bigger rival that had the Noront board in its corner.

“We were spending a lot of time in that nickel sulphide space, and we were shaking every tree, looking under every stone for projects,” Giacovazzi says. “This one stood out and it’s like, ‘why has nobody done this project? It’s one of the best ore bodies we’ve seen’. “People forget that the deal that we actually did on the way into Noront was a really good deal.”

Wyloo did some digging and found out Resource Capital Funds had a fund coming to an end and was looking to exit its position in Noront, the owners of the highest-grade nickel discovery in Canada since Vale-owned Voisey’s Bay.

The Forrest camp was delighted to emerge with a near 38 percent stake in Noront for $US26.5 million in December 2020. The acquisition of the RCF stake also came with a royalty and some other good things for Wyloo, including a pre-emptive rights deal it renegotiated with the Noront board that provided a lot of protection.

When BHP zoomed in on Noront right behind Wyloo, it was a vindication for Giacovazzi. Forrest could have walked away with a massive return but opted to stay and fight for Noront’s Eagle’s Nest nickel project and other assets in the Ring of Fire region, about 1200 kilometres north of Toronto.

“When BHP popped up we had held the investment for a few months and made $200 million to $250 million. So, we were singing from the hilltops,” Giacovazzi says. “It would have been really easy to take that and walk away. We went to Andrew and we were smiling. Andrew said, ‘OK, guys, but why did we do the deal originally?’ ”

Giacovazzi reiterated his belief that Eagle’s Nest is one of the best nickel projects in the world and in a great minerals basin with multi-mine potential.
A sweetheart deal?​What followed through 2021 was a bidding war before BHP eventually gave up when Wyloo refused to back down. The tussle involved Wyloo going public with an unfriendly takeover offer and copping a blast from the Noront board, which accused Wyloo of making misleading statements. Giacovazzi makes no apologies for the way Wyloo went about winning.

“The Noront board at the time really wanted BHP to be part of the story … so they were definitely against us,” he says. “It got to the point where we felt like the deal that BHP were trying to do with the board, I don’t want to call it a sweetheart deal, but it was.

“It was something that wasn’t reflective of value, and it was all just about the BHP brand, and that’s when we stepped forward.”
There’s no love lost between Fortescue Metals Group founder Forrest and iron ore heavyweight BHP, but Giacovazzi’s comments have a familiar ring.

In another battle over green metals, the board of copper miner OZ Minerals last month rejected an $8.3 billion takeover bid from BHP it said significantly undervalued the company. Giacovazzi finally nailed down the Noront acquisition in April on the same day he moved his young family into a rundown home with what turned out to be a leaky roof, but great architectural pedigree. It is the former home and design studio of Perth architect Iwan Iwanoff, with the purchase confirming Giacovazzi’s eye for neglected assets in need of some love.

RELATED​Forrest dives into another mining merger hotspot​He’s shown a knack for finding them under the nose of mining majors rather than in the suburbs. The two-storey home built by Iwanoff in 1966 is a long way from its former brutalist glory, but Giacovazzi is relishing the restoration ahead after moving in with his audiologist wife, three-year-old daughter and infant son.

Iwanoff did his best work in the downstairs studio but working from home is not for Giacovazzi. He probably wouldn’t have found his way to Tattarang in the first place if Credit Suisse hadn’t shut its Perth office. Credit Suisse said he could further work for them from home, but he’d tried that before and found it a “lonely path”.

He was hired by Tattarang chief investment officer John Hartman five years ago and, for a time, it was just the two of them doing a string of deals in property, in what became Squadron Energy, and in other assets classes, as the Forrest family looked to create a spread of investments with the riches flowing from iron ore. The team of two had to roll their sleeves up on all sorts of tasks. Giacovazzi hadn’t been there long when a septic tank burst at a caravan park on the West Australian coast owned by Tattarang. He was sent to the park to sort out the mess.

It has been a rapid rise for Johannesburg-raised Giacovazzi, who arrived in Australia armed with a degree in management after scholarship stints at the University of Sydney and the London School of Economics. He also spent a short time racing around Africa covering banking systems for a stockbroking firm while waiting for his visa.
Mincor worth $1b​“I sort of count my lucky stars because we (Giacovazzi and his wife) applied with degrees, zero work experience, zero money, nothing to take with us, and somehow we got the visa within six months,” he says. The deals have kept coming for Wyloo ever since Hartman and Giacovazzi sat down and pondered what to do with Squadron Resources, a Forrest entity that owned stakes in Poseidon Nickel, uranium play Vimy Resources, some exploration tenements and not much else.

They had made multiple investments in diversifying Tattarang but never any in mining, and everyone from Forrest down saw the potential in battery metals. That first big pitch Giacovazzi made to Forrest was not about Noront but Mincor Resources. Wyloo started investing when Mincor was a $40 million company and retains its stake now that Mincor is a $1 billion company. They saw it as a vehicle to putting the Kambalda nickel precinct – broken up by Western Mining years ago to help pay for Olympic Dam – back together again. Wyloo noted that BHP Nickel West still owned the Kambalda concentrator but Mincor had the dominant land package in the area and was doing well on the exploration front.

“It was a cheeky title [on the slide pack] now that I look back on it,” Giacovazzi says. “I gave him the story around nickel sulphide and why it’s important and how it’ll have a cost advantage over laterites. And that was a hard sell because Andrew had done Anaconda and was a big believer in laterites.”
RELATED​Forrest pumps $150m into rare earths aspirant​In a short space of time, Wyloo has done a takeover (Noront), established long-term shareholdings in companies, and inserted itself into takeover deals. In the case of rare earths play Hastings Technology Metals, Wyloo this month committed $150 million in convertible notes to allow Hastings to buy a stake in Canadian magnet maker Neo Performance Materials, “How many times have you seen private equity fund another company to buy a stake in another company because it looks interesting to put the two together?” Giacovazzi says.

“I don’t think there’s anyone else in the market that could do something like that.” Forrest says that Wyloo has put together a portfolio of exploration assets and can move quickly into production and make a major contribution to the critical minerals industry. “Luca is one of the sharpest analysts and quickest learners in the corporate sector that I have witnessed,” he says. Wyloo thrust itself into the fray when IGO sought to acquire nickel miner Western Areas in a move that also has consequences for BHP’s Nickel West growth plans.

Wyloo bought Western Areas shares on market at prices that were higher than the IGO offer price, fuelling expectations of a rival bid and forcing IGO’s decision to raise its offer by 15 per cent. It then agreed to support IGO’s takeover bid after striking a deal whereby if IGO builds a nickel sulphate plant, it would be as part of a joint venture with Wyloo.

In the past week, Wyloo put itself front and centre in another potential takeover stoush by becoming the biggest shareholder in Greatland Gold, an explorer that is being closely watched by Newcrest after discovering the Havieron gold and copper deposit in WA’s Paterson Province. The Forrest vehicle’s ambitions in rare earths stretch from mining to making permanent magnets, as shown by the Hastings deal, and in nickel sulphide in WA and Canada to making batteries.

Giacovazzi headed back to Ontario from Forrest’s Perth base while the ink was drying on the $60 million deal for 8.6 percent of London-listed Greatland. A major stumbling block to development of the Ring of Fire in the past, and one of the reasons Cliffs Natural Resources gave up ground picked up by Noront, has been the need for a 300-kilometre access road or rail link. Two First Nations groups, Marten Falls and Webequie, have emerged as road-building proponents and are supportive of mine development.

Giacovazzi says Cliffs, which pushed for a rail link after being drawn to the region by the chrome resources, made the mistake of not consulting properly with First Nations and other stakeholders. “They really didn’t have support for what they were proposing,” he says. “People forget that Cliffs had spent $300 million in the Ring of Fire and Noront spent nearly $200 million drilling and making discoveries.

“I think there are six defined ore bodies up there, of which we control five. Eagle’s Nest is the first one. It’s the most advanced of all the ore bodies and also the richest and the best. “Then there’s a tremendously big chrome opportunity. Most of the world’s chrome currently comes out of South Africa and is smelted in China.” Wyloo also sees potential for a copper-zinc mine at the Nikka deposit.

“If Nikka keeps growing, it will probably be Eagle’s Nest, Nikka and then the chrome,” says Giacovazzi. The focus right now is on the infrastructure needed to support any mines but Wyloo is already fielding inquiries from car companies trying to secure minerals.

There appears a chance Wyloo and one or more car companies could become partners in the mine development. Henry Ford tried something similar with rubber plantations as he looked to secure supply a century ago, but ultimately failed. “If a car company came to us and said we want to sign up all your off-take and here’s a pile of money, I don’t think that’s interesting to us,” says Giacovazzi. “I think it’s OK let’s put the money aside and what else could we be doing potentially together as partners, and we help you, and you help us. That’s where our conversations are kind of heading.”

*# END*

Skate.


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## Garpal Gumnut (18 September 2022)

Skate said:


> @qldfrog I'm not a subscriber either. If I want to read an article behind a paywall I copy & paste the heading into Google as it's most likely been syndicated to other sites. Below is the article in question
> 
> *# START*
> Meet the Forrest young gun who shot down BHP​Luca Giacovazzi is a rising star in the Andrew Forrest business empire and boss of Wyloo Metals which stared down BHP in the bidding war for green minerals deposits in Canada. Wyloo Metals wunderkind Luca Giacovazzi has made a lot of money for Andrew Forrest since making his first big pitch to the iron ore billionaire, and he might end up costing BHP plenty.
> ...



Great article.

gg


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## rcw1 (18 September 2022)

Garpal Gumnut said:


> Great article.
> 
> gg



Yes indeed Garpal Gumnut, 100% true that.   rcw1 been following HAS for sometime now.  $0.20 to $4.30 ... overnight.  Research aplenty with this one.  rcw1 has traded.  Not Holding.

Have a very nice Sunday.

Kind regards
rcw1


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## rcw1 (20 September 2022)

Good morning 
Published today through News Corp Media is 20/09/22:

Fortescue to decarbonise by 2030: Twiggy​




Adam Creighton
Iron ore magnate Andrew Forrest has promised to completely remove fossil fuels from Fortescue’s production by 2030, as part of a company-wide “decarbonisation strategy” to shift to 100 per cent “green iron ore”.

The Perth-based iron ore exporter, of which Mr Forrest is a one third shareholder, will spend US$6.2bn to slash its operating costs by US$818bn per year by 2030, the company said in an announcement to the stock exchange on Tuesday.

“We must accelerate our transition to the post fossil fuel era, driving global scale industrial change as climate change continues to worsen,” Fortescue executive chairman Mr Forrest, an outspoken advocate for combating climate change, said in a statement to the stock exchange.

“There’s no doubt that the energy landscape has changed dramatically over the past two years and this change has accelerated since Russia invaded Ukraine”

Mr Forrest timed the announcement with a visit to New York City, where he is participating in the United Nations General Assembly events.

Fortescue said the plan emerged at the invitation of President Joe Biden’s First Movers Coalition, which Fortescue joined as one of 25 founding (and the only Australian) members in November last year.

The plan, once fully implemented, would dispense with around 3 million tonnes of carbon dioxide emissions annually, through the displacement of around 700 million litre of diesel and 15 million GJ of gas, the company said.

“Fortescue is moving at speed to transition into a global green metals, minerals energy and technology company, capable of delivering not just green iron ore but also the minerals, knowledge and technology critical to the energy transition,” Mr Forrest said.

Mr Forrest, who has lauded Australia’s opportunity to become the “Saudi Arabia of green energy”, praised Joe Biden’s Inflation Reduction Act, which includes billions in subsidies for renewable energy developments in the US.


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## qldfrog (20 September 2022)

rcw1 said:


> Good morning
> Published today through News Corp Media is 20/09/22:
> 
> Fortescue to decarbonise by 2030: Twiggy​
> ...



As long as they find woke customers to buy their greenwash steel..it would also make sense to get the smelters as well and produce the green (issh) final product.


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## dat111 (26 September 2022)

dat111 said:


> I look at purchasing each year with the dividends that I received since the last time that I purchased.  I would figure that FSUMF will retest last year's low of $10.25 before the end of the year.   If it does not... I add the dividend money into the next year.  Investing is not a race.  I have been accumulating FMG since 2004.  The most that I paid was $41.29 which underwent a 10-1 split.  The least I have paid is $1.5.  I would expect the price this year to be less than $10.25 as the exchange rate is 9% greater.  All amounts are in US dollars.  My expectation is that FMG will trade between $15.00 - $13.50 (AUD) after dividend is paid within the next year...  So my plan is to purchase half of the dollar amount at the $15.00 (AUD)... then 25% at $14.75 (AUD) and then the balance at $13.50 (AUD)...  I might not purchase this year but the dividend money will be moved to the future so I will eventually purchase.



The exchange rate has gotten worse 1 USD  to 1.54 AUD.. I changed my plans and purchased 25% at $10.50 USD which was executed.  I have orders in for another 25% at $10.25 USD... and will purchase the remaining 50% in 25% increments at $10.00 USD and $9.75 USD....  If it goes lower...


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## divs4ever (26 September 2022)

qldfrog said:


> As long as they find woke customers to buy their greenwash steel..it would also make sense to get the smelters as well and produce the green (issh) final product.





 yep greenwash ( the new term for hogwash  ) is about right 

 brought to your  by NWS who has slaughtered billions of trees to publish the garbage they sell  ( and that is just in MY lifetime ) , presented at the UN the ever-deepening money-pit  that dreams of micro-managing the world ( through it's various appendages ) but does stuff all to reduce it's own carbon footprint  ( how is that 'world peace ' going that was your original mission )

 wait until Twiggy works out it is all  just a global tax scam ( the more money you make , the more tax you pay , to reduce the guilt of being productive )

 so how much of this 'green steel ' will be made into NATO main-battle tanks  so they can encircle the world


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## Value Collector (27 September 2022)

divs4ever said:


> yep greenwash ( the new term for hogwash  ) is about right
> 
> brought to your  by NWS who has slaughtered billions of trees to publish the garbage they sell  ( and that is just in MY lifetime ) , presented at the UN the ever-deepening money-pit  that dreams of micro-managing the world ( through it's various appendages ) but does stuff all to reduce it's own carbon footprint  ( how is that 'world peace ' going that was your original mission )
> 
> ...



It’s actually not just about the environment, the fossil fuel savings based on $1/Litre diesel are going to be about $800 Million per year.


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## divs4ever (27 September 2022)

saving fuel costs is one thing  , running around the world  spinning a sales pitch is another 

 customers want  steel/iron ore at a fair price , shareholders want a well-run business 

 if Twiggy needs to travel , India and Pakistan  would welcome a solid commodity supplier   because i see Chinese growth moderating


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## Value Collector (27 September 2022)

divs4ever said:


> saving fuel costs is one thing  , running around the world  spinning a sales pitch is another
> 
> customers want  steel/iron ore at a fair price , shareholders want a well-run business
> 
> if Twiggy needs to travel , India and Pakistan  would welcome a solid commodity supplier   because i see Chinese growth moderating



If using solar and wind power reduce our operating expenses, it’s means FMG’s cost per tonne is lower, in general the lower the average production costs are across the market the lower the commodity price will be. 

So I am sure our iron ore customers welcome anything that helps reduce the costs of producers.

As for twiggy travelling round the world, that is about locking in future projects to produce green fuels, which is a very large potential growth area for FMG.


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## divs4ever (27 September 2022)

my little adventure isn't doing so well  to save the planet  ,  they are still trying to work out how to fix the roof  after the panel replacements  and the cluster-clown show of electricians/technicians ( and other time-wasters )

 now Twiggy might be smarter at NOT put his panels on top of buildings   , but the savings aren't all they were alleged to be 

i reckon the entourage of tradies' utes and SUVs   have wasted to last 5 years worth of 'planet-saving ' .. and another array  started having issues so just sold the house ( should be a block of units soon )

 but we will see  starting to look like Europe can't afford a postage stamp let alone clean fuel


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## basilio (28 September 2022)

I was in Canada last month sorting out some family business. Then surprise, surprise I picked up a copy of the GlobeandMail and saw that Twiggy was in Maple leaf land spruiking his grand Hydrogen vision.  I found a copy of the (lengthy) article on another investment forum and attached a link. (The Globeandmail  story is behind a paywall)

It is a big and clever sell which the writer has neatly spiked.  Twiggy has sold his dream in 36 countries around the world. He is the type of successful, big business visionary which many governments would love to snare -  but he will ask a big price to play. By opening discussions with so many countries Twiggy is effectively creating a competitive bidding war for inviting FMG/FFI to establish some of its proposed massive  renewable energy/hydrogen production plants in their country

The pitch for Canada is using some of the surplus hydro power from their huge plants to create cheap hydrogen and use it for industrial plants, ammonia and green steel.   His team took the FMG ideas across the country from Prince George to Newfoundland and Labradour to the North West Territories. Each area  was  individually appraised and lobbied .

*Twiggy trick is creating  the market, the supply  and being the first huge industrial user of green hydrogen. *He is signing up customers for millions of tons of green hydrogen to be delivered by 2030. Then he turns around and creates a number of operations both locally and OS to create the green hydrogen to meet that demand. And in the middle of the process FMG itself becomes the first massive industrial enterprise to use the green hydrogen it produces to mine, transport and transform its iron ore effectively proving the commercial and environmental value of green hydrogen. Neat trick..

Another interesting observation in the article is pointing out how Twiggy is no hurry to finalise hydrogen electrolyser technologies. He seems keenly aware that radical  improvements are being made yearly in electrolysers and that innovation and a little patience will reduce costs substantially. I think in the same vein Twiggy will be looking at the latest improvements in solar and wind technologies for his operations. And in a number of cases he will have bought the companies that own the technology

IMV well worth a read as an insight into Twiggys strategies.









						THE BIG GREEN HYDROGEN GAMBIT:  | MLPs Message Board Posts
					

Message board - Online Community of active, educated investors researching and discussing  Stocks.




					www.investorvillage.com


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## InsvestoBoy (28 September 2022)

basilio said:


> The pitch for Canada is using some of the surplus hydro power from their huge plants to create cheap hydrogen and use it for industrial plants, ammonia and green steel.




After reading this article in the AFR today https://www.afr.com/companies/energ...make-the-sun-shine-after-dark-20220922-p5bk2x there must be something to this.



> But selling solar power at midday is not a lucrative game, particularly not in the Mildura region, where a plethora of renewable energy projects have overwhelmed the capacity of the transmission lines that carry power to the major cities.
> 
> That surplus of solar power has hurt the financial returns of renewable projects in the region around Mildura, which is known in the solar industry by the unflattering title “the rhombus of regret”.
> 
> An ability to store the solar power and transmit it to customers in the evenings when power prices are normally higher is fast becoming a critical requirement for those trying to commercialise solar in remote parts of Australia.




The company in the article is trying to store daytime solar for resale at more lucrative nighttime prices.

But what if you can just ignore selling it back to the grid and convert it to hydrogen and use it in industrial process? 

What was oversupplied dreck becomes valuable industrial (sovereignty, supply chain independence, etc) gold.

I had no idea that toilet paper production was so energy intensive until I heard about this German TP manufacturer eating it from high gas prices. 

Australia is a sunny country. With the right vision we could be a bastion of industrial science, have sovereign primary industry/manufacturing/energy production processes. When it comes to this topic I am full on nationalist.


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## Telamelo (28 September 2022)

There is a recent & current proposal by the Treasury and the Government to disallow franking credits associated with capital raisings by Australian companies. Worse still, they are considering making the legislation retrospective.

This means that investors will be hit by huge tax bills for capital raisings that have been carried out, in good faith, in the past. Investors in companies like BHP, CBA, WBC, FMG etc. will all be severely and negatively affected.

I therefore urge ALL investors to strongly oppose this measure, the details of which can be found in the link below. The link contains an email address which can be used to voice your concerns/disapproval
(prior to deadline 5th October 2022).

https://treasury.gov.au/consultation/c2022-314358


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## divs4ever (29 September 2022)

InsvestoBoy said:


> When it comes to this topic I am full on nationalist.



 would you like to run for Parliament  , a nationalist would be a nice change to current agendas  since Albo is a minority leader  .. a by-election could be very opportunistic


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## Belli (29 September 2022)

Telamelo said:


> There is a recent & current proposal by the Treasury and the Government to disallow franking credits associated with capital raisings by Australian companies. Worse still, they are considering making the legislation retrospective.
> 
> This means that investors will be hit by huge tax bills for capital raisings that have been carried out, in good faith, in the past. Investors in companies like BHP, CBA, WBC, FMG etc. will all be severely and negatively affected.
> 
> ...




And 



Belli said:


> Do you mean the Tax Payer Alert (TA2015/2) on the subject matter and issued by the ATO in May 2015 wasn't sufficient warning to cause companies to exercise some caution about this matter?


