 Good day fellow investors! Now I have received some comments about the iron ore investments stocks like Vale, Rio, PHP and so and I want to discuss here in this video the iron ore sector. I wait for the situation in the sector to be perfect before buying so first look at the sector and then if interested looking at the stock I'll start with looking at the sector of iron ore. You might be tempted to invest in those companies because the price earnings ratio are low now and the dividends are high and the profits are high and you might say oh that's a good dividend investment. However the stock prices are very high if you look at the chart what happened in the last year and a half all those stocks have really recovered and especially Vale the Brazilian iron ore mine. However we have to look at iron prices and also iron prices have recovered from the lows that we have seen just a year and a half ago around 40-50 were stable and now they have spiked up. Iron ore prices have spiked up because China increased steel production now they have retreated a bit and iron ore prices have started declining again due to pollution reason. However to determine whether an iron ore investment is good now you have to find a balance price for iron ore see if it will go much higher or it will go lower. For that this is the UBS research report and you can see that the balance price is around 60. The current iron ore price per ton is around 75 but with the balance price at 60 we had to expect much lower prices especially if there is a slowdown in China. So for me iron ore now is too risky. I'll show you another two charts this is the Pilbara Rio Tinto mine in Australia cash cost units and those are below $14 per ton. So when you compare it to the current iron ore price of 70 yes Rio is extremely profitable but I think future iron ore prices will stabilize at a lower price. Then when you look at Vales new S11D projects has even lower costs and expected to be at $8 per ton then I think in the future we'll see much lower iron ore prices as all those companies will ramp up production in order to make more profit. So they will be profitable yes but those are cyclical companies that have to be bought at the down part of the cycle when iron ore prices hit 30 or 40 again and don't worry there will be gluts in the iron ore industry if just those ramp up a bit production then you have oversupply and iron ore prices fall. So if you want to invest in a margin of safety invest when iron ore is cheap. In the short term anything can happen you can bet on higher iron ore prices keep the high dividend but don't expect stability for their long term. So for now I'll leave iron miners aside and when the iron ore prices drops below 50 I'm sure to take a look at them. So consider subscribing as we constantly analyze sector countries and we look where there is an investment with a margin of safety cheap in relation to mining costs other costs productivity growth and so on. That's the best way to invest with low risk and high returns. Thank you for watching click like if you like the content and I'll see you in the next video