Thematic Trading: Beware of brokers bearing iron ore gifts

Thomas Schoenmaker

Alpine Capital

The correction in iron ore prices and the corresponding weakness in iron ore stocks can make it tempting to buy into them for value. If you’re an investor, as opposed to a trader, we would suggest that you need to consider some sobering facts about the state of the iron ore market before diving into to the contrarian investment argument that circles these iron ore stocks. At least go in with your eyes open. It reminds us of the value trap of the likes of Allco Financial, MFS and Babcock and Brown pre the GFC, which caught out seasoned traders and investors alike. Remember spot prices ignore the capital invested in projects. There are some lower risk ways to play the iron ore weakness which we detail in the full note (VIEW LINK)


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Thomas Schoenmaker
Director and Head of Wealth Management
Alpine Capital

Tom is a Founder and Head of Wealth Management. Since 2012, he has been running the Alpine Model Portfolios, focusing on macroeconomics and tactical equity positioning. These portfolios were initially created as a solution for "core wealth...

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