Explaining illogical moves

When the dust settles after a big market correction there's always the search for "why" which inevitably leads to people pointing to examples of outliers and strange behaviour amongst issues. Your humble scribe pointed one out yesterday with the move gold put in last night. This morning, reader SB sent in a different one via this chart you see below:

The share price of Southern Copper (SCCO) as a ratio with the price of copper is the example, with the chart pointing to the big downmove and a low ratio we haven't seen since the fun'n'games of late '08. So is this a buying opportunity in SCCO? Yep, I think so but I'm biased, as I've owned it for what seems like forever. Mind you, it's never traded by your humble scribe and is there for the divis, so perhaps I don't care that much either way. 

If, however, the current U$4/lb line for copper doesn't hold and the metal gets cheaper quicktime, SCCO will likely feel the hit even harder than the metal's drop. That's the risk, but as I personally see copper moving up from here I think there's more potential reward right now.

dyodd, dudettes & dudes

Why Southern Copper (SCCO) is a long-term hold

It's paid $10.54 in divis since the buy and hold started and will pay another juicy one soon thanks to the very good quarter it's just put in.

And for what it's worth*, it was bought way back then at just under $8 a share (split adjusted).

*not much

Cananea, a destroyed mine

That's the title of this report in Mexico's Kiosco Mayor Noticias of Sonora. Reporter Francisco Rodriguez was invited to the site of the copper mine by its owners Southern Copper (SCCO)/Grupo Mexico to see what sort of state it was in now that the striking miners have been dislodged and police have taken control (according to the report, some 1,000 officers are still on site and guarding the facility). Here's the opening paragraph of his report translated:

Cananea, a Destroyed Mine

What Kiosco saw yesterday was a destroyed mine, inoperable for at least the next 12 or 14 months. For it to go back into production, around U$114m in investment will be necessary. Reporters from (Sonora) state and from Mexico City were invited yesterday by the company diretcors to Cananea to tour the mine and verify the state of installations after its long period of inactivity. Continues here