FMG - Fortescue Ltd

[systematic]

I totally missed this. Been out of it for a bit. Quote of the decade minimum, for me.

I’m catching up on some of this thread; and (uncharacteristically for me, replying before I’ve done so. But maybe that’s what I need to learn to do…be uncharacteristic?)

Tell you what MY biggest regret is: my ‘system’ (quant model for posers) has got me in and out of FMG several times.
That’s done well. Recent trade is still current. I got in (yet again) circa 2 months ago. Who’d think that an 80(?)
billion company would be the best current, annualised performer in the portfolio? Like, 14% in a month or two? And when you have 20% of your entire net worth in that; that’s pretty significant? But anyway; my biggest regret: simply, not holding for the, ‘big trend’ that I could have, when I first identified.

Systems / models are great; and will (if implemented correctly) keep emotions in check (I’m almost a robot) and perform better than most experts in a given field, anyway (in our field that would be something like the career analysts)

But the true spoils goes to those who can spot such a business; and ride them through, thick and thin. Regardless of trend, current momentum. Certainly regardless of a vague (non/back testable) flipper concept (from a tipster who changes their back results based on a new and better backtest!)

Most people should index and forget. We all know that. That’s what we (even @tech/a ) would advise his non-stock market interested, friends.

Those who wanna dive in: learn how to test (huge skill, fraught with danger) then test and find what suits. (And then, hope for the best)

Those who are actually willing to pick companies; and invest on a business alone basis - that (to me) is the most amazing group.
That’s the only way you can make 30-40%pa compounded for a decade or two. No robust (ROBUST) model will get you that. To shoot for that, means you have kahunas bigger than Everest.
A few, apparently do. They have my utmost admiration. I’ve said before, I do the systematic thing, because I’m just not that good.

My only challenge to those attempting that (not to those who have actually succeeded in that) is: how do you know, at the end of the next couple decades, that you’ll be that good? You will be Buffett, Craft, Value Collector etc (assuming the latter, after Buffett, are true stories.)

 

[systematic]

I forgot the reason I checked into this thread and got myself sidetracked! Oh, well!

So, here it is, a question (definitely not a trick one!):

Apparently, according to one website that collates such things, FMG is a strong sell on broker consensus. If that’s wrong, forget this question. Apparently it has been, for a bit now.

Yet, as mentioned just above, I’m currently in a wonderful trade (that of course could go -100% theoretically.). So, they can get stuffed, right? (Which has been my consensus since seeing empirical data from Dreman, David; 1998)

What I would like to hear, obviously from
@ValueCollector - as a clearly qualitative analyst (and, anyone else, who puts themselves in that camp) - is why *you* think that *they* have got it so wrong? Oh, and BTW; that you’re, currently right?

I mean, these guys, in all fairness and jokes asides, don’t just eat Arnott’s creams and buy overpriced coffee, right?

I cannot find either academic, or empirical (my own testing) evidence of accuracy or legitimacy.

But again. I’m ‘quant’ (urgh, hate that term / mathematical would be more apt)

FMG is a great, singular case study.

Why are you right, (whoever believes in FMG) versus the disagreement of broker consensus; which is obviously way smarter than you or I?

 

[over9k]

A few, apparently do. They have my utmost admiration.

In the professional space, only about 8-9% of traders consistently beat the market. Even big money hedge funds with all the billions of capital (and therefore ability to hire almost anyone) they have at their disposal struggle to beat the market.

Private equity, venture capital, pension funds etc are a bit different as they're not day trading and the moves/positions they take are far less frequent.

Aside from during covid, I've never been able to make a buck on short term trades, and I like to think I have at least half a clue what I'm doing.

Realistically speaking, the guys in the investment banks that do consistently beat the market are either the absolute, absolute exceptions or they cheat.

The only guy I know from uni that's consistently beaten the market works in private equity and is actually partnered with a few other guys after they all set up their own show after investec (where they all worked together) closed down.

 

[tech/a]

My only challenge to those attempting that (not to those who have actually succeeded in that) is: how do you know, at the end of the next couple decades, that you’ll be that good? You will be Buffett, Craft, Value Collector etc (assuming the latter, after Buffett, are true stories.)

Very true.
It's easy to do once your deep in increased equity. Impossible for most including me if I have a decreasing equity particularly if it's a large majority of my net worth. Even if you have a combined increasing equity from even one large winner and the rest languishing the set-and-forget method is much easier.

Most people should index and forget. We all know that. That’s what we (even @tech/a ) would advise his non-stock market interested, friends.

True again.

