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wayneL said:
wayneL said:(I never say say anything bearish around mining folk)
Anyways he says and I quote "I give another 12 months max"
Maybe a fair summary would be that we should consider the three options :- old bull, young bull, and bear. Patient old bulls seem to be pretty contended in my experience. Can be bloody frustrating for young bulls. Maybe review all this in 11 months time. (?)
Speaking of Geralton and points north (Dampier etc) - Dampier's log (70 years before Cook) complains about the flies up there - Some things at least never change.
I guess if mining folk are putting up with the heat and the flies - they (generally) don't want to hear about any pessimism.
But then again 3000 budding millionaires cant all be wrong.
rederob said:A bit "touchy", Wayne - not a bear with a beer headache, I hope!
Now you could have interpreted this message from your INSIDER and added your view to it.
All I know is that every bull market has come to an end, so repeating the bullish view is fraught with getting caught out.
The opposite, however, might see one as a market savant if the timing of a turnaround gets nailed by one's lucid post.
If, historically, you read the economic tea leaves then you will know interests rates are far to low at present to spell global economic doom. The Yanks would probably say we are just into the second innings - based on the Fed's intention to slow the pace of further increases due to an apparent contraction of inflationary pressures. Anyone following baseball will know it's a pretty dull game most of the time - you can walk away and come back an hour later and nothing has changed on the scoreboard. The "plays" change, however, and it is these subtleties that one needs to watch most closely, as they determine the final outcome. In a long waiting game, patience is a principal virtue.
rederob said:Wayne
From a cyclical sense it is more obvious by the month that we are nearing an end after several years strength.
The issue for investors is if it is a short term retraction within a giant commodity bull, or an end to bull run for another decade or so.
There can be no doubt that ramped up production will overrun markets in late 2007/2008 and excess supply will smash prices.
However, our market is a bit lumpy right now and we are seeing separate metals "run", rather than all move relatively the same direction.
In this light we could see iron ore the first metal to slump, perhaps followed by coal, then copper, then aluminium etc: And the time frames may be right out of whack so that the overall "bearish" influence over the commodity tone is muted.
What I certainly believe is that the true commodity bull is years away. It will occur after China's infrastructure growth spurt is largely over, and its population turn into consumers: While at the same time India transmogrifies itself into a fledgling first world country by running an infrastucture build and consumer economy in tandem. 2.5 billion people will weigh heavier on global markets than anything we have seen, ever.
rederob said:Wayne
From a cyclical sense it is more obvious by the month that we are nearing an end after several years strength.
The issue for investors is if it is a short term retraction within a giant commodity bull, or an end to bull run for another decade or so.
There can be no doubt that ramped up production will overrun markets in late 2007/2008 and excess supply will smash prices.
However, our market is a bit lumpy right now and we are seeing separate metals "run", rather than all move relatively the same direction.
In this light we could see iron ore the first metal to slump, perhaps followed by coal, then copper, then aluminium etc: And the time frames may be right out of whack so that the overall "bearish" influence over the commodity tone is muted.
What I certainly believe is that the true commodity bull is years away. It will occur after China's infrastructure growth spurt is largely over, and its population turn into consumers: While at the same time India transmogrifies itself into a fledgling first world country by running an infrastucture build and consumer economy in tandem. 2.5 billion people will weigh heavier on global markets than anything we have seen, ever.
Over ten years later and where are we?What I certainly believe is that the true commodity bull is years away. It will occur after China's infrastructure growth spurt is largely over, and its population turn into consumers: While at the same time India transmogrifies itself into a fledgling first world country by running an infrastructure build and consumer economy in tandem. 2.5 billion people will weigh heavier on global markets than anything we have seen, ever.
Something to be careful of when it comes to investing is that zinc as it is mined is a very different thing to zinc that is actually useful.My cake icing is zinc. 5 years ago LME zinc levels were in excess of 800k tonnes. Today they are just over 90k tonnes, and falling at an unusual pace.
Zinc producers will either deliver into spot, or a market agreed price. By way of example, here's a contract from December 2018 for MMG Dugald River outlining terms.Something to be careful of when it comes to investing is that zinc as it is mined is a very different thing to zinc that is actually useful.
To get from one to the other at a high purity level requires electrolytic smelting, an expensive and energy-intensive process that's generally not done where the ore is mined.
Point being that a company with a zinc mine can't sell zinc to anyone, all they can sell is ore to a smelter. The financial details of contracts etc will determine who is getting the benefit of rising prices - could be the miner or could be the smelter or could be both.
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