Blackrock World Mining Share Discussion Threads

[aleman] 09/12/2015 10:58

The share options income of the last couple of years would generate 4p+. Are you suggesting BRWM will stop selling on excess future capital returns for current income through options? When the shares hit a low in the cycle, options buyers would probably pay a bit more for the potential recovery so I'd guess they might get 5p per year in options in the near future. If you think they are going to pay out 1-2p in dividend, perhaps you think all miners will axe dividends completely and BRWM are going to pay back 3-4p back to the miners? It seems an unrealistically pessimistic view to me.

[rcturner2] 09/12/2015 10:37

I see this fund with NAV at 100p, with a poor yield of 1-2% and at a discount of 20%, therefore a share price of 80p.

Why anyone thinks this is attractive as an income play is beyond me.

[professor pettigrew] 09/12/2015 10:37

Hmm, I'm not so sure RCT2. Markets, and cycles have a habit of bouncing back when least expected.

I'd reckon on a 5 year view you'll do very well here, but as I said earlier the worst is yet to come.

Remember the good old days of M&G Recovery back in the 70's when all appeared to be doom and gloom? Buying that fund then has multiplied your money over 100 times since.

[professor pettigrew] 09/12/2015 10:17

If I may interject, I can fully see Aleman's point of view here.

It's just a constant buy regardless of price, a classic contrarian view. Very similar to pound cost averaging in a unit/investment trust. As he says, even if the divi yield here goes down to 5% that's still a lot better than the average high st account.

My post last night was designed to highlight that I think BRWM could easily fall to or below £1, but that won't stop me purchasing them at these levels and reinvesting the dividends.

On a 5-year view you probably are looking at an overall gain (including divis) of around 300%.

Obviously though, the worst is yet to come.

[rcturner2] 09/12/2015 10:07

Aleman, your previous successes have no bearing on what happens to BRWM.

The dividend will be cut here, by how much remains to be seen.

Buying a share with a price in freefall and an income that will clearly drop seems a very odd income strategy.

[aleman] 09/12/2015 09:58

You still don't get it, do you, RC2? I have not bought these to sell. I've bought them for the income they will generate. You would be telling me the shares I bought in SDV back in 2008/9 at 49-60p had lost capital value back at the time as they went lower briefly, yet the dividend never dropped below 6p and is now 8p. The cheapest tranch of shares I bought quadrupled. I got paid a yield of over 10% rising to 13-16% as I waited for the shares to post a huge capital gain. I don't need to wait for the bottom to make a lot of money. (How does one know where the bottom is? Many wait for it and miss it!) I just need to start buying when the worst of the falls are done and the prospective yield is good even if it is going to get halved. SDV's dividend fell more than 50% but still made me a fortune.

[hugepants] 09/12/2015 09:50

They've already said they will pay the 14p final dividend out of reserves if necessary. I think thats paid in May. Going forwards Id be OK if they drastically cut full year dividend to 9p-10p. That still gives a 5%+ yield going forward.
Im happy to continue to buy these.
Also buying BRCI. BRCI is a much smaller trust but its split 50-50 between mining and O&G so is a bit better diversified.

[aleman] 09/12/2015 09:45

Curiously, as mining shares were clobbered yesterday, all the base metals rose 1-2% in dollars and the dollar recovered to show no change over the last 24 hours. It's a funny old world.

[rcturner2] 09/12/2015 09:41

Aleman, I really do think you can't see the wood for the trees here. Focusing on the minutiae of the dividend accumulation is missing the bigger picture, which is that the sector is seriously screwed. You have already lost far more in capital than you have gained in income.

