Without a smilie I have no idea if you are serious. Please expand. (DR = Jim P?)
All Ords hit 5000...... What now?
- Thread starter RichardC
- Start date
Without a smilie I have no idea if you are serious. Please expand. (DR = Jim P?)
actually if i was in your shoes with your positions and i was wearing my 'trading hat', maybe then the wisest move to play the effect is just to maintain the 'status quo'.
Gold is trading well within its price band range from Oct 09. Who cares if gold is off $24, that brings it back to the price about what.... 80 hours ago
Given that its trading at the upper limit of the band it can actually come down somewhat and still be within the price band.
Why the focus on the price band?
because this is what the big players are focusing on, and its the big players who will really move the market (think hedge funds), not the retail players, they are just the marginal players.
I found some months ago an excellent piece on the relationship between gold and the three main investment asset classes: property/equities/bond ylds. I cant remember the details, but it went something like this....
post the gold standard, the relationship of gold price is not dependent on inflation, but rather on the underlying real (ie after inflation) return on the 3 major investment asset classes (property/shares/bonds).
Therefore the biggest strategic risk to the price of gold, is a sustainable increase in the returns of the 3 major investment asset classes.
I am not talking about cyclical returns, i am talking about long term secular returns.
So the key might be to focus on when one thinks there will be a secular increase in the returns of the 3 major investment asset classes.
Something i am just reflecting on.
The Dow is down again overnight,and if the Fed goes ahead and buys the entire 600 billion in US Government debt then that will change
the whole market,i still trying to work out how to make money in a market that may well not appreciate at all over the next year,might have to sign up for all the "Soap-Box"speakers ex dropkick experts and see it might not be the time
employ the gearing on gearing strategy,with all the buy backs in the ASX market place,fast food outlets offering 2 for i deals just too balance their books then if those you can't see what's next then good luck.. ..willair..
There was a presentation from The Dailly Reckoning on Torrent Signals and small caps
Somewhere in between 3500 and 7000.
Around 5500.. if most companies can meet the forecast earnings and dividend targets for 2011-2012.
Cheers,
Oracle.
I'm glad that you started this thread back in 2006 as it has been interesting reading. But did you ever consider editing the first sentence?
Any updated opinions from any contributors?
Is there a more up to date keithj spreadsheet looking at p/e ratios?
Cheers
All Ords driven by big stocks anyway, may as well just buy BHP/RIO/FMG and banks. Should just try pick small ord winners.
Took a stab at a miner today after 3 days consecutive falls.
- BFS done
- Funding completed via debt and equity raisings (approx 40% gearing)
- 2 years construction period, working cap of approx 20% capex set aside
- current price seems to be a fair bit below what I would've thought is fair value just by back-on-the-envelope calcs over mine life and also below detailed model valuation
- iron ore price should be a hedge against currency movements
Obviously big movements in iron ore prices and currency will kill the stock, as with any other miner. That said generally speaking they are positively correlated so it should be fine.
Took a stab at a miner today after 3 days consecutive falls.
- BFS done
- Funding completed via debt and equity raisings (approx 40% gearing)
- 2 years construction period, working cap of approx 20% capex set aside
- current price seems to be a fair bit below what I would've thought is fair value just by back-on-the-envelope calcs over mine life and also below detailed model valuation
- iron ore price should be a hedge against currency movements
Obviously big movements in iron ore prices and currency will kill the stock, as with any other miner. That said generally speaking they are positively correlated so it should be fine.
I hate to be that annoying kid that asks lots of questions but, if you wouldn't mind answering I'd really appreciate it
. If you do mind, that's fair enough too.Dunno , skating on thin ice I feel but , Australias been doing that for 3 yrs yet defies gravity time and time again so anything could happen.
Past does show though property dumps often follow a stock market crash 1-2 yrs later though so our property will be a bit of a worry this year, allowing for stimulus . And that stock market crashes are often followed by a second crash around 2 yrs after the first so for me plus world carry ons , the whole deals still a worry - but , who bloody knows !
Cheers
Past does show though property dumps often follow a stock market crash 1-2 yrs later though so our property will be a bit of a worry this year, allowing for stimulus . And that stock market crashes are often followed by a second crash around 2 yrs after the first so for me plus world carry ons , the whole deals still a worry - but , who bloody knows !