My Holdings in Super are governed by a Version of Techtrader which is easy to follow as its equity equity-positive.
I remember back in 200/7 when trading on Nick's (Radge) site the original version live over 3 years.
I traded through BT margin $100k around $40K of my own It was easy to follow because un beknown it turned out to be a cracking Bull Market.
It grew to $485K at its peak and settled back down to $350K as the market pulled back. The System closed out around 60% of the trades by the time I canned it and closed out all positions (Bought another IP with the proceeds).
The system eventually closed out all positions --- my premature exit saved me about $80K.

Right/Wrong? It doesn't matter we live by our decisions and do the best we can whether they turn out Good Bad or Unbelievable!

 

[Value Collector]

I forgot the reason I checked into this thread and got myself sidetracked! Oh, well!

So, here it is, a question (definitely not a trick one!):

Apparently, according to one website that collates such things, FMG is a strong sell on broker consensus. If that’s wrong, forget this question. Apparently it has been, for a bit now.

Yet, as mentioned just above, I’m currently in a wonderful trade (that of course could go -100% theoretically.). So, they can get stuffed, right? (Which has been my consensus since seeing empirical data from Dreman, David; 1998)

What I would like to hear, obviously from
@ValueCollector - as a clearly qualitative analyst (and, anyone else, who puts themselves in that camp) - is why *you* think that *they* have got it so wrong? Oh, and BTW; that you’re, currently right?

I mean, these guys, in all fairness and jokes asides, don’t just eat Arnott’s creams and buy overpriced coffee, right?

I cannot find either academic, or empirical (my own testing) evidence of accuracy or legitimacy.

But again. I’m ‘quant’ (urgh, hate that term / mathematical would be more apt)

FMG is a great, singular case study.

Why are you right, (whoever believes in FMG) versus the disagreement of broker consensus; which is obviously way smarter than you or I?

I am not sure why so many of the analysts get FMG wrong, and have done for as long as I have held. But, if all the Analysts agreed with me I doubt the situation would have interested me, because it would never have been good value.

As far as I remember FMG has been consensus sell since I started buying back in 2012.

Maybe these “analysts”, need to think more like business men, rather than basically trying to make macro decisions and looking at tomany companies to actually understand one.

I probably look at less than 5 companies a year, but I do pretty deep dive into each one, most analysts don’t operate that way.

If I can find one great value situation every 5 years, I am happy, but I doubt the bosses at the research department would be happy with an analyst spending all year dedicate to thinking about one company, and then offering an opinion that was 180 degrees different to every other analyst.

 

[over9k]

because un beknown it turned out to be a cracking Bull Market.

There you go tech. How much did it beat the market by?

If your system, method, any way in which you trade does not beat the market, it's flawed somehow. The only exception to this is getting black swanned, and even then you should have stop-losses in place.

 

[Value Collector]

Very true.
It's easy to do once your deep in increased equity. Impossible for most including me if I have a decreasing equity particularly if it's a large majority of my net worth. Even if you have a combined increasing equity from even one large winner and the rest languishing the set-and-forget method is much easier.



True again.

My Holdings in Super are governed by a Version of Techtrader which is easy to follow as its equity equity-positive.
I remember back in 200/7 when trading on Nick's (Radge) site the original version live over 3 years.
I traded through BT margin $100k around $40K of my own It was easy to follow because un beknown it turned out to be a cracking Bull Market.
It grew to $485K at its peak and settled back down to $350K as the market pulled back. The System closed out around 60% of the trades by the time I canned it and closed out all positions (Bought another IP with the proceeds).
The system eventually closed out all positions --- my premature exit saved me about $80K.

Right/Wrong? It doesn't matter we live by our decisions and do the best we can whether they turn out Good Bad or Unbelievable!

Does you equity level matter in the short term if you have large income flowing in from dividends?

I know it’s a personal thing, but I have always been happy to be paid to wait until the market realised it was wrong .

Most business men don’t get their businesses valued each day, they decide if they are doing well based on the business carried out each month, I treat shares the same way.

 

[tech/a]

There you go tech. How much did it beat the market by?

If your system, method, any way in which you trade does not beat the market, it's flawed somehow. The only exception to this is getting black swanned, and even then you should have stop-losses in place.

It beat it by a very wide margin.

Does you equity level matter in the short term if you have large income flowing in from dividends?

Relative to me specifically No it doesn't matter if I have increasing and not decreasing equity (Reinvest Dividends).
If Dividends do not cover the loss in equity then I find it almost impossible to find a reason to hold if I'm eating into my Equity
by an amount that according to my blueprint is beyond the back and forward test results. Something in my Systematic trading methodology will be broken.