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## InsvestoBoy (29 September 2022)

divs4ever said:


> would you like to run for Parliament  , a nationalist would be a nice change to current agendas  since Albo is a minority leader  .. a by-election could be very opportunistic




Here's the platform divs:

Deficit spending to increase funding to industrial and medical science, industrial and medical science education
Deficit spending on infrastructure projects using Australian primary and secondary inputs
Massive deficit spending on social housing using Australian primary and secondary inputs
Stalinist purge
What do you reckon?


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## Garpal Gumnut (29 September 2022)

I see the FMG thread is still full of, if not insane rants,  then mere barking balms for getting the country back on track. 

The only way to get politicians to do anything is by bribery. 

As for FMG. Twiggy is way ahead of anyone else. A profitable miner who has conned the Greens and gets huge grants from ALP, Libs and Nats. 

Long live ole Twigs and FMG. Dig, mine iron ore and list Hydrogen FFI on the NASDAQ. 

gg


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## divs4ever (29 September 2022)

InsvestoBoy said:


> Here's the platform divs:
> 
> Deficit spending to increase funding to industrial and medical science, industrial and medical science education
> Deficit spending on infrastructure projects using Australian primary and secondary inputs
> ...



 well you shouldn't  need the Stalinist/Leninist purge  once certain agendas lose a receptive ear . you should be able to calmly let their contracts expire . 

 i have never been against government spending when the outcomes improve national productivity  ( that is REAL productivity where profits will be made and extra taxes paid in due course ) ( for instance Rudd's  tragic 'pink batts ' initiative  had some logic , but was poorly implemented  .. i think solar hot water  would have been a better choice ) the outcome more available power to the grid 

 platform  one might be unnecessary if you no longer rely on universities ( and their hidden agendas )  to conduct  research  i would suggest a more rigorous oversight of corporate R&D   but better tax breaks would yield better results ( but you have to watch out for scamsters  doing bogus research just for the tax offsets )  ALSO an intense review on the Australian Patents office might be needed  , so usable patent ideas can get to market sooner 

 now given Australia has a fairly persistent trade surplus despite limited manufacturing currently  . would extra encouragement to the  'Made in Australia ' concept work better  we have the currency flowing in  , maybe we could use it better ( instead of over-spending  on war machines and space projects  .. there is a LOT of lightly explored Australia , PLENTY of space at ground level  )

 less taxes MIGHT increase business investment  ( whether via shares and  debt notes at retail level  or more ambitious projects at corporate level )

 but overall  yes , you can always tweak it for the better once you are elected  ( the poor old public are indoctrinated  into increased deficit spending  , so you can probably get away with that )

 AND you probably have to break up the cartels ( like media and retail banks )


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## basilio (5 October 2022)

Another  investment by FFI in terms of delivering hydrogen gas across Europe. They are partnering the development  of a Hydrogen importing facility in Germany.

*FORTESCUE FUTURE INDUSTRIES AND TREE ENERGY SOLUTIONS PARTNER TO DEVELOP WORLD LEADING GREEN HYDROGEN ENERGY IMPORT FACILITY IN GERMANY*

Fortescue Metals Group Ltd (Fortescue, ASX: FMG) advises that Fortescue Future Industries (FFI) has entered a global strategic collaboration with energy infrastructure developer Tree Energy Solutions (TES) which aims to accelerate the development of a world leading green hydrogen and green energy import facility in Germany. The investment of €130 million (US$127 million) will be funded by FFI’s unutilised capital commitment and provides FFI with a pathway for access to critical infrastructure to execute its strategy.

Through the agreement, FFI subsidiary Netherlands Fortescue Future Industries Holdings B.V. will invest €30 million (US$29 million) to become a shareholder in Tree Energy Solutions B.V. as well as invest €100 million (US$98 million) in the construction of the TES terminal in Wilhelmshaven, Germany, and be a major shareholder with a 30 per cent stake in Deutsche Grüngas und Energieversorgung GmbH (a subsidiary of TES), the project company that will build the TES Green Energy Hub in Wilhelmshaven, Germany.

TES is developing a portfolio of terminals globally that will enable transportation of green energy. The first phase of this partnership is to jointly develop and invest in the supply of 300,000 tonnes of green hydrogen with final locations being currently agreed, and a financial investment decision targeted in 2023.

The first delivery of green hydrogen into TES’ terminal in Wilhelmshaven, Germany is anticipated to take place in 2026. Initial collaboration projects will be focused on Australia, Europe, the Middle East and Africa.

FFI and TES Green Hydrogen Import Facility in Germany                                (PDF 181.8 KB)


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## Garpal Gumnut (6 October 2022)

basilio said:


> Another  investment by FFI in terms of delivering hydrogen gas across Europe. They are partnering the development  of a Hydrogen importing facility in Germany.
> 
> *FORTESCUE FUTURE INDUSTRIES AND TREE ENERGY SOLUTIONS PARTNER TO DEVELOP WORLD LEADING GREEN HYDROGEN ENERGY IMPORT FACILITY IN GERMANY*
> 
> ...



It still seems like a long way to ship H2 from Gladstone. 

I’d be interested in @InvestoBoy and @divs4ever ’s take on this if they can resist going off topic and discussing cartels, GDP, their boils and piles and other stuff that litters the FMG thread. 

Other comfortably sitting ASF members are of course invited to comment on the feasibility of transporting H2 over such a long distance and how it will affect FMG and it’s divies. 

gg


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## divs4ever (6 October 2022)

i would expect logistics  will be quite a bit of change  ,    the trip up the Suez  , that H2 must be worth a lot landed in Germany   , the ship , the crew , the infrastructure to load and unload  , have to be at least as much  as the same quantity of of LNG , so how does the energy efficiency compare ( to LNG )

 in fact one might wonder if it was cheaper   to make the H2 in Germany  they have both seawater and fresh-water  to apply  the electrolysis to , maybe they should be help CCE ( Carnegie )  to commercialize that wave energy  to generate the electricity  in Germany 

 ( i hold CCE , at considerable paper  loss )


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## Value Collector (6 October 2022)

Garpal Gumnut said:


> It still seems like a long way to ship H2 from Gladstone.
> 
> I’d be interested in @InvestoBoy and @divs4ever ’s take on this if they can resist going off topic and discussing cartels, GDP, their boils and piles and other stuff that litters the FMG thread.
> 
> ...



I don’t think they are planning on transporting Hydrogen from Gladstone to Germany, where did you see them say that?

They are building a factory in Gladstone that will produce electrolisers, and these electrolisers will be used in many different locations.

So far FMG has already deals to conduct feasibility studies for projects all around the world, a few of them in Africa, which is much closer to Europe than Australia is.

But Australia is currently exporting shipment of LNG to Europe from Western Australia, if that is viable then hydrogen based fuels might be to.


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## Value Collector (6 October 2022)

Here is one example of possible african projects.

https://www.fmgl.com.au/in-the-news...of-the-republic-of-djibouti-on-green-hydrogen

You see, it’s quite centrally located between two large energy importing markets.


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## Mr Flibble (6 October 2022)

quote from the
"GREEN HYDROGEN TASK FORCE WHITE PAPER AND 10 POINT ACTION PLAN
JUNE 2022

Securing Green Hydrogen for Germany and the EU"



> Transporting sufficient green hydrogen supplies to the EU will also require significant expansion of export and import
> infrastructure, as well as ammonia and hydrogen storage facilities, both at outbound and inbound ports. While
> *relevant ports across Western Australia* and Northern Europe are planning to build up these facilities, their plans
> would need to be accelerated to ensure green hydrogen can reach Germany with no transport bottlenecks by 2024




But there's also Egypt?:








						Fortescue Future Industries studies green hydrogen opportunities in the Arab Republic of Egypt | Fortescue Future Industries
					






					ffi.com.au
				





From what I've read and listened to, shipping ammonia is fraught with problems#, and mixing hydrogen into the natural gas grid for consumer use is just plain dumb##.



Maybe it would be better to make the green steel and/or fertiiser where the renewable (or nuclear?) electricity production is and ship that instead of ammonia?


# eg https://www.rechargenews.com/energy...derived-ammonia-around-the-world-/2-1-1267513

## eg 


I hold a fair whack (by my standards) of FMG, and wish Twiggy's endeavours well, but have a few concerns about the hydrogen hype...


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## Value Collector (6 October 2022)

Mr Flibble said:


> quote from the
> "GREEN HYDROGEN TASK FORCE WHITE PAPER AND 10 POINT ACTION PLAN
> JUNE 2022
> 
> ...




Yep, FMG is planning to make a lot of hydrogen in WA, because that is where their Iron Mining and shipping operations are, and they are planning on converting those operations to 100% renewable electricity,  battery and hydrogen fuels over the next 10 years or so.

So I imagine once they are producing more hydrogen than they can consume in their operations they will be exporting from WA, so early shipments to Europe could be sourced from WA.

However, the Natural home for WA produced Hydrogen fuel exports would be Asia, that’s even more true for any production that comes out of Gladstone. So as FMG’s African projects come online, obviously fuel for Europe would be shipped from there.

————————
In relation to your other comments,

FMG is actually planning on making Ammonia fuel, which can replace diesel/bunker oil as a fuel for ships so it’s not just straight hydrogen they are looking to exports.

Also, I am not sure if you have noticed but there is an energy crisis in Europe, I am not sure they have large amounts of renewable or nuclear electricity that could be diverted to producing green hydrogen, any extra renewable electricity they produce will be needed to be used as electricity as they wind down fossil fuels over the next 10 years and ween themselves off Russian gas.


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## Mr Flibble (6 October 2022)

Value Collector said:


> FMG is actually planning on making Ammonia fuel, which can replace diesel/bunker oil as a fuel for ships so it’s not just straight hydrogen they are looking to exports.






Mr Flibble said:


> # eg https://www.rechargenews.com/energy...derived-ammonia-around-the-world-/2-1-1267513


----------



## Value Collector (6 October 2022)

Yes, Ammonia is toxic and flammable, but so is the exisiting fuels used to power ships, and yes if we were exporting large quantities of ammonia there would be a risk of a spill, but we already accept similar risks with the Oil and gas we transport.

But also I don’t think FMG have settled on an exact method of transporting bulk hydrogen yet. Ammonia is one idea that is being floated around, but I don’t think it’s settled yet. (They will be using it as a shipping fuel though.


----------



## Mr Flibble (6 October 2022)

Value Collector said:


> Yes, Ammonia is toxic and flammable, but so is the exisiting fuels used to power ships, and yes if we were exporting large quantities of ammonia there would be a risk of a spill, but we already accept similar risks with the Oil and gas we transport.
> 
> But also I don’t think FMG have settled on an exact method of transporting bulk hydrogen yet. Ammonia is one idea that is being floated around, but I don’t think it’s settled yet. (They will be using it as a shipping fuel though.




Did you read the article?

Oil floats. Ammonia "attaches itself to moisture"

If someone (FFI?) can come up with an economical way of making methane from renewables, that would be the dog's bollocks.


----------



## Value Collector (6 October 2022)

Mr Flibble said:


> Did you read the article?
> 
> Oil floats. Ammonia "attaches itself to moisture"
> 
> If someone (FFI?) can come up with an economical way of making methane from renewables, that would be the dog's bollocks.



Yeah I read the article, 

oil floats and creates massive slicks that spread across the surface where as Ammonia dilutes into the water, both cause damage and both have pros and cons.

———————

I think in the future hydrogen will be used as the feedstock for refineries that churn out all sorts of hydrocarbons, synthetically produced methane and jet fuel could be possible.


----------



## Garpal Gumnut (7 October 2022)

So the consensus which I share is that manufacturing H2 for transport from Australia to Europe in bulk by FMG is a “bridge too far”. 

However for use by FMG’s iron ore outfit in WA, export to Asia and use of technology “on site” in Europe and North America, it is a goer. 

gg


----------



## Value Collector (7 October 2022)

Garpal Gumnut said:


> So the consensus which I share is that manufacturing H2 for transport from Australia to Europe in bulk by FMG is a “bridge too far”.
> 
> However for use by FMG’s iron ore outfit in WA, export to Asia and use of technology “on site” in Europe and North America, it is a goer.
> 
> gg



It depends on price, at the moment they are profitably exporting LNG to Europe from Western Australia, so at times it might make sense.


----------



## SirRumpole (7 October 2022)

basilio said:


> I was in Canada last month sorting out some family business. Then surprise, surprise I picked up a copy of the GlobeandMail and saw that Twiggy was in Maple leaf land spruiking his grand Hydrogen vision.  I found a copy of the (lengthy) article on another investment forum and attached a link. (The Globeandmail  story is behind a paywall)
> 
> It is a big and clever sell which the writer has neatly spiked.  Twiggy has sold his dream in 36 countries around the world. He is the type of successful, big business visionary which many governments would love to snare -  but he will ask a big price to play. By opening discussions with so many countries Twiggy is effectively creating a competitive bidding war for inviting FMG/FFI to establish some of its proposed massive  renewable energy/hydrogen production plants in their country
> 
> ...




Learnt a bit from Bill Gates didn't he ?


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## Mr Flibble (7 October 2022)

Value Collector said:


> Yeah I read the article,
> 
> oil floats and creates massive slicks that spread across the surface where as Ammonia dilutes into the water, both cause damage and both have pros and cons.




So imagine how much more damage oil would do if it wasn't possible to lay down booms to contain some (most?) of it. This is ammonia.


----------



## Value Collector (7 October 2022)

Mr Flibble said:


> So imagine how much more damage oil would do if it wasn't possible to lay down booms to contain some (most?) of it. This is ammonia.



It’s not as big a deal as you are making out, the relatively small amounts of shipping fuel inside ships wouldn’t cause to much damage on the rare occasion they leaked, the ammonia would dilute down to near background levels and then break down naturally. 

In the case of a tanker spill, That can be mitigated by using modern compartmentalised carriers.

You also have the added benefit over Oil in that a large amount of oil spills come from actually drilling oil in the ocean, but we won’t be drilling for ammonia in the ocean.


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## Garpal Gumnut (7 October 2022)

Mr Flibble said:


> So imagine how much more damage oil would do if it wasn't possible to lay down booms to contain some (most?) of it. This is ammonia.





Value Collector said:


> It’s not as big a deal as you are making out, the relatively small amounts of shipping fuel inside ships wouldn’t cause to much damage on the rare occasion they leaked, the ammonia would dilute down to near background levels and then break down naturally.
> 
> In the case of a tanker spill, That can be mitigated by using modern compartmentalised carriers.
> 
> You also have the added benefit over Oil in that a large amount of oil spills come from actually drilling oil in the ocean, but we won’t be drilling for ammonia in the ocean.



From my knowledge of alcohol people full of the perceived benefits of it don’t worry none too much about spilling it unless there are consequences. 

Perhaps close monitoring of ammonia transport may already be in place. 

gg


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## divs4ever (7 October 2022)

Value Collector said:


> lationYep, FMG is planning to make a lot of hydrogen in WA, because that is where their Iron Mining and shipping operations are, and they are planning on converting those operations to 100% renewable electricity,  battery and hydrogen fuels over the next 10 years or so.
> 
> So I imagine once they are producing more hydrogen than they can consume in their operations they will be exporting from WA, so early shipments to Europe could be sourced from WA.
> 
> ...



 nope, there is no 'energy crisis ' in Europe  it is the consequence of a string of flawed policy decisions , that included taking existing nuclear reactors off-line prematurely  , and  the prince/princess syndrome where some expect their desires to be fulfilled instantly  , the Russian reaction  ( not giving Europe gas for free , while declaring they no longer intended buying Russian energy ) has been very mild and measured to date ( they could still cut the remaining part of the pipeline through Ukraine if they wished )

 the fact that Europe now has issues , is a result of the politicians the citizens have allegedly elected  , the citizens can either accept this outcome or start removing incumbent governments ( as is starting to happen )

 BTW it is NOT just Russian gas it is Russian oil and coal  , and Russia  should now only export uranium  and wheat and diamonds and nickel  to 'friendly nations ' ( which includes over half the world's population )

Europe wants to live in  a 'green paradise ' Russia should help accelerate their wishes   ( while making strong friendships elsewhere )


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## Value Collector (7 October 2022)

divs4ever said:


> nope, there is no 'energy crisis ' in Europe  it is the consequence of a string of flawed policy decisions , that included taking existing nuclear reactors off-line prematurely  , and  the prince/princess syndrome where some expect their desires to be fulfilled instantly  , the Russian reaction  ( not giving Europe gas for free , while declaring they no longer intended buying Russian energy ) has been very mild and measured to date ( they could still cut the remaining part of the pipeline through Ukraine if they wished )
> 
> the fact that Europe now has issues , is a result of the politicians the citizens have allegedly elected  , the citizens can either accept this outcome or start removing incumbent governments ( as is starting to happen )
> 
> ...



Yeah, but just because it’s a man made / political problem definitely doesn’t mean it’s not a crisis.

My point is simply that Europe doesn’t have enough renewable electricity capacity to divert large amounts of electricity to producing liquid fuels or offsetting natural gas consumption.

Wholesale electricity prices are already sky high in Europe, and will be for a while until the fix the gas supply issue, sending tankers of hydrogen based fuel there might be a way to arbitrage the low costs of generating renewable solar and wind over seas into the European market.


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## divs4ever (7 October 2022)

it is made-made , and man can work towards a remedy ( currently )

 Europe is NOT Africa , it has had the opportunity to well educate their population  , and thus plot  a successful course towards their goals  , the fact that course has hit major hurdles  were easily foreseeable  Europe HAD a large number of nuclear power plants to ease the transition  but CHOSE to close some of them first and still continue to take them odd-line ( or keep them as 'hot back-ups ' )

 ALSO Europe has had plenty of time to have 'renewable energy ' set up to supply at least half in their energy needs  Europe has had  windmills for CENTURIES  they have had adequate time to perfect the technology ( and ditto for water/gravity power )

 .. but what was their solution ??  ... carbon credits


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## divs4ever (7 October 2022)

PS the original diesel engines were designed to operate on vegetable oils  to change to petroleum products was a CHOICE


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## Value Collector (7 October 2022)

divs4ever said:


> PS the original diesel engines were designed to operate on vegetable oils  to change to petroleum products was a CHOICE



Yeah, they can run on soybean oil, but I am not sure how much of the worlds farmland it would be wise to dedicate to producing fuel rather than food.

Also, an acre of solar panels will produce more energy than you would collect from an acre of vegetable oil crops, and it’s less fickle than growing crops, not to mention you can put the solar panels in the desert.

—————
As for europes man made problems, sure they could end next week, but I think Putin is a tough man to deal with at the moment, and even if he comes back in a month with a smile on his face asking to be forgiven, I think the EU still wants more supply from others.


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## divs4ever (7 October 2022)

Value Collector said:


> Yeah, they can run on soybean oil, but I am not sure how much of the worlds farmland it would be wise to dedicate to producing fuel rather than food.
> 
> Also, an acre of solar panels will produce more energy than you would collect from an acre of vegetable oil crops, and it’s less fickle than growing crops, not to mention you can put the solar panels in the desert.
> 
> ...



not just soy , from memory Bougainville got by nicely using coconut oil  back when PNG was sanctioning it  

 Putin would not be as harsh as me  to deal with ( and i am only a former paper-boy and VERY small business person ) i would  be inclined to weld the door shut  and chop the phone lines  , MAYBE Trump could unfreeze the ice in the Russian heart  but i  doubt many other ( potential ) NATO leaders  would even get a moments attention  , let alone any pity 

 Europe burnt their bridges with me over Cyprus 

 now solar panels ( in the past i had three arrays , the max  allowed on residential properties in QLD ) keeping those solar systems functional  for more than 5 years has been an eye-opener  and i haven't even tested out the battery durability yet  ( and QLD has pretty good weather for solar , might be a bit harsh on the batteries , though 45C gets tested now and then )

 i am thinking Europe's hope  vanished with Nord Stream and Putin is just trolling to inspire extra unrest 

 and more importantly China is cooling towards the West , that also will have repercussions


----------



## Mr Flibble (7 October 2022)

Value Collector said:


> It’s not as big a deal as you are making out, the relatively small amounts of shipping fuel inside ships wouldn’t cause to much damage on the rare occasion they leaked, the ammonia would dilute down to near background levels and then break down naturally.
> 
> In the case of a tanker spill, That can be mitigated by using modern compartmentalised carriers.
> 
> You also have the added benefit over Oil in that a large amount of oil spills come from actually drilling oil in the ocean, but we won’t be drilling for ammonia in the ocean.




My other concerns I guess I should have mentioned earlier are: 
Burning hydrogen creates NOx gasses with potential for greenhouse effect#, but these emissions can possibly be reduced with catalytic convertors and/or advanced engine design

Desalinisation prior to electrolysis - There is the question of what happens to the brine. Unless carefully managed, it can do a lot of damage to the local coastal environment, it sinks to the bottom and tends to stay there unless there are sufficient currents to move it along. I would hope that since Twiggy has a marine biology degree, he would be aware of this though...

