FMG - Fortescue Ltd

[cbacamden]

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]

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

 

[SenTineL]

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

 

[IFocus]

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

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

 

[IFocus]

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

 

[Rhynoceros]

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.
"

 

[hollowpoint]

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.
"

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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

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.

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

 

[hollowpoint]

Here's one example
http://business.theage.com.au/business/as-demand-slumps-china-closes-steel-mills-20081031-5fhh.html



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.



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

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]

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.