Would you rather invest in a company that basically has no capital expenditure other than a bunch of coders in an office and where wars and property laws have no effect, or would you rather invest in a company that has to spend huge amounts of capital expenditure surveying land around the world in places where economic uncertainty is the rule, where government rise and collapse every 3 years, and where confiscation (watch Russia) is done with the stroke of a pen. Mining companies are very risky business and also very cyclical. IO is facing a big downturn and it will carry way into 2015. VALE is still to suffer from that one day blow where everyone runs for the exits. It is coming. Maybe then I'll consider getting in. But if they cut the divi, this thing will go into single digits.
I agree. In addition, spin offs tend to get hammered immediately after. RYAM numbers will not be that strong for the next 2 quarters. Once the extra capacity kicks in and the standalone company has had a couple of quarters under its belts, that is when they will start realizing gains. Not sure when you jump in on a stock that is worth 40-44, but if you don't have any or have a little start adding. I am expecting a 25% return by end of 2015.
This thing will bleed to $10 and below all the way to the end of 2015. Not worth touching until mid of next year. Then reappraise and only go long with long term calls. If they cut the dividend and interest rates rise $7 is a possibility.
"There is no such thing as a giant iron ore stockpile somewhere."
The glut means, readily accessible to support the demand. In other words, the capital intensive part you described has already played itself out, to support the hyper growth of China. Now that that phase is over, there is overcapacity. Anyone thinking vale is going to $35 is dreaming. Ore prices have COLLAPSED from $180 to $80. VALE will trade between 10 and 14 for the next 5 years.
I mean, I am pulling for apple but...no way I choose them over Samsung. They lost the touch. Maybe Jobs was bigger than we ever made him to be, and that says a lot.
I wish I could produce 1 to 2 year old technology and boast about it while the zombies fall all over each other over it. Pretty soon they will change the name to Granny's Apple.
Prepare for massive dumping. They have shown that they are second banana. There is so much quiet dumping you can do before the snowball starts to take everything out in its path.
This dog has started to wag its tale. Hopefully divi news coming and maybe more.
The $12 puts are paying that much. I mean, if all you want to chase is divi then go and do an arbitrage play like BYI. The thing has a 10% discount to its acquisition value. Although it might have tighten as of late. All I am saying is, who gives a #$%$ about the divi. This thing will lose 3% before you get there
PS Right now I am neither short nor long. The reason I am here is that I had an alert when VALE hit $13. I thought that it would be a good play for a technical bounce based on the chart. But after doing some DD I am not even comfortable selling the $11 puts. Maybe I will when it cracks $12