# eg  https://link.springer.com/article/10.1007/BF02987512


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## Value Collector (7 October 2022)

Mr Flibble said:


> My other concerns I guess I should have mentioned earlier are:
> Burning hydrogen creates NOx gasses with potential for greenhouse effect#, but these emissions can possibly be reduced with catalytic convertors and/or advanced engine design
> 
> Desalinisation prior to electrolysis - There is the question of what happens to the brine. Unless carefully managed, it can do a lot of damage to the local coastal environment, it sinks to the bottom and tends to stay there unless there are sufficient currents to move it along. I would hope that since Twiggy has a marine biology degree, he would be aware of this though...
> ...



Yep, but remember alternative energy sources don’t have to be perfect, they just have to be better than their predecessors. There is not much point sticking to something that is dreadful when decent alternatives exist just because the decent alternative isn’t perfect.

Also burning the bunker oil in ships also producers loads of NOx gases, and these do have rather short lives in the atmosphere compared to the Carbon that is also produced.

So if option 1 releases carbon and NOx, and option two only releases NOx then option 2 is better, especially when as you pointed out the Tech already exists to reduce it.


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## Value Collector (7 October 2022)

divs4ever said:


> not just soy , from memory Bougainville got by nicely using coconut oil  back when PNG was sanctioning it
> 
> Putin would not be as harsh as me  to deal with ( and i am only a former paper-boy and VERY small business person ) i would  be inclined to weld the door shut  and chop the phone lines  , MAYBE Trump could unfreeze the ice in the Russian heart  but i  doubt many other ( potential ) NATO leaders  would even get a moments attention  , let alone any pity
> 
> ...



It doesn’t matter which vege oil you use, it still requires farmland, water and fertilisers, all of which are better used to produce food or just leave as natural forest.

If you think keeping solar panels producing is hard, I take it you have never been a farmer producing vegetable oil.


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## divs4ever (7 October 2022)

oh yes  , i did but only as an employee of a farmer  but that was only  proof of concept growing out-of-season tomatoes  ( the 'farmer' was also a chemical engineer )

 and ideally the vegetable oil should be a by-product of the major crop  ,  but that is another debate 

 BTW i didn't MAKE the solar panels  , but now have a wonderful collection of dud ones ( suitable for scrapping when prices climb higher )

the aluminum alone will be a nice  nest egg when needed


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## Country Lad (7 October 2022)

@Joe Blow, I vote we have 2 FMG threads, one for iron ore only and the other one for any wild and irrelevant topic you like.  I have FMG but I am about to put this one on ignore.


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## Value Collector (7 October 2022)

Country Lad said:


> @Joe Blow, I vote we have 2 FMG threads, one for iron ore only and the other one for any wild and irrelevant topic you like.  I have FMG but I am about to put this one on ignore.



This is the FMG thread, not the Iron Ore thread.

Discussing things that relate to FMG’s energy business is on topic in my opinion.


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## frugal.rock (7 October 2022)

Country Lad said:


> @Joe Blow, I vote we have 2 FMG threads, one for iron ore only and the other one for any wild and irrelevant topic you like.  I have FMG but I am about to put this one on ignore.



I arrived at your post, then realised that I have just wasted 10 minutes of oxygen in this crook. 💩


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## Country Lad (7 October 2022)

Value Collector said:


> This is the FMG thread, not the Iron Ore thread.
> 
> Discussing things that relate to FMG’s energy business is on topic in my opinion.



The last dozen or so posts had nothing to do with FMG. Now, let's see, how do I put this one on ignore.


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## Value Collector (7 October 2022)

Country Lad said:


> The last dozen or so posts had nothing to do with FMG. Now, let's see, how do I put this one on ignore.



We were discussing Ammonia based fuels, and renewable energy as they relate to the viability of FMGs proposed new business, that is directly related to FMG’s energy business.

But I will make it easy for you, I will put you on ignore then you won’t be bothered by my comments.


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## Joe Blow (7 October 2022)

Country Lad said:


> @Joe Blow, I vote we have 2 FMG threads, one for iron ore only and the other one for any wild and irrelevant topic you like.  I have FMG but I am about to put this one on ignore.




This is a difficult dispute to mediate. FMG is a large business and Value Collector has claimed that the discussion of ammonia based fuels was relevant to FMG's proposed new energy business. To complicate (or perhaps simplify) matters, Value Collector has now put you on ignore which means that you should not be able to see any of his posts. I am assuming that much of the discussion that irritated you is now not visible to you... which makes it difficult to know how to proceed.


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## Country Lad (7 October 2022)

Joe Blow said:


> This is a difficult dispute to mediate. FMG is a large business and Value Collector has claimed that the discussion of ammonia based fuels was relevant to FMG's proposed new energy business. To complicate (or perhaps simplify) matters, Value Collector has now put you on ignore which means that you should not be able to see any of his posts. I am assuming that much of the discussion that irritated you is now not visible to you... which makes it difficult to know how to proceed.



Not to worry @Joe Blow, I will put this thread on ignore.


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## eskys (7 October 2022)

Don't be upset, Value Collector. To understand what the discussion was all about, we need an expandable mind and some lateral thinking which is not always easy. That's why we have so much conflict about different subjects......we just cannot see where others are coming from sometimes......my two bobs worth and putting my foot in it....have a great weekend


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## basilio (7 October 2022)

I'm surprised and a bit dismayed that some posters see FMG as a solely iron ore company. That is simply not the case.

It's current and continuing operation is digging and selling iron ore.  Two years ago however FMG announced they were developing a wide ranging  clean/renewable  energy operation to
1) Totally remove fossil fuel usage from their operation
2) Create the capacity for other heavy industry operations to go carbon neutral.
3) Completely change the business paradigm renewable energy operations

To that end they established a whole owned subsidiary FFI  and have funded it with 10% of FMG.s profits to achieve these goals.
Since then they have pursued scores of joint ventures, takeovers and internal operations to that end. 

The conversations about hydrogen networks, ammonia plants and so on are on topic. If you check out FMG's official information page these are the  major news items posted.

That doesn't mean of course that the mining, exploration and sale of iron ore isn't critical. But the new additional direction is intended to be as financially important as iron ore production within this decade.






						Latest News | Fortescue Metals Group Ltd
					






					www.fmgl.com.au


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## divs4ever (7 October 2022)

basilio said:


> I'm surprised and a bit dismayed that some posters see FMG as a solely iron ore company. That is simply not the case.
> 
> It's current and continuing operation is digging and selling iron ore.  Two years ago however FMG announced they were developing a wide ranging  clean/renewable  energy operation to
> 1) Totally remove fossil fuel usage from their operation
> ...



 i would have preferred FMG to stay an iron ore miner , but management ( and a major share-holder ) has decided to diversify/expand 

 my task as a minor share-holder is decide  whether to  stay ( or even add  extra ) or reduce when in profit ( or even exit )

i have been in other companies  where management has lost focus  whilst pursuing new projects ( HVN and WOW as examples )

 i ALSO note the climate agenda folks are also targeting nitrogen emissions  , does that mean FMG has to cull the cattle in uses to re-mediate the leases ( in the near future )


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## Gunnerguy (7 October 2022)

This is an FMG thread.
Whatever FMG do as a business should reside here.
Macroeconomic affects to a varying degree I believe are also relevant to this thread.
FFI info should be here. No discussion, it affects us as shareholders and is part of FMG.
Let’s stop this ‘it’s my ball and I don’t like it so I am taking it away’ attitude. ‘Oh I’m going to ignore this thread’
Let’s stop this schoolground attitude. We’re adults and should behave as such.
I’ve said it before, and I fear it will be said again play nicely guys. We all here to throw our 2 cents worth in that is relevant to the thread.
Gunnerguy
😞😞


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## Sean K (12 October 2022)

Interesting read in the Fin, if you can access it. Summary is that we should be prioritising electrification and hydrogen isn't going to be viable for some time.


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## divs4ever (12 October 2022)

actually i saw a snippet from another company ( BPT ) about blending H2  in a natural gas product  , now my reaction was some very elevated eyebrows 

 i guess time will tell , but my investments into other 'clean' technologies  have either failed absolutely  or turned to crap ( like CCE as an example )

 i hold FMG buy remain sceptical  on this adventure


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## Mr Flibble (12 October 2022)

If you've got a spare hour, the vid I posted here explains the good, bad and ugly of hydrogen in great depth.

I've come to the view that electricfying the fleet of trucks etc still makes sense economically but use batteries not hydrogen.

Although I do wonder if long term FMG could get into making green steel at the source and selling that for a premium instead of ore?


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## divs4ever (12 October 2022)

Mr Flibble said:


> If you've got a spare hour, the vid I posted here explains the good, bad and ugly of hydrogen in great depth.
> 
> I've come to the view that electricfying the fleet of trucks etc still makes sense economically but use batteries not hydrogen.
> 
> Although I do wonder if long term FMG could get into making green steel at the source and selling that for a premium instead of ore?



 given WA's location  that would make more sense to me    than some other stuff i am seeing  , especially if FMG  used other nearby minerals to make various specialty steels ( like Indonesia is doing  )


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## Value Collector (12 October 2022)

Sean K said:


> Interesting read in the Fin, if you can access it. Summary is that we should be prioritising electrification and hydrogen isn't going to be viable for some time.
> 
> View attachment 147943




I am reading that Saul Guys book now, and his Ideas fit with Andrew’s, I don’t think he has actually taken a good look at exactly what Forrest has planned.

Andrew Forrest actually agrees that electrification is the main energy solution, and the hydrogen is only going to be used for the parts that are very difficult to electrify.

For example it’s easy to electrify a car and a truck, but difficult to electrify a ship (unless it’s nuclear powered).

The great thing with Fortescue’s plan to generate green hydrogen is that it will be utilising renewable electricity, So the first step is to build out a bunch of wind and solar infrastructure.

This wind and solar infrastructure can be used to provide electricity for everything that can be electrified and charge batteries, and then during peak production times the excess can be used to make hydrogen for those hard to electricfy areas.


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## basilio (15 October 2022)

The technology that was developed by the University of Adelaide to split hydrogen just using a photocatalyst and solar radiation attracted the attention of FMG.  *In February 2022 FFI and Sparc announced a joint development program to fast track the research and potential commercial production of this  radical approach o hydrogen generation.*

It seems the initial research has been very promising and they are now fast tracking development of a pilot plant to test and improve the various elements of the process. With Twiggy cracking the whip this project will not  die wondering.

*Sparc Hydrogen Completes Preliminary Techno-Economic Analysis and Accelerates Pilot Plant*

HIGHLIGHTS
• Preliminary Techno-Economic Analysis completed for Sparc Hydrogen’s photocatalytic water splitting technology

• Study confirms the commercial potential for the Sparc Green Hydrogen process

• Based on the positive outcomes of the study, the Sparc Hydrogen joint venture partners have agreed to accelerate the project schedule and immediately commence scoping work on a pilot plant

Sparc Technologies Limited (ASX: SPN) (Sparc, Sparc Technologies or the Company) is pleased to report on the completion of a preliminary Techno-Economic Analysis (TEA) by Sparc Hydrogen Pty Ltd (Sparc Hydrogen).

Sparc Hydrogen, a joint venture between Sparc Technologies, Fortescue Future Industries (FFI) and the University of Adelaide, is seeking to commercialise patent-pending photocatalytic water splitting technology with the aim of producing low-cost green hydrogen on a commercial scale (the Sparc Green Hydrogen process). The preliminary TEA has been delivered through a collaborative effort from the joint venture partners, led by the University of Adelaide, and supported by independent engineering consultant, ITP Thermal (ITP). The completion of this collaborative effort is a significant milestone for Sparc Hydrogen and on the back of the positive outcomes, the joint venture partners have agreed to accelerate scoping activities for a pilot plant ahead of the original project schedule.

*Commenting on the milestone, Sparc Technologies Executive Chairman, Stephen Hunt, said:
“Today marks a significant milestone for Sparc Technologies and the Sparc Hydrogen JV, with the preliminary TEA confirming the low-cost potential of this green hydrogen technology. The decision to accelerate a pilot plant is evidence of the JV partner’s enthusiasm and is an important step on the path to commercialisation.”*

Fortescue Future Industries CEO, Mark Hutchinson, added:
“Fortescue is building a world-wide tech network to encourage scientists and engineers from across the globe to advance research and development in technologies. Our goal is to develop green hydrogen and renewable energy innovations and technology, with a specific focus on decarbonising hard-to-abate industries that can be commercialised fast. The result of the preliminary TEA is welcome news.”



			https://www.investi.com.au/api/announcements/spn/69073129-b4e.pdf
		






						Fortescue Future Industries and Sparc Hydrogen accelerate development of next-generation green hydrogen technology | Fortescue Metals Group Ltd
					






					www.fmgl.com.au


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## basilio (15 October 2022)

For those interested FMG pulls together all its developments of renewable energy projects and how they interact with their current operations  on one page.






						Climate Change and Energy | Fortescue Metals Group Ltd
					






					www.fmgl.com.au


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## basilio (17 October 2022)

FMG  SP falling  (like other resource stocks). General stock market concern, couples with fears of a recession and falling iron ore prices.

Worth noting however that as the Oz dollar falls against the US dollar the final value of iron ore sales rises . The dollar is currently 62c.  FMG based their financial predictions on a 73 c dollar.  Big difference in final figures.

If  (if...) sales stay steady and iron ore price stays over $90US  a ton it is the equivalent of around $105-110US  a tonne last October (73-75c)


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## divs4ever (17 October 2022)

basilio said:


> FMG  SP falling  (like other resource stocks). General stock market concern, couples with fears of a recession and falling iron ore prices.
> 
> Worth noting however that as the Oz dollar falls against the US dollar the final value of iron ore sales rises . The dollar is currently 62c.  FMG based their financial predictions on a 73 c dollar.  Big difference in final figures.
> 
> If  (if...) sales stay steady and iron ore price stays over $90US  a ton it is the equivalent of around $105-110US  a tonne last October (73-75c)



 the devil in all these calculations  , is how much plant ( and parts ) do they need to buy in $US  , Korea and Japan  make some usable stuff  and maybe can be bought in local currency ( theirs or ours )


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## basilio (27 October 2022)

22/23 Quarterly production figures out.  Record sales for first quarter production.  Drop in iron ore prices .  Strong focus on FFI progress as well as upcoming commissioning of Iron Bridge project in March 23. 

Making $70 US a ton after costs.  So $3B US for the first quarter.
*
Record first quarter operating performance in strong start to FY23*

Quarterly summary
• Total Recordable Injury Frequency Rate (TRIFR) improved to 1.7 at 30 September 2022, 15 per cent lower than 2.0 at 30 September 2021

• Updated industry leading decarbonisation roadmap, with US$6.2 billion capital investment planned by 2030 to eliminate fossil fuel risks, saving an estimated US$3 billion by 2030 and rising to annual savings of US$818 million once fully implemented

• Iron ore shipments of 47.5 million tonnes (mt) in Q1 FY23 were four per cent higher than the prior comparable period and a record for a first quarter

• Average revenue of US$87/dry metric tonne (dmt) for the quarter, realising 85 per cent of the average Platts 62% CFR Index

• C1 cost of US$17.69/wet metric tonne (wmt), three per cent higher than the previous quarter with a focus on mitigating industry wide cost pressures, including fuel costs

• Cash of US$3.3 billion (net debt of US$2.8 billion) at 30 September 2022 after payment of the FY22 final dividend of US$2.4 billion and capital expenditure of US$653 million in the quarter

• Fortescue Future Industries (FFI) entered a collaboration with Tree Energy Solutions which aims to accelerate development of a green hydrogen and green energy import facility in Germany

• FFI and Incitec Pivot Limited (IPL) progressed planning for the conversion of IPL’s Gibson Island ammonia facility to run on green hydrogen, commencing Front End Engineering Design

• FFI established a U.S. Technology Hub and announced partnership with the U.S. Department of Energy’s National Renewable Energy Laboratory
• Guidance for FY23 shipments, C1 cost and capital expenditure remains unchanged
.



September 2022 Quarterly Production Report                                (PDF 329.6 KB)


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## Value Collector (27 October 2022)

basilio said:


> 22/23 Quarterly production figures out.  Record sales for first quarter production.  Drop in iron ore prices .  Strong focus on FFI progress as well as upcoming commissioning of Iron Bridge project in March 23.
> 
> Making $70 US a ton after costs.  So $3B US for the first quarter.
> 
> ...



One point in the report that is often over looked by the average punter is the realisation rate.

FMG sells ore to at is below the 62% bench mark, so the price their Ore sells at is discounted.

A year ago they were receiving less than 70% of the bench mark price close to a 35% discount. Last quarter it narrowed to 22% discount and this quarter it was 15%.

A narrowing discount is good news for FMG, as it offsets some of the price decline in the Bench mark price (bench mark price is still very good though)


----------



## basilio (28 October 2022)

Anyone feeling courageous ? Or seeing a bargain ?

*FMG currently at $14.88.*  I reckon it has hit a number of stop loss points and automatic selling has accelerated todays fall.


----------



## eskys (28 October 2022)

I'm like a stunned mullet, basilio


----------



## waterbottle (28 October 2022)

basilio said:


> Anyone feeling courageous ? Or seeing a bargain ?
> 
> *FMG currently at $14.88.*  I reckon it has hit a number of stop loss points and automatic selling has accelerated todays fall.



Well why is FMG's price getting slammed? Iron ore prices are fast approaching late 2021 support levels, and this time there is a risk of a global recession.


----------



## Garpal Gumnut (28 October 2022)

basilio said:


> Anyone feeling courageous ? Or seeing a bargain ?
> 
> *FMG currently at $14.88.*  I reckon it has hit a number of stop loss points and automatic selling has accelerated todays fall.



Absence of evidence is not evidence of absence for a good reason causing the fall in FMG’s price. 

I’ll keep my gumnuts safely stored and see what happens at this point in time. 

gg


----------



## againsthegrain (28 October 2022)

I didn't win the power ball unfortunately but ill put in a order for 13 on Wednesday,  the odds are still better then power ball


----------



## divs4ever (28 October 2022)

waterbottle said:


> Well why is FMG's price getting slammed? Iron ore prices are fast approaching late 2021 support levels, and this time there is a risk of a global recession.



 was heavily distracted today ( so still haven't really checked out the market   only to see if any confirmation notes  arrived )

 so thanks 

 a $14  handle  is  mildly attractive to me

 will probably crunch  some numbers for Monday   and see if i can nibble a few extra ( am definitely NOT backing up the truck  or even bringing a suitcase  )

 will also work out a sub $13 target price  for a second nibble


----------



## dat111 (28 October 2022)

dat111 said:


> The exchange rate has gotten worse 1 USD  to 1.54 AUD.. I changed my plans and purchased 25% at $10.50 USD which was executed.  I have orders in for another 25% at $10.25 USD... and will purchase the remaining 50% in 25% increments at $10.00 USD and $9.75 USD....  If it goes lower...



After today's change I have changed my plans.  As I said, I made my first purchase at $10.50 USD with 25% of my planned spend.  I have cancelled my second order of 25% at $10.25 USD and have replaced with $9.50 USD.  I will see what happens over the next few months prior to purchasing my 3rd and 4th quarter.


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## InsvestoBoy (28 October 2022)

againsthegrain said:


> I didn't win the power ball unfortunately but ill put in a order for 13 on Wednesday,  the odds are still better then power ball




I always wonder why people willing to enter low ball bids in a near timeframe don't sell the put.

If one likes it at $13 and are willing to own 100 shares or more, it'd be optimal to sell a $13 put at a near term expiry.

If it trades there one gets it at a bit less than $13, if it doesn't one gets to keep the premium.


----------



## againsthegrain (29 October 2022)

InsvestoBoy said:


> I always wonder why people willing to enter low ball bids in a near timeframe don't sell the put.
> 
> If one likes it at $13 and are willing to own 100 shares or more, it'd be optimal to sell a $13 put at a near term expiry.
> 
> If it trades there one gets it at a bit less than $13, if it doesn't one gets to keep the premium.



This is a good idea,  I never have done puts before.  I'll have to do some research. Thanx


----------



## Value Collector (29 October 2022)

Value Collector said:


> One point in the report that is often over looked by the average punter is the realisation rate.
> 
> FMG sells ore to at is below the 62% bench mark, so the price their Ore sells at is discounted.
> 
> ...



The discount narrowed again yesterday, with the fall in Iron Ore Price being mainly in the higher grades and not FMG’s 58%.








Also, I noted that the fall was mainly in port stocks which and not seaborne, which kind of makes me think it was traders dumping their holdings more so that actual steel mill trade.


