FMG - Fortescue Ltd

[MRC & Co]

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.

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]

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]

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?

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]

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]

Here's a link to support my statements:

http://www.guardian.co.uk/business/feedarticle/7624606

Any comments would be appreciated.

 

[MRC & Co]

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]

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]

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--

.........................................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]

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]

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

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]

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]

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]

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]

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]

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

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]

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]

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]

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]

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]

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