 

[Value Hunter]

I forgot the reason I checked into this thread and got myself sidetracked! Oh, well!

So, here it is, a question (definitely not a trick one!):

Apparently, according to one website that collates such things, FMG is a strong sell on broker consensus. If that’s wrong, forget this question. Apparently it has been, for a bit now.

Yet, as mentioned just above, I’m currently in a wonderful trade (that of course could go -100% theoretically.). So, they can get stuffed, right? (Which has been my consensus since seeing empirical data from Dreman, David; 1998)

What I would like to hear, obviously from
@ValueCollector - as a clearly qualitative analyst (and, anyone else, who puts themselves in that camp) - is why *you* think that *they* have got it so wrong? Oh, and BTW; that you’re, currently right?

I mean, these guys, in all fairness and jokes asides, don’t just eat Arnott’s creams and buy overpriced coffee, right?

I cannot find either academic, or empirical (my own testing) evidence of accuracy or legitimacy.

But again. I’m ‘quant’ (urgh, hate that term / mathematical would be more apt)

FMG is a great, singular case study.

Why are you right, (whoever believes in FMG) versus the disagreement of broker consensus; which is obviously way smarter than you or I?

I think a lot of difference between how analysts look at a company and how myself or someone like Value Collector look at a company is time-frame. I or Value or Craft etc will be considering what a company might be doing 10 years from now with the intention of still holding 10 years from now whereas most analysts are much more short-term.

 

[Value Hunter]

It beat it by a very wide margin.



Relative to me specifically No it doesn't matter if I have increasing and not decreasing equity (Reinvest Dividends).
If Dividends do not cover the loss in equity then I find it almost impossible to find a reason to hold if I'm eating into my Equity
by an amount that according to my blueprint is beyond the back and forward test results. Something in my Systematic trading methodology will be broken.

In the same way that when you own a commercial rental property you are not looking to buy or sell constantly based on swings of market valuation (price) you are looking at the rent its generating now and what it will generate into the future Value collector is looking at FMG or any business as if he's going to own it for a long time and how much is he receiving in dividends (and retained earnings) now and into the future. Just as you treat a private business or commercial business he is treating his equity investments. Why should it be treated differently just because its more liquid? Does that mean you must use that liquidity simply because its there?

And buying and holding is one of the most passive and low stress things you can do. If you can find a stock where you can just buy and hold and generate 15 - 20% annualized returns long term without lifting a finger why wouldn't you do that and go and play golf the rest of the time instead of trying to trade in and out which may or may not improve returns depending on your luck and skill?

 

[Value Collector]

It beat it by a very wide margin.



Relative to me specifically No it doesn't matter if I have increasing and not decreasing equity (Reinvest Dividends).
If Dividends do not cover the loss in equity then I find it almost impossible to find a reason to hold if I'm eating into my Equity
by an amount that according to my blueprint is beyond the back and forward test results. Something in my Systematic trading methodology will be broken.

So do you mean that fluctuating equity bothers you, even if you see it as just a short term fluctuation?

I mean, what if you had a really positive view of the long term output of your business, and really believed that long term dividends would continue to be strong and grow, would you let the fact that your equity might fluctuate bother you?

 

[over9k]

It beat it by a very wide margin.

Right, which means it worked. What I was getting at was that everyone's a genius in a bull market.

A "system" might be as simple as buy index when bull market starting, sell index when bull market over.

 

[dat111]

I forgot the reason I checked into this thread and got myself sidetracked! Oh, well!

So, here it is, a question (definitely not a trick one!):

Apparently, according to one website that collates such things, FMG is a strong sell on broker consensus. If that’s wrong, forget this question. Apparently it has been, for a bit now.

Yet, as mentioned just above, I’m currently in a wonderful trade (that of course could go -100% theoretically.). So, they can get stuffed, right? (Which has been my consensus since seeing empirical data from Dreman, David; 1998)

What I would like to hear, obviously from
@ValueCollector - as a clearly qualitative analyst (and, anyone else, who puts themselves in that camp) - is why *you* think that *they* have got it so wrong? Oh, and BTW; that you’re, currently right?

I mean, these guys, in all fairness and jokes asides, don’t just eat Arnott’s creams and buy overpriced coffee, right?

I cannot find either academic, or empirical (my own testing) evidence of accuracy or legitimacy.

But again. I’m ‘quant’ (urgh, hate that term / mathematical would be more apt)

FMG is a great, singular case study.

Why are you right, (whoever believes in FMG) versus the disagreement of broker consensus; which is obviously way smarter than you or I?

