The amazing mispricing of iron ore equities
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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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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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