Not too late to sell miners!

From Steve Johnson, chief investment officer of Forager Funds Management, via the AFR:

Sure, you can sell your Rio Tinto shares because the China dream is over. But you will be selling them for $40 each, not the $85 they were changing hands for in 2011. You can sell your BHP Billiton shares, but you’ll be banking $24 a pop instead of the $45 you could have received four years ago.

The sharemarket looks through the front windscreen, not the rear view mirror. Stock prices don’t wait for current data, they move as soon as expectations change about the future. Yes, China’s economy is deteriorating, but I can assure you today’s buyer of Rio Tinto is already aware of the fact.

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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.