Systematic,

I started purchasing FMG in 2004. I have been accumulating ever since. There are only a handful of things that we can control when purchasing a stock:

1. What we purchase
2. When we purchase
3. When we sell

What we purchase is the hardest of all. We must make a determination whether the industry and company we are buying is a good one. This has many parts such as competition, need for the product, management of the product, etc. In the case of FMG there was more need for the product than the competition was producing for the growth of China and the rest of the world. I bet that steel is a needed commodity, when steel is no longer needed we need to get out. If the management starts making really bad decisions that greatly impact the business it is time to get out. If too much competition gets into the space or if the competition has a better mouse trap and can supply the product and undercut the company then it is time to get out. Since none of these have occurred with FMG, I am still in and accumulating. When these evaluations are made it is not for one month or one year. It is for a long time horizon. Many of the advisors are making their recomendations for short term trades. I think that it is probable that FMG will go down significantly in the next year. I think the advisors are right! But I will continue to hold because once I get in the trading mode, I am chasing the lows and the highs. I am not good at that because I trade out before it reaches the high and never trade back in because I wait for it to go lower. More or less I miss out too much if I actively trade. I also have dry powder on the sidelines to purchase as I am sitll in the accumulation part of my life. So if I remove the money from FMG I have to pick another company to invest and as I said that is the hardest part of investing.

 

[basilio]

I have been surprised/amazed at the relentless undervaluing of FMG by analysts. I bought in after following VC research and deciding there was far more upside than downside and that the then price was good value. So it puzzles me that seemingly professional analysts have been so off track.

I have been surprised and a bit rueful at the very steep rise since November. Certainly the sustained high price of iron ore is a factor but it seems that sentiment has rapidly and decisively changed.

 

[Value Collector]

I have been surprised/amazed at the relentless undervaluing of FMG by analysts. I bought in after following VC research and deciding there was far more upside than downside and that the then price was good value. So it puzzles me that seemingly professional analysts have been so off track.

I have been surprised and a bit rueful at the very steep rise since November. Certainly the sustained high price of iron ore is a factor but it seems that sentiment has rapidly and decisively changed.

I must admit, when I read that you had sold a bunch of your FMG back in November it made me cringe a bit.

But you never know with FMG sentiment can easily change and you might get a chance to buy back cheaper, or it could head to $35 no one really knows the timing. That’s why I just hold and collect the divvies, so that I am definitely in for the ride up.

I mentioned ages ago when people were saying FMG is just a trading stock to buy at $18 and sell at $21 that it was risky because one day they will sell at $21 and FMG will just power up, not to mention missing the divvies while you are out.

Could this be that solid rise event? Is FMG at $21 a thing of the past? Who knows, but it’s an interesting story to live.

Happy Holidays all FMGers it’s been a great year, and I wish every one a pleasant break. It’s a great time of year to relax, read and learn to draw BB-8 from star with my Nieces I am a big kid at heart especially during the holidays. Have fun every one.

See you all next year.

 

[rcw1]

...

And buying and holding is one of the most passive and low stress things you can do. If you can find a stock where you can just buy and hold and generate 15 - 20% annualized returns long term without lifting a finger why wouldn't you do that and go and play golf the rest of the time instead of trying to trade in and out which may or may not improve returns depending on your luck and skill?

Good evening Value Hunter,
Hoping you had a very nice Christmas Day. rcw1 certainly did, heaps of seafood and icy cold beer and afew rums for good measure

Just want to make some comments on your post. Each to our own, rcw1 readily accepts that. There are traders and there are investors. From a fast/swing and momentum trader mindset / perspective:

And buying and holding is one of the most passive and low stress things you can do.

No not all the time it's not, to capture the right stock at the right time can be challenging, there are always options and taking that correct option with a budget can also be challenging whether you trade or invest. With trading certainly a much more regular occurrence

If you can find a stock where you can just buy and hold and generate 15 - 20% annualized returns long term without lifting a finger

Now then, as previously said, each to our own.

Yes, indeed so, you can just buy and hold and generate 15 -20% annualized returns ... nice if that return is available to you and eventuates accordingly, rcw1 shakes you by the hand, well done. But ... during that 4th year there is crash and or a crisis with that particular stock … and that 15-20% earn is no more and... that inital investment amount just went out the window too ... and it takes 2 - 3 years to recover... at least …

In the meantime, rcw1, is fast trading, collecting that earn, bit by bit, slowly but surely, patiently accumulatively throughout the period, using money to make more money, shifting on this stock and then the next ... not holding for long, thus reducing the risk ... but more often than not taking a minor profit; steady freddy ...over and over again … in the sand pit; oh the joy of it all ….

and play golf the rest of the time instead of trying to trade in and out which may or may not improve returns depending on your luck and skill?

