# BHP - BHP Group



## It's Snake Pliskin (14 May 2005)

I was reading today about predicted price weakness for BHP in the next week. I don't hold any yet. Who might see any further price weakness as a good opportunity to buy? Generally I'm probably a bit negative on the resource stocks due to their well known booms and busts. I'm aware of the China story, but am realistic enough to know that it may not last beyond 2005. 

The last round of price negotiations soured the relationship between BHP and China. Knowing the business style of the Chinese, I feel BHP may have done itself some damage long term. 

Who sees RIO as a better alternative BHP long term?


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## bvbfan (14 May 2005)

*Re: BHP - Price weakness*

Prudential have cut the US listed securities to underweight and the price target from $30US to $18US

They say the price paid for WMR is too high in the current market


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## It's Snake Pliskin (14 May 2005)

*Re: BHP - Price weakness*

I should have posted in the other thread. Found it after I posted.


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## markrmau (14 May 2005)

*Re: BHP - Price weakness*

I dont hold any BHP or RIO, but basically most of the current price weekness is associated with what happens to metal prices on the LME (look at http://kitcometals.com/). Also BHP is in the oil market, and POO is droping as well at the moment: http://www.futuresource.com/charts/charts.jsp?s=CL&o=&a=D&z=610x300&d=LOW&b=bar&st=

As for metal prices, I think the RIO CEO summed it up best when he said there will be a lot of volatility until the end of the year with prices then stabalizing. As for POO however, I suspect that the supply / demand equation doesn't quite warrant the current prices (I may be completely wrong of course).

Are RIO and BHP currently overvalued? - I don't think so, and neither do the real experts - the people running the companies. If RIO thought itself overvalued, why would it be participating in the share buyback. And BHP/WMR - if BHP thought itself overvalued, it would have offerred WMR holders a share swap rather than cash.

When to buy bhp/rio? Sorry I can't tell but I think that a short term minimum might be $15.50-$16. Fust a few thoughts...


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## markrmau (16 May 2005)

*Re: BHP - Price weakness*

I wouldn't buy BHP or RIO today unless you see a really significant recovery in the 3-4pm period that brings the SP back to yesterdays range...


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## mime (16 May 2005)

*Re: BHP - Price weakness*

I think it's a good time to buy in.

Energy/Resources sector has been hit hard but is still very profitable.


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## DTM (20 July 2005)

*BHP set to go up?*

BHP seems to be uncharateristically moving up very strongly for intra-day.  I took a look at the options and there seems to be a lot buying for calls.

Sorry if there was another BHP thread, couldn't find it.


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## It's Snake Pliskin (20 July 2005)

*Re: BHP set to go up?*



			
				DTM said:
			
		

> BHP seems to be uncharateristically moving up very strongly for intra-day.  I took a look at the options and there seems to be a lot buying for calls.
> 
> Sorry if there was another BHP thread, couldn't find it.




I traded this stock a few weeks ago and got out at $18.60 with a profit.
I bought again yesterday at $18.32 and it has shot up today. I believe it is going to go up more based on its exposure to uranium. It's oil revenue is high and reporting season will be good for this one. This is a stock still lower than the previous peak, though fundamentally better with more earnings potential. 

This post is aptly named I feel. This is not a ramp! :bigun2:


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## DTM (21 July 2005)

*Re: BHP - Price weakness*

Somethings up!!!  BHP up 35cents at $19 and looks like to climb steadily.  I've already sold 20 of my ITM call options and was looking to sell 20 OTM call options when someone placed an undisclosed buy amount at the front of the que.  Its rare to see that happen and it could become interesting.

News has it that they've developed a new mine venture with a Japanese Steel company worth 5.7 billion.

*BHP Billiton signs Japanese steel deal
July 21, 2005 - 10:44AM


BHP Billiton has signed a 11-year supply deal with one of Japan's leading steel mills, JFE Steel, worth $5.69 billion.

The iron ore will come from BHP's Yandi mine in Western Australia supplying 16 million tonnes a year.

JFE Steel will take a 20 per cent stake in a sub lease of the Yandi mine.

This BHP's first joint venture with a Japanese steelmaker.

BHP president of Western Australia iron ore, Ian Ashby, said the deal would help ensure BHP maintains its share of the growing iron ore market.*


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## DTM (21 July 2005)

*Re: BHP - Price weakness*



			
				DTM said:
			
		

> I've already sold 20 of my ITM call options and was looking to sell 20 OTM call options when someone placed an undisclosed buy amount at the front of the que.  Its rare to see that happen and it could become interesting.




Oops, it just got swallowed up.


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## It's Snake Pliskin (21 July 2005)

*Re: BHP - Price weakness*

an interesting article. 

What so you make of it?

 :laser_sho http://www.aireview.com/index.php?act=view&catid=8&id=2273


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## DTM (21 July 2005)

*Re: BHP - Price weakness*



			
				Snake Pliskin said:
			
		

> an interesting article.
> 
> What so you make of it?
> 
> :laser_sho http://www.aireview.com/index.php?act=view&catid=8&id=2273




The Yuan just got revalued which could have accounted for the strong buying in resource stocks.


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## brisvegas (8 September 2005)

*BHP rolling over?*

BHP looking like on the verge of rolling over , gave a sell sig on my daily swingsetup recently . if i was  a long term holder might lighten a little 

bris


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## RichKid (8 September 2005)

*Re: OUTSTANDING BREAKOUT Alerts!!*



			
				brisvegas said:
			
		

> BHP looking like on the verge of rolling over , gave a sell sig on my daily swingsetup recently . if i was  a long term holder might lighten a little
> 
> bris




There appears to be some moderate support at 19.50, previous high. I hold and I think that's a logical stop level, which means the instos may try to shakeout the small hands imo. So 19 to 19.50 must survive.


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## The Estimator (15 September 2005)

*Re: BHP - Price weakness*

Any thoughts?  3 steady gains in a row without the rediculous pogo-ing thats been going on the last month.  Is it getting back on track or is it a last gasp before heamoraging?  I'm only new to this game and my charting is pretty crap at the best of times but I'm thinking if it goes through 2080 it could be the start of a steady up trend.

John

DISCLAIMER
I suck


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## Rockon2 (15 September 2005)

*Re: BHP - Price weakness*



			
				The Estimator said:
			
		

> Any thoughts?  3 steady gains in a row without the rediculous pogo-ing thats been going on the last month.  Is it getting back on track or is it a last gasp before heamoraging?  I'm only new to this game and my charting is pretty crap at the best of times but I'm thinking if it goes through 2080 it could be the start of a steady up trend.
> 
> John
> 
> ...





Gday Estimator  
Imo its into no mans land, meaning its not overbought or sold, and will prob drift for a while to come.. Be ready to trade the break on support or resistance lines.
And Im still a bull on bhp in general....We really are in a commodities boom dont forget..
P.S.  Love your Disclaimer.


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## The Estimator (15 September 2005)

*Re: BHP - Price weakness*



			
				Rockon2 said:
			
		

> Gday Estimator
> Imo its into no mans land, meaning its not overbought or sold, and will prob drift for a while to come.. Be ready to trade the break on support or resistance lines.
> And Im still a bull on bhp in general....We really are in a commodities boom dont forget..
> P.S.  Love your Disclaimer.




Hehe yeah, I wouldn't want someone to take something I said on board without being fully aware that I suck


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## The Estimator (16 September 2005)

*Re: BHP - Price weakness*

Well it was kinda cool to pick an increase in the old girl (My first real forecast) but it was bitter sweet.  I got onto some warrants last month and then the pogoing ensued. Since National online doesnt have a trailing stoploss or any stoploss that I'm aware of and so much seesawing in the price I set a break even plus 15% sell point incase I missed a good increase while working.  I basically wanted to get out.  Well I hadnt reset it and I was real busy all morning. I check it out at lunch time and my warrants sold for 150 but continued on to 173.  Well lesson learned.  Time to find an online broker with some stoploss tools and so forth.  Also might be time to get a  system down on paper.

John


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## Yippyio (18 September 2005)

*Re: BHP - Price weakness*

UBS re rate BHP from Neutral 2, to Buy 2. This translated into a modest gain on Friday but BHP traded much better over night, on both the DOW and the FTSE up 3.281 and 3.19 respectively.:bananasmi 

The strength of these solid gains "should" flow through to our market on Monday with perhaps, maybe a 3% gain or 0.62 cents. 

My views are obviously pure speculation. Even with all the research and charts in the world the market will invarible do the exact opposite of what I expect. Thankfully for me my short term losses are asborbed by the gains in my long term holds.


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## Yippyio (19 September 2005)

*Re: BHP - Price weakness*

Deutche Bank re rates BHP  

FYI

Deutsche ups BHP Billiton price target
Source:	LONDON REU
Date:	2005-Sep-17 07:49 AM
Deutsche Bank raised its BHP Billiton share price target to 960 pence from 910p on Friday after the bank upgraded its oil price forecasts.

"Further upgrades to oil price outlook serve to reinforce the dynamics of energy in the commodity complex," Deutsche said in a research note.

The bank rates its top picks for the mining sector - BHP Billiton, Rio Tinto and Xtrata - at "buy".


 :shoot:                                                                             :bigun2:


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## Yippyio (24 September 2005)

*Re: BHP - Price weakness*

Very interesting article in today's SMH. Includes a number of interviews with geoligists and mining executives from BHP, RIO, Portman etc.

All very bullish about Chinese demand and actually state that operations at both BHP and RIO are currently running a full capacity. Both BHP & RIO are undergoing major expansion plans to cope with the existing demand from China. 

The article focuses on China's current industrial revolution spurred on by it's emerging (exploding middle class demographic), what the article does not mention is that India is picking up pace. If you factor the demand from India into this equation then the price of Iron Ore is going to rocket. 

and by the way there is a huge skill shortage  

Interesting times ahead for our miners.......... 

Article to long to post, so here is the link. 

http://www.smh.com.au/news/business/iron-awe/2005/09/23/1126982229167.html


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## Yippyio (29 September 2005)

*Re: BHP - Price weakness*

Overseas Markets eye Aussie Resource stocks.....:aus: 

Specifically BHP, which performed very strongly over night, closing up 2.318% on the DOW & up 2.54% on the FTSE.

Currently up 2.43% on the ASX @ 11.36am 

FYI - UBS has recently announced that they have revised their 06 price foreast for Iron Ore from -20% to +10%. :bananasmi


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## Yippyio (30 September 2005)

*Re: BHP - Price weakness*

More Good News for BHP and other miners


FYI - Article in Mining News


Zinc, copper, iron ore big winners: MacBank


Monday, September 26, 2005
MACQUARIE has upgraded its price forecasts for a swag of commodities due to supply tightness and Chinese demand, with zinc, copper and iron ore amongst those enjoying the stronger rises.

Zinc miners will be around 30% better off than previously expected in the years 2007-2009 due to "lethargic supply growth", with prices for those three years now put at US75c/lb, US70c/lb and US60c/lb respectively.

Macquarie has raised its expected copper price by around 17% next year to $US1.40/lb, while the nickel forecast in 2006 is up 3.8% to $US6.75/lb.

However Macquarie's 2005 nickel price has been reduced by 4.1% to $US6.75/lb because of recent short term weakness.

The thermal coal outlook has also been downgraded (in 2006) due to increased output from Indonesia – down 8% to $US48 per tonne.

Meantime Macquarie has become the latest to raise expectations of further rises in the iron ore price, with its 15% increase in the short term reflecting the "incredible ongoing strength of Chinese steel production".

Furthermore, the bank believes that the ongoing need for high cost Indian and domestic iron ore to stay in the market to plug the gap between supply and demand "should support contract prices at high levels for many years to come" – though some "pullback" in 2007-2010 is "conservatively" forecast.


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## Yippyio (7 October 2005)

*Re: BHP - Price weakness*

FYI - Article in today's Mining News

China, India driving metal prices


Friday, October 07, 2005
FALLING prices on world stock markets has not dimmed enthusiasm among metal traders who continue to see rising demand and rising prices as China and India expand rapidly.

Barclays Capital was the leader in a pack for forecasters who overnight tipped a continued upward trend in base metals, raising its forecast price for copper in the current quarter to $US3900 a tonne from a previous $US3280/t.

During the first quarter of 2006 the average copper price could be as high as $US4000/t.

Driving the optimism is a continued decline in stockpile and inventory levels caused by rising rates of consumption.

The increases forecast by Barclays looked easily achievable last night with copper on the London Metal Exchange trading at $US3882.5/t.

Edward Meir from Man Financial told Dow Jones that: "we now could move much higher, as the intermediate trend has once again re-established itself. We could be targeting the next psychological resistance, as we are literally in unchartered territory."

The latest surge in the copper price is in direct contrast to a series of forecasts made over the past few months which tipped falling metal prices in the final quarter of 2005.

However, the market has been heavily influenced by inventory levels and continued disruption at key mines and metal smelters, including a series of strikes in Canada.

Adding to the mood of optimism that prices might continue to climb was a prediction in Melbourne from the chief executive of Falconbridge, Derek Pannell, that a lack of new mining projects would push prices higher for the next 10 years.

Pannell also raised the possibility of a fresh burst of "consolidation" in the sector with market leaders such as BHP Billiton, Rio Tinto and CVRD looking for acquisitions.


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## RichKid (13 October 2005)

*Re: BHP - Price weakness*

BHP not looking good imo. My money is on it retesting support at 1950, maybe even falling through (which'll be dramatic). I thought it could breakthrough but it's lost steam, with the bad news about the GoM production losses things may not brighten up anytime soon.


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## Yippyio (14 October 2005)

*Re: BHP - Price weakness*

Does anyone know the date that they finalise negotiations on next years Iron Ore price ? (post April 06 deliveries) I think it's anyday now.

If they manage to lock in a 17% increase as McQuarie is spruiking you should see a very good lift in SP


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## Yippyio (14 October 2005)

*Re: BHP - Price weakness*

Mmmm...........Just got stopped out, sold all my BHP holdings. 

I think I will leave BHP until I know when the new Iron Ore price negotiations are due to complete. 

This years price was finalised in Jan 05 but I think they are working on finalising next years pricing sooner then Jan 06, I thought it was in the next couple of weeks ???.


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## It's Snake Pliskin (15 October 2005)

*Re: BHP - Price weakness*

This stock could drop considerably due to shorting, negative news, and profit taking. Where is the support level guys?


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## The Once-ler (16 October 2005)

*Re: BHP - Price weakness*

Bring on the panic selling.

I bought some in May for $16. Have heaps at $7 and $8.

This is one fine stock to hold for the long term. The silly thing about this correction of BHP is that the worry is inflation. Well who is going to benefit? The oil producers, the gas producers, the coal producers. Oil is now being released from strategic reserves.This wont last. BHP is currently getting a pitance for it's uranium. In a few years the Western Mining contract can be redone. It's all good.


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## RichKid (16 October 2005)

*Re: BHP - Price weakness*



			
				The Once-ler said:
			
		

> Bring on the panic selling.
> 
> I bought some in May for $16. Have heaps at $7 and $8.
> 
> This is one fine stock to hold for the long term. The silly thing about this correction of BHP is that the worry is inflation. Well who is going to benefit? The oil producers, the gas producers, the coal producers. Oil is now being released from strategic reserves.This wont last. BHP is currently getting a pitance for it's uranium. In a few years the Western Mining contract can be redone. It's all good.




Agree that BHP is good for long term holders but near term it looks a bit weak. That $19.50 support I mentioned is crucial imo, thousands of technical traders in the market would be keeping their eyes on it, it's such an easy level to spot, when you start seeing moderate gaps down in the daily price action you'll know panic/excitement has set in. The oil revenue cut and expectations of further adverse weather conditions doesn't bode well in the short term (btw, heard a theory that Typhoon may have been rammed by another platform which had cut loose). BHP hasn't got the best dividend yield either. Basically a tough one to get into now with the market in this mood.


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## johnno261 (16 October 2005)

*Re: BHP - Price weakness*

Yeah I got back in partly sub $20 on Friday and looking at more buying opp sub $20, but not tomorrow. May dip later in the week again.Will rebound tomorrow one would suspect. Long ons for tomorrow!!!


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## RichKid (16 October 2005)

*Re: BHP - Price weakness*

Wkly chart of BHP showing simple trend/support lines. Daily chart with much the same, note some of those wild days with large gaps as prices whizzed around- a large co but can be volatile. (some of the lines gave me some trouble, couldn't quite draw it properly, so it may look a bit crooked, just trying to get an idea of the trend, that's all, so don't rely on this as advice please as I'm usually wrong).

I just notice the dates on the charts are different but they are both as of eod Friday 14th of October 2005.


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## Yippyio (16 October 2005)

*Re: BHP - Price weakness*

Thanks for the chart Richkid, support at around 19.70 and resistance at around 22.30 

It looks like a breakout is coming but irrespective of the chart, the announcement of the new prices for Iron Ore post April 06 is crucial. The market has factured in a 10% increase, I expect that anymore will see a good rally and any less will see the stock get dumped (short term).

So when will the new prices announced ???, anyone out there with any idea ???


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## Kauri (19 October 2005)

*Re: BHP - Price weakness*

In The West today....

  Chinese push for 10pc cut in iron ore prices

NEALE PRIOR


Government-owned Chinese metals importer Sinosteel said yesterday it was hoping for a 5 per cent to 10 per cent cut in the price of iron ore next year as it sought a bigger say in annual pricing negotiations for the major steel ingredient.

Sinosteel president Huang Tianwen said he believed the 71.5 per cent price increase agreed between major Japanese steel mills and the major Australian iron ore producers for 2005-06 was too high and a cut next year would help the sustainability of the industry.

"For the long-time interest of iron ore suppliers, including BHP it will be beneficial," he told WestBusiness yesterday. "We are hoping the price of iron ore next year should be balanced."

Mr Huang made the comments after signing an agreement with West Perth-based iron ore hopeful Midwest Corporation for a joint venture that could see Sinosteel and Midwest jointly develop the Australian company's high-grade Weld Range and low-grade Koolanooka deposits east of Geraldton.

Sinosteel has agreed to kick in $16.3 million to fund a feasibility study into a $1.5 billion mining and infrastructure development.

The investment comes as Chinese steel mills, which are supplied with raw materials by Sinosteel, undergo a massive production boom that is likely to see steel production increase this year to 340 million tonnes from 272.5 million tonnes last year.

China has traditionally been a smaller player than Japan in the iron ore market but it now attempting to flex its muscle as it becomes the world's biggest producer of steel, feeding booming construction of property and infrastructure in the world's most populous nation.

Mr Huang raised doubts about whether Chinese mills would continue to accept prices agreed between their Japanese rivals and the big three iron ore miners, BHP Billiton, Rio Tinto and Brazilian major CVRD.

He pointed to BHP Billiton in April dropping a demand for Chinese steels mills to pay a 100 per cent increase, a capitulation that came just as Prime Minister John Howard was heading to Beijing to discuss a free trade agreement.

Mr Huang said China previously had not been in a position to play a big role in price negotiations because of its relatively small tonnages, but it now had a powerful position in the world iron ore market.

He said he believed the power of the Chinese steel mills would be reinforced at the upcoming season of negotiations over the 2006-07 iron ore prices. "We are determined to win our rights as soon as possible," he said. Sinosteel and other Chinese steel players would attempt to play a bigger role in setting the price and not necessarily follow what was agreed between the Japanese mills and the big miners.

Neither Midwest nor Sinosteel would give an estimated time for the development of Midwest's tenements, but Mr Huang said his group wanted to fast track the development provided the reserves and specifications stacked up during the feasibility process and the market remained strong.

"The quicker the better," he said.

att The reporter owns BHP Billiton shares.


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## Yippyio (19 October 2005)

*Re: BHP - Price weakness*

Thanks for the article, interesting considering the market has already factored in a 10 - 15% rise in Iron Ore for 2006. If China is successfull in negotiating a 5% decrease, BHP's SP will suffer a minor melt down.


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## RichKid (19 October 2005)

*Re: BHP - Price weakness*

The Chinese asking for a price cut in iron ore just sounds like smart bargaining tactics to me, negotiating with superpowers isn't easy.


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## Kauri (21 October 2005)

*Re: BHP - Price weakness*

Well, the superpowers have answered!!      West Australian today

  BHP stokes ore price fight

JOHN PHACEAS

Chinese steelmakers were given a reminder yesterday not to expect iron ore prices to fall any time soon as BHP Billiton approved another $US1.5 billion ($1.95 billion) expansion of its Pilbara operations to keep pace with rampant Asian demand.

Approval of the so-called Rapid Growth Project 3 (RGP3) expansion to double production at the company's Area C mine to 42 million tonnes a year and upgrade transport infrastructure, came just 24 hours after Rio Tinto committed $1.8 billion to a rolling expansion of its own Pilbara operations.

And a further $US1.5 billion expansion of BHP Billiton's Pilbara mines was likely to get board approval "in the next 12 months", said Ian Ashby, president of BHP Billiton's WA iron ore division.

The twin expansion approvals come shortly after analysts began upgrading their iron ore price forecasts for next year, predicting prices will rise 5 to 10 per cent on the back of continued steel output growth in China, Korea and Japan.

Previously, most had predicted a small reduction or rollover of current prices given the pain inflicted on steelmakers by February's unprecedented 71.5 per cent price rise.

The first round of annual talks between Japanese buyers and the big three producers - BHP, Rio and Brazil's CVRD - began in Japan earlier this month and will continue on and off over the next five months.

The talks typically set the benchmark price for the rest of the industry, but Chinese steel companies have since flagged using their growing muscle to conduct their own negotiations.

In Perth on Tuesday, Sinosteel president Huang Tianwen also said he hoped for a return to more "balanced" prices next year, 5 to 10 per cent below prevailing levels.

Mr Ashby indicated steelmakers could not expect prices to ease significantly in the foreseeable future.

"Look, the market conditions for iron ore are still pretty strong, (and) we believe it will be stronger for longer, particularly around the China story," Mr Ashby said. "We base our investment decisions on our analysis, and that analysis says that this is a good investment."

Mr Ashby's comments were backed by fresh official data from China, which showed the Chinese economy grew strongly in the September quarter to an annual rate of 9.4 per cent, from the 9.2 per cent growth predicted by analysts, despite government efforts to slow growth to around 8.5 per cent.

Chinese steel production also continues to expand faster than expected, with output now expected to rise 26 per cent to 345 million tonnes this year, and further to 520 million tonnes by the end of the decade.

In London for the company's annual meeting last night, BHP Billiton chairman Don Argus said he expected demand growth to continue in China, Russia and India, and that commodity prices would "remain high by historical standards".

BHP Billiton's 85 per cent share of the latest expansion will cost $US1.3 billion, boosting annual output from its Pilbara mines to 129 million tonnes from 2007. Most money will be spent at Area C, where the E deposit will be developed, but $US235 million will also be spent replacing ageing port and rail infrastructure.

Mr Ashby said a decision on RGP4 to lift the company's Pilbara output to 152 million tonnes a year by 2010 was likely within 12 months and that costs would be similar to RGP3.

State Development Minister Alan Carpenter said BHP Billiton's commitment capped a "ball-bursting week" for WA.


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## It's Snake Pliskin (21 October 2005)

*Re: BHP - Price weakness*

There is good buying to be had today.


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## happytrader (21 October 2005)

*Re: BHP - Price weakness*

Hi Snake Pliskin

I'd have to agree with you if you can buy for $19.40 to $19.60 and derive a profit from them this month. A $2.94 range in one month is excessive for this stock. As for the rest of the quarter there is likely to be more downside imo.

Of course this is all guess work and shouldnt be taken as advice or recommendation.  Do your own research and find your own truths.

Cheers
Happytrader


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## happytrader (21 October 2005)

*Re: BHP - Price weakness*

Well Snake Pliskin 

I think we may have out done ourselves today!

Cheers
Happytrader


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## It's Snake Pliskin (21 October 2005)

*Re: BHP - Price weakness*



			
				happytrader said:
			
		

> Well Snake Pliskin
> 
> I think we may have out done ourselves today!
> 
> ...




Happytrader,

It sounds like you bagged a trophy today too.

I was happy with my little hunting trip. Found it, disposed of it and brought it home.

I have mixed opinions on BHP and foresee some more price weakness. The next month will be telling I think.(Just an opinion - not advice of any sort)

Cheers.
Snake


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## happytrader (21 October 2005)

*Re: BHP - Price weakness*

Its elementary Watson I mean Snake Pliskin!

Read my post at 11.58. I with you!

Cheers
Happytrader


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## It's Snake Pliskin (21 October 2005)

*Re: BHP - Price weakness*



			
				happytrader said:
			
		

> Its elementary Watson I mean Snake Pliskin!
> 
> Read my post at 11.58. I with you!
> 
> ...




I thought you were quoting part of the bible there for a minute.  
Yes fully agree with your post at 11.58.


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## Bronte (21 October 2005)

*Re: BHP - Price weakness*

Interesting that BHP & BSL made Lows on 21st October Last year.


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## Kauri (22 October 2005)

*Re: BHP - Price weakness*

Good and Bad
  Saturdays West Australian

 Bank points to a costly Yarrie sting in the tail

JOHN PHACEAS

BHP Billiton's $US1.5 billion expansion of its Pilbara iron ore operations was welcome but would carry a substantial sting in the tail, investment bank Credit Suisse First Boston said yesterday.

The expansion will double production at the big Area C mine to 42 million tonnes a year from late 2007 and boost BHP Billiton's total Pilbara export capacity to around 129 million tonnes.

CSFB said the expansion left the company "between a rock and a hard place" by forcing it to also shut down its Yarrie operations for up to two years while it builds a new shiploading facility on Finucane Island at Port Hedland and upgrades the Yarrie railway.

The shutdown would subsequently rob the company of about nine million tonnes of annual iron ore production at the peak of the hottest iron ore market in decades.

"While we endorse the announced iron ore expansion . . . the unit will unfortunately drop about 10 per cent of sales over the next two years," analyst Peter O'Connor said. "(That's) not great timing, given that the forgone profit will have been at peak level." Still, removing nine million tonnes of production from global supply would bolster miners' efforts to secure further price increases from buyers during talks for 2006 supplies, he said.

A spokesman for BHP Billiton said the shutdown was unavoidable, given the need to upgrade Finucane Island and the Goldsworthy railway to keep up with future shipping requirements.

BHP Billiton is also understood to be planning an intensive drilling campaign in the Nimingarra and Yarrie area during the shutdown to bolster reserves at the mature operations.


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## johnno261 (22 October 2005)

*Re: BHP - Price weakness*

This action taken by BHP gives foundation that a much longer term strong trend in commodities appears to be the case. Would be good to extract as much as poss. with current high prices, but who knows the exact increases in Iron Ore over the next few years.

I would imagine a 10-15% price increase will be obtained for 01/04/06 and who really knows after that. I have been eating away @ BHP sub $20 all this week as I think it's great buying in my humble opinion!!

Todays Age in Melbourne amongst the "Directors-BUY or SELL" in own Companys showed 2 directors of MGX buying up 1.5 million OPS. between them, which is always a good sign.


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## Kauri (22 October 2005)

*Re: BHP - Price weakness*



			
				johnno261 said:
			
		

> This action taken by BHP gives foundation that a much longer term strong trend in commodities appears to be the case. Would be good to extract as much as poss. with current high prices, but who knows the exact increases in Iron Ore over the next few years.
> 
> I would imagine a 10-15% price increase will be obtained for 01/04/06 and who really knows after that. I have been eating away @ BHP sub $20 all this week as I think it's great buying in my humble opinion!!
> 
> Todays Age in Melbourne amongst the "Directors-BUY or SELL" in own Companys showed 2 directors of MGX buying up 1.5 million OPS. between them, which is always a good sign.





 I think the MGX oppies were directors free oppies being converted @22c each? They were due to expire on 15th.


----------



## RichKid (22 October 2005)

*Re: BHP - Price weakness*

BHP is a great longterm prospect imo over other resources co's because of it's superior diversification, GoM oil problems wont really break this co.
However, I still expect further weakness, mainly for technical reasons since I'm not a 'fundamentalist'.
Also agree that they wouldnt invest like this unless they had positive longterm forecasts in place, but even big co's do get it wrong.

Heard recently that the concentration of power amongst a few large resources co's through consolidation (eg BHP/WMC (Uranium), iron ore by big three etc) will allow them greater control over the market so that high prices can be maintained for the longterm- an oligopoly? This is just the start imo but unexpected events can affect the status quo, high returns come with high risks, we just have to manage it well.


----------



## JetDollars (23 October 2005)

*Re: BHP - Price weakness*

At this stage BHP found support at $20.00, if that break then it will test $19.50 which should be a very strong support otherwise $18.00 should be the next target.


----------



## amohonour (27 October 2005)

*Re: BHP - Price weakness*

They are certainly looking like they are going north again.


----------



## randomtrader (8 November 2005)

*Re: BHP - Price weakness*

BHP seems weak in a strong market.  Any thoughts.


----------



## RichKid (8 November 2005)

*Re: BHP - Price weakness*



			
				randomtrader said:
			
		

> BHP seems weak in a strong market.  Any thoughts.




Still my view from an earlier post/s: ie support at 19.50 or thereabouts, looks like a head and shoulders or similar reversal pattern atm, a breakout that goes sideways for awhile is not the strongest, I expect a retest of that trendline way below $19. Having said that 19.50/19.40 is the crucial area, can't say anthing else for the moment, let's see how it plays out.


----------



## JetDollars (13 November 2005)

*Re: BHP - Price weakness*

BHP in NY and London up in the weekend, so BHP in ASX should see some blue sky tomorrow. I hope it will break $21.50 for upside opportunity. Otherwise H&S is forming.


----------



## RichKid (1 December 2005)

*Re: BHP - Price weakness*

If Chip manages to earn those 600k of shares (yes, that IS big dollars by any account, enough to fund several generations of Goodyears for many, many decades!!). Wonder what the fine print of the criteria are- it should mean BHP will become one HUGE company and the ASX will be dragged up with it. I think Uranium will be the jewel in the crown.

They are talking about the freight differential and cost savings associated with the Chinese only having to pay for the cost of having the stuff shipped in from Oz as opposed to Sth America (CVRD) which is much further away so the Chinese are paying way less overall for Aussie ore- that's my understanding of the argument; so BHP is trying to get China to pay the same price overall (ie including freight costs) whether it be Sth American or Aussie ore.  I don't believe that rubbish from Chip about not developing a resource if they don't get the price they want- unless they collude with RIO. They missed out on a hike for the freight differential last year let's see if they get it this year.

btw, BHP is struggling to break to new highs, these last few bars are not encouraging, especially this week. A retest of 19.40/19.50?? All depends on the general market (XJO) imo.



> *BHP fights for location premium*
> Nigel Wilson The Australian November 26, 2005
> 
> AUSTRALIA risked losing long-term iron ore investment if the market did not recognise the "location premium" of reserves, BHP Billiton chief executive Chip Goodyear said yesterday.
> ...


----------



## phoenixrising (11 December 2005)

*Re: BHP - Price weakness*

Watching BHP on Friday, at 2.30 some serious buying started, went from 21.55 to close at 21.80.

Also the xjo at the same time 4559 rose to a hi of 4587 and closed 4580.

Is Santa rounding up the reindeer now for the Santa rally?


----------



## happytrader (11 December 2005)

*Re: BHP - Price weakness*

Just make sure you are prepared and don't get caught or shaken out if and when they throw a 'dummy'

Cheers
Happytrader


----------



## RichKid (11 December 2005)

*Re: BHP - Price weakness*

I noted brokers downgraded BHP after the GOM update, so instos shorting it?


----------



## happytrader (12 December 2005)

*Re: BHP - Price weakness*

BHP and CBA are Leader stocks and as such are always worth the effort of close observation and analysis. Owning these stocks appears to be the equivalent of owning a luxury vehicle. Perception in the market and anywhere else is everything if you get my drift.

Cheers
Happytrader

Disclaimer
These could be the meanderings of a lunatic. Do your own research and make market truths your own.


----------



## Kauri (12 December 2005)

*Re: BHP - Price weakness*



			
				RichKid said:
			
		

> I noted brokers downgraded BHP after the GOM update, so instos shorting it?





Approved net Short Sale positions as at end of day 08-Dec-2005


                                                                 Reported             Short Limit            % short

                                                               Short Vol 

BHP BHP BILLITON LIMITED 4,627,232 358,731,040 .12%


----------



## dutchie (16 February 2006)

Ok all you fundamentalists

Anyone able to explain why SP is down after BHP's profit announcement?
If the profit was already factored into the price because everyone already knew what the profit was going to be before it was announced then that should be a neutral affect on the SP ??!!

Also they announced a buyback which I thought was usually a positive bit of news- so the SP should go up. If already factored in then there must have been some inside trading (duh!).

Please explain.


----------



## Julia (16 February 2006)

dutchie said:
			
		

> Ok all you fundamentalists
> 
> Anyone able to explain why SP is down after BHP's profit announcement?
> If the profit was already factored into the price because everyone already knew what the profit was going to be before it was announced then that should be a neutral affect on the SP ??!!
> ...




Hi Dutchie

You've said if the profit result had already been factored in THEN THAT SHOULD BE A NEUTRAL EFFECT ON THE SP.  Yes, I'm sure we'd all agree.
However, time after time when this happens the SP drops.
Then the resource sector in general is less popular right now.
Have also been thinking that their as yet unresolved role in the Oil for Food affair could be creating some negative sentiment.  

Julia


----------



## dutchie (16 February 2006)

Thanks for the reply Julia. Yes BHP's involvement in the food for oil scandal may affect the SP - but I don't think so (maybe for a day or two).

A few executives may pay something (fired, demoted), BHP may get fined and/or reprimanded (by who??).  But the affect on final year profits - zilch!

Am I being too cynical or is that how the world works these day??


----------



## bullmarket (16 February 2006)

Hi dutchie (pauline) 



			
				dutchie said:
			
		

> Ok all you fundamentalists
> 
> Anyone able to explain why SP is down after BHP's profit announcement?
> If the profit was already factored into the price because everyone already knew what the profit was going to be before it was announced then that should be a neutral affect on the SP ??!!
> ...




I think there are a number of factors affecting BHP's share price atm and remember that markets are forward looking and so as they say in the 'classics', past performance is no guarantee of future performance..

A bit of the old buy on rumour, sell on fact syndrome is maybe one of them.

Also oil has dropped back below $60 and with the Saudis saying they will increase production or refining capacity (can't remember which) in the next  few years maybe $70ish will be a peak for the forseeable future.

Another reason, if global economies are expected to have lower growth (I think China has a bit to run yet though) in the next few years then the demand for resources will be less.

With our market at ATH's there is more volatility nowadays due to the tug o' war between profit takers and 'bargain' hunters.  Personally I don't see any real bargains at the big end of the market atm.

cheers

bullmarket


----------



## TjamesX (16 February 2006)

dutchie said:
			
		

> Ok all you fundamentalists
> 
> Anyone able to explain why SP is down after BHP's profit announcement?
> If the profit was already factored into the price because everyone already knew what the profit was going to be before it was announced then that should be a neutral affect on the SP ??!!
> ...




From what I've seen, yes the profit result was already factored into the SP. I think what didn't please the analysts was increasing costs from getting the stuff out of the ground. All the miners are getting hit with higher input costs (labour, contractors ,machinery etc). But due to record prices - margins are still increasing, so BHP has suggested as margins increase they will pay whatever it takes to get their stuff out and sell it.

I think a pivotal point maybe the Iron Ore contract prices negotiated with China. How much of a rise will they get?? if they don't get much of a rise, the market may see it as a signal for a top in commodity prices.

But then again this $86 bill company is making almost $9 bill annual profit, so its trading at a PE ~ 10. I'm still deciding whether money in BHP would present better value than money in the bank??


----------



## nizar (16 February 2006)

dutchie said:
			
		

> Ok all you fundamentalists
> 
> Anyone able to explain why SP is down after BHP's profit announcement?
> If the profit was already factored into the price because everyone already knew what the profit was going to be before it was announced then that should be a neutral affect on the SP ??!!
> ...




in this sort of market, anything less than expectations would be punished.
EVERYBODY was expecting around $4.5billion or thereabouts so that was spot on. 

Also, after RIO's announcement of share-buyback, the market was expecting something similar for bhp, anything less would have been punished by investors.

BHP price is dropping because of concerns that resource-boom is getting toppish and of the falling oil price.

Though in the long-term, BHP is a good buy imo...

uranium+oil = u cant really go wrong..


----------



## Nick Radge (16 February 2006)

dutchie,
This decline is solely based on profit taking after the announcement. Analysts would have been upgrading their forecasts over the last 3-months and letting the insto's know. The insto's will then keep buying the stock on the upgrades pushing prices to what would amount to a fair value proposition by the analysts. Once it reaches f/v and the announcement comes in as expected, then there is no demand left in the stock. If there is no demand, it can only go one way - down. The results had to have been better than the analysts expectations to increase the f/v and increase demand. It come is as expected and as such, no further demand means any slight supply offered will have a large impact. That's what's happening now and its a self fulfilling prophecy until prices return to a reasonable "under valued" level. Yesterday's volume is clear cut selling.


----------



## dutchie (16 February 2006)

Thanks for all your replies everyone.

I get the impression that when a company announces its profits (whether on the predictions or slightly better) the SP usually goes down.

I think I'm becoming a T.A. advocate. It is becoming more obvious to me that no matter what the news might be, for us lone traders, it is too late!


----------



## dutchie (16 February 2006)

Nick I understand better with your explanation. 

But why don't the insto's hold onto their shares if the SP is at a fair value (even if there are more sellers than buyers). FV should not change unless profits change (because of metal/oil price changes etc).

Insto's must be day traders?


----------



## michael_selway (16 February 2006)

dutchie said:
			
		

> Ok all you fundamentalists
> 
> Anyone able to explain why SP is down after BHP's profit announcement?
> If the profit was already factored into the price because everyone already knew what the profit was going to be before it was announced then that should be a neutral affect on the SP ??!!
> ...




Dude, base metals prices slumped overnight

Copper fell 8% etc

http://www.kitcometals.com/charts


----------



## aobed (16 February 2006)

Hi there - what are the implications of the share-buy back scheme that BHP announced?  What exactly does this entail for share-owners?


----------



## bullmarket (16 February 2006)

Hi aobed



			
				aobed said:
			
		

> Hi there - what are the implications of the share-buy back scheme that BHP announced?  What exactly does this entail for share-owners?




The long term affect of the buy-back is that there will be less shares in circulation which increases the earnings per share and hence hopefully increases the share price further in the long term than it would otherwise without the buyback - given everything else being equal a company needs to continually raise its EPS if its share price is to continue rising in the long run.

In BHP's case you would need to do some careful number crunching to see whether it is worhwhile selling back any or all your shares, assuming you hold some.

BHP's payment for the bought back shares to the shareholder will have 2 components.

1) $2.10 is the capital component and so assuming you bought higher you can then claim the loss against other capital gains to reduce your annual nett capital gain.

2) the difference between $2.10 and the final buy back price will be paid as a fully franked dividend and so you will have franking credits to help reduce any annual tax payable, or they can increase any refund you would have received from the ATO.

But the trade off will be that BHP will be buying back the off-market shares at an 8% discount to the volume weighted average price (VWAP) over a period of 'X' days as per ann.

Basically, it's probably best to wait until they send out the buy-back doc's which should include all the details after which you can work out if you are better off selling back the shares at 8% discount but then getting the tax benefits in return, or whether to sell them on-market as per usual or just simply do nothing and hang on to them.

Hope this helps..

bullmarket


----------



## happytrader (16 February 2006)

Hi traders

Just a basic point to remember when coming up to profit announcement times. Don't we all know if we are making a profit or not long before we head off to air it with our accountants? 

What in the world makes you think most companies and those with dealings and an interest with them don't have a clue long before the 'official' profit announcement is made?

When you hear the media saying their usual stuff like the market didnt like it and so on, this is just their 'emotional' reporting. The greed run is made prior to the report. Then the stock is usually 'discounted' by the institutions in readiness for the dividend greed run. Why not do some back testing to see whether this is true or not?

Cheers
Happytrader


----------



## 77TRADER77 (29 March 2006)

*BHP up up and awwyyyyyyyyyyyy*

BHP Investors who participated in the buyback and receive their payments should be buying back in large numbers in first or second week of April if they feel the BIG Australian has always looked after them and that there are not many places to place your hard earned nowadays.

This could be an Easter Present for the astute Trader. Am expecting $28 first week of April and later up to $31-00

Always follow your own instincts, common sense and personal analysis.


----------



## Fung (26 April 2006)

*Re: BHP up up and awwyyyyyyyyyyyy*



			
				77TRADER77 said:
			
		

> BHP Investors who participated in the buyback and receive their payments should be buying back in large numbers in first or second week of April if they feel the BIG Australian has always looked after them and that there are not many places to place your hard earned nowadays.
> 
> This could be an Easter Present for the astute Trader. Am expecting $28 first week of April and later up to $31-00
> 
> Always follow your own instincts, common sense and personal analysis.




Sorry, a beginner q's.... What is the reason of Buy-Back?


----------



## ctp6360 (11 May 2006)

Jesus christ 77TRADER77 you were pretty damn accurate with your predictions on this one!

Anyway, the reason I am posting is I am really really happy with BHP's performance the last 2 days. I've found the last few weeks have been all over the place (as is self-evident from the graph), which has actually benefited me as I've been getting in on the dips and selling on the rises (more or less).

But now that I have a solid position in BHP I am content now that I seem a resumtion (or confirmation) of the uptrend, which everyone e.g. Julia has been predicting will last for the rest of the year (forgive me if I am misquoting here)....


----------



## Bobby (11 May 2006)

ctp6360 said:
			
		

> Jesus christ 77TRADER77 you were pretty damn accurate with your predictions on this one!
> 
> Anyway, the reason I am posting is I am really really happy with BHP's performance the last 2 days. I've found the last few weeks have been all over the place (as is self-evident from the graph), which has actually benefited me as I've been getting in on the dips and selling on the rises (more or less).
> 
> But now that I have a solid position in BHP I am content now that I seem a resumtion (or confirmation) of the uptrend, which everyone e.g. Julia has been predicting will last for the rest of the year (forgive me if I am misquoting here)....




Hullo CTp,

I think I know who is 77trader77,  hes got more $$ then I !  
I seem to underestermate him.

Bob.


----------



## mano (22 May 2006)

*Is BHP a good buy*

Hi All
l see BHP has dropped to just over $27 do the seasoned investors see this as a good buy at the moment.I am looking at $20k worth.By all accounts BHP is in for a good year next year.[so l have read]
Fire away with your replys as l am eager to learn.
ta mano


----------



## GreatPig (22 May 2006)

Can't answer your question about BHP being a good buy at the moment, but here's my current chart (ignore all the blue lines).

Cheers,
GP


----------



## ctp6360 (23 May 2006)

Small drop this morning and now its in pre-open? There were 2 announcements today but not mention of a request for a trading halt!


----------



## shinobi346 (23 May 2006)

A iron ore producer has been denied access to BHP's rail line. Should be good news for BHP invest ors


----------



## Fung (25 May 2006)

Bought the shares on $23 and I don't even know if i should sell it to make some earnings....


----------



## Sean K (25 May 2006)

You _might _ be able to sell and buy back a little cheaper, but if you're a long term player this is risky. This is just a correction. Many analysts have BHP price target up to $38.00. I'm still holding and just waiting before the dust settles to buy more.


----------



## Ageo (25 May 2006)

Covered Calls against those shares in this correction would allow to make some little cash. And you wouldnt have the risk of being excercised unless it "corrected" and in that case you close you calls and enjoy the capital growth


----------



## RichKid (31 May 2006)

I've been concerned about the steepness of BHP's run and like many others have wondered when it will end- bearish sentiments. So I tried to 'see' a bullish picture, lo and behold with the semi-log scale it looks damn young, this trend.
Even a fall to the low 20's would see it looking strong overall. With June being a quiet month at times we may see this retracement go deeper. 

The daily chart shows some retracement levels which are 100% the height of wave A. According to EW guidelines WaveA = WaveB, it will occur at that lowest pink dotted line, just below $25. 

The major wave 3 high I have marked on the other charts is probably premature, looking at my labelling of the Major wave 2 and the height of the current Major wave 3 and overall proportions so far it looks like this is a Major wave 3 that is still sub-dividing. If this retracement is deep it may well be the intermediate wave-IV of the major Wave 3. I haven't worked out wave 5 targets yet.


----------



## GreatPig (31 May 2006)

Here's my chart with EW count.

Expecting (or at least hoping) the wave C run will take it back around the trend line, where I'll pick it up again once it looks like turning back up.

Cheers,
GP


----------



## TraderPro (4 June 2006)

I've made my own analysis for bhp here.

I don't use any elliot waves in my analysis - I just stick to the basics... support/resistance, MACD and candlesticks.

Keep up the good work and thanks for the Elliot Wave screencaps!


----------



## coyotte (4 June 2006)

Seems a conflicting range of signals for Trend Trading BHP atm

GMMA in Oz & NY showing a slowing of the decline -- But still a decline .
ADX  D- showing a increasing downturn in price --- ADX a weak D-
OBV strong decline in price

Accum/Dist -- Showing Strong Accumilation  (divergence )

Sym-Triangle Pattern ( NY ) with a steeper top line showing a probable drop in the next couple of days BUT only of around 5% atm 

So what have got -- T/As going Short & F/As Long    

Think Ill hold my Short CFDs in UK for the moment --- allthough them  :swear:  F/As could buggar everything up ! 



Cheers


----------



## TraderPro (11 June 2006)

Just another update at my blog for BHP Billiton given the recent share price falls this week.


----------



## Sean K (11 June 2006)

GP, 

BHP must have hit your support line. Jumping in, or waiting for Wednesday's figures?

Seems every analyst is saying BHP is a bargain now.


----------



## GreatPig (11 June 2006)

Very close, but I think it could still go a bit further yet. Somewhere in the high $25 range is the target (hoping for a dip below the trend line similar to the last wave-C as I've drawn it).

Also want to see how the market overall is looking next week. Quite a few stocks I've got my eye on have returned to longer term trend lines and looking like potential buys, but I want some indication that they're not going to drop through too far first.

I still have some concerns that the XAO could drop back into the low-mid 4800s yet, or possibly even right back to around 4600. So while I'm waiting, I'm frying my brain reading up on warrants. 

Cheers,
GP


----------



## RichKid (15 June 2006)

An update on this apparent zig zag corrective move. Wave B is impulsive, like wave A. Wave B seem to be in a minor wave-iv (or its completed), I need a 1 or 2hr chart to be sure, don't have one so I'll just guess, eitherway wave B has now reached as far as the length of wave A as EW guidelines suggest so time to look for a change of the short term trend imo. That reversal bar yesterday on high volume was interesting, looking out for follow through, today's tight range suggests tension is building.

That trendline GP mentions is hereabouts too, look for a retest maybe?

Also noticed the recent low lines up with a flip flop line- old resistance may now become support, line of regression?


----------



## GreatPig (15 June 2006)

Today closed just above my trend line, but what does concern me, and why I didn't buy today, is that prices pushed back down to close near the low and on fairly high volume (about double the daily average).

I'd like to see some more evidence of holding above the trend line before I consider buying again, although at this point it looks like whoever bought down in the $24 range yesterday might have got a good buy.

Cheers,
GP


----------



## RichKid (15 June 2006)

GreatPig said:
			
		

> Today closed just above my trend line, but what does concern me, and why I didn't buy today, is that prices pushed back down to close near the low and on fairly high volume (about double the daily average).
> 
> I'd like to see some more evidence of holding above the trend line before I consider buying again, although at this point it looks like whoever bought down in the $24 range yesterday might have got a good buy.
> 
> ...




Hi GP,
My money is on a minor wave-v to complete this move, maybe truncated but more likely to go lower imo, some other areas of confluence further down. We may be seeing short covering atm- corresponds to a minor wave-iv if my theory holds. 

....wonder how the MACD is looking atm?

(Also, still tax time selling for a lot of the public who bought late in the last major impulse too. Maybe fresh $$$ will flow in from July onwards.)


----------



## Would Be Trader (15 June 2006)

GP,

If today's high volume is what worries you, stop worrying. 

The following is a note that was sent today by an equity analysis firm:

"Owing to the expiry of June SPI Futures contract today, the early match volume and prices will be skewed. Expect larger than normal volumes on the early and late (close) matches today."

I hope that makes feel you better.

Cheers

WBT


----------



## Hopeful (22 June 2006)

Anyone notice how strongly BHP bounced off its 200 day EMA? Nice entry signal. BHP does tend to conform to the technical analysis techniques quite well. I bought some, may she surpass her old highs!


----------



## MiningGuru (3 August 2006)

Interesting Report in Eureka

BHP Billiton, the cash machine

My view remains that the market’s obsession about whether commodity prices are sustainable is taking the focus off the "company-changing" cash flows the resource sector is spitting out.

I believe these "super cash flows" are reducing the overall risk of the sector because management is showing discipline and using those "super cash flows" to either buy back large chunks of scrip, pay special dividends, or both. These super cash flows are being returned to shareholders, and I believe that will continue.

You don't even have to believe in a "super bull" commodity scenario to see BHP Billiton generate $US30 billion of free cash flow over the next three years ”” yes, that's free cash flow after capital expenditure of $US30 billion.

My research colleague David Radclyffe ran some scenario analysis today, at commodity price forecasts that are far from "outrageous", and the results are that BHP Billiton could have up to $US30 billion of free cash flow over the next three financial years, which equates to $A7 a share (25% of the current market price).

Using an average oil price of $US60 a barrel, an average copper price of $US2 a pound, an average nickel price of $US8 a pound, iron ore up 10% and then staying flat, and flat coal prices for both thermal and coking, the calculation comes to $US30 billion of cumulative free cash flow over the next three years. Then you need to then consider what BHP will do with its huge free cashflow.

The Freeport McMoran quarterly highlights the return to shareholders when cash flows overwhelm allocated capital expenditure commitments. Freeport earned $US1.74 a share in the second quarter and paid a total dividend, including a special, of $US1.06. In the six months to June 30, the company earned net income of $US739 million and returned 61%, or $US452 million, in dividends and share buybacks. The Freeport result is an indication of the potential for BHP and Rio Tinto shareholders as capital expenditure starts to slow. As a reminder, last year BHP paid dividends of US42 ¢, or a yield of 1.4%.

As BHP turns down the capex/expansion/investment tap in 2007-08 and 2008-09, the free cash generation becomes enormous. This strong cash flow generation is expected to yield increased returns to shareholders through increased dividends and further buybacks (each $US2 billion equates to a return of about 1.6%).

So the "upside case" really isn't that optimistic, with many of our assumptions significantly below spot prices, but in line with futures curves. Let’s just say that if we used spot commodity prices and averaged them for the next three years, the free cash flow BHP spits out is obscene.

What will they do with all the money? Free cash flow of $US30 billion or potentially more is a very high-quality problem for a board to have. What a great strategic problem to have ”” what to do with $US30 billion?

I've speculated aloud about BHP taking out Shell and bidding for Woodside Petroleum, but I suspect the more likely use of the free cash flow is a combination of huge buybacks and special dividends.


Bring it home, boys

If I sat on the BHP board I would be strongly considering how to unwind the dual-listing structure. My view remains that the dual-listing is actually playing a role in contributing to BHP's low P/E rating. The ever-widening discount the (UK-based) PLC shares command reinforces just how out-of-date the structure now is and why it needs unwinding.

I think the excess free cash flow should be used to buy back the entire PLC listing. Yes, buy back the entire thing over a three-year period. Buy out the hedge fund dominated register, and return BHP to its rightful spot as a purely Australian listed company.

The beauty of this idea is that you cancel 35% of the entire BHP Billiton register through time, and have an associated earnings per share uplift due to the number of shares on issue being lower. However, the good news is that the lower number of shares on issue in no way effects BHP ASX 200 index weighting of 10% as the UK shares are not included in the ASX calculations anyway.

If you offer the Poms a cash or scrip alternative at parity, and some choose scrip, the ASX 200 weighting will actually rise due more Australian dollar-denominated shares being on issue.

If I don't say so myself, the idea is a no-brainer. I can't see how this isn't in the long-term interests of the company and its long-term shareholders. The influential funds will continue to buy the buyback-generated earnings-per-share upgrades, while 10% of every Australian compulsory superannuation dollar that finds its way into Australian equities will find its way into BHP. That compulsory super flow can be tapped for growth capital if required, and buying back the UK listing in no way constrains BHP growth or acquisition options.

The other beauty of this idea is that it reduces risk, because BHP would be investing in the asset it knows best: itself. BHP has the greatest suite of mining assets in the world, yet the dual listing is contributing to those assets being priced as some of the cheapest in the world.

I know there are tax issues in unwinding the dual-listing structure, but I believe they could be overcome. I believe this must happen, and although I am out of line telling the BHP board what to do, I am certain that if they followed the advice above that BHP would be a $A50 stock in three years time, trading on P/E multiple of 13 times. Today, we have the greatest mining company in the world trading on a single-digit P/E, with that P/E actually contracting.

The stock is basically trading at net present value ”” and that's in the middle of a commodity "super cycle". Action is required to rectify that ridiculously low rating, a rating that clearly doesn't reflect the quality or duration of the assets, the quality of the management and board, or the quality of the balance sheet and cash flows.

I'm a bit passionate about this because I believe there is huge value to be released here, and I believe a much better rating can be achieved for BHP Billiton. I'm certain BHP is considering all these options, I'm just urging directors to get on with it and back themselves. It's now or never boys, let’s take out the Poms and bring it home.

Eureka Report


----------



## MiningGuru (23 August 2006)

"BHP Billiton likely to unveil big jump in Olympic Dam resource estimate - report "

"SYDNEY (XFN-ASIA) - BHP Billiton Ltd is expected to reveal a major increase in the resource estimate at it Olympic Dam copper/uranium orebody in South Australia, reported the Age newspaper without citing sources.

The new resource estimate for the deposit is expected to be included in BHP's 2005-06 annual report, due to be released in the week starting Sept 18, according to the report.

The resource estimate was last updated in 2004.

Even without the expected increase, Olympic Dam already ranks as the world's fifth biggest copper resource and the number one uranium deposit.

While the resource upgrade would push the deposit up the ranks of copper deposits, the Age said it is the expected hike in the uranium resources that will create most interest.

Olympic Dam already accounts for 40 pct of the world's known uranium resources, with 1.524 mln metric tons of the radioactive material.

The newspaper said since acquiring the project's former owner WMC Resources Ltd last year for 9.2 bln aud, BHP has carried on with the aggressive drilling program involving 18 drill rigs aimed at determining the size of Olympic Dam.

Results from the drilling are being fed into a pre-feasibility study, due to be completed at the end of 2007, which assesses a 7-10 bln aud expansion of Olympic Dam that would triple current annual production of copper and uranium to 600,000 tons and 15,000 tons respectively."


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## nizar (23 August 2006)

MiningGuru said:
			
		

> "BHP Billiton likely to unveil big jump in Olympic Dam resource estimate - report "
> 
> "SYDNEY (XFN-ASIA) - BHP Billiton Ltd is expected to reveal a major increase in the resource estimate at it Olympic Dam copper/uranium orebody in South Australia, reported the Age newspaper without citing sources.
> 
> ...





Yes i read somewhere BHP will have 1million tonnes of copper production by 2010 and 40ktones of uranium....

WMC takeover seems like the bargain of the century so far... Olympic Dam is potentially worth as much as BHP's current market cap

And dont forget they also have an oil division (BHP Petroleum) which is bigger than WPL....

Uranium+oil = u cant really go wrong

IMO of course...


----------



## ducati916 (23 August 2006)

Not forgetting that BHP's copper mining property is currently involved in a bitter and continued strike with mine workers, BHP is currently overvalued, and while disrupted supply may not reflect in this Q's earnings, they will reflect at some point.

And the previously posted analysis; 

Current Price $39.91
Code BHP
Yield 1.1%
Market Capitalization $128150
TCI Price Target $18.70 to $13.80
Investment Sector Industrial Metals & Minerals
Price/Earnings ratio 18.73
Recommendation Watch List


INDUSTRY STATISTICS

Market Capitalization: 360B
Price / Earnings: 15.6
Price / Book: 5.2
Net Profit Margin 16.7%
Price To Free Cash Flow -87.0
Return on Equity: 32.6%
Total Debt / Equity: 0.5
Dividend Yield: 1.5%


Resources, commodity prices have been at historic highs just recently. With prices for the producers of commodities currently so high we must take into account the “cyclical” nature of the businesses involved.
We must ascertain whether the P/E ratio is derived from high earnings due to high prices received for production, or, a low purchase price available for the aggregate earnings over a number of business cycles.

To date the earnings have risen on high prices, and this has already more than been reflected within the prices asked for within the industry. This can further be illustrated within the low current dividend yield.

Purchasing this industry implies continued growth within China & other developing nations.
Is this current growth rate sustainable?
There will be many opinions upon that crucial question, but, the answers are all speculative, and if wrong, could find a very nasty correction in the prices of resource stocks. This has already happened in May, and currently the question remains, after the correction, have the prices become cheap, or undervalued?
The unequivocal answer is no. They are still as a sector overvalued.


CAPITALIZATION

Market Cap (intraday): 116.89B
Enterprise Value (19-Jun-06) 129.64B
Trailing P/E ( intraday): 15.08


The Capitalization structure of BHP is an unqualified good.
The debt, constituting both funded debt & Bank debt is a very small component of the Capitalization.
Further, the Pension & Operating Leases component is currently showing a surplus from my estimations. 

Income Statement
Revenue 32.20B
Revenue Per Share 10.64
Qtrly Revenue Growth 9.70%
Gross Profit 10.09B
EBITDA 13.08B
Net Income to Common 7.80B
Diluted EPS 2.56
Qtrly Earnings Growth 55.10%


The coverage of Interest payments is excellent, and poses little risk to holders of debt, or of equity.
We can see the result of the current high prices of commodities reflected within the two ratios of “revenue growth” and “earnings growth”.

A 9.70% growth in Revenue, contrasted with a 55.1% growth in Earnings. Should commodity prices weaken, and commodity prices are very cyclical, we would see a significant shrinkage within earnings as a result, with a concurrent shrinkage in Revenues.

Due to the lack of leverage within the Balance Sheet, and the high percentage of Common, the expectation would be for a low volatility within the share price. This until just recently was the case. It has not been the case over the past two years.

There has also been a significant improvement to net profit due to a reduction in production costs, quite possibly due to economies of scale. There has additionally been a significant improvement within Selling General & Administration, costs falling. These are both positives, but sustainability is a concern.

Balance Sheet
Total Cash 1.65B
Total Cash Per Share 0.546
Total Debt 10.47B
Total Debt/Equity 0.495
Current Ratio 1.092
Book Value Per Share 6.98


Cash is lower currently than one would like to see. This in of itself is not a major problem, as of course the ability to borrow cash would be forthcoming, and undoubtedly, BHP, would have a credit revolver available.
The Current Ratio however is not high enough to qualify BHP as “Investment Grade” currently.

Inventory & Receivables display no red flags, and pass muster.
The collections of Receivables is possibly a little low, but is consistent, this will be monitored.

BHP however does not pass muster on the return generated on assets. With the current high prices that are being paid for commodities, a return of $0.97 on each invested $1.00 is indicative of a low return business.


Cash Flow Statement
Operating Cash Flow 10.04B
Levered Free Cash Flow 8.27B


Cash-flow analysis throws up some interesting areas.
Depreciation is the problem child. As a percentage of Revenues, Depreciation has fallen from an aggregate of 8.9% to 6.6%. This will after Tax, flow to the bottom line, improving net profit growth, this is some $0.13 cents per share.

Capital Expenditures have fallen quite significantly, some $0.77 per share from the aggregate.
Depreciation compared to Capital Expenditures has also decreased.
Depreciation to Cash from Operations……..fallen.
Depreciation as a percentage of Net Assets………..fallen

What we are left with does not look confidence inspiring currently, especially as we are not even purchasing a bargain, thus we have no margin of safety.

We have reduced Capital Expenditures, thus pumping up net profits.
We have reduced Depreciation being charged against Net Assets, pumping up profits.
In short, there may very well be reduced investment, or more importantly reduced, or inadequate spending on maintenance to pump up earnings.

Examination from a different perspective reveals nothing that allays any concerns.
%growth in Capital Expenditures = 30.7%
%growth in Plant Property & Equipment = 24.3%
%growth in Depreciation = 9.8%

When we compare this to the following;

%growth in Revenues = 22.8%
%growth in Gross Profits = 34.3%

It would seem that the Depreciation charge is being inappropriately rated. This is always a red flag, and may pose problems further down the road. At current prices, it is certainly enough of a question to apply prudence to the investment decision.

The Depreciation or Depletion charge carries an extra importance within the purchase of the common stock of a resources business. The Depreciation charged by the business cannot be the depreciation charge utilized by the individual investor, as of course, the business charges depletion at purchase price, and so must the investor.

Utilizing a pessimistic outlook, and diminishing productive capacity after seven years, the investors return would calculate to 4.5%. This is inadequate, and provides no margin of safety at all.

Utilizing a generous twenty years on productive capacity, we still have only a 6.7% return. For this return, a lot of things would need to move in the investors favor.

MANAGEMENT

Looking at hidden Cash-flows we can identify a discretionary Cash-flow of $295.9 million, or $0.09 per share within Selling General & Administration. This in of itself is generally a positive, as these cash-flows may well be available to the business in harder business cycles.

There is however a discretionary Cash-flow within Capital Expenditures also, calculated to be approximately $593.8 million, or $0.19 per share. Under the present question marks present regarding the Depreciation charge, I am not willing to look at this as a positive, if; in point of fact maintenance spending has suffered.

SUMMARY

BHP is considered a “Blue Chip” business, or share. In my opinion, the business is profitable, but has a very low return. It has some serious question marks in regards to the Depreciation charges and related questions regarding the outcome of Capital Expenditure spending.

At the current price, it is too expensive, and returns accruing to the investor, purchased at these prices will reside almost entirely on speculative outcomes. Will commodity prices remain at 25 year highs? Will China & other developing nations continue their extreme growth rates?

If you do not know the answers to these questions, then BHP is a watch list security. Should prices fall to circa $8.00 then there will be enough value available to warrant an investment with “Fair Value” calculated at the range of $18.70 to $13.80 per share.

--------------------


----------



## ducati916 (23 August 2006)

And a quote from Reuters



> This was supposed to be a week in which BHP Billiton (nyse: BBL - news - people ) announced another breathtaking set of annual results. Instead, the Anglo Australian metals and mining giant woke up Monday morning to the 15th day of a prolonged strike at its biggest copper mine in Chile--and it doesn't look likely to end any time soon.
> 
> Copper prices jumped just over 2% on Monday after BHP said operations at Escondida, the world's largest privately owned mine, was running at between 40% and 60% operating capacity. The company is still waiting for the official results of a worker vote on its latest wage offer: a 4% pay rise over three years.
> 
> ...


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## Sean K (23 August 2006)

ducati916 said:
			
		

> Should prices fall to circa $8.00 then there will be enough value available to warrant an investment with “Fair Value” calculated at the range of $18.70 to $13.80 per share.




$8.00 Ducati? Is that your valuation? Or is between $13 and $18, yours??

What p/e would $8.00 put it at, about 2%? LOL


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## ducati916 (23 August 2006)

*Kennas* 

Fair value resides somewhere between $13 & $18
I personally would only be interested at $8/or less
The reason of course is that I must have some discount from fair value to provide me with a margin of safety and profit potential.

jog on
d998


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## Sean K (23 August 2006)

ducati, I haven't seen a valuation under $32.00 for some time. Suppose brokers can't get it right all the time. 

In 'concensus best buys' on Aegis, 15 brokers have been pannelled and one says hold, eight say buy, and six say strong buy. At current prices! 

Holy goat, their members will be taking a flogging after your valuation comes to fruition.


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## Realist (23 August 2006)

ducati916 said:
			
		

> Fair value resides somewhere between $13 & $18
> I personally would only be interested at $8/or less
> The reason of course is that I must have some discount from fair value to provide me with a margin of safety and profit potential.




ridiculous  


"The world's largest diversified miner BHP Billiton Ltd has posted an Australian record annual net profit of $US10.45 billion ($A13.73 billion), and says the global economic outlook continues to be positive."


At $8 a share the market cap is about $27B.

The company would have a PER of about 2.

Hahahahahahaahahahahaahaaaaaaaaaaaaaaaaaaaaaaaa  

Stupidity at its best.  Ducati - you've outdone yourself this time!


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## Joe Blow (23 August 2006)

Realist, using font sizes larger than normal for no reason will cause me to get very cranky.

Don't do it.


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## wayneL (23 August 2006)

Well I like the Ducsters valuation.

It would be primo investment grade at those prices. As is stands, most of the valuation is speculative... and based on speculative prices in metals.

When the heat comes out of both the ecomomy and commodity prices, the BHP share price is toast.


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## MiningGuru (23 August 2006)

Look at this. The idea that is going to go down in price to $8 is absolute fantasy! It is more likely going to go up to $40+ by the end of the year.

Matthew Stevens: Best is yet to come
Matthew Stevens
August 23, 2006
THE really scary thing about BHP Billiton's record crunching profit of $US10.45billion is that we haven't really seen the best of it yet.

Now how can that be?

Well, just look back at last month's annual production report and note that over the past 12 months BHP has pretty much kept pace or slightly bettered its 2005 output of key products like iron ore, copper, aluminium and petroleum.

Overall then, the unreal set of numbers Chip Goodyear delivered to the market this afternoon reflect little more than the once-in-a-lifetime price cycle which has so changed life for the miners.

But that is about to change. Over the past 18 months BHP has spent $US1.45 billion on four, fast-tracked expansion projects in aluminium, copper and iron ore.

So, for the first time in the super cycle, BHP is going to start responding to demand by pumping out serious new tonnages across three of the biggest profit generators in its suite of metals and minerals.

It has, just for example, spent $US490 million adding 20 million tonnes of capacity to its West Australian iron ore operations. BHP earned $US4.5 billion from its steel materials business this year, an increase of 28 per cent over the previous year. But that was done off flat iron ore production. The impact then of a serious increase in production, which is expected to start in the second half of this year, will be profound.

And that is the story across the board. Frighteningly enough, Chip Goodyear is only now going to put his foot on the accelerator.

 » Print Friendly Version  » Email this story

Privacy Terms  © The Australian


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## Realist (23 August 2006)

Wayne, if BHP was $8 now.

The Market cap would be about $27B.

The recent profit was $13.5B

The PE ratio would be 2.     

And if things did not change you would make your money back in 2 years, and hold one of Australia's and indeed the world's greatest companies for free.

It is utter lunacy to say the least.  If anything BHP is undervalued now because analysts, and shareholders and punters alike know things do not get much better than they are now. 

BHP is a buy at the current price, it is one of the best companies in the world, and not overvalued because a future reduction in resource prices are already accounted for.


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## wayneL (23 August 2006)

Realist said:
			
		

> Wayne, if BHP was $8 now.
> 
> The Market cap would be about $27B.
> 
> ...




You should buy some then.

I'll trade it, but only scrip that I can get at value goes into the bottom drawer.


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## Realist (23 August 2006)

Good article Miningguru, there is no reason why BHP can not increase profits this year.

$40 is not an unrealistic current valuation IMHO.

Let's see how it does tomorrow.

I have alot of BHP shares, more so than any other company.   But I am not being biased or ramping it here (as if it would matter to the price if you all bought) it is truly a remarkable company. The recent results are stunning, and the future is bright.


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## Realist (23 August 2006)

wayneL said:
			
		

> You should buy some then.
> 
> I'll trade it, but only scrip that I can get at value goes into the bottom drawer.





I own more BHP than any other shares*, infact twice as much as any other share.    

I have about 20 shares at the moment.

*except one Nasdaq stock..


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## wayneL (23 August 2006)

Realist said:
			
		

> I own more BHP than any other shares*, infact twice as much as any other share.
> 
> I have about 20 shares at the moment.
> 
> *except one Nasdaq stock..




You only have 20 shares? You should buy some more then.


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## Realist (23 August 2006)

wayneL said:
			
		

> You only have 20 shares? You should buy some more then.





19 actually.    


but that is 19 more than you...

 :fu:


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## michael_selway (23 August 2006)

wayneL said:
			
		

> You should buy some then.
> 
> I'll trade it, but only scrip that I can get at value goes into the bottom drawer.




Im with you, quite bearish on BHP actually, but not overly

They annouced results today and it fell today

Basically for Resources companies to do well from this point onwards, they have to be leveraged to the right resources

E.g. specialist in Nickel, Zinc, Uranium

But BHP isnt specialsit in these % wise

















*I value BHP using forward terminal PE of 10 about* so $27

Yes it can spike to $40 in the short term, but long term it wise it should be around $27 based on current forecasts and risks etc

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 128.4 223.7 290.9 268.8 
DPS 36.7 48.8 54.5 56.6 

thx

MS


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## wayneL (23 August 2006)

Realist said:
			
		

> 19 actually.
> 
> 
> but that is 19 more than you...
> ...




Is that so.... Thank you for alerting me to my financial position. I never realised!

:guitar:


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## ducati916 (23 August 2006)

In respect to the reference of a P/E of 2
This in all likelihood would not be the case, as price would not fall so drastically unless......earnings were seriously impacted.

Commodity producers, miners, in this example are *cyclical businesses* currently due to China, there is a resource boom, or bullmarket.
Bullmarkets, do not last forever, unless, this time is different.
Therefore, in a commodities Bear market, with falling earnings, and pessimism ruling the day, $8.00 is a possibility.

That would represent excellent value, and this is in essence what value investors look for, buying when everyone else shuns the security.

If it never reaches that price, and it forever increases in value, so be it.
Do you know of a stock that only went up, never came down?
IBM, a great growth stock for 70+yrs, had some truly amazing retracements in it's price history etc etc etc.

jog on
d998


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## Realist (23 August 2006)

I agree ducati, and what goes up must come down, and of course BHP may go down, it is so huge and so valuable already it would be bloody difficult to double, and not too hard to halve in price.

However as it is it is a good buy and $40 is a reasonable price to 'hope' for.  $8 is unrealistic.

I'm bullish on BHP for the moment, and would not be surprised tomorrow if it went close to $30 - was the announcement after hours? I think it was, will be interesting what it does overnight.

What companies do you recommend people buy instead of BHP?

Your philosophy is correct, bloody hard to implement though, if you are gonna wait for BHP to be $8 you may be waiting a long long long time.


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## GreatPig (23 August 2006)

I still own some shares, but did sell the call warrants earlier today.

That way it's a win-win situation for me: if the price jumps up now because I've sold the warrants, I'll win with the shares, but if the price drops further, well at least I got out of the warrants at a decent price. 

GP


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## justjohn (23 August 2006)

GP to be in a win-win situation I hope you own more than 20 shares


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## YELNATS (23 August 2006)

Realist said:
			
		

> 19 actually.
> 
> 
> but that is 19 more than you...
> ...




Goodonya realist. I do enjoy your posts. chuckle chuckle. regards. YN.


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## Julia (23 August 2006)

Realist said:
			
		

> I own more BHP than any other shares*, infact twice as much as any other share.
> 
> I have about 20 shares at the moment.
> 
> *except one Nasdaq stock..




Umm, Realist, do you mean that you own 20 whole shares in BHP, or am I misunderstanding you and you actually mean that you have shares in 20 different companies?

Julia


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## Realist (23 August 2006)

YELNATS said:
			
		

> Goodonya realist. I do enjoy your posts. chuckle chuckle. regards. YN.




My fan base has just grown 100%..   

The other fan is a handsome value investor dude with a 70's blonde harido.


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## nizar (23 August 2006)

Julia said:
			
		

> Umm, Realist, do you mean that you own 20 whole shares in BHP, or am I misunderstanding you and you actually mean that you have shares in 20 different companies?
> 
> Julia




Reading it again, i think the latter is true...

He would own many-fold more times BHP than 20; from all the money he saves from having no mortgage....


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## Realist (23 August 2006)

Julia said:
			
		

> Umm, Realist, do you mean that you own 20 whole shares in BHP, or am I misunderstanding you and you actually mean that you have shares in 20 different companies?
> 
> Julia




I wish I had 20 whole shares in BHP, I only have 19.


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## Realist (23 August 2006)

nizar said:
			
		

> Reading it again, i think the latter is true...
> 
> He would own many-fold more times BHP than 20; from all the money he saves from having no mortgage....





True.

Man I  love renting, my dryer sh*t itself this week, phoned the landlord and a new dryer was delivered today.

Do not dis renting, it rocks!


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## Freeballinginawetsuit (23 August 2006)

Gee Realist dont you own whitegoods either


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## ducati916 (24 August 2006)

*Realist* 



> I agree ducati, and what goes up must come down, and of course BHP may go down, it is so huge and so valuable already it would be bloody difficult to double, and not too hard to halve in price.




A combination of fundamentals & sentiment drive financial markets. Therefore, in a scenario of poor fundamentals & poor sentiment, $8.00 is possible, notice I didn't say probable, just possible.



> However as it is it is a good buy and $40 is a reasonable price to 'hope' for. $8 is unrealistic.




I try to avoid *hope* as much as possible, she's precocious.



> I'm bullish on BHP for the moment, and would not be surprised tomorrow if it went close to $30 - was the announcement after hours? I think it was, will be interesting what it does overnight.




I would never have imagined that. Overnight was not kind to BHP in the US markets.



> What companies do you recommend people buy instead of BHP?




My selections are on public display on reef.
I may update the thread on ASF



> Your philosophy is correct, bloody hard to implement though, if you are gonna wait for BHP to be $8 you may be waiting a long long long time.




Not at all, as there are almost always opportunities that are undervaluations.
Incidentally, have you calculated your depletion rate on your investment?
If you have, you'll understand why $8.00 is realistic.
If not, then you will have been guilty of overpaying for inventory in the ground.

jog on
d998


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## Realist (24 August 2006)

Freeballinginawetsuit said:
			
		

> Gee Realist dont you own whitegoods either




Nope..  

The landlord owns the dryer.  Why would I want to own a dryer?   

They are poor investments, unlikely to increase in value.


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## TraderPro (24 August 2006)

Realist said:
			
		

> Nope..
> 
> The landlord owns the dryer.  Why would I want to own a dryer?
> 
> They are poor investments, unlikely to increase in value.




I like the way you think 

I bet you depreciate everything and anything you're eligible too and you have a lease on a car etc...

Perhaps you can leverage up your 19 using CFDs or warrants? Maybe exchange your BHP shares to instalment warrants and use that widely promoted (by the asx) strategy of "dividend yield play"... ?


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## michael_selway (27 August 2006)

Commodity prices will fall?



> Goodyear dismisses analysts predictions
> 
> Date : 27/08/2006
> 
> ...




http://www.abc.net.au/insidebusiness/content/2006/s1725127.htm
http://www.abc.net.au/reslib/200608/r103145_316229.asx


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## krisbarry (27 August 2006)

Realist said:
			
		

> True.
> 
> Man I  love renting, my dryer sh*t itself this week, phoned the landlord and a new dryer was delivered today.
> 
> Do not dis renting, it rocks!




Which means your rent will go up an extra 5-10 a week now to cover the cost of a new dryer.

I asked for Aircon in my unit that I was renting, I got it, but up went the rent just after it was installed. 

Nothing comes for free


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## 2020hindsight (27 August 2006)

Could it be that BHP would not have fallen so much if they had made a lesser profit(?) :millhouse


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## michael_selway (27 August 2006)

2020hindsight said:
			
		

> Could it be that BHP would not have fallen so much if they had made a lesser profit(?) :millhouse




SImple answer is no, cause its all about future EPS

copper and nickel, which make up alot of BHp sales, , are very highly priceed now, one could say pretty much unstainable, so profit are likely to fall next yr or the following

thx

MS


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## Realist (27 August 2006)

Stop_the_clock said:
			
		

> Which means your rent will go up an extra 5-10 a week now to cover the cost of a new dryer.
> 
> I asked for Aircon in my unit that I was renting, I got it, but up went the rent just after it was installed.
> 
> Nothing comes for free




Well my rent has not gone up for 3 years so far.

And I flatted in Cremorne for 5 years, the rent never went up once.

I always pay the rent on time, chat to the owner tell him how I got the carperts professionally cleaned recently, tell him he can come over whenever etc.  We have old blinds and old carpet, if I move out he'll have to buy new stuff - the agent has already recommended that. We have a busted light, a few other minor issues that I do not care about, I mention them but say there is no need to fix and I never moan about them, but he knows are there. I even offer to fix stuff myself.  He's happy with me at the current rent, and I am happy too.

I am value renting!!!

A fundamentally good solid flat that others may overlook but is in a great area, we have a pool, garage with automatic door, it is underpriced and a good long term hold.

And man am I saving not owning.


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## Realist (27 August 2006)

TraderPro said:
			
		

> I like the way you think
> 
> I bet you depreciate everything and anything you're eligible too and you have a lease on a car etc...
> 
> Perhaps you can leverage up your 19 using CFDs or warrants? Maybe exchange your BHP shares to instalment warrants and use that widely promoted (by the asx) strategy of "dividend yield play"... ?





I was kidding about the 19.     

You can't even buy only 19 if u wanted to.

I have well over $10,000 in BHP.


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## wayneL (27 August 2006)

Realist said:
			
		

> I was kidding about the 19.
> 
> You can't even buy only 19 if u wanted to.
> 
> I have well over $10,000 in BHP.




Will you buy more when they're worth $4,000?


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## Realist (27 August 2006)

wayneL said:
			
		

> Will you buy more when they're worth $4,000?




Wayne, if BHP end up at $5 a share or whatever Ducati valued them at.

Then YES I sure as hell would buy alot.

I think I've already been quoted as saying I'd sell my eye teeth, my mother and the clothes off my back to buy BHP if it had a PER of 2.


----------



## michael_selway (27 August 2006)

Realist said:
			
		

> Wayne, if BHP end up at $5 a share or whatever Ducati valued them at.
> 
> Then YES I sure as hell would buy alot.
> 
> I think I've already been quoted as saying I'd sell my eye teeth, my mother and the clothes off my back to buy BHP if it had a PER of 2.




Hi Real, i think BHP is worth about $25 now

basically *Forward Terminal PE of 10*, although yield is a bit low relatively

Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS 225.4 291.8 268.8 239.9 
DPS 48.4 54.4 57.0 56.4 

thx

MS


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## nizar (27 August 2006)

Realist a question 4 u (and every1)

does knowing a company (what it does, management team, etc) help u profit from it in any way if its the market that will ultimately deduce and decide its value?

(More to do with the TA versus FA debate)


----------



## Out Too Soon (13 September 2006)

Thanks for that Alan Kohler, Chip Goodyear (BHP) interview MIchael. It was Alan on TV recently who told viewers that "if you invested every May & sold in Nov over the last 50 years (avg ASX 100 or somesuch I forget details) you'd have actually lost money, but if you bought in November & sold in May you'd be up an incredible (once again I forget details pls forgive) I think it was $500K from an initial start of $1000", but dont hang me if that's all screwed up. The gist of it was though & these details r what I scribbled down at the time, "Sell in May go away (until November), Buy in November".


----------



## Realist (13 September 2006)

nizar said:
			
		

> Realist a question 4 u (and every1)
> 
> does knowing a company (what it does, management team, etc) help u profit from it in any way if its the market that will ultimately deduce and decide its value?
> 
> (More to do with the TA versus FA debate)




YES!!

Lets use BHP as an example, if it makes an even bigger profit next year, and even bigger profit the year after and the future looks even better the market MAY react positively and the share price MAY increase.

The market interprets results, that is all. People make judgements and they are wrong as often as they are right. History proves that succesfull companies that make large profits have a share price that increases. Companies that have reducing profits or god forbid losses have share prices that decrease.

You can not control market sentiment, or even predict it. But you can use it to your advantage. If you buy a successfull company for a discounted price you have a far better chance of getting a share that will go up. The longer you hold and the more successfull a company is, the greater your chances. In the meantime you collect in all likliehood ever increasing dividends.

There is no other way to invest, any other way is gambling IMHO.


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## BSD (14 September 2006)

Firstly, why is this thread so short and seldom at the top?

Beware: Rant Follows!


BHP is our largest company and in my view an outstanding company with stunning prospects. Liquid, volatile, transpearant, widely researched, globally traded, going up etc - why dont people discuss BHP more?

Blunty, I think resources are the place to be on the ASX outside of financials. 

I believe there is a pervasive feeling globally that discounts the commodities sector in general and potential for a bull market lasting in excess of a decade. Attitudes will change and I think BHP is great value now.

In Australia, this doubt, in my view is based on so many living through the 90s bear market, laterite nickels, Magma Copper etc not believing the current prices and expecting for some reason to see a reversion to the mean for prices. Resources booming must be a bubble say those who were bitten by rubbish stock in the tech boom. 

This mindsite prevails despite rising cost curves for production (particularly at lower grades, greater depth for everything) and ever rising demand. 

The IMF has stated recently that commodity demand will grow at 5% next year - despite US housing and the potential for recession. A housing slump in Florida is not going to stop the expansion of the Chinese electricity grid and it is not going to stop copper, nickel or oil getting less prevalent and harder to find.    


I have read back on this thread to October when at $19.50 punters were selling it on technicals. 

My interest however is in the fundamental calls and particularly those with values sub $15. These all appear to be based on the premise that copper, iron ore and oil prices will fall at a rapid pace. The same pace the metals bears have been wrongly calling for over twelve months. 

The wave of supply is yet to eventuate and the demand has only risen. 

The cyclical nature of the business is always referred to - but no one contemplates that the cycle may be 15 years and not 3. 

Why can house prices double in five years and not resources? It takes ten years to build a copper mine and three months to build a home. 


BHP offers both leverage to rising commodity prices AND rising production growth of production

BHP is generating massive cashflow

The sustainability of Asian demand is driven by demographics and from a very low base. A far superior engine to that of US consumers borrowing more to buy an extra burger. 

BHP is underleveraged and will be cash positive by the end of the decade.

This comment from Ducati needs to be better quantified for me: 

*"Should prices fall to circa $8.00 then there will be enough value available to warrant an investment with “Fair Value” calculated at the range of $18.70 to $13.80 per share."*

Ducati, I would thouroughly enjoy discussing your model and point to where we disagree. To value BHP at $13.80 what are your assumptions for:

Copper:  07, 08 Long Term
Nickel: 07, 08 Long Term
Coking Coal: 07, 08 Long Term
Iron Ore: 07, 08 Long Term
Oil: 07, 08 Long Term


My only criticism of BHP (and other large houses) is that they arent focussed on more buying of producers and investing in quality projects with more belief in the cycle, rather than returning capital to shareholders. 

But the less they spend - the more tight supply remains.


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## ducati916 (15 September 2006)

*BSD* 

I shall relish the discussion.

Check back to this thread later today, as I have some business to attend to early, and I would like to give some thought to your points of differences and objections.

jog on
d998


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## ducati916 (15 September 2006)

*BSD* 



> My interest however is in the fundamental calls and particularly those with values sub $15. These all appear to be based on the premise that copper, iron ore and oil prices will fall at a rapid pace. The same pace the metals bears have been wrongly calling for over twelve months.




Let's examine the macro/micro fundamentals.
The questions below pertain to both. 



> *The wave of supply is yet to eventuate and the demand has only risen.
> *The cyclical nature of the business is always referred to - but no one contemplates that the cycle may be 15 years and not 3.
> *Why can house prices double in five years and not resources? It takes ten years to build a copper mine and three months to build a home.
> *BHP offers both leverage to rising commodity prices AND rising production growth of production
> ...





From BHP's 2005 Annual Report;
*Petroleum +38.9%
*Aluminium +26.5%
*Base Metals [Copper, Lead, Zinc, Gold, Silver, Uranium Cathode] +221.8%
*Carbon Steel [Iron Ore, Magnesium, Metallurgical Coal] +127.8%
*Diamonds + Specialty -7.9%
*Energy Coal +206.9%
*Stainless Steel +47.7%

Are these types of increases sustainable?
This question must be addressed in two stages;
*Macro-view, viz. global supply/demand dynamics
*Balance Sheet, viz. Accounting policies.

Balance Sheet.
BHP utilizes FIFO accounting for Inventory.
FIFO, in an environment of rising prices, leverages net profit.
FIFO in an environment of stable, or falling prices, causes losses on Inventory.
Therefore, unless prices for Inventory continue to rise, net profits will fall.

Looking at the percentage increases within Inventory pricing, can you envisage further increases of a similar, or increasing magnitude?
If not, then, as prices stabilise and weaken, so FIFO will impact net earnings.
We can calculate this from the Depreciation charge.

Therefore, from a Balance Sheet analysis, we can surmise that the earnings growth could have a fatal flaw that is currently under-appreciated.

From a macro-perspective;
The US & China are symbiotic economies currently.

China can only consume 42% of their own output [this is a very small consumption]
They thus rely on the rest of the OECD bloc to take the surplus production.
The US accounts for some 68% of the 58% surplus.
Walmart alone accounts for 30% of the US 68%

Now supposing China did not cycle the FX surplus back to the US via the purchase of Treasuries? Could, would the US continue to purchase Chinese manufacturing output?
Protectionism is very strongly on the rise through Congress & Senate working parties, you need only look at various mergers that were blocked recently.

Trade tarriffs, etc are again a fact of global trade, thus, should China NOT support the US consumer, the US consumer would possibly be denied the opportunity to purchase from China just in case they would still wish to, or could afford to.

China is still a managed economy.
It is managed locally with great inefficiencies and wasted capital.
In China, it has led to massive overinvestment in manufacturing assets in sectors already suffering from oversupply. Investment in fixed assets -- everything from steel mills to cement plants to oil refineries to highways -- grew by 30% in the first half of 2006. 

Although the reported profits of China's largest industrial enterprises climbed 28% in the first half of 2006 over the same period in 2005, companies in some sectors have seen profits squeezed, sometimes to the vanishing point. According to government numbers, 80% of the profits in the Chinese economy went to companies in the oil, power, coal and nonferrous metals sectors. The other 30 sectors of the economy shared just 20% of corporate profits.

Profits in the Steel sector dropped by 20% in the first half of the year. The problem is overcapacity. Too many steel companies have added too much capacity, driving down the price they can charge for their product.

Cheap money in plentiful supply has produced a real estate boom in China, too. Higher prices pull more money into real estate, of course. In the first six months of 2006, real estate investment climbed 24.2% over the same period in 2005. According to the National Bureau of Statistics, 1.41 billion square meters of housing were built from January through June 2006, up 21% from 2006. 

China needs GDP growth north of 7% a year just to stay even with the number of new job seekers thrown up by its massive population every year. 

A purely rational economic analysis would say that if Chinese textile makers can't compete after the yuan is appropriately revalued, then the least-efficient companies in the sector should go out of business and the jobs should flow to countries, perhaps Vietnam, where lower labor costs would allow textile makers to make a profit.

That would mean shipping jobs out of China, however, and advocating that is political death in a country that needs to create 20 million jobs a year to keep the population governable by the Communist regime.

Therefore, it would seemingly be economic suicide to dampen demand from the US via refusal to fund the deficit in trade. The second part of the equation being, how much of the infra-structure, & productive assets belong to US Corporations via their FDI investments?
Just because the profits are not being repatriated due to tax reasons, does not mean the profits are not accruing to Corporate America.

With such a large component of listed Australian stocks having their earnings seemingly dependent upon Chinese demand, how will Australia weather a recession in China?

China has huge reserves of coal.
They are switching their power generation from oil & imported coal to home produced coal. This will impact the price of coal, particularly if they become net exporters.

Iron ore, with a steel glut already, and getting worse, demand from China will decrease, again, not promising for BHP.

China is the margin economy.
Prices are always set at the margin.
The margin is currently evolving.
In the longer term, I see prices returning to the equilibrium.



> Ducati, I would thouroughly enjoy discussing your model and point to where we disagree. To value BHP at $13.80 what are your assumptions for:
> 
> Copper: 07, 08 Long Term
> Nickel: 07, 08 Long Term
> ...




So what are those prices?
From RIO's Annual Report;

Alumina
Low price $250
Current price $420

Aluminum
Low price $55
Current price $90

Coking Coal 
Low Price $45
Current price $130

Thermal Coal
Low price $35
Current price $55

Copper
Low price $75
Current price $160


Diamonds
Low price $150
Current price $200

Gold
Low price $350
Current price $550

Iron Ore
Low price $35
Current price $80

Iron Pellets
Low price $45
Current price $120

Molybdenum
Low price $5
Current $30

Silver
Low price $5
Current $7

*"Should prices fall to circa $8.00 then there will be enough value available to warrant an investment with “Fair Value” calculated at the range of $18.70 to $13.80 per share."*

Therefore, intrinsic value is in a range between $13.50 - $18.70.
For an *UNDERVALUATION* I recommend buying at least 50% below this range. At $8.00, BHP would enter the undervaluation, or bargain area.

jog on
d998


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## haemitite (15 September 2006)

Mining companies tend to be valued on NPV rather than multiples given the variability of cashflows and the highly capital intensive nature of the mining business

BHP's accounting policies such as FIFO have no bearing on NPV valuations - maybe a minor if not negligible impact on earnings - but studies have consistently show that the share market is driven by long term expectations not by short term earnings.

And you are only considering part of the story when you look at stability ofearnings. Prices will fall, no doubt about that. But volumes are still increasing and will be much higher than the pre-boom period. Plus there has been significant consolidation amonst the bigger producers which will lead to more "sensible" behaviour around prices and production planning when demand does cool


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## ducati916 (16 September 2006)

*haemitite* 



> Mining companies tend to be valued on NPV rather than multiples given the variability of cashflows and the highly capital intensive nature of the mining business




Assuming this to be correct, then the crucial questions revolve around the depreciation & depletion charges to;
*the company
*the investor

If this is the case, and you are stating that it is, then the Accounting policy is a vital consideration. You argue;



> BHP's accounting policies such as FIFO have no bearing on NPV valuations




This is incorrect.



> maybe a minor if not negligible impact on earnings




Incorrect.

NPV calculations revolve around the net present value of all cash-outflows [such as the cost of the investment] and all cash-inflows [returns] via a discount rate, usually a required rate of return. In theory, the investment is acceptable, if, the NPV is positive. Therefore, accounting policy [FIFO] and the Depreciation policy, which includes Depletion, becomes probably one of the most important considerations when analyzing resouce producers.
Even more importantly, the investor should calculate his own depletion and amortization rates based on the purchase price.

Acceptable, and providing a Valuation, are two very different concepts.
Therefore your premise, and your subsequent assertions miss the point entirely due to the fundamental mistake of marginalising the relevence and importance of accounting policy.

We then move on to your next assertion;



> but studies have consistently show that the share market is driven by long term expectations not by short term earnings.




This rather glib opinion seemingly relies more upon convenience, than penetrating thought. Therefore;

*what studies [reference]
*context of the studies
*in what market period were they completed
*have follow up studies been completed
*do the follow up studies confirm the findings of the initial studies
*are the studies consistent across all timeframes
*are the studies consistent across all market participants

Moving on to your last section;



> And you are only considering part of the story when you look at stability ofearnings. Prices will fall, no doubt about that. But volumes are still increasing and will be much higher than the pre-boom period.




We can summarize the above into a simple equation;
*Earnings = Production + Price received - Costs*

You state;
*prices will fall
*volume will increase
*costs......not mentioned or considered.

If price falls, the falling price will leverage the drop in net earnings, due to accounting policies.

An outright prediction of increasing volume is utilized to justify the offset to falling prices. This is a dangerous assumption. It may in point of fact be correct, but, then again, it may be incorrect.

This leads to two further questions;
*if correct, how much additional volume would be required to offset the fall in price
*if incorrect, how would the following impact;

*leveraged falls in net profit
*dispersion between fixed & variable costs [what would this do to margins]

The analyst, must therefore, by definition now look at the macro-economic picture of world demand for a wide range of commodities, with China, currently a managed economy, this is near an impossible task, as they may subsidise losses indefinitely or, they may not. Europe, with 33% of demand, is hardly an easy call. There is no singly agreed policy, therefore, you would need to look at some 15 to 20 individual economies.

Last point;



> Plus there has been significant consolidation amonst the bigger producers which will lead to more "sensible" behaviour around prices and production planning *when demand does cool*




Now the contradiction.
After waffling about increasing demand, we have, ......falling demand. We can therefore discount the notion that you have even a vague idea.
Acquisitions on aggregate, destroy shareholder value.
The destruction of shareholder value revolves around, poor acquistions due to excessive prices being paid, faulty premises of the acquisition etc.
As a potential shareholder, you stand to lose in the face of the institutional imperitive......which is a whole new topic.

jog on
d998


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## dutchie (16 September 2006)

G'day Duc

Shouldn't your last equation:

"Earnings = Production + Price received - Costs"

be --

Earnings = Production X Price received - Costs

Cheers

Dutchie


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## ducati916 (16 September 2006)

*dutchie* 

Yes it should..............ta!

jog on
d998


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## BSD (16 September 2006)

Thanks for the response. 

The base scenario in analysing BHP must be consensus or individual analyst forecasts. We can only really identify our personal differences with the assumptions used by the analysts and identify the effect this has on our valuations. 


Addressing accounting policy and balance sheet first (which I believe has very little to do with the divergence in our valuations). 

The positive effect or leverage from provisional pricing has been valued by some analysts at around $1bn (astonishing) in the previous year. 

This was a large proportion of the surprises from BHP and RIO - but is not seen as sustainable (on the assumption of falling base metals in the future) and is not used in forward EPS assumptions. 

Good analysts are accounting for this in their p/l numbers and individual research pieces abound on the subject. Those who were wrong this last earnings season now have a grip on this effect. 


The major sensitivity in the differences between our valuations must be commodity prices and by way of direct association - world growth.

*Demand*

While all the fear surrounds the US consumer slowing down (as it has for the last decade), US industrial production and government spending remains strong.

People get worried about a slowdown in the rate of US growth, forgetting that under current demand conditions, there are deficits in many metals and inventories are tight. Just a steady state would see the 40% price reductions expected in commodities look silly. 

I understand that China exports a lot to the US. But even if the US has a recession, the effect is not going to send China into a tailspin. The 10% GDP growth rates of the Chinese economy have not been exclusively fuelled by the US and will not be turned negative by a US slowdown.

The US is not homogenous and the banrupcty of property spivs in Florida is not going to turn the entire country into recession. The recession fear in the US maybe warranted - but it is hardly a structural long term problem. 

Sydney is in a recession due to a property bubble - but the rest of Australia is not. 

Industrial production is forecast to rise by 15%pa over the next three years in China, 8%pa in Asia ex-China and 8%pa in Eastern Bloc. 

Metals markets in Europe are ridiculously tight at the moment - people forget Europe all the time, being fascinated by CNBC and the US markets. 

The last three years metals price boom was predicated on Chinese industrial production growth of over 16% pa in 03,04 and 05. 

The US IP grew at 0.6%, 4.1% and 3.0% in the same years. US IP is still forecast to grow at 2.6% in 07 and 3% in the out years. 

Industrial production in copper intensive - textiles industry is not. The industialisation of the Chinese and Eastern European countries is increasing the amount of base metals they consume. The growth of intensity of demand for base metals in developed countries is benign. 

The Chinese internal/external GDP split will change and which way would you expect it to go? 

As the country draws more wealth from dealing overseas, the standard of living expands and the industrial intensity of their lifestyles expands exponentially.  

The infrastructure being built (electiricity generation being an excellent example) in China is astonishing. 

They are building massive amounts of property and infrastructure to meet demand for the tens of millions  moving to cities. This process is not going to be undertaken over a period of three years - it is going to take far more than a decade. 

China will have hiccups (bad debts etc) - but you are not going to slow it down for decades.

A trillion USD in the coffers can fix a lot of problems!


If (when) the Chinese stop buying USD and if (when) the yuan appreciates, the developed nations will stop importing deflation from China and will have inflation. 

What do you want to own when inflation comes - commodities. 


The US will not put tarriffs on Chinese goods. Despite the bluster from fools in the developed countries like the US and Australia, anyone with half a brain can see that our standards of living are not going to increase from having more factory jobs and more expensive consumables. 

The Chinese are not good at allocating capital - but nor are we. Their innefficient use of capital leads to volume at all cost production with razor margins and ours leads to bottlenecks and the inability to funds infrastructure required to exploit opportunities. A match made in heaven!


*Supply*
A decade of underinvestment is leading to a benign supply response. 

BHP and RIO are doing buy backs instead of exploration. The big boys are buying supply and not exploring. This is completely different from previous cycles. 

The management consultants focus on EPS growth during their contracted employment and recommend buy backs and capital returns. Having no entrepreneurs has led to the situation RIO is faced with - no production growth. 

Copper supply takes 10 years to come to market. Grades are falling and depths increasing. 

The production cost curve has moved a long way north. Capital costs alone up by 40% - this must be amortised across the life of production. 

The Nickel market is now becoming reliant upon laterites and grades less than 0.5% for future production - the cost curve rises.       

I could go on. But analysts have been predicting the supply response for the last couple of years and it has not eventuated.

Insufficient new supply is being sured-up to meet demand increases let alone a great oversupply. A massive amount of production growth has been from expansions of current facilities and not greenfields. 

*Prices*
A massive fall in all commodity prices is already being assumed to get current numbers. 

To hit current analyst forecasts the copper price needs to fall 18% from $3.40 to $2.80 in 07 and 35% to hit $2.20 in 08.  Assuming $3.00 in January (a 15%fall), Cu will need to get to $2.60 by the end of 07 (another 15% fall) to average $2.80.

Bankers still use $1.10 for long term. 07 is only three months away.

What type of global 'depression' are we expecting here? 

Forget BHP being overvalued, with the decline in global demand implicit in these forecasts, you would be crazy to invest in anything. 

The consolidated nature of the industry is going to add to the supply/demand function

Why should historical low prices even be mentioned? 

Do we expect the price of a beer to go back to 20 cents a pot?

Nobody wants to stick their neck out and that is why BHP is and has been for the last four years cum EPS-upgrade 

*Cashflow and Acquisitions*

On current forecasts, BHP will generate over $30 billion in free cash before the end of the decade. 

Current case NPVs using bearish commodity prices place the NPV around $20.

If you assume the $30bn is geared to $50bn and invested in projects or takeovers with NPVs exceeding the 9% WACC - it is not hard to get an NPV over $26. 

If you put more bullish forecasts for commodities in the model -$35 is not a ridiculous forecast. 

Finally, in relation to acquisitions, I think you have I wrong when you say that as a rule they destroy value.

The cash takeover of WMR has created exceptional value. The MIM takeover by Xstrata would have been incredible. As long as the NPVs on the acquisitions are positive, they should add value now and into the future. 

Low cost, large scale and ready to produce projects are not common and BHP has a warchest of $50b to buy future growth. With the exception of RIO, the other global majors have seen the value in acquisitions. 

Why explore when you could buy Oxiana for 8 times, Alumina for a 25% discount and other one mine companies on sub 4 PEs?


Most speculative booms are close to an end when the takeovers are made with overvalued script. 

Not by companies trading at 10 times earnings buying with cash.


Consensus EPS is now $2.20 07, $2.06 08 and 1.80 in 09. 

In my view, these numbers will prove excessively conservative and like in the last three years, will be progressively upgraded as prices remain far stronger than forecasts.


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## mime (16 September 2006)

d/p


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## mime (16 September 2006)

I think commodities will remain strong untill construction and China's face lift is completed for the olympics. After that who knows.

Also I read that a post valued BHP at something like $15 a share. The company did just make a 13 or so billion dollar profit. I think fear has undervalued the commodities market right now.


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## Realist (16 September 2006)

mime said:
			
		

> Also I read that a post valued BHP at something like $15 a share. The company did just make a 13 or so billion dollar profit. I think fear has undervalued the commodities market right now.




Yep $15,000,000,000 profit And this year is looking just as good, if not better, despite all the talk otherwise.


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## BSD (16 September 2006)

mime said:
			
		

> I think commodities will remain strong untill construction and China's face lift is completed for the olympics. After that who knows.




The effect of the Olympics on Chinese demand for construction products is negligible.

 It is not a mere facelift - it is a shift of hundreds of millions of people to a modern, industrialised lifestyle. 

http://www.thebeijingguide.com/olympic_construction/beijing_olympic_construction.html

Take a look at this Olympic construction site and check out the buildings on the horizon for a little perspective of the relative importance of the Olympics. This is the outskirts of Beijing. 

Building new modern housing and infrastructure for over 20 million new city dwellers a year is a project in itself

The master planning and scale of construction is difficult to fathom:

*According to the U.S. Embassy to China, the country will be building 108 new airports between 2004 and 2009 * 

http://images.businessweek.com/ss/05/12/china_wonders/index_01.htm

______________________________________________________________

$15bn is top of consensus - Credit Suisse. 

Consensus is $13bn and remains cum-upgrade


The market crapped itself in May at the wiff of inflation after getting expensive. 

It is crapping out now on US fears. 

If oil stays low and inflation ebbs in the US - we are going to rally very hard if Bernanke can CUT US rates and the Asian and European areas continue on their growth path.

In the meantime, hopefully the UK buy-back can shake-out some of the hedge funds using BHP shorts to finance investment in more leveraged pure plays . 

Finally, when will the Aussie value managers admit defeat and accept that BHP is more of a value play than the rubbish no-growth industrials like AMC, PPX, TLS and any other stock Anton "Long and Wrong" Taglieferro likes and start to hold BHP anything near market weight??


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## nizar (16 September 2006)

BSD said:
			
		

> The market crapped itself in May at the wiff of inflation after getting expensive.
> 
> It is crapping out now on US fears.
> 
> ...




Agree, agree, agree, agree, on the ball BSD!

Im calling for the FED to pause on september 20th meeting, and then a rate cut maybe in november or december, just in time to add fuel to the santa claus rally. 

Housing has already suffered too much and the economy as a whole is reeling from the 17-consecutive rises. Upcoming data will confirm inflation being contained as the economy slows..

http://www.marketwatch.com/news/story/58rjpLK1JbmPr2nrGwW7T6s?siteid=mktw&dist=TNMostRead

BHP is so so undervalued, its doing so many expansions that earnings will rise even if commodity prices fall, due to increases in production. Not to mention the Olympic Dam uranium potential. It could very well be that resource upgrade that sparks it to get going again.


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## haemitite (16 September 2006)

> NPV calculations revolve around the net present value of all cash-outflows [such as the cost of the investment] and all cash-inflows [returns] via a discount rate, usually a required rate of return.In theory, the investment is acceptable, if, the NPV is positive.



 Broadly right although you seem to be confusing hurdle rate with WACC at the end 







> Therefore, accounting policy [FIFO] and the Depreciation policy, which includes Depletion, becomes probably one of the most important considerations when analyzing resouce producers.Even more importantly, the investor should calculate his own depletion and amortization rates based on the purchase price.



No

FIFO and Accounting Depreciation are accounting metrics that are irrelevant to cashflow, and hence NPV

The cash cost of producing a stockpile is taken into account in the NPV model when that cost is actually occurred. As is the revenue realised when the stockpile is sold.

The accounting concept of valuing that stockpile at the lower of cost or net realisable value for balance sheet and P&L purposes has no cash impact.


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## ducati916 (17 September 2006)

*haemitite*



> FIFO and Accounting Depreciation are accounting metrics that are irrelevant to cashflow, and hence NPV




FIFO & Depreciation [Depletion] are not irrelevant to cash-flow.
That they are non-cash charges, does not mean that they are unaccountable. Thus if your premise is incorrect, logically, your conclusion must also be incorrect with regards to NPV.



> The cash cost of producing a stockpile is taken into account in the NPV model when that cost is actually occurred. As is the revenue realised when the stockpile is sold.




With regard to Inventory accounting in the above example, Inventory, under LIFO, FIFO, or Normal Stock method all mark inventory "at cost, or market" whichever is lower.

In an environment of rising prices, which currently is the case with many of the commodities, FIFO, will overstate the value of the inventory on a book basis, which also corresponds to the NPV valuation.



> The accounting concept of valuing that stockpile at the lower of cost or net realisable value for balance sheet and P&L purposes has no cash impact.




But yes it does...........
If the market price falls below the cost price based on FIFO.
LIFO & Normal Stock specifically avoid precisely this problem.
Therefore, the choice of accounting policy can have a very important impact on cash generation.

*BSD*

You have divided your response into four topics;
*Demand
*Supply
*Prices
*Acquisitions

I shall try to continue the above topic areas.

*Demand



> The US will not put tarriffs on Chinese goods. Despite the bluster from fools in the developed countries like the US and Australia, anyone with half a brain can see that our standards of living are not going to increase from having more factory jobs and more expensive consumables.




While I concur that tarriffs are absolutely the wrong response, unfortunately, globally, tarriffs are on the way back. Europe as a simple example has placed tarriffs on bananas, the US has had tarriffs on lumber, there are many more examples, and unfortunately they are currently on the increase.



> The Chinese are not good at allocating capital - but nor are we. Their innefficient use of capital leads to volume at all cost production with razor margins and ours leads to bottlenecks and the inability to funds infrastructure required to exploit opportunities. A match made in heaven!




The Chinese are very poor at capital allocation.
Poor capital allocation does indeed lead to low, or non-existent margins.
The destruction of capital unfortunately does not lead to good things.
It lead to the increase in the banking system of bad debts & writedowns.
Writedowns impair the liquidity of banks balance sheets.
Credit withdrawal is the outcome.

That China is a managed economy, the result is not cut & dried, and due to the requirement to keep employment high and growing, industry will most likely be subsidised at a loss. This is already the case in a number of industies in China.



> If (when) the Chinese stop buying USD and if (when) the yuan appreciates, the developed nations will stop importing deflation from China and will have inflation.
> 
> What do you want to own when inflation comes - commodities.




China cannot stop buying the $US, until, internal demand rises.
Only 42% of output is domestically consumed.
This is exceedingly low.

If the Yuan revalues, what will potentially happen is similar to when the Yen revalued at the end of the 1980's early 1990's. Asset bubbles will become unsustainable, and start to collapse.

The real estate boom in China, both commercial & residential, will in part form the equity of the lending banks on the asset side. Similar to Japan, falling land values will severly impact liquidity requirements on the Balance Sheet, leading to credit withdrawal/restrictions. There are any number of scenarios that could trigger the same outcome.



> I understand that China exports a lot to the US. But even if the US has a recession, the effect is not going to send China into a tailspin. The 10% GDP growth rates of the Chinese economy have not been exclusively fuelled by the US and will not be turned negative by a US slowdown.




Well we disagree.
In my opinion, China is currently very heavily reliant on the US, not just for export markets, but for direct investment. If the US turns away from China, there will be very severe consequences for China & exporting nations [Australia & BHP] to China.



> The US is not homogenous and the banrupcty of property spivs in Florida is not going to turn the entire country into recession. The recession fear in the US maybe warranted - but it is hardly a structural long term problem.




I tend to agree.
I am longer term bullish on the US, despite a number of problems.
*pensions [pension reform just passed in Congress is particularly onerous]
*medicare
*medicaid
*social security

Which raises a further concern with China.....
The age of the population.
Their percentage in the crucial age band of 15yrs - 64yrs is higher than that  of the US & Europe and their wealth much lower.

Population:    
1,313,973,713 (July 2006 est.) 

Age structure:   
0-14 years: 20.8% (male 145,461,833/female 128,445,739) 
15-64 years: 71.4% (male 482,439,115/female 455,960,489) 
65 years and over: 7.7% (male 48,562,635/female 53,103,902) (2006 est.) 

Median age:   
total: 32.7 years 
male: 32.3 years 
female: 33.2 years (2006 est.) 

Population growth rate:   
0.59% (2006 est.) 

Birth rate:    
13.25 births/1,000 population (2006 est.)

Death rate:    
6.97 deaths/1,000 population (2006 est.)  

GDP - real growth rate:    
9.9% (official data) (2005 est.) 

GDP - per capita (PPP):    
$6,800 (2005 est.)  

GDP - composition by sector:   
agriculture: 12.5% 
industry: 47.3% 
services: 40.3% 
note: industry includes construction (2005 est.)  

Labor force:    
791.4 million (2005 est.) 

Labor force - by occupation:   
agriculture: 49% 
industry: 22% 
services: 29% (2003 est.)  

Unemployment rate:    
9% official registered unemployment in urban areas in 2004; substantial unemployment and underemployment in rural areas; an official Chinese journal estimated overall unemployment (including rural areas) for 2003 at 20% (2005 est.) 

In summary as far as demand.
Demand from China is not as clear cut, and bankable as some seem to advocate. If, the problems creep into the Chinese economy, and demand for whatever reason wanes, exporters to China will note the contractions in their net profits.

to be continued.........


----------



## haemitite (17 September 2006)

> Therefore, the choice of accounting policy can have a very important impact on cash generation.



 A truly intriguing concept.


Which a first year accounting student would know to be false.


----------



## BSD (17 September 2006)

I don't think there are too many analysts/investment managers who care whether Hills use FIFO or LIFO. It has an effect on reported profits, but no significant effect on cashflow/NPV and over the long term will average itself out. 

The only effect on cashflow from non-cash items (depreciation and revalutions of stockpiles) is on the level of tax paid.


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## ducati916 (17 September 2006)

*haemitite & BSD* 



> I don't think there are too many analysts/investment managers who care whether Hills use FIFO or LIFO.




Quite possibly true. This would certainly explain their bullishness on the prospects for BHP going into the future.



> It has an effect on reported profits, but no significant effect on cashflow/NPV and over the long term will average itself out.
> 
> The only effect on cashflow from non-cash items (depreciation and revalutions of stockpiles) is on the level of tax paid.




And while tax, can also be a book entry, [deferred tax assets/liabilities] and not necessarily a cash transaction in that accural period, the tax asset or liability, in theory will be a cash transaction in some future period.

Depreciation [depletion] in the case of oil resouce companies is a cash transaction, and taken into the Income Statement, and therefore by definition is a cash expense matched to the accural period via GAAP. Mineral resources, are paid for up front......a cash transaction, and entered as an asset, and depreciated over a number of years.

Therefore, the cash, by definition has already been paid, the depreciation charged represents the loss of value [due to consumption] of the asset [mineral] and therefore represents the cost - production * price received of the asset sold [excluding for sake of the example all other costs]
By definition, a cash transaction.

FIFO, far from being irrelevent, becomes very relevent, in times of rising prices, as if prices fall, this will be reflected in short-term earnings.
The market, does not like earnings surprises, and can react quite negatively.

jog on
d998


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## BSD (17 September 2006)

Sorry mate, but we are getting bogged down in semantics. 

As i said in the first paragraph of my recent response, analysts have noted the benefits to earnings of provisional pricing/FIFO accounting at around $1bn last year. 

It is in the numbers and is not going to surprise. The analysts are all expecting commodities to fall and therefore have stripped this benefit out of their future earnings forecasts. 

It is in the numbers, not new, all accounted for and another reason upside exists if the commodities stay where they are. 


We will have to disagree on your other point concerning depletion etc too. 

I am focussing on NPV, the Income Statement and in particular non-cash items like depletion of the carrying value of assets have little to do with the  cash NPV I am talking about.

The depletion will be accounted for in the mine life - the years of cash flow generated. 

You are talking accounting and reported earnings, I am talking finance and discounted cashflow valuations. 

The cash cost of Prominent Hill is expected to be $750m - this is not the NPV of the mine - only the accounting cost. 

The NPV is above the cost of the mine and therefore a project adding to the value of OXR shares. 


Back to more important things; even if you though no one else was accounting for the $1bn FIFO effect,  I still cant understand how you get a price target of sub-$18:

What are your earnings forecasts (or cashflow) per share assumptions for 07 and 08

/and what copper and oil forward curves are you using for the same years?


Remember that iron and coking coal are already locked in for the next twelve months and that iron ore is expected to be priced strongly again after doubling in the last two years.


----------



## ducati916 (18 September 2006)

*BSD*



> Back to more important things; even if you though no one else was accounting for the $1bn FIFO effect, I still cant understand how you get a price target of sub-$18:




Getting stuck on semantics.
Well not really.
You are querying how I value the shares [I understand you differ]
If you dismiss the importance of Depreciation, FIFO, or GAAP anomalies generally, you will never follow my reasoning.

However, the price range of $13 - $18 is not a price target, but the *intrinsic value of the shares* and should price fall below this range, you would have a resulting *undervaluation* 

BHP contains currently in the price per share, a *speculative element* 
This speculative element contains the future expectations that the pricing environment, the demand etc will remain strong, and earnings will continue to improve. I do not pay for speculative outcomes.
I pay for value, tangible, generally available when everyone else hates the stock for any variety of reasons. Currently BHP is popular, and this popularity is also expressed in the share price.



> The base scenario in analysing BHP must be consensus or individual analyst forecasts. We can only really identify our personal differences with the assumptions used by the analysts and identify the effect this has on our valuations.






> As i said in the first paragraph of my recent response, analysts have noted the benefits to earnings of provisional pricing/FIFO accounting at around $1bn last year.




I have zero interest in their projections.
The reason being that;
*this is a resource based business [stock]
*the company's depreciation rate cannot be my rate, as I did not purchase the assets at their prices, rather, the price paid in the market. Therefore, the accounting policies have great importance to the value I am receiving [or not] at the purchase price.
*I don't believe from their numbers, that they have adequately discounted the effects of a FIFO policy.[if they even care]
*based on the above, I will calculate my own depreciation rate, and require a return [discount rate] prior to purchase.
*the resultant range is $13 - $18 as fair value, therefore, should BHP fall 50% below this range, I would be a buyer [except I don't buy resource stock]



> I don't think there are too many analysts/investment managers who care whether Hills use FIFO or LIFO. It has an effect on reported profits, but no significant effect on cashflow/NPV and over the long term will average itself out.




In your opinion, analysts are not unduly concerned with this aspect. 
If this is true, their valuations will be overly optimistic in any downturn.
If prices continue to rise, well then things will work out nicely.

In summary, the difference lies in the valuation approach.
You are projecting earnings, and discounting via NPV
I am depreciating assets, & discounting.
The resultant values we calculate are quite disparate.

jog on
d998


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## chansw (18 September 2006)

http://www.theaustralian.news.com.au/story/0,20867,20430759-31037,00.html

*Key investor sells down BHP stake*
September 18, 2006

GLOBAL financial group Lehman Brothers International's stake in the BHP Billiton has fallen below 3 per cent, the mining giant said today.
BHP Billiton (bhp.ASX:Quote,News) said it had received a letter dated September 14 relating to major interests in shares of BHP Billiton (bhp.ASX:Quote,News) as at September 12.

Lehman Brothers' European operations was listed as a substantial shareholder in BHP Billiton, having held a 5.1 per cent stake in the company as of September 8.

"We write to inform you, pursuant to s198 of the Act, that as at the close of business on 12 September 2006, the interest of Lehman Brothers International (Europe) in the ordinary shares of BHP Billiton Plc had fallen below three per cent," Lehman Brothers said in the letter to the company.

BHP's share price has fallen 9.7 per cent since the beginning of the month to close at $25.02 on Friday.


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## YOUNG_TRADER (20 September 2006)

Look out BHP! I wouldn't want to mess with some of those Hollywood Stars!

Mmmmmmmmm Cindy Crawford, Daryl Hannah and Charlize Theron, I'll vote for whatever they want   




Hollywood A-listers take on BHP Billiton
Wednesday Sep 20 13:07 AEST
Hollywood's biggest stars are going to war with Australian resources giant BHP Billiton.

A who's who of A-List celebrities, including Tom Hanks, Charlize Theron, Barbra Streisand and Cher, have launched a high-profile campaign in the US to halt BHP Billiton's $US5 billion ($A6.67 billion) plan to build a massive liquefied natural gas (LNG) terminal off the coast of the Los Angeles seaside community of Malibu.

Australian singer and actress Olivia Newton-John, a longtime resident of Malibu, has also joined the fight against the company.

"We want to stop the BHP Billiton LNG terminal now!" a letter signed by the 45 high-profile actors, singers, supermodels and Hollywood executives states.







Leading the A-List campaign is former James Bond, Pierce Brosnan, who gave a keynote address at a fundraiser in Malibu last week.

The function's attendees were asked to donate $US250 ($A330) each.

"This proposed liquefied natural gas terminal is part of a globalised assault taking place on our Earth," Brosnan said.

"We cannot let this project be approved."

The campaign, if successful, would be a blow to BHP Billiton and the Australian economy, with the project potentially worth $A15 billion to Australia in exports.

Australian Prime Minister John Howard deemed the project so important for Australia he flew to Los Angeles in 2004 to lobby California Governor Arnold Schwarzenegger.

The BHP Billiton LNG proposal involves the construction of a massive deepwater terminal 23km off the coast of Malibu. The gas would be brought to the terminal by ship from Australia and then piped from the terminal to the US mainland.

Brosnan said the terminal would be 14 stories high and three football fields in length.

Malibu City Council has also launched an aggressive campaign against the LNG project, with council members voting unanimously "to protect and preserve Malibu by strongly opposing the proposed LNG terminals".

The council has allocated $US50,000 ($A66,600) to fight the anti-terminal campaign.

The project could receive US government approval as early as December.

Malibu Council, the celebrities and other environmental groups are heartened by other grassroots campaigns in the US that led to similar proposals being scrubbed.

"Other communities such as Humbolt and Vallejo have successfully stopped LNG facilities from being built," Brosnan said in his address.

"We can, too."

The terminal's opponents claim the project would be an environmental polluter, negatively impact "the health and safety of our families" and would be an attractive terrorist target.

"This floating LNG terminal will emit more than 200 tons of smog-producing pollutants per year, in an area long known for high occurrences of asthma in both children and adults," the letter signed by the celebrities states.

"Additionally, it is estimated that the project as a whole will emit 25,000,000 tons of greenhouse gas emissions annually, further contributing to global warming."

Howard, after his meeting with Schwarzenegger in 2004, backed Australia's LNG safety record.

"We of course can boast a great record of safety and reliability over a period of 15 years we've been supplying LNG to Japan," Howard said at the time.

"No accidents, always delivered on time. Something in the order of 26,000 voyages that can be pointed to without any difficulties."

Howard also downplayed the terminal as a terrorist target, noting the distance the terminal would be located off the coast of Malibu.

Several other companies have proposed rival LNG terminals on the Californian mainland.

"Terrorists always want to inflict maximum misery on people and if they can attack an installation which is closer to a large centre of population, that might be a more attractive target than something that's offshore," Howard said.

Schwarzenegger surprised all sides in the LNG debate a year ago when he said the BHP Billiton proposal "could probably be the most safest one for California".

In January, Australia's Woodside Petroleum announced a rival LNG terminal plan the company billed as safer than the BHP Billiton project.

Woodside's project would not involve a giant terminal built off the coast.

Woodside plans to build special ships that could deliver the natural gas straight into an underwater pipeline 24km off the California coast.

Other celebrities who are supporting the anti-BHP Billiton proposal include Danny DeVito, Rhea Perlman, Sting, Dick Van Dyke, Jane Seymour, Dylan McDermott, Martin Sheen, James Brolin, Kenny G, Ted Danson, Mary Steenburgen, Cindy Crawford, Daryl Hannah and Ed Harris.


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## havingfun (20 September 2006)

Disconnect their gas lines and make them use bottles.....


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## Morgan (20 September 2006)

"Brosnan said the terminal would be 14 stories high and three football fields in length."


 Doesn't sound very big to me.... the LNG ships themselves are roughly that size


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## Sean K (20 September 2006)

And it's 23ks off the coast. Perhaps Hoff will be bumping into it on one of his training swims...

Really, these brain dead hollywood talking airbrushed heads and stunt bottoms should stick to what they do best. Pretending to be people they're not. About as much credibility as Anna Nicole at an old age home.


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## neo (21 September 2006)

Anyone notice that BHP have progressively increased their holdings in their own shares since 7/9/06 by approx 35%. Previous shares held prior to 7/9/06 were 18,820,000 now up to 25,420,000 (about 6.6 million shares, val approx $165mil).
Do they know something we don't?


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## Ken (22 September 2006)

They are cashed up thats what!!!!  

billion dollar profits and paying shareholders ****ty dividends, maybe they have too much cash.

I looked at the start of this thread, and people were saying it was breaking down around $20.00 mark, and should reduce long term.......

the forecast in my westpac broking account says hold....

so thats what i am going to do!


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## pacer (22 September 2006)

|Possible buyback in progress....always good for a big company and at this price it could be a buy....my opinin is that it was always only worth $23 a share and was wy over priced at 29-32$$$$$$$....will,be a slight up soon and a down to $22 then buy big time.


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## wayneL (22 September 2006)

pacer said:
			
		

> |Possible buyback in progress....always good for a big company and at this price it could be a buy....my opinin is that it was always only worth $23 a share and was wy over priced at 29-32$$$$$$$....will,be a slight up soon and a down to $22 then buy big time.




If it's only worth 23, why buy up big at 22?


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## pacer (22 September 2006)

Sorry forgot to to mention I went long CFD1000 on tuesday...a minor amount and have lost 0.32% today........that is nothing....sentiment is a little low but at the moment the yanky market has been good over last two days with stuffall rise over here......tomorrow willl prove up anything.......can only stay flat if anything....will not loose here on a punt.....getting out at first sign of a downturn...but up is my guess...graph looks to be at a turning point....IS THIS THE BIG BEAR.....ME THINKS NOT ...THIS YEAR AT LEAST....No october crash coming ....all you scaredy cats.....everything looks fine and take advantage of any skeptics......the FED took care of that one with the rate rises...that's why I went long on MBL 3000 on tuesday aswell....yyyyeeeehhhhaaaaaaaaa

3000 mbl went up 3.3% today.....glad I stayed up late and caught the news!


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## ducati916 (22 September 2006)

> If the commodity party is over, and with hundreds of billions of dollars newly available to global marketplaces, it's time to ask a crucial question: What's next?
> An awful lot of money flowed into commodities the last few years, and now a lot of cash is running for the exits.
> 
> Amaranth Advisors, which once boasted $9 billion in assets, told investors Monday that it likely lost billions in wrong-way bets on natural gas futures last week. The hedge fund said it's down about 35% year to date. It had been up as much as 22% in August.
> ...




jog on
d998


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## scsl (22 September 2006)

pacer said:
			
		

> Sorry forgot to to mention I went long CFD1000 on tuesday...a minor amount and have lost 0.32% today........that is nothing....sentiment is a little low but at the moment the yanky market has been good over last two days with stuffall rise over here......tomorrow willl prove up anything.......can only stay flat if anything....will not loose here on a punt.....getting out at first sign of a downturn...but up is my guess...graph looks to be at a turning point....IS THIS THE BIG BEAR.....ME THINKS NOT ...THIS YEAR AT LEAST....No october crash coming ....all you scaredy cats.....everything looks fine and take advantage of any skeptics......the FED took care of that one with the rate rises...that's why I went long on MBL 3000 on tuesday aswell....yyyyeeeehhhhaaaaaaaaa
> 
> 3000 mbl went up 3.3% today.....glad I stayed up late and caught the news!



pacer, I think that BHP and the market in general is going to have a bad day. But seeing as BHP was up overnight in London, it might not fall as hard. Just curious, where did you enter the BHP CFD trade and do you have a pre-determined level that you want to exit at? What about the MBL CFDs?

I bought some CML CFDs on Wednesday at $14.23 in anticipation of a positive investor reaction to its restructure details. I also think that another bid and even a bidding war is imminent. The private equity players have A LOT of money (that they are prepared to leverage with) and it's hard to see them backing off now.


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## BSD (23 September 2006)

http://www.bloomberg.com/apps/news?pid=20601012&sid=aeneMAFmYp.0&refer=commodities


BHP, RIO and OXR are due for massive upgrades. Fundamentals will eventually outweigh the macro money. 


The speculative money in metals is short, but physical demand remains strong at these prices. 

Some hedge funds and manipulating shorts are going to lose their shirts. 

Who is short 30,000 tn of Nickel? There is only 6,000tn at the LME

Supply is tight, inventories low and the copper market remains in deficit. 

Analysts are using $2.60 copper for calander 2007 - that is only two months away. We will need Cu to be at $1.80 at the end of 2007 just to get the $2.60 number for the year. 

Why would copper fall 50% in 14 months if it is in deficit?

These Cu forecasts are the basis for the $30+ price targets in BHP - not spot. 

Spot gives 20% upgrades. 


US home building has already fallen at a rapid rate it is not a new story. Speculative money went short months ago and copper remains above $3.00


I cannot see a valid reason for BHP, RIO, OXR or the base metals complex to be a sell beyond the tired and flawed "because it has gone up so much"

Selling BHP at 8 times and buying tech stocks would appear an amusing trade for those who hate money or have an investment timeframe of three minutes.


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## nizar (23 September 2006)

BSD said:
			
		

> http://www.bloomberg.com/apps/news?pid=20601012&sid=aeneMAFmYp.0&refer=commodities
> 
> 
> BHP, RIO and OXR are due for massive upgrades. Fundamentals will eventually outweigh the macro money.
> ...




Dont forget about ZFX
I dont think the market has realised that its $2billion profit was due to a realised zinc price of USD2105/tonne
At USD3300/tonne, even if the spot price doesnt move from us$1.50/lb (=3300), which is where it is now, their profit will still be 50% higher


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## ducati916 (23 September 2006)

*BSD* 



> Why would copper fall 50% in 14 months if it is in deficit?




The reason that Copper, and all other commodities can fall in price & demand, is that China, which is the *margin consumer* only has 42% domestic demand. The other 58% comes from the US & Europe.

If GDP in the US & Europe slows [and or falls] the net effect will be to curtail the growth rates in China. This effect will be leveraged via falling foreign exchange within the Current Account, and continued requirements to subsidise the already loss making industries so as to maintain employment.

The result will be falling commodity prices.
BHP, and other Australian producers, will thus see falling net profits, which will in all possibility impact negatively on investor sentiment, resulting in lower short-term shareprices.



> US home building has already fallen at a rapid rate it is not a new story. Speculative money went short months ago and copper remains above $3.00




It's an old story in the market, but, it has not reflected itself in the Economy as of the moment. When [if] it becomes reflected in the real economy, then, will commodity prices be impacted [again at the margin]



> Selling BHP at 8 times and buying tech stocks would appear an amusing trade for those who hate money or have an investment timeframe of three minutes.




A basic misunderstanding of the vanilla P/E ratio.
P/E's are affected by earnings & price.
Low P/E's are relevent when *earnings are low* not when earnings are high. Cyclical businesses, must be bought in a low earnings environment, anticipating the next cyclical high in earnings.
BHP is currently in the wrong part of the cycle for purchasing, unless, price goes far lower..........



> Who is short 30,000 tn of Nickel? There is only 6,000tn at the LME




No-one seems to know.
Part of the three M's of the market.



> Some hedge funds and manipulating shorts are going to lose their shirts.




Some already have.



> Fundamentals will eventually outweigh the macro money.




So falling commodity prices then?

jog on
d998


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## Sean K (23 September 2006)

For the non bears:

From Egoli:

Investment Stories:
BHP Billiton (BHP) – An 86 billion dollar bargain

If a forward P/E of 6x isn’t reason enough to start accumulating BHP then I don’t know what is! Every long term portfolio should be accumulating at these prices. Put them in the bottom draw and revisit them when they hit $30! 

 BHP has been in a strong uptrend since early 2003. After rallying to $32 in May 06 the stock has been under some selling pressure. The stock is now sitting on a previous turning point at $24.50 where it managed to bounce in June. This level is also the 38.2% Fibonacci support line and looks like a good level to start accumulating the stock for a longer term play. ABN AMRO 12 month price target of $36.

Fundamentals

We are forecasting a FY07 NPAT of US$13.441 bln. Considering BHP’s current market cap is ~A$86 bln, if we assume an exchange rate of 1 aussie for 0.75 US that equates to about A$18 bln NPAT. Therefore BHP is earning about 21% of its market cap in profit.

While commodity prices have retreated from their May 2006 highs, there is no indication at this stage that the commodities boom is over. Prices are still well above long term averages, and BHP’s well diversified suite of assets mean it will be insulated from movements in any one commodity price.


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## BSD (24 September 2006)

*Duc*

The 'margin' does not need to grow to have copper above $1.80 in 2008. Current demand has the market in deficit.  

The 'margin' will need to contract an incredible amount

BHP is therefore cum-upgrades and cheap now

Who knows what happens with another year of 15% Chinese industrial production growth (as forecast by the IMF)



As for my basic misunderstanding of PEs -I think our differences lie in where we think the cycle currently stands. 

You think we are at the top, I think we are three years into a fifteen year cycle. The industrialisation of Japan took longer than a couple of years

The 'fundamentals' are a market in deficit where a supply response takes 8 years. 


*Nizar*
I didnt include ZFX because unlike BHP, RIO and OXR - ZFX doesnt have long mine lives and visible production growth in coming years. 

Would prefer more diversified plays too. KZL and OXR spring to mind.

Will be interested to see how they spend all this cash though.


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## michael_selway (24 September 2006)

nizar said:
			
		

> Dont forget about ZFX
> I dont think the market has realised that its $2billion profit was due to a realised zinc price of USD2105/tonne
> At USD3300/tonne, even if the spot price doesnt move from us$1.50/lb (=3300), which is where it is now, their profit will still be 50% higher




hey nizar how do u get 50% higher? so how much will the profit be if USD3300/tonne is maintained throughout aprox?

thx

MS


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## nizar (24 September 2006)

BSD

where do u think copper will be in 2008?
alot of OXR's profitability (and also BHP's though to a much lesser extent) depends on this

if you use us$2.50/lb as i did, ull find PH isnt all that great

but KZL i like very very much!


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## nizar (24 September 2006)

michael_selway said:
			
		

> hey nizar how do u get 50% higher? so how much will the profit be if USD3300/tonne is maintained throughout aprox?
> 
> thx
> 
> MS




bro (3300-2105)/2105 * 100 = ~57%
their profit will depend on if budel expansion eventuates as per their plan but i think century production will generally be maintained minus 2 weeks (keep in mine 70% of their profits come from here)

though costs will increase and century will be closed for 2 weeks in september and rosebery will be mining lower grades meaning higher costs, i am confident that there will be a zinc spike in the next 6 months taking the spot price us$2/lb+

and that is the basis for my prediction of $2billion NPAT

as always, please do your own research or consult a professional financial advisor before investing. The above is only my opinion and does not constitute financial advice


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## ducati916 (24 September 2006)

*BSD* 

Well I believe Chinese growth is far more dependant upon US & European growth. With only 42% domestic consumption, that figure is far too low to sustain 15% growth in the GDP.

If Chinese growth slows as a direct consequence of slowing world growth, the projected demand will fall, and quite possibly sharply, while concurrently, due to increased capital expenditures, supply increases.

This double blow, could seriously impact prices for commodities.
Commodity prices have historically been extremely volatile, hence the initial requirement for forwards futures markets. This has not changed, and, further cyclicality is a high probability.

Prices for many commodities are at generational highs.
Can they go higher?
Of course, but they can also go lower.
BHP is currently priced for perfection, any negative surprises could be a very nasty surprise for buyers at current levels.

In regards to where we are in the current cycle, agreed, we are at polar opposites. I would say we are nearly 10yrs into the bull market, I have no opinion on how far it should last however.

I would also argue that the price [current prices] have a large speculative component built into them currently, that has little to do with the true underlying fundamentals.

jog on
d998


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## nizar (24 September 2006)

ducati916 said:
			
		

> I would also argue that the price [current prices] have a large speculative component built into them currently, that has little to do with the true underlying fundamentals.
> 
> jog on
> d998




Duc

Wouldnt u agree the speculative component is somewhat less now (u still reckon its large??) and that most of it disappeared when BHP went from $32 to $24 ?


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## michael_selway (24 September 2006)

nizar said:
			
		

> bro (3300-2105)/2105 * 100 = ~57%
> their profit will depend on if budel expansion eventuates as per their plan but i think century production will generally be maintained minus 2 weeks (keep in mine 70% of their profits come from here)
> 
> though costs will increase and century will be closed for 2 weeks in september and rosebery will be mining lower grades meaning higher costs, i am confident that there will be a zinc spike in the next 6 months taking the spot price us$2/lb+
> ...




I see what u mean by 50% roughly

But even if it doesnt spike NPAT will be $2 billion about if prices stay 3300



> Zinifex reported NPAT of $1,079.9m for the year ended 30 June 2006, more than four and a half times that of the previous year. Revenues from ordinary activities were $3,062.7m, up 61% from last year, driven by metal prices and a strong operating performance with total production exceeding the previous year and new annual records set at the Century mine and Clarksville refinery. Diluted EPS was 220 cents compared to 46 cents last year.




2105: Rev $3bil Exp $2bil = NPAT $1bil approx
3300: Rev $4.5bil Exp $2.5bil (cost increase likely) = NPAT $2bil approx?

So $2 bil NPAT without any spike?

thx

MS


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## BSD (24 September 2006)

The speculative money has been short for some time - particularly in physical copper. UBS and Citi have both reported this in the last weeks. But physical demand from consumers continues to provide support. 

I don't know where Cu will trade in 2008.

LME futures has it trading between $2.70 (27mth) and $3.10 (15mth) . My money is being bet on these types of prices and not $1.80.

The supply will eventually catch up and bring prices down. But in my view this will be years later than expected and with a far higher cost of marginal production. I use $1.40 in my long term models, but really think this is too low.


----------



## wayneL (26 September 2006)

Whatever value BHP is, it is certainly better value this evening on the NYSE.

- ~4% atm... and below june lows.

Does that make it a buy or a sell


----------



## MalteseBull (26 September 2006)

as if BHP isn't a good buy right now.. you could make 10% easy within a few months


----------



## Realist (26 September 2006)

But wait, there's more uranium for BHP

September 26, 2006


ALREADY the world's biggest uranium deposit, BHP Billiton's Olympic Dam deposit in South Australia's outback has just got a lot bigger.

Aggressive drilling by BHP and the previous owner, WMC Resources, has allowed the June 2006 resource estimate for the ore body to be upgraded by more than 11 per cent.

The upgrade adds more than 188,000 tonnes of uranium - worth close to $30 billion at current spot prices - to the previous estimate of 1.5 million tonnes, itself accounting for about 40 per cent of the world's known uranium resources.

And that is before taking into account the additional 5.1 million tonnes of copper - the main revenue earner at the remote mine site - indicated by the resource upgrade. The extra 7.5 million ounces of gold won't hurt either.

But it is Olympic Dam's status as the world's biggest and growing uranium deposit that gives the operation its true global significance given the rush to secure long-term uranium supplies for nuclear power, with China and India emerging as new buyers.

Since acquiring WMC Resources last year for $9.2 billion, BHP has carried on with an intense drilling program to determine just how big Olympic Dam is. The drilling program has shown the deposit remains open in several directions - notably to the south - and at depth.

Results from the drilling will determine the feasibility of a $7 billion-$10 billion expansion of Olympic Dam, which would at least triple current annual production of copper (210,000 tonnes) and uranium (5000 tonnes) through the development of a massive open-cut. A feasibility study is due to be completed at the end of next year.

The rush to secure long-term supplies of uranium comes as new mine production continues to fall well short of global consumption of 77,000 tonnes a year. The squeeze has been reflected in spot prices surging from less than $US10 a pound five years ago to more than $US53 a pound.

Australia is scrambling to expand sales options to the boom economies of China and India. In April, an agreement allowing uranium exports to China was signed but that has yet to translate into contract sales. China is nevertheless tipped to be a major buyer of expanded output from Olympic Dam. BHP shares closed 21c weaker at $24.60 yesterday.

The reporter owns BHP Billiton shares.


----------



## watsonc (26 September 2006)

Surely BHP has to bounce back. I'm tipping around $28-$29 by Christmas.
Commodites prices may seem a little unsustainable but I think they will pick up and be at least maintable into early next year.

With BHP's current P/E ratio it is a $40 stock.


----------



## pacer (26 September 2006)

As I said I have only ever valued BHP, Psycologicaly, at $23, but thought it may have turned by now anyway ...I'm out of a long position as of today.. lost 35c on SP....graph looks to sick......need a decent up swing to change my mind.......still holding MBL though-Gained $4.60.....if bHP hits 22-23 then I'm possibly back in.......realist ....where...where was that little spiel from....did you make it up...lol


----------



## wayneL (26 September 2006)

watsonc said:
			
		

> With BHP's current P/E ratio it is a $40 stock.




With the prospect of decreasing earnings p/e should be no more than 6 to be a buy.... and I still wouldn't put it in the bottom drawer.

BHP is simply a stalwart benefiting from a bubble in commodity prices. Once that bubble pops, BHP reverts back to being a dog


----------



## michael_selway (26 September 2006)

watsonc said:
			
		

> Surely BHP has to bounce back. I'm tipping around $28-$29 by Christmas.
> Commodites prices may seem a little unsustainable but I think they will pick up and be at least maintable into early next year.
> 
> With BHP's current P/E ratio it is a $40 stock.




Cant believe people still think resources is a long term hold

Medium and short term should be up yes

But basically prices has gone too high compared to their relative suppliess (or future supplies for that matter) etc

thx

MS


----------



## BSD (26 September 2006)

Forget the PE - the NPV is the key and the current NPVs are not formulated using bullish commodity prices or the investment of a potential $50bn of available cashflow in the next 4 years at solid IRRs.

If you aren't carrying excess leverage you don't care what it does next week. At the moment every man and his dog are short.

This commodity bull market will last more than three years. 


http://www.robtv.com/servlet/HTMLTemplate/!robVideo/robtv0726.20060921.00043000-00043198-clip2/h/220asf/// 


As Jim says, we cannot be in a commodity bubble if nobody owns any.


----------



## wayneL (26 September 2006)

BSD said:
			
		

> Forget the PE - the NPV is the key and the current NPVs are not formulated using bullish commodity prices or the investment of a potential $50bn of available cashflow in the next 4 years at solid IRRs.
> 
> If you aren't carrying excess leverage you don't care what it does next week. At the moment every man and his dog are short.
> 
> ...




Thats just Jim ramping LOL

However, totally agree with him on energy. The rest is crystal ball gazing.

Bulls in the weather markets will be caused by calamity only. 

Metals? In the face of the imminent depression? Perhaps if there is hyper inflation. (a strong possibility)

But as a case for a lasting bull, the video was a tad short of substance.

Nobody owns commodities? LOL It doesn't work that way. Commodities are NOT an investment per se'... and they are owned via the stockmarket.

Cheers


----------



## michael_selway (26 September 2006)

BSD said:
			
		

> As Jim says, we cannot be in a commodity bubble if nobody owns any.




Hm he said Hedge Funds do?

Pension Funds ring a bell also, and there heaps of money in that

Jims Flaw is that he always says historically, in real terms, we are below all time highs

But the thing is History doesnt necessarily repeat itself, it doesnt have to

But I do believe there is 1 or 2 more yrs left 3 maybe, but crash will eb coming esp if prices goes higher

thx

MS


----------



## BSD (26 September 2006)

wayneL said:
			
		

> Thats just Jim ramping LOL
> 
> Metals? In the face of the imminent depression? Perhaps if there is hyper inflation. (a strong possibility)
> 
> ...




Hey Jim is a great source of long term perspective - I didnt expect the vid to stand alone. 

The ownership of commodities point comes back to the regular bear comment:

 "oh, the hedge funds/etf/specialist funds have ramped physicals - its a bubble"

It isnt true. We are where we are due to physical demand fro consumers. The speculators are net short. 

The argument for oil is the same for metals. 

Declining quality and quantum of supply matched with ever rising demand from the industrialisation of China leading to higher and higher prices. 

It is amazing that people still believe a wave of supply is coming in metals like copper and nickel.


As for your depression call - at least I understand your thoughts and can disagree. 

I wouldnt own BHP either if I thought a depression was coming. I wouldnt own anything but a bit of gold!

The global recession story is incredibly strong, but for lack of real evidence. Let alone a depression.


----------



## BSD (26 September 2006)

michael_selway said:
			
		

> Jims Flaw is that he always says historically, in real terms, we are below all time highs
> 
> But the thing is History doesnt necessarily repeat itself, it doesnt have to
> 
> ...




The whole bear argument is based on a historical fallacy. 

"Prices must return to their old lows from the '90s. The supply is coming because it did last time. "

Nobody now believes oil will go back to $10bbl - why are base metals different?

Supply in copper is not coming for at least three-five years and it will come at a far greater marginal cost than that of the miners in the 90s.

What % of current (let alone future) copper supply could operate at $0.80c?


I don't believe these prices should be rocketting up in a straight line - but cannot buy the bear case in lieu of a global depression, which I certainly cannot see as imminent.


----------



## michael_selway (26 September 2006)

BSD said:
			
		

> The whole bear argument is based on a historical fallacy.
> 
> "Prices must return to their old lows from the '90s. The supply is coming because it did last time. "
> 
> ...




yeah again it doesnt have to repeat

Can oil go back to $50bbl sustianably?
Can copper go back to $2.00/lb sustianably?

Yes, but it doesnt have to go back to 10bbl or 0.80/lb respectively, thats the whole point

I always have the veiw that once everything is built up (modernised), theres no need to build much anymore, so much smaller amounts of resources will be needed. But yet supply production keeps increasing? Then prices will fall fast and supply will also fall, putting it back in balance again

Imo need to keep an eye on the below, esp the "ins"

http://www.basemetals.com/stocks.aspx

But short to medium term, yes its still bullish

thx

MS


----------



## Ken (26 September 2006)

i bought bhp, 600 at $26.38

am considering buying another 600 if they get to 23.

bad move?


----------



## Smurf1976 (26 September 2006)

BSD said:
			
		

> The whole bear argument is based on a historical fallacy.
> 
> "Prices must return to their old lows from the '90s. The supply is coming because it did last time. "
> 
> ...



Emphasis mine. Prices not going up in a straight line means that at some point they go down. Question is when and how far?

I don't have a link but I read that ABARE is changing its forecasts rather quickly towards lower prices.


