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Robin B
Posted: 06 September 2024 15:14:01(UTC)
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I was going to buy more of this one earlier but was stifled by an annoying client not paying me on time! But turns out to have been for the good as the sp has kept drifting downwards throughout the day and now forms a new 52-week low as I write.

I fully intend to buy more. This is a sound business with tonnes of cash in the coffers, paying a ~7% dividended and with a PE ratio of around 8. There aren't any alarm bells about the business or its management.

I suppose this stock behaves like a canary in the coal mine for the future macro economic picturw. Will there be a US recession... Will China start firing on all cylinders... Will the price of iron fall ay further..? Will depend on Chinese stimulus and US rate actions I suppose what happens here, amongst everything else.

Still... I wonder if RIO is being over sold and this is a good opportunity to hoover up more? Or is it going to keep falling...

What say you?
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1 user thanked Robin B for this post.
Phil 2 on 08/09/2024(UTC)
ANDREW FOSTER
Posted: 06 September 2024 18:14:22(UTC)
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Robin B;318223 wrote:
I was going to buy more of this one earlier but was stifled by an annoying client not paying me on time! But turns out to have been for the good as the sp has kept drifting downwards throughout the day and now forms a new 52-week low as I write.

I fully intend to buy more. This is a sound business with tonnes of cash in the coffers, paying a ~7% dividended and with a PE ratio of around 8. There aren't any alarm bells about the business or its management.

I suppose this stock behaves like a canary in the coal mine for the future macro economic picturw. Will there be a US recession... Will China start firing on all cylinders... Will the price of iron fall ay further..? Will depend on Chinese stimulus and US rate actions I suppose what happens here, amongst everything else.

Still... I wonder if RIO is being over sold and this is a good opportunity to hoover up more? Or is it going to keep falling...

What say you?


I held RIO in the past and did pretty well, but got out as I felt it was rather 'peaky'. Was my biggest share for a while.

The peak seemed to have been driven on the notion of copper demand driven by very significant expansion of energy generation and automotive use for the EV bubble.

That bubble has quietly unravelled at least for the moment and I think will quietly be dropped having been kicked down the road already by five years. Nobody seems to be talking about Tesla any more and the 'me to' VW bubble has well and truly popped.

So I don't see a significant spike/surge in copper prices re-materialising again any time soon.

That affects RIO heavily, as it has done.

If the SP is sustainable at a 7.5% divvie then that starts to look attractive again as a slow cooker, but I'm not chomping at the bit to re-buy it.

I'm watching it, but think it has to go lower yet before I get itchy fingers.

Just my tuppance of course...



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6 users thanked ANDREW FOSTER for this post.
Newbie on 06/09/2024(UTC), Guest on 06/09/2024(UTC), Robin B on 06/09/2024(UTC), Johan De Silva on 06/09/2024(UTC), stephen_s on 06/09/2024(UTC), Phil 2 on 08/09/2024(UTC)
Johan De Silva
Posted: 06 September 2024 18:55:30(UTC)
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Short term investors see better opportunities with inflation going down.
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2 users thanked Johan De Silva for this post.
ANDREW FOSTER on 06/09/2024(UTC), Robin B on 06/09/2024(UTC)
Robin B
Posted: 06 September 2024 19:45:02(UTC)
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Johan De Silva;318248 wrote:
Short term investors see better opportunities with inflation going down.


Oh yeah? Like what?
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Rookie Investor
Posted: 06 September 2024 19:50:59(UTC)
#4

Joined: 09/12/2020(UTC)
Posts: 2,081
Johan De Silva;318248 wrote:
Short term investors see better opportunities with inflation going down.


What does this even mean?
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Thrugelmir
Posted: 06 September 2024 20:04:40(UTC)
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Commodities are cyclical. Always been a long term hold for me. When some sectors rise others fall. As long as the companies are spinning off dividends. Then they remain to perform a usefull function.
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4 users thanked Thrugelmir for this post.
Jay P on 06/09/2024(UTC), Robin B on 06/09/2024(UTC), Guest on 06/09/2024(UTC), Shaun Fletcher on 06/09/2024(UTC)
Johan De Silva
Posted: 06 September 2024 20:25:06(UTC)
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Rookie Investor;318252 wrote:
Johan De Silva;318248 wrote:
Short term investors see better opportunities with inflation going down.


What does this even mean?

Look at the flow chart RICA had published of various macro outcomes. Higher inflation better for commodities... Higher rates better for financials etc... etc...etc...

Robin B;318250 wrote:
Johan De Silva;318248 wrote:
Short term investors see better opportunities with inflation going down.


Oh yeah? Like what?

Perhaps take a look at the sector overweights and under weights of JGGI in August on their website. JPMorgan trusts take into consideration the current and future macro conditions in overweight/underweight by sector and factor against the index.

As mentioned Commodities are cyclical but the cycle is much larger in timescales that this low is not one (I think). Thrugelmir we know is clearly a long term investor waiting for the cycle that I don't believe is imminent due to the same factors that Andrew wrote in the second post of this thread.

As for me it's a rotation into mostly Utilities during August. Some other members are following with bonds or bond like things (see transaction, infrastructure or REIT threads). This won't make you rich but the returns are more certain until opportunities like RIO come along at the right time.
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2 users thanked Johan De Silva for this post.
Robin B on 06/09/2024(UTC), ANDREW FOSTER on 06/09/2024(UTC)
Robin B
Posted: 06 September 2024 21:14:50(UTC)
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So what do you consider is the length of the broader cycles? How do you identify one of those on a graph charting the longer term changes in this stock price? I don't see obvious evidence of longer term cycles - it does seem to track the general economic conditions - obvious peaks and troughs associated with the GFC and Covid, macro stimulus, etc.
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Johan De Silva
Posted: 06 September 2024 22:09:26(UTC)
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You would to seek a commodities expert. Suspect they would say 20 years as that's how long it takes to build a mine apparently from exploration, licences, feasibility study, funding to the construction.

The biggest newest mines for the transition are in PHI.
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Rookie Investor
Posted: 06 September 2024 22:37:14(UTC)
#7

Joined: 09/12/2020(UTC)
Posts: 2,081
Johan De Silva;318256 wrote:
Rookie Investor;318252 wrote:
Johan De Silva;318248 wrote:
Short term investors see better opportunities with inflation going down.


What does this even mean?

Look at the flow chart RICA had published of various macro outcomes. Higher inflation better for commodities... Higher rates better for financials etc... etc...etc...



Oh if investing were that simple!

Why on earth would anyone listen to RICA anyway?
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