Blackrock World Mining Share Discussion Threads

[rcturner2] 07/1/2016 12:14

The difference is that oil demand is still pretty much at an all time high and is not going anywhere but up. The oil price fall is mainly a supply side issue.

Whereas the commodity problems are mainly a huge drop in demand and that will not change.

[badtime] 07/1/2016 12:09

What an interesting civilised discussion these past couple of days

[mad foetus] 07/1/2016 12:05

Oil has different issues: the rise of shale, Iranian sanctions being lifted, the Iranian/Saudi battle for regional supremacy, environmental concerns.

I look at BRWM and it has held up well this week in the face of a major global correction. I'm not a buyer yet, but would take some confidence from that.

[aleman] 07/1/2016 11:59

The trouble with that comparison is that there is strong evidence of cuts to supply in the mining sector recently but not with oil. (Bit of a gneralisation on all the diffent metals but it's fair given that detailed analysis of them all would take some doing.) Hence metals prices have been fairly stable for 6+ weeks yet oil has fallen nearly 30% to a price that threatens Shells dividend. Although I would consider putting money into both Shell and BRWM, it seems to me that Shell is a bit further behind in its cycle than BRWM is in metals so I find it odd you are talking the former up and the latter down.

[essentialinvestor] 07/1/2016 11:30

I would not view RDSB as much "safer" than BHP or RIO longer term,
that is my take.

There are some mining sector basket cases and value traps, however
the same can be said for the oil sector.

RCT will no doubt point out that for mining China is a much larger factor
and I happen to agree.

But the flip side is that it may prove to be far easier to strip out capacity
in mining than in crude, interesting times.

[rcturner2] 07/1/2016 11:28

Aleman, I think where we differ is in the consideration of what Chinese expansion meant for commodity consumption. We are talking about 25% of the world's population in one country which went into a massive economic project to move from a third world to a first world country. Over a 20 year period they sucked in huge amounts of commodities from around the world. That phase is over, it was a one time event that will never be repeated.

[rcturner2] 07/1/2016 11:24

Aleman, you ask a fair question and this is my general analysis, which you may disagree with, but is the reasoning behind my purchase of Shell:

Resources
Supply: for the main part just continuing to supply as per the past with the danger of supply increase shocks from stockpiles being firesold.
Demand: disappeared from China which drove the increase.

Oil
Supply: at peak supply currently with movement most likely to decrease through natural decline and lack of drilling, risk of conflict only going to disrupt supply, OPEC may also control production
Demand: still very high and will only strengthen as low oil price is economic booster. Oil demand is much faster moving than commodity demand.

[tonsil] 07/1/2016 10:39

BRWM is now below the 2008 crash level. I am continuing to add as it has a heavy discount and a good yield.
The underlying companies are very energy dependent and so costs are dropping. The largest companies are investing heavily in automation to reduce costs.

This is an excellent long term hold and income share. Below 200 every time it drops further i buy more. Keep bringing it on.

[aleman] 07/1/2016 10:19

Don't you think BRWM should follow (and anticipate) metal prices rather than dodgy economic reports about China. Remember we had similar media reports about China in Q1 2008 about falling growth that proved to be too pessimistic. The Chinese stockmarket had fallen 2/3rds at that time yet it nearly doubled in the following 6 months.

I often think our media and politicians put the boot into China and Europe to distract from poor US and Uk news. Did you notice US construction has been revised down after an error was found in the figures ,and US growth seems to be slowing, and junk bond yields exploding, indicating problems in US credit markets? Recent European PMIs have been strong after our media have been suggesting ongoing weakness (although liquidity issues in US credit markets have a habit of crossing the Atlantic). The news out there is mixed but generally weak. That is nothing new, though. Base metals prices are flat to a whisker up over 6 weeks and gold is up slightly. I think they are more of a cue to follow rather than scaremongering reports about China.

What do your justify your long position in RDSB on if you think the world ecoomy is continuing to get worse because of China? Do you think oil is not related to economic growth and, if so, can't that mean that miners' shares might not follow global growth either? The recent supply cuts might be able to increase prices even if demand falls, and you often get a bounce in share prices when the weakest player in the sector goes to the wall, as well. I suggest to you that BRWM does not have to follow Chinese GDP if the mining companies BRWM are invested in are in the prccess of heavy rationalisation.