----------



## pacer (26 September 2006)

KEN...NO! ........A verry good idea, unless there is a crash going on then hold till $22.....unless ur doing cfd's then wait till $24.15- $24.16....just keep an eye on it and bail at your own STOP.....Like I said $23 is the psychological buy time and I mean $23 not $23.95....if it hits that.......I held to =$29.99 and folded, from $18, and missed 32 but a win was enuf.....and took the falls from $29.99 on cfd's aswell and can honestly say i enjoyed the ride...especialy since I was trading in a cafe in thailand once a day after it hit .......buy more and more.....unless you believe in a bad october crash....not this year I think....best buying time....scaredy cats!!!!!!!!!!!!!!


Do your own thing............but don't be a gambler...unless you're lucky .... like me....LOL.....and put all your profits into cent shares....in the drawer..NMS&NWR&NEO..............I'm big the "N" companies,,,,especialy  in november.......hehe!................all nnnnnnnnnnnnnn's


----------



## michael_selway (26 September 2006)

pacer said:
			
		

> KEN...NO! ........A verry good idea, unless there is a crash going on then hold till $22.....unless ur doing cfd's then wait till $24.15- $24.16....just keep an eye on it and bail at your own STOP.....Like I said $23 is the psychological buy time and I mean $23 not $23.95....if it hits that.......I held to =$29.99 and folded, from $18, and missed 32 but a win was enuf.....and took the falls from $29.99 on cfd's aswell and can honestly say i enjoyed the ride...especialy since I was trading in a cafe in thailand once a day after it hit .......buy more and more.....unless you believe in a bad october crash....not this year I think....best buying time....scaredy cats!!!!!!!!!!!!!!
> 
> 
> Do your on thing............but don't be a gambler...unless you're lucky .... like me....LOL




http://metalsplace.com/metalsnews/?a=7257



> UBS lowers iron ore forecast, cuts Rio/BHP earnings
> Source: Dow Jones
> 
> UBS said the iron ore market could also be affected by China's move to boost its own production, which rose 47% last year.
> ...




thx

MS


----------



## pacer (26 September 2006)

Good way to cut down on the chinese populace....and the refugees, and stock prices..........send 'em all out to find thier own stuff....90% of China unexploered.....minerals.....


----------



## Ken (26 September 2006)

i am definatley holding BHP,

there will be no selling involved at this stage.

i have applied for margin loan so when i feel the time is right i will be going in for another 600.

I have been looking at some other mining companies starting with N!

NAD (diamond producing company at 5 cents, and rising)
NIA ( Niagara mining) going to germany to sell there story to investors on 8th of OCtober so hopefully they buy it.

a lot of opinions on the company am not in a position to give a good forecast as i dont know the sums.  I'm in it for the long term, dont have time to day trade.


----------



## pacer (27 September 2006)

PS....what I'm reading into this is the fact China has drilled the hell out of Itself, with the help of foreign companies....but is verry Quiet and will dictate margins from now on......To BHP and RIO.....but try to stop a full Global F....STUF-FUP.........SCARY HUH....The Speed you are travelling at determines the result!....Same as when you're in a CAR!!!!!....
*The type of crash will determine the time you spend doing repairs!!!!!!*


----------



## wayneL (27 September 2006)

BSD said:
			
		

> The global recession story is incredibly strong, but for lack of real evidence. Let alone a depression.




_"Is there any other point to which you wish to draw my attention?"
"Only to the curious incident of the dog in the night-time."
"The dog did nothing in the night-time."
"That was the curious incident,"_ remarked Sherlock Holmes.

-Sir Arthur Conan Doyle (_Silver Blaze_)

***
Cheers


----------



## BSD (27 September 2006)

http://www.bloomberg.com/apps/news?pid=20601012&refer=commodities&sid=aQs.ur_n1BIg


Sept. 26 (Bloomberg) -- Copper rose to a two-week high on speculation that makers of metal wires and pipes, particularly in China, will increase purchases to avoid a supply shortfall this year. 

Demand for copper will exceed mine output by 52,000 metric tons through 2006, after a deficit of 360,000 tons last year, Goldman Sachs Group Inc. forecast on Sept. 18. Stockpiles have plunged 86 percent in the past four years, leaving stockpiles monitored by the London Metal Exchange at levels sufficient to meet demand for just three days. 

*``There is no doubt that consumers are adding support to this market,''* said Peter Hickson, a London-based strategist at UBS Ltd. who has worked more than three decades in the metals and mining industry, including the last 12 as a metals analyst. 

*
``The Chinese have got themselves short of copper,'' he said. Copper's 14 percent decline from its record high came from selling by hedge funds, not actual users of the metal, he said. * 



The iron (and coal for that matter) downgrades are new and interesting. I thinks three banks moved down yesterday.

 Most analysts had/have 'price rollover' or a +/- 10% in their numbers. 

Not a bad result if you consider the doubling in two years will be effectively sustained.

Maybe we should consider what happens if Cu remains above $3 for three years?


----------



## wayneL (27 September 2006)

BSD said:
			
		

> http://www.bloomberg.com/apps/news?pid=20601012&refer=commodities&sid=aQs.ur_n1BIg
> 
> 
> Sept. 26 (Bloomberg) -- Copper rose to a two-week high on speculation that makers of metal wires and pipes, particularly in China, will increase purchases to avoid a supply shortfall this year.
> ...




Looking at the comments on Cu in that article, and looking at the dec Cu chart below, that article looks like spin to me.







Bloomberg should never be believed...unless of course, they post something bearish LOL.

I wonder what that nugget of malachite sitting on Mrs night table is worth now?


----------



## BSD (27 September 2006)

wayneL said:
			
		

> Bloomberg should never be believed...unless of course, they post something bearish




Good stuff! 

You can have Bloomberg then, if I can take DJ Wires!


----------



## hos11au (3 October 2006)

anyone else getting the feeling that bhp will explode upwards?


----------



## Realist (3 October 2006)

hos11au said:
			
		

> anyone else getting the feeling that bhp will explode upwards?





I AM!!       : 

Rio as well....


----------



## Ken (3 October 2006)

i get there feeling they are taking me to a happy place called boom TOWN.


time will tell.

i guess

i hope everyone who went short on BHP is massively out of pocket!


----------



## Sean K (3 October 2006)

Well, I don't hope anyone loses money, but I do hope BHP recovers. I am long term BHP.

There is going to be significant resistance around $27.00 which happens to be around 200d ma also. It's a long way from recovery yet. Don't count your chickens gents.


----------



## michael_selway (3 October 2006)

Realist said:
			
		

> I AM!!       :
> 
> Rio as well....




BHP & RIO likely to go up i suspect as DOW is on the up, by how much cant really say atm

BHP - Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS 225.4 295.1 274.3 248.8 
DPS 48.4 52.9 55.6 56.9 

RIO - Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 492.6 776.0 739.3 679.6 
DPS 259.0 120.0 129.9 139.1 

thx

MS


----------



## wayneL (3 October 2006)

Consider this completely anecdotal and for entertainment value only:

I have been doing a survey amongst people I knoe who invest in shares:

1/ Do you own BHP? ....usually yes

2/ Do you think it is going up in the short term?  ... usually yes, with added superlatives etc, targets of $40 -$50 - %60 bythe end of next year.

3/ Do you intend to buy more over the next year? ... probably not, already got too much, ... I'm upgrading my house etc.

[/end of survey]

Those aquainted with contrarian theory will draw some conclusions from that which are likely to be the opposite to the rest.

 

Cheers


----------



## Realist (3 October 2006)

wayneL said:
			
		

> Consider this completely anecdotal and for entertainment value only:
> 
> I have been doing a survey amongst people I knoe who invest in shares:
> 
> ...





Ahh this is one of your best posts Wayne.

Hahahaa, its funny cause it is true!!

I'm not willing to pump too much more money into them for one main reason, their dividend policy stinks, and BHP is now so large it can't possibly double quickly, it'd be like turning the Queen Mary around, the bigger they are the slower they are. But they are nice solid investments cause the chances of them plummeting are small as well (bigger slower again).

(I do own more BHP than any other ASX stock, and have RIO)


----------



## Sean K (3 October 2006)

wayneL said:
			
		

> Consider this completely anecdotal and for entertainment value only:
> 
> I have been doing a survey amongst people I knoe who invest in shares:
> 
> ...





He he, I'm sure the poll was considered sufficient for a thesis sample Wayneo. Thanks for the in depth analysis of market perceptions and positions towards BHP. 

You're probably right though!   

So, I'll sell all mine tomorrow.


----------



## Jadefox (3 October 2006)

The following is a list of headlines concerning copper prices. I kept a list earlier in the year (for about one month) to demonstrate how difficult it would be to make trading decisions based on headlines alone - and to convince myself that time reading news headlines would usually be better spent on TA.


Comex Copper Review: Bounces On Short Covering - FutureSource.com, Jun 14, 2006 14:06

Copper Rebounds on Speculation Drop Was Exaggerated - Bloomberg, 

Copper Drops in London as Investors Sell Metal on Interest Rate Concerns - Bloomberg

Copper edges up but still wary of slowing economy - Reuters,

Comex Copper Review: Higher On Short Covering Boost -FutureSource

Copper Leads Metal Price Gains in London on Concern Over Supply Disruption - Bloomberg, Jun 22, 2006 06:39

Copper continues higher as inventories fall - Reuters

Copper drifts; growth worries offset demand signals - Mining Weekly

Global copper market in surplus by 15,000 mt in March: ICSG - Metals Place,


Comex Copper Review: Rises On Technicals, Fed Expectations - FutureSource.com, Jun 29, 2006 17:45


Copper Prices Rise as Investors Bet Fed Will Pause Rate Rises - Bloomberg, Jun 30, 2006 07:24


Copper climbs on strong fundamentals, eyes funds - Mining Weekly,
Bottom of Form 1


Copper '06 in 190,000-ton deficit, not surplus - BME


----------



## wayneL (3 October 2006)

kennas said:
			
		

> He he, I'm sure the poll was considered sufficient for a thesis sample Wayneo. Thanks for the in depth analysis of market perceptions and positions towards BHP.
> 
> You're probably right though!
> 
> So, I'll sell all mine tomorrow.




Here's a quintessentially BHPesque conversation I had with my Father-in-Law who has some BHP

*****************

Me: I think BHP has topped for now.

Outlaw: What do you mean?

Me: Looks like a blow off top in May and we are now below the 200DMA

Outlaw: What are you talking about?

Me: Well it's certainly off its highs

Outlaw: Are you mad? It's at all time highs and going higher.

Me: It is? Not by my chart it ain't. Where did you get this info from?

Outlaw: It was on TV last night. !...? (Some BOZO maket commentator with a s##tload of BHP) was talking about it.

Me: So you haven't checked the price for yourself?

Outlaw: No.

Me: It topped at about $50 in May and it's now less than $40... nearly 30% down! <edit = NYSE prices>

Outlaw: Are you sure?

Me: Yep, go check the paper.

Outlaw: (Silence)

Me: Whadaya reckon?

Outlaw: ...................subject changed

****************

You wouldn't believe the number of conversations I've had in the last 2-3 months just like this one, it's like groundhog day LOLOL!


----------



## Sean K (3 October 2006)

wayneL said:
			
		

> Here's a quintessentially BHPesque conversation I had with my Father-in-Law who has some BHP
> 
> *****************
> 
> ...




Did you say you were short BHP Wayne? 

Repeat the conversation inverse and you are the outlaw just supporting your position. (are you sure BHP went to $50 in May?   )

Yes, yes, maybe most people think BHP is still a good long term stock and you are a contrarian of sorts, and think that the US is about to bust and therefore the supercycle is a myth, blah, blah, blah. 

Time will tell. 

I won't lose my shirt on BHP though. Just a sleave perhaps.  

But uranium and gold will make up for it.


----------



## wayneL (4 October 2006)

kennas said:
			
		

> Did you say you were short BHP Wayne?



No position in BHP



			
				kennas said:
			
		

> Repeat the conversation inverse and you are the outlaw just supporting your position. (are you sure BHP went to $50 in May?   )



 Those were NYSE prices.. sorry for the confusion



			
				kennas said:
			
		

> Yes, yes, maybe most people think BHP is still a good long term stock and you are a contrarian of sorts, and think that the US is about to bust and therefore the supercycle is a myth, blah, blah, blah.
> 
> Time will tell.
> 
> ...




Why do I post all this bearish ####?

Two reasons:

1/ To observe reactions

2/ People have lost all fear of the markets, and fear is healthy. I hope to precipitate at least a bit of thought about risk.

A couple of incidents that support my activism in this.

1/ There was an excellent article in the West Austarlian about this guy; he had 30k in savings and wanted to spend 100k remodelling his house. So he borrowed 70k. What has this got to do with BHP? Well he took the 100k and opened a CFD a/c  and geared himself to the freakin' moon on BHP... and lost most of the 100K  (apologies if slightly vague, I had to read it very quickly)

2/ A mate of mine MEWed 100k odd then margined himself up to 400k to plonk into the ASX, primarily on resource stocks... this in spite of my cautions.

To cut a short story even shorter, he recieved a margin call and won't tell me how much he lost.... just mumbles "I should have listened to you". But I have a fair idea that he now has an extra 100k of debt on his mortgage and nothing to show for it.

This isn't to make me look like a guru. I just think people should have a "healthy" fear of the markets and what they can do.... heck, this correction is childs play compared to what "can" happen.

....and yes I think the US economy is going in the tank.

Cheers


----------



## wayneL (4 October 2006)

kennas said:
			
		

> (are you sure BHP went to $50 in May?   )



For interest sake the BHP chart as quoted on the NYSE\/

Trading near the close @ 37.22


----------



## 2020hindsight (4 October 2006)

wayneL said:
			
		

> This isn't to make me look like a guru. I just think people should have a "healthy" fear of the markets and what they can do.... heck, this correction is childs play compared to what "can" happen.  ....and yes I think the US economy is going in the tank.Cheers



Wayne my brother tells me he wouldnt go near the stock market with a 40 foot pole at the moment -  mind you he bet a few $K on swannies to win .
but he's not as brave as I am!! lol
when you say "going in the tank" , i think that means bad news right ?  just that my optimistic side is trying to interpret that as a tank of money maybe - like Uncke Scroooge used to swim in


----------



## Realist (4 October 2006)

> my brother tells me he wouldnt go near the stock market with a 40 foot pole at the moment




Amateurs think that once the stock market has gone up quite a bit it is only logical that it will come down.

The reality is nobody knows, and the stockmarket may continue to rise for quite a few more years.

So what happens? Well people think ohh I'll stay out and be safe, but then the market rises, and rises, and rises, and they think ohh damn I was wrong I better get in, and whammo it crashes. 

Haha.

Amateurs (infact everyone) should buy stocks at regular intervals and not ever try and predict crashes for this very reason..

No-one can predict crashes or highs, trying to just makes you look silly.


----------



## Sean K (4 October 2006)

Wayne, I am being cautious atm, but I'm afraid (I can't believe I'm saying this) I agree with Realist to some extent to. The old chestnut 'it's time in the market, not timing the market' is a valid long term investment approach. Which is where Realist is coming from and 75% of my portfolio is aimed at too. The other 25% is trading which I have clear exists for. I can't ever see myself to be totally out. Maybe I'll lose my shirt.....


----------



## Sean K (4 October 2006)

Lost a sleave.   

Good buying opportunity.....


----------



## Ken (4 October 2006)

4 days gains work lost in the opening price

that suxs!

at least S8 limited are looking after me (touch wood)


----------



## 3 veiws of a secret (4 October 2006)

kennas said:
			
		

> Lost a sleave.
> 
> Good buying opportunity.....




Rode bare back from work round the ring road just to get last 35 mins of trading ....and Kennas I was close to buying a 1000 shares today $24.72....pulled the pin as I felt I was too hasty ,or should I say unfocused at 30 degrees. Have the feeling theres plenty of slippin'n'sliding going on soon.   :bowdown:


----------



## 2020hindsight (4 October 2006)

kennas said:
			
		

> I can't ever see myself to be totally out. Maybe I'll lose my shirt.....



Im such a novice in this company - but if you're interested in my biggest weakness, it's that I CAN't leave the bludy market alone - I MUST have all my bludy money in there, (the option of having no horse at all is a nono to my subconscious) and then an opportunity comes along, eg CBH this Friday - which was ALWAYS gonna happen - and BLIND BLUDY FREDDY could have predicted it - and guess what - I dont have any spare cash .. sheesh I could kick myself.
I kid myself that I got out of ABC when it peaked - but the trouble is I bought XYZ instead lol which dropped 20% ...hot diggity bludy dog !  Heck I got out of BHP when it was around $30 - big deal - I got into something else which has fallen more than BHP has lol.    - Sorry Ill shuddup now.   :hammer: 
moral :- only invest x% of your bank.  (where x in my humble and uneducated opinion varies 50 to 75%)


----------



## 2020hindsight (4 October 2006)

Realist said:
			
		

> Amateurs think that once the stock market has gone up quite a bit it is only logical that it will come down. The reality is nobody knows, and the stockmarket may continue to rise for quite a few more years.



being realistic mate  the chances of a wave continuing to rise gets less the higher the wave gets surely  - i mean , If we were in a casino - and if Id won $4000 at the craps table, then Id say - just keep bettin.!! .. the chance of a win on the next roll of the dice are the same as when I walked in ...

BUT in the stock market - my brother ( bless him) would say - sheesh I remember the last time I went in when it was near top, and I had to watch like a tortured prisoner as it tumbled down, those famous "corrections" that everyone seems to know about (usually in hindsight lol) ... ahh shin bone,  I'm talking to the converted / experienced / worldly wise , ... I'll shuddup again.  :horse:


----------



## BSD (4 October 2006)

wayneL said:
			
		

> No position in BHP
> 
> This isn't to make me look like a guru. I just think people should have a "healthy" fear of the markets and what they can do.... heck, this correction is childs play compared to what "can" happen.
> 
> ...




Heck Wayne, I dont understand/agree with  half of what these TA guys talk about - but can you stop only posting when Hills gap down? Where were you last week !

Copper is looking stunning tonight in London up 10c/lb (dont ask me why!!!) and Hills could rally strong tomorrow but I get the feeling I should have spruiked more in last week's rally?  (For fun's sake)

I LOVE the post from JADEFOX -re Headlines - but fail to see it as an endorsement of charts and only a boost for having an investment timeframe of longer than five minutes and a good feel for longer term fundamentals. Following the three month copper (or any other) chart would give you nothing but a complex and a number of margin calls in my view. 

There is certainly no trend. 

The Chinamen have a weeks holiday and everyone forgets there aint a lot of copper/oil/nickel/zinc to be found at low prices

Maybe we need another thread -  what is the difference between oil and copper?

I agree with your feelings re: big events ie (what can (??) happen) but I dont feel this type of scenario should guide 90% of a man's investing decisions.

The BHP shorts have had a breather but (in my relatively consistent view) will be found-out by that horrible reality - physical demand

If you want to talk about black swans - why must it be on the BHP forum?

Oh and unless your  (our mine) relatives hold 5m shares , who cares about their views, particularly if they are bananas?

How much does the retail punter move Hills? 

Not much


----------



## wayneL (4 October 2006)

BSD said:
			
		

> Heck Wayne, I dont understand/agree with  half of what these TA guys talk about - but can you stop only posting when Hills gap down? Where were you last week !




LOL! Waiting for the gap down of course!



			
				BSD said:
			
		

> Copper is looking stunning tonight in London up 10c/lb (dont ask me why!!!) and Hills could rally strong tomorrow but I get the feeling I should have spruiked more in last week's rally?  (For fun's sake)




Chop.... see below



			
				BSD said:
			
		

> I LOVE the post from JADEFOX -re Headlines - but fail to see it as an endorsement of charts and only a boost for having an investment timeframe of longer than five minutes and a good feel for longer term fundamentals. Following the three month copper (or any other) chart would give you nothing but a complex and a number of margin calls in my view.
> 
> There is certainly no trend.




BSD,

This view from you fundies does get rather tiresome. The misinformed assumption that trading in a range necessitates losses and margin calls is arrogant in the extreme. There is NO Way a professional trader would EVER recieve a margin call, unless they have a secret desire to blow up their account. (Common in hedge funds apparently  )

Why on earth would a techie be subject to margin calls, yet fundies miraculously immune? Give me a break!!

Charts DO NOT tell us many things. But charts do not lie. We cannot argue with them successfully. Some try but you just can't long term. 

For instance, as you point out, there is no trend currently. This is highly visible via a chart. Trend traders won't be anywhere near this contract. As for longer term fundamentals, there will be fundamental opinions on both sides of the fence. It would be dangerous to assume all fundies are long. I would bet my @55 that there are a bunch of fundies who are short. 

While the losing fundamental opinion drops a substantial bundle, the techie just jumps the fence. 

When will you people realise that both approaches have merit?




			
				BSD said:
			
		

> The Chinamen have a weeks holiday and everyone forgets there aint a lot of copper/oil/nickel/zinc to be found at low prices
> 
> Maybe we need another thread -  what is the difference between oil and copper?




Good idea!



			
				BSD said:
			
		

> I agree with your feelings re: big events ie (what can (??) happen) but I dont feel this type of scenario should guide 90% of a man's investing decisions.
> 
> The BHP shorts have had a breather but (in my relatively consistent view) will be found-out by that horrible reality - physical demand
> 
> ...




Your view may turn out to be correct. It might not.

But does the retail punter move Hills... ultimately, yes.


----------



## wayneL (5 October 2006)

BSD said:
			
		

> Copper is looking stunning tonight in London up 10c/lb (dont ask me why!!!) and Hills could rally strong tomorrow but I get the feeling I should have spruiked more in last week's rally?  (For fun's sake)




HGZ06 (Cu) finished -7.70 c/lb.

BHP(NYSE) @36.20 -1.08 40 mins prior to close.

A buy or a sell?


----------



## BSD (5 October 2006)

Wayne - I will reply in some more detail later. 

I dont disagree with much of what you say and I think we have some crossed wires in places. 

I think I need to learn to make better use of emoticons!

Funnily enough, last night I think I hit the reply button as copper 'gapped up' looking exceptionally bullish on the chart. 

I wake to find it 15c lower

 

Just popped my emoticon cherry!


----------



## Realist (5 October 2006)

2020hindsight said:
			
		

> being realistic mate  the chances of a wave continuing to rise gets less the higher the wave gets surely  - i mean , If we were in a casino - and if Id won $4000 at the craps table, then Id say - just keep bettin.!! .. the chance of a win on the next roll of the dice are the same as when I walked in ...




So if the stockmarket goes up you'd pull all your money out and wait for it to fall?   

Obviously it is wise to pull your money if it is going to go down. But my point is no one knows when that time is, and trying to time it is alot harder than people think.

If it keeps going up which it usually does then you lose out.

And if it goes down you may lose as well.  For instance if the market goes up 20% and you sell then you pay 2% in brokerage and your tax is 9% - you're down 11%, and when you wanna buy in that is another 2%, missed dividends could be 3% - the market would need to fall 16% for you to break even.

When has the market fallen 16% in a few months before? Not often!!


----------



## 3 veiws of a secret (5 October 2006)

something freaky going on.Buyers (on Westpac broking ) bidding $25.5 sellers @ $24.68?????  
Glitch -seems fine


----------



## hos11au (5 October 2006)

hey 3 views, i saw exactly the smae thing. i even have screen dumps of the "action". can anyone shed any light on what was going on?


----------



## hos11au (5 October 2006)

with the way it's going up now, i don't think it was a glitch.


----------



## 3 veiws of a secret (5 October 2006)

hos11au said:
			
		

> hey 3 views, i saw exactly the smae thing. i even have screen dumps of the "action". can anyone shed any light on what was going on?




Strange today as soon as BHP kicked into gear RIO was ramming it up another notch.How the trade movers and pepper shakers work....no doubt they dont have time to talk!  :bekloppt:


----------



## wayneL (7 October 2006)

wayneL said:
			
		

> HGZ06 (Cu) finished -7.70 c/lb.
> 
> BHP(NYSE) @36.20 -1.08 40 mins prior to close.
> 
> A buy or a sell?




Cu back to what seems to be equilibrium for the moment @ $3.40 lb

Likewise BHP sitting in consolidation... ~$37.50(NYSE)

I feel a trade coming on...


----------



## Sean K (7 October 2006)

wayneL said:
			
		

> Cu back to what seems to be equilibrium for the moment @ $3.40 lb
> 
> Likewise BHP sitting in consolidation... ~$37.50(NYSE)
> 
> I feel a trade coming on...




Which way Wayne?


----------



## hos11au (10 October 2006)

dare i say .......... up


----------



## Ken (11 October 2006)

question?

IF brokers have a 12 month target price of $35 for BHP and $104 target price for RIO Tinto what are the all ords going to be? We're closing down on all the all time high BHP and RIO are no where near their all time high.  

IF theres a serious rally in the resource sector from here on in, will it just mean there will be a sway from the recent jump in defensive stocks to resources?  Or will the defensive stocks hold their value and the market will just set new highs?

Is BHP undervalued at $26.10, its funny how things can change.  BHP now seems expensive as it was $24 a share just last week.


----------



## Morgan (11 October 2006)

Very good question Ken.
I have been both a long term employ and long term holder of BHP since 1989 (though neither now) and am still no closer to understanding BHP SP movements.
My biggest gains (and biggest missed potential gains  ) have all been from BHP shares. I really miss the 7500 BHPs that I held at one time  . I still remember looking at the screen with the price at $8.30 in the dark days of 2002 and thinking 'Nah!', and also remember selling at all time highs in 2004, only to see the SP continue upwards in leaps and bounds. 
These days it is difficult to compare BHP to other stocks- as well as the metals resources base, you have to bear in mind the now big exposure to the uranium boom via Olympic Dam; and the further diversification through oil and gas. Certainly BHP has products that will always be in demand at one time or another.

From my point of view, I would not argue that $24-50 to $25-00 would be a worthwhile entry point at this point in time.
Maybe if I get back some of my JPR money   it can go back to BHP


----------



## Ken (11 October 2006)

i spose if you look to past investors couldnt believe the all ords tipped over 5000....


----------



## dlineinvestor (11 October 2006)

*Re: BHP - BHP Billiton Todays movements*

I was watching BHP and Rio today and watched both share prices moving up but gold and oil prices were moving down ?
Can anyone explain, 
any feedback would be appreciated !


----------



## Realist (11 October 2006)

The ASX All Ords could quite easily be 10,000 in 5 years time.

It will almost certainly be 10,000 within 8 years time.

This rubbish of "ohhh we have hit a new high" is moronic if it aint going up it aint matching inflation and we're losing, at only an 8% gain each year, the ASX will double every 9 years. And if you think you'll be rich from it think again, houses will have doubled, petrol probably doubled, food doubled, etc. etc.....

RIO maybe $200 within 8 years, infact I'd be reasonably sure of it    

It'll go up and people will buy, then it'll dropand hold and people will sell, as Morgan found out, if you've gotta goodie - hold it!!


----------



## wayneL (12 October 2006)

Realist said:
			
		

> The ASX All Ords could quite easily be 10,000 in 5 years time.
> 
> It will almost certainly be 10,000 within 8 years time.
> 
> ...



It could also be at its true value in 5 years time... maybe 4000 or so :


----------



## Realist (12 October 2006)

wayneL said:
			
		

> It could also be at its true value in 5 years time... maybe 4000 or so :




I knew you'd come out of the woodwork after that post Wayne!  

10,000 in 2012 I say!


----------



## wayneL (12 October 2006)

Realist said:
			
		

> I knew you'd come out of the woodwork after that post Wayne!
> 
> 10,000 in 2012 I say!




LOL, I should stop being so predictable then.

I'll do a Harry Dent... ASX 20,000 by 2010  

























....then 4000 ROFL


----------



## pacer (12 October 2006)

Till the North Koreans put a bomb up ya bum....the we'll all be in the pooo.....

Gotta get a grip fellas.....the tide is rising!

It will be all different in 20 years...land that is, above water marks is where it's all at......cu swimming in 20.......later.....PACER.....



My high on the hill proprty will be the next waterfront property.....HEHE!


----------



## MiningGuru (12 October 2006)

Resources: The Bulls Are Getting Excited Again
FN Arena News - October 11 2006

By Rudi Filapek-Vandyck

Investors and traders in Sydney are turning bullish on miners and natural resources again.

Our sources tell us there's a rumour going around that the institutional desk of noted commodities bull GSJB Were has expressed the view that the "Great Resources Bull Market", expected to run from 2004 to 2010, looks like being "on the verge of its second wind".

To add some more juice to the thesis, the desk apparently forecasts BHP Billiton (BHP) shares to hit $40 (compared to $25.87 yesterday) while Rio Tinto (RIO) shares are tipped to hit $100 in early 2007. Rio Tinto shares closed at $71.05 yesterday.


I think that BHP will get to around $40 in the lead up to Christmas and January Bull Run


----------



## MiningGuru (12 October 2006)

Iron Ore & Exploration To Drive BHP and Rio Tinto
FN Arena News - October 11 2006

By Chris Shaw

Improved sentiment has seen investors return to the resources sector in recent trading sessions, resulting in solid gains in leaders such as BHP Billiton (BHP) and Rio Tinto (RIO). Prices are not yet close to peak levels seen earlier this year, but both Merrill Lynch and Citigroup has given reasons why they expect share price gains will continue.

The Merrill Lynch reasoning is based on earnings upgrades stemming from increases to their forecasts for iron ore prices in coming years. Previously the broker has expected prices in the Japanese FY07 would simply roll over from FY06 levels before falling by around 20% in FY08, but it has revised up its forecasts to a 5% increase this year and a rollover outcome in FY08, which compares to the consensus forecast of a 12% cut in FY08.

The increase reflects the broker's view there is limited downside for iron ore prices thanks to high average production costs in China. It estimates costs for average producers there are around US$64 per tonne and as much as US$74 per tonne for marginal producers due to higher stripping costs, a decline in new capacity grades and recoveries and the fact much of the production expansion is occurring at underground operations, which are higher cost.

As a result it suggests it would not take much to force a cut in production levels. The broker suggests such a move would be supportive for prices and should see the big three iron ore producers, namely BHP, Rio Tinto and Brazil's CVRD, maintain pricing power until at least FY09.

The new price forecasts have led the broker to lift its earnings estimates for both companies, with Rio Tinto enjoying the larger increases given the company's greater leverage to iron ore. It has lifted its forecasts for the stock in FY07 by 2% to US$7.6bn, in FY08 by 14% to US$7.2bn and in FY09 by 20% to US$6.1bn. In contrast, BHP's forecasts have increased by 0.5% to US$14bn, 4% to US$11.7bn and 9% to US$9.5bn over the same period.

The broker values Rio Tinto at $64.48 and BHP at $22.80, with respective price targets of $95.00 and $35.00. Citigroup suggests the renewed exploration focus by both companies offer significant potential for upside to their respective valuations, especially given about 50% of the estimated US$7bn in exploration expenditure will be on greenfields projects, which offer the potential for major discoveries.

Any such discoveries may prove significant for their respective share prices as the broker suggests there could be us much as $5-9 in upside to its BHP valuation and $18-29 for Rio Tinto if both companies can maintain market shares in all their major commodities through exploration success.

Little surprise then both stocks are highly rated in the FN Arena database, each receiving nine Buy ratings and one Accumulate recommendation. Merrill Lynch offers one word of caution though – while it expects both stocks to rally through to the end of the year, it sees potential for some weakness in 2007 as the US slowdown may result in reduced demand for some commodities and the easy money in the sector has probably been made over the past three years.

BHP shares at 2.45pm today were up 26c at $26.13, while Rio Tinto shares were 39c higher at $71.44, which compares to their respective average share price targets according to the FN Arena database of $35.47 and $97.74.


----------



## Ken (13 October 2006)

what wil BHP hit today?

the US share price is almost kicked over $40.

will this calculate to between 26.50 and 27.00 on the Australian share price?


----------



## michael_selway (14 October 2006)

Ken said:
			
		

> what wil BHP hit today?
> 
> the US share price is almost kicked over $40.
> 
> will this calculate to between 26.50 and 27.00 on the Australian share price?




Thing is BHP doesnt deserve to go higher because it has the wrong mix of commodities.

It has the mostly copper and aluminim and coal, and those arent moving much like zinc, nickel, lead.

thx

MS


----------



## nizar (14 October 2006)

I think BHP has a beautiful mix of commodities.

Uranium + Oil = u cant go wrong if u look at things a bit more longer term...


----------



## michael_selway (14 October 2006)

nizar said:
			
		

> I think BHP has a beautiful mix of commodities.
> 
> Uranium + Oil = u cant go wrong if u look at things a bit more longer term...




Longer term both of those 2 shoudl go down? only ST to MT they go up?

also whats the % of those 2 do they sell compared with the otehr comoodities

thx

MS


----------



## nizar (14 October 2006)

MS,

Why dont u think uranium and oil will be wont be worth much more in the longer term (say 10years)?

Saudi only has 10years of oil reserves left by its own (probably optimistic) measure.

U think nonconventionals (tar sands, oil shale) can be extracted on a commercial basis by then? I dont think so personally.
Well i guess if thats your thinking then its a valid point. But barring any massive discovery, which there hasnt been since the 1970s, in 10 years time, oil will be much more scarce than it is today.

Have a read of Jeremy Leggets "Half Gone" - he interviews Matthew Simmons and the worlds best authorities on oil and peak oil theory - Big Oil executives, government officials and much more. He spells it all out there.

Higher oil prices only make uranium more viable. It provides already a large % of the energy required to many european countries. India and China are planning many more reactors.
Or are u one of those who thinks uranium will be eclipsed by thorium?

We are several several years away from that happening IMO... 
I think many of us are underestimating the spike in the uranium price that will occur in the next few years. This is only the beginning.


----------



## rederob (14 October 2006)

nizar said:
			
		

> I think BHP has a beautiful mix of commodities.
> 
> Uranium + Oil = u cant go wrong if u look at things a bit more longer term...



nizar
Agree wholly.
Now is the time to re-enter BHP with confidence.
I think $30 before Xmas is likely.
$40 in 2007 - maybe.
I think $35 is more probable.
However, if oil prices take a drive north again, a new ball game.


----------



## GreatPig (14 October 2006)

The weekly chart is forming a bearish triangle.

Interesting to see if it does break out on the top side next week.

GP


----------



## Ken (14 October 2006)

if oil prices go north does this help BHP?

or does that mean cost of mining increases.  i know they have oil exposure but which is best for them as far as profits go.


----------



## haemitite (14 October 2006)

Very beneficial for them.


----------



## BSD (15 October 2006)

Uranium will always be an after-thought for BHP. 

From the June 2006 numbers in the earnings preso you can find the following attribution of the $15 USD Billion EBIT:

http://www.bhpbilliton.com/bbContentRepository/2006830445271/bhpbprelimpresentationaug06.pdf

Base Metals (copper and moly)     $5.4 bn
Oil and Gas                               $3.0 bn
Aluminium                                 $1.1 bn
Iron Ore and Coking Coal             $4.5 bn
Stainless (Nickel)                       $0.9 bn
Thermal Coal                             $0.3 bn
Diamonds and Other (U)              $0.3 bn

The copper price is well above the 2006 average
The Nickel price is in the stratosphere
Iron has gone up and looks set to roll again
Coal off a bit - but hard coking still looks amazingly strong
Even aluminium is holding up 

The oil and gas business for BHP is a volume growth story 

Hopefully the Yanks get nervous around the next quarterly production report (Escondida effect, Ravensthorpe blow outs etc) and give us another rolled gold opportunity below $26.00

The Yanks are still underweight and covering. Hills have gone up a couple of times this week on down nights on the LME, even after weak leads from London. 


Anybody see the Goldmans note commenting on RIO being too cheap and open to a bid?!?!?!?!?

Oh my...


----------



## nizar (15 October 2006)

BSD said:
			
		

> Uranium will always be an after-thought for BHP.




Right now yeh, but Not after 2013 when the OD expansions kick in.

40,000tonnes/pa will make them a major player. It will also make up a much bigger chunk of their profits. Thats 88million pounds a year. Margin of us$50/lb gives EBIT of us$4.4billion

And thats just on todays prices (costs about us$12/lb).

Yeh the Yanks see BHP as mainly an oil company


----------



## BSD (15 October 2006)

Interesting - can you link me to something on this?


Making some rough calcs, the information I have at hand has Olympic Dam going from 200,000tn to 500,000 tn of Cu per annum at a reserve grade of around 1.5% Cu. The Cu expansion alone could be generating another USD$1.3bn of cash flow

The U grade is about 0.06% and on my back of envelope this would mean U output would be going to around 20,000tn pa. This paper says 15,000tn is the target of the expansion.  

http://www.dpmc.gov.au/umpner/submissions/223_sub_umpner.pdf

Still amazing numbers though


Interesting to see how the U price holds up with all the new supply coming on line from Olympic Dam and growth projects in Australia and Africa. U is a pretty common substance at $50lb

 RioTinto certainly dont use a price anywhere near $25lb (let alone $50lb) in their forecasts. 

Olympic Dam produced 9% of the world's U production in 2005, so tripling output will certainly have an effect on supply.



The table I put together in my last post was slightly incorrect. U is reported in the base metals division, not specialties. 

Last year U production was 4,000 tonnes


----------



## Sean K (15 October 2006)

BSD said:
			
		

> Interesting - can you link me to something on this?
> 
> Making some rough calcs, the information I have at hand has Olympic Dam going from 200,000tn to 500,000 tn of Cu per annum at a reserve grade of around 1.5% Cu. The Cu expansion alone could be generating another USD$1.3bn of cash flow
> 
> ...




Gents, thanks for the analysis and discussion here. I still note most analysts have around $35 and $100 one year targets on BHP and RIO. Looks like people are pretty bullish on the run home to Xmas. Can't see BHP being under $26 again, from here, but if it is, looks cheap. Interesting note on RIO being a potential target. That would be a lot to swollow. Who would have the cash for that apart from BHP?


----------



## nizar (15 October 2006)

kennas said:
			
		

> That would be a lot to swollow. Who would have the cash for that apart from BHP?



There are some private equity guys in the U.S. with equity of more than $100million. Somebody told me that at a time when i was convinced BHP would be too large for someone to buy - apparently not.

BHP some of parts would be worth at least $40/share. That certainly looks attractive on paper.


----------



## Ken (15 October 2006)

bhp takeover on rio tinto to form the super stock....


----------



## BSD (17 October 2006)

BHP, Copper and Nickel up 4% o/n

Watching the macro momentum players covering their shorts is exciting !


----------



## Sean K (25 October 2006)

*ABN Amro* rates the stock as Buy - The broker notes the Q1 production result was in line with expectations but failed to impress as the company continues to find it difficult to lift volumes.

Following the result the broker has cut its earnings forecast for FY07 by 2% to US$13,119m as it expects an improvement in subsequent quarters.

Valuation is $20.74.

Target price is $34.00 Current Price is $27.52 Difference:$6.48 - (brackets indicate current price is over target). If BHP meets the ABN Amro target it will return approximately 24% (excluding dividends, fees and charges - negative figures indicate an expected loss).

*Credit Suisse* rates the stock as Outperform - The broker saw the quarterly production result as reasonable as the company''s key divisions performed as expected.

In the broker''s view the key short-term driver of the stock remains commodity prices, which it notes offer some upside to forecasts given current spot prices.

There is no change to its positive view.

Target price is $37.58 Current Price is $27.52 Difference:$10.06 - (brackets indicate current price is over target). If BHP meets the Credit Suisse target it will return approximately 37% (excluding dividends, fees and charges - negative figures indicate an expected loss).

*Deutsche Bank* rates the stock as Buy - The broker was disappointed with base metal production levels and is reviewing the numbers.

Target price is $32.60 Current Price is $27.52 Difference:$5.08 - (brackets indicate current price is over target). If BHP meets the Deutsche Bank target it will return approximately 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

*JP Morgan* rates the stock as Overweight - Poor production levels mean the broker is maintaining Overweight based on higher prices and not on higher volumes.

Target price is $35.00 Current Price is $27.52 Difference:$7.48 - (brackets indicate current price is over target). If BHP meets the JP Morgan target it will return approximately 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).

*Macquarie* rates the stock as Outperform - Poor production levels just go to highlight supply constraints, the broker says, which can only place upward pressure on commodity prices. BHP is cheap, the broker yells.

Target price is $32.55 Current Price is $27.52 Difference:$5.03 - (brackets indicate current price is over target). If BHP meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

*Merrill Lynch* rates the stock as Buy, Medium Risk - Q1 production was as expected, with oil and coal coming under pressure. The broker is maintaining a Buy rating, but suggests "trimming" positions in a Dec quarter rally ahead of adverse effects of US slowing in early 2007.

Target price is $35.00 Current Price is $27.52 Difference:$7.48 - (brackets indicate current price is over target). If BHP meets the Merrill Lynch target it will return approximately 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).

*SB Citigroup* rates the stock as Buy, Medium Risk - The broker suggests the quarterly production report was broadly as it had expected, though coking coal was somewhat disappointing and diamond production was lower than forecast.

It sees upside risk to earnings forecasts given commodity prices remain strong, as on current spot prices the broker''s FY07 forecast would increase by 7% to US$15.5bn and in FY08 by 43% to US$16.8bn.

Target price is $37.00 Current Price is $27.52 Difference:$9.48 - (brackets indicate current price is over target). If BHP meets the SB Citigroup target it will return approximately 34% (excluding dividends, fees and charges - negative figures indicate an expected loss).

*UBS* rates the stock as Buy 2 - Quarterly production was weaker than expected, leading to a 4.2% earnings reduction, but you''d have to go a long way to find someone who would downgrade BHP. For the record, the broker prefers RIO at the moment.

Target price is $36.50 Current Price is $27.52 Difference:$8.98 - (brackets indicate current price is over target). If BHP meets the UBS target it will return approximately 33% (excluding dividends, fees and charges - negative figures indicate an expected loss).


----------



## dallee (26 October 2006)

kennas said:
			
		

> *ABN Amro* rates the stock as Buy - The broker notes the Q1 production result was in line with expectations but failed to impress as the company continues to find it difficult to lift volumes.




Hi. I'm curious to know from where this sort of information is available. Is there a newsletter that one can subscribe to that lists all the broker recommendations?

Dallee


----------



## BSD (26 October 2006)

Get a stockbroker


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## legs (26 October 2006)

BHP the great aussie fighter. With Asian countries booming and their own governments trying to slow themselves down they need as much Iron Ore as ever. Try and tell me the boom is over!!


----------



## Sean K (26 October 2006)

dallee said:
			
		

> Hi. I'm curious to know from where this sort of information is available. Is there a newsletter that one can subscribe to that lists all the broker recommendations?
> 
> Dallee




I just made it al up dallee to get people to buy BHP and push up my stock.   

You get this sort of stuff on fnarena. I don't think they would like what I have done above, but hey, I just like sharing information.


----------



## michael_selway (26 October 2006)

legs said:
			
		

> BHP the great aussie fighter. With Asian countries booming and their own governments trying to slow themselves down they need as much Iron Ore as ever. Try and tell me the boom is over!!




the boom is not over but the high prices are

BHP sells coal, iron ore, steel, copper, aluminium the most i think

and prices for those have peaked or about to peak

thx

MS


----------



## MiningGuru (27 October 2006)

Thats right the Boom is not over.

High prices are not over either!

There is still massive demand from China, and India's economy is growing even faster!

Iron ore prices will probably go up even higher next year

Just wait until early 2007 and then you will see even higher base metal prices.

BHP down today. A buying oppurtunity!

The MiningGuru


----------



## michael_selway (27 October 2006)

MiningGuru said:
			
		

> Thats right the Boom is not over.
> 
> High prices are not over either!
> 
> ...




Nono, prices will come down as time goes by, because supply will grow faster than demand, in the ST/MT prices will go up yes because demand is larger then supply

Also when you say base metals, which ones?

thx

MS


----------



## MiningGuru (27 October 2006)

In the long term  yes prices will gradually come down, but that is years away.

As it is taking so long for new capicity to come on stream, and demad is growing not only from China, but from India, Brazil, Argentina, Mexico, Vietnam and a host of other countries I can't see supply catching up with demand for around 5 years at the earliest.

The average mine takes three years at the absolute mininum to get up and running.

That is why prices will stay higher for longer, as those in the know, eg Chip Goodyear have been saying for a while.

The Mining Guru


----------



## Ken (27 October 2006)

Article in the fin review in relation to BHP and RIo tinto was that they didn't invest enough in funding future growth.

As a result they are running above 100% capacity to meet demand.

They said this may have been a mistake looking back, but it was better to be runnings at 100% capacity than over comitting on expansion.  

They also said this would keep commodities at higher levels for longer as opposed to trying to make as much cash as they could fast, which would result in a sharp crash in commodities.

They said that with there resources for production supply would overtake demand.  It would be a case of demand dropping.

If you held BHP and rio for 3 years and they were $27 and $78 you would be pretty stiff i would have thought. Possible but stiff....

anyone disagree?

if so why?


----------



## Julia (27 October 2006)

dallee said:
			
		

> Hi. I'm curious to know from where this sort of information is available. Is there a newsletter that one can subscribe to that lists all the broker recommendations?
> 
> Dallee



Dallee

As Kennas has said, subscribing to FNArena will give you this information.
Imo it's good value for money.  Less than $200 p.a. gives you complete market news service, monthly super stock report, plus daily broker call which publishes all recommendations put out by all brokers every week day.

Even if you don't put much store by the analysts' recommendations, obviously it's pretty likely that if six brokers all come out with a Buy on a stock then it's going to be bought by enough people to make a difference to the SP.

www.fnarena.com

Julia


----------



## TraderPro (27 October 2006)

BHP closed the week at $27.53...

Do you guys think that there is any prospect for these shares hitting $37 in the next 12 months? ($37 is a stock recommendation from Citigroup)

As with commodity prices - of course there supply demand issues... I heard somewhere that China is building up their steel mills - and may lower the price of steel - does that have any impact on BHP's business?


----------



## nizar (27 October 2006)

TraderPro said:
			
		

> BHP closed the week at $27.53...
> 
> Do you guys think that there is any prospect for these shares hitting $37 in the next 12 months? ($37 is a stock recommendation from Citigroup)
> 
> As with commodity prices - of course there supply demand issues... I heard somewhere that China is building up their steel mills - and may lower the price of steel - does that have any impact on BHP's business?




Maybe so, but what has a far greater impact on BHP's business and sp is the price of oil.


----------



## Ken (27 October 2006)

They can predict to a certain extent, but unexpected interest rate rises, oil shocks, terrorism, and outside effects can be a factor.

If there was  a 100% chance of it getting there, people would not be selling the stock for $27.53. 

A target price is just that....


----------



## michael_selway (27 October 2006)

MiningGuru said:
			
		

> In the long term  yes prices will gradually come down, but that is years away.
> 
> As it is taking so long for new capicity to come on stream, and demad is growing not only from China, but from India, Brazil, Argentina, Mexico, Vietnam and a host of other countries I can't see supply catching up with demand for around 5 years at the earliest.
> 
> ...




Yes thats very general, but you need to look at the live numbers at the shop floor

http://www.basemetals.com/stocks.aspx
http://www.kitcometals.com

How can you say copper supply hasnt caught up to demand when there has been alot of "ins" recently at LME?

thx

MS


----------



## Fab (27 October 2006)

Actually where can I check LME price ?? Is there a website to check these commodities prices ?


----------



## michael_selway (27 October 2006)

Fab said:
			
		

> Actually where can I check LME price ?? Is there a website to check these commodities prices ?




where the **** have you guys been???   

http://www.basemetals.com/stocks.aspx
http://www.kitcometals.com







Also you need to understand what the above 2 sites mean, so do you understand it?

thx

MS


----------



## dallee (28 October 2006)

Julia said:
			
		

> Dallee
> 
> As Kennas has said, subscribing to FNArena will give you this information.
> Imo it's good value for money.  Less than $200 p.a. gives you complete market news service, monthly super stock report, plus daily broker call which publishes all recommendations put out by all brokers every week day.
> ...




Ta for the link, Julia, I've signed up for the free trial.

Dallee


----------



## Sean K (30 October 2006)

BHP cracking $28.00 making it's first higher high for a while and going through resistance at this level. Significant move. Perhaps officially going into an up trend. Day isn't over yet though...


----------



## Ken (31 October 2006)

kennas please refrain from putting pressure on BHP..

a 2% loss decrease was filth!

bhp should be booming they are the kings of uranium and ERA are catching them at a fast rate.  i can't see ERA keeping it up!  either way good for RIO tinto....


BHP your share price should be $30 +, sort it out!


----------



## scsl (2 November 2006)

BHP and RIO are up over 3% atm in London!   

Does anyone know where I can get free LME prices? I know there might not be live sites but I'll settle for delayed prices.


----------



## stoxclimber (2 November 2006)

scsl: www.kitcometals.com


----------



## scsl (2 November 2006)

stoxclimber said:
			
		

> scsl: www.kitcometals.com



Thanks mate!

I just had a look: Cu down 0.07%, Ni up 1.62%, Al up 0.06%

BHP's flying atm, while there isn't too much movement in base metals prices.   

I guess it could be the FTSE doing well in general, pulling the miners up with it.


----------



## stoxclimber (2 November 2006)

What happened to resources late in trading last night? Despite BHP/RIO being up a lot on the LSE when I went to bed, they're both down on the ASX...


----------



## scsl (2 November 2006)

stoxclimber said:
			
		

> What happened to resources late in trading last night? Despite BHP/RIO being up a lot on the LSE when I went to bed, they're both down on the ASX...



I think we're just following the DJIA's lead atm. There's been some weak economic data coming out in the US, such as weaker than expected GDP, manufacturing almost coming to a halt. It's the same old story, with investors over there worried about future corporate profits etc. 

My feeling is that the DJIA might pull-back very soon, which will give us an opportunity to jump on BHP.


----------



## haemitite (2 November 2006)

scsl said:
			
		

> Thanks mate!
> 
> I just had a look: Cu down 0.07%, Ni up 1.62%, Al up 0.06%
> 
> ...



iron ore sentiment is bullish, predictions have recently moved from price rollovers from 1 Apr to at  leat a 10% increase.


----------



## scsl (2 November 2006)

haemitite said:
			
		

> iron ore sentiment is bullish, predictions have recently moved from price rollovers from 1 Apr to at  leat a 10% increase.



There's been some positive iron ore predictions by brokers. Good for BHP... but the Chinese are not going to be happy at all! If they were furious about not having a major say in the last contract negotiations, imagine what they're going to be like trying to get a price rollover, not to mention a decrease.


----------



## BSD (2 November 2006)

Demand is that high, the Chinese are mining 10% grade ore. They are moving six times as much dirt as BHP to get their vital steel inputs. 

They will pay more for our ore than last year. When you consider where the cost curve has moved to, they probably should be paying up.


----------



## ice (2 November 2006)

No doubt all true but on my homemade chart BHP s/p is trending down. 
As it stands atm looks to be some support around 2730 and resistance around 2820. Longer timeframe a return to 2460 or so looks distinctly do-able.
But then I'm hopeless at charting so this analysis is worth about what it costs (or less).

ice


----------



## scsl (2 November 2006)

BSD said:
			
		

> Demand is that high, the Chinese are mining 10% grade ore. They are moving six times as much dirt as BHP to get their vital steel inputs.
> 
> They will pay more for our ore than last year. When you consider where the cost curve has moved to, they probably should be paying up.



Wow that's pretty desperate of them huh! 

So what about the new supply that is coming into the market from India? I read about it a few weeks ago but it seems that it's not going to be enough.


----------



## Sean K (3 November 2006)

ice said:
			
		

> No doubt all true but on my homemade chart BHP s/p is trending down.
> As it stands atm looks to be some support around 2730 and resistance around 2820. Longer timeframe a return to 2460 or so looks distinctly do-able.
> But then I'm hopeless at charting so this analysis is worth about what it costs (or less).
> 
> ice



Short term has been trending down. Long term up. Above 200d ma is positive. I generally agree with your support and resistance levels.


----------



## Ken (3 November 2006)

I think its common knowledge that BHP is pretty much held by every institution. How much at one point in time determines the share price. It is not determined by the average punter, but where a bunch of economist see everything heading.

When BHP dips,  insutitions back the truck up. I think at current prices its still cheap.

The $30 mark is a physcological level which will be a price that people will doubt whether it can hold.

I believe it will hang in between the $28 mark and $26 range.  

When it makes its break for $30 it will be down in fast fashion.

So holding I think is better than waiting for the break incase you miss out.


----------



## scsl (9 November 2006)

At least we know one person is keen to get in before this next run in the sp - David Tweed:



> LONDON (Dow Jones)--BHP Billiton Thursday warned shareholders about about unsolicited offers to purchase BHP Billiton shares.
> 
> A company called 'Direct Share Purchasing Corporation Pty (DSPC) has written to BHP Billiton requesting a copy of our share register, BHP said in a letter to shareholders.
> 
> ...



That managed to find its way into MarketMaker's live news feed!

For BHP, today was an indication that perhaps most of the selling pressure has gone. Overnight, base metals were down, yet BHP was well supported at about $27.52, rising on both occasions it fell to that level.


----------



## Freeballinginawetsuit (9 November 2006)

Personally I've traded out of my midcaps, Nickle ones a few weeks back and Zinc plays this week. Gains have been terrific but they seem to be reaching fair value ATM. 

I feel that the last month in the market has been quite unusual with the well valued midcaps leading the way out of the June correction and July/August sideways abortion. BHP has consolidated but is way off the mark.

BHP amounts to a large proportion of the materials index, but is still lagging. I'm more confident in the outlook for commodities (post June) and BHP catching up and running shortly, its way undervalued ATM.

So hence putting some of my profits into more accumalation of BHP during its SP dips has been my play, surely its going to run soon.


----------



## Ken (9 November 2006)

i have a lot of confidence in giving bhp my hard earned. 

they wouldnt be buying back there own shares if they thought it was over valued.....

BHP will rise when dividend comes around....

will be $30 by january.


----------



## scsl (9 November 2006)

Freeballinginawetsuit said:
			
		

> Personally I've traded out of my midcaps, Nickle ones a few weeks back and Zinc plays this week. Gains have been terrific but they seem to be reaching fair value ATM.
> 
> I feel that the last month in the market has been quite unusual with the well valued midcaps leading the way out of the June correction and July/August sideways abortion. BHP has consolidated but is way off the mark.
> 
> ...



Yeah, I would definately be accumulating BHP atm. I think what many people don't realise is that the All Ords and ASX200 have both gone on to make new highs whilst BHP and RIO are still well down on their May highs. I think the market will ease up in the next week or two and then BHP/RIO will take the market onto even higher highs.

Btw FBINAW, when are you looking to get back in on the zinc and nickel stocks? I got in on CBH and KZL today but I'm afraid it could turn nasty very quickly.


----------



## Freeballinginawetsuit (9 November 2006)

scsl said:
			
		

> Yeah, I would definately be accumulating BHP atm. I think what many people don't realise is that the All Ords and ASX200 have both gone on to make new highs whilst BHP and RIO are still well down on their May highs. I think the market will ease up in the next week or two and then BHP/RIO will take the market onto even higher highs.
> 
> Btw FBINAW, when are you looking to get back in on the zinc and nickel stocks? I got in on CBH and KZL today but I'm afraid it could turn nasty very quickly.





I don't think Nickle or Zinc stocks will turn nasty, their just ripe for a correction although Zinc is still looking strong for longer. IMHO the last couple of days have thrown a decent indicator and it won't take much for the bulls to lose momentum and the bears gain the upperhand for a shortlived decent correction.

Personally I'll get back into KZL, ZFX and MRE,MCR and SMY at a pullback, IMHO I think we are only days away from one. I still hold some of the above though, just out of my trading portfolio ATM on these.

After the correction I am of the opinion that BHP will run and drag the midcaps back up with it. That's just just my theory as due to BHP's weighting of the materials index, a run now would put ridiculous gains on the index. 

I'd get out of 'U'phoria too, don't get caught with your pants down. I reckon PDN is the goer though!.


----------



## Sean K (10 November 2006)

A small article in the Fin has some dude claiming RIO is a better buy than BHP atm due to BHP being more of an oil play, and oil going down/sideways recently. (might explain why RIO has outperformed recently) Not sure what price he was using to make a call on BHPs profits on oil, but I am sure their projections are on oil way below current spot. Oils long term going up, and if it hangs around $60 for the next few months then BHP will be the one to own not RIO. Probably a smart play to have both actually, if you're stronger for longer.


----------



## mildew79 (10 November 2006)

bhp is very undervalued atm. possible reasons for the lag in their SP? copper production down 19 %? strike in chile, maintenance at Olympic, july sale of Tintaya

They have not yet tested their may high, yet nickel prices have gone nuts, they sit on uranium, ore price is steady, and they have earnings streaming from almost every commodity out there.

bhp also has investments of around one billion dollars in projects around the globe. these include 2 in the feasibility stage and hundreds more in early stage assessments.

emerging/developing economies shall mean a continued demand for commodities for at least another two years. China, india, japan to name the major players.

Tech/A: charting: will take time to move through 29 - 30 resistance, especially with the up and coming market correction (it will happen very shortly). After moving through 29 - 30 selling pressure SP will test the may high. If succesful a decent SP percentage increase lurks....

BHP a very low risk investment, with massive leverage advantages and very respectble gains. my prediction: 35 dollars thereabouts by mid 2007


----------



## mildew79 (10 November 2006)

Did i mention they have been buying their own shares?? when a company feels this the best way to spend its cash it is an expremely good sign.


----------



## Sean K (10 November 2006)

mildew79 said:
			
		

> Did i mention they have been buying their own shares?? when a company feels this the best way to spend its cash it is an expremely good sign.




Mildew you shold also mention the upside they will get from the extensvive drilling program they re undertaking around Oly Dam. The aim is to significantly increase the copper and uranium reserves there. From what I've read, this is going to be completed around Jan/Feb, so this will be a massive boost for the company, partcularly on the uranium side. Spot price will probably be around $65 by then at this rate. 

If I may add from their web site:

Imagine ...

BHP Billiton’s Olympic Dam mine is already big. It is the world's fourth largest copper deposit, the largest uranium deposit and also produces more gold and silver than most other mines in Australia. It is the biggest underground hard rock mine in Australia.  It is already complex.  The polymetallic resource yields copper, uranium, silver and gold. The process route employs both hydrometallurgical and pyro-metallurgical techniques on a significant scale to extract refined copper, silver and gold metal and uranium oxide.  All this on-site at Olympic Dam situated 570 kilometres north-west of South Australia's capital, Adelaide.

Now think bigger

The proposed expansion, which is likely to see operations converted to open pit, will be one of the biggest of its type in the world.  Establishing the open pit will require the removal of around a million tonnes of over burden every day for four years. Once completed, the expanded mine will produce around 40 million tonnes of ore to the new processing plant each year. The plant will produce significantly more metal in each of the commodity groups using similar technologies to those currently employed.  The Prefeasibility Study, which is now underway, will take two years to complete.  The study will produce an estimate of the capital cost of the expansion.

There are around *20 diamond drill rigs* on site now. They are carrying out resource definition drilling to infill the resource model that underpins the Prefeasibility Study. There is also a large geotechnical program as well as sterilisation drilling to determine final positions of infrastructure. Specialised rigs are probing the depth of the ore body with some holes planned to go more than two kilometres deep. 

An Environmental Impact Study is being produced as part of the project to analyse the projected impacts of the expansion.  One impact will be the growth of the town of Roxby Downs, where most mine and plant employees are based.  It is expected that the town will more than double in size to a population of about 10,000.



I had to put the 20 diamond rigs in bold. Most companies struggle to get their hands on just one!!!!!


----------



## Sean K (13 November 2006)

Overnight commods have crippled the Big Australia (plus). Ouch, off $1.00 tumbling through important $27.00 and 200d ma.

Perhaps Ducati was right!

Or, is it going to be a buying opportunity?


----------



## TheRage (13 November 2006)

mildew79 said:
			
		

> Did i mention they have been buying their own shares?? when a company feels this the best way to spend its cash it is an expremely good sign.




This is true only sometimes. Some companies buy back shares deliberately to hide a fall in earnings and only quote Earnings Per share not actual earnings. Most Australian companies buy back shares not because they actually care about increasing our share as investors but because they can't find any better alternatives. By the way I love share buy backs don't get me wrong but I think most Australian companies do it as a self preservation mechanism when rates go up and projects die down.


----------



## pacer (13 November 2006)

If you ask me, it looks almost like a double top, and has gapped, I expect it to loose again tomorrow to around $26.40, or less, and after that it may break down to $26 resistance....then who knows......it'll either pop back up or continue a little lower say a low of $25.70....then it may be a great buying opp.......just my opinion.


----------



## Sean K (13 November 2006)

Any courageous bargain hunters out there?

4% drop. People are panicking    Like me.


----------



## spitrader1 (13 November 2006)

kennas said:
			
		

> Any courageous bargain hunters out there?
> 
> 4% drop. People are panicking    Like me.



KENNAS-just bought in at 26.75


----------



## Freeballinginawetsuit (13 November 2006)

I'd wait another day, or two. The down percentages today seem to be more than just a profit take day. Bottom picks on a correction are best on the 2nd or 3rd day.

Then again I believe their's   still some oomph in the commodities and am happy to get my fingers dirty


----------



## Sean K (13 November 2006)

There's some amazing trades in BHP going through. Parcels between 5,000 and 20,000 flying in.    Or out.


----------



## justjohn (13 November 2006)

kennas said:
			
		

> Any courageous bargain hunters out there?
> 
> 4% drop. People are panicking    Like me.



No thanx Kennas , not just yet i dont think it has finished yet :


----------



## spitrader1 (13 November 2006)

justjohn said:
			
		

> No thanx Kennas , not just yet i dont think it has finished yet :



at the end of the day if it goes down again tomorrw ill buy some more...i almost want it to come back so i can back the truck up!!


----------



## Sean K (13 November 2006)

spitrader1 said:
			
		

> at the end of the day if it goes down again tomorrw ill buy some more...i almost want it to come back so i can back the truck up!!



There will be a good opportunity here. If you still believe in the Chindiapanaiwanporeasia story. Oh, and Russazil.


----------



## Kauri (13 November 2006)

kennas said:
			
		

> There's some amazing trades in BHP going through. Parcels between 5,000 and 20,000 flying in.  Or out.




    You can control 5000 BHP shares with 5% CFD's for between $6000 to $7000..


----------



## justjohn (13 November 2006)

spitrader1 said:
			
		

> at the end of the day if it goes down again tomorrw ill buy some more...i almost want it to come back so i can back the truck up!!



This so-called truck i hope your not leasing it from the CHICKEN because i think you will find it full of SBM


----------



## spitrader1 (13 November 2006)

spitrader1 said:
			
		

> KENNAS-just bought in at 26.75



nice tick on the close to 26.84


----------



## imaginator (13 November 2006)

haha,
I just bought back at 26.76 after shorting it this morning at 27.28. Not sure what direction its gonna go tomorrow, but probably up cos it went up slightly just before the market closed.


----------



## spitrader1 (13 November 2006)

imaginator said:
			
		

> haha,
> I just bought back at 26.76 after shorting it this morning at 27.28. Not sure what direction its gonna go tomorrow, *but probably up cos it went up slightly just before the market closed*.



im not sure thats a reason for the stock to rally tonight. My prediction is lower to slightly lower which will be great to get back in again. I didnt want to take the risk that it bounces hard and i miss stock today so i dipped the toe in..


----------



## Gundini (13 November 2006)

I also jumped out today, although was only holding a light parcel. Just don't like the momentum of the markets at the moment. DOW massively high, Real Estate broken, massive public debt: Just think the economy will slow quicker than they like. Still I think another interest rate rise would be financially responsible to hold the dollar value. On the other hand, the ASX 200 is struggling to move to its new highs, has broken through a 6 month upward trendline, interest rates up, talk of more, world turmoil, high gas prices, don't think its a time to accumulate yet, IMO... I have dumped all but Gold and Oil, and am not a doom and gloom guy, but, I'm short on the ASX 200, and maybe for 250 points. Just not as comfy as I would like, and want to protect my capital, and stay in the game for the big run up to 2008 China Olympics. 

"Is this the start of the pullback we have to have?"

With all due respect of course... Cheers


----------



## Freeballinginawetsuit (13 November 2006)

Gundini said:
			
		

> I also jumped out today, although was only holding a light parcel. Just don't like the momentum of the markets at the moment. DOW massively high, Real Estate broken, massive public debt: Just think the economy will slow quicker than they like. Still I think another interest rate rise would be financially responsible to hold the dollar value. On the other hand, the ASX 200 is struggling to move to its new highs, has broken through a 6 month upward trendline, interest rates up, talk of more, world turmoil, high gas prices, don't think its a time to accumulate yet, IMO... I have dumped all but Gold and Oil, and am not a doom and gloom guy, but, I'm short on the ASX 200, and maybe for 250 points. Just not as comfy as I would like, and want to protect my capital, and stay in the game for the big run up to 2008 China Olympics.
> 
> 
> Has BHP reached highs since May, Nope and considering their commodities/business in which they trade, it just dosen't add up. BHP has basically been sideways for 6 months.
> ...


----------



## wayneL (13 November 2006)

Freeballinginawetsuit said:
			
		

> Has BHP reached highs since May, Nope and considering their commodities/business in which they trade, it just dosen't add up. BHP has basically been sideways for 6 months.
> Personally I think we will see a shorted lived profit take this time around on the midcaps, with the BHP's and RIO's coming out of the blocks leading the way for the Xmas run.
> Their has been no commodities crash since June and BHP's current SP just dosen't stack up, reality has to come to the fore at some point.




Agree. Quite a lot of froth in that SP.

The selling today probably has a lot to do with the technical breakdown in copper and this commodity will be a good leading indicator for BHP IMO. 

FWIW

BHP has been a nice story for ma & pop investors, but it's time to move on IMO. Not to say it can't be traded for decent profit, but make friends with the bears, there money in the downside... again IMO.


----------



## Gundini (13 November 2006)

Has BHP reached highs since May, Nope and considering their commodities/business in which they trade, it just dosen't add up. BHP has basically been sideways for 6 months.
Personally I think we will see a shorted lived profit take this time around on the midcaps, with the BHP's and RIO's coming out of the blocks leading the way for the Xmas run. 
Their has been no commodities crash since June and BHP's current SP just dosen't stack up, reality has to come to the fore at some point.

Hi Freeballing, hey, the fundies are great with the stock, no doubting the biggest miner on the planet, but it has been in a downtrend since May, and if you draw some trend lines, it is possible for it to revisit the $24 level if materials pullback. The Daily MACD looks a shocker, and the Daily Materials Sector MACD looks just as bad. I recon if it busts $26.64, it has futher to go, taking into account my post above. No doubting the stock will then gain momentum for the run through $32 early next year.

All due respect, cheers   

PS, sorry, but not sure how to add charts yet, my program doesnt allow cut and paste


----------



## rosie (13 November 2006)

A quick look at the chart tells me BHP ran into time resistance, last leg was 360 days into $32 high, running out 180 days from there...


----------



## Freeballinginawetsuit (13 November 2006)

Heard all the bearish talk before, the market is due for a pullback and BHP is underpriced and a bargain ATM. 

Geez it can't go sideways all year.


----------



## wayneL (13 November 2006)

rosie said:
			
		

> A quick look at the chart tells me BHP ran into time resistance, last leg was 360 days into $32 high, running out 180 days from there...




What is time resistance Rosie?


----------



## rosie (13 November 2006)

Same as price resistance, only using time instead, when you combine the two you have what is called time & price, some ignore it some use it.


----------



## wayneL (13 November 2006)

Freeballinginawetsuit said:
			
		

> BHP is underpriced and a *bargain* ATM.




Bargain:

I suggest this term is seriously misused, overused and consequently cliche'd, as far as the market is concerned.

Unless the purchase can be immediately arbitraged for a profit, there are no bargains amongst the blue chips.


----------



## wayneL (13 November 2006)

rosie said:
			
		

> Same as price resistance, only using time instead, when you combine the two you have what is called time & price, some ignore it some use it.




Rosie,

For the benefit of us that don't get this time and price thing. Using BHP as an example, how would one calculate time resistance? What is being resisted?

Cheers


----------



## Freeballinginawetsuit (13 November 2006)

I don't trade BHP (I'm not silly), I have however accumalated them on 2 occasions since May and hopefully again in the next few days.

I have offloaded some property in recent months and those funds I am putting into BHP. It is a large sum that I do not wan't to trade or watch but gain a long term return on in the next year, BHP is my decision, and yes I consider them a bargain.


----------



## rosie (13 November 2006)

For the benefit of us that don't get this time and price thing. Using BHP as an example, how would one calculate time resistance? What is being resisted?

As mentioned time went 360 days into high, it has gone 180 days into lower high last week, which makes it 50%, price at 50% of a range is a very strong resistace/support level.


----------



## wayneL (13 November 2006)

Freeballinginawetsuit said:
			
		

> I have offloaded some property in recent months




Good decision IMO.

Why would it be silly to trade BHP?


----------



## BSD (13 November 2006)

Another transfer of money from the impatient to the patient. 


Cu prices have 'broken down' on the chart at least 3 times in the last six months and have 'broken out' about the same number of times to end at about the same! 

And the Chinese economy and metals demand has appeared to have faltered /ended about 6 times in the last three years.

Shorts may swing in and belt the stock/metal some more yet; but they will again be wrong. 

The Chinese are forecast to have drawn-down 500,000 tn of Cu from their State reserves this year -demand is going to ramp again when they get back on the market. This is twice the amount available on the LME.

GDP growth continues at a massive clip in China, mine grades continue to fall and capex continues to blow-out. New copper supply is still years away. 


BHP is trading at 10 times forecast cashflow for next year using Cu numbers well below spot. 

Bulks still strong and oil going up (in my view) - the BHP shorts from the US were probably covering their old shorts last week at $28. These fools were short at $24.50 and they had their @sses handed to them. 


I cannot imagine shorting BHP at these prices on the basis of a copper chart - amazing insight into the current short-termism in equities trading.

One strike/cave-in/inventory drawdown and Cu and BHP will go up by the same magnitude and another hedge fund will lose a leg. 

Even better, Exxon decides to diversify into mining and wagers only four years of free cash on a tilt at BHP. 

That would be truely stunning!


----------



## Freeballinginawetsuit (13 November 2006)

There is no money in trading them ATM, look at their chart. Plenty of better ones out their.

Personally if I was a bit of a risk taker I would have put a large proportion of the aforementioned funds in BDG (Their value is bizzare at the current SP) and PDN, but ATM I am only prepared to trade a certain amount and just looking for a safer alternative with these funds that still achieves potential value IMHO, and thats BHP.


----------



## rosie (13 November 2006)

You could very well be right BSD I trade what the chart tells me


----------



## BSD (13 November 2006)

No criticism Rosie - I am not even bright enough to understand what you are talking about (time resistance, 360 day etc). 


But, in any case, I dont think 1% of demand for copper, oil, iron ore, nickel, coking coal or uranium is linked to such concepts anyway.


----------



## rosie (13 November 2006)

BSD said:
			
		

> No criticism Rosie - I am not even bright enough to understand what you are talking about (time resistance, 360 day etc).
> 
> 
> But, in any case, I dont think 1% of demand for copper, oil, iron ore, nickel, coking coal or uranium is linked to such concepts anyway.




We all look at markets in a different light l guess.


----------



## Freeballinginawetsuit (13 November 2006)

Its not BSD, its just people trying to justify why BHP share price is suffering ATM, the answer could be that they are undervalued, lagging and yet to run to a fair value SP.

The problem is that would be to simple an answer for an analyst/expert or proffessional to deal with, they have to provide reasons as senseless as they maybe!.


----------



## rosie (13 November 2006)

Freeballinginawetsuit said:
			
		

> Its not BSD, its just people trying to justify why BHP share price is suffering ATM, the answer could be that they are undervalued, lagging and yet to run to a fair value SP.
> 
> The problem is that would be to simple an answer for an analyst/expert or proffessional to deal with, they have to provide reasons as senseless as they maybe!.




i recall when the price was $8 it was unloved


----------



## wayneL (13 November 2006)

BSD said:
			
		

> Another transfer of money from the impatient to the patient.
> 
> 
> Cu prices have 'broken down' on the chart at least 3 times in the last six months and have 'broken out' about the same number of times to end at about the same!
> ...




...and another stunningly condescending post from BSD. Will your obviously poor self-esteem not allow you to post opinions and facts without resorting to sarcastic half truths and prevarications ?

BSD, you make some very good points, but also some monumental assumptions that could only come from a seriously depressed imagination, a dogmatic mind and an indoctrinated intellect.

Hedge funds are not the only institutions to "lose a leg"...

"Why do you look at the speck in your brothers eye and ignore the log in your own" (or whatever it says)

Bitter post... bitter post


----------



## Freeballinginawetsuit (13 November 2006)

Of what relevance is that Rosie,  marketplace/commodity cycle was different then. The PDN'S and KZL's were nothing (cents) and Pasminco and Annoconda were in recievership (now ZFX and MRE). What a difference a commodities boom makes.


----------



## wayneL (13 November 2006)

Freeballinginawetsuit said:
			
		

> There is no money in trading them ATM, look at their chart. Plenty of better ones out their.
> 
> Personally if I was a bit of a risk taker I would have put a large proportion of the aforementioned funds in BDG (Their value is bizzare at the current SP) and PDN, but ATM I am only prepared to trade a certain amount and just looking for a safer alternative with these funds that still achieves potential value IMHO, and thats BHP.




Agree there are better charts. But BHP sets up some great opportunities at various times and at that particular point in time there are not many better. 

PS The NYSE version is more tradeable than the ASX. ASX version too gappy.


----------



## constable (13 November 2006)

wayneL said:
			
		

> ...and another stunningly condescending post from BSD. Will your obviously poor self-esteem not allow you to post opinions and facts without resorting to sarcastic half truths and prevarications ?
> 
> BSD, you make some very good points, but also some monumental assumptions that could only come from a seriously depressed imagination, a dogmatic mind and an indoctrinated intellect.
> 
> ...



bhp with a little psychoanalysis ....now this is entertainment!


----------



## rosie (13 November 2006)

Freeballinginawetsuit said:
			
		

> Of what relevance is that Rosie,  marketplace/commodity cycle was different then. The PDN'S and KZL's were nothing (cents) and Pasminco and Annoconda were in recievership (now ZFX and MRE). What a difference a commodities boom makes.




Point being no-one wanted the stock then, now many are chasing at this level. 
As you say the "boom" has driven prices, what goes up....


----------



## rosie (13 November 2006)

rosie said:
			
		

> Point being no-one wanted the stock then, now many are chasing at this level.
> As you say the "boom" has driven prices, what goes up....




Old adage "trade your knowledge" fwiw


----------



## Gundini (13 November 2006)

I so much enjoy all your posts, fantastic guys, Thanks, but don't you regard this resistance point a stumbling block? I mean IMO the pullback that didn't occur in SEPT/OCT is still possible, and for the TA's, it's almost predictable. Am reading it wrong?... Shouldn't we be wary? Is it really a time to accumulate? Just a question, no disrespect intended, cheers


----------



## BSD (13 November 2006)

wayneL said:
			
		

> ...and another stunningly condescending post from BSD. Will your obviously poor self-esteem not allow you to post opinions and facts without resorting to sarcastic half truths and prevarications ?
> 
> BSD, you make some very good points, but also some monumental assumptions that could only come from a seriously depressed imagination, a dogmatic mind and an indoctrinated intellect.
> 
> ...




Being very comfortable with my self-esteem and carrying the 'feeling' of openmindedness I will take this seemingly grumpy post with a grain of salt - for I think you are very sharp Wayne. 

I have no reason for bitterness. Short termists have buttered my bread for a long time and the more they get irrational - the more I feel I benefit. I dont think I post half truths - at least I actually explain my position and dont just say:

"it is going up, i am going to double up here, all the sellers are silly, you are an idiot for selling and not believing this story because my mate said so and even though it wont produce for a decade and it is trading 100 times NPV it i worth another 1000 shares etc" 

Check out the CDU, RDS threads where illiterates abuse me for adding some substance. 

I can truthfully say that I have no idea what Rosie was talking about. Zero and I certainly wouldnt be swinging any Hills around based on something I cannot understand. 

US based hedge funds are the big short players and moves like today are not created by retail punters, CFD players, warrant crumbs or Colonial First State trimming on the back of a Cu chart. They are (and have been) led by short term money from offshore. This is not a monumental assumption. 

Some of my most profitable trades have been on the short side. I just think that shorting companies on 10 times cashflow with rising EPS, strong demand, constrained supply,  50 year mine lives and no debt is not the way to make money.  

There are plenty of dog companies in Australia with expensive PEs and no earnings growth to short. Ex banks and resources, the market is a short. But the momentum players continue to focus on Hills because of its liquidity and their seemingly non-existant ability to understand the metals and energy markets.

Their loss will continue to be our gain.

You dont have to agree - you dont pay me any brokerage!


----------



## Gundini (13 November 2006)

My God that's deep!~ I've got a lot to learn..... Cheers, I'll read that again...


----------



## Ken (13 November 2006)

look back through all your post guys....

when bhp goes up 4% it is hitting the blue sky again...

when it falls 4% its plumeting. 

when will people realise this is part of being a shareholder in the market...

if you cant handle it.... get yourself a fixed interest rate


----------



## spitrader1 (14 November 2006)

Ken said:
			
		

> look back through all your post guys....
> 
> when bhp goes up 4% it is hitting the blue sky again...
> 
> ...




well said ken...overnight down smalls, glad i dipped the toe in.


----------



## Sean K (14 November 2006)

BHP bouncing a little from yesterday's slaughter. Where to next? Probably depends quite a bit on commods of course, but there looks to be pretty good support on the downside at $26.00 and then worst case $24.00. Bad Karma it broke through the 200d ma and $27.00 was a support level. 

On the charts still looks to be going short term sideways in a long term upward trend. Would have to break $24.00 to be in serious trouble. The up trend would continue with a solid break through $28.00. 

Still looks to be a half half proposition IMO, unless you are a firm believer in the stronger for longer supercycle blah blah..

I'm still holding. Bought at $9.90 (in 2002   ), $14 (04), and $26 (06)....

2 year, 1 year and 6 month charts:


----------



## Ken (14 November 2006)

love your graphs kennas. 

Question i post -  that i cant answer my self

Has BHP's uranium production been taken into account as far as share price goes. What happens when there uranium production moves into full swing.

They hold the biggest uranium location in the world correct?  Spot price of Uranium has gone over $50. ERA has gone from $12 to $18 a share. PDN $4 to $6. 

Yet BHP has been steady and if anything flat.

Or is it that BHP is so big it's uranium is just a small portion of the shareholder returns, and other factors play a more important role.

Not sure. but since Uranium has been such a buzz word when people look at stocks just wondering why the worlds biggest producer hasnt been effected (in recent times)

Oh and one last thing.  Media reports on BHP goes in cycles. One week you here they can't keep up with production. Next week you here they are oversupplying. It is a direct relationship with share price. When i rises and falls.

All i know is majority of major port folios contain BHP


----------



## spitrader1 (14 November 2006)

kennas said:
			
		

> BHP bouncing a little from yesterday's slaughter. Where to next? Probably depends quite a bit on commods of course, but there looks to be pretty good support on the downside at $26.00 and then worst case $24.00. Bad Karma it broke through the 200d ma and $27.00 was a support level.
> 
> On the charts still looks to be going short term sideways in a long term upward trend. Would have to break $24.00 to be in serious trouble. The up trend would continue with a solid break through $28.00.
> 
> ...





kennas, you are a credit to ASF.


----------



## Sean K (14 November 2006)

Ken said:
			
		

> love your graphs kennas.
> 
> Question i post -  that i cant answer my self
> 
> ...




They would have most of their current uranium production sold forward in contracts out to maybe even 2010. Not sure of the exact dates and price. Anything extra they start digging up next year they will be able to set new contracts for or sell at spot. Lots of upside there. The upgraded resource stimate for OD should be out in Jan/Feb. Will be a big boost for BHP I reckon.


----------



## GreatPig (14 November 2006)

On a weekly chart, it could be either in a downtrend channel or forming a bearish triangle, depending on how you like your poison.

Very similar shape to the gold chart actually.

GP


----------



## Ken (14 November 2006)

i understand how it can be frustrating for many investors, especially if they are holding stock on BHP via margin loan.  

the way i see it. if i take my money out of BHP. where else am i going to put it....

theres not a whole heap of undervalued stocks out there.

I am not a day trader so i guess a bit different for me.


----------



## Sean K (14 November 2006)

Ken said:
			
		

> i understand how it can be frustrating for many investors, especially if they are holding stock on BHP via margin loan.
> 
> the way i see it. if i take my money out of BHP. where else am i going to put it....
> 
> ...



Good red should hold up. I recommend a few dozen Hill of Grace.   I'll take one for the financial advice..


----------



## nizar (14 November 2006)

Ken said:
			
		

> i understand how it can be frustrating for many investors, especially if they are holding stock on BHP via margin loan.
> 
> the way i see it. if i take my money out of BHP. where else am i going to put it....
> 
> ...




I think zinifex is incredibly undervalued, but thats my personal opinion. Earnings forecasts and industry outlook for zinc mite give you a few pointers as to why.
BHP is more a copper play and:



> Copper for delivery in three months on the LME was quoted at $6,850 a tonne after losing $410, or 5.6 percent, to $6,900 in London on Friday after LME stocks leapt 1,625 tonnes to 148,200, up 54 percent from the start of the year.



http://today.reuters.com/news/artic...eexportedtoAsiainValparaisoport&from=business


Their sensitivity to copper price to NPAT is $20million per CENT/lb
And to oil about $20million per DOLLAR/barrel

Not the best stock to hold when copper and oil are going down. Long term outlook, i like BHP due to their oil and uranium exposrure.


----------



## bigdog (14 November 2006)

Nizar,

Can you please advise me how to post quotes per you last post
-----------------------------------------------------------------
Quote:
Originally Posted by Ken
i understand how it can be frustrating for many investors, especially if they are holding stock on BHP via margin loan. 

the way i see it. if i take my money out of BHP. where else am i going to put it....

theres not a whole heap of undervalued stocks out there.

I am not a day trader so i guess a bit different for me. 
--------------------------------------------------------------------


----------



## nizar (14 November 2006)

bigdog said:
			
		

> Nizar,
> 
> Can you please advise me how to post quotes per you last post
> -----------------------------------------------------------------
> ...




bigdog,

click on "quote" instead of reply
OR
write [QUuOTE="poster name"]insert text to be quoted here, from copy and paste or wateva[/QUOTE]

(obviously spell quote properly, but if i didnt do that it will actually quote)


----------



## Sean K (14 November 2006)

Latest broker reports:

*ABN Amro* rates the stock as Buy - The broker notes the company''s short-term oil production profile has been improved by the purchase of the Genghis Khan field in the Gulf of Mexico, but delivery of production targets will be required to get full value from the acquisition.

In the broker''s view the company paid a reasonable price for the acquisition and it expects it will add around 1% to earnings in FY08.

Target price is $34.00 Current Price is $26.84 Difference:$7.16 - (brackets indicate current price is over target). If BHP meets the ABN Amro target it will return approximately 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).

*Credit Suisse* rates the stock as Outperform - On the broker''s estimates the purchase of the Genghis Khan field in the Gulf of Mexico will add 12-30% to the company''s reserves, while it will be able to soon bring the asset into production.

It suggests the company paid a reasonable price for the asset.

Target price is $37.58 Current Price is $26.84 Difference:$10.74 - (brackets indicate current price is over target). If BHP meets the Credit Suisse target it will return approximately 40% (excluding dividends, fees and charges - negative figures indicate an expected loss).

*Deutsche Bank* rates the stock as Buy - BHP and partners paid a full price for the purchase of the Genghis Khan oil and gas project, Deutsche Bank suggests. The analysts hasten to add they believe purchase price is nevertheless "reasonable".

They believe key reasons behind the transaction are the ability to bring additional production on line whilst the oil price is high, and to add benefits from the development synergies of having two fields so close to each other.

Target price is $32.36 Current Price is $26.84 Difference:$5.52 - (brackets indicate current price is over target). If BHP meets the Deutsche Bank target it will return approximately 21% (excluding dividends, fees and charges - negative figures indicate an expected loss).

*Macquarie* rates the stock as Outperform - The Genghis Khan acquisition just goes to show BHP''s ability to jump at world-class, valuable opportunities, the broker suggests.

Target price is $32.55 Current Price is $26.84 Difference:$5.71 - (brackets indicate current price is over target). If BHP meets the Macquarie target it will return approximately 21% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company''s fiscal year ends in June. Macquarie forecasts a full year FY07 dividend of 0.00 cents and EPS of 208.30 cents .

*Merrill Lynch* rates the stock as Buy, Medium Risk - The broker continues to maintain a Buy rating, but suggests "trimming" positions in a Dec quarter rally ahead of adverse effects of US slowing in early 2007.

Target price is $35.00 Current Price is $26.84 Difference:$8.16 - (brackets indicate current price is over target). If BHP meets the Merrill Lynch target it will return approximately 30% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company''s fiscal year ends in June. Merrill Lynch forecasts a full year FY07 dividend of 56.80 cents and EPS of 314.50 cents . At the last closing share price the estimated dividend yield is 2.12%.

*UBS* rates the stock as Buy 2 - The broker suggests the acquisition of Genghis Khan is a good move at a reasonable price.

Target price is $36.00 Current Price is $26.84 Difference:$9.16 - (brackets indicate current price is over target). If BHP meets the UBS target it will return approximately 34% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company''s fiscal year ends in June. UBS forecasts a full year FY07 dividend of 59.40 cents and EPS of 310.50 cents . At the last closing share price the estimated dividend yield is 2.21%.


----------



## Kauri (14 November 2006)

And on the daily charts I would rate it as a cautious buy  , would feel better if it moves strongly up through the $28.40 area.. looking for $34-$36..


----------



## nizar (14 November 2006)

kennas said:
			
		

> Latest broker reports:
> 
> *ABN Amro* rates the stock as Buy - The broker notes the company''s short-term oil production profile has been improved by the purchase of the Genghis Khan field in the Gulf of Mexico, but delivery of production targets will be required to get full value from the acquisition.
> 
> ...




Broker reports have been bullish for ages.


----------



## Sean K (14 November 2006)

nizar said:
			
		

> Broker reports have been bullish for ages.



Yep. Are they all willing to get this so wrong? Is it just a matter of the sheep to the slaughter, or do they actually understand world economics, supply/demand, yada yada.


----------



## Kauri (14 November 2006)

kennas said:
			
		

> Yep. Are they all willing to get this so wrong? Is it just a matter of the sheep to the slaughter, or do they actually understand world economics, supply/demand, yada yada.




     When did a broker have anything but a buy rec. of some sort on BHP. Although the S/P rises over time, there have been periods when it has fallen.


----------



## Knobby22 (14 November 2006)

kennas said:
			
		

> Yep. Are they all willing to get this so wrong? Is it just a matter of the sheep to the slaughter, or do they actually understand world economics, supply/demand, yada yada.




I am bullish on this stock for fundamental reasons, bought at $25.
You bears are too quick sometimes. There is a thread somewhere predicting the mineral collapse nearly a year ago and don't forget BHP is also an energy company.


----------



## The Mint Man (14 November 2006)

Kauri said:
			
		

> When did a broker have anything but a buy rec. of some sort on BHP. Although the S/P rises over time, there have been periods when it has fallen.



 share prices fall?
damn  

cheers


----------



## scsl (14 November 2006)

Does anyone else think that while the BHP sp has been going sideways/down these past few months, the targets set by the brokers keep getting higher?


----------



## Sean K (14 November 2006)

scsl said:
			
		

> Does anyone else think that while the BHP sp has been going sideways/down these past few months, the targets set by the brokers keep getting higher?



Definately sideways and some short term down. Maybe even medium term down. Break under $24.00 will be very negative. Above $28.00 and it's going up IMO.


----------



## Ken (14 November 2006)

it was $28 2 days a go.... before dropping 4% to where it is now.

Was the run from $24 to $28 in the past month to fast....  that would have made a fair few people take profits

the faster it goes up the faster it comes down.


----------



## Sean K (14 November 2006)

Ken said:
			
		

> it was $28 2 days a go.... before dropping 4% to where it is now.
> 
> Was the run from $24 to $28 in the past month to fast....  that would have made a fair few people take profits
> 
> the faster it goes up the faster it comes down.



Yes, faster, faster...agree.

$28.00 was never really 'broken' though. Spent some time above and just once overnight I think. Needs to clear it, and stay above for 3 days and retest it as support and continue to climb. That might be a little bit off...But I do have memories of April.   $23.50 to $28.00+.


----------



## imaginator (16 November 2006)

guys the only support i see is possibly $26.00.
Do u think its gonna fall lower than that?

I think perhaps, since the All Ords is a bit shaky these few days.
I do feel the market is overheated and its time it plunge like in mid September,

what do u think?


----------



## Sean K (16 November 2006)

imaginator said:
			
		

> guys the only support i see is possibly $26.00.
> Do u think its gonna fall lower than that?
> 
> I think perhaps, since the All Ords is a bit shaky these few days.
> ...



Yep, then $24.00.


----------



## HRL (16 November 2006)

Let it drop until payday... then I will be in! This is still rated a buy/strong buy and predicted to be well above $30 for a 12mth target.  Hold and relax surely?  Actually the call options for middle of next year are looking more attractive the lower the sp goes.  $30 opts for Jun 07 were $1.70-1.80 only a couple of weeks ago and are now $1.30.


----------



## Ken (16 November 2006)

the market does feel like its overheated. 

For bhp and rio to kick on past $30 does there need to be a shift in stocks the big fish are holding . 

Changing from the banks, and other defensive stocks, into the resource sector again, or is it just a matter of resources stocks bouncing like they have been of late

bhp is still undervalued to me.


----------



## marklar (16 November 2006)

Ken said:
			
		

> bhp is still undervalued to me.



I took profit from ARR and got me some BHP yesterday.

m.


----------



## scsl (16 November 2006)

It has BEGUN!!



> Baosteel is expected to be in talks with miners including Australia's BHP Billiton Ltd. (BHP), Rio Tinto PLC (RTP), and Companhia Vale do Rio Doce (RIO), or CVRD, of Brazil. BHP, Rio Tinto and CVRD account for a combined 70% of global iron ore export sales.
> 
> In June, China's steel producers accepted a 19% increase in iron ore prices for 2006, which followed a 71.5% hike for 2005.
> 
> ...


----------



## Ken (16 November 2006)

what has begun....


----------



## spitrader1 (16 November 2006)

marklar said:
			
		

> I took profit from ARR and got me some BHP yesterday.
> 
> m.



i did exactly the same thing the other day mark


----------



## scsl (16 November 2006)

Ken said:
			
		

> what has begun....



The 2007 iron ore price negotiations, which will last a few months.


----------



## Out Too Soon (16 November 2006)

marklar said:
			
		

> I took profit from ARR and got me some BHP yesterday.
> 
> m.




I did similar thing back in APril for $29, still waiting for a profit so I can unload them, BHP's like money in the bank, a safe place when the going get's tough.   Wish I hadn't of cause but can't lose in the long run.


----------



## imaginator (16 November 2006)

what do u mean payday? when is ex-d for bhp?


----------



## spitrader1 (16 November 2006)

imaginator said:
			
		

> what do u mean payday? when is ex-d for bhp?



i think the most amusing thing about BHP is no one has accounted for the U bull. All the other U stocks are going through the roof, like DYL/PDN etc, but no one has even looked at hills, and they are sitting there with olympic dam!! spot price released on wednesday at 62.50, up another 4% WOW


----------



## nizar (16 November 2006)

spitrader1 said:
			
		

> i think the most amusing thing about BHP is no one has accounted for the U bull. All the other U stocks are going through the roof, like DYL/PDN etc, but no one has even looked at hills, and they are sitting there with olympic dam!! spot price released on wednesday at 62.50, up another 4% WOW




WMC hedged uranium the way ERA did, so all output from olympic dam up until 2008 is hedged and sold at prices well below spot (think us$15-20/lb).


----------



## Kauri (17 November 2006)

Kauri said:
			
		

> 14/11/06  And on the daily charts I would rate it as a cautious buy  , would feel better if it moves strongly up through the $28.40 area.. looking for $34-$36..




    Not so cautious now, another good positive vol/higher close day on Mon and I will be on.


----------



## rederob (17 November 2006)

Kauri said:
			
		

> Not so cautious now, another good positive vol/higher close day on Mon and I will be on.



Kauri
I reckon your suggested lines of attack are on the money.
Unfortunately I don't think BHP is going to take off until oil takes off again.
Although I reckon that's a matter of only months away, and present price of BHP is only the odd dollar off probable medium term low.
If you work on the basis of a buy at $26 and a target of only $32 next year, that's still almost a 25% profit (and there will be a small div between times).
at the moment the iron ore price negotiations are still looking at a small (say 10%) increase over present prices.  If that is the case BHP will have to do something with its excess cash a bit more meaningful.
I reckon there are some folk avoiding BHP on the basis it is just not giving enough back - it's a lot to outlay just to be on a "growth" stock.


----------



## Ken (17 November 2006)

well maybe the $30+ broking target prices know something we dont....

special dividend?  increased dividend?


----------



## nizar (17 November 2006)

rederob said:
			
		

> Unfortunately I don't think BHP is going to take off until oil takes off again.




I agree.
The Yanks in particular view BHP as almost solely an oil business, and thus it trades there accordingly.
Another big earner for BHP is copper. Their sensitivity to the copper price is $20million in NPAT bottom line for every 1cent movement in price. Dont get me wrong - olympic dam was profitable at 70c/lb - but the fact that spot copper is taking a beating means BHP will suffer.
But as a long term hold, i can think of very few better stocks.


----------



## Nick Radge (17 November 2006)

Interesting chart Kauri


----------



## rocker (17 November 2006)

And suffering it is at moment. Down nearly 3% in London already. And copper
just gone under $3lb u.s. Doesn't bode well for monday.


----------



## michael_selway (17 November 2006)

nizar said:
			
		

> I agree.
> The Yanks in particular view BHP as almost solely an oil business, and thus it trades there accordingly.
> Another big earner for BHP is copper. Their sensitivity to the copper price is $20million in NPAT bottom line for every 1cent movement in price. Dont get me wrong - olympic dam was profitable at 70c/lb - but the fact that spot copper is taking a beating means BHP will suffer.
> But as a long term hold, i can think of very few better stocks.




Nizar long term doesn copper price go down more? So why long term?

thx

MS


----------



## nizar (17 November 2006)

michael_selway said:
			
		

> Nizar long term doesn copper price go down more? So why long term?
> 
> thx
> 
> MS




Long term i think copper will be average around us$2.50/lb (2008 and beyond). It wont get to as low as us$1.80/lb (as most analysts use) because IMO the demand side of the equation has been altered permanently. After China you have India. India is at least 10 years behind China and even China has been growing for 27 years and its not slowing down. And then Brazil, Russia. People dont refer to the growth economies of the world as Chindia anymore. Its now called BRIC.

Dont forget that the copper stocks, though up 44% this year, are still very low by historical standards and accounts for only 3.1 days of global consumption. Any supply shocks and its welcome back for the bulls.

BHP is still VERY profitable at us$2.50/lb copper.

Also, Longer term oil will become more expensive (Ghawar will be no more in about 10 years), and uranium from Olympic Dam will make up a much larger part of BHPs earnings. A MUCH larger part.

Rederob and others, any ideas why BHP didnt hedge copper when it was ~us$3.70 knowing that at least in part, it will be THEIR OWN production increases that will bring down the spot price?

Obviously if this was to happen ie. hedging, analysts would all upgrade their long term earnings and the sp would also benefit. Surely Chip didnt think copper would stay in the high 3s forever?


----------



## Kauri (18 November 2006)

Thanks for all the information guys, it's appreciated. I trade purely by chart, and have enough trouble doing that, I get a headache rivalling that given by a bad red when I attempt to fathom the micro/macro earnings/outlook side of things, so I pretty much leave the fundaments to the fundamentalists. The way I see it is if copper remains tarnished overnight and oil doesn't fire up then BHP's price on Moonday will reflect this and my entry invitation will not appear. 
Famous last words...


----------



## Sean K (21 November 2006)

BHP entering top up territory for me. I think in the $24.00 - $26.00 zone it looks pretty good IMO. I am a believer in the stronger for longer thingy though, so if that doesn't happen, perhaps $10.00 will be a better price.    

Should at least see a technical bounce from $26, $25 and $24, on the way down. If it keeps going down...I suppose it will if POC and POI keep sliding.....


----------



## nizar (21 November 2006)

kennas said:
			
		

> BHP entering top up territory for me. I think in the $24.00 - $26.00 zone it looks pretty good IMO. I am a believer in the stronger for longer thingy though, so if that doesn't happen, perhaps $10.00 will be a better price.
> 
> Should at least see a technical bounce from $26, $25 and $24, on the way down. If it keeps going down...I suppose it will if POC and POI keep sliding.....




POI?
Do you mean POO as in price of Oil ?


----------



## Sean K (21 November 2006)

nizar said:
			
		

> POI?
> Do you mean POO as in price of Oil ?



 Yep, POO. Or, maybe, Price of Iridium?


----------



## rosie (21 November 2006)

Be careful punters...tried to warn you what the chart god's were saying


----------



## wayneL (21 November 2006)

rosie said:
			
		

> Be careful punters...tried to warn you what the chart god's were saying




Eyes on copper too.

Overseas particularly, BHP is seen as a copper play... and copper* needs* to supported right here if the bulls are to have any chance.


----------



## michael_selway (21 November 2006)

wayneL said:
			
		

> Eyes on copper too.
> 
> Overseas particularly, BHP is seen as a copper play... and copper* needs* to supported right here if the bulls are to have any chance.




Yeah theres no more upside to Copper price imo

thx

MS


----------



## rosie (21 November 2006)

michael_selway said:
			
		

> Yeah theres no more upside to Copper price imo
> 
> thx
> 
> MS




Copper chart not happy.


----------



## wayneL (21 November 2006)

This calls for a chart  

Various lines thrown on ad-lib, but it's currently at the line in the sand as far as I am concerned.


----------



## rosie (21 November 2006)

Bouncing off obvious support, when that gives...

Cheers.


----------



## rosie (21 November 2006)

rosie said:
			
		

> Be careful punters...tried to warn you what the chart god's were saying




Chart fwiw.


----------



## nizar (21 November 2006)

wayneL said:
			
		

> Eyes on copper too.
> 
> Overseas particularly, BHP is seen as a copper play... and copper* needs* to supported right here if the bulls are to have any chance.




Maybe in London.
Yanks see it almost as a pure oiler.

Doesnt help much when oil and copper both tanking.


----------



## TheRage (22 November 2006)

rosie said:
			
		

> Chart fwiw.




I think it is pointless showing the BHP price chart when you consider that Bluescope demerged from BHP along this timeline. Some of the rapid growth in the share price experienced by BHP over the last few years has been due to the economic environment, I am not questioning that. However getting rid of  bluescope seem to improve earnings in a positive manner also. Business consolidation can sometimes improve cost efficiencies and refocuss the business. I think it is a little bit like comparing apples with oranges when you include a share price chart that includes a major restructuring within a business. In 03 BHP drops bluescope as evidenced by the reduction in shares outstanding below. Earnings per share improved dramatically by dropping this poor manufacturing component of the business. Not to mention BHP continues to buy back it's own shares with surplus cash. Therefore while the chart shows rapid growth and possible contraction I think I would prefer to use earnings data as a guide to forecasting the future over indicators. I don't disagree that the price of oil and copper will definately impact on earnings but the quantification of this impact can be calculated merely by multipling the segment of BHP business contributed by these areas then discounting back to an approximate price copper and oil maybe in two years, picking the worst case scenario, and presto an idea of where the earnings from these components of the business will be. Remember BHP is made up of 6 segments. By the way I don't own BHP, but if they creep a little lower I may be tempted.


	May-97	May-98	May-99	Jun-00	Jun-01	Jun-02	Jun-03	Jun-04	Jun-05	Jun-05
Sales ($)	2.16	2.12	1.88	1.88	2.05	1.63	3.76
             5.32	6.77	7.27
Cash flow (cents)	41.2	35.6	35	34.4	43.9	38.2	87.4	118.7	189.8	232.5
Earnings (cents)	14.3	13	3.6	17.8	28.7	19.4	45.3	78.2	128.4	225.4
Dividends (cents)	8.6	8.6	8.6	5.7	17.8	8	21.7	37.7	36.7	48.4
Franking (%)	51	100	100	--	51	100	100	100	100	100
Capital Spending (cents)	-49	-45	-31.8	-12.9	-39	-28.2	-70.3	-70.7	-92.8	-133.3
Book Value ($)	1.07	0.96	0.84	0.98	1.41	1.32	3	3.51	3.9	5.43
Shares outstand (m)	11,741.80	12,069.10	10,294.80	10,522.70	17,224.50	17,224.50	6,215.80	6,227.60	6,056.10	6,000.00


----------



## rosie (22 November 2006)

TheRage said:
			
		

> I think it is pointless showing the BHP price chart when you consider that Bluescope demerged from BHP along this timeline. Some of the rapid growth in the share price experienced by BHP over the last few years has been due to the economic environment, I am not questioning that. However getting rid of  bluescope seem to improve earnings in a positive manner also. Business consolidation can sometimes improve cost efficiencies and refocuss the business. I think it is a little bit like comparing apples with oranges when you include a share price chart that includes a major restructuring within a business. In 03 BHP drops bluescope as evidenced by the reduction in shares outstanding below. Earnings per share improved dramatically by dropping this poor manufacturing component of the business. Not to mention BHP continues to buy back it's own shares with surplus cash. Therefore while the chart shows rapid growth and possible contraction I think I would prefer to use earnings data as a guide to forecasting the future over indicators. I don't disagree that the price of oil and copper will definately impact on earnings but the quantification of this impact can be calculated merely by multipling the segment of BHP business contributed by these areas then discounting back to an approximate price copper and oil maybe in two years, picking the worst case scenario, and presto an idea of where the earnings from these components of the business will be. Remember BHP is made up of 6 segments. By the way I don't own BHP, but if they creep a little lower I may be tempted.
> 
> That's your opininion which is fine, l trade what is on the chart, not fundamentals... as for being pointless l disagree, but willl keep in mind next time l have the urge to post a chart.
> Cheers.


----------



## Kauri (23 November 2006)

You've gotta love these rumours.. from Metalsplace....



Predator Freeport-McMoRan Copper & Gold Inc. (FCX) may itself become a takeover target with Credit Suisse tipping a bid from mining giant BHP Ltd. (BHP) as a possibility.

Freeport is carrying out a US$25.9 billion friendly takeover of rival US miner Phelps Dodge Corp. (PD) that will create the world's biggest copper producer.

But the deal may never get done if Freeport itself becomes a target of the consolidation taking place in the global mining industry.

Credit Suisse said BHP Billiton and other global miners will be looking at Freeport "now that the Freeport/Phelps Dodge space is in play".

"The probability of BHP going beyond a cursory look would likely be around 50:50," Credit Suisse analysts said in a client note Wednesday.

Credit Suisse said funding the purchase would not stretch BHP and winning control of Freeport's Grasberg mine in West Papua would strengthen its copper position, lifting its reserves by about 30%.

The acquisition would also bring down average costs and make BHP the fourth lowest cost copper producer from its current position as sixth.

Freeport's free cash flow suggests a payback period of about seven years, which Credit Suisse said is "OK, but not a 'no brainer'".

But the purchase could also increase risk, Credit Suisse said, and BHP may have trouble convincing investors the deal makes more sense than an extension of its share buyback program.


----------



## TheRage (23 November 2006)

rosie said:
			
		

> TheRage said:
> 
> 
> 
> ...


----------



## BSD (23 November 2006)

Kauri said:
			
		

> You've gotta love these rumours..





I will see your rumour and raise with this!

(EDITED BY ME)

=DJ Qantas May Be Precursor To Global Mega-Merger 

   By Rebecca Thurlow and Alex Wilson 
   Of DOW JONES NEWSWIRES 

  SYDNEY (Dow Jones)--With Qantas Airways Ltd. (QAN.AU) in the takeover spotlight, 
analysts are now asking how long investors will have to wait before there is a truly 
*global mega-merger in Australia, perhaps with miner BHP Billiton (BHP) as a US$115 
billion-plus target. *   "The broader implications are that no company really seems out of reach, 
particularly those once thought perhaps too cyclical for private equity interest," 
said Matt Williams, a senior portfolio manager at Perpetual Investments. 
  "So really it confirms that no one is particularly safe in the market," said 
Williams. 

  For fund managers, it is the latest example of the M&A frenzy in the local market 
that Rob Patterson from funds manager Argo Investments complains could lead to his group 
ending up as a "cashbox". 
  Charlie Aitken, head trader at institutional brokerage firm Southern Cross Equities, 
said the offer put to Qantas has enormous ramifications for other bluechip stocks. 
  "If Qantas can attract private equity interest then just about the entire 
Australian market is in play," Aitken said. 
  "People need to strongly consider the ramifications of this move; this is massive 
news." 
  Visiting Australia last month from his New York base, Carlyle Group founder David 
Rubenstein told the Australian Financial Review newspaper that the traditional reluctance 
of private equity to buy natural resources companies because of their unpredictable 
cashflow has changed. 
  "Previous to that, the resources sector was definitely thought of as being too 
cyclical for private equity," said Greg Goodsell, equity strategist at ABN AMRO. 
  "Rubenstein's argument was that commodity prices will stay up and become less 
cyclical, which makes those sorts of businesses potentially of interest." 
*JP Morgan analyst David George said global miners Rio Tinto (RTP) and BHP Billiton - 
usually thought of as predators - could become targets. 
  "There is a lot of trapped value in those two companies," he said. 
  "They are big but there are some big transactions going on so we have got to start 
thinking about who potentially might cop it." * 

  Tim Sims, managing director of Australian-based Pacific Equity Partners, said the local 
M&A pace will intensify. 
  "There's no structural reason why we shouldn't be seeing similar levels 
of private equity involvement in deals as the U.K., Europe and the U.S.," Sims told 
Dow Jones Newswires. 

  The mining and energy giant is based in Melbourne, with a global workforce of 38,000 in 
25 countries. Its operations stretch across base metals and uranium mining, iron ore and 
coal mining, and petroleum production. 

  "But what (private equity players) have found when they come here is there are 
some great businesses with great management teams and a very stable economic environment, 
which has resulted in great opportunities to make money," Knox said. 
   -By Rebecca Thurlow, Dow Jones Newswires; 61-2-8235-2959; rebecca.thurlow@dowjones.com 

   (Alex Wilson and Susan Murdoch in Melbourne, and Lyndal McFarland in Sydney 
contributed to this article.) 
   -Edited by Ian Pemberton 

  (END) Dow Jones Newswires 
  November 22, 2006 02:06 ET (07:06 GMT) 
  Copyright (c) 2006 Dow Jones & Company, Inc.
_____________________________________________________


----------



## wayneL (23 November 2006)

Now that would be something!!!


----------



## BSD (25 November 2006)

Copper rallying sharply and oil up

BHP down - difficult to understand

Does anyone else think the market is expecting BHP to launch a bid for Freeport/Phelps?


----------



## ducati916 (25 November 2006)

BSD said:
			
		

> Copper rallying sharply and oil up
> 
> BHP down - difficult to understand
> 
> Does anyone else think the market is expecting BHP to launch a bid for Freeport/Phelps?




BHP is overvalued, and, should they launch a bid for Freeport, or, Phelps Dodge, they would destroy huge shareholder wealth.

jog on
d998


----------



## Freeballinginawetsuit (25 November 2006)

BSD said:
			
		

> Copper rallying sharply and oil up
> 
> BHP down - difficult to understand
> 
> Does anyone else think the market is expecting BHP to launch a bid for Freeport/Phelps?





BHP would have to be silly to bid for Freeport, but they have done stranger business decisions in the past (Headland HBI, Beenup and canning half of Newmans workforce in 99 to name a few!). It would certainly not be in the interest of their Shareholders, and I am one of those  .

As for BHP being overvalued, thats akin to them bidding for Freeport, ridiculous!. Youre sounding like a subscriber to the T3 float.


----------



## ice (25 November 2006)

As for BHP being overvalued said:
			
		

> The market decides that, and it doesn't appear to agree with you.
> 
> ice


----------



## Kauri (25 November 2006)

BSD said:
			
		

> Copper rallying sharply and oil up
> 
> BHP down - difficult to understand
> 
> Does anyone else think the market is expecting BHP to launch a bid for Freeport/Phelps?




       Don't know what to think anymore..    

       In the West Australian paper today



*Foster’s, Rio Tinto in private equity sights 
*_25th November 2006, 7:00 WST

_Having stalked Australian companies such as Coles Group and Qantas, insatiable private equity firms with up to $US300 billion ($387 billion) to spend are now believed to have set their sights on other giants such as Telstra, Foster’s and Rio Tinto. 

As investors digest the possibility of a takeover of Qantas by a consortium led by Macquarie Bank and US private equity firm Texas Pacific, the market is now considering which other companies may face a bid. 

The hit list includes David Jones and the Australian Stock Exchange. 

Aequs Securities institutional dealer Ric Klusman said US-based private equity firms had been targeting US companies for nearly 15 years, stripping the market of most opportunities and they were now looking at other markets, particularly Australia. 

“Companies in Australia seem cheap to them,” Mr Klusman said. 

Comparable US companies were trading at twice the price to earnings ratio and generating lower yields than many Australian companies which represented good buying opportunities. 

“The big players are looking to grow but they can’t get their growth through organic means so they have to take out their opposition and they are prepared to do that at a higher price,” Sentinel Stockbroking chief executive Norman Robinson said. 

Mr Robinson warned that many assets were overpriced and said that because of their high leverage private equity groups would be vulnerable to higher interest rates or slower economic growth. 

Mr Klusman said private equity firms would not launch any hostile takeover bids which could delay the capital investment and therefore future returns. 

“It has to be friendly and it has to be almost guaranteed of going through,” he said. 

Foster’s remains in the frame, with its shares racing to a record high yesterday on unusually high volumes amid rumours of an imminent bid by Belgian brewer Inbev or a private equity consortium. 

Another European group is also understood to be readying a tilt at paper and plastics group Amcor, with broking house Goldman Sachs JBWere working behind the scenes to get a bid up. 

Mr Klusman also predicted a move would be made on the Australian Stock Exchange but said current legislation prevented majority foreign ownership. 

Research director at Shaw Stockbroking Scott Marshall said the private equity groups were looking for companies that would provide a strong return down the track. 

“They are looking at very strong brands and something that can be offloaded relatively easily down the track and they are looking at companies that have fallen on hard times,” he said. 

“These investors have gone around the world in the last few decades acquiring assets and Australia is just the target of the month.” 

Hartleys broker Ian Parker forecast there would be at least six takeover bids by Christmas, with the strong merger and acquisition activity continuing into 2007. 

The recent move by Freeport-McMoRan Copper & Gold to buy out Phelps Dodge at a premium had re-rated global resource stocks by 25 to 30 per cent, sparking a spending spree by private equity groups, he said. 

“This thing gets a life of its own and it starts filtering down, starting with the big quality companies, then goes to the lesser quality companies,” he said. 

“It would need a major external shock to the system to stop this.” 

ABN AMRO investment manager Tim Carvolth identified Telstra as the biggest sitting duck, with the recent Federal Government sell-off of Telstra shares changing the company’s fundamentals. 

“Like Qantas, one of the most profitable airlines in the world, Telstra is one of the most profitable telcos in the world for its size,” he said. 

TRACEY COOK and REBECCA KEENAN


----------



## BSD (25 November 2006)

Buying Freeport doesn't make huge sense. One mine risk in a very poor place in the world to do business. Great mine though 

BHP has been avoiding the regions like Africa and Central Asia. It will be interesting to see how long this lasts with some mid cap players doing well in Africa (Congo/Zambia/Tanzania)


BHP would be better having a crack at RIO

Both have very lazy balance sheets and diversified, long mine life assets.

Rio has missed the boat so far and have left themselves exposed. 

The Chinese would squeal if the big bulks joined hands - iron ore would be controlled by an even smaller cartel. 

BHP et al are becoming price makers in this consolidation phase; an excellent justification for the stronger for longer club



The only way BHP is overvalued is if you think Cu, Ni and Oil are going to drop by at least 40% in the next two years.


----------



## Freeballinginawetsuit (25 November 2006)

The market simply "is", it doesn't always reflect fundamentals of a business or the commoditys in which it derives it's income or the outlook for said commodities on a global scale.

Many examples of this can be seen this year, last year and so on. The market is a herd that follows, it follows the lead of the big players once they have made their call and take positions, again plenty of evidence of this in recent commodities and companies in recent times. A low SP for you may an entirely different view for me, it may be my accumalate point. 

I'm only interested in my outlook on certain commodities and trading stocks to my percieved targets and entering/exiting as such.

BHP at present is a strange one, despite the majority of its business interests generating historical premiums, its SP is lagging and its undervalued IMO.

I'm not at all interested what the market considers as BHP's value short term, every opportunity its sold down I'm accumalting and haven't traded them at all since April. 

At  some point in time positions will be taken in BHP, the herds will follow and their fundamentals will be reflected in their SP. BHP are the largest weight on the materials index. 

The call was made in August on commodities, we were only a smidgen away from a Bear in my opinion, one more lower high and my opinion on BHP and materials/global outlook short term may have been different  , its not and I'm happy with my call.

By the way BHP is only a stock which I margin on, I'm not interested in trading it and are more interested in a perhaps 30 percent profit target (with a bit of STOP safety) this financial year, should get their I reckon.


----------



## Ken (25 November 2006)

will we see BHP hit $24 again.... 

who will margin lend.... or are they worth margin lending if they dip to 25.60ish...


----------



## wayneL (25 November 2006)

BSD said:
			
		

> Copper rallying sharply




Yowza!

It looked to doing so, but has laid up a nasty reversal bar.

Bearish when drawing a line through the USD

http://avalonian.wordpress.com/copper-charts/


----------



## pacer (25 November 2006)

Freeballinginawetsuit said:
			
		

> BHP would have to be silly to bid for Freeport, but they have done stranger business decisions in the past (Headland HBI, Beenup and canning half of Newmans workforce in 99 to name a few!). It would certainly not be in the interest of their Shareholders, and I am one of those  .
> 
> As for BHP being overvalued, thats akin to them bidding for Freeport, ridiculous!. Youre sounding like a subscriber to the T3 float.




I was 'ON THE LINE' when the brought in the coppers to 'break the line'  in Newman a few years back.....I snuck up on a copper chick and whispered in her ear.....


----------



## pacer (25 November 2006)

You wouldn't do that to you own union...why us....3-4 years later they protest and not a single miner was brought in to quell the unrest...
I now value BHP in the low $24 mark....was high $23 estimate in my quotes previously but % interst has been accounted for now.... 3-4 months ago and you all laughed....:......Low $24 is almost a certainty.....


----------



## rederob (25 November 2006)

pacer said:
			
		

> You wouldn't do that to you own union...why us....3-4 years later they protest and not a single miner was brought in to quell the unrest...
> I now value BHP in the low $24 mark....was high $23 estimate in my quotes previously but % interst has been accounted for now.... 3-4 months ago and you all laughed....:......Low $24 is almost a certainty.....



pacer
I do hope you are wrong.
On Monday I expect to have added BHP (again) to my portfolio.
I am hoping that I hold it for a few years, as I did the last few occasions.


----------



## constable (25 November 2006)

rederob said:
			
		

> pacer
> I do hope you are wrong.
> On Monday I expect to have added BHP (again) to my portfolio.
> I am hoping that I hold it for a few years, as I did the last few occasions.



I dont own any bhp shares but if had a spare 20k would certainly park it with them. I feel that the growth coming out of india and china is too easily underestimated and much rather than a fall in commodity prices we should see a consolidation. Plus at the end of the day bhp is still a target for the equity monsters who will eventually take over the planet!


----------



## pacer (25 November 2006)

constable said:
			
		

> I dont own any bhp shares but if had a spare 20k would certainly park it with them. I feel that the growth coming out of india and china is too easily underestimated and much rather than a fall in commodity prices we should see a consolidation. Plus at the end of the day bhp is still a target for the equity monsters who will eventually take over the planet!




BHP is a takeover target.....all them people putting an extra $ away in thier super funds has and will continue to create takeover targets for them *super* companies....what else ar they gonna do with the $$$$, take it to the Casino?

A frind of mine said today..."These super funds make you 5-15% and we're supposed to be grateful for that?....I took out my super and doubled it in a week!"......DOH!.....


----------



## It's Snake Pliskin (26 November 2006)

pacer said:
			
		

> BHP is a takeover target.....all them people putting an extra $ away in thier super funds has and will continue to create takeover targets for them *super* companies....what else ar they gonna do with the $$$$, take it to the Casino?
> 
> A frind of mine said today..."These super funds make you 5-15% and we're supposed to be grateful for that?....I took out my super and doubled it in a week!"......DOH!.....




I hope it paid the Bourbon bill


----------



## pacer (26 November 2006)

I just have to stop myself becoming an Alchoholic...yes it paid off.....my BAR TAB ......hehe.....


----------



## It's Snake Pliskin (26 November 2006)

pacer said:
			
		

> I just have to stop myself becoming an Alchoholic...yes it paid off.....my BAR TAB ......hehe.....




What about the TAB?


----------



## pacer (26 November 2006)

It's Snake Pliskin said:
			
		

> What about the TAB?




THAT QUESTION WAS ANSWERED A LONG TIME AGO.....

It's ok to have a punt now and then...just don't let it run your life...

I can quote the note on the back door of my friends place (which I wrote there 3 years ago IN BLACK TEXTER.........and is still there!)

BIG PUNTERS ARE BIG LOOSERS....
IT'S HARD ENOUGH PICKING YOUR NOSE,
LET ALONE A HORSE......

And I am serious for a change......


----------



## ducati916 (26 November 2006)

*BSD*



> BHP et al are becoming price makers in this consolidation phase; an excellent justification for the stronger for longer club
> 
> The only way BHP is overvalued is if you think Cu, Ni and Oil are going to drop by at least 40% in the next two years.




On what basis would you support your assertion that BHP is a price maker?
With regards to the 40% fall in price, yes, I can see that happening, it is definitely in the realms of possibility for me.

jog on
d998
http://grantmacdonald.blog.co.nz/


----------



## rederob (26 November 2006)

ducati916 said:
			
		

> *BSD*
> 
> On what basis would you support your assertion that BHP is a price maker?
> With regards to the 40% fall in price, yes, I can see that happening, it is definitely in the realms of possibility for me.
> ...



ducati can make the improbable possible!
Mind you, don't ask him to commit to it: He would simply prefer you to put up some numbers, and then you have to interpret his response to your post.
What ducati is possibly not seeing is the the price relativities - financial 2006 year to date versus financial 2007. 
Apart from oil, BHP will strongly outperform its 2006 result on continuation of trend.


----------



## michael_selway (26 November 2006)

rederob said:
			
		

> ducati can make the improbable possible!
> Mind you, don't ask him to commit to it: He would simply prefer you to put up some numbers, and then you have to interpret his response to your post.
> What ducati is possibly not seeing is the the price relativities - financial 2006 year to date versus financial 2007.
> Apart from oil, BHP will strongly outperform its 2006 result on continuation of trend.




Red you have to look at FY 2008, we are already in FY 2007

thx

MS


----------



## rederob (26 November 2006)

michael_selway said:
			
		

> Red you have to look at FY 2008, we are already in FY 2007
> 
> thx
> 
> MS



MS
On the contrary if you read my post.
My point is that on known financial year to date prices (ie July to November 2006) of BHP's commodities, compared to last year (July to Nov 2005), BHP is this year making a heck of a lot more.


----------



## nizar (26 November 2006)

rederob said:
			
		

> MS
> On the contrary if you read my post.
> My point is that on known financial year to date prices (ie July to November 2006) of BHP's commodities, compared to last year (July to Nov 2005), BHP is this year making a heck of a lot more.




Rederob,

Just wanted to know your view about why BHP didnt hedge copper when it was in the high -3s ?

After all, it is them that will bring on the new supply.

Obviously the sp wouldve suffered if they announced such a decision, but astute management focus on profits, not the share price, and surely such a move wouldve resulted in higher profits (and im not just saying this in hindsight, from near the beginning of the year it was clear that the supply/demand fundamentals for copper arent that great as new supply is coming online relatively soon)


----------



## BSD (26 November 2006)

nizar said:
			
		

> Rederob,
> 
> Just wanted to know your view about why BHP didnt hedge copper when it was in the high -3s ?
> 
> ...





The level of backwardation prevailing in the copper markets (particularly when spot peaked) was extreme and I would guess that any hedging put in place in the last 12 months would actually be underwater as the spot price has prevailed above $3.10

BHP believes their level of diversification brings a natural hedge and they are not in the business of hedging production. That said, their view on copper prices remains bullish and would appear to be another strong vote of co0nfidence in the persistancy of the cycle.


BHP are not bringing huge amounts of new supply onto the market in the near term. 

Spence with an extra 200,000 Cu t/pa is the best

Olympic Dam expansion is not due for completion until next decade 

Ravensthorpe hopelessly delayed and overbudget


BHP only spent $50m last quarter on exploration

They will remain acquisitive with very lazy balance sheet. Petroleum appears to be the key focus - rumours of $10bnUS kitty to spend shows further belief in high oil prices prevailing, negating the need for hedging.


----------



## Knobby22 (26 November 2006)

Three points:

The profits for next financial year, already half over, will give a PE rating of 8.8. This is not expensive considering:

- BHP is not only a minerals company, it is also an energy company with big oil. gas and uranium interests. The uranium mine is expanding. This should be considered carefully when evaluationg the company.

- Second, this company has a lot of advantages over smaller mining companies. When the minerals downturn eventuates, then they will be able to buy the better companies at a good price. Look at WMC. They are able to buy technologies and control them. Look at their interest in APG (I have a good holding of that one), I would not be surprised to see a takeover offer.
They have the financial strength to take advantage of opportunities profitably and finally they have the ability to generate some blue sky. 

- Thirdly,  if the company did get devalued somewhat more by short term investing then you may see an offer by China. (Peter Costello had a big chat with the Chinese and it is believed Woodside was discussed at length, I would not be surprised if BHP was not also discussed). 


I have backed my judgement by buying a reasonable amount of shares at just over $25. 

Jogging is bad for your health.

K22


----------



## haemitite (26 November 2006)

nizar said:
			
		

> Rederob,
> 
> Just wanted to know your view about why BHP didnt hedge copper when it was in the high -3s ?
> 
> ...



For the same reason they didn't hedge when it was at $2/lb

Mix of commodities and forex exposure provides significant natural hedging which BHP monitor with their cashflow at risk model

And of course there is a strong argument that shareholders should be able to take their own directional action on price risk, and not have their investment leverage obfuscated by companies using derivitaives


----------



## mrlava (27 November 2006)

Ken said:
			
		

> will we see BHP hit $24 again....
> 
> who will margin lend.... or are they worth margin lending if they dip to 25.60ish...




I hope you are right, I have my buy order in at $24.50. If you look at the price over the last 12 months, it seems to fluctuate rather consistently.


----------



## mrlava (27 November 2006)

TheRage said:
			
		

> rosie said:
> 
> 
> 
> ...


----------



## wayneL (27 November 2006)

BSD said:
			
		

> The level of backwardation prevailing in the copper markets...



BSD

What backwardation tells investors and traders is still somewhat controversial. (More controversial than indicated in the attached article)

To mention it with regards to the future of Copper prices and BHP only serves to confuse. It is about as predictive as the MACD.   

 Cheers


----------



## ducati916 (28 November 2006)

*et al*

Backwardation occurs when demand is higher in the near future.
Therefore, coming from a period of high[er] demand, backwardation implies a falling demand into the future.

This would tie in with slowing US demand from a number of industries and reflects slowing US consumer spending.

jog on
d998


----------



## TheRage (29 November 2006)

mrlava said:
			
		

> Hi, what charts do you use if you don't mind me asking? I am shopping around for some. Cheers.




I won't recommend any particular chart as there are many opinions from people with greater technical expertise than I who could steer you toward a good program. I use charts that I created in a visual basic format. All I have to do is download price data off of YAhoo finance and presto put it into my models and several charts are created. My charting is no where near as sophisticated as many of the day traders but it doesn't need to be as I am an investor. Often I have made my mind up on buying a share long before I analyse it with a chart. It is great news if my charts tell me what the fundamentals are already telling me. However if they don't this doesn't stop me necessarily from buying. Often my decision to buy can be swayed by talking with the management of the company and putting tough questions to them and seeing how they react. I don't need a psychology major to know when I am being lied to and this can play a strong criteria also in my investing decision.


----------



## ducati916 (29 November 2006)

*Rage*



> Often my decision to buy can be swayed by talking with the management of the company and putting tough questions to them and seeing how they react. I don't need a psychology major to know when I am being lied to and this can play a strong criteria also in my investing decision.




What tough questions would you ask?
What type of reaction would place you on guard?
How would you decide that you are being lied too?

jog on
d998


----------



## TheRage (29 November 2006)

ducati916 said:
			
		

> *Rage*
> 
> 
> 
> ...




This is an example of question that I have asked a company just this week. 

Q1: Why was bad earnings news released at the same time as an acquistion.
Q2: How come calculations on share % ownership being written on script is being worked out on the final total not on the current shares outstanding.

In relation to reactions that put me on guard, usually if there is any pausing that is then followed by a answer that totally spins my question around until I am so confused I forgot why I asked it well that puts me on gaurd. 

Sometimes I am also on gaurd from a particular tone in a voice. My wife has taught me to become aware of tones as a way of undertstanding her better. 

As to how I would decide whether I am being lied to well I will probably use all of the subtle nuances from the conversation and then use them and my intuition to make up my mind from that. I may not always be right but I have found from experience I have a reasonably good strike rate. Anyway I am not so much interested in the liar as the person who is honest. How do I know they are honest I guess I don't but when people are telling me bad news honestly I tend to believe them. An example of this relates to the questions above. I further inquired to the managing director What is the rationalisation behind the acquisiton. He did not tell me that the purchase was earnings accretive or was a good organic fit blah blah blah, he told me that because thier business was facing stiff competition from companies taking away their business the company in question needed to secure an income stream, which is five years gauranteed to offset any short fall in their other businesses. I tended to believe him as he has no reason to tell me bad news as a lie. By the way after this conversation I realised the company in question was not the monopoly I thought it was and probably is a poor business with great management. So I will hang in there with them but if management changes so will my ownership in that company.


----------



## ducati916 (29 November 2006)

*Rage*

Hey, thank's for answering my three questions.

jog on
d998


----------



## TheRage (30 November 2006)

No problems.


----------



## Sean K (6 December 2006)

Had an ok day today, short term looks to be moving up, but still a long way to go to get out of the downwards/sideways trend. Neds to get to the blue circle I reckon to be heading up, although looks like there is a slight change in the momentum....

I'm not topping up yet. 

Even though it's on a pe of about minus 35, the market is still not convinced about the Chindiapanaiwanporesal story.


----------



## mmmmining (6 December 2006)

kennas said:
			
		

> Had an ok day today, short term looks to be moving up, but still a long way to go to get out of the downwards/sideways trend. Neds to get to the blue circle I reckon to be heading up, although looks like there is a slight change in the momentum....
> 
> I'm not topping up yet.
> 
> Even though it's on a pe of about minus 35, the market is still not convinced about the Chindiapanaiwanporesal story.




Agree, the chart is not looking perfectly. But I am buying. I strongly believe the big end of the resource will play catch up game. and secondly, I strongly believe soon or later LBO will do something about BHP. 

One day those fat cats will say, wait a minute, why not buy these big resource stocks for PE like 10s, with load of cash, and wonderful long life asset, Sell a couple of asset to China for $100 billion dollars, such as the oil, and uranium, and the rest are considered profits, dividends, commissions, bonus, whatever you want to call it. And flood the market with 100+ Chihuahuas (James Dines term) with breed of copper, zinc, nickel, energy coal,  metallurgical coal, alumina,  diamond, iron ore, silver, gold, manganese, titanium, mineral sands, etc.


----------



## ducati916 (7 December 2006)

mmmmining said:
			
		

> Agree, the chart is not looking perfectly. But I am buying. I strongly believe the big end of the resource will play catch up game. and secondly, I strongly believe soon or later LBO will do something about BHP.
> 
> One day those fat cats will say, wait a minute, why not buy these big resource stocks for PE like 10s, with load of cash, and wonderful long life asset,




P/E's for commodity based stocks are not that straightforward. If the P/E is low to cyclically high earnings, that is most definitely not the same as a low P/E due to a low price with cyclically low earnings.

BHP is the former, and definitely not the latter. Therefore far from being a bargain, BHP is overvalued at this seemingly low P/E. Here is a longer chart based view for those who think the boat is just leaving, and in point of fact is already well out to sea.

jog on
d998


----------



## Sean K (7 December 2006)

ducati916 said:
			
		

> P/E's for commodity based stocks are not that straightforward. If the P/E is low to cyclically high earnings, that is most definitely not the same as a low P/E due to a low price with cyclically low earnings.
> 
> BHP is the former, and definitely not the latter. Therefore far from being a bargain, BHP is overvalued at this seemingly low P/E. Here is a longer chart based view for those who think the boat is just leaving, and in point of fact is already well out to sea.
> 
> ...



Ducati, are all your assumptions on the value of BHP based on falling demand and falling prices in line with the cycle? And if so, what if you are wrong? What if demand continues to outweigh supply for some years to come? What if Chindia (and other growing nations - there's plenty out there) keep growing at 10% ish a year for another 10 years? Won't this very basic premise continue to support strong commodity prices into the future?

Also, not sure what your point is with the chart. Last few bars indicate higher low and higher high, so perhaps it's continuing the trend up. Perhaps you are just referring to the fact it's been going up for 4 years. Probably 10 more to go I reckon.


----------



## ducati916 (7 December 2006)

kennas said:
			
		

> Ducati, are all your assumptions on the value of BHP based on falling demand and falling prices in line with the cycle? And if so, what if you are wrong? What if demand continues to outweigh supply for some years to come? What if Chindia (and other growing nations - there's plenty out there) keep growing at 10% ish a year for another 10 years? Won't this very basic premise continue to support strong commodity prices into the future?
> 
> Also, not sure what your point is with the chart. Last few bars indicate higher low and higher high, so perhaps it's continuing the trend up. Perhaps you are just referring to the fact it's been going up for 4 years. Probably 10 more to go I reckon.




No, not really. As far as commodity prices are concerned we have three possible scenario's;
*prices continue to rise
*prices stay more or less stable
*prices fall

Only in scenario #1 does BHP continue to record increasing revenues in excess of production gains [some 2.3% odd] and thus support the further growth theory and increases in shareprice.

 If prices reflect scenario #2 and stay fairly stagnant, the slowing growth will quite possibly trigger momentum and growth based investors out, this can trigger general technical selling. 

Obviously in scenario #3, falling prices signal earnings shrinkage, and that is never good for a premium valued shareprice.

No volume, no interest in 2003, commodity bull market was underway, but vastly under-appreciated by the average retail investor/trader.

Today, massively increased volume, share price pretty stagnant, lot's of hype and ramping by the brokerages, and the vast majority quote to me what their analyst has recommended, yada, yada.

I can find numerous examples of brokerage flops, and endless commentary by numerous posters as to the ineffectiveness of brokers/analysts generally.
As usual, the extreme bias of speculation blinds many to an unbiased and rational approach.

People love their charts, so, a chart.
It illustrates the loss of price momentum, the huge increase in volume, and suggests in technical analysis terms distribution.

Could I be wrong?
Absolutely, which is why the game is so fascinating.

jog on
d998


----------



## Sean K (7 December 2006)

ducati916 said:
			
		

> No, not really. As far as commodity prices are concerned we have three possible scenario's;
> *prices continue to rise
> *prices stay more or less stable
> *prices fall
> ...



Thanks ducati. Yes, it is fascinating at the moment. And I just love how brokers can have such vastly differing opinions on stocks. Just how can company XZF be a sell to one and a strong buy to another? LOL. I suppose there lies the answer to how we all here might have different opinions. If they can't agree with their DBAs and living the market, how can we poor forum surfers agree?


----------



## ducati916 (7 December 2006)

> _But I am buying. I strongly believe the big end of the resource will play catch up game. and secondly, I strongly believe soon or later LBO will do something about BHP. _




LBO, very unlikely.
Why?

LBO's require the following;
*high free cash-flow
*low debt
*low required reinvestment rate
*reasonable growth rate
*moderate share price

The first two do qualify BHP. It has good cash-flow & low debt.
The reinvestment rate is 12%, far too high.
The growth rate is an adjusted 2.3%, too low.
Moderate share price, no, currently overvalued.

jog on
d998


----------



## Knobby22 (7 December 2006)

ducati916 said:
			
		

> LBO, very unlikely.
> Why?
> 
> LBO's require the following;
> ...





Actually I think an LBO won't be interested because cashflow and profit is too unpredictable on a commodity producer and therefore too risky for the gearing they undertake.

Disagree on valuation but been there, done that.


----------



## wayneL (7 December 2006)

OK

FWIW, I like anagrams, but LBO is not computing.

WTF is an LBO FFS?

TIA


----------



## stoxclimber (7 December 2006)

leveraged buy out


----------



## wayneL (7 December 2006)

stoxclimber said:
			
		

> leveraged buy out



Ah! TY.


----------



## potato (7 December 2006)

thats a silly question Wayne, every1 knows LBO is a large brown octopus...


----------



## Sean K (7 December 2006)

potato said:
			
		

> thats a silly question Wayne, every1 knows LBO is a large brown octopus...



Come on Potato, it's actually, *Little * Brown Octopus. Get it right.   

But, on the serious side, this would be the ultimate private equity deal, when the planet (well NYC) is awash with cash. Don't be surprised if something like this happens in the top end of town. I agree that breaking this up via seperate IPOs might work. Why not? BHP is getting just too darn big. How can one man effectively control such a beast? Or, do I have no idea? Yep, you're right.


----------



## mmmmining (7 December 2006)

ducati916 said:
			
		

> LBO, very unlikely.
> Why?
> 
> LBO's require the following;
> ...




Excellent, thank you for the analysis for both low P/E, and LBO possibility.  I enjoy read them because of your good knowledge. 

Somehow, when you think logically, the market has different ideas.  It is part of the game. 

LBO might be not possible maybe because of national interests. (unless pommy want it). 

But my point is very simple, resource giant’s value sometimes cannot be fully recognized because of some long term, and idled assets. 

For example, the uranium assets in BHP are earning pennies, but it worth a lot of money on resources basis. 

Yeelirrie  52,500t U3O8  Worth $1.2b (use NEL valuation), cannot do anything, maybe forever.

Olympic Dam 1.76mt Worth $39b (use the same valuation, if not higher)

Sitting on over $40b asset, how much money it made last year with uranium asset? 

BHP produce less than 4000t with long term contract. Luck if they can sale all of them for $100m. assume the cost is 0 as by product, the profit is $100m.

With $40b worth of asset to generate $100m profit, wonderful, right? Sell the asset, put the money in the bank will generate at least $2.4b interest!(with Etrade cash deposit rate at 6%)

How many other idle assets like this?

Of course, please excuse me for over-simplify the situation. I just try to make my point.


----------



## Ken (7 December 2006)

so your basically saying bhp

are going to 

WIN THE GAME!!!!!


all ords are now 5400 when bhp starts kicking some goals again will there just be a swing in positions fund managers hold.... e.g sell off in the performers last 6 months.... or will the all ords go to 6000?

if BHP is $35 this time next year, would all ords be over 6000....?

i think BHP will put its kicking boots on but it is scary if the rest of the market comes along. could cause a burst at the top.


----------



## mmmmining (8 December 2006)

Ken said:
			
		

> so your basically saying bhp
> 
> are going to
> 
> ...




Just sick and tired of small companies busy spinning off so-called uranium asset, and big companies siting on wonderful assets, can't or don't want to do anything about it;

And also those LBOs busy buying the retails, newspapers,painting companies,  free-to-air televisions (cyclical, growth, or obsolete industry, it's your call) with crazy price. The management bought the Las Vegas local Station Casino for P/E like 40. The expect the Las Vegas will double the populations before they can sell to some other crazy people. Obviously they are betting on the party time on and on forever! What is wrong with resource companies with P/E in 10s and a lot of wonderful assets?


----------



## ducati916 (8 December 2006)

*mmmmm*



> _But my point is very simple, resource giant’s value sometimes cannot be fully recognized because of some long term, and idled assets.
> For example, the uranium assets in BHP are earning pennies, but it worth a lot of money on resources basis.
> 
> Yeelirrie 52,500t U3O8 Worth $1.2b (use NEL valuation), cannot do anything, maybe forever.
> ...




The LBO question has raised some interesting questions as to a value on BHP, as of course an LBO would purchase the entire business.

Using the latest Balance Sheet 06/30/06

Total Assets = $48.516B
Total Liabilities = $24.298B
Net Total Assets = $21.218B
Enterprise Value = $131.93B

Assuming your calculations are correct, based I assume on current spot prices for uranium, then we can add;

+$40.0B undervalued assets
Net Assets = $61.298B
Enterprise Value = $131.93B
+20% premium for purchase price = $26.386B
Net Enterprise Value = $157.93B
Less Net Assets $61.298B

Value created/destroyed = [-$96.63B]

Therefore, even using your figures, there will be no value in an LBO at anywhere near the current price of BHP. It just makes no sense. If BHP was valued at my "value" figure, then we would have a very different set of figures, and BHP in the current environment might indeed be a candidate.

The LBO candidates, in the main tend to be businesses that are currently unpopular, or have some insider catalyst for unlocking the value. For example the large medical provider HCA, bought out in conjunction with KKR, has a member of the Senate sitting within the LBO directorship, thus regulatory benefits can be monetised.

jog on
d998


----------



## mmmmining (8 December 2006)

ducati916 said:
			
		

> *mmmmm*
> 
> 
> 
> ...




Sorry, I cannot understand your calculation. What is wrong to unlock possible $40b value? How many other idle assets do they have? If you do through study, you might find over $100b idle assets. I don't know.

If you control BHP, sell a bunch of idle assets, use the money to buyback shares, retire the debt, BHP may be so pretty that make ZFX's PE ratio looks too high. Now you can sell it to RIO, RCVD, AAL..., or simple re-float it.


----------



## ducati916 (8 December 2006)

mmmmining said:
			
		

> Sorry, I cannot understand your calculation. What is wrong to unlock possible $40b value? How many other idle assets do they have? If you do through study, you might find over $100b idle assets. I don't know.
> 
> If you control BHP, sell a bunch of idle assets, use the money to buyback shares, retire the debt, BHP may be so pretty that make ZFX's PE ratio looks too high. Now you can sell it to RIO, RCVD, AAL..., or simple re-float it.




Best stay away from LBO's I guess.
jog on
d998


----------



## mmmmining (9 December 2006)

ML downgrades mega-miners, including BHP. The abstract is free the following link. 

Interest points are:
1. BHP price is down about 20% from it is high in May, ML recommendation is buying from May to now; You would lose you money if you follow the recommendation (I admit too tough on the analyst)

2. The analysis say forecast 30% down in base metals in 2007. The only metal is down is copper. The aluminum is mentioned as substitute of copper, assume it is going higher, and the research is bullish on nickel, and zinc, and uranium (uranium a base metal?) How could they concluded that the whole base metal is going to down 30%?

I cannot figure it out. Help please. Thank you.

http://www.mineweb.net/mining_finance/517020.htm


----------



## BSD (9 December 2006)

mmmmining said:
			
		

> Sorry, I cannot understand your calculation.




There is nothing to understand - because it doesnt mean anything and has no relevance.

An LBO (or any purchase of a business) does not need to be made at a price below the net asset value to be accretive. Net asset value (typically based on depreciated histroric costs) has little relevance to the actual value of the business (based on discounted future cash flows)

To ascertain the value of the business the future cash flows need to be forecast - something a balance sheet does not do. 


Private equity will eventually move into the commodities sector. Being focussed on cashflow generation (and not accounting profit) they would structure the businesses differently.

They could buy BHP, hedge the forward production to lock in the cash flows, sell some businesses attracting forward multiples well in advance of the current 10 times and gear the whole thing up (extracting billions). 

Qantas is a prime example of a presumingly risky business being taken over by private equity. The new owners will hedge costs forward and use the added security of cashflow to carry a lot more leverage.


----------



## rederob (9 December 2006)

BSD
I agree with your logic.
But the new breed of private equity firms are run by numbers that allow accountants to take over.
I could go into Qantas and make a bucket load of money by breaking everything down, selling off non-core operations and bolstering sectors that generate $$$s.  
Mining operations need the nouse of industry specialists that have the ability to plan well ahead.  Any wrong decision can cost billions in no time at all.  even right decisions, like BHP's Ravensthorpe project, can get caught  out by bad timing, or bad prices, or high costs, that are nearly impossible to factor in too far in advance.
Any new operators "moving in" on a large diversified miner will need to immediately show they have the capacity to "manage" the business.  And if they can't, their money will go quicker down the drain than light into a black hole.
In relation to an earlier comment about copper prices being now lower, take care to understand that year on year comparisons still have this metal at a higher average price.  In the case of valuing BHP it is vital to note that the majority of its output continues to be sold well above last year's average prices.  In the case of BHP's uranium, it is hard for lay folk to "value' its contribution as BHP is not generous with its numbers/contract values/hedges.
However, if it is the case that most of its term contracts are coming in for renewal in the period to 2008, then one can bet the new contract values will take account of uranium's new price paradigm.  add that point to its intention to markedly ramp up uranium output and the long term picture is rosy.
In the intermediate period I have no real view on where BHP is headed: I rejoined it the other week for another very long ride.


----------



## haemitite (9 December 2006)

BSD said:
			
		

> There is nothing to understand - because it doesnt mean anything and has no relevance.
> 
> An LBO (or any purchase of a business) does not need to be made at a price below the net asset value to be accretive. Net asset value (typically based on depreciated histroric costs) has little relevance to the actual value of the business (based on discounted future cash flows)
> 
> ...



You can only hedge forward for so long

Plus commodity companies are different from the normal private equity targets, they have massive upside optionality - imagine the BHP share price if copper and oil had been capped.

