@Learner - congrats and I must admit I have looked at FMG since it was $3; never taking the plunge as I was distracted to much by noise rather than facts. I have to laugh when I think the dividend would be larger than the buy in.
I find Iron Ore is always an interesting topic. In a way it reminds me of the shares v property topic.
For me there are some interesting things I am looking at before finally taking the plunge. Keep in mind just like other stocks I understand that when I do buy in, it could go up or down but, I am looking at it as a 5-10yr hold.
CONSIDERATIONS:
Significant money can still be made by the big iron producers even at $40,50,50,70,80.
The Evergrande situation may or may not cause a temporary slowdown in domestic housing development in China. Opportunity still for a better entry price than my target price range of $13-14?
The signs worldwide indicate most countries aim to build (infrastructure) their way out of this crisis including in the USA where not since the California earthquakes of 1994 has the US embarked on such a planned massive infrastructure program to bring itself at least into the 21st century. These projects will inevitably require a significant amount steel they will need to buy.
Small iron ore players have already started shutting up production ie WA miner GWR (not likely to be the only one) Would this allow the big companies the opportunity to offset prices decreases with greater volume?
China produced 56.5% of the worlds global crude steel production. An increase of 3% from 2019 and in contrast to reducing steel production in Europe (world steel.org). So for China it's a major and important exporting market for them. Could they offset any home usage reduction with assisting the world infrastructure build?
Australian Iron Ore has some of the highest grade iron ore in the world. Including some of the lowest carbon intensive production. These are important issues for countries who, still need iron ore to consider, as ESG becomes arguably one of the biggest investing considerations over the next decade.
The biggest, most efficient and forward thinking companies (in most fields) can make money regardless of the market. So with limited knowledge in this field I figure I will focus on buying the Apple or Microsoft equivalent of a mining company. These are just some of the things I have been thinking as I wait for an entry.