----------



## divs4ever (29 October 2022)

Value Collector said:


> The discount narrowed again yesterday, with the fall in Iron Ore Price being mainly in the higher grades and not FMG’s 58%.
> 
> View attachment 148574
> 
> ...



i did see something about China and more lock-downs  ( implying less manufacturing  in China )

 maybe time  will tell us the real impact  , China seems to have a policy of accumulating stockpiles ( to reduce potential disruptions )


----------



## dat111 (29 October 2022)

Fortescue provide the following on the September 2022 Quarterly Production Report:
-    Updated industry leading decarbonisation roadmap, with US$6.2 billion capital investment planned by 2030 to eliminate fossil fuel risks,          saving an estimated US$3 billion by 2030 and rising to annual savings of US$818 million once fully implemented 

Does anyone know how much of the US$3 billion by 2030 and $818M/year there after is attributed to governement give backs?


----------



## Value Collector (29 October 2022)

dat111 said:


> Does anyone know how much of the US$3 billion by 2030 and $818M/year there after is attributed to governement give backs?




In a prior report the $800 Million per year in savings was just from savings in Diesel and Natural gas they won’t be purchasing.


----------



## rcw1 (29 October 2022)

Good afternoon
Published Financial Review 27/10/22, Journo Peter Ker.   

Fortescue’s flagship iron ore division has started the new financial year with strong export volumes but has suffered a 16 per cent surge in unit costs over the past year.

The inflationary pressures come despite relief from a lower Australian dollar, which has reduced the US dollar denominated cost of Australian wages by more than 10 per cent over the past year.

But the tight labour market and rising fuel costs more than offset the currency tailwinds, meaning Fortescue is now caught between rising costs and falling iron ore prices.

Benchmark ore with 62 per cent iron was fetching $US87.80 a tonne on October 27, well below the $US119.65 a tonne recorded by Platts for October 27 last year.
Macquarie analysts said continued lockdowns in China to curb the spread of the COVID-19 pandemic were dampening demand for iron ore while a recovery in sales in the Chinese property sector had also stalled in recent weeks.
Fortescue shipped 47.5 million tonnes of iron ore from Western Australia over the past three months – the highest volumes ever achieved by the company in the three months to September 30.   UBS had expected Fortescue to ship 47 million tonnes in the period.Fortescue has told investors to expect between 187 million and 192 million tonnes of iron ore to be shipped from Western Australia in the year to June 2023.  Fortescue said in August that 1 million tonnes of those exports would come from the Iron Bridge magnetite project.
Iron Bridge harvests low-grade iron deposits and uses an energy-intensive process to turn the ore into a concentrate with 67 per cent iron, under a business model that has higher costs than traditional iron ore mining but should also receive higher prices to reflect the higher iron grades.  Fortescue said in July that Iron Bridge would cost between $US3.6 billion and $US3.8 billion to construct and would deliver its first iron ore before March 31, 2023.
Those cost and schedule estimates were reaffirmed on Thursday.
Those cost and schedule estimates have blown out since the project was approved in April 2019, when Fortescue said it would cost $US2.9 billion and deliver first ore before June 2022.
The original plan had Iron Bridge ramping up to full production by June 2023.


----------



## Telamelo (30 October 2022)

Concern that Iron ore price just below critical " $80 a tonne support level " .. suggests best time to buy BHP, FMG & RIO is when Iron ore price cycle falls to $40 a tonne (if it ever falls that low I guess as seems unlikely imo)


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## bk1 (1 November 2022)

Macquarie opinion and targets over Iron Ore.

Macquarie price targets​"We maintain our preferences for BHP given its organic growth options; Mineral Resource benefits from the lithium exposure, while Deterra Royalties offers low volatility exposure," said Macquarie analysts in a note on Wednesday.

The investment bank's ratings and target prices among the iron ore majors included:


BHP: Outperform with a $45.00 target price
Rio Tinto: Neutral with a $95.00 target price
Fortescue Metals: Underperform with a $14.50 target price

Its about a year since FMG was this low, coming into trading range for me. Dependent on the macro China situation.


----------



## dat111 (2 November 2022)

dat111 said:


> After today's change I have changed my plans.  As I said, I made my first purchase at $10.50 USD with 25% of my planned spend.  I have cancelled my second order of 25% at $10.25 USD and have replaced with $9.50 USD.  I will see what happens over the next few months prior to purchasing my 3rd and 4th quarter.



Purchased second 25% yesterday at $9.50 USD.


----------



## mullokintyre (2 November 2022)

Twiggy Forrest must be a difficult bugger to work for.
Fortescue has now lost 75% of its senior management with the departure of its most senior HR person.
From   The Evil Murdoch Empire


> Only three of the 11 members of Fortescue’s executive leadership team listed in the company’s 2021 annual report now remain with the company: chief financial officer Ian Wells, long-term legal boss Peter Huston, and former Fortescue Future Industries chief executive Julie Shuttleworth, although Ms Shuttleworth is now in a new role.



And it seems some of the other divisions of the Forrest Empire are having  departure problemas.


> The company’s rapidly expanding green energy arm, Fortescue Future Industries, has also seen a wave of senior departures. FFI director of energy Rob Grant left the company shortly before Christmas, with its North America president and chief executive Paul Brown quitting in early September after only eight months in the role.
> In October FFI head of projects development, Gordon Cowe – promoted to the role in May – handed in his notice, with FFI’s US head of green hydrogen and ammonia marketing also quitting to take up a role elsewhere in the industry.



To lose one executive is unfortunate.
To lose that many  is indicative of some problems.
Mick


----------



## qldfrog (2 November 2022)

mullokintyre said:


> Twiggy Forrest must be a difficult bugger to work for.
> Fortescue has now lost 75% of its senior management with the departure of its most senior HR person.
> From   The Evil Murdoch Empire
> 
> ...



Great info, when i read that, i am nearly happy my reentry in fmg was shortlived with a quick SL exit


----------



## divs4ever (2 November 2022)

mullokintyre said:


> Twiggy Forrest must be a difficult bugger to work for.
> Fortescue has now lost 75% of its senior management with the departure of its most senior HR person.
> From   The Evil Murdoch Empire
> 
> ...



didn't add in the recent dip ( didn't reach my target price )

 but with the senior management   he is being rather ambitious and in various areas  , so  they may be under extra pressure ( extra regulations to learn ,  extra travel ) , not everyone can up the work-effort  by , say, 20% for the mid-term   ( and the journey to where they are now  was no walk in the park , competing with BHP , RIO and others )

 i do find that  statement rather amusing  coming from the NWS empire though ,  i remember a wisdom about those living in glass houses


----------



## mullokintyre (3 November 2022)

#


divs4ever said:


> didn't add in the recent dip ( didn't reach my target price )
> 
> but with the senior management   he is being rather ambitious and in various areas  , so  they may be under extra pressure ( extra regulations to learn ,  extra travel ) , not everyone can up the work-effort  by , say, 20% for the mid-term   ( and the journey to where they are now  was no walk in the park , competing with BHP , RIO and others )
> 
> i do find that  statement rather amusing  coming from the NWS empire though ,  i remember a wisdom about those living in glass houses



NWS is merely the medium. It should not affect reporting unless its an outright lie.
the staff did leave. The only questionable part may be  the analysis as to why. That is conjecture, opinion, bias, conspiracy theory or whatever.
Mick


----------



## basilio (3 November 2022)

divs4ever said:


> didn't add in the recent dip ( didn't reach my target price )
> 
> but with the senior management   he is being rather ambitious and in various areas  , so  they may be under extra pressure ( extra regulations to learn ,  extra travel ) , not everyone can up the work-effort  by , say, 20% for the mid-term   ( and the journey to where they are now  was no walk in the park , competing with BHP , RIO and others )
> 
> i do find that  statement rather amusing  coming from the NWS empire though ,  i remember a wisdom about those living in glass houses




I think the pressure Twiggy puts on his senior management is known to be fierce. Losing/breaking that many top execs is troubling. Probably worth seeing where they went. Some could well have been promotions or serious lapses in performance. We know for example that the execs in charge of the Iron Bridge project in 2021  had to leave under a cloud because, frankly, their results were very poor.

The pressure on FFI staff will be relentless. Twiggy wants this to happen yesterday and it isn't as simple as just building mass new plants from current technology. The trick to the project will be identifying and fast tracking the best new technologies that can make hydrogen use cheap and safe.  That is a rapidly moving target.

I am uneasy. IMV long term success should feature strong longer term leaders  not a succession of peopl.


----------



## mullokintyre (3 November 2022)

basilio said:


> I think the pressure Twiggy puts on his senior management is known to be fierce. Losing/breaking that many top execs is troubling. Probably worth seeing where they went. Some could well have been promotions or serious lapses in performance. We know for example that the execs in charge of the Iron Bridge project in 2021  had to leave under a cloud because, frankly, their results were very poor.



You may well be correct about promotions not working out, and if that is the case, it raises questions about their selection process. 
Perhaps thats why the latest departure is from HR.
Whatever the reasons for the departures, it signals some long term issues for me.
I will be keeping out of FMG for some time unless a better and more compelling narrative comes along.
Mick


----------



## divs4ever (3 November 2022)

basilio said:


> I think the pressure Twiggy puts on his senior management is known to be fierce. Losing/breaking that many top execs is troubling. Probably worth seeing where they went. Some could well have been promotions or serious lapses in performance. We know for example that the execs in charge of the Iron Bridge project in 2021  had to leave under a cloud because, frankly, their results were very poor.
> 
> The pressure on FFI staff will be relentless. Twiggy wants this to happen yesterday and it isn't as simple as just building mass new plants from current technology. The trick to the project will be identifying and fast tracking the best new technologies that can make hydrogen use cheap and safe.  That is a rapidly moving target.
> 
> I am uneasy. IMV long term success should feature strong longer term leaders  not a succession of peopl.



 i know it has been a few years since i participated in the  work-force , but you don't need to be a 'slave-driver' to burn through staff  , just a bit stingy  on the remuneration .. all the top performers  quickly find better conditions elsewhere , now i doubt that is the case at FMG ,
 but i suspect the boss expects the staff to be at least as committed to projects as he is ( and that usually puts pressures on families and health )

 ALSO  there has been a trend in big business to frequently  'refresh' the staff with 'new blood '  (  sometimes that is a BAD thing  )


----------



## basilio (3 November 2022)

mullokintyre said:


> You may well be correct about promotions not working out, and if that is the case, it raises questions about their selection process.
> Perhaps thats why the latest departure is from HR.
> Whatever the reasons for the departures, it signals some long term issues for me.
> I will be keeping out of FMG for some time unless a better and more compelling narrative comes along.
> Mick




The reality is that Twiggy owns 37% of FMG and is for all intents and purposes the driver of the direction and processes in FMG.

He is determined to move heaven and earth to make renewable energy the  future cornerstone of the company and at the very least make a healthy profit. ( Frankly I can't see how any project short of printing money can be more profitable than mining 180m tones of  iron ore a year  at $17$ a ton and selling it for the prices they were getting last year.) In that context he will  create totally unrealistic deadlines and his employees will have to somehow produce results.

I'm sure many people on ASF have been familiar with leaders like this. It isn't a safe process. It isn't comfortable. But it is exciting. It can produce outstanding results.  Elon Musk and Tesla come to mind as an example of such an approach.  

*However I suggest that whatever happens with FFI, the meat and potatoes element of FMG (iron ore)  will still be making a ton of money for years to come.* At the very minimum the  renewable energy projects that strip out hundreds of millions of dollars in operating costs will be effective and enhance the profitability of iron ore sales.  These will not go away. If people are looking for a narrative this ongoing element of the company underpins the financial returns investors can realistically bank on. 

The FFI component will add substantial value to these operations as noted and could evolve to the vision Twiggy envisages.


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## mullokintyre (3 November 2022)

basilio said:


> I'm sure many people on ASF have been familiar with leaders like this. It isn't a safe process. It isn't comfortable. But it is exciting. It can produce outstanding results.  Elon Musk and Tesla come to mind as an example of such an approach.
> 
> *However I suggest that whatever happens with FFI, the meat and potatoes element of FMG (iron ore)  will still be making a ton of money for years to come.* At the very minimum the  renewable energy projects that strip out hundreds of millions of dollars in operating costs will be effective and enhance the profitability of iron ore sales.  These will not go away. If people are looking for a narrative this ongoing element of the company underpins the financial returns investors can realistically bank on.
> 
> The FFI component will add substantial value to these operations as noted and could evolve to the vision Twiggy envisages.



All that is true, but for every Elon Musk ad TSLA there are a lot more failures like Trevor Milton and Nikola, or Adrian Nueman and WeWork, or as locally with Ralph Sarich and the orbital Engine co.
Mick


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## divs4ever (3 November 2022)

basilio said:


> The reality is that Twiggy owns 37% of FMG and is for all intents and purposes the driver of the direction and processes in FMG.
> 
> He is determined to move heaven and earth to make renewable energy the  future cornerstone of the company and at the very least make a healthy profit. ( Frankly I can't see how any project short of printing money can be more profitable than mining 180m tones of  iron ore a year  at $17$ a ton and selling it for the prices they were getting last year.) In that context he will  create totally unrealistic deadlines and his employees will have to somehow produce results.
> 
> ...



 now i know i sound like a 'doom  merchant '   but i see iron demand ( exports from Australia )  declining  from various angles 

1. the natural downturn in the mining super cycle ( symptomatic of a slowing global economy )

 2. an ever-warming up  of a war with China ( the trade war first , maybe a hot war  later )

 3. rising costs in Australia , possibly offsetting a sliding Aussie sliding dollar 

 4. the return of Vale iron projects  to full production 

 5. iron projects  from less developed regions (  like Mongolia  and Africa ) coming into full production 

  i would prefer  that FMG not get too  impatient  pushing the  'green projects '  and perhaps starving the iron/port  infrastructure of timely maintenance   ( but i suppose if FMG keeps too much in cash reserves , some shareholders will agitate for increased divs and buy-backs )


----------



## basilio (3 November 2022)

divs4ever said:


> now i know i sound like a 'doom  merchant '   but i see iron demand ( exports from Australia )  declining  from various angles
> 
> 1. the natural downturn in the mining super cycle ( symptomatic of a slowing global economy )
> 
> ...





mullokintyre said:


> All that is true, but for every Elon Musk ad TSLA there are a lot more failures like Trevor Milton and Nikola, or Adrian Nueman and WeWork, or as locally with Ralph Sarich and the orbital Engine co.
> Mick



Trevor Milton was a deceitful dangerous crook. He nearly took GM down with him
The We Work fiasco was another creative scam
Ralph Sarich I agree was an excellent engineer with a great product.  From what I remember the great promise of the orbital engine never came off but he did make a tidy business.

Yes there are many Big names in business who failed or were cheats.  I suggest that Andrew Forrest has firmly made his reputation for business audacity, engineering skills and  corporate drive with his FMG success.  No doubt there many elements one could be critical of but  if one was trying to back a corporate horse  I think he has good form.

With regard to  the risks facing FMG continuing iron ore success.  I totally agree.  All of these factors may well substantially impinge on the  future profitability of FMG.  I would be confident that Twiggy would also acknowledge these issues.

*IMV I believe these factors are an important reason behind Twiggys determination to widen FMG's business base*. One can't taken iron ore for granted . What's next ?

Essentially he sees renewable energy as the next big thing.  More importantly he recognises that unless the world turns on a dime and rapidly decarbonises, CC will destroy everything. He doesn't bang on about this too much  publicly because all the suits and bean counters are still in denial about what is happening and what will happen because of human caused global warming. 

*Twiggy gets it. He is a very real scientist *as well as a businessman*. * He totally understands what is happening to our planet as result of the billions of tons of CO2 we pump into the atmosphere. The PhD Thesis he completed in 2019 was his deep dive education into how CC is destroying our oceans. I'm just glad he is putting his brains and our collective financial muscle into turning heavy industry on a dime in the next 10 years and maybe giving us a chance of not being toast.









						Don't fall for 'quick sound bites' around clean energy sources, Fortescue chairman says
					

Politicians have to look beyond catchphrases like "clean hydrogen" and understand the research behind renewable energy sources, says Andrew Forrest.




					www.cnbc.com
				








						Postgraduate profiles: Full alphabetical listing > Research: The University of Western Australia
					

Postgraduate profiles



					www.research.uwa.edu.au


----------



## againsthegrain (3 November 2022)

Have been watching and hoping VC will jump in sooner or later with some positive words 😔


----------



## Garpal Gumnut (3 November 2022)

I just try and keep it simple with FMG. 

1. Twiggy leads it. 
2. The best predictor of future performance is past performance.
3. Once ole Comrade Xi opens up the Chinese circus again everyone will get a feed, from the carnie to every shareholder in commodities. 
4. FFI is sexy, whether it delivers involves bromance, consummation, growth and much labour. If not just list on NASDAQ.
5. Iron rules.  
6. Iron rules
7. Iron ...

gg


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## qldfrog (4 November 2022)

againsthegrain said:


> Have been watching and hoping VC will jump in sooner or later with some positive words 😔



Of course he will, just some facts from me today








						Énergie : ArcelorMittal va arrêter temporairement un de ses hauts-fourneaux de Fos-sur-Mer
					

La baisse de la demande d'acier et l'inflation touchant l'énergie poussent l'industriel à limiter son activité.




					www.lefigaro.fr
				



Europe unable to carry on steel production: lower demand and exploding energy price...
Do not expect the Chinese foundry demand to be replaced by the EU


----------



## qldfrog (8 November 2022)

Andrew Forrest says big companies are 'forcing' customers to 'destroy the planet'
					

Australian mining magnate Andrew "Twiggy" Forrest has accused energy companies and businesses selling single-use plastics of forcing customers to "destroy the planet".




					www.abc.net.au
				



Going full sail narrative..how much is FMG going to suck from our tax dollars.
There is no way Twiggy is believing that. So he is walking the line:
Either to be on the receiving end of our taxes , or the madness in power is such that he sees this as the only way an Aussie company can survive.

And while it is true plastic currently can only be recycled 3 tomes or so, it is just a matter of which plastic we use








						How Many Times Can Plastic Be Recycled?
					

You would be forgiven for thinking that every time you throw a plastic bottle into the recycling, it will eventually be reincarnated as another plastic bottle. Unfortunately, that’s not quite how...




					www.envirotech-online.com
				



So a choice..real science or the plastic straw scam
I would prefer Twiggy to push for science and technology more than parrotting the Greta line, but have to acknowledge it might be the wise business move.
Volkswagen did the right choice business wise in 1930s going with the Nazis as did Bayer BMW etc . The one which did not and objected are not here anymore.


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## mullokintyre (8 November 2022)

qldfrog said:


> Andrew Forrest says big companies are 'forcing' customers to 'destroy the planet'
> 
> 
> Australian mining magnate Andrew "Twiggy" Forrest has accused energy companies and businesses selling single-use plastics of forcing customers to "destroy the planet".
> ...



And just to underscore that, according to the Evil murdoch press Forrest has been defending Chinas role in being the largest carbon Polluter on the planet.


> *Andrew Forrest* has defended China, saying Beijing does “care about” what the West thinks of the country's “nightmare” track record of burning coal.
> 
> “Look, they absolutely do care. We're being caught in the crossfire between North America and China here … If we could have peaceful, mutual engagement, I think you would see China taking a more proactive stance,” the founder of Fortescue Metals Group told the ABC’s 7.30 program on Monday, the first day of the COP27 in Egypt.
> 
> ...



Yea, Nah. Sorry mate, but either we get rid of fossil fuels or we don't.
You cannot possibly pretend that CO@ emissions from Australia or Europe are somehow different or worse than those emitted from China. "The Science(TM)" does not work that way.
Mick


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## divs4ever (8 November 2022)

qldfrog said:


> Of course he will, just some facts from me today
> 
> 
> 
> ...



 i am expecting the West  to try to turn Africa  into the 'manufacturing  heart '  NWO ( keep the population  under-educated and the land full of waste and pollution  .. the main reason  became the previous 'manufacturing heart ' ) , am not sure how much iron ore is in Africa  but they have a fair bit of coal and oil  ( and other base metals )

 i think the West would have preferred India , but then India had a dose of European occupation  several years back , and still remembers it , vividly


----------



## divs4ever (8 November 2022)

mullokintyre said:


> And just to underscore that, according to the Evil murdoch press Forrest has been defending Chinas role in being the largest carbon Polluter on the planet.
> 
> Yea, Nah. Sorry mate, but either we get rid of fossil fuels or we don't.
> You cannot possibly pretend that CO@ emissions from Australia or Europe are somehow different or worse than those emitted from China. "The Science(TM)" does not work that way.
> Mick



it does in 'Murdoch World ' i have worked there , ( rules for thee but not for me )

 i have hours of riotous tales on 'safety ' alone 

 Twiggy has an easy task to look better than ' Murdoch World '


----------



## Value Collector (8 November 2022)

mullokintyre said:


> All that is true, but for every Elon Musk ad TSLA there are a lot more failures like Trevor Milton and Nikola, or Adrian Nueman and WeWork, or as locally with Ralph Sarich and the orbital Engine co.
> Mick



The thing that separates FMG, is they aren’t just a cash burning IPO, they have a solid cash producing Iron Ore business. 

