Have just checked and indeed Rio and glen are both down by 20% since August, 700p in the case of Rio and 80p in the case of glen, so in that comparison it is a piece of not very convincing writing, 20% each is the same.
RE: oversold, so say HL
Dking Thanks for the info. However imo Ivan needs to show the benefits of the xstrata tie-up first, before he starts getting takeover fever again. If any of the miners has underperformed in recent years it is glencore. With so many of their top bosses multi- millionaires as a result of the last merger and generous share options, it is worth questioning the ambition of some. Not Ivan though, as he would have made Ghegis Khan run. It may be a distraction play to divert attention from glens p..s poor sp performance over the past couple of years imo. Will be worth watching though for a t/o premium perhaps.atb
oversold, so say HL
I know this a long article but thought I share. HL one of my brokers has a oversold on RIO shares, along with Royal Mail. Komodo Dragons kill their prey by nipping them in the leg with poisonous fangs and then just follow along behind, waiting for the venom to do its worst. Thus they avoid a risky scrap, but still eat well. We wouldn’t be surprised if Glencore CEO, Ivan Glasenberg knows a thing or two about Komodo Dragons. Earlier this year Glencore approached Rio Tinto but were rebuffed. That was the bite. After a while, word got out and Rio Tinto had to announce they had spurned their suitor. Rio Tinto now has to either fight its way through the venom, or succumb. Shareholders know a premium was on offer, but not shown to them. Rio Tinto must deliver, or else, could be the fund managers’ way of thinking. In common with other mining stocks Rio Tinto has been hit hard in recent weeks and the stock is now some 700p below its recent high. Rio Tinto CEO Sam Walsh recently described the company as a cash machine. Major investments in new capacity are coming to fruition and as he sees it, sales could start to flood whilst capital expenditure falls. Over the last decade, Rio Tinto shares have, on average, been valued at the equivalent of 3.3 times turnover. Today, the ratio stands at 2.0. The outlook for commodity prices is far from clear, but key commodities like iron ore and coal have already seen large falls. If Mr Walsh is right, Rio Tinto will have plenty of free cash flow to dispense to investors in the hope of mollifying them. But if he is wrong, he may well find that Mr Glasenberg is there, waiting at a safe distance.
I disagree over your argument that the recent surge in (over-) investment commodities' was merely another one of those 'cycles' that come and go. China, and the BRIC story, represented something completely different. Everyone, and I mean everyone, made an assumption that these huge populations in developing countries would move en mass at break neck speed into urban areas, thus requiring every greater quantities of commodities of all kinds, including oil. This surge was akin to a mania, and the coming glut will not more be a 'normal cyclic' correction than the recent surge in investment was normal. It set out to anticipate something that, in all probability, will occur over a greater time frame than than anticipated. RIo, BLT and Vale are doing what Saudi Arabia and its peers in OPEC are doing - trying to squeeze out over-supply. This is par of the 'new normal' and, once the speculative rallies in stocks have passed, what you really need to do is sit back and work out for yourself what is the most realistic range that you can buy Rio stock. And it's less than nothing taking note of broker's ratings. Work this one out for yourself. Good luck!
Goldenshares, I don't reckon that a RIO buy at just over 2700 is going to prove to be a bad move. First of all everybody is going by figures from China when realistically we all know that these are, by and large a work of pure fiction. Heavy commodities have always been a cyclical trade and, taken over the last ten years or so, 2700 is close to the bottom of RIO's range. It takes very little in the way of global good news to push this price back above thirty. Put more personally: I wish I was in your position; you're going to be in green figures two and a half quid sooner than I am after my last trade.
Keep watching RT, waiting for 2300, Merry Christmas and a happy New Year to the whole spectrum of investment strategists.
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