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What are your thoughts on mining stocks?

I am just starting research on my next share purchase, and for further diversification, have got miners in my sights.

So.... what are your thoughts - not on the category as I'm pretty settled on that - but on the various companies?

Is big beautiful, or is there something to be said for one of the tiddlers? (although I've got to stick to full FTSE listing, not AIM, to meet the ISA rules).

:)
I've got a plan so cunning you could put a tail on it and call it a weasel.
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Comments

  • purch
    purch Posts: 9,865 Forumite
    Highly volatile sector.

    Of the FTSE 100 miners Xstrata probably has the most upside potential, but would be the riskiest play currently due to the nature of their business model.

    BHP Billiton probably is the least risky bet.
    'In nature, there are neither rewards nor punishments - there are Consequences.'
  • 3Dogs
    3Dogs Posts: 14,092 Forumite
    Spammer Kent Hamel has been reported
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  • Wobblydeb
    Wobblydeb Posts: 1,046 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    purch wrote: »
    Highly volatile sector.

    Of the FTSE 100 miners Xstrata probably has the most upside potential, but would be the riskiest play currently due to the nature of their business model.

    BHP Billiton probably is the least risky bet.
    How easy would you say it is to determine business model from the annual accounts? Or would I be better off looking for articles in the financial press?
    I've got a plan so cunning you could put a tail on it and call it a weasel.
  • fairtrade
    fairtrade Posts: 476 Forumite
    It looks like you want mining stocks and I can't advise you but this article may be of interest -
    http://www.cityam.com/news-and-analysis/china-growth-fears-hammer-mining-shares
    For myself I am an optimist - there does not seem to be much use being anything else.
    Sir Winston Churchill
  • LadyElouise
    LadyElouise Posts: 34 Forumite
    Interested in starting new post but can't find where to do so. Any help?
  • fairtrade
    fairtrade Posts: 476 Forumite
    Top Left of main forum page Blue new thread icon.
    For myself I am an optimist - there does not seem to be much use being anything else.
    Sir Winston Churchill
  • turbobob
    turbobob Posts: 1,500 Forumite
    Wobblydeb wrote: »
    I am just starting research on my next share purchase, and for further diversification, have got miners in my sights.

    So.... what are your thoughts - not on the category as I'm pretty settled on that - but on the various companies?

    Is big beautiful, or is there something to be said for one of the tiddlers? (although I've got to stick to full FTSE listing, not AIM, to meet the ISA rules).

    :)

    Blackrock has a mining investment trust - BRWM. I think this is a bit less risky than individual mining stocks but obviously you need to DYOR. Miners are volatile and particularly so at the moment.

    A comment I saw somewhere was "miners are a leveraged play on the health of the global economy" or words to that effect. With a great deal of uncertainty at the moment about the health of the global economy, these are getting pummelled on some days.
  • Wobblydeb
    Wobblydeb Posts: 1,046 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    turbobob wrote: »
    A comment I saw somewhere was "miners are a leveraged play on the health of the global economy" or words to that effect. With a great deal of uncertainty at the moment about the health of the global economy, these are getting pummelled on some days.
    Which is what has set my nose twitching. I love a bargain (obviously holding long-term) ;)
    I've got a plan so cunning you could put a tail on it and call it a weasel.
  • JamesU
    JamesU Posts: 1,060 Forumite
    Part of the Furniture Combo Breaker
    Wobblydeb wrote: »
    I am just starting research on my next share purchase, and for further diversification, have got miners in my sights.

    So.... what are your thoughts - not on the category as I'm pretty settled on that - but on the various companies?

    Is big beautiful, or is there something to be said for one of the tiddlers? (although I've got to stick to full FTSE listing, not AIM, to meet the ISA rules).

    :)

    Fundamentals on mining companies easy to find, but too much risk with individual companies for me....geopolitical risks in mining areas (eg asset seizure, war, tin-pot governments), financial risks (eg any trading regulations, risks to profit with taxation changes, Australia etc). This aside, as mentioned above, high leverage of mining stocks depending on growth make them attractive. But yes, think best compromise is fund or an etf rather than individual shares.

    STOXX 600 basic resources etfs a play on this. Benefits of the leverage, good exposure to miners, diversified risk. RIO, AAL, BLT, XTA make up about 60% of index. "Tiddlers" though such as ANTO with much less weighting. So maybe have a look at etfs also. But DYOR on the etfs themselves, how long running, liquidity, ters etc. XSPR db x-tracker ok in ISA for sure (care: this is NOT XBRS which is etf short) but note db x-trackers are swap derivative. iShare running longer (DE:0006344724). Reasonable recent overview in Morningstar link here with discussion on ST600 basic resource etf providers :

    http://www.morningstar.co.uk/uk/etfs/article.aspx?lang=en-GB&articleid=90034&categoryid=656


    JamesU
  • Wobblydeb
    Wobblydeb Posts: 1,046 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    Thanks for the advice, and link JamesU - really helpful! :D

    I think this is my weekend's reading and research....
    I've got a plan so cunning you could put a tail on it and call it a weasel.
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