Not to mention, they aren’t reinventing the wheel, a large portion of their move to renewables is low risk proven technology.

Eg, 

1. Installing solar panels, wind turbines and batteries to reduce and eventually eliminate the need to burn diesel and natural gas to generate electricity for their operations is pretty straight forward.

2. Converting a bunch of ICE based trains and  mining equipment to Battery electric or Hydrogen is still pretty low risk investment in the grand scheme of things.

When it comes to producing hydrogen for export, and electro fuels etc that is more speculative, but not totally off the charts and as I said in earlier posts, if the hydrogen stuff was a complete bust it’s not a 100% loss, because all the solar and wind installed for the hydrogen project can still be used to generate electricity for other purposes.


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## Value Collector (8 November 2022)

An interview with Andrew Forrest about renewable energy.

https://www.abc.net.au/news/2022-11-07/andrew-‘twiggy’-forrest-sets-the-record-straight/101626722


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## Value Collector (8 November 2022)

mullokintyre said:


> And just to underscore that, according to the Evil murdoch press Forrest has been defending Chinas role in being the largest carbon Polluter on the planet.
> 
> Yea, Nah. Sorry mate, but either we get rid of fossil fuels or we don't.
> You cannot possibly pretend that CO@ emissions from Australia or Europe are somehow different or worse than those emitted from China. "The Science(TM)" does not work that way.
> Mick



China’s emissions on a person basis is actually lower than America and Australia, so it can be a bit misleading to call them the biggest polluters, especially if you factor in that a lot of their energy use is used to export products we use, so the pollution is really attributable to us, and not them.

———————

But either way, China is also a leader in developing renewable energy too, they are moving in the direction of renewables too, it just takes time.


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## martaart077 (8 November 2022)

Andrew Forrest is the useful idiot for China, doing China's bidding. He doesn't mind though as they give him lots of money for it. It's all business.


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## martaart077 (8 November 2022)

Value Collector said:


> China’s emissions on a person basis is actually lower than America and Australia, so it can be a bit misleading to call them the biggest polluters, especially if you factor in that a lot of their energy use is used to export products we use, so the pollution is really attributable to us, and not them.
> 
> ———————
> 
> But either way, China is also a leader in developing renewable energy too, they are moving in the direction of renewables too, it just takes time.



Statistics can be misleading.
Environmental degradation and hellish living environments due to extreme levels of pollution are the norm in China. You can't imagine till you experience it first hand.


----------



## divs4ever (8 November 2022)

martaart077 said:


> Andrew Forrest is the useful idiot for China, doing China's bidding. He doesn't mind though as they give him lots of money for it. It's all business.



 i don't know about 'useful idiot' , with my dealings with Chinese  , if you stick to your deals and are a reliable trading partner/customer  things go very smoothly  , BUT Chinese class haggling as a national sport ,  so if you want to play rough'n'tumble , they have strategies for that as well .( including zero-Covid policies , i suspect )

 now sure  i wished Twiggy  had of diversified his customers ( some to South Korea , some to India , and some to China ) but maybe China made it less complicated  doing business 

 and profit is what business is about ( making it efficiently without fuss is even better )


----------



## Value Collector (8 November 2022)

martaart077 said:


> . You can't imagine till you experience it first hand.



Yes, that is one of the reasons we have exported our pollution there.
I am in no way trying to say china is an environmental wonderland, I am just pointing out that when some people try and use the excuse that "it is not worth us trying to lower emissions because china produces more than us", that is a bit of a fallacy.

Because when it comes to carbon emissions "per person" Both Australia and USA produce more, so it is definitely worth us trying to reduce.

its also not worth trying to demonise china about their emissions, because as I said they are trying to lower their intensity probably more so than us, but in the mean time the average Chinese person still wants heat, transport, employment etc etc.

I guess my main point in pointing fingers and having ultimatums about who should lower first is silly, we should just follow Twiggys lead and get it done, and make some money a long the way.


----------



## SirRumpole (14 November 2022)

Value Collector said:


> The thing that separates FMG, is they aren’t just a cash burning IPO, they have a solid cash producing Iron Ore business.
> 
> Not to mention, they aren’t reinventing the wheel, a large portion of their move to renewables is low risk proven technology.
> 
> ...




Twiggy is maybe the only person in the country with both the technical knowledge and business acumen to advance renewable energy for Australia. I just hope it doesn't end up like our coal and gas resources, all for export and stuff all for us.

Since Twiggy is into electric trains, maybe he should diversify into electric car production, so the Aussie masses can actually afford to buy one and not have to wait for years.


----------



## Value Collector (14 November 2022)

SirRumpole said:


> I just hope it doesn't end up like our coal and gas resources, all for export and stuff all for us.




Some thing I have thought about is whether a floor will form under the local electricity price.

For example we know that the ability to liquify and export natural gas has basically put a floor under the gas price and keeps gas prices high.

If producing hydrogen for export and synthetic jet fuels etc becomes a thing, it could put a floor under electricity prices.

This would be a great thing for owners of electricity infrastructure and stimulate huge amounts of new investment and jobs, but it could cause high electricity prices for a while.

Let’s say jet fuel sells for $2 a litre, and it takes 5 kWH of electricity to make a litre of jet fuel, this might mean that the companies running the electrolisers converting electricity to liquid jet fuel will buy as much electricity as they can at up to 30 cents per KWH, meaning households have to pay more.


----------



## UMike (14 November 2022)

If you bought on the Dip and Sold at open it'd be a nice little earner.


----------



## SirRumpole (14 November 2022)

Value Collector said:


> Some thing I have thought about is whether a floor will form under the local electricity price.
> 
> For example we know that the ability to liquify and export natural gas has basically put a floor under the gas price and keeps gas prices high.
> 
> ...




No doubt there is a production cost but if the electricity supply is renewable (maybe owned by the hydrogen producers themselves) then they can get cheap energy without driving the price up for the rest of us as long as there are sufficient sources of renewable for other businesses, industry and consumers.


----------



## Value Collector (14 November 2022)

SirRumpole said:


> No doubt there is a production cost but if the electricity supply is renewable (maybe owned by the hydrogen producers themselves) then they can get cheap energy without driving the price up for the rest of us as long as there are sufficient sources of renewable for other businesses, industry and consumers.



I think the hydrogen producers will have their own production, but also supplement that by buying from the market when the market is producing more wind or solar than it can consume and electricity is cheap. But that does open the doors to exactly what pricing the turn on and shut off the electrolysis plants.

One thing for sure is that the future of electricity supply and demand is going to be dynamic, we will have renewable producers expanding production causing big swings between high and low production, and we will have storage folks trying to arbitrage those price swings by charging batteries and pumping water up hill, and we will have hydrogen and electro fuel producers trying to buy as much electricity as they can to keep their electrolyses running to sell high value fuels.

It will be a boon for people involved in electricity production, even people with just home solar and batteries.


----------



## basilio (14 November 2022)

The Iron Bridge project is moving to production.  The first crushing or ore has been made.  Production will start in March 2023 and reach 22 m tons of 67% ore concentrate when fully operational.
The plant will also feature green energy use across it's operations.

Fortescue’s Iron Bridge Magnetite project marks first ore into processing plant​Oct 31, 2022

Fortescue’s track record of delivering complex projects continues with today marking first ore feed into the processing plant at its Iron Bridge Magnetite project in the Pilbara.

With first production anticipated in the March 2023 quarter, Iron Bridge will see the world’s fourth largest iron ore miner deliver an enhanced product range and create 900 new jobs.

Significantly, it could become one of Fortescue’s first fossil fuel free sites, enabled by the recently announced world leading US$6.2 billion decarbonisation investment to reach real zero Scope 1 and 2 emissions by 2030.






						Fortescue’s Iron Bridge Magnetite project marks first ore into processing plant | Fortescue Metals Group Ltd
					






					www.fmgl.com.au


----------



## basilio (14 November 2022)

In Indonesia FFI has signed an MOU with Indonesian steel plants to  decarbonise their operations using green hydrogen and  green ammonia. 
And yes the green hydrogen/ammonia will come from FFI's Australian operations.
Fortescue Future Industries to support Indonesian steel giant Gunung Raja Paksi on path to decarbonisation​
Nov 14, 2022

Fortescue Future Industries (FFI) and PT Gunung Raja Paksi Tbk (GRP) – a member of Gunung Steel Group and one of the largest steelmakers in Indonesia – will investigate how green hydrogen and green ammonia supplied by FFI could be used to help decarbonise GRP’s steelmaking factories.

Fortescue Chairman and Founder, Dr Andrew Forrest AO, and GRP Member of the Executive Committee Kimin Tanoto, have signed a Memorandum of Understanding (MOU) at the B20 Summit in Bali, Indonesia.

The use of green hydrogen could allow GRP to produce low-emission steel in what is a particularly hard-to-abate sector.

Under the MOU, the companies will seek to identify mutually beneficial opportunities to collaborate on green hydrogen and/or green ammonia technology and implementation, as well as offtake opportunities.






						Fortescue Future Industries to support Indonesian steel giant Gunung Raja Paksi on path to decarbonisation | Fortescue Metals Group Ltd
					






					www.fmgl.com.au


----------



## Value Collector (14 November 2022)

basilio said:


> The Iron Bridge project is moving to production.  The first crushing or ore has been made.  Production will start in March 2023 and reach 22 m tons of 67% ore concentrate when fully operational.
> The plant will also feature green energy use across it's operations.
> 
> Fortescue’s Iron Bridge Magnetite project marks first ore into processing plant​Oct 31, 2022
> ...



Here is the video of their processing plant stacking the first pile of ore, Millions of tonnes to follow soon.


----------



## basilio (16 November 2022)

Seems as if FFI is firming up it's plans for developing massive solar and wind power plants to produce green hydrogen in Queensland.
Game changing North Queenland Super Hub to power green hydrogen with wind, solar​
Nov 14, 2022

North-West Queensland is set to become home to one of the State’s largest ever renewable energy projects, with Fortescue Future Industries (FFI) and Windlab to partner on a Super Hub which could generate more than 10GW of wind and solar power and underpin the industrial-scale production of green hydrogen from purpose-built facilities within Queensland.

Green hydrogen has been highlighted as a solution for decarbonisation across a range of sectors, including, transport, industrial and energy storage. According to research conducted for the Australian Renewable Energy Agency, demand for hydrogen exported from Australia could be over three million tonnes per year by 2040, injecting up to $10 billion into the economy annually.

However, industrial-scale green hydrogen – hydrogen produced from renewable energy – has been constrained by the lack of renewable supply to power the process of extracting hydrogen from water through electrification.

....  FFI will partner with leading renewables developer Windlab on the North Queensland Super Hub, leveraging Windlab’s decade-long presence in the region including developing and operating Kennedy Energy Park, a world-first hybrid wind, solar and battery storage facility near Hughenden.

The first stage of the proposed project includes the 800MW Prairie Wind Farm and the 1000MW Wongalee project and is currently in detailed planning, with land agreements in place and the application for development approval for Prairie Wind Farm planned for submission in the coming months.

*Subject to approvals, construction on the first stage is expected to commence in 2025 with the projects anticipated to begin to produce power by 2027. Energy generated from the project stands to produce green hydrogen as well as feed renewable power to the grid.






						Game changing North Queenland Super Hub to power green hydrogen with wind, solar | Fortescue Metals Group Ltd
					






					www.fmgl.com.au
				



*


----------



## Garpal Gumnut (17 November 2022)

basilio said:


> Seems as if FFI is firming up it's plans for developing massive solar and wind power plants to produce green hydrogen in Queensland.
> Game changing North Queenland Super Hub to power green hydrogen with wind, solar​
> Nov 14, 2022
> 
> ...



Once I see the words "game changer" I immediately look at the chart and my profit. 

For FMG today it was a SELL for me, so I'm presently out.

Let the FMG thread continue now with people talking about how skinny they are, what shape poos they produce and what they bloody well eat and give the @Country Lad thread a bit of a break. 

Jesus wept. 

gg


----------



## basilio (17 November 2022)

Garpal Gumnut said:


> Once I see the words "game changer" I immediately look at the chart and my profit.
> 
> For FMG today it was a SELL for me, so I'm presently out.
> 
> ...



?????
*
GG in what universe did you think Twiggy and FMG/FFI were not going to go full bore with attempting to create a 3 Million ton a year Hydrogen market by 2030 ?* For two years now it has been absolutely clear that FMG was  decarbonising its operations and FFI was (somehow..) going to reach it's stretch goal for 2030. It is an absolute game changer for FMG in particular and heavy industry in general.

But having said that FMG's core business of mining and selling iron ore is still front and centre of operations. They are still expanding their iron ore operations locally and internationally. FFI takes 10% of the profits to make it's running. But the current main game stays.

If Twiggy does reach his stretch goals in 7-8 years then there will be two massive income earners in the FMG portfolio - iron ore and hydrogen based heavy industry.


----------



## Garpal Gumnut (17 November 2022)

basilio said:


> ?????
> 
> *GG in what universe did you think Twiggy and FMG/FFI were not going to go full bore with attempting to create a 3 Million ton a year Hydrogen market by 2030 ?* For two years now it has been absolutely clear that FMG was  decarbonising its operations and FFI was (somehow..) going to reach it's stretch goal for 2030. It is an absolute game changer for FMG in particular and heavy industry in general.
> 
> ...



Thanks @basilio 

I have nothing against hydrogen energy. 

I have nothing against wind farms ( I used to ).

The combination of the two is "challenged". 

I'll re-enter when all the hype settles down at a more reasonable price, as will Twiggy. 

As Brian's mother said " He's not the Saviour, he's just a very naughty boy".

gg


----------



## basilio (17 November 2022)

GG I agree that right now it seems difficult to see how hydrogen will be produced at $2 a kilo in 2030.  That, I understand, is the objective.

Having said that even in the past couple of years there has been some quite interesting technology that could result in far more cost efficient hydrogen production. FFI has already bought into these technologies. 

Will the development of these new industries be a financial drag on FMG ? I understand that the analysts think so and predict that within a couple of years FMG dividends will collapse because of the "billions of dollars" required to create this new infrastructure.  I'm not inclined to accept their POV. I think that Twiggy will move heaven and earth to get external funds to support this development and that FMG dividends will stay broadly on track.  FFI will need to live on the 10% it currently receives from the profits.  The capital expenditure component of FMG may indeed help finance some of the internal solar/wind developments they are undertaking to decarbonise their business.


----------



## divs4ever (17 November 2022)

Garpal Gumnut said:


> As Brian's mother said " He's not the Saviour, he's just a very naughty boy".



 yes , several times i have  threatened to change my name to Brian


----------



## divs4ever (17 November 2022)

Garpal Gumnut said:


> Once I see the words "game changer" I immediately look at the chart and my profit.




 interesting  .. i will ponder on whether to add 'game changer' to my existing list of red flags 

 cheers


----------



## basilio (17 November 2022)

Interesting to see that Twiggy has made a very decisive move to support Ukraine in it's redevelopment after the war.
He is stumping up $500m US in an international recovery fund. He is trying to lead other investors into supporting the country. (*Probably doesn't hurt his efforts at selling FMG as well.)*

*To be clear this is his money not FMGs.  *It is coming from his private investment operations.  But I wouldn't be one little bit surprised if FMG/FFI end up with a piece of any action in redeveloping Ukraine heavy industry and energy sectors.









						'Sending a message to the world': Andrew 'Twiggy' Forrest pledges $744 million towards rebuilding Ukraine
					

The mining magnate invests in a fund that will pour money into primary infrastructure, including energy and communications, in the country.




					www.abc.net.au


----------



## eskys (17 November 2022)

Why be Brian when you can be Brain, divs?


----------



## divs4ever (17 November 2022)

eskys said:


> Why be Brian when you can be Brain, divs?



 it was the folks that kept expecting miracles  , that was the problem 

 and what would i do if i took over the world .. start a Tik-Tok channel  of folks making terrible choices , perhaps ( you can't save them all , one will always U-turn at run straight into the lion's mouth .)


----------



## eskys (17 November 2022)

I knew you have brains, but let's say goodnight before someone throws rocks at us


----------



## divs4ever (17 November 2022)

cheers , and goodnight


----------



## sptrawler (17 November 2022)

What we have to keep in perspective is, while we talk about our move to a hydrogen economy, we are starting to import coal.
If all this green economy fails, we are going to be caught swimming naked. Lol
I do hold FMG and I do hope it all works out, but if it doesnt, well I only have to put up with a maximum of 20 years of the down side.


----------



## divs4ever (18 November 2022)

Australia shouldn't have to import coal in the next 50 years  ( we still have massive reserves laying undeveloped)

if Australia needs to import coal we have a government policy problem ( and NOT just in QLD ) 

 and 'green energy ' is already failing  to the extent they are now including uranium  as 'clean energy ' despite having had 40 years to use uranium to replace coal-fired power-plants ( and not doing so , properly )

 with such proven planners in charge , what could possibly go wrong 

 of course i could always be a spoil-sport , and ask how are they  going to build all the infrastructure ( to make and transport hydrogen  ) in a global economy on the verge of a ( coordinated ) collapse


----------



## mullokintyre (18 November 2022)

divs4ever said:


> Australia shouldn't have to import coal in the next 50 years  ( we still have massive reserves laying undeveloped)
> 
> if Australia needs to import coal we have a government policy problem ( and NOT just in QLD )
> 
> ...



Australia as a whole does not need to import coal, but WA will have to import coal for a little while yet as they have closed down or bankrupted all the mines in that state.  South Australia has closed it only coal mine at Leigh Creek, but if my memory serves me correctly, they also closed down their remaining coal fired power plants. .
Expect Victoria to follow suit.
Mick


----------



## divs4ever (18 November 2022)

Northern Star ( a gold miner ) has a very large deposit  that it has chosen not to develop 

 QLD has deposits  that could be developed or expanded 

if certain states  need to import coal from an international mines 

 one must ask questions about various government policies


----------



## Value Collector (18 November 2022)

sptrawler said:


> What we have to keep in perspective is, while we talk about our move to a hydrogen economy, we are starting to import coal.
> If all this green economy fails, we are going to be caught swimming naked. Lol
> I do hold FMG and I do hope it all works out, but if it doesnt, well I only have to put up with a maximum of 20 years of the down side.



The good part about the hydrogen projects is that it includes building a lot of wind and solar, so if hydrogen fails it will be the death nail for coal, because all that wind and solar will turn towards the grid.


----------



## Value Collector (18 November 2022)

Any links to articles about Australian coal imports?


----------



## divs4ever (18 November 2022)

i haven't seen reports in Australia importing coal , however  i note the QLD government  stalling/delaying approvals for Acland 3 ( NHC extension )  , the almost absence of Adani news 

 now NST had discovered a Maules Creek-size deposit  but has decided to stick to gold mining ( not even talk about a farm-out  on the resource )

i also remember Victoria  making it difficult to  develop low grade deposits  about 5 years back 

 i would have thought the remaining QLD coal projects  would have been enough to supply all of Australia's needs for at least 10 years ( and NSW has plenty of coal to sell  as NHC and WHC  clearly show )

 AND i would have thought the idealistic move across Australia to move away from coal-fired power-plants  demand for coal inside Australia would shrink  , so would Australia import inferior cheap coal  , in preference to the local product ??

i would also would have expected  the unions ( specifically the CFMEU ) to raise a fuss if they became aware of such imports 

however is it happening , or is there a plan  to import coal to Australia ( given we have a wide range of coal qualities , unlike say , parts of Europe )


----------



## sptrawler (18 November 2022)

Value Collector said:


> Any links to articles about Australian coal imports?











						Coal shortages and abundant solar lead to shut down of Collie power station
					

UPDATED: A WA government-owned coal plant slated to be retired in 2027 has shut down temporarily in a bid to address coal shortages in the state.




					reneweconomy.com.au
				



From the article:  3 October 2022
But the minister says the pause in generation means that “coal that would ordinarily be burned in October, November and December is available to us in January and February.”

Johnston says the WA government has granted diversified mining and manufacturing company South32 access to the state’s port of Bunbury to import coal from Indonesia to run its Worsley alumina plant. In the past, South32 has sourced its coal domestically.


----------



## divs4ever (18 November 2022)

sptrawler said:


> Coal shortages and abundant solar lead to shut down of Collie power station
> 
> 
> UPDATED: A WA government-owned coal plant slated to be retired in 2027 has shut down temporarily in a bid to address coal shortages in the state.
> ...



 cheers 

 i missed that  release


----------



## qldfrog (18 November 2022)

divs4ever said:


> cheers
> 
> i missed that  release



And WA is already importing coal based on ABC article last week i think..So it is not, WA is going to, but we are already doing this


----------



## divs4ever (18 November 2022)

one might ask  why not from other states in Australia , but since it seems S32 ( i hold ) is importing  are they using former subsidiaries in Africa  , that they had some sort of agreement with 

 it still seems strange that with at least  3 Australian states  with coal mines producing WA needs to import from overseas 

 does SA still mine coal  ??


