Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
I have been reflecting more on AAL. AAL is NOT interchangeable with RIO and BHP.
The latter two are greatly diversified both by product and jurisdiction, with a copper bias. AAL is southern Africa focused, and a major miner of PGM (Platinum group metals), which have taken a proper kicking (just look at what happened to the palladium price), and it is so heavily into the diamond business, that it owns DeBeers. The wholesale diamond price has fallen by about 70%, and may fall by another 70%. Read the recent Zerohedge article on that.
The two year head and shoulders pattern telegraphed in advance, this near 20% fall in AAL. This has been in the making for a looong time. The price then bounced back to 2000p, we can call that a resistance line, and I sold most of my AAL shares there (at a small %age loss I might add, but that's the head over-ruling the heart). This was a textbook retracement to resistance, and has bounced back down off it, so I think the biggest drop is yet to come.
I can't see what will turn the platinum/palladium price around, if cars are truly going all EV. Plus, diamond prices, have always been artificially manipulated UPWARDS, and I think the jig there is up. They can simply be made in a lab, at a fraction of the cost.
I don't know where the fair value for AAL should be, but I moot that any confidence to keep holding at this price ought be based in conviction in the prospects for the price of PGM and diamonds (which I don't have). You need to know why you think it is undervalued, if you sit tight or buy more. I'm open to well informed arguments.
GLTA.
@Toffappleton1,
It is true that since 1999, the FTSE has made no headway, but 1999 was at the time, a record peak.
The US stock markets themselves were flat between WW2 and the late 60's, with many believing that the DOW would never break thru 1000. Arguably it only did so through currency devaluation !!!
Compared to Blighty, I would say that the US markets are a far better example of rigging or absurdity. Their current aggregate PE ratios are off the charts. They are well into bubble territory.
I have heard this rationalised, on the basis of low interest rates, and because capital needs yield, and had nowhere else to go. But even the recent rise in interest rates could not pop the bubble.
But the comparator here is the Tokyo stock exchange from 1989, which popped spectacularly, and in 34 years, hasn't saw those highs again. I think at one point, it was down 90%.
So old Blighty might be stuck in the mud, But if a global crash kicks everything over, we could say that we would take a hit, but we would not be wiped out as individual investors, as say the yanks might be.
If there is manipulation, I think it's worse when it's to the upside. You think you would cash in, in time, but we wouldn't.
@toffappleton1,
I actually agree with you that the markets are rigged, but that should not be our default assumption. I do agree with you that n@ked shorting is a bane to us small investors.
So, we should look at price movements in this sector with open eyes, just to mull on things we maybe overlooked.
Note also that commodities might crash in a global downturn, because price is determined at the margins. We might get anything between a commodities supercycle, or an extended commodities slump.
I tender the view, that the big five FTSE commodities giants, need not and do not move together over the medium term, regardless that they seem to in the short term.. Out of those 5, we have four groups, and this is why the chart formations differ:
---ANTO is a) for copper, in b) a singular jurisdiction (Chile).
---BHP and RIO, have a lot of copper exposure, but in more diverse jurisdictions, plus they are multi-commodity miners.
---AAL is less on the copper, more into PGM and diamonds, both having had a spanking. What need now for PGM, when the car industry is going EV, so no need for catalytic converters. The recent AAL RNS might not have been the actual cause of the recent drop, but just the final straw. If traders seek copper exposure, AAL is cutting its production, ANTO involves too much jurisdictional risk, whereas RIO and BHP are still diversified companies with a lot of copper exposure.
---GLEN is on planet Mars as far as this sector goes. I understand they had a re-org, and their price history is a sort of reset.
I have no expertise in any of this. I just notice things and maybe collectively we can figure it out.
I forgot to mention,
you can see all these chart patterns yourself, if for each company on this site, you just click 'share charts' on the top panel, then select the longest time period (currently 5 years) , and they come into view.
The neckline doesn't have to be horizontal (like it was for AAL); it's allowed to slope a bit (as it does for BHP).
The pattern is supposed to bounce along this line. three bumps, being two shoulders of equal height, on either side, and the summit will be in the middle.
A reverse H&S is the same, but inverted, as with Anto. If it breaks through the neckline as the formation completes, then it will comprise a price breakout.
So with my amateur eye, I see copper and the rest of the commodities complex maybe pulling in different directions. Even the big boys don't yet know which way it will go, but just maybe, they are selling AAL to buy BHP and RIO, to hedge their bets. BHP and RIO give you copper exposure, without focusing your entire investment in one jurisdiction.
Nonetheless, at some point, AAL becomes cheap.
