John Hempton-Bronte Capital

[Guest Dazel]

http://brontecapital.blogspot.co.il/2012/06/how-business-decisions-are-made-in-boom.html

 

 

John Hempton back shorting  a couple of the board's investment ideas....with very sad research even for him....he must be back reading he board...wonder what his new handle is?

 

Naked shorting back?

 

Dazel.

[Liberty]

I wasn't around back in the old FFH days, thanks for pointing that out.

 

Can't say I find that post of his convincing, but he can short good companies all he wants for all I care, it'll just allow me to buy good stuff more cheaply and benefit later when the fundamentals eventually win out.  :P

[PlanMaestro]

I wasn't around back in the old FFH days, thanks for pointing that out.

 

Can't say I find that post of his convincing, but he can short good companies all he wants for all I care, it'll just allow me to buy good stuff more cheaply and benefit later when the fundamentals eventually win out.  :P

 

From the comments, Iron Ore cost curve.

 

http://ge.tt/1jsMYcI/v/0?c

[moore_capital54]

I wasn't around back in the old FFH days, thanks for pointing that out.

 

Can't say I find that post of his convincing, but he can short good companies all he wants for all I care, it'll just allow me to buy good stuff more cheaply and benefit later when the fundamentals eventually win out.  :P

 

Oh man this guy is a total fool, he is missing the key element in why Iron Ore EBIT margins are so damn high!!! hahaha, it's not like LVMH you have to own an ore body and the cost of that ore body is not reflected in the cash costs of extraction, either you delineate an ore body (like Alderon did) or you acquire an ore body at a discount to NAV (which is what BHP does) in which case the value of the ore body is accounted for under mineral properties with depreciation/amortisation marks being taken based on the mine life.

 

Moreover, most of BHP's iron ore deposits are the high grading taconites in the Pilbara region, deposits that are far superior to Alderons (again I am just using alderon as an example we own the name). Anybody in the business knows that Direct Shipping Ore Taconites (50%+ Fe) are extremely rare China is now mining on average 19% Fe and mostly magnetite, which is an inferior ore body.

 

Anyhow the reason why iron ore EBIT Margins are so high is because the world's central banks have flooded us with funny money and iron ore is the second most important industrial commodity after oil. Some think the iron ore story is only relevant to China and BRIC's but they are terribly wrong, it is only a matter of time before NON-BRIC iron ore and steel demand rebounds in which case this is an industry that is very inelastic. I am very bullish on iron ore and steel producers such as Nucor/Mittal and Ferrexpo.

 

 

[meiroy]

 

I think he's spot on as far as the macro goes.

[Guest Dazel]

http://thinkprogress.org/climate/2011/05/02/207994/grantham-must-read-time-to-wake-up-days-of-abundant-resources-and-falling-prices-are-over-forever/

 

 

Jeremy Grantham's research has a reversal in the long term iron ore trend price at 1 in 2.2 million.

 

We like thoses odds.

 

The world is obviously a mess right now....and yet the price per ton of iron ore is still $135. If Moore capital is right like Jim Rogers et all and there will be more money printing...

 

However, Johm Hempton does not deserve too mich attention to his shoddy research...we are more interested in the return of Naked Shorting.

 

Dazel.