Private equity works beacuse they bring in experiencef management teams to cut costs and they can work out of sight of the public. Its not about the debt funding, debt/equity structuring doesn't change a dud underlying business into a good one

How would private equity add value to a Rio or BHP? 

Give away price upside?
Cut exploration?
Reduce growth projects?

Cutting the cost base would destroy the revenue base, not a geat outcome in a high margin business

Both companies already do manage for cashflow, both state that they make decisions on NPV (note Ducati, LIFO or FIFO policy doesn't seem to rate highly as a cashflow driver)


----------



## BSD (9 December 2006)

Rederob and haemitite - I dont disagree with anything you are saying. 

I dont think the LBO guys have the balls or the knowledge/skll set to take out Hills or Rio. Exxon or another big oiler on the other hand...

I do believe RIO and Hills are under geared though and I would prefer them to become-one with Hills as the aggressor, or at least get acquisitive while some mid caps with high quality projects are trading at big discounts (OXR,EQN etc)

The LBO players are not focussed on creating good long term businesses, they are interesting in stripping cash and tarting up businesses for sale on a five year turnaround. 

Look at Repco, ex Private Equity deal, made the punters and bankers a heap and is now a complete piece of rubbish unable to keep the bankers at bay without another new owner taking control. 


The longevity and scope of the current cycle has been and will be contined to be extended due to the discipline of the management teams of the majors restricting the quantum of the supply side response

Much of the current management practice is excessively risk adverse. 

Very limited new exploration spend
Buybacks and more buybacks favoured over expansion spending
Low divs

Some would/do call it a lack of entrepreneurial skill or risk taking that comes from MBAs running mining businesses - it is probably somewhere in between.


----------



## ducati916 (9 December 2006)

*BSD*



> _To ascertain the value of the business the future cash flows need to be forecast - something a balance sheet does not do. _




Absolute nonsense.
Where exactly do you think you will find the assets that are going to generate your cash-flow? 



> _They could buy BHP, hedge the forward production to lock in the cash flows, sell some businesses attracting forward multiples well in advance of the current 10 times and gear the whole thing up (extracting billions). _




If they forward hedge, being one of the larger players, they will cause prices to fall. As their margins currently heavily weight high prices over unit production, this will kill the golden goose of high[er] prices that are responsible for all that cash-flow.

With falling prices, watch out, here comes the speculative money chasing prices down further [in the same way they have chased them up]. With falling revenues impacting highly leveraged Net Profit, down goes the enterprise value [not that it matters, as it would now be private].

But, what they would note is the shrinkage in value of all these currently spot market valued assets in the ground. Thus the selling, would not be at premium prices, debt could not be reduced, cash-flows shrinking, interest payments high, an unholy mess. LBO's will not touch BHP.



> _Qantas is a prime example of a presumingly risky business being taken over by private equity. The new owners will hedge costs forward and use the added security of cashflow to carry a lot more leverage._




A good example of utter stupidity.
Ok, BHP could be a takeover target, there is obviously an absolute glut of cash in the system, but if the credit cycle turns, this one could be a bankruptcy, airlines hold the record I think for the most capital destroyed.



> _An LBO (or any purchase of a business) does not need to be made at a price below the net asset value to be accretive. Net asset value (typically based on depreciated histroric costs) has little relevance to the actual value of the business (based on discounted future cash flows)_




Depreciated [depletion] in the case of RESOURCE businesses, far from being irrelevant is one of the most IMPORTANT metrics period. He who ignores depreciation is headed for serious trouble.

*rederob*



> _I could go into Qantas and make a bucket load of money by breaking everything down, selling off non-core operations and bolstering sectors that generate $$$s. _




Really.
How specifically would you accomplish this?



> _Mining operations need the nouse of industry specialists that have the ability to plan well ahead. Any wrong decision can cost billions in no time at all. even right decisions, like BHP's Ravensthorpe project, can get caught out by bad timing, or bad prices, or high costs, that are nearly impossible to factor in too far in advance._




So, BHP would be vulnerable to falling prices for commodities?
Strange, the impression given was that BHP was [is] bullet proof, a sure thing, no brainer etc. I'm shocked.



> _In relation to an earlier comment about copper prices being now lower, take care to understand that year on year comparisons still have this metal at a higher average price. In the case of valuing BHP it is vital to note that the majority of its output continues to be sold well above last year's average prices. In the case of BHP's uranium, it is hard for lay folk to "value' its contribution as BHP is not generous with its numbers/contract values/hedges._




So, if prices fall, [shock, horror] Net Profit & Cash-flow may fall?



> _In the intermediate period I have no real view on where BHP is headed: I rejoined it the other week for another very long ride._




I notice the trip in Gold has also been extended, as $800 before Dec.31.06 looks like fantasy land at the moment.

*BSD*



> _The longevity and scope of the current cycle has been and will be contined to be extended due to the discipline of the management teams of the majors restricting the quantum of the supply side response_




Credit cycle.
I'll say it again........*credit cycle*
Demand is based on investment dollars looking for a return. When credit runs dry......adios commodity bull market. [Or any bull market for that matter]

LBO activity correlates with credit cycles, and bull market tops.
The current LBO cycle is smashing records all over the place.

jog on
d998


----------



## rederob (9 December 2006)

> BSD
> 
> 
> > To ascertain the value of the business the future cash flows need to be forecast - something a balance sheet does not do.
> ...



It's great fun reading stuff like this.
Apparently the stated "assets" also have a forward-valued future cash flow that we can rely on.
I will ring Chip and let him know it's "that easy".
He can then sack a few hundred employees in headquarters and just tell everyone to read the company's reports for everything they need to know about how much BHP is worth down the track.
I wonder if Chip will pay me a "spotters" fee for such incredible advice?


----------



## ducati916 (9 December 2006)

rederob said:
			
		

> _It's great fun reading stuff like this.
> Apparently the stated "assets" also have a forward-valued future cash flow that we can rely on.
> I will ring Chip and let him know it's "that easy".
> He can then sack a few hundred employees in headquarters and just tell everyone to read the company's reports for everything they need to know about how much BHP is worth down the track.
> I wonder if Chip will pay me a "spotters" fee for such incredible advice_?




Hey, I remember Chip from the Gold thread, he was the tea boy wasn't he. Do pass on my regards and best wishes for his promotion to dish-washer.

jog on
d998


----------



## rederob (9 December 2006)

ducati916 said:
			
		

> Hey, I remember Chip from the Gold thread, he was the tea boy wasn't he. Do pass on my regards and best wishes for his promotion to dish-washer.
> 
> jog on
> d998



Once a year you will have a Goodyear.
ducati, you will have to wait till 2007.
I guess there's a problem with the kiwi calendar....... something to do with counting sheep.

By the way, a kiwi told me why farmers prefer to tie rope to keep their trousers up.  Apparently their belts had so many notches cut into them their pants kept falling down.
So now we know why sheep run scared!


----------



## haemitite (9 December 2006)

I wonder how long it will take before ducati and rederob realied that they have embarassed themselves.
I enjoy your posts BSD, a pity that they are wasted on some here.


----------



## rederob (9 December 2006)

haematite 
I look forward to your forecast price of nickel in 2007.
I do recall you mentioning that you thought it would be lower in 2007 (a post in th Minara thread early September).


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## BSD (9 December 2006)

Thanks haemitite

After an excess of frustation on the commodities thread; I have given up responding to Ductati.

I still haven't worked out if he is serious or taking the mickey.


----------



## ducati916 (9 December 2006)

haemitite said:
			
		

> _I wonder how long it will take before ducati and rederob realied that they have embarassed themselves.
> I enjoy your posts BSD, a pity that they are wasted on some here_.




I was going to overlook your gaffes, as I thought, it was a gallant effort, but, oh well.



> _Give away price upside?
> Cut exploration?
> Reduce growth projects?
> 
> ...




Of the items that you have listed, they of course are not costs at all.
They are Capital Spending, or *INVESTMENT* which is something else entirely, as of course COSTS cannot be capitalized, COSTS cannot be depreciated and COSTS must be expensed. Therefore, the reference to investment, being classified as a cost would materially alter the Income Statement, Balance Sheet & Cash-flow Statement.

So, in summary, nonsense.

As regards BHP being a high margin business, well yes, and no.
You see the margins are highly leveraged, high prices in the spot market, and you have increasing margins, low prices in the spot market, and you have shrinking margins.

So incorrectomundo.

And the last in regards to LIFO & FIFO.
BHP is a FIFO producer, and FIFO overstates profits in time of rising prices. Currently we have [or have had] rising prices [commodity bull market from "99] and BHP has ridden the crest of that wave on massively leveraged Net Profit [hence the low P/E] due to HIGH EARNINGS not a low security price. Cash flow is strangely, directly correlated to cash-flow, and FIFO increases cash-flow when prices are rising, whereas, LIFO understates Net Profit & cash-flow in a rising price environment

Therefore, incorrect.
jog on
d998


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## haemitite (9 December 2006)

ducati,

This may surprise you - FIFO & LIFO are accounting treatments

So I'm very curious to understand how accounting treatment impacts either the amount or timing of cashflows.

As for all your cost and balance sheet mumbo jumbo, suggest you go back and read up on BSD. Its all about net present value of cash flow.


----------



## ducati916 (10 December 2006)

haemitite said:
			
		

> _ducati,
> 
> This may surprise you - FIFO & LIFO are accounting treatments
> 
> ...




BSD is as confused as you are, well, ok, not as confused as you.

Let's use the hypothetical pile of coal.
The first coal produced is at the bottom of the pile *First In*
The later produced coal is thrown on top, *Last In*

Now, prices [both prices of unit costs, and selling prices] are rising slowly and steadily, like our current commodity bull market thus;

If we take our *Last In First Out* as our accounting standard, this will most closely on an accrural basis represent* replacement cost* thus will understate Net Profits.

If we take our *First In First Out* as our accounting standard, we shall inflate our Net Profits [leverage them] as, we shall cost our inventory at the lower production cost, but sell the inventory at the high spot prices, thus providing on an accrural basis misleading [but not illegal] financial statements.

So, the NPV of the cash-flow is materially distorted, giving excessively high valuations, and thus drawing in the amateurs at, or fairly near the top of a bull market.

jog on
d998


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## BSD (10 December 2006)

*Accounting profit is not the same as cashflow*


Now repeat a thousand times


----------



## haemitite (10 December 2006)

And he was doing so well until the very last line.

PS - just how long do you think a standard coal stockpile takes to build & reclaim ducati?


----------



## ducati916 (11 December 2006)

BSD said:
			
		

> *Accounting profit is not the same as cashflow*
> 
> 
> Now repeat a thousand times




Correct.

However, cash-flow is calculated from the cash-flow statement. The Cash-flow statement is built from the Income Statement & Balance Sheet.

Cash-flow is an analyst adjusted figure. It can be a very different figure depending on who you talk to.

Second, cash-flow, like Net Profits, is subject to distortion [leverage] in exactly the same way, therefore, cash-flow can also be overstated, and thus NPV calculations will overvalue the business.

jog on
d998


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## MiningGuru (11 December 2006)

Notice out that one of the Directors just bought 10,000 shares.

I remember to December last year when a number of Directors bought just prior to the December price surge.

Is it going to happen again this year?


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## Ken (12 December 2006)

Directors have money.

They have to put it somewhere.

BHP is a big blue chip stock. You would be pretty stiff if you invested in BHP for 10-15 years and didnt get any capital growth.

I see BHP undervalued still, but they have also copped some negative press. 

If the so called mining boom is now then why arent BHP pushing new highs....

It should be shouldnt it...... Or are the big fish just making millions as it bounces between $25 and $27.


Either way if it hits $24.50 again i'll be getting 1000.


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## Ken (12 December 2006)

When it has another run again it will happen in a hurry.

All these tiny uranium companies booming at the moment.

I wouldnt have thought BHP would have left Uranium alone....

Few steady years though. All patience with them.


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## scsl (13 December 2006)

Ken said:
			
		

> Directors have money.
> 
> They have to put it somewhere.
> 
> ...



Well if I were a BHP director, I'd be buying as much as I could! (-thinking long-term of course)
---
The negative press seems to be increasing by the day. MacBank has joined Merrill's downbeat view on the resources sector. Instead of the mega-miners, they're suggesting to be more selective i.e. stocks like Zinifex and Minara.

Would any short term traders, chartists like to give me a clue as to where BHP is likely to head in the next week? I understand that I've got to make up my own decision, but I'd appreciate your views. I'm long on UK and Australian BHP CFDs atm and am getting worried. My gut feel is that BHP (Aus) is headed towards between $24-25.


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## ducati916 (13 December 2006)

Short term I'd say down.
But, at 50/50, my guess is just that, a guess.

Fundamentally, BHP is just plain overvalued.

jog on
d998


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## wayneL (13 December 2006)

A few of the metals miners are being sold off in the US. BHP:NYSE is back under $40 once again.

Though not the only sector experiencing whackage this evening.


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## ducati916 (13 December 2006)

Looking at it a different way;

Over the last 10yrs;
Revenues = +12.5% compounded growth
Net Profits = +44.7% compounded growth
Share price = +18% componded growth [if you bought at the low, & sold at the high, you would have returned 425% on your capital]

Is it any wonder that it sports a *low* or reasonable P/E?
The Net profits leveraged by the commodity bull have distorted the valuation.
If you buy BHP at current prices, you are not buying BHP, you are really buying the anticipated continuation of a commodity bull market.

jog on
d998


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## Nick Radge (13 December 2006)

*BOTTOM LINE 
12/12:*
EW Trend: Up (?)
Price Trend: Up
Trend Strength: Weak
Broker Consensus: Intermediate BUY
*17/11*:
EW Trend: Up
Price Trend: Down
Trend Strength: Weak
Broker Consensus: Intermediate BUY

*LAYMANS ANALYSIS 
12/12:*
VIDEO ANALYSIS (1 mins 48 secs)
BHP is struggling here. If it weren't for the bigger picture it could be easily concluded that prices were in a down trend rather than a larger up trend. The critical level is the September low of $24.06. A break down through there will place the trend on notice and would also indicate that BHP has a lot more work to do at these lower levels before any resumption of the multi year trend can be considered again. Until then, we may well see prices dip below the recent double bottom at $25.55 and $25.52. I'd say that we'll see those beaten by a few cents - just enough to stop weaker hands out. Those lows offer an obvious protective stop placement point so it's a good chance that they'll be tested. If they are tested, then prices start to rally, it's a very positive sign. Stand aside until better clarity is showing.
*17/11:*
VIDEO ANALYSIS (2 mins 3 secs)
If you've been watching these pages closely you may see that BHP analysis has just been slightly altered. The depth of the decline over the last week took the immediate bullish momentum off the stock suggesting that the recent highs were in fact the completion of that 5-wave pattern. Not all is lost because we should now travel higher in a new 5-wave pattern which could see BHP through $35.00. I am not going to make a formal recommendation here at the moment, but if you're looking to trade BHP then buy on a break of $26.71 and place a protective stop below todays low of $25.90. I will look to make a formal recommendation over the next week or so. 

*TECHNICAL DISCUSSION 
12/12:*
The Elliott Wave count is now unclear and the Golden Rule is that when the count is unclear one should stand aside. The move down to wave-2 was a swift move; more like an impulse move rather than a corrective move. The last 2-weeks have been choppy suggesting a correction and not the expected impulse. A break through the minor double bottom followed by an upside rejection is in fact a very bullish trading signal known as a "fake-out". It's like a bluff and tends to suck in the stop losses before prices reverse higher. If we did see that then prices break higher through $26.71 I'd be a lot more confident about the immediate future for BHP, but until then, I'm certainly concerned that we may have another leg lower toward that $24.00 support.
*17/11:*
Today's price and volume activity were very bullish. A gap open, a close on the days high and a good volume bar suggests buyers are back in. The recent retracement passed through the lower degree wave-i high so I am suggesting now that the smaller structure did in fact complete at the $28.29 level and we're seeing a wave-2 decline now. The bullish price/volume action seen today coincided with the typical retracement zone for a wave-2, being between 50.0% and 61.8% of the prior 5-wave advance. I like the look of BHP and we should not see those $24.00 lows again. The target for the wave-3 in this structure is $31.00 and the early wave-5 target is through $35.00.




_This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

Past performance is not a reliable indication of future performance. This material has been prepared based on information believed to be accurate at the time of publication. Subsequent changes in circumstances may occur at any time and may impact the accuracy of the information._


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## haemitite (13 December 2006)

ducati916 said:
			
		

> Is it any wonder that it sports a *low* or reasonable P/E?
> The Net profits leveraged by the commodity bull have distorted the valuation.
> If you buy BHP at current prices, you are not buying BHP, you are really buying the anticipated continuation of a commodity bull market.
> 
> ...




No.

You are buying BHP on a risk weighted outlook which includes the possibility of a contuining strong commodity market

If the market took an inefficient singular view such as the one you espouse above, BHP would be trading at around $40-50 not $25.


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## Ken (13 December 2006)

thats the best chart i have seen

top work.

I would definatley look at BHP as a buy personally if it gets around $24

if it dips in $23 i'd be a bit worried.

either way i am holding them long term, but its nice to get the timing.


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## Moneybags (13 December 2006)

I'm long term on BHP, even so the last few weeks have had me worried.......

Thanks Nick for a great chart & analysis.........the video makes it so much easier.

MB


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## bigdog (14 December 2006)

Warning - Potential ripoff for BHP shareholders by DSPC

Received an offer from DSPC Direct Share Purchasing Corp in the mail today.
-- 26 Francis St Melbourne or PO box 1234 North Melbourne
-- assume David Tweed!

They have obtained the BHP share register for October 23 and identified that my wife had 1,000 BHP shares.

The Dec 8 SP was $25.95 and DSPC offer price was $18 which was a $7.95 per share profit for DSPC or total $7950 profit.

Has anyone else received the offer from DSPC?

Who should we complain to? 
-- The ASX or who else?


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## scsl (14 December 2006)

Thanks for the responses everyone! I was particularly amazed at the accuracy of Nick's forecast of Wednesday's trading in BHP. Nick said:



> Until then, we may well see prices dip below the recent double bottom at $25.55 and $25.52. I'd say that we'll see those beaten by a few cents



And what do you know, the low of Wednesday was just under $25.40! BHP reversed strongly today and with BHP in London up strongly atm, this should hopefully continue tomorrow. Now, I look forward to the following, also written by Nick:



> If we did see that then prices break higher through $26.71 I'd be a lot more confident about the immediate future for BHP



P/S: I didn't end up covering the long CFD positions.


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## mmmmining (15 December 2006)

Funny number games, about BHP's PE ratio

London (Yahoo UK) 9.76
Sydney (Etrade) 10.18
New York (Yahoo) 12.66

In Aussie, last year earning 225.4c, next year 289.1c, Trailing PE is 11.49, forward PE is 8.96.


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## Nick Radge (15 December 2006)

scsl,
One of the strongest thiings I can put forward to new traders is observation. People do not observe price action. They watch, but rarely do they take it in. Once you start to observe these little nuances then see that they do in fact repeat often, then you start putting it to good use. 

I don't get them all right either. I said on Tuesday that CSL would just drop back a touch more to $55 - $56 before taking off to the high $60 region. So I missed that trade...


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## Freeballinginawetsuit (15 December 2006)

Nick Radge said:
			
		

> scsl,
> One of the strongest thiings I can put forward to new traders is observation. People do not observe price action. They watch, but rarely do they take it in. Once you start to observe these little nuances then see that they do in fact repeat often, then you start putting it to good use.
> 
> I don't get them all right either. I said on Tuesday that CSL would just drop back a touch more to $55 - $56 before taking off to the high $60 region. So I missed that trade...





Totally agree


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## mmmmining (16 December 2006)

There is an article about Olympic Dames' expansion plan, how important it is, how cheap the uranium was sold, and how long does it take to increase the production three-folds.

http://www.theage.com.au/news/business/bhp-tips-growing-uranium-demand/2006/12/15/1166162318436.html

Siting on 38% of global resources, the uranium is not singled out as one bright spot, buy buried with the base metal. The lazy assets are managed by lazy people.


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## Sean K (16 December 2006)

Perhaps BHP will be the next Big Australian to go to private equity so that it's true value can be unleashed? I see this being conquered and divided and refloated, under about 5 different company names shortly.

Although, I'm sure Ducati would argue against this. Perhaps it gets refloated for a total of about $10....he he


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## mmmmining (16 December 2006)

Siting on 38% of world resources, currently only produce less 5% of world production; Even it rumps up th 15,000t/yr, still less than 15% of total. BHP is a really nice guy, keep the resource, and let the Canadians make all the money.

I bet after ten years, people might find a cheap way to get uranium from ocean, or thorium based reactor become commercially available, technological sound, and safer to run.

If BHP is still in the business, it will be siting on a pile of copper ores with radiative wastes.

Those poor uranium juniors, working like bees, try to save the world with meager production plans here and there,  even knowing they cannot get production permits. While the big brother with resources, money, and permit are siting there do absolutely marginal. What a shame. 

From this angle, the three-mine policy should be flushed to toilet.


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## MiningGuru (17 December 2006)

Give them a break!

Remember they only took control of Olympic Dam just over a year ago after buying WMC.

It does take a little while to ramp up production


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## mmmmining (17 December 2006)

MiningGuru said:
			
		

> Give them a break!
> 
> Remember they only took control of Olympic Dam just over a year ago after buying WMC.
> 
> It does take a little while to ramp up production




Guru, I remember my WMC shares was sold to BHP cheaply by the Board. By current standard, WMC may worth well over $40 dollars.

I am not against BHP, just to point out how the assets value can be undervalued if you give them a break. BHP got it cheaply, and still think it cheaply. So is the BHP's SP.

I would suggest BHP create a tracking stock for the uranium assets, a kind of situation between RIO and ERA. Then the value of the uranium can be realized, and they have dedicated team to develop Olympic Dam, and acquire more uranium projects.


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## rosie (17 December 2006)

Nick Radge said:
			
		

> scsl,
> One of the strongest thiings I can put forward to new traders is observation. People do not observe price action. They watch, but rarely do they take it in. Once you start to observe these little nuances then see that they do in fact repeat often, then you start putting it to good use.
> 
> I don't get them all right either. I said on Tuesday that CSL would just drop back a touch more to $55 - $56 before taking off to the high $60 region. So I missed that trade...




Very good point... the last two rallies 86 & 84, currently is 80 cents.

Cheers.


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## mmmmining (17 December 2006)

The following is from:

http://www.uranium.info/news/industry.html#Cam

TENEX Considers Role in Olympic Dam Expansion

Russia’s state-controlled uranium producer and exporter, Techsnabexport (TENEX), is talking with BHP Billiton about its involvement in the expansion of the Olympic Dam uranium mine in South Australia.

Vadim Zhivov, first deputy general director for TENEX, confirmed today that the company is negotiating a role in the development of the mine. “We’re discussing various forms of participation in the Olympic Dam project with BHP Billiton,” said Zhivov, adding that “there are a lot of factors involved.” The next round of talks between BHP and TENEX are scheduled for January 2007, Interfax reported.

Comments: 
1. Where is Chinese, Indian, or Japanese?

2. If BHP spin off the Olympic Dam, together with other BHP's uranium assets, into a uranium focused company, things could be done a lot fast, and more profitable. Until one, Olympic Dam is a base metal copper project, uranium, together gold and silver is a by product.


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## haemitite (17 December 2006)

mmmmining said:
			
		

> 2. If BHP spin off the Olympic Dam, together with other BHP's uranium assets, into a uranium focused company, things could be done a lot fast, and more profitable. Until one, Olympic Dam is a base metal copper project, uranium, together gold and silver is a by product.



The orebody won't recogonise any change to the company structure.


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## mmmmining (17 December 2006)

haemitite said:
			
		

> The orebody won't recogonise any change to the company structure.




With due respect, do you mean "Qantas travelers won't recognize the LBO?" Your're 100% correct.

I think it is fair for me to say, as a shareholder, I do recognize the qantas' SP appreciation with the LBO.


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## mmmmining (19 December 2006)

For these who think LBO is not possible for BHP, here is an article about $120b ConocoPHillps.

http://yahoo.reuters.com/news/artic...2-18_00-14-08_N17469682&type=comktNews&rpc=44

..........
I quote:

The paper also said that while the company's market value of $120 billion may make it too large to become a takeover target, it noted that "few deals are impossible now." ConocoPhillips might attract interest from an even larger energy company or *a consortium of private-equity investors*.


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## Sean K (19 December 2006)

BHP is still toying with us. Just which was is it going to go? Aaaaahhhhh!!!

Looks pretty tenuous to me..


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## mmmmining (19 December 2006)

kennas said:
			
		

> BHP is still toying with us. Just which was is it going to go? Aaaaahhhhh!!!
> 
> Looks pretty tenuous to me..




I see some divergence, the share price is down recently, but the volume is not up.


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## Ken (19 December 2006)

Looking at getting 1000 BHP at some stage soon, unsure if they are going to drop to $24 again though.

Am just a bit cautios with the market being at all time highs in a resource boom, and BHP is over 20% down on 52 week highs...


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## mmmmining (19 December 2006)

Ken said:
			
		

> Looking at getting 1000 BHP at some stage soon, unsure if they are going to drop to $24 again though.
> 
> Am just a bit cautios with the market being at all time highs in a resource boom, and BHP is over 20% down on 52 week highs...




Getting closer!


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## matti_pacman (19 December 2006)

i find it interesting that BHP is trading at PE of 10, for the fear of a commodity downturn in the next couple of yrs. While stocks such as CDU, who have no real production but MAYBE a great asset, is trading at massive premium... 

I mean, by the time they have the facilities up and running, the resource boom should be well and truely over?   

either the market is under pricing BHP   , or over pricing small/mid cap resources stock. what do u guys think?


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## mmmmining (20 December 2006)

matti_pacman said:
			
		

> i find it interesting that BHP is trading at PE of 10, for the fear of a commodity downturn in the next couple of yrs. While stocks such as CDU, who have no real production but MAYBE a great asset, is trading at massive premium...
> 
> I mean, by the time they have the facilities up and running, the resource boom should be well and truely over?
> 
> either the market is under pricing BHP   , or over pricing small/mid cap resources stock. what do u guys think?




I guess you have answered your own question. Do you believe that the commodity boom is over or not?

Having visited US and China recently, my answer is a big "NO". After you owned your first car, do you want to trade it for a bicycle? "NO WAY, JOSE!"  

China will continuously be a big commodity consumer, but also a wiser consumer. Their car is small, air-conditioner is more energy efficient and quite. They can achieve the same living standards with one-third of resources American used. But Chinese population is 4 times as much. 

I don't need to mention India's population. Just guess how many Vietnamese are there? You might be surprised that is about 4 times of us.  I was shocked when told by a Vietnam friend, and verified on the internet. I thought the Americans have killed most of the VietCon. No offense, I highly respect Vietnamese, they are smart, hard working, brave, and friendly. 

there are about 21m Aussie (maybe less if counted by Pauline Hanson), How about our "friendly" neighbor, Indonesia, 245m, others in on the top of the list:

Brazil 188m, Pakistan 166m, Bangladesh 147m, Russia 142m, Nigeria 131m, Mexico 107m, Philippines 89m, Vietnam 84m, Egypt 79m, Ethiopia 75m, Turkey 70m, Iran, 69m, Thailand 64m, Congo 63m, Burma 47m...

Now they are able to know how other people live through globalized media. They want to live life like you and I materially. All sort of commodities are something required to get them there.  

You might count how much money you have made on one of the resource juniors operated in Zambia, or Jibasigar. The development of resources industry in developing countries is transforming from resources exploitation to economy stimulation through foreign investments on roads, ports, power, utilities, school, housing, and commercial centers, etc... , and in turn put on demand on commodities in these countries. 

And in turn, developing countries will want to have bigger cut of the pie!! It is happening. Nationalize assets, windfall profit tax, increased royalty and company tax, foreign investment restriction, etc, making the commodities more scarce! 

All these point it out to a sustainable commodities prices if not going any higher.

But I need to watch out, and stay away from easily recyclable commodities. All developing countries are excellent reclyclers!

And also I stay away from so called dual-use commodities (Jewelry and industrial) Do you want to hang on a piece of industrial metal around your neck?


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## MiningGuru (20 December 2006)

And the Uranium. 

Holding the Olympic Dam resorce, the largest U resource in the world, and it could be possibly bigger has hardly been factored into the price.

With spot prices hitting $72 a pound, BHP is due a big dividend from U after its current contracts expire over the next few years!

Sooner or later people will realise this and rather rate it on a PE of 10 for current production, will rate it much higher on its future potential.

Early in the new year I think the share price will start moving towards the low $30s again.


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## Sean K (20 December 2006)

MiningGuru said:
			
		

> Early in the new year I think the share price will start moving towards the low $30s again.



If commods generally hold ok then I agree. BHPs chart is still generally sideways and more down atm if anything. 

I agree with Jan as a possible date for appreciation, with the OD expansion/resource upgrade/feasibility study due.


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## mmmmining (20 December 2006)

kennas said:
			
		

> If commods generally hold ok then I agree. BHPs chart is still generally sideways and more down atm if anything.
> 
> I agree with Jan as a possible date for appreciation, with the OD expansion/resource upgrade/feasibility study due.




Kennas, Can you please update the chart? Thanks. I think the volume is up today.


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## Sean K (20 December 2006)

mmmmining said:
			
		

> Kennas, Can you please update the chart? Thanks. I think the volume is up today.



Vol up a little. I'll be happier when it gets back over $26 and stays there. MUCH happier when it gets to the green circle. Higher highs is what we need. Breaking $28.15 ish could almost be a breakout for BHP. Also watch for the MACD to be breaking up through the signal line. Let's hope we're analysing it around there early in the new year....


----------



## ducati916 (22 December 2006)

BHP update;

From last week;


----------



## bigdog (22 December 2006)

BHP sales volume is huge today compared to prior days!

Noted that there were large trades prior to opening with trans OSXT, LTXT and EP

Does any one know what us happening?

Perhaps BHP selling shares from their future fund!

Volume -----value --------- date/time
41,638,504  1,059,244,013  22-Dec 10:41:31  

Date --------Open ---High ---Low ----Close ---Volume  
21-Dec-2006 25.6000 25.6200 25.2900 25.2900 30,684,109 
20-Dec-2006 25.5000 25.8600 25.4700 25.7700 21,503,582 
19-Dec-2006 25.4000 25.4900 25.3200 25.3200 18,733,197 
18-Dec-2006 25.8500 25.9300 25.5600 25.6700 17,572,957 
15-Dec-2006 26.0500 26.1600 25.9800 26.0200 11,956,293 
14-Dec-2006 25.6400 25.9800 25.5800 25.9000 18,815,262 
13-Dec-2006 25.4500 25.6400 25.3600 25.4200 22,767,590 
12-Dec-2006 25.7700 25.8900 25.6500 25.6500 15,576,619 
11-Dec-2006 25.8800 25.9500 25.7200 25.9500 16,506,055 
08-Dec-2006 26.1900 26.2400 25.9000 25.9600 17,139,384  
07-Dec-2006 26.5200 26.6100 26.3500 26.4000 13,167,364 
06-Dec-2006 26.6500 26.7100 26.5300 26.7100 16,596,900 
05-Dec-2006 26.4100 26.5000 26.2600 26.3100 22,996,776 
04-Dec-2006 25.9100 26.1400 25.8800 26.0000 15,692,965 
01-Dec-2006 26.3800 26.3800 25.8700 25.9300 13,936,326 
30-Nov-2006 26.2000 26.2600 26.1000 26.2300 16,259,860


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## rwkni1 (22 December 2006)

bigdog said:
			
		

> BHP sales volume is huge today compared to prior days!
> 
> Noted that there were large trades prior to opening with trans OSXT, LTXT and EP
> 
> ...




There is plenty of news about at the moment. Could have something to do with 2007 Contract Iron Ore prices being struck. CVRD just struck a 9.5% rise with Baosteel, this is a good number for the producers.  Also, there is likely to be plenty of sellers as the copper price really took a dive overnight.


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## bigdog (22 December 2006)

PM note just received on large volume today suggested that:

"its all option expiry volume put thru the market-nothing sinister at all"


----------



## MiningGuru (22 December 2006)

Don Argus the yesterday bought 11500 shares on market at $25.19

Last year just before Christmas he bought a significant parcel as well.

Just after that the shares in BHP started to surge.

Does Don Argus know what he knew last year?

Will there be a post Xmas surge?


----------



## marc1 (22 December 2006)

Re bhp: Noticed Don Argus dropped some small change from his pocket this morning , he picked up a lazy 11,500 shares to round of his small parcel to
307,495 !!!! life must be tough living on struggle street.  
cheers from the aussie battler!


----------



## Ken (22 December 2006)

i accidently bought 400 bhp shares at $25.32 after i thought i cancelled the order.

ever happened to anyone before???

i now have a 1000 of them at a an average price of $25.90 holding long term 

bought the 400 through a margin loan, so will try pay them off by april next year and have another look.

not too worried i guess..


how are these 9% price rise going to effect bhp? it looks positive to get a rise in cost of steel....


----------



## Devil_Star (22 December 2006)

Ken said:
			
		

> i accidently bought 400 bhp shares at $25.32 after i thought i cancelled the order.
> 
> ever happened to anyone before???
> 
> ...




Don't forget the falling copper prices as well. Investors are weighing both the upside (higher iron ore prices) and downside (plummeting copper prices). It's hard to tell which side is heavier now.


----------



## hector (22 December 2006)

Ken said:
			
		

> i accidently bought 400 bhp shares at $25.32 after i thought i cancelled the order.
> 
> ever happened to anyone before???
> 
> i now have a 1000 of them at a an average price of $25.90 holding long term




Ken,

Same happenned to me at closing auction 19th Dec CFD order to market. Can't understand how it happened as I was sure I hadn't placed a contingent order.

Was pleased to be up $700 at close on 20th, and then disappointed to give it all back and hit stop yesterday. Got to improve on taking profits!

AC


----------



## rederob (23 December 2006)

Devil
I picked up 2000, but I actually meant to.
Copper will impact negatively, but nickel will more than compensate.
A 9.5% price rise for iron ore is not a guarantee that the mining boom is full steam ahead, but it's certainly telling us that the market will be again tighter in 2007.
More steel output should also mean more need for nickel and zinc, and these latter two metals are where one needs to look if you are not going the big diversified route.


----------



## nizar (23 December 2006)

rederob said:
			
		

> Devil
> I picked up 2000, but I actually meant to.
> Copper will impact negatively, but nickel will more than compensate.
> A 9.5% price rise for iron ore is not a guarantee that the mining boom is full steam ahead, but it's certainly telling us that the market will be again tighter in 2007.
> More steel output should also mean more need for nickel and zinc, and these latter two metals are where one needs to look if you are not going the big diversified route.




For me personally to take advantage of high nickel and zinc prices, i would probably be looking at more purer plays.


----------



## Sean K (23 December 2006)

nizar said:
			
		

> For me personally to take advantage of high nickel and zinc prices, i would probably be looking at more purer plays.



Lets not forget oil gents. Should be hovering around $60 ish all next year with spikes up and maybe down, but I hazzard a guess that BHPs long term forecast for profit is a bit lower. Anyone have what they are working on??


----------



## mmmmining (23 December 2006)

My personal view is copper and aluminum will not looking good because they are very recyclable.

Zn, Ni, Co, Mo, Cr, Mn etc that associated with iron/steel are looking good, almost impossible to recycle. Other metals are looking good is rare earth metal staff. 

My recent visit to China reinforced my view. I have seen the rusty fences, building structures all over the place. 5 years old building there looks like 20 years old here.

I doubt about the future of gold and sliver because they are almost not consumable. And it is impossible to go back to the age of hard currency, and central bank always want to sell them. It is only good for the war time. 

I guess BHP is looking good as long as iron ore price is keeping up.

How can we forget about uranium?  I start looking for good company with  thorium exposure.


----------



## Devil_Star (23 December 2006)

rederob said:
			
		

> Devil
> I picked up 2000, but I actually meant to.
> Copper will impact negatively, but nickel will more than compensate.
> A 9.5% price rise for iron ore is not a guarantee that the mining boom is full steam ahead, but it's certainly telling us that the market will be again tighter in 2007.
> More steel output should also mean more need for nickel and zinc, and these latter two metals are where one needs to look if you are not going the big diversified route.




Agree. I have been backing some iron ore and zinc miners, like MGX, KZL & ZFX for months. They should be doing fine in 2007. But I'm not quite confident about nickel, wondering if supply's catching up demand soon, no idea...


----------



## Devil_Star (23 December 2006)

mmmmining said:
			
		

> My personal view is copper and aluminum will not looking good because they are very recyclable.
> 
> Zn, Ni, Co, Mo, Cr, Mn etc that associated with iron/steel are looking good, almost impossible to recycle. Other metals are looking good is rare earth metal staff.
> 
> ...




Uranium stocks look quite fully priced at the moment. So for Thorium, how soon do u think it can be used at commercial scale?


----------



## rederob (23 December 2006)

Devil_Star said:
			
		

> Uranium stocks look quite fully priced at the moment. So for Thorium, how soon do u think it can be used at commercial scale?



Devil
Devil, even Ziggy reckoned that if Oz today decided to go nuclear they would be looking at 10 years to see any power being delivered to the grid, and that would be optimistic.
I am not sure how easy it is to convert a power plant to thorium from urunaium.  But my view is that until there is a clear demand for thorium as a fuel, an investor may be piddling into the wind.


----------



## mmmmining (23 December 2006)

Sorry guys, I might have confused you.

IMO, uranium will be the investment of life-time for at least another few years. There is no alternative for it for at least 10 years.

If uranium price reach $100, or even someone fancy $200-300 per lb, I believe people will look for alternatives. 

Like oil, when it reach $80, people start to use cooking oil staff. 

I guess thorium have some remote chance to make it before the successful of technology under experiment, ITER, which use heavy water nuclear fusion technology. The experiment is going for 30 years with $13b budget.

I am a long term investor, and also like to try new ideas.

According to my research, there is no Aussie company mining thorium.


----------



## Fab (28 December 2006)

BHP looks to me really undervalued at the current level. I am picking $25 as the bottom that is why I can't understand why it's sp is so low. Uranium with Olympic damn is also a major asset for them.


----------



## nizar (28 December 2006)

Fab said:
			
		

> BHP looks to me really undervalue at the current level. I am picking $25 as the bottom that is why I can't understand why it's sp is so low. Uranium with Olympic damn is also a major asset for them.




Yeh true but the market looks short term i hear its $6billion for the capEx of olympic dam expansion, thats a fair stack.

And copper is dragging it down, big time.

And oil is struggling. Yanks see BHP as purely an oil company.


----------



## JBMMMMMMMMMM (28 December 2006)

Should bounce well off the $25 yr low resistance, my pick 2% rise today

-BHP-Share Prices
Exchange Price % Move 
ASX A$25.04     0.000 
LSE GBP9.28      +1.03 
NYSE (Ltd ADR) US$39.60 +2.27 
NYSE (Plc ADR) US$36.88 +2.19   
JSE ZAR127.62    +0.98 

-BASe metals- CRUDE oil- gold silver- doing well overnite 
 increase in raw materials ,should be good year for BHP


----------



## YOUNG_TRADER (28 December 2006)

I can't believe that this fat lard of a mining giant is still sitting its fat rear around the $25 mark,  I have never and will probably never own any BHP shares, but it amazes me that BHP is still around these price levels

Hasn't every single analyst been calling for BHP SP to be $30-$35 and this was using heavily discounted spot prices as well?

Surely it looks like an attractive takeover target, I know it sounds silly but companies fom Canadia and Nth America trade on much higher P/E multiples so it would actually be beneficial for a smaller lighter Xstrata to try the unthinkable and T/O(merge) with BHP


----------



## nizar (28 December 2006)

YOUNG_TRADER said:
			
		

> Surely it looks like an attractive takeover target,




You should have a crack YT, 100billion ought to do it, just sell a few (of your other) shares !


----------



## Ken (28 December 2006)

Along with bhp.

How bout rio tinto owning era shares...?

They have boomed, and no positive signs for rio even knowing they own the majority of era.

I hold bhp and rio tinto.

bhp still cheap but imagine what the all ords would be if bhp was $35 and rio was $90?


----------



## mmmmining (28 December 2006)

Ken said:
			
		

> Along with bhp.
> bhp still cheap but imagine what the all ords would be if bhp was $35 and rio was $90



It might be the same if people switch from banks to resources, like late 1990s.


----------



## Ken (28 December 2006)

Having said that:

bhp has still returned over 10% to shareholders since the the start of 2006.


----------



## michael_selway (28 December 2006)

Ken said:
			
		

> Having said that:
> 
> bhp has still returned over 10% to shareholders since the the start of 2006.




which is below all ords average i think, and clearly below likes of ZFX & PDN etc, all in ASX 200

thx

MS


----------



## Julia (28 December 2006)

michael_selway said:
			
		

> which is below all ords average i think, and clearly below likes of ZFX & PDN etc, all in ASX 200
> 
> thx
> 
> MS



Exactly right, Michael.  BHP, despite its rep as being an essential core stock in any portfolio, is the worst performer in my stable, and the low growth isn't compensated by a decent dividend.

Julia


----------



## Ken (28 December 2006)

What about the last 2 year returns...?

I wouldnt invest in BHP as a get rich quick stock. Yes its underperformed, everyone knows it.  But who is going to  make it go up in price?

Could it be that there are to many investment funds waiting for BHP to hit a certain level before they are allowed to act on it and buy more?

I dont know how it all works but its not Mr Jones or Ms Smith making the shareprice of BHP head north or south.  Its the big players and they will decide when its right.

If the fundamentals arent right then fair enough but it would appear that they are there, and something is holding the stock back. Maybe the big players see shorter term upside in other companies that are growing at a fast rate....

All speculation and the reason we all invest.

Lets remember that for people to make money in the sharemarket people have to lose money...


BHP's time will come again. If its $30 in two years time I would be suprised But I wont be complaining that it has gone up in value.


----------



## nizar (28 December 2006)

Ken said:
			
		

> What about the last 2 year returns...?
> 
> I wouldnt invest in BHP as a get rich quick stock. Yes its underperformed, everyone knows it.  But who is going to  make it go up in price?
> 
> ...




The best time to be holding a stock is when its moving. As far as i am concerned, if its not moving RIGHT NOW in the right direction, then its a dog.

Yeh we can all look at the past 2 years but unfortunately thats not going to help us make money TODAY.

Cash rate is 6%, so you just have to ask yourself, is 4% a year (this year) enough for the risk you are taking. And think about all the risks you are exposed to with BHP, its not just zinc like ZFX.

And i want to say that when BHPs time comes again, i will be in, but i probably wont. I'll probably never own this stock.

I like uranium but much better exposure through pure plays.


----------



## mmmmining (28 December 2006)

If you believe the commodity boom will last about 20 years and this boom began in 1999, you should only begin to worry about the under-performance of BHP after 2015 when BHP is a $100+ stock. 

Short term correction is normal. This correction is a bit over 20% from top. If you hold some of the hot stocks like PDN, and ZFX, they have experienced around 40% corrections sometimes this year.

Just the prolonged bearish worried me a bit. I believe soon or later, the sentiments will be back to these big cash cows. 

Just like, who could predict that TLS is out-performing ASX200 in recent month?


----------



## nizar (29 December 2006)

mmmmining said:
			
		

> If you believe the commodity boom will last about 20 years and this boom began in 1999, you should only begin to worry about the under-performance of BHP after 2015 when BHP is a $100+ stock.
> 
> Short term correction is normal. This correction is a bit over 20% from top. If you hold some of the hot stocks like PDN, and ZFX, they have experienced around 40% corrections sometimes this year.
> 
> ...




You can tell the quality of a stock from how well it recovers after corrections. During the May correction:
KZL smashed from 4.70 to 2.89. Today $6.92. PDN smashed from 5.50 to 3.55. Today $8.90. ZFX absolutely hammered from $13.50 to $8.00. Today $18.69. 

All have made new highs.

BHP the high was $32. Still 20% off THE PREVIOUS HIGH. Forget about making new highs substantially above it like the other stocks mentioned have done.

I wonder how long you guys will give it before you decide its time to fold?


----------



## mmmmining (29 December 2006)

nizar said:
			
		

> I wonder how long you guys will give it before you decide its time to fold?



Nizar, I guess you have spectacular return on ZFX, KZL and PDN etc. Congratulations! 

My problem is I cannot put all my money on a couple of star stocks *after the factor*. I have to pick a basket of stocks, such as ZFX, KZL, PDN, and BHP to begin with. So some stocks make good money, some make less money, and some even lose a lot of money at any time-frame. 

If I can pick up the top performance stock every day and each time, I will be richer than Bill Gates in no time.

I am a believe of the commodity boom super cycle theory. I am investing and I will invest in all kind of resource stocks at different stages.

But I admit BHP is a bit bearish, and too long.


----------



## It's Snake Pliskin (29 December 2006)

mmmmining said:
			
		

> Nizar, I guess you have spectacular return on ZFX, KZL and PDN etc. Congratulations!
> 
> My problem is I cannot put all my money on a couple of star stocks *after the factor*. I have to pick a basket of stocks, such as ZFX, KZL, PDN, and BHP to begin with. So some stocks make good money, some make less money, and some even lose a lot of money at any time-frame.
> 
> ...




What is a star stock? I mean really STAR like what does it do?


----------



## Fab (29 December 2006)

It's Snake Pliskin said:
			
		

> What is a star stock? I mean really STAR like what does it do?



I think PDN would qualify as a star stock at least to me . What a stellar rise in 2 years and it keeps going up. My only regret is not having bought earlier and more. I got in at $2.45 a year ago


----------



## scsl (2 January 2007)

BHP in London is up 2.5% so far tonight. Strongest single day rise in a few weeks - which is probably the beginning of the next rise up to about $27-28. US markets are closed tonight so we'll most likely take the lead from the UK. BHP and RIO are due for a bit of a run IMO.


----------



## Warren Buffet II (3 January 2007)

scsl said:
			
		

> BHP in London is up 2.5% so far tonight. Strongest single day rise in a few weeks - which is probably the beginning of the next rise up to about $27-28. US markets are closed tonight so we'll most likely take the lead from the UK. BHP and RIO are due for a bit of a run IMO.




They had the run yesterday, I think they will go down again today as the copper prices are heading south faster than first predicted, inventories heading north.

WBII


----------



## spitrader1 (3 January 2007)

Warren Buffet II said:
			
		

> They had the run yesterday, I think they will go down again today as the copper prices are heading south faster than first predicted, inventories heading north.
> 
> WBII



WBii you need to learn a few basics about how the ASX works. Big traders trade the spread between BLT and BHP, and if BHP goes up in the UK/US you can almost guarantee (ex an announcement or any systemic factor) that thats what the trend will be on the asx. any miss-price of this and the insto traders/fundies are all over it. You should know that before BHP opens, i, and a heap of other investors, basiclly know where BHP will open within about 10 cents because of where it closed in the states, so saying things like the above discredits you. BHP currently up 1.1% @ 25.80


----------



## Warren Buffet II (3 January 2007)

spitrader1 said:
			
		

> WBii you need to learn a few basics about how the ASX works. Big traders trade the spread between BLT and BHP, and if BHP goes up in the UK/US you can almost guarantee (ex an announcement or any systemic factor) that thats what the trend will be on the asx. any miss-price of this and the insto traders/fundies are all over it. You should know that before BHP opens, i, and a heap of other investors, basiclly know where BHP will open within about 10 cents because of where it closed in the states, so saying things like the above discredits you. BHP currently up 1.1% @ 25.80




Well, it is 25.60 now only 0.27% up, if that is what you call following the States and UK market well good on you mate. It is pretty easy to see the depth of the market before it opens but it does not mean that it will stay there.As you are trying to give me a lesson, I will give one, do not expect the Australian market to follow the US and UK market all the time 

WBII


----------



## spitrader1 (3 January 2007)

Warren Buffet II said:
			
		

> Well, it is 25.60 now only 0.27% up, if that is what you call following the States and UK market well good on you mate. It is pretty easy to see the depth of the market before it opens but it does not mean that it will stay there.As you are trying to give me a lesson, I will give one, do not expect the Australian market to follow the US and UK market all the time
> 
> WBII



did i say it will stay there?? I said thats where it would open. You were saying, before the market opened, what you thought would happen to BHP. I stated you cant say it will open down when it was up in the UK. It followed the UK and the states, it opened almost exactly in line (figuring in FX and spread calculations). I also think you didnt read the rest of my post (ex announcement and systemic risk). Systemic risk has come into play today where the market was up 20 odd points when BHP opened (in line with the UK) and now the market is only up 9 odd points and BHP has drifted accordingly. I was not talking about depth. I can tell you exacxtly where BHP will open, as stated within about 4-5 cents, without even looking at market depth. On to your next point, i never said the market follows the us and uk, i said BHP does, ex any announcement of systemic risk. The reversse is also true, if BHP trades up for any reason here, the UK will follow suit, there is too much money on the table in the spread trade for the stock to follow any other pattern and you are a fool to think otherwise.


----------



## Warren Buffet II (3 January 2007)

spitrader1 said:
			
		

> did i say it will stay there?? I said thats where it would open. You were saying, before the market opened, what you thought would happen to BHP. I stated you cant say it will open down when it was up in the UK. It followed the UK and the states, it opened almost exactly in line (figuring in FX and spread calculations). I also think you didnt read the rest of my post (ex announcement and systemic risk). Systemic risk has come into play today where the market was up 20 odd points when BHP opened (in line with the UK) and now the market is only up 9 odd points and BHP has drifted accordingly. I was not talking about depth. I can tell you exacxtly where BHP will open, as stated within about 4-5 cents, without even looking at market depth. On to your next point, i never said the market follows the us and uk, i said BHP does, ex any announcement of systemic risk. The reversse is also true, if BHP trades up for any reason here, the UK will follow suit, there is too much money on the table in the spread trade for the stock to follow any other pattern and you are a fool to think otherwise.




This is my post for you again so you can read and read again and understand. It must be difficult for you sometimes.
******************
They had the run yesterday, I think they will go down again today as the copper prices are heading south faster than first predicted, inventories heading north.
******************

So I will explain to you, "I think they will go down again today", well that means during the day not at opening.

And you mentioned, systemic risk, I can see you have been reading your "Economy for Dummies" book lately, finish it first and then come back.

WBII


----------



## Absolutely (3 January 2007)

he he lol   

actually WBii I think your call was right


----------



## potato (3 January 2007)

whats it gonna do tomorrow guys


----------



## spitrader1 (3 January 2007)

Warren Buffet II said:
			
		

> This is my post for you again so you can read and read again and understand. It must be difficult for you sometimes.
> ******************
> They had the run yesterday, I think they will go down again today as the copper prices are heading south faster than first predicted, inventories heading north.
> ******************
> ...




I wasnt making this personal so i dont understand why you are. Dont try and get agressive, it doesnt suit you. Ask the last person who got agressive with me on this forum, and you will find out what happend to them. I was only trying to help educate you, to help you understand how the opening of BHP works compred to the overseas market because you had made a comment contrarian to this trend.


----------



## potato (3 January 2007)

what happened to the last person, im pretty bored i wouldnt mind reading about it....


----------



## spitrader1 (3 January 2007)

potato said:
			
		

> what happened to the last person, im pretty bored i wouldnt mind reading about it....



i dont want to go into it, too much of the topic of BHP, which is what i was trying to keep this post about.


----------



## Absolutely (3 January 2007)

Well all I can say is BHP is looking sick. Gone red again now - following the copper price I guess.

I bought in a few months ago at $25 when all the talk was about hitting $32 - $35 even $40 in 12 months. Well those values look a long way off right now and this stock isn't worth holding for dividends in my opinion.

I'm considering busting out as the money might be better used elsewhere....


----------



## Warren Buffet II (3 January 2007)

potato said:
			
		

> what happened to the last person, im pretty bored i wouldnt mind reading about it....




Potato LOL

I am pretty sure he cyber-killed them    What a joker  :bananasmi , if you are bored I bet you can have some fun reading his post in other threads. 

He is just a funny very smart :  character.

:


----------



## Warren Buffet II (3 January 2007)

Absolutely said:
			
		

> Well all I can say is BHP is looking sick. Gone red again now - following the copper price I guess.
> 
> I bought in a few months ago at $25 when all the talk was about hitting $32 - $35 even $40 in 12 months. Well those values look a long way off right now and this stock isn't worth holding for dividends in my opinion.
> 
> I'm considering busting out as the money might be better used elsewhere....




Hi Absolutely,

I have been thinking the same way for a couple of months now. I just had a look at the prices of copper for the last 6 months and 1 year and they are in a downtrend and inventories are the other way around.

I sold 50% my holding when it reached $28 last time and I do not see it going up very strong anytime soon.

It may turn its trend but no sure if that will happens in the next 3 months. You know RIO is experiencing the same behaviour is stack there as well.

Did they got out of flavour?

WBII


----------



## spitrader1 (3 January 2007)

Warren Buffet II said:
			
		

> Hi Absolutely,
> 
> I have been thinking the same way for a couple of months now. I just had a look at the prices of copper for the last 6 months and 1 year and they are in a downtrend and inventories are the other way around.
> 
> ...




I think the market, has got BHP horribly wrong. The theory that "its run so far it cant keep going does not hold water. The same people who said that are still short the index at 5200. As don argus said (and you would think he would know a thing or two about banking systems), the china story has not even begun yet. Only when a proper banking system is implemented in china and the avg person in  china is taught to consume, will we see the real power of china. BHP is seeing on average 80,000 new people a month wanting infastructure in china, and this will only grow. 

The company’s project development and expansion plans exceed US$9.8B over a five-year period. The room for expansion, and caqpital used at its full ability is too large to ignore. People that are saying that BHP has seen its best days and is looking "sick" will be the people that are gagging and looking to buy the stock 30.00 plus. The easy money may be over, but the lower BHP goes, the more i back the truck up.


----------



## Sean K (3 January 2007)

WBII and Spi, lets try and continue to keep it civil thanks. I certainly agree with Spi on the opening price of BHP, it's always in line with closes overseas pending any factors ann in between open/close, but picking a closing price in Australia is much more problematic. While copper may go down overnight (or any other commod), what happens when iron ore contacts are ann, or oil prices change during the day because of a hurricane developing in the Gulf, or Mid East instability? Day's not over yet anyway, so who knows.


----------



## Ken (3 January 2007)

over the past 6 months bhp has been bouncing up and down... correct....

that would that some people are making money.... correct?

How long this method of making money continues with bhp is anyones guess.

I still hold, as i see it as undervalued, and as my major stock that I margin lend against.

It is all going to happen in a hurry when it has its next run, and those not on may be paying the extra price that the majority of people think its worth.

We all knew it was going to be a little bit choppy.  How you decide to handle the  ups and downs now will determine the end result


dont tell me 30 years time BHP will be in the $30 mark.... 

those looking for a good cheap buck, buy yourself some anything with Uranium in its name...

BHP = long term stability in my eyes..


----------



## ducati916 (4 January 2007)

*Ken*



> _dont tell me 30 years time BHP will be in the $30 mark....
> those looking for a good cheap buck, buy yourself some anything with Uranium in its name...
> BHP = long term stability in my eyes.._




Thirty years is quite a holding period. If BHP consistently grows the dividend payout in nominal terms, inflation is benign, then why not.

Just look for anything that ends in dotcom, and you'll retire a millionaire.

Stability of what exactly?
Share price?
Revenues?

Well I understand that you do not expect a stable share price.
Revenues are based upon the supply and selling of commodities, notoriously volatile, cyclical, therefore about as far from stable as you can get.

As commodities are hot at the moment, this represents a very poor period in which to ENTER the asset class. If you've been here [commodities] for a while, then you have already earned large profits, and may be looking to lighten your positions.

jog on
d998


----------



## ducati916 (4 January 2007)

spitrader1 said:
			
		

> I think the market, has got BHP horribly wrong. The theory that "its run so far it cant keep going does not hold water. The same people who said that are still short the index at 5200. As don argus said (and you would think he would know a thing or two about banking systems), *the china story has not even begun yet. Only when a proper banking system is implemented in china and the avg person in  china is taught to consume, will we see the real power of china.* BHP is seeing on average 80,000 new people a month wanting infastructure in china, and this will only grow.
> 
> The company’s project development and expansion plans exceed US$9.8B over a five-year period. The room for expansion, and caqpital used at its full ability is too large to ignore. People that are saying that BHP has seen its best days and is looking "sick" will be the people that are gagging and looking to buy the stock 30.00 plus. The easy money may be over, but the lower BHP goes, the more i back the truck up.




The China story has been underway for 20+yrs already. That it has now appeared within the public domain, and everybody + the shoeshine boy quotes the inevitibility of China, starts to make you wonder just how valid the great unwashed opinion actually is.

Taking Banking as your example, we have been here before.
Japan, mid to late seventies, through 1989, and then disaster. China uncannily mirrors the Japanese story, but with far greater inherent instabilites.
The significant difference is one of government policy and regulation. Are you willing to place your bet on being able to analyse future government policy?

BHP is priced for perfection.
Any deviation from this paid for future, and BHP holders will have interesting decisions to make.

On the daily swings & roundabouts, currently not a happy place.


----------



## Warren Buffet II (4 January 2007)

ducati916 said:
			
		

> *Ken*
> 
> Thirty years is quite a holding period. If BHP consistently grows the dividend payout in nominal terms, inflation is benign, then why not.
> 
> ...





I agree with you ducati916. Entering these type of asset class at the moment is, based on probabilities the worst time to do it. People forget history and think that because the commodities have been doing good in the last 4 years it will keep like that in the future, commodity inventories in the market are showing that, you know all the ChinaIndiawhatever talk are not consuming all the stuff produced and the prices will keep going down until an average trend, 6 months of rising copper inventories is not a good sign.

So, BHP 24.5 today?

WBII


----------



## Fab (4 January 2007)

Warren Buffet II said:
			
		

> I agree with you ducati916. Entering these type of asset class at the moment is, based on probabilities the worst time to do it. People forget history and think that because the commodities have been doing good in the last 4 years it will keep like that in the future, commodity inventories in the market are showing that, you know all the ChinaIndiawhatever talk are not consuming all the stuff produced and the prices will keep going down until an average trend, 6 months of rising copper inventories is not a good sign.
> 
> So, BHP 24.5 today?
> 
> WBII



I am wondering where the bottom is for this one. I thought 24.5 was looking good to bounce back on it tomorrow. I have to say I bought some more today as I can't believe that BHP is so cheap at the moment


----------



## brendan87 (4 January 2007)

Hi everyone.
This is my first post  Although I've watched the forums on this sight for quite a while. Briefly, I'm 19 y/o studying Commerce/Economics in Brisbane. Dabbled in the market from the age of 12 (with my pocket money). I've got a commsec ML and just starting to utilise it for some s-t plays to spice things up a bit. With the recent run up I've unlocked a bit of 'play money'. So I took a small position in BHP just before the close at $24.42. Looks like the support is there just around 24.50 or slightly below. The next support is $24.00 which would be a nice tight stop for anyone getting in this afternoon. Fundamentally the stock looks good - very cheap with a PE of 9, the funds/brokers still love it and commodities unlikely to fall through the floor (at least in 07). I wonder if the stock is appealing to value investors, surely? Looking back when BHP was briefly under $25 in June it pulled back 10% within a week and almost 20% by the end of the month. Same in late September, with a small rally to $26 and then on to $28 by the end of October. Anyway, lets see how things go tomorrow and I'm interested to hear anyone else's thoughts on BHP as a s-t play or a longer term hold. Cheers,
Brendan


----------



## reece55 (4 January 2007)

Well, what a day for commodity exposed stocks. BHP is looking very sick to me indeed. Brokers retain their bias to the stock, but the chart says otherwise. The depth today was quite incredible - I saw 300,000 shares taken out in one go at midday at 24.50. Market depth illustrates the bearish view on the stock. Copper is now in the middle of no where, with support a very long way down from the price we are currently at. And BHP is edging very close to support at ~23.50. IMO now is not the time to be going long in this stock - yes, it has a low PE, etc. Just remember though that this is a company that has come from $14 in Jan 05 to a peak of above $32 back in May. Stay away in my view and below ~$23.50 short.

Cheers
Reece


----------



## ducati916 (4 January 2007)

> _I wonder if the stock is appealing to value investors, _




No, far too expensive.

jog on
d998


----------



## markrmau (4 January 2007)

brendan87 said:
			
		

> interested to hear anyone else's thoughts on BHP



I don't know what tomorrow will bring. Nobody does. It is basically taking a punt on copper prices.

http://www.marketwatch.com/tools/quotes/intchart.asp?symb=HG07H&sid=1951684&freq=1&time=3mo

Now I do think that what we are seeing is 'technical selling' of copper - where people are selling purely because the price has dropped below certain lines on a chart.

Of course this is silly, but if enough people believe it, it becomes true.

I think that copper is under pressure because buyers are on the sidelines 1. over end of year break, 2. to see how low it will go before buying. I do expect a bounce, but I may be wrong.

I think that copper will be down tonight (and hence bhp drop tomorrow) but may be completely wrong.

The most important thing for you is to ignore brokers in the short term, and understand you are making a proxy investment in the metals and oil markets.


----------



## haemitite (4 January 2007)

markrmau said:
			
		

> I don't know what tomorrow will bring. Nobody does. It is basically taking a punt on copper prices.



Its pretty crazy if people whacked BHP 4% based on the copper price decline, no one expects the base metals bubble to last - the future markets certainly don't

Smart investors would have noted the significane of the early iron ore price rise

Not so smart investors would claim that LIFO policy impacts cashflow and therefore BHP is expensive


----------



## 2020hindsight (4 January 2007)

http://www.abc.net.au/news/newsitems/200701/s1821631.htm abc seem to think that things are heading south


----------



## wayneL (4 January 2007)

2020hindsight said:
			
		

> http://www.abc.net.au/news/newsitems/200701/s1821631.htm abc seem to think that things are heading south



Copper certainly is, in an awful hurry too.

Now $2.57 on the march futs


----------



## Darkblue66 (4 January 2007)

hmm I recall a short time ago when WPL was down, people were 'writing it off', however as we now know that didn't happen.

I think a similar situation, BHP is down, however the markets are way up, and copper will get to a price where buyer won't help but buy it.

Quite likely when fund managers return to work next week, they will be all over it, a possibility.


----------



## wayneL (4 January 2007)

Darkblue66 said:
			
		

> hmm I recall a short time ago when WPL was down, people were 'writing it off', however as we now know that didn't happen.
> 
> I think a similar situation, BHP is down, however the markets are way up, and copper will get to a price where buyer won't help but buy it.
> 
> Quite likely when fund managers return to work next week, they will be all over it, a possibility.




Hedge funds are selling copper. Long only funds won't be buying until it gets to low 2's imo


----------



## ducati916 (4 January 2007)

haemitite said:
			
		

> Its pretty crazy if people whacked BHP 4% based on the copper price decline, no one expects the base metals bubble to last - the future markets certainly don't
> 
> Smart investors would have noted the significane of the early iron ore price rise
> 
> Not so smart investors would claim that LIFO policy impacts cashflow and therefore BHP is expensive






> _And the last in regards to LIFO & FIFO.
> BHP is a FIFO producer, and FIFO overstates profits in time of rising prices. Currently we have [or have had] rising prices [commodity bull market from "99] and BHP has ridden the crest of that wave on massively leveraged Net Profit [hence the low P/E] due to HIGH EARNINGS not a low security price. Cash flow is strangely, directly correlated to cash-flow, and FIFO increases cash-flow when prices are rising, whereas, LIFO understates Net Profit & cash-flow in a rising price environment
> 
> Now, prices [both prices of unit costs, and selling prices] are rising slowly and steadily, like our current commodity bull market thus;
> ...




Therefore as spot prices head south, so will Revenues & Cash-flows, magnified by the same leverage that enhanced them on the way up, so it will magnify them on the way down.

With a pending surplus in steel, we'll see how long iron ore holds up, and Nickel.

jog on
d998


----------



## Gundini (4 January 2007)

Yes well, tripple whammy with Oil down $2.50 (Unstastainable for the oil rich nations IMO, $60 is their staple), Copper off (But China growth story still in vogue), and Nickel mine closure ( Temp due to cyclone in WA). 

Not happy Jan, but massive support @ $24.08. A break bellow this level would be a major concern for mine. I'm happy to back up the truck, but a very painfull day. The old "Dog chasing its Tale" theory... But hey, the shakeout will pale when the stock hits $30+.... Just hope I live that long


----------



## 2020hindsight (4 January 2007)

Gundini said:
			
		

> But hey, the shakeout will pale when the stock hits $30+.... Just hope I live that long



wouldnt it be great if we all had foresight - for example that BHP would hit $50 in the next 2 years ? (serious long term speculation here - no ramping implied)
sorry joe - this is speculative and baseless - but - gee whiz the price of oil can only go up surely     It's gonna get to the point where we're gonna run out of caramelised palm trees and dinasaurs etc.


----------



## dhukka (4 January 2007)

brendan87 said:
			
		

> Fundamentally the stock looks good - very cheap with a PE of 9, the funds/brokers still love it and commodities unlikely to fall through the floor (at least in 07). I wonder if the stock is appealing to value investors,




At over 4x NTA I don't think value investors will be rushing in to buy anytime soon. A FY07 prospective PE of 9 is undemanding however on what assumptions are this year's earnings based? It would be interesting to see a sensitivity analysis of earnings to changes in commodity prices. 

Whilst BHP has enjoyed the benefits of high commodity prices in recent years there has also been a notable increase in production costs. Just recently BHP announced the projected costs for the Ravensthorpe Nickel project had tripled from original estimates. Ducati pointed out the double whammy effect of rising prodction costs and falling commodity prices on another thread that could really cut into margins (which are now at historical highs). Too much downside risk here for value investors I would think.


----------



## Gundini (4 January 2007)

2020hindsight said:
			
		

> wouldnt it be great if we all had foresight - for example that BHP would hit $50 in the next 2 years ? (serious long term speculation here - no ramping implied)
> sorry joe - this is speculative and baseless - but - gee whiz the price of oil can only go up surely     It's gonna get to the point where we're gonna run out of caramelised palm trees and dinasaurs etc.




Actually, 2020, you have a good point. BTW, my appologies if the ramping comment was directed at me, but it was not intended, but I do agree it is baseless for the following math:

Earnings & Dividends Forecast (cents per share) 
       Curr     2007    2008    2009  
EPS  225.4   288.4   293.0   262.5 

Current P/E 9.45

 By simply multiplying the forcast EPS by the current P/E, the following share prices can be forcasted without ramping:

Current: $21.30
2007   :  $27.25
2008   :  $27.68
2009   :  $24.81

These figures actually shocked me, and I thank you for bringing to my attention 2020, but it seems that if BHP doesn't grow faster than the current P/E, or EPS remains consistant with predictions, this stock may not hit $30, heaven forbid $50 in the next 3 years!   

This is of course understanding that these figures are only forcasted projections by the major broking houses of the world, and can change over time. Also, the Uranium factor is probably not factored into the growth projections due to it not coming online until from memory 2009? And obviously the Chindia growth factor is the wildcard. 

Cheers


----------



## Fab (4 January 2007)

dhukka said:
			
		

> At over 4x NTA I don't think value investors will be rushing in to buy anytime soon. A FY07 prospective PE of 9 is undemanding however on what assumptions are this year's earnings based? It would be interesting to see a sensitivity analysis of earnings to changes in commodity prices.
> 
> Whilst BHP has enjoyed the benefits of high commodity prices in recent years there has also been a notable increase in production costs. Just recently BHP announced the projected costs for the Ravensthorpe Nickel project had tripled from original estimates. Ducati pointed out the double whammy effect of rising prodction costs and falling commodity prices on another thread that could really cut into margins (which are now at historical highs). Too much downside risk here for value investors I would think.



This one is a bargain at this level. That is why I bought at 24.50. People have a very short memory I believe. P/E is low, earnings I believe were the best reported on the asx and they have been doing a share buy back also RSI is low. All these reasons push me to buy more and I am very happy about it. I believe it might keep going down a little bit more but in 6 months it should be much higher


----------



## Warren Buffet II (4 January 2007)

Just got this from the London Market - FTSE 

BHP Billiton (NYSE:BHP) led the fallers, down 40-1/2 pence at 892-1/2, further hit by news that a storm off Australia's southwest coast has forced the company to close nickel operations in the area.

Peers Rio Tinto lost 94 at 2,559, Vedanta was off 51 at 1,107, Xstrata fell 130 at 2,287, Antofagasta was down 22 at 466 and Kazakhmys eased 49 at 1,038.

Copper down at the moment 3%

So, I guess tomorrow BHP could break the $24 mark

WBII


----------



## Jrowl (5 January 2007)

Whats the point of looking at pe in the short term when the company is too **** to pay out a decent dividend? I mean they are making so much money but paying shareholders nothing.







If they start paying a higher dividend, the stock will go up.


----------



## silence (5 January 2007)

Technically I'd be looking to buy BHP soon, at slightly below $24. I base this on the support trendline in this chart (yesterday's close is marked by the horizontal line as I'm using delayed data). Stop at say 23.50


----------



## markrmau (5 January 2007)

Jrowl said:
			
		

> Whats the point of looking at pe in the short term when the company is too **** to pay out a decent dividend?




Hi Jrowl. Do you know of any companies that pay higher dividends? Who runs them - budhists? Or should I look for islamic companies?

With regards to capital return of profits, international companies prefer to do stock buy backs to increase capital gain, rather than pay dividends. This is because of the way these returns are taxed internationally. Australian franking credits are particularly useless to overseas investors.


----------



## ducati916 (5 January 2007)

Some more short-term price action for you guys to ponder;


----------



## Warren Buffet II (5 January 2007)

Interesting number from The Sydney Morning Herald

Shares in BHP Billiton, which stands to lose $US20 million a year in profit for every US1c a pound dip in the copper price, closed $1.11, or 4.4 per cent, lower at $24.37.

http://www.smh.com.au/news/business...resource-stocks/2007/01/04/1167777219314.html

It has dipped around 30-40c this week

WBII


----------



## Sean K (5 January 2007)

Might well possibly break $24.00 today, which is a pretty critial level. Has almost done this before in the past few months to bounce fairly strongly. Highs continue to get lower and lower.....  

Perhaps some support between $20 - $22.00, which will be around the 200d ma by then. 

Way oversold on Stochastics. 

As a believer in the stronger for longer scenario, I'm still holding for the minute, even if you have a $9 valuation Ducati.


----------



## dhukka (5 January 2007)

Fab said:
			
		

> This one is a bargain at this level. That is why I bought at 24.50. People have a very short memory I believe. P/E is low, earning I believe where the best reported on the asx and they have been doing a share by back also RSI is low. All these reason push me to buy more and I am very happy about it. I believe it might keep going down a little bit more but in 6 months it should be much higher




Well this is better than the type of comments you see on hotcopper in support of stock selection but not much.   



			
				Fab said:
			
		

> earnings I believe were the best reported on the asx and they have been doing a share buy back



 This is a clear indication that you don't understand fundamental anlaysis. The best earnings are not necessarily the highest, you should be looking at the quality of those earnings and whether they are sustainable. BHP's FY06 record profits were a result of both volume and price increases. The question you should be asking is whether these volume and price levels are sustainable are likely to increase or decrease. Of course they are buying back shares - they have to if they want to retain foreign investors to whom Australian franked dividends aren't worth much. 

You may well be right BHP may rally from around these levels (at time of this post $20.21) but your reasoning doesn't exactly fill me with confidence.


----------



## pacer (5 January 2007)

I'll still stick to my $23 prediction a few months back....Waynel agreed too.....well I'll be waiting till then.....


----------



## dhukka (5 January 2007)

dhukka said:
			
		

> You may well be right BHP may rally from around these levels (at time of this post *$20.21*) but your reasoning doesn't exactly fill me with confidence.




Sorry above should have been $24.21


----------



## Sean K (5 January 2007)

dhukka said:
			
		

> Sorry above should have been $24.21



Nice blog dhukka, or should I say suffering. Why not nirvana? 

Interesting you have a link to HC. Plenty of fundamental analysis there. LOL. 

Hope to see plenty in your posts here. Cheers! 

Have you had a look at any upside from potential trippling of output from Olympic Dam, as has been anticipated? Feasability study is due on this, this month I think. I suppose this is a blip in their overall output anyway. 

Is there any way they can increase output across their divisions to keep their growth chugging along, or are we just relying on price apreciation in iron ore, oil, etc? Perhaps they need to start being a little more acquisitive. Their recent purchase on Genghis Khan in the Gulf must value add?  

BHP seems to have held above critical support line at $24.00. Perhaps some technical buying going on?


----------



## dhukka (5 January 2007)

kennas said:
			
		

> Nice blog dhukka, or should I say suffering. Why not nirvana?
> 
> Interesting you have a link to HC. Plenty of fundamental analysis there. LOL.
> 
> ...




Hi Kennas,

Just kicked off the blog so not much to see there yet. Whilst I'm a fundamentalist I'm open to all angles - was just home for Christmas and picked up a copy of Nick Radge's "Adaptive Analysis" so looking forward to an interesting read there. Nirvana would imply I've reached a place beyond suffering which unfortunately I haven't so I'll stick with dhukka for now. 

Kennas I can't comment with any accuracy on exactly how much new production BHP is bringing on in the next 12 - 18 months, needless to say one way to offset falling commodity prices is to increase production but as you  know bringing new supply onstream takes time. Another way is to make acquisitions - in a climate like this though you have to be careful not to overpay. 

Having worked with plenty of resource analysts I know they are usually conservative with regard to their forecasts for commodity prices however I'll be interested to watch any downgrades in earnings coming through in the next few months particularly if other commodities start to follow copper. On the flip side 1H07 is already behind us so downgrades will probably effect FY08 earnings more than this year.


----------



## Ken (5 January 2007)

I have an average price on BHP of $25.25.

I continue to hold.  I think this is period is another chance to accumulate some more, but thats just me.

I am not going to say it cant fall anymore cause it has dropped so much...

However i am prepared to give it 12 months.

Hasnt been a lot of positive light shed on BHP.

When do cas report get released? How do we expect them to fare compared to last year?


----------



## ducati916 (6 January 2007)

> _Is there any way they can increase output across their divisions to keep their growth chugging along, or are we just relying on price apreciation in iron ore, oil, etc? Perhaps they need to start being a little more acquisitive. Their recent purchase on Genghis Khan in the Gulf must value add? _




If BHP increase their SUPPLY to the market, that will have the effect of lowering prices even further/faster. The same effect is found if BHP hedge their production, the selling pushes prices down [they do lock in their price or margin]

BHP Revenues [net profits] have been predicated upon a very strong commodity bull market, and there are economic forces afoot that will start to limit that effect.

The outsourcing, and placement of manufacturing capacity is now slowing, due to a number of factors tied to logistics. The seeming net effect will be a slowing in the capital invested within new PP&E within the developing economies, thus slowing demand for basic commodities [non-agricultural]

Combine that with a possible slowdown/recession in the US, and resource based businesses will again feel the bite of cyclical business swings.

The credit cycle, also is starting to show signs of weakening. China increased their reserve requirements, Europe will tighten, Japan & US?

If the credit cycle swings the other direction, BHP and the likes will enter my buying range.

jog on
d998


----------



## haemitite (6 January 2007)

BHP have a project pipeline of 30B to spend over the next few years. While prices - especially base metals - will come off production volumes will be significantly greater.

Additional iron ore, coal, copper, alumina and petroleum capacity is coming online now.


----------



## Fab (6 January 2007)

Ken said:
			
		

> I have an average price on BHP of $25.25.
> 
> I continue to hold.  I think this is period is another chance to accumulate some more, but thats just me.
> 
> ...




I have to say I agree I remain positive in the mid term for BHP. I bought some more on thursday. Unfortunately the drop might not be finished yet


----------



## Fab (6 January 2007)

kennas said:
			
		

> Might well possibly break $24.00 today, which is a pretty critial level. Has almost done this before in the past few months to bounce fairly strongly. Highs continue to get lower and lower.....
> 
> Perhaps some support between $20 - $22.00, which will be around the 200d ma by then.
> 
> ...




Kennas, 
Could you please explain what is the stochastic used for? I mainly use the RSI


----------



## BSD (6 January 2007)

Setting aside the current short-termist selling which could take BHP down to any price (<$20 perhaps, who knows?) the long term story is undeniable. 

For those seeking a high quality company with a growth story priced at very cheap multiples - BHP is a standout. 

Forgetting the current noise in the pricing of the commodities, contemplate the current forecasts of volume growth from 2006 to 2010.

Oil (mboe)
2006     115
2010     176
Up 53%

Copper ('000t)
2006      1275
2010      1420
Up 11%

Coking Coal (Mt)
2006       35.6
2010       51.9
Up 45%

Iron Ore (Mt)
2006       89
2010      113
Up 27%

Nickel ('000t)
2006      183
2010      260
Up 42%

Alumina ('000t)
2006      4,187
2010      5,327
Up 27%

*These are October 2006 Estimates from Goldman Sachs. 

It is these growth numbers that put BHP on sub-10 PEs into the coming years, even when bearish metals price forecasts are used. 

_______________________________________________________

The current copper panic is one-way betting for shorts at the moment. 

Amazing how many forecasts are emerging for a copper surplus when three months ago all the talk was of deficit. 

While supply is relatively easy to estimate, demand is almost impossible. 

Contemplate that the rumoured Chinese destocking last year was in the vicinity of 200,000tns. 

A similar amount of Cu is all that is available right now in the apparently 'bloated', LME inventory. 

What happens if a decent portion of the Chinese demand last year met by the no longer existent strategic stockpile comes into the open market again.  

Deficit anyone?

Some interesting reading:

http://www.henrythornton.com/article.asp?article_id=4444

http://www.kitco.com/ind/Field/jan032007.html


----------



## ducati916 (6 January 2007)

*BSD*



> _Setting aside the current short-termist selling which could take BHP down to any price (<$20 perhaps, who knows?) the long term story is undeniable. _




But if your heart is set on buying BHP shares, which would you rather pay, $30, or $15 [assuming you will hold until your zimmer rusts to a pile of scrap]
I would rather pay less, and receive more.



> _For those seeking a high quality company with a growth story priced at very cheap multiples - BHP is a standout. _




Cyclical, cyclical, cyclical.
Cyclicals are bought at low P/E's when the earnings are low, not high.
BHP's earnings are at cyclical highs.



> _Forgetting the current noise in the pricing of the commodities, contemplate the current forecasts of volume growth from 2006 to 2010.
> *These are October 2006 Estimates from Goldman Sachs.
> Amazing how many forecasts are emerging for a copper surplus when three months ago all the talk was of deficit. _




Does all the above not leave you somewhat skeptical as to the relevance of estimating supply/demand for their products?

jog on
d998


----------



## mmmmining (6 January 2007)

ducati916 said:
			
		

> *BSD*
> 
> Cyclicals are bought at low P/E's when the earnings are low, not high.
> 
> d998




I guess you have typo, should be bought at high P/E

Do you know how long this cycle is? Do you believe the commodity cycle has about 18 years bull market, and this cycle started in 1999?


----------



## ducati916 (6 January 2007)

mmmmining said:
			
		

> I guess you have typo, should be bought at high P/E
> 
> Do you know how long this cycle is? Do you believe the commodity cycle has about 18 years bull market, and this cycle started in 1999?




Not at all.
You would like, in an ideal world [for cyclicals] low earnings and a low price, this will give you a lower P/E than low earnings + higher price.

Do I know how long this cycle will be..........no.
Will there be smaller cycles in the larger cycle......I have no idea, but possibly
Did it start in 1999..........No, it started well before 1999

jog on
d998


----------



## BSD (6 January 2007)

ducati916 said:
			
		

> *BSD*
> 
> Does all the above not leave you somewhat skeptical as to the relevance of estimating supply/demand for their products?
> 
> ...




Try reading my post again:
*
"While supply is relatively easy to estimate, demand is almost impossible." * 

or from the Raff Report link:

*"When looking at the commodity markets remember that it is only the supply side that is well known and even then the error is probably plus or minus 5-10%.  But when it comes to demand side, the most important side of the equation, analysts are making a best guess with an error probably ranging between 10% and 20%. "*

Without estimating supply and demand - how on earth to you take a view on future price?

Then again, you are the one who doesn't read analyst research because you know more and actually prefer to make no estimates - benefiting at cash rates from balance sheet analysis.


----------



## ducati916 (6 January 2007)

*BSD*



> _Then again, you are the one who doesn't read analyst research because you know more and actually prefer to make no estimates - benefiting at cash rates from balance sheet analysis._



_

That's correct.
You would have been buying at $30+
While I would not consider buying below $12

If BHP in 10yrs is worth $45........who made the better returns?

jog on
d998_


----------



## BSD (6 January 2007)

If you look back (your forte) my interest in BHP on this thread has been in a range between $24 and $28. 

Even if I was buying at $30+ - in your little riddle, I will make more money at $45 because *you will never get set at below $12*


----------



## chops_a_must (6 January 2007)

Maybe I'm in the minority, actually... I know I'm in the minority here. I do not like BHP's medium or short term prospects.

The reason is simple, the majority of their production increases come when the commodities they are increasing the production of, are coming into balance, and may even be in a supply surplus.

However, I can't see the SP crashing because the Instos love this stock, and couldn't handle a massive loss on this one.


----------



## wayneL (6 January 2007)

When it all boils down, elephants can't dance.

Elsewhere in the resources sector, folks have been absolutely raking it in. Even noobs are share market gurus 'cause they've made a crapper full of cash.

BHP is big old slow dog that should only be bought VERY cheaply.


----------



## ducati916 (6 January 2007)

BSD said:
			
		

> If you look back (your forte) my interest in BHP on this thread has been in a range between $24 and $28.
> 
> Even if I was buying at $30+ - in your little riddle, I will make more money at $45 because *you will never get set at below $12*




Incorrect.
I could have bought it at that price in June 2004, when it was undervalued, before everyone and their granny jumped on the commodities bandwagon.

You really need to raise the level of your own analysis, it seems you depend far too much on the analysts that you read.

jog on
d998


----------



## ducati916 (6 January 2007)

And of course, as I was originally talking in terms of the US ADR, then here is the same buying point in price in 2002. When everyone hated everything.

jog on
d998


----------



## BSD (6 January 2007)

ducati916 said:
			
		

> Incorrect.
> I could have bought it at that price in June 2004, when it was undervalued, before everyone and their granny jumped on the commodities bandwagon.
> 
> You really need to raise the level of your own analysis, it seems you depend far too much on the analysts that you read.
> ...




Raise the level to what?

Why is BHP not in your 'cash return - massive risk' portfolio then?

You would have knocked it out about $10 below the current price anyway

I like PDN at 0.6c too - but I don't have a time machine. 


In the short term we are all guessing.


----------



## haemitite (6 January 2007)

ducati916 said:
			
		

> Incorrect.
> I could have bought it at that price in June 2004, when it was undervalued, before everyone and their granny jumped on the commodities bandwagon.
> 
> You really need to raise the level of your own analysis, it seems you depend far too much on the analysts that you read.
> ...



What a coincidence.

I could have bought it at that price in June 2004 as well.


----------



## dhukka (7 January 2007)

chops_a_must said:
			
		

> Maybe I'm in the minority, actually... I know I'm in the minority here. I do not like BHP's medium or short term prospects.
> 
> The reason is simple, the majority of their production increases come when the commodities they are increasing the production of, are coming into balance, and may even be in a supply surplus.
> 
> However, I can't see the SP crashing because the Instos love this stock, and couldn't handle a massive loss on this one.




Chops I'm happy to join you in the minority camp, being in the minority actually gives me more confidence. Remember when the instos loved AMP? Most of them were too scared to call it a dog even when they knew it was a dog - mainly because they didn't want lose business from the biggest fund manager in Australia, but in the end it got dumped.


----------



## moses (7 January 2007)

BSD said:
			
		

> http://www.kitco.com/ind/Field/jan032007.html




Wow! Great reading alright, thanks for that.


----------



## ducati916 (7 January 2007)

BSD said:
			
		

> Raise the level to what?
> 
> Why is BHP not in your 'cash return - massive risk' portfolio then?
> 
> ...




In the short term I can agree we are all guessing, absolutely, 50/50.

As to knoking it out earlier [had I actually held it] correct, I wouldn't have held it past much past 50% return.

As to why is it not there, simply for two reasons, at the time I was making the transition from technicals to fundamentals and never looked at it.
By the time I would have looked at it, it was gone.

The point in regards to BHP really is this; if you thought BHP was the behemoth, cash churning machine that you seem to, why did you not buy it at those bargain basement prices?

Why are you promoting it so vocally at the current high prices?
Simply looking at the charts, does it not seem POSSIBLE that you could get it cheaper, and thus improve your returns in the longer run?

jog on
d998


----------



## Fab (7 January 2007)

To me there is no doubt that BHP is undervalued at the current level. The question is how long you are planning to hold for. If it is short term then you will probably try to get it at an even lower price that it is otherwise the current level are probably not bad at all to buy now. I have personally bought some BHPJMD (installment warrant) on thursday as I am very bullish on this one for 2007.
My only problem is it does not pay much dividend compared to other stocks. Hopefully this will change.


----------



## haemitite (7 January 2007)

ducati916 said:
			
		

> In the short term I can agree we are all guessing, absolutely, 50/50.
> 
> As to knoking it out earlier [had I actually held it] correct, I wouldn't have held it past much past 50% return.
> 
> ...



Because BHP in Jan 07 is a different beast to BHP of Jun 04. Future expectations - hence share price - were very different to today.

In early 2005 I sold shares in a small iron ore company MGX after a 300% return over the prior 3 years. Iron ore price expectations were for a 20% rise, a few months later people finally woke up to China when a 70% price rise was delivered. The iron ore price today is more than double what it was in Jun 04, volumes are much higher too. 

People who decide not to buy a stock because its more expensive than an earlier buying opportunity  miss the point. Likewise it makes little sense to bemoan not buying the shares when they were "cheap". If you had believed them to be cheap at the time you would have bought them. Obviously you didn't.


----------



## annalivia (7 January 2007)

A major attraction of BHP continues to be a superb pipeline of projects across the globe. There are 23 projects at the feasibility stage or under construction, representing capital investments of around $14 billion. There are also around 200 projects in early stage assessments in 35 countries. BHP is definitely building for the future.

The international spread of such a large pipeline enhances and de-risks BHP in my opinion. The strike in Chile provides a prime example of this. Despite affecting the largest copper mine in the world, full year profitability remains on track. Similarly, due to earnings streaming from a wide range of commodities, BHP is less likely to be seriously impacted by weakness in one or two product markets.


----------



## ducati916 (7 January 2007)

annalivia said:
			
		

> A major attraction of BHP continues to be a superb pipeline of projects across the globe. There are 23 projects at the feasibility stage or under construction, representing capital investments of around $14 billion. There are also around 200 projects in early stage assessments in 35 countries. BHP is definitely building for the future.
> 
> The international spread of such a large pipeline enhances and de-risks BHP in my opinion. The strike in Chile provides a prime example of this. Despite affecting the largest copper mine in the world, full year profitability remains on track. Similarly, due to earnings streaming from a wide range of commodities, BHP is less likely to be seriously impacted by weakness in one or two product markets.




*annalivia*

First, I would disagree that investing so heavily at this point [historically high commodity prices] is strategically the right way forward, as by the time they are actually productive, the margins may be so squeezed, that they run at a loss.

Second, and more importantly, BHP returns from PP&E are desultory. They are on aggregate $0.93/$1.00 and even with the wind at their backs with high commodity prices, they remain an uninspiring $0.97/$1.00

This is a low return business. It is bad.
It is of course a commodity business, and by definition, they are low return high volume businesses.

There is no guarantee that this $14Billion invested will return ANYTHING.
Assuming for the moment that everything works out well, no hiccups, no delays, no strikes, price rises, cost overflows, etc,.............you will still earn the same on capital investment.

Could there not be a better use for the money?
Increase dividends, buybacks, etc?

Certainly at current prices there is no value to be had, you are paying for a stock, priced for perfection.

jog on
d998


----------



## haemitite (7 January 2007)

ducati916 said:
			
		

> This is a low return business. It is bad.
> It is of course a commodity business, and by definition, they are low return high volume businesses.d998



this just about tops it

You've confused a commodity business with a supermarket.


----------



## BSD (7 January 2007)

annalivia said:
			
		

> A major attraction of BHP continues to be a superb pipeline of projects across the globe. There are 23 projects at the feasibility stage or under construction, representing capital investments of around $14 billion. There are also around 200 projects in early stage assessments in 35 countries. BHP is definitely building for the future.




Very true - the capital expenditure is the driver of the production growth identified on the previous page. 

These new projects need to jump IRR hurdles of 20% and the assumed prices for commodities used in the modelling are very low. - $1.20 Cu, $40 bbl oil etc

Another year will pass and another $10bn of free cashflow for new investment will be generated


----------



## ducati916 (8 January 2007)

BSD said:
			
		

> Very true - the capital expenditure is the driver of the production growth identified on the previous page.
> 
> These new projects need to jump IRR hurdles of 20% and the assumed prices for commodities used in the modelling are very low. - $1.20 Cu, $40 bbl oil etc
> 
> Another year will pass and another $10bn of free cashflow for new investment will be generated




Do any of you people actually look at the numbers, or are you all relying on outside analysts to tell you what you "should" think?

Here are 10yrs worth of figures;

Sales..............EBIT......Depreciation.......Total...........EPS.....Tax Rate 

32,153.0 ......14,166.0.......2,264.0......... 9,783.0.........1.61 ....25.64 
26,722.0 .......8,940.0 .....1,801.0 ..........6,388.0 .......1.04 .....25.86 
22,887.0 ......4,369..........1.793.............2,716.0.........0.43.....19.91
15,608.0........2,783..........1,689.............1,581............0.25.....31.7
15,896.0........2,607..........1,769.............1,249............0.21......34.9
10,516.63......1,308...........1,220.............820.............0.22.......41.4
10,096.56......812.............1,087..............314............0.08........3.1
820.23..........55.8............77.2...............148.............0.04........60
9,770.24......[-1,089.8]....1,126.............[-950]..........[-0.27]....0.0
10,766.11....[-514.7]......1,120..............[-297]..........[0.09]......0.0

As you can see from the figures, the likelihood of generating $10Billion cash-flow on a sustained basis might as well be zero.

The returns from this business, as previously detailed are uniformly poor. In fact they are atrocious. I might even have to lower my intrinsic value. You guys are living in lala land.

jog on
d998


----------



## Knobby22 (8 January 2007)

Ducat

Your figures are wrong.

Earnings per share last year were 225.4 for instance.

Keep jogging.


----------



## ducati916 (8 January 2007)

Knobby22 said:
			
		

> Ducat
> 
> Your figures are wrong.
> 
> ...




Incorrect.
I tend to work from the US ADR figures, as I have more data.
The above figures would need to be adjusted for ASX.

jog on
d998


----------



## Warren Buffet II (8 January 2007)

ducati916 said:
			
		

> Incorrect.
> I tend to work from the US ADR figures, as I have more data.
> The above figures would need to be adjusted for ASX.
> 
> ...




So your numbers are per share or per ADR?

WBII


----------



## ducati916 (8 January 2007)

Warren Buffet II said:
			
		

> So your numbers are per share or per ADR?
> 
> WBII




Where the figures read *EPS* read per *ADR*
All other figures are not "per share/ADR" therefore read as are.

jog on
d998


----------



## Warren Buffet II (8 January 2007)

ducati916 said:
			
		

> Where the figures read *EPS* read per *ADR*
> All other figures are not "per share/ADR" therefore read as are.
> 
> jog on
> d998




It doesn't make too much sense then because I can see in the adr.com website that the EPS for 2005 is 2.08 and for 2006 3.45.

Can you please clarify your numbers?

WBII


----------



## chops_a_must (8 January 2007)

In free fall now. Doesn't look to be much from stopping this one getting to $22.


----------



## Would Be Trader (8 January 2007)

BHP is up 1.2% in London atm. 

Could this be the turnaround that many are waiting for?


----------



## wayneL (8 January 2007)

chops_a_must said:
			
		

> In free fall now. Doesn't look to be much from stopping this one getting to $22.




March copper just dipped below $2.50 too


----------



## Warren Buffet II (8 January 2007)

Commodity prices are heading south again today and warehouse stocks are up.

Copper -2.16%
Zinc -3.73%

So if they stay there BHP will probably touch 23.4 tomorrow.

WBII


----------



## reece55 (9 January 2007)

If BHP reaches below 23.50, IMO any thoughts of a recovery are off. Certainly at the moment, the chart points to it reaching this level....

U have to laugh at investors getting in on BHP now though..... no1 stock bought on Comsec today...... like lambs to a slaughter...... certainly not a stock I would be looking to go long in at the moment.....

CHeers


----------



## Mr Right (9 January 2007)

reece55 said:
			
		

> If BHP reaches below 23.50, IMO any thoughts of a recovery are off. Certainly at the moment, the chart points to it reaching this level....
> 
> U have to laugh at investors getting in on BHP now though..... no1 stock bought on Comsec today...... like lambs to a slaughter...... certainly not a stock I would be looking to go long in at the moment.....
> 
> CHeers





copper is up 2.5%


----------



## Sean K (9 January 2007)

Has bounced off the $24.00 mark for the minute, but it's a long way to recovery IMO. This might be just technical buying, with hardly a change in prices, inventories up, oil off...


----------



## dhukka (9 January 2007)

Mr Right said:
			
		

> copper is up 2.5%




Just wondering where everyone gets their commodity prices from. According to commsec copper was down 4.3% last night. Attached is the rest of the prices they quote for today. Judging by the prices quoted on Comsec you would expect resources to be down today. Are Comsec a day behind?


----------



## Sean K (9 January 2007)

dhukka said:
			
		

> Just wondering where everyone gets their commodity prices from. According to commsec copper was down 4.3% last night. Attached is the rest of the prices they quote for today. Judging by the prices quoted on Comsec you would expect resources to be down today. Are Comsec a day behind?



Kitco:

www.kitcometals.com


----------



## dhukka (9 January 2007)

thanks kennas,


----------



## hector (9 January 2007)

In nothing more than a punt, I took a short position at close today. Hope it doesn't hurt too much!

Enjoy reading fundamentals contributions (kennas, ducati et al), your knowledge helps others of us grow-cheers,

hector


----------



## Ken (9 January 2007)

You may be right,  a short position could be the go.  Plenty of profits up for grabs tomorrow.

BHP offers more than copper though, maybe some good news about the olympic damn, could get things cranking.

Either way I wouldnt take the punt just yet.

Going short on BHP now is probably not the smartest move.  Its still got a lot of lost ground to cover.


----------



## ROE (9 January 2007)

If you do fundamental analysis BHP is way over price even at $24 a pop. (feel sorry for guys who bought them at $32, they wont see BHP near that price range for a while.)

I reckon they close to peak earning or already there and there isn't much growth left in this company.

Look for the next BHP


----------



## Ken (10 January 2007)

ROE, the fundmentals are that they are halfway through a share buy-back.

Towards the latter half of this buy-back I think some positive news will come.


----------



## ducati916 (10 January 2007)

hector said:
			
		

> In nothing more than a punt, I took a short position at close today. Hope it doesn't hurt too much!
> 
> Enjoy reading fundamentals contributions (kennas, ducati et al), your knowledge helps others of us grow-cheers,
> 
> hector




To take a SHORT entry, you have to try and look at the chart *kennas* posted, and look to go short circa $26.50, near the top band of the Bollinger.
Currently, as indicated by the same chart $24 is a major psychological support point [it has zero fundamental significance] from the May correction.

jog on
d998


----------



## pacer (10 January 2007)

Yesterday was a classic long punt for an overnight and ,carry-on trade,,,,trade trade,,,trade.......two gapps with a small bottom on the 6 month low....easy money within 3 days.....where are re the techies............I didn't do it myself, as I am playin' a new system, and am on holidays...but it was rather obvious guys,,,,doh.................$$$$$MISSED  


burp!


----------



## pacer (10 January 2007)

But I'm still with WAYNEL on a $23ish bottom....possibly lower if this commodity correction carries on........personally ...I'm still bullish...this is just a pull back till the markets rocket again....but i'll be shorting by october.....I'm scared of heights, and It's hard to jump out of my window to end it all.....sorry....you'll just have to put up with me for another year.......boooohooooo....,,,,,
Hey DUKES......pop out to the MT MANIA CLUB (Whangarei heads) AND SAY GIDDAY TO MY MUM & DAD.....BARB and AL.....You'll have a ball and a good feed....lol!....and meet some good people.....



			
				pacer said:
			
		

> Yesterday was a classic long punt for an overnight and ,carry-on trade,,,,trade trade,,,trade.......two gapps with a small bottom on the 6 month low....easy money within 3 days.....where are re the techies............I didn't do it myself, as I am playin' a new system, and am on holidays...but it was rather obvious guys,,,,doh.................$$$$$MISSED
> 
> 
> burp!


----------



## Bush Trader (10 January 2007)

_I apologise that data on RIO has been included in this thread, however the the FN Arena Tech Wizard's views on the two big miners are presented here in conjunction_

Support Levels To Determine Direction For RIO, BHP
Source: FN Arena News - January 09 2007 
It's crunch time for both Rio Tinto (RIO) and BHP Billiton (BHP) shares, the Tech Wizard believes.

*Charts not included.  * 

He has noted that both shares have been struggling in the past few months in line with an equally struggling spot copper price. The first week of the new year proved be unquestionably bearish for copper (as well as for gold and other commodities including crude oil) and this has done quite a bit of damage to the technical charts for RIO and BHP, he says.

The Tech Wizard has now come to the conclusion that most price targets for Rio Tinto –high 90s and above 100 per share- may well be too optimistic. He says he is uncomfortable at present and this feeling might be reinforced by gold closing below US$600/oz on a weekly basis.

The Wizard says he regards this as a genuine possibility as he believes the outlook for gold appears ongoing bearish. However, a weekly close above US$600/oz is still possible and would keep the prospects of Rio Tinto shares reaching their price targets sometime throughout the year intact.

The Wizard believes real damage will be done to RIO 's prospects if the key support level at $64.85 is taken out on a weekly basis. Below that level there is no strong support levels until $50.00, he says, which would indicate the potential damage if the shares were to drop below key support.

BHP shares dropped to their key support level at $23.50 last week. The Wizard believes price action needs to hold at this level or we could see a nasty fall to $20.00.

Again he has noted fundamental analysts are all bullish with price targets ranging between $35.00 and $40.00. Watch out for the equity brokers reiterating their Buy recommendations on BHP this week to support their call for higher share prices later this year, he says. Unfortunately, this may not necessarily have a positive impact on BHP shares, he adds.

Adding to the Wizard's bearish sentiment is the fact that BHP's MACD reading is currently bearish and the Wizard would like to highlight this has been the case for the past few months. Needless to say, he adds, this would explain the selling pressure on the stock.

The Wizard strongly feels BHP shares will need to show some sort of a bounce this week, or at least a stabilising of the share price, as BHP has the same problem as RIO with no key support until way below at $20.00.

If either RIO or BHP shares would break down to their key support levels he suspects there will be a lot of red faces in the analysts' rooms at broking houses.

Were these key support levels to break in the next few weeks a lot of damage will be done to the profits and losses (P/Ls) of hedge funds and Super Funds who are holding BHP and RIO as the cornerstone of their resources portfolio, the Wizard says.

This may well be what is currently happening in the copper market already, he adds.

_Cheers_
_It will be an interesting few days for both stocks_


----------



## spitrader1 (10 January 2007)

hector said:
			
		

> In nothing more than a punt, I took a short position at close today. Hope it doesn't hurt too much!
> 
> Enjoy reading fundamentals contributions (kennas, ducati et al), your knowledge helps others of us grow-cheers,
> 
> hector



this may pay off, you should see BHP open around 24.12


----------



## sails (10 January 2007)

spitrader1 said:
			
		

> this may pay off, you should see BHP open around 24.12



Well done!  Low of the day so far @ 24.16.  Do you mind sharing how you calculate this, spitrader?


----------



## spitrader1 (10 January 2007)

sails said:
			
		

> Well done!  Low of the day so far @ 24.16.  Do you mind sharing how you calculate this, spitrader?



Nothing too hard-just going off the new york close in the ADR's. Its accurate 95% of the time ex any announcements to within about 10C.


----------



## sails (10 January 2007)

spitrader1 said:
			
		

> Nothing too hard-just going off the new york close in the ADR's. Its accurate 95% of the time ex any announcements to within about 10C.



I agree, you have been very close in your opening calls for BHP - but do you mind sharing the formula?


----------



## hector (10 January 2007)

Guys, I mistraded the classic candle formation yesterday. Should have entered long at the open, and should have had a bullish outlook at close...

Anyway, the short went well today, closed at open. BHP really struggling to shake the bears.

Cheers,
hector


----------



## Sean K (10 January 2007)

Commods mostly even by my data. Oil obviously off. Does this account for BHP sliding 2% in a generally benign environment?

Breaking through $24.00 again will be short term quite bearish to me. 

Anyone else lining up a short?


----------



## nizar (10 January 2007)

kennas said:
			
		

> Commods mostly even by my data. Oil obviously off. Does this account for BHP sliding 2% in a generally benign environment?
> 
> Breaking through $24.00 again will be short term quite bearish to me.
> 
> Anyone else lining up a short?




The Yanks consider BHP as an oil company.


----------



## Kauri (10 January 2007)

kennas said:
			
		

> Commods mostly even by my data. Oil obviously off. Does this account for BHP sliding 2% in a generally benign environment?
> 
> Breaking through $24.00 again will be short term quite bearish to me.
> 
> Anyone else lining up a short?




     In the short term quite possibly, "longer term" I have quite a few (Tech)reasons for it to bottom out between current price and $22.


----------



## Sean K (10 January 2007)

Kauri said:
			
		

> In the short term quite possibly, "longer term" I have quite a few (Tech)reasons for it to bottom out between current price and $22.



I have $22.00 as a target as well.


----------



## Sean K (10 January 2007)

Kauri said:
			
		

> In the short term quite possibly, "longer term" I have quite a few (Tech)reasons for it to bottom out between current price and $22.



So you're seeing a wave C ending somewhere between $22 and $24, for then another 5 wave up? Maybe.


----------



## Kauri (10 January 2007)

kennas said:
			
		

> So you're seeing a wave C ending somewhere between $22 and $24, for then another 5 wave up? Maybe.




  Hi Kennas...
*It's a very big maybe*, but yes.     The .... coloured box (sorry a tad colour blind), is the typical W4 retracement area of 38% to 50% (with small over/under allowance). If it plays out that way then I would expect a wave up. I'm not too experienced with E/W so don't bank on my interpretation though.


----------



## Ken (10 January 2007)

When does bhp announce their dividend?

And what will it be?


----------



## reece55 (10 January 2007)

Ken
Ex dividend date for BHP is normally at the end of Feb. They should announce this along with their quarterly report on 23 Jan 07, according to my corporate calendar.

Don't expect it to be big however - in recent years, BHP have only been paying about 24 cents, so its really on about 1% of capital invested at this level, ex franking.

Cheers
Reece


----------



## Ken (10 January 2007)

what will happen if the quarterly report for BHP  is encouraging, and they are on target for record profits again?

will this swing BHP back into favour?

Or are we just waiting for stabilsing of commodity prices on a whole...

should we resign ourselves to BHP losing more ground over 2007.

How do brokers come up with target prices for RIO and BHP when they are both so far away?

Have the brokers recommendations changed recently????


----------



## reece55 (10 January 2007)

Ken
Do yourself a favour and stop listening to analysts NOW. They are almost never right (use fundamental analysis most of the time to support their target, like BHP using a DCF model). Why did they constantly support a $35, $30 target - they got paid to, their firm wanted to make the stock attractive so their investing house could dump it, etc. 

BHP's price may react positively to its quarterly report - but then again it may not. I prefer to let the chart do the talking - BHP has been in a downtrend since May 2006. Now, IMO there is a lot of support at about $23.50. We are now in the midst of testing this support. albeit we are about 50 cents off. Would I be rushing to dump my BHP now - well, I suppose that depends on your investment objectives - however, short term, I think its going to take a lot to get back to a bullish scenario again. Personally, I am not looking to go long until I see about 26.50 broken, on high volume with a close at the day high. This reflects my objectives in the stockmarket however - I prefer to use leverage to get an increased return in a short time period. If you were a value investor, this migh tbe different.

Cheers
Reece


----------



## BSD (10 January 2007)

reece55 said:
			
		

> Ken
> Do yourself a favour and stop listening to analysts NOW. They are almost never right (use fundamental analysis most of the time to support their target, like BHP using a DCF model). Why did they constantly support a $35, $30 target - they got paid to, their firm wanted to make the stock attractive so their investing house could dump it, etc.
> 
> Cheers
> Reece




Yeah Ken - forget the advisers to the billions, follow the graphs of the day traders who put their success down to leverage.

Who would be mad enough to use fundamentals and DCF?

Only instos would use such rubbish and what do they know- they only control 80%+ of volume...

Who paid them to be bullish and burn their clients/reputation/income streams?


----------



## dhukka (10 January 2007)

Ken said:
			
		

> what will happen if the quarterly report for BHP  is encouraging, and they are on target for record profits again?
> 
> will this swing BHP back into favour?
> 
> ...




Ken, according to Huntley's data on Commsec FY07 eps is forecast at 286 cps down from 290.2 30 days ago and 294.6 60 days ago.  FY08 eps is forecast at 292.4 up from 288.4 30 days ago and 274.6 60 days ago. Not terribly significant in and of themselves. Remember last quarter's results are in the bag, the recent commodity price falls won't affect them.

How do analysts come up with their target prices? Believe me you don't want to know. But I'll give you a method that is just as accurate. Grab a dartboard and change the numbers. Change 10 to $24.00 11 to $25.00 12 to $26.00 13 to $27.00 etc. Then do the same in the opposite direction for the lower numbers 9 to $23.00 8 to $22.00 etc. Throw one dart and that's your target price (have another throw if you get a bullseye). There will be the odd analyst who is a good darts player but most of them will be lucky to hit the board. Personally I'd be aiming for the 1.


----------



## Ken (10 January 2007)

well i dont know where else to park my money

who knows whats going to happen, look back over posts, and there so much speculation.

everyone on here has  a different opinion because they trade differently, short, long, day etc

all i know is BHP is very red for me right now and i am trying to figure out if the commodity boom is gone and dusted or there is still upside.


----------



## reece55 (10 January 2007)

BSD
Are you actually supporting the Analysts here? HA!

IMO BHP is a classic example analysts getting it completely wrong.... Since May, ABN Amro, MBL et al have been recommending the stock as a screaming buy - the chart says it all - we are 25% off the high in May 06. Not only did they get it wrong on BHP, they were markedly wrong. 

I am an accountant who regularly gets paid to construct DCF valuations of companies, etc. Trust me, it's all bull**** - you can make the numbers look any way you want them to look - the only question is what side is paying the bill!

As for the advisor's to the billions, trust me unless you have big $$$$ by the time you hear the story, the people with the real money have already made their cut. 

However, its all up to the individual - if you want to trust analysts, you go right ahead - I remember when Sons of Gwalia was a screaming buy according to analysts before the thing topped itself - there are many examples of this. Learn to read the chart, it will let you know what is required.


----------



## chops_a_must (10 January 2007)

Ken said:
			
		

> well i dont know where else to park my money



It doesn't really take much effort to find good stocks. Nickel still looks good, as does anyone with tin. And Australian gas companies are getting all fired up. As soon as China stops dumping zinc, I think you'll see that make a comeback as well.


----------



## BSD (10 January 2007)

reece55 said:
			
		

> BSD
> Are you actually supporting the Analysts here? HA!
> 
> IMO BHP is a classic example analysts getting it completely wrong.... Since May, ABN Amro, MBL et al have been recommending the stock as a screaming buy - the chart says it all - we are 25% off the high in May 06. Not only did they get it wrong on BHP, they were markedly wrong.
> ...




Thanks for the tip. 

A couple of points:

1. Analyst DCFs have been way below price targets for a long time (40%) due to not accounting for much terminal growth and focussing on long term Cu prices of $1.10

2. The variance of price targets to current prices have resulted from *sentiment*. Despite the apparent ease of judging sentiment from your charts - large clients worry about long term performance and often have massive imbedded capital gains. 

Scaring them over a short term dip to knock out a stock which is 10% of their portfolio based on some hedge fund shorting in copper is not a way to create return business. 

"Yeah, we missed that $2 dip from $26 to $24, but you had to pay $4 in tax and the stock is back at $28 - by the way, the chart is really bullish now it is $4 higher than we sold and I think we should get back in.... BEEP BEEP BEEP"

3. No analyst is getting a bonus for dodgying up the DCF to smoke their clients - who is paying the bill for the broking analysts to cheat the numbers?

4. SGW blew-up investors (me included) because of problems that were not public until the blow-up. Analysts canot be blamed for not knowing about non-public info. 

5. For the amount of chartists ignoring fundamentals who saved money in SGW/HIH etc - there are about 10 broke ones who bought two-bit hyped up rubbish and lost 50% the next week when the rug got pulled. GSE/MLS/GDN/CDU anyone?

6. I wont just 'trust you' about the $$$ etc - I have just a touch of knowledge about the industry mate. 


An accounting chartist - the perfect rear vision specialist


----------



## reece55 (10 January 2007)

BSD
Easy mate, easy..........

All you are pointing out is that you have a different objective to myself. I'm not knocking the way you trade the market! All I was stating was that I didn't agree with your view on analysts. When I responded to Ken, I stated that his decision on his holding should be based on his investment objectives, but that short term sentiment is down and this may drag prices down in the short term. If you asked me fundamentally what I thought, I would say at around $23.50, BHP is at a great price to add to your long term portfolio. I just would prefer to see some positive movement before moving in, thereby balancing fundamental with technical.

Generally, I think most analysts are rubbish, but obviously you have a different view and I respect that. What they don't factor in is sentiment and ok, if you have an investment horizon that is say 5 years long, this would be ok.  However, I am a bit younger and for me, I am looking for a quicker move. Once again, this all comes down to your investment objective. Plus, in general, I think many analysts don't understand some of the accounting principles behind the reports they are constructing views on - different accounting policies/interpretations can have a material affect on a company's actual financial position. If we had IFRS in place since the 90's, the mark-to-market requirements of hedging would have meant that analysts would have had a better chance of knowing that SGW was in the poo.

For the record, I am not an idiot - I have never traded GSE/MLS/GDN/CDU - why, because I know its hype because I actually understand fundamentals. Unlike most techies, I think that most Uranium stocks are overvalued. Believe it or not I actually construct GPFR myself for a living - I have "a touch of knowledge myself" as well..... I only trade liquid, top stocks...... 

I do however retract my view on SGW with regard to analysts - it is not fair to expect an analyst to have knowledge of unexpected events and SGW was certainly the mother of all of these. However, I still think that even for a long term holder, you should set a stop price. A balance of technical and fundamental knowledge is the key to success in my view.

Cheers
Reece


----------



## rederob (11 January 2007)

Reece
Somewhat off the topic of BHP, but SGW's hedge book was "known" and well before it disappeared down the gurgler I was a vocal opponent of some very hot rampers on the early chat and posting sites.
Apart from that, anyone looking at SGW's regular reports could see two things: First, its main asset of tantalum had no "figures" reported that enabled an ivestor to determine its per pound sales price/contracts (a bit like BHP and uranium), and; secondly SGW could not actually produce gold for less than it was selling it.  
I really don't think IFRS would have stopped SGW's demise, nor - given that few traders seem to read analytical reports - the hype that certain vested interests managed to inject.
Specifically on BHP, I re-entered the stock and have no "floor" price to trigger a sale.  If it dips to $10 next year, so be it: The company would have to reinvigorate itself from such a low - something it has done time and again and again and again.  
Although diversified industrials may not have fared as well as sector specific producers in 2006, the market has a habit of putting first back to last, and vice versa.


----------



## steven1234 (11 January 2007)

I agree with your view on BHP Rederob.  I think it is a bargain and have bought into BHP expecting it to kick back again.  I too have no floor price either.  If need be i'll hold on to this for a while.  If it heads north in the near future i may consider selling it, if not it's worth holding onto.  

I hope i'm not making a mistake here....  but i consider it a bargain atm


----------



## ducati916 (11 January 2007)

*et al*

*BSD*


> _4. SGW blew-up investors (me included) because of problems that were not public until the blow-up. Analysts canot be blamed for not knowing about non-public info. _




*rederob*


> _Apart from that, anyone looking at SGW's regular reports could see two things: First, its main asset of tantalum had no "figures" reported that enabled an ivestor to determine its per pound sales price/contracts (a bit like BHP and uranium), and; secondly SGW could not actually produce gold for less than it was selling it. _




BHP is kinda, sorta, like this.
If you read the statements, you can see that it is a low return business.
$0.93/$1.00 kinda low, as opposed to say a higher return business such as OFIX @ $16.48/$1.00 [for example]

Like SGW, that couldn't produce below selling price, that warning sign is in place for BHP & RIO, that if commodity prices come off the boil, and stay at the lower ends, Net Profits will fall.

What happens in the Stockmarket when Net Profits fall, and, the share price is near all time highs? Probably nothing good if you are long.

Management should also seriously look at increasing the dividend rather than wasting shareholder capital on share buybacks at inflated prices. The time for buybacks is when the price offers true value, not an opportunity to artificially bolster Net profits/share

jog on
d998


----------



## ducati916 (11 January 2007)

One of the primary reasons that resource producers are such poor long term investments, unless of course you buy them near the bottom of a cycle, and sell them near the top, is the tremendous requirement of capital expenditures on PP&E

BHP has averaged 15%, and last year hit 19%+ replacement [expansion] of PP&E. The compounded growth in CapEx of 30.7% has exceeded the compound growth in COG 15% by a factor of two.

It is only the high spot prices that have predominated in the last 18mths, that has saved the show so to speak. If prices return to historic means, BHP will again test some of the share price lows, as earnings evaporate.

jog on
d998


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## markrmau (11 January 2007)

ducati916 said:
			
		

> If prices return to historic means, BHP will again test some of the share price lows, as earnings evaporate.




Absolutely, there is no question of this. So the basic question is, will prices return to historic means?

Ignoring for a moment the jokes about 'this time it is different...' I think there is a case to argue that the mineral commodities will not return to historic means, and indeed have much further to run.

1. There is evidence in nickel for example, that a lot of the easy to mine 'low hanging fruit' may have been scooped out of the earth. Companies are now going after the difficult to refine latterites rather than the sulphides (may be mixed up with details here). With oil, companies are drilling in deeper and more politically risky areas. 

I think that this really does point to a step change in the cost of finding and extracting minerals.

2. The often discussed excess liquidity. We really are in some sort of Nash game theory equilibrium. Sooner or later something has to give. What will happen? Calamity on the forex markets? I think people will want to invest in something that has real value (not gold, though it will get a little kick too), but minerals that have value through what we can make with them. Don't forget, the money will still be sloshing around, and at least some consumption demand will exist. I think investors will start hording commodities.

3. Are prices actually high at the moment? Despite the squeals of copper consumers, I think that adjusted for inflation, prices are actually returning to the mean value....if you look at the longer term, and consider they are not infinite resources. 

.....

Now getting back to ignoring the 'this time it's different' jokes. Back in the tech boom, many would be arguing along similar lines that I am - latching onto an idea that seems to be self evident, but may look ridiculous in hindsight.

.....

Just a few random thoughts... May all be rubbish of course.


----------



## reece55 (11 January 2007)

Markrmau.......

I think your post illustrates the junction we are at with respect to the resources sector........ It is very difficult to gauge if commodity prices are too high because of the incredible demand from China/India...... Ask 10 different economists on the future price for any metal and I am sure you would get 10 answers. But you are right in saying that this may be a self fulfilling prophecy - similar views were taken in the 60's - 70's when all commodity prices boomed and we all know where that led to. Granted, we haven't had quite the same level of exuberance we had then, but it's still relevant.

With respect to BHP, I still say let the market do the talking. I mean, if this endless resources gravy train were expected to continue along in the same vein, then why is BHP, the worlds largest diversified miner, 25% off its highs and in a down trend. To argue that BHP is dramatically undervalued is arguing that the market for BHP shares is inefficient. Or how about that it is being dominated by short term investors - this is a stock that has a daily turnover of about $250 Mil and at peak almost $1 Bil - do we really all think this is just day traders! What BHP is worth is exactly what it can be bought on the ASX at any given day, no more and no less.

Rederob and Steven - if, per your posts, you are willing to risk a 60% loss on your capital invested, then I think you need a lesson in capital preservation. I understand the concept of staying the course, but honestly no sensible person would risk more than 50% of their money just because BHP has good credentials. I mean its not like you would get the money back in dividends! Plus, you are effectively missing out on other opportunities on other stocks in different sectors.

Duc, I think you have hit the money on he head re the buy back - if they wanted to return money to shareholders, they should have just paid a higher dividend or paid out a capital return - buy backs are for when your share is trading at half what you think it is worth so you can lap them up at a cheap price and increase EPS per shareholder.

Cheers
Reece


----------



## ducati916 (12 January 2007)

*et al*



> _I think your post illustrates the junction we are at with respect to the resources sector........ It is very difficult to gauge if commodity prices are too high because of the incredible demand from China/India...... Ask 10 different economists on the future price for any metal and I am sure you would get 10 answers._




Actually I disagree, for the simple reason the numbers simply do not stack up correctly.

Let's just quickly discount India as a past & current factor, they may well figure into the future, as their growth has been powered not by infrastructure build, but by technology, and outsoucing from the US, Europe.
Tele-centres and the like, none of which involves a pricing effect within commodities that BHP is active in.

China, has been on a growth explosion for 30yrs+
The 30yr average = 7.8%
That is huge.
Therefore, you would expect to see a steady state, or even a trend reflected within commodity prices, to reflect this steady, sustained, growth explosion in China........not even close.

Have commodities that are produced by BHP, and BHP itself reflected this enormous and sustained demand from China?
The simple answer is again, not even close.

Sure you can argue that China's economy 30yrs ago did not reflect the same absolute demand that it currently exerts, but BHP was also smaller in absolute terms..........in relative terms, you would expect sustained growth demand from China to reflect themselves in commodity prices, and thus BHP's operating results.

No such correlation is suggested within BHP's financial results.

How then can the huge surge in spot commodity prices be explained?
Investor sentiment.
Commodities entered a bullmarket a few years back, and suddenly, possibly 18mths ago entered the retail investors consiousness. Suddenly commodity based stocks were hot, as earnings, leveraged by spot prices, were booming.

What drove spot prices?
ETF's, ETN's, Hedge Funds, Carry Trades, to name the main culprits.
How much money?
The ETF's, most of which were launched, guess what, in the last 18mths, account for approximately $100 billion........a staggering influx of hot money into an asset class [commodities] that lacked the liquidity of the Stock & Bond markets, and this does not even include the cash available to the Hedge Funds. Spot prices exploded.

Of course, all bull markets come to an end eventually. The hot money can flow both ways of course, and selling pressure can replace buying pressure in a heartbeat.

Therefore BHP was the recipient of bulging earnings due to a bullmarket in speculators driving a bullmarket in commodities, not a legitimate bullmarket in fundamental demand from China.

jog on
d998


----------



## BSD (12 January 2007)

Who used-up the copper, aluminium, zinc and nickel stockpiles then?

There must be a big warehouse where 800,000tn of copper, 750,000tn of Al, 30,000tn of Ni and 550,000tn of Zn have been hidden by the speculators

Is this also the case in iron and coal?

 Were hedge funds to blame for BHP getting double the price of five years ago?

China, India, Brazil, Russia, Eastern Europe and South East Asia are real and are increasing their use of the aforementioned commodities as they grow wealthier each year. 

This is an undeniable fact.

Keep buying the dips


----------



## ducati916 (12 January 2007)

*BSD*

It all becomes clear; you actually buy into efficient market theory. You believe that _the market price = fundamental value_.

That sentiment, psychology, hedging, arbitrage, momentum, have no influence on market prices............that BHP at $24 really is worth $24, and of course at $30, that BHP was really worth $30

You subscribe hook, line, & sinker that commodity spot prices are indicitative of...............fundamental consumed demand. That price, cannot, under any circumstance become disengaged from value based on consumption.

You were also bullish on tech, when eyeballs were an analysts leading metric of calculating value. I know how much value you place in the analysts and their projected growth figures.

jog on
d998


----------



## BSD (12 January 2007)

ducati916 said:
			
		

> *BSD*
> 
> You were also bullish on tech, when eyeballs were an analysts leading metric of calculating value. I know how much value you place in the analysts and their projected growth figures.
> 
> ...




I was never bullish on tech - please don't make such assumptions. The only money I lost in the Tech Boom was through opportunity cost from sitting on the sideline.

I cannot hold any value in your projections, because as opposed to analysts, you do not make any. The noise of sentiment is fleeting and provides opportunity.

On reviewing your portfolio - the market, for all of its inefficiencies, appears to value stocks better than you.

How much is FORD worth again?

Back to my other questions:

Where are all those metals?

Which hedge fund manipulated the bulk commods and where are they hiding all that iron ore?


----------



## Freddy I (12 January 2007)

Hi All,

Im a bit of a newbie so would appreciate if someone could help me out...

BHP is up 3.2% in the US and 4.9% in the UK despite oil droping and gold not doing a great deal.

Anyone got any clues as to why ?


Cheers


----------



## bigdog (12 January 2007)

Dow Jones at close is also up today 72 points which is encouraging for all

Dow 12,514.98  72.82 (0.59%)


----------



## spitrader1 (12 January 2007)

bigdog said:
			
		

> Dow Jones at close is also up today 72 points which is encouraging for all
> 
> Dow 12,514.98  72.82 (0.59%)



good day for BHP holders, should open at around 25.00 (sails sorry i havent got back to you on the explanation-im trying to word the explanation in a way even kennas will understand-hehehehehehe)


----------



## Sean K (12 January 2007)

Freddy I said:
			
		

> Hi All,
> 
> Im a bit of a newbie so would appreciate if someone could help me out...
> 
> ...



Hi Freddy, gold is just a byproduct for BHP. 

Oil, Nickel, Iron Ore, Coal, Aluminium, Diamonds, Uranium are more important.

The rise could be technical buying off support levels, or general market advance. The market's a strange beast.


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## Sean K (12 January 2007)

spitrader1 said:
			
		

> good day for BHP holders, should open at around 25.00 (sails sorry i havent got back to you on the explanation-im trying to word the explanation in a way even kennas will understand-hehehehehehe)



Sorry, I don't understand....LOL 

Bouncing well of $24, yet again. Making it a stronger support line - but the highs are still getting lower......Maybe it's just going to go sideways for the next year, or 5.....


----------



## spitrader1 (12 January 2007)

kennas said:
			
		

> Sorry, I don't understand....LOL
> 
> Bouncing well of $24, yet again. Making it a stronger support line - but the highs are still getting lower......Maybe it's just going to go sideways for the next year, or 5.....



just making sure you are on the ball young man-and of course as always-you are!


----------



## chops_a_must (12 January 2007)

ducati916 said:
			
		

> China, has been on a growth explosion for 30yrs+
> The 30yr average = 7.8%
> That is huge.
> Therefore, you would expect to see a steady state, or even a trend reflected within commodity prices, to reflect this steady, sustained, growth explosion in China........not even close.



It would be an exponential trend, not a steady trend, and the rise in commodity prices I would argue have gone along that line.


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## nat (12 January 2007)

spitrader1 said:
			
		

> good day for BHP holders, should open at around 25.00 (sails sorry i havent got back to you on the explanation-im trying to word the explanation in a way even kennas will understand-hehehehehehe)




Hi there i wouldnt have a clue how to work out adrs on stocks ,i just go to broker one website and they work it out for you on top traded stocks ,they seem to be close to the money for the open price ,Nathan


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## spitrader1 (12 January 2007)

nat said:
			
		

> Hi there i wouldnt have a clue how to work out adrs on stocks ,i just go to broker one website and they work it out for you on top traded stocks ,they seem to be close to the money for the open price ,Nathan



link??


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## nat (12 January 2007)

spitrader1 said:
			
		

> link??




http://www.brokerone.com.au/level_report.php

Nathan


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## spitrader1 (12 January 2007)

nat said:
			
		

> http://www.brokerone.com.au/level_report.php
> 
> Nathan



txs


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## Knobby22 (12 January 2007)

Ducat (and BSD)

I partly agree with BSD and partly agree with you. It is not just investment sentiment that commodity prices have risen. There are a lot of hard nosed Japanese, US and Chinese people who have dine their best to keep commodity prices low.

I do agree with you that commodity prices will slowly fall because at present prices a lot of unviable resource becomes mineable and there is a hunt for more resources. Resources are not really getting harder to find (except oil) as technology is better, more parts of the world is opening up (eg Laos). 
The question is: when will supply surpass the demand? BHP is in an enviable position because it has large energy resources (gas, oil, uranium) and is an efficient producer with the bucks to take over small companies should they get a great mine.  

I believe it is a little cheap at present and the end of the boom is still a distance off.  Profitability will reduce but not before BHP has managed to grow a fair bit bigger and hopefully avoid the pricetaker scenario. It is not an obvious buy or sell to me at these prices.


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## Ken (12 January 2007)

bhp  is up in the UK by a lazy 5% today.

All things equal this will start bhp up on the asx monday.

Does the 930.00 uk share price put the ASX listed BHP to mid $25 range???


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## hector (12 January 2007)

Hope not - I'm short BHP


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## wayneL (12 January 2007)

Ken said:
			
		

> bhp  is up in the UK by a lazy 5% today.
> 
> All things equal this will start bhp up on the asx monday.
> 
> Does the 930.00 uk share price put the ASX listed BHP to mid $25 range???




That was yesterday. It's too early to get a fix on BHP for today in London.


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## haemitite (12 January 2007)

reece55 said:
			
		

> BSD
> Are you actually supporting the Analysts here? HA!
> 
> IMO BHP is a classic example analysts getting it completely wrong.... Since May, ABN Amro, MBL et al have been recommending the stock as a screaming buy - the chart says it all - we are 25% off the high in May 06. Not only did they get it wrong on BHP, they were markedly wrong.
> ...



You sound more like a day trader more than investor. 

Good luck with the charting short cut.


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## rub92me (12 January 2007)

haemitite said:
			
		

> You sound more like a day trader more than investor.
> 
> Good luck with the charting short cut.



Please explain this comment. You think day traders are the only people that use charts and/or that charts are only useful for day trading


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## rederob (12 January 2007)

reece55 said:
			
		

> With respect to BHP:
> Rederob and Steven - if, per your posts, you are willing to risk a 60% loss on your capital invested, then I think you need a lesson in capital preservation. I understand the concept of staying the course, but honestly no sensible person would risk more than 50% of their money just because BHP has good credentials. I mean its not like you would get the money back in dividends! Plus, you are effectively missing out on other opportunities on other stocks in different sectors.



Reece
You are right on many counts.
But my 2k BHP shares are less than 5% of my total portfolio, so any loss on BHP could be replaced elsewhere.
I certainly do not fit the mold of a trader, and do not attempt to. One thing I *never * do is sell into weakening cycle as I can afford to hold for 5+ years, by which time most cycles have turned or ended. Now that could be defined as poor capital management.  But if I recall correctly, my Onesteel and Bluescope Steel shares originally cost me nothing as they were "spun off" by BHP. 
I often read about the "efficiency" of the market, and that some people actually believe it is true.  The market is only a pricing mechanism.  Nothing more, nothing less.
when there are no more "upside" or "downside" surprises when companies report, I will change my mind.


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## haemitite (12 January 2007)

rub92me said:
			
		

> Please explain this comment. You think day traders are the only people that use charts and/or that charts are only useful for day trading



No

I think that the previous comments about analysts are short sighted. Analysts get paid a lot of money for a good reason - the market thinks those skills are well worth paying for. 

Analyst forecasts are on a mid to longer term basis.


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## reece55 (12 January 2007)

Rederob
Fair enough - if BHP is a diversified portion of your portfolio, then your logic here, whilst not my style, has merit. Especially if you have an investment time frame of greater than five years. This kind of an investment strategy is useful for a long term investor and I would never argue that such a strategy wasn't in your interest - all you have to do is review the XAO for the last 5 years. As I have said all along, I am not the kind of person who gives someone grief for having a long term hold investment strategy. In fact, I wish you the very best with your portfolio for 07 - after all we are all here to help each other, not attack one another. I also agree that BHP's divestment strategy (OST and BSL) is one of the greatest facets of the organization in the last ten years - if you held both after the spin off you would be a very happy investor! In reference to not selling in cyclical weakness, this I still disagree with - I short-sell into weakness and buy into strength - however, this is because I have a 1 month - 3 month holding time line on my stocks. Once again, its all about investment strategies and I wish you the best with yours. In reference to the market efficiency hypothesis, empirical evidence suggests that, bar some unforeseen event, the market is pretty efficient, specifically a highly liquid stock such as BHP. I won't say it's perfect because it is not - but I find it is better than reviewing the financial's or an analyst report and trying to come up with a price yourself. However, with your investment timeframe, I would think this assessment is irrelevant as you are probably going to hold for a substantial part of an economic cycle.  

Haemitite, I can only concur with rub92me (a very interesting user name however i note!!!!). I mean really, do you think just day traders use charts. My time frame is usually 1 - 3 months, involves a combination of warrants for moderate leverage and the occasional options trade. Charts are not just for day traders - they are good for even someone with a 1-2 year outlook - just change the time cycle to weekly instead of daily. As for the charting short cut, I personally don't think it is a short cut - in fact, proper technical analysis is a skill that takes years to perfect. If you ask me, the long cut (obtaining a degree in finance/accounting) is much easier from a learning point of view. But hey, if you would prefer to have a dogmatic view of the investment world, good luck to you.

Cheers
Reece


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## hector (14 January 2007)

It's probably been done before, but I wanted to see if there was a correlation between copper prices and BHP share prices.

I've averaged the price trends for copper, and I used the high in May of $3.90 and the low of January 06 of $2.10, matched to the SP high and low of $32 and $23.40 for BHP for the year.

Hope the maths assumptions are correct...the picture tells a story.


----------



## hector (14 January 2007)

Try again with smaller file size...


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## wayneL (14 January 2007)

hector said:
			
		

> It's probably been done before, but I wanted to see if there was a correlation between copper prices and BHP share prices.
> 
> I've averaged the price trends for copper, and I used the high in May of $3.90 and the low of January 06 of $2.10, matched to the SP high and low of $32 and $23.40 for BHP for the year.
> 
> Hope the maths assumptions are correct...the picture tells a story.


----------



## Wysiwyg (14 January 2007)

hector said:
			
		

> It's probably been done before, but I wanted to see if there was a correlation between copper prices and BHP share prices.
> 
> I've averaged the price trends for copper, and I used the high in May of $3.90 and the low of January 06 of $2.10, matched to the SP high and low of $32 and $23.40 for BHP for the year.
> 
> Hope the maths assumptions are correct...the picture tells a story.




I.M.O. investing in blue chip shares during this mining bull run for me would have been a waste of time in reference to price appreciation.The speculative and the explorer have done (on price action) exceptionally well in comparison). 

24.24c dividend is pitiful, i think,for an investor.Plus a price depreciation.


----------



## reece55 (14 January 2007)

Wow Hector/Wayne

I had always thought about conducting this analysis - whether or not the relationship is coincidental, the strong correlation is fairly easy to see on the eyes. Great charts guys...... 


WYSIWYG, whilst I agree that the performance of small cap explorers in the last 2-3 years have provided a much larger windfall, i'm not sure I would say investing in BHP is a waste of time. I mean, as per my previous posts, I would want better price action before taking a long position at present, but if you are a holder of shares for say 10 years, it would be hard to leave BHP out of such a portfolio. The other point I make is that I wouldn't be expecting the small caps to continue this performance - many of these stocks trade at their theoretical NPV value on the basis of announced reserves before they reach JORC status - this is because all of a sudden traders have become geologists! Many of these company's state there theoretical reserves with 2% of the drill holes required to make such an assertion - watch this space in 07 and 08 I think!

Cheers


----------



## Wysiwyg (14 January 2007)

reece55 said:
			
		

> Wow Hector/Wayne
> 
> I had always thought about conducting this analysis - whether or not the relationship is coincidental, the strong correlation is fairly easy to see on the eyes. Great charts guys......
> 
> ...




Yes...long term s.p. appreciation seems inevitable but the dividends?Is that what blue chip share investment is about?


----------



## wayneL (14 January 2007)

reece55 said:
			
		

> Wow Hector/Wayne
> 
> I had always thought about conducting this analysis - whether or not the relationship is coincidental, the strong correlation is fairly easy to see on the eyes. Great charts guys......



Check out this correlation... BHP & Gold


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## Sean K (14 January 2007)

I imagine Oil/BHP is tracking this too.......

Perhaps a summary of all the commods BHP digs up is tracking it's sp.  

Perhaps BHP needs to start digging up more Zinc and Uranium to sort out their sp.


----------



## Ken (14 January 2007)

kennas what do you expect BHP to start at tommorow?

Will the momentum from friday and thursday continue?

I will be shattered if 3% is wiped off after all the hard work.

My average price is $25.32 and its my major stock at the moment, so if it goes above $26 I may put in a trailing stop loss and try and get a lower entry price.


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## Sean K (14 January 2007)

Ken said:
			
		

> kennas what do you expect BHP to start at tommorow?



Spitrader would be better at giving you that, but without seeing the ADRs I'd say up, due to general market sentiment, XJO, POO, and general commods steady. It's an OK hold until it breaks below $24.00 IMO. Then it's a go short option, perhaps. As always, predicting these things is fraught with danger. There's still 12 hours of world events to take effect on the market opening....


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## hector (15 January 2007)

Great photo kennas.

http://www.brokerone.com.au/level_report.php


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## spitrader1 (15 January 2007)

Ken said:
			
		

> kennas what do you expect BHP to start at tommorow?
> 
> Will the momentum from friday and thursday continue?
> 
> ...



circa 25.35


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## Phoenix (15 January 2007)

Anyone bought this?


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## UMike (17 January 2007)

Phoenix said:
			
		

> Anyone bought this?



 Yep.

Might pay off long term.....

I hope.


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## Ken (20 January 2007)

BHP up 3.5% in US. goodish signs.


----------



## UMike (21 January 2007)

Ken said:
			
		

> BHP up 3.5% in US. goodish signs.



 Yay.... 

Thanks Ken.


----------



## chops_a_must (22 January 2007)

UMike said:
			
		

> Yay....
> 
> Thanks Ken.



I'm not sure it's all good news.

http://www.news.com.au/business/story/0,23636,21084716-31037,00.html

I wouldn't want to be touching BHP with a 50 foot barge pole.


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## steven1234 (22 January 2007)

I would disregard the claim.  BHP has in place releases and indemnities which it signed upon its withdrawl.  The story is lacking all the important facts....  May cost a little in legal fees but if the indemnity stands BHP will have no liability to face.  

Here's a news release from 2002 - http://www.bhpbilliton.com/bb/inves...pmentFundForBenefitOfPapuaNewGuineaPeople.jsp


----------



## chops_a_must (22 January 2007)

steven1234 said:
			
		

> I would disregard the claim.  BHP has in place releases and indemnities which it signed upon its withdrawl.  The story is lacking all the important facts....  May cost a little in legal fees but if the indemnity stands BHP will have no liability to face.
> 
> Here's a news release from 2002 - http://www.bhpbilliton.com/bb/inves...pmentFundForBenefitOfPapuaNewGuineaPeople.jsp



The indemnity is what is being challenged as far as I'm aware.

http://www.abc.net.au/pm/content/2007/s1830288.htm


----------



## spitrader1 (24 January 2007)

spitrader1 said:
			
		

> circa 25.35



maybe another good day for BHP holders, should open circa 25.92. Can hear the choking of the shorts already.


----------



## rico01 (24 January 2007)

Spitrader ,do you know were to get the equivalent prices in $US and pound  sterling for the estimate prices of bhp every day.
  Would be a great help
  thanks
 Rico


----------



## rwkni1 (24 January 2007)

Yup, BHP up 2.4% in London overnight. Chinese copper imports rose 11% in December according to data released overnight. This is the largest rise in imports since October 2005.


----------



## hector (24 January 2007)

Looked back at past few months and noticed that on options expiry days sp is higher than the preceeding day and the following day. So expecting tomorrow could be higher again, and hoping like hell that Monday it dumps because my short position is pretty shaky at present!

Any thoughts anyone?

hector


----------



## spitrader1 (24 January 2007)

hector said:
			
		

> Looked back at past few months and noticed that on options expiry days sp is higher than the preceeding day and the following day. So expecting tomorrow could be higher again, and hoping like hell that Monday it dumps because my short position is pretty shaky at present!
> 
> Any thoughts anyone?
> 
> hector



plenty

today was options expiry

the market is closed friday


----------



## BSD (24 January 2007)

Hills up another 2.4% in London at the moment. 

When do the chartists cover the shorts?

$26?

$28?

and when do they go long?
__________________________________________________

Apparently Chinese YOY copper imports in December grew by more than any month in the last two years. 

Fancy that - an economy growing at 10% that is expanding its copper purchases. 

___________________________________

When does the money flow from Australia's excessively expensive industrials to the cheap miners?

Soon methinks. 


Looks like the bearish analysts who downgraded and put $26.50 price targets on BHP based on short term momentum are going to have to eat a **** sandwich and wheel out the upgrades.


----------



## chops_a_must (24 January 2007)

BSD said:
			
		

> When does the money flow from Australia's excessively expensive industrials to the cheap miners?
> 
> Soon methinks.
> 
> ...



Would be more convincing if the SP hadn't been artificially bolstered.


----------



## reece55 (24 January 2007)

BSD said:
			
		

> When does the money flow from Australia's excessively expensive industrials to the cheap miners?
> 
> Soon methinks.
> 
> ...




HAHAHAHA BSD...... You are right on the money with regards to the analysts...... And I completely agree that almost every industrial in Australia at present is ridiculously overvalued, but that is the market as they say!

As for BHP - I wouldn't be counting my chickens yet - I still await a move above 26.50 on high vol to enter which IMO will remove the bearish hang on the stock. Todays action was great, but I am still on the sidelines here until I see the takeoff. But to those who entered at the lows in 24, you would be setting pretty now!

Cheers


----------



## hector (24 January 2007)

spitrader1 said:
			
		

> plenty
> 
> today was options expiry
> 
> the market is closed friday




Thanks spit1,

Might be closing out tomorrow to stop the bleeding. A bit to think about in the morning.

Got to take a look at why I stayed with a dumb trade for so long! It has taken 2 good trades to cover this. 

Cheers,  hector


----------



## steven1234 (25 January 2007)

London is up 2.24% atm.  Could we see $26.50 tomorrow????

time for bed now


----------



## wayneL (25 January 2007)

BSD said:
			
		

> Hills up another 2.4% in London at the moment.
> 
> When do the chartists cover the shorts?
> 
> ...




What on earth makes you think all chartists are short? This is just the sort of presumption which blows away your credibility. 

I guarantee you at least half will be long.


----------



## rederob (25 January 2007)

wayneL said:
			
		

> What on earth makes you think all chartists are short? This is just the sort of presumption which blows away your credibility.
> 
> I guarantee you at least half will be long.



I guarantee that you can't guarantee that.
And, I can warrant that.
That's the long and the short of it.
Unless you call it different, or put it another way - some options?


----------



## wayneL (25 January 2007)

wayneL said:
			
		

> What on earth makes you think all chartists are short? This is just the sort of presumption which blows away your credibility.
> 
> I guarantee you at least half will be long.




*BSD*

Furthermore, what makes you think there are not at least some fundies who are short.

Sometimes you do great posts, at other times non sequiturs abound. Your antagonism towards charting seems a bit illogical. Why?


----------



## BSD (25 January 2007)

Plenty of non-chartists short Wayne.

Heck - I dont mind getting short from time to time. 

I have just seen the greatest "no brainer short" based on all sorts of charts get nailed and was wondering when the chartists cover or go long. 

Someone said $26.50 - fair enough. 

The fundamentalists that are short (Ducati) wont be switching to longs so it is not an issue. If you are talikng about fund managers, yes, heaps of smarty hedge fund types were also short focussing on short term momentum as opposed to cashlow. 

 I even bagged the fundamental analysts in that post - if I was going to bang on about chartists, I would have at least mentioned a moon phase or geometrical pattern  


We might go back to sub$25 again - this rally could be the noise of shorts covering .

Assuming nothing changes in Chindia, I will again be a buyer at those levels.  


Chops. what do you mean saying BHP was 'articifially bolstered'?

Would love to meet the guys who can manipulate BHP - had they sold a monster bunch of puts or something?


Up 2.7% in London


----------



## wayneL (25 January 2007)

BSD said:
			
		

> Plenty of non-chartists short Wayne.
> 
> Heck - I dont mind getting short from time to time.
> 
> ...




My point is that there are 1001 ways to read... and trade a chart. Taking BHP for instance; there is quite a logical long trade at around 37.50 - 38.00 (NYSE) based on monthly pivot levels... with several ancillary crutch... errr, I mean indicators as backup.

Add to that a few amateur fundamentals (commods bouncing) and it's a pretty tidy looking swing trade long.

Cheers

Disclaimer: I do not hold BHP.


----------



## scsl (25 January 2007)

Costs going up left, right and centre but output's up...



> MELBOURNE (Dow Jones)--BHP Billiton (BHP) Thursday unveiled further cost blowouts and delays at major projects, highlighting the pressures affecting miners around the world.
> But the global miner also posted healthy production figures that reassured analysts BHP will report a record first half profit above US$6 billion early next month. With a recent 9.5% price hike struck during talks with Chinese steel mills, and citing continuing strong demand, the company achieved record second quarter and first half output from its key Australian iron ore operations.
> Analysts had expected cost increases as BHP starts new projects in an overheated mining industry, with the share price rising 0.5% to end at A$26.02, off a high of A$26.35. Last year the company acknowledged significant cost pressures facing its Ravensthorpe nickel mine in Western Australia, with the original outlay doubling to US$2.2 billion and a delayed start date.
> BHP revealed Thursday that the price tag of its Atlantis South oil and gas field in the Gulf of Mexico is now likely to reach US$1.5 billion, up from the previous estimate of US$1 billion. Both the US$850 million Neptune development in the Gulf of Mexico and the US$600 million Stybarrow project off the coast of Western Australia face cost pressures, it added.
> ...


