Regular readers will know that I’m more than a little amused by the current pricing of iron ore equities. To my mind it is screamingly obvious that the juniors are doomed and the majors are stuffed. The major reason is this chart which is, if anything, now too conservative:
The chart takes reasonable account of shut downs in Chinese mines. It is this that has led me to name this the “idiocy trade”.
Yet the trade is attracting new fans by the day. Motley Fool is the latest to slap a buy on Rio Tinto:
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