'Bottom of the Cycle' Leverage
John Robertson
PortfolioDirect
Prices of companies with iron ore exposure were especially strong last week. BHP Billiton rose 6.9%, Rio Tinto added 4.9% and Fortescue Metals Group gained 18.2%. Overseas, the share price of the other iron ore market leader, Vale, increased 34.9% over the week. The equity price action has once again emphasised the share price leverage to signs of cyclical recovery which exists throughout the sector. Prices have declined to such an extent that unusually strong near term returns may arise from time to time even without a sustained cyclical improvement. Uranium is another industry segment which has shown unusual strength. The Global X uranium exchange traded fund rose 11.6% during the week. The trajectory of this indicator looks very similar to other price indicators in the sector. From the longer term perspective displayed in the chart, last week’s gain in the uranium ETF hardly makes an impact on the loss of value through the cycle.
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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business strategist and investment market professional for over 30 years after starting his career as a Commonwealth Treasury economist in Canberra. Since being Australia's top-rated commodities analyst and chief economist at one of Australia' leading stockbroking firms, he has advised companies across the mining, consumer products, IT and biotech sectors on their equity market relations. He leads the firm's investment evaluation and security structuring activities on behalf of the Australian Small Scale Offerings Board (ASSOB), the world's first equity 'crowdfunding' investment platform. John Robertson discusses the interaction of mining and investment markets in his weekly 'From the Capital' column in Mining Journal.
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John Robertson
PortfolioDirect
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
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No areas of expertise
John Robertson
PortfolioDirect
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
Expertise
No areas of expertise
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