----------



## UMike (26 January 2007)

BSD said:
			
		

> We might go back to sub$25 again - this rally could be the noise of shorts covering .
> 
> Assuming nothing changes in Chindia, I will again be a buyer at those levels.



 I sold mine and be happy to reinvest around the 24 mark. 




			
				BSD said:
			
		

> Chops. what do you mean saying BHP was 'articifially bolstered'?
> 
> Would love to meet the guys who can manipulate BHP - had they sold a monster bunch of puts or something?



I'd love to meet them also :lol:


----------



## Ken (26 January 2007)

I look at Telstra as defensive, and BHP and RIO as resources....


Today telstra down

BHP up....

Not everything can keep going up at once.

BHP still a long way off all time highs.

The choppyness of BHP was predicted.

Play the game the best way you know how.


----------



## ducati916 (26 January 2007)

> Last year the company acknowledged significant cost pressures facing its Ravensthorpe nickel mine in Western Australia, with the original outlay doubling to US$2.2 billion and a delayed start date.
> BHP revealed Thursday that the price tag of its Atlantis South oil and gas field in the Gulf of Mexico is now likely to reach US$1.5 billion, up from the previous estimate of US$1 billion. Both the US$850 million Neptune development in the Gulf of Mexico and the US$600 million Stybarrow project off the coast of Western Australia face cost pressures, it added.
> The company's share of the cost of expanding the Alumar alumina refinery in Brazil has also blown out 40% to US$725 million with production delayed from mid 2008 to the second quarter of 2009. It also said the cost of expanding the Yabulu nickel refinery in Queensland is up 20% to US$556 million.




Higher costs will impact BHP's margins, returning them closer to their historical average.

That means, if, COG's returns to 0.55, from the recent 0.50 and in addition falling prices decrease Revenues, we can expect to see a shrinkage in the margins from 31.5% to 22.6%

This is a huge drop.
Margins should be fairly stable over time, large deviations are always evidence for close analysis. An almost 10% shrinkage would be fatal to BHP's share-price



> "We have managed to achieve record production at a time when the market is very overheated," she said. "While costs are increasing, we are driving volume growth to increase output into a tight market."




And what is the golden rule?
The best cure for high prices is....................high prices.
Increased supply, will reduce price, thus leading to surplus production, at a high cost, in a falling price market...............boom, bust.



> BHP said the retreat in copper prices is set to have an impact on the bottom line, with the finalization of pricing of copper sales to cut first half earnings by US$220 million.
> Copper production for the quarter was 300,700 tons, in line with the previous corresponding period but up 20% on the September quarter when industrial action at Escondida in Chile caused disruptions.




Higher production, lower prices = higher costs, lower margin on Revenue's.
Ugly scenario.

Increased maintenance spending................
BHP seriously underspent on maintenance in the past 18mths.
This underspend added to, and inflated Net Profits, and now is coming back to haunt them. 

The technical bounce from $24.00 as previously called [due to shorts covering] will run out of steam, you need some committed buyer's to push the price up higher.............based on the fundamentals, they [buyer's] will be in short supply.

With world markets getting a little nervous due to the extended run, nice big liquid shorts like BHP would be ideal candidates for some circa $27.00 - $26.70

jog on
d998


----------



## haemitite (26 January 2007)

Ducati,

You've confused capital cost with operating costs.

And why are capital costs increasing - well mainly due to the resources boom. Probably a good thing for a mining company wouldn't you think?

Iron Ore up 9.5%, Nickel at record highs, coking coal over $100/t and copper way above long term expectations. Volumes also on the up.

But you would hardly buy them at $25 given you passed over them at $8.


----------



## chops_a_must (26 January 2007)

BSD said:
			
		

> Chops. what do you mean saying BHP was 'articifially bolstered'?



Share buy back. Would have been better off paying a dividend that was not akin to a joke.


----------



## haemitite (26 January 2007)

chops_a_must said:
			
		

> Share buy back. Would have been better off paying a dividend that was not akin to a joke.



If a share buyback does bolster the share price then its delivered real value for share holders as intended.


----------



## GRTRADER (26 January 2007)

I heard there was meant to be another buy back this year? Anyone know if that is true?


----------



## BREND (26 January 2007)

I'm a buyer of BHP recently, and I believe that its earnings will surprise the market. 

BHP share price had fallen due to fall in copper price, but BHP has a diversified portfolio. In addition, I believe copper price is reaching a bottom soon. So as copper price rises, it may lead BHP share price up again.

According to my model, BHP is currently 50% undervalued.


----------



## Fab (27 January 2007)

BREND said:
			
		

> I'm a buyer of BHP recently, and I believe that its earnings will surprise the market.
> 
> BHP share price had fallen due to fall in copper price, but BHP has a diversified portfolio. In addition, I believe copper price is reaching a bottom soon. So as copper price rises, it may lead BHP share price up again.
> 
> According to my model, BHP is currently 50% undervalued.



I hold BHP too and I am very disappointed that it is not moving higher faster compared to other pure mine players. A lot of people seems to be expecting BHP to reach the $30 mark soon but it is just not happening at the moment. I can't help to top up so when it gets to the $24 - $24.50 mark it is too much of a bargain to me then.


----------



## Mofra (31 January 2007)

*Shanghai Copper Rises on Supply Disruption Risk, Falling Stocks * 

http://www.bloomberg.com/apps/news?pid=20601012&sid=ay71JdvHyMMo&refer=commodities

Jan. 31 (Bloomberg) -- Copper futures in Shanghai rose as labor disputes at mines in Chile, the world's largest copper producer, threatened to disrupt supplies, and global stocks of the industrial metal dropped. 

A union at BHP Billiton Ltd., the world's biggest mining company, voted to strike at Chile's Cerro Colorado copper mine in protest over wages, union president Mario Yanez said Jan. 30. Supply disruptions helped prices gain 17 percent in the past year. 

``Copper has fallen to a critical point where news of possible supply disruptions can help change the direction,'' said Li Ling, an analyst at Minmetals StarFutures co., today. 


Could hurt BHP short term - although I'm bias with a Feb bearish call spread on BHP


----------



## UMike (31 January 2007)

Mofra said:
			
		

> .....
> Could hurt BHP short term - although I'm bias with a Feb bearish call spread on BHP



Hope so.....

I want back in.


----------



## steven1234 (31 January 2007)

Interesting read from 30/01/07.  Hope this helps the US price rise.  

http://www.investor.reuters.com/Article.aspx?docid=10383&target=companyoftheday


----------



## annalivia (31 January 2007)

IMHO BHP is a screaming buy and hold.
The company has a market capitalisation of around A$87 billion. Consensus estimates of net asset value (or equity) at June 30 this year is about A$40.5 billion, so the company trades at 2.2 times the value of its equity. This is another way of saying the price to book ratio is 2.2 times.
Consensus estimates tip BHP to achieve return on equity of 45 percent for the year to June 30, 2007, and over 30 percent the following year.

Paying just over 2 times book value to obtain in excess of 30 percent return on equity is a very good deal, and one rarely found in today's hyperactive markets.

BHP is cheap and attractive on other parameters, too. Cashflows are robust, contributing to a strengthening balance sheet, as debt falls and share buybacks continue. On a price-to-earnings (PE) ratio basis, BHP trades around 8.7 times 2007 consensus earnings. 

Forget your pullbacks, your triangles, etc....just buy the bloody stock, sit back and relax.

al


----------



## BSD (31 January 2007)

Wait for the instos to sell the industrials at 20 times and move back into Hills and Rio and Woodies at low multiples as China stocks up again on Copper and Oil. 

SECTOR ROTATION will be the call for the next couple of months. 

Market down today on bullish leads while Hills goes north

Get set folks!


----------



## BREND (31 January 2007)

Fab said:
			
		

> I hold BHP too and I am very disappointed that it is not moving higher faster compared to other pure mine players. A lot of people seems to be expecting BHP to reach the $30 mark soon but it is just not happening at the moment. I can't help to top up so when it gets to the $24 - $24.50 mark it is too much of a bargain to me then.




Fab, buy some Rio Tinto as well. Rio will be announcing result tomorrow, the earnings result will surprise the market.  :


----------



## rwkni1 (1 February 2007)

annalivia said:
			
		

> IMHO BHP is a screaming buy and hold.
> The company has a market capitalisation of around A$87 billion. Consensus estimates of net asset value (or equity) at June 30 this year is about A$40.5 billion, so the company trades at 2.2 times the value of its equity. This is another way of saying the price to book ratio is 2.2 times.
> Consensus estimates tip BHP to achieve return on equity of 45 percent for the year to June 30, 2007, and over 30 percent the following year.
> 
> ...




Agree with what you're saying, but you have to be careful when doing the price to book calcs. The A$87b market cap only accounts for the shares listed in Aus. If you take the PLC stock too, that will add approximately another A$60b to your market cap.


----------



## bigdog (1 February 2007)

Todays AGE
http://www.theage.com.au/news/busin...all-says-survey/2007/01/31/1169919403844.html

Mineral prices to rise before fall, says survey
Nassim Khadem, Canberra
February 1, 2007

FORECASTS for commodity prices have edged higher amid expectations of a US downturn, an Access Economics report shows.

Despite warnings from Treasury that the mining boom is nearing an end, the December-quarter Minerals Monitor report suggests iron ore, gold, oil, platinum and uranium will continue to rise over the next year before falling away.

The report, which gives an overview of the world economy and the mineral price forecasts of 13 leading commodities analysts, predicts falls in lead, zinc, cobalt, nickel and copper over the next 2 ½ years.

It says the commodity price surge seen since 2003 will "take a breather" as the supply of minerals catches up with strong demand from growing economies such as China.

"A US slowdown poses less risk to commodity demand than in times past," the report says. "Although China is set to slow from here, it and other commodity-hungry nations will still drive industrial commodity demand forward at a good pace.

"Inventories are slowly being rebuilt for the likes of oil and copper and there is increasing evidence that 2007 and 2008 will see supply lift solidly, especially for some key base metals."

The report says that while iron ore prices are still rising, the consensus view of analysts surveyed is that prices will fall beyond 2009.

"The panel sees the coming fall in minerals prices as a slow burn, with most minerals expected to still be overvalued in June 2009 when compared to their long-term sustainable price."

The report says lead is now the most overvalued mineral and predicts its price will fall by 51 per cent over the forecast period of March this year to June 2009. "This large fall is largely due to the 38 per cent rise in lead prices in the December quarter," it says.

Zinc will drop by almost 50 per cent by mid-2009, cobalt will drop 46 per cent, nickel will fall almost 45 per cent and copper will dive 44 per cent. Price falls of more than 20 per cent are also expected for tin, coal, aluminium, silver, uranium and zircon. Rises are tipped for ilmenite (12 per cent) and rutile (5 per cent).

The report also provides strong upward revisions to earlier forecasts on oil, in light of the Organisation of Petroleum Exporting Countries cutting production.


----------



## BREND (1 February 2007)

bigdog said:
			
		

> Todays AGE
> http://www.theage.com.au/news/busin...all-says-survey/2007/01/31/1169919403844.html
> 
> Mineral prices to rise before fall, says survey
> ...




Ya, lead is good. Lead is my top pick metal for 2007.
See attached for my reasoning:
http://basemetal-trading.blogspot.com/2007/01/buy-3-lots-of-lead-virtual-trade.html


----------



## rederob (1 February 2007)

The bears seem to be conspicuous by their absence!
I always look forward to ducati coming along and "valuing" a stock using his unique blend of economyelitis, disanalysis and obfuscation to put things right.


----------



## BSD (1 February 2007)

rederob said:
			
		

> The bears seem to be conspicuous by their absence!
> I always look forward to ducati coming along and "valuing" a stock using his unique blend of economyelitis, disanalysis and obfuscation to put things right.




Ducati prefers the obvious superior 'value' available in FORD

http://www.bloomberg.com/apps/news?pid=20601087&sid=a.peELHwidUY&refer=home

Going well it appears!
_____________________________________________

Are the chartists long yet?


----------



## hector (1 February 2007)

BSD said:
			
		

> Are the chartists long yet?




Still short, but it was a total stuffed up mistrade unattended lack of planning and decision-making that has kept me in it!

Will be out of it tomorrow if close higher. Any thoughts what SP might do leading up to report due 7th Feb?


----------



## mmmmining (1 February 2007)

For BHP, time is on long side. Because BHP is making money every seconds! If everything stay the same, BHP should add value like $2.5 minus dividend year after year. The clock is ticking...


----------



## steven1234 (1 February 2007)

BHP is up 3.16% in london atm.

It will be interesting to see what happen in the US when i wake up tomorrow morning..  Could we see $27.00 tomorrow????

Maybe all the share buy backs have something to do with the rise? or the anticipated results due on 27 Feb 07?  Or everyone decided to take the brokers advice (yeah right!)


----------



## UMike (2 February 2007)

steven1234 said:
			
		

> BHP is up 3.16% in london atm.
> 
> It will be interesting to see what happen in the US when i wake up tomorrow morning..  Could we see $27.00 tomorrow????
> 
> Maybe all the share buy backs have something to do with the rise? or the anticipated results due on 27 Feb 07?  Or everyone decided to take the brokers advice (yeah right!)



Not so great news for those that want to get in.

Great news for those that still hold the stock.


----------



## wayneL (2 February 2007)

rederob said:
			
		

> The bears seem to be conspicuous by their absence!




No.

Even Bears get long on the quiet... I'm not in BHP, but in some others in the sector.

But ferchrissake don't tell anyone, there are reputations to uphold here


----------



## ducati916 (2 February 2007)

BSD said:
			
		

> Ducati prefers the obvious superior 'value' available in FORD
> 
> http://www.bloomberg.com/apps/news?pid=20601087&sid=a.peELHwidUY&refer=home
> 
> ...





*BSD*
It would seem that you have neglected to do even the most basic and cursory homework.............why am I not surprised.

*FORD* is not Ford Motor Company which has the Ticker *F*
But a completely different company.

jog on
d998


----------



## GRTRADER (2 February 2007)

http://www.smh.com.au/news/national/bhp-alarm-over-pms-river-plan/2007/02/01/1169919474127.html


----------



## spitrader1 (2 February 2007)

spitrader1 said:
			
		

> maybe another good day for BHP holders, should open circa 25.92. Can hear the choking of the shorts already.



whats that sound i can hear??coughing and spluttering of shorts choking??


----------



## radarz (5 February 2007)

wayneL said:
			
		

> *BSD*
> 
> Furthermore, what makes you think there are not at least some fundies who are short.
> 
> Sometimes you do great posts, at other times non sequiturs abound. Your antagonism towards charting seems a bit illogical. Why?




Its a sign of genius...


----------



## pacer (5 February 2007)

I've got a $100 bet on that it falls below the $26.41 close today, first up tomorrow....there's the fun put back into trading......is there a bookie out there who wants to play that game?
dlineinvestor took $10 off me for a close above 26.35 today.....pay back for me tomorrow me hopes...lol.....


----------



## hector (5 February 2007)

Your money is safe pacer, Closed my shorts and went long at close...


----------



## CanOz (5 February 2007)

pacer said:
			
		

> I've got a $100 bet on that it falls below the $26.41 close today, first up tomorrow....there's the fun put back into trading......is there a bookie out there who wants to play that game?
> dlineinvestor took $10 off me for a close above 26.35 today.....pay back for me tomorrow me hopes...lol.....




Pacer, BHP finished the day very strong...whats the reason you think it will open weak tomorrow?


----------



## hector (5 February 2007)

Just for interest sake,
 the past three years BHP has performed very strongly in the reporting week and week following. I don't imagine the fundamentals will have changed too much.


----------



## pacer (5 February 2007)

Well I recon metals will fall again tonite....correction time?...my money is in oil and banks for the next few weeks......safer bets my friends....bhp has oil but uses it too....nickel is rising but the Ravensthorpe job is a big looser....removed the boss there, and project is way over budget by 1billion...on a 1.5 bill project and is also behind in the start up by a year....to many cost cuttig exircises cost you $$ in the end.....Murrin Murrin was a classic....under engineered project....took 3 years to break even and even then it sucked.....I was working there on construction by the way, to many tossers, trying to look good saving a buck, ruin projects like this....I was asked to go back to fix the place but, said "no way...too dangerous."....fact!

Bhp is full of these type of cost cutting idiots on new projects.....pay the $$ for the extra engineering materials and save yourself some $$ on the time it takes to get a profit....and everyone is happy....including the trades persons...who laugh at some of the crap they are asked to do..... but engineers never ask a "tradesperson" whats wrong and a tradie won't tell them because the tossers never asked the question in the first place......hire me to do a project and you would see a big difference....tradies would be above engineers....except for ones like me with dip eng.....we'd be management tradies....the system is wrong.....an we tradies know it....too many idiot's running the show....and unsafely too..

Unsafe....every time a safety officer(office boy) came up to me on the job...I'd say....look over there....they are being dangerous....and he'd p---of-  and go away....lol.....a lack of properly trained personel....not tradies, is the detriment of all, projects.....and unskilled workers from overseas....safety officers on construction should have a minium of a riggers and scaffolders ticket, and either an apprenticeship or 5 years of work in the relavant industry.

there's where alot of project costs can be minimised.....still my opinion.

BHP ....$23 again soon....they are too big to care....as long as they get thier bonuses!

just my opinion from 20 years in the mining/construction industry....


----------



## CanOz (5 February 2007)

Ok, your on. 100 Chinese Yuan says BHP open and trade higher for the day.

Cheers,


----------



## steven1234 (5 February 2007)

pacer said:
			
		

> I've got a $100 bet on that it falls below the $26.41 close today, first up tomorrow....there's the fun put back into trading......is there a bookie out there who wants to play that game?
> dlineinvestor took $10 off me for a close above 26.35 today.....pay back for me tomorrow me hopes...lol.....




It closed on $26.41.  How did you come up with that??


----------



## Garpal Gumnut (5 February 2007)

CanOz said:
			
		

> Ok, your on. 100 Chinese Yuan says BHP open and trade higher for the day.
> 
> Cheers,




Should you guys/gals need an honest sp bookie, I'm happy to oblige on these bets, a trailing 10% charge available on these important events/transactions. I only deal in cash as flummoxed by bookkeeping and wish not to diminish your profits. 

Garpal


----------



## dlineinvestor (6 February 2007)

Pacer,   

I hope you haven't run out of bourbon because as you say, 

"doesnt' hurt as much when you have a bourbon in hand".

100 Yuan plus 100 AUD so far any more posters want some easy money from Pacer !


----------



## mmmmining (6 February 2007)

At one stage, three people bid for BHP about $300.00! Funny to watch.


----------



## CanOz (6 February 2007)

Good to see another good finish for BHP. 

Just mail me $16 AUD Pacer. I'll pick up a couple slabs and think of you while i'm sipping.

Cheers,


----------



## Kauri (6 February 2007)

In the UK news......


*Market Report: BHP boosted by rumours of taking out a rival *

*By Andrew Dewson *

*Published: 06 February 2007 *



Despite a huge surge in the value of mining assets over the past few years, there is yet to be a deal that propels any of the major industry players into the global league of mega-cap companies. One rumour doing the rounds among Australian brokers could mean BHP Billiton becomes the first to move into the top league, taking out one of its major rivals in the process. 

The word is that BHP is talking to the French oil group Total with a view to selling its oil interests in the Gulf of Mexico and using the proceeds to bid for Rio Tinto or Anglo American. BHP's Mexican interests are owned jointly with the oil giant BP, with BHP owning 56 per cent to BP's 44 per cent. The development, called Atlantis, is proving more expensive than BHP anticipated, and it is thought that although the company has told investors that Atlantis is a core asset, the right offer could tempt the company.

The word is that BHP's stake is severely undervalued by the market and could be worth up to $40bn (£20bn). Even if it is not sold traders said the Atlantis project could lead to a major rerating of BHP shares. BHP closed 7p firmer at 983p, with Rio Tinto 11p better at 2,702p and Anglo American unchanged at 2,393p.


----------



## pacer (6 February 2007)

Lost some made some.....picked up a tidy 2k profit today on others....sorry Canna....OZ $ only accepted......it would have cost me 100 yuan to change it to ozzie dollars....so pretty pointless transaction it would have been for me....

Win some loose some....never was much of a gambler....unlike dlineinvestor....should change his name to dlinegambler....lol


----------



## CanOz (6 February 2007)

pacer said:
			
		

> Lost some made some.....picked up a tidy 2k profit today on others....sorry Canna....OZ $ only accepted......it would have cost me 100 yuan to change it to ozzie dollars....so pretty pointless transaction it would have been for me....
> 
> Win some loose some....never was much of a gambler....unlike dlineinvestor....should change his name to dlinegambler....lol




You owe me 100 Yuan...not the other way around.

Cheers,


----------



## haemitite (6 February 2007)

Kauri said:
			
		

> ld be worth up to $40bn (£20bn). Even if it is not sold traders said the Atlantis project could lead to a major rerating of BHP shares. BHP closed 7p firmer at 983p, with Rio Tinto 11p better at 2,702p and Anglo American unchanged at 2,393p.



Atlantis is worth $40B for a part-owned asset?  

Looks like someone had fat finger


----------



## marc1 (6 February 2007)

Big day tomorrow for all BHP holders guys , profit results due.

What i'm hoping for tomorrow is,
Wake up to find all base metals have had a strong session on the LME
A nice jump in oil to around the $60 ish mark.
A profit result above expectations.
Costs under control.
And a big dividend increase.

Hmmmmm bet you'd never guess BHP makes up 20% of my portfolio  

Cheers to all holders.


----------



## nomore4s (6 February 2007)

marc1 said:
			
		

> Big day tomorrow for all BHP holders guys , profit results due.
> 
> What i'm hoping for tomorrow is,
> Wake up to find all base metals have had a strong session on the LME
> ...




lol, you don't want much.

but I want the same things, lol


----------



## Garpal Gumnut (6 February 2007)

marc1 said:
			
		

> Big day tomorrow for all BHP holders guys , profit results due.
> 
> What i'm hoping for tomorrow is,
> Wake up to find all base metals have had a strong session on the LME
> ...





Dear Marc1,

I've bought bhp on weakness in a contrary manner and seen it recover each time. I have similar hopes. Unfortunately its much less than 20% of my portfolio, as I see good things for this stock, though as I said I only buy bhp in gloom

Garpal


----------



## marc1 (6 February 2007)

Garpal Gumnut said:
			
		

> Dear Marc1,
> 
> I've bought bhp on weakness in a contrary manner and seen it recover each time. I have similar hopes. Unfortunately its much less than 20% of my portfolio, as I see good things for this stock, though as I said I only buy bhp in gloom
> 
> Garpal



Garpal my broker had the same contrary thoughts in early 2003 @ $9.00
bless her heart,thats why its @ the 20% level.

cheers


----------



## Garpal Gumnut (6 February 2007)

marc1 said:
			
		

> Garpal my broker had the same contrary thoughts in early 2003 @ $9.00
> bless her heart,thats why its @ the 20% level.
> 
> cheers




Good on you Msrc1. I got in at about $8, $11, $13 and $16, but obviously not at the precentages of my portfolios that you did with yours. some of these were old BHP prices before billiton came on board. However this is over a 20 yr trading history so the traders may have outdone me, though I'm not complaining. If BHP ever get back into the high teens I'll be in like flynn. My next buy will be at $19 or even $16, heaps of support there,  if the Chinese state starts to break up under its tremendous social pressures.

Garpal


----------



## bigdog (7 February 2007)

BHP Billiton H1 earnings up $US12.9b
February 7, 2007 - 9:19AM
http://www.theage.com.au/news/Busin...nings-up-US129b/2007/02/07/1170524130097.html


BHP Billiton has posted an 42 per cent jump in first half earnings and increased its capital management program by $US10 million ($A12.91 million).

Net profit for the six months ended December rose to $US6.168 billion ($A7.96 billion), from $US4.364 billion ($A5.63 billion) in the same period in the prior year.

The company also announced that chief executive Chip Goodyear will retire by the end of 2007.

The world's biggest miner said its outlook for the global economy remains encouraging, with continued gross domestic product growth in China, a strong performance in Europe and improving confidence in the US.

"A healthy corporate sector, accommodative monetary policies and ample liquidity continue to provide support," the company said.

"Falling oil prices have also brought some relief to inflation levels and have assisted in improving sentiment in oil-importing countries.

"Tight labour market conditions and falling unemployment rates continue in a number of regions."

BHP Billiton said in the short-term it expects global growth to moderate but that the economic outlook remains healthy.

"While we expect growth for the US economy to be below the rate in 2006, a soft landing in the housing sector, strong capital investment and an easing of energy prices should result in a growth rate consistent with long term trends," BHP Billiton said.

"Strong economic activity in Western Europe and an improvement in Japan's economic outlook should lessen the impact of any slowdown in the US."

BHP Billiton said that in 2006 real annual average prices for copper, zinc, iron ore, coking coal, thermal coal, crude oil, natural gas and uranium reached their highest levels since the 1970s.

"Market indicators do not point to large-scale surpluses emerging in 2007, although demand growth can be expected to vary regionally in line with varying economic activity," the miner said.

"China is set to continue as the main driver of demand, but more mature markets may also lend support, especially Europe and Japan.

"Despite the expansion of China's domestic production base, imports of commodities will continue to play a crucial role in supporting the country's industrialisation."

BHP Billiton said while it expects a constructive environment, the path of the US economy is uncertain.

"Although the US economy will continue to have an important impact on the global economy, it is increasingly clear that improved economic conditions in other OECD countries and the increased relevance of emerging economies is decreasing the global impact of US economic activity," the company said.

"As a result the global impact of a slow down in the US is expected to be lower than generally assumed and we do not anticipate a return of prices to longer run averages over the medium-term."

In six months, BHP Billiton recorded a 21.7 per cent rise in revenue to $US18.503 billion ($A23.89 billion) and hiked its interim dividend to 20 US cents from 17.5 US cents in the same half in 2005/06.

The company said that while costs remain a challenge, the rate of increase has continued to slow.

"The rate of increase in costs across out business has slowed," the miner said.

"Although this is a positive sign, the current environment continues to be challenging and the pressure on access to labour and other inputs to our business has not lessened."

Inflationary pressures on input costs across BHP Billiton's businesses shaved $US200 million ($A258.18 million) off underlying earnings.

The company chief executive Chip Goodyear plans to step down by the end of calendar 2007.

"After nine years with the company, and what will be five years as CEO, I have decided it is an appropriate time for the organisation to transition to the next generation of leadership," he said.

Chairman Don Argus said the company will use the time before then to implement its succession plan.

"One of Chip's significant contributions is that he has developed a number of strong internal candidates who will be considered for the role," Mr Argus said.

BHP Billiton also plans to return more cash to shareholders by increasing its capital management program by $US10 billion ($A12.91 billion) to $US13 billion ($A16.78 billion).

The amount will be returned to shareholders over the next 18 months through a series of buy backs.

"Our confidence in the company's outlook and strong cash generative capability has underpinned our decision to continue to announce sizeable returns to our shareholders," said Mr Argus.

The company had announced a capital management program of $US3 billion ($A3.87 billion) in August.

"Our financial strength means we are well positioned to fund our $US17.5 billion ($A22.59 billion) pipeline of projects and capture other value enhancing opportunities as they arise," Mr Argus said.

Meanwhile, first half underlying earnings before interest and tax (EBIT) in base metals rose 53.5 per cent to $US2.905 billion ($A3.75 billion), while earnings in iron ore increased 13.1 per cent to $US1.406 billion ($A1.82 billion).

The petroleum division managed to up earnings by 12.3 per cent to $US1.612 billion ($A2.08 billion) while aluminium more than doubled its underlying earnings to $US840 million.

Stainless steel materials also posted a massive 284 per cent jump to $US1.436 billion ($A1.85 billion).



ASX ANN 
BHP 8:29 AM   Half Year Results Presentation 
http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00691120

ASX ANN
BHP 8:29 AM  Half Yearly Report & Half Year Accounts 
http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00691119


----------



## bigdog (7 February 2007)

BHP SP up $1.38 to $28.06

The market liked the half yearly ANN today

BHP   $28.06    +$1.38  +5.17  9,616,357  $267,431,524  07-Feb 10:01:35


----------



## Freeballinginawetsuit (7 February 2007)

The bulk of postings and notable absentee's during cyclical periods on ASF is comical  .
BHP is no different!.


----------



## TheAbyss (7 February 2007)

Hi

I am lucky enough to have bought a few last month. What are your thoughts on selling and buy back in after ex div date or retain and collect the div?

Theoreticaly of course


----------



## Absolutely (7 February 2007)

div is worth peanuts even with the increase

not worth holding to collect a div


----------



## hector (7 February 2007)

Freeballinginawetsuit said:
			
		

> The bulk of postings and notable absentee's during cyclical periods on ASF is comical  .
> BHP is no different!.





Hi Freeball,
Do you mean the notable experts?

Glad to go long Monday. Might go short on close tonight unless it goes ballistic (can't see it happening, it's already happened) then I'll just close.

hector
(notable novice)


----------



## Kauri (7 February 2007)

BHP from an (my interpretation) E/W perspective... I don't hold


----------



## Kauri (7 February 2007)

Freeballinginawetsuit said:
			
		

> The bulk of postings and notable absentee's during cyclical periods on ASF is comical  .
> BHP is no different!.




    Ominous too, could be a good contrarian indicator??


----------



## mmmmining (7 February 2007)

I can hear the scream of short-squeeze..... But tomorrow SP might be down a bit for ex-45 days frank credit things.


----------



## chops_a_must (7 February 2007)

Bahahahahaha! This dividend surely is management having another laugh isn't it? Whilst they piss on your leg. OOOOOOEEEEEERRRRRR profit up 40 something percent! And dividend up 14%. Why I never!

Just buy BBW. What a joke. Why the hell would you want to own this stock? Absolutely no incentive to own it.


----------



## Absolutely (7 February 2007)

nice sound effects


----------



## CanOz (7 February 2007)

chops_a_must said:
			
		

> Bahahahahaha! This dividend surely is management having another laugh isn't it? Whilst they piss on your leg. OOOOOOEEEEEERRRRRR profit up 40 something percent! And divident up 14%. Why I never!
> 
> Just buy BBW. What a joke. Why the hell would you want to own this stock? Absolutely no incentive to own it.




I must admit that BHP is not something i would own if i had time to actively trade. However, if you want to get exposure to low risk growth from a diverse range of mining and resource operations, BHP is hard to go past. They are buying back allot of shares, which to me is as good as dividends as i'll reap shorter term benefits from this when the supply of stock starts to affect the price.

I'm in until 32.00 or the div., which ever comes first.

Cheers,


----------



## Fab (7 February 2007)

Could anyone give me an example of how the off market buy back works. My understanding is that there is a big incentive in buying some BHP today (too late) or tomorrow to get the incentive of the franking credit and capital loss from Off market buy back. My issue is I don’t quite understand how it works and would appreciate some explanation on the benefits of doing that.

Cheers


----------



## mmmmining (7 February 2007)

Fab said:
			
		

> Could anyone give me an example of how the off market buy back works. My understanding is that there is a big incentive in buying some BHP today (too late) or tomorrow to get the incentive of the franking credit and capital loss from Off market buy back. My issue is I don’t quite understand how it works and would appreciate some explanation on the benefits of doing that.
> 
> Cheers



If you are a holder of BHP, Very simple, for superfund, do as much as you can, or if you are poor have little income and want to get back the small tax you paid (I don't think the later will apply to you.), and buy back BHP stock on the market.

For any other situation, do not bother to think about it.


----------



## ducati916 (7 February 2007)

> July-December net profit rose to $6.17 billion from $4.36 billion a year earlier due to strong markets for most mineral commodities -- just below forecasts for about $6.3 billion.
> 
> Higher prices for nickel, copper, aluminum, iron ore, petroleum products, zinc, alumina, energy coal, silver lead, manganese alloy and diamonds contributed about $4.2 billion to earnings before interest and tax (EBIT), BHP said.
> 
> ...




Lots of leverage contained in those earnings.
What happens to them in a falling market?

jog on
d998


----------



## marc1 (7 February 2007)

Sorry guys another question re BHP buy back.

Approaching this exercise with approx figures only.

Have i got my head around this correctly ?

BHP approx market cap 93 billion AUD

Todays buy back ann 13 billion AUD,(10 billion usd)

If i have this correct approx 14% of stock will be removed from the market ?

14 % of 93 billion = 13.2 billion,surely not possible ???

If commodity prices hold up, this could happen again next year
which in turn must support sp.

Hope it all makes sense
cheers marc


----------



## haemitite (7 February 2007)

ducati916 said:
			
		

> Lots of leverage contained in those earnings.
> What happens to them in a falling market?
> 
> jog on
> d998



still trying to self justify not buying  them at $8?

The market has factored in much lower forward prices than the current spot prices, but you've missed the upswing in production in iron ore, coking coal, copper etc. The market hasn't

And of course the sky is about to fall in tomorrow based on BHPs choice of inventory accounting which somehow reduces cashflow.


----------



## haemitite (7 February 2007)

chops_a_must said:
			
		

> Bahahahahaha! This dividend surely is management having another laugh isn't it? Whilst they piss on your leg. OOOOOOEEEEEERRRRRR profit up 40 something percent! And dividend up 14%. Why I never!
> 
> Just buy BBW. What a joke. Why the hell would you want to own this stock? Absolutely no incentive to own it.



 a little thing called growth perhaps?


----------



## chops_a_must (7 February 2007)

haemitite said:
			
		

> a little thing called growth perhaps?



Commodities are at a peak. Extra supply will come in when prices are dropping. There are many better places for growth than in this overrated stock.


----------



## Garpal Gumnut (7 February 2007)

BHP is a big gem, buy it in weakness, gloom and crashes, and it always comes good. 

Garpal


----------



## haemitite (7 February 2007)

chops_a_must said:
			
		

> Commodities are at a peak. Extra supply will come in when prices are dropping. There are many better places for growth than in this overrated stock.



 peope called the peak last year as well. 

While copper has come off, Nickel has since doubled and iron ore is up another 10%.

As for the extra supply - where from exactly? It takes 5-10 years to get a new mine studied, get approvals and then be up and running.   

And there has been massive supplier consolidation since the last boom, "sensible" competion is here to stay.


----------



## petervan (7 February 2007)

with such a big warchest the question is which companies are on its buying list.  big name director retiring and hoping to leave an expanding company. will be interesting to see when the rumours start.


----------



## mmmmining (7 February 2007)

Nick, I have seen this kind of chart in early discussion when BHP is at $25 dollars, and falling. It's too long for me to read, as you said, it is useless after the fact. 

To save me a bit of time, can you tell me what the price will be like tomorrow, in a week, and in a month with your crystal ball?


----------



## CanOz (7 February 2007)

mmmmining said:
			
		

> Nick, I have seen this kind of chart in early discussion when BHP is at $25 dollars, and falling. It's too long for me to read, as you said, it is useless after the fact.
> 
> To save me a bit of time, can you tell me what the price will be like tomorrow, in a week, and in a month with your crystal ball?




 This was two weeks ago.....whats so hard to read about this? Looks like its right on the money so far! And i mean ON the money, its uncanny.

Cheers,


----------



## hector (7 February 2007)

Love the chart Nick, I took a punt and went short on close.

No method, in fact  my estimation is for the stock to go higher but felt like a punt for the heck of it! We'll see if my wife still loves me at open tomorrow.

If your predictions are right, I'm putting in long and large on the bounce...

Cheers

hector


----------



## CanOz (7 February 2007)

hector said:
			
		

> Love the chart Nick, I took a punt and went short on close.
> 
> No method, in fact  my estimation is for the stock to go higher but felt like a punt for the heck of it! We'll see if my wife still loves me at open tomorrow.
> 
> ...




It gapped up so far today that its likely to me to retrace a bit to fill the gap a bit...not entirely as BHP and RIO etc, don't always fill thier gaps.

Cheers,


----------



## reece55 (7 February 2007)

mmmmining said:
			
		

> Nick, I have seen this kind of chart in early discussion when BHP is at $25 dollars, and falling. It's too long for me to read, as you said, it is useless after the fact.
> 
> To save me a bit of time, can you tell me what the price will be like tomorrow, in a week, and in a month with your crystal ball?




Mmmmmmmmining.......... what are you actually saying here....... Nick's analysis was right on the mark......... And whilst he is saying that considering the gap today, it's a bit outdated, it at least a picture of where he thought the stock was at a few weeks back. 

As for what the price is at any stage, who knows??? But by using wave analysis and TA, what Nick is illustrating is how to establish a high reward/ low risk scenario. Isn't that what we are all looking for? I have subscribed to Nick's service in the past and it is very good - he is pretty honest and more than willing to admit when he is wrong. But his stats in his various model portfolio's speak for themselves.

Hector, mate, after today's strong close the last place you want to be here is short. Just as you shouldn't try pick bottoms, IMO don't try picking tops. I wouldn't be surprised if we see the $32 level again, not sure when, but it is on the cards. 

Duc, yes, plenty of leverage in the earnings. And you would have to ask the question of where they can go from here. But remember that fundamentals don't always move markets in the way you expect them. Eventually, BHP will run out of steam. But at the present stage, the TA is pretty clear - strong price action. Therefore, trade accordingly IMO.

Cheers


----------



## BSD (7 February 2007)

Howabout those analysts hey?

Where did the bears think the $10bn of cash was going to go for an undergeared company?

Are the charts bullish yet? As bullish as yesterday? 

Who cares?

Massive buy back, massive new investment and still only 20% balance sheet leverage.

Who to buy next with an accretive deal - OXR, RIO, ANGLO???

Fancy the Chinese still buying commodities hey

What a great report

Upgrades Upgrades Upgrades


----------



## Seaking (7 February 2007)

mmmmining said:
			
		

> Nick, I have seen this kind of chart in early discussion when BHP is at $25 dollars, and falling. It's too long for me to read, as you said, it is useless after the fact.
> 
> To save me a bit of time, can you tell me what the price will be like tomorrow, in a week, and in a month with your crystal ball?




No need to read, just click the VIDEO ANALYSIS and you can kick back and have a listen instead


----------



## CanOz (7 February 2007)

Seaking said:
			
		

> No need to read, just click the VIDEO ANALYSIS and you can kick back and have a listen instead




Isn't it GREAT! I've been listening for months. $50 per month, i'd nearly pay that to listen to the frogs and crickets at nite in the background!

Sorry to sound over enthusiastic but i'm a bit of a fan.  

Cheers,


----------



## reece55 (7 February 2007)

BSD said:
			
		

> Are the charts bullish yet? As bullish as yesterday?




BSD

HAHAHA...... I guess you have reason to have a go at all that gave you grief when the price was bottoming out at $24.00....... 

But for the record mate, I looked at the chart on Tuesday morning, looked strong.... it broke the 26.50 barrier on heavy volume and I was happy to commit to a long position at close Tues via a warrant. Needless to say that I made 20% return in a day's hold. And this was all done by analysing the chart via price action......... 

Cheers


----------



## mmmmining (7 February 2007)

My point is when BHP is $24, where is this chart?

I can predict every day, every hour, and every minutes in the past, but I cannot predict the share price next hour, tomorrow, next week, and next month. Get it? If I can, I don't need to make and sell the video to make a living.


----------



## CanOz (7 February 2007)

mmmmining said:
			
		

> My point is when BHP is $24, where is this chart?
> 
> I can predict every day, every hour, and every minutes in the past, but I cannot predict the share price next hour, tomorrow, next week, and next month. Get it? If I can, I don't need to make and sell the video to make a living.




Nobody can predict, only improve the odds of being correct using probablilities. Thats why most of us wait until we have confirmation of the trend, and sometimes its much later. Then we manage the trade to cut the losses (mistakes) and let the winners run.

For the record, I'm sure that Nick Radge does what he does to share his passion for technical analysis, and he would earn far more from his past trading and current investments than from his books or his website.

Your right, he doesn't need to do it, but thankfully he does.

Cheers,


----------



## mmmmining (8 February 2007)

Canaussieuck. 

I have no problem with Technical Analysis. As a matter of fact it was one of my subject for my post-graduate study.  I am not thinking like a chartist, but I am taking the advantage of a chartist thinking whenever there is an opportunity.


----------



## wayneL (8 February 2007)

mmmmining said:
			
		

> Canaussieuck.
> 
> I have no problem with Technical Analysis. As a matter of fact it was one of my subject for my post-graduate study.  I am not thinking like a chartist, but I am taking the advantage of a chartist thinking whenever there is an opportunity.



I can guarantee you that if you get 10 chartists in a room you'll get 11 opinions (to steal from the old EW cliche')

So what is chartist thinking then?


----------



## wayneL (8 February 2007)

BSD said:
			
		

> Howabout those analysts hey?
> 
> Where did the bears think the $10bn of cash was going to go for an undergeared company?
> 
> ...



Meanwhile, plenty of other stocks have flown over the last year, while this mangy stinking flea bitten dog did nothing. Nice! LOL

Disclaimer: long the mangy stinking flea bitten dog. lol


----------



## ducati916 (8 February 2007)

ducati916 said:
			
		

> To take a SHORT entry, you have to try and look at the chart *kennas* posted, and look to go short circa $26.50, near the top band of the Bollinger.
> Currently, as indicated by the same chart $24 is a major psychological support point [it has zero fundamental significance] from the May correction.
> 
> jog on
> d998




Posted the 10'th of January 2007

The fundamentals of BHP are poor.
The markets that they rely upon, are over-heated.
Currently as enzo has observed, it's churning in a range, good if you can trade the swings.

jog on
d998


----------



## Warren Buffet II (8 February 2007)

Fab said:
			
		

> Could anyone give me an example of how the off market buy back works. My understanding is that there is a big incentive in buying some BHP today (too late) or tomorrow to get the incentive of the franking credit and capital loss from Off market buy back. My issue is I don’t quite understand how it works and would appreciate some explanation on the benefits of doing that.
> 
> Cheers




Back to this question, can someone explain with an example how this works from the point of view to CGT.

WBII


----------



## mmmmining (8 February 2007)

Warren Buffet II said:
			
		

> Back to this question, can someone explain with an example how this works from the point of view to CGT.
> 
> WBII



It is very heavy staff. Go read the booklet. If you don't have one, download it from the company website. Very simple rules, for Superfund, very good, set it and buy back. For any other purpose, depends.


----------



## Warren Buffet II (8 February 2007)

mmmmining said:
			
		

> It is very heavy staff. Go read the booklet. If you don't have one, download it from the company website. Very simple rules, for Superfund, very good, set it and buy back. For any other purpose, depends.




It is easy to find the info:
http://www.bhpbilliton.com.au/bb/in...ffmarketBuybackOfBhpBillitonLimitedShares.jsp

what I am after is what this means:
Tax Value will be calculated pursuant to the ATO guidelines (detailed in Tax Determination 2004/22) which effectively provide that the Tax Value will be the five day VWAP of BHP Billiton Limited shares on the ASX up to and including 6 February 2007 and will be adjusted for the movement in the BHP Billiton Plc share price from the closing price on the London Stock Exchange on 6 February 2007 to the opening price on the London Stock Exchange on the closing date of the buy-back (23 March 2007)

WBII


----------



## Fab (8 February 2007)

The off market buy back is very good specially if you bought few years ago and are sitting on a big CGT by selling back through the buy back you are turning your CGT into a capital loss . Great  + getting the 20c / share dividend payment . That is why I bought everything I could of BHP today even though they went down they will never go back to $2.50 within 45 days.
It is even better if you do that within a DIY super fund


----------



## reece55 (8 February 2007)

Fab said:
			
		

> That is why I bought everything I could of BHP today even though they went down they will never go back to $2.50 within 45 days.




Fab
The recent rise in BHP stock price has been great - but mate, never say never. The stock was $24.00 almost exactly a month ago - $4.00 from where it is now. Personally, I would doubt we will see those levels again for a while, but to say that it will never do that is fraught with danger.

If you are looking to extract value out of dividends/capital returns, BHP is hardly the pick of the bunch. Try one of the many infrastructure trusts, buy a warrant and extract the dividend. These provide much better yields and are more stable - just my opinion though!

Cheers


----------



## hector (8 February 2007)

Reece, thanks for your advice (and Nick too) and appreciate learning from your comments. I was lucky today with my short but it might have ended in tears...

My current thinking is to enter a position based on my analysis (reasoned!) and hold the position until proved wrong.  So I'm staying short for now and looking for the recovery after it happens!

Cheers all,

hector


----------



## ducati916 (9 February 2007)

Nick Radge said:
			
		

> My comment was a tongue-in-cheek slap at Duc which I'm sure he see's as a fun poke. We've met on several ocassions and share respect. He's also twice my size, so I do need to show respect
> 
> If you look at my comments you'll see they were actually written on January 24 from which time my subscribers have (hopefully) been long. I did not foresee these events of the last 24-hours because I cannot foresee anything into the future. I do however assess low risk/high reward opportunities using a variety of technical techniques. Sometimes I get lucky like this one. The market ebbs & flows, back and forth. It may well be a short over the coming days if you're bold but that is still not enough to remove the long positions. When the analysis has be proven incorrect, then I'll remove them.




Hi Nick,
The thread is divided between traders [yourself + others] who are looking to trade significant swing points, and the Fundies arguing over the quality of the business and longer term implications.

Somewhere in here there is also an economic argument raging over the impact of the emerging economies, and their impact upon BHP amongst others.

As you know I am an Elliot Wave afficinado, with a Doctorate based on the research presented in relation to the applicability of EW. to econometric models of bank NPL's & interest rates.

By my count, BHP is doomed.

jog on
d998


----------



## Fab (9 February 2007)

reece55 said:
			
		

> Fab
> The recent rise in BHP stock price has been great - but mate, never say never. The stock was $24.00 almost exactly a month ago - $4.00 from where it is now. Personally, I would doubt we will see those levels again for a while, but to say that it will never do that is fraught with danger.
> 
> If you are looking to extract value out of dividends/capital returns, BHP is hardly the pick of the bunch. Try one of the many infrastructure trusts, buy a warrant and extract the dividend. These provide much better yields and are more stable - just my opinion though!
> ...




Reece55,

Note that I also use instalment warrant to dividend strip nevertheless my understand of this share buy back is that not only you get the franking dividend from it but also you can turn a potential Capital gain into a paper capital loss which is fantastic and is probably one of the best deal I have seen on the Aussie stockmarket


----------



## haemitite (9 February 2007)

ducati916 said:
			
		

> Hi Nick,
> The thread is divided between traders [yourself + others] who are looking to trade significant swing points, and the Fundies arguing over the quality of the business and longer term implications.
> 
> Somewhere in here there is also an economic argument raging over the impact of the emerging economies, and their impact upon BHP amongst others.
> ...



By your count accounting policy manages to change real cashfows.


----------



## BSD (9 February 2007)

Would love to know the 'EW count' on:

1. Chinese copper, iron, nickel and oil demand
2. The Australian vs England odds tonight

Make more money knowing these than shorting BHP due to inventory accounting issues.


----------



## ducati916 (10 February 2007)

*haem & BSD*

Accounting and cash-flows has already been detailed in previous posts.
If you still don't understand, or worse, still disagree, then so-be-it.

jog on
d998


----------



## haemitite (10 February 2007)

ducati916 said:
			
		

> *haem & BSD*
> 
> Accounting and cash-flows has already been detailed in previous posts.
> If you still don't understand, or worse, still disagree, then so-be-it.
> ...



If you can find a someone to second your opinion that LIFO/FIFO policy changes cashflows then I'm all ears

Even better - can you find someone else who also believes BHP should be $8 based on their book depreciation?


----------



## rederob (10 February 2007)

BHP is doomed, according to ducati.
I would find it hard to get a better "buy" indicator for a stock.
Accordingly, expect BHP to appreciate no less than 20% by year's end on the basis of extrapolating his contra-indicated "values".


----------



## nomore4s (10 February 2007)

There is a very good post on BHP by Magdoran in the Potential swing trades thread.

https://www.aussiestockforums.com/forums/showthread.php?t=5773

It's post No. 7
I hope I posted the link correctly.


----------



## nizar (10 February 2007)

rederob said:
			
		

> BHP is doomed, according to ducati.
> I would find it hard to get a better "buy" indicator for a stock.
> Accordingly, expect BHP to appreciate no less than 20% by year's end on the basis of extrapolating his contra-indicated "values".




I think its amazing that BHP's share price hasnt moved from last year even though the profits have gone through the roof.

And the $10billion buyback is proof that BHP view their share price as undervalued.

ZFX management did something similar when the share price was in the $5-7 range.


----------



## ducati916 (10 February 2007)

haemitite said:
			
		

> If you can find a someone to second your opinion that LIFO/FIFO policy changes cashflows then I'm all ears
> 
> Even better - can you find someone else who also believes BHP should be $8 based on their book depreciation?




This really is the underlying problem, *BSD* thought *FORD = F* and you think I said $8 = the value after book depreciation.

I actually said nothing of the sort.
If you wish to *quote* me, at least try to be accurate.

As to LIFO/FIFO, as stated, I am indifferent to your acceptance or understanding.

jog on
d998


----------



## annalivia (12 February 2007)

The most compelling reason for investing in BHP remains the attractive valuation. Given the general overvaluation of the market at this point, BHP remains a compelling opportunity. Unlike many stocks that are 'priced for perfection', BHP remains 'priced for disappointment'. 

BHP currently trades on a price-to-earnings multiple of around 9.4 times, while the price to cash flow multiple is around 7.2 times. Profitability remains exceptionally high with return on equity expected to exceed 40 percent.

But what the hell do I know, I'm just a dumb value investor.

al


----------



## dhukka (12 February 2007)

annalivia said:
			
		

> The most compelling reason for investing in BHP remains the attractive valuation. Given the general overvaluation of the market at this point, BHP remains a compelling opportunity. Unlike many stocks that are 'priced for perfection', BHP remains 'priced for disappointment'.
> 
> BHP currently trades on a price-to-earnings multiple of around 9.4 times, while the price to cash flow multiple is around 7.2 times. Profitability remains exceptionally high with return on equity expected to exceed 40 percent.
> 
> ...




If you are truly a value investor then you know that price and value are independent of each other. You also know one of the inputs in the p/e ratio is price, how then can any measure that uses price as an input be an indicator of value? Answer, it can't. ROE's are what's important, whilst BHP is on track to post ROE of over 40% for 2 years running now you'd have to overly optimistic to think it could continue. 10 year average ROE currently stands at around 20% - still good but does it represent good value? 

Personally I think the stock will keep running on the strength of the 1H07 result. Going forward what is the upsdie and downside risk to earnings? Upside: Further increases in commodity prices? Doubtful, increased production? Too far off to have any short term impact on earnings. So we are left with capital management initiatives. Downside: falls in commodity prices that can happen suddenly and have immediate impact on earnings, margins and returns on capital. The Downside is far more frightening than the upside is exciting IMHO.


----------



## Garpal Gumnut (12 February 2007)

annalivia said:
			
		

> The most compelling reason for investing in BHP remains the attractive valuation. Given the general overvaluation of the market at this point, BHP remains a compelling opportunity. Unlike many stocks that are 'priced for perfection', BHP remains 'priced for disappointment'.
> 
> BHP currently trades on a price-to-earnings multiple of around 9.4 times, while the price to cash flow multiple is around 7.2 times. Profitability remains exceptionally high with return on equity expected to exceed 40 percent.
> 
> ...




Dear annalivia plurabelle, so as a value investor is it as low as it gets in this cycle, I normally pile in to bhp in crashes but the Australian article on cessation of dual listing today sounds very bullish. any comments??

Garpal


----------



## BSD (12 February 2007)

ducati916 said:
			
		

> This really is the underlying problem, *BSD* thought *FORD = F* and you think I said $8 = the value after book depreciation.
> 
> I actually said nothing of the sort.
> If you wish to *quote* me, at least try to be accurate.
> ...




No Chief - I thought the FORD you were losing money on was FOMOCO and I was wrong in that assumption. 

By the way FORD is a dog too. 

You still are yet to show us how accounting treatments effect cashflow. And unlike me, are unable to accept your obvious MISTAKE. 

_We don't care whether you are indifferent to our absolute disagreement, with your MISTAKE, we just wan't you to accept that LIFO/FIFO policy changes DO NOT effect cashflow._

Then again, you can keep losing money making dumb mistakes...


----------



## 2020hindsight (12 February 2007)

http://www.abc.net.au/news/newsitems/200702/s1846004.htm APEC meeting discusses future of mining


> Asia Pacific Economic Cooperation (APEC) forum delegates have begun a week of meetings in Perth to discuss the mining industry.  The Ministers Responsible for Mining meeting brings together more than 350 delegates from 19 of the 21 member economies of APEC, including Australia, the United States, China and Japan.
> 
> Also attending the meeting are executives from some of the world's major mining companies, such as BHP Billiton, Rio Tinto, Alcoa and Barrick Gold.  Federal Industry, Tourism and Resources Minister Ian Macfarlane says economic and environmental issues in the mining industry will be key points of discussion at this week's meeting.
> 
> The delegates will spend the week consulting with executives from some of the world's major mining companies before releasing a communique outlining a set of non-binding policies governing mining practice. Mr Macfarlane says the meeting is crucial to maintaining the growth of the region's resources sector. "Australia wants to see the economies of APEC develop," he said. etc



  might cause a blip on the graph - up ? or down i guess?


----------



## Freeballinginawetsuit (12 February 2007)

I don't think anyone can dispute that BHP has done well over the last few weeks albeit at a swifter pace than could have reasonably been anticipated. 

I am the first to admit that BHP has been a bit of a dog throughout 06, but certainly was of the opinion it was an accumalate on weakness, especially in recent months. Simplistic....maybe, but it wasn't rocket science that their half yearly was going to be a bumper one.

Hopefully momentum can take them into the mid $29 range at which point I will bump most of my short term holdings, the funds were significant and wouldnt mind spreading them over a few mid tier oilers (BPT and ROC) and some others at today's prices  .

Its been a bit dissapointing to read posters on the thread bagging purchasers of BHP on weakness. I know in my case I have had a large sum of funds in them recently and its hard to maintain a positive vibe with such dribble being spun out about incorrect fundamentals.

So to all that enjoyed picking BHP's bum recently, well done its not often you get a 15 odd percent return on a blue chip in a month.


----------



## annalivia (13 February 2007)

dhukka said:
			
		

> If you are truly a value investor then you know that price and value are independent of each other. You also know one of the inputs in the p/e ratio is price, how then can any measure that uses price as an input be an indicator of value? Answer, it can't. ROE's are what's important, whilst BHP is on track to post ROE of over 40% for 2 years running now you'd have to overly optimistic to think it could continue. 10 year average ROE currently stands at around 20% - still good but does it represent good value?
> 
> Personally I think the stock will keep running on the strength of the 1H07 result. Going forward what is the upsdie and downside risk to earnings? Upside: Further increases in commodity prices? Doubtful, increased production? Too far off to have any short term impact on earnings. So we are left with capital management initiatives. Downside: falls in commodity prices that can happen suddenly and have immediate impact on earnings, margins and returns on capital. The Downside is far more frightening than the upside is exciting IMHO.




dhukka,

I agree ROE is what is important.
The gloss has come off the big diversified miners over the past 12 months or so, as investors have focussed on cost blowouts and projects not completed on schedule. Ironically, this is a reason to remain bullish on commodity prices remaining strong. Put simply, higher costs for just about everything mean sustained higher commodity prices are required to provide incentive to go ahead with new projects.
With the outlook for commodity prices remaining strong, BHP's huge cash flows will go towards expanding capacity in order to increase future production. At some point, this will temper the commodity price rise, but I certainly do not believe it will result in sustained price falls, as many are predicting.
Although new supply is coming on stream over the next few years, the response has been slow. Companies like BHP not only need to dig resources out of the ground, they need to move them to ports for export. Much of the supply constraints are due to lack of capacity and adequate infrastructure at ports and railways. So not only does mining capacity need investment, infrastructure capacity is required too.
While volatility in oil and copper have spooked some investors over the earlier part of this year, BHP's operating earnings are derived from iron ore and coal, whose prices are contractually set each year. Iron ore prices will rise by 9 percent from April this year while coal prices are expected to decline from last years record highs.
China's and indeed much of the emerging world's industrialisation has just started. Even though there will be times when these economies experience growing pains, BHP will be a long term beneficiary of their growth, and therefore I think can maintain a high ROE for many years to come.

annalivia


----------



## Moneybags (13 February 2007)

According to my Broker, Times Newspaper in London is reporting BHP & RIO are about to bid for Alcoa...........It's associate here Alumina up over 6% this morning.

Anyone else heard about this?

MB


----------



## ducati916 (13 February 2007)

BSD said:
			
		

> No Chief - I thought the FORD you were losing money on was FOMOCO and I was wrong in that assumption.
> 
> By the way FORD is a dog too.
> 
> ...




Incorrect.
It would seem that you need actually to resort to lies. 
The evidence;



> Ducati prefers the obvious superior 'value' available in FORD
> 
> http://www.bloomberg.com/apps/news?pid=20601087&sid=a.peELHwidUY&refer=home
> 
> Going well it appears!




As regards the LIFO/FIFO.
The information and explanations have already been posted.
No need to repeat myself.
If you couldn't understand it the first time, why would a second or third time be any different?

jog on
d998


----------



## bigdog (13 February 2007)

BHP is now driving on the right side of the road and SP now up 11 cents to $28.70 from low today of $28.31

BHP   $28.70    +$0.11  +0.38%  8,587,289  $244,402,562  13-Feb 11:41:30


----------



## happytown (13 February 2007)

mb,

the times story:

"BHP Billiton and Rio Tinto both eyeing Alcoa as target

The TimesFebruary 13, 2007

BHP Billiton and Rio Tinto both eyeing Alcoa as targetDavid Robertson, Business 
Correspondent 

BHP Billiton and Rio Tinto have drawn up plans for a $40 billion (£20.5 billion) 
takeover of Alcoa, one of the world’s largest aluminium groups, The Times has 
learnt. 

It is understood that the two are independently considering an approach for 
Alcoa and have drawn up feasibility studies for a bid, but they are not thought 
to have yet approached the board of the Pittsburgh-based company. 
BHP and Rio, both Anglo-Australian mining giants with large aluminium 
operations, are looking at ways to expand production as prices hit record 
levels. 

Alcoa is considering its own future and has drawn a list of potential new chief 
executives, The Times has also learnt. 
Ironically, BHP executives feature prominently on the wish-list of new leaders, 
which is believed to have been put together at the request of Alcoa board 
members. 

Sources close to those on the list say that BHP’s outgoing chief executive, Chip 
Goodyear, and the executive directors Marius Kloppers and Chris Lynch have been 
approached or are being considered. 

Mr Kloppers and Mr Lynch are also leading candidates to replace Mr Goodyear, who 
is to leave BHP later this year. 

Also on the list is Alcoa’s executive vice-president, Helmut Wieser. Another of 
the internal favourites, Cynthia Carroll, is no longer available having taken 
the top job in Anglo American. 

BHP, which produces about 1.3 million tonnes of aluminium a year, is understood 
to have done the groundwork on a bid for Alcoa. 

Rio, which produces about 1.2 million tonnes of the metal, has considered a bid 
for Alcoa, but is not thought to have progressed as far as BHP. 

Any deal is likely to value Alcoa at more than $40 billion, which would make it 
by far the largest target in the recent round of mining takeovers. 

Last year Xstrata and CVRD set the pace in the mining sector with acquisitions 
worth $17 billion and $19 billion. Freeport-McMoRan’s offer of $26 billion for 
Phelps Dodge will be decided next month. 

Alcoa is seen as a target by many analysts because it is struggling to expand 
its business and compete with Russia. 

Alcoa and Alcan, the traditional leaders in the aluminium industry, now trail 
RusAl as the largest producer in the world. 

Alcoa’s share price has also struggled, and was down nearly 30 per cent at its 
worst point last year. The stock has since recovered some of its losses, partly 
as investors anticipate a change in direction. Alcoa shares were among the 
biggest midday risers on Wall Street yesterday. 

A change of direction could be provided internally as Alcoa considers who could 
succeed its chief executive, Alain Belda. Board members are understood to have 
asked for external and internal candidates on the list of potential successors 
ahead of the retirement next year of Mr Belda, 63. It is not clear what 
involvement, if any, Mr Belda has had in succession planning. 

Alcoa declined to comment last night, as did Rio Tinto. BHP said: “We look at 
every possible opportunity that could grow the business.” "


----------



## Moneybags (13 February 2007)

Cheers happytown,

Interesting times ahead it would seem.

MB


----------



## Out Too Soon (13 February 2007)

I was thinking Alcoa could be a good investment at present but found the asx listing confusing. It seems to be in a trading halt & looking at the chart confused the hell out of me.  Has anyone been following Alcoa lately/ know whats going on?


----------



## mmmmining (13 February 2007)

Gurgler said:
			
		

> Now today this posting on FN Arena:
> 
> *
> UBS analysts have crunched the numbers implicit from the bid, and arrived at a valuation of uranium resource of US$31.61/lb.
> ...




Apply the same valuation, BHP's uranium asset worths US$125b!, while BHP's market cap. is AU$100b. I cannot figure it out....

I strongly suggest that BHP to spin off the uranium project, create an ERA like company. So the uranium asset is not buried under base metal. The advantage of the tracking company is not only the value of the asset can be realized, but also the management can focus on project acquisition, development,lobbying, and rationalize the whole uranium industry in Aussie land, and in the whole world. It won't last forever that so many juniors releasing a few drilling holes everyday to pump up the stock price. Soon or late, the market will be tired of it. And the whole story will be stopped at uranium discovery, and no mining. 

Ironically, there is the reason for a lucky few companies having flying start in the game such as PDN, NEL, RPT, PNN....


----------



## haemitite (13 February 2007)

A rational investor should still value BHP's uranium assets properly without a spin-off. If they don't  - all the better, its undervalued

Of course the major expansion at Olumpic Dam is a long way off, and the expansion itself will to cost about as much as the current combined market of ZFX & OXR


----------



## trendsta (13 February 2007)

What would the affect of Alcoa buyout be on BHP share price? 

I am assuming it will be negative in short term because purchasing another asset is more risky than keeping cash?? Further, bidding between RIO and BHP will cause the companies to pay higher price for the assets thus making the buyout less attractive.. 

Any other views?


----------



## haemitite (13 February 2007)

It would be surprising to see either RIO or BHP take out Alcoa

Aluminium is a good business but not great, and both RIO and BHP would end up looking like Aluminium companies with a few other assets bolted on. Not so diversified anymore.

Plus Alcoa consume around 1% of the worlds total energy supply - not a great look when global warming is all the rage.

Smells like a media beat up


----------



## Garpal Gumnut (13 February 2007)

trendsta said:
			
		

> What would the affect of Alcoa buyout be on BHP share price?
> 
> I am assuming it will be negative in short term because purchasing another asset is more risky than keeping cash?? Further, bidding between RIO and BHP will cause the companies to pay higher price for the assets thus making the buyout less attractive..
> 
> Any other views?




It depends !!!!

Watch the charts , if increased volume and price its a done deal post announcement usually, and usually price will increase.  I like charts as it tells me whats happening, as the average investor is 3-4 days behind the mates rates that operate in fundamental analysis. Its not quite as simple as that as I tend to look in longer time frames, but if in doubt do a technical analysis course. It takes the uncertainty out of it all.

Garpal


----------



## reece55 (13 February 2007)

I agree Haemitite.........

This is hardly the business that BHP or RIO would want to buy at this stage in the game.....

Plus, I would have thought that only BHP would be able to pull it off, and would have to use scrip to finance a $20 Bil US acquisition.......

Just doesn't make sense though - they would be better sticking to their diversified business model.... If you ask m, the media is just looking for a stock to talk up at the moment.....

Cheers


----------



## stockpile (13 February 2007)

Hi all, first post here.

I have a pre print of tomorrow's paper, don't ask me where i get it but if anyone ever wants to know what the top stories will be tomorrow I am happy to oblige the information.

Big article that the media will be all over tomorrow states that both Rio and BHP have prepared their bids, as stated on this forum, however the article goes on to suggest that BHP is in the box seat to seal the 50 Billion dollar deal.


----------



## reece55 (13 February 2007)

Stockpile - which paper do u have access to????? The Fin?????

Cheers


----------



## stockpile (13 February 2007)

Don't have it tonight but can get it also.  I prefer not to name the paper but lets just say its in massive circulation.


----------



## mmmmining (13 February 2007)

It is the Financial Review, where all kind of stories begin...


----------



## stockpile (13 February 2007)

Tip on the fin also, they don't hit the printing press till 11:30PM at night so its too late for me to get info out from that print.  The author of the article also asks Fat Prophets their opinion, and they said the current speculation 'could have legs'.


----------



## mmmmining (13 February 2007)

stockpile said:
			
		

> Tip on the fin also, they don't hit the printing press till 11:30PM at night so its too late for me to get info out from that print.  The author of the article also asks Fat Prophets their opinion, and they said the current speculation 'could have legs'.



Ahha, got you. Just my lucky guess, and really I don't care which paper. 

Anyway, It's not new news. The Australian had it yesterday, and the Times had it today. I believe both Rio Tinto and BHP know what they are doing. I am not going to judge whether it is right or wrong to do it or not to.

I can take care of their uranium business if they don't mind....


----------



## ducati916 (14 February 2007)

Having just run AA numbers, I would concur, the purchase of AA by BHP would undoubtably be a mistake for BHP [shareholders] and destroy value.

jog on
d998


----------



## reece55 (14 February 2007)

Duc
Read your analysis on Alcoa - my points:

1. OK, they have plenty of debt. BHP doesn't exactly have that much debt at the moment. What's to stop them using a 100% scrip deal and with the free cash flow they are generating pay the debt off. I mean, you wouldn't say BHP would have a problem meeting these obligations and therefore reduce the gearing.

2. How do yo calculate intrinsic value - is this termination value of assets and liabilities (which I assume it is considering the valuation is so low), or a DCF analysis (which I sure is the premise BHP are working on)?

Duc, you seem overly negative to almost every deal at the moment. You obviously a very educated person, but I wonder why you think that you are smarter than thousands of accountants and investment bankers doing the calculations on these buy outs. I would be interested to see what your valuation methodology thought of BHP's acquisition of WMC. I remember everyone was saying it was a ridiculously expensive acquisition that BHP should never have done - history tells us now that got it for a song.....

I would say that whilst Alcoa is a great business that is undermanaged (and this is widely accepted), BHP is not likely to gain any major synergistic benefits from the organisation. It also de-deversifies there business from that of a mix of commods, to having a fair bulk now coming from Aluminum. So, rather than painting doom and gloom like Duc, I don't like the strategic fit here.

Cheers


----------



## ducati916 (14 February 2007)

*reece55*



> 1. OK, they have plenty of debt. BHP doesn't exactly have that much debt at the moment. What's to stop them using a 100% scrip deal and with the free cash flow they are generating pay the debt off. I mean, you wouldn't say BHP would have a problem meeting these obligations and therefore reduce the gearing.




If they have the scrip in the treasury, then a 100% scrip deal would make much more sense than cash. Pay for one overpriced asset with another overpriced asset.

If however they have to issue new scrip, you are diluting the existing shareholder base, and therefore not so good.

Part of the *debt* that they are paying off, consists of commercial paper and bank financing, for liquidity issues of inventory possibly already sold, thus the purchase of the debt does not correspond to any asset [except capitalized costs which as we see = $0.00]



> 2. How do yo calculate intrinsic value - is this termination value of assets and liabilities (which I assume it is considering the valuation is so low), or a DCF analysis (which I sure is the premise BHP are working on)?




Well DCF it most certainly is not.



> Duc, you seem overly negative to almost every deal at the moment. You obviously a very educated person, but I wonder why you think that you are smarter than thousands of accountants and investment bankers doing the calculations on these buy outs. I would be interested to see what your valuation methodology thought of BHP's acquisition of WMC. I remember everyone was saying it was a ridiculously expensive acquisition that BHP should never have done - history tells us now that got it for a song.....




I never valued the WMC acquisition, so we have no direct comparison.
With regards to the investment bankers; 

*how do they get paid?
*are they going to be holders of any part of the capitalization?

The answers are;
They get paid by claiming fees on each deal [circa 4% per deal]
They will hold nothing [save possibly a small freebie equity stake]
Therefore, almost by definition, they could care-less whether the deal makes good business sense, it makes good dollar sense for them.

When I value the company, it is because I place myself in the position of taking an equity or debt position. Therefore it must be conservative and the worst case scenario as a valuation before I would place MY MONEY into the proposition.



> I would say that whilst Alcoa is a great business that is undermanaged (and this is widely accepted), BHP is not likely to gain any major synergistic benefits from the organisation. It also de-deversifies there business from that of a mix of commods, to having a fair bulk now coming from Aluminum. So, rather than painting doom and gloom like Duc, I don't like the strategic fit here.




Certainly the strategic fit, is being propagated by many analysts as to why BHP wouldn't want this acquisition.

However, where there is smoke, sometimes there is a fire. BHP is loaded with cash..........cash burns holes in pockets, and I smell a little smoke.
It may well be extinguished, we'll see.

jog on
d998


----------



## Knobby22 (14 February 2007)

I also don't think BHP would even want to look at this!

Why would they, at this stage of the cycle, want to buy a  business like Alcoa, which uses amazing amounts of energy requiring cheap power (therfore a political risk), is not a pure mining play (execution risk) and is very susceptible to the effects of carbon trading (risk, risk, risk). 

I can see heaps of other companies they could go for with better prospects than this one. It's just rumour.


----------



## mmmmining (14 February 2007)

Knobby22 said:
			
		

> Why would they, at this stage of the cycle



I heard this when BHP was bidding WMC.... 
Try this might help you to define the cycle
http://www.smh.com.au/articles/2007/02/05/1170524026360.html?feed=html

and 

http://www.dailyreckoning.com.au/commodities-boom/2007/02/09/


----------



## mmmmining (14 February 2007)

Earlier in the thread, I fancied that BHP could be a target for LBO. Here is an something I quoted from a link:

(Jim) Rogers said the likes of BHP could become targets for private equity.
“There are now gigantic amounts of private equity being raised. Billions of dollars are being raised for private equity. It has got to go somewhere,” he said.
“BHP, on an asset basis, is a cheap stock. This isn’t a prediction. Whether a private equity group wants to come in and try to buy them or whether BHP wants to sell, I’ve not a clue. But I do know that if you look at their assets and you look at the amount of private equity out there, that’s what these guys do, they go around looking for companies where they think they’ll make a lot of money.”

http://tangibulls.com/category/jim-rogers/


----------



## haemitite (14 February 2007)

reece55 said:
			
		

> Duc, you seem overly negative to almost every deal at the moment. You obviously a very educated person, but I wonder why you think that you are smarter than thousands of accountants and investment bankers doing the calculations on these buy outs. I would be interested to see what your valuation methodology thought of BHP's acquisition of WMC.



 Be careful on your assumptions - Ducati has repeatedly stated that LIFO/FIFO policy alters cashflow

And he has confused project capex with ongoing operating costs

Not to mention he thinks BHP is a sell because of its book depreciation.


----------



## reece55 (14 February 2007)

haemitite said:
			
		

> Be careful on your assumptions - Ducati has repeatedly stated that LIFO/FIFO policy alters cashflow
> 
> And he has confused project capex with ongoing operating costs
> 
> Not to mention he thinks BHP is a sell because of its book depreciation.




Guys,
I don't want people to think that I am having a go at Duc - if thats the way it was interpreted thats not how it was intended. I actually think his analysis is a breath of fresh air in an otherwise very bullish world at the moment. But as I  P&L and Balance Sheet metrics, said, I think he is overly negative from a valuation perspective and focuses on as opposed to a DCF model. This is sensible if buying private companies, but doesn't work on public coy's. In my experience, this leads to a valuation based more on the termination or intrinsic value of a company, rather than the true enterprise value. Additionally, from a stock trading perspective, it is impossible to trade on this sort of analysis unless you are looking to hold for an economic cycle.

For the record, BHP using LIFO as your accounting policy obviously inflates profits dramatically - specifically when prices increase rapidly, which is occurring in the mining industry. Haem, Duc doesn't confuse capex with operating costs - what he is saying is that the projects they are commissioning now are costing a bucket load and when they do come online, they will barely meet the cost of the developed mine. Now, obviously we are looking into the future here - I mean, I wouldn't have a clue if say Raven has cost far too much to build. We will only know this in five years.

Duc, I agree with you on the investment bankers, but the accountants working for the companies constructing these deals will have the organizations best intentions at heart - after all,, it is there balls on the line (+ I have a conflict of interest here - I am an accountant)! And you are right on the mark about BHP and their cash - it's burning a hole in their pocket. They are under immense pressure at the moment to deliver shareholder value and certainly one way of doing this is to acquire an asset with their buckets of dough. In the past (i.e. WMC) they have got it right - lets hope they do as well in future with their future acquisitions.

Cheers
Reece


----------



## haemitite (14 February 2007)

Reece, I didn't think you were having a go at him

Ducati is welcome to his very bearish position - but a fundamentalist he isn't. He banged on for ages about BHP's accounting policy impacting cashflow.

As for burning cash, well many BHP shareholders will be enjoying a nice franked dividend and an enticing capital loss soon. And BHP won't be going anywhere near Alcoa


----------



## ducati916 (15 February 2007)

haemitite said:
			
		

> Reece, I didn't think you were having a go at him
> 
> Ducati is welcome to his very bearish position - but a fundamentalist he isn't. He banged on for ages about BHP's accounting policy impacting cashflow.
> 
> As for burning cash, well many BHP shareholders will be enjoying a nice franked dividend and an enticing capital loss soon. And BHP won't be going anywhere near Alcoa




The nice easy explanation.
Depreciation is a non-cash charge.
Thus depreciation increases cash-flow.
Depreciation, to accurately state cash-flow, must be deducted.

*reece55*

An accountant, should have realized.
Your primary issue then being that the CFO & staff should have a grasp of the financial facts, and understand that AA is a poor choice [fit] for BHP.

Thus we come into the psychological realm of, Institutional Imperative. This can [and does] explain many of the truly zany business decisions within acquisitions.

jog on
d998


----------



## BSD (15 February 2007)

ducati916 said:
			
		

> The nice easy explanation.
> Depreciation is a non-cash charge.
> Thus depreciation increases cash-flow.
> Depreciation, to accurately state cash-flow, must be deducted.
> ...




This is really frustrating.

Where is the depreciation line on the Cash Flow Statement?

Page 5
http://www.bhpbilliton.com.au/bbContentRepository/signedbhpbillitonlimitedjune2006.pdf

or F-7
http://www.bhpbilliton.com.au/bbContentRepository/20ffinancialstatements.pdf


Reece, us dumb brokers and analysts cant explain to Duc the difference between cashflow and accounting profit

Give us a hand please -he listens to other accountants
____________________________

More importantly -

Hills up another 1.5% in the US

Upgrades are coming in bulk commods and copper is going back to $3.00 before $2.00 after the January Chinese imports of copper were 40% higher than pcp and iron ore 30%.

When these upgrades and the accretion of buying back $10bn worth of shares hits the models, the PE will slump to 8 and the analysts will be calling for $35

Plenty more to come in this story


----------



## Bush Trader (15 February 2007)

More news on the Alcoa takeover rumour, James Regan of Reuters, commented yesterday that BHP “had no plans to have a go at Alcoa”.  It will be interesting to see if the market continues to speculate.

Cheers


----------



## haemitite (15 February 2007)

ducati916 said:
			
		

> The nice easy explanation.
> Depreciation is a non-cash charge.
> Thus depreciation increases cash-flow.
> Depreciation, to accurately state cash-flow, must be deducted.



Depreciation is a non cash item -> it does not increase cashflow

And perhaps by now you may have realised that book depreciation and tax depreciation are different beasts


----------



## rederob (15 February 2007)

Am up about 12% since buying BHP in December, which is a reasonable outcome in a few months.
Again, the commodity doomsayers are found to have misjudged the market.
ducati is welcome to present his cumbersome valuations and accompanying incongruent jargon, but its value remains elusive given his additional capacity for significant error.
It is all good and well to announce the "sky is falling" and have the Chicken Littles of the world worrying the bejeebers out of everyone - if the sky is indeed falling.
BHP is just a few dollars away from blue sky again and has the capacity to fly even further if broad-based commodity market tightness can again put a strangle on copper prices.

If I was a WPL executive at the moment, I would be looking at where BHP might place me on the corporate ladder.  Or be looking for another corporate opportunity.


----------



## michael_selway (15 February 2007)

rederob said:
			
		

> Am up about 12% since buying BHP in December, which is a reasonable outcome in a few months.
> Again, the commodity doomsayers are found to have misjudged the market.
> ducati is welcome to present his cumbersome valuations and accompanying incongruent jargon, but its value remains elusive given his additional capacity for significant error.
> It is all good and well to announce the "sky is falling" and have the Chicken Littles of the world worrying the bejeebers out of everyone - if the sky is indeed falling.
> ...




Hi not bad BHP

*Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS 225.4 286.0 299.8 287.8 
DPS 48.4 54.9 57.5 60.4 * 

thx

MS


----------



## haemitite (15 February 2007)

Bush Trader said:
			
		

> More news on the Alcoa takeover rumour, James Regan of Reuters, commented yesterday that BHP “had no plans to have a go at Alcoa”. It will be interesting to see if the market continues to speculate.
> 
> Cheers



Unless Regan doubles as a BHP executive then his comments are as credible as the original speculation.


----------



## ducati916 (16 February 2007)

haemitite said:
			
		

> Depreciation is a non cash item -> it does not increase cashflow
> 
> And perhaps by now you may have realised that book depreciation and tax depreciation are different beasts




Well neither yourself, nor BSD managed to understand the second time round.
With regards to Book Depreciation as opposed to Tax Depreciation, you only need check Deferred Tax Liabilities for the rates used.

The net effect of course, is to reduce Tax paid, without effecting a reduction in Net Profits reported to the shareholders.

Now, if you can think logically; if the company accelerates the depreciation for Tax purposes, reduces their Tax and capitalises the liability........does this effect their cash-flow?

Ponder on
d998


----------



## CanOz (19 February 2007)

michael_selway said:
			
		

> Hi not bad BHP
> 
> *Earnings and Dividends Forecast (cents per share)
> 2006 2007 2008 2009
> ...




Can you guys remember when the dividend date is for BHP?

Cheers,


----------



## Lert (19 February 2007)

Ex div  26/2/07  yield about 1.7%


----------



## Warren Buffet II (21 February 2007)

For those interested in the off-market buy-back, this is the BHP calculator to help you decide what is best for you depending on your situation:

http://wm-au.ibb.ubs.com/pca/taxcalc/conditionsOfUse.htm

WBII


----------



## BSD (22 February 2007)

Hills up 2% in London ATM


The next massive catalyst is the ASX buy back completing. 

Company buys $3billion of shares back at massive discount and sellers rush to buy-back vended shares on market.

More broker upgrades coming into an already cheap stock to fuel the fire.


----------



## hector (22 February 2007)

BSD said:
			
		

> Hills up 2% in London ATM
> 
> 
> The next massive catalyst is the ASX buy back completing.
> ...




Hi BSD,

I'm fairly new to trading but I bought 2000 BHP today because it seemed like a temporary pull-back. I read posts on this thread to try and pick up fundamental reasons to buy/short or avoid this stock. Can you tell me please what relevance/effect has Hills (Hills Industries?) on BHP sp?

Cheers,
hector


----------



## BSD (23 February 2007)

Sorry Hector

BHP is often referred to as 'Hills"

Broken *Hill * Proprietary Company

Those 2000 shares should be worth a bit more tomorrow

Good luck


----------



## hector (23 February 2007)

BSD said:
			
		

> Sorry Hector
> 
> BHP is often referred to as 'Hills"
> 
> ...




Thanks mate, I'll flash my knowledge when I'm in the company of Brokers next.

Oil up, Dow down, UK up, ADR down...  Bit hard to predict an open this morning. (what does ADR stand for?)

Looking forwards to a good day, cheers


----------



## Sean K (24 February 2007)

POO up, Copper up, in fact, everything up....BHP recently breaking long sideways consolidation period. Momentum looks clearly up at the moment. Might find some resistance at psychological $30, but all time high next likely stop IMO.


----------



## reece55 (24 February 2007)

kennas said:
			
		

> POO up, Copper up, in fact, everything up....BHP recently breaking long sideways consolidation period. Momentum looks clearly up at the moment. Might find some resistance at psychological $30, but all time high next likely stop IMO.




Gday Kennas
Agreed mate.........

The Weekly chart really tells the story - we had a very long sideways pattern in place for almost a year could have been bearish if we had broken through that 23.50 ~ barrier. However, the gap after the half yearly results and price action subsequently says the stock is strong and steady as she goes. I reckon we will get to see a test of those highs before June, and then we will see from there....

Cheers


----------



## Sean K (24 February 2007)

reece55 said:
			
		

> Gday Kennas
> Agreed mate.........
> 
> The Weekly chart really tells the story - we had a very long sideways pattern in place for almost a year could have been bearish if we had broken through that 23.50 ~ barrier. However, the gap after the half yearly results and price action subsequently says the stock is strong and steady as she goes. I reckon we will get to see a test of those highs before June, and then we will see from there....
> ...



Will just have to get over some short term resistance at $29.50 as well. Failed there a few days ago, and might consolidate a little before pushing on. MACD is saying it's having a break, but due to overnight commods I think this will change.


----------



## rederob (24 February 2007)

kennas said:
			
		

> Will just have to get over some short term resistance at $29.50 as well. Failed there a few days ago, and might consolidate a little before pushing on. MACD is saying it's having a break, but due to overnight commods I think this will change.



Gee kennas.
I dunno; without hearing from ducati on this one, I wouldn't know which way to go.


----------



## Sean K (24 February 2007)

rederob said:
			
		

> Gee kennas.
> I dunno; without hearing from ducati on this one, I wouldn't know which way to go.



Yeah, I know. I think Ducati has a $9 valuation from memory. We'll have to wait and see.


----------



## haemitite (24 February 2007)

kennas said:
			
		

> Yeah, I know. I think Ducati has a $9 valuation from memory. We'll have to wait and see.



 Wasn't it $8?

I'm intrigued by Ducati's iinovative use of  fundamental measures. Would love to get his insights on Google's value


----------



## rederob (24 February 2007)

kennas said:
			
		

> Yeah, I know. I think Ducati has a $9 valuation from memory. We'll have to wait and see.



Yes
But surely that is based on his view of the fundamental value of our dollar, as measured against the difference between the greenback and euro prior to "unification" and the adoption of decimal currency in New Zealand, less a deflator on the gold index, and a grossing up pre-tax.
Can't you get that into your heads, boys!


----------



## Sean K (24 February 2007)

rederob said:
			
		

> Yes
> But surely that is based on his view of the fundamental value of our dollar, as measured against the difference between the greenback and euro prior to "unification" and the adoption of decimal currency in New Zealand, less a deflator on the gold index, and a grossing up pre-tax.
> Can't you get that into your heads, boys!



That's obviously not factored into the chart yet.   But perhaps one day it will...


----------



## CanOz (24 February 2007)

Hi folks, i sold out of BHP two days, the day after it hit the high. I was worried it seemed little demand for the stock at the time. Since then its been hit with some selling pressure. Maybe its only a short term retracement....i guess i'm just getting nervous about everything atm.

Cheers,


----------



## hector (24 February 2007)

This thread seems to attract as much fervour as any football match involving Collingwood - is it 'wrong' to have a bearish outlook on BHP?

From a novice point of view, the debate between ducati and BSD and others has yielded much insight into the way you value companies and project their future growth/earnings - thanks, I can't get enough of it.

But the purpose of this thread I imagine, is to share information and form some consensus on how to trade this stock for profit whichever direction it is heading. From all accounts, this company is well run, has been performing well and is set to grow, I hope it does and I hope to profit by it. I also enjoy hearing a contrary view and look forward to duc's next post.

Cheers all,

hector


----------



## Sean K (24 February 2007)

hector said:
			
		

> This thread seems to attract as much fervour as any football match involving Collingwood - is it 'wrong' to have a bearish outlook on BHP?..............I also enjoy hearing a contrary view and look forward to duc's next post.



Don't get me wrong hector. I totally respect everyone's opinion of any stock when it comes with some analysis and justification. And I definately appreciate a contrary view. (my friends call the the ultimate devils advocate) To be perfectly honest, my fundamental analysis of any stock is extremely basic, and I do not understand most of what Ducati says. What's more important to me is price action as I believe all the markets available information and psychology is generally factored into a sp. (of course, the market is a heard animal and over and undershoots fair value) BHP seems to be going up now and is at $29.00 ish. It's a fair way off a confirmed down trend to Ducati's fair value target of $8-9 ish at the moment. I have to ask, who is more likely to be correct at the moment? The heard, or Ducati?


----------



## Sean K (24 February 2007)

CanOz said:
			
		

> Hi folks, i sold out of BHP two days, the day after it hit the high. I was worried it seemed little demand for the stock at the time. Since then its been hit with some selling pressure. Maybe its only a short term retracement....i guess i'm just getting nervous about everything atm.
> 
> Cheers,



Hi Canaussieuck, I noticed it mentioned elsewhere on the site that Nick Radge gave a sell on BHP recently. I think I recall you were signed up. Is that why you sold, or because of your own analysis. Just curious.

Chart wise, it has paused at $29.50 resistance, but the long term chart says it's probably going up, IMO.

I am also nervous, but perhaps it's unfounded? There is so much liquidity out there, it just has to find a home.....I have sold 3/4 of my portfolio the past 5 months expecting a sharp correction, only to see lots of potential gains lost.....perhaps the old theory of 'time in' the market, not 'timing', should be held up a little more.


----------



## hector (24 February 2007)

kennas said:
			
		

> BHP seems to be going up now and is at $29.00 ish. It's a fair way off a confirmed down trend to Ducati's fair value target of $8-9 ish at the moment. I have to ask, who is more likely to be correct at the moment? The herd, or Ducati?




Hi kennas,

That's got me chuckling!

Went to a Lincoln Indicators seminar here in Adelaide which seems like a good tool for chartists who would like to put fundamentals in some sort of perspective...anyway BHP was a standout performer in reported fundamentals, yet at the time their sp was languishing and in a down trending channel.

So while I was shorting BHP I was ever-mindful that the market might catch on and reverse the trend. Actually I was sluggish but never mind about that....

cheers


----------



## ducati916 (24 February 2007)

Chap's,

See you are all missing me.
My fair value range was [and is] $13.80 to $18.70
My *personal* buy point would be $8.00 to $10.00

With regards to the share price, hey it's a bullmarket. That said, I still maintain that it is overvalued and as an investment does not represent a safe purchase at these price levels.

If you are going to trade it, then who cares.

jog on
d998


----------



## Moneybags (24 February 2007)

kennas said:
			
		

> I am also nervous, but perhaps it's unfounded? There is so much liquidity out there, it just has to find a home.....I have sold 3/4 of my portfolio the past 5 months expecting a sharp correction, only to see lots of potential gains lost.....perhaps the old theory of 'time in' the market, not 'timing', should be held up a little more.




Kennas,

I'm also in the nervous club at the moment........I think reaching 6000 is significant. However BHP has finally turned around and I'm happy to run with it........after all there are probably worst stocks to be in should a correction come ( eg U stocks ).

Anyways, since you have sold 3/4 of your portfolio you are in a perfect position to pick up the pieces when the correction finally does come.......that is providing you didn't spend it all on booze in Mexico.........  

cheers MB


----------



## rederob (24 February 2007)

ducati916 said:
			
		

> Chap's,
> 
> See you are all missing me.
> My fair value range was [and is] $13.80 to $18.70
> ...



Confirmation: BHP is now a buy.
Thanks duc.
I suspect Monday will be a bit too high a price to pay, but maybe later in the week.
Based on duc's fair value ranges, which are very successful at twice the quoted price, we have BHP with a chance of touching $37 this calendar year.
I do concede, however, my preference for buying BHP at closer to $10.
But with climate change the way it is, I am unsure of when hell will freeze over.


----------



## ducati916 (24 February 2007)

And that is the point really isn't it.
A purchase at value lets you sit back and ignore the crowd. BHP at $10 was just such a purchase and now you would have been able to sell out at a 300% profit.

BHP at $29 is not such a comfortable purchase, you are now in with the herd.
Who knows what the herd will do?
Can you still ignore them if they run for the exits?

Value is rarely, if ever the popular choice.
If it's popular, hell son, it's overvalued.

jog on
d998


----------



## Kauri (24 February 2007)

ducati916 said:
			
		

> And that is the point really isn't it.
> A purchase at value lets you sit back and ignore the crowd. BHP at $10 was just such a purchase and now you would have been able to sell out at a 300% profit.
> 
> BHP at $29 is not such a comfortable purchase, you are now in with the herd.
> ...




  Duc, 
         Just wondering, was BHP at $10 a value purchase on its figures then as opposed to it being value at $10 on its current figures?


----------



## ducati916 (24 February 2007)

Kauri said:
			
		

> Duc,
> Just wondering, was BHP at $10 a value purchase on its figures then as opposed to it being value at $10 on its current figures?





Perceptive question.

As a cyclical, you have to value it on liquidating value. Will it survive and what if anything as a holder of the common might I see? [answer nothing]
If the answer is yes [to survival] and particularly if the leverage is high, [which it was] you then might have an attractive *speculation*.

This of course is the major problem with BHP [currently], it is a cyclical, and you are buying it at the top, or near top, of the commodity cycle to which it is leveraged. Thus a top down analysis in conjunction with a bottom up analysis is the order of the day.

Purely on the numbers [which is your question] no, BHP wasn't fair value at $10.00 it would have had to be lower still. But as I said, this is where you take a bigger picture view, and speculate intelligently [one hopes]. Would I have bought it at $10.00.......no chance.

jog on
d998


----------



## haemitite (24 February 2007)

You continually focus on price cycles Ducati. Whereas a smart investor would look at key factors such as

Spectactular consolidation of resource ownership. We will be seeing a lot more market discipline & "sensisble competition" in years to come 
Volumes are much higher as well as prices.
A scarcity of new mines in the near to mid term (0 to 5 years)
last but not least, the BRIC countries are hardly going to evolve using plastic.


----------



## ducati916 (24 February 2007)

haemitite said:
			
		

> You continually focus on price cycles Ducati. Whereas a smart investor would look at key factors such as
> 
> Spectactular consolidation of resource ownership. We will be seeing a lot more market discipline & "sensisble competition" in years to come
> Volumes are much higher as well as prices.
> ...




Considering point #1 viz. consolidation;
Monopoly, duopoly etc bring lowered profitability, counter-intuitive, but there you go.

Therefore, consolidation far from being a positive, actually becomes a negative.

jog on
d998


----------



## haemitite (24 February 2007)

ducati916 said:
			
		

> Considering point #1 viz. consolidation;
> Monopoly, duopoly etc bring lowered profitability, counter-intuitive, but there you go.
> 
> Therefore, consolidation far from being a positive, actually becomes a negative.
> ...



the proverbial horse lead to water - and will die of thirst

Your proposal that BHP should be valued on a liquated basis is interesting, but so are train wrecks.


----------



## CanOz (24 February 2007)

kennas said:
			
		

> Hi Canaussieuck, I noticed it mentioned elsewhere on the site that Nick Radge gave a sell on BHP recently. I think I recall you were signed up. Is that why you sold, or because of your own analysis. Just curious.
> 
> Chart wise, it has paused at $29.50 resistance, but the long term chart says it's probably going up, IMO.
> 
> I am also nervous, but perhaps it's unfounded? There is so much liquidity out there, it just has to find a home.....I have sold 3/4 of my portfolio the past 5 months expecting a sharp correction, only to see lots of potential gains lost.....perhaps the old theory of 'time in' the market, not 'timing', should be held up a little more.




Hi kennas, I took the trade with BHP and wanted to try and pick the exit myself this time, based somewhat on what i've learned from his VSA theory. 

I sold on the 21st because the i thought there was not enough demand for the stock. That day, there was less than average volume and quite a drop in price. I was away from the screen yesterday and it was this morning i noticed the high volume and close on the low, a sure sign of selling pressure. Later i logged onto Nick's site and noticed the advice.

There may be another opportunity yet to jump back in. 

As far as the markets are concerned i'm nervous that the Shanghai composite is parabolic, the US is hot, and the XJO is getting hotter by the day. I'm concerned its like a perfect storm. I'm not holding as many specs now, and i have some bank stock atm, and some gold stocks. I really want to stay in as long as i can, but its getting difficult to control the urge to go into cash.

Cheers,


----------



## mmmmining (26 February 2007)

Fasten your seatbelt. The first day of years of pig in China sharemarket begins with a big bang on resources related stocks. Many of Energy, Copper, Gold, Nickel, Zinc, Aluminium, Iron and Steel stocks etc was suspended because it reach the daily limits +10%. That's right, +10%!!!

While the banks is on the downside, an clear indicator for sector switch. It might happen here locally. Let's see....


----------



## Halba (26 February 2007)

isn't chinese sharemarket fully priced? i mean their p/e's are much higher than ours!


----------



## hector (26 February 2007)

One of the very few fundamentals I check is ex-div date  -and I forgot to quit BHP friday      
Instead of expected capital loss I get a dividend and a handy gain?


----------



## mmmmining (26 February 2007)

Halba said:
			
		

> isn't chinese sharemarket fully priced? i mean their p/e's are much higher than ours!



Don't worry, here I am not ramping Chinese market. The average PE is 40+. Jim Rogers doesn't like. A one line contains "bubble" cause a minor correction. It is right back to its course, up, and up, to the record.

I try to point out a possible sea-change, the switch between resource and financial sector. It happened before in 1999? here, it might happen again soon.


----------



## CanOz (26 February 2007)

hector said:
			
		

> One of the very few fundamentals I check is ex-div date  -and I forgot to quit BHP friday
> Instead of expected capital loss I get a dividend and a handy gain?




I jumped out knowing i'd miss out on the dividend...but i didn't think it would come back so strong today.  

My mistake.

Cheers,


----------



## mmmmining (27 February 2007)

It's funny, when I try to report a good news, the bad news follows right after. Chinese market crashed, big time. down more than 9%, I mean the whole -9%!!!

Almost 9 out of 10 stocks reached the daily down limit -10%! The only good news is damage to the energy and resources stock is not as serious as the others. Some of them hold a small gain over the first two trading days. 

That explains why the Australian market down a lot in the after trading. I don't know what kind of implication to European and US market today.


----------



## CanOz (27 February 2007)

mmmmining said:
			
		

> It's funny, when I try to report a good news, the bad news follows right after. Chinese market crashed, big time. down more than 9%, I mean the whole -9%!!!
> 
> Almost 9 out of 10 stocks reached the daily down limit -10%! The only good news is damage to the energy and resources stock is not as serious as the others. Some of them hold a small gain over the first two trading days.
> 
> That explains why the Australian market down a lot in the after trading. I don't know what kind of implication to European and US market today.




We've been posting on the correction in the SPI thread, i think all of this is worth a thread, don't you? I posted a chart one of the Shanghai indexes over on the SPI thread. I got out this afternoon just before the market closed, sold everything, including BYR that just released a report! DOH! Even got rid of my other gold shares....this could be a blood bath for tomorrow!


----------



## mmmmining (27 February 2007)

Yes, if you want to start one. 

Chinese market is totally overvalued, but still about half-way of what Japanese market in late 80s. People do remember what happen to Japanese market afterwards. So tend to get out early. 

It caused by extremely money over supply. All retirement and investment fund can only buy Chinese A share. But there is only limited number of A shares you can buy in China. 

The crash is not a news, but just when....


----------



## CanOz (27 February 2007)

mmmmining said:
			
		

> Yes, if you want to start one.
> 
> Chinese market is totally overvalued, but still about half-way of what Japanese market in late 80s. People do remember what happen to Japanese market afterwards. So tend to get out early.
> 
> ...




Check out the "next correction" thread Mmmmmm


----------



## BSD (27 February 2007)

BHP down 4% in London on Chinese market falling

What a great opportunity to buy heaps. I hope the seppos flog it even harder. 

Chinese A Market is a joke and has completely seperated from any economic reality

Did the market rally based on this tin pot index booming ?

What a wonderful opportunity


----------



## Freeballinginawetsuit (27 February 2007)

LOL  , have you seen the charts of their index's....real Cape Canaveral stuff!.


----------



## constable (27 February 2007)

CanOz said:
			
		

> Check out the "next correction" thread Mmmmmm



canaaussieuck are you having trouble containing your excitement over the slightest possibility of a correction?


----------



## wayneL (27 February 2007)

BSD said:
			
		

> BHP down 4% in London on Chinese market falling
> 
> What a great opportunity to buy heaps. I hope the seppos flog it even harder.
> 
> ...



We might get to the Ducsters' valuation after all... I have a spot in my bottom drawer if so, until then just a piece of crap to buy and sell.


----------



## Freeballinginawetsuit (28 February 2007)

Well that piece off crap made me significant funds recently. Certainly wouldn't like to open a large position on any old piece of crap.......interesting viewpoint though.

ATM BHP is copping a further flogging on the FTSE.......might be another opportunity to buy some more crap just around the corner


----------



## constable (28 February 2007)

constable said:
			
		

> canaaussieuck are you having trouble containing your excitement over the slightest possibility of a correction?



Its this comment i now regret canaaussieuck !!!!!


----------



## reece55 (28 February 2007)

Freeballinginawetsuit said:
			
		

> Well that piece off crap made me significant funds recently. Certainly wouldn't like to open a large position on any old piece of crap.......interesting viewpoint though.
> 
> ATM BHP is copping a further flogging on the FTSE.......might be another opportunity to buy some more crap just around the corner




Hard to establish whether it will be a buying opportunity, or a continued fall....

One things for sure, I will wait and bide my time until it looks just about right....

Next support level is at $26 and then we are back to $24 - but what a volatile ride of late!!!!!!

I am watching with anticipation!

Any other views of whether others are buying here???

Cheers


----------



## wayneL (28 February 2007)

Freeballinginawetsuit said:
			
		

> Well that piece off crap made me significant funds recently. Certainly wouldn't like to open a large position on any old piece of crap.......interesting viewpoint though.
> 
> ATM BHP is copping a further flogging on the FTSE.......might be another opportunity to buy some more crap just around the corner



Crap can be very profitable  Everything I trade is a piece of crap.

"There's money in muck" as my father used to say.


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## Freeballinginawetsuit (28 February 2007)

Hi Reece,

IMO BHP will hit the 26 level tomoz and posably weaken further, chances are it will retest the lows in JAN. On the flip it might find a higher support this time around and bounce.

Sure its best for the dust to settle and I will take a punt then, only on my predetermined value points. Nothing has changed fundamentally for me on BHP in the last day.....as yet  .


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## Freeballinginawetsuit (28 February 2007)

wayneL said:
			
		

> Crap can be very profitable  Everything I trade is a piece of crap.
> 
> "There's money in muck" as my father used to say.




There probably is money in muck ...or at least was in your Fathers day. Thunder boxes arent around anymore/niether are septics their a dying breed. 

As stated large positions taken in Companies like BHP would be on a bit more research than just the 'crap' approach.

Just my opinion.......certainly no expert of youre proportions!.


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## wayneL (28 February 2007)

Freeballinginawetsuit said:
			
		

> There probably is money in muck ...or at least was in your Fathers day. Thunder boxes arent around anymore/niether are septics their a dying breed.
> 
> As stated large positions taken in Companies like BHP would be on a bit more research than just the 'crap' approach.
> 
> Just my opinion.......certainly no expert of youre proportions!.




Ooooooooooo! I detect sarcasm! LOL

Laaaaaaaarge positions in BHP eh?

OK flop it out, I'll get the ruler...  I guess we'll need a yardstick eh?


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## Freeballinginawetsuit (28 February 2007)

No need for that Wayne, I said at the time what I'd put into BHP and at that time the money was to large to put elsewhere.......Not really that much of a gambler on those amounts. Certainly not on any old piece of crap  .....although my first inclination was a particular Nickle stock.....doh.
Hindsight is wonderful after the fact.


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## Bobby (28 February 2007)

wayneL said:
			
		

> OK flop it out, I'll get the ruler...  I guess we'll need a yardstick eh?



 HeY Wayne,

Got some lady friends that would be interested   

Bob.


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## Fab (2 March 2007)

I just read the offmarket buy back leaflet. My understanding  was that the capital component of the buy back was $2.50 but there is another component that is buy price - buy back price  and the difference comes to add up to the $2.50 to make the capital component from where you get normally your capital tax loss. This makes it much less interesting to participate in the buy back if BHP keeps on falling. Also can anyone tell me over which days the price will be set from which the buy back discount will be calculated?


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## ak98 (2 March 2007)

Just thought I would bring this up in case there are any SMSF managers on the forums and to get confirmation.

Reading through to the Off-Market Buy Back booklet from BHP that arrived today and pricing the buyback specifically for SMSF(Taxed at 15%) I have come to the conclusion that this BuyBack is just too good to pass up.


Considering that the buyback is offered as a capital component($2.50) and a fully franked dividend component calulated from the Tender Price

E.g.
Your marginal tax rate 15% 
Tender Discount 12% 
Assumed Market Price $27.00 
Assumed Buy-Back Price $23.76 
Fixed capital component $2.50 
Deemed dividend component $21.26 
Assumed Tax Value $27.69 
Cost base (unindexed) $25.00 --------------Average Buy Price
Assumed brokerage fee per Share from on-market sale $0.27 


Total after tax proceeds per Share from the Buy-Back $30.17 
Total after tax proceeds per Share from on-market sale $26.47 

BOTTOM LINE 
Amount by which after tax proceeds from selling a Share into the Buy-Back exceeds (or is less than) the after tax proceeds from on-market sale
= $3.70



This calculation from the BHP tax calculator
http://wm-au.ibb.ubs.com/pca/taxcalc/conditionsOfUse.htm


Thus for SMSF there is an opportunity to gain $3.70 per share via the tax implications of the dividend component having purchased at average of $25.

Now if alter you alter the to purchase price to $27 then you still make $3.62 per share by selling at $37 per share.

Remember this is throufgh tax implications of the dividend component and only works for low tax rates (SMSF at 15%).


Wonderful.

Confirmation anyone.


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## Knobby22 (2 March 2007)

ak98

If your marginal tax rate is 15% then you would be foolish not to take it up.
If your marginal tax rate is 42% then it is a different story.
The other advantage is that you can use the capital loss (assuming you bought the shares for more than (I think) $7 against your profits for the year.


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## BSD (26 March 2007)

BHP pushes through $30.00

Buys back 4% of stock for ~$24.50 

Record Chinese buying pushes copper through $3.10lb and forces more investment banks to make massive upgrades in iron ore prices for the next three years. 

Nickel remains above $20lb and Oil hits year high

Pullback in broader market has limited effect


BHP is going to make new highs and fast


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## haemitite (26 March 2007)

BSD said:


> BHP pushes through $30.00
> 
> Buys back 4% of stock for ~$24.50
> 
> ...



Looking foward to seeing Ducati say that BHP is more over valued than ever.

Presumably he is shorting BHP to match his oh so strong directional conviction.


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## rederob (26 March 2007)

haemitite said:


> Looking foward to seeing Ducati say that BHP is more over valued than ever.
> 
> Presumably he is shorting BHP to match his oh so strong directional conviction.



ducati
Please avoid a reply: I fear you may change your mind on BHP, and if you do, I will be forced to sell.
Your score on BHP is almost 100% (wrong), and as a believer in trends, cycles and probabilities, I would need to be convinced that your positive view on BHP (if you stray into that field) was a statistical aberration.


----------



## Bobby (26 March 2007)

rederob said:


> ducati
> Please avoid a reply: I fear you may change your mind on BHP, and if you do, I will be forced to sell.
> Your score on BHP is almost 100% (wrong), and as a believer in trends, cycles and probabilities, I would need to be convinced that your positive view on BHP (if you stray into that field) was a statistical aberration.


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## ducati916 (27 March 2007)

Ok, let me see if I understand this correctly;
In little under one year, from it's high, BHP has *LOST 6%* and you are gloating about how clever you all are?

Obviously we are investing in a parallel universe.

I'm still waiting for Gold to break out past $800 from last year. That's another profitable trade I take it?


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## BSD (27 March 2007)

It is up almost $6.00 or 25% since the thread was revitalised on 15 September last year

Not bad for an old dog like BHP


----------



## Halba (27 March 2007)

Its harder for a stock like BHP to go up. Too many shorters/hedge funds stuffing up with the price. It will attack 30.50 today as metals are stronger for longer. Price momentum is has got.


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## mmmmining (27 March 2007)

mmmmining said:


> (Posted on Dec  2006) Agree, the chart is not looking perfectly. But I am buying. I strongly believe the big end of the resource will play catch up game. and secondly, I strongly believe soon or later LBO will do something about BHP.
> 
> One day those fat cats will say, wait a minute, why not buy these big resource stocks for PE like 10s, with load of cash, and wonderful long life asset, Sell a couple of asset to China for $100 billion dollars, such as the oil, and uranium, and the rest are considered profits, dividends, commissions, bonus, whatever you want to call it. And flood the market with 100+ Chihuahuas (James Dines term) with breed of copper, zinc, nickel, energy coal,  metallurgical coal, alumina,  diamond, iron ore, silver, gold, manganese, titanium, mineral sands, etc.




Check this article, I can wrote it over three months ago.

http://www.theaustralian.news.com.au/story/0,20867,21451002-643,00.html


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## Bush Trader (27 March 2007)

BHP is 36% of my portfolio, in case any of you think this is a down ramp.  There is no doubt we will see the momentum in the stock in the short term, with the markets perception of new value going forward as a result of the share-buy back.  Spot commodity prices are still in excess of broker estimates.  The question I have for all of you is what happens is a carbon tax is introduced?  Read the Citibank’s predictions if a carbon tax is introduced at $20/tonne, it could see a decline in net profits for companies such as BHP of up to 45%, look at the impact on forward P/E’s and you will see a greater impact with the introduction of such tax than a fall in commodity prices below the current broker estimates.  If a federal labour government is elected then the likelihood of an introduction of this tax is very strong.  Be on the lookout for such political rhetoric unless Rudd continues aligns himself with the right, however there is no doubt that a Federal Policy on Carbon omissions will be an election issue, and if implemented it will affect companies such as BHP that have high Carbon emissions.


Cheers


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## mmmmining (27 March 2007)

Does the carbon tax covers BHP's operation overseas?


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## ducati916 (27 March 2007)

In addition, from last May's lows the ASX 200 went to new highs.
What did BHP do?

Oh yes, absolutely nothing.

Go that gold!

jog on
d998


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## Sean K (27 March 2007)

ducati916 said:


> In addition, from last May's lows the ASX 200 went to new highs.
> What did BHP do?
> 
> Oh yes, absolutely nothing.
> ...



I got a 26 cent per share dividend. That came to about $500!! I think I bought a bottle of Grange with that.  LOL. In the bank I might have earnt $2.5K....

I'm loving the LBO rumours on BHP. 

Ducati, do you think that there would be more value in BHP if it's broken up into separate entities? Pretty vague request, but you seem to have analysed BHP by its parts. Anything that actually does make good money? What if it spun out its oil for example?


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## ducati916 (27 March 2007)

kennas said:


> I got a 26 cent per share dividend. That came to about $500!! I think I bought a bottle of Grange with that. LOL. In the bank I might have earnt $2.5K....
> 
> I'm loving the LBO rumours on BHP.
> 
> Ducati, do you think that there would be more value in BHP if it's broken up into separate entities? Pretty vague request, but you seem to have analysed BHP by its parts. Anything that actually does make good money? What if it spun out its oil for example?




Almost certainly it would release value.
Didn't it spin-off a steel company? [Bluescope Steel?]

That's doing better on it's own than under BHP.
The same could be said for many of it's current parts.

Management love the big capitalization, they get paid more. They don't manage it better however.

Buffett's BRK.A is an example of a pretty good conglomerate, possibly GE but even there I have my doubts.

jog on
d998


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## happytrader (27 March 2007)

Personally and technically I think BHP is an excellent traders stock. It will be interesting to see if it makes an upward break to the next level.

Disclaimer

These are merely my opinions.

Cheers
Happytrader


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## Uncle Festivus (27 March 2007)

ducati916 said:


> Ok, let me see if I understand this correctly;
> In little under one year, from it's high, BHP has *LOST 6%* and you are gloating about how clever you all are?
> 
> Obviously we are investing in a parallel universe.
> ...




Ah Ducati, you are twisting periods again!. Obviously if you, after the fact, pick X date and compare with Y date you can make your argument fit. Now even you would agree that within that period there have been ample opportunities for profitable trading/investing in BHP, long or short. 

And I think you'll find that gold has seriously outperformed the S&P500 by a considerable margin since the gold bull began in 2000. See, even I can pick a date and make my point look correct. Gold's not dead yet  .


----------



## camaybay (28 March 2007)

Can someone tell me the name of the (ASX)company which is developing pelleted furnace dust for recycling and BHP have funded to some extent. The same company has a gold mining process which is going to be trialled in China under old mines? 
:dunno: 
Thankx


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## Knobby22 (28 March 2007)

camaybay said:


> Can someone tell me the name of the (ASX)company which is developing pelleted furnace dust for recycling and BHP have funded to some extent. The same company has a gold mining process which is going to be trialled in China under old mines?
> :dunno:
> Thankx




APG


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## camaybay (28 March 2007)

Thanks Knobby


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## haemitite (28 March 2007)

ducati916 said:


> Almost certainly it would release value.
> Didn't it spin-off a steel company? [Bluescope Steel?]
> 
> That's doing better on it's own than under BHP.
> The same could be said for many of it's current parts.d998



Interesting comparison - so its doing much better than the Bluescope Steel company still inside BHP?


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## vishalt (28 March 2007)

Hope BHP holds @ this $29.50 level and pushes on to $40 D:, although like one of the above posters said even if its ranging from $23-$29 it can be very profitable.


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## reece55 (3 April 2007)

Nice move from BHP today, broke that $30.00 barrier quite nicely today which has proved to be significant resistance of late....

All in all, it has been quite a run for BHP of late. I thought after the half year earnings release we would see $30.00, but I didn't expect it to get there so quickly. Would be nice to see a bit more volume, tomorrow will be an interesting day. Wide candles for the last 5 or so trading days - accumulation or distribution is the question? Personally, I think accumulation and I think we will see a run to that elusive $32.00 barrier. From there, its anyone guess.

Best of luck to all holders!

Cheers


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## rederob (3 April 2007)

ducati
Appreciate your replies above.
I can now confidently add BHP on price weakness.
As for gold, I am a very patient investor, and have continued to add Lihir on its dips: It's in keeping with my strategy of buying larger producers with lower quartile costs (which is pretty much what BHP is in most of its commodity categories).

reece
Although I think $30 is a bit much to pay now for BHP, I regard it as a relatively safe longer term buy.
Yet again in 2007 BHP will rack up a massive profit (especially due to its high nickel price margins) and those analysts that continue to base their future-year forecasts on now-defunct commodity price models will eat humble pie.
Should iron ore prices rise another notch in 2008 then we should see BHP sit comfortably over $35 next year.


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## bigdog (24 April 2007)

Todays SMH

http://www.smh.com.au/news/Business...oduction-record/2007/04/24/1177180607998.html

*BHP Billiton announces production record*
April 24, 2007 - 9:19AM

BHP Billiton has announced that it has produced record quantities of natural gas, alumina, aluminium, copper, nickel, iron ore and manganese ore in the nine months to March, underpinned by strong demand.

It said that record year to date production had been achieved at the North West Shelf Venture thanks to strong demand, as well as at the Zamzama and Escondida operations in Pakistan and Chile respectively.

In the three months to March, natural gas production rose 14 per cent from the corresponding period last year to 86.67 billion cubic feet and rose two per cent to a new record of 260.47 billion cubic feet for the nine-month period.

But total production of petroleum products rose six per cent during the quarter to 27.68 million barrels of oil equivalent (BOE) and were up one per cent to 85.53 million BOE for the nine-month period.

"Total production year to date was in line with the nine months to March 2006," BHP Billiton said.

"Natural field decline has been completely offset by operational improvements and no new operations commencing production during the period.

"Production was higher than the March 2006 quarter mainly due to improved facility uptime, reduced weather impacts, and increased gas sales."

Copper enjoyed a record year to date, production in the quarter up 22 per cent to 357,600 tonnes and up four per cent in the nine-month period to 908,000 tonnes.

"Record year to date (in copper) and quarterly production reflecting the successful ramp up of the Escondida Sulphide Leach Project and Spence (both Chile)," BHP Billiton said.

"During the quarter Spence produced 33,500 tonnes, which is equivalent to 67 per cent of nameplate capacity on an annualised basis."

Alumina production climbed one per cent during the quarter to 1.085 million tonnes and up six per cent in the nine-month period to a record 3.316 million tonnes.

Aluminium added one per cent in the quarter to 331,000 tonnes and rose two per cent in the nine-months to a new high of 1.006 million tonnes.


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## dlineinvestor (28 April 2007)

The run up pre-April in BHP has created a large area between support levels.
Base metals along with other factors need to rise in order to keep away from the secondary support area.
Some comfort can be derived from a higher closing price in copper on the LME Friday close.


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## legs (28 April 2007)

How about this for a price booster?>>>
Prime Minister John Howard on Saturday promised to remove all excessive restrictions on mining, processing and exporting of Australian uranium as a possible step to embarking on domestic nuclear power generation
Mr Howard said expert advice to the government clearly showed Australia was giving up a major economic opportunity as a result of the excessive barriers on uranium mining and export.
He said a key theme of that advice was that Australia should do what it could to expand uranium exports and remove unnecessary barriers that were impeding efficient operation and growth of the industry.
"I am announcing today a new strategy for the future development of uranium mining and nuclear power in Australia," he said.


----------



## vishalt (28 April 2007)

Sounds like a good thing for BHP, and other uranium miners ofcourse. 

wtf is with this 100 char message, shutup


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## rederob (28 April 2007)

legs said:


> How about this for a price booster?>>>
> Prime Minister John Howard on Saturday promised to remove all excessive restrictions on mining, processing and exporting of Australian uranium ....
> "I am announcing today a new strategy for the future development of uranium mining and nuclear power in Australia," he said.



Oh well, as he won't be Prime Minister long enough to introduce his strategy, I geuss we will instead have to live with cheaper coal powered electricity for the next few hundred years!


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## dlineinvestor (1 May 2007)

*BHP for Tues May 1st*

The Dow is up and oscillating above it's previous close, Copper and most base metals has risen. A strike by workers in Peru is keeping the price of copper from regressing !
Could be an up day for BHP


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## Garpal Gumnut (1 May 2007)

rederob said:


> Oh well, as he won't be Prime Minister long enough to introduce his strategy, I geuss we will instead have to live with cheaper coal powered electricity for the next few hundred years!




Don't ever write JWH off. KR has plateaued in the polls and seems to have lost some of his sheen. BHP will be around long after both of them have gone. If it breaks out of this TR it will go on to $40.

Garpal


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## dlineinvestor (1 May 2007)

It looks as though the market is awaiting the final reports on US Data, this week may be a sideways week for BHP. I hold no BHP pending the outcomes.
Should 29.00 be breached 28.50 could be the next stop if more negative US data is released or the same if Base metals fall. IMO 29.00 should hold.
To coin the expression "If the US markets sneeze, Aus markets get a cold".


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## Sean K (1 May 2007)

dlineinvestor said:


> It looks as though the market is awaiting the final reports on US Data, this week may be a sideways week for BHP. I hold no BHP pending the outcomes.
> Should 29.00 be breached 28.50 could be the next stop if more negative US data is released or the same if Base metals fall. IMO 29.00 should hold.



Yep, $29 and $28 look to be important support levels. Not sure if $29 'should' hold though. There's probably more support at $28. Would like to see an EW count on this, and fib retractments from $30. A 50% retractment from latest run will take it to $26.50 ish by visual guestimate. And $28 might be a 38% ish drop.


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## dlineinvestor (1 May 2007)

On a weekly chart the main noise is around $28.12, this is approx. where the parabolic indicator reveals a change in the uptrend. I think 29.00 is a psychological level for some traders but the impact of the US market will prevail in case of direction.
May also seems to be traditionally the month of caution. As long as daily volumes don't increase on the downside dramatically I would expect a narrow trading range between 28.50 to 29.50 until a breakout occurs.


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## dlineinvestor (4 May 2007)

A return to the high reached last May ?
One could see the possibility, copper has been in a steady trend and some LME traders are saying that the recent jump has also happened during China's "Golden Week" (a chinese holiday) So a return to more buying next week could propel the copper price even higher. The same traders also mentioned that profit taking at these levels was very possible and could have an effect.
The end of the strike in Peru may slow down the surging copper price.


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## BSD (4 May 2007)

All the graphs said sell at $24. 

Why look to them for guidance now?

Copper is $3.70, Oil is $65, Iron and Coal are going up, Nickel is $50K/t ffs

BHP is cheap and going up


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## Sean K (5 May 2007)

BSD said:


> All the graphs said sell at $24.
> 
> Why look to them for guidance now?
> 
> ...



No, $24 was support. It was under 24 where it was definately going down, and a sell. I didn't have the conviction to buy more at that point and missed a few $$.  Was happy to buy more when it was confirmed to be heading back up. The charts tell me more than copper is at $3.70.  Well, that's my theory for the minute, until I change my mind. :


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## MiningGuru (7 May 2007)

BHP is in a trading halt at the moment.

I wonder what this is in relation to?

Is a private quity bid about to be launched for BHP? I doubt it at this stage.


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## questionall_42 (7 May 2007)

Doesn't appear to be in a trading halt today - up 0.75 to 31.35 (high of 31.44).  Why do you think it is in a trading halt?


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## Sean K (7 May 2007)

I hadn't considered this scenario really. I thought more like RIO buying WPL, but not BHP buying RIO. Would certainly strengthen the Iron Ore assets and change the US perception that it is more of an oil stock. Interesting. 



> 1309 [Dow Jones] BHP (BHP.AU) would be most likely bidder for Rio (RIO.AU) in takeover scenarios analysed by Citigroup. "Rio Tinto's strong cash flow and nominal gearing may bring it into the crosshairs of private equity, but we think BHP Billiton is a much more likely bidder given synergies and nationalistic control issue of Australian assets," says broker. Says deal is highly earnings accretive using conservative assumptions, with main consideration being concentration of iron ore/coking coal market shares and lack of BHP CEO elect. Adds acquirer could unlock 40% discount that RIO trades at A$117/share sum-of-parts valuation. Says 30% premium seems to be benchmark market expectation for takeover. Keeps BHP at Hold with A$33/share price target. Keeps RIO at Buy with A$94 target. BHP up 2.4% at A$31.33, RIO up 2.8% at A$89.25. (DWR)


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## Ken (7 May 2007)

Heres a scenario I thought about on the train.

Private equity puts in a bid to buy BHP for $40 a share....

Hypothetically... would it be sold at this price??? Dont know.

Secondly say, the market bumps the price of BHP up to $40.

That would send the all ords screaming to past 6500 wouldn't it??


----------



## stoxclimber (7 May 2007)

Yes it would send up the All Ords, but a) I don't think PE would buy BHP and b) if they did, I don't think theyd pay so much above market


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## x2rider (7 May 2007)

hi stox
It would only be a 25% premium on the days close. Certainly not out of the way for a stock like this. Being such a aussie icon to be able to get their hands on it they would have to pay more than just what it's worth. 
There is the emotional factor to bring in as well.
And these days of takeovers, there always seems to be a better offer lurking in the background. 
Interesting days.

 Cheers martin


----------



## Gurgler (11 May 2007)

Another sign that they are coming --- are we ready for them? It will require some savvy strategists to ensure Oz gets reasonable outcomes. Can we assume BHP has them?

This from today's Age, entitled: "China to satisfy metal hunger here"

http://www.theage.com.au/news/busin...tal-hunger-here/2007/05/10/1178390469284.html


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## quarky (11 May 2007)

BHP is already down by about $0.90
that's a big drop.  it's all those rumours about the Rio-Tinto buyout being more a 'rumour'.

maybe the market is being 'corrected'?


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## Omninewbie (11 May 2007)

imo, I don't see a private equity bid materialising. BHP is not an underperforming coming, and a lot of brokers have had 12-month targets of $35 for a while. It trades at a pretty low multiple.

The bid would have to be pretty enticing for me to sell... if market sentiment is good, I wouldn't sell at $38.

So bidders would have to come in with maybe $45+ (just a guess) given private equity's savvy to pay high multiples nowadays, and it would probably be rejected by the board anyway (e.g. like Orica)


----------



## barnz2k (21 May 2007)

Arnie rejected BHPs LNG plan for malibu - this could have been massive for them. But im not gonna argue with arnie


----------



## Kauri (29 May 2007)

I wonder if the small ledge with the _false break??_ is W4 or if it has further down to go (T/L channel support??) yet. Watching EOD for a possible pyramid into W5...


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## MiningGuru (31 May 2007)

BHP very strong today. I think it close above $32. IMO this will be the start of the breakout and push upwards to aqbove $34.

It could get there very quickly from here! Today and another strong day on the market tomorrow or early next week could see it there!


----------



## Kauri (1 June 2007)

Well have taken a pyramid position on BHP... interesting to see where it goes from here.... 100 yet???


----------



## rico01 (3 June 2007)

Bhp has closed at $32.17 its highest weekly close . Last time it did this on 27/3/06 it ran up from ^$26 -$32 inthe following weeks
  I think we could have a few bullish weeks ahead IMHO!!!:


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## MiningGuru (4 June 2007)

Trading strongly today. Now up to $32.86

There is a very good chance that the share will crack the $33 mark today.

IMO this will be a breakout, and that the share should continue its upwards push an head towards $37


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## Kauri (8 June 2007)

BHP has held up quite well over the last couple of days despite copper and nickel prices/concerns. I wonder how much it has to do with the Bell Potter comments in I think The Herald Sun a couple of days ago, which have been picked up and spread by the major world press players, saying that China will make a move on BHP???


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## Sean K (8 June 2007)

Kauri said:


> BHP has held up quite well over the last couple of days despite copper and nickel prices/concerns. I wonder how much it has to do with the Bell Potter comments in I think The Herald Sun a couple of days ago, which have been picked up and spread by the major world press players, saying that China will make a move on BHP???



Yeah, I wouldn't be surprised. The Fin was all over it this morning. Perhaps BP were ramping it after a buy reco for their clients? Wouldn't be surprised. Funny how ramping is allowed in the newspapers. Surely they have to back up their claims somewhere somehow. Perhaps a hole in ASIC guidelines.


----------



## reece55 (9 June 2007)

Kauri said:


> BHP has held up quite well over the last couple of days despite copper and nickel prices/concerns. I wonder how much it has to do with the Bell Potter comments in I think The Herald Sun a couple of days ago, which have been picked up and spread by the major world press players, saying that China will make a move on BHP???




I agree Kauri, BHP has shown incredible strength, which shows how heavily the rest of the market fell within our index over the last couple of days. Every day down was met with strong buying, volume decent too. 

However, fairly alarming divergence on most indicators, so personally i'm on the sidelines with BHP at the moment, be that good or bad. In saying that, we are in uncharted territory in the stock at the moment and by my inferior count a wave 5, so it could very well go further. 

Cheers


----------



## motorway (10 June 2007)

reece55 said:


> I agree Kauri, BHP has shown incredible strength, which shows how heavily the rest of the market fell within our index over the last couple of days. Every day down was met with strong buying, volume decent too.
> 
> However, fairly alarming divergence on most indicators, so personally i'm on the sidelines with BHP at the moment, be that good or bad. In saying that, we are in uncharted territory in the stock at the moment and by my inferior count a wave 5, so it could very well go further.
> 
> Cheers




With  a slide in the over all mkt and some sectors esp
I would expect BHP to superficially to have some weakness ..

But I think the comparative relative strength should not be ignored
If We are seeing continuing rotation and accumulation under the cover of mkt weakness... The indicators might well show negative divergences

Weakness being absorbed by canny ? buyers .........



> One of the best indications of the future course of a group or a stock is its comparative strength when the rest of the market is weak, or its comparative weakness in a strong market.
> 
> James R. Keene used to say: "Watch the stock that shows strong
> resistance to pressure when the market is weak, and buy those stocks
> ...




here is an interesting observation  ALL Stock mkt data is padded by noise and  subtefuge... I thought of this recently when looking at the issue of padded and unpadded data,, I realized all data is padded in the sense I have stated it..

So here is a chart that removes most of the padding

It shows rotation into BHP ( and a lot of similar stocks )
since early in the year.. and with a nice tight pattern ( demand meeting supply )

also .. last two bars had very good closes on the bar chart..

We get a good day in the index ... We will have a good test of the real story.

motorway


----------



## Kauri (11 June 2007)

reece55 said:


> I agree Kauri, BHP has shown incredible strength, which shows how heavily the rest of the market fell within our index over the last couple of days. Every day down was met with strong buying, volume decent too.
> 
> However, fairly alarming divergence on most indicators, so personally i'm on the sidelines with BHP at the moment, be that good or bad. In saying that, we are in uncharted territory in the stock at the moment and by my inferior count a wave 5, so it could very well go further.
> 
> Cheers




 Hi reece,
             I'm with you on both the count and the chanell, I currently have a *possible* minor 4th wave forming which if it plays out will lead to a minor 5 of the intermediate 5th.... which possibly will take it back up towards the top chanell/supply line???  If not the shorter-term portion of the last trade has its stop set at B/E and the original and pyramid longer-term trades have a stop set where not too much damage will occur....... Onwards and upwards..   
   Cheers
            Kauri


----------



## Kauri (12 June 2007)

Have taken the short-term trade profit at 2R today, now left with the original and pyramid longer-term trades still running...


----------



## Kauri (15 June 2007)

Have closed out original and pyramid trades... not because I don't think it will go higher but because I just may be moving house... if the settlement problems go away    .. seems that the trading chanell may cap it for a while and lead to an intermediate W*2*.. if it does I will be watching..


----------



## ta2693 (17 June 2007)

A very shocking news I read on Chinese newspaper, A new formed Chinese state 
owned fund which is above US$200billion cap is going to invest in BHP and take a decent position. They begin to talk now.
If this news were announced in Australia, how high the price going to be?


http://www.singtaonet.com/chinafin/200706/t20070614_557612.html


----------



## Sean K (19 June 2007)

The Aitken's are really ramping BHP and some of the other big commod plays.

1110 [Dow Jones] Strength in iron ore juniors shows iron ore majors cheap, says Southern Cross Equities director Angus Aitken. Notes massive rise in iron ore juniors relative to BHP (BHP.AU) and Rio (RIO.AU) in recent weeks. "They still look cheap given they are the only guys with any real scale and leverage to current prices and within 9 months we can throw Fortescue Metals (FMG.AU) into that mix." Says RIO may be a little ahead of itself on takeover speculation, but BHP headed to A$40 near term. *Expects BHP rise to trigger panic buying from locals and further spike to A$50.00.* BHP last A$34.47, down 0.6%. RIO down 0.6% at A$99.43. (DWR) 

What was Ducati's valuation?


----------



## BSD (19 June 2007)

kennas said:


> *Expects BHP rise to trigger panic buying from locals and further spike to A$50.00.* BHP last A$34.47, down 0.6%. RIO down 0.6% at A$99.43. (DWR)
> 
> What was Ducati's valuation?




Very wrong


Now what happens if the 'reversion to mean' commodities assumption fails for another three years?

What if long-term copper is $2 and oil $60 ?


----------



## Sean K (19 June 2007)

BSD said:


> Very wrong
> 
> Now what happens if the 'reversion to mean' commodities assumption fails for another three years?
> 
> What if long-term copper is $2 and oil $60 ?



So, you're saying it should be valued higher? 

I don't think I saw the reasons for his forecast in that statement, but it looked to me like there was a lot of 'puff' in it. A lot of momuntum and bull market fervour he was factoring in that would push these stocks higher. 

Maybe my perception is wrong. Maybe he's calculating this on the underestimated BRIC demand over the next 20 years? 

I am no analyst, I'm an ex barman and baby oil wrestler, so I'll just keep reading day to day evaluations with interest to try and sort the fluff from the substance. At the moment, I'm confused.


----------



## rederob (19 June 2007)

ducati916;108559 6th-January-2007 said:


> *BSD*
> 
> That's correct.
> You would have been buying at $30+
> ...



While ducati made some interesting points about BHP, he would never make any money from his musings.
BHP could be worth $45 next year.
But as ducati would never have bought it - because it never fitted his valuation model - he won't be sharing in any of the profits.
I've picked up the odd dividend and now am sitting on a paltry 30% profit in 6 months.
I keep wondering where I went wrong.
ducati?


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## OK2 (20 June 2007)

did he say baby oil wrestler? 

i have never quite been able to understand how the worlds largest miner can trade in a range from mid 20's to mid 30's on a continual basis. it would be of no benefit for me to hold these shares because of my minimal financial input but surely they will explode onto RIO's heels some time soon. good dividends, vast resources, quality management and equipment that is unmatched. pls explain if i am missing something as to why BHP stands where it is on the market.................


----------



## Fab (20 June 2007)

OK2 said:


> did he say baby oil wrestler?
> 
> i have never quite been able to understand how the worlds largest miner can trade in a range from mid 20's to mid 30's on a continual basis. it would be of no benefit for me to hold these shares because of my minimal financial input but surely they will explode onto RIO's heels some time soon. good dividends, vast resources, quality management and equipment that is unmatched. pls explain if i am missing something as to why BHP stands where it is on the market.................




I believe one reason for the low Australian valuation is its double listing on the ASX and london stock exchange also it looks like BHP seems to be buying back some of their shares on the London stock exchange. One of the best things that could happen to boost the BHP aussie price is if BHP decided to delist from the london stock exchange which  might happen I believe. I have to say that I like BHP very much. Not much downside and a lot of upside in my opinion


----------



## zuluwarrior08 (20 June 2007)

Fab said:


> I believe one reason for the low Australian valuation is its double listing on the ASX and london stock exchange also it looks like BHP seems to be buying back some of their shares on the London stock exchange. One of the best things that could happen to boost the BHP aussie price is if BHP decided to delist from the london stock exchange which  might happen I believe. I have to say that I like BHP very much. Not much downside and a lot of upside in my opinion




Fab Delisting the LSE just a rumour? Did you read it somewhere? if so could you post a reference please? cheers


----------



## Kauri (20 June 2007)

What's with the low valuation compared to RIO???? Don't bother with the share price, check out the market cap...


----------



## OK2 (20 June 2007)

just added BHP to my portfolio. i could not afford to many shares (could colate them with 3 fingers), a bit like drinking Penfolds Grange. if it goes backwards i can call it my goodwill contribution to an Australian ikon. it is due to go imo, all the majors are coming up to reporting season. should be an adventure.


----------



## OK2 (21 June 2007)

BHP almost hit $35 but has dropped back slightly. I may have chosen a good time to buy in, not sure why the price rise, I didn't buy enough shares to influence the stock price. No International news which would provide a lead that I know of.


----------



## Sean K (21 June 2007)

OK2 said:


> I didn't buy enough shares to influence the stock price.



 That's good news OK2! Who are you? The Future Fund? 

And yes, baby oil wrestling.  That's the type of thing you need on a CV to be a Mod at ASF. 

All the best. Warn us out before you attempt to move the sp again, so I can load up the truck! LOL.


----------



## OK2 (21 June 2007)

I have alot of heart for big Australia the companies which compete on the World stage and rule. Our ikons remain few and far between. 

I also took the liberty of adding the London listed shares and combined them with ours, without been to technical they still added up to a significant amount less than the value of Rio shares. Believe me when I say there is no technical charting of w1 to w5 graphs or tea cup handles in this assumpion, it is simply common sense that the shares are cheap. They still cost a fair bit per share but they are worth more, if that makes sense.


----------



## OK2 (21 June 2007)

$35 just taken out, here we come. Not sure what the range will be Friday but all looks good for a happy run.


Forever forget any takeover of BHP, we do all the takeovers.


----------



## Kauri (21 June 2007)

OK2 said:


> I have alot of heart for big Australia the companies which compete on the World stage and rule. Our ikons remain few and far between.
> 
> I also took the liberty of adding the London listed shares and combined them with ours, without been to technical they still added up to a significant amount less than the value of Rio shares. Believe me when I say there is no technical charting of w1 to w5 graphs or tea cup handles in this assumpion, it is simply common sense that the shares are cheap. They still cost a fair bit per share but they are worth more, if that makes sense.




  No waves, tea cup handles, or even voodoo here, just pure fundementals.. your speciality... do the sums...


----------



## PhoenixXx (21 June 2007)

Kauri said:


> No waves, tea cup handles, or even voodoo here, just pure fundementals.. your speciality... do the sums...




Hi Kauri, can u pls explain in simple terms what does the figures mean?
Does it mean that $35 is capped at the moment and will move downwards?
thx


----------



## Kauri (21 June 2007)

PhoenixXx said:


> Hi Kauri, can u pls explain in simple terms what does the figures mean?
> Does it mean that $35 is capped at the moment and will move downwards?
> thx




*Capped*???.. that is the word that the terminology police should be after... I doubt that even Packer could "cap" BHP. 
   The figures are just the simple fundementals, as I am not a fundementalist I would end up making a bigger fool of myself than I do already if I tried to interpret them, OK2 is your man... and don't forget the takeover rumour premium built into RIO that possibly makes RIO overvalued as opposed to BHP being undervalued... for mine BHP has possibly got further up to trundle yet, ore then again maybe not..


----------



## barnz2k (22 June 2007)

when i first thought about getting into shares, BHP was in my sights. I had no idea about shares, and didnt know how to get into it.. My interest faded and I saw BHP soar shortly after.

This happened a 2nd time!!

THen I got in and BHP has STILL been one of my strongest performers.

Im in for the long run. Hopefully it will push past $35 and not slide back.


----------



## Fab (23 June 2007)

Which website can show me the share price of BHP in london ? Can anyone explain why the market in america went down strongly overnight ?


----------



## reece55 (23 June 2007)

Fab said:


> Which website can show me the share price of BHP in london ? Can anyone explain why the market in america went down strongly overnight ?




Fab, try here......

http://finance.google.com/finance?q=LON:BLT

And as for why the US went down last night, funny how I didn't see you complain when it went up rapidly .......

There are many reasons, but interest rate risks and maybe a bit of an overdue experience of distribution..... It's still a sideways market until proven otherwise IMO.....

Cheers


----------



## swhmale (24 June 2007)

Fab said:


> Which website can show me the share price of BHP in london ? Can anyone explain why the market in america went down strongly overnight ?




London stock exchange has 15 minute delayed prices from 10.00am GMT (7.00 PM Sydney time) in aussie winter.

Seems US stocks took a bit of a dive over continued concerns over sub-prime mortgage market worries and interest rate concerns. that plus wall street seems to get jittery every couple of weeks.


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## zuluwarrior08 (29 June 2007)

HUGE volumes this morning. Futures fund at work?
65 million before 10:30am. Watch this one........................


----------



## RM8 (29 June 2007)

There was actually 63 Million before the market opened.

Something to do with the last trading day of the financial year??

I've heard it refered to "window dressing" by the funds before, whatever the hell that means.


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## ice (29 June 2007)

Big volumes before the open were settlement of ETO's which expired yesterday. 

(I am told my post isn't accepted cos it doesn't contain enough characters. There are times when brevity is a virtue Joe.)


ice


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## zuluwarrior08 (30 June 2007)

Ice huge newbie here...

What are ETOs?

What affect will that volume have on sp?

Any other factors investors need to consider?


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## ice (1 July 2007)

Zuluwarrior,

ETO's (Exchange Traded Options) are basically a form of betting on a particular stock

You can get the skinny om them here if you are interested

http://www.asx.com.au/investor/options/getting_started/what_are_etos.htm#expiry defn

Generally 'in the money' holders trade out prior to expiry but there are always some who exercise their right to buy (or sell) the physical shares on the expiry day which is the Thursday preceding the last Friday of the month. 

These transactions are generally concluded aftermarket and entered into the ASX system prior to the next mornings open. 
(Next will be 26 July so you'll see a volume spike on the 27th for BHP  and others).

As to whether they impact the s/p, well that's an interesting question. 
From my own observation I'd say no in a big picture sense. 
However if on expiry day there is a raft of puts or calls at a particular strike price (or better still a raft of puts AND calls) and the sp is within reach of that strike price my bias is for a close very near that figure. 
But that's just me and I'm a neurotic paranoid obsessive. 


ice


----------



## rederob (4 July 2007)

When will we see ducati riding back into this thread so that we can better determine what the BIG australian is really worth?


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## Ken (4 July 2007)

Who took out a margin loan on BHP at $24.00????


I did but sold far too early!!!  Bugger.

Would be a year off work if I was still holding!!!

errr


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## OK2 (5 July 2007)

The Big Australian coming up on $37 SP in a hurry. Reporting season will bring the fruits of this baby home, still think $40 SP will be an easy run. Enjoy


----------



## rederob (5 July 2007)

Well, BHP is "doomed".
Proclaimed by Dr Doom himself.
I do wish he would return.
I need another of his doomed stock tips to work over:iamwithst



ducati916;120130 said:


> Hi Nick,
> The thread is divided between traders [yourself + others] who are looking to trade significant swing points, and the Fundies arguing over the quality of the business and longer term implications.
> 
> Somewhere in here there is also an economic argument raging over the impact of the emerging economies, and their impact upon BHP amongst others.
> ...


----------



## OK2 (9 July 2007)

BHP just smashed through the $38 dollar mark and still going! A nice weekend return for the Executives, maybe a nice dividend coming?


----------



## OK2 (9 July 2007)

BHP have been accumulating a substanstial number of their own shares at no more than 105 per cent of the average middle market closing price. What are the benefits of an on-market buyback if the Sp will be driven higher by declaring the intention to accumulate between the normal "close period" from 1 July to 22 August, a period in which the Company directors would normally refrain from transacting BHP shares?


----------



## OK2 (9 July 2007)

No enthusiasm for BHP??? Surely not everyone is tied up with the small spec stocks. BHP up over 3% for the day and around 7% in the last 5 trading days, testing a $39 SP today and no one cares!!! How sad..................

Where are the YT's, Kennas and alike? Not even popcorn or champagne for the occasion. What a tough audience and to think that everyone is waiting for BHP to make a takeover of their spec stock.

Can I nominate BHP for a OUTSTANDING BREAKOUT ALERT or is it still a little underdone? Not that I look forward to even thinking about thinking through the preparation of a graph.


----------



## vishalt (9 July 2007)

I agree with you OK2, this forum doesn't have a sparkling interest for BHP for some reason. 

It's return in the US (in the form of ADR's) is 54%, compared with the Aussie stock which has returned 35%, am I missing something?

Stable and sound, BHP powers ahead.


----------



## Knobby22 (9 July 2007)

I care! There are faster moving stocks but this is like a train. Once the momentum starts its hard to stop.

I think the ADRs are higher due to the exchange rate, the US$ has dropped a lot.


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## wayneL (9 July 2007)

vishalt said:


> It's return in the US (in the form of ADR's) is 54%, compared with the Aussie stock which has returned 35%, am I missing something?



Yes you have.

The USD has tanked against the AUD. If you converted aussie dollars to yankee dollars to buy the ADRs and then back to aussie dollars today, you will find that your return (in AUD) will be 35%.


----------



## reece55 (9 July 2007)

reece55 said:


> If BHP reaches below 23.50, IMO any thoughts of a recovery are off. Certainly at the moment, the chart points to it reaching this level....
> 
> U have to laugh at investors getting in on BHP now though..... no1 stock bought on Comsec today...... like lambs to a slaughter...... certainly not a stock I would be looking to go long in at the moment.....
> 
> CHeers




Seems so long ago, but it was just in January that I was thinking that BHP was in deep trouble....

My, how 6 months can change things!!!! BHP has now risen 14.80 since bottoming out at 24 and we have a 60% return for those investors that went long at this point..... For such a large Company, this is an incredible result....

My question is where does the wave 5 stop - even Nick was saying be cautious at about 32.50 and now we are way way way off that number..... I laughed when I saw reports of BHP being able to get to 40.00 shortly, but what do you know, we are nearly there.....

Cheers


----------



## BSD (9 July 2007)

It is no longer free money - but BHP still has high quality, long life assets exposed to Chinese demand and massive cashflow generation. 

It still trades at a huge discount to the overvalued ASX industrials ex Banks and will soon be debt free.  

$38 will look cheap if commodities prices remain where they are for another year or so. They don't even have to go up. 

Anyone keen to predict oil, copper, iron ore and coking coal to fall in the coming year? Global GDP is expanding and the drivers are developing countries whose growth is 'metals rich'. 

Even the US has some good manufacturing and industrial production figures emerging. It appears the US property collapse is a big "who cares" for the metals complex. 

For the fourth year running, the analysts are using massive falls for one/two year forward commodities prices in their models and in my view, again they will be wrong and having to upgrade on the run. 

Why should copper fall below $3 if we are in deficit for another year and inventories are approaching the sub 100,000 tn mark?

Why do these analysts maintain price assumptions so different from forward markets?

Anyone keen to name 5 greenfield copper projects of substance (100,000tn pa) coming online in the next 18 months?

I can think of 2. 

The 'new supply wave' for copper is years away...

The iron ore hopefuls are still 3+ years away and their cost curves are multiple of the DSO producers. 

Anyone found a new oil elephant yet?

What about coking coal? Anyone know a new supplier coming on line?


----------



## michael_selway (9 July 2007)

reece55 said:


> Seems so long ago, but it was just in January that I was thinking that BHP was in deep trouble....
> 
> My, how 6 months can change things!!!! BHP has now risen 14.80 since bottoming out at 24 and we have a 60% return for those investors that went long at this point..... For such a large Company, this is an incredible result....
> 
> ...




