gamesinvestor
23 Feb 2016
Hindsight I see everyone is beating themselves up about what ya should a would a done!!Maybe it's also time to reflect on those areas of the market that have been massively overbought because of the panic selling of commodities, oil banks (although I'd take an exception to banks anyway as they are craxxy organisations with an ever low real return on investment).But I think we all know the areas that are in the category -- consumer staples, consumer discretionary; pharmaceuticals in some areas; tobacco (although this is lumped under consumer staples/discretionary).It's probably just a matter of time before sentiment shifts to all these other companies sporting P/E's of 25+ to being recategorised as needing a P/E in the 10-15+ range which is still pretty generous compared to their real growth rates.Games -- Forecasting -- it's easy really!! -- acting on that forecast -- now that's the hard part!
Jack_Walsh
23 Feb 2016
Re: Divi slashed 75% -- loss $5.67Bn Eadwig.I hope you're learning not to take my comments as anything other than badinage. Investing is way too important to be taken seriously. If you did, you'll probably go mad!With regard to your point about learning from the past - I tend to find that experience is the thing you gain just after the moment you needed it in the first place.Also, experience often only works when the same set of circumstances arise a second time - which they don't in global events, my man.Anyhow, have a good day. It's sunny here in Constable Country!
Eadwig
23 Feb 2016
Re: Divi slashed 75% -- loss $5.67Bn LKH, "Well, yes, it is ... but only with the benefit of 20/20 hindsight. "Ditto my post previous post to Jack. Yes, it could well play out as you suggest, and oil too. Some people are suggesting the cut backs in exploration will cause a spike in oil prices .... in 2021. That's the year, not vision.Some metals will come back quicker than others. I don't think we'll ever see the high prices of the last few years again, not without a decade or two of inflation on top.One lesson I will be learning is that investments in miners in future will be based on the usual fundamentals, but I will also work a lot harder to identify the global supply and demand situation for any given metal. If that metal is short of supply but mainly produced by a couple or three miners like BHP and makes up only 5% or less of their revenues, then I wont be buying those miners as a way to play that metal, and may well just let the play go completely instead.There's one lesson I'm taking from this commodity bear market. That situation is more likely to arise than ever given all the M & A activity that happened a few years back.
Jack_Walsh
23 Feb 2016
Re: Divi slashed 75% -- loss $5.67Bn LK.I completely agree with your sentiment regarding prices recovering. As they say, the cure for low prices is low prices! As we all know, commodities tend to be cyclical - which I feel justifies holding them for the long-term. Also, as you've mentioned, nobody seems to have any reliable track record when predicting the price of commodities. Shiller mostly does my head in; however, his CAPE10 method does meet with my approval.Also, let's not forget that the survivors (such as BLT, RIO, ANTO etc) will have increased their market share - so they should be making double coinage when prices do recover.All that said, the above is only any good if you're a buy-and-hold investor (such as myself) - which seems to be a somewhat maligned category of stock-market participant.
Eadwig
23 Feb 2016
Re: Divi slashed 75% -- loss $5.67Bn Jack, "to paraphrase your post: it would have been useful to have been able to see into the future"Well, obviously, hindsight is a wonderful thing. But if you look at my post again, what I am actually saying is that the signs were very obviously there. Indeed, not just signs, but straight-forward information, as given continually by the Chinese government, for example.In other words, its easy to see with hindsight, but I'm still trying to figure out how I missed it at the time - in order to try and learn for the future. This was a lot easier to see than, say, Rolls Royce continually failing to turn itself around, for example.The one thing I can say in mitigation is that global production figures and accurate demand figures are hard to come by. Especially across many different revenue streams like the big miners such as BHP and GLEN have. (RIO and ANTO especially, are much easier to follow).Although not so hard for professional fund managers who can and should be paying the thousands per report that certain specialist analysts compile (one particular one whose name escapes me now is pretty much the industry standard for metals mining and they are very good when you do manage to get a glimpse of wehat they produce) - and I don't remember any of them giving warnings either, not until there was a very obvious collapse in commodity prices. In fact, not even then, really.Warnings only came once share prices were not just down, but way down beyond correction levels. This is what I was saying to LKH that I bet many a fund manager has been invested in BHP throughout the share price decline.I must have been watching copper every day and seeing it pretty much steadily dropping since 2012. Trouble is, I was watching the copper price as an indicator for the Chinese and global economy - and failed to extrapolate what I was seeing to the conclusions I should have drawn with regard to my mining holdings.It is a bit more forgivable in oilers. I personally did sell my oilers quite early when the price of oil started dropping. Unfortunately I badly misjudged how far it was possible for it to drop, so started to buy back in after it seemed to be recovering from lows of around $55 a barrel about a year ago.That turned out to be way too early. It was easy to be fooled because the price recovered above $60 a barrel around that time for a couple of months or so. Long enough to fool me that we had seen the bottom anyway. Then once you've bought your first tranche, you keep buying more on further drops if you believe you're around the bottom. I do anyway. Then you end up deep underwater, a long way from break-even. Then the dividend gets cut and you're even further away and have to start contemplating how much loss you're prepared to take, or need to take, in order to get funds for better opportunities elsewhere.Be glib if you like about seeing into the future. Personally, I'd prefer to try and learn some lessons to avoid getting caught the next time around. If you have any, then please do share.
LK Hyman
23 Feb 2016
Re: Divi slashed 75% -- loss $5.67Bn Eadwig,"They paid through the nose to ramp up production and to meet a demand that was over-estimated and that is now massively over-supplied."It was ever thus, m8 ... and probably ever will be. The herd instinct among the miners is the same as it is among people in general.It's easy now to bleat that "We should all have seen what was coming, it was blindingly obvious".Well, yes, it is ... but only with the benefit of 20/20 hindsight. What is your prediction for the future [of mining]?Mine [my prediction I mean] is that all these cutbacks and chicken licken hand-wringing wails of despair will lead to a situation where, in a few years, supply will undershoot demand and prices will rise again. So I shall hold my big miners, which only represent 4.1% of my shrunken wad (4.2% if I include that munter South32 LOL), and try and learn my lesson. I'm still not quite sure what the lesson is, mind.LKH on the flybridge here endeth the lesso
CF
13 Jan 2016
So what has happened to all those learned people who talked about peak oil a few years ago
