Such flexibility is surely prudent for all cyclical stocks be they miners or housebuilders (Other OTC: UBGXF – news) .
- That has resulted in two interrelated problems: huge oversupply of most commodities and many miners being over-leveraged.
- Many miners had progressive dividend policies that required payouts to slowly increase or, at the very least, stay the same over time.
- As the markets turned and the miners began to flounder, these badges of pride soon became albatrosses around their necks.
- The root cause of their woes, and indeed those of all commodities producers, is the same China .