True although PE is getting high now, 13 atm

*Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS 225.4 272.6 312.3 331.0 
DPS 48.4 50.9 53.6 62.0 

EPS(c) PE Growth 
Year Ending 30-06-07 272.6 13.8 21.0% 
Year Ending 30-06-08 312.3 12.0 14.6% *

Thanks

MS


----------



## OK2 (13 July 2007)

BHP set to test $40 SP today, days high $39.79

A landmark occasion for the Big Australian, maybe will consolidate over $40 and go for another run mid August depending on the market movement in general.


----------



## Sean K (13 July 2007)

Where's Ducati? 

Ducati, 

Are you going to revise your valuation, or is this just hedge fund speculative buying, or future fund buying?

Or, were your assumptions incorrect?

Or, will we still see $15 BHP shortly?

Sincerely interested in your current position. Cheers.


----------



## annalivia (16 July 2007)

BHPers,

  From the I told you so files...

https://www.aussiestockforums.com/forums/showthread.php?p=117157#post117157

Maybe there is something to this value investing after all.

"There seems to be some perverse human characteristic that likes to make easy things difficult."
Warren Buffett

al


----------



## rederob (31 July 2007)

post script
Joe's view is that a PM from me to ducati might be in order on this matter.
True.
But Kennas is also interested in what ducati might have to add here.
And maybe others too.
BHP is a market megalith.
When people like ducati, who self-confesses to being well qualified in analysis, make gross mistakes (not itty bitty little ones) on such an equity, it makes "rampers" look good.
ducati does not have to answer to us.
He should, however, be answering to himself.
How did he get it so wrong?

The reality is that posting a point of view begs a hiding to nothing.
Sometimes we win.
Sometimes we lose.
We should not, however, delude ourselves that we must be right because the "numbers line up", or whatever!

ducati will again remind me that gold is not yet $800.
But in this game patience is a virtue and man waits for all time.


----------



## ducati916 (31 July 2007)

kennas said:


> Where's Ducati?
> 
> Ducati,
> Are you going to revise your valuation, or is this just hedge fund speculative buying, or future fund buying?
> ...




No, my *valuation* was for the intrinsic value for BHP. While the intrinsic valuation may be slightly higher on an updated analysis, it will not be significantly so.

BHP is overvalued and will remain so while;
*Equity markets worldwide reflect Bull market valuations
*Sentiment predominates valuations

BHP [apparently] pays it's lorry drivers $120K/year. If [when] commodity prices fall the COG component will impact margins significantly, unless they are made redundant. This is just one example out of any number of problems that face BHP.

BHP is a *price taker* not a price maker, and will always reflect the underlying prices for commodities. Thus, when commodity prices are strong, the share price will reflect the enthusiasm for the rising earnings. When commodity prices fall, so falls the share price.

Cyclicals [BHP] are bought at the bottom of the cycle [intrinsic value levels] and sold at overvaluations, such as current valuations.

Additionally, you will have the trader fraternity who will follow and strengthen the trend both to the upside and the downside.

Currently the *story* is China's boom and the commodity supercycle, which personally I see as total nonsense, but, we'll see.

jog on
d998


----------



## rederob (31 July 2007)

ducati
You are to be commended on your consistency.
Oddly enough in a bull market most stocks rise to inflated levels.
The converse is also true.
This does not help one trade an equity, except to understand the nature of a trend.
"Price taker" and "price maker" mumbo jumbo is not helpful as institutions forward price "value" on their consensus estimates.  In this environment, the institutions have marked down forward prices for commodities for years.  
They, like you, keep getting it wrong and the price of BHP steams ahead on the power of a non existent commodity supercycle.

Yet again your post is a total sham, with market truisms that impact the likes of BHP as they do stock in many other sectors. 
What makes it dangerous is the implication that BHP is always bought at the bottom of the cycle, and sold at the top.  This is not supported by the data, or any data for that matter.  Because within a cycle there is constant trading, and the top and bottoms are only known well after the event.

I won't say that BHP is a screaming buy.  It was when it was around $25 and I posted my thoughts at the time, and bought BHP to boot.
BHP has proven time and again that a major diversified industrial equity has the capacity to outlast sectoral fads, such as drive single commodity stocks like PDN, or SMY.  Most importantly, in my view, BHP has long term exposure to high value "energy" resources that will sustain its high prices much longer than folk like ducati could conceive.


----------



## ducati916 (31 July 2007)

*rederob*

That you agree that in a Bull market, common stocks rise to inflated levels would rather indicate that after 8 years + of a commodity bull market it then is reasonable to assert that BHP is overvalued.

In a bear market, they fall to unjustifiable [low] levels. Common stocks at undervaluations can be recognized and capitalized upon.

It is the overexuberance in valuations that are more difficult to *time* as the bullish sentiment may remain long past any rational, sane or even optimistic valuation.

As to BHP having the capacity to outlast sectoral fads, nonsense, simply look at BHP's chart, it suffered the neglect of the sector the same as any one trick pony.

jog on
d998


----------



## rederob (31 July 2007)

ducati916 said:


> *rederob*
> 
> 
> > That you agree that in a Bull market, common stocks rise to inflated levels would rather indicate that after 8 years + of a commodity bull market it then is reasonable to assert that BHP is overvalued.
> ...



ducati needs to come to grips with what the market is about, namely, making money.
I won't deal with his other points as this thread is more about working out if BHP is a buy or a sell.  ducatis comments in this regard are quite useless unless you give them credence.  His track record here is as good as krisbarry's ramps.


----------



## navneetsharma (6 August 2007)

I feel that BHP has hit a support at $35.53. Candlesticks show "springs"and hammer pattern formation. Bullish signs. Overall, I think it has passed its wave 5 and is at the end of corrective wave (a). 

In addition, the ultra high volume on 27th July occurred when there was a tiny price range confirms that smart money is moving in. 

What do others thinks?


----------



## Ken (14 August 2007)

*BHP - so important to aussie market*

BHP is vitally important to the strength of the aussie market.

If BHP falls like the rest of the ASX the all ords will be low 5000's

A BHP at $24 again would be a serious correction.


Thoughts?

The financial have been in a down trend for some time now.


----------



## ta2693 (14 August 2007)

BHP will not fall to $24. Chinese new formed nation investment fund are buying or going to buy BHP as strategic investment for China's huge export surplus. That is the opportunity for them to buy a decent amount without causing significant price effect.


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## Crafty (14 August 2007)

BHP was $24.12 when I bought a swag on Jan 8 this year.   I would LOVE to see them at that level again... 

LOAD UP LOAD UP

Too bad I am dreaming.   I can't see BHP going below $30 again, EVER.

My opinion only  DYOR.


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## ducati916 (17 August 2007)

kennas said:


> Where's Ducati?
> 
> Ducati,
> 
> ...




And we can add old *rederob*

BHP speculative?
Or fundamental?

Guess what chaps, the price being reflected at these and higher levels are speculative. Hence, the wide fluctuations.


----------



## Sean K (17 August 2007)

ducati916 said:


> And we can add old *rederob*
> 
> BHP speculative?
> Or fundamental?
> ...



It's still double your valuation isn't it Ducati?  I sold out at $36.50 ish. Made 200% on my investment.  

I'm happy investing in growth and earnings, and trading off price action. 

I think there will be more opportunites in BHP. 

Unhappy I didn't short it a few days ago!


----------



## ducati916 (17 August 2007)

BHP down currently in the US 8.15%

The point that I made is that the price of BHP is currently a speculative price, which means to make money in this name, you have to actively TRADE the stock.

Purchasing for an investment, that is to hold over a longer time period is fraught with problems due to the huge speculative pricing.

This is what was being advocated by many.

If you want simply to trade it, fine, no valuation required.

jog on
d998


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## Sean K (17 August 2007)

ducati916 said:


> If you want simply to trade it, fine, no valuation required.
> 
> jog on
> d998



Yep, I get your point. 

I am really struggling to truly _value_ anything. The amount of misinformation, deception, and assumption made by all is overwhelming. Company accountants do a post grad at Hogwarts, I'm sure! 

I'm starting to lean towards managed funds for 'value' and trade price action. That's certainly the way I've gone over the past 2 years. I used to hold a pile of blue chips. Now, I have some left over Telstra that Rach got given to her when she was employed there. They'll be in the bin shortly too.


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## trendsta (21 August 2007)

Hi all,

Any ideas when iron ore contracts for 08/09 are to be negotiated??

There are murmurs that prices may increase 20-35% (UBS, Mac Bank etc). It will be a boon for BHP and RIO since most analysts were expecting a drop of 5% at start-mid of this year, for 2008..


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## alankew (22 August 2007)

This might help things along tomorrow,from what i have read online its at the top end of forecasts http://www.smh.com.au/news/Business...-16b-net-profit/2007/08/22/1187462338185.html


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## rederob (25 August 2007)

ducati916 said:


> BHP down currently in the US 8.15%
> 
> The point that I made is that the price of BHP is currently a speculative price, which means to make money in this name, you have to actively TRADE the stock.
> 
> ...



ducati
You really are a numskull!
Every stock on the ASX has a speculative component using your methodologies.
The overriding issue relates to what price BHP is, and what direction it is moving in, if you (perhaps not you personally given your lacklustre record on this equity) are going to put money on it.
The likelihood of BHP reclaiming $40 is strong given its stellar profit - a profit that it could beat again next year given the tightness of the commodities it sells to market.
Your remarks about BHP's long term potential encapsulate your blindness to "value".  BHP is sitting on the world's biggest energy pit at Olympic Dam, and its in no hurry to commit to digging it out for an energy starved world too soon.
Additionally, BHP is strongly leveraged into gas and oil assets, and has an exploration budget to die for.
The valuable lesson you offer to readers is the capacity you have to sway them to your view.
Over several years now these remain burn offerings.
How about buttering them up?


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## ducati916 (27 August 2007)

rederob said:


> ducati
> You really are a numskull!
> Every stock on the ASX has a speculative component using your methodologies.
> The overriding issue relates to what price BHP is, and what direction it is moving in, if you (perhaps not you personally given your lacklustre record on this equity) are going to put money on it.
> ...




*Every ASX stock has a speculative component.
While I haven't looked at every stock, 5yrs of a bull market does place speculative valuations on the majority of stocks, so in essence, yes.

*Direction [fluctuations]
Not what I have been discussing. I am discussing it's investment merit and value.

*Regarding it's "Profits"



> Revenue for the year climbed 21 percent to $47.47 billion from $39.110 billion a year earlier, the company said.
> 
> BHP said higher prices boosted earnings for the year by $7.1 billion and higher sales volumes added $438 million, more than offsetting the $859 million that rising costs shaved from earnings.




So if we take Revenues of $47.47 and subtract the contribution made by higher prices we come to $40.37 Billion which is a 3.2% increase in Revenues.

Thus “demand” from a year on year may have in point of fact fallen. I’ll find the financial statements later and check.

Rising costs are given short shrift in the article.

*Strongly levered to Oil/Gas
Dangerous place to be long term, good short term.

*Olympic Dam.
I am assuming you are talking about uranium.
Two issues;
First, it is speculative to assume the world will go nuclear.
Second, assume that they do, France has moved the technology forward and can now re-cycle "spent" uranium, thus the market price for this commodity will fall based on increased supply.

*numskull
Apart from mis-spelling the word, does this make you feel better for your hideous call on gold. I've got so many gold bars in my garage waiting for the big run, I can't even park my bike in there!

jog on
d998


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## rederob (27 August 2007)

ducati
Your efforts on BHP make you a "numskull" whichever we you choose to read or spell it - I don't think its meaning is lost on the average reader, let alone those that actually can spell.
Trot out all the facts and figures you like to confuse readers, and then compare the share price of company today to its price, say, 10 years ago; 400% profit is not to bad for a stock you believe to have no investment merit or value.
And then you tack on your inability to understand the role that energy plays in today's world, or at least your inability to understand that demand for finite resources will push up the prices relentlessly.
Your concepts of value are askew, except perhaps from the perspective of what you can glean from a set of books.


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## theasxgorilla (27 August 2007)

Rederob, you're playing the ball and man...the preference would be if you continued to play the ball.

Thanks,

ASX.G


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## rederob (27 August 2007)

theasxgorilla said:


> Rederob, you're playing the ball and man...the preference would be if you continued to play the ball.
> 
> Thanks,
> 
> ASX.G



Cheers
In this case the man needs to be played, or pulled off the field.
Seeing the moderators have no problems with the stupidity of ducati on this stock, I'll keep pointing out what he's up to.
By the way, I did read the entire thread yesterday - my view is well supported by the posts.


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## vishalt (27 August 2007)

ducati why do you care about what he says about the stock?

anyone who's in BHP Billiton is generating delicious returns (unless they only bought at the top). Bears will always keep whinging and crying - but in real-time (NOW) the bulls & people buying are actually making money, money generated from stocks (in this case BHP) says a hell of a lot more than any opinion ever could.

also can i just say: while the bears have been speculating *since 2003* about particular stocks that are going to go down the drain, or the stock market poised for a crash - the bulls have been making money for almost 4 years now, so until something bad happens in the case of BHP or the stock market, we'll keep on laughing all the way to the bank. 

thanks!


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## wayneL (27 August 2007)

rederob said:


> Cheers
> In this case the man needs to be played, or pulled off the field.
> Seeing the moderators have no problems with the stupidity of ducati on this stock, I'll keep pointing out what he's up to.



Rubbish Rederob,

Everyone is entitled to post their analysis without being insulted. Please, take a chill pill.


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## rederob (27 August 2007)

wayneL said:


> Rubbish Rederob,
> 
> Everyone is entitled to post their analysis without being insulted. Please, take a chill pill.




Wayne.
Your emotive tone is unbecoming.

It is unfortunate that one who posts "optimistically" gets accused of ramping, and needs to justify their stance or risk a sin binning.
The opposite should be equally upheld, should it not?
In the case of ducati's posts on BHP, what perhaps fools some as serious or even deep and meaningful analysis, is really nothing of the kind.
His almost throw-away lines in his most recent post are classic examples:


> *Strongly levered to Oil/Gas
> Dangerous place to be long term, good short term.
> 
> *Olympic Dam.
> ...




Why would oil/gas be good short term and not long term?
They could be both, but industry consensus - verifiable through forward cost curves - suggests both are excellent long term (ie 3 year plus) investments.

Next are his 2 points about uranium.
First, it is fanciful to suggest there is "speculation" about the world going nuclear.  There are about 440 operating power plants worldwide, while another 50 or so are in the construction/permitting pipeline. Hundreds more are envisaged, with even our PM indicating we should hold a plebiscite on where nuclear plants would be located in OZ. 
Secondly, the "re-cycling" that France is doing (along with the US, Japan and Russia) can return about 5% back to market supply.  That is something of a pittance given the odd 40% of secondary uranium already in use by industry.

Let's go back even further now to examine ducati's preference to by BHP if it represented "value" against his criteria.  Ideally ducati would buy if BHP if it hit the single digit range - at least a dollar value less than $12 per share.
ducati's logic would have us believe that at such a price the "speculative" element of BHP's price would be removed, so one could expect to be buying a fair-priced, good value company.
In fact there is no logic at all to this proposition.  If BHP's share price fell back to around $12 there would be operating divisions of the company incapable of turning a profit: More so now due to the escalating costs of production, which ducati actually noticed was recently a matter given "short shrift".  
So whatever "value" might be arbitrarily ascribed to the stock at such a low price, the market as a whole will be marking it down. One would only be buying BHP on the speculative proposition that the commodity cycle would again turn up.  "Cycle-timing" in the commodities arena is not a cake walk because a diversified miner - as is BHP - will have its various basket of goods peaking and waning at different times, typically across many years.
Thus, if BHP were to decline to ducati's "value" proposition, there is a strong likelihood that buying at that price could confine one to many years of little or negative return on investment until the next upcycle.

Apparently if one posts "analysis", no matter how bad, they deserve not to be insulted.  
No?
Then they deserve to have their posts removed, or edited accordingly.
ducati may be a protected species in the minds of some.
In my view his "protectors" are equally likely to be numskulls duped into a misguided view that copious fact and figures, no matter how disjointed and disconnected from reality, should be deemed credible and acceptable.


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## theasxgorilla (27 August 2007)

rederob said:


> Apparently if one posts "analysis", no matter how bad, they deserve not to be insulted.
> No?




Rederob,

Your critique of the analysis is fair play.  Why didn't you write this in the first place?

The rules are the same for all.  Please play by them.

ASX.G


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## rederob (28 August 2007)

theasxgorilla said:


> Rederob,
> 
> Your critique of the analysis is fair play.  Why didn't you write this in the first place?
> 
> ...



\
The rules are not the same for all.
Moderators are quick to come down on "ramping".
Why are they not so quick to come down on "de-ramping", or whatever opposite word describes a practice of debasing an equity using a similar degree of illogic?
A clever person would be one who was able to use the information available to them for their own advantage: In this case it would imply using it to trade BHP shares - long or short.
I invest long-term in BHP for reasons I state from time to time.
On the weight of evidence in this thread it would be difficult to consider ducati's contributions as constructive towards trading or investing - possibly neither of which he indulges via BHP if we are to believe what he has posted.
In fact, his calls of BHP gloom and doom are so removed from reality that it beggars belief.
But don't call him stupid or you get a posting infraction - in my case its infraction number 4.
Of course there is a massive difference in saying "nonsense", rather than "stupid", despite there being no difference in the inference.
I suggest moderators rein-in posters that purport reason without substantiation.
But I suspect that is too hard.

It seems we need to say the weight of evidence in relation to the analysis presented by ducati, when considered over the duration of this thread, and in conjunction with the relative movements in BHP's share price, provides ample suggestion of a derelicion of duty of care to ASF members and readers who might genuinely wish to be financially successful on the balance of probabilities that ducati's contibutions represented fair and reasonable assessments of BHP's merits as a listed equity on the ASX which is responsive to local and international market movements.


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## Joe Blow (28 August 2007)

rederob said:


> The rules are not the same for all.
> Moderators are quick to come down on "ramping".
> Why are they not so quick to come down on "de-ramping", or whatever opposite word describes a practice of debasing an equity using a similar degree of illogic?




We do. Ramping is presenting an overly optimistic view of a stock without providing any evidence or analysis to back up their assertions. Downramping is presenting an overly negative view of a stock without supplying any evidence or analysis to support their case. Once some analysis of some sort is presented it is up to other ASF members to critique that analysis. The point that the mods and I have been making is that it is possible to critique someone's analysis without referring to them as an 'idiot', 'numbskull' or 'stupid'.

And this is what we expect of all ASF members. Play the ball, not the man. Attack the analysis and not the contributor.

I don't know how to make it any clearer.


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## ducati916 (28 August 2007)

*rederob*

First off, apologies for the tardy reply, but I am currently serving jury duty.

Addressing the uranium issue;
*large investment required
*regulatory approval required
*public sentiment needs to be cultivated due to 3 Mile Island/Chernoble

All of the above problems [challenges] make the outcome currently speculative. The worlds largest energy consumer [US] still needs to embrace nuclear energy as a primary energy supply. Marginal energy users [Australia] are less critical.

While currently uranium re-cycling is not a major factor, should nuclear become a primary source of energy production worldwide, I suggest that re-cycling will become a much larger factor for the following 2 reasons

*price [cheaper]
*efficient [preferable] use of waste material [rather than burying waste]

Looking now at the Oil/Gas question; [primarily oil]
The production of oil has in all probability hit peak production, and we [world supply] are on a decline while "demand" via China is increasing.

Fields [Super-Giant, Giant] on production declines
Oseburg..............Norway
Brent..................North Sea
Gulfaks...............
Prudhoe..............Alaska
Slaughter............Texas
Romashkino..........
Forties................Texas
Samotlor..............Russia

There is also the speculation concerning Saudi Arabian fields;
Ghawar, Abqaiq, Safaniya, Berri, that they also are in point of fact on declining production.

Regarding BHP;
Investment values can increase over time [or decrease] thus they are dynamic. However, using my original analysis figures which I am quite comfortable with.

You persist in misquoting the context as this "helps" your bias.
The correct context is, should BHP ever trade in this valuation range during a bear market, BHP would become seriously undervalued and thus become a very safe investment due to the margin of safety provided between market price and tangible values.

As to whether the valuation would be correct [by the market] exactly my point, no it would not, thus a purchase would in all likelihood prove very profitable.

As regarding would BHP ever trade this low?
In a severe bear market, yes, it is entirely possible.
Should you buy a fully valued [overvalued] BHP at the top [or near] of a bull market? I say no, it represents a very speculative component in the valuation.

The escalating costs are important as they indicate poor efficiency. Low cost producers fall less in a downturn than high cost producers. [evidence if required]

Also, that BHP is running inventories lower and utilise FIFO accounting, exaggerates profits in the period where older inventory is sold in a period of rising prices.

This period has passed.
Prices are still high, but, margins are shrinking due to poor cost control and exhausted "old" inventory.
Evidence...in the statements, part of which I highlighted.

As regards the quality or lack thereof of my analysis.
You seem to feel that my analysis should be edited.
I take it that you feel qualified to do so.

I would ask, on what basis do you feel that you are qualified to undertake such a task?

jog on
d998


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## ducati916 (28 August 2007)

First off, a thank-you to those highlighting the "personality" issue, appreciated.

Second, I have now had a look at the latest financials, to say there are some interesting "negatives" contained therein, would be an understatement.

When I have a little more time, I'll post the highlights.

jog on
d998


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## rederob (28 August 2007)

> As regards the quality or lack thereof of my analysis.
> You seem to feel that my analysis should be edited.
> I take it that you feel qualified to do so.
> 
> I would ask, on what basis do you feel that you are qualified to undertake such a task?



Which particular aspect of your analysis is in keeping with the price trend of BHP?
Which aspects of your analysis will have led readers to making a well informed decision that would enable them to profitably trade BHP?
How is your "peak oil" contention (post above) in keeping with your view that oil/gas is a short term trade and not a good investment?
How is the ability to reprocess about 5% of spent nuclear fuel going to be a major factor supporting supply when the present shortfall is many times that, and the forecast shortfall in years to come - should Cigar Lake not come on line - suggests nuclear plants will be scouring the world for uranium or curbing energy output?
How is a "safe investment" one where there are meagre or no dividends, and nothing on the horizon to suggest the company will return to profitability within a timeframe that would have suggested ones financial input would have been rewarded by that decision?


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## BSD (28 August 2007)

Uranium and BHP? 

Who cares? 

BHP had a $7bn benefit to the bottom line from price hikes, but so what? 

Their production growth is massive and all that money is being reinvested or reducing shares on issue. 


Next year is all about OIL and production growth for BHP. 

Atlantis (44%) - 200,000bbls of oil and 180 mcf of gas per day

Ghengis Khan (44%) - 55,000bbls of oil a day

Stybarrow (50%) - 80,000bbls of oil a day

Neptune (35%) - 50,000bbls of oil and 50mcf of gas per day

Zamzaza (38.5%) - 150mcf gas per day. 

All coming into production next year...

Forgetting the gas, that adds up to 170,000 bbls a day for BHP or 62mbbls per annum

At $70bbl that is another $4bn of revenue for BHP to help replace the windfall from last year

It is amazing how much investing you can do in NPV positive projects with $15bn a year in cashflow.

*Copper*
Unless someone can point me to the massive copper mines coming into production next year, I think the rising demand from Asia will continue to sustain or increase the copper price. 

*Nickel*
The nickel price may not hit the highs of last year again with the low grade (0.15%Ni) coming into profitabilty at the high prices and flooding the market - but BHP has a little project called Ravensthorpe coming online with 50,000tn of Ni production. That adds up to another $1bn of revenue at current prices. 

Bear in mind that the ultra low grade Ni ore is not profitable at 'old' prices. 

*Iron Ore*
It sounds like ~15% price increases are in the bag. 

We'll have to wait another year for the China-bears to be right again in iron it appears. 

Oh, and BHP is ramping production in coming years by 100's of million tonnes

RIO and BHP are unable to ramp up production sufficient to meet demand at the moment and remember that Fe prices are based on the high cost magnetites and not the heamitites of BHP and RIO. 

*Coking Coal*

BHP made 31% less in coking coal last year. Guess which type of coal is already being contracted at 30% -50% higher prices already for the coming year?

Of course, BHP is expanding this production too. 

*Costs*
To quote:
"Lowest rate of unit costs in three years - 3.6%"

http://bhpbilliton.com/bbContentRepository/bhpbFy07ResultsPresentation.pdf

What a well managed company. Great assets, great markets, great customers and a great secular bull market based on growing demand and dwindling supply. 

Forget current volumes - BHP has $14bn of approved investment for 19 projects, 14 projects at feasibility stage for $7bn and $50bn at conceptual phase!

All of this expansion is into projects with 20% IRR forecasts using far lower prices than those prevailing now.


No mention of FIFO in the presentation, amazingly enough.


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## GREENS (28 August 2007)

BSD I have to say that is an excellent post and sums up the situation perfectly; we aren’t dealing decades away, but rather investing in the foreseeable future and BHP is a sound investment that will be highly profitable for at least the next couple of years with the quality projects it already operates combined with those coming online. If the long term commodity bull does lasts longer, well projects like Olympic Dam (expansion) will be a bonus and the profits to BHP will be mind blowing. 

Ducati may in fact have the very long term value of BHP correct, but if you applied this to every stock it would be hard to make a sound profit because every stock is cyclical in some respect. Of course this commodity bull may not last for decades as Chip confidently stated, but the signs over the next 12-18 months are signalling that there are more good times to come. I will again assess my investment closer to this time as circumstances change but until then I am one happy BHP customer.


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## It's Snake Pliskin (29 August 2007)

BSD said:


> Uranium and BHP?
> 
> Who cares?
> 
> ...




BSD,

I like to read posts from Ducati and yourself.

But how does it relate to price appreciation?


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## ducati916 (29 August 2007)

rederob said:


> Which particular aspect of your analysis is in keeping with the price trend of BHP?
> Which aspects of your analysis will have led readers to making a well informed decision that would enable them to profitably trade BHP?
> How is your "peak oil" contention (post above) in keeping with your view that oil/gas is a short term trade and not a good investment?
> How is the ability to reprocess about 5% of spent nuclear fuel going to be a major factor supporting supply when the present shortfall is many times that, and the forecast shortfall in years to come - should Cigar Lake not come on line - suggests nuclear plants will be scouring the world for uranium or curbing energy output?
> How is a "safe investment" one where there are meagre or no dividends, and nothing on the horizon to suggest the company will return to profitability within a timeframe that would have suggested ones financial input would have been rewarded by that decision?




*rederob*
*At low "Prices" value received is higher than at high "Prices"

*Not really interested in "TRADERS" more investors. You advocated that BHP @ circa $30+ was an investment. I disagree. It will definitely be a trade, any price has a "trade" potential. It does not possess investment merit at current prices $20+

*Peak oil. If my assertion is correct and peak production worldwide has happened, or imminent, then in the short term price could potentially rise and rise strongly. This will drive innovation and technology to surplant oil in one or more of it's current uses.

One of the largest consumers of oil, the automobile, already has a viable alternative...the electric car [there is a documentary film] This could be produced very quickly [12mths] and totally make oil [for automobiles] redundant.

This would have a significant effect on the demand curve for oil, thus driving prices lower.

Thus short-term, oil, is a good play. Longer term, oil will be potentially not so good.

*Again, 5% is the current figure, the technology is relatively new. This will improve, thus far greater % will be recycled [if required]

*Last comment....??
Relevance to BHP?

Now you see, I have indulged you and answered all of your questions.
You on the other hand answered my question not at all, just a flurry of diversionary questions.

So, I repeat;
What qualifications do you possess that would provide the ability to correct my asserted, errors, omissions, etc?

jog on
d998

PS. Should anyone be interested, the analysis of BHP's current financial results are on my blog. I shall post them here later today or tomorrow.


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## ducati916 (29 August 2007)

*BSD*

A very bullish analysis.
Nothing particularly wrong with looking at the bullish picture, except that it only presents one side of the story.

As always, there is an alternative narrative that should be examined, this is called risk management, or due diligence, common sense, etc.

If after looking at both sides, you are still super bullish, then that stock can be purchased.

Of course, the negative viewpoint, invariably makes the provider of the bad news intensely unpopular.....shoot the messenger psychology.

jog on
d998


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## rederob (29 August 2007)

ducati916 said:


> *rederob*
> *At low "Prices" value received is higher than at high "Prices"
> 
> *Not really interested in "TRADERS" more investors. You advocated that BHP @ circa $30+ was an investment. I disagree. It will definitely be a trade, any price has a "trade" potential. It does not possess investment merit at current prices $20+
> ...



ducati
Your stated answers are typically obscure and poorly thought.
Let's just take your points about oil, and the "car" as an example.
You see a "short term" opportunity for oil due to rising prices emanating from peak oil.  The bell curve on peak oil gives us many years leeway before severe impacts arise, so you may need to define what you mean by short term.
Your comment on the electric car is valid to the extent that it is possible to replace the present ICA (internal combustion automobile) with EV s(electric vehicles).
So let's do some quick sums, using only the USA as a basis.  Present new car sales over 7 million units pa.  EV uses at least twice average amount of copper wire as conventional ICA which averages 25 kilos per unit - therefore EV would average at least 50 kilos per unit.  So if all new vehicles sold in USA were replaced by EVs an additional (mimimum) 175 million tonnes of copper would be needed. 
However, that equation relates only to new sales, which would mean that all the other ICAs would need to be quickly replaced by EVs.  Given there are over 200 million cars in the USA an extra 5 billion tonnes of coppper will be needed (over and above present needs) to ensure the Americans can drive around as they presently do.
Simply put, just to convert the US to electric vehicles would wipe out present copper inventories in no time at all.  Then, of course, we need to offer EVs to the rest of the world!
The above example has only focussed on the EV affecting copper.  I could have mentioned that lithion ion or nickel metal hydride battery manufacture would be problematic.
Given what BHP mines and sells, I have a suspicion that replacing the fleet of global cars with new electric vehicles would benefit BHP significantly in years ahead if your peak oil scenario played out.  It's certainly plausible.

If you wish to ask about what skills are involved in "analysis", rather than qualifications per se, the above provides a crude but useful example.  Investing effectively requires one to examine many variables and be astutely forward looking.  If we can "read" the probability of major future events and themes, and map these back into equities that are most likely to prosper, we too are likely to prosper.
Have a look at DYE and see what I mean.


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## rederob (29 August 2007)

Apologies: My above post has confused "tonnes" with "pounds", however my point about copper inventories being incapable of meeting demand for an EV scenario is equally valid.
LME copper inventories peaked in 2002 at around 1 billion pounds (one million tonnes).
LME, Shanghai and Comex warehouses presently hold less than 250 million pounds of copper. A twenty-fold increase would be needed to convert the US car fleet to EVs, and that's just not possible!
Put another way, if every pound of copper consumed by the US was diverted to the production of EVs, it would take 2 years to convert the fleet.  That of course would be a very big problem for the other industry sectors that are responsible for about 90% of annual copper use (I'm not sure stopping home costruction for 2 years in the US would go down too well - an average US home consumes 4 times more copper than a car).


Quickly back to one of my questions to ducati:
"Which particular aspect of your analysis is in keeping with the price trend of BHP?"
ducati's reply:


> rederob
> *At low "Prices" value received is higher than at high "Prices"



I admit to being very confused by this reply.
If I sell BHP at a low price, the value received is higher than if I sell BHP at a high price?
"Value received" implies a consideration, that is, "money received".
I anticipate another reply from ducati with mumbo jumbo and word gymnastics, and distortions, that will completely debunk what I said.
So that there can be no confusion about the intent of my original question, I was seeking an explanation of how ducati's analysis which implied BHP was overvalued was in keeping with the market trend of BHP reaching higher highs.


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## ducati916 (30 August 2007)

*rederob*

At a purchase price....value received is higher at a low price than at a high price.

Thus, you want to BUY low SELL high.

Currently you are buying high.
You MAY be able to sell higher, in which case, not a problem. However that involves some speculation due to the speculative component contained within the price currently [by my analysis]

But I'm sure you could have figured that out all by yourself. 

As regards your analysis of copper. Apart from the typing error [forgivable] over tonnes/pounds [mixture of metric/imperial?] your copper analysis was very impressive.

Shame it's irrelevant.



> GM signs for electric-car battery
> Automaker hopes to beat Toyota to first plug-in
> By TOM KRISHER
> THE ASSOCIATED PRESS
> ...




GM and Toyota are well under way [again] to making electric cars commercially.

Peak Oil is not some fantasy, and it is much closer than most appreciate. Current reserves which is a highly speculative undertaking, takes Saudi estimates at being able to produce up to 10M/barrels/day IF required.

Saudi productive capabilities are seriously challenged on this basis.

jog on
d998


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## ducati916 (30 August 2007)

Here is the analysis that was posted on my blog;

BHP released their financials early last week. Having now had a chance to read through them in-between Jury service, there are some interesting things going on.

BHP have two separate share repurchase programs that have currently been announced. The August program, a $3.0B program, is more or less complete now.

142Million common shares were repurchased at a cost of $2.957B or circa $20.82/share. Does this represent management’s assessment of value?
Ignoring whether this was good value or not, the allocation of cash-flow went;
$286M………………………….Share Capital
$2.559B……………………….Retained Earnings

So, we can count these earnings twice?
The first time, the earnings are earned via Revenue, flow through the Income Statement, ending up on the bottom line as Net Profit.

That Net Profit if not paid out in dividends, would then rightly be recorded as Retained Earnings. 

However, that is not what happened.

Assuming cash was paid for the share repurchase program, out of Net Profit, the shares were repurchased, placed in the Treasury, awaiting cancellation. [Previous Treasury shares have been retired]

Meanwhile, the cash used for the purchase has been recorded as….Retained Earnings. At this point we have the same cash showing up in three different places;
*Net Profit [Retained Earnings]
*Treasury shares [Share repurchase]
*Retained Earnings [Share Repurchase via Treasury shares]

Now, if the shares are not retired [cancelled] and are stored in the Treasury, they should not be recorded under Retained Earnings, they however remain an asset that can be resold. Should this happen, then the proceeds will be recorded under Financing Cashflows, and the proceeds placed in Current Assets as cash.

If the shares are retired, then, the asset is destroyed, in effect, a Return of Capital.
The advantages of this strategy is that future earnings are divided over a smaller share base, thus earnings per share will rise.

In either case, these are not retained earnings.
Currently BHP are counting their earnings three times…a little optimistic.

Earnings were also reported without including “Exceptional Items”.
Exceptional Items totaled……………………………………. $259M
Not an insignificant sum. The general rule is, are the items normal business?
In the case of BHP I would say that they are, thus they should be included.
They were;
*Impairment of South African Coal operations
*Newcastle steelworks rehabilitation [maintenance]

Capitalised Interest……………………………………………$353M
This one is a disgrace. Capitalising interest boosts net earnings. With a company claiming such a successful earnings period, capitalising interest is particularly egregious.

Taxes.
BHP have been utilising Tax Loss carryforwards to reduce Taxable income [no figure supplied]
This company has lost money?

Deferred Taxes……………………….+53.6%
BHP has accelerated depletion for tax purposes. In a resource business this is important. If you purchase on the basis of shareholder figures, you are guaranteed to overpay by the Deferred Tax figure. Again, simply a ploy to boost per share earnings by subterfuge.

Revenues/Inventories/Receivables.
So if we take Revenues of $47.47 and subtract the contribution made by higher prices we come to $40.37 Billion which is a 3.2% increase in Revenues. Now Inventories and Receivables rose by 20.6% and 22.4% respectively.

If you accept that Revenues rose due to advantageous pricing as opposed to increased sales of production [which is the case] then this figure is confirmed by the increase within the Inventory. It is also interesting to note that if Revenues hide the sold production, Receivables suggest that BHP is financing their customers purchases. In this “high demand” era, why is that?

BHP is a highly cyclical company. BHP is a “Pricetaker” not a “Pricemaker” thus, in weak commodity price cycles, BHP can indeed lose money. 

Therefore BHP has certainly boosted Net Income by;
Tax + Exceptional + CapInt………………………………………$612M + ?
Retained Earnings………………………………………………….$2.957B
Total………………………………………………………………..$3.569B+

Liquidity [Working Capital]
Total Current Assets……..$8776………………$11087
Total Current Liabilities…..$8661………………$10249
Net Current Assets……….$115.0……………..$838.0
Current Ratio……………….1.01………………..1.08

For a “Blue Chip” Investment, BHP does not come close to passing the working capital liquidity test [minimum = 2.0] It is almost 100% below the cut-off point minimum.

This, especially in a contractionary credit cycle is vital. We have seen $10B Hedge Funds go bankrupt in the space of 5 days. I’m not suggesting BHP is a Hedge Fund, just that liquidity is vitally important and if you don’t have it when you need it, bad things happen.

BHP does have a newly negotiated $3.0B credit revolver…but were you expecting your rock solid investment ever requiring emergency bank lending?

In addition BHP debt is increasing in the time of plenty;

BHP have issued new debt, and placed a Shelf Registration for future debt.
This of course underlines the fact that the ashflow from Net Earnings, ahem, has been spent.
Future Working Capital requirements exceeding cash on hand etc, will be financed via this new issued debt and the debt registered, and already sold.

$788M Floating rate due 2008
$788M 4.375% due 2014
$875M Floating rate due 2009
$625M 5.125% due 2012
$750M 5.4% due 2017

Those “Floating” rates, could seriously impact future earnings…..if of course they are not capitalised or re-financed. 

So what were the real, or adjusted earnings?
Adjusted figures………………………………$1.894B

Not quite the headline grabbing BHP version.


jog on
d998


----------



## stoxclimber (30 August 2007)

ducati916 said:


> For a “Blue Chip” Investment, BHP does not come close to passing the working capital liquidity test [minimum = 2.0] It is almost 100% below the cut-off point minimum.





I'm not getting involved in the BHP debate.
I don't even own BHP shares.
In fact, I think they are slightly overvalued.

However, I must stress strongly that saying a share is a risky investment if its current ratio is less than TWO is really silly. In fact, I'd have problems with management having current ratios OVER two. WORKING CAPITAL DESTROYS VALUE. 

Best of luck sirs.


----------



## ducati916 (30 August 2007)

stoxclimber said:


> I'm not getting involved in the BHP debate.
> I don't even own BHP shares.
> In fact, I think they are slightly overvalued.
> 
> ...




Really [in reference to Working Capital]
How so?

jog on
d998


----------



## rederob (30 August 2007)

ducati
Electric cars have electric motors.
Batteries power their electric motors.
When cars run on batteries alone (without motors) then my point about copper will be irrelevant.

On peak oil we are in agreement.
We are not in agreement about the time fame of the relative impacts it will have on equities that are exposed.  In this regard you have again failed to indicate what you regard as "short term".

As for other analysis on BHP, BSD has raised many of the company’s growing revenue streams, yet you choose to ignore these as indicative of a bullish view.  The more likely downside to BHP’s massive profits will come from an appreciating Australian dollar over coming years.


----------



## ducati916 (30 August 2007)

rederob said:


> ducati
> Electric cars have electric motors.
> Batteries power their electric motors.
> When cars run on batteries alone (without motors) then my point about copper will be irrelevant.
> ...




They already can [run without a combustion engine]
Whether they have an electric + combustion or electric only; copper is irrelevant.....the engine transfers power to a crankshaft, which drive the wheels.

In regards to "Peak Oil" I gave a  timeframe.....it's already happened.
As evidence, the major fields that have categorically gone into decline.

Speculative, that the Saudi Arabian oil production has also hit peak production.

Therefore "short term" = 5yrs

As to BSD's analysis, it simply states BHP managements projections.

jog on
d998


----------



## rederob (30 August 2007)

ducati916 said:


> They already can [run without a combustion engine]
> Whether they have an electric + combustion or electric only; copper is irrelevant.....the engine transfers power to a crankshaft, which drive the wheels.
> 
> In regards to "Peak Oil" I gave a  timeframe.....it's already happened.
> ...



ducati
Let me put the case for copper in cars more clearly for you as you are having some problems with the concept.
*ICE vehicles do not have electric motors *to deliver power to a car's wheels.
EVs and hybrids do have electric motors specifically for that purpose. (If you go to the "hybrid synergy drive" link at this site there is a very good schematic of the hybrid variants: http://prius.toyota.com.au/toyota/vehicle/Content/0,4664,2393_842,00.html)
Therefore, EVs and hybrids consume significantly more copper than a conventional car because additional electric motors are essential to their operation.

Thank you for clarifying "short term" as 5 years: You may be unique with that view in trading/investing circles.


----------



## ducati916 (31 August 2007)

rederob said:


> ducati
> Let me put the case for copper in cars more clearly for you as you are having some problems with the concept.
> *ICE vehicles do not have electric motors *to deliver power to a car's wheels.
> EVs and hybrids do have electric motors specifically for that purpose. (If you go to the "hybrid synergy drive" link at this site there is a very good schematic of the hybrid variants: http://prius.toyota.com.au/toyota/vehicle/Content/0,4664,2393_842,00.html)
> ...





No, not really.
EV's have already produced the 100% electric motor that drives the wheels, thus this extra "copper" is not necessary.

Thus your copper calculation, while interesting, irrelevant.

Unique.
That sounds like me.

jog on
d998


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## ducati916 (31 August 2007)

stoxclimber said:


> I'm not getting involved in the BHP debate.
> I don't even own BHP shares.
> In fact, I think they are slightly overvalued.
> 
> ...




I note there has been no evidence provided to support this opinion.
How odd, the opinion seemed so entrenched.

jog on
d998


----------



## ducati916 (31 August 2007)

And here we have Israel looking to break the addiction to ME Oil [Arab]
Technology will jump forward as increasing numbers of people start to examine the alternatives, especially as "peak oil" has quite possibly already occurred [just very quietly, you didn't expect trumpets?]




> JERUSALEM: Holding company Israel Corp said on Sunday its board had agreed to invest $100 million in an electric car venture.
> 
> Israel Corp would own 33 per cent of the rights in the venture, which includes several investors and is being led by entrepreneur Shai Agassi, the company said in a statement.
> 
> ...




jog on
d998


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## Freeballinginawetsuit (31 August 2007)

Exactly what is the point of all this 'tit for tat' , chill out and simply accept you have different views on current/future fair value for BHP.

The current SP of BHP is what it is! and in the case of some they called it horribly wrong from a forward perspective some months back!.


----------



## moses (31 August 2007)

ducati916 said:


> No, not really.
> EV's have already produced the 100% electric motor that drives the wheels, thus this extra "copper" is not necessary.
> 
> Thus your copper calculation, while interesting, irrelevant.




On the contrary, Rederob's point about copper is perfectly relevant.

If an EV requires, say, twice the copper of a PV (because an electric motor is essentially made of copper), then car manufacturer's will need to buy twice as much copper as they do today.

My understanding of Rederob's argument is that this extra demand on copper will create shortages and force price rises, which will be to BHP's benefit.

You may disagree (and I haven't done the calculation), but you certainly haven't given a valid reason to dispute his argument. All you've done in the statement above is dismiss Rederob with some specious waffle that indicates you've both missed his point and don't have a clue what you are talking about.


----------



## ducati916 (31 August 2007)

moses said:


> On the contrary, Rederob's point about copper is perfectly relevant.
> 
> If an EV requires, say, twice the copper of a PV (because an electric motor is essentially made of copper), then car manufacturer's will need to buy twice as much copper as they do today.
> 
> ...




*moses*

So without doing the calculation, you are willing to accept anothers work?
This demonstrates your laziness.

Electric DC motors manufacture materials;



> Major types of DC motors are:
> 
> Brushless DC Motors: These motors are used to drive CD-ROM spindles, fans, office products like Xerox machines, lasers and also in expensive aircraft models. They have a permanent external rotor magnet; three phase driving coils and Hall Effect devices that sense rotor position. They are more efficient than AC motors, do not produce excessive heat and last longer since there is no commutator.
> 
> ...




Let's have a look at "homemade" electric motors and a basic "how they work diagram;

jog on
d998


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## ducati916 (31 August 2007)

*moses*

While I accept that there potentially will be copper utilised in an electric motor, currently, there is no evidence to support the huge increase in copper utilisation as advocated by *rederob*

Technology is also advancing.
For the major car manufacturers, commercial viability requires attractive profit margins. Thus, if oil and the cost/availability mandates a paradigm shift, they will allocate sufficient reserach money to create the highest profit margin that they can.

jog on
d998


----------



## resourcesman (31 August 2007)

ducati916 said:


> Really [in reference to Working Capital]
> How so?
> 
> jog on
> d998




i didnt read much of this thread so I am gonna take a shot at what he meant. 

Excessive capital, if its sitting in the bank doing nothing but earning low returns would have been better off being returned to shareholders (special dividends etc) so that they could make better use of it. To the extent that the capital is sitting within the company earning less than they could have elsewhere, value is being destroyed. 

For example, if you were provided with one of two investments:

1. $100k sitting in an account that will earn 5% pa but cannot be withdrawn or sold until in 20 years time; or,

2. $100k that you can take now and do anything you wish with it

which option would you pay more to purchase?


----------



## ducati916 (31 August 2007)

resourcesman said:


> i didnt read much of this thread so I am gonna take a shot at what he meant.
> 
> Excessive capital, if its sitting in the bank doing nothing but earning low returns would have been better off being returned to shareholders (special dividends etc) so that they could make better use of it. To the extent that the capital is sitting within the company earning less than they could have elsewhere, value is being destroyed.
> 
> ...




As it was not your assertion [originally] I have no problem with your logic.

However, Working Capital, almost by definition, is not *excess cash*
Quite the reverse, Working Capital is the prudent level of liquidity required to ensure that bankruptcy does not ensue due to an inability to fund current liabilities.

*Working Capital* consists of;
*Cash & liquid instruments [bills]
*Receivables
*Inventory [all 3 components]
*Prepaid expenses
*Other

The financial ratio of a minimum of 2.0 has been accepted as the standard for some 100yrs+
Note that 50+ mortgage lenders, 10+ Hedge Funds have all gone bankrupt in the last 6 weeks due to a lack of liquidity [working capital]

So, what reasons are you advancing [original poster] to the revision of this standard?

Or was the comment simply "off-the-top of your head, and simply opinion?

jog on
d998


----------



## rederob (31 August 2007)

ducati916 said:


> *moses*
> 
> While I accept that there potentially will be copper utilised in an electric motor, currently, there is no evidence to support the huge increase in copper utilisation as advocated by *rederob*
> 
> ...



ducati
I'm not going to do more homework for you on the maths about copper utilisation in electric cars as the point I was making was conceptual.
However, I can see that your inability to grasp some simple concepts is going to be a continuing problem here.

moses
You hit the nail on the head.
Moreover, the point I have raised is not new, and is quite well understood by both motor vehicle manufacturers and base metal miners.


----------



## ducati916 (31 August 2007)

rederob said:


> ducati
> I'm not going to do more homework for you on the maths about copper utilisation in electric cars as the point I was making was conceptual.
> However, I can see that your inability to grasp some simple concepts is going to be a continuing problem here.
> 
> ...




*rederob*

Of course not, that would require finding evidence to support your assertion, so best just use the condescention excuse, so much easier.

Conceptual or factual?
Rather big difference isn't there?

jog on
d998


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## ducati916 (31 August 2007)

rederob said:


> The evidence is found under the bonnet of EVs and HEVs.
> qed




*rederob*

Having looked more in detail at the copper content of previous EV's, it is suggested that copper useage will increase in the following manner;

*12lbs-25lbs per vehicle in the use of copper wire 21%-45%
*8lbs-10lbs converting hydraulics [power steering, brakes] 14%-18%
Total = 36%-63%
Offsetting into the future, high recyclability.

This was the state of affairs in 1998.

Four points;
*Technology moves forward, thus this figure *may* reduce under present research, as affordability must be a consideration.

*Energy losses in electric motors fall into four categories: 

Power losses 
Magnetic core losses 
Friction and windage losses, and 
Stray load losses. 


*The increased recyclability will offset the longer term demand. In the short run, I accept that copper demand will rise [offset with a fall in demand of other replaced commodities]

*The ranges are very heavily influenced by the size/weight & power output of the vehicle. Assuming that peak oil is the catalyst for this change, I suggest smaller lighter cars will be increasingly prevalent over the 4wd monsters currently in vogue within the US. It is primarily the US market that will have the greatest impact currently. If so, we are looking at the lower end of the demand increase, viz. 36%

Thus for BHP, the entire transaction based on various prices for the various commodities may well become a wash.

I'm in the innovation will overcome previous problems camp.

jog on
d998


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## vishalt (31 August 2007)

Please keep continuing this !

I'm seriously enjoying my BHP collection ranging from $18 - $32, keep it up, its so over-valued with its low P/E ratio, high earnings and cash-filled balance sheet.


----------



## ducati916 (1 September 2007)

*rederob*

Continuing from your original analysis;



> So let's do some quick sums, using only the USA as a basis. Present new car sales over 7 million units pa. EV uses at least twice average amount of copper wire as conventional ICA which averages 25 kilos per unit - therefore EV would average at least 50 kilos per unit. So if all new vehicles sold in USA were replaced by EVs an additional (mimimum) 175 million tonnes of copper would be needed.
> However, that equation relates only to new sales, which would mean that all the other ICAs would need to be quickly replaced by EVs. Given there are over 200 million cars in the USA an extra 5 billion tonnes of coppper will be needed (over and above present needs) to ensure the Americans can drive around as they presently do.
> Simply put, just to convert the US to electric vehicles would wipe out present copper inventories in no time at all. Then, of course, we need to offer EVs to the rest of the world!





Of course we have the already identified tonnes/pounds anomaly.

We also have the anomaly of kg/lbs
EV motors measure their copper content in lbs not kg
Thus, the calculation is incorrect by a multiple of 2.2

Thus you will grossly overestimate the copper requirement.

However that is also not taking into account that the switch from combustion engines to EV's would not [could not?] take place overnight. Typically when State, or, Federal legislature seek to instigate legal reforms to existing standards, there is always a period of grace.

This would relate to "new car sales" as there would be inventory considerations for the various manufacturers in addition to a potentially higher retail price. For older cars being replaced, there would also be a legal timeframe.

Thus the change would take place over a 5yr-10yr period. If oil was in crisis, possibly faster. However such is the lobby power of specialist interests [the reason for the initial failure of the EV] that even with an oil crisis, it would take some time.

Other countries, UK & NZ for example follow similar lead in times. You would not be required to change overnight.

Thus, correcting for your variety of lbs/kg/tonnes, correcting for your overnight quick fix, the impact on world copper supplies would be ....irrelevant.

jog on
d998


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## ducati916 (1 September 2007)

vishalt said:


> Please keep continuing this !
> 
> I'm seriously enjoying my BHP collection ranging from $18 - $32, keep it up, its so over-valued with its low P/E ratio, high earnings and cash-filled balance sheet.




Obviously not following the thread that closely, how disappointing.
The *E* in P/E stands for earnings. The earnings have been high due to high prices for commodities not due to *increased revenues or increased market share*

This is a rather important distinction. BHP is a cyclical stock, and should be purchased as a HIGH P/E [when price and earnings are depressed]

Interesting that you mention *cash filled Balance Sheet*
A previous poster dismissed the *working capital* component as a negative.

Obviously you haven't read the analysis I posted [apart from being crushed] you would have realized that BHP's working capital position is below investment standard and that liquidity problems could force BHP to draw down on their $3B credit revolver.

That carries an interest charge.
Considering that if required to draw down, things would not be going to plan, added interest charges at this time would seriously impact the earnings. Falling earnings has a horrible consequence in stocks with speculative pricing, the share price tends to drop.

However, look on the bright side, should that unfortunate set of circumstances ever occur, you could add to your collection at much lower prices.

jog on
d998


----------



## rostov (1 September 2007)

ducati916 said:


> BHP released their financials early last week. Having now had a chance to read through them in-between Jury service, there are some interesting things going on.






> For a “Blue Chip” Investment, BHP does not come close to passing the working capital liquidity test [*minimum = 2.0*] It is almost 100% below the cut-off point minimum.




When the results were 1st posted, I was 1/2 way in a personal spreadsheet which attempted to apply, at the very least, Graham's checklists for defensive investments. Though I'm still learning, what blew me away was your post that my initial assumption to use *total* asset/liability ratios as the 2st litmus test could have severe shortcomings for defensiveness, instead of using *current* asset/liability ratios as:



> Liquidity [Working Capital]
> Total Current Assets……..$8776………………$11087
> Total Current Liabilities…..$8661………………$10249
> Net Current Assets……….$115.0……………..$838.0
> Current Ratio……………….*1.01*………………..*1.08*




Before the ANN came out, Ratio was: 65.271/32.371 = 2.02 (pass), but a ratio of 1.01-1.08 is _bad_. To be truly defensive, I will adjust ratios using current to reflect each company's path forward. Honestly, thanks for that correction (I still have so much to learn)



> $788M Floating rate due 2008
> $788M 4.375% due 2014
> $875M Floating rate due 2009
> $625M 5.125% due 2012
> $750M 5.4% due 2017




Thanks for this. When current asset/liability ratios are so dangerously low, it pays to examine how leveraged they are.



> So what were the real, or adjusted earnings?
> Adjusted figures………………………………$1.894B
> 
> Not quite the headline grabbing BHP version.




3rd test of Graham's litmus test is Earnings stability for the past 10 years. Though he was very very conservative (30% over 10 years increasse in EPS), here's the figures and deltas for BHP eps after the ANN. Forgive me if my figures are off somewhere.

1997 / 38.2
1998 / 34.9 (-8.64%)
1999 / 9.5 (-72.78%)
2000 / 47.5 (+400.00%)
2001 / 76.8 (+61.68%)
2002 / 51.9 (-32.42%)
2003 / 45.3 (-12.72%)
2004 / 78.2 (+72.63%)
2005 / 128.4 (+61.19%)
2006 / 225.4 (+75.55%)
2007 / 266.86 (*+18.39%*)

Notice that the above +18.39% increase in EPS compared to 2007 was what I derived (I hope I was right then) with the ANN out. Taking their EPS at face value, it would seem that 2007 was a year they could not earn as much as the period from 2004-2006, and their earning growth has been shed off about 4 times (+75.55% div +18.39%). [Opinion]This gives me a sinking feeling of unsustainability, as per what they (BHP) reports _at face value_.

With your modified:



> Adjusted figures………………………………$1.894B




,however, this would mean this year's true EPS would be a mere $0.6486 per share. That is a lot of homework to do to truly work out the real/adjusted EPS and deltas for the past 10 years to get a true picture. I shudder at the true values being derived at the end of the exercise.

What worries me is that even without the adjusted figures, the 2007 EPS just didn't excite me much. Assume that we close 1 eye and take at face value their EPS and book value (some say NTA), further down the track in Graham's test already fail. Here's a few tidbits:

1) P/E ratio based on price divided by past 3 years of _earnings_ is 6.20. Very healthy compared to Graham's suggestion of 15. (Note : we need to move on to below checks ... this can't stand by itself)

2) Price-to-book ratio at 31/8/2007 price of, say, $38.5 (approx!) is 6.44 (published NTA is roughly 5.98). 6.44 from Graham's cautions against 1.50 as a ratio is very scary : that's 4 times overpriced.

3) His moderate factor of having both the above (P/E of 3 years earnings _multiplied_ price-to-book ratio) not being above 22.50 gives BHP a value of 39.94.

Based on conservative defensive holding investment litmus test of BHP, it already fails a few litmus factors even BEFORE one moves to examine RR and IRR ratios of the company or examining the sustainability of its business. One would need  BHP to be around $28 at current NTA/book-value before it passes such litmus (#3 moderate factor, but still fails price-to-book ratio) to continue studying its true value (not price!) of BHP.

On the bright side, that means I don't really have to work out the real EPS values for the past 10 years. If one were to assume they would do anything to look good in front of major shareholders, taking the BEST CASE presentation from their ANNs and showing that they are overpriced is satisfying enough not to continue such work.

Criticisms welcome. I learn either way. Cheers

p.s. I'm NOT an accountant.


----------



## BSD (1 September 2007)

Perhaps valuation and treasury management techniques have moved a little since Graham and Co created these 'rules of thumb'. 

We aren't valuing a corner-store here.  

What does the 'interest cover' look like guys?


I find it interesting that some are worried about the liquidity of BHP when most (myself included) are focussed on BHP being insufficiently geared. 

Will 'value' managers be wrong on BHP for another decade if the cycle 'amazes' the doubters and lasts for 20 years rather than 5?


BTW: I dont think BHP is 'cheap' at these levels 

But I do believe it is of very high quality and a very attractive purchase when the Chinaphobes and Americans get all worried and sell their 'risky resources shares' to buy USD backed treasuries at 3.5%.


Getting set for the iron-ore negotiations with excitement in my bones!

I am assuming a 20% rise. 

For yet another year this will boost the multi-billion dollar earnings of the iron ore businesses of both BHP and RIO. 

Do any of the rear vision guys have an opinion on how the contracted iron ore price is going to look? Do your stencils have room for forward price assumpions?

Those Chinese sure do love their steel


----------



## rederob (2 September 2007)

Hello BSD
I just love some of the supposed analysis in this thread:


> The E in P/E stands for earnings. The earnings have been high due to high prices for commodities not due to increased revenues or increased market share.



I'm wondering which part of BHP's 21% increase in revenue over last year ducati wants to parse next!
Then he trots this one out again:


> This is a rather important distinction.BHP is a cyclical stock, and should be purchased as a HIGH P/E [when price and earnings are depressed]



If both price and earnings are depressed, there is little change in pe!
People who take the time to do the sums, and invest with up to a 12 month timeframe, will do handsomely well with commodity based equities if they buy when the pe is lowest.  That is, if the commodity prices driving earnings are stable, and the share price drops, you are buying into increased value.
We can skirt around an array of other factors, but the certainty we presently have is continuing strength across the majority of commodities.
Matched with BHP's world class production costs and increasing production volumes in many of its key sectors, we are presently looking at BHP matching or bettering its 2007 numbers next year.  My sense is that oil/gas and uranium (the latter being relatively small) will be strong contributors to profit.
I'm not in the "go out and buy" camp at present - a slightly lower price is inevitable in the short/medium term (I mean within the next quarter).
Tho I have set aside $12,000 for another *thousand *shares just in case!


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## ducati916 (3 September 2007)

*rederob*

The part of the 21% increase in Revenues I didn't like was this part;



> So if we take Revenues of $47.47 and subtract the contribution made by higher prices we come to $40.37 Billion which is a 3.2% increase in Revenues.




These figures [not the calculation] came from where?
Off the top of my head?
No, from BHP's initial Press release.

jog on
d998


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## rederob (3 September 2007)

Surprisingly enough commodity producers rely on higher prices to increase revenues, along with increased production and increased operating margins, and a host of other factors.
That's what makes them attractive to buy.
If you advocate or practice buying the likes of BHP when commodity prices are low, don't expect to be rewarded for a very long time, as even ducati realises the cyclical nature of these type of stocks.


----------



## ducati916 (3 September 2007)

rederob said:


> Surprisingly enough commodity producers rely on higher prices to increase revenues, along with increased production and increased operating margins, and a host of other factors.
> That's what makes them attractive to buy.
> If you advocate or practice buying the likes of BHP when commodity prices are low, don't expect to be rewarded for a very long time, as even ducati realises the cyclical nature of these type of stocks.




Revenue increases due to;
*higher prices/same market share
*static prices/increased market share
*higher prices/increased market share

BHP's increased revenues are primarily due to higher prices/flat market share
Thus it is fair to assume if prices fall, Revenue falls.

Also, due to LIFO, higher prices further leverage BHP's production.
The accounting standard also works in reverse, falling prices, increased losses of Revenue/Profits.

Addressing the P/E question as I didn't have time this morning.
When a cyclical company makes *losses* the earnings go to zero and into negative numbers.

The *price* however does not fall to $0.00
Thus the P/E ratio is *high*

This is the best time to purchase cyclical stocks, when the P/E is high due to losses.

BHP had losses in 1998 & 1999, just around the apex of the tech boom. Everyone then was buy XYZ.......was any one talking about resouces?

I'm sure some were.

Today's "tech" are resource stocks.
They are overpriced, just as tech was in the late 90"s

The tech boom was changing everything, you couldn't lose etc.
Sound familiar?

China, demand, commodity supercycle, 20+yrs to go etc.

jog on
d998


----------



## Knobby22 (3 September 2007)

Regarding copper utilisation in Electric cars, this will not be a factor in increasing copper usage. As incadescant/halogen globes are being replaced by LED and fibre becomes the form of communication within a car to send electrical signals and battery technology changing the increase of copper will not be large.

Copper however is a very important substance for industrial societies, more in the form of transformers and electrical cabling. Aluminium is the alternative but it is a relatively poor one.

It is also the best readily available heat sink material for serious applications, so important in today's electronics. (silver is too expensive).

Copper is therefore a bellweather of industrial societies. If China or India usage stabilises then this would be a signal that the present resources boom is ending.


----------



## rederob (3 September 2007)

Over the past 15 years if one had bought BHP on high pe multiples - say, well over 20 times - a significant period of holding would have been needed to get a fair return on the investment.
On the other hand, buying BHP at pe multiples nearer 15 times (or lower), could reward the buyer handsomely and often very quickly - months not years.
This has been especially the case for BHP during the last 5 years.

By the way, my data provider does not show BHP to have reported financial year losses any time in the last 10 years, athough this is not integral to the principal theme of when best to buy.

ducati says:


> This is the best time to purchase cyclical stocks, when the P/E is high due to losses.




The data says the opposite is true.
The best time to buy BHP is when sentiment is low, its share price is low, and its  earnings are stable to strong: In a bull market.


----------



## ducati916 (3 September 2007)

rederob said:


> Over the past 15 years if one had bought BHP on high pe multiples - say, well over 20 times - a significant period of holding would have been needed to get a fair return on the investment.
> On the other hand, buying BHP at pe multiples nearer 15 times (or lower), could reward the buyer handsomely and often very quickly - months not years.
> This has been especially the case for BHP during the last 5 years.
> 
> ...




The debate has centred around the investment quality of BHP and when would an investment purchase prove to be both *safe & profitable*
There have been numerous mentions from both yourself and *BSD* as to the advisability and safety of purchasing BHP circa $30

Now you are advocating *trading BHP*

From the loss in 1997 to the current situation in 2007 a period of 20 years, if you had purchased in 1997 your returns to date would have been;
Capital gains = 15.3% compounding
Dividend = [estimate 5%+]

A very satisfactory return.


----------



## rederob (3 September 2007)

ducati
The 10 years you mention show the value of investing very long term in blue chips.
I tend to buy and hold for long terms, but also am willing to take profits from time to time.
I checked my most recent forays into BHP and it shows that on 18/2/05 I bought at $16.94 and sold on 21/4/06 at $30.55.
I bought again on 30/11/06 for $26.10 and am still holding most of these.
I will let others define "trading" and "investing" as they see fit, but personally don't believe selling after more than a year warrants calling it "trading".
When I compare your theoretical 10-year outcomes to my recent efforts, I know what I would have preferred.

I'm not interested in a pissing contest, and I will always call things as I see them.  
I regarded BHP as a buy last year, and I bought.
I even copped some flak at the time because the charts were not looking good!
I don't yet regard BHP as a sell, and may even be content to never sell it should the commodity bull press on for another 10 years.
Then again, if BHP creeps up to a trailing pe nearing 30 times in coming months I will definitely be selling.
And if the bull market remains in play thereafter, I will definitely be buying back if BHP hits a multiple below 12.

When this commodity bull turns sour, I will quit my base metal plays relatively quickly.  I have already started moving more into energy-related equities, and anticipate more additions on price weakness (lower pes) in years to come.


----------



## rederob (3 September 2007)

Knobby22 said:


> Regarding copper utilisation in Electric cars, this will not be a factor in increasing copper usage. As incadescant/halogen globes are being replaced by LED and fibre becomes the form of communication within a car to send electrical signals and battery technology changing the increase of copper will not be large.



Knobby
This topic has moved to the "commodity" section of ASF.
Just be aware that "fibre" cannot transmit the voltages that operate car electricals, and thinner wires for any metal relies on higher voltages being run through them - dictated by the laws of physics.
Most of the extra copper I am referring to emanates from electral motors.  These can be in motors that operate power windows, power mirrors, power doorlocks, power seats, wipers, pumps, apart from driving the wheels.


----------



## ducati916 (4 September 2007)

rederob said:


> ducati
> The 10 years you mention show the value of investing very long term in blue chips.
> I tend to buy and hold for long terms, but also am willing to take profits from time to time.
> I checked my most recent forays into BHP and it shows that on 18/2/05 I bought at $16.94 and sold on 21/4/06 at $30.55.
> ...




*rederob*

It seems that we have moved on from discussing valuations, metrics, timeframes etc to your *hindsight trades*

Now of course, when hindsight trades are posted, they can illustrate any point the poster wishes to make.

It would seem on that basis, you very much wish to instigate a pissing contest, as why else would you argue hindsight evidence of your "irrefutable" genius?

Interesting that you make this distinction;
*and I will always call things as I see them.  
*
Certainly, but you feel that is your sole province?

When the commodity bull turns sour....and that will be signalled by?

Just a note on *post 1109*
That should read *LIFO* not FIFO [the edit button expired] <== N.B. Corrected for you{Mod}

jog on
d998


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## ducati916 (4 September 2007)

*Mr Mod*
Thank's for correcting that error for me.


*rederob*

As regards BHP having losses in 1997 & 1998, two separate data sources confirm the losses;
*Reuters
*BHP Financial Statements [EDGAR database]

In regards to high Vs low P/E ratio's, here are a selection of ratio's;

..........Avg P/E... Price/ Sales ....Price/ Book..... Net Profit Margin (%) 
06/06 ....22.10 .....8.13 ...............5.30 ..................30.4 
06/05.... 22.60 .....6.29 ...............4.70 ..................23.9 
06/04.... 37.80 .....4.65.............. 3.62................... 11.6 
06/03.... 43.00..... 4.36 ..............2.88.................... 9.6 
06/02.... 53.00..... 4.18 ..............2.78................... 7.3 
06/01... 46.80 ......3.47.............. 3.41................... 7.2 
06/00... 131.50 .....3.87 .............3.78 ...................2.8 
06/99... 209.50... 48.97............. 4.24................. 16.9 
05/99.. [-30.30]....3.23 ..............3.80................ [-8.5] 
05/98 ..[-124.30]. 2.32 ...............2.79 ................[-2.4]

The interesting thing to note [when compared against the long term chart] is that as the price of BHP rises, so the P/E falls, yet all the other ratio's *rise* in contradistinction.

In the two loss making years, this is reversed. This is common with cyclical stocks, particularly the auto stocks [GM, F, etc]

jog on
d998


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## ducati916 (6 September 2007)

BSD said:


> Perhaps valuation and treasury management techniques have moved a little since Graham and Co created these 'rules of thumb'.
> 
> We aren't valuing a corner-store here.
> 
> ...




*BSD*

Regarding *Interest cover* the interest cover is good. Why?
Simply because BHP *capitalise their interest.*

Liquidity and gearing are not necessarily correlated, nor causative.
For example;

Low liquidity with high levels of long term debt, is not the same as low liquidity with high levels of short term debt [liabilities]

The two scenario's are completely different. 

Currently, BHP has the latter, low liquidity due to high current liabilities. This while not immediately dangerous, as BHP has a $3.0Billion credit revolver, may necessitate in poor conditions a drawdown on said revolver.

That BHP in extremely favourable economic conditions for resources, has a liquidity issue at all is the major surprise [and warning red flag]

If you don't think that BHP is *cheap at these levels* then how do you reconcile your later statement that BHP is *very attractive purchase when the Chinaphobes and Americans get all worried and sell their 'risky resources shares' to buy USD backed treasuries at 3.5%.
*

The two statements seem to be in contradiction to one another.

With regards to your anticipation to iron-ore negotiations and China's steel industry;



> China's steel exports have started slowing down as a result of the government's control measures, according to the latest industry data.
> 
> Overseas shipment of Chinese steel products stood at 6.17 million tons last month, down from 7.16 million tons in April, show figures from China Iron & Steel Association.
> 
> ...




Thus I suggest projecting 20% price increases, may be slightly optimistic.

jog on
d998


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## rederob (7 September 2007)

ducati
Your pe data supported my case nicely.

My personal investments in BHP can be called whatever, and I guess I'm the only one that really cares about the outcomes.  I believe that it's useful for anyone investing to compare what they have achieved with those others who suggest a more profitable path was possible.

I'm not sure why you would criticise some earlier statements in this thread that regarded getting into BHP near $30 was relatively safe, when clearly it has proved profitable to boot.

Given you regard BHP as doomed, and you fancy yourself as a dab hand with Elliott waves, perhaps a chart with timeframes could educate us to your estimations of "when" and "how low".

I guess asking you to keep it short and to the point is a tall order.
But you could always try.


----------



## ducati916 (7 September 2007)

rederob said:


> ducati
> Your pe data supported my case nicely.
> *Nonsense*
> 
> ...



*Strange, in a previous post you complained that my "opinions" were unsubstantiated and that you required some argument or factual basis. Looks like your opinion fluctuates to suit*


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## reece55 (8 September 2007)

Double top anyone????

I think there is a high chance that this is going to be a top price for BHP for some time to come. It has put up a valiant effort to shrug off the US, but I think it is inevitable that a down turn in the US will depress BHP's share price (and indeed all share prices).

Complete EW to a wave 5 at about 39.80 or so. It's been a fantastic ride, but I think it's time to hit the eject button on this baby. The PE may be cheap, but earnings at this point in the economic cycle for BHP are likely to be at a peak.

Unbelievably, the target if the 32.00 fails is $24!!!!! I'm not saying it will go that far, but if someone said in Jan that it was going to go from 24 to 39 in 9 months, you probably would have laughed!

All the best trading.

Cheers


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## rederob (8 September 2007)

ducati916;120130 said:


> As you know I am an Elliot Wave afficinado, with a Doctorate based on the research presented in relation to the applicability of EW. to econometric models of bank NPL's & interest rates.
> By my count, BHP is doomed.
> jog on
> d998






> Given you regard BHP as doomed, and you fancy yourself as a dab hand with Elliott waves, perhaps a chart with timeframes could educate us to your estimations of "when" and "how low".
> *Never mentioned Elliott waves*
> ducati



Adding lies to your repertoire advances your credibility.

To debunk yet another of your "nonsense" replies, your data on pes shows that in near subsequent years, as the pe declines, the subsequent year's profit for "holding" BHP increases.
When the commodity cycle turns down, it's time to quit BHP.
But only if its energy assets are unable to compensate for declines in its metals assets.

Your point about an overvalued entry not being "safe" is not valid if the assumptions supporting it are unsound.  In this case we are enjoying a bull market for most commodities, with cyclical record prices for metals being regularly achieved.  People who are unable to see this, or just wish to present a counter view because they can, will clearly not be benefiting from trading this equity.

There is a saying, "the proof of the pudding is in the eating".  This is hindsight proof. 
I know the ingredients are still in place, and the cooking conditions are right.
So I think the BHP pudding will taste OK next year, but there are no guarantees.
With the benefit of hindsight, and a little foresight, investors and traders may have another 12 months on BHP.
However, as BHP's pe is outside my target range - way too high at present - I'm prepared to give reece's double top thesis some credibility in the near term.


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## gregcourageous (8 September 2007)

With the dow dropping substantially and BHP hitting that 100% Fibonacci line, i think we could see a nice drop over the next week... back to around the 61.8% mark, seems to be a _little _support there. That last "hanging man" candle seems to indicate a reversal as well... Could be worth a short first thing Monday. 

Thoughts anyone?


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## kerosam (8 September 2007)

i used the bollinger bands & it appears that the closing is on the high end  of band without extra ordinary high volumes. might retrace downwards next week. 

have a look at WPL, quite similar.

short both on friday.


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## Captain_Chaza (8 September 2007)

gregcourageous said:


> With the dow dropping substantially and BHP hitting that 100% Fibonacci line, i think we could see a nice drop over the next week... back to around the 61.8% mark, seems to be a _little _support there. That last "hanging man" candle seems to indicate a reversal as well... Could be worth a short first thing Monday.
> 
> Thoughts anyone?




One does not need to be a Rhodes Scholar to Know what will happen on Monday's open

Where to from there ?


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## BSD (9 September 2007)

ducati916 said:


> If you don't think that BHP is *cheap at these levels* then how do you reconcile your later statement that BHP is *very attractive purchase when the Chinaphobes and Americans get all worried and sell their 'risky resources shares' to buy USD backed treasuries at 3.5%.
> *
> 
> The two statements seem to be in contradiction to one another.




No, they don't. 

At A$38 per share they are not cheap. 

But, when the Americans and others who cannot see/believe that we are in the midst of a sustained bull market in commodities and energy created by massive increases in real demand from developing economies and a limited supply response - BHP gets sold-off aggressively. 

Last year the fear mongers knocked the price down to $24, this year low $30 region. 

Great opportunities that have provided excellent profits.


I remain very confident in my forecast for iron ore prices. Seeing you believe I am being excessively bullish - what are you expecting, a fall?

Copper is forecast to be in deficit for another 18 months. 

Oil is holding $70 very easy at the moment. 

How many large copper mines (150,000tnpa) are coming into production next year? How many jumbo oil fields?

Global demand for steel, copper and energy is not going down. 

So where is the end of this 'cycle' we keep hearing we are at the top-of?


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## gfresh (9 September 2007)

.. don't forget uranium and olympic dam

there are 34 reactors under construction now, with an expected 60 reactors to come on worldwide over the next 15 years. source: http://www.uic.com.au/nip19.htm

BHP is cheap IMO.. with what looks like going to be an outright fight to secure resources over the next 50 years, a company that pretty much has fingers in every resource you can think of, will do very well.


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## reece55 (9 September 2007)

gfresh said:


> .. don't forget uranium and olympic dam
> 
> there are 34 reactors under construction now, with an expected 60 reactors to come on worldwide over the next 15 years. source: http://www.uic.com.au/nip19.htm
> 
> BHP is cheap IMO.. with what looks like going to be an outright fight to secure resources over the next 50 years, a company that pretty much has fingers in every resource you can think of, will do very well.




Point taken gfresh re olympic dam, it is a word class mine and the long term U story is a good one, but I guess it depends on what investment timeline is - 50 years is a long to wait for a return on a share....

But cheap relative to it's earnings? I think fundamentally at the stage of the business cycle we are in, it is looking exceedingly expensive..... Just my opinion though, there are plenty of others to go with on this thread!

Cheers


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## ducati916 (10 September 2007)

rederob said:


> Adding lies to your repertoire advances your credibility.
> *It would seem that you have trouble distinguishing a facetious statement.*
> 
> To debunk yet another of your "nonsense" replies, your data on pes shows that in near subsequent years, as the pe declines, the subsequent year's profit for "holding" BHP increases.
> ...




*"Ingredients" a rather imprecise term when making a case for an investment, the rest of your statements are simply *speculative*. In speculation, you may be correct, or you may be incorrect, that is the nature of speculation. BHP however has been touted as a solid Blue Chip investment stock @ these prices. You are not providing any analysis for this viewpoint, simply speculation*


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## rederob (10 September 2007)

ducati916 said:


> *"Ingredients" a rather imprecise term when making a case for an investment, the rest of your statements are simply *speculative*. In speculation, you may be correct, or you may be incorrect, that is the nature of speculation. BHP however has been touted as a solid Blue Chip investment stock @ these prices. You are not providing any analysis for this viewpoint, simply speculation*



ducati
I forgave your inability to spell aficionado, and your incorrect claim over how numskull may be spelt.
But on BHP there is nothing in your analysis to date that will have enabled anyone to profit from following your posts.

In relation to BSD's post on iron ore pricing, your reply ignores the present reality of spot iron ore prices - and dry bulk shipping rates - rising markedly.  

You need to come to grips with your inability to undertake "fundamental analysis" and perhaps pursue a more suitable path.  Might I suggest comedy.  I have certainly enjoyed a good many laughs here.


----------



## ducati916 (10 September 2007)

rederob said:


> ducati
> I forgave your inability to spell aficionado, and your incorrect claim over how numskull may be spelt.
> But on BHP there is nothing in your analysis to date that will have enabled anyone to profit from following your posts.
> *In regards to aficionado and it's spelling, I concede the error. In regards to "numskull" we have a dual spelling...Main Entry: num·skull
> ...




*Of course, your responses almost invariably focus on the personality issue, very rarely is any data or analysis provided. I notice in this post the evidence of analysis that you offer are; 2 spelling mistakes, one of which turns out not to be a spelling mistake at all.*


----------



## ducati916 (10 September 2007)

*BSD*

I would argue that there is indeed a contradiction.
If at $38 they are not cheap, then selling BHP would be rational?

With relation to industrial metals, yes, I am expecting a fall. I am expecting a fall on the following basis;
*If the US enters recession, which looks increasingly likely, then demand from the US will fall for industrial metals. If demand falls [significantly] or otherwise, I would expect lower prices.

*If the falling demand for a variety of products from China to the US falls as the US enters recession, what will happen to the growth curve in China?
*rise
*stable
*fall
In 2/3 scenario's the outcome for China is negative. Thus, I would again expect falling prices.

What evidence. Industrial metals are correlated to the economic cycle and correlate to rising [falling] interest rates. Interest rates are rising worldwide and will continue to rise. Thus, your industrial commodity bull market is threatened via the economic cycle.


----------



## rederob (10 September 2007)

ducati916 said:


> *Of course, your responses almost invariably focus on the personality issue, very rarely is any data or analysis provided. I notice in this post the evidence of analysis that you offer are; 2 spelling mistakes, one of which turns out not to be a spelling mistake at all.*




ducati
Others can do the homework needed to convince themselves one way or another.
Others can look at the kitco 5 year charts of metal supply, and correlate that information with present metal prices.
Some things are patently obvious.
Others might also like to look at both the long term price contracts for iron ore and compare these to prevailing spot prices, and the spot price trend.
I raised this point in my post, but you chose to deal with whatever suits your inability to acknowledge market realities.
The baltic dry index is another source of information fundamental to appreciating global bulk commodity transport trends (again, I mentioned .  I have included a snapshot below for those interested.
The data shows a rising trend of almost inconceivable proportions given the rate that new ships have hit the oceans in recent years.
And guess where most of the bulk commodities end up?
75% of the world's 20 busiest ports are in Asia, including 50% in China.
The US accounts for only 15% of the top 20 ports - possibly fewer given the data I used from Wiki was 2 years old.
Although US financial concerns have a global footprint, US industrial dominance has waned to the extent that China now surpasses it in many areas of consumption and production - most especially in commodity sectors.
Again, this is not a recent trend:  It's well established and there is very little chance in the foreseeable future that it will change.


----------



## ducati916 (10 September 2007)

*rederob*



> Although US financial concerns have a global footprint, US industrial dominance has waned to the extent that China now surpasses it in many areas of consumption and production - most especially in commodity sectors.
> Again, this is not a recent trend: It's well established and there is very little chance in the foreseeable future that it will change.




China 
GDP, current prices 
US dollars | Billions  percent change  
  1980    301.51    
  1981    285.27   -5.4%  
  1982    279.77   -1.9%  
  1983    300.38   7.4%  
  1984    309.09   2.9%  
  1985    305.26   -1.2%  
  1986    295.48   -3.2%  
  1987    321.39   8.8%  
  1988    401.07   24.8%  
  1989    449.10   12.0%  
  1990    387.77   -13.7%  
  1991    406.09   4.7%  
  1992    483.05   19.0%  
  1993    601.08   24.4%  
  1994    542.53   -9.7%  
  1995    700.22   29.1%  
  1996    816.41   16.6%  
  1997    898.24   10.0%  
  1998    946.32   5.4%  
  1999    991.36   4.8%  
  2000    1080.74   9.0%  
  2001    1175.72   8.8%  
  2002    1270.67   8.1%  
  2003    1416.60   11.5%  
  2004    1649.39   16.4%  
  2005    1843.12   11.7%  
  2006    2040.33   10.7%  

United States 
GDP, current prices 
US dollars | Billions  percent change  
  1980    2789.5    
  1981    3128.4   12.1%  
  1982    3255.0   4.0%  
  1983    3536.7   8.7%  
  1984    3933.2   11.2%  
  1985    4220.2   7.3%  
  1986    4462.8   5.7%  
  1987    4739.5   6.2%  
  1988    5103.8   7.7%  
  1989    5484.4   7.5%  
  1990    5803.1   5.8%  
  1991    5995.9   3.3%  
  1992    6337.8   5.7%  
  1993    6657.4   5.0%  
  1994    7072.2   6.2%  
  1995    7397.6   4.6%  
  1996    7816.8   5.7%  
  1997    8304.3   6.2%  
  1998    8747.0   5.3%  
  1999    9268.4   6.0%  
  2000    9817.0   5.9%  
  2001    10128.0   3.2%  
  2002    10487.0   3.5%  
  2003    11004.0   4.9%  
  2004    11733.5   6.6%  
  2005    12438.9   6.0%  
  2006    13152.7   5.7%  

The US still dwarfs China in GDP. Thus if the US enters a significant recession, the fall in demand for commodities [specifically] industrial metals, steel, etc will also be significant. Significant enough to suggest that prices could fall.

The first three charts are of US demand for industrial metals, iron & steel, and building materials

Additionaly, you can see the effect of interest rates on the shipping rates. The new shipping will in a falling price of commodities market exert the same competitive pricing within the shipping industry as they lower prices to compete for business.


----------



## Knobby22 (10 September 2007)

The ideal scenario for BHP Billiton is that commodity prices do fall, possibly as per Ducat's scenario of a US recession - partially.
This will stimie the startups and make capital harder to get, reducing competition and slowing the mineral supply increase. 

This will allow the boom to continue longer allowing the BHP huge profits to continue.

It would also make Rio susceptible to takeover from BHP as it would then be obvious that they paid too much for the aluminium assets.

Note: What is good for BHP may not be good for the other mining companies.


----------



## rederob (10 September 2007)

ducati916 said:


> *rederob*
> The US still dwarfs China in GDP. Thus if the US enters a significant recession, the fall in demand for commodities [specifically] industrial metals, steel, etc will also be significant. Significant enough to suggest that prices could fall.
> Additionally, you can see the effect of interest rates on the shipping rates. The new shipping will in a falling price of commodities market exert the same competitive pricing within the shipping industry as they lower prices to compete for business.




ducati
GDP is a poor proxy for "consumption".
This link - deliberately a few years old - provides some data on China/US comparative consumption:
http://www.earth-policy.org/Updates/Update45.htm
Since then, China has now added most base metals to its portfolio of "greatest global consumer of...."

With respect to your chart comparing interest rates with the Baltic Dry Index, the correlation coefficient is barely supportive in your chosen time period.  Not only is there no leading or lagged indicator effect, opposite trends can run for significant periods, suggesting no reliability can be attributed to the approach.

It would be foolish to ignore the potential impact of a US-led recession on the rest of the world.  But BHP will not be Robinson Crusoe in this event.


----------



## ducati916 (11 September 2007)

*rederob*

Deliberately out of date........
All the data from China is out of date. This is part of the problem with any analysis from China, getting accurate, reasonably up to date data.

These two paragraphs are interesting;



> China’s eclipse of the United States as a consumer nation should be seen as another milestone along the path of its evolution as a world economic leader. Its record-high domestic savings and its huge trade surplus with the United States are but two of the more visible manifestations of its economic strength. It is now China, along with Japan, that is buying the U.S. treasury securities that enable the United States to run the largest fiscal deficit in history.
> 
> The United States, the world’s leading debtor nation, is now heavily dependent on Chinese capital to underwrite its fast-growing debt. If China ever decides to divert this capital surplus elsewhere, either to internal investment or to the development of oil, gas, and mineral resources elsewhere in the world, the U.S. economy will be in trouble.




The problem of course is that per capita annual income [as stated in this article] US is 7:1 in comparison.

China has been "funding" US consumption. The US has been consuming an enormous quantity of Chinese exports. Call the US portion *X1*

[If] and when the US goes into into recession you have the following;
*US consumption of commodities falls "X2*
*US consumption of Chinese commodities falls by *X1*

Thus world demand for commodities falls by  X2 + X1 

The next issue, *employment*
China already has an employment problem.
Should US demand create job losses of "Y1* what impact on the economy from a consumption, savings consideration?

Chinese Banks are notoriously bad [by world standards] Although saying that, several world Banks have been exposed as having been optimistic with regard to their Balance Sheets. [10 = good 0 = bankrupt]

On all Banking ratio's, Chinese Banks are very poor. So poor that to initially float them to the market the government had to repair their Balance Sheets.

The point being, that internal growth, excluding foreign capital inflows, must be generated via the banking system. This system is at danger of a severe credit contraction in the same way that the US is experiencing currently.

Chinese companies rely primarily on equity capital for expansion. Two main reasons; firstly, the equity markets are much better developed than the Bond market, which is practically non-existent and the Banks are currently over-leveraged.

Thus, the very active IPO market and sales of additional stock. This has actually reduced the debt component in the capital structure, which is good, however, it leaves businesses vulnerable to business cycle downturns as equity capital goes missing and the banks cannot seemingly pick up the short-fall.

Thus, the US could trigger a massive reaction within the Chinese economy should they move into recession. It's not only the US though, Europe is also watching closely the fallout of housing within their own economies, UK, Spain are two examples.

China is not a mature enough economy to bail out the world in the face of a global recession, which this one is starting to look like. China hsa based it's growth on exports, not consuming it's own production which has been very low, only some 40%+


----------



## rederob (14 September 2007)

ducati
Nobody will deny that a recession is always a possibility.
I have little faith in the US economy going anywhere but down.
However, the present subprime "crisis" is not yet proving the catalyst some thought it may.
It's also interesting to note the intervention of central banks across continents - something I haven't seen before.
Is this new intervention indicative of an ability to manufacture a "soft landing" should a liquidity crisis loom?
The jury is still out!

Many of the points you make have been made by the doom and gloom merchants for at least 4 years, and still no global bear market is in sight.
Nor is there any change in gear from China's flat out growth rates.

While it may be the case that "financially" China does not have the clout to nullify the impact of a possible US meltdown, I would argue that a new consumption paradigm has moved the well established goal posts of economic fundamentalism.
That is, to sate the hard and soft commodity needs of emerging BRIC nations will require levels of consumption that are not only unprecedented, they are barely able to be met from present global reserves.

BHP sits well in this environment.
And is better placed than most of its competitors to rally after any period of market malaise.


----------



## ducati916 (17 September 2007)

rederob said:


> ducati
> Nobody will deny that a recession is always a possibility.
> I have little faith in the US economy going anywhere but down.
> However, the present subprime "crisis" is not yet proving the catalyst some thought it may.
> ...




*BHP may well be superior to it's competitors, no argument. However, the current valuation of BHP is pricing in a continuation of the current commodity bull market, if that conclusion proves to be false, the share-price of BHP could revalue lower.*


----------



## rederob (17 September 2007)

ducati
The BRICs are indeed consumption economies.
While China is clearly a manufacturing behemoth, it is also consuming the lion's share of its commodity imports - not just copper and steel, but foodstuffs.
It won't be too long before China overtakes the US in annual automobile numbers added to their roads, although the US will be the dominant oil consumer for at least the next 15 years.
What data is telling you otherwise?
It seems that some fools can't see the writing on the Great Wall.


----------



## The Once-ler (17 September 2007)

ducati916 said:


> *BHP may well be superior to it's competitors, no argument. However, the current valuation of BHP is pricing in a continuation of the current commodity bull market, if that conclusion proves to be false, the share-price of BHP could revalue lower.*




My old grandpa used to say,...

"If the dog hadn't of stopped it would have caught the rat".............


----------



## ducati916 (17 September 2007)

rederob said:


> ducati
> The BRICs are indeed consumption economies.
> 
> *Yes, they consume, but due to their inherent current relative poverty, not proportional to their function as a cheap manufacturing base for Western economies, principally the US.
> ...




*As per usual, your post is full of opinion, very light on data, and the usual personal references. If you have access to actual data, it would actually make interesting reading, rather than endless opinion supported by nothing.*


----------



## rederob (18 September 2007)

ducati
This is the BHP thread.
If you want to raise other matters exclusive of BHP, you can do it via another thread.
Your point about some of my posts being light on data is deliberately the case.
When your data proves my point, and you contend the opposite, there is little point adding more information: You will similarly recreate the data's "meaning" to suit yourself.

My reality here is simple.
BHP is in the superleague of hard commodity producers, and China is the superpower of global consumers.
If China cannot maintain its consuption patterns, perhaps because of an impending global recession, the warning bells will sound soon and loud.
Unless of course we all wake up tomorrow to nothing, or just don't wake at all.

I run off simple probabilities.
They place a trend continuation for BHP as a reasonable probability - from a long term perspective.
Then again, as Greenspan yesterday noted, the probability of a US recession perked up to around 30%, but he sees it less that 50%.

The Chinese save around 40% of their income.
Americans are in debt to the tune of $64,000 per taxpayer!
Some numbers and charts that present the dire state of US affairs:
http://www.earth-policy.org/Updates/2006/Update62_data.htm

The Chinese are increasing their rates of internal consumtion of manufactured goods at a very rapid pace. Despite their relatively low per capita incomes, in 2000 they overtook the US in ownership of fridges and tvs.  This year they will probably put more cars on the road than America.


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## vishalt (19 September 2007)

$40

please, keep speculating on how BHP is overvalued and going to collapse soon, its just going to sail higher the more you deny it LOL!

Rio should surge past all-time highs soon since they tend to track each other, $110 soon!


----------



## rederob (19 September 2007)

ducati916 said:


> *As per usual, your post is full of opinion, very light on data, and the usual personal references. If you have access to actual data, it would actually make interesting reading, rather than endless opinion supported by nothing.*



If we can rely on today's closing price of BHP as but one of the "data" samples, ducati might find that his longstanding analysis in this thread has been - not to put too fine a point on it - deficient.
Should BHP hit a further record high on Friday I will be seriously tempted to take profits.


----------



## Bush Trader (19 September 2007)

Next week will be an interesting one, as it corresponds with last years low of $24, so many of those parcels will be coming up to 12 months old and hence into CGT discount land.  I was only one of the many.


Cheers


BT


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## barnz2k (19 September 2007)

rederob said:


> Should BHP hit a further record high on Friday I will be seriously tempted to take profits.




I have been seriously thinking about this too. I couldnt be happier with my gains on bhp in close to 2 years. without it, my folio would be a lot lot worse.


----------



## The Mint Man (19 September 2007)

Hey guys,
As you may know OSH went up 11% the other day based on take over speculation.
My question to those of you who are in on BHP is, how likely do you think it is that BHP would be looking at OSH as a possible take over?
The reason I ask is because the other night on Lateline Business Carlo Caiani from Caiani & Co said "BHP Billiton, among others, had been looking at it for a while. We're surprised actually it hasn't gone before."
Any feedback would be appreciated.
Heres a video from lateline business - http://www.abc.net.au/reslib/200709/r184144_683326.asx
and heres the link to transcript - http://www.abc.net.au/lateline/business/items/200709/s2035796.htm

Cheers


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## rederob (19 September 2007)

Minty
My view is that OSH is not a large enougher oil/gas player to fit BHP's resource-base standard.
My view has been for some years now that WPL would be in BHP's sights.
However, I suspect that the present bull run in oil will catapult WPL out of range - I have a near term price target of $50 for WPL and any takeover speculation (were it to come from BHP) - would add another 20%: Too expensive!


----------



## GREENS (20 September 2007)

Looks like it could be another strong performance by the big blue-chip today (i.e. as long as the run yesterday did not factor in a likely rise in metals overnight as a result of the fed cut). 
•BHP up 2.67% in US
•Dow (0.5%) & FTSE (2.8%) both up overnight 
•Cu up 3.87% to $US3.58/lb, Ni up a whopping 9.39% to $US15.07/lb and Brent Crude up slightly.


----------



## bigdog (20 September 2007)

BHP is doing great first up this morning UP $41.31 +$0.87 +2.15% with high of $41.50

 BHP   	BHP Company Research  	 $41.31  	   	  +$0.87  	  +2.15%   	  	 	 15,938,771 shares 	 $661,266,617  	 20-Sep 10:03:53


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## vishalt (20 September 2007)

Its totally gonna collapse soon, 

BHP is over-valued and deserves to be $5 a share even though its going to be printing money out for the next 15 years..











/end sarcasm


----------



## rederob (20 September 2007)

ducati916 said:


> *Exports: [CIA Factbook]
> $974 billion f.o.b. (2006 est.)
> Exports - commodities:
> machinery and equipment, plastics, optical and medical equipment, iron and steel
> ...



I posted earlier that ducati's analysis was "deficient".
In the above example you can see that its exports to the US are a mere 5% greater than exports to Hong Kong.
The more intelligent analyst will have quickly picked up the fact that Hong Kong is part of China.  That is not to say the data is not reliable - it is.
But ducati is incapable of fair or reasonable analysis.
He believes that the US is the key to Chinese prosperity.  Yet the data he relies on (CIA Factbook) apparently did not tell him that 47% of exports were to Asia, and 22% were to Europe.
So when ducati says *the surplus, as we know is largely generated by the US* he either was lying, or was incapable of understanding the available data.
For those interested, these links are useful:
http://www.delchn.cec.eu.int/en/eu_china_wto/12.2006.World.xls
http://www.delchn.cec.eu.int/en/eu_china_wto/EU China Trade Statistics.htm
http://www.china.org.cn/e-company/web1.htm
Had he gone a step further he would have noticed that the rate of change in exports was greater for Europe than the US, to the extent that extrapolation of the data suggest that in 2007 Europe will have replaced the US in export dominance.

Let's now place BHP into this context.
BHP presently derives 20% of its sales revenue from China, about 25% from Europe, and around 5% from the US. Australia is more important than the US for BHP's revenue stream (Japan is twice as important as the US).
China and India are becoming increasingly important to BHP, at the expense of all other trading partners.
The US is but a small bit player as far as BHP is concerned.

That is not to say the US is not important in other regards.
BHP's commodities are USD denominated and every one cent decrease in value of the USD knocks about US$60m off BHP's bottom line.
Apart from reserve currency status, the US continues to dominate global financial markets.  So glitches like the sub-prime fiasco, and an impending recession will have global ramifications.
Other threads canvas those themes in more detail.


----------



## vishalt (20 September 2007)

Why are our mining companies earnings generally denominated in USD?

Seems a bit silly to me as that currency is getting weaker and weaker.


----------



## michael_selway (20 September 2007)

vishalt said:


> Why are our mining companies earnings generally denominated in USD?
> 
> Seems a bit silly to me as that currency is getting weaker and weaker.




Because the commodities markets trade in USD e.g. basemetals, precious metals, oil, coal, uranium, iron ore etc?

thx

MS

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 275.0 327.2 361.2 331.6 
DPS 55.4 64.4 72.8 75.1 *


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## rederob (20 September 2007)

michael_selway said:


> Because the commodities markets trade in USD e.g. basemetals, precious metals, oil, coal, uranium, iron ore etc?
> 
> thx
> 
> ...



MS
TOCOM?
SHFE?
WCE?
NMCE?
None of above trade in USDs, and there are many more I have not mentioned.
Would you like to try again?


----------



## barnz2k (21 September 2007)

while I still think the future earnings may stay strong, my finger is hovering over the sell button. 
Now that im in London though I cant watch it cause im sleeping!


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## vishalt (21 September 2007)

barnz2k said:


> while I still think the future earnings may stay strong, my finger is hovering over the sell button.
> Now that im in London though I cant watch it cause im sleeping!



remember the time BHP was at $20 and looked too strong? well its @ $40 now, looking strong, still printing massive amounts of money, and its given a 100% return on US ADR's as opposed to the 60% on the ASX. I've noticed the ASX tends to catch up to the ADR's, just hold onto it lol, itll be $50/$60 by halfway next year IMO, i'm certainly pursuing it in Rio Tinto


----------



## rostov (22 September 2007)

BSD said:


> Perhaps valuation and treasury management techniques have moved a little since Graham and Co created these 'rules of thumb'.
> 
> We aren't valuing a corner-store here.




Hi BSD,

  I've given your post a lot of thought, and have since done a litle more than Graham's litmus test to value a company.

  The nagging question is this : what is the *value* of BHP?

  Not the price. Value.

  From the value, you can then determine, with one's calculate assumptions, how over or undervalued BHP is.

  Here's a few assumptions : I hold BHP for 10 years, and I look at BHP's earnings for the past 10 years. My expected Rate of Return is 15% p.a. holding BHP for these 10 years. And I'm using a discount rate (pessimistic) of 7.25% -- that of the Australian gov bond yield with a little more added to it. 

  Now. Using Ducati's concerns with accounting (I went through the balance sheets and cash flows with the ANN as well), I discount, very heavily, the 2007 EPS and also normalize the EPS in 1999 so that the EPS difference from 1999 to 2000 is not 400% (!). I then tabulate 3 10-year histories of BHP : Their past EPS, P/E, dividend %. I then tabulate their 10-year _forward_ of their EPS weighted by their discount rate.

  In short, BHP is underpriced by 23.52%. Maximum price I would pay for a share of BHP to obtain 15% rate of return over 10 years is $47.91 (current price as of time of writing is $38.79). Current Rate of return is 17.11%.

  Even with very pessimistic EPS from the 2007 annual and normalization of the EPS at 1999, I did not go through the previous *9* years of annual reports with ducati's deligence to reduce(?)/increase each year's EPS, so I took at face value what Huntley provided.

  But because it fit my profile of 10 year hold for 15% (at least) of rate of return, I will still buy BHP, and be prepared for fluctuations of at least 50% decrease over 10 years.

  Having said that, I am extremely worried by the accounting practices of BHP, especially those highlighted by ducati and published. Without such dodgy practices, the EPS already looks nice enough, and one can only guess why they chose to do so (hide their intent in their ANN). Further worries are their working asset and liability ratios.

  This worry can be substantiated in my valuation of BHP as well. In the 2008 annual report, *if the correct* (meaning -- going through the bal and cashflow and correctly pinpoint what actual profits are) *EPS is only 11% more than 2007's* (instead of the average of 27.4%), then BHP would already be just about $1 above what I would pay for a 10 year hold @ 15% RR.

  I will be watching their 1/2 year report very, very closely.

  Question : I would like to compare results with anyone who values companys using www.stockval.com.au . Apparently they use these same methods.

  Note : Do NOT discount worries about very solid looking companies, even if it's BHP. If one were to look at this article concerning the 1987 crash, one can read somewhere at the bottom (favourite parts in bold):



> One of the more compelling arguments for this theory was published in the Harvard Business Review in 1988. The authors—Avner Arbel, Steven Carvell, and Erik Postnieks (all professors at Cornell)—wrote that the crash “was almost nothing of what so many analysts, investors, and observers believe it was. Instead of a panic, it was the restoration of sobriety and rationality.” The authors applied a pricing formula developed by Benjamin Graham, the Columbia University scholar and mentor to Warren Buffett, to 1,800 publicly traded companies. They looked at the companies’ valuations a year before the crash, two weeks before, and the day after. Their model indicated the overall market (not just the 30 stocks of the Dow) was *overvalued by about 17 percent*. The Wilshire 5000, an index that encompasses virtually every publicly traded stock, *declined 18 percent*. The title of their article: “The Smart Crash of October 19th.”




  (I can not discount Graham's foundations. He covers periods even before 1929)


----------



## GREENS (24 September 2007)

Have been very tempted to take part profits the past few weeks, seems to be getting a little overstretched in my view and finally set a target of $42, which it hit today. Sold the majority of my BHP holdings for a profit of 79% excluding dividends and brokerage. Not a bad return for a solid blue-chip over 1.5years. Still holding a small parcel for any upside in metal prices and/or the run into the Christmas period and will look to re enter if it falls back into the low-mid 30’s.


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## KIWIKARLOS (24 September 2007)

BHP is expected to announce this week a resource upgrade for the Olympic Dam mine. Results are forecast to greatly expand the gold reserves and prove the site as the worlds largest known gold deposit.

$42 will be considered cheap in the medium term, Iron ore prices are going to rise very soon as they are renegotiating prices with the chinese BHP and RIO etc were after 40%! but i think it will be around 20-30%. With all these upcoming events i reckon it could be around $50 by years end.

Look at FMG they don't even produce ore yet and they are going nuts


----------



## vishalt (24 September 2007)

guys bhp is like way totally overvalued, the bears should come out of the woods and start shorting the company as its totally not sustainable lolol

Rio will hit $130 the way BHP is going


----------



## Nyden (24 September 2007)

vishalt said:


> guys bhp is like way totally overvalued, the bears should come out of the woods and start shorting the company as its totally not sustainable lolol
> 
> Rio will hit $130 the way BHP is going




Like, really? Way totally even?
What are you, 15?


What do you have to back this up? You don't know what the _potential_ gold upgrade may be.


----------



## rederob (24 September 2007)

KIWIKARLOS said:


> BHP is expected to announce this week a resource upgrade for the Olympic Dam mine. Results are forecast to greatly expand the gold reserves and prove the site as the worlds largest known gold deposit.
> 
> $42 will be considered cheap in the medium term, Iron ore prices are going to rise very soon as they are renegotiating prices with the chinese BHP and RIO etc were after 40%! but i think it will be around 20-30%. With all these upcoming events i reckon it could be around $50 by years end.
> 
> Look at FMG they don't even produce ore yet and they are going nuts



Looks like we can't rely on ducati for one of his famous valuations so that we can confirm $50 as a high probability.
However, with base metal prices maintaining higher than expected prices, for longer than expected, and with oil holding firmly over $80/bbl, the $50 dollar scenario might be in the rear vision mirror this time next year.
Therefore I have put the BHP "sell" button away for now, and will only resurrect it when quinquadigital dollars is normative.


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## BSD (24 September 2007)

Intos are upgrading assumed iron ore price moves to well above 25% 

Copper is rallying above $3.60 and remains in deficit 

Oil is at all time highs

Nickel is bouncing

Coking coal is following iron ore


*Sub-prime is a cut of steak as far as the Chinese are concerned. *


Forget the Gold at Olympic Dam - what about the 500,000tn of copper and 15,000tn of U308 per year from the expansion ?

US$7bn at current prices - puts the gold to shame

BHP is going up....


----------



## vishalt (24 September 2007)

Nyden said:


> Like, really? Way totally even?
> What are you, 15?
> 
> 
> What do you have to back this up? You don't know what the _potential_ gold upgrade may be.



You obviously haven't read this thread much, so go back a couple of pages and read the amount of bears who have neutral/sell opinions on BHP when clearly all you have to watch is the low P/E ratio and insatiable demand from the people who buy off BHP. 

My profits and technical analysis back me up so go to my blog if you want that.


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## Trader Paul (25 September 2007)

Hi folks,

BHP ..... just watching NBR ... yanks are saying,
that BHP will likely announce the world's biggest
gold resource in South Oz, later this week ... ???

..... and if you think BHP is expensive now, just
wait until 07-17032008 ... !~!

have a great day

paul


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## KIWIKARLOS (25 September 2007)

mate they are announcing the results from their Olympic dam studies tomorrow. On the agenda is upgrade of resource, remeber Olympic is mainly producing Copper and uranium with Gold and silver as by products so imagine how big the whole deposit upgrade could be if it is the largest gold deposit and its a secondary product!

Plus they are looking into converting it from an underground mine to an open pit mine at a cost of approx 6 bill. we will know 2morrow


----------



## Bush Trader (25 September 2007)

This may be my biggest ever trading mistake, however today I chose to sell the rumour and tommorrow I'll see if the fact should be bought back.  I have held this particular parcel for 12 months for a return of 79.84% before divideds and brokerage and that my only explionation for selling, anyway I'll need the money to buy expensive hay to feed my horses.


Cheers


BT


----------



## michael_selway (26 September 2007)

Bush Trader said:


> This may be my biggest ever trading mistake, however today I chose to sell the rumour and tommorrow I'll see if the fact should be bought back.  I have held this particular parcel for 12 months for a return of 79.84% before divideds and brokerage and that my only explionation for selling, anyway I'll need the money to buy expensive hay to feed my horses.
> 
> 
> Cheers
> ...




Not bad

http://www.smh.com.au/news/business...dam-shares-fall/2007/09/26/1190486354903.html

Btw does anyone know the difference between measured, indicated, inferred, proved, probable (exactly)?

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 275.0 320.7 354.9 326.8 
DPS 55.4 63.0 73.6 77.3 *

thx

MS


----------



## Bush Trader (26 September 2007)

Interesting Article

Cheers

BT

*Did BHP Disappoint?*
FN Arena News - September 26 2007 
By Greg Peel

Prior to this morning's release of BHP Billiton's (BHP) annual resource upgrade, the stock had leapt close to 9% in two days. While BHP has been ploughing its way back from a subprime bottom last month, and was bolstered by the news the Fed would save the US economy, the last two days have been somewhat surreal.
It all kicked off when the rumour went around that BHP had suddenly realised the gold deposit at Olympic Dam may actually be the biggest the world has ever seen. Olympic Dam already holds the world's largest known reserves of uranium, and the fourth largest reserves of copper, and now it seems its gold deposits might be three times bigger than first thought (which they would have to be to become the world's largest). Gold or no gold, the expectation was that BHP was going to announce something big at Olympic Dam either way.
The company reduced its proved and probable (2P) gold estimation from 9.2moz to 8.7moz. It did, however, increase the indicated gold resource from 17.5moz to 30.6moz.
In afternoon trade BHP's shares are off over 3% - still a healthy three-day return. There was a major upgrade to the Olympic Dam orebody - by 75% to 7.7 billion tonnes in fact - but the 2P reserves were only increased by a mere 7%.

Whatever may lie under the dust in South Australia, it won't be reaching the surface tomorrow. The reserve update provides the company with justification to proceed to a feasibility study to expand uranium operations. Uranium production has already been ear-marked for a tripling of production - over decades. Base metal production will also be increased, but gradually, in order to make the most of currently high prices.
Mine expansion takes an inordinately long period of time (if it didn't, commodity prices would never have reached this high), it is invariably beset with setbacks and delays, and capacity and labour constraints have led to surging costs.
BHP chairman Don Argus told Reuters he expects commodity prices to fall back to long-run marginal cost of supply in the medium term, while remaining historically high a volatile in the interim.
You'd be hard pressed to find someone who didn't think BHP was a worthwhile investment for the long term player. In the short term however, analysts have watched bemused as shares in the Big Australian have skyrocketed as the world worries about recession. The stock scores an 8/2/0 B/H/S ratio in the FNArena database, but the average 12-month price target stands at $43.32  - 3% below yesterday's high. Some analysts have already voiced their concern that investors were diving too hard and too fast into resource stocks since the Fed rate cut. Tomorrow's broker reports should make for interesting reading.


----------



## Whiskers (26 September 2007)

michael_selway said:


> Btw does anyone know the difference between measured, indicated, inferred, proved, probable (exactly)?




There is a reporting compliance code called JORC detailed at following link.

http://www.asx.com.au/ListingRules/appendices/App5a.doc


----------



## Bush Trader (26 September 2007)

michael_selway said:


> Btw does anyone know the difference between measured, indicated, inferred, proved, probable (exactly)?
> 
> thx
> 
> MS




See attached: Figure 1. General relationship between Exploration Results, Mineral Resources and Ore Reserves


An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed.

A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm geological and grade continuity.



An ‘Ore Reserve’ is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. Ore Reserves are sub-divided in order of increasing confidence into Probable Ore Reserves and Proved Ore Reserves.

A ‘Probable Ore Reserve’ is the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors These assessments demonstrate at the time of reporting that extraction could reasonably be justified.

A ‘Proved Ore Reserve’ is the economically mineable part of a Measured Mineral Resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified.


----------



## Bush Trader (26 September 2007)

Whiskers said:


> There is a reporting compliance code called JORC detailed at following link.
> 
> http://www.asx.com.au/ListingRules/appendices/App5a.doc




Sorry Whiskers, 


I was working on the answer while you posted.

Good Luck


Cheers


BT


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## Whiskers (27 September 2007)

Bush Trader said:


> Sorry Whiskers,
> 
> 
> I was working on the answer while you posted.
> ...




No worries Bush Trader. It's happened to me before too. Anyway michael and anyone else who were wondering have got the official jargon and a more brief laymans version as well now.


----------



## hacheln_mice (27 September 2007)

Looking to short this sucker soon.  It's meeting long term resistance and I just can't see it getting any more parabolic *on a weekly or monthly closing basis* regardless of the news (unless there is a BHP takeover offer for $50+).

Not long term bearish - just in it for a short to intermediate term swing.


----------



## vishalt (27 September 2007)

hacheln_mice said:


> Looking to short this sucker soon.  It's meeting long term resistance and I just can't see it getting any more parabolic *on a weekly or monthly closing basis* regardless of the news (unless there is a BHP takeover offer for $50+).
> 
> Not long term bearish - just in it for a short to intermediate term swing.




I don't know if this is advice or not but you're absoloutely right, BHP can get taken over at any moment if something like the Chinese government or Singapores Temasek Holdings or 3 of the major US security firms decide to have enough of our price raising bull****. 

You're better off shorting the index since BHP is worth only 50% or something of that lol (still a massive risk).


----------



## hacheln_mice (28 September 2007)

vishalt said:


> I don't know if this is advice or not but you're absoloutely right, BHP can get taken over at any moment if something like the Chinese government or Singapores Temasek Holdings or 3 of the major US security firms decide to have enough of our price raising bull****.
> 
> You're better off shorting the index since BHP is worth only 50% or something of that lol (still a massive risk).




Vishalt, you've mistaken what I've said about the takeover.  I think there is *ZERO risk of BHP actually being taken over by anyone*.  The main risk to shorts is in the spread of RUMORS in regards to a BHP takeover.  Regardless, I still think BHP is a decent short swing candidate, although it may try and hold at this lofty level for a week or two while undergoing distribution.

Mods, please delete the double post above.


----------



## Fab (28 September 2007)

I just bought a PUT on BHP ( BHPKZS) as I can see some strong resistance around $45. Depending on how the market go I believe BHP could go down for the short term. What do you think?


----------



## The Once-ler (28 September 2007)

You must have big nuts to short that thing. 

Why not short telstra, or a bank, or anything else?......................


----------



## Fab (29 September 2007)

The Once-ler said:


> You must have big nuts to short that thing.
> 
> Why not short telstra, or a bank, or anything else?......................




I agree it is a big call but I am like hacheln_mice  I think in the short term BHP might be a good short. I actually short it yesterday when it was trading at 44.95 as $45 is strong resistance point. It went down to $44.55 at closure so at the moment my short is doing well also commodities did not do too well overnight and the US stockmarket did not move much either so I am hoping for some profit taking at the beginning of next week which would allow me to sell then my short.
Don't get me wrong I love BHP and I think it will go higher and higher but at the moment it has run very hard so I think it might go down a bit in the short term.
The mini that I mentioned before is a highly leveraged put so if well play it can deliver very good short term return.
Also it gives some kind of insurance if the market goes down.

Does anyone know how BHP performed overnight in London ?


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## The Once-ler (29 September 2007)

Fab said:


> Does anyone know how BHP performed overnight in London ?




BHP was up 1.45% in London.

Good luck with it anyway.

Where the hell is Ducati..?? I need a good belly laugh.


----------



## vishalt (29 September 2007)

hacheln_mice said:


> Vishalt, you've mistaken what I've said about the takeover.  I think there is *ZERO risk of BHP actually being taken over by anyone*.
> 
> Mods, please delete the double post above.



Rofl okay, fight the trend and go for your life and short it!

Even the mightiest can fall to predators (hello Time Warner + AOL).


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## barnz2k (1 October 2007)

By BHP hitting new record high, I guess the new boss coming in is a positive step which people are backing then!
I didn't know much about it so im glad its positive start.


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## bigdog (2 October 2007)

barnz2k said:


> By BHP hitting new record high, I guess the new boss coming in is a positive step which people are backing then!
> I didn't know much about it so im glad its positive start.




BHP opens this morning up +$1.31     +2.94%

 BHP   	$45.81  	   	  +$1.31   	  +2.94%   	with high of  $45.87  	 $45.79  	 2,600,095 shares 	 $117,962,374 @ 	 02-Oct 10:01:03


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## hacheln_mice (4 October 2007)

vishalt said:


> Rofl okay, fight the trend and go for your life and short it!
> 
> Even the mightiest can fall to predators (hello Time Warner + AOL).




The trend has been to trade roughly within the channels, so I won't necessarily be fighting the trend.


----------



## MiningGuru (4 October 2007)

Chinese savings tipped for local resource stocks

John Garnaut Asia Economics Correspondent in Beijing
October 4, 2007
SMH

SOME of China's $7.3 trillion in private and official savings could soon be channelled to the Australian sharemarket, analysts predict. BHP Billiton and Rio Tinto are tipped to be prime targets for China's new $US200 billion sovereign wealth fund, while regulators are opening paths for Chinese private investors to punt on overseas sharemarkets.

Chinese investors have accumulated 38 trillion yuan ($5.7 trillion) in commercial bank deposits while the People's Bank of China, the central bank, holds another 10.5 trillion yuan ($1.6 trillion) in foreign exchange reserves.

Almost all of it is locked up in Chinese banks and US Treasuries, earning low or negative real returns. Chinese authorities are looking to loosen outward investment restrictions in order to reduce pressure on inflation, asset prices and the pegged renminbi currency.

On Saturday the Government launched the China Investment Corporation, with an initial mandate to increase returns on $US200 billion in foreign exchange holdings.

Vincent Chan, a strategist for Credit Suisse in Hong Kong, said the fund would be seeking 5 to 10 per cent stakes in resources companies that are levered to China's industrial boom, especially those in "friendly" countries where political backlashes are unlikely.

Mr Chan has put Russia's state-controlled oil and gas behemoth, Gazprom, at the top of the fund's likely shopping list, followed by BHP Billiton. Rio Tinto is at No.6.

"Having a stake in BHP and Rio Tinto are quite high on China's agenda," Mr Chan said. "There will be some paranoid voices in the process, but there is rather little that the Australian Government can do - at least openly. It's more or less all about price."

Chinese authorities have also introduced a series of pilot programs to allow individuals and institutions to invest offshore. One of them, dubbed the "through train", will allow some investors to punt on the Hong Kong sharemarket.

Hong Kong shares have risen almost 39 per cent since the idea was floated on August 20.

While the market apparently expects a flood of Chinese capital, the scheme has yet to begin and details have been obscured amid bureaucratic infighting.

Yu Yongding, an authoritative economist who stepped down from the central bank's monetary policy committee last year, recently warned Chinese officials that they could court disaster by opening outward investment channels before introducing a more flexible currency regime.

"Capital controls are China's last line of defence and cannot be eased until China's financial reforms are complete," he told the Herald. "Growth is cyclical and a sudden change in China's situation could prompt massive capital flight. If there are no restrictions to ease the blow at that point, the effects on China's economy will be disastrous."

But Singapore stocks have also been buoyed by rumours China would open investment channels there. Some analysts expect Chinese individuals and institutions will soon be authorised to spread as far as Australia.
Top of the list

* Gazprom

* BHP

* HSBC

* Toyota

* CVRD

* Rio Tinto

* Samsung Electronics

* Rosneft (Russia oil and gas)

* Lukoil (Russia oil and gas)

* POSCO (Korean steel)


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## vishalt (4 October 2007)

Finally BHP takes 2 days worth of a breather. 

Good opportunity to buy IMO (I certainly did) - especially with the Chinese poised to channel some of those trillion dollar funds into our assets. 

It'd be pretty cool if they decided to just say "Hey, lets just takeover BHP!" lol. 

Looking at the P/E (commsec research) 

BHP P/E ratio	*BHP 15.85	All ords 16.63	Sector 15.58	* it looks like BHP (and Rio is similar) are fairly in line with value. 

But if you look at the US & British shares of the company, they've returned 120%, 100% respectively, and we've done 80%. 

So I'm going to say speculatively that BHP still has a fair way to go, and with sustained strong earnings, high metal prices, project upgrades and Kloppers at the helm I'm confident that BHP can punch through $50 in the medium-term and then go on from there. 

What also looks interesting is the Canadian big cap (Teck Cominco) www.teckcominco.com - which is another diversified miner with a P/E of just 10! Anyone have any thoughts on that? I'd trade it but I'm not satisfied with CMC's margin and the AUD/CAD rates.


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## hacheln_mice (5 October 2007)

vishalt said:


> But if you look at the US & British shares of the company, they've returned 120%, 100% respectively, and we've done 80%.




I've got no doubt BHP has much further to go in the long term, especially with the collapsing US $ and countries with plenty of $ to throw around.


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## hacheln_mice (9 October 2007)

Another reason why I think BHP has made an intermediate top.  Either it trades sideways for awhile or pulls back a bit.


----------



## Fab (9 October 2007)

hacheln_mice said:


> Another reason why I think BHP has made an intermediate top.  Either it trades sideways for awhile or pulls back a bit.




I think BHP topped for the short term at $46. My hope is that it will drop to $40 -$42 for the short term as I have bought a put on BHP.


----------



## zt3000 (10 October 2007)

Extract from MiningNews.net

************

Base metals lead stocks down 

Colin Jacoby
Tuesday, 9 October 2007

RESOURCE stocks had a lacklustre day on the bourse after all base metal prices dropped overnight, while UBS has upped its target prices for the mining majors.

Both BHP Billiton and Rio Tinto ended the day in the red with BHP closing down 21c at $44.48, while Rio closed down $2.22 at $109.10.

UBS has increased its target prices for BHP to $52 from $45 and Rio from $128 from $118 on higher iron ore price forecasts.

As a result, analysts at UBS have lifted earnings forecasts for the mining majors with BHP's earnings tipped to increase 6% in 2008 and 10% in 2009, while Rio's tipped to increase 10% in 2008 and 12% in 2009.


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## Bush Trader (16 October 2007)

Some interesting comments

Cheers

BT

Merrills currently has a Neutral rating on BHP (and thus no target) and a Buy on Rio (target $120.00). But the analysts this morning have released a report which applies reverse logic - effectively estimating at what price various commodities would have to remain at - in perpetuity - to justify various valuations.

Current valuation, by Merrills' calculation, would need the following prices (all in US$) to remain for ever: copper 3.08/lb, aluminium 1.10/lb, nickel 15/lb, iron ore 55% above JPY07, hot coking coal (HCC) 90/t, thermal coal (TC) 60/t and oil 70/bbl.

A valuation of $50 for BHP and $120 for Rio would require the following prices: copper 3.10/lb, aluminium 1.12/lb, nickel 15/lb, iron ore 55% above JPY07, HCC 100/t, TC 65/t and oil 70/bbl.

A valuation of $60 for BHP and $140 for Rio would require: copper 3.60/lb, aluminium 1.12/lb, nickel 15/lb, iron ore 55%, HCC 125/t, TC 100/t and oil 100/bbl.

Clearly, in making these calculations, Merrills has tried to keep things realistically possible. However, while the prices might be possible, the capacity for them to remain in perpetuity is where things get stretched. (Not the actual infinite nature of perpetuity, as earnings tend to zero on a discounting basis once you get out into time). In actual fact Merrills is expecting commodity prices ultimately to decline from current levels.


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## vishalt (16 October 2007)

lol merrill lynch are a bunch of hacks, they called this a bubble and said the commodities cycle ended in the mid-2005 correction and the february plunge this year and now they're suddenly neutral and buying Rio?


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## Bush Trader (16 October 2007)

vishalt said:


> lol merrill lynch are a bunch of hacks, they called this a bubble and said the commodities cycle ended in the mid-2005 correction and the february plunge this year and now they're suddenly neutral and buying Rio?





Firstly Vishault, they are not my comments and I neither agree nor disagree with them, merely posted them for those that are interested.  Whether or not Merills are hacks that fact of the matter is that Brokers (Macquarie is another) are beginning to re-rate the big miners, and there are people out there that heed the advice of these “hacks”.  

Secondly the critical part of the post was the valuation numbers in relation to commodity prices which should be noted:

A valuation of $50 for BHP and $120 for Rio would require the following prices: copper 3.10/lb, aluminium 1.12/lb, nickel 15/lb, iron ore 55% above JPY07, HCC 100/t, TC 65/t and oil 70/bbl.

A valuation of $60 for BHP and $140 for Rio would require: copper 3.60/lb, aluminium 1.12/lb, nickel 15/lb, iron ore 55%, HCC 125/t, TC 100/t and oil 100/bbl.

Thirdly I believe that fundamentals for the likes of BHP and RIO remain intact for the Mid Term, however the run has been strong since the August correction and when you think about the weight of the XAO represented by BHP any hiccups are going to have a large effect.

BHP has been a great stock for me, however I have always traded it on a contrarian basis, I have never accurately picked bottoms and have never been fortunate enough to pick the top, I have however made a lot of money out of the stock i.e. bought $24.50 sold $44.60 + dividends + franking credits neither the top nor the bottom over the 12 month trade, and this was done using a broker sentiment index. See attachment.



Cheers


BT


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## TERRAIN (16 October 2007)

Bush Trading 

Was wondering where you got that sort of information from?

Rob


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## Jimminy (16 October 2007)

Those assumptions are just that.

Most analysts had sell targets of $32.00 less than 9 months ago.


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## vishalt (16 October 2007)

Bush Trader said:


> Firstly Vishault, they are not my comments and I neither agree nor disagree with them, merely posted them for those that are interested.  Whether or not Merills are hacks that fact of the matter is that Brokers (Macquarie is another) are beginning to re-rate the big miners, and there are people out there that heed the advice of these “hacks”.



I respect it here to read for others and I'm only being fair by noting what they've said in the past. 

I think it's pretty embarrassing for a financial giant like them to come onto Bloomberg TV every 2nd day and say the "commodity boom is over" and the big diversifieds (BHP/Rio)  are going to "deplete in value by 40% over the year" and then change their mind about it, don't you think?


----------



## rederob (16 October 2007)

Bush Trader said:


> Secondly the critical part of the post was the valuation numbers in relation to commodity prices which should be noted:
> A valuation of $50 for BHP and $120 for Rio would require the following prices: copper 3.10/lb, aluminium 1.12/lb, nickel 15/lb, iron ore 55% above JPY07, HCC 100/t, TC 65/t and oil 70/bbl.
> A valuation of $60 for BHP and $140 for Rio would require: copper 3.60/lb, aluminium 1.12/lb, nickel 15/lb, iron ore 55%, HCC 125/t, TC 100/t and oil 100/bbl.
> Thirdly I believe that fundamentals for the likes of BHP and RIO remain intact for the Mid Term, however the run has been strong since the August correction and when you think about the weight of the XAO represented by BHP any hiccups are going to have a large effect.




Looks like BHP will sit closer to $60 next year than $50 at the present rate.
Only iron ore and oil are likely to drag out the painful ascent for those who keep trying to short it!


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## vishalt (16 October 2007)

rederob said:


> Looks like BHP will sit closer to $60 next year than $50 at the present rate.
> Only iron ore and oil are likely to drag out the painful ascent for those who keep trying to short it!



I wouldn't put the other base metals (Copper/Nickel etc) out of the game to make record highs just yet!

With Christmas around the corner and signs that the Fed will ease rates even more the US consumer should be on a purchasing spree.


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## Bush Trader (16 October 2007)

Jimminy said:


> Those assumptions are just that.
> 
> Most analysts had sell targets of $32.00 less than 9 months ago.




I agree totally, however the SP was lagging the price targets and it was rated a buy 9 times out of ten.  Brokers then upgraded price targets with high sustained commodity prices and revised earning forecasts, so yes it is an assumption, however a calculated one.  For me having a win means picking an earnings upgrade before the brokers publish it.

Cheers


BT


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## Bush Trader (16 October 2007)

TERRAIN said:


> Bush Trading
> 
> Was wondering where you got that sort of information from?
> 
> Rob




www.fnarena.com


Cheers


BT

................................................................................................................................................................................................................


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## Bush Trader (16 October 2007)

Bush Trader said:


> www.fnarena.com
> 
> 
> Cheers
> ...




I will repost the attachment of the Broker sentiment info.  When viewing in word go to "View" and then Click on "web layout" to see the document properly.


Cheers


BT


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## Knobby22 (19 October 2007)

Has everyone been selling out? It's gone quite on this thread.

Read the annual report last night and the incoming project stream can only be described as impressive.


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## overule (19 October 2007)

I have lost half of BHP's shares (very happy about that) but confident prices will still rise further.


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## overule (25 October 2007)

Hi All,

This week BHP has been pretty bad but i still have confident that BHP will rise sky-high in near future. 

What do you guys think ?

Thanks


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## vishalt (25 October 2007)

I think it'll drop a bit more and then consolidate for a while, its had an unstoppable run from $24. 

But yeah I can see it (and Rio) going much further with the whole commodities story, but maybe not as strongly thanks to the US dollar pretty much doomed now - every cent increase really squeezes the profits, I think they said $60 million per cent? Jesus thats a little over 1/2 billion per 5 cents. 

But I can see on charts commodity prices consolidating for a while now and I think they'll follow gold into uncharted territories by next year. 

I'm still accumulating Rio as it drops and shorting BHP as a hedge.


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## rederob (26 October 2007)

vishalt said:


> But yeah I can see it (and Rio) going much further with the whole commodities story, but maybe not as strongly thanks to the US dollar pretty much doomed now - every cent increase really squeezes the profits, I think they said $60 million per cent? Jesus thats a little over 1/2 billion per 5 cents.



Lets see:
$60m x 5 = $300m

So that's actually a* little over 1/2 billion per 10 cents*.
Maybe Wayne needs to open up a "maths" thread?


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## vishalt (27 October 2007)

yes maybe wayne does, then maybe we can get elves and fairies to teach us the magic of mathematics with magical wands and maybe we can also count the amount of times people have been wrong in calling a short on BHP and how much money they've lost?

not naming names


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## imaginator (5 November 2007)

WHATS HAPPENING TO BHP? 

The prices dropped dramaticly today. 

There was a trading halt, but no news out........


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## overule (5 November 2007)

Not only BHP.. The whole market is going crazy.

Expect market to be in this condition for a week or two.


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## Noskcid (7 November 2007)

, we will see in the time to come. Its slowly climbing back up now in the last 2 days but still have to wait and see.


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## vishalt (7 November 2007)

BHP solidly holding around its level as usual, always underperforms Rio in the short-term though, but solid


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## Fung (8 November 2007)

I am going to hold my BHP shares for another 1-2 years, just top up abit around 45 and bit more around high 43 low 44


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## hacheln_mice (8 November 2007)

vishalt said:


> maybe we can also count the amount of times people have been wrong in calling a short on BHP and how much money they've lost?
> 
> not naming names





My post here mentioned in the chart that there was limited upside beyond $46 for the *intermediate *term (not long term).  I sold out of my BHP holdings at the 45.7-46.5 and have not looked back since.  Frankly, the stock has gone nowhere since the start of October, and has in fact fallen below 46 more than it has risen above 46.

The 'herd' turns out to be wrong as usual.  Don't worry, I didn't lose money. 

First Fib support appears to be the 41.3-41.8 region, so I guess that will probably be the downside target IF $43 support is cracked.  Considering 43 held today, the stock will probably bounce within a range for the coming few days.

I'm LT still bullish on BHP, so I've got my buy orders lined up.


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## hector (8 November 2007)

hacheln_mice said:


> First Fib support appears to be the 41.3-41.8 region, so I guess that will probably be the downside target IF $43 support is cracked.  Considering 43 held today, the stock will probably bounce within a range for the coming few days.
> 
> I'm LT still bullish on BHP, so I've got my buy orders lined up.




Hi h_m,

I believe your summation to be correct and there is money to be made if range trading suits you. I'm having a shot at it and it's a bit 2 steps forward and 1 step back, but OK on balance. And I reckon BHP is likely to break through upwards rather than downwards. We'll just have to see what the rest of the world thinks.

Happy trading,

hector


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## Bush Trader (8 November 2007)

hector said:


> Hi h_m,
> 
> I believe your summation to be correct and there is money to be made if range trading suits you. I'm having a shot at it and it's a bit 2 steps forward and 1 step back, but OK on balance. And I reckon BHP is likely to break through upwards rather than downwards. We'll just have to see what the rest of the world thinks.
> 
> ...




And how much of the world has purchased it on margin?.........................................................................................

Cheers

BT


----------



## hector (8 November 2007)

Bush Trader said:


> And how much of the world has purchased it on margin?.........................................................................................
> 
> Cheers
> 
> BT




Ha! That includes me BT, so BHP better go up tomorrow or I will be walking around barefoot with my pockets turned out.

Cheers


----------



## Bush Trader (8 November 2007)

hector said:


> Ha! That includes me BT, so BHP better go up tomorrow or I will be walking around barefoot with my pockets turned out.
> 
> Cheers




You problably didn't purchase them at $47.50 on 85% leverage or worse on some unhedged CFD contract.


Cheers


BT


----------



## Bush Trader (8 November 2007)

Latest broker Ratings on BHP

Excuse the format

Cheers

BT

Broker Date Rating Recommendation Target Price % to Reach Target 

Citi  06-Nov-07  3  Hold, Medium Risk  $48.00  11.0%  
On the plus side the price outlook for thermal and metallurgical coal look good but this continues to be offset by capacity constraints. 
The result is no change to the broker's Hold rating. 


Merrill Lynch  05-Nov-07  3  Neutral, Medium Risk  -  -  

After a BHP site tour in the Hunter Valley, analysts made predictions about the coal business, saying that the NGIG terminal at Newcastle is unlikely to be open until 2011 Ã¢â‚¬“ this will influence BHPÃ¢â‚¬™s export volumes out of Newcastle. 
BHP Billiton continues to see a tight market for thermal coal due to infrastructure constraints and strong demand from China and India. Analysts suggest that an index like BHPÃ¢â‚¬™s energy coal price index, could give the company competitive advantage in the iron ore market. 


Macquarie  05-Nov-07  3  Neutral  $42.48  - 1.8%  

The broker has increased its 4Q07 oil price forecast to US$79.83/bbl and 1Q08 to US$76.00/bbl. These are 20% increases and clearly the broker is still holding out for a pullback, while acknowledging geopolitical tensions. 
Target rises from $41.41 to $42.48. 


UBS  05-Nov-07  1  Buy  $52.00  20.3%  

After the final site visit to New South Wales Coal and briefing on Energy coal, the broker envisages no material change to near term earnings but believes there is potential for upside to earnings beyond FY09 as capacity is lifted by new projects. 
O
verall, the broker has maintained the buy rating to reflect upside to pricing in thermal and coking coal, and iron ore. The broker has noted that recently Xstrata settled thermal coal contracts at US$78 per ton which is higher than its forecast of US$70 per ton for FY08. 


Credit Suisse  02-Nov-07  3  Neutral  $45.00  4.1%  

Analysts are still reporting from the Australian asset tour. They note for BHP's Bowen Basin operations India is much more a focus than for the iron ore business which is much more China oriented. 

Also, constraint issues in Queensland have more to do with rail capacity than port. This means BHP will be constrained like the rest of the industry, albeit to a lesser degree, the analysts believe, at least through 2010. 

No changes were made. 


JP Morgan  30-Oct-07  1  Overweight  $47.00  8.7%  

Following a site visit to the comapny's WA iron ore operations the broker notes the growth outlook for the division appears good, though higher costs are increasingly becoming an issue. 

ABN Amro  24-Oct-07  1  Buy  $51.13  18.2%  
Target $51.13 (was $51.22). The company's production report was a little below what the broker had expected, the result being a 5.5% cut to its earnings forecast for the current year. 
Despite this its Buy rating has been maintained given expected future production growth. 


Deutsche Bank  24-Oct-07  1  Buy  $46.30  7.1%  
September quarter production report showed a bit of a slow start into the new fiscal year, the analysts comment, but since most of it was related to maintenance it's no cause for alarm. 

The broker appears to be positive about 2008 price prospects for oil, copper, coal and iron ore and thus the Buy rating remains firmly in place. Projected strong cashflow and potential for capital return are two other reasons cited. 


Aspect Huntley  27-Apr-07  3  Downgrade to Hold from Accumulate  -  -  
Production for the quarter was marginally lower than expected but this is offset by higher commodity prices, so Aspect Huntley has lifted its earnings estimates slightly this year and by around 10% in FY08. 
It also suggests the stock is currently slightly better value than Rio Tinto (RIO) and has a better balance of commodities, but has downgraded its rating regardless. 




Last Change +/- Change % Volume 
$43.24 
8 Nov 2007  -1.6200  - 3.61% 24,830,685 
Open High Low 
$43.42  $43.65  $42.94


----------



## hacheln_mice (8 November 2007)

hector said:


> Hi h_m,
> 
> I believe your summation to be correct and there is money to be made if range trading suits you. I'm having a shot at it and it's a bit 2 steps forward and 1 step back, but OK on balance. And I reckon BHP is likely to break through upwards rather than downwards. We'll just have to see what the rest of the world thinks.
> 
> ...




I'm personally gonna wait it out and buy when it tags 41.3-41.8 because the fib retracement also coincides with a WEEKLY gap at the 41.5 level.


----------



## Bush Trader (8 November 2007)

hacheln_mice said:


> I'm personally gonna wait it out and buy when it tags 41.3-41.8 because the fib retracement also coincides with a WEEKLY gap at the 41.5 level.




Why not just wait for a sentiment shake out - take a look a the LME Copper price chart, and the fundamentalist comentaries on the red metal.  That should unnerve a few.


Cheers


BT


----------



## vishalt (8 November 2007)

finally BHP is getting some heavy selling, time to buy buy buy!

rumours of BHP taking over Rio came around today again, does anyone think thats even possible? itd require over $220 billion, both companies prices are high and after the sub-prime fallout yikes!


----------



## Fung (8 November 2007)

hector said:


> Ha! That includes me BT, so BHP better go up tomorrow or I will be walking around barefoot with my pockets turned out.
> 
> Cheers




I start regreting that I fill up the shares too early. Seems like I will need to flow on the river for a while, hope there's no waterfall

Maybe I am thinking too short-term


----------



## hacheln_mice (8 November 2007)

Well, given the BHP/RIO takeover news, I don't think I'll be seeing $41.5 anytime soon.  I reckon I've still got a shot at buying back below my selling price though.


----------



## M34N (8 November 2007)

hacheln_mice said:


> Well, given the BHP/RIO takeover news, I don't think I'll be seeing $41.5 anytime soon.  I reckon I've still got a shot at buying back below my selling price though.



Could go either way I reckon, watching the reaction on the FTSE tonight, it went from -3.5% pre-announcement, +3.5% after the announcement, then it went to -2% about 30-40 mins after that, and now it's basically flat again with a slight positive bias.

A lot may see it as a negative because it would require a LOT of money and with all this sub-prime mortgage problems in the US, who knows. But really, if anyone can afford to do a takeover like this, it's really only the resource stocks with the money and financial backing that can pull it off. Will be curious to see if any more details come out on who will help fund it, and how far the talks have gone between both RIO and BHP.


----------



## Jimminy (9 November 2007)

I think you'll see the perfect buying opportunity today for BHP....

The market will push BHP down and Rio up, yet the cost savings represented to BHP would be very very significant.  Interesting times ahead.

I don't think it will happen, and that Xstrata will be quivering in the corner.


----------



## Mr_T (9 November 2007)

This is scary stuff. 
Specifically what is frigtening here?

a) The fact that BHP wants to takeover via a scrip for scrip as opposed to cash. A company that values its shares tends to  raise the cash for a takeover rather than using scrip for scrip. Like BHP did with Western Mining - and what a good move that was, paying cash rather than its undervalued shares.

Is this a sign BHP management doesn't beleive its shares are undervalued?

b) There are few things more frightening than companies with too much money. Especially ones run by people who think that they just know how to spend it wisely.They wouldn't want to to do anything sensible like return the money to shareholders through higher dividends or share buyback (the latter option was a very successful one under the guidance of the brilliant Chip Goodyear - please come back!).

History is full of examples of companies with too much money squandering it, like Telstra under the guidance of Ziggy wasting all those billions on Richard Li's PCCW with views of world dominaton. Predictably went pear shaped.

c) Most (though not all) takeover end up with the predator overpaying, whether that be by shares or cash. One notable exception is BHP buying Western Mining, which was one of the steals of the century.

Just look at how TABCORP overpaid for Tab Ltd, and what has happened to its share price ever since - yes, there are many other factors that led to Tabcorp's problems, but this was a huge factor. 

Or how well has Daimler Chrysler done since its merger?

Again, every takeover/merger must be seen on its individual merits. Where is the evidence this one is different to most?

d) Are there any synergistic benefits here at all? Is there any evidence that 1 + 1 = 3 for these two companies? If not, then why would BHP bother buying RIO? Just return the surplus money in the form of higher divs/share buybacks, and if shareholders then want to buy RIO Tinto they can. At $110 instead of $130. Or at least they could have.

What synergistic benefits are there here? The main potential benefit I can see is it would give the merged entity the opportunity to have more control of the market share and hence price of certain commodities. But would world wide anti trust laws allow this? In other words, for those commodities where there are potential benfits for a merger, would be most likely to be ones where anit trust laws would apply and so the synergistic benefits would disappear.

Im happy to hear people disagreeing with me. As a matter of fact I encourage everyone to do so.


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## Jimminy (9 November 2007)

Mr_T said:


> What synergistic benefits are there here? The main potential benefit I can see is it would give the merged entity the opportunity to have more control of the market share and hence price of certain commodities.
> 
> Im happy to hear people disagreeing with me. As a matter of fact I encourage everyone to do so.




I might have read you wrong, but it sounds as though you find it difficult to see what synergies exist other than the price issue......

But on the anti-trust laws, in Europe which is where CVRD has a big presence I don't see a problem. Africa, with the mineral sands jv could be..

But the competition thing will be heated up by Korea and China - that's a given.

I believe there are real advantages in putting the two companies together, particularly because of the advantages of shared infrastructure in the Western Australian iron ore operations. I am cautious though as this could mean the loss of a rail-line in WA.... very bad. 

But the upside is with Rio.... BHP won't get them for under $150. They know that, Rio know that. BHP will have to throw some cash at them.

I'm a BHP shareholder - not sure how to feel on this. Excited for the long term, but now know there is more risk and less upside in the short term on this.


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## vishalt (9 November 2007)

What's frightening is the possibility of Rio ganging up with Teck Cominco/Xstrata/CVRD to buy out Rio Tinto and carve it up instead, I reckon that's scarier and possible!


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## overule (9 November 2007)

Where do you guys think of the BHP's SP is heading in the next month or so ? I am a long-term holder with BHP so i don't really care too much eventhough i incurred some losses (paper loss, ie) but would like to know.

Thanks


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## Captain_Chaza (9 November 2007)

overule said:


> Where do you guys think of the BHP's SP is heading in the next month or so ? I am a long-term holder with BHP so i don't really care too much eventhough i incurred some losses (paper loss, ie) but would like to know.
> 
> Thanks






Could  RIO now make a bid for BHP??
Stranger things have happened in the past

Sometimes it all depends on who has the better friends

Was it the small BPC that took over the much larger MAY a few tears ago?

Salute and Gods' speed


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## greenfs (9 November 2007)

My son - in - law is Rio junior staffer. His immediate opinion as handed down from higher above is that BHP has taken on 'Mission Impossible'. I think that this is partly reflected in the BHP share price movement today with the market commentators marking management (and the share price) down accordingly.

Havind said that I am sure that everyone will agree that Rio will now stay above $120. 

Also, we now know why BHP didn't get JBM.


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## legs (9 November 2007)

I dont know if it has been mentioned yet, as I am too lazy to go back thru the hundreds of posts, but how can the ACCC let this RIO takeover go ahead? Surely it would be against all that the ACCC is set up to protect?


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## Mr_T (9 November 2007)

legs said:


> I dont know if it has been mentioned yet, as I am too lazy to go back thru the hundreds of posts, but how can the ACCC let this RIO takeover go ahead? Surely it would be against all that the ACCC is set up to protect?



Not at all. The Trade Practices Act has exclusions for mergers/takeovers that are in the national interest. As BHP/Rio earn more of their money from exports, it is in the national interest for them to be able to get as good a price as possible for their goods.

In other words, since they are ripping off non-Australians, it's acceptable to the ACCC.

On the other hand, European anti trust laws might not allow it......


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## Mr_T (9 November 2007)

greenfs said:


> My son - in - law is Rio junior staffer. His immediate opinion as handed down from higher above is that BHP has taken on 'Mission Impossible'. I think that this is partly reflected in the BHP share price movement today with the market commentators marking management (and the share price) down accordingly.
> 
> Havind said that I am sure that everyone will agree that Rio will now stay above $120.
> 
> Also, we now know why BHP didn't get JBM.




I hope this is true. If I wanted RIO Tinto, I'd buy some shares in it. I don't need BHP to make the acquisitions for me at a higher price than I would pay.


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## Garpal Gumnut (10 November 2007)

This post follows on a discussion on the RIO thread about the cost of investing in high value shares, and my belief that in the not too distant future we will see BHP crack $70 and then $100 and yes in the next two to three years $140. I'm not a funnymentalist, more of a guttist with chartist tendencies, so I include this chart.

It follows BHP and RIO from 1997. It is a monthly bar chart. 

It is on a semilog scale for price, so the distance between $10 and $20 is the same as between $20 and $40. 

This not a bad way to look at high value shares as it takes the bias against spending a heap of money for just 100 shares out of the equation.

If you'd bought 100 RIO at $87 in August your profit would be $13100 - $8700 which is $4400, which is a 50% gain.  , no different than buying 10,000 shares in an 87 cent share, which goes up to $1.31.

So buying BHP at these prices is only a matter of deciding if it will increase in price following an acquisition/merger with RIO. 

I think it will. I hold both and would be more fearful of a reversal in RIO's price than in BHP's if the t/o is knocked back.

That is my gut feeling.

On the chart , when I stand a bit back on my verandah where the geckos congregate, from a distance,  it seems as if BHP has been doubling at a faster rate than RIO. The horizontal lines double from $4.375 up to $140.  

The trend line took off in mid 2003 for BHP a full 12 months before it did for RIO.  They parallel each other for most of the time observed back to 1997. However even though RIO has recently reasserted its 2 doubling box advantage over BHP, this is on takeover talk for the former and acquisition fears on the latter's price.