And I don't know why all my caps disappeared, and everything ended up in lower case.
as a minor aal investor, i am finding this a fascinating thread, because i am a buyer of more, if we can discern a price bottom.
thanks to toffappleton1 and all others for the views. i have a few observations to add.
for those who pay heed to head & shoulder chart formations, note the following:
aal had a classic 'in your face' head and shoulders formation that lasted a couple of years, that it violated a few months ago, falling below the neckline, that back then, portended the fall we just saw. i am surprised it took so long.
however, its peers tell a slightly different story. bhp had a similar formation, but only barely pierced the neckline, then got back above it. the h&s formation seems to have been rejected.
rio is even weirder; the shoulder-head-shoulder formation is ****ahoop; it was a head-shoulder-shoulder formation, invalidating the pattern.
i think the key to it all, is anto***asta, which i am taking as a proxy for the copper price. anto had a reverse head and shoulders formation in the same period. it is currently coming up, out of the right shoulder. if it breaks through the neckline, charting theory says it is going to soar higher.
here is where it all collides: these patterns suggest to me, that commodities miners in general are going to get a spanking, but copper is going to go the other way; it is primed to go up. rio and bhp are much closer correlated to copper than aal, so are caught between 2 forces, and the battle is still playing out. but aal's mix of products is less geared towards copper, so is being dragged the other way, not least by pgm metals and diamonds.
that might help explain what is going on. views welcome.
To buy clothes to go where?
The Market doesn't so far at least, like the news. Price down 10% as I type, effectively down to the offer price.
Paypoint already went through a formal government probe into anti-competitive practices, a couple of years ago, and was cleared. I don't have the details to hand, but I presume any complaint against them would have to go through the same body, which already cleared them.
That was my question. Is there a purpose to selling shares at a premium to the market price? If you know of such purpose then please share.
Do you think the board will be shocked when they have zero uptake, or are there really that many maroons out there who would pay 51p when the current price is 38p? It's like selling £5 notes for £10. Expect a big queue for that!
What is the real purpose of this ret@rded offering that's designed to fail? I start to lose confidence in a stock when the board behaves like this.
So I am advised in my ISA, that for every 5 shares of GCL that I hold, I qualify to buy another one for 51p, while the current market price is 38p, and has been under 50p for several months.
LOL - This looks totally ******ed. Why would anybody do that? What am I missing?
In the absence of news or broader market swings, I think the natural low for Boo today, is the 20 dma, but depending what data source you use, we might have had that already at 52.5 pence. I calc'd it at 52.3p, so my order was unfilled. Some people use the 21dma; I'm not sure which of the two these days is deemed superior or why.
Notwithstanding a drop in the overall market that whacks everything, this share has been grinding in a low zone for quite a while now, and is today at a noteworthy recent low.
It's an unloved share, thinly traded, lots of gloom and despondency; unless there are any further skeletons to declare, then today might prove to be a buying opportunity. I added some at 295p, as a return to the high 300's or even the 400's seems reasonable. It seems a bit undervalued, and it's also a bit niche; it might be a takeover target, or maybe it can pull itself out of its malaise by itself.
GLTA
Thanks shorters; I added ad 51p. Average cost for me now 85p. GLTA
Hat tip to pokerchips and compound for your recent posts below.
If somebody thinks otherwise, then please articulate, but my understand of all technical trading, including that of calls and puts, is that it drives price in the absence of news (the driver being a presumption of a shared understanding by those in the know, of where price will turn), whereas actionable news can change everything.
Pokerchips; do you think traders of calls and puts have access to info that we don't, or is it just a way to amplify hoped for gains, through margin?
Following on from my last post, Barclays valuation on a PE basis has been trailing the sector for a while, and price was also pinned down by a relentless resistance line that goes back to 2008. But, as that resistance line approached zero, we broke above it last year, but not with any flair. So the PE ratio is the next thing that suggests Barclays is undervalued, but PE is a very controversial (and slippery) metric. There are too many ways to calculate 'earnings.'
For convenience, here is how Barclays measures up against its peers on a PE basis, from 4 sources, as at 8:55 this morning. Whichever platform you go to, Barclays lags, and has done for a while. I find this very interesting, I hope others do too.
_______interactive investor_______This site_______Yahoo Finance__________Hargreaves Lansdown
BARC_________5.78________________4.58_____________5.72___________________4.59
LLOY_________7.81_________________6.36____________7.93____________________6.35
HSBA________9.12_________________11.55____________9.46___________________9.78
NWG_________10.40_______________10.00____________10.50__________________11.07
I do loads of long term TA on Barclays and Lloyds. I was intrigued by Barclays because its PE was so much lower than its sector peer group, and this disconnect was suggestive of a set up where a major rise is possible (or all the other banks fall).
