Ann: Trading Update, page-44

tks again. good preso. quality exec

but you are still confusing share price performance and industry fundamentals as if they are the same thing.

ill give you another eg of what i mean

have a look at AGO in iron ore

- absurd top of market super high capex benefication business plan - same complete lack of risk mgt as our indian presenter friend outlines here

-  sector normalises - AGO sp falls in a heap, business plan is entirely contingent on getting finance to support building this super high capex plant. outside of that these are 3rd tier resources which would only get nominal book value.  

and yet - and yet - when the iron ore spot price rises, and equity market starts to 'mark to market' an increased possibility of its future cashflows coming to reality....

https://www.google.com/finance?q=ASX:AGO&ei=X4ZnWNmSDIee0ASYqoXYBg

notwithstanding this is an oversupplied market with further massive oversupply coming online in form of Vale's 440Mtpa expansion from next year

your friend is wrong about one thing - the assinine capital allocation driven by egotistic boat builders is exactly the same as every other capital intensive industry in the world.  think hotels, mines, steel makers etc

only a few groups have the expertise and capital to build - so they build in advance of future opportunity that often doesnt arrive for a long time longer than they expect - because they are inept at understanding their cycles

but they dont care because their capital moats are so big the board members and key exec always keep their jobs - they just throw their hands up in air sand say ;who could have predicated this' - hunker down for a few years, sack some rank and file plebs - then come out like heros and make out like bandits when the cycle turns up again.

but this has only a very loose correlation to the actual share price cycle.  coking coal topped out in 2010 - yet share prices didnt materially collapse until 2012.

its the same on the way up as the way down