The chart for BHP shows nice uptrending higher highs and higher lows and appears healthy.

It took RIO 2.5 years to double from $30 to $60 from May 2003 to Nov 2005, yet only 10 months for BHP to double from $23.86 in January to $47.70 in October 2007. 

So BHP has doubling runs on the board, thus my optimism for BHP's price over the next few years, particularly with its trendline behaving as it has.

gg


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## overule (10 November 2007)

Great post! mate

I agree  that BHP has huge potential ahead so i will be filling up as it's dropping.  US Markets dropped overnight. Monday might be another great buy for BHP.


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## Garpal Gumnut (10 November 2007)

As befits a stock which over the past 10 years has tracked RIO so closely, I attempted to see if it had similar support and resistance lines to RIO. (see RIO thread for $23 pattern on that stock)

BHP appears to have had good support following resistance at $8, $16, $24, $32, $40 and $48. 

If it falls back to $40 I'll be adding to my holdings. Trading the range would seem to be the way to go if it becomes volatile, or hang in and buy if it goes ballistic

As my previous post says I expect it to hit $100 in the next 12-18months.

gg


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## Mr_T (11 November 2007)

BHP double in the next year? Possible but highly unlikely.

This would give it a P/E ratio of over 30. The only thing that would justify such a high P/E is strong expectations of extraordinary profit growths for the next few years.

Given that the general consensus is for moderate profit growth in the next year or so, I can't see how a P/E of 30 is in any way justified in BHP's case. 20 maybe...but not 30.

Of course it might get up to such a high price based on a speculative bubble, but as has been said before, if its not supported by fundamentals, it just won't stay there.


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## vishalt (11 November 2007)

Great post Garpal, I agree with your analysis but yeah $100 is extremely high on the enthusiasm scale. 

I think it depends on a lot of factors: 

1) Strong currency will eat into the profits, I think it will cause a bit of a slowdown in growth, we're in our tightening cycle while the US is loosening their rates. 

2) Commodity prices are still consolidating, they're still expensive at the moment but they need to go up more to negate the currency factor. 

3) If the US does slowdown, I believe it'll take our market down initially with it for a hefty correction, but I strong believe that we'll diverge and be able to shield against a US bear market because of China's demand. 

4) If BHP gulps Rio, the merging process will be very extensive, these companies are massive and have long histories - so we could see some extensive consolidation. 

5) If BHP gets a knockback I think we could both shares fall because institutions will pull out, before they go back again (just like Alcoa).

Based on current P/E ratios, Rio is 23, BHP is 16, that is a RIDICULOUS discount of nearly 30%, i.e *BHP right now from $42 should be trading at $56 to match Rio. 
*

If institutions/commentators/analysts truly believe Rio is worth that much in (given P/E) - and that its net profit declined 6% last year - I think BHP will after a while go ballistic. 

Another bid for Rio could see it go to $150, the P/E could shoot to like 25 or even 28, making BHP $60+ in that comparison, I think its looking very healthy!


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## Mr_T (11 November 2007)

vishalt said:


> Great post Garpal, I agree with your analysis but yeah $100 is extremely high on the enthusiasm scale.
> 
> I think it depends on a lot of factors:
> 
> ...




No no no no no. Rio's comparatively high P/E is due to BHP willing to pay so much for them. 

Rio is the one that is being overpaid - high P/E.

BHP is the one that is doing the overpaying - nothing to justify a high P/E. Arguably should even have a lower one due to overpaying.


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## vishalt (11 November 2007)

Mr_T said:


> No no no no no. Rio's comparatively high P/E is due to BHP willing to pay so much for them.
> 
> Rio is the one that is being overpaid - high P/E.
> 
> BHP is the one that is doing the overpaying - nothing to justify a high P/E. Arguably should even have a lower one due to overpaying.




Yes yes yes yes yes. You think BHP is "overpaying" for the business - I think that BHP is saying "here's how much we think you'll be worth soon, we'll give you your future value now, so lets merge". 

BHP believes that in time Rio will be worth $140+ in a few earnings time, equating to a P/E bump, if Rio could be worth that much what would happen to BHP, which is biggest and strongest?


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## rederob (11 November 2007)

Garpal
I enjoyed your enthusiastic approach to pricing BHP.
For those querying BHP's capacity to double in 12 months, just remember that it has done this already in the past 3 years.
BHP rose from $15.55 on 16May05 to $32.00 on 11May06 (on closing prices).
BHP fell 2 cents shorts of doubling on closing prices when it peaked on 18Oct07 at $47.70 after having come of its low of $23.86 on 8Jan07.

Could BHP sustain a doubled price if it took over RIO?
In the short term it's always hard as integration costs make the balance sheet look initially sad.
In out years the synergies would be in place, and BHP would have very few global competitors to worry about in its price-setting negotiations.
If you are wondering how it works out in BHP's favour, think of it being analogous to the common advantages of "compounding".
For example, imagine that in the first year of China negotiations without a "RIO" to compete against, BHP got a 50% increase in iron ore (instead of a 30% increase which would have been a more reasonable expectation in a competitive market).  Then in the second year there is a global recession and China wants to reverse the previous year's increase, but BHP says, instead, we will hold prices steady and review them next year if things have not picked up.  In the third year things pick up and a price increase is back on the table.
Using this scenario as an analogy, BHP picks up a 20percentage point greater price increase in the first year, and holds onto in the second year because of its bargaining power.  Then in the third year it leverages off the initial year's price increase.
In the scenario where RIO was a competitor, BHP would have been back to scratch at year 3, and would be in negotiation from a base case of 30% increases rather than 50%.
Do the maths over a further 5 years comparing the 2 scenarios, adding 5% annual price increases, and see how much further ahead BHP would be - pretty stunning outcome!


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## haemitite (11 November 2007)

The market isn't going to price BHP on the integration costs, they will be noted as one off impacts and then ignored. Its already clear that the market see enormous upside as BHP has basically been flat even with the inferred premium going to RIO


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## rederob (11 November 2007)

haemitite said:


> The market isn't going to price BHP on the integration costs, they will be noted as one off impacts and then ignored. Its already clear that the market see enormous upside as BHP has basically been flat even with the inferred premium going to RIO



True.
But the market has institutional and private investors.
Private investors are keener for something immediate.
Right now private investors are not jumping onto BHP: They want the dust to settle.
Institutional investors that are BHP holders - which ones are not!!! - may take some BHP off the the table, but clearly present price action shows they are more probably still "holding" firm. 
Private holders, myself included, with a long term view are not likely to sell either, unless the news on markets generally becomes unfavourable.
My view has always been that it is more likely that BHP professionals have a much keener insight into forward probabilities than the average investor.  They will be paying lawyers and consultants millions$$ until RIO rolls over.


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## Mr_T (11 November 2007)

vishalt said:


> Yes yes yes yes yes. You think BHP is "overpaying" for the business - I think that BHP is saying "here's how much we think you'll be worth soon, we'll give you your future value now, so lets merge".
> 
> BHP believes that in time Rio will be worth $140+ in a few earnings time, equating to a P/E bump, if Rio could be worth that much what would happen to BHP, which is biggest and strongest?




How much it will be worth soon is not the same as how much it is worth now. For 2 reasons a) its future price is speculation and b) time value of money.

RIO's price is now artficially inflated due to it being a takeover target. Comparisons between itself and BHP are truly an apple v pear issue.


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## Mr_T (11 November 2007)

rederob said:


> True.
> My view has always been that it is more likely that BHP professionals have a much keener insight into forward probabilities than the average investor.  They will be paying lawyers and consultants millions$$ until RIO rolls over.



Do high up BHP big guns have more knowledge about the costs v benefits of a RIO takeover than a simpleton shareholder like little me? Why of course. So on the face of it, if they want it, it is the right thing to do - they are the ones with the information, corporate experience, intelligence, business instincts, etc etc etc. All those things that most shareholders don't have.

In the real world however that's not how things always work out. For many reasons. IMHO, one of them being that they are (like everyone) biased. Since these high flyers tend to be overly confident and egotistical (not always, but often) their quest for infinite power and growth of their organisation will lead them to subconsciously magnify benefits and downplay the risks of such a takeover. And out the window goes good sensible judgement.


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## hacheln_mice (11 November 2007)

Well, it looks like I may indeed get to buy near my preferred price range on Monday.  There looks to be a tradeable bounce coming near *41.3-41.6* should it hit that area.

If prices fail to stabilise there, then we could get further selling down to the *39.4 *area.

-----------------------


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## rederob (11 November 2007)

Mr_T said:


> In the real world however that's not how things always work out. For many reasons. IMHO, one of them being that they are (like everyone) biased. Since these high flyers tend to be overly confident and egotistical (not always, but often) their quest for infinite power and growth of their organisation will lead them to subconsciously magnify benefits and downplay the risks of such a takeover. And out the window goes good sensible judgement.



Does that explain why Gilbertson got the boot for approaching RIO without the BHP Board's approval some years back?
This is not a new plan.
The industrialisation of over 2 billion people over the next generation or two will make post WWII western industrialisation of a fraction that number pale into insignificance.
Lest we forget.


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## Mr_T (11 November 2007)

rederob said:


> Does that explain why Gilbertson got the boot for approaching RIO without the BHP Board's approval some years back?
> This is not a new plan.
> The industrialisation of over 2 billion people over the next generation or two will make post WWII western industrialisation of a fraction that number pale into insignificance.
> Lest we forget.



I am not saying that companies will do anything at any price in the quest for expansion and power. I am saying that the quest for expansion and power will cloud their judgements in some situations. These things are matters of degrees, not absolutes.

I agree with your industrialization comment. I have been going to China for a few years, and for those who think that the demand for commodities has reached its peak - have I got news for you. Things are going there faster than ever, yet most people are relatively untouched by industrialization. Reality is that most Chinese don't (yet) live in Beijings/Shanghais/Guangzhous, they are peasants living on farms/rural areas with highly inadequate amenities. This is changing, and will change further, and demand for commodities will be huge in coming years.

Which means that a well managed resource company should have a good future. The emphasise being on the words "well managed". Which it clearly was under Chip. Time will tell if Marius will do a good job.

And remember, every asset has a good, bad and fair price. No one doubts that the t/over of Rio is a good thing at certain prices. But as I said in an earlier post, history has shown that most predators overpay for targets.


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## greenfs (11 November 2007)

My son in law is a Rio engineer. He told me they did a poll of Rio GM's on Friday and it clearly indicated that the merger is as good as a done deal, subject to BHP coming back with a much higher offer ($160+).

He indicated that if for some reason this does not happen someone else will come along & make the required offer


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## Gurgler (11 November 2007)

Mr_T said:


> Reality is that most Chinese don't (yet) live in Beijings/Shanghais/Guangzhous, they are peasants living on farms/rural areas with highly inadequate amenities. This is changing, and will change further, and demand for commodities will be huge in coming years.




So true; here in Ningbo (one of the top 10 developing cities - that was last year) we are surrounded by vacant estates of apartments awaiting the projected migrant inflow from the rural areas (as shown in the lower pic). Before we came in Feb 2005, we were on the edge of land covered by  market gardens. By early August that year they were replaced by what is in the top picture. You will also note the upsurge in construction over the two years between these two pictures (Aug 9 2005 and today). Buildings, roads and skylines change continually. These images are indicative of the growth going on in almost all cities in China.

What will happen when these apartments are filled with people using TV's, microwaves, etc.? The mind boggles! Literally the tip of the resource-demand iceberg.


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## Mr_T (11 November 2007)

Thanks for that Gurgler. Your pictures really do tell what words can only attempt to describe.

What is happening to China is truly amazing.

I have never been to India. Wonder to what extent the story is similar there.


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## vishalt (11 November 2007)

Mr_T said:


> Thanks for that Gurgler. Your pictures really do tell what words can only attempt to describe.
> 
> What is happening to China is truly amazing.
> 
> I have never been to India. Wonder to what extent the story is similar there.



It's pretty much the same, a lot of people are untouched by this boom thus far, I went there 2 years ago. The major cities themselves need a lot of development . 

Anyway referring to your earlier comment about price inflation - I think that's the stock market for you in a way, a lot of the stocks have inflated prices already being held up by the confidence of strong fundamentals, I won't really comment on how much BHP is paying for Rio, I have no idea of the good M&A prices. 

However I totally disagree with the strategy and I hope competition watch dogs dont' allow it, it'll be an extremely powerful monopoly that could shut smaller miners down. 

I think it should pursue organing growth or smaller acqusitions, WMC acqusitiion was a masterstroke, or companies like Teck Cominco, Oxiana, Woodside, smaller explorers/miners that are cheaper and have potential.


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## haemitite (11 November 2007)

greenfs said:


> My son in law is a Rio engineer. He told me they did a poll of Rio GM's on Friday and it clearly indicated that the merger is as good as a done deal, subject to BHP coming back with a much higher offer ($160+).
> 
> He indicated that if for some reason this does not happen someone else will come along & make the required offer



 A Rio GM is 3 steps away from the CEO, its hardly as if they will have their middle management team conduct a vote on the outcome. Its a Board/CEO call

As for someone else - who?


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## rederob (11 November 2007)

Mr_T said:


> Thanks for that Gurgler. Your pictures really do tell what words can only attempt to describe.
> 
> What is happening to China is truly amazing.
> 
> I have never been to India. Wonder to what extent the story is similar there.



It appears to be similar: Scroll through the various pictures at this site for an idea:
http://www.flickr.com/photos/85296574@N00/379244922/in/set-72157594382704326/
Below is a new high rise complex in Calcutta (Kolkata)


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## Miner (11 November 2007)

haemitite said:


> A Rio GM is 3 steps away from the CEO, its hardly as if they will have their middle management team conduct a vote on the outcome. Its a Board/CEO call
> 
> As for someone else - who?




Dear Haematite
Your information is very true.  The  GM (Stratum 4) is  only two steps below CEO (No Stratum) of a business unit and MD (Stratum 5). Each Business unit like Pilbara Iron / Expansion Projects/ Asset Utilisation has an MD who reports (normally) reports to Rio Board. I am sure any one could visit www.pilbarairon.com.au or www.riotinto.com and will able to see every thing there. 
I believe you are referring to Pilbara Iron aka Rio Tinto Iron ORe not necessarily Rio Tinto London Office. In the GM Conference it is attended by the MD of business unit full time and partly by the CEO. It is no fool's party.
IN the past (2006) it was only talked about increasing the capacity to 300 MTPA and today it becomes a game plan.

So I am sure what your son in law saw will be true in action.

I am a Miner .

Regards


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## GREENS (12 November 2007)

Nice post Red! (#1243)

I think in the end BHP will be willing to pay a bit extra even if many will regard the offer as expensive because of the following:

1.Monopoly power - as soon as BHP gets its hands on RIO’s assets it will have a near monopoly position (or the upper hand in a oligopoly cartel) that will inturn give the company an even more powerful say in how metal prices particularly Iron Ore, Copper, Coal, Aluminium and Uranium are determined in the markets. Similar to what Red said about the pricing of Iron Ore. Given this dominant position the potential for much higher profits are obvious. 

2.Leverage to Chindia’s Mouth – The main commodities that RIO produce, Iron Ore, Coal, Uranium and Copper are basically the 4 main commodities with the exception of oil and gas that be in strong demand from China and India over the coming decade (if not decades). The reasoning, China and India already need substantial amounts of energy to operate their economies, and this demand is only going to grow as these nations continue to rapidly develop into economies like the rest of the western world. & if these nations are worried about emissions at the moment Uranium seems to be the only suitable alternative to dirty coal, put two and two together and Uranium will be one of the most sought after commodities over the next decade. Furthermore the construction boom that China is currently in and India has really yet to start will underpin the demand for Iron ore, Nickel and Copper. 

3.The synergies – Don’t have to really go on about this, it should seem quite obvious throughout the globe they have a lot of projects in close proximity e.g. Pilbara region, where the one company could cut a lot of costs by combing the entity and inturn increase margins.  


But will BHP double in the next year, I would highly doubt it. Why? Investors will view the RIO takeover originally as much too expensive considering the high PE multiple they would be paying for the company. The benefits from the takeover will take a couple of years to show through. Lately BHP has been trading well above its historical PE average of around 12-13 x earnings. Metal and Oil prices in AUD terms are being eroded at present from the sky rocketing AUD. I was reading in the Australian a few weeks back that a rise from an ER of 0.9 -to- parity with the USD would erode BHP profits by around 18%. That’s a staggering figure by any means the only benefit to BHP is that it reports in USD which may subdue this effect. Lastly Credit worries and the US slowdown which I believe will continue to have a ripple effect on share markets around the globe and in particular commodity markets for a while to come.  I still hope to pick up more around the mid to higher thirties. LT however I think the increased market power, economies of scale (low cost operations and hence higher margins) and the significant leverage to the main commodities in demand by Chindia will underpin its growth going forward. 

Suppose well have to wait and see how this pans out, it rarely goes according to plan.


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## vishalt (12 November 2007)

What stock has NOT been trading "well above historical averages" ? - only a minority of the market, and most of them are oversold or rubbish stocks. 

Imo BHP just keeps on getting cheaper and cheaper!


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## haemitite (12 November 2007)

GREENS said:


> But will BHP double in the next year, I would highly doubt it. Why? Investors will view the RIO takeover originally as much too expensive considering the high PE multiple they would be paying for the company. The benefits from the takeover will take a couple of years to show through. Lately BHP has been trading well above its historical PE average of around 12-13 x earnings.



 Markets have begun to price in these synergies already. PE ratios are close to useless for valuing mining companies - you might want to think about how you would begin to measure the value of the massive growth in iron ore volumes of both RIO and BHP with PE.


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## barnz2k (14 November 2007)

Well I scratched an itch. Toped up on BHP. Not heaps but rounding out the number of shares haha. Funny, Spending 2/3rds of my initial buy but I only get 13rd of the shares - can't argue with the gains though!


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## Mr_T (15 November 2007)

I'm not optimistic for the next few weeks/months. The following seems to mean that for the near term, the only way is down:

a) Concerns that BHP will succeed in its takeover for RIO and overpay in the process - even if the payment is merely in the form of scrip for scrip.

b) Continuing fears about the subprime crisis affecting the world economy and leading to lower demand for commodities.

c) Leading from these 2, a view that BHP is on the way down (share price wise) which of course causes a pack mentality.

I hope I'm wrong, I really do.


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## overule (15 November 2007)

I don't this will be the case. After the merger, there will be more upside (massive cost savings) rather than downside. BHP's SP is currently undervalued so get it before it's too late.


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## vishalt (15 November 2007)

Mr_T said:


> I'm not optimistic for the next few weeks/months. The following seems to mean that for the near term, the only way is down:
> 
> a) Concerns that BHP will succeed in its takeover for RIO and overpay in the process - even if the payment is merely in the form of scrip for scrip.
> 
> ...




I think you're wrong!

Buying Rio @ this scrip price will take BHP 10 years to pay off and will only take its gearing to 24%, it can do more, and with the profit potential of this combined colossus I should think there'd be immense upside. 

Ofcourse BHP is on the way down, its given shareholders DOUBLE there money back + dividends/frank after a sustained one year uptrend, people who expect such gains to continue forever should just stick to lottery tickets instead!

Also remember there is plenty of greed, people have sold a good portion of BHP off to have a chance to make a quick buck at Rio should there be another takeover, its only natural for the predator stock to consolidate.

I've topped up more BHP, my 5th buy, boy I hope it falls more, that P/E ratio of 14 is just mouth-watering! Some broker I read in the Fin Review today raised his target to $55.


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## Mr_T (15 November 2007)

I hope you're right Vis, I really do.

I have over 6000 BHP shares...and though most of them were bought at a much much lower price than 41 dollars, it really really hurts to see the price go down so quickly.


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## barnz2k (15 November 2007)

Not happy its gone down cuase Im not planning on anymore buying - but I topped  up for Long Term. And Long term im sure this is going to benefit. Even without the takeover BHP is still a mammoth and all the chindia boom reasons etc.. Go Bhp!!


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## nick2fish (15 November 2007)

BHP is the no 1 diversified mining company in the world.


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## overule (15 November 2007)

To benefit from these short volatilities, buy a put option as a hedge 
I will do that next thing tomorrow.


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## GREENS (15 November 2007)

vishalt said:


> What stock has NOT been trading "well above historical averages" ? - only a minority of the market, and most of them are oversold or rubbish stocks.
> 
> Imo BHP just keeps on getting cheaper and cheaper!






haemitite said:


> Markets have begun to price in these synergies already. PE ratios are close to useless for valuing mining companies - you might want to think about how you would begin to measure the value of the massive growth in iron ore volumes of both RIO and BHP with PE.





Please, at least have some substance in your response, very disappointed. Not one of you has obviously looked at how BHP has historically traded over the past few years in regards to its PE at a point in time and its historical PE (even during a period when iron ore prices have been rising strongly). Iron ore prices need to rise to cover the inflating costs hitting the mining industry; skills shortages and higher capital costs and let’s not forget the effect of the rising Australian dollar since the last contracts were singed off. 

Back to PE ratios. Why are analysts so concerned then about why the market is trading above or below its average historical PE then? Or believe ANZ now represents good value because it is trading at a discount based on its PE ratio to the average PE of the other Banks? Or could it be the fact that PE ratios are actually an integral part of valuation? However don’t get me wrong they are not designed to be used in isolation and in my original post you can see this very clearly it was 1 of only 4 points made for the case of BHP being weaker over the ST. And actually I didn’t quite understand what your arguments were on the contrary; did you come up with any? Please if you are going criticise my opinion give me something with some substance or something I can learn from. At least we agree on one thing, the big picture, BHP should be a winner LT and why I continue to hold half of my orig holdings and will be buying more as the share price continues to moderately weaken over the ST.


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## Mr_T (16 November 2007)

GREENS said:


> Please, at least have some substance in your response, very disappointed. Not one of you has obviously looked at how BHP has historically traded over the past few years in regards to its PE at a point in time and its historical PE (even during a period when iron ore prices have been rising strongly). Iron ore prices need to rise to cover the inflating costs hitting the mining industry; skills shortages and higher capital costs and let’s not forget the effect of the rising Australian dollar since the last contracts were singed off.
> 
> Back to PE ratios. Why are analysts so concerned then about why the market is trading above or below its average historical PE then? Or believe ANZ now represents good value because it is trading at a discount based on its PE ratio to the average PE of the other Banks? Or could it be the fact that PE ratios are actually an integral part of valuation? However don’t get me wrong they are not designed to be used in isolation and in my original post you can see this very clearly it was 1 of only 4 points made for the case of BHP being weaker over the ST. And actually I didn’t quite understand what your arguments were on the contrary; did you come up with any? Please if you are going criticise my opinion give me something with some substance or something I can learn from. At least we agree on one thing, the big picture, BHP should be a winner LT and why I continue to hold half of my orig holdings and will be buying more as the share price continues to moderately weaken over the ST.




Of course P/E ratios are important, they are a vital starting point in valuing a share. Of course, a P/E needs to be seen in context of a share's future profitability.

Whilst I agree with much of what you say, there is one point that needs to be made. There is an argument that historical P/E's are not a good benchmark for valuing BHP because it is now in an unprecedented situation (regarding China and India).  Which does not mean that its P/E should be ignored, rather that there might be a better basis for comparison than its historial P/E.

Bottom line is that none of us knows what will happen in the future regarding BHP. For the simple reason that we are in an unprecedented situation. We are all gambling, no matter how certain we pretend to be.


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## GREENS (16 November 2007)

Mr T 

I totally agree with you. But I am thinking fairly ST here; I don’t think we have reached that stage quite yet where BHP’s PE will diverge significantly from its long term PE average i.e. a re-rating of miners. I think in the medium to longer term that is definitely a real possibility and hence one of the reasons why I am a long term believer in BHP. I think once the US heads out of this sub prime housing crises and India really heats up, we will see metal demand growth reach astonishing levels. Therefore when brokers and investors alike truly realise this long term sustainability of the commodities super cycle it will be shortly followed by a re-rating of mining stocks, hence pushing up the values in which they trade on. If we had already reached this stage I would suspect that many of the mid tiers with extortionary growth profiles would be trading on much higher values than they are currently (especially oilers and base metal stocks). 

I suppose in the scheme of things who really cares about a few extra dollars if we all believe in the LT potential of BHP.


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## vishalt (16 November 2007)

Hihi. 



			
				Wall Street Journal said:
			
		

> There is a potential new character on the scene of the globe-spanning mining takeover battle: Pac-Man.
> 
> British mining giant Rio Tinto PLC, fighting off an unsolicited $131.57 billion takeover bid from Australian rival BHP Billiton PLC, is considering turning the tables on its rival and launching a counterbid for BHP, according to people close to the matter. The gambit is called the Pac-Man defense, and has a relatively checkered history in the annals of mergers-and-acquisitions maneuvers.
> 
> Coined after the videogame in which the pursued character can turn and eat its attackers, the Pac-Man defense still is being studied as part ...




Counter-bid anyone ? Hope they gang up on BHP so **** hits the fan basically lol! Bought more BHP today, yay!


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## Captain_Chaza (16 November 2007)

Captain_Chaza said:


> Could  RIO now make a bid for BHP??
> Stranger things have happened in the past
> 
> Sometimes it all depends on who has the better friends
> ...




I told you so! (~on the 9th of November)

How many of you believed me?
When BHP beat RIO to WMC it then became PERSONAL!!

Let the game begin
My money is on RIO 

Salute and Gods' speed


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## Mr_T (16 November 2007)

According to Stephen Bartholomeusz, the pac-man rumour is ludicrous.

I am inclined to agree with him.

http://www.businessspectator.com.au...ac-Man-rumour-is-ludicrous-8Z3PX?OpenDocument


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## vishalt (16 November 2007)

Oh and the thought of BHP making a bid for Rio, after Rio ate Alcan wasn't ludicrous? 

That came out of the blue like an old man in a bikini, just look @ Symbio v Healthscope, and stranger things have happened anyway.


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## haemitite (16 November 2007)

GREENS said:


> Iron ore prices need to rise to cover the inflating costs hitting the mining industry; skills shortages and higher capital costs and let’s not forget the effect of the rising Australian dollar since the last contracts were singed off.



 Yep, BHP and RIO are doing horribly with their 70% EBITDA iron ore margins, close to the poverty line.

Luckily the next price rise will more than wipe out the complete cost base.

If you are going to get affronted, you might want to get your facts in order first.


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## prawn_86 (16 November 2007)

I think a pac-man bid by RIO would be awesome.

It would show a real move towards consolidation in the industry and would kick virtually every other miner along imo.


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## Mr_T (16 November 2007)

vishalt said:


> Oh and the thought of BHP making a bid for Rio, after Rio ate Alcan wasn't ludicrous?
> 
> That came out of the blue like an old man in a bikini, just look @ Symbio v Healthscope, and stranger things have happened anyway.




Did you read the article? Stephen's piece is well written, and his arguments are very strong. Basically, RIO is the one receiving the premium being the target. Why would they instead pay a premium by being the predator?


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## overule (16 November 2007)

I don't think it's possible for RIO to counter-bid BHP. They don't have the cash.

"Rio seen unlikely to counter bid for BHP"
http://au.biz.yahoo.com/071116/19/1hot2.html


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## stoxclimber (16 November 2007)

Pac man bids are very very rare. I wouldn't be so quick to claim the winning ship, captain! She has not even left dry dock.


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## vishalt (17 November 2007)

Mr_T said:


> Did you read the article? Stephen's piece is well written, and his arguments are very strong. Basically, RIO is the one receiving the premium being the target. Why would they instead pay a premium by being the predator?



Yeah and I don't buy it, I don't see whats so hard to believe? 

If you're able to conceive how much money these guys are willing to throw around its believable. Gang up with Xstrata, AA, Teck, get a huge loan from Chinese + willing banks and buy BHP and carve up the assets!

Pac-man or not BHP still looks very attractive at current prices.


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## brodion (17 November 2007)

Would not that be a great if RIO took on BHP Just a pleasant thought I wander if it would  have the same market reaction????


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## GREENS (17 November 2007)

haemitite said:


> Yep, BHP and RIO are doing horribly with their 70% EBITDA iron ore margins, close to the poverty line.
> 
> Luckily the next price rise will more than wipe out the complete cost base.
> 
> If you are going to get affronted, you might want to get your facts in order first.




Haematite sorry I think you’ve missed the boat on the whole conversation. I honestly have no idea what you are going on about now or what point you are trying to make? I have gone to effort to state my points if you want to argue your’s then please put them forward, otherwise responding to you is a waste of my time. You write two or three measly lines that make no sense to the argument at hand. 

When did I ever say BHP and RIO were doing poorly with their margins, when in fact they are doing very very well. Yes you are right the rise will wipe out the costs and impact of the higher currency and hence margins won’t change all that much. But just because a company currently has sound margins doesn’t imply that they are not due for a correction over the short term or that they can not be overvalued slightly. I hold BHP and as I have said many times BHP is a great company to be in. Please feel free to elaborate on which of my facts are out of order, because so far in your last post you agreed with everything I have said on BHP in this thread, i.e. 

•BHP’s future outlook is good and they are exposed to metals that will be in great demand from Chindia. Cu, U308, Ni, Iron Ore, Petroleum products. 
•Because of the size and scope of their operations they will have low cost, high profit margin operations. 

I couldn’t be bothered going on, you should get the gist. So when you criticise my facts this time make sure you pick a fact that has something to do with what I originally said. 

Nevertheless if RIO makes a bid well then none of this will matter one little bit, BHP will be hitting blue skies in no time because the premium they would have to pay would be massive. But by the looks of it, the market didn’t really take too much interest in this idea on Friday, so will just have to wait and see how that pans out over the next week or so.


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## rederob (17 November 2007)

Captain_Chaza said:


> I told you so! (~on the 9th of November)
> 
> How many of you believed me?
> When BHP beat RIO to WMC it then became PERSONAL!!
> ...



Now if that were to occur, then a takeover premium would ratchet up BHP.
If my money were on RIO (it's not - it's on BHP), then I would sell off RIO quick smart as the premium it got from BHP's actions will soon be wiped off.

In any event BHP's share price is probably justified on Olympic Dam's resource base as the minerals it has in the ground there keep rising in value - especially uranium.


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## haemitite (17 November 2007)

Greens, I quote you "Iron ore prices need to rise to cover the inflating costs hitting the mining industry; skills shortages and higher capital costs and let’s not forget the effect of the rising Australian dollar since the last contracts were singed off."

From this its apparent you don't understand the iron ore industry basics. 

Just as your earlier points re BHP's historical PE and future valuations do not make any sense. And when you linked your two "points", your reasoning is plain messy.

As for RIO taking out BHP - thats ludicrous. Do you really think RIO woould pay what one commentator estimated to be 70B for management rights?

You can keep on posting "I don't get it" threads, or you can go back and read what was said, including your own words. Up to you.


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## Garpal Gumnut (17 November 2007)

One of the things that struck me recently about BHP was how resilient a stock it was on pullbacks in price.

It respects extremely well previous support and resistance levels.

In the chart enclosed I have looked at BHP from Feb 2005 to the present on a weekly chart.

I have drawn dark red lines at previous major previous alltime highs and yellow lines at recent major lows, purists might call them intermediate lows.

When BHP makes new all time highs profit takers sell off and it retreats to invariably near its previous high or if it drops below that high never goes much lower than 3% or so from the previous.

It also follows reasonable fibonnaci retracements although I haven’t put these on this chart to save cluttering.

I’m overweight in BHP and RIO so will not be buying BHP unless it retraces further to the 50% at about $39.50 just below the previous high, or to 62% which would still not be too far below that high. As in the past I would expect it to rise up again and seek new highs.

This is probably on a longer term trading pattern than that with which most are comfortable in ASF.

The volume with BHP I find meaningless as “the smart operator” is so widespread that even the funds, I feel, don’t know when to get and out of it. I’m quite sure the Future Fund is up to its neck in it.

I couldn,t give a monkeys whether RIO takes BHP out or vice versa, either way it will be good for both companies and the charts are witness to their outperformance.

Hopefully BHP will keep on going up and I won’t have to buy it!!

gg


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## vishalt (18 November 2007)

Anyway while we wait for BHP to travel up to $55 (sorry doomsayers) if these 2 companies were to merge, what would it be called lol?

BHP & Rio
BHP Tinto
Rio BHP Tinto
BHP Billiton Rio Tinto
Billiton Tinto

such yuck names, hope they rename the whole thing


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## prawn_86 (18 November 2007)

Why not keep with the acronyms and have something along the lines of:

BHP BRT

or 

BHP BRTA

Who knows, maybe just:

Huge Frickn Mining Company


----------



## barnz2k (18 November 2007)

or some completely mutant hybrid name? haha

Briltinton PrioH

just rolls of the tongue eh!

what about their slogan?

"Come get some, Chindia!"

So what do people think, is it better to be holding BHP or RIO now?or both?


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## Kauri (18 November 2007)

vishalt said:


> Anyway while we wait for BHP to travel up to $55 (sorry doomsayers) if these 2 companies were to merge, what would it be called lol?
> 
> BHP & Rio
> BHP Tinto
> ...




 I hear Broken Toe has the inside running currently... with Rio's Broke coming a distant second....
Cheers
.........Kauri


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## The Mint Man (19 November 2007)

Hey guys,
I'm hearing reports that a boss from BHP has died in a helicopter crash. Im sure more news will flow through soon.

Cheers


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## Dilan (19 November 2007)

I found this on the internet. I assume that it is this crash. 



> The mining giant BHP Billiton says it has suspended its operations in Angola after leading executives were killed in a helicopter crash.
> 
> A company statement says five people died in the crash, including BHP's chief operating officer in Angola, David Hopgood.
> 
> ...



http://story.malaysiasun.com/index.php/ct/9/cid/3a8a80d6f705f8cc/id/301111/cs/1/


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## vishalt (19 November 2007)

That's quite sad. 

Sounded like a routine flyover.. 

May they RIP, they contributed their part in making a great company.


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## Mr_T (20 November 2007)

Herald Sun's Terry Mcrann wrote a brilliant article today on this takeover. Basically, he doesn't see the point of it.

http://www.news.com.au/heraldsun/story/0,21985,22787256-36281,00.html


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## vishalt (20 November 2007)

Yeah a brilliant article indeed. 

I wonder what Chip Goodyear is thinking!

I reckon if this takeover is all about iron ore then BHP should wait for Fortescue to start producing first and then acquire it, it'll be much cheaper and hey.. it's iron ore!


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## Lucky_Country (24 November 2007)

Should rename it Westralian Resources !
A combination of BHP RIO WPL and FMG ! 
Now thats my kinda company !


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## Garpal Gumnut (24 November 2007)

BHP is hanging at the 50% retracement from the recent highs to the August lows. The 50% retracement was a resistance point on the way up. 

Recent volume has been very low so it doesn't look as if there are many sellers about.

Enclosed is a daily chart.


gg


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## haemitite (24 November 2007)

Mr_T said:


> Herald Sun's Terry Mcrann wrote a brilliant article today on this takeover. Basically, he doesn't see the point of it.
> 
> http://www.news.com.au/heraldsun/story/0,21985,22787256-36281,00.html



I think his comments re Billiton are very interesting, BHP shareholders overpaid. Then again maybe BHP wouldn't have eaten WMC without Kloppers.

But Mcrann has presumably missed the point on the iron ore growth, BHPs presentation was about deal synergies, ie volumes above that that could be delivered in the absence of a deal

And the market would have already priced in RIOs superior position on iron ore


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## vishalt (15 December 2007)

This might be an extremely long an exhaustive process, I've done an analysis of the last time BHP had a major correction.

Here's BHP making a perfect doubling in 2006. A pretty classy and fast uptrend. 






The big bull needed a rest and it was a frustrating several months of consolidation, and once again - when everything is fine, all you'll hear from the media, fund managers and Wall Street is IT'S ALL GOOD THE MARKETS GREAT YAY WOOT. But once there's a correction OMGOSH SUBPRIME THE MAREKTS EXPLODING RECESSION BOOM IS OVER etc etc, 

It was a frustrating and agonising consolidation period that lasted from June 06 to March 07, and BHP played in a range of $23.5 to $27, 28, stochastics seemed to break down each time it broke supports within that range. 






After BHP pulled through, a 2006 Deja Vu` anyone? 






And once again, after it doubles, the bull is tired. But did anyone notice in this stage every report out of Wall St was good, and how every fund manager/analyst/media company was spinning things like Dow 15,000! Asx 7000?






But when the correction and consolidation period kicked in, everything out of Wall St and the media is bad, omgz the metal prices! Demand! Yet the fundamentals of China and India are still rock solid. You simply have to visit the place (like I visited India a while back) to grasp the amount of construction going on. 

Anyway in 2006 BHP dropped from $32.5 to a low of $23.5, around $9 or 30 per cent, so its conceivable that BHP right now could possibly fall as low as $32, and play in a range of $32 - $38 - but not corrections are the same but right now its following the same pattern as 2006. 





_
Personally, I'm confident in the fundamentals and my medium-term target - should BHP drop to $32 in this correction is for it to double to around $64 around the 3rd quarter next year, but I think thats just conservative considering BHP's pipeline. _


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## overule (15 December 2007)

I don't really think BHP will drop that low to $32 but i might be wrong. 
In 2006, BHP's SP reached its peak of $32 in May so that's about 5 months of rising and SP dropped in value till the end of the year.

But in 2007, SP reached its peak of $47 in mid October and that's 10 months of rising SP. Looking at the trend, you might be right to say that BHP's SP is dropping but fundamentals plus support levels are still strong to prevent a drop of 30%!!.


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## vishalt (15 December 2007)

I'd certainly hope so Overrule, but I think traders should prepare for a minimum 30 per cent drop - if not 50 or a total crash, just from a pattern it seems pretty conceivable - but if it doesn't happen hey thats a bonus!


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## Lucky_Country (15 December 2007)

BHP  has new production coming onstream this quarter in oil and nickel also a ramp up of iron ore tonnage which should help the share price rise early next year.
Coal and iron ore forecasts are in the 30 - 50% rise which will also act as a catalyst too the share price so in all a positive start too the new year imo


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## vishalt (15 December 2007)

Lucky_Country said:


> BHP  has new production coming onstream this quarter in oil and nickel also a ramp up of iron ore tonnage which should help the share price rise early next year.
> Coal and iron ore forecasts are in the 30 - 50% rise which will also act as a catalyst too the share price so in all a positive start too the new year imo



Just those? 

Check this pipeline out - it blows Rio Tinto's out of the water... 

They're really pushing petrol, such a strong revenue from there and so many projects to come for that, don't know why Kloppers is so desperate to merge with Rio.


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## chewy (20 December 2007)

I know it is still an hour until open - but there are currently about $250million of buy orders on BHP by just 4 buy orders! wtf


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## dastrix (20 December 2007)

Yep, see that.. well i see 3 orders totalling about 212million

Interesting 

I guess someone sees BHP a real bargain right now...


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## chewy (20 December 2007)

apprently it was just something to do with futures expiry.........nothing to see here moving along


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## 2020hindsight (29 December 2007)

just for the record 
here's BHP for the last 2 years (High Low Close) + averages 
plus BHP vs XAO for last 12 months (candlestix) + ditto  (percent indicates relative preformance of BHP campared to datum of XAO)

PS I plan to do this to a few stocks - please feel free to either 
a) help out an divvy the job up between a few of us
b) suggest amendments to graphs
c) request some stocks you'd like me to post (maybe PM me)
d) tell me it's not necessary lol (or too wasteful of memory maybe?)


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## vishalt (4 January 2008)

Wow... base metals surged last night, up 4% generally but nickel up 8%, and with oil at $100US barrel this is great for BHP, which was up 4% in London last night!


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## dastrix (4 January 2008)

Finally some movement. BHP has been rather stagnant in the recent months after the announcement, hoping today brings back some of the losses I've taken with BHP!

Heres hoping, thanks for the good news


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## the barry (4 January 2008)

dastrix said:


> Finally some movement. BHP has been rather stagnant in the recent months after the announcement, hoping today brings back some of the losses I've taken with BHP!
> 
> Heres hoping, thanks for the good news




Have to agree, if today doesnt get things moving in the right direction i will be very worried. From a chart point of view, around the 40 dollar mark is proving to be support, bounced to 44 bucks last time, hopefully we will see the same again.


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## Lucky_Country (4 January 2008)

Just think what the sp would be if it wasnt for the RIO takeover.
The share buyback would still be running people would not have moved there money from BHP to RIO.
$46 would be my estimate, oh well short term pain long term gain.


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## vishalt (4 January 2008)

Lucky_Country said:


> Just think what the sp would be if it wasnt for the RIO takeover.
> The share buyback would still be running people would not have moved there money from BHP to RIO.
> $46 would be my estimate, oh well short term pain long term gain.




Took the words out of my fingertips! But really, with oil prices this high and BHP finally pushing hard on its Petroleum division I'd think itd produce more smashing results this year and I'm confident it'll break past $50 in the medium term.


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## gfresh (4 January 2008)

I'm waiting for this silly merger talk to be off too.. at least we now only have until Feburary 6th to worry about it. This should coincide closely with half-yearly profits. So it will be either a good (profits at or above expections, and takeover off) or bad double whammy (results below exp, takeover seen as a failure) I think. Always the possibility BHP tries to up the bid near then, but IMHO only, not likely in the current environment.


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## vishalt (5 January 2008)

Metals forging ahead once again, mostly up 2% with nickel up 4% and Oil as expensive as ever, BHP's hit the accelerator on the right projects!

What really burns my tongue is how the US Adr's of BHP, and the British BHP perform so much better than the Australian one, WHERE THE BLOODY HEADQUARTERS ARE AT. I mean wtf, up 4% in London last night but here it barely manages half of that, dual structure sucks.


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## treefrog (6 January 2008)

yep BHP up lately but a wee bit sobering in UK fri night

had gained 6.5% in the last couple of days but gave it *all* back in the last 3hrs of trade on concern of the US data - yes that's down 6.5% in 3 hours

might be a down a wee bit on Oz mkt monday

Oz $ lost a full cent (88.2 to 87.2) in the same period confirming concern for commodities


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## M34N (6 January 2008)

treefrog said:


> yep BHP up lately but a wee bit sobering in UK fri night
> 
> had gained 6.5% in the last couple of days but gave it *all* back in the last 3hrs of trade on concern of the US data - yes that's down 6.5% in 3 hours
> 
> ...



Yes I saw this also, BHP up 2.5-3% in London on Friday around 8pm our time, went out and checked the market Saturday morning to see it closed at -3.5%. On the positive side for the market, when BHP went up 4% Thursday in London and we only went up 1.5% the next day, this could potentially lead to a capped fall of somewhere near 2.5% only. Would be surprised to see a bigger fall than that, could provide a tempting buying opportunity if it's a bigger fall than that


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## Lucky_Country (8 January 2008)

Well it seems like only a few weeks ago BHP had made a little run too $44 now its $39 with no buyback no takeover offer posted and alot of uncertainty surrounding the US.
I thought BHP was a safe bet !


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## vishalt (8 January 2008)

Lucky_Country said:


> Well it seems like only a few weeks ago BHP had made a little run too $44 now its $39 with no buyback no takeover offer posted and alot of uncertainty surrounding the US.
> I thought BHP was a safe bet !



Well once again you have to remember that it doubled in price not too long ago, a very unsustainable run, so of course its gonna have some fall from grace. 

Also there's no such thing as a safe bet!


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## vishalt (9 January 2008)

Definitely poised for a rebound today, metals surged bigtime on the LME and BHP was up - up to 5% on the FTSE.


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## tronic72 (9 January 2008)

vishalt said:


> Definitely poised for a rebound today, metals surged bigtime on the LME and BHP was up - up to 5% on the FTSE.




Yeah but the Dow and NASDAQ were down 1.45% & 1.65% respectively. I wouldn't want to call todays trading. We'll know in 2 hours.


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## potato (9 January 2008)

Vishalt, everything u say about BHP is positive, even when it gets smashed. Theres way too much ramping in this thread now. It used to be good.


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## vishalt (9 January 2008)

Yeah whoops I didn't see the Dow, I guess we're just gonna suck and follow the yanks down. 

Great, British BHP gets to leap 5% while we go down yay!

I'm still positive on it though, I really wouldn't be surprised if it ended up at $32/$30, BHP is a long term trade for me.


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## tronic72 (9 January 2008)

potato said:


> Vishalt, everything u say about BHP is positive, even when it gets smashed. Theres way too much ramping in this thread now. It used to be good.




I'm not siding with anyone but his quote..... 

"Well once again you have to remember that it doubled in price not too long ago, a very unsustainable run, so of course its gonna have some fall from grace. "

.....isn't super positive just realistic.

I think you have to remember that the fact that ANYONE is holding a share, means they have a positive outlook for the share. Unless they are shorting it which isn't the case for Vishalt.


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## treefrog (9 January 2008)

poet Robert Frost: "Take care to sell your horse before he dies. The art of life is passing losses on."
This is particularly apt for shares. If you think you've got a dog of a stock, you have only two choices – keep it or sell it.
But when you sell it, you're not putting it out of circulation -- you're handing it to someone who wants to buy it.
Conversely, when you buy, you are taking over what someone else considers to be their dog.

of course the resistance to selling the blue chips is often to avoid cgt

the other option of course is to hedge

two fears come into play with BHP holders with the market retracing >10% now 
1) what if it is no longer an assured growth stock - the divvy sux
2) whait a minute - it already is no longer an assured growth stock - oh no! 
         2007  2008  2009  2010 
       EPS 275.0 309.9 380.1 351.0 
       DPS 55.4   63.9   73.7   81.3


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## Nyden (9 January 2008)

treefrog said:


> poet Robert Frost: "Take care to sell your horse before he dies. The art of life is passing losses on."
> This is particularly apt for shares. If you think you've got a dog of a stock, you have only two choices – keep it or sell it.
> But when you sell it, you're not putting it out of circulation -- you're handing it to someone who wants to buy it.
> Conversely, when you buy, you are taking over what someone else considers to be their dog.
> ...




TF, may I ask what sectors you hold in? So far, I've seen nothing but negative posts from you for everything :

That growth looks pretty good to me, just because 2010 sees a decline from 09 (in these *projections*), that is not in the slightest indicative of another such decline in 2011.

The argument of "the divvy sux" - very analytical, by the way. Represents the fact that they reinvest the money back into the company, which *does* assure sustained growth.

The way you phrase your arguments, of "sell sell sell", you just seem to be a bit of a stirrer? Yesterday you referred to the 3 stocks in my signature as the the very 3 dead weights keeping the market down (OXR made a gain - by the way )

----


Is BHP declining purely on a T/A standpoint? I can't imagine any actual reasoning other than that at the moment. Base metals are mostly up, gold is up, I guess there may be currency issues though.
 ~ & Of course, the fact that the DOW plummeted...but who the heck cares about that 

It does seem to be on a bit of a downtrend at the moment, I just hope support holds & we don't see too much further a fall into the 30s.


----------



## treefrog (9 January 2008)

here are the SP "pause" levels using Fib. retrace taken from the top

values used: A 4767; B 3977; C 4433

the targets: 1) 3945 (yep, but refreshment stop only)
2) 3643
3) 3155


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## vishalt (9 January 2008)

tronic72 said:


> I think you have to remember that the fact that ANYONE is holding a share, means they have a positive outlook for the share. Unless they are shorting it which isn't the case for Vishalt.



Errr I have BHP short too, covers my interests plus bonus $$, so there you're wrong! And BHP made an amazing rally today!


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## AnDy62 (9 January 2008)

Nice to see BHP in the green again, good rally yeh. Still its come down nearly 20% since a few months ago, $47.70. But I'll wait a while before thinking of topping up


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## treefrog (9 January 2008)

Nyden said:


> TF, may I ask what sectors you hold in? So far, I've seen nothing but negative posts from you for everything :
> 
> That growth looks pretty good to me, just because 2010 sees a decline from 09 (in these *projections*), that is not in the slightest indicative of another such decline in 2011.
> 
> ...




We are obviously on different planets Nyden

when I look at the attached chart I see it going down whereas you see it going up (please don't tell me; 'but it is" by saying see the little squiggle at the bottom - that means it is going up)

I am negative atm because almost across the board the market is negative so that means I sell (short) stocks I don't have and buy them back later at a lower price

I work mostly on daily charts (my posts here refer to day charts unless I say otherwise) and that is short to medium term trades

If a share is going up, I am long, if it is going down and I can short it, I am short. I keep a close eye on "summary" fundamentals and charts before entering a trade

You keep posting that because zinc (or some other commodity) went up o'night you expect something like ZFX to go up - there are other fundaments at play that put pressure against this - like the continued forecast for zinc to go down another 30+% this year

short term events move the penny stocks quite a bit but not so the ocean liners (the established blues) with these the big holders are looking well ahead and that is why "analysts" look at growth and likely divvies years ahead to the extent they can

I like BHP and trade it both up and down as I do many other stocks on day and intraday trades

I hold a lot of "yellowchip" shares long (those making earnings but not yet paying divvies) for much longer periods though - up to 15 months, but always sell when their trendline fails

best advice I ever got in shares was to trade what IS there, not what you hope to be there

there is an awful lot of hope and hype on sites like this


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## barnz2k (14 January 2008)

any body care to explain this to me? A bunch of buy and sells from MQG on BHP?
Is this just one of those things that expire that people always talk about??

http://www.reuters.com/article/pressRelease/idUS120086+11-Jan-2008+RNS20080111

cheers


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## tech/a (16 January 2008)

Nice.
Some technical stuff.
This looks like a nice low risk setup.
Stop around $36.65 Targets around $51-55 for wave 5 completion.


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## tronic72 (16 January 2008)

vishalt said:


> Errr I have BHP short too, covers my interests plus bonus $$, so there you're wrong! And BHP made an amazing rally today!




Um, exactly how old are you? 

Vishalt: "so there you're wrong!"

What kind of comment is that?

For the record you've misunderstood me. I was actually siding with YOU!!! The point I was making, was you weren't ramping, just being realistic. Maybe you should read things a little better before you post.



PS. So much for BHPs rally. They got hit like everything else.


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## vishalt (16 January 2008)

tronic72 said:


> Um, exactly how old are you?
> 
> Vishalt: "so there you're wrong!"
> 
> ...



Asking someone how old they are is a cliche, I think kids are more mature than adults half the time. 

And yeah so much for that rally, thank god I had it short hey! It's like having protection because you don't want losses to become pregnant . 



> I think you have to remember that the fact that ANYONE is holding a share, means they have a positive outlook for the share. *Unless they are shorting it which isn't the case for Vishalt.*



Pretty confusing statement there, I am holding a share AND I'm shorting it at the same time.

But yeah thanks for siding with me anyway, the internet communication can be confusing sometimes!


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## tech/a (17 January 2008)

Opened through stop level so again patience as we watch what the market is doing at these levels.
Back on the watchlist----potential but no cigar---yet.


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## mayk (18 January 2008)

Tech/A how much chance according to fib analysis for it to go below 34 (upto august correction maybe...?)

Secondly..Will BHP put up a new or revised offer for RIO? I think highly unlikely, it might shy away citing the current scenario and uncertainties and maybe try again in 6 month time? Because even at 4:1 it is still lower than its previous offer (  $$ wise...) Currently it is around 3.6:1 so market has already taken into account the revised offer??

New here and trying to figure out this stock. Thanks


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## Lucky_Country (18 January 2008)

BHP down $1.70 RIO up $5 ish is something brewing tonight in London that we dont know about yet ?
RIO = 3.5 BHP shares maybe and a nice big buyback.


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## Nyden (18 January 2008)

Lucky_Country said:


> BHP down $1.70 RIO up $5 ish is something brewing tonight in London that we dont know about yet ?
> RIO = 3.5 BHP shares maybe and a nice big buyback.




Rumors that BHP will up the offer. If they don't; going to be a hard fall for RIO imo,

BHP has been hit harder than a lot of specs have been lately, very very strange. The money should be flooding *into* quality stocks, not out of them! :

BHP's future looks very bright in my opinion, what with their oil exposure.


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## 3MT (18 January 2008)

Uncertainty killed the cat too.

How much will BHP pay? What about the integration risks? Will they walk away? How long will it take to realise the synergies? In time before China falls back to earth? Why is the sky blue?


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## Whiskers (18 January 2008)

Not very confident that it will succeed. 

I think RIO has been agressively ramping up production to max. I think they are intent on posting best possible revenues and forecasts to max out the share price and take out all the blue sky attractiveness that BHP see.



> Rumours abound of new BHP bid for Rio
> Friday Jan 18 19:58 AEDT
> The Australian and UK financial markets are abuzz with rumours that mining giant BHP Billiton Ltd is set to make an improved takeover bid for rival Rio Tinto Ltd as early as next week.
> 
> ...


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## kerosam (19 January 2008)

i would taught the new supprt level would be 34.12... i too am a BHP shorter... then again, it seems the present market conditions is good for shorting...


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## oldblue (19 January 2008)

3MT said:


> Uncertainty killed the cat too.
> 
> How much will BHP pay? What about the integration risks? Will they walk away? How long will it take to realise the synergies? In time before China falls back to earth? Why is the sky blue?





Actually it was "curiosity" that did for the cat.

With the market in its present state, my money's on BHP walking away until the dust settles.

Disc: Hold BHP but no RIO, unfortunately.


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## TMC19 (19 January 2008)

Pretty new here so bear with me.

Looks like there are 2 scenarios that could pan out here and I would like to get a grasp of the prospective movements of each stock if either scenario was to happen.  By prospective movements I'm talking what normally happens in a talkover situation and I'm also taking short term movement (approx 2/3 weeks)

*1.  BHP go ahead with RIO bid*.
RIO value increases
BHP value decreases

*2. BHP pull out of the RIO bid*
RIO value decreases
BHP value increases

Is this a simplistic overview of what would likely happen  ?  Interested in other peoples views on this.


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## M34N (19 January 2008)

TMC19 said:


> Pretty new here so bear with me.
> 
> Looks like there are 2 scenarios that could pan out here and I would like to get a grasp of the prospective movements of each stock if either scenario was to happen.  By prospective movements I'm talking what normally happens in a talkover situation and I'm also taking short term movement (approx 2/3 weeks)
> 
> ...



Short term, correct.

Long term, BHP up. BHP gains Rio's iron ore assets, eliminates a competitor, increases its assets overall, still has plenty of cash in the bank and China boom story to go on for years. Only depends on the US sub-prime / recession mess now and how deep that will go, and more importantly, what the US Fed and government does to halt the inevitable fall into recession.

All basic resources like copper, zinc, iron, coal, lead, gold, oil etc, still are high in demand and that will drive profits for BHP long term. Fundamentals are still great, and BHP has a fantastic board with a lot of money and assets, no reason to panic on BHP IMO.


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## Garpal Gumnut (19 January 2008)

treefrog said:


> here are the SP "pause" levels using Fib. retrace taken from the top
> 
> values used: A 4767; B 3977; C 4433
> 
> ...




BHP is a beautiful stock to chart, all human life is there. Asutralian's hopes and dreams, their super and future often rest on this little miner.

I have been following BHP for many years.

I enclose a weekly chart from mid 1998 to the present. 

Firstly it is important to note that BHP remains in a primary uptrend and should it continue, confirmation will occur when it goes through its previous all time high of $47.70.

However when I stood at the other end of the verandah from the screen I noticed a pattern which should urge some caution.

BHP may be in a head and shoulders pattern in a larger as well as a more recent time frame.

The gold trendline shows longer term longer time support and the blue the shorter term support. The trading range which I expect BHP to trade in should it fall is $23 to $30. I'll certainly be topping up below $30 and definitely at $23 should this "correction" continue. The shoulders are shown as big and little, in the respective time frames. The possible heads are the same, the recent highs.

I would be wary therefore of a rally to $40 especially on low volume as it may auger a retracement and fulfillment of the head and shoulders hypothesis.

So I'll be buying if it continues down and watching volume if it recovers.

gg


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## Trader Paul (20 January 2008)

Hi folks,

BHP ... our astroanalysis shows us 3 significant
and positive cycles in play 07022008, so we will
be alert for more BHP/RIO news, at that time.

..... that's also one day after the next interest
rate announcement !~!

have a great weekend

paul



=====


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## Garpal Gumnut (21 January 2008)

Garpal Gumnut said:


> BHP is a beautiful stock to chart, all human life is there. Asutralian's hopes and dreams, their super and future often rest on this little miner.
> 
> I have been following BHP for many years.
> 
> ...




Just an update on the weekly chart to today which shows BHP nudging and going through some significant support lines.

gg


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## vishalt (21 January 2008)

I don't think there is any technical indicator that could suggest what BHP is going to do, this market is going indiscriminately nuclear. 

BHP is holding better than the financial atleast, brace yourselves for $30-$31 tomorrow, and I'm being optimistic there.


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## Ken (21 January 2008)

I agree.

Chartwise if BHP touches its long term up trend line then it would be $28.00

Now if BHP is to do what more stocks have done of late, which is break its long term uptrend then your looking at sub $28.00's

That is just chart wise.

Fundamentally that would make worth buying.

I have seen with so many stocks that they have gone really fast down to meet their long term trend lines.

BHP could be no exception.


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## Bushman (21 January 2008)

BHP is currently 5.8% down on the LSE. Looks like $30/$31 is a distinct possibility tomorrow. Wow. 

I topped up today at $34 odd thinking that 11 straight down days on the ASX could not be sustained and BHP would lead the rally as it did in August. Looks like I will be able to get some more tomorrow. 

Low in the mid 20's? Guess it depends what the DJIA does tomorrow night. If the futures are a guide, its down, down, down! 

Savage really.


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## rub92me (22 January 2008)

BHP shareprice is fighting back hard at the moment; maybe maybe we've seen the worst for today at 31.25


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## treefrog (22 January 2008)

the still long BHP brigade (and this appears to be many) should be aware of what happens to growth stocks in a significant downturn - there is neutral or even negative prospects for the PEG - ie the future or foreseen earnings, and stockholders look for reasonable dividends - I am short BHP looking for $24 and am wondering if that support will hold for long - will continue to trade what is there - not what I would like to be there
our fed govt must be wondering what to do with all the CGT it will collect from the med and long termers who are now bailing in numbers
and what does the poor fund manager do - income is linked to fund performance


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## chops_a_must (22 January 2008)

treefrog said:


> the still long BHP brigade (and this appears to be many) should be aware of what happens to growth stocks in a significant downturn - there is neutral or even negative prospects for the PEG - ie the future or foreseen earnings, and stockholders look for reasonable dividends - I am short BHP looking for $24 and am wondering if that support will hold for long - will continue to trade what is there - not what I would like to be there
> our fed govt must be wondering what to do with all the CGT it will collect from the med and long termers who are now bailing in numbers
> and what does the poor fund manager do - income is linked to fund performance



That's exactly what I am looking for here now...

Should have seen a bounce by now if it was going to pull up. Any above support is now probably invalid.


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## wayneL (22 January 2008)

treefrog said:


> the still long BHP brigade (and this appears to be many) should be aware of what happens to growth stocks in a significant downturn - there is neutral or even negative prospects for the PEG - ie the future or foreseen earnings, and stockholders look for reasonable dividends - I am short BHP looking for $24 and am wondering if that support will hold for long - will continue to trade what is there - not what I would like to be there
> our fed govt must be wondering what to do with all the CGT it will collect from the med and long termers who are now bailing in numbers
> and what does the poor fund manager do - income is linked to fund performance



Well I'm in the muppet category with regard to fundamental analysis, but that is exactly what I'm thinking (PEG and whatnot)

Stocks not looking cheap at all right here... including BHP.

BWTFDIK


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## treefrog (22 January 2008)

let's assume BHP earnings for 2008 hold to predictions - this may be unlikely with current retrace in commodities
and lets assume they hold at 2008 levels for 2009 and 2010 due to recession
lets assume also that the market believes this and wants more balance between gowth and earnings and expects a moderate 3.5% divvy from BHP
what then is the target for BHP share price for this scenario??

would you believe $18


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## Lucky_Country (23 January 2008)

BHP wont let their share hit $18 they will be buying them all back soon.
I'd be suprised if they go ahead with the RIO deal in these market conditions therefore they will be returning capital back too shareholders in the form of dividends and buybacks.


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## rub92me (24 January 2008)

treefrog said:


> let's assume BHP earnings for 2008 hold to predictions - this may be unlikely with current retrace in commodities
> and lets assume they hold at 2008 levels for 2009 and 2010 due to recession
> lets assume also that the market believes this and wants more balance between gowth and earnings and expects a moderate 3.5% divvy from BHP
> what then is the target for BHP share price for this scenario??
> ...



No I wouldn't. Not unless you provide some detailed analysis as to why this would be the case. Otherwise it's the downramp of the year.


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## Kauri (28 January 2008)

Just a very *simple* (suits my intellect  ) take on two of the paths I see that may play out for BHP.. there are others of course..  
Cheers
...........Kauri


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## Nyden (28 January 2008)

Kauri said:


> Just a very *simple* (suits my intellect  ) take on two of the paths I see that may play out for BHP.. there are others of course..
> Cheers
> ...........Kauri




So, in other words - your highly analytical take is ... "anything could happen" :

Gosh, this market is messy. Might as well head down to the roulette table & bet a few grand on Black!


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## barnz2k (28 January 2008)

Nyden said:


> Might as well head down to the roulette table & bet a few grand on Black!






			
				Passenger 57 said:
			
		

> Always bet on black




haha. They might introduce ODDS to the market LOL. how about special features? Picke the right stock and you get 10 "free plays". Any direction is right..


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## Sean K (28 January 2008)

Whatever the case, 38-40 looks like important resistance to me. Could determine whether it continues up, or is in a longer term down trend. Might be representative of the overall commodity market also.


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## Kauri (28 January 2008)

Nyden said:


> So, in other words - your highly analytical take is ... "anything could happen" :
> 
> Gosh, this market is messy. Might as well head down to the roulette table & bet a few grand on Black!




 Yep, and more often than not something does happen.. :  
 I have my two most likely scenarios mapped out, and rather than try to predict the market I will let it tell me what it is doing.. if it conforms to one of my maps I will be in early with my ears pinned back... not after the move is near completed and obvious to one and all.  Just a different way of trading I guess...  
Cheers 
.........Kauri


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## Lucky_Country (28 January 2008)

Higher Iron Ore and Coal prices should give the sp a boost.
RIO uncertainty set too end on the 6th Feb no bid equals resumption of sharebuyback and hopefully increased dividends.
Higher production set to offset any lull in commodity prices.
All good imo


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## kengaikl (29 January 2008)

Iron ore prices for bhp will probably go up around about 40% this year as they plan to increase to long term contract prices with their major buyers which are way cheaper than the prices on the spot market. I just dont understand why they have been sold down so much. PLease dont tell me its the US "resession". for some reason people think that the words slowdown and resession has the same meaning.


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## Lucky_Country (29 January 2008)

So if BHP doesnt bid for RIO then there will be a resumption of the sharebuyback and traders move their money from RIO into BHP both of which will give the sp an injection.
If BHP does bid for RIO what will it do to the shareprice ?


----------



## vishalt (29 January 2008)

Lucky_Country said:


> So if BHP doesnt bid for RIO then there will be a resumption of the sharebuyback and traders move their money from RIO into BHP both of which will give the sp an injection.
> If BHP does bid for RIO what will it do to the shareprice ?



I'm guessing hammer it - like everything else in the market that has huge amounts of debt.

Feb6 is almost here, I think nothing is gonna happen but Kloppers could may well surprise yet.


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## Miner (29 January 2008)

I think the hidden devil is from south africa- with catastrophic power shortage very soon BHP will close their coal mines as well. So the high cash inflow will be plugged; the recession in USA will worsen (no matter how much cut is made in next two days- President Bush is a classic example of failure in everything - attacking Iraq for oil - did not pay back, creating a successor of Greenspan - sorry Ben you are no where near Greenspan, economy is down, dividends are being paid now for the major wrong strategies - world is affected so will be BHP, there is a chain reaction from lack of demand from China and as we close towards Sept 2008 the Olympic - Chinese markets will shrink .

So BHP will downgrade. Fortunately Rio has more strategic positions with automated mines, two ports, high resource base - it will not accept the BHP offer.

Of course it is my guess based on some speculative calculations. If I was so smart nevertheless I woudl be in the BHP or Rio Board ,

Best of luck


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## Lucky_Country (29 January 2008)

Maybe a pure scrip bid ?
Sharebuyback included they still have plenty left over from the cancellation of their last one.
Plus profits from a BHP/RIO would be astronomical easily repay debt.
Look at FMG zero revenue and 3.6 billion in debt !


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## meganut (29 January 2008)

kengaikl said:


> I just dont understand why they have been sold down so much. PLease dont tell me its the US "resession".




I, too don't understand the how when Iron Ore is doing so well that the share price takes a dive, apparently on a whim, I have seen their exported tonnes go from 68M a year to just under 300M. Of course this now includes the sale from Robe as the new amalgamated Pilbara Iron. China can't get enough Iron Ore, Rio is purchasing 6 of it's own ships and plans to freight their own ore in their own ships just to meet demand.

China now has it's finger in so many joint pies in the pilbara it's not funny (Murchison Metals, Channar minesite at Paraburdoo 50%) and it won't be long before China will be into FMG.

China gas accepted a 30-50% price increase from this year for contract sales but as usual I'm still baffled by the rise and fall of shares.

Personally I think it is more related to supply and demand based on panic and fear and an eye for a bargain.


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## kengaikl (31 January 2008)

Miner said:


> I think the hidden devil is from south africa- with catastrophic power shortage very soon BHP will close their coal mines as well. So the high cash inflow will be plugged; the recession in USA will worsen (no matter how much cut is made in next two days- President Bush is a classic example of failure in everything - attacking Iraq for oil - did not pay back, creating a successor of Greenspan - sorry Ben you are no where near Greenspan, economy is down, dividends are being paid now for the major wrong strategies - world is affected so will be BHP, there is a chain reaction from lack of demand from China and as we close towards Sept 2008 the Olympic - Chinese markets will shrink .
> 
> So BHP will downgrade. Fortunately Rio has more strategic positions with automated mines, two ports, high resource base - it will not accept the BHP offer.
> 
> ...




China will shrink??? are you saying that the chinese economy will go into Recession? The US is not even in a recession yet alone china. A slower growth rate does not mean that they will buy less iron ore from us even if they have a slower growth rate they will still buy more from us because they are still growing. The only way they will buy less if they actually go into a recession with means that their economy has negative growth which is highly unlikely because they are actually trying to cool down their economy. The asian economies unlike the mid 90's are in a position where they can now protect themselves from any recession in the US as they have alot of room to move interms of fiscal and monetary policies to insulate themselves from a downturn in the US.


----------



## Captain_Chaza (31 January 2008)

Patience is Everything!

Please 
Just hold onto your hats overnight 
Tomorrow is not that far away

Salute and Gods' speed


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## Trader Paul (31 January 2008)

BHP astroanalysis ... 30012008: 

 

Hi folks,

Looking ahead, with the RIO takeover announcement imminent,
our astroanalysis has us expecting some very positive BHP time
cycles, over the next couple of months:

06-07022008 ..... 3 minor cycles should bring some positive news, 
                            probably finance-related ... 

08-25022008 ..... underlying positive sentiment for BHP     

03-04032008 ..... 2 minor cycles and more news expected here

07-17032008 ..... BHP should be VERY STRONG here ... 

26-27032008 ..... 2 cycles and more positive news expected 

     07042008 ..... 2 cycles and negative spotlight on BHP

15-16042008 ..... a difficult cycle

18-21042008 ..... significant and negative cycle here

25-28042008 ..... significant and positive news expected.

07-08052008 ..... positive spotlight on BHP

14-16052008 ..... 2 positive cycles expected


have a great weekend

  paul



=====


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## vishalt (31 January 2008)

At the level the British listed BHP is at, the Aussie one should be at $39, so I think its quite a bargain and I was almost right in my analysis that get ready for BHP to tank to $32 and now it is flying !!

This titan carried the XAO on its back today with a late surge. 

I do hope BHP gets smashed a bit so I can close my shorts and just get all the longside dividend >_<!


----------



## haemitite (1 February 2008)

Miner said:


> I think the hidden devil is from south africa- with catastrophic power shortage very soon BHP will close their coal mines as well. So the high cash inflow will be plugged; the recession in USA will worsen (no matter how much cut is made in next two days- President Bush is a classic example of failure in everything - attacking Iraq for oil - did not pay back, creating a successor of Greenspan - sorry Ben you are no where near Greenspan, economy is down, dividends are being paid now for the major wrong strategies - world is affected so will be BHP, there is a chain reaction from lack of demand from China and as we close towards Sept 2008 the Olympic - Chinese markets will shrink .
> 
> So BHP will downgrade. Fortunately Rio has more strategic positions with automated mines, two ports, high resource base - it will not accept the BHP offer.
> 
> ...



You do realise that BHP supplies coal to these power stations in SA? And that coal mines consume mainly diesel powerwise

And of course RIO has no automated mines


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## mayk (1 February 2008)

August correction and the jan one look remarkably same. Same time frame for recovery. I guess the share price will consolidate at these levels ( given no market crash in US) for few weeks and then might get on with its long term uptrend. We might see a peak near $50, before next announcements of write off period in US.  

If BHP backs off or do not increase its bid I guess we might see a 2-5% further rise after 6 Feb.

Any other comments welcome.


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## Kauri (1 February 2008)

From Reuters...

Rio Tinto Chief Executive Tom Albanese on Sunday left the door open to a sweetened takeover offer from BHP Billiton, but said Rio would be happy to grow on its own if BHP walked away.
The world's biggest miner, BHP, must make a formal offer by Feb. 6 or leave Rio alone for at least six months under a deadline imposed by the UK Takeover Panel.
Rio shares jumped 4.9 percent in London on Friday on talk that BHP was set to improve its offer to 3.58 of its shares plus A$16.50 cash for Rio from a three-for-one all share offer, which was worth $140 billion when revealed last November.
While continuing to talk up the company's growth prospects, Albanese did not rule out accepting an improved offer.


----------



## matilda (1 February 2008)

Friday February 1, 08:31 AM   

REUTERS UK


Chinalco and Alcoa take stake in Rio Tinto
LONDON (Reuters) - Chinese and U.S. aluminium producers Chinalco and Alcoa <AA.N> have teamed up to buy a 12 percent stake in Rio Tinto (Stuttgart: 855018 - news) <RIO.L>, days ahead of a deadline for suitor BHP Billiton (LSE: BLT.L - news) <BLT.L> to make a firm offer for Rio or walk away.

The move sent Rio's shares surging 13 percent and the stock was trading 10 percent higher at 54.59 pounds by 8:22 a.m.

Chinalco, China's biggest aluminium producer, and Alcoa (NYSE: AA - news) said in a statement on Friday they did not currently intend to make an offer for Rio, but reserved the right to do so if Rio received a firm bid from a third party.

BHP, the world's biggest mining group, made public a proposal on November (Frankfurt: A0S9N7 - news) 8 to take over Rio and forge a mega-mining group with a market capitalisation of around $350 billion, but Rio spurned the approach.

Rumours have swirling for weeks about possible involvement in Rio by players from China, which buys huge amounts of commodities produced by both Rio and BHP to build infrastructure for its booming economy.

"Our acquisition of a significant strategic stake in Rio Tinto Plc today reflects our confidence in the long term prospects for the rapidly evolving global mining sector," Chinalco's President Xiao Yaqing said.

"We have confidence in the fundamental value of the Rio Tinto Group and the management's strong ability to realise that value for shareholders."

The statement did not say how much was paid for the stake, but Lehman Bros said it bought the shares on behalf of Chinalco at 60 pounds a share.

"The door is still very much open for BHP. 12 percent is not a blocking stake...and 60 pounds a share is equivalent to about 4-to-1 (BHP shares for each Rio share) and we think BHP can go up to about 4.5-to-1," said Liberium Capital analyst Michael Rawlinson.

Rio has spurned BHP's all-share takeover proposal, saying it fundamentally undervalued Rio and its growth prospects.

In an effort to fend off BHP's advances, Rio said on November 26 it would spend $9 billion (4.5 billion pounds) in 2008 to expand output, boost dividends and generate at least $15 billion in asset sales.

BHP Billiton, which has argued a combination with Rio would generate $3.7 billion in synergies, had until February 6 to make a firm offer for Rio Tinto or to drop its proposed takeover for six months under a deadline imposed by UK takeover regulators.

(Reporting by Mark Potter and Eric Onstad; Editing by Louise Ireland)


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## vishalt (1 February 2008)

BHP up like 15% in London at one stage. Get ready for a $4 move higher haha (dammit I wish I closed my shorts earlier) >_<


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## Lucky_Country (1 February 2008)

BHP bid for RIO all too hard too pull through now and could become very costly.
BHP shareholders should get immediate rewards from BHP resumption of the sharebuyback increased dividends and more buybacks in the future.
BHP may go on a shopping spree too increase its size so any co with great mineral assets will be in the window.


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## vishalt (1 February 2008)

I hope it doesn't. 

I hope Vale & Xstrata merge and then buy BHP. 

Then most of us BHP holders will be set for retirement or atleast buy a Jaguar or one of them trucks the miners drive!


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## cordelia (2 February 2008)

vishalt said:


> I hope it doesn't.
> 
> I hope Vale & Xstrata merge and then buy BHP.
> 
> Then most of us BHP holders will be set for retirement or atleast buy a Jaguar or one of them trucks the miners drive!




well I am a bit cautious right now.....I know the price of BHP has increased but I am waiting for a few more of my signals before I go in. I won't pick the bottom but once BHP takes off there willbe plenty of profit..... Good luck to those who are already holding. I nearly bought in today but thought better of it. There wasn't the volume to support it..

I love BHP


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## vishalt (2 February 2008)

That's the problem with BHP though, when it runs its extremely hard to catch and it just runs too hard at times. Buying on dips really has been a stellar tactic, or if you had enough guys to buy a bit during the correction!


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## Miner (2 February 2008)

haemitite said:


> You do realise that BHP supplies coal to these power stations in SA? And that coal mines consume mainly diesel powerwise
> 
> And of course RIO has no automated mines




Dear Haemitite
Thanks for your update and increasing my knowledge base.
RIo has done the automated operation of mines some two years back on trial. Ironically I have witnessed it personally - won't get any more from me on this . Now it is in public domain since last two months and please follow recent posting by Mr Sam Walsh CEO of RTIO.
What i meant by automated mines - there would be no crusher operator and they will be actually sitting in Perth St Georges Office. 

Thanks any way on the update on coal front.

Regards


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## Garpal Gumnut (2 February 2008)

Garpal Gumnut said:


> BHP is a beautiful stock to chart, all human life is there. Asutralian's hopes and dreams, their super and future often rest on this little miner.
> 
> I have been following BHP for many years.
> 
> ...




It appears as if BHP is doing a classical Elliot Wave down since its high at $47.70. If volume falls in the next few weeks it may challenge these lows at just above $30 and reach $25 or so, or lower.

gg


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## the barry (2 February 2008)

Garpal Gumnut said:


> It appears as if BHP is doing a classical Elliot Wave down since its high at $47.70. If volume falls in the next few weeks it may challenge these lows at just above $30 and reach $25 or so, or lower.
> 
> gg




Dont know why you bother to look at the charts on this one. If the market goes up, so will bhp and vice versa if the market goes down. If the US continues to rally these prices wont stay around for long. Then you have to add in chinas problems which is going to see short term (at least) strength in commodities prices. Will bounce back over 40 this coming week on chinas problems alone.


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## haemitite (2 February 2008)

Miner said:


> Dear Haemitite
> Thanks for your update and increasing my knowledge base.
> RIo has done the automated operation of mines some two years back on trial. Ironically I have witnessed it personally - won't get any more from me on this . Now it is in public domain since last two months and please follow recent posting by Mr Sam Walsh CEO of RTIO.
> What i meant by automated mines - there would be no crusher operator and they will be actually sitting in Perth St Georges Office.
> ...



Every mine I have seen has a remote control room for process plant and truck allocation. And the Citect control systems can and are be maintained and run remotely 

But truly automated mines with driverless trucks etc are a long way off.


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## Nyden (2 February 2008)

the barry said:


> Dont know why you bother to look at the charts on this one. If the market goes up, so will bhp and vice versa if the market goes down. If the US continues to rally these prices wont stay around for long. Then you have to add in chinas problems which is going to see short term (at least) strength in commodities prices. Will bounce back over 40 this coming week on chinas problems alone.




Right now you're feeling the euphoria of recent events, but if things turn sour again - suddenly charts will hold relevance again.

Possible interest rate rise on Tuesday, possible increase in bid for Rio on Monday/Tuesday as well ... frankly, I can see a lot of *risk* here.


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## Garpal Gumnut (2 February 2008)

the barry said:


> Dont know why you bother to look at the charts on this one. If the market goes up, so will bhp and vice versa if the market goes down. If the US continues to rally these prices wont stay around for long. Then you have to add in chinas problems which is going to see short term (at least) strength in commodities prices. Will bounce back over 40 this coming week on chinas problems alone.




Thanks, we'll see.

The recent rise to alltime highs and the recent twin lows in low 30's have been on falling volume.

I'll be keeping my gumnuts until BHP gets down to $25 which is where the long term trendline will provide support.

gg


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## Kauri (2 February 2008)

haemitite said:


> Every mine I have seen has a remote control room for process plant and truck allocation. And the Citect control systems can and are be maintained and run remotely
> 
> But truly automated mines with driverless trucks etc are a long way off.





Major components of the ’mine of the future’ are being commissioned in Rio Tinto Iron
Ore operations in 2008 and 2009 including establishing a Remote Operations Centre
(ROC) in Perth to manage operations in the Pilbara mines hundreds of kilometres away.
This allows operators overseeing Rio Tinto Iron Ore mines and process plant facilities to
be physically located in Perth, Western Australia.
*Remote control ‘intelligent’ trains, drills and trucks will be operational within Rio Tinto Iron*
*Ore during 2008*. Humans will no longer need to be hands on as all this equipment will be
‘autonomous’ – able to make decisions on what to do based on their environment and
interaction with other machines. Operators will oversee the equipment from the ROC.
Tom Albanese said, “Rio Tinto is changing the face of mining. We have at least a three
year start on the rest of the industry, which has focused on discrete technologies rather
than modernising the whole mine-to-port operation. We’re aiming to be the global
leaders in fully integrated, automated operations. It will allow for more efficient operations
and directly confront the escalating costs associated with basing employees at remote
sites, giving us a competitive advantage as an employer along the way."​*Remote Operations Centre​*A Remote Operations Centre (ROC) will be built for Rio Tinto near Perth’s domestic
airport. When completed in 2009, the ROC will house at least 320 employees who will
work with Pilbara-based colleagues to oversee, operate and optimise the use of key
assets and processes, including all mines, processing plants, the rail network, ports and
power plants. Operational planning and scheduling functions will also be based in the​ROC.

Cheers
...........Kauri


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## kengaikl (2 February 2008)

i dont no why people bother with technical analysis. Really does it work?? i got a friend who does it and i just go opposite to what he says and that seems to work.


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## Nyden (2 February 2008)

kengaikl said:


> i dont no why people bother with technical analysis. Really does it work?? i got a friend who does it and i just go opposite to what he says and that seems to work.




Ha. Lately no form of analysis seems to work accurately, too much volatility, & the unpredictable nature of human emotion causes the markets to be very difficult to play at the moment. Down on bad news, up on bad news, sideways on bad news, hmmm ... only consistent thing here is bad news :::


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## Kauri (2 February 2008)

Nyden said:


> Right now you're feeling the euphoria of recent events, but if things turn sour again - suddenly charts will hold relevance again.
> 
> Possible interest rate rise on Tuesday, possible increase in bid for Rio on Monday/Tuesday as well ... frankly, I can see a lot of *risk* here.





LoLoL   only here.    ..  Mind you.. risk is the only thing you can control..   
Cheering .........
.........Kauri


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## Nyden (2 February 2008)

Kauri said:


> LoLoL   only here.    ..  Mind you.. risk is the only thing you can control..
> Cheering .........
> .........Kauri




: BHP is our whole index! Risk here, means risk for the all ords : I thought that was implied! (Kidding!)

Don't mind me though, I'm just a wondering lunatic


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## Garpal Gumnut (2 February 2008)

kengaikl said:


> i dont no why people bother with technical analysis. Really does it work?? i got a friend who does it and i just go opposite to what he says and that seems to work.




What works for you is what works.

TA works for me.

It doesn't for your mate, but then it does for you if you are a contrarian to his advice !!

BHP is a good stock to follow on TA as it *usually* trends for long periods of time then breaks out. 

Its behaviour recently is new territory for everyone. Make your own mind up is the best way to go.

gg


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## haemitite (2 February 2008)

Kauri said:


> Major components of the ’mine of the future’ are being commissioned in Rio Tinto Iron​
> Ore operations in 2008 and 2009 including establishing a Remote Operations Centre
> (ROC) in Perth to manage operations in the Pilbara mines hundreds of kilometres away.
> This allows operators overseeing Rio Tinto Iron Ore mines and process plant facilities to
> ...



Remote Ops Centres are nothing new. This one is simply located in Perth rather than at site

The statement does not say that RIOs entire truck operation will be automated- ie the fact that that Remote Control Room isn't due till next year makes this look like another RIO spin gimmick. One truck somewhere as a trial perhaps?

The language is overbown, Trucks will hardly be making a decision on ore v waste in their "envirornment". Despatch has been used to allocate trucks for the last decade, driverless trucks would be an advancement. But with the safety issues I'll believe it when I see it


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## Kauri (2 February 2008)

kengaikl said:


> i dont no why people bother with technical analysis. Really does it work?? i got a friend who does it and i just go opposite to what he says and that seems to work.






Nyden said:


> Ha. Lately no form of analysis seems to work accurately, too much volatility, & the unpredictable nature of human emotion causes the markets to be very difficult to play at the moment. Down on bad news, up on bad news, sideways on bad news, hmmm ... only consistent thing here is bad news :::




  Can't for the life of me understand... BHP has not only conformed near spot on with the E/W analysis I use.. (W3 at 1.618 of W1) but has also conformed to the one of the oldest forms of T/A.. namely horizontal S/R... despite the  apparent "*unpredictable nature of human emotion causes the markets to be very difficult to play at the moment*." I think that you will find that people who are in step and are actually trading the markets are having a ball... 

find a setup...find an instep timeframe... quantify your risk... and ignore what the *experts* of the press say.. after all.. if no-one had told me that the market was in turmoil.. going by my chart.. BHP is not that much different volatility wise since OCT07-JAN08. as it was from Dec06-OCT07... except it is going down, not up..  I thunk..
Cheers
...........Kauri


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## Kauri (2 February 2008)

haemitite said:


> Remote Ops Centres are nothing new. This one is simply located in Perth rather than at site
> 
> The statement does not say that RIOs entire truck operation will be automated- ie the fact that that Remote Control Room isn't due till next year makes this look like another RIO spin gimmick. *One truck somewhere as a trial perhaps?*
> 
> The language is overbown, Trucks will hardly be making a decision on ore v waste in their "envirornment". Despatch has been used to allocate trucks for the last decade, driverless trucks would be an advancement. But with the safety issues I'll believe it when I see it




The mining company recently began operating the processing plants for its West Angelas and Hope Downs mines from a site in Perth's city centre to allow the operators to live on the coast rather than fly in and out of the remote Pilbara locations. The new operations centre near the airport should be completed next year, giving Rio enough space to run its railway system from the same location.
"As we look ahead, it's increasingly hard to attract the number of new people we need and base them in the Pilbara or create fly-in/fly-out solutions," the chief executive of Rio, Tom Albanese, said yesterday. "You may still see more employees in total, but there will be a larger amount of tonnes produced per employee with the automation."
*Rio Tinto has been successfully trialling automated drill rigs, trucks and trains at West Angelas*, following a failed effort at its Tarong coalmine in Queensland during the 1990s. "We didn't feel the technology was there to safely put automated equipment in the same space as humans, so we wound back our program," Mr Albanese said of the earlier Tarong tests.


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## Nyden (2 February 2008)

Kauri said:


> Can't for the life of me understand... BHP has not only conformed near spot on with the E/W analysis I use.. (W3 at 1.618 of W1) but has also conformed to the one of the oldest forms of T/A.. namely horizontal S/R... despite the  apparent "*unpredictable nature of human emotion causes the markets to be very difficult to play at the moment*." I think that you will find that people who are in step and are actually trading the markets are having a ball...
> 
> find a setup...find an instep timeframe... quantify your risk... and ignore what the *experts* of the press say.. after all.. if no-one had told me that the market was in turmoil.. going by my chart.. BHP is not that much different volatility wise since OCT07-JAN08. as it was from Dec06-OCT07... except it is going down, not up..  I thunk..
> Cheers
> ...........Kauri




Yes, but I'm not a trader, well - I guess I am to an extent, but only for the medium term, & my appetite is for risk is very minimal right now, so I hate volatility!

The only problem is ; as to what I was referring, is that no matter what your form of analysis is at the moment; be it T/A or fundamental - any number of factors can hit that out of whack very quickly. The US seems to dominate our market at the moment, not analysis. At least, that's my opinion :


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## haemitite (2 February 2008)

Kauri said:


> The mining company recently began operating the processing plants for its West Angelas and Hope Downs mines from a site in Perth's city centre to allow the operators to live on the coast rather than fly in and out of the remote Pilbara locations. The new operations centre near the airport should be completed next year, giving Rio enough space to run its railway system from the same location.
> "As we look ahead, it's increasingly hard to attract the number of new people we need and base them in the Pilbara or create fly-in/fly-out solutions," the chief executive of Rio, Tom Albanese, said yesterday. "You may still see more employees in total, but there will be a larger amount of tonnes produced per employee with the automation."
> *Rio Tinto has been successfully trialling automated drill rigs, trucks and trains at West Angelas*, following a failed effort at its Tarong coalmine in Queensland during the 1990s. "We didn't feel the technology was there to safely put automated equipment in the same space as humans, so we wound back our program," Mr Albanese said of the earlier Tarong tests.



Again, I'll believe it when we see entire sites running fulltime with driverless trucks. As opposed to trials.


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## matilda (3 February 2008)

From The Sunday Times
February 3, 2008



> Chinese gear up for Rio Tinto battle
> The Chinese government has put a £60 billion war chest at the disposal of Chinalco as it prepares to battle with BHP Billiton over Rio Tinto




The money would be made available through CIC (China Investment Corporation), the sovereign wealth fund behind Beijing’s recent investments in the Wall Street firms Blackstone and Morgan Stanley

http://business.timesonline.co.uk/tol/business/


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## barnz2k (3 February 2008)

theyve already bought %12, and "reserve the right to buy more shares" if BHP puts a bid forward.

What effect do you think this will have to both sides?
Probably better if we can just get a resolution either way. dragging it out is hurting both no?


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## noirua (3 February 2008)

The investment in RIO, in the London Stock Exchange part of the company "Rio Tinto PLC", was given the Green Light after U.K. Prime Minster Gordon Brown visited China recently. He said Britain welcomed investment by China in their Country.


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## haunting (3 February 2008)

My 2c.

From the Chinese perspective, their objectives seem to be, first and foremost, be a spoiler to the BHP-RIO merger because regardless what promises BHP had given them, in the long run, the merger will almost certainly  make BHP and Vale into a duopoly in the iron ore market. 

As a big consumer in this market, this is extremely bad news for the Chinese, especially when their country is going through a rapid pace of growth, the consumption of iron/steel will only increase in the next 10 or 20 years. The merger will certainly strengthen the bargaining power of both the producers whilst greatly reduce the consumers' - it will be most silly of them if they do not act and let it happen.

Secondly, preservation of their US$ reserve value by investing in commodity, in this case, RIO probably is one of the better way in achieving this goal. It makes a lot of sense especially when the USA has clearly indicated they intend to reduce interest rate to combat recession. The speculative end of the market is anticipating a target rate of 2 - 2.5% in 6 months time. The more they offload their US$ into hard assets, the better it would be.

With these considerations, one has to ask what is the chance of success for BHP?

In my view, in the current proposal, ZERO!

Barring any political pressure from the EU to the Australian government, on pure commercial considerations, China will not give up their holding in RIO and let BHP succeed in this merger. Not when they know the stake is this high and has such long devastating effect on their country as a whole. The Chinese communist central government will make sure the stake in RIO won't be given up so easily.

For that matter, the Chinese will probably raise their holding in RIO if BHP were to turn hostile and aggressive in their bid. Now that the Chinese' move is out in the open, the basic message is quite clear, especially to BHP - they want to have their say in the matter and they are not going to be a passive bystander. And they have plenty of cash! Over a trillion! Ok, may be not all of them, but at least there are 200 billions in stand by.

I can't see how BHP can succeed under this circumstance, especially when they are making an all script offer. In terms of cash or buying power, they are the weaker side. In terms of synergy, appealing to the share holders, etc, the Chinese and their partner are  one happy RIO share holders and they won't sell!

Other possible scenarios:

1) RIO makes a reverse take over of BHP. With the Chinese backing, I won't rule this out. Especially when Gordon Brown has appealed to the Chinese to invest in UK in his recent visit to China, this will make a good test case for both governments.

2) BHP invites the Chinese to take a substantial stake in the company, in the process, buying over their stake in RIO. There may be added sweetener for the Chinese, like guarantee supplies for the next 20 years at certain control price increment.

(This has the potential of antagonizing the Japanese and the S.Korean).

3) Others, if you know, you can tell us.

Cheers.


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## stoxclimber (3 February 2008)

"The Chinese communist central government will make sure the stake in RIO won't be given up so easily.

For that matter, the Chinese will probably raise their holding in RIO if BHP were to turn hostile and aggressive in their bid."


BHP can't go hostile if the Chinese govt has >10% and wants to block the merger. Their chance, which is far from 0%, is via a scheme of arrangement


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## BSD (3 February 2008)

stoxclimber said:


> "The Chinese communist central government will make sure the stake in RIO won't be given up so easily.
> 
> For that matter, the Chinese will probably raise their holding in RIO if BHP were to turn hostile and aggressive in their bid."
> 
> ...




I tend to agree and will be switching a fair bit of RIO exposure to BHP tomorrow.

In the broader context this is a stunning vote of confidence for the resources cycle from those driving it.

Further, this must be an even bigger vote of confidence for the Aluminium price and the effect the global energy squeeze is going to have on its price.


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## Jimminy (3 February 2008)

stoxclimber said:


> "
> BHP can't go hostile if the Chinese govt has >10% and wants to block the merger. Their chance, which is far from 0%, is via a scheme of arrangement





BHP only require 75% for a merger. The 12% stake cannot block a merger.

90% required for takeover.


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## matilda (3 February 2008)

China ready to block BHP deal in court

The Observer, Sunday February 3 2008 


last updated at 00:02 on February 03 2008. 

The Chinese government is preparing to launch an unprecedented legal challenge against BHP's planned $130bn takeover bid for Rio Tinto. High-ranking officials from the Chinese embassy in London have been approaching top City law firms over the past month for help in blocking what would be the world's second-largest takeover.

Beijing has recently drawn up framework legislation for the country's first competition law. Once passed, the Chinese government wants to use it to mount its first legal challenge to a foreign takeover. The legal moves are part of a two-pronged attack on BHP, which has until Wednesday to table an offer for Rio or walk away for six months. 

On Friday, state-owned Chinalco launched a dramatic dawn swoop on Rio, buying a 12 per cent stake for $14bn. The stake is not large enough to prevent BHP from bidding for Rio, but it enables the Chinese to influence the outcome of any BHP bid. 

Chinalco said it might also launch a takeover bid to counter any offer made this week by BHP. But analysts said this weekend that such a move was unlikely, believing that it would be blocked by regulators in Australia, where BHP and Rio Tinto are based. 

Beijing is concerned that a combination of Rio and BHP would control over a third of the world's seaborne exports of iron ore. China is the world's largest steel-producing country, and so is heavily dependent on ore imports. 

Chinese embassies elsewhere in Europe and in the US have also been seeking advice on ways of blocking the takeover. China's embassy in London did not return calls.

Mike Pullen of law firm DLA Piper said: 'Rio and BHP may not have any assets in China but the Chinese government would argue that a takeover would affect its domestic market. There's no precedent to such a challenge.'

An offer for Rio by BHP could also trigger a lengthy investigation by the European Commission and possibly US and Australian authorities as well. 

Pullen admitted it was not clear which jurisdiction would prevail if different conclusions were reached in the different investigations: 'There is no guarantee that all the competition authorities will come to the same verdict.' 

Bankers working for BHP were this weekend scrambling to examine whether a bid for Rio was still feasible. Neither BHP nor Rio has yet held a meeting with Chinalco, and neither company is sure about the intentions of the Chinese. BHP is still expected to make an offer, but analysts say it would have to at least match the price Chinalco paid for its stake on Friday. 

One top-10 UK-based Rio shareholder, who asked not to be named, is urging the Chinese and BHP to discuss how they can work together to break Rio up: 'A BHP-Rio deal is a deal that should be done. Chinalco's move was quite aggressive. There will have to be some element of kite-flying between the Chinese and BHP to see if there is anything worth doing anything together.'

http://www.guardian.co.uk/business/2008/feb/03/mining.china[/URL]


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## Fed23 (4 February 2008)

Dam chinese want to ruin everything. 

If I were BHP i'd say get out of our way else we want our metals we donated for the olympics


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## vishalt (4 February 2008)

Aussie listed BHP is trading it a very significant discount to the British counterpart. 

What a weak performance by both Rio and BHP today compared to the 12 & 10% done on London overnight, oh well just makes it a sexier buying opportunity .


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## kengaikl (4 February 2008)

vishalt said:


> Aussie listed BHP is trading it a very significant discount to the British counterpart.
> 
> What a weak performance by both Rio and BHP today compared to the 12 & 10% done on London overnight, oh well just makes it a sexier buying opportunity .




Maybe british investors have more common sense than Australian investors, or maybe Australians are more chicken when it comes to investing in stocks.


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## hartley (5 February 2008)

Re-post from the thread: What will happen to BHP and RIO after Feb 6th?

Chinalco ready to sell
Updated: 08:04, Tuesday February 5, 2008
Chinalco, Rio Tino's newest major shareholder, has confirmed it is prepared to sell its 12 per cent stake in the company, to BHP Billiton.

That's if it makes money on the deal.

The company says the purchase was a strategic investment to diversify its options and won't interfere with Rio management.

The buy was made in London because of market liquidity and in terms of timing the decision was made based on price.

The fact that it came close to BHP's deadline to formalise its bid for Rio was pure coincidence.

It's also confirmed it has no future plans to increase its 12 per cent stake in Rio, although it is looking at other Australian investments.

On the sector as a whole, Chinalco executives say they see strong demand and prices for metals and that the general global outlook is strong.


===========


Sounds like good news for BHP to me.


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## Nyden (5 February 2008)

hartley said:


> Re-post from the thread: What will happen to BHP and RIO after Feb 6th?
> 
> Chinalco ready to sell
> Updated: 08:04, Tuesday February 5, 2008
> ...





Maybe not ...

IF BHP end up 'over paying', at least in the eyes of investors ... that would be awful for share price - & now it looks like they're going to be over paying for at least 12%


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## haunting (5 February 2008)

_That's if it makes money on the deal_ - I think this line says it all. 

How much will they be happy to sell?

The easy conclusion here is BHP is going to overpay for a whole lots of dirt. M&A at a market top has always ended in misery. This time is no difference.

Cheers.


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## cordelia (5 February 2008)

Nyden said:


> Maybe not ...
> 
> IF BHP end up 'over paying', at least in the eyes of investors ... that would be awful for share price - & now it looks like they're going to be over paying for at least 12%




I don't know much about the whole takeover deal thing but if BHP shares take a dive what's to stop Chinalco buying them up on the sly?   

I wouldn't take this whole scenario at face value.....


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## Fed23 (5 February 2008)

Man the chinese are saying it was pure coincidence... which I say is BS.

They played it smart, they didnt want to lose on a chance of making money.. pure greed.

Now greed is going to stop them from selling that 12%. I would prefer as a BHP holder for BHP to walk away and watch RIO drop.


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## YELNATS (5 February 2008)

Fed23 said:


> Man the chinese are saying it was pure coincidence... which I say is BS.
> 
> They played it smart, they didnt want to lose on a chance of making money.. pure greed.
> 
> Now greed is going to stop them from selling that 12%. I would prefer as a BHP holder for BHP to walk away and watch RIO drop.




Yes, walk away for now and watch RIO drop and let the opportunistic Chinalco take a loss, at least on paper.

There will probably other chances down the track for BHP to acquire RIO.


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## Pager (5 February 2008)

I dont think the senior management at BHP will overpay, they will/have run the rule over RIO, factor in savings/synagies to be achieved for a merged BHP/RIO and increase the offer accordingly.

IMO, they never expected the initial 3 for 1 offer to be accepted, it was just the opening bid to feel the water so to speak.


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## kengaikl (5 February 2008)

Fed23 said:


> Man the chinese are saying it was pure coincidence... which I say is BS.
> 
> They played it smart, they didnt want to lose on a chance of making money.. pure greed.
> 
> Now greed is going to stop them from selling that 12%. I would prefer as a BHP holder for BHP to walk away and watch RIO drop.




Trust me the chinese can afford RIO, to them it's just pocket change. This 12% stake is only the begining from the chinese to try and make sure that no one has a monopoly over the global iron ore supply; iron ore they need to keep up with their demand.


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## vishalt (5 February 2008)

Besides that boys, tomorrow will be a day to rejoice as BHP will probably post the biggest 1H profit in Australian history. 

I'm tipping oil and copper as the biggest profit chippers with maybe a surprising boost to the dividend + share buybacks. 

I'm tipping that there will be atleast a formal offer from BHP for Mr. Tinto, so I'm buying up small in Rio but if it fails I have a stoploss. 

Good luck to BHP & Rio shareholders, hope we both come out of this as winners!


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## agro (6 February 2008)

BHP briefing
Updated: 08:31, Wednesday February 6, 2008
BHP will address the investment community in Sydney today to discuss its half year profit results and takeover bid for mining rival, Rio Tinto.

BHP advisers have been locked in meetings to discuss the takeover deal, which is likely to see the company launch a 3-for-1 bid for Rio, or just slightly above this.

There's also the possibility BHP may walk away from the deal, especially after the China-based Chinalco joined forces with America's Alcoa to purchase a 12 per cent strategic stake in Rio.

BHP is being pushed into making a decision by the UK Takeover Panel, which has told the company it must make a formal bid for Rio by today, or walk away.

The Herald is reporting that if BHP does gain control of Rio, it plans to offload the company's Alcan business.

BHP is hoping that this will quell market fears the Chinese government is using its stake in Chinalco to block the Rio takeover.

This all comes as as BHP is expected to announce half-year profits of almost $7 billion.


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## prana (6 February 2008)

NPAT about 6.017B vs estimated 7  unless there's something in the pooding I missed this is not good


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## Sean K (6 February 2008)

3.4 for 1.

Probably still not enough. 

RIO will call it insufficient again, even though it's an above average premium to where they were before the original approach. 

Will probably mean the market will expect a counter bid, or BHP will have to raise it's price. Good for RIO holders right now.


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## vishalt (6 February 2008)

I reckon the Rio board will atleast meet with the BHP board with the raised offer. 

3.4/$147 billion is ridiculously huge!


----------



## Mellow77 (6 February 2008)

Can somebody tell me why BHP is not traded atm? I have not noticed any trading hold.

 Maybe a stupid question....


----------



## Mellow77 (6 February 2008)

Mellow77 said:


> Can somebody tell me why BHP is not traded atm? I have not noticed any trading hold.
> 
> Maybe a stupid question....




OK already found it.

-> pre 10:50, resumes 11:00
__

Any thoughts on the share price? Up or Down or DownDown?


----------



## Nyden (6 February 2008)

Mellow77 said:


> OK already found it.
> 
> -> pre 10:50, resumes 11:00
> __
> ...




Indicative shareprice is 39.1, so - already in the negative territory ... probably not going to be a good day for BHP.


----------



## zhang66777 (6 February 2008)

Mellow77 said:


> OK already found it.
> 
> -> pre 10:50, resumes 11:00
> __
> ...




would you mind to tell me where you can find trading hold info, and resume info, many thanks


----------



## Mellow77 (6 February 2008)

zhang66777 said:


> would you mind to tell me where you can find trading hold info, and resume info, many thanks




It is stated in CommSec Pro. Only one line info, no pdf document. The merger and the results, too much info for today. I wonder how the market will react. Good trading to all.


----------



## barnz2k (6 February 2008)

Official Bid

http://business.smh.com.au/bhp-makes-bid-for-rio/20080206-1qgl.html



> BHP Billiton, the world's biggest mining company, has made a formal $US147.4 billion ($164.5 billion) bid for Rio Tinto, raising its initial offer by more than 10 per cent.
> 
> The Melbourne-based mining company offered 3.4 of its own shares for each Rio share, a 45 per cent premium on Rio's price.




if its rejected, it still buys BHP time right? as in they can continue negotiating, not step away for 6months?


----------



## dhukka (6 February 2008)

Notably absent is any comment on BHP's lacklustre results. Net profit down for the half year. EPS up slightly only because of share buybacks. Growth only to be achieved through overpriced acquisitions. No compelling reason to own this stock at current prices.


----------



## cordelia (6 February 2008)

dhukka said:


> Notably absent is any comment on BHP's lacklustre results. Net profit down for the half year. EPS up slightly only because of share buybacks. Growth only to be achieved through overpriced acquisitions. No compelling reason to own this stock at current prices.




yes....for the amount of money you have to invest with BHP to get a decent return I think there are better places to go.....SP has taken a tumble today...sold mine at $40...so glad I did....


----------



## vishalt (6 February 2008)

dhukka said:


> Notably absent is any comment on BHP's lacklustre results. Net profit down for the half year. EPS up slightly only because of share buybacks. Growth only to be achieved through overpriced acquisitions. No compelling reason to own this stock at current prices.



Lacklustre? 

You can't be serious...... just because it wasn't a gain doesn't mean it was "lacklustre" - it still steamrolls what most countries in this world can make in half of a year. 

You also have to remember that currency is hurting BHP but atleast as a shareholder it relieving to know the company is churning out ridiculous amounts of cash. 

BHP is one of the most undervalued companies listed and I'd still buy more when the market settles, afterall Rio Tinto reported a 6% decline in its last report and the shares have still shot up on future outlook by $60.

If anything I was surprised they kept it up at the same level as they have and I was more surprised with the dividend boost.


----------



## foopepper (6 February 2008)

hey guys, 

anyone know why bhp's share price went down this morning, was it b/c of their half-year earnings or was it b/c of the rio deal? i would have thought it would have gone up b/c of the 3.4 for 1 bid

any insight is appreciated.


----------



## albi000 (6 February 2008)

Should also see increases in Coal and Iron ore prices


----------



## Nyden (6 February 2008)

vishalt said:


> Lacklustre?
> 
> You can't be serious...... just because it wasn't a gain doesn't mean it was "lacklustre" - it still steamrolls what most countries in this world can make in half of a year.
> 
> ...




It was lacklustre. A company's share price is based mostly on future & potential *growth*, not current earnings. This is especially the case with a low-yielding (piss poor dividend) stock such as BHP; the entire price is based on an increase of earnings / positive return on the current price, & nothing else.

BHP is priced at 13 times it's earnings, it is not undervalued, not a single stock in this uncertain market is.

 If base metal prices show no growth this year, or worse yet a decline - in line with an *increase* in most production costs ... what was a bargain today, will be a curse tomorrow.


Edit; Is it just me, or has BHP become the titanic of the ASX? The company that can't possibly sink : All the hopes of the average investor weigh on her shoulders ... the media darling, hype is never a good thing!


----------



## dhukka (6 February 2008)

vishalt said:


> Lacklustre?
> 
> You can't be serious...... just because it wasn't a gain doesn't mean it was "lacklustre" - it still steamrolls what most countries in this world can make in half of a year.




Surely you cant be serious with this statement. Net Profit down, eps up *2.8%* because of buybacks, lacklustre is being generous. Undervalued on what basis?


----------



## Buffettology (6 February 2008)

prana said:


> NPAT about 6.017B vs estimated 7  unless there's something in the pooding I missed this is not good




ha ha, yeh, this takeover speculation has really trumped the actual profit results!  Not good at all!

I think BHP is going to see some more downside in the coming weeks!


----------



## nomore4s (6 February 2008)

Nyden said:


> BHP is priced at 13 times it's earnings, it is not undervalued, *not a single stock in this uncertain market is.*




Could be very wise words there Nyden. Things could certainly get alot cheaper the way things are panning out.



dhukka said:


> Surely you cant be serious with this statement. Net Profit down, eps up *2.8%* because of buybacks, lacklustre is being generous. Undervalued on what basis?




Agree with Dhukka here, pretty poor results really. Net profit down isn't really a good sign.

If a company like BHPs net profit is already coming under pressure even with China booming, where is the upside going to come from? Maybe China is already priced in?
It will be interesting to see if China begins to slow after the Olympics (even if it only drops back to 3-6% growth) and if it does, what effect it will have on BHP and other resource stocks.

I think people were expecting a strong reporting season to help pull us out of the current downtrend and choppy market conditions, but with WOW and now BHP releasing weak (below market expectations) results the signs aren't good imo.

Reality setting in?


----------



## mayk (6 February 2008)

Hi, 

Can some one tell me what will the dividend for BHP ?
 Was today the ex-dividend date? 

Sorry I can't find this information anywhere. Can someone point me to right direction.

Thanks


----------



## Fed23 (6 February 2008)

I just want to know what happens if RIO says we will not take the offer?

Will BHP SP drop more or will it go up as they will have that $145billion that isn't used?


----------



## albi000 (6 February 2008)

mayk said:


> Hi,
> 
> Can some one tell me what will the dividend for BHP ?
> Was today the ex-dividend date?
> ...





http://www.bhpbilliton.com/bb/investorsMedia/calendar/dividendDates.jsp

Mon 25 Feb 	Ex-Dividend Date (ASX & JSE) 	 
Wed 27 Feb 	Ex-Dividend Date (LSE & NYSE (3))


----------



## Sir Burr (6 February 2008)

mayk said:


> Hi,
> 
> Can some one tell me what will the dividend for BHP ?
> Was today the ex-dividend date?
> ...




http://www.asx.com.au/asxpdf/20080206/pdf/3179nm1bgqd7vb.pdf

US 29.0 cents fully franked.

Edit: Hey albi000 beat me to it but that doesn't say how much


----------



## Buffettology (6 February 2008)

nomore4s said:


> I think people were expecting a strong reporting season to help pull us out of the current downtrend and choppy market conditions, but with WOW and now BHP releasing weak (below market expectations) results the signs aren't good imo.
> 
> Reality setting in?




This is EXACTLY what I was thinking when I heard this result.  

I was also expecting a strong reporting season and have been surprised, dont like the looks of things at the moment, but thank god I am 65% cash now!  If it gets down anywhere towards 5000, I will definatley start buying up.  

For some reason, I dont think we have seen the big lows yet!  A bottom has to be established before we can really get back into the next bullish phase!


----------



## Nyden (6 February 2008)

Sir Burr said:


> http://www.asx.com.au/asxpdf/20080206/pdf/3179nm1bgqd7vb.pdf
> 
> US 0.29c Fully franked...............




Which is absolutely pitiful for a $35 stock :

Which once again reiterates the point - BHP is a "high growth" stock, not a high yield'er (dividends) ... if it doesn't meet that high growth, it's got nothing


----------



## Buffettology (6 February 2008)

Nyden said:


> Which is absolutely pitiful for a $35 stock :
> 
> Which once again reiterates the point - BHP is a "high growth" stock, not a high yield'er (dividends) ... if it doesn't meet that high growth, it's got nothing




Not to mention, the risk to that growth is at least average, which has to be factored into its P/E ratio.

Price and growth are not the only things taken into account.


----------



## albi000 (6 February 2008)

Buffettology said:


> Not to mention, the risk to that growth is at least average, which has to be factored into its P/E ratio.
> 
> Price and growth are not the only things taken into account.




Future Growth explain here?  The first time I read this it looked like a jumbled mess, still does but makes some sense the second time around.


----------



## dhukka (6 February 2008)

Pretty graphs are nice but they have to translate into results and that didn't happen in the last half. It's amazing how much analysts got this number wrong. According to this smh story, analysts had forecasts ranging from NPAT of *US$6.3* billion to *US$7.75* billion. That's quite a miss, BHP will surely get spanked in Europe and the States tonight.


----------



## Buffettology (6 February 2008)

dhukka said:


> Pretty graphs are nice but they have to translate into results and that didn't happen in the last half. It's amazing how much analysts got this number wrong. According to this smh story, analysts had forecasts ranging from NPAT of *US$6.3* billion to *US$7.75* billion. That's quite a miss, BHP will surely get spanked in Europe and the States tonight.




Absolutely!  These analysts were way off!  I mean a billion dollars isnt a small figure!  

Its in for a hammering tonight!


----------



## numbercruncher (6 February 2008)

So is the rise in Ore prices going to be enough to offset falling/fallen USD, Rising Input costs and very possibly lower demand from a US led recession ?


----------



## treefrog (6 February 2008)

albi000 said:


> Future Growth explain here?  The first time I read this it looked like a jumbled mess, still does but makes some sense the second time around.




look awfully like a bag of party ballons to me - bhp needs to somehow keep that kid over there with the pin (US recession) away or there won't be many left


----------



## vishalt (6 February 2008)

Analysts were way off? Whoa thats big news!

Anyway the reason why I say its undervalued is because no way should a beast earning $16 billion + a year be worth $30. It's P/E if you look at the British & Aussie market is around 10/12, a discount to the All Ords when it bounces around 14/16. 

Please keep dreaming if you expect to earn a ridiculous $16 billion per year and break it by increments of 30-100%, not even Exxon Mobil does that but the security of a sustained need for oil has continued to boost its share price from $5 to $95, and similarly I believe that a sustained need for raw materials and petro-products from BHP will be needed for the BRIC to industrialise. 

Just like a chart you're going to have down days in the profit reports and I'm personally very confident in BHP and the mining boom to ride ahead despite this short-term indiscriminate volatility. 



			
				BHP Billiton media release said:
			
		

> In the longer-term, with continued strong demand growth driven by the industrialisation of China and India, structurally higher cost sources of new supply will be required. We continue to expect commodity prices will be driven by long run marginal costs of supply.


----------



## AnDy62 (6 February 2008)

Well said Vishalt. It's good to see that someone that has a decent long term view. It's earning huuuuge amounts of money and yet the share price is going down (mainly due to short term factors). Combined with the long term outlook of the sector; China and India are unprecedented in the possible scope of their development- the upside for BHP, longer term, is obvious - with or without Rio. Buy big on the dips I would reckon


----------



## treefrog (6 February 2008)

AnDy62 said:


> Well said Vishalt. It's good to see that someone that has a decent long term view. It's earning huuuuge amounts of money and yet the share price is going down (mainly due to short term factors). Combined with the long term outlook of the sector; China and India are unprecedented in the possible scope of their development- the upside for BHP, longer term, is obvious - with or without Rio. Buy big on the dips I would reckon




agree - looking to pick up another bagfull at $24 as last time "you are dreamin' frog!" - completion of the currently forming classic Head and shoulders pattern will trigger the get ready to load signal

but yes agree long term she will keep on trucking - as long as the current homo-sapian breeing program holds to keep increasing commodities demand


----------



## Garpal Gumnut (6 February 2008)

Garpal Gumnut said:


> BHP may be in a head and shoulders pattern in a larger as well as a more recent time frame.
> 
> 
> So I'll be buying if it continues down and watching volume if it recovers.
> ...




Agree with the head and shoulders hypothesis.

I'll wait for BHP to settle between $20 and $27 before looking at buying in again.

What did the Chinese philosopher say about living in interesting times !!

gg


----------



## Freeballinginawetsuit (6 February 2008)

Nyden said:


> .
> 
> it is not undervalued, not a single stock in this uncertain market is.





From a liquidity perspective a stock is worth the price to offload on market.............on the aforementioned quote youre correct 'sort of' .

The rest of your comment is rubbish...........plenty of undervalued companies around ATM................not that I consider BHP one of them!.

Cheers


----------



## cordelia (6 February 2008)

something is only worth what someone else is willing to pay for it. That is the cold hard fact which most people choose to ignore whilst looking through rose coloured glasses........

I speak from experience..I have a big diamond


----------



## mayk (6 February 2008)

LON:BHP is only down 4.5% we went down 7.5%, may be tomorrow will be a small bounce day, given US does not tank.


Thanks Sir Burr and albi000 for the dividend info.
At .89 exchange rate it is around Aus 32.5 Cents a share.
Which at today's stock price of 36.66 gives a Yield of 1.77% ( assuming same dividend for second half).


----------



## Buffettology (6 February 2008)

vishalt said:


> Anyway the reason why I say its undervalued is because no way should a beast earning $16 billion + a year be worth $30.




Man, what does its earnings or profit have to do with share price?  

How many shares are out on issue?  If it had half the shares out on issue, it would be worth $60.  

I really hope you apply some kind of formula to your valuation methods.  This stock is one to short I beleive.


----------



## dhukka (7 February 2008)

vishalt said:


> Analysts were way off? Whoa thats big news!
> 
> Anyway the reason why I say its undervalued is because no way should a beast earning $16 billion + a year be worth $30. It's P/E if you look at the British & Aussie market is around 10/12, a discount to the All Ords when it bounces around 14/16.
> 
> ...




I thought you might actually have a fundamental reason to hold BHP but it's clear from the above that you don't.  As Buffetology said, who cares if a company earns $16billion or $16 million? That has nothing to do with valuing a company. P/E 's are also an irrelevant measure when valuing a company. 

You are bound to make mistakes when you don't understand the difference between value and price.


----------



## Buffettology (7 February 2008)

Exactly.

P/E ratios dont take into account growth or risk.

A company with high risk and low growth, will have a very low PE.  Vice-versa, a company with high growth and low risk, will have a very high PE.  Now for a company with high risk and high growth............. take a look at EQN over the last couple months!  Nobody can decide what it is worth which makes it near impossible to value.

Also remember, PEs only take into account earnings and NOT profit.  Therefore it takes into account revenue, but not cost.  As most companies have focused on cost cutting over recent times "synergies seems the new buzz word", it means PEs can now be slightly higher, as opposed to historical PEs.  As profits will increase quickly and therefore the company will become "better value".  But these synergies are of course, very limited.

Time for bed, Im confusing myself my brain is so fried!  Time for some more dreams (or nightmares as they have become these days) about the stockmarket


----------



## mayk (7 February 2008)

Rio Tinto rejects latest BHP Billiton bid
http://www.marketwatch.com/news/sto...3C-4788-99A7-74AAFD7171DF}&dist=TQP_Mod_mktwN

Is it good or bad news??


----------



## vishalt (7 February 2008)

dhukka said:


> I thought you might actually have a fundamental reason to hold BHP but it's clear from the above that you don't.  As Buffetology said, who cares if a company earns $16billion or $16 million? That has nothing to do with valuing a company. P/E 's are also an irrelevant measure when valuing a company.
> 
> You are bound to make mistakes when you don't understand the difference between value and price.



What I said is my fundamental reason for holding the stock, my calls have been right and I have made big amounts of money from BHP. 

You may apply Buffetology in that way if you wish but from what I see I'm owning a very big, simple business at a beaten down price(Buffetology) thats mining the earth for minerals and supply petroleum to power economies.

Anyway ofcourse feel free to disagree with me if you wish, we'll see who the winner is, however I have noticed a lot of people suddenly hopping on the "overvalued" side of the road suddenly since the correction started and for some reason that people expected a profit rise on an already ridiculously high profit figure of $6b.


----------



## agro (7 February 2008)

Rio Tinto, BHP fall after renewed takeover bid 

http://www.marketwatch.com/news/sto...5F7-7A62-4B5D-A297-6222F1730876}&siteid=yhoof


----------



## barnz2k (7 February 2008)

vishalt said:


> and for some reason that people expected a profit rise on an already ridiculously high profit figure of $6b.




I dont get all this massive concern on talk of slowdown and decreased profits, Vishalt is right, you cant just push up and up forever. Even if the actual figure doesnt increase, 6b is still ridiculous and i don't understand why people hammer it because it was less than 7b. 1b difference is a lot, but 6b is shytloads!


----------



## Buffettology (7 February 2008)

The thing is guys, you have to calculate the intrinsic value of BHP if you want to value it.  

Return on Equity has to remain high every single year which it has done the last couple years and was expected to do (this is YOUR increase in the company) and if its net profits are not rising, but equity is (as their payout ratio is not high) then whilst equity is growing, net profit is not, and hence ROE falls.  Which will dramatically cut the value of the company especially over a longer timeframe.  Now, factor in you need growth in net profit year in and year out also, if BHP has already started to slow, what is in store for its future growth over the years?  Perhaps its not as good as first expected, which will flow right back through all of what I just said.   

I valued it at $29 personally, but if this slowdown continues, then that value will fall.

Also remember a company that is liked by the public, historically can trade anywhere upto double fair value over the course of decades.  As companies such as MQG and RIO WERE doing IMO.  

Anyways, if you are making money and happy with your investment techniques then all good to you.  But just be careful, I read read read non-stop on all the different techniques (just getting into options and technical analysis now).  Its also CRUCIAL IMHO to have an understanding of economics, hence why I studied an economics degree already.  

But good luck to everyone at the moment!  I agree with those chart fellas above though, I will wait until it settles in the 20s before I buy into BHP for now.


----------



## Fed23 (7 February 2008)

RIO knocked back it's offer so does that mean BHP will still be in talks with RIO? or do they have to go back to the drawing board and offer more?

It finished positive today, so lets hope it continues tomorrow


----------



## Bluesky (7 February 2008)

You guys see RIO's ann 30 mins ago?

Rio Tinto reports 3 billion tonnes of additional Resources.
BHP will have to go offer more now lol


----------



## enigmatic (8 February 2008)

I'm pretty new to all this stuff and was wondering if anyone could explain todays announcement by BHP, and if you think its good bad or doesnt have any impact.


----------



## haunting (8 February 2008)

With the announcements by RIO on additional 3 billions tons of iron ore and a billion tons of thermal coal, I am to an extent not too surprise to see the stock price of BHP getting a work over.

How much more does the young head honcho have to cough out to satisfy the RIO share holders? And this is just one aspect of the take over. They have yet to convince the Chinese to happily part with their 9% stake - a task, I believe, is as tough as borrowing a comb from a baldie.

On top of that, with the stake seemingly growing by every announcement, the risk too is getting bigger, especially from the lenders angle. Will they get cold feet and back off?

Probably not. But still, one has to ask what's the upper end before BHP will throw in the towel and get back to more serious matter, like running its current businesses and look into positioning themselves for the forth coming iron ore negotiation?

Still the same conclusion  - ZERO. Ok, may be not, let's make it 10% chance of success. But, a better strategy is to throw in the towel now, walk away, wait for 6 months, and then go back and knock on RIO's door. That will keep them RIO board some cold sweat. By then, who knows, they may even come around lamely like they should in the first place!


----------



## kengaikl (8 February 2008)

It would be a very big mistake for BHP to up their bid. If they were to walk away now and let RIO drift down along with the market maybe they'll have a better chance to take over RIO at a cheaper price


----------



## haemitite (8 February 2008)

haunting said:


> With the announcements by RIO on additional 3 billions tons of iron ore and a billion tons of thermal coal, I am to an extent not too surprise to see the stock price of BHP getting a work over.
> 
> How much more does the young head honcho have to cough out to satisfy the RIO share holders? And this is just one aspect of the take over. They have yet to convince the Chinese to happily part with their 9% stake - a task, I believe, is as tough as borrowing a comb from a baldie.
> 
> ...




Interesting read in the Australian today that pointed out that BHP owned more tonnes in the Pilbara on an equity basis, which RIO were forced to correct by the takeover panel having naughtily quoted tonned owned by JV partners.

3Bt on top on of 30Bt will simply push their mining life along a few years.

As for energy coal in South Africa, well thats hardly something to get excited over.


----------



## SM Junkie (9 February 2008)

This was kindly posted by Agro in the FMG thread:

http://www.theaustralian.news.com.au...83-643,00.html

"RESOURCES and Energy Minister Martin Ferguson has flagged changes to the Trade Practices Act that would protect BHP Billiton and Rio Tinto from having to allow upstart iron ore rival Fortescue Metals Group use of their rail lines in the Pilbara."

It's an interesting article that makes me consider if FMG fits into the plan for BHP's takeover of RIO. Not only will they take over their biggest competition, but if changes are made to the Trade Practices Act, then they would certainly have a thumb over the upcoming competition. Delaying FMG and potentially owning RIO certainly has BHP in the drivers seat.  If causing disruption to FMG's startup is a part of the plan, then I would not be suprised if BHP ups the offer for RIO.

I would be interested to hear others opinion on this?


----------



## Garpal Gumnut (10 February 2008)

I am dizzy with all this funnymentalist information about BHP. Information overload ain't the word for it. P/E's and forward projections, bubble charts that make mine look anaemic, ore and coal prices, infrastructure and the Chinese, Rio and the take over panel, Lil Rudd and Swannie, projects starting, stopping, London , New York.

What A Kerfuffle as Lou would say in Little Britain. 

Lets bring a note of sanity to all this ferment. 

A chart.

This is a chart of BHP, and before you all start heading for your prescription medications , its a chart with an inverted Y axis, so it looks a bit like MQG heading down, with lower lows and lower highs. 

Its not a bad idea if you are ever unsure about a stock to turn the chart upside down!

Standing at the back of my verandah as the smoke from my Fonseca Cazadore wafts over the volume bars I note that the recent movement up on this chart has been on low volume. Thus the retracement in price has got little support and I would now guess that I will not pick this little beauty up as I said before in the mid twenties. I do hope it retraces again to 30 as I'll be in there if it does, where the double "highs" recently on this chart.

I trust this is not too confusing. 

Thus I expect BHP to continue up and up. Its a contarian opinion but there you are.

Cheers

gg


----------



## Lucky_Country (10 February 2008)

Seems too be finding a trading range between $35 and $40.
May have the odd dip below and test the $40 mark but seems set in that range for some time.


----------



## kengaikl (14 February 2008)

Buffettology said:


> Exactly.
> 
> 
> Also remember, PEs only take into account earnings and NOT profit.  Therefore it takes into account revenue, but not cost.  As most companies have focused on cost cutting over recent times "synergies seems the new buzz word", it means PEs can now be slightly higher, as opposed to historical PEs.  As profits will increase quickly and therefore the company will become "better value".  But these synergies are of course, very limited.
> ...




P/E = Current Stock Price / (Net Profit / Number of shares) Net profit takes into both revenue and cost therefore it does take into account profit. If P/E's, Dividend, earnings growth forcasts are all irrelevant then what is relavant? Technical Analysis,Graphs and trends? vishalt you make more sense than anyone else here keep it up


----------



## Buffettology (14 February 2008)

kengaikl said:


> P/E = Current Stock Price / (Net Profit / Number of shares) Net profit takes into both revenue and cost therefore it does take into account profit.




True.  As you can see, I dont take much notice of P/E ratios (infact, I dont really look at them whatsoever as I dont factor them into my equations).

I always just assumed it was price/ earnings (as in revenues per share), not net profits.  Only reason I look at EPS is to find an upward historical trend and future growth potential. 

Still, P/E doesnt take into account future growth potential or risk (Price does to some extent, based on mob (crowd) mentality, which can be very risky in itself), so pretty irrelevent (which is why I never really took any notice of its calculation).  My bad, I simply assumed its calculation instead of actually checking.  

Earnings growth forecasts are important, but you have to look at these in % terms and see how they will enable ROE to grow (afterall, this is YOUR owning of the company).  The higher the growth % forecast, obviously, the higher ROE will grow (or the bigger the dividend will be if the company decides to use its extra profit for higher dividend payouts). Dividend payout ratios matter, because the higher ratio payed, the less profit (earnings) kept for the company and the smaller growth in book value (or equity per share).  Risk must too be taken into account, which interwines with management, sector, company, entire stockmarket and economic outlook.  

Technical analysis can predict when a share "might" breakout of its current trend, how strong the tend is and when this could be reversed.

Just remember, any ratio is a snapshot of a "point in time" just like the balance sheet.  You must also look at the flows and see how things are trending.


----------



## kengaikl (14 February 2008)

So far there are still no signs that the future profit growth at BHP are slowing down. the recent figures that missed analyst estimates are largely due to the AUD and the fact that the company itself has invested heavily in its mines to increase output. I believe that the benefits of these investments will be seen in the medium term which will also be reflected in their share price. For those who suggest that they will drop back to 20-27 levels, well i really dont see that happening.


----------



## mrgroundwork (14 February 2008)

Buffettology said:


> True.  As you can see, I dont take much notice of P/E ratios (infact, I dont really look at them whatsoever as I dont factor them into my equations).
> 
> I always just assumed it was price/ earnings (as in revenues per share), not net profits.  Only reason I look at EPS is to find an upward historical trend and future growth potential.
> 
> ...




dont wanna be rude, as you seem to be newish to this whole stock gambling business, but a lot of what you are saying is either incorrect or so basic, it doesnt need to be said at all... 

anyway, back to BHP... and more importantly large cap miners in general... i am becoming increasingly concerned that this whole "mining boom cycle" is a myth... fair enough we have had some stellar years, but recently the growth in profits from the large cap miners has not been that impressive... it seems that costs are growing at a similar pace, therefore negating any rise in revenues... that to me signals the boom is over and with most analysts predicting commodity prices to fall, we could potentially see some nasty profit downgrades in the sector over the next year perhaps?

IMO doesnt bode well for BHP


----------



## the barry (14 February 2008)

mrgroundwork said:


> dont wanna be rude, as you seem to be newish to this whole stock gambling business, but a lot of what you are saying is either incorrect or so basic, it doesnt need to be said at all...
> 
> anyway, back to BHP... and more importantly large cap miners in general... i am becoming increasingly concerned that this whole "mining boom cycle" is a myth... fair enough we have had some stellar years, but recently the growth in profits from the large cap miners has not been that impressive... it seems that costs are growing at a similar pace, therefore negating any rise in revenues... that to me signals the boom is over and with most analysts predicting commodity prices to fall, we could potentially see some nasty profit downgrades in the sector over the next year perhaps?
> 
> Can you point out which analysts are predicting commodity prices to fall. My brokers report states they expect most commodities to increase, would be interested to hear which analysts think they are going to drop, considering most brokers has bhp as a buy.


----------



## mrgroundwork (14 February 2008)

sorry barry, i phrased that wrong... should have said a number of analysts are still predicting price growth but are revising their price forecasts downwards since US recession has come into focus...


----------



## vishalt (14 February 2008)

Good to see people still listening to analysts "forecasting" - more like "reacting" to high fed rate cuts which might indicate a US recession. 

The US government and the Fed are giving lollipops to the country and will avert recession for atleast a year more IMO, them rate cuts and stimulus packages will take time to come into affect. 

Also copper & aluminum have been going nuts lately on the LME and those metals are true indicators about the health of the world economy. 

Also again on BHP's profit, I reinterate that it is still $6 billion, that is astronomical, if you expected a 30%+ increase you were living in lala land, as funny as saying you can double your portfolio each year.

The important thing is that BHP is still making riveting amounts of money each year, take Exxon Mobil for example, its had periods of record profits of $40US billion and then declines to $30US billion because of a blend of shutdowns, slowdowns etc etc but shareholders still realize that its cashed up and as long as blue-chip company is earning money it will continue to go up - as Mobil has done. 

If I remember correctly Rio Tinto had a 6% decline last year, and that's when the stock was $80. 

Future growth prospects of BHP (superb petrol projects, copper) and Rio (Ore & Aluminum) are too good.

P.S I have been buying more in the $30's, BHP once again does not cease to disappoint me, on the verge of $40 again, what a stock!


----------



## Buffettology (15 February 2008)

mrgroundwork said:


> dont wanna be rude, as you seem to be newish to this whole stock gambling business, but a lot of what you are saying is either incorrect or so basic, it doesnt need to be said at all...
> 
> anyway, back to BHP... and more importantly large cap miners in general... i am becoming increasingly concerned that this whole "mining boom cycle" is a myth... fair enough we have had some stellar years, but recently the growth in profits from the large cap miners has not been that impressive... it seems that costs are growing at a similar pace, therefore negating any rise in revenues... that to me signals the boom is over and with most analysts predicting commodity prices to fall, we could potentially see some nasty profit downgrades in the sector over the next year perhaps?
> 
> IMO doesnt bode well for BHP




Yes, only a year intensly studying into these things, so relatively new still.  Though, been in the stockmarket 13 years on and off.

However, can you please point out the parts that are wrong?  Also, what other factors are in play here, as your analysis seems "basic" in itself.

What I said were the very basics behind most valuation methods in fundamental analysis, as this is what the poster I replied too asked.

Should I have wrote ceteris paribus after my basic part on equity?


----------



## ShareIt (18 February 2008)

Is this cyclone over the WA Pilbara coast likely to have any disruption for BHP over the next week? (their ports are located on that part of the coast right?)


----------



## SM Junkie (18 February 2008)

This cyclone will have no impact on BHP and as has already moved West of Karratha. They only closed the port for 24 hours as they needed to move the ships out to deep water.  Only seasonal rains inland, so no impact on production.  Late February and into March are the busy periods for cyclones and there is likely to be a couple more in the coming weeks.


----------



## TheAbyss (18 February 2008)

Actually it will have an impact. BHP, RIO and WPL have had to lock down for a day or two.

http://www.theaustralian.news.com.au/story/0,25197,23229403-5005200,00.html


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## SM Junkie (18 February 2008)

Someone forgot to tell the BHP trains that are still running on the tracks today. 

A day or two is not an impact and can easily be caught up.  The models are showing that this cyclone may not even cross the coast. Inland river levels are steady and all roads are open.  Anything written in the press on cyclones is always extremely outdated. If you are interested then take a look at the following link: http://www.bom.gov.au/products/IDW60285.shtml for current forecasts. Trust me when you live in the area you watch their movements like a hawke because it affects all our businesses.

I would expect if the cyclone keeps on this projected path then I really doubt it will have any significant impact on the mines in the Pilbara except for a bit of rain as it passes by. But if it does cross the coast, it is likely to be around Onslow or Exmouth and then it will depend on its path from that point as to where flooding will occur.


----------



## meganut (18 February 2008)

TheAbyss said:


> Actually it will have an impact. BHP, RIO and WPL have had to lock down for a day or two.




Well, not quite true, spoke to my son in Karratha last night who works for RIO and the threat has already passed and it is business as usual...


----------



## vishalt (19 February 2008)

Yet again another dissapointing performance by the Australian listed BHP Billiton yet again. 

A tip for you all, BHP Australia is a spitting joke, I cannot comprehend how the ADRs in the US have blown away the returns from this Aussie listed pot-stock and how the British one has done better. 

Big believer in BHP, just disgusted with the shocking performance of the Aussie-listed vehicle.

It should be @ $43.


----------



## Fed23 (19 February 2008)

It was sliding downwards after 3.30 this afternoon. It was around $40 most of the day and then it went down, It just cant get over that $40 barrier.


----------



## ShareIt (19 February 2008)

vishalt said:


> Yet again another dissapointing performance by the Australian listed BHP Billiton yet again.
> 
> A tip for you all, BHP Australia is a spitting joke, I cannot comprehend how the ADRs in the US have blown away the returns from this Aussie listed pot-stock and how the British one has done better.
> 
> ...




If you take a look at the technical side... there was a bearish engulfing pattern last week back when it had a drop of 7.5%. This produced a resistance level at around $40.15 from that pattern. The market has tested it today and then pulled back... The rise in price today with low volume and no clear break of resistance is definately suggesting a hesitation and a strong possibility that the stock may make it's way back to support at $36 over the next week....


----------



## vishalt (19 February 2008)

Shareit, you're right that there is a technical side, but as stupid as I this sounds: If BHP in London goes up 5% overnight, the Australian BHP should not perform any worse regardless of whatever is on the chart, the same company should have an almost identical correlation in price regardless of supports/resistances. 

I do not understand counterpart investors of the same company enjoy better returns?

*British*-BHP Jan 2003 low = 3.11 pounds. 
*British*-BHP all-time high = 18.98 pounds. 
*= six-fold return*

*Australian*-BHP Jan 2003 low = $8.90
*Australian*-BHP all-time high = $47.70
*= 5.35x return*

*US-BHP* Jan 2003 low = $10.36
*US-BHP* all-time high = $87.26
*= almost nine-fold return*

Dual-listing and US ADR's are a disgusting joke. 

It is the worst for Australians using margin lending on BHP as we get charged the most interest out of both those countries. 

What a joke.


----------



## ShareIt (19 February 2008)

vishalt said:


> Shareit, you're right that there is a technical side, but as stupid as I this sounds: If BHP in London goes up 5% overnight, the Australian BHP should not perform any worse regardless of whatever is on the chart, the same company should have an almost identical correlation in price regardless of supports/resistances.
> 
> I do not understand counterpart investors of the same company enjoy better returns?
> 
> ...





I see your point... but you must take into account the volume... The US and UK without a doubt have a lot more investors in the market and that is definately going to have an impact on supply/demand.... it is a stupid concept considering it is the SAME company, but this is what makes share trading exciting


----------



## MRC & Co (19 February 2008)

ShareIt said:


> I see your point... but you must take into account the volume... The US and UK without a doubt have a lot more investors in the market and that is definately going to have an impact on supply/demand.... it is a stupid concept considering it is the SAME company, but this is what makes share trading exciting




Exactly.

How is the Aussie dollar expected to do against the pound and USD?  Another aspect to consider.

But I would not base my investments on relative prices in different countries.  If the Australian economy is performing better than that of the US (which it is), why did our stockmarket fall further?

If most global investors (not just locals), are more aware and comfortable investing in the US or UK, then it might explain why their prices are higher, and isnt it true PE ratios are historically lower in OZ anways?  Another thing to consider anyways.


----------



## ShareIt (19 February 2008)

MRC & Co said:


> Exactly.
> 
> How is the Aussie dollar expected to do against the pound and USD?  Another aspect to consider.
> 
> But I would not base my investments on relative prices in different countries.  If the Australian economy is performing better than that of the US (which it is), why did our stockmarket fall further?




Good point... I am no expert, but I have noticed that when you have thin volume traded there is more volatility (bigger moves).... obviously we have a smaller market than our overseas counterparts and much less investors... which would leave me to believe that this is the reason why we have a bigger moves.... don't quote me on it though


----------



## MRC & Co (19 February 2008)

ShareIt said:


> Good point...




Yes, however I think the third and final paragraph in my above post is probably the most likely explanation.

Cheers


----------



## Whiskers (19 February 2008)

BHP won't be merging with RIO if China can help it according to US intelligence firm, Stratfor.

http://news.theage.com.au/chinalco-to-block-bhprio-merger-report/20080219-1szb.html


----------



## overule (23 February 2008)

BHP is going ex-div on monday. How much % should it be dropping ? and do you guys still see volatility with BHP in the short term or is it an upward trend ?

I got some put options. Hopefully, i can make the right choice.


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## mrgroundwork (23 February 2008)

overule said:


> BHP is going ex-div on monday. How much % should it be dropping ?




if you knew the answer to this then you would make a lot of money...

all things being equal it should drop by the amount of the dividend, but with other factors in play, who knows...


----------



## vishalt (23 February 2008)

Yeah I have no clue what is going to be happy on Mon, wouldn't be surprised if it drops or rallies. 

Only thing I have like I've said a billion times is probability in my favor. 

With copper near records, high iron ore prices and petrol at $101 the stars are shining for BHP.

Also the price BHP in London is at BHP here should be $42 relatively (for the short-term).


----------



## Lucky_Country (23 February 2008)

$40 was a resistance point for BHP too brake on its way down also seems too be on its way up.Like it downward path once it breaks could be in for a good run.
When well who knows but Iron Ore Coal and Oil at record levels may not be too long.


----------



## vishalt (24 February 2008)

Lucky_Country said:


> When well who knows but Iron Ore Coal and Oil at record levels may not be too long.



How? The Iron Ore is contracted, and China is ever dependant on coal especially after those plant shutdowns. And petrol well, only way long-term for that is up and more up unless no-one's car works anymore!


----------



## Jadefox (24 February 2008)

BHP and Rio tend to behave as though the dividend payout doesn't exist.
It's relatively small anway - for both companies. Trying to predict how they will behave ex-div could lead to frustration.


----------



## AnDy62 (24 February 2008)

vishalt said:


> How? The Iron Ore is contracted, and China is ever dependant on coal especially after those plant shutdowns. And petrol well, only way long-term for that is up and more up unless no-one's car works anymore!




All of this is true.. longer term. But this market seems to have forgotten about lthe ong term at present... what BHP needs is a softening of the $AUD / nice commodity prices... hopefully interest rate rises will start to hit the economy, in particular, imports and thus put downward pressure on the dollar soonish. Personally, I think BHP is in for a run maybe from 6 months or so. Why six months? Hopefully America will have sorted itself out (or be well on the way) by then and hopefully the dollar will have eased off a tad. Just my humble opinion...


----------



## Miner (24 February 2008)

Reading between lines Uncle SAM will not return before early 2009. Probably it will shed the departure of Uncle Ben as soon as the New President is sworn in. 

THe red flag to US has already been shown by Lord China.

That is my observation and I would like to be seen as wrong (vested interest in share market only fulfils if USA returns to black).


----------



## ShareIt (26 February 2008)

Had a clear break of a rising support line today... was going to play it short but was not 100% convinced as the weekly support is not broken.... any other TA traders care to share some thoughts on this one?


----------



## blablabla (26 February 2008)

ShareIt said:


> Had a clear break of a rising support line today... was going to play it short but was not 100% convinced as the weekly support is not broken.... any other TA traders care to share some thoughts on this one?




If you refer to the support line beginning on the 22Jan it's quite a steeply rising line and so it's really only been broken so far by sideways SP action. If the SP is lower again tomorrow I agree it would be more convincing. If it's some other line you are looking at then a chart would be most helpful. 

From a short-term FA perspective, most of the base metal prices are falling today along with gold. Also, oil has fallen slightly since yesterday while the AUS dollar continues to strengthen. If all these trends continue overnight then expect BHP's SP to be lower tomorrow. If this does occur then the TA will reinforce the short-term FA. Check the metal and oil prices first thing tomorrow. It may not be too late to short BHP at the open.


----------



## ShareIt (26 February 2008)

blablabla said:


> If you refer to the support line beginning on the 22Jan it's quite a steeply rising line and so it's really only been broken so far by sideways SP action. If the SP is lower again tomorrow I agree it would be more convincing. If it's some other line you are looking at then a chart would be most helpful.
> 
> From a short-term FA perspective, most of the base metal prices are falling today along with gold. Also, oil has fallen slightly since yesterday while the AUS dollar continues to strengthen. If all these trends continue overnight then expect BHP's SP to be lower tomorrow. If this does occur then the TA will reinforce the short-term FA. Check the metal and oil prices first thing tomorrow. It may not be too late to short BHP at the open.





I was referring to the support line begining on the 22nd Jan as you mentioned. Thanks for the tip.. my plan was exactly that, to see where BHP opens... if it opens lower, then I will wait for that bounce up to the rising resistance line to see if it holds... if it does, then will short BHP at some point during the day


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## Kauri (18 March 2008)

*Brisbane Times*,.... China has reportedly locked out BHP and Rio Tinto in the iron ore spot market. The report says that neither has been able to send a shipment to China since Jan 1st affecting an estimated $A300 mln in exports. This boycott is not impacting imports from other countries with China now Australia"s top export destination. The revelation suggests that export receipts for Australia could be impacted in the months to come, a negative for the economy and currency.


----------



## treefrog (18 March 2008)

obvious this is in steady but confirmed weekly downtrend in price and momentum

watch for break of neckline (pink line) as this will complete the head and shoulders


----------



## mayk (18 March 2008)

Can someone explain the effect of this china's spot Iron blocking on BHP share price. It does not constitute their main business of selling iron ore to companies. How much do they sell in spot market of china?  

The current fear of china blocking BHP/RIO is because of the political ( Dalai Lama, fear olympic ban, China unfaviurable in the eye of world etc..) aspects or is there any fundamental substance in this news. 

Is it just merely a tactic to negotiate the iron ore price?


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## mayk (18 March 2008)

AS noone seems interested in BHP spot market target, I did some research and found this for the benfeit of anyone interested.

from bloomberg:
http://www.bloomberg.com/apps/news?pid=20601081&sid=ak2mUhvTE8NU&refer=australia



> ``Our position is we are still involved in pricing discussions,'' Gervase Greene, Rio spokesman, said by telephone from Perth. ``We have said we expected to sell up to 15 million tons on the spot market this year and that hasn't changed.




And considering a conservative spot price of $150 per ton ( $190 quoted in the bloomberg article ), it amounts to 

15Million T * 150 $/T =$2.25B .....if BHP has a target of half of that this will become a Billion dollar question.

Just for a curious mind current contract for iron ore is $85 for RIO ( I assumed the same for BHP). Which they are negotiating to be increased by more than 71% ( which china has agreed with brazillian CVAD ) .My guess is $150 per Ton is the price target RIO/BHP are looking for.

Any comments to correct me are welcome.


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## Sean K (19 March 2008)

Fundamentally valuing something this big with so many moving parts, rapidly moving prices, unsigned draft contracts, hurricanes, floods, strikes, forecast demand rising a falling like the tides, and sharmans operating their accouning division, who knows? 

Chart wise, a very nasty H&S bearing down ominously.


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## dutchie (20 March 2008)

Interesting build up to todays open.
3, 6 & 9 million shares being offered (at moment).
Check out the depth.


----------



## profithunter (20 March 2008)

dutchie said:


> Interesting build up to todays open.
> 3, 6 & 9 million shares being offered (at moment).
> Check out the depth.




