Ouch! How things can change...

[Deleted User]

cheerfulcat wrote: »

Yant, I hope you aren't addressing me? I don't trade, I am a long term investor.

No just saying something generic.

Dithering_Dad

I just bought back into A&L because it has dropped quite a bit this morning. It's now north of where I bought back in at. I managed to buy back all my shares and pocket some cash. I've turned the corner - I am now an expert in share speculation!

Sell, High, Buy Low. That's my mantra!!

Bit worrying when the BoE fella starts telling us that if we have a huge amount of debt, we better get paying it off quick because we're heading into a financial disaster. I'm glad I started the Mortgage Free in Three challenge - if the economy can just limp along for another 2yrs 5mths, I'll be safe!!

wombat42_2

UK mining shares were the worst performing sector last week down 12.5% but this week they are the best performing sector up 11.8%.

Talk about a roller coaster :eek:

[Deleted User]

RIO jumped from 40 quid a share to 52 quid a share in one day. Some can even double in a day. Lots of things you need to be careful of with miners, some operate in dodgy areas where they either get shot at or the government chucks them out, like I believe rio has an operation in zimbabwe of all god forsaken places. Lots of other risks involved too.

Apparently the best metal prices vs costs at the moment are gold, platinum, palladium, copper. Worst are zinc + stainless steel. According to the UBS analysts report, things dont change quickly so it should be the case till at least 2009. They also noted that the majority of mining companys where significantly undervalued in the market.

Hence why the stockmarkets been using them as a safe haven on major financial turbulence days.

wombat42_2

Yant1 wrote: »

RIO jumped from 40 quid a share to 52 quid a share in one day. Some can even double in a day. Lots of things you need to be careful of with miners, some operate in dodgy areas where they either get shot at or the government chucks them out, like I believe rio has an operation in zimbabwe of all god forsaken places. Lots of other risks involved too.

Apparently the best metal prices vs costs at the moment are gold, platinum, palladium, copper. Worst are zinc + stainless steel. According to the UBS analysts report, things dont change quickly so it should be the case till at least 2009. They also noted that the majority of mining companys where significantly undervalued in the market.

Hence why the stockmarkets been using them as a safe haven on major financial turbulence days.

There may be some inverse relationships between the pure commodities and share prices but i think in general there arent inverse relationships between the general share market and mining shares, or at least the relationship is more complicated. Mining shares are often considered geared and high risk so general share movements are often just reflected in an exagerated way in mining shares.

[Deleted User]

Quite the opposite, most mining companys have no loans what so ever. A fair few that do have loans are very small in comparison to the market cap, for example mercator goldmines is in full operation with all the equipment it needs and yet has 2.7million loans to its market cap of 55million.

To say they are inversly proportional is also not true at all as it would imply that is ftse tended to zero miners would tend to infinity and vice versa.

In the long run they go up with there continuing operations.

Yes there are huge risks involved with mining and oil but there are also much higher rewards and its getting the balance right. Some of the larger companys can absorb quite huge risks because of their size though. The smaller companies however you really need to assess to risks closely.

[Deleted User]

Right vedanta is geared at 35% but is a large company thus will use loans to create shareholder value.

Mercator goldmines is geared at 4.4%
Rusina mining - No debt
RIO tinto - 32%

Lets compare it to none miners -
Patientline - 147%
Rank (casino + bingo) - 88%
Barclays bank - 97.5%
RBS - 94.78
BP - 61.1%
ICI - 110%
Marks and spencers - 56%
Tesco - 36.53%

So I think ive put your assertion to bed

hyposmurf

So does this just look like a bit of a blip or the markets still on a downward leg?I was thinking of holding out until Jan to buy some new investments, but I'm just sitting on th fence at the moment, not sure which way to go.

[Deleted User]

http://seekingalpha.com/article/55866-john-embry-on-gold-i-can-t-think-of-a-better-time-to-buy-juniors

Theres always a bull market at anytime somewhere in the world.

wombat42_2

hyposmurf wrote: »

So does this just look like a bit of a blip or the markets still on a downward leg?I was thinking of holding out until Jan to buy some new investments, but I'm just sitting on th fence at the moment, not sure which way to go.

Timing the markets is a nightmare - a lot of the time they just defy logic. Maybe stick half back in now and the rest in January.