Member Info for Just_My_Opinions

So scfc... in answer to your question on why I think it's madness that Glencore should do a share buy back. Right now times are good, they have a lot of free cash flow, when times are good Glencore should be learning from it's lesson and paying of a lot of that debt so that when times are bad the company is rock solid.

Because if it doesn't there could be share holders sitting with a 80%+ loss again. My comment about madness was feck all to do with the way they had worded their debt on the company report. It was to do with the real fact that they still have $33.9 of total borrowings... which in plain English is still debt no matter how it's worded.

If the trade war kicks off big time and the entire global economy takes a hit, if the China bubble finally bursts as some financial commentators think it could... that cash flow drops, the value of it's inventories drops and it might even need to burn cash reserves to keep operating while it weathers the storm.

Oh I understand how they arrived at the figure, a monkey could understand that. My point is it is factual to state they have $33.9 Billion of debt. They owe $33.9 Billion.

It's like saying Thomas has a £33,900 loan from the bank... but Thomas debt is considered to be £10,600 because Thomas bought Gold with the loan worth maybe £10,000 and Thomas has £13,300 in income from his job. So the bank considers Thomas's risk as £10,600

It doesn't change the fact that Thomas still owes the bank £33,900... what If Thomas's cash flow should drop if Thomas is made redundant? What if the value of Thomas's Gold goes down with the Gold price?

If that happens, the bank might call Thomas in for an annual review of his accounts if they suspect he might get into difficulty paying.

Do I really need to break it down like a primary school maths example? I don't mean that condescending either... I thought it was pretty clear what I mean. But scfc the random clever cloggs accountant has a bee in his bonnet now he's trying to pull rank haha

scfc,

I couldn't care less if you're an Accountant or a Magitician mate. You're a randomer on a forum, for all I know you're sitting in your dressing gown and slippers watching Jeremy Kyle pretending to be an accountant.

$33.9 Billion is the amount of debt/borrowings/owed by Glencore. You can say it has X amount of Inventories, it has X amount of cash flow etc... Not so long ago the market slaughtered Glencore's share price for being about $40 Billion in debt due to having doubts of the valuation of it's inventories etc

The lionshare of that debt is still sitting on the balance sheet. All I'm saying is, if the market for commodities takes a dive and the price of commodities goes down... which is entirely possible if this trade war develops further... then that debt could be a problem in the future just as it was in 2015 when the market took Glencore to 67p.

Evidently Ivan started paying some of it off, and while he was doing that confidence came back to the market in the form of increased demand for commodities. I personally don't think he's paid enough of it off... right now cash flow is great so it's absolutely not a problem.... but as above that could change.

This explains why Glencore tends to tank much quicker than some of the other big miners who don't have as much debt.

It's a simple point. They owe $33.9 Billlion. They don't owe $10.67 Billion. They haven't paid $23.23 Billion off. It's sitting on the balance sheet. It's a liability. They can ah but we have x amount of cash, we have x amount of inventories but both of which can take a hit for a variety of reasons. So the risk is higher, hence why it dive bombs at any sign of problems.

Nope not getting confused it's right there on the report Net debt to FFO is $10.6 Billion. They have total debt of $33.9 Billion. They can service it right now easily due to strong cash flow. But if the cash flow is threatened the funds from Operations would be lower and hence the net debt to Funds from Operations changes. They absolutely have $33.9 Billion in debt give or take slightly as the next report could show a slight change.

FFO means (Funds From Operations). The Net Debt to FFO is $10.6 Billion. From the limited reading I've done on it, this is nothing to do with assets, it's as in the name states "funds from operations".

To put it in simple terms... There is absolutely $33.9 Billion in debt (give or take as not seen next report) the funds from operations means they can easily pay most of it off to take it to $10.6 Billion.

But if funds from operations takes a hit. I.e a Global downturn, loss of mining rights etc... then that Net Debt to FFO increases. They will obviously have inventories that can be sold to keep the wolves away from the door, but who knows what they will be worth should the above happen.

This is why any potential hit to Free Cash flow, or perceived threat to it moves the share price lower far quicker than most other stocks of a similar market cap. The higher the debt, the higher the leverage, and the bigger the risk should things go wrong.

Glen is highly leveraged, when things are going well it climbs rapidly. When things are doubtful or not going well it drops rapidly too.

A share buy back... it should be a debt pay off first. They've got $33 Billion of debt, that they're trying to pass off as $10 Billion. Madness.

Check your Twitter notifications.

Dibeg,

That might be true, maybe they haven't. But they're doing business in the DRC... a country not known for it's honesty and lack of corruption. And Glen has already agreed to start paying someone on the US sanctions list. So it doesn't take much imagination to conclude that they might have done something wrong.

There's been a number of Gap downs on the DAX, CAC 40 and FTSE (UKX) recently... with some of them not closed. It won't take much to give the market a multi day bounce if anything remotely positive comes out about the trade war.

But I'm staying out until the bigger picture is clear on the trade war. A tiny bit of give or take doesn't end it.