Futures expiry, at 9.13am the market is matching up 350 points but will not open there...would be nice though


----------



## Muschu (20 March 2008)

profithunter said:


> Futures expiry, at 9.13am the market is matching up 350 points but will not open there...would be nice though




Can you help out a relative novice guys?  What kind of BHP action are you expecting today?  
Many thanks


----------



## Sean K (20 March 2008)

Muschu said:


> Can you help out a relative novice guys?  What kind of BHP action are you expecting today?
> Many thanks



Pending any offer from China, I'd say in line with commods and the US market plus or minus 5%. So, somewhere between +2% and -7% ish. :


----------



## Muschu (20 March 2008)

kennas said:


> Pending any offer from China, I'd say in line with commods and the US market plus or minus 5%. So, somewhere between +2% and -7% ish. :




Tremendously helpful. [?]  I gather some prophets, or would-be prophets, out there actually estimate opening and closing prices based on a range of data.


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## Sean K (20 March 2008)

Muschu said:


> Tremendously helpful. [?]  I gather some prophets, or would-be prophets, out there actually estimate opening and closing prices based on a range of data.



Any time Rick. 

Current match is 33.26.

Why do you ask anyway? What value is the opening price to you? Just curious?

Or, you're talking about exactly where it's going to go during the day so you can trade it whichever way it's going?

I'd like to know that too, thanks.


----------



## Muschu (20 March 2008)

kennas said:


> Any time Rick.
> 
> Current match is 33.26.
> 
> Why do you ask anyway? What value is the opening price to you? Just curious?




Thanks for that.  I have held BHP, which along with WOW has been my best-serving stock, for years and topped up from time to time.  I was thinking of a small top-up today but am not able [and don't want to] sit at my PC all day.
Regards


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## ShareIt (20 March 2008)

was looking for a thought on this... noticed that volume and sell is quite high today, any reason why?

Thanks


----------



## Sean K (20 March 2008)

ShareIt said:


> was looking for a thought on this... noticed that volume and sell is quite high today, any reason why?
> 
> Thanks



Answered above:

"profithunter: Futures expiry, at 9.13am the market is matching up 350 points but will not open there...would be nice though"


----------



## Aussiejeff (20 March 2008)

Look's like not much love for BHP or the mining sector in general today. BHP Currently down almost $3 (-8%) to $33.96. What price by close I wonder...

AJ


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## Boggo (20 March 2008)

Aussiejeff said:


> Look's like not much love for BHP or the mining sector in general today. BHP Currently down almost $3 (-8%) to $33.96. What price by close I wonder...
> 
> AJ





On my basic understanding it is in a critical area now, ie 33.66 to 33.72, next stop could be in the 29.72 area.

Mike


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## Dezza (21 March 2008)

Article on BHP courtesy of reuters, doesn't have much better outlook in the short-term. 

http://www.reuters.com/article/ousiv/idUSL1924608220080320?sp=true

Should be an interesting Tuesday on Aussie markets...


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## vishalt (21 March 2008)

Once again the markets prove how cool they are. Notice when BHP was around $38 or whatever copper/aluminum rose 30% along with surges in other metals, the miners didn't follow? Oh but when it goes down from that level. 

BAM!

I think its just sector rotation taking place with indiscriminate selling.


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## >Apocalypto< (21 March 2008)

vishalt said:


> Once again the markets prove how cool they are. Notice when BHP was around $38 or whatever copper/aluminum rose 30% along with surges in other metals, the miners didn't follow? Oh but when it goes down from that level.
> 
> BAM!
> 
> I think its just sector rotation taking place with indiscriminate selling.




the selling in BHP has nothing to do with the fact  that Gold is getting hammered and it just so happens BHP is a Gold producer and miner! Yeh it's indiscriminate selling. WHATEVER!


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## Sean K (21 March 2008)

Boggo said:


> On my basic understanding it is in a critical area now, ie 33.66 to 33.72, next stop could be in the 29.72 area.
> 
> Mike






kennas said:


> Chart wise, a very nasty H&S bearing down ominously.




Breaking 32/33 ish, and the H&S target's about $24/25. I'd say the critical support line is closer to $32. Depends on if you're using weeklies or dailes, and intra/eod closes.


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## vishalt (21 March 2008)

>Apocalypto< said:


> the selling in BHP has nothing to do with the fact  that Gold is getting hammered and it just so happens BHP is a Gold producer and miner! Yeh it's indiscriminate selling. WHATEVER!



Oh ok cool, nice. Did you notice anyone buying BHP as copper climbed 30%, aluminum climbed 30%, nickel advanced 20%, lead and zinc did 10+% and gold went from $650 to $1130 and Oil went from $85 to $110?

As far as I can remember the share hibernated there like a bear.


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## MRC & Co (21 March 2008)

Vishalt, BHP held steady in the face of global equity falls.

Now that its underlying commodity prices are falling, so too is the SP, to reflect global equity falls over the corresponding timeframe.

Cheers


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## vishalt (21 March 2008)

I was just pointing out how irrational the market is behaving, the rises are not being tracked but the falls are?

I don't own any BHP so no bias! Funds have nearly destroyed the perception of the share price behaving like a report card.


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## MRC & Co (21 March 2008)

Yes, but refer to my above post.

If equities are falling, so too should BHP.  It didnt for some time there, as commodity prices were rising.  

Now that commodity prices are falling, it is moving to where it would be if it fell in line with other equities.  

If you took a composite/weighted total of underlying commodity price movements BHP produces and of equity movements on a % basis, you may find some correlation.


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## Kauri (23 March 2008)

updated chart posted originally on Feb2.... will $32ish hold, or is it the  $24-$26 area???
 Cheers
............Kauri


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## Garpal Gumnut (23 March 2008)

Garpal Gumnut said:


> BHP is a beautiful stock to chart, all human life is there. Asutralian's hopes and dreams, their super and future often rest on this little miner.
> 
> I have been following BHP for many years.
> 
> ...




I agree this is a classical head and shoulders, BHP may go down further, in my previous post above I suggested $23. I'm collecting my gumnuts together, always profitable to buy BHP on big dips and sell into tax advantaged buybacks.

gg


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## jaeyon (25 March 2008)

an ok day for bhp today (as for the rest of the market haha).
opened at 34.80 and closed at 34.41 (lowest of the day), with a high of 34.97.


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## Sean K (4 April 2008)

Bounced beautifully off 32/34 ish support, but still not going up until it breaks this downtrend line and 40. Potential breakout around here I think. Interesting.


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## mayk (7 April 2008)

folks, my etrade is showing me 1Billion  shares traded on 4th of April, is this true, and what does this signify?

EDIT:  Never mind, I think their system is screwed, it is showing outlandish volume for other stocks too.


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## Fab (7 April 2008)

40$ is a strong resistance point. Just wondering when iron and ore negotiations will bring a deal as this help breaking this strong resistance. At this stage it looks like BHP might drop a bit from $40. Just my opinion based on RSI and bollinger band.


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## bigdog (7 April 2008)

BHP has now broken $40 today     	 $40.01  	   	  +$1.41   	  +3.65%

 BHP $40.01  	   	  +$1.41   	  +3.65   	high of $40.05  	low of  $39.54  	 7,088,296  	 $281,193,572  @	 07-Apr 11:15:27


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## Fab (7 April 2008)

WOW I did not think BHP would break $40 that easily. Look like a buying signal now. Still much more buying orders than selling. Got some good momentum and volume


----------



## Fab (7 April 2008)

It keeps going up in big volume. I am really hoping these iron ore negotiations will come to a close soon with a big increase in price which will put a rocket below BHP and RIO


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## the barry (7 April 2008)

Garpal Gumnut said:


> I agree this is a classical head and shoulders, BHP may go down further, in my previous post above I suggested $23. I'm collecting my gumnuts together, always profitable to buy BHP on big dips and sell into tax advantaged buybacks.
> 
> gg




Hows your gumnut collection going? You still waiting for your suggested $23? Did it turn out to be one of those "classical" head and shoulders?


----------



## MRC & Co (7 April 2008)

the barry said:


> Hows your gumnut collection going? You still waiting for your suggested $23? Did it turn out to be one of those "classical" head and shoulders?




Dont get too excited.  Based on its pattern, that was a continuation gap, expect to see some strong price action in the next few trading days, or that gap, in all probability, will be closed.


----------



## overule (7 April 2008)

MRC & Co said:


> Dont get too excited.  Based on its pattern, that was a continuation gap, expect to see some strong price action in the next few trading days, or that gap, in all probability, will be closed.




So do you mean, it will rise then fall sharply again? How do you come up with your analysis? Please share. 

thanks


----------



## michael_selway (7 April 2008)

overule said:


> So do you mean, it will rise then fall sharply again? How do you come up with your analysis? Please share.
> 
> thanks




Hi yep it will good to see what the reponse is. However looking at the current forward numbers. BHP is worth about $40.00 ot less if you take into accoutn lowist Dividend Yield. Unless they commodity prices increase alot from here etc

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 275.0 300.0 400.7 405.5 
DPS 55.4 68.0 75.9 87.2 *



> Date: 7/4/2008
> Author: Stephen Wyatt
> Source: The Australian Financial Review --- Page: 17
> BHP Billiton has indicated that it will seek to increase the coking coalcontract price to $US300 ($A325) a tonne, three times the 2007 price. The moveis likely to be confirmed in early April 2008, to the advantage of otherAustralian coal companies, but Japanese steel mills are said to be concerned inthe face of rising raw material costs. In Australia, coking coal currentlytrades at up to $US350 a tonne at port on the spot market


----------



## MRC & Co (7 April 2008)

overule said:


> So do you mean, it will rise then fall sharply again? How do you come up with your analysis? Please share.
> 
> thanks




Michael, as far as fundamentals, based on those forecasts, current balance sheet, I too value BHP <$40.

Overule, basically, there are a few types of gaps.  All are filled, except 2, these are breakaway and continutation gaps.  

Breakaway gaps, "gap up" after a consolidation pattern.  Since BHP SP was rising previous to the gap up today, it must be a continuation gap (or not?).  

My analysis is not saying it will rise again.  I am simply stating, the only way for this to be a continuation gap, is for the price to rise over the next few trading days.  If price falls (obviously the gap will be closed), if it now starts to move sideways, you would look for the gap to close (SP fall).  

I.e.  If holding (long) BHP, you will want to see the SP rising.  If this does not happen and price now looses upward momentum and moves sideways, look for the gap to close (sell before the gap closes).  

This is simple gap theory, correct me if Im wrong.


----------



## Mr_T (7 April 2008)

I am curious as to why on fundamentals BHP is worth only $40 according to some of the people here.

It is trading (according to Comsec) on modest P/E's of about 13.5. Furthermore, there is huge growth expected for the next financial year in earnings. What happens after that is unpredictable - BUT given the fact that half the world, ie India & China, are going through an Industrial Revolution, it is becoming more accepted that BHP will have very good growth for the foreseeable future even after 2008/9.

A strong argument can be put that BHP on fundamentals is worth substantially more than $40.


----------



## MRC & Co (8 April 2008)

I use a simple formula to calculate "value", however, its definately FAR from an exact science.  Just a rough idea.  A good start is Michaels formula in his signature.  

My mistake also, I used the wrong projected earnings (I see they have been revised upwards?).  Commodity volatility means I use a higher discount rate when converting back to present value.  

However, with these new figures, I have BHP >$40.  Not a bad fundamental price at all, could well be a continuation gap.  Of course, commodity price movements are going to affect the SP of BHP far more than any T/A IMO and these are looking strong so far tonight from a quick glance.  Dr Copper always the best to watch for a general idea.


----------



## the barry (8 April 2008)

I always tend to think that the market will determine the price of a stock. Up over 4 percent again on the lse, should see similiar gains here today. Stock has had a stellar performance over last two weeks, might be time to take profits later on today.


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## Mr_T (8 April 2008)

Some of that 4% gain was mirroring our gain from yesterday, some of it reflected the higher Australian dollar. Rest of it was reflected in higher opening BHP price, but that disappeared throughout the day.


----------



## the barry (9 April 2008)

Mr_T said:


> Some of that 4% gain was mirroring our gain from yesterday, some of it reflected the higher Australian dollar. Rest of it was reflected in higher opening BHP price, but that disappeared throughout the day.




Really not sure what you are trying to say? Was up over 4 percent friday on the lse, which in response to caused our run on monday. Was also up similiar amounts monday night and again so last night on the lse on talk of baosteel preparing to take a larger stake than the one taken in rio. So not sure how they were mirroring our gain unless they had a crystal ball? Anywhos, looks good for the bulls, talk of china preparing to take a stake would explain the recent run and should bode welll for the short term at least.


----------



## Fab (9 April 2008)

Another 4.79% up overnight in London . WHY as most commodities price were down ?I am wondering what that means for opening of BHP on the ASX. Should be psoitive


----------



## Sean K (9 April 2008)

kennas said:


> Bounced beautifully off 32/34 ish support, but still not going up until it breaks this downtrend line and 40. Potential breakout around here I think. Interesting.



Perhaps probably cautious: lol), not going down any more, but not necessarily up. Another higher low might help.


----------



## chansw (9 April 2008)

Fab said:


> Another 4.79% up overnight in London . WHY as most commodities price were down ?I am wondering what that means for opening of BHP on the ASX. Should be psoitive




*China chasing large stake in BHP Billiton*
By Rowan Callick and Dennis Shanahan
April 09, 2008 01:49am
http://www.news.com.au/business/story/0,23636,23509172-462,00.html


TENSIONS between Australia and China are set to rise as Kevin Rudd arrives in Beijing today amid revelations that China is preparing to buy a multi-billion-dollar stake in BHP Billiton (bhp.ASX:Quote,News).

Sources in Beijing said China was in the early stages of planning to snare a bigger chunk of BHP than the 9 per cent stake in rival Rio Tinto (rio.ASX:Quote,News) it bought with US-based Alcoa for $15 billion in a stock market raid in February. 

News of the plan - part of an attempt by China to intervene in BHP's (bhp.ASX:Quote,News) takeover of Rio to create one of the world's biggest companies - follows a warning from the Prime Minister to the Chinese Government and industry that they will have to accept higher coal, iron ore and natural gas prices and cannot expect intervention from Canberra in the raw materials market. 

On Monday, giant South Korean steelmaker Posco said it had agreed to triple the price it paid for Australian coal this year, raising expectations that Chinese steel mills would have to follow suit.

The Posco deal also increased the likelihood that China would have to pay BHP and Rio 70-85per cent more for Australian iron ore - the other key ingredient in steelmaking -  this year. 

As he prepared to travel from London to Beijing on the last leg of his 17-day world tour, Mr Rudd said that at times China got good deals and at other times Australian producers were better off. 

"That's life in a commodities market," Mr Rudd told a 1000-strong audience at the London School of Economics.

 "Our challenge is to make sure that it is conducted on market principles and in the overall framework of long-term security of what's supplied, as we have over many decades with our friends in Japan. 

"Sometimes the buyers see the market prices as too high and sometimes the producers see them as too high. China did well out of the LNG contract with Australia while iron ore is the reverse." 

China and its state-owned steel companies are deeply worried about the effect of the $400billion merger between BHP and Rio on iron ore and coal markets. 

The plan to buy into BHP means foreign investment and regulatory controls are likely to become a crucial agenda item in Mr Rudd's talks with Chinese President Hu Jintao and Premier Wen Jiabao this week.

The price of raw materials, climate change, China's role in Tibet and the chaos engulfing the Olympic torch relay also loom as potential controversies on Mr Rudd's four-day visit. 

The plan to buy a stake in BHP is under development, with Chinese authorities yet to determine which state-owned financial institution or steel mill - such as the largest, Baosteel-  might take the lead role in seeking sellers within BHP's diverse shareholder base. 

It is unlikely to be Chinalco, the aluminium giant that led the raid on Rio, complicating BHP's protracted takeover bid. 

The plan reflects the strong view among China's planners that its steelmakers should become ever more deeply entrenched partners of global iron ore producers. 

The Government is likely to use Mr Rudd's visit to check whether Canberra is contemplating strengthening or relaxing Foreign Investment Review Board procedures that relate to sovereign wealth funds or other state-owned enterprises. 

This issue has already become the subject of intense lobbying in Australia in recent weeks. 

While China wishes to ensure its government-owned companies can operate without fear or hindrance within Australia, questions are also being asked as to the consequences of having state-owned firms pursue Chinese government policy inside Australia. 

Australian firms also remain severely constrained in investing within China, where the resources sector provides only limited scope for foreign involvement.


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## mayk (9 April 2008)

What is the max % a foreign entity can hold in Australian Law? 


If they hold around 15% will they be able to block the BHP-RIO deal?


Will the un-braking on the BHP stock because of merger talks lift the stock higher?


The current P/E is around 14 ( normal level), so I guess it has not taken in to account the increase in the prices of commodoties? Coal 200% increase, Iron ore 60%> increase etc.


Also their Olympic dam, gas and oil projects seem to be not fully taken into account the current price.


I am new to fundamental analysis , so please be patient


----------



## MRC & Co (9 April 2008)

BHP is doing well, another gap today, perhaps a measuring gap.......which by definition, means the price has quiet a bit higher to go yet!  

I bought in just above $40 with a stop around $39 for a very safe play.  

Will watch price action closely, would want this run to continue sharp and fast, perhaps an exhaustion gap further up, followed by an island reversal just to make this a textbook example!  

But yes, the China news is definately the driver!


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## Mr_T (9 April 2008)

The fact that the Chinese are keen to get their hands on resource companies shows that they clearly view these companies as undervalued. 

Yes, I realise that the Chinese are the ones driving up the prices of commodities, but if the companies themselves weren't viewed as undervalued, then buying them would be a zero sum gain.

Alternative explanation: the Chinese are buying stakes in them to prevent the BHP/Rio takeover. But I actually don't think that is their prime motivation.


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## MRC & Co (9 April 2008)

I would moreso say trying to cap prices on commodity imports (especially with inflation high in China at present I beleive).  They are only concerned with one thing, their economy.  Not the companies in which they buy (of course, to an extent).

At least thats my take on it.


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## Mr_T (9 April 2008)

MRC & Co said:


> I would moreso say trying to cap prices on commodity imports (especially with inflation high in China at present I beleive).  They are only concerned with one thing, their economy.  Not the companies in which they buy (of course, to an extent).
> 
> At least thats my take on it.




Disagree completely.

This would make it into a zero sum game. If they could reduce prices of commodities, then there would be a corresponding decrease in the profitability & market value of the commodity companies. 

Just like a pub that buys a brewery. If they got the brewery to sell the pub beer for cheap, increases the profitablity of the pub, but at the expense of the brewery. Zero sum game.

All of which is theoretical. No way buying a minority stake in these commodity companies is going to be able to reduce commodity prices.


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## MRC & Co (9 April 2008)

Mr_T said:


> No way buying a minority stake in these commodity companies is going to be able to reduce commodity prices.




Block merger/takeover, decreasing monopoly/oligopoly power.  

Zero sum game is better than a negative sum game, right.......?  Hedging........


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## Mr_T (9 April 2008)

MRC & Co said:


> Block merger/takeover, decreasing monopoly/oligopoly power.
> 
> Zero sum game is better than a negative sum game, right.......?  Hedging........




I agree that buying a blocking stake would be the one instance where it isn't a zero sum game for them, but as I said in an earlier post, I really don't think that is their prime motivation. 

I still think their main motivation is their view that resources companies are undervalued. So they figure if they get ripped off by paying for commodities, they can recoup this with high profits and share values on their share of resource companies that they hold.

You could label this a form of hedging.

I read somewhere today that in the next few decades 200 million Chinese peasants are expected to relocate to the cities. I personally think the number will be much higher than this.


----------



## Fab (9 April 2008)

Also I think the fact that Chinese company want to buy Oz biggest resources company show that they can see a long term proposal to the resource boom. It is also a way of protecting themselves to what we have started to see which is price negotiations largely in favour of the producer. This mean that by buying a stake into BHP or RIO part of the money of the resource boom is coming back to China.


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## Mr_T (9 April 2008)

Fab said:


> Also I think the fact that Chinese company want to buy Oz biggest resources company show that they can see a long term proposal to the resource boom. It is also a way of protecting themselves to what we have started to see which is price negotiations largely in favour of the producer. This mean that by buying a stake into BHP or RIO part of the money of the resource boom is coming back to China.




Yes. Which is another way of saying they think that resource shares are undervalued. Since they see good long term prospects, it means they think share prices will go up a lot in future- another way of saying the current price doesn't represent future prospects/


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## Garpal Gumnut (9 April 2008)

the barry said:


> Hows your gumnut collection going? You still waiting for your suggested $23? Did it turn out to be one of those "classical" head and shoulders?




It didn't get down to $23 and has now shaken off the head and shoulders. I still hold BHP but greed for a cheaper price meant I didn't buy more when it recently hit the low $30's.

I would be surprised if BHP fell again to below $40.

A semi log chart enclosed.

gg


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## MRC & Co (9 April 2008)

Mr_T said:


> Disagree completely.
> 
> This would make it into a zero sum game. If they could reduce prices of commodities, then there would be a corresponding decrease in the profitability & market value of the commodity companies.
> 
> ...




Huh?  

Either way, your opinion for their stake or my opinion for their stake, is the same concept, hedging.  Does it really matter why?

You cannot completely disagree with my opinion, saying this would make it a zero sum game (add in a bar and brewery example), then go on to lay the same scenario (a zero sum game), with a different means.  Same ends.

I can see some long-term ownership here.


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## Fab (10 April 2008)

Looks like today should be another good day for BHP. Up 2.38% overnight in London. Also Chinalco has not denied being interested in BHP. Mentioned that they were looking at investing in more mining stocks around the world
How far can BHP go. I am guessing possibly $50. How soon is the question but there is still a lot of potential good news in the pipeline


----------



## Mr_T (10 April 2008)

MRC & Co said:


> Huh?
> 
> Either way, your opinion for their stake or my opinion for their stake, is the same concept, hedging.  Does it really matter why?
> 
> ...



Looks like this disgreement is all in vain...the Chinese weren't after it after all.

I do get your point about wanting a hedge not necessarily meaning they view the shares as undervalued.


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## Kauri (11 April 2008)

meantime.....
  the top five Japanese steel makers have capitulated and accepted a 300% rise in coal prices from BHP. The *Nikkei *reports that this could "virtually wipe out the combined operating profits at the five companies". 

 Cheers
..........Kauri


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## Mr_T (16 April 2008)

Strong March 2008 GDP figures out of China today. Very good news for BHP shareholders.

This should help persuade the market that an American recession has not materially affected Chinese growth, which means that the commodity boom can continue.


----------



## dalek (16 April 2008)

Mr_T said:


> Strong March 2008 GDP figures out of China today. Very good news for BHP shareholders.
> 
> This should help persuade the market that an American recession has not materially affected Chinese growth, which means that the commodity boom can continue.




 I think there would be a significant lag to any effect on China as most forward export orders could be commited 6 months ahead. 

Might still be a bit early to properly gauge ?

Being the consumer society the USA is it seems impossible that such a major supplier as China would go uneffected.


----------



## MRC & Co (16 April 2008)

However, inflation is soaring at over 8%.

What are they going to do to reign this in?  Will it have an impact on demand and hence commodity prices.........?

On another note, will be interesting to see how the markets react to the news.  US inflation figures tonight too I beleive?

BHP doing well lately   First experience in BHP for me (usually don't like the big guns), but a pleasant one so far.  Up 6% since the 8th, excellent consistent position trade so far.


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## Mr_T (16 April 2008)

It is my understanding that exports account for 10% of China's GDP. Specifically, American exports account for 2% of China's GDP. If I am incorrect on these figures, am happy for someone to point this out, but they are what I have read/heard (I wish I could remember from where).

It is also my understanding is that the USA recession isn't all that severe. I got this perception from talking to the people living there. Apart from their housing market of course. 

Bottom line, the USA slowdon appears unlikely to materially affect China's growth rate. But I guess we already knew that, given that most of China's growth thesedays  is domestic.

Now for the next issue: what will the Chinese do to tackle high inflation? Not sure but what I WISH they woudl do is revalue their currency. This would lower prices there whilst increasing demand for imports (ie our and other countries' exports).


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## vishalt (16 April 2008)

BHP in London is almost back to its altime high. 1820 pence, just 80 away from the all time high. 

Probably a good sign that we may hit $46 soon.


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## Mr_T (16 April 2008)

On a more negative note, rumour has it that BHP might raise its stake for RIO. More skin for them means less for us.

On the other hand, Marius does have a history of taking the other side to the cleaners whilst giving the impression he is offering a good deal - him being on the Billiton side of the BHPB merger and the price BHPB paid for Western Mining being two such instances.


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## 2020hindsight (16 April 2008)

well if steel prices keep heading skyward  (already up about 15% this year).  - just a matter of time you'd think before the iron ore boys head that way themselves - heading up like a homesick angel as they say.   Supply of steel plate in Aus starting to look like hen's teeth at the moment.


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## Mr_T (16 April 2008)

I still think that RIO price would be lower if it wasn't for the BHP t/over proposal. Though I guess that's just speculation on my part.


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## MRC & Co (17 April 2008)

Mr_T said:


> I still think that RIO price would be lower if it wasn't for the BHP t/over proposal. Though I guess that's just speculation on my part.




I would tend to agree by a quick valuation.

I much prefer BHP, especially when you take its current technicals into the equation.


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## mayk (17 April 2008)

Basic materials prices are at their all time high :
http://finance.google.com/finance?catid=57629812&hl=en


LON:BLT is near its all time high of 1580:
http://finance.google.com/finance?q=LON:BLT&hl=en&meta=hl=en

NYSE:BHP is near its all time high.
http://finance.google.com/finance?q=BHP&hl=en&meta=hl=en

ASX:BHP is NOT near its all time high:
http://finance.google.com/finance?q=asx:BHP&hl=en&meta=hl=en


We might break a short term resistance of 43.50 tomorrow, after that if we break the resistance at 47.10 then we might establish a new high.

Interesting times for BHP after a long sleep!


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## Kauri (17 April 2008)

*



BEIJING is poised to take greater control of China's push to secure Australian iron ore assets, amid speculation that Chinese entities are considering a $22 billion-plus share raid on BHP.

Click to expand...


* 
* http://www.theaustralian.news.com.au/story/0,25197,23551237-643,00.html*

 Last week, the news of S. Korea and Japan paying a 300% price rise for Australian coal emerged, with the news this week that the China government is now looking to secure rights to Australian resources including iron ore. Also today, the press is that China has negotiated a 227% increase for Potash from a Canadian/US firm for a $400 a ton increase.
Also, the push higher in the AUD has been on the back of a lot of Asian CB buying... wonder why??

  Now, back to Skip, we have 94 option barriers to take out..

Cheers
...........Kauri


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## MRC & Co (17 April 2008)

If that speculation does turn to reality, we will see it in the volume anyways, which has not been looking overly eager, so sellers are obviously sparce ATM.  Sure to be some profit takers come in soon and another little consolidation on it's run.  A few may be waiting for it's breather.  

Will be good if it can close above resistance today, though a weak resistance at that.  

Quiet a few nice set-ups presenting themselves today, I will open 2-4 more positions at close depending on the outcome of trade today.


----------



## Kauri (17 April 2008)

Kauri said:


> *http://www.theaustralian.news.com.au/story/0,25197,23551237-643,00.html*
> 
> Last week, the news of S. Korea and Japan paying a 300% price rise for Australian coal emerged, with the news this week that the China government is now looking to secure rights to Australian resources including iron ore. Also today, the *press is that China has negotiated a 227% increase for Potash from a Canadian/US firm for a $400 a ton increase.*
> Also, the push higher in the AUD has been on the back of a lot of Asian CB buying... wonder why??
> ...




 IPL might have been a safe bet on the back of that... short-term?? or even longer term maybe??

Cheers
..........kauri


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## MRC & Co (18 April 2008)

Looks like it's found resistance at the closing of the gap.  

This is where I have moved my stop too, just below the gap close level, at around $42 FWIW.

Tonight in the US is options expiration, sure to be a strange night.


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## MRC & Co (21 April 2008)

MRC & Co said:


> Looks like it's found resistance




Sorry, support*

BHP still on a nice role, fantastic position trade so far, a technical example at it's finest!


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## AnDy62 (23 April 2008)

Up 3.6% to $45.10, real stallion at the moment. From here, a move above 47.70 would be the next target, then to the half-ton! The 'Mums and Dads' might be alright afterall


----------



## JackJackJack (23 April 2008)

As a complete amateur I exited BHP at $40! 

Can any chartists out there give me an idea how I could have identified that it was breaking through previous resistance levels? (increasing MACD?)

Plus identifying new resistance?


----------



## BSD (23 April 2008)

*ASX Banks and Industrials* - no earnings growth for the coming year. First world consumers are struggling with mortgages on LCDs, McMansions and renovators delights. No immediate end in sight.

*BHP and RIO* - 40%+ earnings growth and 9 times PE - China growing at over 10% per annum and the commodity inventories and supply struggling to keep pace. 

Where do you want to be?

On a daily basis, we still have to listen to fund managers (typically those who made their money in being long banks) who cannot accept a 10 year (let alone 20 year) commodity bull market saying the demand and good times can't last. 

These guys have been WRONG for five years and will continue to carp from the sidelines. They whine that we are in a 'speculative bubble' - but cannot explain the demand for iron ore and coal which attract no speculative funds. 

The older punters who actually saw the last bull market in commodities are wiser. 

The smart blokes who can understand the FACT that there is NO supply response coming in copper, oil, nickel, molly, coking coal etc are tired of the doubt - but now laugh about how being wrong for 5 years and more has made us so much money. 

The 'GLOBAL CREDIT CRUNCH' has not effected investors in high-quality mining/energy houses.

Big miners are making new highs. Many mid-tier producers are only recovering - but they have steadily outperformed the  crippled investors in banking, property, consumer, infrastructure, services etc. Many commodities are again hitting all time highs. 

What does that say about the so-called commodities bubble??? I would have thought a BUBBLE would have burst in such a climate?

BHP is going up.

GO the big Australian


----------



## michael_selway (23 April 2008)

BSD said:


> *ASX Banks and Industrials* - no earnings growth for the coming year. First world consumers are struggling with mortgages on LCDs, McMansions and renovators delights. No immediate end in sight.
> 
> *BHP and RIO* - 40%+ earnings growth and 9 times PE - China growing at over 10% per annum and the commodity inventories and supply struggling to keep pace.
> 
> ...




Yep new numbers out for BHP

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 275.0 287.6 391.2 422.5 
DPS 55.4 64.4 72.2 80.1 *



> Date: 23/4/2008
> Author: Yuko Narushima
> Source: The Sydney Morning Herald --- Page: 1-2
> The Olympic flame is expected to land in Canberra on 24 April 2008 amidcontroversy and protest threats. The flame reached Jakarta on 23 April under theprotection of around 2,500 police and 1,000 military officers. Althoughoriginally due to pass through the city at street level, the relay event wasrelocated to a stadium and the crowd reduced to invitation-only guests.Protesters are expected at the Australian leg of the torch relay afterdemonstrations by pro-Tibet supporters during stops in the US and Europe.Sponsors such as BHP Billiton have moved to distance themselves from the relay,shifting from being a "proud supporter" to a provider of metal for thetorch
> ...


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## BSD (23 April 2008)

Albanese is fighting a losing battle.

http://business.smh.com.au/kloppers-puts-the-boot-into-rio/20080423-280u.html

"On every metric I can envisage they have been beaten. They have missed the boat on China, they are missing the boat on energy,'' Mr Kloppers said.

"It must be terrible that every quarter, BHP outperforms, and that has been the case for seven years,'' Mr Kloppers said, adding that he was incredulous that Rio's chief executive, Tom Albanese, had criticised BHP's petroleum business last week when the oil price was close to $US115 a barrel.

"Rio are energy-short and they will not benefit from the 80% margin in that business. I don't know what Tom was thinking,'' Mr Kloppers said.

--------

Go Marius!


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## Mr_T (23 April 2008)

BSD said:


> *ASX Banks and Industrials* - no earnings growth for the coming year. First world consumers are struggling with mortgages on LCDs, McMansions and renovators delights. No immediate end in sight.
> 
> *BHP and RIO* - 40%+ earnings growth and 9 times PE - China growing at over 10% per annum and the commodity inventories and supply struggling to keep pace.
> 
> ...





Whilst I am bullish on BHP, I gotta make the following points:

a) According to my Comsec account, BHP has a P/E of about 15, not 9.

b) No supply response? Of course there will be an increased supply in some commodities. Although there are constraints in supply for some commodities, eg oil, for others such as various base metals, it's just a matter of time. There are 2 sub-issues here that we can only guess the answers to:

i) Will the constant increase in demand from China & India outweigh the higher supply that eventuates - so that commodity prices remain high? If so, how high?

ii) If there is a drop in commodity prices due to higher supply, will the loss of profit per unit be made up for by more units being sold, eg (and I'm plucking these figures out of the air, they are only meant to illustrate a point, not to be accurate) instead of 10m tons of Copper being sold at a profit of $6000 profit per ton, maybe they'll sell 20m tons of Copper at a profit of $4000 per ton. But what if they end up selling 20m tons of Copper at a profit of $2000 per ton instead?

The reality is that we are entering into unchartered waters. Nearly half the world is experiencing an industrial revolution, we know that demand for commodities will be strong, we just don't know how strong.


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## mayk (24 April 2008)

BLT in LON closed today at its all time high  Now if we can achieve that on ASX.
http://finance.google.com/finance?c...0&chdet=1208969999234&chddm=689669&q=LON:BLT&

Such a strong rise in BHP again give rise to suspictions of a chinese interest in the company. Iron Ore prices are also something which might help the company's share price move higher.

Disclaimer: I hold BHP.


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## BSD (24 April 2008)

Mr_T said:


> a) According to my Comsec account, BHP has a P/E of about 15, not 9.
> 
> b) No supply response? Of course there will be an increased supply in some commodities. Although there are constraints in supply for some commodities, eg oil, for others such as various base metals, it's just a matter of time. There are 2 sub-issues here that we can only guess the answers to:
> 
> ...




I refer to the more important forward PE of BHP - does Commsec offer a one year forward number?

With 90% of brokers unable to provide a recommendation and earnings estimate for BHP due to 'research restrictions' stemming from corporate involvement in the merger plan, it is not easy to find updated BHP forecasts. 

Consider though that the tripling of coking coal prices is set to add over $4bn to the bottom line over the next Japanese financial year, oil is at least 40% above the last years number (in a year of large production expansion), copper is bouncing against new highs every day and we haven't even got the iron ore price rise through...

The forward PE may be over 10 now after the recent rally. But as you say, we are in unchartered territory, so maybe it could be even lower. 

The supply-response I refer to is the one we have been told is coming for the last five years. The response destined to send metals prices back to 'marginal cost of production'. Of course there is a supply response, but it is hardly of the size we have been promised by the doubters. 

Iron ore expansions are taking years and only keeping up with demand. 

Copper has lagged years behind all expectation and the issues in Africa and South America are only making it harder.

Nickel only caught up when the price went to $50,000tn! and ultra low grade ore became useful at a cost of $15Kt. 

Despite a global credit crisis, a recession in the United States and a major slowing of the European economy - the majority of commodities are in low supply/inventory. 

What happens when the first world gets growing again?

As for volume growth, just remember that BHP reinvests its profits into projects with expected returns on investment of 20% (based on conservative forecasts of commodity prices). Check out the 'bubble charts' in their investor presos to ge a feel for the upcoming projects. You will note that the great majority are in energy production. 

I agree that we are all guessing and I note that current prices will do very well for investors in miners - we don't need them to take another leg higher to be a believer in the sector. 

There is no certainty in investing; but the demographics of 40% of the world's population is a pretty good bet.


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## MRC & Co (24 April 2008)

BSD said:


> The supply-response I refer to is the one we have been told is coming for the last five years. The response destined to send metals prices back to 'marginal cost of production'. Of course there is a supply response, but it is hardly of the size we have been promised by the doubters.




Good post BSD.

As for the part above, it is important to remember that 10% growth in China requires a LOT more material, than 10% growth 5 years ago.

Compounding.  

As long as China/India keep ticking along, the resources bull is sure to continue despite continued supply expansion.

However, Lumwana is sure to add to the copper supply in a big way!


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## MRC & Co (24 April 2008)

Today was either profit taking or could have signaled some distribution (perhaps the beginning).

Next couple trading days will be important for BHP.


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## Sean K (26 April 2008)

kennas said:


> Perhaps probably cautious: lol), not going down any more, but not necessarily up. Another higher low might help.



Breaking 40 was outstanding, discounting that H&S. Now the next challenge is ATH.

Lot's of support established to the downside now around 35-40. LOTS!


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## Mr_T (26 April 2008)

BSD said:


> I refer to the more important forward PE of BHP - does Commsec offer a one year forward number?
> 
> With 90% of brokers unable to provide a recommendation and earnings estimate for BHP due to 'research restrictions' stemming from corporate involvement in the merger plan, it is not easy to find updated BHP forecasts.
> 
> ...




I've cut and pasted this from Comsec, so the formatting wont' be ideal, but here it is. Basically, the Forward P/E for the 2008/9 financial year based on Median estimates = 11.5. 

Which probably still makes BHP a good buy. Just not quite as brilliant as it was when it was $35 a month or so ago. Though it goes without saying that forecasts are just that, forecasts, and the future is always unpredictable.



          Year Ending 30-06-08       ---------      Year Ending 30-06-09 
           EPS(c)       PE Growth      ---------  EPS(c)         PE        Growth 
Median 287.6         15.6    4.6%                   391.2         11.5      36.0% 
High 355.0             12.6   29.1%                  512.6         8.8        44.4% 
Low 263.9             17.0   -4.0%                  349.5          12.8       32.4% 


Number of Analyst 
Estimates 8


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## MRC & Co (6 May 2008)

Some solid support found around the $42 mark.  Im waiting for a pullback to close the gap below in this consolidation zone (which is subsequently at a former resistance point) before we see a run to test the old highs and hopefully some volume to enter the fray.


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## Fab (7 May 2008)

I heard on the news today that BHP and RIO are close to be getting a freight premium from China. BHP was up almost 4% overnight in London. I am wondering how high this will push BHP and RIO share price if they get this iron ore price premium specially after the 200% + increase in coking coal price . Looks very bright for BHP at the moment


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## Fab (8 May 2008)

I am getting conflicting information today on BHP. I heard on channel nine that BHP shares where down more than 4% in the US (I did not know they were listed there) and when I check their share price in London they went down only 0.41%. Bgi difference. I am wondering what that will mean for BHP opening today in the ASX. Probably down but will it be a lot down or just a bit


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## mayk (8 May 2008)

With articles like these, who needs rampers 
http://www.smh.com.au/news/money/hot-stock--bhp-billiton/2008/05/05/1209839551086.html



Any way BHP is listed in USA as BHP(ADR).  Here is a link

http://finance.google.com/finance?c...=0&chdet=1210197784875&chddm=1447&q=NYSE:BHP&


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## Frank D (8 May 2008)

Weekly Dilernia 'Drops' :- expectation that BHP is rotating back down into MAY 50% level.....

If BHP is going to continue higher, then I would look for a lower Weekly close and support around the 50% level this week, and then rise Upwards from a lower Weekly open next week, as long as price remains above the 50% level.


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## Miner (8 May 2008)

Fab said:


> I am getting conflicting information today on BHP. I heard on channel nine that BHP shares where down more than 4% in the US (I did not know they were listed there) and when I check their share price in London they went down only 0.41%. Bgi difference. I am wondering what that will mean for BHP opening today in the ASX. Probably down but will it be a lot down or just a bit




Hi Fab
It should have been 4.74% . Please see extract from Huntley's Newsletter published this morning. You already got the symbol from another post.
This morning BHP opended in ASX $44.23. 

" For *Australian ADRs listed on the NYSE, BHP Billiton fell $4.12 (4.74%) to $82.71*, Rio Tinto Plc weakened $21.77 (4.25%) to $490.67, News Corporation dropped 25 cents (1.29%) to $19.20, ResMed shed 41 cents (1.01%) to $40.33, Telstra Corporation lost $1.00 (4.15%) to $21.02, Telecom Corporation of NZ dipped 70 cents (4.47%) to $14.96 and Westpac declined $7.64 (6.27%) to $114.28"


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## mayk (9 May 2008)

BHP on fire tonight, broke a psychological barrier on LON:BLT, 2000...

Will be a good day here in Austrlia. I think we might see an all time high price for this share soon on ASX too!

Reason seem to be BHP's CEO public disclosure that China is interested in a stake in BHP ( in coded words). But I guess, a win-win situation will be if china can have a 20% stake in a combined BHP-RIO company.


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## bigdog (12 May 2008)

BHP is approaching 12 month high!

 BHP   $46.29  	   	  -$0.21   	  -0.45% with high today of  $47.08  and low of 	 $46.15  	 2,637,452 shares  	 $122,787,515 @ 	 12-May 11:15:26

52-wk High	47.7000
52-wk Low	30.2900


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## adamim1 (13 May 2008)

BHP to buy Anglo Potash for 300million

http://www.theaustralian.news.com.au/story/0,25197,23689807-5005200,00.html


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## mayk (14 May 2008)

What has spooked BHP today? Is Iron ore agreement with china on its way to announcement today? Or is it the circulating rumors of deal sweetening 3.8 :1  for RIO( as appeared in bloomberg today).

I had set a target of 48.70 quite a while ago, now it seems I have to move my exit point a little higer


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## diliff (14 May 2008)

mayk said:


> What has spooked BHP today? Is Iron ore agreement with china on its way to announcement today? Or is it the circulating rumors of deal sweetening 3.8 :1  for RIO( as appeared in bloomberg today).
> 
> I had set a target of 48.70 quite a while ago, now it seems I have to move my exit point a little higer




No idea, but what a nice run it just had... I'm so frustrated, about 10 minutes before it began, I got sick of waiting for something to happen and sold at what looked like the ceiling at the time - 48.80.. then whoosh. Maybe it was me that triggered it.


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## ShareIt (14 May 2008)

It's currently trading in channel... $50 looks to be the target then a pullback.... looking too risky to buy at these levels, looks like it has lost momentum and volume is extremely light


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## MRC & Co (14 May 2008)

ShareIt said:


> It's currently trading in channel... $50 looks to be the target then a pullback.... looking too risky to buy at these levels, looks like it has lost momentum and volume is extremely light




Yeh, it is in a damn messy channel!  Very odd trading at the moment!  I would certainly not buy until there was a clear (by this I mean a lot of effort, wide spreads, good volume) break of it's previous all-time high.

Until then, too low R:R with resistance just overhead.

Cheers


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## Fab (14 May 2008)

Looks like the market is not agreeing with you guya as BHP is up almost 5 % Why ????Can't explain this clearly


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## MRC & Co (14 May 2008)

As of last post, BHP has gone para, broke through all-time high on decent volume so far, will wait until close and see what volume comes in and how the close ends up.

RSI at a decent level, but not relatively strong enough for me.  I expect to see a consolidation around $48 here, but definately a breakout opportunity potentially presenting itself for those willing to take the chance.  

Would still be onboard from its $40 gap up if I didn't have to spend a week in an isolated part of the world and dump all trades beforehand.    Since, have not found a decent trading opportunity arise! 

Well done to the investors!


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## Fivo (14 May 2008)

Rumour is that the Chinese are getting ready to purchase a stake in BHP, therefore the dramatic jump in BHP'S share price today.A few analysts have since come forward noting that volume hasnt been extravagent and that no large block purchases have been seen,basically indicating that it is still just a rumour at the moment.BHP price at 48.12 and dropping,from a high of 48.54.


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## ShareIt (14 May 2008)

Fab said:


> Looks like the market is not agreeing with you guya as BHP is up almost 5 % Why ????Can't explain this clearly




It is agreeing with us.... what we are saying is that it is in a channel and it should hit around $50 give or take a little.... you need to look at the internals behind this rally, and they look very weak to me... volume is my biggest indicator as a move up or down needs volume to sustain... right now the BHP move up is getting extremely light on volume based on the move sizes...


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## ShareIt (14 May 2008)

Fivo said:


> Rumour is that the Chinese are getting ready to purchase a stake in BHP, therefore the dramatic jump in BHP'S share price today.A few analysts have since come forward noting that volume hasnt been extravagent and that no large block purchases have been seen,basically indicating that it is still just a rumour at the moment.BHP price at 48.12 and dropping,from a high of 48.54.




scrap rumours... the biggest downfall of a trader... think of it this way, by the time it hits us, the prices is way out of reach, big guys then pound the stock off to the little guy at large prices... perfect example was the RIO rumour, stock shot to $150... big guys sold off at those levels and then price dropped to $100 over a couple months


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## jonojpsg (14 May 2008)

ShareIt said:


> scrap rumours... the biggest downfall of a trader... think of it this way, by the time it hits us, the prices is way out of reach, big guys then pound the stock off to the little guy at large prices... perfect example was the RIO rumour, stock shot to $150... big guys sold off at those levels and then price dropped to $100 over a couple months




Exactly the reason I just took out a short on BHP - haven't seen BHP run by 10%+ in a few days before without giving some back in the near future.


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## ShareIt (14 May 2008)

jonojpsg said:


> Exactly the reason I just took out a short on BHP - haven't seen BHP run by 10%+ in a few days before without giving some back in the near future.




good call if you ask me... much more limited risk than taking a long position... I personally would have waited till a $50 touch or a confirmation of turn... but either way risk is in your favour


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## MRC & Co (14 May 2008)

ShareIt said:


> good call if you ask me... much more limited risk than taking a long position... I personally would have waited till a $50 touch or a confirmation of turn... but either way risk is in your favour




Why would you say this?  It just moved up through an old all-time high on decent volume on a wide spread and closed near the high?  I would say there would be more risk if volume did not increase (however still would have been nice to see volume higher than today).  

Also, RSI is sitting around where it was in April at the $45 level, so it would have been reassuring to see RSI move higher.

I did not take the trade, just did not have confidence in this breakout and will be looking for a consolidation. 

Cannot say there is less risk in taking a short.........


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## michael_selway (14 May 2008)

MRC & Co said:


> Why would you say this?  It just moved up through an old all-time high on decent volume on a wide spread and closed near the high?  I would say there would be more risk if volume did not increase (however still would have been nice to see volume higher than today).
> 
> Also, RSI is sitting around where it was in April at the $45 level, so it would have been reassuring to see RSI move higher.
> 
> ...




Hi numbers up again!

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 275.0 292.8 429.8 447.4 
DPS 55.4 64.6 72.1 80.6 *



> Date: 14/5/2008
> Author: Barry FitzGerald
> Source: The Age --- Page: B1
> BHP Billiton agreed to pay $C284 million ($A298 million) for junior Canadianpartner Anglo Potash on 12 May 2008. The acquisition follows on from former BHPMD Chip Goodyear's "feed the world" strategy, which wasintroduced after the executive determined that rampant industrialisation inChina and India would increase global demand for food. BHP's offer valuesAnglo at a 34 per cent premium to its closing share price on 12 May
> ...




thx

MS


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## barnz2k (14 May 2008)

BHP just keeps on chuggin. When I first bought in I hoped I hadnt missed the boat, and had seen 2 significant rises I missed watching.. Now if i had just put it all in BHP id be much better off than I  am now haha. Again, without BHP, my folio would look a lot worse right now haha.

Goin like the kloppers


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## ShareIt (14 May 2008)

MRC & Co said:


> Why would you say this?  It just moved up through an old all-time high on decent volume on a wide spread and closed near the high?  I would say there would be more risk if volume did not increase (however still would have been nice to see volume higher than today).
> 
> Also, RSI is sitting around where it was in April at the $45 level, so it would have been reassuring to see RSI move higher.
> 
> ...




Everyone has a different style of trade, but just to explain my thoughts here goes

1) I always put myself in the situation of what the big guy would do and what the amateur would do.... the amateur would buy at these levels and the big guys would sell at these levels... remember, the big guys pick up at the bottom from $33 and sells off at the top to the average joe who thinks it will go higher and higher and higher

2) Looking at BHP, I see where it has come and where it is now... from $33 (mid march) to $48 in the space of 2 months is way too fast, way too soon... so this give me an opinion that this stock is WAY too over extended...

3) I look at the volume around October 07 to Jan 08 and it looks quite decent on the sell.... compared with the volume from march 08 till now, it has been very light and is getting lighter (trend wise).... yes, we may have a few up spikes in volume, but the overall trend is very light.... so this tells me that the buyers are not 100% behind the stock but rather taking partial position. Not a strong case for the bulls at a level of $48....

4) Volume did pick up today... but looking at intaday charts, it all happened around the $48 mark after the move up... that tells me that the big guys are selling into the power move up and hence we have volume... but considering the stock did $3 today, volume is shocking!

5) RSI, MACD and all those other indicators... I take those with a grain of salt as they are all lagging.... I might use them as a second opinion, but that's about it.... i.e. if a stock is overbought I might reconsider taking a long position and wait till it settles down.

So all these points I have made formulate a negative bias based on the way I trade.... I definately would not short at this stage, but the moment i see one sell day with heavy volume I will jump in.... On a risk to reward ratio, the downside looks more attactive.... any move higher than $48 is resistance and the next decent level of support is $40 - $42... another point, BHP is in a channel and it just hit the top resistance, so a pullback to around $46 - $47 would be expected before another leg up... I think $50 - $51 will be tough to break, but I will only trade it down if I see heavy volume at this level....


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## MRC & Co (14 May 2008)

Yes, I can see your point (I actually came to very similar conclusions).  But risk either way to me is relatively equal (though I add analysis of the XMJ to this regarding the long side), long or short (hence I did not take the trade, no confluence here). The close was well above resistance/support, which is positive, however the next few days will be crucial.

The decreasing volume over the last few months is EXTREMELLY worrying for this breakout and why I did not take the trade.

RSI definately only confirmation.  MACD, don't use it.


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## ShareIt (14 May 2008)

MRC & Co said:


> Yes, I can see your point (I actually came to very similar conclusions).  But risk either way to me is relatively equal (though I add analysis of the XMJ to this regarding the long side), long or short (hence I did not take the trade, no confluence here). The close was well above resistance/support, which is positive, however the next few days will be crucial.
> 
> The decreasing volume over the last few months is EXTREMELLY worrying for this breakout and why I did not take the trade.
> 
> RSI definately only confirmation.  MACD, don't use it.




Yeah, I find breakouts really tough these days because a lot of them turn out to be up fakes.... my rule of thumb, never chase the breakout.... MOST cases it always comes back to that level for testing where it broke out... if it holds well then buy

About BHP, it will probably hold up for a while, but it wouldn't suprise me if it cracks and heads down to $42 ish


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## MRC & Co (14 May 2008)

ShareIt said:


> Yeah, I find breakouts really tough these days because a lot of them turn out to be up fakes.... my rule of thumb, never chase the breakout.... MOST cases it always comes back to that level for testing where it broke out... if it holds well then buy
> 
> About BHP, it will probably hold up for a while, but it wouldn't suprise me if it cracks and heads down to $42 ish




Yes, I have been waiting for consolidation back at the breakout level to buy also.  Perfect example right now, MCR.  I've got my eyes firmly locked on this one.

This is definately an extremelly hard chart to read for me.  I also expect some type of consolidation, either around the previous high, or could retrace all the way to around $42 where it should find strong support.  However, would have to see some capitulation of the XMJ which is the absolute bull of the XAO!


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## ShareIt (15 May 2008)

MRC & Co said:


> Yes, I have been waiting for consolidation back at the breakout level to buy also.  Perfect example right now, MCR.  I've got my eyes firmly locked on this one.
> 
> This is definately an extremelly hard chart to read for me.  I also expect some type of consolidation, either around the previous high, or could retrace all the way to around $42 where it should find strong support.  However, would have to see some capitulation of the XMJ which is the absolute bull of the XAO!




just had a look at MCR, looks like it is in the pullback phase... i would look to buy this at the 200 MA ($3.53).... it should find some really good support there... it might dip below the 200 MA as a possible fake to the downside, but i would still hold my long if this is the case.


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## MRC & Co (15 May 2008)

Yeh, long-term MAs are something I do not use in my trading, despite having read several strategies using them.

I am looking for a consolidation around the 3.40 area on MCR, and a micro pattern to trade.

Of course, none may ever come about and it may head right back down (looking the case at the moment), it was just an example, KZL is in a similar situation now, just approaching resistance, however these type of consolidations are probably more probable when at all-time highs anyways.  

We have digressed, back to BHP.

US looking good accross most segments tonight (except energy) on expected CPI news (which must have been better than expectations ) and decent oil inventories.  Perhaps a bad sign for BHP.


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## ShareIt (15 May 2008)

MRC & Co said:


> Yeh, long-term MAs are something I do not use in my trading, despite having read several strategies using them.
> 
> I am looking for a consolidation around the 3.40 area on MCR, and a micro pattern to trade.
> 
> ...




It tanked at the end (with heavy volume selling) and that is exactly what I expected... always happens on the options expiration before day... as for MAs, you would be very surprised how a stock acts around them for support or as resistance


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## MRC & Co (15 May 2008)

ShareIt said:


> It tanked at the end (with heavy volume selling) and that is exactly what I expected... always happens on the options expiration before day... as for MAs, you would be very surprised how a stock acts around them for support or as resistance




Yeh, I have watched it numerous times, however it just does not fit my trading plan or set-ups.  I have quiet a few and am testing them all against eachother.  Accumulation/support and gap plays are seeing by far the best results for me.  

What tanked as expected at the end on options expiration (BHP)?  As far as seasonality, options expiration is generally a positive time for the market, historically, moving up more than down in those weeks.

I saw a study from Merrill Lynch over the period 1985-2000 which stated the stockmarket has outperformed in expiration weeks over that period.  One of the reasons suggested is the generally bearish stance of options traders.  Their unwinding of positions causes prices to rise. Generally works better when there is heavy put buying in relation to call buying.  Of course, even more powerful in tripple witching weeks.


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## ShareIt (15 May 2008)

MRC & Co said:


> Yeh, I have watched it numerous times, however it just does not fit my trading plan or set-ups.  I have quiet a few and am testing them all against eachother.  Accumulation/support and gap plays are seeing by far the best results for me.
> 
> What tanked as expected at the end on options expiration (BHP)?  As far as seasonality, options expiration is generally a positive time for the market, historically, moving up more than down in those weeks.
> 
> I saw a study from Merrill Lynch over the period 1985-2000 which stated the stockmarket has outperformed in expiration weeks over that period.  One of the reasons suggested is the generally bearish stance of options traders.  Their unwinding of positions causes prices to rise. Generally works better when there is heavy put buying in relation to call buying.  Of course, even more powerful in tripple witching weeks.





Sorry, I was referring to the US markets.... they have option exp tomorrow (as do we) and they ususal fake to the up and then go down (or vice versa depending on the put to call ratio)... the thing is with options exp is that the market goes the opposite direction to the crowd... if there are too many calls on the market, then usually the index goes south... too many puts, index goes north.... basically the institutions want to collect the most premiums without having to pay up....

BHP looking to pullback as i called yesterday... will find some support on the rising channel line and make another move higher


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## MRC & Co (15 May 2008)

Yeh, though generally up.  

Far better trades out there than BHP currently which looks indicisive to me.

Infact, a very good one came up today!


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## mayk (16 May 2008)

I am a bit confused, china is buying a stake in BHP, 
http://www.bloomberg.com/apps/news?pid=20601081&sid=aWl6.WZPMc7M&refer=australia

Is the recent price hike because of this?


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## ShareIt (16 May 2008)

MRC & Co said:


> Yeh, though generally up.
> 
> Far better trades out there than BHP currently which looks indicisive to me.
> 
> Infact, a very good one came up today!




BHP hit $50 and then the heavy volume selling came in so far.... but need a little more confirmation


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## ShareIt (16 May 2008)

mayk said:


> I am a bit confused, china is buying a stake in BHP,
> http://www.bloomberg.com/apps/news?pid=20601081&sid=aWl6.WZPMc7M&refer=australia
> 
> Is the recent price hike because of this?




A lot of the news is already factored in once it hits the public... the price spikes is a way that the big institutions pound the stock off to the little guy who has just heard the news and that is the "driving factor".... I usually stay away from news unless you are close friends with the CEO


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## mayk (16 May 2008)

Actually I entered BHP at the right time ( 36.70) , now I want a good exit. I will reenter when it will breath a little. Some news sources are saying chinese will buy it at around 53.00... So the question is what is a good exit. Hang in or lock in the profit. I hate decisions


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## Fab (16 May 2008)

If the Chinese are ready to buy at $53 then $49.90 is a good entry not a good exit.


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## ShareIt (16 May 2008)

mayk said:


> Actually I entered BHP at the right time ( 36.70) , now I want a good exit. I will reenter when it will breath a little. Some news sources are saying chinese will buy it at around 53.00... So the question is what is a good exit. Hang in or lock in the profit. I hate decisions




I always say... don't be too greedy $50 is a great exit considering you bought a $36.... why risk the downside for an extra $3?


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## bergers_n_fries (16 May 2008)

as bhp dominates my portfolio at the moment i am sweating on a good exit price...i literally have no idea...my age is really showing

i bought around 38...held it up to 48...watched it fall with the crash earlier in the year...rebought around 36ish now its hit 50 odd

i would like to see some consolidation in the stock before i sell off...considering the stock is still getting widespread attention driving the increases im finding it difficult to muster the courage to sell

ahhh!!!!!


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## overule (16 May 2008)

mayk said:


> Some news sources are saying chinese will buy it at around 53.00...




Do you have the link to that news ? 
I believe this is just another speculation. The Chinese are not that stupid to tell the price they are willing to pay. This only makes the share price to shoot up.

Now is a good time to trade. All these depend on your decision.


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## questionall_42 (16 May 2008)

overule said:


> Do you have the link to that news ?
> I believe this is just another speculation. The Chinese are not that stupid to tell the price they are willing to pay. This only makes the share price to shoot up.




0936 [Dow Jones] Dealer expects BHP Billiton (BHP.AU) to lead S&P/ASX 200 at least 1% higher, tipping BHP could push through record A$50/share mark on renewed buying, noting report in The Australian newspaper that China could team with local superannuation fund and private equity fund to buy 9% stake in BHP "seems to push all the right buttons", with traders saying price tipped to be paid ranges from A$53 to A$60 per share


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## MRC & Co (16 May 2008)

For me exits are absolutely quintessential, and will define how a trader does over the long-term.

I would personally, in this case, place my stop around 47.50 for the moment.  It is below the previous high, gives enough room for daily volatility and is below the gap which will act as support.

Good luck to all onboard!


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## mayk (16 May 2008)

ShareIt said:


> I always say... don't be too greedy $50 is a great exit considering you bought a $36.... why risk the downside for an extra $3?




I am not being greedy, the thing is, I have just a nomargin account with my broker and once I sell the stock the money will be transferred after 3 days. I have done that before and most of the time in three days I am not in a better position....

But if it will go above $50, I will sell it...


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## BSD (16 May 2008)

MRC & Co said:


> For me exits are absolutely quintessential, and will define how a trader does over the long-term.




Others would say you make money buying well. 

Those who bought around $10 at the start of the boom and have ignored all the negative signals (noise) since have now generated a 400% return on funds. 

Beats sweating 2% swings in my view

Go the Big Australian


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## MRC & Co (16 May 2008)

BSD said:


> Others would say you make money buying well.
> 
> Those who bought around $10 at the start of the boom and have ignored all the negative signals (noise) since have now generated a 400% return on funds.
> 
> Beats sweating 2% swings in my view




Why I stated, it will define how a _trader_ does over the long-term.

Buying is easy, managing the trade is the hard part.  

The part about buying at $10 is correct, but I think the price swings were a bit more than 'noise', not sure on your definition.  However, this arguement is overcooked and I don't wish to go there, do a search if you feel the need to debate F/A v T/A.  I personally beleive in both if used correctly.

I thought it was pretty easy to catch the trend on this one from $40-$50 (around), a 25% move in a matter of weeks, with little downside risk.


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## Garpal Gumnut (16 May 2008)

MRC & Co said:


> Why I stated, it will define how a _trader_ does over the long-term.
> 
> Buying is easy, managing the trade is the hard part.
> 
> ...




From a technical point of view the only concern I have about BHP is the divergence between price rise and volume as illustrated by the attached monthly chart.

Admittedly the price has more than doubled , the volume has however dropped off dramatically.

A good volume in may may be as good an indicator as any that BHP is set to go way beyond $50. If there continues to be little volume then a retracement is inevitable.

gg


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## Garpal Gumnut (17 May 2008)

Garpal Gumnut said:


> From a technical point of view the only concern I have about BHP is the divergence between price rise and volume as illustrated by the attached monthly chart.
> 
> Admittedly the price has more than doubled , the volume has however dropped off dramatically.
> 
> ...




Watching doubling in price on a semilog scale where each doubling in price is an equal distance on the y axis from the next is an interesting exercise. 

Whenever I think of selling all my BHP or RIO I pop this old chart up, previously posted but updated. Its a monthly of BHP and RIO

The next target for BHP would be 70 and if RIO survives t/o and /or the Chinese 140.

gg


----------



## Garpal Gumnut (17 May 2008)

Sorry that should be target of 70 for BHP and 280 for RIO

Not very good on figures , like to see it on a chart !!!

gg


----------



## MRC & Co (17 May 2008)

Garpal Gumnut said:


> From a technical point of view the only concern I have about BHP is the divergence between price rise and volume as illustrated by the attached monthly chart.
> 
> Admittedly the price has more than doubled , the volume has however dropped off dramatically.
> 
> ...




Yes, this was my big problem with BHP also.

ShareIt and myself discussed this on p81.

Cheers


----------



## Garpal Gumnut (17 May 2008)

MRC & Co said:


> Yes, this was my big problem with BHP also.
> 
> ShareIt and myself discussed this on p81.
> 
> Cheers




Thanks for the link to that page. I agree with your sentiments on BHP, it would be good to see the vol increase next week.

gg


----------



## bergers_n_fries (21 May 2008)

im confused with bhp as per usual

the company announces a few new projects yet the share price goes down...quite considerably...

5-6% this week alone

can anyone explain this or is this just a typical bhp consolidation as has been seen before in the event of sharp rises

cheers in advance, bergers_n_fries


----------



## senorita (21 May 2008)

Garpal Gumnut said:


> Sorry that should be target of 70 for BHP and 280 for RIO
> 
> Not very good on figures , like to see it on a chart !!!
> 
> gg





280 for RIO? When do you see that happening? Seems a bit far-fetched.
70 seems realistic for BHP in the long run


----------



## mayk (21 May 2008)

bergers_n_fries said:


> im confused with bhp as per usual
> 
> the company announces a few new projects yet the share price goes down...quite considerably...
> 
> ...




European stock market includin LON:BLT, sort of 'mini-crashed' last night. It is the fallout of that we are seeing today. 

Plus BHP will consolidate around 45-47, before starting its journey above $50. 
With Iron ore and oil jumping like crazy I don't see any stopping for bhp in the short-medium-long run ( they are 49th oil producer in the world...)

I was thinking of buying some more BHP today, but the funds will take some time to get transferred to my broker account.


P.S Plus it bounced off hard and fast today. from 46.5 
I hold BHP.


----------



## ShareIt (21 May 2008)

Nice correction this week on BHP.... Should get a decent bounce up past the $50 mark within the next few weeks


----------



## bergers_n_fries (21 May 2008)

is there a good website i can go on to find the biliton price from the london markets???

i want to follow the sp a little more and begin trading the stock more frequently as my judgement decides

cheers in advance


----------



## vishalt (21 May 2008)

bergers_n_fries said:


> is there a good website i can go on to find the biliton price from the london markets???
> 
> i want to follow the sp a little more and begin trading the stock more frequently as my judgement decides
> 
> cheers in advance




www.bloomberg.com, then in the "Enter Symbol" box type: "BLT:LN" and hit enter.

BHP P/E 20 now jeebus D:, but more than justified as it's ripping out cash from its petrol and copper divisions


----------



## Garpal Gumnut (21 May 2008)

bergers_n_fries said:


> is there a good website i can go on to find the biliton price from the london markets???
> 
> i want to follow the sp a little more and begin trading the stock more frequently as my judgement decides
> 
> cheers in advance




I use this link to the FTSE 100 on Yahoo. If you click on "next" you come to a page with RIO on it. I believe it is 15min delayed.

http://uk.finance.yahoo.com/q/cp?s=^FTSE

gg


----------



## sassa (21 May 2008)

bergers_n_fries said:


> is there a good website i can go on to find the biliton price from the london markets???
> 
> i want to follow the sp a little more and begin trading the stock more frequently as my judgement decides
> 
> cheers in advance



You can go directly to the London stock exchange-www.londonstockexchange.com.Prices are 15 minutes delayed.Type in bhp on the price link on the left hand side.


----------



## bergers_n_fries (28 May 2008)

little confused once more...a loss of 3.3% today alone...is this part of the consolidation or something more sinister???

i noticed today it announced another project with a company in the pilbara region...

so it goes down???


----------



## jim ray (29 May 2008)

can someone please fill in why this stock has fallen 10% over the last week and ahalf? will it bounce back in the coming week?
I thought it would fly past the $50 barrier!


----------



## Moneybags (29 May 2008)

jim ray said:


> can someone please fill in why this stock has fallen 10% over the last week and ahalf? will it bounce back in the coming week?
> I thought it would fly past the $50 barrier!




BHP has had a stella run and was due for a pull back......probably will go past $50 sometime soon but latest action is all healthy in my opinion.

I jumped off at $42 after buying at $34 and never thought it would have run like it did.

Bergers........BHP hardly ever moves up on ann of new projects, this is a massive Co and these projects are usually small in comparison to other factors such as metals prices and what the Co has done in London & US overnight.

Cheers

MB


----------



## TheRage (29 May 2008)

jim ray said:


> can someone please fill in why this stock has fallen 10% over the last week and ahalf? will it bounce back in the coming week?
> I thought it would fly past the $50 barrier!




Bhp is not immune nor are any shares from market weakness. The whole market has pulled back in the last week. Typically there is a run-up each May with a bit of a sell off in June. The run-up usually corresponds with some of the larger shares announcing profit results. The sell off is usually caused by investors and to a greater extent managed funds either dumping some crap to offset against their gains or in the case of a weak market some managed funds actually sell shares with a large internal capital gain which they have been saving for a rainy day to prop up their investment return for the financial period. Becasue many managed funds practice this method they all sell at the same time causing downward pressure on the share price.


----------



## mapna (30 May 2008)

Anyone has idea why BHP dropped nearly $1.00 at the auction time today?? who were selling them? any thing that we dont know??????


----------



## mayk (30 May 2008)

I think someone needs to offload shares during the month of may, some adjustment going on between funds.

If any sinister thing is done it will appear on LON:BLT, which is not that bad, with some luck we will have a green day for bhp on monday. Any severe dip generally grant an upday.


----------



## MRC & Co (30 May 2008)

Commodities fall, BHP falls, nothing more sinister than that.  

The run of the mill slosh of funds from one asset class to the other.  

BHP will be back.

Just presenting a buying opportunity IMO.  Wait for this little fall to finish and it's the next swing trade on the way!


----------



## questionall_42 (6 June 2008)

For what is worth, from the E-trade research news flow. Closing price was $44.00.  If this is an outrageous ascertian, I would love to see an explanation why.

1013 [Dow Jones] BHP (BHP.AU) up 3.3% at A$43.90, in line with ADR close, after early rise to A$43.95. BHP spokesman says 2008 iron ore contract price negotiations with China ongoing. Overnight surge in U.S. stocks and oil prices rubbed off on BHP. Focus now on technical factors, specifically, today's reaction to former support from head and shoulders neckline at A$43.89. Close above that level would negate bearish pattern which targets A$43.36. If BHP breaks downtrend line at A$44.44 at any time today, all technical shorts should stop out. Certainly, BHP is cheap on forward PE view but such obvious fundamental value won't necessarily prevent a sharp fall in the short term, with many traders saying the recent surge to A$50.00 was too rapid. (DWR)


----------



## AnDy62 (14 June 2008)

Earnings and Dividends Forecast (cents per share) 
 2007 2008 2009 2010 
EPS 275.0 294.8 469.9 442.2 
DPS 55.4 63.7 72.0 79.5 

Is looking nice on a forward PE < 10 for such a popular stock.
Thinking of adding some more to the pile before the iron ore deadline.
Cheers, Andy


----------



## Miner (15 June 2008)

In addition to what BHP reported about Kalgoorlie Nickel Smelter episode.
The loss is massive . Unplanned breakdown, Panic work and premium prices for everything labour, engineering, refractory, steel, installation, plumbing,
Kwinana Refinery work stopped . Unplanned maintenance again
KNS maintenance has been very bad and wrong attitude and work culture
Looking for a maintenance manager now when you need him or her to take the leadership
Worsley Alumina planned shutdown is starting
Iron ore prices are yet to be settled
Furnace rebuilding was planned to start in mid 2009. Long delivery items will be brought in half cooked way. God bless the chaotic work

The only positive side will be with other nickel suppliers who will have sunshine, contractors working in KNS - lot of money. Shareholders of BHP - sorry


----------



## AnDy62 (15 June 2008)

Miner said:


> The only positive side will be with other nickel suppliers who will have sunshine, contractors working in KNS - lot of money. Shareholders of BHP - sorry




She was up about 4% in the US, no need to be sorry. It should be a nicely green Mondey  What is with this 100 character rule?


----------



## wayneL (15 June 2008)

AnDy62 said:


> Earnings and Dividends Forecast (cents per share)
> 2007 2008 2009 2010
> EPS 275.0 294.8 469.9 442.2
> DPS 55.4 63.7 72.0 79.5
> ...



According to Yahoo (based on NYSE data) PE is 17.66, Forward PE 17.66 (WTF?) qnd PEG @2.0

http://finance.yahoo.com/q?s=bhp

That ain't cheap.


----------



## Mr_T (15 June 2008)

According to Comsec, the P/E is 14.64, PEG is 0.48.

Forward P/E is 9.2 (for 2008/9 financial year, median forecset).

I'd rather trust Comsec than YF.


----------



## jonojpsg (16 June 2008)

There is no difference guys!  2009 EPS is 469c which is a PE of <10 at current SP 

Hopefully will see this head back to record highs soon (i hold)


----------



## jonojpsg (19 June 2008)

Just out of interest for anyone who's watching - BHP is currently on a pre-open price of $58.91 (30% higher than yesterdays close ), with 6 buy orders all the same for 514783 shares each at 58.91 

Surely these will not go through, eg they will be pulled before open?  What is this all about, someone playing silly buggers?  Be interested to hear what others think.


----------



## Tradert (19 June 2008)

jonojpsg said:


> Just out of interest for anyone who's watching - BHP is currently on a pre-open price of $58.91 (30% higher than yesterdays close ), with 6 buy orders all the same for 514783 shares each at 58.91
> 
> Surely these will not go through, eg they will be pulled before open?  What is this all about, someone playing silly buggers?  Be interested to hear what others think.




Options expiry today. You can check out the ASX calendar in their web site (http://www.asx.com.au/investor/futures/trading_information/maturity_calendar.htm)

Maybe that's got something to do with this!?


----------



## njc.corp (19 June 2008)

i dont think they will open that high-

might be a little bug in the system-

it also have ipl at $239.00

Thanks

Nick--


----------



## SGB (24 June 2008)

Technically still looking quite strong, won’t be surprised to see all time highs being tested again in the interim.  

SGB


----------



## Mr_T (3 July 2008)

WTF happened to BHP today? There's been no big bad news.....

Anyone got a reasonable explanation?


----------



## Nastybit (3 July 2008)

hey,

I noticed a really big gap this morning, considering it opened 6% lower 

I didn't know what was going on and conveniently the internet died, so I've been out of the loop today. I have however looked for announcements that could have prompted the price jump. Yet i didn't find any, the last one was on the 2nd.

Anyone have some views on this?

Nastybit


----------



## pilbara (3 July 2008)

Nastybit said:


> I noticed a really big gap this morning, considering it opened 6% lower



the stock is listed on the NYSE as ADRs, worth 2 ordinary ASX BHP shares for each ADR.  For whatever reason, the materials sector and steel were smashed in USA trading yesterday.  

Closing price for the BHP ADR = $77.75 USD
In Aussie dollars @ 1.039 = $80.79 AUD
Divide by 2 = $40.39 AUD, a good estimate for the opening price of BHP on the ASX this morning.

previous close = $42.89 
expected gap down = $42.89 - $40.39 = $2.50  = 5.8% down on open


----------



## mayk (3 July 2008)

http://business.smh.com.au/bhps-rio-bid-clears-us-regulatory-hurdles-20080703-314l.html

Well lets see some positive news will bring this baby up tomorrow in green. I was waiting for this drop, I got out previously at 42.77. I bought some today in hope of a dead cat bounce... Lets see how it turns out .

Trend wise 1 month time frame, the primary trend for BHP is down.
http://finance.google.com/finance?c...=1&chdet=1215069594218&chddm=13472&q=ASX:BHP&

Copper strike in peru, and fluctuation in its price has something to do with material prices.


----------



## Nastybit (3 July 2008)

pilbara said:


> the stock is listed on the NYSE as ADRs, worth 2 ordinary ASX BHP shares for each ADR.  For whatever reason, the materials sector and steel were smashed in USA trading yesterday.
> 
> Closing price for the BHP ADR = $77.75 USD
> In Aussie dollars @ 1.039 = $80.79 AUD
> ...




thanks pilbara, now i know what happened. Now i know where to look to find out if it will be a temporary or serious blow. Not sure if I could keep a world wide watch on BHP lol Oh well

Would you think this drop will be sustained?

lol took too long to post again, oh well. yeah I bought at 36 coz i'm stupid and optimistic. hopefully long term will see it grow, though if it falls lower i might agree to my stop loss


----------



## mayk (4 July 2008)

IS this H & S with a leg down? See the attached figure. BLT and NYSE:BHP showed some weak signs of recovery. 

Apparantely huge drop in coal prices is the key reason for this huge drop.


----------



## Sean K (4 July 2008)

Yep, but just a probability.

Target around $36 which lines up with some support. Long term support at $32 ish.


----------



## grace (4 July 2008)

kennas said:


> Yep, but just a probability.
> 
> Target around $36 which lines up with some support. Long term support at $32 ish.




Now don't tell me it's heads and shoulders, knees and toes!  I picked them up at toes last time $32, don't tell me we are heading there again!  The XAO is going to play up badly if the engine room starts falling apart!

Possibility though.


----------



## Sean K (4 July 2008)

grace said:


> Now don't tell me it's heads and shoulders, knees and toes!  I picked them up at toes last time $32, don't tell me we are heading there again!  The XAO is going to play up badly if the engine room starts falling apart!
> 
> Possibility though.



Grace,

I love charts, and TA and FA, and Gann. 

It all adds up a decision. 

A decision based on perception.

Perception is reality.

The question now is:

Where in the perception?

For anything?

Hmmmmm?


----------



## nyo (4 July 2008)

mayk said:


> IS this H & S with a leg down? See the attached figure. BLT and NYSE:BHP showed some weak signs of recovery.
> 
> Apparantely huge drop in coal prices is the key reason for this huge drop.




*"Australian coal price to stay strong despite pullback"*

Section from article:

*# All the indicators in Asia certainly point to ongoing tightness in the thermal coal market.

In May, China reverted to being a net coal importer, with imports exceeding exports by 250,000 metric tonnes, as local output failed to keep pace with demand.

Between January 2008 and May 2008, China's coal exports fell 4.1 per cent on year, to 18.5 million tonnes, the General Administration of Customs said on June 23.*

************************************************

http://www.theaustralian.news.com.au/story...5005200,00.html


*Australian coal price to stay strong despite pullback*

Alex Wilson, Dow Jones Newswires | July 03, 2008

A SHARP pullback in benchmark Australian thermal coal prices is a natural correction after a recent surge, according to analysts.


----------



## pilbara (4 July 2008)

mayk said:


> Apparantely huge drop in coal prices is the key reason for this huge drop.



I think it's similar to what happened last time there was a major selloff in resource stocks, which was just before Easter.  I think that around the start of a new quarter, if there is a major public holiday coming up (eg Easter, 4th July) then before the holiday the major institutional investors will put in place their longer term changes in policy for the next quarter.  

Also I agree with the following analysis by Jeff @ TradeInTheZone, who was commenting on the high performing stock US Steel Corp (X)



> Wednesday July 2nd, mutual fund managers and hedge funds decided the  global growth story is over. Coal, steel, ag, infrastructure,  machinery, etc…anything that exports to the rest of the world got  absolutely crushed (most names down a stunning 5-20% in 6.5 hours). I  would NOT rush into these names right away or add to positions as of  now…when they break like this it usually takes some time for them to  rebound (if they do). DEflation is the worry…and it is brutal for these names. There is a good chance that the big price increases that the exporters have been able to put on could be history…and that kills psychology and PE ratios. X is likely to be a great trading stock over a period of hours...but choppy the next few weeks.
> 
> Jeff
> 
> www.tradeinthezone.com


----------



## pilbara (4 July 2008)

mayk said:


> BLT and NYSE:BHP showed some weak signs of recovery.



Another thing to watch now is the strength of recovery in BHP compared to RIO, now that the the US regulators have not vetoed the takeover of RIO.  For a while RIO tracked BHP at 3.4 BHP to 1 RIO, but then dropped down to the 3.1 BHP to 1 RIO.  I'd say the recovery in RIO might be better, or perhaps the BHP recovery held back a bit with the takeover starting to come back into play.


----------



## Garpal Gumnut (4 July 2008)

grace said:


> Now don't tell me it's heads and shoulders, knees and toes!  I picked them up at toes last time $32, don't tell me we are heading there again!  The XAO is going to play up badly if the engine room starts falling apart!
> 
> Possibility though.




Hi Grace you are a lucky lady, I was greedy and waiting for a drop under $30 and missed out. No toes this time I predict although if it gets anyway below $38 I'll be in like Q.

gg



kennas said:


> Grace,
> 
> I love charts, and TA and FA, and Gann.
> 
> ...




Hi Kennas,
Doesn't BHP channel nicely on a semilog weekly. I might go to your living room one day and do my ayurvedic humming on good ole BHP if it keeps on going. Imagine the equivolume on a combined BHP/RIO.

gg


----------



## 2020hindsight (4 July 2008)

http://www.abc.net.au/news/stories/2008/07/04/2295144.htm
85% increase for BHP's ore price (in keeping with recent trends)



> BHP accepts 85pc iron ore price rise
> Posted 5 hours 9 minutes ago
> Updated 4 hours 49 minutes ago
> BHP has followed the lead of its mining rival Rio Tinto and agreed to an 85 per cent rise in the price of its Western Australian iron ore.
> ...


----------



## mayk (10 July 2008)

http://finance.google.com/finance?c...ue&chdet=1215647346343&chddm=2889&q=NYSE:BHP&

Just a question. Is this spike in the before market open tradin in NYSE:BHP  just a trading glitch ( pressing of wrong button from some enthusiastic trader?). 

What does these kind of glitches generally mean?


----------



## Caliente (17 July 2008)

I like the support BHP Billiton is showing this morning at $38.

Very surprised that the share price is down so heavily with the Dow shooting last night and XJO also not doing too badly albeit a financial driven rally.

In for 1000 units BHP@37.99 with Falling Sell Trigger at 37.89 incase my interpretation of the trend is incorrect.

Cheers
-Cali


----------



## Sean K (17 July 2008)

Caliente said:


> I like the support BHP Billiton is showing this morning at $38.
> 
> Very surprised that the share price is down so heavily with the Dow shooting last night and XJO also not doing too badly albeit a financial driven rally.
> 
> ...



Good luck Cali.

Diversified commod stocks are moving off metal and oil prices at the moment.

Poo and Zn tanked last night which is why BHP is down. 

Hope they recover for you.


----------



## Caliente (17 July 2008)

Cheers Kennas - CSL worked successfully for me yesterday =)

I'm using such a tight stop atm because even though I think I've just about picked todays bottom the market is so wild its hard to tell whats happening atm.

if you don't mind asking, what do the charts suggest to you Kennas? It doesn't help that BHP fell off the cliff face and had $5bn wiped off its market cap this morning


----------



## Sean K (17 July 2008)

Caliente said:


> Cheers Kennas - CSL worked successfully for me yesterday =)
> 
> I'm using such a tight stop atm because even though I think I've just about picked todays bottom the market is so wild its hard to tell whats happening atm.
> 
> if you don't mind asking, what do the charts suggest to you Kennas? It doesn't help that BHP fell off the cliff face and had $5bn wiped off its market cap this morning



eeeek, 

See the 'Head and Shoulders' thread.

Hopefully it doesn't come to fruition. 

Those H&S don't always work, just probabilities. 

As you say, need to have a stop either way if you are 'trading', and not a long term buy and hoper...


----------



## Caliente (17 July 2008)

Failed trade. Stopped out at 37.90. Loss of ~$160 taken.

But you have to play the rules of expectancy or you'll get killed out there.

I just saw your analysis Kennas - and it looks disturbing. If BHP headed back to 34/35 which i've been thinking it could...that would weigh down pretty heavily on the AORDS.

-Cali


----------



## Mr_T (18 July 2008)

What's going on with BHP? Oil gone down a bit, but still high.

Chinese growth still high at 10.1%.

What justifies sucha  drop in the price?


----------



## ColB (18 July 2008)

BHP almost $50 six weeks ago.  

Oil price goes up and the media talk about the high cost of running mines etc What happens?  BHP goes down.  Oil price drops! What happens?  BHP share price goes down as they have a significant part of their operations in the oil sector.  Okay base metal prices have dropped at times during this period but BHP are off some 30-30% from their recent high.  And our technical experts on this forum indicate it may go down to very low $30's!!!!

Spare me


----------



## mayk (18 July 2008)

http://www.miningmx.com/markets/670694.htm


I am waiting for BHP to go down (I hold BHP right now), but I want a much cheaper entry. 

According to the analysis of the link, given we break the 35-36 we might see 20's.


----------



## ColB (18 July 2008)

> I am waiting for BHP to go down (I hold BHP right now), but I want a much cheaper entry.
> 
> According to the analysis of the link, given we break the 35-36 we might see 20's.




Mayk, we won't see 20's in our lifetime!  Maybe $30-33 if you're lucky.  

My  worth!!utthedoor:


----------



## mayk (18 July 2008)

I meant to say high 20's. Sorry if I mis-lead anyone into thinking 20-or 22, I meant 28-30 is a real possibility.

Please read this thread, when BHP was hovering around $50 mark, some people said the same thing about BHP going under 40. 

In my short learning curve of stock market, I have learnt to avoid using the word 'never', as anything is possible in this crazy world.


----------



## VViCKiD (19 July 2008)

maybe this one is worth a short... looks like a double top has formed  ... 
what do u guys think ? can u see the double top ?


----------



## Sean K (19 July 2008)

VViCKiD said:


> maybe this one is worth a short... looks like a double top has formed  ...
> what do u guys think ? can u see the double top ?



You mean the peaks in Oct 07 and Mar 08? Doubt it, gives a target of about $18. It was worth shorting the H&S with a target of $34. _Should _be a lot of support there, but who knows....


----------



## VViCKiD (19 July 2008)

yeh.... they're the 2 tops...  yeh... $18 target seems a bit far fetched ... 
did u derive $34 from the aug 07 and apr 08 troughs ?


----------



## Sean K (19 July 2008)

VViCKiD said:


> yeh.... they're the 2 tops...  yeh... $18 target seems a bit far fetched ...
> did u derive $34 from the aug 07 and apr 08 troughs ?



No, see the Head and Shoulders thread. Neckline at $42, once it broke down through there, target's about $34.


----------



## VViCKiD (19 July 2008)

ohhh... i seee it ...  cool thanks kennas !!!!


----------



## njc.corp (19 July 2008)

ColB said:


> Mayk, we won't see 20's in our lifetime!  Maybe $30-33 if you're lucky.
> 
> My  worth!!utthedoor:




on what facts and figures-

wont does not cut it in the market

things happen with-in a blink of a eye-

i would be interested to hear why it wont or cant go into the $20.00+ region


Thanks

Nick--


----------



## Mr_T (19 July 2008)

njc.corp said:


> on what facts and figures-
> 
> wont does not cut it in the market
> 
> ...




Anything is possible, but the reality is that it is already trading on modest P/E ratios. Furthermore, if you look at the P/E ratio based on this year's projected earnings, the P/E looks VERY cheap (8.0, according to Comsec). 

It is true that some companies' P/E can be very low, but they tend to be companies with problems, eg high debt, companies that make their money from being financial engineers, etc. 

In a nuthshell, it could go to 20's, but given its strong earnings (real earnings, not some Macquarie or Babcock pie in the sky earnings based on debt and revaluations) this is unlikely.


----------



## njc.corp (19 July 2008)

Mr_T said:


> Anything is possible, but the reality is that it is already trading on modest P/E ratios. Furthermore, if you look at the P/E ratio based on this year's projected earnings, the P/E looks VERY cheap (8.0, according to Comsec).
> 
> It is true that some companies' P/E can be very low, but they tend to be companies with problems, eg high debt, companies that make their money from being financial engineers, etc.
> 
> In a nuthshell, it could go to 20's, but given its strong earnings (real earnings, not some Macquarie or Babcock pie in the sky earnings based on debt and revaluations) this is unlikely.




I dont doubt u at all-i just seen in the post  i put up-the poster said it would not happen in our life time-

i find that a bit funny-as we all know anything possible in this game-

that aside he might have a good reason that i would like to know-

Thanks guy's

Have a good weekend and better trading next week-

Thanks

Nick--


----------



## ans25 (19 July 2008)

Didnt it go sub $30 earlier this year... that famous day in January 

Personally I think for me enterance in to BHP would be $32.


----------



## michael_selway (20 July 2008)

njc.corp said:


> on what facts and figures-
> 
> wont does not cut it in the market
> 
> ...




Hi Nick what do you think of these numbers

Date: 18/7/2008 
Author: Michael Vaughan 
Source: The Australian Financial Review --- Page: 58 
BHP Billiton has bought back a coal deposit in Queensland. The BHP BillitonMitsubishi Alliance (BMA) relinquished the New Saraji coking coal deposit in2002 to cut costs when coal prices were low. In July 2008, it has agreed torepurchase the asset from New Hope Corporation for $A2.45 billion. This is abouttwice the price expected by analysts, but BMA can gain cost savings and useinfrastructure from its adjoining Saraji mine 

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 275.0 289.8 460.8 490.5 
DPS 55.4 63.6 72.0 78.4 *

thx

MS


----------



## ColB (20 July 2008)

> on what facts and figures-
> 
> wont does not cut it in the market
> 
> ...




Hey Nick, when you find someone on this thread that can predict what a share price will drop to or rise to and backs its up with "facts & figures??" please point him/her out to me.  Until that happens, I'll express my opinion like many others here who give their thoughts on where an SP may head.

Granted, I should have qualified my statement and given reasons why I don't believe BHP will drop below $30.  

For what its worth refer to Mr T's response who puts up a case quite succinctly as to why its not likely to drop below $30

Ans and Kennas are looking at the $32-34 range as a possible bottom.  I'll put my balls on the line and predict not below $33. 

Time will tell and you may have the last laugh only I don't think many of us will be laughing if BHP goes sub $30

Regards, Col B


----------



## ColB (20 July 2008)

> Didnt it go sub $30 earlier this year... that famous day in January
> 
> Personally I think for me enterance in to BHP would be $32.




Ans it closed around $31 that famous day but may have dropped below $30 intraday I don't have the data.

I'm with you in buying back at $32-33.  Only wish I sold when the buggers were up near $50 bucks recently.  Shoulda, coulda (Hindsight a wonderful thing  Regards CB


----------



## nyo (20 July 2008)

ColB said:


> Ans it closed around $31 that famous day but may have dropped below $30 intraday I don't have the data.
> 
> I'm with you in buying back at $32-33.  Only wish I sold when the buggers were up near $50 bucks recently.  Shoulda, coulda (Hindsight a wonderful thing  Regards CB




Chartist out there does BHP have to close the Gap that happened back Jan?  See the information below where it shows the gap.  If so does this mean that BHP will go lower? A some feedback on this would be helpful for me.  Thank you. 

*BHP BILLITON LIMITED*
Date  	*Open * *High* *Low * *Close*  	Volume

*23-Jan-2008* *33.4000* 34.2900 33.2900 33.8900  	30,414,817

*22-Jan-2008* *31.5000* 32.2800 *31.0000* *31.0000* 	29,678,753

*21-Jan-2008* 34.5900 35.0800 *33.2900* *33.2900* 	20,850,322


----------



## Gekko (20 July 2008)

ColB said:


> Ans and Kennas are looking at the $32-34 range as a possible bottom.  I'll put my balls on the line and predict not below $33.
> 
> Time will tell and you may have the last laugh only I don't think many of us will be laughing if BHP goes sub $30
> 
> Regards, Col B







Ill put my balls on the line and say it wont fall below $34-$35. Commodities will rebound very shortly. The smart money, and big-money, knows they are where you want to be for the next 40 years.


----------



## Miner (20 July 2008)

Gekko said:


> Ill put my balls on the line and say it wont fall below $34-$35. Commodities will rebound very shortly. The smart money, and big-money, knows they are where you want to be for the next 40 years.




Gosh 

What a prediction and conviction on BHP management

Balls from Col B and Gekko may put too heavy weights on BHP shares when it reaches $34 and drag down further. I do not want it  !!

So Let us hope both of you remain unhurt from any minor surgery occur from any BHP fall out, enjoy a fantastic quality life and BHP shares go up $35 and up up up :

Let us see what Monday turns out to be


----------



## d_crome (20 July 2008)

Gekko said:


> Ill put my balls on the line and say it wont fall below $34-$35. Commodities will rebound very shortly. The smart money, and big-money, knows they are where you want to be for the next 40 years.




On the bright side flights to Thailand are pretty inexpensive these days...LOL

But seriously, all mining stocks were pummeled for no apparent reason - looks like the cause of the matter - namely yanks profiting from shorting an already anxious market - looks to be patched for the time being.  Thus a positive bounce is due.

I won't put any bodily items on the line - but I'm with you in regards to not seeing BHP below $34.


----------



## MRC & Co (20 July 2008)

nyo said:


> Chartist out there does BHP have to close the Gap that happened back Jan?  See the information below where it shows the gap.  If so does this mean that BHP will go lower? A some feedback on this would be helpful for me.  Thank you.
> 
> *BHP BILLITON LIMITED*
> Date  	*Open * *High* *Low * *Close*  	Volume
> ...




Could well do. Then again, may not.  

That was an island reversal (thats the technical name).  That area, the bottom of the 'island' or the bar below the gap, will act as some strong support.

My bet, would be unless some terrible data came out of China, BHP won't go below $30.  

Nothing showing a stop of this fall in the short-term though.  Resources have been coming off of late, with more price falls on Friday night.


----------



## ans25 (20 July 2008)

ColB said:


> Ans it closed around $31 that famous day but may have dropped below $30 intraday I don't have the data.
> 
> I'm with you in buying back at $32-33.  Only wish I sold when the buggers were up near $50 bucks recently.  Shoulda, coulda (Hindsight a wonderful thing  Regards CB




Exactly like me COLB, I feel your pain

I sold out when it hit $40 a while back thinking that it would drop...

but yeah if it hits $32-33 then Im in (for the long term)....but then you who knows? Maybe it will go below $30 and it would be amazing if it did

But I think it may spike on Monday a bit.


----------



## grace (20 July 2008)

BHP reporting on 18 August.  I expect the profit reporting will be fine, and within expectations.    This will be the catalyst for BHP's bounce, and I'd expect, the overall market to bounce too.  Next years profit will be even better.  

Bad news out of China.....mmm, well they are holding the Olympics aren't they


----------



## jonojpsg (20 July 2008)

I'm not much into charting but are they inverse hammers at the bottom of all those big gains (Jan 31-, Mar 21-, May 1-)?  If so, given we had an inverse hammer Friday, maybe we will see another strong rally from here?  Expert chartists forgive me if I'm way off track, I don't actually know what "inverse hammers" are supposed to indicate


----------



## subaru69 (20 July 2008)

jonojpsg said:


> I don't actually know what "inverse hammers" are supposed to indicate




I didn't know either, so I looked it up.

http://akuma99.blogspot.com/2005/09/theory-candlesticks.html


----------



## MRC & Co (20 July 2008)

This is the best site I have found on candlesticks:

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:introduction_to_candlesticks

This link provides for actual patterns:

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:candlestick_pattern_

Personally, I only use hammers or shooting stars on high volume ONLY when the market was trending, signalling a reversal.  Never in sideways movement zones.  Have not found other candles or patterns overly useful, but find them generally easier and quicker to take in at a glance, as opposed to bar charts. 

Cheers


----------



## subaru69 (20 July 2008)

:topic but..

Thanks MRC,

I don't know why they don't teach this stuff in schools.  The 12yr old with the Scooby avatar has the right idea.  Hopefully by the time he is our age he will be retired or at least paying enough tax to help keep the hospitals open.


----------



## jonojpsg (23 July 2008)

Production & exploration/development reports out.

They look pretty good to me, records in a number of production levels 

"Annual production records achieved in petroleum, copper, iron ore, manganese ore and alloy, alumina and molybdenum. Annual production also increased in crude oil and condensate, uranium, lead, zinc, silver and diamonds. 

Quarterly production records achieved in alumina, copper, iron ore and manganese ore."

Given the prices for their main products,eg copper, oil, iron ore, coal have maintained high levels as well, they are looking good!!


----------



## Sean K (23 July 2008)

jonojpsg said:


> Production & exploration/development reports out.
> 
> They look pretty good to me, records in a number of production levels
> 
> ...



Reaction will depend on what was expected jonojpsg. The 'analysts' may have expected more, and BHP could have projected better. I'm not in the know on that one. Market will tell us.


----------



## Miner (24 July 2008)

*Record year puts pressure on BHP to lift dividend*
*24 Jul 2008 | The Australian Financial Review | Jo Clarke *

http://www.afr.com/home/viewer.aspx?EDP://20080724000030059053&magsection=news_home1&source=/_xmlfeeds/home/feed.xml&title=Record+year+puts+pressure+on+BHP+to+lift+dividend 

 There is market speculation from analysts suggesting BHP to lift its dividend
Details are provided in above link from AFR

Cheers


----------



## Tysonboss1 (24 July 2008)

What happened to the BHP / Rio merger, Is that still on the table. :bricks1::bricks1: ( i just learned how to use the cartoons)


----------



## subaru69 (24 July 2008)

Tysonboss1 said:


> What happened to the BHP / Rio merger, Is that still on the table. :bricks1::bricks1: ( i just learned how to use the cartoons)




It's gone pretty quiet.  Some analysts were saying the strong BHP result and, more importantly, the future outlook make the takeover more likely from a shareholder point of view.  Problem is that there is no clarity from the regulator standpoint, either here or O/S.

Either way I've heavy into both companies. :aus::jump::aus:


----------



## michael_selway (24 July 2008)

subaru69 said:


> It's gone pretty quiet.  Some analysts were saying the strong BHP result and, more importantly, the future outlook make the takeover more likely from a shareholder point of view.  Problem is that there is no clarity from the regulator standpoint, either here or O/S.
> 
> Either way I've heavy into both companies. :aus::jump::aus:




Hm still pretty good

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 275.0 288.0 458.0 487.5 
DPS 55.4 63.2 72.0 77.9 *



> Date: 24/7/2008
> Author: Jamie Freed
> Source: The Sydney Morning Herald --- Page: 31
> In a promising quarterly report on 23 July 2008, BHP Billiton indicated it is ontrack to reach record-breaking earnings of $US15.7 billion. Analysts werepleased with the report, which outlined record June-quarter production levels incopper, iron ore, alumina and manganese. Petroleum production has increased 13%since last June. BHP forecast a lowering of production by between 10% and 15%per year at the BHP-Rio Tinto Escondida mine in Chile, due to declining grades.BHP did not release production figures for its new $US2.2 billion Ravensthorpenickel laterite mine in Western Australia, but revealed it will be under $US313million due to early-stage costs. BHP gained 21.3% in iron ore productionquarterly, beating takeover target Rio Tinto's 13%




thx

MS


----------



## Garpal Gumnut (26 July 2008)

I was looking at some yearly , quarterly and monthly charts this evening and noticed an intriguing pattern about BHP.

It has been in an accumulative trend for 4 years , with a gradual increase in volume until the beginning of 2007. 

Since then the share price has increased but the volume has dropped. 

This would indicate to me that there is little or no distribution of BHP, with the holders not selling off on weakness in any large numbers. 

I had hoped to grab more BHP under $30 last year but realise the folly of that now. 

It appears set to trade in a range between between $32 and $50 and i will buy more of this Aussie beauty if it gets anywhere near $32 in the future.

I enclose a monthly chart.




gg


----------



## Caliente (3 August 2008)

BHP Billiton ADR got SMASHED in US on Friday. 

[70.25 down -4.41 -5.91%]

It's going to be a rocky start to the whole Index on Monday.


----------



## Muschu (3 August 2008)

Caliente said:


> BHP Billiton ADR got SMASHED in US on Friday.
> 
> [70.25 down -4.41 -5.91%]
> 
> It's going to be a rocky start to the whole Index on Monday.




So, if we do the same then BHP will go below $37?  That's where it was a couple of weeks ago wasn't it?


----------



## Sean K (3 August 2008)

I thought the H&S on BHP was going to be invalidated late last week when it poked it's head through $40, but the resistance was too great. Therefore, still in play with a target around $34 ish. Just probabilities and of course, and TA does not predict the market. :


----------



## Muschu (3 August 2008)

kennas said:


> I thought the H&S on BHP was going to be invalidated late last week when it poked it's head through $40, but the resistance was too great. Therefore, still in play with a target around $34 ish. Just probabilities and of course, and TA does not predict the market. :




So, H&S = Peruvian for ??  [Naive question but only between you and me...

TA does not predict the market?  Careful Kennas ---


----------



## Sean K (3 August 2008)

Muschu said:


> So, H&S = Peruvian for ??  [Naive question but only between you and me...
> 
> TA does not predict the market?  Careful Kennas ---



LOL.

H&S is Head and Shoulders, but the neckline is at $42 not $40, although $40 looks to be very important down the track. 
Check the Head and Shoulders thread for charts and discussion.


----------



## alleyronin (3 August 2008)

Caliente said:


> BHP Billiton ADR got SMASHED in US on Friday.
> 
> [70.25 down -4.41 -5.91%]
> 
> It's going to be a rocky start to the whole Index on Monday



 I can hear a few Graham Kennedy crow calls already 

One question for posters......... why is the ASX200 SPI Futures index not reflecting this?


----------



## Sean K (3 August 2008)

alleyronin said:


> I can hear a few Graham Kennedy crow calls already
> 
> One question for posters......... why is the ASX200 SPI Futures index not reflecting this?



BHP does not make up the entire index. Perhaps. 

If there's some follow through, and the financials keep sliding, then it will be factored in soon.


----------



## Muschu (3 August 2008)

kennas said:


> LOL.
> 
> H&S is Head and Shoulders, but the neckline is at $42 not $40, although $40 looks to be very important down the track.
> Check the Head and Shoulders thread for charts and discussion.




So the $34ish target is the waistline?  Now I get it!  I can go and watch my grandson play real football and relax in peace....


----------



## alleyronin (3 August 2008)

kennas said:


> BHP does not make up the entire index. Perhaps.
> 
> If there's some follow through, and the financials keep sliding, then it will be factored in soon



BHP and RIO make up 1/6 of the index and they fell 6% on the NYSX on Friday. Even allowing for our lower Friday and the US dollar strengthening it is still a big, sudden drop. Not a good omen.


----------



## Sean K (3 August 2008)

Muschu said:


> So the $34ish target is the waistline?  Now I get it!  I can go and watch my grandson play real football and relax in peace....



 LOL. Grandson! Crikey!!! 

The H&S formation is just a general TA concept that may or may not eventuate. It's a probability, not a certainty. And I'm actually not sure what 'probability' means in % terms. Must be more than a 50% chance, but I'm just plucking. Damn, I should know that! 

Here's some theory on H&S:

http://stockcharts.com/school/doku...._analysis:chart_patterns:head_and_shoulders_t


----------



## MRC & Co (3 August 2008)

Yep, simply a probability, one of which has to be continuously prooven and disprooven.  Sorry to sound like tech/a, but too many want to find that crystal ball or simply set and forget!

Unfortunately, we are not in a several year bull market, so those days are over!  It's why I see a transition to trading funds (hence a move towards hedge funds), as opposed to your traditional mutual funds, visits to stockbrokers or people trying to invest for themselves.  You need to be continuously prudent at the moment and really need the ability to short, if simply to hedge broader market risk.  

As most know, this market is 'fukced', so it's simply about minimising risk and high freqency trading IMO to really be able to gain an edge.  

T/A will only give you an indication of what could happen a few days forward IMO.  For longer-term, you need fundamentals, but with information coming out non-stop, even those fundamentals have to be re-evaluated on a continual basis.  

Pattern 'probabilities':

http://thepatternsite.com/


----------



## Nicks (5 August 2008)

Well put. Its not a market for 'set and forget' but I think with the volatility getting in and out quickly can reap rewards.


----------



## Tukker (5 August 2008)

Nicks said:


> Well put. Its not a market for 'set and forget' but I think with the volatility getting in and out quickly can reap rewards.




Might be time to make a quick buck off bhp buying in today at these old support lvls of past. I'm turning off my comp today, waste of time expecting anything bull to happen. 

Note to self: Put more money into your short system.


----------



## Miner (18 August 2008)

Miner said:


> *Record year puts pressure on BHP to lift dividend*
> *24 Jul 2008 | The Australian Financial Review | Jo Clarke *
> 
> http://www.afr.com/home/viewer.aspx?EDP://20080724000030059053&magsection=news_home1&source=/_xmlfeeds/home/feed.xml&title=Record+year+puts+pressure+on+BHP+to+lift+dividend
> ...





Yes BHP met the speculation by raising dividend 

Would the market be happy just with ROI increase and increase dividend as sufficient factors already included in the price.

Any thing positive if market reacts to lift the price above $40 considering it went much above that recently without actual profit being declared.

I am keeping fingers crossed for tomorrow and tonight (NYSE)

http://www.asx.com.au/asxpdf/200808...85FA2=0&bcsi_scan_filename=31brjp9plp2x91.pdf


----------



## Miner (19 August 2008)

Hi All
After reading this report in ABC *Posted 2 hours 27 minutes ago (5.30 AM WST)

BHP Billiton has urged investors to be patient with its $US150 billion ($173 billion) takeover bid for rival Rio Tinto, while analysts have predicted regulators may put restrictions on the proposed merger[/B]

and seeing the NYSE trend even if BHP ADR has made some minor up I am not very hopeful to see any better of BHP today at ASX. 

Few moments of nervousness for me and ? *


----------



## Sean K (29 August 2008)

Miner said:


> Few moments of nervousness for me and ?



BHP's been recovering pretty well during Aug. Broken resistance at $40 and potential to crack $42. Have to be happy with an $6 gain for the month..


----------



## jonnycage (29 August 2008)

yes, might just be creeping back up towards that might 50 mark
yet again, certainly a keeper

jonny


----------



## MRC & Co (1 September 2008)

kennas said:


> BHP's been recovering pretty well during Aug. Broken resistance at $40 and potential to crack $42. Have to be happy with an $6 gain for the month..




May just be closing the gaps, has a couple overhead to get through.  Quite some resistance for BHP to get through above.


----------



## apra143 (2 September 2008)

Took a bit of a dive today, -4.32%

Must be something pretty big. Perhaps:
http://www.topix.com/com/bhp/2008/09/bhp-billiton-shuts-down-oil-production-in-gulf


----------



## mayk (2 September 2008)

Because BHP has a pie in OIL and whenever oil drops in value so does BHP. BLT.LON is taking a sever beating as well. I got out at 41.50, because a severe drop in price was imminent. But hopefully it will start to rally from the end of week. As no one in OPEC will like the oil to go below $100 a barrel. Iran (a member of OPEC) has already made it quite clear. 

As financials are improving, it will also cause commodoties to lose their value. Until something unexpected happens in the oil front and US dollar continues its upward trajectory, BHP might hits its said target of $31 till the end of this year.

P.S Today was ex-dividend day, which will also explain some drop.


----------



## mayk (5 September 2008)

I was not anticipating this sequence of lows from BHP. It lost almost all the gains it made over a month. I was hoping a recovery in BLT or BHP (ADR) today might lead to a steady recovery in ASX:BHP. But I guess market has other plans... 

But todays decline seems concerning to me. I was thinking of entering around 36 but now not so sure. From the news I conclude:
1- Negative spin on BHP and positive on Vale.
2- Oil smackdown 
3- Tough clearance issues from European regulators for RIO.(recently process stalled)
4- Negative sentiment on commodities emating from US. (although financials are also not showing strength either).

Can someone provide a technical analysis of BHP and where it might be heading? especailly for a short to medium term(1-3 months).


----------



## Motogoon (5 September 2008)

I'm hoping it doesn't even get down to $36!

They've made record income this year haven't they? I really need some of my shares to kep move up, pleeeeease!!!


----------



## Sean K (5 September 2008)

Motogoon said:


> I'm hoping it doesn't even get down to $36!
> 
> They've made record income this year haven't they? I really need some of my shares to kep move up, pleeeeease!!!



That dramatic failure at $42 resistance set the tone. Sure they made awesome money last year but the market rates stocks of forward earnings. XAO will be crumped today and nothing will be saved. Crash helmet on for long longs....


----------



## BSD (5 September 2008)

kennas said:


> That dramatic failure at $42 resistance set the tone. Sure they made awesome money last year but the market rates stocks of forward earnings. XAO will be crumped today and nothing will be saved. Crash helmet on for long longs....




Forward earnings will be 50% (at least) higher than 08!

Coal tripled and iron doubled - all locked in. 

Crash helmetted me will be buying into this noise. 

Though a long lunch will be in order, nobody needs to watch this train smash for any more than a couple of hours.


----------



## Miner (5 September 2008)

kennas said:


> That dramatic failure at $42 resistance set the tone. Sure they made awesome money last year but the market rates stocks of forward earnings. XAO will be crumped today and nothing will be saved. Crash helmet on for long longs....




It looks like your fear is coming to reality
DJ slumped 344. 
Probably BHP will back to $34 on momentum and fear as well as considering RIo BHP not going to be happening in a year's time, nickel price (a big business Nickel West) constantly down, low Oz dollar will assist.

So general market will be down.


----------



## tech/a (5 September 2008)

mayk said:


> Can someone provide a technical analysis of BHP and where it might be heading? especailly for a short to medium term(1-3 months).




my views from post 28 here.
https://www.aussiestockforums.com/forums/showthread.php?t=12119&page=2

Wont sit to well with many on this thread.


----------



## Sean K (5 September 2008)

tech/a said:


> my views from post 28 here.
> https://www.aussiestockforums.com/forums/showthread.php?t=12119&page=2
> 
> Wont sit to well with many on this thread.



Sorry Tech, Couldn't find your exact views in that page.

It was a short on the H&S breakdown yonks ago. Anything different to that?


----------



## Sean K (5 September 2008)

BSD said:


> Forward earnings will be 50% (at least) higher than 08!
> 
> Coal tripled and iron doubled - all locked in.
> 
> ...



Maybe the market's looking further forward than that?

Or, maybe it's a fantastic buying opportunity. The market's just panick selling BHP right?

Wonder what's going to happen with their other earnings? Oil, Ni, etc..


----------



## agro (6 September 2008)

*Fourth BHP worker dies in five weeks*

http://business.smh.com.au/business/fourth-bhp-worker-dies-in-five-weeks-20080905-4amv.html


----------



## Motogoon (8 September 2008)

Seems like todays announcements are good news, enough to make me feel a lot more positive anyway.


Hopefully another good day to follow tomorrow.


----------



## apra143 (9 September 2008)

Interesting close at 36.05
Looks to be an important area of support. Tomorrow should be very interesting


----------



## mayk (10 September 2008)

tech/a said:


> my views from post 28 here.
> https://www.aussiestockforums.com/forums/showthread.php?t=12119&page=2
> 
> Wont sit to well with many on this thread.




Thanks Tech/a. Much appreciated. I agree with your forecast.   If not $28  around $28-31 seems a possible level for BHP in short term.   

Are you using E/W? or some other indicator to predict this target?


----------



## Seneca60BC (10 September 2008)

I personally think BHP will breach $30 - the way oil is going - what do you guys think ?........................................


----------



## michael_selway (10 September 2008)

Seneca60BC said:


> I personally think BHP will breach $30 - the way oil is going - what do you guys think ?........................................




Hm mightbe a good buy at $30?

*Earnings and Dividends Forecast (cents per share) 
2008 2009 2010 2011 
EPS 285.4 519.1 582.5 530.6 
DPS 72.7 98.1 103.1 97.9 *



> Date: 10/9/2008
> Author: Luke Forrestal
> Source: The Australian Financial Review --- Page: 8
> Factors such as margins and costs are increasingly becoming a concern forAustralian-listed mining companies. While BHP Billiton and Rio Tinto posted hugeprofit growth in 2007-08, the earnings of many smaller players came underpressure due to rising costs and a downturn in commodity prices
> ...










thx

MS


----------



## Tukker (11 September 2008)

I had a quick read on the asx website yesterday and saw the Lehmon Brothers who posted that 4 billion loss today were transacting with BHP.  Im not familiar with this document and don't know how to interpret it.  Is it saying that Lehmon Brothers had 127K shares and now they have less than 3%? Or is the amount that was transacted equal to less than 3% of their holdings? Or am I off on another planet altogether? 

http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00878642


----------



## netcat8280 (11 September 2008)

Lots of people keep shorting mining sector such as BHP, RIO, FMG and OZL. if BHP is around $30, personally think it's good to buy. For RIO, seems $85-$90.
Market is getting worse, I am doubting ASX200 will break support point which is 4800 shortly, another support will be 4500. Does anyone have the same opinion with me?


----------



## Motogoon (11 September 2008)

I think stock brokers will be jumping out the roof of high buildings if that happens. Lets hope not.


----------



## AnDy62 (11 September 2008)

netcat8280 said:


> Lots of people keep shorting mining sector such as BHP, RIO, FMG and OZL. if BHP is around $30, personally think it's good to buy. For RIO, seems $85-$90.
> *Market is getting worse, I am doubting ASX200 will break support point *which is 4800 shortly, another support will be 4500. Does anyone have the same opinion with me?




Is that a contradiction? Otherwise I agree, I think BHP is approaching a very good buy. On the ASX, I think the All Ords might break the support of 4800, but I don't see a lot more downside, maybe 4400/4500 yes.


----------



## Green08 (30 September 2008)

That is one huge pre order going through

As at 30/09/2008 8:48:19 AM 
Real-Time

08:37:13 AM   34.240    2,920,561


----------



## moXJO (30 September 2008)

sorry cant post a chart atm. But would the period from roughly 1/1/08 to now on a weekly chart be considered a head and shoulders pattern?


----------



## tulasi74 (30 September 2008)

moXJO said:


> sorry cant post a chart atm. But would the period from roughly 1/1/08 to now on a weekly chart be considered a head and shoulders pattern?




Dow Jones technical analysis has been calling a head and shoulders pattern for BHP for a long time now.  The head and shoulders target was $33.00.  That target was well and truly taken out today.  Its closer to the bottom today than ever before.

A reputable stock market guru who follows technical analysis called a bottom for blue chip companies in late September/early October.  Also called for a bottom in commodities.

For what its worth, I bought BHP today at 31.00.

Tulasi


----------



## Ashsaege (30 September 2008)

BHP hit a new low today since mid 2007. Should be interesting to see where things go over the next couple of weeks... may need to place a few buy orders soon


----------



## noirua (1 October 2008)

The price of BHP is now at "can't resist point". For the first time ever I've bought the stock. Rio Tinto should very gradually succumb to BHP and they, BHP, appear unhurried.


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## agro (1 October 2008)

*news in *

A.C.C.C. NOT TO OPPOSE BHP BILLITON'S PROPOSED ACQUISITION
OF RIO TINTO

The Australian Competition and Consumer Commission has concluded that the
proposed acquisition of Rio Tinto Ltd and Rio Tinto plc by BHP Billiton Ltd is unlikely
to substantially lessen competition under section 50 of the Trade Practices Act 1974.
"This conclusion was reached after conducting a comprehensive review of the
proposed acquisition, including extensive market inquiries with a range of interested
parties and careful consideration of the internal documents of the merger parties,"
ACCC Chairman, Mr Graeme Samuel, said


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## Seneca60BC (3 October 2008)

Seneca60BC said:


> I personally think BHP will breach $30 - the way oil is going - what do you guys think ?........................................




And there she goes - LOL - just was a matter of time.  Oh well LOL..................................


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## mayk (3 October 2008)

What is the next support level for this stock? Now 31.00-33.00 will act as resistance. As per the chart posted by Tech/A (in shorter's thread) the price target of reaching 28.00 might be achieved next week. Of course after a dead cat bounce of todays price on passage of bill in US congress.


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## netcat8280 (3 October 2008)

mayk said:


> What is the next support level for this stock? Now 31.00-33.00 will act as resistance. As per the chart posted by Tech/A (in shorter's thread) the price target of reaching 28.00 might be achieved next week. Of course after a dead cat bounce of todays price on passage of bill in US congress.




That's it, mate...$28. That's the support point of long term WEEKLY up-trend (200 weeks). It should be a strong support as my understand, at least test it 3 or 4 times around $28 level.

If it is broken down, that means BHP will be going down-trend.
Hopefully Congress will approve this rescure plan during the weekend. And making US dollor going down. That way maybe can push up mining sector.

Anyway, if $28 can't give some support, we will see $25. That's good for long term investors like me... 

Last time I posted ASX200 will reach 4500, BHP will reach $30 and RIO will get $85-90. If you are a long term investor, buy some BHP at $28, and then buy some at $25, it will make you safe...


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## skyQuake (3 October 2008)

netcat8280 said:


> That's it, mate...$28. That's the support point of long term WEEKLY up-trend (200 weeks). It should be a strong support as my understand, at least test it 3 or 4 times around $28 level.
> 
> If it is broken down, that means BHP will be going down-trend.
> Hopefully Congress will approve this rescure plan during the weekend. And making US dollor going down. That way maybe can push up mining sector.
> ...




Hey, where did you get your $28 support from? I have BHP as cracking its long term trend by a whole heap, and then failing the $31 level from Aug 07 and Jan this year. If congress passes the rescue, it wont necessarily save the US from recession, and thus commodities will suffer as well.

Haven't seen this many weekly red bars since the late 90s.


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## netcat8280 (3 October 2008)

skyQuake said:


> Hey, where did you get your $28 support from? I have BHP as cracking its long term trend by a whole heap, and then failing the $31 level from Aug 07 and Jan this year. If congress passes the rescue, it wont necessarily save the US from recession, and thus commodities will suffer as well.
> 
> Haven't seen this many weekly red bars since the late 90s.




$28 is weekly chart of BHP, but not daily chart. I did checked the chart last night, and it's $28 support of *200 weeks moving everage *in weekly chart, if monthly chart, it would be $25.
Daily chart could be for 3-6 months, but weekly one could be 3-5 years, monthly would be the longest.


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## skyQuake (3 October 2008)

Had a look at it, but it has failed to hold anything in the past. Why are u giving it credibility now? I have the 200Week moving average at $29.83, Also, the 200-month SMA is at $13 :


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## njc.corp (6 October 2008)

ColB said:


> Hey Nick, when you find someone on this thread that can predict what a share price will drop to or rise to and backs its up with "facts & figures??" please point him/her out to me.  Until that happens, I'll express my opinion like many others here who give their thoughts on where an SP may head.
> 
> Granted, I should have qualified my statement and given reasons why I don't believe BHP will drop below $30.
> 
> ...




Col b-it seems the day has come and the balls are  well and trully on the line-

and trust me  i dont want to have the last laugh in a south direction-

wish it's a quick turn around for your sake if u are still in

but i dont have any facts/data saying it will-

Thanks

Nick--


----------



## Motogoon (6 October 2008)

Doom and gloom everywhere, i'm sick of it, the negativity is feeding on itself and becoming a self fulfilling prophecy. Screw the American economy, we've taken more of a beating on the markets than they have and we're not even the ones in the ****!

Sure people are selling BHP at the moment, but someones buying those ones being sold and i don't think they're buying them on the expectation that they're going down much further.

Anyone else feeling like they're at a bargain price?


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## skyQuake (6 October 2008)

Motogoon said:


> Sure people are selling BHP at the moment, but someones buying those ones being sold and i don't think they're buying them on the expectation that they're going down much further.




The road to hell is paved with good intentions 

And imo those bargain hunters' stops will fuel the downward spiral when it keeps going down...


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## sardines (7 October 2008)

Read a comment today that the junior exploration companies may suffer if commodities keep sinking since risk appetite for exploration funding will diminish. To me, that makes logical sense and is a positive for the large-cap miners since the weaker players scuttle away and die. It leaves the big boys less competition in the future and a chance to strengthen their line of projects on the cheap.

(I bought some RIO today...talk about catching a falling knife!)


----------



## chops_a_must (7 October 2008)

sardines said:


> Read a comment today that the junior exploration companies may suffer if commodities keep sinking since risk appetite for exploration funding will diminish. To me, that makes logical sense and is a positive for the large-cap miners since the weaker players scuttle away and die. It leaves the big boys less competition in the future and a chance to strengthen their line of projects on the cheap.
> 
> (I bought some RIO today...talk about catching a falling knife!)




Yes, a lot of stories here about start ups about to fall over as they can't get funding.

Add to that, anecdotally, a whole heap of unskilled laborers have poured back onto the job market and it becomes pretty clear what is happening...


----------



## noirua (7 October 2008)

sardines said:


> Read a comment today that the junior exploration companies may suffer if commodities keep sinking since risk appetite for exploration funding will diminish. To me, that makes logical sense and is a positive for the large-cap miners since the weaker players scuttle away and die. It leaves the big boys less competition in the future and a chance to strengthen their line of projects on the cheap.
> 
> (I bought some RIO today...talk about catching a falling knife!)



BHP should be able to pick up worthwhile mining companies, once medium size, for minnow prices. 
Doubtful that they'll be interested in midget explorers as they wait for a company to find and usually develop something first.
As you may be inferring, in 5 to 7 years time, some won't believe the opportunity missed today.


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## gazelle (7 October 2008)

2875 approx should mark the low . Copy of my letter below 

The 100pt rate cut lines up with critical time and price targets on BHP . From a technical perspective we have an intraday low at 2875 prior to the RBA decision to cut interest rates . 

1 : Looking at the chart we can see price has completed a 100% range extension into 2875 . Volume indicates a heavy selloff into this low which could be a possible indication that selling pressure has expired into this point . 

2 : Time has ran out approx 90 weeks from which is 1/4 of the circle from 12th January 2007 Primary Low at 23.88 . 
I was initially looking for a change around the 10th October on the All Ordinaries index but individual stocks have a tendency to lead the broad index depending at which point their short or larger term cycles expire . 

With the Time Factor complete I believe there is a strong chance that BHP will mark lows at 2875 and rally back up . 
I will be watching the overnight chart and the 3 day swing chart for confirmation . Buy BHP on weakness as long as it holds above 2875 it is in a tehnically strong position .


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## Sunburnt Land (7 October 2008)

Picked up some BHP when it dipped below $30 late last week. Will continue to top up my holding on any further weakness. I couldn't care less if it drops back below $30, down to $25, or even lower. I'll keep chasing this one down all the way.


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## gazelle (7 October 2008)

Be Careful Sunburnt otherwise you might break out in a rash . 
Dont average your position down for this is a fools game . 
Irrespective of my analysis and the underlying fundamental position of BHP always use sensible stops and a balanced position sizing model otherwise you will come unstuck very quickly for the market doesnt always conform to your pre conceptualized ideals .


----------



## Sean K (8 October 2008)

gazelle said:


> Be Careful Sunburnt otherwise you might break out in a rash .
> Dont average your position down for this is a fools game .
> Irrespective of my analysis and the underlying fundamental position of BHP always use sensible stops and a balanced position sizing model otherwise you will come unstuck very quickly for the market doesnt always conform to your pre conceptualized ideals .



Although we can't give investment advice here, this is good advice....lol

Crasing things down a slippery slope, no matter how confident you are in their business is fraught with danger. This approach might work some of the time with solid companies in growth areas, but it's hardly a sure fire way to maintain your capital. 

Good luck.


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## Whiskers (8 October 2008)

Went '_that_' close to picking up some BHP this arvo... thinking they're hit bottom for awhile... but went back to one of my other favourite stocks instead.

With commodity prices making a bit of a recovery overnight so far it looks a chance of making another dollar or two.

Knew I shouldn't have slept in... coulda got'em cheap in the mornin.


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## mayk (8 October 2008)

skyQuake said:


> Had a look at it, but it has failed to hold anything in the past. Why are u giving it credibility now? I have the 200Week moving average at $29.83, Also, the 200-month SMA is at $13 :




So you are saying that we can go to as low as 13? That is pretty nasty, it will mean negative growth in Chindia? Can it happen? Sure.  Will it happen? Probably not. 

Still I think touching price levels of 24 , and maybe 22 is a real possibility.

Can some T/A guru, post a complete fib analysis with all the retracement possibilities? 

Any comments on merger with RIO the raio of 3.4:1 is far off at current prices, is this telling us something?


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## skyQuake (8 October 2008)

mayk said:


> So you are saying that we can go to as low as 13? That is pretty nasty, it will mean negative growth in Chindia? Can it happen? Sure.  Will it happen? Probably not.
> 
> Still I think touching price levels of 24 , and maybe 22 is a real possibility.
> 
> ...




Haha dont have targets that low, was just pointing out that the moving averages never did anything useful for BHP and where their current values are.

From my experience, fibs don't work too well on BHP (maybe its just cause it never retracts that far). We are at 50% of retractment of rally from 03. This would explain the buying support...

Cheers


----------



## Whiskers (9 October 2008)

This is my take on BHP... a bit controversial, but I'm getting increasingly confident that it's in a very similar EW position to the XAO... about to rebound substantially, probably to revisit 50 and theoritically wace c could go as far as the low 60's.

Took a long position in another, since I slept in yesterday, but it should reach it's target in a couple of days... in time to move across here.


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## mayk (9 October 2008)

Thanks SkyQuake and whiskers. 

I appreciate the effort. The current obvious trend is down, short term.


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## Tysonboss1 (9 October 2008)

Whiskers said:


> This is my take on BHP... a bit controversial, but I'm getting increasingly confident that it's in a very similar EW position to the XAO... about to rebound substantially, probably to revisit 50 and theoritically wace c could go as far as the low 60's.
> 
> Took a long position in another, since I slept in yesterday, but it should reach it's target in a couple of days... in time to move across here.




that would be nice,.... $50< it's certainly been interesting the last month or so..............................


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## Whiskers (9 October 2008)

Tysonboss1 said:


> that would be nice,.... $50< it's certainly been interesting the last month or so..............................




Certainly would be nice. 

Be interesting to see tech/a's software assisted take. We,ve had different counts, but the trend going in the same direction before. He's mentioned in the XAO thread that he might post it soon.


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## Sean K (10 October 2008)

If 3400 XAO is a possibility perhaps picking up BHP at $24 is a chance too.

Or, maybe a recovery will take too long to bother....


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## dhukka (10 October 2008)

kennas said:


> If 3400 XAO is a possibility perhaps picking up BHP at $24 is a chance too.
> 
> Or, maybe a recovery will take too long to bother....




Could be, but I tell you what isn't a chance, BHP hitting *$60* anytime in the near future. BHP has seen its highs for a couple of years IMO.


----------



## treefrog (10 October 2008)

mayk said:


> Still I think touching price levels of 24 , and maybe 22 is a real possibility.
> 
> Can some T/A guru, post a complete fib analysis with all the retracement possibilities?




use fib levels mayk but hardly guru status - probably as many fib takes as there are EW takes - nar, couldn't be!

I take refs from start and end of an obvious run and try to omit periods of consolidation

as for the projected possible targets using the most obvious abc points being $50:00, $35:88, $42:17 we get first target of 33.44 (downer stalled here which is also 38% retrace of main UPleg), then $28:04 (trying to clear this area now after pausing briefly at 50% retrace of UPleg) and final target of $19:32

have previously posted that I also like Kenny's $24 level. besides the obvious strong historical S/R here, it is also the 62% fib retrace of the main UPleg - significant for mine


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## marcadrian (10 October 2008)

You can show me as much techanalysis as you like - BHP won't be anywhere up near $60 for a long time. Credit will be hard to come by for a few years yet while people/Gocts/banks sort their **** out and without big leverage we won't see $60.


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## Mr_T (16 October 2008)

Not sure what universe some people here are living here. BHP is at 25.50 and falling. $60??? You gotta be kidding.


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## peteai (16 October 2008)

Yeh it would seem crazy now - but then when BHP hit $50 a few months ago most would have said $25 was history never to repeat for BHP.

Also remember China & India are still growing still requiring more resources ....the market can be insane at times in either direction & is unpredictable ..


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## Goldmann (16 October 2008)

BHP would ahve to be the single biggest stock that people now have Margin calls at risk with... for every day it crashes 5% - expect it to crash another 5% the following day as people get their margin calls... viscious cycle this is we are in...

Long term - it may well be a great entry price anywhere around $25... but at this stage, and after call two false bottoms - most people will avoid the market like the plague now... nothing is to be trusted, history is now being written...

one more decent 1987 like 20% fall to go IMO... keep your pennies close...


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## prana (16 October 2008)

I just need team Ju and Dh to tell me this business is dead, "a friend of a friend who predicted the death of Enron said this is a goner", then the sentiment will be just right to make a move on this one.

This is one of the worlds great businesses, with high exposure to oil, Uranium and coal, I'll be happy to invest back in at the helm of asset deflation.


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## Boggo (16 October 2008)

This was last nights data, its hit the first target today and $22 is not far now.

Another lovely short gone begging 

Unbelievable really !

(click to enlarge)


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## Mr_T (16 October 2008)

FWIW, I know quite a few people in China and Australians who have visited China lately. They all say the same thing. China is BOOMING. Zero evidence of economic slow down.


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## sardines (16 October 2008)

Why not let the top-down sellers have their fun for a while? There's plenty of this "global recession means everyone and the US will fall" wisdom being freely dished out on the likes of Bloomberg and such. These investment themes usually last at least about 3 or so weeks so I'd prefer to be meeting the sellers much further down the price list.
P.S. ASIC's due to review the reinstatement of shorting so I'm dusting off my stocks and getting my $ ready.


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## Ashsaege (16 October 2008)

Goldmann said:


> BHP would ahve to be the single biggest stock that people now have Margin calls at risk with... for every day it crashes 5% - expect it to crash another 5% the following day as people get their margin calls... viscious cycle this is we are in...
> 
> Long term - it may well be a great entry price anywhere around $25... but at this stage, and after call two false bottoms - most people will avoid the market like the plague now... nothing is to be trusted, history is now being written...
> 
> one more decent 1987 like 20% fall to go IMO... keep your pennies close...




I doubt that many people would still have margin loans in these times... surely they have been flushed out by now.


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## DionM (16 October 2008)

Ashsaege said:


> I doubt that many people would still have margin loans in these times... surely they have been flushed out by now.




I have it on good advice (from a friend that works there) that Commsec made plenty of phone calls last weekend ... plenty of margin loans still around - but maybe now people have run out of capital to put in and and selling.

Anyway, back to BHP ... I'm very tempted to add some more to my collection.  The next drop might convince me.


----------



## treefrog (16 October 2008)

DionM said:


> I have it on good advice (from a friend that works there) that Commsec made plenty of phone calls last weekend ... plenty of margin loans still around - but maybe now people have run out of capital to put in and and selling.
> 
> Anyway, back to BHP ... I'm very tempted to add some more to my collection.  The next drop might convince me.




not so sure BHP near their bottom yet DM - when BHP has tanked before there seems to have been a least a few of their activities hold prices well - like eg oil down, iron up, U up etc.
Hard to think what they are into these days that has not tanked in price or is at risk of reduced demand in near future


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## Garpal Gumnut (16 October 2008)

Garpal Gumnut said:


> BHP is a beautiful stock to chart, all human life is there. Asutralian's hopes and dreams, their super and future often rest on this little miner.
> 
> I have been following BHP for many years.
> 
> ...




This is a very old comment of mine which rings true. I'm in like flynn at present. One or three dollar difference in buy in price will seem like chickenfeed in 3-5 years time. I enclose a chart.

gg


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## Mr_T (17 October 2008)

Without anyone talking about it, BHP has become a high yielding share (dividend wise).

Keep in mind that the dividend is paid in us dollars. Which means that the sharp fall of the aussie dollar mean something like a 40% increase in its dividend in the future (assuming dollar stays around where it is).

So although Comsec says BHP has a 3.8% div yield, if it was paid at current exchange rates it would be much higher. The interim div paid early next year is also expected to be much higher in as far as BHP lifting the payment - a different issue.

If interest rates will go down to 7.2% (realistically expected in next few months) it could quickly become cashflow positive when including franking credits (if funded by a home equity loan).


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## Sean K (17 October 2008)

Mr_T said:


> Without anyone talking about it, BHP has become a high yielding share (dividend wise).
> 
> Keep in mind that the dividend is paid in us dollars. Which means that the sharp fall of the aussie dollar mean something like a 40% increase in its dividend in the future (assuming dollar stays around where it is).
> 
> ...



You're assuming dividends will remain at current levels. 

Interest rates will probably go much lower than 7.2% though..


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## Mr_T (17 October 2008)

kennas said:


> You're assuming dividends will remain at current levels.
> 
> Interest rates will probably go much lower than 7.2% though..




Agree with interest rates.

You think BHP is going to lower their div payments?  Their payout ratio has always been low, and their profit is conservatively (in Australian dollars) to go up 80%+ this year.

I guess a very very huge decrease in commodity prices could lead to lower dividend payments, but it's not likely.


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## jonojpsg (17 October 2008)

treefrog said:


> not so sure BHP near their bottom yet DM - when BHP has tanked before there seems to have been a least a few of their activities hold prices well - like eg oil down, iron up, U up etc.
> Hard to think what they are into these days that has not tanked in price or is at risk of reduced demand in near future




Gotta remember tho that BHPs coal and iron ore prices are locked in for the next year at much higher price than last year, that the $A fall has meant that oil is still over A$100 a barrel.  And there is no doubt that even with reduced oil demand, the overall supply/demand situation is not going to improve much from here on in since peak oil has hit.  Base metal prices are definitely the kiler atm tho, but I think BHP should weather the storm and not head more than another couple $ further.


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## DionM (17 October 2008)

At around US0.70 roughly per year in divvies, that's say 1 AUD per share.

At $25 AUD / share ... that's 4%.


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## Mr_T (17 October 2008)

DionM said:


> At around US0.70 roughly per year in divvies, that's say 1 AUD per share.
> 
> At $25 AUD / share ... that's 4%.




That's 4% franked.

Say you're on the 30% tax rate (as most people are).

7% interest = 4.9% after tax

Get 4%, pay no tax if on 30% rate as fully franked.

That's not quite cashflow positive, but nearly there.

Of course, a slight increase in dividend payments will then push it into positive territory, but that is speculation.


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## PFWA85 (17 October 2008)

treefrog said:


> not so sure BHP near their bottom yet DM - when BHP has tanked before there seems to have been a least a few of their activities hold prices well - like eg oil down, iron up, U up etc.
> Hard to think what they are into these days that has not tanked in price or is at risk of reduced demand in near future




agreed, i think we could see another spike before it goes lower though i think.
i added a small proportion to my portfolio this morning, may not be at the bottom yet but i see it as a long term prospect still.


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## gfresh (17 October 2008)

BHP talked about raising the dividend a while ago, and I think now/soon would be an excellent time to do so. 

As less cash required for project expansion (due to reduced demand), it would seem sensible that instead of spending that money, there would be the environment to pass some of that excess cash to shareholders. 

This would also help stabilise the share price, and help encourage longer-term investors and/or institutionals looking for good-yield stocks in a low-growth environment. 

Depends on the fate of the RIO deal I guess. If cash is required to fund that, then things will be different. 

The good thing with BHP is that they been through all this before, lower demand, lower prices, etc, they know the likely impacts, and how to adapt. They have people at the top who have been around well before 2003, who will know what needs to be done. They are much better positioned IMO than many of the miners who have rose to such prominence only in the last 10 years, and who have been only been exposed to the "good times"


----------



## gfresh (17 October 2008)

Here is a quick chart of major support levels as I see them.  

$24.00 (very close to current price), if that falls $20..  then $16 seem to be the next major support levels. Not so sure on $16, but $20 would seem possible in the near-term. 

p.s. maybe should use a LOG scale, but anyhow, here it is..


----------



## noirua (17 October 2008)

If and when?  BHP decide to drop their bid for RIO, could see a concerted buy-back of stock.  A sharp increase in dividend might well give a lift in the short term but once that's out of the way people will focus on likely further increases after that, not much.


----------



## nick2fish (18 October 2008)

noirua said:


> If and when?  BHP decide to drop their bid for RIO, could see a concerted buy-back of stock.  A sharp increase in dividend might well give a lift in the short term but once that's out of the way people will focus on likely further increases after that, not much.




No if.... but a when ? BHP can smell the fear in its prey now and will be closing in for the kill. Recent developments have me seeing a deal that is almost done and dusted. IMO


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## Muschu (18 October 2008)

If BHP are to acquire RIO, isn't RIO the better buy with the ration between their SPs out of kilter with the offer?  
Alan Kohler suggested this but I'm interested in ASF opinions.


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## Muschu (18 October 2008)

Forgot to add - There are various views here about where the low might be for BHP and when to get back in.  If the down trend of the past weeks is to continue I have no idea as to when that time might be.  
I have no idea how to do this but maybe someone is interested in setting up a poll on where BHP will be in a month's time?
Just an idle Saturday morning thought....


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## noirua (18 October 2008)

Hi Muschu, You seem to have left out the pressures from China against the merger.  It may be safer, with China set to continue expansion, to drop this plan that will hurt BHP for many years ahead.


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## Garpal Gumnut (18 October 2008)

gfresh said:


> Here is a quick chart of major support levels as I see them.
> 
> $24.00 (very close to current price), if that falls $20..  then $16 seem to be the next major support levels. Not so sure on $16, but $20 would seem possible in the near-term.
> 
> p.s. maybe should use a LOG scale, but anyhow, here it is..




I agree totally.

I was preparing a chart along the same lines. $23 then $16 or lower. If it goes far through $23 then its got no real support anywhere as this is the 61.8 retracement.

Thanks mate.

gg


----------



## treefrog (18 October 2008)

Garpal Gumnut said:


> I agree totally.
> 
> I was preparing a chart along the same lines. $23 then $16 or lower. If it goes far through $23 then its got no real support anywhere as this is the 61.8 retracement.
> 
> ...



been a few on here calling $24 as the value entry level for the big ozzie boomer for quite a while (yt included) and much merriment ensued from incredulous LT holders to those suggestions.
But now that its virtually there am not so sure it will hold in this current economic climate.


----------



## demons27 (18 October 2008)

It's Snake Pliskin said:


> I was reading today about predicted price weakness for BHP in the next week. I don't hold any yet. Who might see any further price weakness as a good opportunity to buy? Generally I'm probably a bit negative on the resource stocks due to their well known booms and busts. I'm aware of the China story, but am realistic enough to know that it may not last beyond 2005.
> 
> The last round of price negotiations soured the relationship between BHP and China. Knowing the business style of the Chinese, I feel BHP may have done itself some damage long term.
> 
> Who sees RIO as a better alternative BHP long term?




BHP should have a great day on Monday owing to an 11% increase overnight on LSE.  Should do something similar and move into $27 range. 

BHP is looking better by the day to succeed with the RIO take over....next key date is 15/1/09 when  Euro regulators vote on anti-competition concerns.

China is still experiencing good growth albeit it may drop to 8% or so...BHP is in the box seat to reap on-going strong revenues......great investment right now.....even more so with BHP/RIO combined revenues, operating synergies and massive footprint.


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## M34N (18 October 2008)

Looking at the chart gfresh posted just above, it looks like BHP broke its major uptrend line, so a dip down to $20 or lower would not be off the cards, at least in the medium term.

But is anyone else willing to call a short term bottom? That $24 level looks fairly solid, I think I may buy in some on Monday and set a tight stop at around $23. This drop seems to be fairly similar to that drop in January and March this year, and the sharp rally in the time after those drops were very profitable (+25% or so). I suspect if it holds, a rise back up to the $30 price range may occur, going by the previous rallies.

Looks like a reasonable trading opportunity. Anyone else got any thoughts?


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## MRC & Co (18 October 2008)

The thing is Rick, nobody here knows.  It's simply probabilities, which again, everybody determines through different techniques.  So a poll would really be useless, you have to work out which techniques you 'trust' or think have the highest probability using.  Always place a stop, below a recent low or even an arbitary 8% or so.  

A poll would be useless as it would simply be a consensus of ASF sentiment, which would probably be more useful fading (trading against).  So if a vast majority are bearish, go long.  

I would dare to say most here just have a wild 'guess' without much useful analysis.  Not pointing out anybody inparticular.  

If you want probably the most simple method which is also probably the most useful IMHO, look for a higher low and a higher high.  Signals a change in trend.  Easy.  Don't need EW counts to see a trend change when you can simply look for a HL, HH.  Most of the best traders on the planet I have seen use something so simple.  Nothing esoteric about it.  

Perhaps even just a low which forms on HUGE volume and narrow ranges or a huge spike down on high volume followed by a spike up on high volume (also known as a 'pipe bottom').  Even a gap down, followed by a huge candle or gap back up (also known as an island reversal or a bullish engulfing).  There are other candle patterns you can use also, but are probably pointless (except for maybe a hammer on high volume). All these on a daily chart and all are probably the most useful IMHO.  There are sites like stockcharts or bulkowskis (similar spelling), which you can use to learn these patterns very very simply.  It is not hard and anybody can learn in far less time than they spend perusing ASF.   

Remember, in times like this, ALWAYS USE A STOP.  You don't have to have a conditional order in, just make a mental stop if that's all you have on your E-trade account and when it hits that point, USE IT!  Don't think twice.  This will stop HUGE losses like some are incurring at the moment. 

Just a few comments for a lot of the questions I see around ASF in times like these.  There is no guarantee, just minimising risk and enhancing probabilities, that is all this game is about.

Another quick comment, there is little value IMHO except for a fun element, in trying to pre-determine a bottom.  Just wait until it looks like one with one of the patterns above.  Could be at $5, could be now!


----------



## kingbrown (18 October 2008)

*Is the fat lady starting to sing ?*

*Chill winds reach our fair shores* 

THE AGE SAT 18th 
by John Garnaut , Beijing correspondent.

Commodities traders had piled up stocks expecting China's construction and heavy industry to burst back to life after the Olympics. Instead, the financial crisis reverberated around the world, stock piles were liquidated, and the five-year resources boom quickly turned to bust.

*At Tangshan, the heart of China's steel industry, traders report that dozens of mills are going belly up and a third of blast furnaces have been shut down.

"This is the beginning," says MySteel analyst Xu Xiangchun. "So many steel companies have suddenly collapsed and more and more are running out of cash and will go the same way." For the benefit of an Australian audience, he adds: "This is very good for China in front of the upcoming contract price negotiations."*
Traders who had been selling iron ore at about $US200 a tonne on the Tangshan spot market were this week struggling to make a sale at $US80. The Newcastle spot price for power-generating coal has plunged from nearly $US200 to $US110.


"No, I did not predict the carnage at the moment," says Jim Lennon, Macquarie Bank's respected head commodities analyst. "Last week was the first time since records began that the Chinese spot market price for iron ore went below the Australian long-term contract price. The freight market has imploded. We've declared force majeure on the global commodities super-cycle."

*." Most of the hundreds of hopeful Australian mining companies that have sprung up at the tail end of the resources boom will not survive.*

*"A lot of the junior miners will run out of cash and go into liquidation as they will be unable to raise funds," *says Linda Liu Bearne, an investment consultant whose clients include China International Capital Corporation, China's largest investment bank.

*Andrew Forrest at Fortescue Metals Group also has a direct interest in the smoke that continues to bellow from the large blast furnaces at Delong. If they shut down he will have to find another buyer.*
The two companies signed a long-term contract that helped place Forrest's Fortescue Metals Group on the investor map. But now, just five months after FMG's first cargo load arrived in China, Ding has sacked the hapless manager who signed the deal.

The Age believes that FMG contracted to arrange freight for the iron ore deliveries and pass the costs on to Delong Steel. FMG locked in the freight costs months ago, when freight rates were high.

*But the deal now looks expensive because spot market iron ore and freight rates have collapsed and Ding's own customers are deserting him in droves. Ding wants FMG to wear the cost of expensive freight before agreeing to take more ore. FMG says they are flexible, and they might have no choice. "They contacted us yesterday but we have not renegotiated anything," says Graeme Rowley, executive director of operations at Fortescue metals.*
A senior manager at Delong Steel, Lu Bing, says times are tough but all his 5000 workers remain fully employed. But worker and industry sources say about a third of them have been ordered to take unpaid leave and more will be stood down unless steel prices recover next week.

*Delong's bankers are banging at the door. "It's the same for every steel mill in China and across the world," says Lu, the manager at Delong. "The big mills are all cutting production and lots of smaller mills are shutting down. No one knows how long this slump is going to take."*
Marius Kloppers at BHP Billiton and Tom Albanese at Rio Tinto are also anxiously watching the smoke from China's largest blast furnaces.

Chinese statistics are often unreliable and the slide of China's steel industry has been so sudden that it is impossible to keep pace. Delong, for example, has been laying off workers for nearly seven weeks but nobody outside the village seems to know.

With BHP's value down 39% this year and Rio down 53% , both companies need faster ways to gauge how far this resources slump might go.



*Last week a team from Rio quietly fanned out across China to survey the mills and see how many of China's high-cost iron ore mines are shutting down. *
Plenty more bad news to come imo 
iam jumping on the fence ! 

for the whole article check this link 

http://business.theage.com.au/busin...20081017-539t.html?page=fullpage#contentSwap2


----------



## Garpal Gumnut (18 October 2008)

Muschu said:


> If BHP are to acquire RIO, isn't RIO the better buy with the ration between their SPs out of kilter with the offer?
> Alan Kohler suggested this but I'm interested in ASF opinions.




