Step 1. Your comment " china is an exporter of steel, why are they importing our steel ? again my Q, which you haven't yet answered, who buys the steel? coz it is not china or local SA industry . so must be somebody else, but who ? preston, you're talking your book, totally expected, we all are .. but don't expect me to buy into it"
I don't think KIO will go bust, but it going to get very nasty long before it gets good again for KIO .. an yes it will get good again for KIO, but my view is that's years away and with cyclical co's timing is everything ..
a classic circular argument - matched in veracity by the ridiculous MTN thread. Preston has been advocating buying KIO since it was trading at R150. So with an investment down more than 60% over 6 months - Preston is still advocating cost averaging. Different strokes for different strokes, I suppose.
So let do the maths, and you do need a MBA degree to do this, undergrad degree will suffice or even matric maths will suffice. Iron prices has fallen 17%, which is offset by a depreciating rand of 8%, yet the share price has fallen 58% to date. This is further compounded by the fact that 85% of the issued shares are held by Anglo American, IDC and another shareholder.
Must admit Preston, averaging down on a clear loser is not a winning strategy. You can adore this share all you like, it's an Iron Ore $ price taker. You're paying labola for the girl, but instead you're getting the ugly mother in law.