----------



## Value Collector (18 November 2022)

sptrawler said:


> Coal shortages and abundant solar lead to shut down of Collie power station
> 
> 
> UPDATED: A WA government-owned coal plant slated to be retired in 2027 has shut down temporarily in a bid to address coal shortages in the state.
> ...



So it’s just a local short term interruption in WA, not a Net importation situation for the country.


----------



## Value Collector (18 November 2022)

divs4ever said:


> one might ask  why not from other states in Australia , but since it seems S32 ( i hold ) is importing  are they using former subsidiaries in Africa  , that they had some sort of agreement with
> 
> it still seems strange that with at least  3 Australian states  with coal mines producing WA needs to import from overseas
> 
> does SA still mine coal  ??



The Australian producers probably already have contracts to supply their coal to others, Also it might be cheaper to transport from Asia, there are already plenty of bulk carriers heading down the WA coast empty to pick up iron ore, loading some coal from Asia would be cheap.


----------



## divs4ever (18 November 2022)

Value Collector said:


> The Australian producers probably already have contracts to supply their coal to others, Also it might be cheaper to transport from Asia, there are already plenty of bulk carriers heading down the WA coast empty to pick up iron ore, loading some coal from Asia would be cheap.



 still has bad optics , just like importing petrol and diesel from overseas refineries


----------



## basilio (22 November 2022)

FMG have uploaded the AGM report .  Interesting  and useful.  Couple of new projects I hadn't yet heard about. Check the Kenyan connection.





Company Presentation                                (PDF 14,093.6 KB)


----------



## Value Collector (22 November 2022)

basilio said:


> FMG have uploaded the AGM report .  Interesting  and useful.  Couple of new projects I hadn't yet heard about. Check the Kenyan connection.
> 
> View attachment 149586
> Company Presentation                                (PDF 14,093.6 KB)



They made an interesting choice on slide 12 to label King Charles as " The British King" , did the person putting the slides together forget that King Charles is also King of Australia.


----------



## Garpal Gumnut (22 November 2022)

basilio said:


> FMG have uploaded the AGM report .  Interesting  and useful.  Couple of new projects I hadn't yet heard about. Check the Kenyan connection.
> 
> View attachment 149586
> Company Presentation                                (PDF 14,093.6 KB)



I am very disappointed in you @basilio 

Posting about matters pertaining to FMG amidst all the other sh**te on the FMG thread is very bad form. 

gg


----------



## Garpal Gumnut (23 November 2022)

For those of us of a charting nature there is a very nice channel forming on FMG. 

A good entry may be possible around the $14 mark which seems to be a support level for FMG. 

This could occur just about Xmas school holiday time when the idiot cousins are left in charge of the brokerages and fund houses while the market makers are wondering why they bought that house in boring Noosa Heads and paying $6 for a packet of Tim Tams at the local Woolies. 

DYOR on the price of Tim Tams. 








gg


----------



## finicky (23 November 2022)

Garpal's FMG chart looks a bit like a colon, which reminded me, have any posters on this FMG thread tried this great product?








						Green Banana Resistant Starch | Natural Evolution
					

At Natural Evolution, our Green Banana Resistant Starch is made from 100% natural and biodynamic lady finger bananas. Check out the amazing benefits, here.




					www.naturalevolutionfoods.com.au


----------



## Garpal Gumnut (23 November 2022)

finicky said:


> Garpal's FMG chart looks a bit like a colon, which reminded me, have any posters on this FMG thread tried this great product?
> 
> 
> 
> ...



Mate,

I picked up a Colonoscope (used) on Gumtree. 

If you drop in to the pub on Sunday morning I'll check you out and see if it is suitable. 

There will be an audience. 

gg


----------



## basilio (23 November 2022)

Garpal Gumnut said:


> Mate,
> 
> I picked up a Colonoscope (used) on Gumtree.
> 
> ...



That is *SO* good of you GG.  Are you selling tickets or will this be a free event ?  Will Twiggy be invited to inspect the 'scope and ensure it is suitable for FMG promotion ?  Are you considering live streaming the event (with a Twiggy introduction of course..)


----------



## finicky (23 November 2022)

Flash backs to PTSD past
.. full calendar Sunday morning


----------



## InsvestoBoy (23 November 2022)

finicky said:


> Garpal's FMG chart looks a bit like a colon, which reminded me, have any posters on this FMG thread tried this great product?
> 
> 
> 
> ...




Why buy expensive processed resistant starch when you can "make" it at home by simply cooking some potatoes/rice/pasta and putting them in the fridge?









						Cooling Some Foods After Cooking Increases Their Resistant Starch
					

Resistant starch is a carb with several health benefits. Interestingly, cooling foods like potatoes, rice and pasta may increase their resistant starch content.




					www.healthline.com
				




hi @Garpal Gumnut, hope you are enjoying the thread.


----------



## Garpal Gumnut (24 November 2022)

Quite a good article for the constipated commenters on FMG and off topic matters on ASF. 

Basically a summary of my thoughts on Twiggy Forrest's attempts to be a new age Renewable guru and run an Iron Ore company at the same time. 

The turnover of executives of supposed high quality is quite high at FFI, the Hydrogen arm of FMG. 

The Chinese Circus looks like it will not be opening for any New Year over the next 12 months. 

Whither FMG ? 









						Behind Fortescue’s executive revolving door
					

In the cult of  Andrew Forrest not all disciples who sign on can operate under this messianic leader or within its governance structure.




					www.brisbanetimes.com.au
				




gg


----------



## basilio (25 November 2022)

Garpal Gumnut said:


> Quite a good article for the constipated commenters on FMG and off topic matters on ASF.
> 
> Basically a summary of my thoughts on Twiggy Forrest's attempts to be a new age Renewable guru and run an Iron Ore company at the same time.
> 
> ...




Yeah . No surprises in Elizabeth Knights discussion re Twiggys dominant role in FMG/FFI.

Twiggy owns 37% of FMG.  He also drives it's operations and direction.  He pushes his staff to  extremes and exhaustion. It is pretty autocratic. 

The new (additional...)  direction of FMG is  pure Twiggy.  IMV it is largely driven by his view that  unless Carbon emissions  are dramatically reduced CC will effectively destroy our current society. Some people might think that is extreme.  However almost every climate scientist would concur.  Twiggy has this knowledge in his knapsack.

He sees "his" FMG as having the capacity *and  financial self interest *to make a radical contribution to reducing carbon emissions in heavy industry.  So he has constructed FFI, financed it through FMG and is driving it relentlessly to achieve what most observers would say is an impossible outcome. 

This discussion has been made many times on this thread. FMG will gain substantial  return on investment and value from reducing fossil fuel costs.  Achieving the bigger objectives will take enormous  energy and some very calculated technological decisions. Finding and holding  the management team to make this happen could well be the Achilles heel of the project.  I sincerely hope Twiggy gets the balance right. But boldness, vision and money are big drivers.

Having said that I think the iron ore operations will still power on and continue to make FMG a profitable concern. As they must. Hopefully there will still be sufficient oversight of these operations to ensure the best commercial outcome.


----------



## Value Collector (25 November 2022)

basilio said:


> So he has constructed FFI, financed it through FMG and is driving it relentlessly to achieve what most observers would say is an impossible outcome.




As a great man once said “it’s kinda fun to do the impossible”.

History is full of people that did what other  people thought was impossible, and made the world better doing it.


----------



## Garpal Gumnut (25 November 2022)

basilio said:


> Yeah . No surprises in Elizabeth Knights discussion re Twiggys dominant role in FMG/FFI.
> 
> Twiggy owns 37% of FMG.  He also drives it's operations and direction.  He pushes his staff to  extremes and exhaustion. It is pretty autocratic.
> 
> ...



I believe the reason behind executives and key people leaving is that they are expected to follow Twiggy's brainfarts and are unable to have their feedback acknowledged. 

I have spoken to many engineers who say Hydrogen is a no go.

The people leaving are high quality talent who may see that the writing is on the wall for Hydrogen as an alternative fuel and that it is all Mickey Mouse, in deference to @Value Collector. 

I'm not trying to pour Olive Oyle on your expectations of Twiggy @basilio but it is a fairly big bet he is making in an unforgiving casino.

gg


----------



## rcw1 (25 November 2022)

Good evening Friday nighters... 

It Couldn’t Be Done​BY EDGAR ALBERT GUEST

Somebody said that it couldn’t be done
      But he with a chuckle replied
That “maybe it couldn’t,” but he would be one
      Who wouldn’t say so till he’d tried.
So he buckled right in with the trace of a grin
      On his face. If he worried he hid it.
He started to sing as he tackled the thing
      That couldn’t be done, and he did it!

Somebody scoffed: “Oh, you’ll never do that;
      At least no one ever has done it;”
But he took off his coat and he took off his hat
      And the first thing we knew he’d begun it.
With a lift of his chin and a bit of a grin,
      Without any doubting or quiddit,
He started to sing as he tackled the thing
      That couldn’t be done, and he did it.

There are thousands to tell you it cannot be done,
      There are thousands to prophesy failure,
There are thousands to point out to you one by one,
      The dangers that wait to assail you.
But just buckle in with a bit of a grin,
      Just take off your coat and go to it;
Just start in to sing as you tackle the thing
      That “cannot be done,” and you’ll do it.


----------



## basilio (25 November 2022)

Garpal Gumnut said:


> I believe the reason behind executives and key people leaving is that they are expected to follow Twiggy's brainfarts and are unable to have their feedback acknowledged.
> 
> I have spoken to many engineers who say Hydrogen is a no go.
> 
> ...



After almost 70 years I have given up on saying what can't be done. Probably they most powerful experience I have had  as a teacher was working with Year 4 students, - 10 year olds,  who didn't know what "couldn't be done" in their school - and then just did it. 

I have also seen many projects conceived and executed that were thought impossible but ended up successful. Drive , determination, flexibility, creativity all played their part.  I'm quite sure that experience would also be common with many people.

Will green Hydrogen be  (part of ) the solution to decarbonising heavy industry and tackling global warming ?  Who knows ?  One thing we can be absolutely certain of is that not having a red hot go at the issue of decarbonising  our world will result in  catastrophe.  That is a certainty. 

Let's hope for everyones sake that, one way or another, Twiggy, FMG and FFI are successful in some way with the quest. You can't let the perfect get in the way of the good.


----------



## Value Collector (25 November 2022)

Garpal Gumnut said:


> .
> 
> I'm not trying to pour Olive Oyle on your expectations of Twiggy @basilio but it is a fairly big bet he is making in an unforgiving casino.
> 
> gg




I don’t think it is as big of a gamble as you would imagine.

Only 10% of their profits are dedicated to FFI, so that alone makes it a minor bet. But then you have the fact that of that 10% a chunk of it is being used just to build solar and wind power generation which is low risk stuff that even if the hydrogen never works will still be valuable. Then you have the conversion of diesel equipment to battery electric that’s pretty low risk too.

It’s only really the final stage which is producing the hydrogen that could be considered risky, but even parts of that plan is not super high risk, I mean there is multi pathways they are exploring to monetise the hydrogen.

But as I said even if hydrogen plan doesn’t work we get left with a bunch of renewable electricity generation and batteries.


----------



## Value Collector (27 November 2022)

Value Collector said:


> , I mean there is multi pathways they are exploring to monetise the hydrogen.




I just realised there is another potential pathway to consume hydrogen that is very important in WA.

Hydrogen in the form of Ammonium Nitrate is a main ingredient in explosives, and The mining and quarrying industry consumes a lot of explosives in WA. There an already Ammonium Nitrate plants in WA that produce 100’s of thousands of tonnes of Ammonia for the explosive market (and over 1 Million tonnes for fertiliser exports).

With WA’s large Iron ore, Gold and nickel mining SA’s copper mines and both states future growth in Battery minerals mining there is a large steady demand for explosives.

The fertiliser and explosives markets will probably be interested in moving to green hydrogen too.


----------



## sptrawler (27 November 2022)

Value Collector said:


> I don’t think it is as big of a gamble as you would imagine.
> 
> Only 10% of their profits are dedicated to FFI, so that alone makes it a minor bet. But then you have the fact that of that 10% a chunk of it is being used just to build solar and wind power generation which is low risk stuff that even if the hydrogen never works will still be valuable. Then you have the conversion of diesel equipment to battery electric that’s pretty low risk too.
> 
> ...



I agree with you VC, if global warming is being caused by carbon emissions, eventually H2 and nuclear will have to do the heavy lifting, so it isn't unreasonable to think that FFI will eventually be a major contributor to FMG's bottom line.
Being a one trick pony, relying solely on iron ore, is a riskier route to take IMO.
The world is changing at a hell of a pace and not thinking outside the box, is leaving a lot of companies stranded.
The legacy car companies are a current example of it, last generation Nokia and Kodak were examples of companies that dug in and tried to ride out the change.
Adapting to change, is a far less risky strategy, than hoping things will stay the same.
Twiggy leading the charge, will get a lot of opportunities/subsidies and joint ventures, that wont be available at a later date.
Somewhat like early adopters of rooftop solar, many said it was a waste of money, well after 12 years I can tell you it wasn't.


----------



## basilio (29 November 2022)

Value Collector said:


> I just realised there is another potential pathway to consume hydrogen that is very important in WA.
> 
> Hydrogen in the form of Ammonium Nitrate is a main ingredient in explosives, and The mining and quarrying industry consumes a lot of explosives in WA. There an already Ammonium Nitrate plants in WA that produce 100’s of thousands of tonnes of Ammonia for the explosive market (and over 1 Million tonnes for fertiliser exports).
> 
> ...




FFI always identified the fertiliser and ammonium nitrate market as important users/markets of green hydrogen.






						Fortescue Future Industries and Incitec Pivot progress green conversion of Gibson Island ammonia facility | Fortescue Metals Group Ltd
					






					www.fmgl.com.au
				









						Fortescue Future Industries to join forces with the Government of Kenya to eliminate fossil fuels from Kenya's fertiliser supply chain | Fortescue Metals Group Ltd
					






					www.fmgl.com.au


----------



## rcw1 (29 November 2022)

Good afternoon
Published this afternoon (29/11/22):

Fortescue Metals Group taps Woodside operations vice president Fiona Hick as chief executive of its mining arm, almost a year after former boss Elizabeth Gaines announced her intention to leave the company’s top job.
Ms Hick is a 21-year veteran at Woodside and will commence as chief executive officer of Fortescue Metals in February. She last worked in iron ore with Rio Tinto as a rail superintendent in 2001 and recently been Woodside’s operations vice president since 2019, and before that briefly served as its strategy and planning boss, and before that as its crisis management leader.Ms Gaines announced her intention to stand down as the Fortescue chief executive on December 10 2021, but remained on until August as the company hunted for a successor. 

In May Fortescue founder Andrew Forrest said he would become the company’s executive chairman, taking on the role of running its iron ore division as being the figurehead and driving force behind its green energy subsidiary, Fortescue Future Industries.  As recently as last week, at Fortescue’s annual shareholder meeting, Dr Forrest said he was in “no hurry” to find a replacement.  Since then the company has been hit by the departure of FFI chief financial officer Guy Debelle after only months in the role, capping a year that has seen substantial turnover in the top ranks of the iron ore major.


Have a very nice evening.

Kind regards
rcw1


----------



## basilio (29 November 2022)

sptrawler said:


> I agree with you VC, if global warming is being caused by carbon emissions, eventually H2 and nuclear will have to do the heavy lifting, so it isn't unreasonable to think that FFI will eventually be a major contributor to FMG's bottom line.
> Being a one trick pony, relying solely on iron ore, is a riskier route to take IMO.
> The world is changing at a hell of a pace and not thinking outside the box, is leaving a lot of companies stranded.
> The legacy car companies are a current example of it, last generation Nokia and Kodak were examples of companies that dug in and tried to ride out the change.
> ...




IMO probably one of the most succinct  and accurate analysis of FMG and the rationale for it's strong FFI venture yet posted.

Only  additional point worth noting is  recognising that Twiggy deliberately created a separate  FFI entity to protect FMG's main current operations from possible fallout if  FFI went seriously pear shaped.


----------



## basilio (5 December 2022)

FMG climbing steeply today. Currently up 5.6%.

Iron ore price has jumped from $92.50  to $107.44 in the last 1-2 days. If this holds or improves FMG profits will jump substantially









						Iron Ore PRICE Today | Iron Ore Spot Price Chart | Live Price of Iron Ore per Ounce | Markets Insider
					

Iron Ore Price: Get all information on the Price of Iron Ore including News, Charts and Realtime Quotes.




					markets.businessinsider.com


----------



## UMike (5 December 2022)

Yea Gone way above my target price..
Put an extra dollar on it. will reevaluate tomorrow I guess.


----------



## divs4ever (5 December 2022)

UMike said:


> Yea Gone way above my target price..
> Put an extra dollar on it. will reevaluate tomorrow I guess.



 i got mine  ( target price ) 

 i am GONE

 i invested in a iron miner  not to throw cash all around the world for various agendas


----------



## wayneL (5 December 2022)

divs4ever said:


> i got mine  ( target price )
> 
> i am GONE
> 
> i invested in a iron miner  not to throw cash all around the world for various agendas



There are some interesting smaller players.

FMG as a ticker symbol has a lot to like from my perspective, volume and optionability specifically, but the issues highlight won't have me putting any scrip in the bottom drawer.


----------



## basilio (5 December 2022)

divs4ever said:


> i got mine  ( target price )
> 
> i am GONE
> 
> i invested in a iron miner  not to throw cash all around the world for various agendas



That is interesting. I was under the impression that you valued FMG for its iron ore mining and the probability of  ongoing $2 a year dividends  from your investment in it.

I thought you saw the small(10%)  portion  of its profits that were used to seed FFI as an exercise in developing a new arm to their business.  But that as long as the iron ore component stayed effective and profitable you would keep getting the cheques.

Was I mistaken or have you changed your view on entire operation ?


----------



## divs4ever (5 December 2022)

basilio said:


> That is interesting. I was under the impression that you valued FMG for its iron ore mining and the probability of  ongoing $2 a year dividends  from your investment in it.
> 
> I thought you saw the small(10%)  portion  of its profits that were used to seed FFI as an exercise in developing a new arm to their business.  But that as long as the iron ore component stayed effective and profitable you would keep getting the cheques.
> 
> Was I mistaken or have you changed your view on entire operation ?



 yes i WAS , but am seeing all these peripheral investments  and partnerships  , in a market of increasing uncertainty ( for instance we look like we are heading for a substantial trade war with China )

 i might be  wrong in my move just like when i held MTS   and left in a hurry 

if this was ( similar ) to March 2020  and the market was deciding between a bottom and another leg down ..  i would have only reduced 

 but this feels ( to me ) like climbing a wall of worry 

 i see a government starting to behave like that of current Germany   i would rather have exited VUK as well but probably won't get near the target 


 i still hold GRR and MGX  ( as well as BHP ) as iron exposure 

 but i feel an ill wind coming ( just like January 2020 )

 now best of luck to Twiggy and the holders  , but it looks like i will have to spend most of Christmas looking for alternative investments ( and targets )


----------



## basilio (5 December 2022)

divs4ever said:


> yes i WAS , but am seeing all these peripheral investments  and partnerships  , in a market of increasing uncertainty ( for instance we look like we are heading for a substantial trade war with China )
> 
> i might be  wrong in my move just like when i held MTS   and left in a hurry
> 
> ...



Well you certainly made a dollar on your deal. I can recognise your concerns and yes if one believed the whole world economy was facing a grim future I struggle to see what stock investments would  make sense.

I have to say I am very split. I suppose I believe that my few investments represent areas that will be required, are well run (I hope)  and forward looking. Taking FMG in particular IMV if iron ore prices and sales volume fell to the point that it was unprofitable then Australia as a whole would be an absolute disaster. Such a scenario would be reflected across the whole mining sector and would result in  the undermining of a huge part of our national income.


----------



## divs4ever (5 December 2022)

basilio said:


> Well you certainly made a dollar on your deal. I can recognise your concerns and yes if one believed the whole world economy was facing a grim future I struggle to see what stock investments would  make sense.
> 
> I have to say I am very split. I suppose I believe that my few investments represent areas that will be required, are well run (I hope)  and forward looking. Taking FMG in particular IMV if iron ore prices and sales volume fell to the point that it was unprofitable then Australia as a whole would be an absolute disaster. Such a scenario would be reflected across the whole mining sector and would result in  the undermining of a huge part of our national income.



one of my flaws ( strengths ?? ) i can be very  fickle ( at unusual times )

 sadly i much would have preferred to swap straight into another investment  ( like my BKL into WES deal )

 grim ,  i can handle but multiple uncertainties  is very different  , for instance if Australia had a sizable manufacturing sector ( to use that coal/iron/copper in Australian goods ) i might have waited longer 

 interestingly   a disaster in the mining sector  would probably seal the fate of the ALP as well ( even the QLD Premier understands that )

 Australia has some very low cost miners currently BUT those margins tempt cash-strapped governments , costs and complexity could explode 

 and to make it worse Albo seems to be duty-bound to annoy China ( when China has options , even if they are second rate ones )

 problem two  if it was just Australia v. China  that is bad enough  , but other places have big problems as well ( cash , power , transport etc etc )  suddenly the global market is not a placid lake


----------



## Value Collector (5 December 2022)

wayneL said:


> won't have me putting any scrip in the bottom drawer.