Also SM, on Trump... November might give a better inclination of his popularity. No one really knows how people are perceiving his policies until election time. The polls for example... I don't pay a blind bit of attention to them, they had Crooked Hilary well ahead of Trump by nearly every polling company for months, if you believed them he could not possibly win.

But win he did, all the people critical of Trump, I don't pay much attention to them either... other than to note it's obvious they're sore losers. At the moment there is a transition of power from the left to the right happening all over the Western World.

In the UK people are Remoaning about Brexit and trying to stop the democratic vote. In the USA people are moaning about Trump and doing everything possible to try and have him impeached. Now they're calling for people to mob members of the Trump administration and Republican congress in the street, in petrol station etc (Maxine Waters and others)... they're getting frustrated that no matter how hard they try they haven't gotten anything on Trump to have him impeached so they can take back power again... so they're borderline calling for violence.

I think most objective people can see it for what it is... sore losers who can't accept the result of democracy. I don't know if he'll serve another term, but I wouldn't be the slightest bit surprised to seem him win again.

The danger is though... if it happens, the respective countries in the trade war could hold out for so long that it causes an economic depression, then there's more chance of violence. I don't want violence, I'd rather all this happened peacefully, shortages and constant threat to life is no good for anyone. But it might have to happen to get there.

Note: I'm not predicting this is going to happen, for all I know one side is about to back down today. But I'd love it to happen to sort this world out.

Shareminator,

My ideal scenario... the UK crashes out of the EU with a proper hard Brexit... the one David Cameron promised would happen if we voted leave. The Pound tanks even more, the UK then aggressively cuts corporation tax.

Then the UK becomes super cheap for exporters to produce their goods due to the lower pound, and super competitive for corporation tax. If we got very aggressive with this we could steal the lunch of the EU.

Ignoring the stock market... my total ideal playout...

1. Trump, the EU, Candada, China and Mexico don't back down.
2. The trade war escalates over the coming months.
3. The UK Hard Brexit's.
4. The USA & the UK tag teams the EU by aggressively lowering corporation tax to steal their lunch.
5. The EU population revolts against their respective globalist elite governments, either votes them out or overthrows them.
6. The Right wing takes over the Western world, stops all illegal immigration and deports all illegals.
7. The Western World rebuilds and emerges stronger economically.
8. Western leaders implement free child care and rapidly build houses to bring our fertility rate back to 2.1 per fertile female or above so that we're not replaced by 3rd world cultures.

I hope all that happens, but there might be a bit of civil war on the journey... those in power won't want to let go easily.

I agree with your take on China, they don't have elections to worry about. And the EU are unlikely to cave in. When you put it like that, it does look like Trump is in a weaker position. So the gamble is... keep buying the market because Trump is going to cave in.

Or take him seriously, he's old, near the end of his life. He's a multi-billionaire, but has passed control of his companies to his children. He's clearly an American patriot that puts America first whether people like him or not, that's in no doubt.

So maybe he will go toe to toe with them and not back down. Usually trade wars don't conclude over night though... it's tit for tat for months until someone gives in and wants to negotiate.

1. Dan Gertler was sanctioned by the USA.
2. Glencore decided to stop paying Dan Gertler because he was sanctioned by the USA.
3. The Congo started threatening Glencore's mining operations in the DRC.
4. Glencore decides to start paying Dan Gertler again.
5. The USA's sanction wasn't lifted.
6. The USA goes after Glencore with a subpeona.

How could anyone not have seen something like this coming?

Mick-B you'll notice that I didn't disagree with not taking the advice of people on a forum. In fact I haven't seen anyone try to tell anyone when to buy here today. Just opinions on where they think the share price could be headed etc.

Scfc... don't kid a kidder, you were aiming it at people. If you weren't aiming it at people... then why not just say "Don't take the advice of people on the forum, it's your money your decision? etc"... following it up with specifics is obvious you were aiming it at people who use technical analysis. So many people in the UK have little digs without just coming out with exactly what they think. And then insult the intelligence of people by pretending they weren't doing that.

I'm in agreement with you though, never take the advice of anyone on a forum. A) They probably don't even have authorisation to do so. B) You don't know who they are, or what their motives are.

I think most intelligent people just read all the different opinions, and combine that with other reading of company news, market news etc and make a decision.

She's managed to survive, but for how much longer who knows. Hence the Dax is up significantly.... this article however paints the real picture. Albeit it's the Guardian that's struggling to survive due to it's normal left wing bias.

https://www.theguardian.com/world/2018/jul/03/doubts-raised-over-merkel-compromise-on-border-controls

No one has discussed charts or technical analysis today. And how can you say no-one could have seen this coming? The USA already sanctioned Gertler, and Glencore chose to pay Gertler regardless. Why would the USA say, oh ok... we'll just let that slide.

By paying Gertler, this has angered the USA... now they want documents going back to as far as 2007. So they now have a bigger problem on their hands.

Best of luck to those buying, but the forum needs balance.

Well you derisked anyway by selling you're original stake if memory serves me right, so assuming the Divi continues you're laughing.

haha I knew it :-)