AGO 0.00% 4.5¢ atlas iron limited

Iron analysis

  1. 1,068 Posts.
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    Hi guys

    I did a detailed analysis of the iron ore sector recently, mainly covering FMG and RIO.
    http://hotcopper.com.au/threads/fmg-pros-and-cons.2548635/?post_id=15589127
    http://hotcopper.com.au/threads/rio-pros-and-cons.2550087/?post_id=15604097

    As mentioned there, much of the factors of my FMG analysis would also apply to other junior companies and probably to an even bigger extent. So, even if I was analysing AGO in detail, I would be following a similar template - so you can have  a look at that analysis if you like, and see what is applicable (Please do not comment in that thread, there however as that is the FMG forum).

    I can understand that some long term investors might be tempted to buy back to average their cost, but please consider all pros and cons before doing so.

    Like I mentioned in the FMG analysis, the length of the bear market might determine the fate of all iron miners and AGO is no exception. Managing costs, cash and debt IMO should be the top priorities of all iron stocks and AGO is no exception.

    Like I mentioned in the FMG analysis, a lot of what I thought could happen in the iron ore sector came true down to the last detail - so much so that I had mentioned in my FMG analysis on July 6 that falls can happen in multiple legs and price could go back to 45$, and we actually moved from 54$ to 44.59$ in just 2-3 days (July 9)– a fall of around 16%, including the 10.1% biggest one day fall on record some 12 hours after I warned of a perfect storm brewing in the iron sector.

    Like I said there however, I don't take any credit for short term predictions. I do take credit however for the fact that iron has gone fully according to how I thought it would go, all through last year. I wish I had shared my analysis much earlier as it might have saved some folks money.
    I don’t short stocks however and can’t say that I’ve gained a cent out of what I thought could happen. I'm actually happy about it in some ways as I'm not sure I would be comfortable making money out of the grief that has plagued the iron sector last year.

    For what it is worth, AGO is the only iron stock that I bought all through last year as I watched the price of iron stocks collapse day after day. I bought it just on Monday actually - at 3.7c but freaked out and sold at 3.8c. I’ll admit that AGO does seem kind of tempting.

    Anyway, like I said, just be aware of the pros and cons and the iron ore market dynamics. I've mentioned a lot of the dynamics in my FMG analysis and many of those factors would also apply to AGO, ARI, BCI, MGX, etc.

    A lot of stocks in the iron ore sector are extremely high risk – high reward stocks. You have to ask yourself if the risk is worth it.
    Good luck with whatever decisions you guys take and all the best. I might not be in the iron sector but I hope you guys make a lot of coin. Cheers
 
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