As value destruction is now a daily event for Australian mining, even the number one cheerleader, the AFR, has been forced to concede:
When asked if he had any thoughts on the new hybrid security to be issued by global mining giant BHP Billiton, Campbell Dawson of specialist hybrid fund Elstree Investment Management was swift in his response.
“Notwithstanding the credit rating and world class Pilbara assets, you should have problems about buying a hybrid from a company that has squandered the last decades worth of cashflow, written down almost everything it bought in the last decade, is less diversified after shunting South32 and is now more involved in a deeply cyclical industry and intends to pay dividends that are higher than profit,” he said.
Finally the truth. And for those determined to hang on as the bear market goes much lower for much longer, here is Marcus Padley:
There are no mistakes in buying a stock, there is just your best effort to choose the best ones, protected by your extreme vigilance, iced with a readiness to change your mind when it goes against you, topped by a willingness to sell freely if the time comes without your pride, conditioning or subconscious getting in the way.
The sooner we all learn that, that it is about odds not certainty, the sooner selling will become no big deal and the sooner we’ll all stop losing money when the market changes trend – an essential ingredient for making it.
I love selling; I am well known for selling before I go on holiday, for instance, and my holidays have proved a particularly reliable counter-indicator of the markets. Selling is very cleansing and when you do, it it is remarkable how your state of mind changes.
You go from worrying about something falling to hoping it does. You are instantly out of danger, in control and with all options open. You should try it some time.