Yeah had been known to swing a club from time to time wasn’t real flash at it … but liked the social side of golf ; age has slowed rcw1 down … knees are becoming problematic but still jog … well shuffle is more appropriate word.

Exercise is good for the body and mind.

The blood circulation and pressure certainly gets a good hammering both with trading ha ha ha ha ha and exercise.

Luv the challenge of trading and chalking up a steady flow of wins, over time, decades in fact, it all becomes second nature... have discovered that belief. The challenge that awaits both traders and investors is not to lose that belief.

Yes, there are some very bad days when it all goes wrong, that unfortunately comes with the territory. Luck however, for mine, plays no part in it whatsoever, those days of ‘having a stab in dark’ are long over for rcw1. On the punt, sure, there is an element of luck which can be enhanced with alcohol … ha ha ha … just jokes.

Disclosure
The only investment stock currently holding is STX. Anything and everything else … the hot potato methodology is applied.

Do like to trade FMG but becoming more expensive to do so, and there are other cheaper stocks around to trade that will achieve the same purpose. However, having said this, recently had a swing play with CSL, such a dynamic stock !!

Anyways, rcw1 view.
Have a very nice day today and all the best with FMG.

Kind regards
rcw1

 

[Value Collector]

Good evening Value Hunter,
Hoping you had a very nice Christmas Day. rcw1 certainly did, heaps of seafood and icy cold beer and afew rums for good measure

Just want to make some comments on your post. Each to our own, rcw1 readily accepts that. There are traders and there are investors. From a fast/swing and momentum trader mindset / perspective:


No not all the time it's not, to capture the right stock at the right time can be challenging, there are always options and taking that correct option with a budget can also be challenging whether you trade or invest. With trading certainly a much more regular occurrence



Now then, as previously said, each to our own.

Yes, indeed so, you can just buy and hold and generate 15 -20% annualized returns ... nice if that return is available to you and eventuates accordingly, rcw1 shakes you by the hand, well done. But ... during that 4th year there is crash and or a crisis with that particular stock … and that 15-20% earn is no more and... that inital investment amount just went out the window too ... and it takes 2 - 3 years to recover... at least …

In the meantime, rcw1, is fast trading, collecting that earn, bit by bit, slowly but surely, patiently accumulatively throughout the period, using money to make more money, shifting on this stock and then the next ... not holding for long, thus reducing the risk ... but more often than not taking a minor profit; steady freddy ...over and over again … in the sand pit; oh the joy of it all ….



Yeah had been known to swing a club from time to time wasn’t real flash at it … but liked the social side of golf ; age has slowed rcw1 down … knees are becoming problematic but still jog … well shuffle is more appropriate word.

Exercise is good for the body and mind.

The blood circulation and pressure certainly gets a good hammering both with trading ha ha ha ha ha and exercise.

Luv the challenge of trading and chalking up a steady flow of wins, over time, decades in fact, it all becomes second nature... have discovered that belief. The challenge that awaits both traders and investors is not to lose that belief.

Yes, there are some very bad days when it all goes wrong, that unfortunately comes with the territory. Luck however, for mine, plays no part in it whatsoever, those days of ‘having a stab in dark’ are long over for rcw1. On the punt, sure, there is an element of luck which can be enhanced with alcohol … ha ha ha … just jokes.

Disclosure
The only investment stock currently holding is STX. Anything and everything else … the hot potato methodology is applied.

Do like to trade FMG but becoming more expensive to do so, and there are other cheaper stocks around to trade that will achieve the same purpose. However, having said this, recently had a swing play with CSL, such a dynamic stock !!

Anyways, rcw1 view.
Have a very nice day today and all the best with FMG.

Kind regards
rcw1

An interesting calculation for you to perform, since you said you like to trade FMG, would be to work out whether you would have made more money from just holding FMG,m and collecting a the franked dividends and earning the 50% cap gain discount than you did from your actual trading on the stock you performed.

 

[over9k]

iron ore futures now at 18 month high

 

[Garpal Gumnut]

iron ore futures now at 18 month high

I now wonder whether or not this may be a low or thereabouts for 2024.

Certainly $25 will provide good support.

gg

 

[basilio]

FMG is now well and truly at historic highs. I am picking it for the CY2024 comp because I can see its iron ore production and profitability continuing to grow and the host of renewable energy projects starting to make shape.