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Xstrata


dopamine
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Xstrata has plunged to around the £10 mark, which I understand is around current NAV. Anyone got any views on why one shouldn't buy in at this price?

Because in these markets it could still go lower and quality gets hit alongside the rubbish. After today's fall stateside it could be a lot cheaper tomorrow. I agree with you though, many of the big miners are looking attractive if you hold to the fundamentle view that this commodity bull has a long way to run and you in for a few years, but what if it goes to a fiver, could you stomach it? The trouble is, the China/India growth story is not as strong as it was (or isn't being accepted by the market as it was a few months ago) and with the US/UK/Western world either in or on the verge of recession, you would have to be a big believer in the decoupling theory to buy in now.

 

Chart looks awful, falling knife. From a technical standpoint you would hold fire and wait for some evidence that it has bottomed out.

 

http://www.sharecrazy.com/share2607share/s...re&epic=XTA

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Thanks no.6. I agree that it may fall a lot further - I'll be watching it closely. I suppose my thoughts were that at these levels it's hard to imagine losing money over the longish term (although the rule book has clearly changed over past few weeks). I will wait and then buy.

 

Around 4 months ago I had a conversation with a professional trader from a stockbroker I used to use. He tried to get me to pile into Xstrata in a big way as price had fallen to £31 (from peak of £44). I told him that it would soon drop to below £30 and from there would continue to drop. He told me that if Xstrata went back below key support (then) of £29, he would see it as the bargain of the century. I told him I couldn't share his optimism.

 

I assume he is now financially ruined /redundant , and/or has lost a lot of gullible punters a lot of money.

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Thanks no.6. I agree that it may fall a lot further - I'll be watching it closely. I suppose my thoughts were that at these levels it's hard to imagine losing money over the longish term (although the rule book has clearly changed over past few weeks). I will wait and then buy.

 

Around 4 months ago I had a conversation with a professional trader from a stockbroker I used to use. He tried to get me to pile into Xstrata in a big way as price had fallen to £31 (from peak of £44). I told him that it would soon drop to below £30 and from there would continue to drop. He told me that if Xstrata went back below key support (then) of £29, he would see it as the bargain of the century. I told him I couldn't share his optimism.

 

I assume he is now financially ruined /redundant , and/or has lost a lot of gullible punters a lot of money.

I suppose it depends on the timeframe the trader was worker to, but key support levels are only good for as long as they hold and the trend has been clearly down since around July. Once it crashes through one support line, you are looking for the next one and it can become guesswork, especially in markets like these when you see FTSE 100 shares going down (or up) 10-20% in a day. You have to be very good to time this level of volatility and I would guess that the trader you spoke to probably never saw the last few weeks coming at all. As a general rule I find that when clear trendlines emerge, whether up or down, you shouldn't try to second guess when it will change and bet against it. The trend for this one is still down and I guess we can use this thread to keep an eye on it for any possible bottom and change in the trend.

 

Xstrata will do well if it losses less than 5-10% tomorrow, although much may depend on how the Dow opens in the afternoon.

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Down 13.6% today. I must admit I'm surprised at how aggressively resources stocks have sold off today. Markets are clearly anticipating an almost unprecedented slowdown in economic activity. Next stop could well be £5, as you sggested. There will come a point that I won't be able to resist buying some.

 

The thing is, the metals xstrata mines can be used to make tin foil hats, and the markets are pricing in a scenario where the people who wear them will have the upper hand. :lol:

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Down 13.6% today. I must admit I'm surprised at how aggressively resources stocks have sold off today. Markets are clearly anticipating an almost unprecedented slowdown in economic activity. Next stop could well be £5, as you sggested. There will come a point that I won't be able to resist buying some.

Just think if you had bought at £40+ and held on because of all the talk of super-cycles, etc. You do wonder when it comes to this sector, when is a crash not a crash? If it's just a correction it's one of the biggest in the history of markets.

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Just think if you had bought at £40+ and held on because of all the talk of super-cycles, etc. You do wonder when it comes to this sector, when is a crash not a crash? If it's just a correction it's one of the biggest in the history of markets.

 

I agree. Commodities have crashed. I've lost quite a lot on energy and resources funds, but these are long term investments that I expect to recover over a 10 year period. For now though, I just can't see this as a correction. I'm sure some would say that it's an artificially exaggerated correction due to the unprecedented circumstances and need for liquidity, but whatever the cause, this is a major crash. Amongst all the talk of gold and its value, there hasn't been much talk in the main forum of the implications of such a collapse in the diversified miners - the standard bearers for the commodity supercycle, after all, are closer to valueless than anyone probably thought possible only 2 months ago.

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I agree. Commodities have crashed. I've lost quite a lot on energy and resources funds, but these are long term investments that I expect to recover over a 10 year period. For now though, I just can't see this as a correction. I'm sure some would say that it's an artificially exaggerated correction due to the unprecedented circumstances and need for liquidity, but whatever the cause, this is a major crash. Amongst all the talk of gold and its value, there hasn't been much talk in the main forum of the implications of such a collapse in the diversified miners - the standard bearers for the commodity supercycle, after all, are closer to valueless than anyone probably thought possible only 2 months ago.

 

Fair enough, do take a look at the decoupling of prices between paper and real bullion silver and gold though

 

Xstrata's also in tangles of lawsuits in Argentina with TNR Gold Corp (http://www.tnrgoldcorp.com) and Minera Andes (www.minandes.com) - 40% owned by ex Gold Corp Rob McEwan... interesting times..

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XTA around £7.50 today - unbelievable.

Give it a few weeks and I can't see how anyone could go wrong in the medium - long term.

 

I'm pretty convinced that we're going to have deflation now.

 

Good call if you were in today, great spike back up! Mere 25% B)

 

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  • 3 weeks later...
Xstrata has plunged to around the £10 mark, which I understand is around current NAV. Anyone got any views on why one shouldn't buy in at this price?

 

Very volatile again today, just noticed it's droping again like a lead ballon. Most likely on Aluminium and copper price concerns as a guess. Almost back to it's lows again.

 

Is this possible to trade the spikes?

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