Long story short, there are long term trend lines going back to 2008, and a real surfeit of trend-lines that contribute to a chaotic picture, BUT, I think the price action of the last few days is at a real critical juncture for the coming 3 months or so. If we can stay above 170p, I see it as setting a new floor for the next 2 or 3 months. If we struggle to stay above 170, it will be a ceiling. This is approx, as these are not horizontal lines, but the slopes are not steep.
GLTA
@twocents,
I do want to respect that this is an investment blog, as this is not the place to discuss things That do not impact us as investors. So, not to you in particular, but following on from your post:
I suspect that Klaus himself is just mid-tier management, but such as it goes, it is well documented that his little pets include the presidents/prime ministers and their cabinets of Canada, Holland, Finland, New Zealand. That of France and Germany too, maybe less obviously so. In the UK, disciples include Mordaunt, Sunak, and likely Truss and all the others, but most crucially, total control of mainstream media everywhere. I hear that Mr B.Gates (another Klaus pet) attends G7 meetings whenever he feels like it as though he is head of a nation state, controls the WHO, is working on blocking out the sun, and is releasing GMO mosquitoes, without accountability to anybody. And how does a vanilla understanding of the world explain his power and freedom to act as such? And his frequent trips to Epstein island were of no media interest? (one of those taboos...)
The tell, is that world leaders increasingly act in 'lockstep.' They do the same things, use the same language, and even synchronise their actions. They do not criticise, but support each other, while the media in turn, covers for them. Prime examples are the recent global response to a controversial health event, plus so called climate crisis, and general consensus that certain groups and topics are simply taboo.
What does this mean for investors: our world is under attack, economically (through energy restrictions, monetary debasement, restrictions and obstacles to our mobility, the ideological race to EVs, and attack on small businesses), as well as culturally, and spiritually.
The great depression was a tell. 99.9% lost huge wealth, to the 0.1%. It is going to happen again. Did you notice we were all locked down ostensibly to save grandma, but now to hell with grandma and let her freeze, because we now fly the ukraine flag?
Every time there is 'the latest thing' or cause, we are whacked again economically, and you have to pay attention to notice that our ostensible values keep switching, according to the 'latest thing.' While we get distracted by the latest thing, and whether this or that town was taken in ukraine, our pockets are being picked, and we are increasingly herded over the trap door, where at the right time, the lever will be pulled.
Any business like travel and leisure, or which has high transport costs like Ocado, think about the effect on their costs while at the same time the customers wallets are shrinking. And as economies struggle, the breakdown in law and order will add further costs and headaches to the mix.
Investing is about spotting trends, and anticipating changes. But if this all sounds far fetched, then just relax, let the certainties of your belief system assure you.
GLTA
OK, I know this is like talking to a wall, but I'll try.
The Russians do not consider themselves in a war with Ukraine, who they see as a brotherly nation, but in an existential war against NATO, who are using Ukraine as their spear carrier. The Russians are moving as carefully as they can through Ukraine to liberate their people, to minimise harm to both civilian casualties, and to their own soldiers. You are easily misled into thinking this careful pace is due to ineptitude or poor leadership. The Russian army is under no time pressure, and is in alliance with the Donbass militias, the later of which do most of the infantry work, and who are the ones urging caution on the more powerful Russian military, as it is their own relatives across the line of control, typically used as human shields.
About the 'New World Order, ' or great reset, anybody in the west who is ra-ra for western leadership, you are the sucker at the poker table. Whether Putin and Xi are WEF or not, who knows, but pretty much every western government is comprehensively WEF, including your current leaders, and any possible replacements for them. It's all rigged, the recent UK transfer of power is case in point, and so is any future election. All your choices are preselected, WEF candidates. Go on the WEF's own website, and see all your precious western leaders there. The moment they are elected, they turn to Klaus for their instructions. If there is any chance of pushback against this monstrous agenda (you vill eat ze bugz, own nothing and be happy), then it can only be Russia that has the power to do this, and the universal demonisation of Russia trains you to loathe the one global actor free of the WEF global control grid. Your WEF masters are laughing at you.
Yes, scoff, but no other power is up to the job, the west has fallen, its citizenry lined up for a fall, in a war they don't even know they are in. This is not a war against Russia or Ukraine; you are the carbon that your masters want to eliminate.
Mindful that this is a FXPO thread, Poltava is in the zone that may end up in Russian hands. Invest accordingly. You are being fed drivel by western MSM that Russia is losing this war. The war is already lost for Ukraine; it's just the new border that is yet to be finalised. Those who misguidedly trust their MSM, probably boostered to the hilt, are the suckers at the table who didn't get the memo. Don't take my word for it; there are plenty of even western patriots, banned from MSM but who can be found speaking freely, who deserve a listen and who lay it out. Scott Ritter for example, is a name you might be familiar with.
Have a nice day.