Cheers
No worries. I'm not a geology expert so my definition is pretty rudimentary. My background just comes from dealing with these resource companies (among other industries) in corporate and banking/finance activities.
1. BFS = Bankable Feasibility Study.
It's a study that breaks down the economics of the project based on various studies, chemical tests, drill holes, professional costings of infrastructure, potential sale prices (depending on whether you've locked in offtake with buyers) etc. It's basically an economics report. It's a document that's done to a very high standard, often higher than say a Prospectus for an IPO for example (eg QR), as it's not as much a marketing pitching. It's for banks and professional investors (ie institutions).
While it sounds like something you can knock off in a month or so, it's actually a study that requires months of work and millions of dollars of commitment. The study will show that your reserves have already been proven up and that it complys with industry standards, and investors and lenders will have confidence in the report about how much you're going to produce each year, how long your mine life /asset life is etc.
For most junior miners, a BFS could require up to $10m-$20m spend. So getting it out of the way is a MASSIVE milestone. It's also necessary to get this BFS in order to secure funding from the banks (hence it's 'bankable'). Once funding is in place, all that is left is building the infrastructure.
2. Construction period of the infrastructure/roads was 2 years roughly.
3. Generally speaking the strong A$ is a function of our strong terms of trade. High commodity prices is also a function of strong demand for resources.
When resources crash and no one wants it, commodity prices fall. That's a negative. However, when no one wants resources, our A$ also crashes as we no longer have a strong terms of trade. A weak A$ is good for exports (I'm sure you've read this in the paper heaps) because we sell our commodities in US$ or British Pound.
1. BFS = Bankable Feasibility Study.
It's a study that breaks down the economics of the project based on various studies, chemical tests, drill holes, professional costings of infrastructure, potential sale prices (depending on whether you've locked in offtake with buyers) etc. It's basically an economics report. It's a document that's done to a very high standard, often higher than say a Prospectus for an IPO for example (eg QR), as it's not as much a marketing pitching. It's for banks and professional investors (ie institutions).
While it sounds like something you can knock off in a month or so, it's actually a study that requires months of work and millions of dollars of commitment. The study will show that your reserves have already been proven up and that it complys with industry standards, and investors and lenders will have confidence in the report about how much you're going to produce each year, how long your mine life /asset life is etc.
For most junior miners, a BFS could require up to $10m-$20m spend. So getting it out of the way is a MASSIVE milestone. It's also necessary to get this BFS in order to secure funding from the banks (hence it's 'bankable'). Once funding is in place, all that is left is building the infrastructure.
2. Construction period of the infrastructure/roads was 2 years roughly.
3. Generally speaking the strong A$ is a function of our strong terms of trade. High commodity prices is also a function of strong demand for resources.
When resources crash and no one wants it, commodity prices fall. That's a negative. However, when no one wants resources, our A$ also crashes as we no longer have a strong terms of trade. A weak A$ is good for exports (I'm sure you've read this in the paper heaps) because we sell our commodities in US$ or British Pound.
Do all mining companies publicly listed do such a study? So ppl who have such information viz professional investors (institutions) should make healthy return for their investors. Got examples of some funds which I can invest that have shown a good history following their advantage with the BFS.
Cheers,
Oracle.
If they do one, you'll find it. It's just a document they release to ASX. I guess the difference between retail investors and institutions is that the mum and dad wouldn't know to look for that (eg the MMR thread). That said the BFS is a late-stage document, so arguably you've missed a lot of upside. Of course, lower-risk, lower return.
A lot of major iron ore developers didn't need BFS because the majority of them source their funding from Chinese companies who ended up buying 50% of the asset or 19.9% of the company and provide funding in return for offtake, and the Chinese don't need to go to the banks. They are the bank (ie quoting Clinton who asked "how do you talk to your banker?").
A lot of major iron ore developers didn't need BFS because the majority of them source their funding from Chinese companies who ended up buying 50% of the asset or 19.9% of the company and provide funding in return for offtake, and the Chinese don't need to go to the banks. They are the bank (ie quoting Clinton who asked "how do you talk to your banker?").