FMG - Fortescue Ltd

[basilio]

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.
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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]

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.

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.

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]

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!

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]

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]

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]

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]

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]

Here's evergrande for the day for some context

 

[againsthegrain]

Pulled my degen order. Here's why:

View attachment 130525

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:

View attachment 130528


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.

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]

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]

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]

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]

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]

Well, I pulled my head in and sold.
When Twiggy finally starts doing invisible flame hydrogen farts through FMG, I may be interested again.

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..

Market overreaction

Yep, that's what crashes are...

 

[over9k]

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]

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]

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]

Ap

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

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]

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]

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