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Twenty-five plus years of excellence in economic, industry and market analysis including equity research, portfolio management, capital markets, business development and strategy. Deep, broad relationships with chief executives and their management teams, institutional investors, industry... More
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LANGENBERG & COMPANY
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TheFirstShift
  • MINING: WHY YOU SHOULD READ THE PAPER... 0 comments
    May 3, 2013 12:43 PM | about stocks: GLCNF

    Hi All:

    As we all know there is a big debate around mining. While I do not attempt to get ALL my insight from the newspaper, occasionally there is really something worth pointing out.

    Unless you are already deeply familiar with the global mining sector...

    I WANT YOU TO INVEST FIVE MINUTES of your time reading, thoroughly, the interview with Glencore CEO Ivan Glasenberg, CEO of Glencore Xstrata post the $66 billion merger with Xstrata.

    Two pieces in the Wall Street Journal (Friday, May 3, 2013). The larger article covers his plans. The smaller one gives you a sense of how he ticks. Read both.

    Page B1 (left column): Glencore CEO Preps Big Layoffs After Deal

    Page B2 (top middle - right below his picture): What makes him tick.

    I am purposely not going to give you any key points. However, if you have interest in CAT, JOY, TEX, ABB, ROK, GE, ATCA, SDVKF or any other company reliant or even modest exposed to mining capital spending, particularly coal, this will be one of the higher ROI five minute periods of your day.

    Why? To quote (paraphrase) Sun Tzu:

    "If ignorant both of your enemy (end customer) and yourself, you are certain to be in peril."

    The point is, the outlook commentary from various mining equipment players has variance and, in most instances, the owners of those assets have limited history with mining. With respect to the business pattern of mining some may know little more than you and me.

    I submit it makes sense to build a good understanding of the playing style of Mr. Glasenberg and the culture of his organization, which will be familiar to those well versed in basic materials but, candidly, less so those of us who came up the electrical, machinery and aerospace pipe. While we never know, for sure, what the future holds, a key input is the playing style of the ultimate decision maker (really - the ultimate decision maker is the commodity price) who has committed to maintaining his capital spending plan through 2015 but...

    Sincerely,

    Brian K. Langenberg, CFA
    Principal

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Themes: CAT, JOY, ATCA, SDVKF, GE, ABB, ROK, TEX, MINING, CAPITAL SPENDING Stocks: GLCNF
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