But that’s the best place for it, atleast that’s where I keep mine 😁,


----------



## divs4ever (5 December 2022)

Value Collector said:


> But that’s the best place for it, atleast that’s where I keep mine 😁,



i was planning to keep several companies in that bottom drawer , including FMG  ,  but things in certain companies are changing  , sure there is liable to be some boring ever-greens there ( like say CSR  , BKW and  SOL ) but not as many as i was hoping .

 there is a time to be agile , and a time to be patient  good luck making the correct choices


----------



## UMike (6 December 2022)

Gone as Well.

Happy to get back in. This really is a sell at its peak stock rather than a buy and hold.


----------



## Garpal Gumnut (6 December 2022)

divs4ever said:


> i was planning to keep several companies in that bottom drawer , including FMG  ,  but things in certain companies are changing  , sure there is liable to be some boring ever-greens there ( like say CSR  , BKW and  SOL ) but not as many as i was hoping .
> 
> there is a time to be agile , and a time to be patient  good luck making the correct choices



Thanks @divs4ever 

FMG for me has become a trading stock, although to be honest I've only bought and sold it over the last 3 years.

I've had some big bets via my SMSF which luckily have paid off buying only around the lower line on the accompanying chart and selling at the other two lines. When I say around, not ever buying or selling at the lowest or highest price.

FMG has now reached the stage where the prospect of divies is outweighed by the risk of very large capital losses, so I feel comfortable. Should FMG keep charging up ( I sold before it reached $20 just recently in the mid to high $19's ) I will not be buying in. 

As others have mentioned you can carry too much Iron in your saddlebags if you also hold BHP and RIO. 







gg


----------



## Value Collector (6 December 2022)

UMike said:


> Gone as Well.
> 
> Happy to get back in. This really is a sell at its peak stock rather than a buy and hold.



I am not sure about that, being paid 10% while we wait for a 100% capital gain screams buy and hold to me.

It’s funny how a 5% Div stock, with maybe potential for 5% capital gain per year can be considered a buy and hold (which it is).

But just because a stock price is a bit more volatile, it gets written off as a trading stock even though the potential gains are huge.

I would much rather a bumpy 15% return than a steady 10%


----------



## sptrawler (6 December 2022)

If there is one constant with shares, it is everyone has a different take on them and the very reason there is usually always a buyer for every seller.

I do hold and agree with the sentiments presented, they all have merit.


----------



## dat111 (8 December 2022)

sptrawler said:


> If there is one constant with shares, it is everyone has a different take on them and the very reason there is usually always a buyer for every seller.
> 
> I do hold and agree with the sentiments presented, they all have merit.



I am of the same opinion.  I am watching as Andrew Forrester invests our money in green energy programs that are unfortanely funded by the government.  I am always leery when the pathway to profitability is dependent upon government handouts.  10% of the profit along with the management spending time on the green initiative push is a huge burden for any company.


----------



## Value Collector (8 December 2022)

dat111 said:


> I am of the same opinion.  I am watching as Andrew Forrester invests our money in green energy programs that are unfortanely funded by the government.  I am always leery when the pathway to profitability is dependent upon government handouts.  10% of the profit along with the management spending time on the green initiative push is a huge burden for any company.



There is only so much that can be invested into Iron Ore, so they need to find a new business to diversify, energy is a nice big industry to invest in.

Let’s see how it turns out, worst case we end up with a bunch of renewable energy infrastructure that we can use ourselves, best case in 20 years FMG’s energy business is bigger that Saudi Aramco


----------



## dat111 (9 December 2022)

Value Collector said:


> There is only so much that can be invested into Iron Ore, so they need to find a new business to diversify, energy is a nice big industry to invest in.
> 
> Let’s see how it turns out, worst case we end up with a bunch of renewable energy infrastructure that we can use ourselves, best case in 20 years FMG’s energy business is bigger that Saudi Aramco



Agree... There is only so much that can be invested into Iron Ore.  My issue is that I am not sure that I would invest in renewable green energy infrastructure.  I can't get the math to work out unless the government is heavily involved.  I have been involved in both solar and wind projects for the past 15 years and they would not exist without government funding...


----------



## Value Collector (9 December 2022)

dat111 said:


> Agree... There is only so much that can be invested into Iron Ore.  My issue is that I am not sure that I would invest in renewable green energy infrastructure.  I can't get the math to work out unless the government is heavily involved.  I have been involved in both solar and wind projects for the past 15 years and they would not exist without government funding...



Things are changing, the world needs energy, and it increasingly doesn’t want to get it from fossil fuels.

Even if you don’t believe in climate change there is very good economic reasons to move away from fossil fuels.


----------



## Dona Ferentes (9 December 2022)

Value Collector said:


> Even if you don’t believe in climate change there is very good economic reasons to move away from fossil fuels.



That's been a pretty easy decision to make.

Mind you, some of the best stocks to hold over the past period have been tobacco companies


----------



## Garpal Gumnut (9 December 2022)

Value Collector said:


> Things are changing, the world needs energy, and it increasingly doesn’t want to get it from fossil fuels.
> 
> Even if you don’t believe in climate change there is very good economic reasons to move away from fossil fuels.



I believe you are referring to the first world developed countries rather than the third, the former being a very small proportion of humanity.

Having once observed a conga line of about one hundred unfortunates at a relatively unmanned border between two sh*thole countries illegally lugging cans of fuel the ICE is still the most effective engine for the majority of our cousins worldwide. 

Wars and hunger are ever present and until we can provide a cost effective easily transportable fuel or energy source for the third world we are merely chipping away at the edges.

Hydrogen ain't it, no matter what Twiggy spouts. 

gg


----------



## Value Collector (9 December 2022)

Garpal Gumnut said:


> I believe you are referring to the first world developed countries rather than the third, the former being a very small proportion of humanity.
> 
> Having once observed a conga line of about one hundred unfortunates at a relatively unmanned border between two sh*thole countries illegally lugging cans of fuel the ICE is still the most effective engine for the majority of our cousins worldwide.
> 
> ...



Fossil fuels will be important for a long while, but their global market share will decrease. 

The western world is smaller in number, but we are huge when it comes to our proportion of energy consumption, especially if you include China.

Just as it makes sense for Australians to go renewable, so I will it make sense for the less developed countries. 

Hydrogen is the be all and end all for either the world or Fortescue, it’s just part of the solution.

FMG is focusing on electrifying everything that can be electrified, and the where it makes sense it will develop hydrogen. 

This isn’t a case of hydrogen vs electrification, both will be the winners, the loser is going to be traditional fossil fuels.

This doesn’t mean I am rushing to sell my Woodside shares, oils and gas wells will still be great little annuity style investments during the transition. But management need to be careful with each billion dollars they deploy into fossil fuels, to be sure that the market is going to be there over the expected annuity life of each well.


----------



## dat111 (10 December 2022)

Value Collector said:


> Fossil fuels will be important for a long while, but their global market share will decrease.
> 
> The western world is smaller in number, but we are huge when it comes to our proportion of energy consumption, especially if you include China.
> 
> ...



Austerity is a fickal mistress.  The debt being being generated by developed countries is a shell game and will come crashing down eventually.  The US's national debt is 121.85% of GDP... Australia's national debt is 48.39% of GDP.  When austerity hits... green energy will be hit hard.


----------



## Value Collector (10 December 2022)

dat111 said:


> Austerity is a fickal mistress.  The debt being being generated by developed countries is a shell game and will come crashing down eventually.  The US's national debt is 121.85% of GDP... Australia's national debt is 48.39% of GDP.  When austerity hits... green energy will be hit hard.



How so?

If you own solar panels and they are steadily producing energy for you every day, how are you going to be hit hard?

The people that own solar panels will be more resilient than those that don’t. 

And that’s going to be the same for businesses that source their energy from their own solar and wind turbines.


----------



## dat111 (10 December 2022)

Value Collector said:


> How so?
> 
> If you own solar panels and they are steadily producing energy for you every day, how are you going to be hit hard?
> 
> ...



A quick look at google shows companies that have closed or gone bankrupt here is a few quick ones as examples...  Also, I am in the hydraulic field.  My involvement is selling hydraulic power units and actuators to wind power and solar power plants along with providing service and repair.  I service all hydraulic systems and thought that being involved in wind and solar was a good ideal...  A good portion of the solar panels are moved with hydraulic cylinders and just about all of the wind turbine blades pitch are controlled with hydraulic cylinders... the gear boxes are hydraulic motors in wind turbines...  A good many of the wind plants are no longer operating and the cost to repair exceeds the value of the energy they produce...  

*2009 to 2010*

Bankrupt, closed, acquired


Advent Solar (emitter wrap-through Si) acquired by Applied Materials
Applied Solar (solar roofing) acquired by Quercus Trust
OptiSolar (a-Si on a grand scale) closed
Ready Solar (PV installation) acquired by SunEdison
Solasta (nano-coaxial solar) closed
SV Solar (low-concentration PV) closed
Senergen (depositing silane onto free-form metallurgical-grade Si substrates) closed
Signet Solar (a-Si) bankrupt
Sunfilm (a-Si) bankrupt
Wakonda (GaAs) closed

*2011*

Bankrupt, closed


EPV Solar (a-Si) bankrupt
Evergreen (drawn Si) bankrupt
Solyndra (CIGS) bankrupt
SpectraWatt (c-Si) bankrupt
Stirling Energy Systems (dish engine) bankrupt

Acquisition, sale


Ascent Solar (CIGS) acquired by TFG Radiant
Calyxo (CdTe) acquired by Solar Fields from Q.cells 
HelioVolt (CIGS) acquired by Korea's SK Innovation
National Semiconductor Solar Magic (panel optimizers) exited systems business
NetCrystal (silicon on flexible substrate) acquired by Solar Semiconductor
Soliant (CPV) acquired by Emcore

*2012*


Bankrupt, closed


Abound Solar (CdTe) bankrupt
AQT (CIGS) closed
Ampulse (thin silicon) closed
Arise Technology (PV modules) bankrupt
Azuray (microinverters) closed
BP (c-Si panels) exits solar business
Centrotherm (PV manufacturing equipment) bankrupt
CSG (c-Si on glass) closed by Suntech
Day4 Energy (cell interconnects) delisted from TSX exchange
ECD (a-Si) bankrupt
Energy Innovations (CPV) bankrupt
Flexcell (a-Si roll-roll BIPV) closed
GlobalWatt (solar) closed
GreenVolts (CPV) closed
Global Solar Energy (CIGS) closed
G24i (DSCs) bankrupt in 2012, re-emerged as G24i Power with new investors
Hoku (polysilicon) shut down its Idaho polysilicon production facility
Inventux (a-Si) bankrupt
Konarka (OSCs) bankrupt
Odersun (CIGS) bankrupt
Pramac (a-Si panels built with equipment from Oerlikon) insolvent 
Pairan (Germany inverters) insolvent
Ralos (developer) bankrupt
REC Wafer (c-Si) bankrupt
Satcon (BoS) bankrupt
Schott (c-Si) exits c-Si business
Schuco (a-Si) shutting down its a-Si business
Sencera (a-Si) closed
Siliken (c-Si modules) closed
Skyline Solar (LCPV) closed
Siemens (CSP, inverters, BOS) divestment from solar
Solar Millennium (developer) insolvent
Solarhybrid (developer) insolvent
Sovello (Q.cells, Evergreen, REC JV) bankrupt
SolarDay (c-Si modules) insolvent
Solar Power Industries (PV modules) bankrupt
Soltecture (CIGS BIPV) bankrupt
Sun Concept (developer) bankrup
2015​
Enecsys (microinverters) bankrupt -- Enecsys raised more than $55 million in VC from investors including Wellington Partners, NES Partners, Good Energies and Climate Change Capital Private Equity for its microinverter technology.
QBotix (trackers) closed -- QBotix had a two-axis solar tracker system where the motors, instead of being installed two per tracker, were moved around by a rail-mounted robot that adjusted each tracker every 40 minutes. But while QBotix was trying to gain traction, single-axis solar trackers were also evolving and driving down cost. QBotix raised more than $19.5 million from Firelake, NEA, DFJ JAIC, Siemens Ventures, E.ON and Iberdrola.
Solar-Fabrik (c-Si) bankrupt -- German module builder
Soitec (CPV) closed -- France's Soitec, one of the last companies with a hope of commercializing concentrating photovoltaic technology, abandoned its solar business. Soitec had approximately 75 megawatts' worth of CPV projects in the ground.
TSMC (CIGS) closed -- TSMC Solar ceased manufacturing operations, as "TSMC believes that its solar business is no longer economically sustainable." Last year, TSMC Solar posted a champion module efficiency of 15.7 percent with its Stion-licensed technology. 



> Evergreen Solar ($24 million)*
> SpectraWatt ($500,000)*
> Solyndra ($535 million)*
> Beacon Power ($69 million)*
> ...


----------



## qldfrog (10 December 2022)

dat111 said:


> A quick look at google shows companies that have closed or gone bankrupt here is a few quick ones as e



or more appropriate for FMG:
AGL writting off 2 billions of wind farms just in last february...


			https://www.pv-magazine-australia.com/2021/02/04/wind-farm-contracts-prove-costly-for-agl/ust
		

I know, it is different, AGL went too early etc etc LOL So different

What will happen: economic crisis will hit (they always come at one stage especially for such a common commodity ..   as Iron;
Price collapses, FMG will have to sell or takeover/shared ownership; new owners will send forensic accounting teams and whole lala dream will be written off , unless he can pull a "taken over by gov" scheme (aka taxpayers are screwed instead) if FMG is lucky to still have some watermelons in power by then.
IMHO, FMG should really split to ensure shareholders can make proper decisions anyway, I do not own anymore


----------



## Value Collector (10 December 2022)

dat111 said:


> A quick look at google shows companies that have closed or gone bankrupt here is a few quick ones as examples...  Also, I am in the hydraulic field.  My involvement is selling hydraulic power units and actuators to wind power and solar power plants along with providing service and repair.  I service all hydraulic systems and thought that being involved in wind and solar was a good ideal...  A good portion of the solar panels are moved with hydraulic cylinders and just about all of the wind turbine blades pitch are controlled with hydraulic cylinders... the gear boxes are hydraulic motors in wind turbines...  A good many of the wind plants are no longer operating and the cost to repair exceeds the value of the energy they produce...
> 
> *2009 to 2010*
> 
> ...




I think you could find an even longer list of fossil fuel companies that have gone bankrupt, think of all the oil and gas explorers, drillers companies etc even petrol stations etc

Just because you can find examples of bankruptcy in a given industry does not mean that the industry is destined for failure, look at the car industry as an example, I think there was 3000 car companies in the USA that went bankrupt in the first 50 years of the automobile, off course that didn't stop Tesla.

------------------
Not to mention that most on your list are either installers which like builders will come and go, or companies trailing new tech which offcourse is fickle.

Neither is evidence that sound tried and tested green energy infrastructure is going anywhere, once its installed its basically free energy, its not like I am going to go and rip the solar panels up my roof just because interest rates go up or unemployment rises.


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## sptrawler (10 December 2022)

The thing is IMO, at the moment there is an opportunity to diversify and Twiggy is going for it, whether it works out or not will have zero to do with Twiggy.
It will be how committed the Govt's of the world are into making it work and that wont be known for several decades, meanwhile there is a lot of money to be made along the journey.
I only bought FMG because they have diversified and I do hope FFI is eventually spun out of FMG, which my guess is it will happen, once FFI can stand on its own two feet.
To me it is a bit like buying WES for $40 and then they spun out COL, which are now about $16 and WES are still $40, a no brainer really IMO.

Whether a person agrees or disagrees with the viability of renewables, fossil fuel generation can't compete, so the fossil fueled generators are closing down, that is completely taken oos, blown up, trashed, never to return.
So as the limitations of renewables become more and more obvious, which will happen, more and more money will have to be thrown at renewables until we have an electricity system that works. At the moment we are in the early stages and any viable clean energy source is going to be assisted, because there is going to be no other option, as can be seen by the panic going on over energy prices at the moment.

Twiggy has just bought the biggest renewable energy generator in Australia, he can decide who he sells that renewable energy to, FFI or into the grid, meanwhile he has the renewable credentials now to actually say I'm using some of it to make green H2 with AGL.
I can't see, at this point in time, how he can lose. In 5 years time, I will re consider, ATM IMO we are on the upswing of the bellshaped renewable curve not the down swing.
Currently we are throwing heaps of money at low energy density easy to deploy renewables, when that finishes the cry will be to install more clean energy with a smaller footprint but a higher energy density, so that is when GT's running on or co firing H2 will come into play, when that reaches saturation, reality will hit and hard choices will have to be made. Until then, ride the wave IMO.
Just my two cents worth.


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## basilio (12 December 2022)

qldfrog said:


> AGL writting off 2 billions of wind farms just in last february...
> https://www.pv-magazine-australia.com/2021/02/04/wind-farm-contracts-prove-costly-for-agl/ust  I know, it is different, AGL went too early etc etc LOL So different




Did you actually read the story beyond the headlines Qldfrog ?

*Those wind farms are still going strong producing abundant clean cheap energy. The  current owners of the wind farms are also doing very well thank you*. There is absolutely no way FMG would take such a financial bath on their renewable energy  projects

So how did AGL "Lose" $2B on the deal. ?  Read the story in full. 
______________________________________________________________
As for FMG going broke because of a collapse in iron ore prices ?  The current costs of its ore are around $17 a ton. Current returns are $100 plus a ton.  They are the  lowest cost iron ore operater  in the market. Almost every other producer would have to fold before FMG bites the dust.  FFI is also a subsidiary to FMG but any liabilities held by FFI stay with them . That is the insurance to protect the main operation









						How AGL lost nearly $2 billion from its early push into wind farms
					

How did AGL manage to lose nearly $2 billion on its early wind farm investments? And can it avoid a repeat as it manages the survival and exit of its coal and gas assets.




					reneweconomy.com.au


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## dat111 (13 December 2022)

Value Collector said:


> I think you could find an even longer list of fossil fuel companies that have gone bankrupt, think of all the oil and gas explorers, drillers companies etc even petrol stations etc
> 
> Just because you can find examples of bankruptcy in a given industry does not mean that the industry is destined for failure, look at the car industry as an example, I think there was 3000 car companies in the USA that went bankrupt in the first 50 years of the automobile, off course that didn't stop Tesla.
> 
> ...



I agree...that is why we need to question whether it is a good business...  1 in 100 make it or is it 1 in 500 or is it 1 in 5000...  those are the odds of companies making it when the business is governed by free market capitalism.  This is government backed/mandated/funded business oportunity that can only exist if the government wills it...  The thought process of generating ammonia to be transferred around the world for its H2 doesn't make sense from a thermodynamic standpoint...


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## Value Collector (13 December 2022)

dat111 said:


> I agree...that is why we need to question whether it is a good business...  1 in 100 make it or is it 1 in 500 or is it 1 in 5000...  those are the odds of companies making it when the business is governed by free market capitalism.  This is government backed/mandated/funded business oportunity that can only exist if the government wills it...  The thought process of generating ammonia to be transferred around the world for its H2 doesn't make sense from a thermodynamic standpoint...



I am not sure you understand what FMG is actually doing, and the order and time line they are actually doing it in.

1, The first step which they have been working on for a while is just building a bunch of solar, wind and batteries to connect to their mines so that they don’t have to rely on burning diesel and gas. This is risky it’s pretty straight forward and the investments will be cashflow positive.

2, the second step is to continue expanding the renewable electricity supply while simultaneously expanding the amount of their equipment that uses electricity, eg replacing diesel trucks, trains and other equipment with battery electric systems.

3, continue expanding the renewable electricity supply while simultaneously installing hydrogen electrolisers, and diverting the extra electricity to the hydrogen production and finding various ways to monetise that hydrogen, eg hydrogen powered equipment, fertiliser and explosive production, ammonia based fuels for their ships, export etc etc.

As I have said here before, some of the hydrogen plans might not work out, but their is multiple pathways to hydrogen monetisation in the works, and even if hydrogen is a complete failure, all is not lost because we still have all that renewable infrastructure that we can use for our own consumption and also sell to the grid.


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## dat111 (14 December 2022)

Value Collector said:


> I am not sure you understand what FMG is actually doing, and the order and time line they are actually doing it in.
> 
> 1, The first step which they have been working on for a while is just building a bunch of solar, wind and batteries to connect to their mines so that they don’t have to rely on burning diesel and gas. This is risky it’s pretty straight forward and the investments will be cashflow positive.
> 
> ...