The global PMI is weakish but actually doesn't look much to worry about:



Chinese manufacturing PMI has been weak for 4 years:



Chinese services PMI has been weak for 4 years:



When you actually go look at the PMI surveys at source, you kind of get the feeling there is some scaremongering going on.

Do you think there are signs of turning in commodities if you bought RDSB a few weeks ago or are you thinking some comanies do not have to follow the general trend?

[rcturner2] 07/1/2016 08:04

Are the longs on here actually watching the news? Are the China economic stories irrelevant?

I have been warning on here for months, probably over a year, that the situation in China is dire, far worse than the official figures.

I'll say it again, China is in recession, their economy is contracting not expanding.

[hugepants] 06/1/2016 20:38

RIO and BHP Billiton both tanked 5% today. They comprise 24% of the portfolio. On the bright side silver and gold miner Fresnillo up today. Thats 4.4% of the portfolio. Gold, silver and diamonds are 24% of BRWM's portfolio which may explain the relatively modest drop here today.
BRWM's diversification should be providing a degree of safety but howlers like the london mining investment have probably negated that.

[aleman] 06/1/2016 16:02

Studies have shown that about 10-15% of traders make money in the long term, and some of them won't make much. The succesful ones tend to trade much less than the unsuccessful ones, perhaps even doing a only few trades a year and taking bigger positions. Those that make many small trades per week just tend to make their broker rich. This is just a generalisation, of course. There are lots of niche techniques for successful investing and trading.

[rcturner2] 06/1/2016 14:34

Well generally I buy a share where I am happy with the dividend and hope for capital growth as a bonus. Like anhar I will only sell if the yield falls below a certain point. I regard this as an investment, I am happy to hold forever. A trade is something that has a defined time frame and price action required. The evidence is quite clear, trying to trade short term share price movements is no different from playing roulette.

[essentialinvestor] 06/1/2016 14:27

Unfortunately trading tends to attract a personality that enjoys risk taking,
that can often be a lethal combination in the stock market.
I get nervous crossing the road.

Whether you invest or trade and I think there are degrees between the two
rather than black and white, you accept some risk, you are risking
capital.

The two are not mutually exclusive imv and trading a % of a core holding can often
prove rewarding, just my own experience, it does require a time commitment so not something many would either have the free time or inclination to do.

[rcturner2] 06/1/2016 14:21

Yes I did, I never trade. I also bought GTC (oil services) and that is up 50%. Shell is a bit of a punt, I think oil will turn soon as the supply side is much more vulnerable to shocks than standard commodities.

[essentialinvestor] 06/1/2016 14:16

The majority of those are index trading and margined,
never used margin in nearly 30 years and stick to LSE quoted shares, never touch AIM.
I made one recent exception buying NYSE quoted IBM, which I took a quick profit.

RDSB and BP my main earners last year, looking to get back in to BP shortly.

You bought some Shell recently from memory?.

[rcturner2] 06/1/2016 14:10

EI, the evidence is quite categorical, traders lose money on average. The fact that there are a small number of traders making a profit is simply down to randomness and not skill.

[essentialinvestor] 06/1/2016 13:59

You can trade the sector RCT, as mentioned this had all the hallmarks
of a bear market rally.

Appreciate most who post here are probably buy and hold
and short term positioning is not for everyone.

[rcturner2] 06/1/2016 13:40

Longs looking at ten minute price windows and trying to talk up occasional small rises are missing the bigger picture. The trend is down and for good reasons.

[chillwill] 06/1/2016 11:35

Might be right there RCT, ftse looks set for <6000, and copper fairly low... depends if it's all in the price. I'm pretty light on mining co's, just holding some of this (with a tight stop). Looks like a short-term down-trend from 250p has broken and I'm looking for 210p, but will close around 170p if it starts heading south again.

[rcturner2] 06/1/2016 07:52

Shocking news from China on Monday and Baltic Dry hits another all time low?!

Longs have their head in the sand here.

[fabius1] 06/1/2016 01:43

Gents, expect a double bottom test. By the way, what happened to Stavros with his fancy software?

[pixi] 05/1/2016 21:38

Aleman, well done. Value will always out.

[aleman] 05/1/2016 18:02

The longer term trend is a very compressed triangle/wedge within the down channel, which suggests significant pressure building, whichever way it moves.


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[aleman] 05/1/2016 17:51

Will need more bad news soon if it is not to break the medium term downtrend. (The longer term downtrend is still intact up around the 350o level.


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