[aleman] 09/12/2015 09:39

Accumulated income now 10.74p versus 14.69p last year versus 15.27p the year before. Don't make the mistake of thinking income is down 27%, though, since the reduction accumulates from one quarterly dividend period to another. 3 months ago, it was 5.65p versus 9.45p. so the shortfall has only gone from 3.8p to 3.95p in the last quarter to Dec 9th. Timing of payments could mess that up a bit, though. A year ago, the shortfall was 0.58p. This means the reduction in accumulation is 3.37p over the last year after paying out 21p. That would be consistent with a 17.63p dividend over the 12 months tp Dec 9th, however, it looks pretty clear that things have recently worsened. I shall guess a touch lower at next year's dividend, going for 14p (i.e. basically doubling up on the last year's damage from dividend cuts) and this could lower still if metals prices do not recover after the Fed meeting or even fall further.

Comments welcome.

[aleman] 09/12/2015 00:52

see page 17

[professor pettigrew] 08/12/2015 21:12

Look at the five year chart.
805p to 180p.

Look at the management.
Top class.

Look 12 months out.
Capitulation coming.

Glencore going under?
Anglo American in deep trouble?
FTSE under 5000 by end 2016 due to it's heavy mining content?

Who knows.

BUT as soon as these sink below around 100p they will then be a SCREAMING BUY.

[professor pettigrew] 08/12/2015 20:59

On the website, and here, there are only the top 10 holdings listed.

Does anyone have a link to the entire holdings BRWM has?

[llef] 08/12/2015 16:25

in case someone has not seen it, BHP (13% of BRWM as of 31 oct) is facing a 5bn usd civil law suit in Brazil (as well as 5bn federal law suit)

A deadly dam burst at a Brazilian iron ore mine has triggered a civil lawsuit seeking 20 billion reais ($5.31 billion) in environmental and property damages from mine operator Samarco and its owners, BHP Billiton Ltd and Vale SA , Vale said in a securities filing on Monday.

The National Humanitarian Society (Sohumana) has filed the lawsuit before a federal judge in Rio de Janeiro, Vale said. Brazil's federal and state governments have also said they will sue Samarco and its owners for 20 billion reais after a burst tailings dam last month unleashed 60 million cubic meters of mud and mine waste that devastated a village, killed at least 13 people and polluted a major river valley.

[essentialinvestor] 08/12/2015 14:59

You beat me to it RCT, if you really must have exposure del
that is the way to do it imv.


Listening to the RIO webcast presentation atm, on a 15 minute break currently,
fascinating way to spend a rainy Tuesday afternoon, or is it )

[deltrotter] 08/12/2015 14:54

Thanks RCT. I am buying a good few ITs monthly in my iii ISA. The £20 quarterly fee includes 13 of their regular investment trades (£1.50 each), so:

Month 1 - I buy 5 ITs
Month 2 - I buy 4 ITs
Month 3 - I buy 4 ITs

and then repeat each quarter. I might put this into the mix and buy once a quarter.

[rcturner2] 08/12/2015 14:49

deltrotter, if you are tempted I would recommend pound cost averaging, setting up a monthly payment through a suitable platform. That will reduce the possibility of getting the timing all wrong.

[deltrotter] 08/12/2015 14:37

Yup, all a question of when the cycle will turn. I enjoy the discussion on here.

I am certainly tempted to invest on a VERY long term basis.

[aleman] 08/12/2015 14:32

That would depend on where you think dividends will settle. If the dividend income at the bottom means a BRWM dividend of 15p, then probably yes. If the dividend settles at 10p, then maybe. If it settles at 5p, then probably not. It's all guess work. Accumulating revenue at the moment seems down about 20% but looks set to drop a bit further with a few more cuts recently. The question is whether Chinese and emerging markets' recovery could put a stop to any more and I get my 15p dividends in future. I don't know but my guess is we've dropped a bit too far until things become clearer. There is good news out there that is being ignored for some reason.

[deltrotter] 08/12/2015 14:24

Ok, I am a long term investor. What do you reckon to buying some now and holding for 20 years (until I retire). Do you reckon I'd average out at 10% pa over that time period by buying and holding (ignoring!)?

[aleman] 08/12/2015 14:12

(See 3rd chart of strongly rising retail sales in the last 6 months.)

Like I said, I think the long $/short commodities traders have got carried away ahead of the expected rate rise at the Fed meeting next week.