I am well aware of the strategy...  

The Perth-headquartered iron ore miner currently powers its operations with fossil fuels, such as diesel and gas. As part of its broader green energy push, Fortescue has detailed plans to shift its operations to renewable energy by 2030. The company plans to spend about AU$9.2 billion on the energy transition, according to a _Wall Street Journal _report.

However, Fortescue estimates the renewable energy shift will save it more than AU$1 billion in annual costs, delivered through energy and carbon credit purchase savings. The renewable energy shift plan also aligns with Fortescue’s goal to achieve net-zero carbon emissions target by 2030. 

My concern is how much of the savings is coming from carbon credit purchase savings...  What is the value of the carbon credit purchase savings... ie. how much money is an Australian carbon credit worth...  Where are they traded... How much is the government willing to pay for one today vs. 5 or 10 years from now.  I have not seen an Australian carbon credit traded or a value placed upon it... If a carbon credit is 50% of the value of savings rather than a 10 year payback.. it will be a 20 year payback if the government runs out of money.


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## UMike (14 December 2022)

Value Collector said:


> I am not sure about that, being paid 10% while we wait for a 100% capital gain screams buy and hold to me.
> 
> It’s funny how a 5% Div stock, with maybe potential for 5% capital gain per year can be considered a buy and hold (which it is).
> 
> ...



So at well under 7% from what i sold it for should i return???? Or wait for another 7% discount to current price?


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## Value Collector (14 December 2022)

UMike said:


> So at well under 7% from what i sold it for should i return???? Or wait for another 7% discount to current price?



I don't know, I am not a trader so I can't offer advice on your trading strategy, I just buy quality companies and hold them.

I am confident todays price represents great value, and would result in a great buy and hold opportunity for the long term investors looking for dividends and capital growth over time. But some one that focuses on short term price fluctuations will find their returns basically based on the randomness of the news cycle and the iron ore price sentiment in the short term.

Taking a longterm position in Fmg is a kin to buying a high quality farm or apartment building you plan to hold longterm as a store of value that produces income. Buying or selling FMG based on your guess of whether it will be up 7% next week or down 7% next week is more like betting Red or Black on the roulette wheel. You might guess right or you might guess wrong, but it would be a mistake to believe a correct guess was based on skill, that would lead you to become a gambler and suffer a gamblers fate.


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## Garpal Gumnut (14 December 2022)

UMike said:


> So at well under 7% from what i sold it for should i return???? Or wait for another 7% discount to current price?



My attitude is to buy lowish which is somewhere above $14 and sell around $20 and let the ole Twiggy have his heart attack giving me nearly 50% profit each bet. 

If he does have a health event as they say, I’ll lower my buy price. 

Not that I’d want anything to happen to the ole Twigs. 

gg


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## UMike (14 December 2022)

Not asking for Advice from VT But am pretty damm sure that knowing FMG price fluctuations it is almost certain that a dip to $19 and below and a peak over $20. are almost certain.
Just depends on how cheeky the trade is to be.
Buying and blindly holding FMG is a waste of a knowledgeable person's time.


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## Value Collector (14 December 2022)

UMike said:


> Not asking for Advice from VT But am pretty damm sure that knowing FMG price fluctuations it is almost certain that a dip to $19 and below and a peak over $20. are almost certain.
> Just depends on how cheeky the trade is to be.
> Buying and blindly holding FMG is a waste of a knowledgeable person's time. Be



There was a time when fmg would fluctuate between around $2.5 and $1.80, no doubt some traders sold out at around $2.5 that last time knowing that is was sure to head back towards $2 on it’s next fluctuation, because after all it was just a “trading stock”.

But, then it didn’t go to $2 again it headed to $6, and paid some dividends along the way. 

The story is repeated many times, leading up to its share price now in the $20’s. each time some traders manage to make some good trades, which make them feel good in the short term, but they also probably missed out on some oversized dividends, some of the big run ups in share price, probably paid a higher rate of capital gains tax and maybe missed some franking credits etc while paying some extra trading costs.

I am pretty happy with just holding FMG for the past 8 years or so, I have received all the dividends which is more than I paid for the stock, all the franking credits, paid no CGT yet and when I do it will be discounted, paid no additional reading costs, and didn’t have to fiercely follow the ups and downs refreshing my screen to see if the daily ups or downs made me happy or sad. 

By all means Trade if that’s your nature, but I don’t believe it’s a better strategy in general than just holding quality stocks.

Right now I am sitting in my easy chair reading enjoying the warm weather, I did some yoga this morning, I’m just about to make some lunch and then enjoy a movie with the wife or maybe some video games on Nintendo switch at happy hour, That’s the type of life style I enjoy, I Don’t want to be making trading choices every day and I don’t feel trading would have got me to be able to retire at 36 like I did.

Buy and hold suits me, I prefer limiting my investment activity to making long term decisions and reading annual and half yearly reports etc 

I do use options which is the closet income to trading, but even that is related to my long term investing.


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## dat111 (15 December 2022)

Value Collector said:


> There was a time when fmg would fluctuate between around $2.5 and $1.80, no doubt some traders sold out at around $2.5 that last time knowing that is was sure to head back towards $2 on it’s next fluctuation, because after all it was just a “trading stock”.
> 
> But, then it didn’t go to $2 again it headed to $6, and paid some dividends along the way.
> 
> ...



Have you purchased any pure play solar generation stocks?  If any are publically traded, would you mind sharing them?

Thanks,


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## Value Collector (15 December 2022)

dat111 said:


> Have you purchased any pure play solar generation stocks?  If any are publically traded, would you mind sharing them?
> 
> Thanks,



Nope, I am not aware of any pure plays. But I do have exposure to solar in a few other ways.

1, I own my own solar panels.

2, I have solar panels on some rental properties which I charge extra rent for.

3, I provide loans to people installing solar through the Plenti loan platform

4, I have held APA for 20 years, they have a few solar and wind sites, FMG also have some solar, and Berkshire Hathaway energy has a lot of wind and solar.

5, I have investments in charter hall who are adding solar to their commercial properties and leasing some of their roof space for solar.


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## Value Collector (17 December 2022)

I think there is going to be some volatility in both the FMG share price and Iron Ore price between now and March. There is a whole bunch of both positive and negative things at play in the short term at the moment. It’s going to be very hard to pick whether the market is going to be bullish or bearish on any given day based on all the factors.

1, China is dumping the covid Zero policy which is very positive long term, because it will end the endless interruptions caused by lock downs.

2, The bad thing is in the short term, say 3 months  the spread of the virus will cause some major chaos, that could be worse than the lock downs, but will end eventually like it did here.

3. Positive thing is the Chinese government has said they will pull out all stops to keep the economy stable and be ready for growth, which should be good for iron ore.

4. The Chinese government has started a platform for centralised purchasing of Iron Ore, which isn’t a bad thing, it might actually create more stable pricing, but in the short term could cause some traders to dump Iron Ore holdings etc and mills to run down stocks which will affect spot pricing, but it should stabilise within 3 months.

So basically there is some great reasons to be positive over the long and medium term, but some short term situations that could cause so negative effects also.


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## frugal.rock (17 December 2022)

Value Collector said:


> 4. The Chinese government has started a platform for centralised purchasing of Iron Ore, which isn’t a bad thing, it might actually create more stable pricing, but in the short term could cause some traders to dump Iron Ore holdings etc and mills to run down stocks which will affect spot pricing, but it should stabilise within 3 months.



More on this with FMG mentioned, and some broader "off topic" subject, but pertinent to us investing trading types.

https://www.mining.com/chinas-central-iron-ore-buyer-may-replicate-success-in-lithium/


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## basilio (24 December 2022)

Twiggy keeps the grass around his feet  well mown.  Always new developments in the wings with  FMG/FFI.

This green steel project marries  FMG's massive production of iron ore with creating a viable way of make green steel from the ore.

Fortescue, Primetals Technologies, and voestalpine to jointly evaluate groundbreaking green ironmaking plant​On December 19, Primetals Technologies, together with its strategic partners Mitsubishi Corporation, Fortescue, a global leader in the mining and heavy industries, and globally leading steel and technology group voestalpine, signed a Memorandum of Understanding (MoU).

The partnership is aimed at designing and engineering an industrial-scale prototype plant with a new process for net-zero-emission ironmaking at the voestalpine site in Linz, Austria. The collaboration will also investigate the implementation and operation of the plant.

The new ironmaking process will be based on Primetals Technologies’ HYFOR and Smelter solutions. HYFOR is the world’s first direct reduction process for iron ore fines that will not require any agglomeration steps, like sintering or pelletizing. A pilot plant has been in operation since the end of 2021, and Primetals Technologies has run numerous successful test campaigns over the last year including successful trials on Fortescue’s Pilbara iron ore products.

The new Smelter technology from Primetals Technologies is a furnace powered by electrical energy. It is used for melting and final reduction of direct reduced iron (DRI) based on lower-grade iron ores. In that way, it produces alternative green hot metal for the steelmaking plant.

..... *Fortescue’s main responsibility in the new project is to provide knowledge about iron ore quality and preparation. In addition, Fortescue will supply various iron ores for the new plant.*

Fortescue Future Industries (FFI) CEO Mark Hutchinson said the partnership was the perfect alignment of the company’s mining and renewable energy goals: “Fortescue has more than two decades of expertise in the iron ore industry, rising to become one of the world’s lowest cost exporters, now shipping more than 180 million tons of iron ore a year. Global demand for iron ore and steel will remain strong for years to come, but we need cleaner, greener industry powered by green energy to eliminate emissions.”

*An industrial prototype*

The project planning phase will be used to design an industrial-scale prototype plant with a capacity of between three to five tons of green hot metal per hour. It is the first solution to link a hydrogen-based direct reduction plant for iron ore fines with a Smelter.

The main goal of the project planning phase is to develop the basis for decision to realize a prototype plant capable of continuous operation, and then to gain the know-how needed for the next step, a commercial full-scale plant. Another target is to investigate the use of various types of iron ores to produce DRI, hot briquetted iron (HBI), and hot metal and, as a next step, draw conclusions about the individual process steps as well as different combinations of them.






						Fortescue, Primetals Technologies, and voestalpine to jointly evaluate groundbreaking green ironmaking plant | Fortescue Metals Group Ltd
					






					www.fmgl.com.au


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## basilio (2 January 2023)

Still holding FMG and have chosen it for the 2023 stock comp.

I think the $100 a ton iron ore price is holding and with new high grade ore coming onto the market plus development of the renewable energy projects  a 2023 price of $40 per share is quite possible. 

But that's just my thoughts.  I Googled a  far more detailed and authoritative analysis of FMG which appears exceptionally impressive. 
A Crystal Ball of exceptional clarity.  With this sort f detailed information surely one could trade a fortune on the predicted highs and lows.





						FMG Share Price Forecast 2023, 2024
					

Fortescue Metals share price for the next days. FMG share forecast and predictions for tomorrow, near days and weeks. Fortescue Metals stock price in 2023, 2024, 2025




					audtoday.com
				



FMG Share Price Forecast 2023, 2024​ 
*January 2, 2023 3:45 pm.*
Fortescue Metals Share Price Forecast For Tomorrow, This Week And Month.​FMG Share Price By Day​
DateWeekdayLowHighPrice01/02Monday18.7321.99*20.36*01/03Tuesday18.5721.81*20.19*01/04Wednesday18.8122.09*20.45*01/05Thursday18.8122.09*20.45*01/06Friday18.8122.09*20.45*01/09Monday18.6921.95*20.32*01/10Tuesday18.8522.13*20.49*01/11Wednesday19.4222.80*21.11*01/12Thursday19.1422.46*20.80*01/13Friday19.2322.57*20.90*01/16Monday18.9622.26*20.61*01/17Tuesday18.9222.20*20.56*01/18Wednesday19.1322.45*20.79*01/19Thursday18.3221.50*19.91*01/20Friday18.0921.23*19.66*01/23Monday18.6021.84*20.22*01/24Tuesday18.2821.46*19.87*01/25Wednesday18.6921.95*20.32*01/26Thursday18.4021.60*20.00*01/27Friday19.3222.68*21.00*01/30Monday19.0522.37*20.71*01/31Tuesday19.6223.04*21.33*02/01Wednesday19.5422.94*21.24*02/02Thursday19.9723.45*21.71*


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## basilio (Sunday at 3:59 PM)

There are always a range of stories on FMG in AFR.   Soem examples

Relentless Forrest never concedes defeat​Billionaire Andrew Forrest’s huge ambition and drive, along with an appetite for risk-taking, has shaped the economy and the fortunes of his company.


Dec 16, 2022
Jennifer Hewett
How Sweden’s dash for green steel could trigger a Pilbara revolution​A Nordic experiment called Hybrit is the first runner in a global race to reshape an entire industry. BHP, Rio, Fortescue and GFG could be in the box seat - if they dare.


Dec 9, 2022
Hans van Leeuwen
Rio Tinto and Fortescue in talks on green hydrogen​Rio Tinto and Fortescue Metals Group seek common ground on green hydrogen amid conflicting views of the role it can play in energy transition.

This man is using ‘pixie dust’ to solve green hydrogen’s big problem​Professor Greg Metha and Fortescue might have a solution to Saul Griffith’s fear that Australia will waste time, money and renewable power making green hydrogen.


Updated Nov 14, 2022
Peter Ker and Lap Phan







						FMG News, Analysis, Announcements & Results | Fortescue Metals Group Ltd | AFR
					

The latest Fortescue Metals Group Ltd [FMG] news, articles, data and analysis from The Australian Financial Review




					www.afr.com


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## divs4ever (Sunday at 8:16 PM)

Value Collector said:


> Nope, I am not aware of any pure plays. But I do have exposure to solar in a few other ways.
> 
> 1, I own my own solar panels.
> 
> ...



no ORG ??

 ORG through a state government initiative  installed ( well had sub-contractors install ) 3 solar arrays   , on the properties held at the time ( one each property )  which fed into the grid  giving  ( most periods )  a rebate  after paying down the solar installation loans


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## Value Collector (Sunday at 9:00 PM)

divs4ever said:


> no ORG ??
> 
> ORG through a state government initiative  installed ( well had sub-contractors install ) 3 solar arrays   , on the properties held at the time ( one each property )  which fed into the grid  giving  ( most periods )  a rebate  after paying down the solar installation loans



I prefer APA over ORG.


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## divs4ever (Sunday at 9:10 PM)

Value Collector said:


> I prefer APA over ORG.



i used to hold ORG  but have exited ( probably permanently )

 APA has never arrived at my price target ( i held Ethane Pipeline in the past  , but APA took them out in an all cash deal )


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## mullokintyre (Monday at 10:29 AM)

FMG continues to lose its top execs ith the departure of Ian Wells, the group CFO.
From The Evil Murdoch Empire


> Fortescue Metals Group's long-serving group chief financial officer Ian Wells resigns, adding to the exodus of senior executives.
> Mr Wells, who joined Fortescue in 2010 and has been CFO since 2018, resigned "to pursue other opportunities".
> It is the latest senior resignation to hit Andrew Forrest's iron ore company, with just two of 11 members of Fortescue’s executive leadership team listed in the company’s 2021 annual report remaining with the company.
> “Ian has been a trusted member of the executive team which has led Fortescue through a number of iron ore market cycles, more recently the impacts of Covid-19 together with global volatility," Dr Forrest said.
> ...



At some stage, the departure of so many execs has got to be a bit of a Problem.
Mick


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## sptrawler (Monday at 12:08 PM)

mullokintyre said:


> FMG continues to lose its top execs ith the departure of Ian Wells, the group CFO.
> From The Evil Murdoch Empire
> 
> At some stage, the departure of so many execs has got to be a bit of a Problem.
> Mick



It depends, as technology is changing rapidly, there is a natural tendency to resist the change.
It means that a lot of senior management have to learn new technical knowledge, I think a lot of 50+ age group managers will be struggling with keeping on top of their brief and it wont only be with FMG management.
This change to new clean energies will affect everyone, from the lay person to the top executives, not all will cope well with the stress of it IMO. 
I saw the introduction of a distributive control system installed in an aging long established plant, most of the older personel walked.
The last thing they wanted, was to have to start learning the whole process from scratch, using technology that they struggled to get their heads around.
I'm not suggesting that this is the reason for the FMG turn over, but I bet it has caused some of the turn over, digging holes and loading ships is a lot different from developing a completely  new production process and marketing a dream.


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## qldfrog (Monday at 2:08 PM)

sptrawler said:


> It depends, as technology is changing rapidly, there is a natural tendency to resist the change.
> It means that a lot of senior management have to learn new technical knowledge, I think a lot of 50+ age group managers will be struggling with keeping on top of their brief and it wont only be with FMG management.
> This change to new clean energies will affect everyone, from the lay person to the top executives, not all will cope well with the stress of it IMO.
> I saw the introduction of a distributive control system installed in an aging long established plant, most of the older personel walked.
> ...



Not at that level of management:
 a CEO or CFO will manage a company producing beans, IO or cruise ship wo issues.
What it points to is that some key top level management do not want to see their names associated to current decisions as this is seen as career destroying
 in this case cleary the green washing move..


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## divs4ever (Monday at 3:43 PM)

will be interesting to see who the replacement is ( and the skill-sets )

 for example  somebody with plenty of M&A experience , might signal  Twiggy going on an acquisition adventure  , in contrast someone with extensive finance skills  may signal   more borrowing  or other financial moves ( say an IPO )


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## mullokintyre (Tuesday at 10:43 AM)

divs4ever said:


> will be interesting to see who the replacement is ( and the skill-sets )
> 
> for example  somebody with plenty of M&A experience , might signal  Twiggy going on an acquisition adventure  , in contrast someone with extensive finance skills  may signal   more borrowing  or other financial moves ( say an IPO )



When you have lost about 20 of your top execs, including the Group CFO and the CFO at Fortescue Future Industries, I would suggest that there is some pretty severe tension at the top. Unfortunately,  none of the Alphabets that oversee these things will be giving them a please explain,  or at least a reasonable explanation for these departures. 
FMG is probably not something I would put my money into at the moment.
Mick


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## divs4ever (Tuesday at 11:03 AM)

mullokintyre said:


> When you have lost about 20 of your top execs, including the Group CFO and the CFO at Fortescue Future Industries, I would suggest that there is some pretty severe tension at the top. Unfortunately,  none of the Alphabets that oversee these things will be giving them a please explain,  or at least a reasonable explanation for these departures.
> FMG is probably not something I would put my money into at the moment.
> Mick



tension or a restructure  ?

 but yes i left the building  in December ( 2022 )

 maybe i will return and maybe not  , too many irons in the fire  for my liking currently


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## Value Collector (Tuesday at 12:54 PM)

qldfrog said:


> Not at that level of management:
> a CEO or CFO will manage a company producing beans, IO or cruise ship wo issues.
> What it points to is that some key top level management do not want to see their names associated to current decisions as this is seen as career destroying
> in this case cleary the green washing move..



I don’t agree at all that the type of business doesn’t matter to a CEO, there are many examples of star CEO’s that’s fail when they switch businesses.

Take Apple for example, they put in the CEO of Pepsi, who was amazing at running a sugary drinks business, but he bombed majorly at Apple, when they brought back Steve Jobs the company flew again.

To think that Andrew Forrest could have replaced Walt Disney, or Disney replace Andrew because both were successful CEOs and should be able to run any business is absurd.


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## UMike (Tuesday at 1:21 PM)

mullokintyre said:


> When you have lost about 20 of your top execs, including the Group CFO and the CFO at Fortescue Future Industries, I would suggest that there is some pretty severe tension at the top. Unfortunately,  none of the Alphabets that oversee these things will be giving them a please explain,  or at least a reasonable explanation for these departures.
> FMG is probably not something I would put my money into at the moment.
> Mick



Not @ $21......
But if they do a bit of a dip.......


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## sptrawler (Tuesday at 1:26 PM)

Value Collector said:


> I don’t agree at all that the type of business doesn’t matter to a CEO, there are many examples of star CEO’s that’s fail when they switch businesses.
> 
> Take Apple for example, they put in the CEO of Pepsi, who was amazing at running a sugary drinks business, but he bombed majorly at Apple, when they brought back Steve Jobs the company flew again.
> 
> To think that Andrew Forrest could have replaced Walt Disney, or Disney replace Andrew because both were successful CEOs and should be able to run any business is absurd.



Agree with you 100%, the H2 story is a hard sell and if the management isn't 100% committed it wont work.

It still may not work, but it is the right idea at the right time, to make the most of the opportunity IMO.


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## Sean K (Today at 7:58 AM)

Must feel like a bit of a merry go round with FMG/FFI/Tattarang/Squadron - anything to do with Twiggy. The People and Culture division must be a busy lot.


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