Monday's 12.8% fall in the small resources share price index was a record daily decline

John Robertson


Monday's 12.8% fall in the small resources share price index was a record daily decline. The smallest falls among the stocks in the index were the iron ore miners Atlas Iron and Sundance Resources - possibly because they had already been repriced dramatically. The index has now fallen 58% since the beginning of 2014. What had appeared to be the cyclical low point for the sector in June 2013 has been superseded by nearly 30%. As foreshadowed in our most recent investment report, the past few days will require a rethink of our hypothesis that resources sector equity returns would resemble those in the late 1990s and early 2000s. The dramatic shift in the price of crude oil following the earlier slump in iron ore prices has highlighted once again the tendency for commodity prices to gravitate toward marginal production costs if there is no countervailing market force, potentially rendering all but the most resilient in the sector unprofitable. The latest PortfolioDirect report is available here: (VIEW LINK)

2 topics

John Robertson
John Robertson

John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...


No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.


Please sign in to comment on this wire.