Just remember though that if the t/o fails the ratio will change the other way, as there is a t/o premium in rio's price and a t/o charge to bhp's.

gg


----------



## gav (18 October 2008)

Garpal Gumnut said:


> Just remember though that if the t/o fails the ratio will change the other way, as there is a t/o premium in rio's price and a t/o charge to bhp's.
> 
> gg




So if it fails, BHP's price will fall and RIO's price will go up?  I thought it would go down, as there will be ppl buying RIO atm due to the profit they'd make if the t/o goes through...


----------



## Muschu (18 October 2008)

MRC & Co said:


> The thing is Rick, nobody here knows.....




Now MRC, I really need you to know otherwise I have to work things out for myself..... That's a bit much to ask isn't it?


----------



## MRC & Co (18 October 2008)

Muschu said:


> Now MRC, I really need you to know otherwise I have to work things out for myself..... That's a bit much to ask isn't it?




ha ha.  

The thing is, you can really only see the basic trend of a stock from it's chart, and maybe some volume traits and patterns in the price action and get some idea if it looks ok or not.  It's not until you see something very specific that you would actually enter (or even exit).  Right now, I would not be buying BHP.  But I definately feel a rally is on the way, which may present an opportunity if the chart presents itself right.  Just have to learn what you are looking for.  If you use somebody elses tip as your entry or even to convince yourself to enter, how do you know when to exit?  

Value is definately starting to come into some of these commodity equities though, from a fundamental perspective IMHO.


----------



## Garpal Gumnut (18 October 2008)

gav said:


> So if it fails, BHP's price will fall and RIO's price will go up?  I thought it would go down, as there will be ppl buying RIO atm due to the profit they'd make if the t/o goes through...




Yes, so if the t/o fails RIO's price will come down and BHP will rise if the t/o fails. 
There is a premium atm in rio's price due to the t/o, and a charge down to bhp's because of the costs involved, due diligence, dealing with governments, having to have meetings with kev07 and listening to him droning on and having to sit there when he is droning on and on, when we can just change to watching south park, and other intangible charges.

gg


----------



## gav (18 October 2008)

LOL!  Maybe they could do a South Park episode where Kev07 makes an appearance, that should be more entertaining for the poor BHP exec's.  The South Park creators wouldnt even need to do any extra drawing or animation for Kev07, they can just use pics of the Milky Bar Kid! :


----------



## Garpal Gumnut (18 October 2008)

gav said:


> LOL!  Maybe they could do a South Park episode where Kev07 makes an appearance, that should be more entertaining for the poor BHP exec's.  The South Park creators wouldnt even need to do any extra drawing or animation for Kev07, they can just use pics of the Milky Bar Kid! :




lol, we just have to let sussex st. allow cartman leave the nsw parliament and get a federal seat.

back to bhp though, its a fantastic company, I'll continue to accumulate on dips down to old support levels. It will recover.

if it doesn't australia is done for and kev07's guarantee of deposits will be for pesos and not aussie dollars. 

gg


----------



## skyQuake (18 October 2008)

demons27 said:


> BHP should have a great day on Monday owing to an 11% increase overnight on LSE.  Should do something similar and move into $27 range.




BLT.L on the LSE rose but its ADR in New York fell 2.61% after London closed.
Expected open at $25.40 or a gain of 3.3% on Aus open.

Cheers


----------



## ducati916 (19 October 2008)

BHP is starting to scare some of the "longer term" holders as it's price retraces closer to intrinsic values.

The question now is, will it overshoot on the downside, as much as it overshot on the upside.



ducati916 said:


> *BSD*
> 
> 
> 
> ...




jog on
duc


----------



## rederob (19 October 2008)

ducati916 said:


> BHP is starting to scare some of the "longer term" holders as it's price retraces closer to intrinsic values.
> 
> The question now is, will it overshoot on the downside, as much as it overshot on the upside.
> 
> ...



Your pathetic analysis is available earlier in this thread for those interested.
Your contention is that you buy on high pes.
I will add more BHP on very low pes.
I am content to wait for markets to melt down significantly more.

I won't get into a debate with you about "intrinsic value" as we will never agree.
However,  for those interested in BHP as an equity it is instructive to examine the price performance of BHP vis a vis other mining companies *and* other companies as a whole during this destructive market phase.


----------



## nick2fish (19 October 2008)

Ducati, 
              If BHP is $8 or even $10 in my lifetime I will run around the block naked cause I won't have pants let alone a shirt on my back  

Just as the commodity bubble has burst it will over deflate and resulting correction should not only reflect real world demand/consumption but add much needed long term certainty for our material export industry.

Energy consumption and construction has slowed not stopped and world wide population growth and hence demand will ensure it never doses.

I'm buying BHP through RIO on every down day.


----------



## Julia (19 October 2008)

ducati916 said:


> BHP is starting to scare some of the "longer term" holders as it's price retraces closer to intrinsic values.
> 
> The question now is, will it overshoot on the downside, as much as it overshot on the upside.
> 
> ...



Hey Duc,

It has been some time since you graced us with your charm and erudition.

You may care to offer your archetypal fundamentalist views on the more general global situation - and the remedial measures offered so far - on one of the general threads?

With kindest regards
Julia


----------



## ducati916 (19 October 2008)

rederob said:


> Your pathetic analysis is available earlier in this thread for those interested.
> Your contention is that you buy on high pes.
> I will add more BHP on very low pes.
> I am content to wait for markets to melt down significantly more.
> ...




rederob,

Well it seemingly may well trade down towards my "intrinsic value." Go figure.

jog on
duc


----------



## ducati916 (19 October 2008)

nick2fish said:


> Ducati,
> If BHP is $8 or even $10 in my lifetime I will run around the block naked cause I won't have pants let alone a shirt on my back
> 
> Just as the commodity bubble has burst it will over deflate and resulting correction should not only reflect real world demand/consumption but add much needed long term certainty for our material export industry.
> ...




nick2

Commodities have been cyclical, and probably will remain cyclical. Thus, BHP will again see a bull cycle and return/exceed possibly it's highs.

The problem is purely psychological, who wants to buy when all are selling? Thus a valuation provides at least an "approximation" of what you should seek as remuneration for accepting the "risk."

jog on
duc


----------



## ducati916 (19 October 2008)

Julia said:


> Hey Duc,
> 
> It has been some time since you graced us with your charm and erudition.
> 
> ...




Julia,

I may at that. However I'm sure many will disagree with your "analysis."

jog on
duc



qqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqqq


----------



## treefrog (19 October 2008)

nick2fish said:


> Ducati,
> If BHP is $8 or even $10 in my lifetime I will run around the block naked cause I won't have pants let alone a shirt on my back



shouldn't be too long Nick; not at the rate it's currently trying to get back there - ($8-10 jul03). besides if you are older than 5yrs, you probably need to do the run because it has already been there. - can always do it at night.


----------



## Julia (19 October 2008)

ducati916 said:


> However I'm sure many will disagree with your "analysis."



Just as many will appreciate that my 'analysis' was at least partly tongue in cheek.  

I know you are much too sophisticated to be offended and I should add that I have always enjoyed reading your posts.  The stoushes between Tech/A and yourself were a delight.


----------



## ducati916 (19 October 2008)

Julia said:


> Just as many will appreciate that my 'analysis' was at least partly tongue in cheek.
> 
> I know you are much too sophisticated to be offended and I should add that I have always enjoyed reading your posts.  The stoushes between Tech/A and yourself were a delight.





Julia,

Oh I'm sure the odd tete-a-tete will once again emerge with all the usual suspects, would be passing strange should it not.

jog on
duc


----------



## rederob (19 October 2008)

ducati916 said:


> Well it seemingly may well trade down towards my "intrinsic value." Go figure.
> 
> jog on
> duc



In the present economic climate its price may collapse considerably.
This has very little to do with intrinsic or fair value estimates.
It has a lot to do with a market meltdown and a rush for the exits.

Anyone claiming expertise in fundamental analysis would realise the asset base of BHP has grown considerably since 2005.  Moreover BHP has had sharebuybacks in place for much of that time (until the RIO bid), thereby enhancing the per-share value of the company.

Irrespective of "value" considerations, BHP remains *the * high volume low cost producer of minerals plus oil, which will place it at a massive advantage during this downturn, and give it an incredible head start when the next commodity bull run resumes, as surely it will.

You need to focus on what BHP will represent from an investment perspective rather than slimily trot out an old post that becomes as accurate as a broken watch.


----------



## treefrog (19 October 2008)

rederob said:


> Anyone claiming expertise in fundamental analysis would realise the asset base of BHP has grown considerably since 2005.
> Irrespective of "value" considerations, BHP remains *the * high volume low cost producer of minerals plus oil, which will place it at a massive advantage during this downturn, and give it an incredible head start when the next commodity bull run resumes, as surely it will.



fair and relevant comment red, but as someone who used (in engineering aspects) terotechnology to determine assets and their real worth, a lot of so called assets are in fact liabilities - depending on just where the variables have shifted and which ones have shifted.
Haven't heard/seen anyone suggesting the market won't recover but it may not recover and mirror what it was.
I suspect BHP is big and smart enough to adjust but you never know for sure.


----------



## nick2fish (19 October 2008)

Hey Treefrog 
Have you stopped driving cars in Broken Hill ? Building slowed to zero? 

Bhp have apart from diversification, another long term plan to survive this downturn and be superbly positioned for the next commodity bull run ... its called acquisition. 

And the reason it will pay off big time....SYNERGIES

The mirror was optimism and Greed which has as much chance of disappearing as future world demand.


----------



## nick2fish (19 October 2008)

treefrog said:


> shouldn't be too long Nick; not at the rate it's currently trying to get back there - ($8-10 jul03). besides if you are older than 5yrs, you probably need to do the run because it has already been there. - can always do it at night.




Oh it will be at night alright for the sake of of my neigbours who probably wouldn't recover from the cardaic arrest they would surely suffer watching my Man Boobs hit my chin


----------



## treefrog (19 October 2008)

nick2fish said:


> Hey Treefrog
> Have you stopped driving cars in Broken Hill ? Building slowed to zero?
> 
> Bhp have apart from diversification, another long term plan to survive this downturn and be superbly positioned for the next commodity bull run ... its called acquisition.
> ...




always a sign of bad times for the stock when holders ramp it desperately.
yes to both questions nick, BH a great leading indicator for BHP - they started here remember?
tell me how you get enough optimism from this BHP chart to "advise" getting in now??
If you track back to the last significant market dip 1987/8 what was the SP for BHP in those circumstances - $3.50? and allowing CPI of 100% to today that would make BHP down to $7 then when this dip bottoms and back up from there with those synergies, aquisitions and diversifications.
but looking at this chart and at the same time holding a current BHP stock certificate can only mean


----------



## nick2fish (19 October 2008)

Thanks for the warning though I'll be averaging down... on the way down.

Chart is grim but so was the market one week ago and all that of fear drove the quails from the bushes. Fear and margin calls.

I am not overly sensitive just making you guys work to support your opinions which benefits me as a holder/purchaser and others. 

Cheers


----------



## ducati916 (20 October 2008)

rederob said:


> In the present economic climate its price may collapse considerably.
> This has very little to do with intrinsic or fair value estimates.
> It has a lot to do with a market meltdown and a rush for the exits.
> 
> ...





rederob,

Intrinsic values and undervaluations only become available in bear markets, or if very bad news assails a specific stock or industry. Therefore in a market meltdown, intrinsic value gives you an entry point, irrespective of what the market may, or may not do. That is exactly the point.

With regards to "resource common stocks" the increase in asset base can actually work as a negative. Here's a hypothetical example, although it was exactly this "problem" that the Banks sought to cure via their SIV's etc.

BV = Net Tangible Assets

So lets take company A and Company B

Company A has NTA of $100
Company B has NTA of $100 

Company A earns 6% on NTA
Company B earns 12% on NTA

The market applies a multiplier of 10 times to the 6% earnings and 15 times to the 12% earnings, thus…

Company A = 6% * 10 = $60/share
Company B = 12% * 15 = $180/share

Now lets reduce Company A NTA to $50
The same earnings on 50% of NTA now returns 12% on NTA and gains the same 15 times multiplier, thus…

Company A = 12% * 15 = $180/share

Lo and behold, instant gratification, courtesy of a smaller “Book Value.”

This is exactly what the Banks were doing when they moved their “ASSETS” Off Balance Sheet, they increased their Return on Assets ratio, and benefitted from “upgrades” “outperform” and other associated nonsense on the basis of reduced Book Values.

BHP I agree is the low cost producer. Ironically, it is very often the "high cost" producers that run first in an upturn after a serious and prolonged downturn for their commodity. I'll leave you to see if you can figure out why this is the case.

As to your last comment, nonsense.

jog on
duc


----------



## rederob (20 October 2008)

ducati916 said:


> rederob,
> Intrinsic values and undervaluations only become available in bear markets, or if very bad news assails a specific stock or industry. Therefore in a market meltdown, intrinsic value gives you an entry point, irrespective of what the market may, or may not do. That is exactly the point.
> jog on
> duc



Bear markets provide entry points at lower prices, no more no less.
The markets come with no guarantees.


----------



## skyQuake (20 October 2008)

rederob said:


> Bear markets provide entry points at lower prices.




That's no guarantee that these entries at lower prices will lead to exit at higher prices. People that bought dot com companies in the tech wreck looking for value got burnt pretty hard...


----------



## jonojpsg (20 October 2008)

skyQuake said:


> That's no guarantee that these entries at lower prices will lead to exit at higher prices. People that bought dot com companies in the tech wreck looking for value got burnt pretty hard...




Absolutely no point in comparing dotcom trash with the biggest mining company in the world   Agreed that lower entry doesn't necessarily lead to higher exit, but seriously you can't think that BHP will never get above $25 again?


----------



## Mr_T (20 October 2008)

BHP currently has a payout ratio of 25% (very low).

Conservatively speaking, this year's profit will increase by 70% (Commsec median forecasts claim about 100%, but lets be conservative).

It is unlikely that the payout ratio would go much lower.

Which means that theoretically, the dividend should increase by at least 70%. Or else have a ridiculously low payout ratio?


----------



## treefrog (20 October 2008)

*Last Down Last Up*

*Snakes and Ladders*:
A cautionary note to BHP permabulls. Historically, commodities are usually the last sector to join a bear market and last to rejoin the recovery.
True to form so far with XDJ (bellweather sector) leading the plunge with XFJ landing on a snake at the same time: the XMJ avoided the snakes and looked like winning the game until .........ar crap;  landed on a big one.
XDJ blue
XMJ red
XFJ black


----------



## treefrog (20 October 2008)

Mr_T said:


> BHP currently has a payout ratio of 25% (very low).
> 
> Conservatively speaking, this year's profit will increase by 70% (Commsec median forecasts claim about 100%, but lets be conservative).
> 
> ...




wonder how they will get the extra cash for RIO (not the execs holiday bash but the takeover) - surely they wouldn't reduce the divvy???

and forget not that the current market price reflects what the expectations are for that stock looking 2-3 years ahead

a $1:30 divvy may eventuate but if there is significantly reduced growth prospects that may mean a 4-5% divvy will be needed to hold the price as a reasonable earnings stock. So does that forecast only that BHP will be $25 this time next year if the divvy forecasts hold - all pure speculation of course


----------



## Mr_T (20 October 2008)

treefrog said:


> wonder how they will get the extra cash for RIO (not the execs holiday bash but the takeover) - surely they wouldn't reduce the divvy???
> 
> and forget not that the current market price reflects what the expectations are for that stock looking 2-3 years ahead
> 
> a $1:30 divvy may eventuate but if there is significantly reduced growth prospects that may mean a 4-5% divvy will be needed to hold the price as a reasonable earnings stock. So does that forecast only that BHP will be $25 this time next year if the divvy forecasts hold - all pure speculation of course




Cash isn't on the table for the RIO offer. It might have been a possibility in the past, it isn't now.

I think you'll find the divvy will be more like $1.50+ in a year, if only some of the following are true: (if all of them are true, I don't think a divvy of $2 is out of the question).

a) The interim div will have a similar % rise in $US as the final dividend did

b) The Australian dollar stays at a smiliar level (remeber, the div is prices in $US)

c) There is a 70%+ rise in profit (almost a given)

d) The payout ratio is raised from its ridiculously low level of 25%.....BHP, wtf are you doing with all that cash? (this one isn't a given, but would be nice).


----------



## skyQuake (20 October 2008)

jonojpsg said:


> Absolutely no point in comparing dotcom trash with the biggest mining company in the world   Agreed that lower entry doesn't necessarily lead to higher exit, but seriously you can't think that BHP will never get above $25 again?




No thats not what im getting at, agree BHP is not trash but it may take many many years to get back to where it was. Look at Microsoft - High of $60 during the dot com bubble, smacked down to $20 after it...


----------



## boombubble (20 October 2008)

Lower than expected growth from China will affect prices I believe.

Take this as an example:  
Oct. 20 (Bloomberg) -- China's economy grew 9 percent in the third quarter, the slowest pace in five years, underscoring concern that the spreading financial crisis threatens the biggest contributor to global growth.

The median estimate of 12 economists surveyed by Bloomberg News was for a 9.7 percent expansion, after a 10.1 percent gain in the previous three months. The statistics bureau released the data in Beijing today.

I like many still believe in the medium term that China will still need truckloads of resources but people are still reacting emotionally. 

Big funds are also reversing out of short financials long resources trades. And there is no reason why this trade in fact could be reversed pushing down resource stocks in the short term as FMG would attest to.

With price pressure many mines will have to close and/or postpone plans. This can breed short term fear. Conversely this puts on supply pressures. So as resources get oversold this should create a switch. just need to watch the timing on it.
BTW i am still a newbie and these are just my thoughts so any feedback welcome


----------



## Miner (20 October 2008)

boombubble said:


> Lower than expected growth from China will affect prices I believe.
> 
> Take this as an example:
> Oct. 20 (Bloomberg) -- China's economy grew 9 percent in the third quarter, the slowest pace in five years, underscoring concern that the spreading financial crisis threatens the biggest contributor to global growth.
> ...





Reading through newspaper clippings I understand today China will publish its GDP growth result. This will explain officially  if iron ore demand still high or slacked. 

Enjoy today's rise in market until the  Chinese Mystism (good or bad)  is unopened  today.


----------



## Miner (20 October 2008)

Miner said:


> Reading through newspaper clippings I understand today China will publish its GDP growth result. This will explain officially  if iron ore demand still high or slacked.
> 
> Enjoy today's rise in market until the  Chinese Mystism (good or bad)  is unopened  today.




http://www.abc.net.au/news/stories/2008/10/20/2396410.htm?section=justin

I hate to post this link but I will be a financial  martyr tomorrow once market opens


----------



## shag (21 October 2008)

well i dont see too many posts on bhp today
i wonder why....
it had a very strong end to the day.
chinas gdp of 8/9p is still hot. they will try to grow their economy with infastruture from roads, bridges, nuc power stations etc. just watch them open the spending taps only held back by manning issues.
this has to be so good for the majors, so many lame ducks to pick off when they desire, including rio.
it will really be the big australian then.


----------



## my03 (21 October 2008)

Yeah bhp did heaps well today, is this because the 9% wasnt far behind projected figures and there was a bit more confidence? All other markets seemed to be doing well too. Not to mention alot of works was postponded during the olympics.

Do you guys think this is just a little peak and theres still room to fall? Or is it going to be up from here on out? I know there are no crystal ball answers but I just want to here some arguments or externalities that may affect this?

Also I herd tommorow there's going to be some sort of company announcement that will affect the stock either way? Sorry I'm a bit of newb here so you got to mind the newb language. 

Great forum with some great people here guys.


----------



## noirua (21 October 2008)

Will still be interesting to see if China makes any moves concerning BHP over its bid for RIO, now that the iron ore market is softer.
BHP stock price still looks cheap, if there is a strengthening in commodity markets. Cut backs are likely during 2009 that will impact BHP profits, but a guessing game as to how much.


----------



## rederob (21 October 2008)

treefrog said:


> fair and relevant comment red, but as someone who used (in engineering aspects) terotechnology to determine assets and their real worth, a lot of so called assets are in fact liabilities - depending on just where the variables have shifted and which ones have shifted.
> Haven't heard/seen anyone suggesting the market won't recover but it may not recover and mirror what it was.
> I suspect BHP is big and smart enough to adjust but you never know for sure.



frog
You will therefore know that most (if not all) have resequenced their mining profiles so that they are extracting minerals with highest grades and least cost.
In the good times producers will mine to lowest ore grade cut-offs to maximise mine life while still maintaining profit.
I'm sure BHP is well into this re-adjustment phase.

Each time I take a reality check it tells me quickly that a greater proportion of the world sees what Americans have, and would like to be there too.  (If not Americans, then maybe the French, or Swedes, or Australians.)
Not only does the rest of the world want to catch up with us, at every chance they get, they try their hardest.  We would have to have rocks in our heads if we thought we could stop the BRICs and cashed up OPEC members from industrialising.

I strongly believe that the recent bull run in commodities (now temporarily suspended) was the shortest, and that the next will see a repeat performance of even greater intensity.  I say this because the run we just had proved conclusively that supply could not meet demand, and prices went ballistic.  
It has taken the greatest market meltdown in 80 years to get many of the commodities back to balance.  Even now we have copper, lead and zinc stockpiles at the lower end of long term averages.  Moreover, market carnage has quickly put to care and maintenance many hundreds of mines that in normal times would have kept churning out minerals at a little better than cost of production. 
While risks to the downside will prevail, do not be surprised if several commodities consistently rebound due to a failure to rebuild stockpilies.


----------



## Ruincity (21 October 2008)

rederob said:


> frog
> You will therefore know that most (if not all) have resequenced their mining profiles so that they are extracting minerals with highest grades and least cost.
> In the good times producers will mine to lowest ore grade cut-offs to maximise mine life while still maintaining profit.
> I'm sure BHP is well into this re-adjustment phase.
> ...




Very good post which makes a lot of sense to me - Thanks for sharing. 
I personally envisage profit taking in the short term and some hard times ahead but the long term future is sound IMO.


----------



## noirua (22 October 2008)

It does depend on what you read and where you read it. BHP Billiton feature in the FTSE100 index and comments in the UK seem to read as if BHP are a British company now. Annoying, but it is at least increasingly international.

There appears zero chance of the demand for commodities getting back to the 2007 levels in the next two years and this could easily stretch out to nearer 10 years.

Iron ore and coal supplies are set to dramatically increase over the next two years just as demand falls back. That is also the case for many other commodities.
Companies will need to cut back supplies of iron ore and coking coal to maintain prices.  This is unlikely to work that well, and Opec are the first to be tested on that front shortly.


----------



## boombubble (22 October 2008)

There has been a lot written about slowing demand and price drops on metals. What is interesting is when you look at stock levels they often seem way out of sync. I used to think prices followed the fundamentals of inventory levels but i think that is only part of the story. Like the rapid change in the price of oil investors especially large funds can influence prices violently in either direction. 

Demand is slowing, add the recent forced selling and you witness the carnage that has been happening. However I think fundamentally metal levels are low for the demand requirements of Chindia in for the medium to long term. It takes alot of $ and time to get mines up and running and to keep them optimised. When prices force mines to pause or close this will ultimately affects supply moving forward. With the credit crunch still in play it will be harder for smaller companies to get their hands on much needed capital. Repairing all this and gearing up again may not happen as fast as it did in last couple of years. However i do believe once the market repairs people will once again shift back into metals and this will drive the price back up again.

People have short term memories they will forget the current pain and drive up hard again. Particularly boomers who need to build up their super once again. For now the overall market will dictate direction. We are probably going to bounce around current levels for a while and this volatility will still probably spook most people if it hasn't already.Once the market starts to trend up again BHP will do well. It is not often that you get blue chips on sale. For now though we will probably experience some rollercoaster time, not for the faint hearted, i know my sleep patterns have been screwed up watching the DOW at night


----------



## nick2fish (22 October 2008)

Exactly and down the track................ panic under supply and another commodity bubble is formed


----------



## treefrog (22 October 2008)

rederob said:


> frog
> You will therefore know that most (if not all) have resequenced their mining profiles so that they are extracting minerals with highest grades and least cost.
> In the good times producers will mine to lowest ore grade cut-offs to maximise mine life while still maintaining profit.
> I'm sure BHP is well into this re-adjustment phase.
> ...




Sounds like its all smooth sailing red. Can't say I believe history is likely to keep recycling to the same formula though.
Highly likely to affect the future model is global warming (the greens are really excited about this as they believe they have the rudder now and can use it to steer towards slowing growth) so whether warming turns out to be fact or fiction, modelling needs to factor this in and chindia will not be immune as it has been so far.
Secondly the population growth you are swinging on has downside as well as traditional consumerism upside- particularly now it is near exponential: the 'have nots' have seen how effective terrorism is to disrupt the status quo and containment is extremely expensive.
I think we are looking at continued turbulance with far less long, steady periods of growth.


----------



## treefrog (22 October 2008)

shag said:


> well i dont see too many posts on bhp today
> i wonder why....
> it had a very strong end to the day.
> chinas gdp of 8/9p is still hot. they will try to grow their economy with infastruture from roads, bridges, nuc power stations etc. just watch them open the spending taps only held back by manning issues.
> ...




false start shag; the starter has called all BHP scrip back to the $25 blocks again for a restart. Mind you, may well head them downhill again as punishment for the premature break.


----------



## Garpal Gumnut (22 October 2008)

In my simplistic way I look at bhp's chart over the long term.

If it drops below $24 it will go to just above $10 and then down to $8 or thereabouts., on the support resistance levels.

However I believe this will not happen as the closes recently have been above the inital lows on high volume.

Should I have another large win in lotto next week it will all go on bhp, whatever the price.

a chart is enclosed.

gg


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## Sean K (24 October 2008)

Garpal Gumnut said:


> If it drops below $24 it will go to just above $10 and then down to $8 or thereabouts., on the support resistance levels.



eeeek, 8-10 bucks! 

While the S&R of just about any code on the ASX has been well unsupported recently, $25 _might_ hold, then $20 ....

Maybe...


----------



## Rastan (24 October 2008)

DOW finishes up 172 points with a rally in energy and utilities and BHP opens LOWER??? what'd I miss?


----------



## Nicks (24 October 2008)

Rastan said:


> DOW finishes up 172 points with a rally in energy and utilities and BHP opens LOWER??? what'd I miss?




Lower commodity prices. Commodity prices are very bearish moving forward and analysts are avoiding them.


----------



## gfresh (24 October 2008)

Hedge funds are also liquidating due to record redemptions in the last quarter. First the commodity contracts themselves, and then the stocks subject to them. Double whammy. 

It is realistic to expect reduced profit from BHP over the coming couple of years. Analysts will be downgrading from 285cps profit of last year to possibly -30%, if not 08/09, at least 09/10

A forward "guesstimate" of EPS: 200cps = $20 target @ P/E 10 (negative sentiment)

I remember people were saying "The banks are cheap with P/E's of 8, what gives?!" as the share price slid continuously. Previously (late 2007) it was expected that the banks would continue to beat profits, but people were looking at the past to predict the future. 

Now ANZ comes out and announces a 21% fall in net profit, EPS of 204.8 becomes 170.4. 170.4 x 12 = $20.44. Current pricing is not far off that. 

So often the chart may seem nasty, but can be a forward leader of where "those in the know" believe the profits of the company are heading. They may be off a little, but often by not much


----------



## treefrog (24 October 2008)

treefrog said:


> false start shag; the starter has called all BHP scrip back to the $25 blocks again for a restart. Mind you, may well head them downhill again as punishment for the premature break.




yep, thought so, he's headed them south again in pennance - all have fallen at the $24 hurdle so far this morning though - ah there we go, a few have cleared it now......no, no, they fell after just clearing the bar and the rest are retreating and regrouping for another attempt.
Well look at that - there are still quite a few stragglers that entered this race way back at the $40 post, they are not really up with things at all are they??


----------



## nick2fish (24 October 2008)

treefrog said:


> Well look at that - there are still quite a few stragglers that entered this race way back at the $40 post, they are not really up with things at all are they??




Well look at that the $40 stragglers are hunkering down to sleep it off for a few years  

Yez... you think that we worry about a 2 month downturn for a 5-10 year investment.
I'll see you in a couple of years TreeFrog  
:sleeping:


----------



## Mr_T (24 October 2008)

gfresh said:


> Hedge funds are also liquidating due to record redemptions in the last quarter. First the commodity contracts themselves, and then the stocks subject to them. Double whammy.
> 
> It is realistic to expect reduced profit from BHP over the coming couple of years. Analysts will be downgrading from 285cps profit of last year to possibly -30%, if not 08/09, at least 09/10
> 
> ...




200 cps???? Take the most pessimistic, doomsday scenario and you won't get that for 2008/9.

According to Commsec, for the 2008/9 financial year earnings are projected to be 652 cps. OK, you say, that's a projection, they are wrong. But the projection is recent.

Keep in mind the following:


*EPS was 285.4 in the 2007/8 financial year.

*High prices are set in contract for most of the financial year for ore and coal (in US dollars).

*The $A dollar is way way lower than a few months ago. When the dollar was 98 cents, every dollar of profit in $US was just over a dollar of profit in $A. Now every dollar of profit in $US is about $1.50 in $A.

*Oil is still high. Half as much (in $US!!!) as before, but still high. And BHP is pumping out more and more oil.


----------



## skyQuake (24 October 2008)

nick2fish said:


> Well look at that the $40 stragglers are hunkering down to sleep it off for a few years
> 
> Yez... you think that we worry about a 2 month downturn for a 5-10 year investment.
> I'll see you in a couple of years TreeFrog
> :sleeping:




You are deluded if you think this is a 2 month downturn. How long has BHP been tanking for? 

Are you right or is the market right?


----------



## nick2fish (24 October 2008)

skyQuake said:


> You are deluded if you think this is a 2 month downturn. How long has BHP been tanking for?
> 
> Are you right or is the market right?



YOU TELL ME ... I'M DELUDED 
The market can do what it wants ..... I'm in for the long term is all I'm saying


----------



## nick2fish (24 October 2008)

skyQuake said:


> Are you right or is the market right?




I'll answer your question, with a question.... How the hell can the market be right at this time? 
Are the currency markets right? Gold , Oil ,Commodities.  

People must be going to stop eating soon cause wheat futures are down

I'll just grin and bear it (sic) if thats okay by you


----------



## Garpal Gumnut (24 October 2008)

skyQuake said:


> You are deluded if you think this is a 2 month downturn. How long has BHP been tanking for?
> 
> Are you right or is the market right?






nick2fish said:


> YOU TELL ME ... I'M DELUDED
> The market can do what it wants ..... I'm in for the long term is all I'm saying






nick2fish said:


> I'll answer your question, with a question.... How the hell can the market be right at this time?
> Are the currency markets right? Gold , Oil ,Commodities.
> 
> People must be going to stop eating soon cause wheat futures are down
> ...




It all depends on whether you are a long term, medium or short term investor/trader.

BHP is one sick puppy.

I enclose a chart with support lines.

I will not be buying more until it gets down to $16 , $13 or $10.

Interesting times.

gg


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## skyQuake (24 October 2008)

nick2fish said:


> I'll answer your question, with a question.... How the hell can the market be right at this time?
> Are the currency markets right? Gold , Oil ,Commodities.
> 
> People must be going to stop eating soon cause wheat futures are down
> ...




That's easy, the market is by definition, _always_ right. 

"Markets can remain irrational longer than you can remain solvent"

My only beef was with the '2 months' comment. If you intend to buy and hold for the long long term, I don't see too much trouble with that; only that you can probably get it a fair bit cheaper.


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## ducati916 (25 October 2008)

ducati916 said:


> *BSD*
> September 16 2006
> 
> 
> ...




It would seem that the much touted "growth" in China, as is the want of the business cycle, is about to drive increasing unemployment.

This cannot be a good thing regarding political stability in China, nor for the US who have some $2 Trillion held by China in their foreign reserves.

US interest rates, up the yield curve could possibly start to rise as inflationary pressures start to mount.

jog on
duc


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## noirua (25 October 2008)

BHP Billiton is the only mining stock up in London today, up 2%.  Xstrata down 13%, Vedanta down 7%, Anglo American down 3%, Antofagasta down 3%, Rio down 1.5%.


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## Sean K (25 October 2008)

ducati916 said:


> It would seem that the much touted "growth" in China, as is the want of the business cycle, is about to drive increasing unemployment.
> 
> This cannot be a good thing regarding political stability in China, nor for the US who have some $2 Trillion held by China in their foreign reserves.
> 
> ...



ducati, not sure why you quoted your post from Sep 06. Back then BHP was at $25 and then ran to $50. A 100% gain for those invested in it. And even now, it's still $25, so no loss. Add in any dividends.

Obviously it could go lower, but I'm surprised if you are pasting that up as an 'I told you so'...

Good to see you back by the way!


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## ducati916 (25 October 2008)

kennas said:


> ducati, not sure why you quoted your post from Sep 06. Back then BHP was at $25 and then ran to $50. A 100% gain for those invested in it. And even now, it's still $25, so no loss. Add in any dividends.
> 
> Obviously it could go lower, but I'm surprised if you are pasting that up as an 'I told you so'...
> 
> Good to see you back by the way!




BHP will fluctuate. If it fluctuates lower, so be it.

However, China was cited as the catalyst for ever increasing BHP revenues. Obviously, just not the case. Economies also fluctuate.

Rest easy, on this thread I have many more examples.

jog on
duc


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## Mr_T (25 October 2008)

noirua said:


> BHP Billiton is the only mining stock up in London today, up 2%.  Xstrata down 13%, Vedanta down 7%, Anglo American down 3%, Antofagasta down 3%, Rio down 1.5%.




Yeah, when I first saw how Europe was doing on the Bloomberg page (down down down)  I shuddered at how I imagined BHP must be doing (especialy as the Aussie dollar was being hammered as well). Then when I checked BHP I was amazed to find it had risen.

Is this a sign that the market feels it has hammered BHP so much it just doesn't deserve any more? Is that a sign that the bottom has been reached?


----------



## rederob (25 October 2008)

ducati916 said:


> BHP will fluctuate. If it fluctuates lower, so be it.
> 
> However, China was cited as the catalyst for ever increasing BHP revenues. Obviously, just not the case. Economies also fluctuate.
> 
> ...



China is still the driver of BHP's commodity projects and will remain so for some considerable time (the rest of my lifetime, at least).
A rather apparent "recession" cum depression is sweeping global markets and smashing equity prices in its wake.
China's command economy has done well to weather the harshness of recessionary impacts elsewhere.  How long it can remain in a growth phase in the present climate is, to me, the moot point.
I'm not sure what point ducati is trying to make unless he thinks it profound in just stating the obvious.
We are in very precarious times on the commodity front, as OPEC curbs output and a spate of mine closures across the globe begins to curtain the supply of an array of minerals.
Whatever bargains are to be had, they could prove expensive as markets implode through cycles of calamity across continents in months to come.


----------



## noirua (25 October 2008)

Mr_T said:


> Yeah, when I first saw how Europe was doing on the Bloomberg page (down down down)  I shuddered at how I imagined BHP must be doing (especialy as the Aussie dollar was being hammered as well). Then when I checked BHP I was amazed to find it had risen.
> 
> Is this a sign that the market feels it has hammered BHP so much it just doesn't deserve any more? Is that a sign that the bottom has been reached?



Hopefully we could be moving into a new phase. Just as there was a flight to the US$ in the time of crisis, investors will now move to add the strongest and biggest stocks.
Australia will not be hit as badly as Europe in a recession and views increasingly show we will avoid it. 
Just a matter of time before cash returns, not as before, but enough to increase the present crazy low prices.


----------



## ducati916 (25 October 2008)

*rederob*



> China's command economy has done well to weather the harshness of recessionary impacts elsewhere. How long it can remain in a growth phase in the present climate is, to me, the moot point.




The point is that China is not weathering the storm well. China's growth was predicated on the government subsidising numerous industries, so as to undercut global competition.

This they succeeded in. Demand duly shifted to China for all manner of ****e products.

Now, demand has evaporated from the US & Europe, and China is left with massive excess capacity.

Thus, the BHP's of the world, who built new capacity to ostensibly service the demand for raw materials from China, will be left with excessive productive capacity, in a falling price environment.

BHP's cretinous management want to buy RIO for some massively inflated price. BHP shareholders will benefit from that I'm sure.

jog on
duc


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## Mr_T (25 October 2008)

There seems to be a lot of myths around China. Reading some media reports one would get the impression that China has gone from boomtown to some kind of wasteland in the space of a few weeks.

The reality is that China always has been (in recent history) and stil is a very very poor country. The vast majority of Chinese don't live in Beijings, Shanghais, Guangzhous, etc. The majority of Chinese are peasants on very low incomes.

This is slowly changing. In every city new buildings are going up left right and centre, incomes are increasing. The process is going to take a long long long time.

But yes, it is still continuing.

One strange thing about China is that construction there literally goes on 24/7. When you are driving in Beijing at 2:00 AM at night (virtually the only time there is no traffic jam) you see people working on construction sites. It never stops.


----------



## MRC & Co (25 October 2008)

skyQuake said:


> That's easy, the market is by definition, _always_ right.
> 
> "Markets can remain irrational longer than you can remain solvent"
> 
> My only beef was with the '2 months' comment. If you intend to buy and hold for the long long term, I don't see too much trouble with that; only that you can probably get it a fair bit cheaper.




Don't argue with this cat.  

He is the master of the trend picking!

BHP going lower then I would think.


----------



## nick2fish (25 October 2008)

you don't have to be Warren Buffet to know that.... down along with the rest of the market I would think.

No augment from me about that all I'm saying is I don't care and either should other Long Term Holders.

When this commodity bubble over deflates which will be soon don't forget to post me the change of trend


----------



## MRC & Co (25 October 2008)

Well Buffett is buying, so I guess he thinks the end is near.

Commodity bubble over inflates?  We have a LONG way to go before we get back to those highs, how soon is soon?  I highly doubt it's getting to the levels it was at anytime soon.  

Just to add this in for holders (buyers) of BHP, FMG and all the others.  AVERAGING DOWN IS A DANGEROUS GAME.


----------



## nick2fish (25 October 2008)

Pretty simple chart really showing that the bourse decline and rallies go hand in hand with BHPs. So I may venture that when the stock market recovers so will BHP IMHO 

SkyQuake the two months I was referring too are the past two. Thats what I call a tank and as to the future I'm not predicting anything, just gonna wait and see. Cheers


----------



## MRC & Co (25 October 2008)

nick2fish said:


> View attachment 25129
> 
> 
> Pretty simple chart really showing that the bourse decline and rallies go hand in hand with BHPs. So I may venture that when the stock market recovers so will BHP IMHO




lol, as BHP holds such a huge weighting of the market cap index and signals the strength of most of the commodity sector in Australia due to it's diversity, this would naturally be the case unless the banking sector and commodities diverge, but they are both intertwined by the recession at the moment.


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## coolacoola (25 October 2008)

Ftse for BHP up 5.5%.  Anyone know why it rose so much on FTSE?
BHP on US index was down about 0.89%?

So whos willing to point out where they think it will open on Monday,


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## Mr_T (25 October 2008)

coolacoola said:


> Ftse for BHP up 5.5%.  Anyone know why it rose so much on FTSE?
> BHP on US index was down about 0.89%?
> 
> So whos willing to point out where they think it will open on Monday,




Given the large decline of the Austrailan dollar overnight, it should open up substantially higher on Monday given that BHP rose/was steady on overseas markets.

In theory anyway......


----------



## coolacoola (25 October 2008)

Hey MR T

I saw someone calculate it as

CLose of US price is 31.06 U.S. dollars = 50.1129397 Australian dollars

Then they divided this by 2, which gives 25.05

This sound right??
Thanks


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## Mr_T (25 October 2008)

coolacoola said:


> Hey MR T
> 
> I saw someone calculate it as
> 
> ...




Didn't realise it works like that (ie one of their shares = 2 of ours), but the calculations sound about what I would have expected it to open at.


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## coolacoola (25 October 2008)

SPI futures is only 37 points lower, its very weird how the all ords is working at the moment,i do notice though that rallies sometimes occur on monday, hope BHP matches what it did on the FTSE


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## CoffeeKing (25 October 2008)

http://compareshares.com.au/show_news.php?id=S-524783

with this news about BHP/RIO takeover from SACA if the EC wait until 15 jan 2009 and the RIO shares are lower will it save BHP money, sometimes it appears when companies spend money they drop, must be worth the expenditure. Lot of money to spend at a time like this...


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## skyQuake (26 October 2008)

Yah, I have it as $25.40 converted from ADRs 

However, copper is down significantly which may limit any rally on monday, Unless shang hai copper can stage a turnaround.

SPI closed down 37 @ 3835 which is still a fair bit lower than the XJO at 3869, fair value is around 3900.


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## mfsperth (28 October 2008)

The teacher wouldn't let students BHPB and Rio Tinto do "news" in the main classroom at the Iron and Steel Conference in Qingdao last week.
He said that they had been charging other students too much to buy marbles last year, and needed to learn a lesson about not trying to get all of other students' lunch money.


----------



## Sean K (31 October 2008)

kennas said:


> While the S&R of just about any code on the ASX has been well unsupported recently, $25 _might_ hold, then $20 ....
> 
> Maybe...



Bounced off $25 ish nicely. 

Maybe we have a decent bear bounce in the making.

RIO issue still a golliwog in the kindling.


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## my03 (3 November 2008)

bhp made some good ground in the last week, closing at 29.9 today. 

while long term it seems like a safe and good buy at this price, I just want to know your thoughts medium term, is this rally we've seen in the last week going to last? are there any suggestions or indicators to show that it has peaked in this rally and it will go back down to the 24 it was at in the last few weeks?


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## M34N (3 November 2008)

my03 said:


> bhp made some good ground in the last week, closing at 29.9 today.
> 
> while long term it seems like a safe and good buy at this price, I just want to know your thoughts medium term, is this rally we've seen in the last week going to last? are there any suggestions or indicators to show that it has peaked in this rally and it will go back down to the 24 it was at in the last few weeks?




Well that bounce in the last 10 minutes of trading was extraordinary, gained about 2.5% in that time alone, with some seriously big buy orders going in.

I believe it needs to break the $30 resistance and manage a close above that level to enforce it as support, but it depends on how long this general market rally lasts and if it can continue on. Of course, it also depends on the metal prices, oil and the US markets and how they react to the elections.

I hold BHP shares so I'm hoping for it to go up, picked them up at $25 after the $24 support held mid-October, looks to have a fair bit of momentum behind it now so not going to rush to sell.


----------



## mfp (3 November 2008)

my03 said:


> bhp made some good ground in the last week, closing at 29.9 today.
> 
> while long term it seems like a safe and good buy at this price, I just want to know your thoughts medium term, is this rally we've seen in the last week going to last? are there any suggestions or indicators to show that it has peaked in this rally and it will go back down to the 24 it was at in the last few weeks?




Been in and out several times since going sub 25 last couple of weeks. My latest purchase was for 1500 units on Friday @ an average 27.55. Was ready to sell 750 on close today then decided to sell the lot when I saw the indicative price jump to 29.90 last few seconds, luckily my order was accepted in time. Have a feeling the market will pull back tomorrow and that BHP will struggle to break or hold 30 for now, so hopefully will allow me to reenter around 28ish. My only regret is I didn't create a separate sell order for the other 750 which would have saved me $7 in brokerage...grrrrrrr...almost enough for two happy meals for the kids! Was typing so fast I didn't have time to think!


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## Fung (5 November 2008)

Just asking for opinion. Any chances that BHP will drop back to 24-25 ish? Material prices seem going up trend again so not sure if it will just go back to 4x mark or so.


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## nick2fish (5 November 2008)

My opinion....It can go back to $24-$25 in a flash. Commodity demand uncertainties coupled with ugly economic stats from the US are my reasons.   
Be careful out there


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## battery (5 November 2008)

i've been waiting for it to go back down to 24 since it hit 26 and now its at 31, 

RIO has risen at almost the same rate too.


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## M34N (5 November 2008)

Today's close above $30 is bullish, and again closed at its day high, I just moved my stop to just under $30 (up from $27.50).

FWIW, in the past 2 years, every time BHP closed above $30, it has risen higher and moved back into the $35-40 range.

But I still have a stop set just in case


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## jonojpsg (6 November 2008)

M34N said:


> Today's close above $30 is bullish, and again closed at its day high, I just moved my stop to just under $30 (up from $27.50).
> 
> FWIW, in the past 2 years, every time BHP closed above $30, it has risen higher and moved back into the $35-40 range.
> 
> But I still have a stop set just in case




A wise move given the DOW close this morning!!  I reckon the fact that BHP has moved up after a +$30 close over th past two years is old news and not worth considering in the new age.


----------



## mfp (6 November 2008)

mfp said:


> Been in and out several times since going sub 25 last couple of weeks. My latest purchase was for 1500 units on Friday @ an average 27.55. Was ready to sell 750 on close today then decided to sell the lot when I saw the indicative price jump to 29.90 last few seconds, luckily my order was accepted in time. Have a feeling the market will pull back tomorrow and that BHP will struggle to break or hold 30 for now, so hopefully will allow me to reenter around 28ish. My only regret is I didn't create a separate sell order for the other 750 which would have saved me $7 in brokerage...grrrrrrr...almost enough for two happy meals for the kids! Was typing so fast I didn't have time to think!




Re-entered 28.94 average on Melb Cup day and sold 30.75 average yesterday, re-entered today 29.08.


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## Mr_T (6 November 2008)

IMHO, most shares & especially resource shares are on the way down in coming weeks.

Most of the news coming out about the world economy is bad. Very bad. And before anyone says "oh, but it's priced in" I don't accept this is correct, because most of the news appears materially worse than "estimates".

Despite all the bad news, BHP (other than today) has had a stellar rise in recent days.

Sooner or later something's gotta give.....


----------



## noirua (11 November 2008)

BHP are looking good now with the LSE affect, viz a viz the tanking of the £ v A$ in the last 10 days, and strength in the ADR's.


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## skyQuake (11 November 2008)

Just be careful that BHP in Aus doesnt have to match the BHP Blt plc in london despite its dual listing. Aus one has always been higher after currency conversion.
US ADRs match well though.
Looks like a big day ahead.

Cheers


----------



## frenzel (12 November 2008)

Just curious on what people's thoughts are on the fact that BHP are yet to announce any productions cuts.  RIO and Vale have announced cuts along with a lot of other players, yet BHP remain silent.

Is this an attempt not to spook the market, or do they see themselves as being in a better position somehow?  I don't see how, but those announcements of production cuts and expansion revision must surely come soon?


----------



## Sean K (12 November 2008)

frenzel said:


> Just curious on what people's thoughts are on the fact that BHP are yet to announce any productions cuts.



I think they eventually will at a guess, unless the current trend turns around which is hard to see in the very short term. 

They've already put back OD expansion.


----------



## prawn_86 (12 November 2008)

kennas said:


> I think they eventually will at a guess, unless the current trend turns around which is hard to see in the very short term.
> 
> They've already put back OD expansion.




Surely if they dont have any production cuts they will have to accept lower prices for their negotiated contracts, and are already getting lower prices for their spot market stuff.


----------



## noirua (12 November 2008)

prawn_86 said:


> Surely if they dont have any production cuts they will have to accept lower prices for their negotiated contracts, and are already getting lower prices for their spot market stuff.




Hi, This policy could weaken smaller miners and put some out of business quite quickly, or tank their share price towards zero. BHP can then pickup any bits they want for very little.


----------



## enigmatic (12 November 2008)

Surely the cost of producing will not decrease as demand picks up, again as it always will. So getting a heafty stockpile from there current plants would be a smart move by them. 

They may however cut back expansion focusing only on high demand products with high returns. Aslong as BHP can continue to provide high grade products they will be able to take more and more of the market pushing the others Eg Vale and RIO out of theirs.

They were expecting 25bil profit this year even if that is cut in half of this years its still 7bil.


----------



## Pairs Trader (13 November 2008)

china has started to come off in a big way, how can you believe the numbers they throw at us, if things are still all rosy why are they doing a 800 billion stimulus package?


----------



## oldblue (13 November 2008)

Pairs Trader said:


> china has started to come off in a big way, how can you believe the numbers they throw at us, if things are still all rosy why are they doing a 800 billion stimulus package?




The theory seems to be that they need this abnormally high ( to us ) growth rate at this stage of their urbanisation/industrialisation if they are to avoid social dislocation/unrest. ( Sorry about the big ....ion words ! )

I don't, for a minute, believe all the numbers that get thrown around; witness the "denial by numbers" indulged in by the USA on their inflation figure until recently!


----------



## 2020hindsight (16 November 2008)

http://www.news.com.au/business/story/0,23636,24655478-14334,00.html

uh uh 
BHP Billiton has admitted it is facing first-half iron ore sales losses of up to $US600 million ($920 million), ... spot market despite prices falling well below $US100-a-tonne ... as low as $US63.50 ... etc



> BHP Billiton expects $920m in iron ore losses
> By Matt Chambers
> The Australian
> November 15, 2008 12:00am
> ...





> In recent weeks. BHP sold several capesize shiploads on to the spot market, where prices are at $US69 a tonne after falling as low as $US63.50 at the end of October.


----------



## Aussiejeff (16 November 2008)

2020hindsight said:


> http://www.news.com.au/business/story/0,23636,24655478-14334,00.html
> 
> uh uh
> BHP Billiton has admitted it is facing first-half iron ore sales losses of up to $US600 million ($920 million), ... spot market despite prices falling well below $US100-a-tonne ... as low as $US63.50 ... etc




Well, that news should do wonders for the SP on Monday open - not!

It's looking like a Red Carpet day for sure....


aj


----------



## Miner (18 November 2008)

*Steel mills defer BHP shipments*

BHP BILLITON has admitted its iron ore shipments could fall by as much as 28 per cent during the final two months of the year because difficulties in obtaining credit has forced some steel mills to postpone deliveries.
*
Sydney Morning Herald - 17/11/2008*

B*HP BILLITON has admitted its iron ore shipments could fall by as much as 28 per cent during the final two months of the year because difficulties in obtaining credit has forced some steel mills to postpone deliveries.*

The admission - yet to be announced to the market - lays to rest BHP's insistence last week that its iron ore division was operating as normal even though rivals like Vale, Rio Tinto and Fortescue Metals have announced reductions in their ore production.

A BHP spokeswoman, Samantha Evans, said the miner still had no plans to cut production, but up to 6 million tonnes of shipments - worth $US600 million ($926 million) at benchmark prices - could be postponed until next year following feedback from customers.

She said BHP would attempt to sell the production into the spot market, which is trading at a 40 per cent discount to the benchmark price, but would not be drawn on the issue of further sales cutbacks if the market remained soft.

There are concerns in the industry that BHP's continued selling into the spot market at discount prices will serve to lower the benchmark price of iron ore - and therefore Australia's export and corporate tax revenues - even further next year.

But BHP is in a tough position, since it is seeking European Commission approval for its bid for Rio amid concerns about the combined company's dominance of the iron ore market.

At an investor briefing in London on Friday, Vale's chief financial officer, Fabio Barbosa, launched a thinly veiled attack on BHP for its lack of disclosure on iron ore sales in recent weeks.

"We cannot escape the reality. We must face it," he said. "We have been very, very transparent, as is our approach, and conveyed to markets our views about what is going on. In terms of production, we were the first leading company to announce a cutback in production because we most clearly understood the state of the market."

Frank Zhang, a representative of BHP's shipping agent, Wilhelmsen Ship Services in Port Hedland, told the Herald last week his company expected fewer ships to be chartered in coming weeks and noted loading of some ships had already been stalled while waiting for letters of credit.

Last week the miner cited several operational issues rather than lack of demand as the reason for lower shipments, even though the Herald reported the Port Hedland Port Authority website showed BHP was poised to make about 40 shipments this month, down from 60 in recent months.

But when an interview with BHP's chief commercial officer, Alberto Calderon, in which he disclosed a revised sales outlook, was published on the internet early on Saturday morning, the miner's shares reversed earlier gains in London trading to close 21.5 pence lower at #9.05 ($20.75).

Ms Evans insisted the information was not price-sensitive and therefore did not need to be announced to the market in the same transparent manner as the cutbacks by Vale, Rio and Fortescue had been conveyed.

"We didn't see it as worthy of announcing it," she said.

BHP's board is expected to decide this month whether to proceed with a $US6.1 billion expansion to its iron ore production capacity. Chinese iron ore demand has not rebounded since the Chinese Government announced a $US586 billion stimulus package involving railway last week, but there are signs the market is stabilising.

"The railway package has helped recharge expectations about the future," Mr Barbosa said. "The first impression . . . is the deterioration has stopped, but we still have some issues to deal with [like less steel demand from the automotive sector]."

There are concerns that Japanese steel makers - which account for about a quarter of Australian iron ore purchases - are poised to make production cuts which could exacerbate the weak global demand.


----------



## Boggo (18 November 2008)

So sub $22 early next week may not be unrealistic after all.

Its down just over 1% in the UK at the moment but is on the way back up.

(click to expand)


----------



## SenTineL (18 November 2008)

what happened here ...................................................................................................


----------



## sinner (18 November 2008)

I saw similar activity on Origin Energy and a few others.

Judging by the sale codes 

XT - Crossed trade
SX - Portfolio special crossing
OS - Overseas


----------



## nomore4s (18 November 2008)

SenTineL said:


> what happened here ...................................................................................................




Look at the time & the status.

It is only the closing auction. Pretty sure there is a sticky in the beginners lounge on the subject of opening and closing auctions.


----------



## Sean K (19 November 2008)

The Big Australian not holding above $24 looks untidy.

We either bounce from this 3400 XAO / $24 zone or it's another leg down maybe.


----------



## Frank D (19 November 2008)

*BHP:- *

Even thouugh BHP is currently supported around it's 4th Quarter lows...

The expectation once price moved below 34:45 in the last Week of September, was to continue down into $18:00.

Current price action:-  November 50% level rejection pattern looking to continue down into November's lows, and I'd would say probably
 complete the $18:00 move some time in December if not sooner.

That's the only conclusion I can see by looking at the current price action 
on resources.


----------



## Sean K (20 November 2008)

Opening up under $22....cripes!

I thought under $25 was a buy.

I've underestimated the power of this drive down.


----------



## Miner (20 November 2008)

kennas said:


> Opening up under $22....cripes!
> 
> I thought under $25 was a buy.
> 
> I've underestimated the power of this drive down.




Gone down at $21.12 (RIO $56). What the chart saying now Kennas. 

I remember in your recent  posts you (?) did say with the help of a chart that if BHP does not hold at $24 it will slide. 

I hate to see you are correct again in such  predictions  but market is supporting you !!


----------



## Sean K (20 November 2008)

Miner said:


> Gone down at $21.12 (RIO $56). What the chart saying now Kennas.
> 
> I remember in your recent  posts you (?) did say with the help of a chart that if BHP does not hold at $24 it will slide.
> 
> I hate to see you are correct again in such  predictions  but market is supporting you !!



I'm not sure if these lines matter anymore, it's just panic out there. 

I thought if 24 broke, then 20ish was a chance, but I'm not trusting anything in this downward lurch.


----------



## hotbmw (21 November 2008)

considering the current environment for resources stocks and if the rio bid goes through (which seemed like a great idea at the time), bhp will have 50bn in debt. 

is this scary in this current environment?

do u think it could drop below $20 in 2009 due to this?

will bhp be able to adequately handle this kind of debt?

thoughts....?


----------



## noirua (21 November 2008)

hotbmw said:


> considering the current environment for resources stocks and if the rio bid goes through (which seemed like a great idea at the time), bhp will have 50bn in debt.
> 
> is this scary in this current environment?
> 
> ...



 Will BHP walk away at the very last moment or revise the bid terms? They must be waying up the options knowing markets are going for a last minute withdrawal.


----------



## hotbmw (21 November 2008)

do u think they r in too deep to walk away now?

how would it look if they pulled out now? 

if they go ahead could it drive the share price down due to the high debt/risk?

if they pull out, could it disappoint investors.......? so many questions.......


----------



## Ferret (22 November 2008)

Its a scrip bid so I don't think the current state of the markets has so much to bear on it.

Actually, I don't think it is going to get past the EU regulators.  And I think both BHP and RIO will drop when this is announced.


----------



## hotbmw (22 November 2008)

seems like a loss situation in any given scenario....

does anyone know the date the eu regulators will announce their decision?


----------



## mayk (22 November 2008)

hotbmw said:


> seems like a loss situation in any given scenario....
> 
> does anyone know the date the eu regulators will announce their decision?




It was supposed to be Feb next year, but I think BHP has yet to submit some papers to EU, so it might be extended till March. My hunch is Ides of March...


----------



## subi1 (22 November 2008)

Ferret said:


> Its a scrip bid so I don't think the current state of the markets has so much to bear on it.
> 
> Actually, I don't think it is going to get past the EU regulators.  And I think both BHP and RIO will drop when this is announced.




I was thinking BHP might rise if the RIO takeover doesn't go ahead.

They should be able to resume their buybacks and wouldn't have as much debt as if they went ahead with the takeover.

That is just my opinion but I think  it is a good possibility.

DYOR


----------



## chansw (22 November 2008)

mayk said:


> It was supposed to be Feb next year, but I think BHP has yet to submit some papers to EU, so it might be extended till March. My hunch is Ides of March...




*BHP may face delay in EU ruling on Rio bid: paper*
Thu Nov 20, 2008 3:36am EST

http://www.reuters.com/article/innovationNews/idUSTRE4AJ2D920081120

SYDNEY (Reuters) - *A January 15 deadline for a European Union ruling on mining giant BHP Billiton Ltd/Plc's (BHP.AX: Quote, Profile, Research, Stock Buzz) bid for rival Rio Tinto Ltd/Plc (RIO.AX: Quote, Profile, Research, Stock Buzz) could slip by up to three weeks after BHP missed a deadline to offer asset divestments, the Australian Financial Review paper reported on Thursday.*

The paper, in an unsourced report, said BHP was arguing it may not be required to make any divestments though the market expects significant asset sales would be required, putting the deadline back to February 5.

BHP missed a November 17 deadline to offer early asset sales and stay on track for the mid-January decision, the paper said.

"BHP now has until December 1 for a final deadline to put forward remedies to the European Competition Commission's statement of objections, or risk the regulator opposing the merger completely," the Review reported.

Earlier this month, BHP received a document from the European regulator detailing anti-trust hurdles to its bid for Rio.

Details of the EU's objections remain confidential, though analysts have said the main issue revolves around iron ore, since Rio and BHP are the world's second and third biggest producers.

In a separate report on Thursday, the Sydney Morning Herald paper said the EU's objections include concerns a combined group would have the power to forge a new global iron ore pricing system, whether its customers like it or not.

(Reporting by James Thornhill, editing by Wayne Cole)


 © Thomson Reuters 2008 All rights reserved


----------



## noirua (23 November 2008)

subi1 said:


> I was thinking BHP might rise if the RIO takeover doesn't go ahead.
> 
> They should be able to resume their buybacks and wouldn't have as much debt as if they went ahead with the takeover.
> 
> ...



Spot on me thinks. There are better bombed out investments around the world, especially in Australia. RIO has still got these awkward can't sell coal mines in America and now dud looking iron ore mines.


----------



## Ruincity (24 November 2008)

BHP up 6.758% to $23.38
RIO down 0.35% to $59.80

These guys are usually on par with each other as far as highs and lows. 
Today is an exception that I deem to be a significant difference.
What can be read from this or is it simply all in a days trading..

Cheers.


----------



## long$$ (24 November 2008)

Ruincity said:


> BHP up 6.758% to $23.38
> RIO down 0.35% to $59.80
> 
> These guys are usually on par with each other as far as highs and lows.
> ...




The market is now getting nervous about BHP taking on $42 billion of Rio debt - see the link

http://www.businessspectator.com.au...2-billion-question-LP377?OpenDocument&src=kgb


----------



## M34N (24 November 2008)

Ruincity said:


> BHP up 6.758% to $23.38
> RIO down 0.35% to $59.80
> 
> These guys are usually on par with each other as far as highs and lows.
> ...




I think this may explain the price movements; BHP still on a buy rating, while RIO was downgraded to a hold.

http://www.iii.co.uk/shares/?type=news&articleid=7030631&action=article



> Nov 24 (Reuters) -
> 
> # ING CUTS RIO TINTO, ANGLO AMERICAN TO HOLD FROM BUY
> 
> ...


----------



## long$$ (24 November 2008)

Ruincity said:


> BHP up 6.758% to $23.38
> RIO down 0.35% to $59.80
> 
> These guys are usually on par with each other as far as highs and lows.
> ...




Also Tom Elliot, Eureka Report today on Rio takeover bid:

"Rio Tinto/BHP Billiton. Rio has close to $US50 billion of debt, whereas BHP has less than $10 billion. I’ve said many times that I think ultimately BHP will win this contest, but if, for example, it just got too hard for BHP or the European regulator said it wouldn’t allow the takeover to proceed, then Rio’s in trouble. It’s not going to disappear, but it’s one of the bigger lumps of debt out there that needs to be refinanced over the next few years. So if Rio potentially has issues with its refinancing, you can imagine for smaller companies it’s just going to be very difficult."


----------



## chops_a_must (26 November 2008)

I've been waiting on this trade for a while now. And was lucky enough to get in today.  Perhaps...

Looking for it to fill the gap indicated on the chart, after what looks to have been a blow off, capitulation bottom with a lot of stopping volume. Thought it was pretty ambitious, and it has a lot of work to do, but it is well and truly possible from here...

Cheers.


----------



## Sean K (26 November 2008)

chops_a_must said:


> I've been waiting on this trade for a while now. And was lucky enough to get in today.  Perhaps...



Looks pretty good chopbots. I think leaping back up over $24 was pretty important. I wasn't going anywhere near it till that happened.


----------



## noirua (26 November 2008)

The ft analysts views and ratings of BHP Billiton:  http://markets.ft.com/tearsheets/analysis.asp?s=AU:FLX


----------



## Sean K (26 November 2008)

noirua said:


> The ft analysts views and ratings of BHP Billiton:  http://markets.ft.com/tearsheets/analysis.asp?s=AU:FLX



That's Felix Noirua, you shameless cross thread ramper.  LOL 

Unless BHP is going after them now?


----------



## noirua (26 November 2008)

noirua said:


> The ft analysts views and ratings of BHP Billiton:  http://markets.ft.com/tearsheets/analysis.asp?s=AU:BHP



Tut tut, good grief, blush blush, and here it is corrected. The  big guy will be annoyed, my sincerest apologies

PS. Kennas: Can't comment on BHP going after FLX as that would be shameless ramping.


----------



## my03 (26 November 2008)

bhp made good gains overnight in the us market on news it was ditching the rio takeover. What's your opinions on bhp now? Will these gains stick giving a hold or buy rating or will it not last advising to sell after the current rally?


----------



## panikhide (26 November 2008)

kennas said:


> Looks pretty good chopbots. I think leaping back up over $24 was pretty important. I wasn't going anywhere near it till that happened.




So, now that it has jumped above $28 (TWO DAYS LATER) is it now too late to get in - ie is that likely to be the extent of the bounce?


----------



## Sean K (26 November 2008)

panikhide said:


> So, now that it has jumped above $28 (TWO DAYS LATER) is it now too late to get in - ie is that likely to be the extent of the bounce?



No, but tight stops are the name of this game. 

Between 30 and 34 looks like a pause, with 34 the great wall of china.

Don't trust anything in this environment. 

Conserve capital or have buffett pockets...


----------



## noirua (26 November 2008)

panikhide said:


> So, now that it has jumped above $28 (TWO DAYS LATER) is it now too late to get in - ie is that likely to be the extent of the bounce?



BHP may now have in mind mopping up all these small iron ore outfits who are forced to dump it at any price. They may also want to gobble up small coal producers or those near to producing.

A chance to vote for AUSSIE STOCK FORUMS at compare shares with only 9 days to go 

http://www.thebull.com.au/the_stockies/forums.html


----------



## Miner (27 November 2008)

Ravensthrope and Nickel News 

One more salvo from BHP 

http://au.biz.yahoo.com/081126/31/229d2.html


----------



## panikhide (28 November 2008)

kennas said:


> No, but tight stops are the name of this game.
> 
> Between 30 and 34 looks like a pause, with 34 the great wall of china.
> 
> ...





Sage advice. Thank you. I was feeling a bit bummed about missing out on such an impressive bounce and I'm getting itchy fingers. But hey, I don't want to get burnt by following the herd after the gate has shut, so to speak. I guess the thing to do is avoid buying the highs and selling the lows I guess.


----------



## nick2fish (28 November 2008)

*Re: BHP - HP Billiton*



noirua said:


> BHP may now have in mind mopping up all these small iron ore outfits who are forced to dump it at any price. They may also want to gobble up small coal producers or those near to producing.
> 
> A chance to vote for AUSSIE STOCK FORUMS at compare shares with only 9 days to go
> 
> http://www.thebull.com.au/the_stockies/forums.html




neighbor iron ore juniors for sure , but just wondering if BHP would be looking at also expansion to their oil exposure. Diversification seems to be BHPs strength atm. Or maybe a farmin to a couple of exploration elephant grounds (Senegal,Far/Hunt, Offshore Nigeria, ORG/ PLC, NOD/OEL)

Just some thoughts, and we will know in due course  Cheers


----------



## BSD (28 November 2008)

Why would BHP buy more iron ore via acquisition? 

They have an (esentially) infinite resource already that is only constrained by infrastructure and demand. 

Energy and copper on the other hand...

Although - a chunky buy-back would be a good start


----------



## zorrro13 (28 November 2008)

some advice please. 
I bought 20k at 22 and didn't think it would bounce so fast and didn't leverage up. I would like to invest another 20k so should I wait for a retrace or should I just do it. Another option would be to sell and buy back later but I'M long term and that's not appealing. Any thoughts anyone?


----------



## Miner (28 November 2008)

zorrro13 said:


> some advice please.
> I bought 20k at 22 and didn't think it would bounce so fast and didn't leverage up. I would like to invest another 20k so should I wait for a retrace or should I just do it. Another option would be to sell and buy back later but I'M long term and that's not appealing. Any thoughts anyone?




Hi Zorro13

How are you ?
WIthout upsetting you I think in this forum no one is allowed to provide advise. 

So please use DYOR. 

THanks


----------



## fro (28 November 2008)

zorrro13 said:


> some advice please.
> I bought 20k at 22 and didn't think it would bounce so fast and didn't leverage up. I would like to invest another 20k so should I wait for a retrace or should I just do it. Another option would be to sell and buy back later but I'M long term and that's not appealing. Any thoughts anyone?




Hi Zorro
What to do with a $9k approx. profit in a week isn't a bad predicament
Miner is right do your own research
Your in a good position to protect your capital you'll work it out


----------



## zorrro13 (29 November 2008)

hmmm thanks for the replies and having thought about it  maybe its best to put a stop loss on and take whatever profit and very happy that was my first ever trade


----------



## noirua (29 November 2008)

*Re: BHP - HP Billiton*



nick2fish said:


> neighbor iron ore juniors for sure , but just wondering if BHP would be looking at also expansion to their oil exposure. Diversification seems to be BHPs strength atm. Or maybe a farmin to a couple of exploration elephant grounds (Senegal,Far/Hunt, Offshore Nigeria, ORG/ PLC, NOD/OEL)
> 
> Just some thoughts, and we will know in due course  Cheers



Fair enough, though the added complication of strength of currencies comes into play here. I'm not sure at all as to which currencies BHP hold their cash in, however profits should come in better quoted in Aussie$'s.

Have you voted in the compareshares competition for best forum yet http://www.thebull.com.au/the_stockies/forums.html


----------



## zorrro13 (1 December 2008)

Jumped ship today. Was a wild ride but to hold tonight would be gambling 30% in 5 days but thinking we are no in no mans land could go either way


----------



## noirua (2 December 2008)

zorrro13 said:


> Jumped ship today. Was a wild ride but to hold tonight would be gambling 30% in 5 days but thinking we are no in no mans land could go either way



Went empty on BHP despite being the worlds strongest miner. I remember reading a book on bear markets that showed certain sectors and market cap stocks bounce about 50% after massive falls.  Well, that has happened and the bells are ringing.


----------



## prana (2 December 2008)

zorrro13 said:


> Jumped ship today. Was a wild ride but to hold tonight would be gambling 30% in 5 days but thinking we are no in no mans land could go either way




In hindsight, it was a great call. Test and respect of 20 again for a W formation and I'm in long myself.


----------



## zorrro13 (2 December 2008)

Huge relief today but I think  and just a gut feeling that yesterdays dump on NYSE was profit taking and thinking it will stabilize tonight


----------



## Ruincity (2 December 2008)

zorrro13 said:


> Huge relief today but I think  and just a gut feeling that yesterdays dump on NYSE was profit taking and thinking it will stabilize tonight




Well if you were so sure of that you could alway have bought back in easily at around 7-9% lower today and ridden that stability/bounce your predicting tomorrow!

Trading is easy in hindsight..


----------



## zorrro13 (2 December 2008)

To chicken I lucked it out 1st time so will stay cash except bought into FMG today (sucker rally) bought at 2.70 lets see what tomorrow brings


----------



## zorrro13 (3 December 2008)

Ruincity said:


> Well if you were so sure of that you could alway have bought back in easily at around 7-9% lower today and ridden that stability/bounce your predicting tomorrow!
> 
> Trading is easy in hindsight..




What hindsight, It was a prediction that came true but still happy i got out and it may go side ways but definitely down in next few weeks.


----------



## Miner (3 December 2008)

Very interesting Zorro 13 your postings.

A relatively new comer in the forum.

Entered slowly asking people advise.

Then going big bang with crediting on BHP trade as successful prediction.

Almost each posting from you has invited some debate / comments from other members.

You are definitely keeping the forum a bit awake


----------



## zorrro13 (4 December 2008)

Hi Miner, You started it by suggesting That i would work it out lol. I spend the whole trading day in front of my screen everyday for the last month since I jumped in cashed up and after the october crash figuring it would be easy, not true! have taken a few hits but thankfully somewhere nearer to the bottom I hope


----------



## noirua (7 December 2008)

BSD said:


> Why would BHP buy more iron ore via acquisition?
> 
> They have an (esentially) infinite resource already that is only constrained by infrastructure and demand.
> 
> ...



Hi BSD, missed your question earlier. If BHP buy up iron ore miners at about 10% of their original value, they can mothball the mines and prevent iron ore being dumped at any price.


----------



## Sean K (17 December 2008)

Is it going to fail yet again at $31 ish, or push through the neckline?

Watching with interest. 

Harry tells me I should have bought some at $20 ....


----------



## Sean K (17 December 2008)

kennas said:


> Is it going to fail yet again at $31 ish, or push through the neckline?
> 
> Watching with interest.




1149 [Dow Jones] BHP (BHP.AU) looks increasingly bullish on the charts, according to Dow Jones Newswires technical analysis. Follows sustained break of "neckline" resistance from inverse head & shoulders pattern, targeting A$42.00. Former neckline resistance, now at A$30.70, should turn into support. Traders should consider buying with stop-loss below Tuesday's low at A$30.01, with a view to add to longs on a break above major range resistance at A$32.09. While A$32.09 caps, there's a faint chance of a fall to double top target near A$14.00. But scope for a fall is fading rapidly. Weekly momentum indicators are rising with bullish divergence, from oversold levels. Weekly MACD will give a major buy signal if BHP closes firmly this week. BHP is positively correlated with AUD/USD and AUD/USD has also triggered an inverse head & shoulders pattern. Sentiment has reached the point where the majority are so conditioned to being bearish that they are delaying decisions to buy, despite a rising market. BHP will form a significant uptrend if it closes above A$31.00. BHP last up 1.2% at A$31.00. (DWR)


----------



## babka (17 December 2008)

Kennas, thanks for a detailed chart analyses. I do hope (desperately need to hope) that your charts are right. Your posts are always great to read and to learn something. All the best to you.


----------



## outback (17 December 2008)

Yeh thanks Kennas. I have one question or query or whatever  regarding your upside target of $42.00. My limited knowledge gives me a target a poofteenth under $40.00 Pretty much splitting hairs when we are talking about a 25% increase on today's price, but I'm interested where you get your target from.


----------



## white_crane (17 December 2008)

I concur with kennas.  There has been good volume on BHP in the last month or so, so if it can break the resistance at $32, then I think it will get to about $40 before it reaches another resistance level.


----------



## Sean K (18 December 2008)

The target of $42 is just a probability based on the inverse H&S. The target is derived from measuring the distance from the head to the neck and then extending that in the opposite direction. Thus the green lines I drew on the chart above. Must stress, just a probability, and it again seems to have failed at the neckline. This region is turning into significant resistance. This means one of 2 things to me. 1, it's going to fail here, or 2, when it breaks through it will probably run pretty hard. Or not....lol


Here's some more info on H&S's from Chart School for anyone interested.

*Head and Shoulders Bottom (Reversal) *

The Head and Shoulders bottom is referred to sometimes as an Inverse Head and Shoulders. The pattern shares many common characteristics with its comparable partner, but relies more heavily on volume patterns for confirmation. 

As a major reversal pattern, the Head and Shoulders Bottom forms after a downtrend, and its completion marks a change in trend. The pattern contains three successive troughs with the middle trough (head) being the deepest and the two outside troughs (shoulders) being shallower. Ideally, the two shoulders would be equal in height and width. The reaction highs in the middle of the pattern can be connected to form resistance, or a neckline. 

The price action forming both Head and Shoulders Top and Head and Shoulders Bottom patterns remains roughly the same, but reversed. The role of volume marks the biggest difference between the two. Generally speaking, volume plays a larger role in bottom formations than top formations. While an increase in volume on the neckline breakout for a Head and Shoulders Top is welcomed, it is absolutely required for a bottom. We will look at each part of the pattern individually, keeping volume in mind, and then put the parts together with some examples. 

*Prior Trend*: It is important to establish the existence of a prior downtrend for this to be a reversal pattern. Without a prior downtrend to reverse, there cannot be a Head and Shoulders Bottom formation.
*Left Shoulder*: While in a downtrend, the left shoulder forms a trough that marks a new reaction low in the current trend. After forming this trough, an advance ensues to complete the formation of the left shoulder (1). The high of the decline usually remains below any longer trend line, thus keeping the downtrend intact.
*Head*: From the high of the left shoulder, a decline begins that exceeds the previous low and forms the low point of the head. After making a bottom, the high of the subsequent advance forms the second point of the neckline (2). The high of the advance sometimes breaks a downtrend line, which calls into question the robustness of the downtrend.
*Right Shoulder*: The decline from the high of the head (neckline) begins to form the right shoulder. This low is always higher than the head, and it is usually in line with the low of the left shoulder. While symmetry is preferred, sometimes the shoulders can be out of whack, and the right shoulder will be higher, lower, wider, or narrower. When the advance from the low of the right shoulder breaks the neckline, the Head and Shoulders Bottom reversal is complete.
*Neckline*: The neckline forms by connecting reaction highs 1 and 2. Reaction High 1 marks the end of the left shoulder and the beginning of the head. Reaction High 2 marks the end of the head and the beginning of the right shoulder. Depending on the relationship between the two reaction highs, the neckline can slope up, slope down, or be horizontal. The slope of the neckline will affect the pattern's degree of bullishness: an upward slope is more bullish than downward slope.
*Volume*: While volume plays an important role in the Head and Shoulders Top, it plays a crucial role in the Head and Shoulders Bottom. Without the proper expansion of volume, the validity of any breakout becomes suspect. Volume can be measured as an indicator (OBV, Chaikin Money Flow) or simply by analyzing the absolute levels associated with each peak and trough.
Volume levels during the first half of the pattern are less important than in the second half. Volume on the decline of the left shoulder is usually pretty heavy and selling pressure quite intense. The intensity of selling can even continue during the decline that forms the low of the head. After this low, subsequent volume patterns should be watched carefully to look for expansion during the advances.
The advance from the low of the head should show an increase in volume and/or better indicator readings, e.g., CMF > 0 or rise in OBV. After the reaction high forms the second neckline point, the right shoulder's decline should be accompanied with light volume. It is normal to experience profit-taking after an advance. Volume analysis helps distinguish between normal profit-taking and heavy selling pressure. With light volume on the pullback, indicators like CMF and OBV should remain strong. The most important moment for volume occurs on the advance from the low of the right shoulder. For a breakout to be considered valid, there needs to be an expansion of volume on the advance and during the breakout.
*Neckline Break*: The Head and Shoulders Bottom pattern is not complete, and the downtrend is not reversed until neckline resistance is broken. For a Head and Shoulders Botom, this must occur in a convincing manner, with an expansion of volume.
*Resistance Turned Support*: Once resistance is broken, it is common for this same resistance level to turn into support. Often, the price will return to the resistance break, and offer a second chance to buy.
*Price Target*: After breaking neckline resistance, the projected advance is found by measuring the distance from the neckline to the bottom of the head. This distance is then added to the neckline to reach a price target. Any price target should serve as a rough guide, and other factors should be considered, as well. These factors might include previous resistance levels, Fibonacci retracements or long-term moving averages.


----------



## chops_a_must (18 December 2008)

Looks like they are reading your analysis Kennas. 

I still have this trade on... didn't think that would be so... but anyway...

And my trade reasons are a little different.

Originally, I was looking for that gap just below 34.

In the meantime, the H&S has appeared... and it brings into play another partially closed gap above it, about 42. In the beef off the H&S target.

There is a tonne of resistance in the way... so any weakness and I'm likely out if it starts going through the region...

Gaps in blue and the H&S workout in white, for everyone's convenience. 

Cheers,

Chops.


----------



## GumbyLearner (18 December 2008)

Cheers Kennas

Long term hold

Thanks
Gumby


----------



## outback (18 December 2008)

Than you all. Most interesting. Until recently I invested based on funny mentals. I'm now trying to learn T/A so I can trade a bit. All a barrel of laughs.

Thanks for your patience.


----------



## long88 (19 December 2008)

Hi all,

All indicators are now pointing to upside (MACD (weekly and daily), etc), but we are still in the bear market arent we ?

i presume time will tell here, on what will happen.


----------



## noirua (19 December 2008)

long88 said:


> Hi all,
> 
> All indicators are now pointing to upside (MACD (weekly and daily), etc), but we are still in the bear market arent we ?
> 
> i presume time will tell here, on what will happen.




I'm still waiting for a major slip in BHP stock and the present Xmas party may continue to the end of January sales. Could prove to be expensive if they start to go strongly negative and shutdown many more mines.


----------



## long88 (20 December 2008)

Today slip for $1, been trying to buy the damm put for the last couple of day.

anyway, wait for monday if it slips again. i will definitely in the ride.

anyone with me ?


----------



## nick2fish (26 December 2008)

*Re: BHP - HP Billiton*



nick2fish said:


> neighbor iron ore juniors for sure , but just wondering if BHP would be looking at also expansion to their oil exposure. Diversification seems to be BHPs strength atm. Or maybe a farmin to a couple of exploration elephant grounds (Senegal,Far/Hunt, Offshore Nigeria, ORG/ PLC, NOD/OEL)
> 
> Just some thoughts, and we will know in due course  Cheers




Looks like OEL's deepwater SC 55 got the nod. 
Another great decision by the worlds most diversified miner.


----------



## Garpal Gumnut (28 December 2008)

I enclose a chart of BHP ,  a yearly going back to 1987.

The patient could wait for this to go to $13 or the more aggressive could get in now.

Me, I'll wait for $13.

A chart is enclosed

gg


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## investedz (5 January 2009)

Hi There,

Just wondering if any Tech Analysis people out there could verify an ascending triangle pattern forming (from Nov 19th 2008 to today)?


----------



## Boggo (5 January 2009)

There is a pattern, however, it has tried again to pass above the high of Dec 17th and failed, it needs to close above 31.67 to be in positive territory.

I am seeing it as a potential short at the moment until it proves otherwise.

Note: this is not any sort of technical analysis or qualified comment, just my view at the moment.


----------



## Garpal Gumnut (5 January 2009)

Boggo said:


> There is a pattern, however, it has tried again to pass above the high of Dec 17th and failed, it needs to close above 31.67 to be in positive territory.
> 
> I am seeing it as a potential short at the moment until it proves otherwise.
> 
> Note: this is not any sort of technical analysis or qualified comment, just my view at the moment.




I agree, the enclosed chart shows the appearance of a bottoming pattern, but it lacks volume. 

It needs to go up beyond $32, on some volume, then retrace and test $32 and move on up on volume before I'd look anywhere beyond a further fall on the monthly chart as I mentioned above. 

A chart is enclosed, a daily from recent months.

gg


----------



## nunthewiser (5 January 2009)

personally think it looks like a prime short with a nice low % loss on stopout point


oops speaking aloud again

crashnburn ya sucka!


----------



## kam75 (6 January 2009)

BHP has formed a very good Head and Shoulders Bottom over the past 3 months.  I'll be getting on board on a break of 32.00


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## nunthewiser (6 January 2009)

crashnburn i say 

but yeah if they closed abouve 32 20 ish and above i,d be out with a small loss and tail between legs


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## Boggo (6 January 2009)

I took a small loss when it looked like closing back below 31.70, it hasn't closed above 31.70 for nearly three months now.

Today's close is significant ??

I thought it was going to hold above 31.95 on the 1, 5 and 15 minute charts, I shouldn't be looking at these timeframes.

Yesterday's daily.
(click to expand)


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## It's Snake Pliskin (7 January 2009)

Boggo said:


> I took a small loss when it looked like closing back below 31.70, it hasn't closed above 31.70 for nearly three months now.
> 
> Today's close is significant ??
> 
> ...




There was a bit more volume today but a poor close but possible mediocre demand. 

*Opinion only. Do your research.*


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## outback (7 January 2009)

It's certainly bouncing against the ceiling. I'd love to see it close above $32.00.

I'm in the money so far but have set pretty tight stop losses to protect the gain.


----------



## shag (7 January 2009)

its making hard work breaking away from 32. rio's fired away, bhp seems held by a bungy to it.
seems it will do similar volume to yesterday. 10millish.


----------



## Garpal Gumnut (7 January 2009)

shag said:


> its making hard work breaking away from 32. rio's fired away, bhp seems held by a bungy to it.
> seems it will do similar volume to yesterday. 10millish.




BHP is down 4% in London tonight, I doubt on recent ASX volumes it will stay above $32 in the short term tomorrow and Friday.

I'm still bearish on this for that reason and as posted in above charts, in the medium term.

gg


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## nunthewiser (7 January 2009)

i got stopped out of short when it broke , spewin now , but hey better to be safe than sorry , and murphy dictates if i,d kept position open it would have risen 4 % tonight instead


----------



## nikemi (10 January 2009)

According to the Business Spectator: 

"SHANGHAI - Chinese steel firms joined Japanese counterparts in demanding price cuts of around 40 per cent for term iron in 2009, as mills look to cut costs amid faltering demand and huge cutbacks in output. 

Asian steelmakers are calling for the first cut in annual iron ore prices in seven years as they struggle with steel prices that have tumbled since late last year, as the global economy stagnates in the grip of a worsening financial crisis. 

"The bottom line for Chinese steel mills is for iron ore prices to drop to the levels between 2007 and 2008, meaning Brazilian miners must cut ... by at least 39 per cent and their Australian counterparts by at least 45 per cent," the Shanghai Securities News newspaper quoted unnamed industry sources as saying. 

The China Iron and Steel Association declined to comment, while analysts predicted that, while ore prices seemed certain to drop sharply, steelmakers could struggle to force through cuts of that magnitude. 

Asian steelmakers agreed to close to a doubling of iron ore prices for the year to the end of March but are now extending production cuts amid few signs of a recovery in demand. 

On Tuesday Japan's JFE Holdings, the world's third largest steelmaker, said it wanted iron ore prices in the 2009/2010 business year to fall at least back to 2007/08 levels. 

Global steel output fell 19 per cent in November, the World Steel Association said. It and may fall further in December and January as South Korea's POSCO considers more cuts and JFE scales back further by becoming the first Japanese firm to shut a blast furnace. 

Mini rally 

Iron ore major BHP Billiton and Rio Tinto declined to comment on the Chinese report. Spokesmen for both groups said it was company policy not to discuss price negotiations. 

Rio Tinto shares in London fell 2.2 per cent to 1,692 pence while BHP lost 0.15 per cent to 1,290 pence by 1042 GMT (2142 AEDT), compared to a 2.76 per cent loss in the UK mining index, which shed 56 per cent last year. 

Iron ore price negotiations informally began late last year but have stepped up, with China's steel mills likely to push for an early settlement. 

"It's early days and they're probably being opportunistic on the back of the iron ore price weakness pre-Christmas," said James Wilson, an analyst at DJ Carmichael. 

"They're trying to lock in prices while they can but I think they will find they won't be able to do that. I don't see a 45 per cent reduction happening." 

Analyst Andrew Keen at Bernstein Research in London agreed the fall in iron ore prices would be less than expected. 

"We believe contract prices are likely to surprise on the upside ... We are expecting a 35 per cent decline in Australian iron ore fines and believe that the market is pricing in a decline approaching 50 per cent," he said in a note this week. 

Spot iron ore prices plunged 70 per cent from highs of nearly $US200 per tonne last February to $US60 a tonne in October, but have since recovered to about $US80 a tonne. 

The recovery comes as production from China, the world's biggest steel producing country, crept up in recent months from more than two-year lows in November as some mills raised operating rates to ride a mini rally in steel prices. 

Asian steel prices rose 13 per cent from a two-year low in late November, as coordinated output cuts globally tightened market conditions and forced buyers with low inventories to accept price hikes by some producers. 

But the tentative recovery in prices may end soon as key buyers, such as automakers, rein in production. 

"So far, what is absent is a significant recovery in end-use steel consumption," said Jim Lennon at Macquarie in a note to clients. 

Goldman Sachs JBWere analyst Malcolm Southwood in a research report this week forecast a 30 per cent fall in steel prices. ''


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## CoffeeKing (20 January 2009)

BHP may be close to shutting big Aust nickel mine

http://www.businessspectator.com.au...stralia-nickel-mine-report-NF5PU?OpenDocument

Found this article, unsure of how factual it is, DYOR


----------



## wayneL (20 January 2009)

CoffeeKing said:


> BHP may be close to shutting big Aust nickel mine
> 
> http://www.businessspectator.com.au...stralia-nickel-mine-report-NF5PU?OpenDocument
> 
> Found this article, unsure of how factual it is, DYOR




Yep, it was also reported in The Australian. I also read that coal and iron prices will probably halve.


----------



## CoffeeKing (20 January 2009)

Doesn't seem that long ago (this company was one of them) that somebody came up with the phrase 

"cant go wrong with the Blue chips" wonder what they are thinking now?

Just feel sorry for the amount of people who lose jobs *IF* things like this happen...


----------



## GumbyLearner (20 January 2009)

Should do better than the likes of Rio. Rio are dogged with debt.
BHP on the other hand have relatively low debt and are much better positioned on the acquisition path while others capitulate. Even if they unfortunately have to mothball Ravensthorpe. JMO!

DYOR


----------



## TheAbyss (20 January 2009)

A lot of press reporting that BHP will post a decline in profit of arounf 10-15%. Mainly becasue BHP have provided no guidance and pinted to the report as the medium for profit statements etc.

My question is, how much of this decline in profits has been priced in already?


No one expected BHP to post a higher profit level this time imo so am wondering what level of profit decline would inspire a SP decline/ ascent?


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## S73417H (20 January 2009)

TheAbyss said:


> A lot of press reporting that BHP will post a decline in profit of arounf 10-15%.




Does anyone think that BHP's timing of this report which is due out tomorrow was planned to coincide with Obama's inauguration? Either way, does anyone think that the potential bad news will be offset some if any due to this?


----------



## Sean K (20 January 2009)

S73417H said:


> Does anyone think that BHP's timing of this report which is due out tomorrow was planned to coincide with Obama's inauguration? Either way, does anyone think that the potential bad news will be offset some if any due to this?



LOL, and perhaps the 'Obama factor' is factored in. Could be a sell the fact event. Overall market's on a knife's edge right now, eeeeek!


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## Rudy (20 January 2009)

kennas said:


> LOL, and perhaps the 'Obama factor' is factored in. Could be a sell the fact event. Overall market's on a knife's edge right now, eeeeek!




Hi Kennas,

Based on my Elliott Wave studies of both the XJO and BHP I would expect both to fall badly tomorrow.  https://www.aussiestockforums.com/forums/showpost.php?p=387773&postcount=336 

Cheers


----------



## Dezza (21 January 2009)

Closed lower today on the FTSE and the DOW's not looking too sexy at the moment even after Obama's inauguration.


----------



## Trembling Hand (21 January 2009)

Anyone know what time the release is for the December-quarter production report.

Cannot see the time stated anywhere other than today


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## sails (21 January 2009)

Trembling Hand said: "Anyone know what time the release is for the December-quarter production report.
Cannot see the time stated anywhere other than today"

According to Iress, it's just come out.


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## Trembling Hand (21 January 2009)

Sails said_"According to Iress, it's just come out............................................................... Oh dear, 100 characters again !!!!!"_

Yep I'm getting it. Nothing disastrous in it. Olympic dam getting "scaled back", Small cuts to production Blah Blah ....

Lets see how the Boyz like it hey?


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## sails (21 January 2009)

Trembling Hand said:


> ....Lets see how the Boyz like it hey?




LOL - definitely depends on the Boyz especially with option expiry next week.  Fundamentals seem to go out the window...


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## S73417H (21 January 2009)

Shutdown of Ravensthorpe confirmed. 
Production is down to what looks to be like expected levels.
Scale back of Olympic Dam..


----------



## Aussiejeff (21 January 2009)

S73417H said:


> Shutdown of Ravensthorpe confirmed.
> Production is down to what looks to be like expected levels.
> Scale back of Olympic Dam..




It's not just the shutdown of the mine and processing plant that's at stake here. I feel very much for the poor folk of what was becoming the nickel mining boom-town of Ravensthorpe (and nearby Hopetoun). BHP's shutdown is "indefinite" due to 







> .. diminished prospects for profitability of Ravensthorpe and Yabulu in the current environment, significant and continuing deterioration in the outlook for the nickel market, and the projected level of capital expenditure required in order to achieve and sustain projected production volumes at Ravensthorpe. As a result, the total workforce at these operations and associated Perth-based functional areas will be reduced by approximately *800* employees and *1,000* contractors by June 2009.
> 
> In addition, the rate of mining at the Mount Keith (Australia) operation will be reduced in order to preserve its economic viability. The overall rate of concentrate production at Mount Keith will remain largely unchanged. Improved processing technology will enable the operation to source and process more ore from existing stockpiles. The Mount Keith workforce will be reduced by approximately *100* employees and *200* contractors by end February 2009.




...and from the Ravensthorpe Shire website ...



> 2004 – New hospital completed in Ravensthorpe. *Ravensthorpe nickel project commences construction at Bandalup Hill. Wind turbine for power commences at Hopetoun*.
> 
> 2005 - *With BHP Billiton construction phase, population increases in Ravensthorpe and Hopetoun. A new airport is built between the towns and air service commences.*
> 
> 2006 - *Extensive development for housing in Hopetoun and some in Ravensthorpe. Construction of a new school in Hopetoun commences.*




All that development is now shot. Ravensthorpe / Hopetoun had around 1,000+ electors with population growing by 11%+ in past 12 months - till now. 

Wonder how much all that "extensive housing" will plummet in value over coming months?


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## aleckara (21 January 2009)

sails said:


> LOL - definitely depends on the Boyz especially with option expiry next week.  Fundamentals seem to go out the window...




Sails, how does the option expiry affect the share price? I just imagine that people would be closing their positions and it depends on the positions that people have as to its effect.


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## Trembling Hand (21 January 2009)

aleckara said:


> Sails, how does the option expiry affect the share price? I just imagine that people would be closing their positions and it depends on the positions that people have as to its effect.




Its not the holders that you have to think about. Its the writers of the option, the market makers. They have VERY deep pockets and their aim is to have the option expire out of the money or on the money by pushing and pulling the stocks around. and very often you get stocks "pinned" to a large open interest strike price.


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## sails (21 January 2009)

aleckara said:


> Sails, how does the option expiry affect the share price? I just imagine that people would be closing their positions and it depends on the positions that people have as to its effect.




Aleckara, TH has explained it in a nutshell.  And it's not only BHP - can affect any optionable stock.  Then there is the "unwinding" effect that usually follows for a day or more after expiry.

The largest open interest levels don't always work, so it's usually difficult to predict where or if the stock might "pin" at expiry.  However, there is often some decent volatility leaving up to expiry.


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## noirua (31 January 2009)

BHP took a knock in Europe as mining stocks retreated on Friday and BHP was downgraded once again to neutral. Still up slightly on the week.


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## Miner (4 February 2009)

How interesting that the Big Australian site is not directly visited by any one since 31st Jan whereas plenty of discussions about Big Australian BHP in other threads.

Any way it was interesting to read the profit announcement from BHP today.

Great Dividend increase 41 % with the money probably saved from Rio bid.
Great reduction in EPS 56% 
Great reduction in attributable profit
Great reduction in operational profit
Incrased revenue and so increased bonus for the CEO and Executives.
In News release they have said attributable profit up by 2% whereas the bottom table says it has reduced by 56.5%  

Is it a game that BHPB board is so pleased to advise or I am reading wrong 

Please read the extract from ASX published today.


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## oldblue (4 February 2009)

The bottom line profit is impacted by " impairment writedowns " totalling almost *USD4.7b*.
This is a non-cash item of course and the co claims that the underlying business is doing well in terms of cash flow and profitability.
Most of the USD4.7b relates to a write down of the Ravensthorpe operation. It's arguable as to how one should view this - I suspect that accounting rules require it to be done this way - will we see a writeback of value if/when Ravensthorpe becomes operational again?


----------



## oldblue (4 February 2009)

Well, it looks like the market was pretty happy with the result.

BHP's SP up 1.6% at this stage, doing rather better than the market as a whole.


----------



## nunthewiser (5 February 2009)

Has entered BHP short at 31.34 today . silly move? . gotta love a rise on a 50% profit drop ....... blessem

ps . normal stoploss rules apply ... overnight to longer term 
position


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## Sean K (5 February 2009)

nunthewiser said:


> Has entered BHP short at 31.34 today . silly move? . gotta love a rise on a 50% profit drop ....... blessem
> 
> ps . normal stoploss rules apply ... overnight to longer term
> position



Looks good if the $32 resistance level is defeated _yet again_. Overall market trend is down, so a high probability move imo. Would want to bail if that $32 mark is broken and held.


----------



## nikemi (5 February 2009)

nunthewiser said:


> Has entered BHP short at 31.34 today . silly move? . gotta love a rise on a 50% profit drop ....... blessem




And that still incorporates timeframe where demand was high, and on top of bleak outlook picture they painted. Last quarter it was weak short term outlook with positive medium term, this quarter it is weak short and medium, at that rate....

Also i don't understand why everyone keeps ignoring the write off of Ravensthorpe mine as if it is another company's wirte off. What's the guarantee that there won't be any other "once off" mines closed in the next half if things don't get better the cost of that is worse than any other high production cost.


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## nunthewiser (6 February 2009)

Doubled short at 32.20 ....... mmmmmmmmmm .....maybe VERY VERY silly ... gawd i gotta do something about this suicide gene i inherited from the bishop


----------



## sails (6 February 2009)

nunthewiser said:


> Doubled short at 32.20 ....... mmmmmmmmmm .....maybe VERY VERY silly ... gawd i gotta do something about this suicide gene i inherited from the bishop




I seem to remember you are sometimes a day early - hopefully so this time!  Anyway, good luck with the trade...


----------



## vincent191 (6 February 2009)

Look at RIO, I sold out last week at $41....look at it this week. I am afraid to sell BHP, afraid that it may do another RIO and keep going up.

I know it is a different kettle of fish but I really don't know what to expect. Your views???


----------



## Sean K (6 February 2009)

Rudy in the EW thread posted an EW chart that looked like a potential break up to highs but later poo poo'd it for some reason.

I still think if $32 breaks and holds we'll probably see an upward thrust, which goes against the other EW analysis of the XAO which they say points down. 

Just on BHPs movements, I'd have to consider a long on the break disregardless of the XAO or EW predictions.

Longer term BHP looks like a bearish flag but short term looks positive, and the previous H&S maybe still in play.


----------



## Sunder (6 February 2009)

To be honest, I'm tempted to go long on BHP. 

China's steel production rose for the first time in 6 month. Statistical artifact, or the start of the next growth spurt?

I'm not in yet, but going to be eyeballing BHP and RIO closely for a while... If this is not a statistical artifact, what other shares would benefit from a rise in Chinese steel production?


----------



## nikemi (6 February 2009)

vincent191 said:


> Look at RIO, I sold out last week at $41....look at it this week. I am afraid to sell BHP, afraid that it may do another RIO and keep going up.
> 
> I know it is a different kettle of fish but I really don't know what to expect. Your views???




BHP has already been going up since 27.40, whatever that indicates...... 
I don't think any one can give you advice on what to do as it depends on your strategy and entry and exit targets, but when i persanally face decisions like that i always ask myself one question - will i be more sorry if i exit now at a profit (presumably) and it carryes on further or will i be more sorry if i don't exit and possibly let some profits evaporate if it goes the otherway or even let a  winning trade become a looser, and how i would answer this question to myself will drive my decision.


----------



## M34N (6 February 2009)

nunthewiser said:


> Doubled short at 32.20 ....... mmmmmmmmmm .....maybe VERY VERY silly ... gawd i gotta do something about this suicide gene i inherited from the bishop




I personally think a short on RIO or FMG may be better, they've had phenomenal runs this week and may even seem overbought (to some). Blame the bishop when things don't go your way, huh?


----------



## nunthewiser (6 February 2009)

M34N said:


> I personally think a short on RIO or FMG may be better, they've had phenomenal runs this week and may even seem overbought (to some). Blame the bishop when things don't go your way, huh?




 was long on FMG up till yesterday and figured they had helped the collection box enough as it was  BHP hasnt donated in at least a week so figured it was time for them to cough up 

yeah that bishop has got a lot to answer for i reckon


----------



## shag (6 February 2009)

im stupid enough to be long on bhp since last failed break of 32.
not a strong finish today too me, but people need to dump their monies somewhere and bugger the banks.
i like the cape ships report.
bhp wont cream the iron ore market, but even a 40pc cut in prices and they will cut a good profit.
u hope all of chinas roads to knowhere etc soak up plentyof cheaper ore.
like build it all now and i9ts way cheaper.


----------



## Sean K (7 February 2009)

shag said:


> im stupid enough to be long on bhp since last failed break of 32.



Doesn't look so stupid at the moment shag. The 28 zone found support again making it harder to beat the next time. Has just kept it's head above 32 which I though was very importat on the 6 mth and 3 yr charts but 1 yr 34 looks equally important, and Nick is saying 33. This chart has a lot of resistance confluence around the same points, but it's not semilog, that may change things a little.


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## dirty_harry (7 February 2009)

Up in US last night. = 33.59 AUD equivalent
BHP 45.44 Close Price  3.04 (+7.17%)

********************


----------



## outback (7 February 2009)

The old girl is languishing a bit, if it can hold it's head above $32ish to create some support there, we may get some clear air for a while. It just never seems to get there though.


----------



## Garpal Gumnut (7 February 2009)

These are pessimistic times and I'm quite bearish re BHP and believe it could get as low as $12.

This is the only decent support resistance line in the last 7 years.

If it goes below that we are looking at $8-9 as support.

The chart shows a monthly from 1987. I've been generous with the trendline, its worse if you match it up with the lows, so I've hitched it on the closes.

As Kennas mentioned its a semilog which is often better for observing RIO and BHP.

Oh and that $12 may not be this year.

gg


----------



## rustyheela (7 February 2009)

spi futures up 85, strong wall st, mite give resistance at $ 33.20 a nudge and maybe/ hpefully if it can on reasonable volume, hold and possibly push further, but if i was to buy it would probably tank!!


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## shag (8 February 2009)

one thing you have to remember is china needs australia as much as aus needs china presently. the worlds resources are all finite, and aus has a lot of good dirt and sea.
if china doesnt keep its gdp looking ok and look after aus somewhat, not only will they lose face, but 'friends' and opportunities. and we all know they plan for millenia.
i'd love the big australian to hold the 30's, but i don't see it going down past twenty. it held at 24 solidly in pretty desperate times. if its hits 12 then i doubt anyone will be reading this blog.


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## nunthewiser (9 February 2009)

Well done all you longies  

Has placed 3rd and final short entry . 33.50 

gives an avereage of around 33 

the bishop is adament that he,s onto a winner so he at one with a slightly larger than average overall position size and at one with taking an overall larger loss.



amen


----------



## M34N (9 February 2009)

nunthewiser said:


> Well done all you longies
> 
> Has placed 3rd and final short entry . 33.50
> 
> ...




That bishop is adamant, isn't it?

Not so sure on the shorts yet, you expecting the Dow to plummet soon? This rally could last a bit longer and I reckon if this stimulus package passes tonight, it may well lead to that big rally. I agree eventually the short will work out in your favour, but why not wait and short at a higher price? Why the rush?


----------



## nunthewiser (9 February 2009)

M34N said:


> That bishop is adamant, isn't it?
> 
> Not so sure on the shorts yet, you expecting the Dow to plummet soon? This rally could last a bit longer and I reckon if this stimulus package passes tonight, it may well lead to that big rally. I agree eventually the short will work out in your favour, but why not wait and short at a higher price? Why the rush?





will be out if it clearly breaks 34 

im often a "support and resistance trader , hence the staggered entrys 

i often do it when going long also

i can never pick the "exact " tops and bottoms hence the stagger entry at times 

i can pick the exact entrys the day after tho 

no rush , just a trade on what is in front of ME 

prolly wrong and happy to wear it also


----------



## nikemi (9 February 2009)

M34N said:


> That bishop is adamant, isn't it?
> 
> Not so sure on the shorts yet, you expecting the Dow to plummet soon? This rally could last a bit longer and I reckon if this stimulus package passes tonight, it may well lead to that big rally. I agree eventually the short will work out in your favour, but why not wait and short at a higher price? Why the rush?




M34N,

you assume that passage of the stimulus will lead to a big rally, the last few passages actually resulted in sell offs, yes there were rallies just prior to that but when it eventually passed there were no rallies, yet this time might be different, though listening to various commentaries analysts don't seem too excited about how effective they think this stimulus will be.


----------



## M34N (9 February 2009)

nikemi said:


> M34N,
> 
> you assume that passage of the stimulus will lead to a big rally, the last few passages actually resulted in sell offs, yes there were rallies just prior to that but when it eventually passed there were no rallies, yet this time might be different, though listening to various commentaries analysts don't seem too excited about how effective they think this stimulus will be.




I don't assume the market WILL rally, just that it MIGHT rally. You are correct that it may well go down, and looking at the Dow futures right now, the markets will open down 90 points, but the markets find any excuse to rally or collapse just as hard. My point more-so was why bet on it failing when you may just as well go to the casino and pick red or black?

But nun is, from my observations, pretty good at picking swings (crazy bast*rd , so I was more curious why he picked BHP and why to short it when it's actually only gone higher lately. I still personally think other stocks may provide a better opportunity to short in the next few days, always interesting to hear what other traders do and why. Maybe nun is just a glut for punishment... would explain some of the 'themed' posts he makes in other thread


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## mitch87 (9 February 2009)

Garpal Gumnut said:


> These are pessimistic times and I'm quite bearish re BHP and believe it could get as low as $12.
> 
> This is the only decent support resistance line in the last 7 years.
> 
> ...



$8, or $9??? i know your charting may rise the possibility of this but certainly the realistic value of bhps assets equate to far more than even $15 ps, even if the market was to bottom at around 3000, maybe 2800 which i think is possible, but def not certain, bhp may trade at $15, but if bhp were to ever trade at $8 in the near future, well i think pigs will fly, china and india and japan and the usa would need some sort of  meteorite to wipe them all out and then we might see them levels with bhp


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## aleckara (10 February 2009)

mitch87 said:


> $8, or $9??? i know your charting may rise the possibility of this but certainly the realistic value of bhps assets equate to far more than even $15 ps, even if the market was to bottom at around 3000, maybe 2800 which i think is possible, but def not certain, bhp may trade at $15, but if bhp were to ever trade at $8 in the near future, well i think pigs will fly, china and india and japan and the usa would need some sort of  meteorite to wipe them all out and then we might see them levels with bhp





The banks have gone back to pre-boom levels. I can't see why in a commodity downturn we can't go back to preboom levels either for BHP. Its assets are only worth what they can generate and if they don't generate as much cash well then the company is worth less.

Not sure about their cash position and their build up of assets over the boom though. I think that BHP and RIO were slow to react to the boom so I would imagine they were slow to develop the assets as well.

I do agree with one the posts earlier though. It is a tempting short just that the market seems to be going in random directions lately, range trading. BHP is about to break a resistance or bounce off it? I might just wait and see.


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## shag (10 February 2009)

the banks trade in bad debts, at the very least BHP has oil, gold and power.
whatever happens uranium must hold up to some extent, china etc will build nuc stations to feed the recession.


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## aleckara (10 February 2009)

shag said:


> the banks trade in bad debts, at the very least BHP has oil, gold and power.
> whatever happens uranium must hold up to some extent, china etc will build nuc stations to feed the recession.




Just like the banks though the expected value of the aggregate of their assets is now worth less. It is a downturn and the share didn't hit $34 until 2006 and rebounded to this level in 2007. Back then the commodities bubble was in full force with the euphoria. The commodities boom has been longer than that by far and now that it has crashed it is still lingering there.

I think that BHP is at best at fair value and it will stay in this trading range. I am thinking of shorting right now although in this market it is hard to predict anything. Of course I could be entirely wrong on this.  It did gap higher than yesterday and close lower.


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## enigmatic (10 February 2009)

However do you actually believe we have fallen below pre-Boom commodity prices and demand i dont think so, what assets have BHP acquired since such time and what new mines and plants have BHP established since pre-boom.

I highly believe that the increase in supply and demand which BHP has obtained has increased significately over the boom while the banks supply and demand have had a trickle down effect of the boom so there increase has not been as significant.

Looking over prices of commodities alot have only dropped to 2006-2007 prices and I'm sure BHP was making an arm and a leg in 2001 with the prices back then


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## Sean K (13 February 2009)

$32 grimmly holding on, but looks untidy.

$34 proving too hard.

Still in potential breakup position, but the shorts will probably have their day here unless there's some really positive news for BHP or market moves to catapault them through this Great Wall of China at 32-34.


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## nunthewiser (17 February 2009)

just checkin in to see how its all going........... sure doesent want to make a clean break north this lil darlin ....... any chartists got any views on it now ?

blessem


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## Boggo (17 February 2009)

nunthewiser said:


> just checkin in to see how its all going........... sure doesent want to make a clean break north this lil darlin ....... any chartists got any views on it now ?
> 
> blessem




I definitely would not class myself as a chartist but I did have a look at BHP this arvo and drew this up to print and stick on my cork board.

Its stating the obvious regarding the two levels I think, where it will go ????

Thats my  worth.

(click to expand)


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## nunthewiser (19 February 2009)

The bishop has filled the collection plate for now and reckons you longies can have a go for a couple of days instead

he would like to thank you for all opinions and chart help and will be waiting to jump back on at any given moment 

he thinks a small bounce due b4 continuing south so he will catch it agin when he see,s fit

amen


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## M34N (19 February 2009)

nunthewiser said:


> The bishop has filled the collection plate for now and reckons you longies can have a go for a couple of days instead
> 
> he would like to thank you for all opinions and chart help and will be waiting to jump back on at any given moment
> 
> ...




Agree, bounced off $30.00 support twice now, think it will shoot higher tomorrow so went long on a little just to get a few $$

Think it can go as high at $32.00 before next drop? nice 7-8% range from there if so


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## nunthewiser (25 February 2009)

mmmmm ok .just thought i,d see how it was all going ....... the bishop sends his regards and wonders how chartists view the current prices ........ we heading for 24ish next ? or we at another bounce area ?

sure has been a bewty so far tho


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## rustyheela (27 February 2009)

went X div few days ago, would think it would probably drift through lack of interest next few weeks / month. consolidate perhaps? still making higher highs and higher lows, maybe a positive sign of gettin up a head of steam? would need to break $ 33.85 on good volume to arouse interest from punters i would suspect. trend is ya friend!!


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## gfresh (27 February 2009)

Sitting right on the bottom of the channel formed since mid-October.. If it breaks down, it shall be decisive, and could well be decisive on our index as a whole towards 2800 or so. 

MACD seems to tipping downward and losing strength, and MMA showing some bearish signs.  If I'd have to guess anything, I'd say going down short-term. 

London BLT is showing down -1.65%  at present.


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## Garpal Gumnut (27 February 2009)

gfresh said:


> Sitting right on the bottom of the channel formed since mid-October.. If it breaks down, it shall be decisive, and could well be decisive on our index as a whole towards 2800 or so.
> 
> MACD seems to tipping downward and losing strength, and MMA showing some bearish signs.  If I'd have to guess anything, I'd say going down short-term.
> 
> London BLT is showing down -1.65%  at present.




Agree and thanks, I'll wait for it to go down, then trade up, a long trade on RIO recently saved my portfolios bacon.

Aint life tough.

gg


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## noirua (2 March 2009)

Having fallen today to $27.68, BHP seem to have moved down to a price range of $25 - $30.  With a yield of 4% that should easily be covered, they look firm enough with interest rates tumbling.
I doubt BHP will make a dip for RIO with Chinalco paying over the odds.  Should be an opportunity to pick some bits off though.


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## MaverickTrader (13 March 2009)

Do you think BHP is a good buy for a 1st timer? I'm think of scratching up a little money and getting into the sharemarket and am thinking BHP and RIO Tinto

And advice will be appreciated.


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## rustyheela (14 March 2009)

huge well diversified company, massive cashflow & cashed up is trading in a range from around $ 26 - 32 bucks in last six months. u could average in?

oil and copper are usually first 2 commodities to turn and they have enough of the stuff


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## nunthewiser (19 March 2009)

> Union wants all BHP sites in WA closed after mine deaths
> 
> 19th March 2009, 14:45 WST
> 
> ...




http://www.thewest.com.au/default.aspx?MenuID=77&ContentID=131013


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## Sean K (20 March 2009)

Expanding triangley wedgey thing happening here. Don't these end in tears? Or, am I dreaming and all's good?


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## Mr Capital (20 March 2009)

End in tears for memory.

I'll Probably lock in some profits come days end & may re-enter just to see if it can push higher come Monday, i need to recoup some FMG losses


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## Sean K (24 March 2009)

Mr Capital said:


> End in tears for memory.



I wonder how important $34 is to this overall view. If we break through confidently, there should be less technical selling you'd assume. Well, I hope anyway...


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## investedz (24 March 2009)

kennas said:


> Expanding triangley wedgey thing happening here. Don't these end in tears? Or, am I dreaming and all's good?




The AUD is bouncing back up. Right now its past USD 70c (from 68c earlier this week), and up 4.83 chinese yuan (from 4.60 last Wed).

At this rate it could mean less buying of ores from the Chinese, and could be a reason for a bear trend @ 35/36 to happen after the resistance line.


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## shag (24 March 2009)

well it was pretty obvious it would come back-the aus/yank dolla. even to me.

kennas i'd say thats a resounding pass thru 34, like its 34 and a couple of cents....thats pretty good with all u b.rstards shorting the thing and likely naked selling it.....
u're all probably spreading false rumors too....

i at least have faith the boat will sail along before it goes to davey jones's locker.


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## outback (24 March 2009)

I jumped ship, they reckon I can't go broke making a profit. We'll see I guess.                                                                                                                                                                                                                                                                                                                       .


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## Sean K (27 March 2009)

Tentative signs that it's going through.

Just a heads up.

I have no confidence until the $34 mark is blown away, or tested as support.

At that time, will add to my small investment.

Wish I was one of those taking a risk down at $20. 

Arggghhhhh!!!!


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## nunthewiser (27 March 2009)

PERSONALLY starting to look towards the SHORT side again (last one smacked me in the chops)............. not entered as yet but watching like a hawk

but for a few of my latest calls on the forums one would be prolly better off going the opposite way


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## Smashing (27 March 2009)

I got in at 25.590 had some extra cash at the time only wish I had got more.

Been watching this thread being a noob in the stock market game I don't understand all of what has been said but it has been good reading, Thanks for all the charts btw.


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## M34N (27 March 2009)

nunthewiser said:


> PERSONALLY starting to look towards the SHORT side again (last one smacked me in the chops)............. not entered as yet but watching like a hawk
> 
> but for a few of my latest calls on the forums one would be prolly better off going the opposite way




Hope you shorted nice and early today on this one, nun. Maybe time for a few days down before the last gasp up? 

As you say mate, bless'em.


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## Hank Moody (28 March 2009)

yeah i am looking at shorting this on monday..... it seems to have had a nice trend of 28 - 32 over the past few months. I think this break through will be short lived dropping back down to $30 mark, however after that if it can through the $34 mark again i think it will begin a new range of $32 - $36


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## MaverickTrader (30 March 2009)

I'm thinking BHP might be my first buy. I'll watch closely over the next few weeks and hopefully get on at the right time


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## M34N (31 March 2009)

Hank Moody said:


> yeah i am looking at shorting this on monday..... it seems to have had a nice trend of 28 - 32 over the past few months. I think this break through will be short lived dropping back down to $30 mark, however after that if it can through the $34 mark again i think it will begin a new range of $32 - $36




Agree, will look to close short quick on this since the markets turn quickly and there is a lot of support for stocks like BHP when things turn positive. Looking at an exit at around $32 at the very least, but expecting a drop to around $30-31 and support to hold there for this down leg. Depends on the volume/price movements and watching US futures closely in case some miraculous bailout of GM/Chrysler eventuates and there's a sharp rally up. 

More than happy to go long as soon as the tide turns... just following the masses still.


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## Hank Moody (31 March 2009)

M34N said:


> Agree, will look to close short quick on this since the markets turn quickly and there is a lot of support for stocks like BHP when things turn positive. Looking at an exit at around $32 at the very least, but expecting a drop to around $30-31 and support to hold there for this down leg. Depends on the volume/price movements and watching US futures closely in case some miraculous bailout of GM/Chrysler eventuates and there's a sharp rally up.
> 
> More than happy to go long as soon as the tide turns... just following the masses still.




Rumors are floating of another RIO bid, not sure how this will affect the price though........

I am concerned though as you said, BHP is one of those stocks people rally behind when the market gets good news and turns up.

Am starting to worry that my target price of $31 might be a bit to optimistic


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## M34N (31 March 2009)

Well I just closed my short before at $32.10 for a $2.00 gain, something funny-buggers is going on and I suspect the US markets are going to rally tonight, may be some news coming out about GM or something providing a boost for the markets so not interested in holding and to get stopped out much higher.

A lot of other resource stocks pulling higher, signals to me a turn higher tomorrow.


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## nunthewiser (31 March 2009)

> Iron ore miners 'agree to 40% price cut'
> 31st March 2009, 15:10 WST
> 
> Rio Tinto Ltd and BHP Billiton Ltd have reportedly agreed to a temporary 40 per cent cut to iron ore prices, China's steel mills say.
> ...




i did have a gloat post earlier but it was a worthless adition to this thread and was removed 

fair enough , it was just a gloat after all 

however . this one not so worthless 


ANYONE . ......... anyone consider  the ramifications of these price negotatiations on BHP bottom line seeing as they already got there profit hammered on last report and THAT was on boomtime prices ??

do people still regard BHP as an investment stock at these levels?

Not intrested in trade ideas as already got my own , mainly tryting to guage ppl,s confidence in this stock as a blue chip investment


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## wonderrman (31 March 2009)

I sold my piece at 34.4. Chart attached, most likely a part of a large push up but I would like to play it safe in these bitchy markets.







wonder.



> Not intrested in trade ideas as already got my own , mainly tryting to guage ppl,s confidence in this stock as a blue chip investment




Sorry didn't see your edit until I posted. cheers.


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## nikemi (31 March 2009)

nunthewiser said:


> i did have a gloat post earlier but it was a worthless adition to this thread and was removed
> 
> fair enough , it was just a gloat after all
> 
> ...




I have considered BHP overpriced since it jumped above $25. 

Not sure how many people realise that a price reduction of 40% requires future increase of 66.67% to only get back where it started ....


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## S73417H (2 April 2009)

I too believe that BHP is currently over priced. I'm more confident that it will test the $25 mark once again rather than continue it's upward trend. Can't see it hitting $20 but hey, anything is possible.


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## Sean K (3 April 2009)

wonderrman said:


> I sold my piece at 34.4. Chart attached, most likely a part of a large push up but I would like to play it safe in these bitchy markets.



Was a good move at the time. Failed on queue, again. Did you change it for a short?

Going though again, intraday, but I must say, I have no confidence in it keeping above the $34 line, it's disappouinted again and again around this level. 

Anyway, I'm waiting to see how it goes here. Breaking through this level may be quite significant I think.


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## wonderrman (3 April 2009)

kennas said:


> Was a good move at the time. Failed on queue, again. Did you change it for a short?
> 
> Going though again, intraday, but I must say, I have no confidence in it keeping above the $34 line, it's disappouinted again and again around this level.
> 
> Anyway, I'm waiting to see how it goes here. Breaking through this level may be quite significant I think.





Gday didn't switch it for a short just got out with the nice profit. She's been in this trading range for a while so any breakout above the resistence would send it alot higher you would think. We'll see how it goes, if he heads back to the $29 mark again and turns up I'll probably get my toes wet. cheers.


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## outback (3 April 2009)

It took a few attemps to get through $32.00, it appears to be the same for the $34.00 level. I took the profit, and am waiting for a retreat to something closer to $30.00, then in again for the next push up.


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## wonderrman (23 April 2009)

BHP chart looking pretty good again for a break of $34. 

Chart enclosed, next significant resistence line is ~$40. 






wonder.


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## nikemi (23 April 2009)

wonderrman said:


> BHP chart looking pretty good again for a break of $34.
> 
> Chart enclosed, next significant resistence line is ~$40.
> 
> ...




Just curious why would you say it looks good, with a lower top and a lower bottom?! Can you please provide some analysis


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## nunthewiser (23 April 2009)

LOL personally hope not as still shorting this sucka .........


i saw in one of those chart book thingo,s that perhaps its latest pattern maybe known as a crown top thingo , or something also , but i wouldnt listen to me on it as i dont know the lingo


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## Sean K (13 May 2009)

Nun, this short is looking ordinary, have you covered, or what?

Chart wise, this looks like long term material, until it breaks back down.

Like RIO at $30 ish, and BHP at $20 ish, what AWESOME short term opportunities!!!!!


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## nunthewiser (13 May 2009)

kennas said:


> Nun, this short is looking ordinary, have you covered, or what?
> 
> Chart wise, this looks like long term material, until it breaks back down.
> 
> Like RIO at $30 ish, and BHP at $20 ish, what AWESOME short term opportunities!!!!!





yes its been a rather ordinary trade so far , definately not lighting the skies as yet ......still in trade........ lol my view on bhp is the latter of your statement and PERSONALLY expecting a major break downwarrds

cheers


----------



## clayton4115 (13 May 2009)

my personal view would be bearish on this stock, but its hard to analysis the support on this one, looks like $31.20 is support?


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## nunthewiser (14 May 2009)

for what its worth ...... i have closed original 33.10 entry on BHP short . leaving the other 2 parcel entrys to ride .

my first 33.10 entry was not a smart entry and happy to be shod of it .


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## investorpaul (14 May 2009)

Im going short on BHP once it closes below $32. 

I feel we are going to see some sustained profit taking across all stocks given the performance of the market so far this week.


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## nunthewiser (14 May 2009)

investorpaul said:


> Im going short on BHP once it closes below $32.
> 
> I feel we are going to see some sustained profit taking across all stocks given the performance of the market so far this week.





dont get me wrong im still short at present and holding at a 34.95 average , but i like to call it 35 as it sounds better .. just wanted to get out of one parcel that was annoying me and been dragging things down .
personally think maybe it even due for a minor bounce shortly and will maybe add to position IF it happens


crashnburn BHP for tossa nuns i say


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## M34N (14 May 2009)

M34N said:


> Hope you shorted nice and early today on this one, nun. Maybe time for a few days down before the last gasp up?




That gasp lasted for much longer than I expected, but it seems to be over for now anyway.

Well done as usual nun, always picking the turn of the tide. Expecting a sharp short rebound now? I think a lot of confidence has been shot out of the market over the past few days so I agree with adding to shorts at any sign of a weak rebound... I personally wouldn't be surprised to see $28-26 target range hit in the next couple months.

Only long on NCM right now, looking at gold to outperform but not putting the house on it.


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## johnnyg (15 May 2009)

nunthewiser said:


> dont get me wrong im still short at present and holding at a 34.95 average , but i like to call it 35 as it sounds better .. just wanted to get out of one parcel that was annoying me and been dragging things down .
> personally think maybe it even due for a minor bounce shortly and will maybe add to position IF it happens
> 
> 
> crashnburn BHP for tossa nuns i say




Do you risk a certain % of your capital per trade nun? With your exiting of 1 parcel, does this mean you brought say 3 lots at $34.95, exited one yesterday and will remain to hold the other 2 or did you divide your original parcel say into 1/3's and sell 1/3 yesterday?

Cheers John.

(Edit - I see you purchased @ 33.10 so there was an averaging into your $34.95 average price?)


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## nunthewiser (15 May 2009)

johnnyg said:


> Do you risk a certain % of your capital per trade nun? With your exiting of 1 parcel, does this mean you brought say 3 lots at $34.95, exited one yesterday and will remain to hold the other 2 or did you divide your original parcel say into 1/3's and sell 1/3 yesterday?
> 
> Cheers John.
> 
> (Edit - I see you purchased @ 33.10 so there was an averaging into your $34.95 average price?)





on this trade BECAUSE of my original first entry at 33.10 i risked 6% of my TRADING capital , not overall capital .TRADING capital .before anyone replys saying blah blah blah do this do that , i was fully aware of the larger than normal risk loss , was my own fault through hasty entry and fighting a strong trend, not a normal practise exposing that much capital.

overall my entrys were at 33.10,34.45, 35.50 and was happy to drop the first parcel yesty at a small win 

i often phase in over various prices on trades as im not one of these folks that can pick the exact tops and bottoms but can get it fairly close usually

often phase out my exits also


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## johnnyg (15 May 2009)

Thanks for the reply nun, I wont be telling you how to trade your money. Was just curious on your entry. Will you be moving stops to B/E now for the other 2 parcels?


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## nunthewiser (15 May 2009)

johnnyg said:


> Thanks for the reply nun, I wont be telling you how to trade your money. Was just curious on your entry. Will you be moving stops to B/E now for the other 2 parcels?





no worries ..... nope 34 ish will see me out , and locking in a win , then will redo it all again OR assess the situation around 35 ish up .......

with the benefit of hindsight trading i coulda covered yesty and rentered later tho .... gunna get me a hindsight crystal ball one day


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## Tukker (31 May 2009)

So BHP is bouncing around a bit, but gaining new supports as it trends upward.  Maybe a drop on Monday to test the support again.  I'm looking to make another entry at $33 if it heads that way.


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## jonojpsg (1 June 2009)

Tukker said:


> So BHP is bouncing around a bit, but gaining new supports as it trends upward.  Maybe a drop on Monday to test the support again.  I'm looking to make another entry at $33 if it heads that way.




Alternatively, it looks like a triangle formed over the past two weeks - this has now been broken out of, at least so far today.  Don't reckon it will test $33 again for a while IMO.


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## Stpt (1 June 2009)

The chart suggests that BHP will remain a bullish long side trade on an upside breakout of the wedge and a bearish short side trade on a downside break. Could go either way. A nice one to watch develop.


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## Stpt (1 June 2009)

BHP looks bullish on an upside breakout and bearish on a downside break. Has to go one way or the other soon. Nice one to sit back and watch develop.


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## Sean K (1 June 2009)

I thought $34 was a change of the tide, and it's taken some time for that to be supported, but it looks to be.

But, who is to say?


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## Stpt (2 June 2009)

BHP is current making a rising wedge pattern........blue sky territory kicks in above $36.30. 

Thanks


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## nunthewiser (2 June 2009)

he he he 


um .guess what 

silly ole nun jumped back on BHP short today at 3658 ........now where did i put that stoploss button ?


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## Sean K (2 June 2009)

nunthewiser said:


> he he he
> 
> 
> um .guess what
> ...



Good luck!

Hm, well, actually, I just doubled my holdings in it. Holding above $34 just looks too good to me. 

So, :

Will fall over now of course.


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## nunthewiser (2 June 2009)

kennas said:


> Good luck!
> 
> Hm, well, actually, I just doubled my holdings in it. Holding above $34 just looks too good to me.
> 
> ...




good luck with it m8 

my entry just a low % loss entry on stopout point ......... thats all ....... i do have a strange facination for this BHP channel , one day it may even bust out of it properly and that will be the end of my bread and butter on this one


----------



## nunthewiser (2 June 2009)

nunthewiser said:


> he he he
> 
> 
> um .guess what
> ...




just added to position at 37.00 ..... WILL be stopping out of all entrys at 3750 no if buts or anything ......


----------



## Sean K (5 June 2009)

Hooly dooly!!!!!!!! 

Will the government allow this?

Bad news for the juniors maybe. Or, maybe not. 

Press release

*Rio Tinto and BHP Billiton announce West Australian Iron Ore Production Joint Venture*
5 June 2009

Rio Tinto and BHP Billiton today signed a non-binding agreement to establish a production joint venture covering the entirety of both companies’ Western Australian iron ore assets. The joint venture will encompass all current and future Western Australian iron ore assets and liabilities and will be owned 50:50 by BHP Billiton and Rio Tinto.

The joint venture is expected to unlock significant value from the companies’ overlapping, world-class resources. Both companies believe the net present value of these unique production and development synergies will be in excess of US$10 billion (100 per cent basis). These substantial synergies are anticipated to come from:

• Combining adjacent mines into single operations;
• Reducing costs through shorter rail hauls and more efficient allocations of port capacity;
• Blending opportunities which will maximise product recovery and provide further operating efficiencies;
• Optimising future growth opportunities through the development of consolidated, larger and more capital efficient expansion projects;
• Combining the management, procurement and general overhead activities into a single entity.


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## nunthewiser (5 June 2009)

kennas said:


> Hooly dooly!!!!!!!!
> 
> Will the government allow this?
> 
> ...





Personally thinks this a GREAT step for Australia ....... keep it ozzie owned , keep control of OUR resources 

the goverment would be silly NOT to let it go through and totally unpatriotic

ozzie ozzie ozzie 

go BHP for holders!


----------



## skc (5 June 2009)

Was there any mention of the marketing and sales function? The Chinese won't like it. 

It is proving good for the juniors. Every iron ore share is spiking up.


----------



## shag (5 June 2009)

no ones going to stop this one
its too big, too much dosh. too many involved. bit like trying to stop an ore train.
must be good for the economy. so many synergies too.


----------



## waz (5 June 2009)

I wish this announced before market opening and not at 10:16

It screwed up my shorts that I opened at about 10:10am (at this time it shot up)

I get the feeling it was leaked out to a few select people first.


----------



## Absolutely (5 June 2009)

Gotta be good for juniors. Chinese will want to invest in startups to create new competition ASAP.

I hope anyway.


----------



## VViCKiD (5 June 2009)

Shame RIO is in trading halt now. Would be good to see this one rocket as well .. Any one care to take a guess as to what price range RIO will open on Tuesday ?


----------



## cutz (5 June 2009)

waz said:


> I wish this announced before market opening and not at 10:16
> 
> It screwed up my shorts that I opened at about 10:10am (at this time it shot up)
> 
> I get the feeling it was leaked out to a few select people first.




Ouch, that would have hurt, RIO was already in a trading halt and there has been speculation lately that BHP would get involved.

Hope it didn't do to much damage.


----------



## shag (5 June 2009)

its probably good for the juniors in regaurds to the lines also. they can all get interconnected and cover much more area and be easier to manage logistically. plus with one massive company laying track, it must go down faster.


----------



## Sean K (5 June 2009)

Maybe for the juniors it means the Chindianese are going to start gobbling them up even faster to secure resources. Looks like what the market expects. There's some multi million/billion ton resources out there sitting solo. They must now be on the radar, now more than ever.


----------



## shag (5 June 2009)

after such a kick in the guts, might take them a while to get pragmatic again.
on virtually the anniversary of tianamin square too. be interesting how the iron ore talks r going....
either way, its grt for bhp and australia.
what a loss/dropped ball for chinalco(id say they got greedy) and shows how bhp played this all very well and got the prize in the end.


----------



## Largesse (5 June 2009)

shag said:


> after such a kick in the guts, might take them a while to get pragmatic again.
> on virtually the anniversary of tianamin square too. be interesting how the iron ore talks r going....
> either way, its grt for bhp and australia.
> what a loss/dropped ball for chinalco(id say they got greedy) and shows how bhp played this all very well and got the prize in the end.






too right, great result for australia.

really bothered me that we were selling our backyard so damn cheap


----------



## Mr_T (9 June 2009)

Can we please see some real fundamental analysis here? I'd really be interested in hearing the views of others.

My 5 cents: BHP is now trading on high p/e's (high teens). Given that its profitability will almost certainly decline next year, shouldn't there be a lot of downwards pressure on its share price?


----------



## SM Junkie (9 June 2009)

BHP are in rapid expansion. More port facilities, improving rail infrastructure, they are planning on moving a hell of a lot more product.

Why do you believe profitability would be in decline?


----------



## Mr_T (9 June 2009)

SM Junkie said:


> BHP are in rapid expansion. More port facilities, improving rail infrastructure, they are planning on moving a hell of a lot more product.
> 
> Why do you believe profitability would be in decline?




Lower commodity prices. In Australian dollar prices are now lower than what they averaged over the financial year.

There is almost zero chance that their profit will be anything but lower - even the most optimistic forecasts anticipate a profit fall. Lets not even go into the pessimistic forecasts...


----------



## Mr_T (9 June 2009)

This is from Comsec. Admittedly forecasts need to be taken with a pillar of salt, but given that the financial year is nearly over, figures for year ending 06/09 should be reasonably accurate.

Sorry about the formatting

 Year Ending 30-06-09                  --------- Year Ending 30-06-10 
          EPS(c)     PE          Growth --------- EPS(c)         PE         Growth 
Median 212.2       18.0         -25.6%            149.5         25.5       -29.5% 
High     237.4       16.1         -16.8%            222.0         17.2       -6.5% 
Low     151.2        25.3        -47.0%            130.5         29.3       -13.7% 
#
Number of Analyst 
Estimates 15  15


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## Nero64 (9 June 2009)

> Can we please see some real fundamental analysis here? I'd really be interested in hearing the views of others.
> 
> My 5 cents: BHP is now trading on high p/e's (high teens). Given that its profitability will almost certainly decline next year, shouldn't there be a lot of downwards pressure on its share price?




Some people buy the story not the balance sheet. 

Yeah it will be lower but when everybody else in the sector is going to be lower, who do you buy?

Think beyond the balance sheet.


----------



## Mr_T (10 June 2009)

Nero64 said:


> Some people buy the story not the balance sheet.
> 
> Yeah it will be lower but when everybody else in the sector is going to be lower, who do you buy?
> 
> Think beyond the balance sheet.




Not exactly sure what all that means. Nearly all assets have a price that is good, fair and bad. My question is which one of those BHP fits into at its current price.

The whole idea that you can ignore the fundamental indices of a stock such as its p/e ratio is absurd. OK, justify it on "expectation of drastically higher profits in the future" if you can, but it does need some justification.


----------



## gooner (29 June 2009)

I read in the paper that the UK shares are trading at 20% below the Australian ones. Does anyone know an easy way to buy the UK shares?


----------



## skyQuake (29 June 2009)

gooner said:


> I read in the paper that the UK shares are trading at 20% below the Australian ones. Does anyone know an easy way to buy the UK shares?




CFDs, IB... Commsec i think charges you $130 brokerage for overseas stuff...

But BLT.L has been trading at discount to BHP.AX for AGESSSS now. Although its dual listed the shares are non-convertable. The difference exists due to some taxation issues and other regulatory stuff... and the fact pommies have worse weather : D


----------



## gooner (29 June 2009)

skyQuake said:


> CFDs, IB... Commsec i think charges you $130 brokerage for overseas stuff...
> 
> But BLT.L has been trading at discount to BHP.AX for AGESSSS now. Although its dual listed the shares are non-convertable. The difference exists due to some taxation issues and other regulatory stuff... and the fact pommies have worse weather : D




Skyquake

Thanks - had not thought about the tax issue. If I am up for UK tax as well as well as Aussie tax, I might just stick with the local shares

Paper said the discount had blown out recently


----------



## Mr_T (8 July 2009)

Mr_T said:


> Can we please see some real fundamental analysis here? I'd really be interested in hearing the views of others.
> 
> My 5 cents: BHP is now trading on high p/e's (high teens). Given that its profitability will almost certainly decline next year, shouldn't there be a lot of downwards pressure on its share price?




At the risk of sounding like saying "I told you so"....

I TOLD YOU SO!!!!!!!!!!!!!!!!!!!!!!!!!!!
I TOLD YOU SO!!!!!!!!!!!!!!!!!!!!!!!!!!!
I TOLD YOU SO!!!!!!!!!!!!!!!!!!!!!!!!!!!


----------



## Tukker (27 July 2009)

Shares all around this behemoth seem to be still banking gains day after day while BHP sits in the corner all alone like he missed the boat and doesn't know what to do.  Would really like to see if the giant can break that titanium ceiling its been crouching under for ages, and soon.


----------



## WRONG'UN (27 July 2009)

Er, as of right now it's gained 20.7% off its 8 July low, in 13 and a bit trading days - that's an annualized rate of over 300% - and in that run there's only been one day when it closed below the previous day. Is there anything wrong with that? OK, BHP's a supertanker - sounds like you are looking for a jet-ski.


----------



## Sean K (27 July 2009)

Mr_T said:


> At the risk of sounding like saying "I told you so"....
> 
> I TOLD YOU SO!!!!!!!!!!!!!!!!!!!!!!!!!!!
> I TOLD YOU SO!!!!!!!!!!!!!!!!!!!!!!!!!!!
> I TOLD YOU SO!!!!!!!!!!!!!!!!!!!!!!!!!!!




This was about 8 July I think.

Oh dear. 



Doesn't pay to be too smug does it.

I suppose it could crash in the coming days and you can say it again.


----------



## skyQuake (27 July 2009)

kennas said:


> This was about 8 July I think.
> 
> Oh dear.
> 
> ...




lol, 8th July = swing lows; good run though

Lets see if your post coincides with the swing highs  :


----------



## Sean K (27 July 2009)

skyQuake said:


> lol, 8th July = swing lows; good run though
> 
> Lets see if your post coincides with the swing highs  :



 Could possibly, it's run pretty hard coming up to $38 resistance and the overall market is overcooked short term. Surely. 

I stand by my post pointing to the goosishness of 'I TOLD YOU SO' ing at the drop to $32. 

His original post on 9 June was:



> My 5 cents: BHP is now trading on high p/e's (high teens). Given that its profitability will almost certainly decline next year, shouldn't there be a lot of downwards pressure on its share price?



It did certainly tumble since then, but is back at the same spot. Let see...


----------



## Tukker (30 July 2009)

WRONG'UN said:


> Er, as of right now it's gained 20.7% off its 8 July low, in 13 and a bit trading days - that's an annualized rate of over 300% - and in that run there's only been one day when it closed below the previous day. Is there anything wrong with that? OK, BHP's a supertanker - sounds like you are looking for a jet-ski.




I guess i would just like to see BHP (and all the other behemoths) break this  super resistance they all seem to be stuck under. 

Im biased because ive been in the red for over a year with BHP (capital all locked up missing out on many other good trades). It would be really nice to my emotions to see a long term trend going again.


----------



## bigdog (5 August 2009)

http://www.businessspectator.com.au...for-BHP-pd20090804-ULAU8?OpenDocument&src=kgb

Commentary
5:36 PM, 4 Aug 2009   Robert Gottliebsen
The right man for BHP

Both Jac Nasser and John Schubert would have made excellent chairmen of BHP Billiton, but I am glad the BHP board chose Jac Nasser. At this stage of its development, the Commonwealth Bank needs the hand of John Schubert as chairman and it would not have been possible for Schubert to do justice to both positions. It will be a triumphant home coming for Nasser – one of the few Australians to become global CEO of a major international company.

Nasser is aggressive and likes to expand, which means that BHP will not be standing still, so don’t be surprised if BHP undertakes more acquisitions in 2010 and 2011.

I suspect it was Nasser’s global enterprise experience and his expansionary drive that made him the choice of Don Argus. The risk is that whereas Schubert is an experienced chairman in the Australian tradition, Nasser’s experience comes from the American tradition, which means that there will need to be some clear boundary-setting between Nasser and BHP CEO Marius Kloppers. This undoubtedly led some on the BHP board to favour Schubert. But Nasser’s position is not that different to the situation Argus found, when he shifted from being NAB chief executive to being chairman of BHP in 1999.

Argus would clearly love to complete the iron ore joint venture with Rio Tinto before stepping down. 

I wrote about the Argus legacy on July 21. We are going to see more garbage come out in some media about how Argus overplayed his hand in pushing to have the Rio Tinto deal with Chinalco overturned. As readers will know, it was Chinalco who overplayed their hand by trying to gain control of Rio Tinto and skewer BHP, with 600 pages of side deals. Once the Australian government understood how the side deals were constructed (and I am sure Argus played a role in making sure Canberra did understand the side deals) then there was no way that the Australian government would have agreed to the Rio Tinto-Chinalco deal as proposed.

Argus has had many fine hours, but my favourite was when he convinced the BHP board to show the then-CEO Brian Gilbertson the door, when Gilbertson tried to shift the head office to London, with a series of major takeovers.

Jac Nasser and Marius Kloppers will have to face more flak from China, who lost face in the failed Chinalco deal with Rio Tinto. But if the iron ore join venture goes ahead, then the combined company will have the lowest cost iron ore in the world and will be an enormous power house.


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## gfresh (7 August 2009)

Some reality for the ridiculous prices on BHP at the moment.. Wouldn't be surprised if the price comes off 10-20% in the next few months.

http://www.businessspectator.com.au...une-half-profits-to-plunge-UNBZU?OpenDocument



> *BHP, Rio Tinto June half profits to plunge*
> 
> By Sonali Paul of Reuters
> 
> ...


----------



## Mofra (7 August 2009)

gfresh said:


> Some reality for the ridiculous prices on BHP at the moment.. Wouldn't be surprised if the price comes off 10-20% in the next few months.
> 
> http://www.businessspectator.com.au...une-half-profits-to-plunge-UNBZU?OpenDocument




The question isn't if the profits plunge - the pertinent question is if the reduction is less than or greater than market expectations. I'd expect some drop in profit is already priced in.


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## johannlo (7 August 2009)

Good point mofra. That is the question indeed

But looking at some very rough figures pulled from aegies, they quote 19,000M NPAT for FY09 and EPS of 330 and PE of 11 which is a long way from 'ridiculously overpriced' at current prices?

Agreed it would have to be super bullish to think there wouldn't be some kind of retrace at this stage of the recovery and given the rally we've just experienced. But LT is it really 'ridiculously overpriced'?

Would it be foolish to assume that anything that's not unexpected in the upcoming report would result in a favourable reaction from the market? Seems to be the trend!!!


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## gfresh (8 August 2009)

Seeing as their reports are in $USD, we'll use this for the basis of comparison.. 

http://www.bhpbilliton.com.au/bbContentRepository/docs/annualReport2008.pdf

2008 Annual report, full year earnings per share was 275.3cps

We already known what the first half (financial) year brings:

http://www.bhpbilliton.com.au/bbContentRepository/docs/2008InterimResultsNewsRelease.pdf

page 1: *Basic earnings per share: 47c*
taking our exceptional items it is 110.1cps

So exceptional items really bring down the first half. Mine closures such as Ravensthorpe, various writedowns, funds spent on RIO takeover attempt, etc I assume. Maybe you can look past them, I don't know. 

Now if we look at like for like: 

2008 half year:
http://www.bhpbilliton.com.au/bbContentRepository/bhpbInterimResultsHyEnding31Dec07.pdf

*107.2cps after exceptionals.. *

From 107.2 to full year 275.3cps figure BHP obviously had a cracker in the 2nd half of that year, but in 2009 the 2nd half is likely to be well down, maybe less exceptionals this HY, but overall down. 

So overall, first of all you've got a reduction from 107.2c to 47c in the first half. Now the second half of this year is a little hard to tell exact prices fetched (still well down on the peak of late 07/early 08), but if we take a stab at say 100cps (optimistic).. 

100cps + 47cps = 147cps vs 275cps ($USD) or *46% down*.

If you read the article I posted as well (from reuters), you can see forecasts are saying more than a halving of profit as well, so many of the analysts are very bearish too...



> *BHP is tipped to book a second-half profit of around $US4.07 billion before one-offs, down from $US9.37 billion a year ago.*




If we take the aussie EPS (from Commsec) which reads 285.4 for 2008, and take 46% off that.. 154.12cps. $38 per share / 1.5412 = 24x earnings! Even if my figures are right off the mark, and closer to 200cps, $38 / 2 = 19x earnings. See why I may not be crazy thinking it's overpriced?? 

You can also take a look at another known with the production report for the full year out which shows pretty much flat production across most segments. With no increase in production, and an average reduction in prices (in some cases significant), where's the  extra profit coming from this year?

http://www.bhpbilliton.com.au/bbContentRepository/docs/2009Q2ProductionReport.pdf

Sure you can look at the future, and what may happen in future, with economies fully recovering quickly to 3% GDP, and other blue-sky events. These definitely aren't certainties yet.

Likewise, if you want to look forward, and read around, the next few months of the year may be a worry if China slashes business loans -- http://www.bloomberg.com/apps/news?pid=20601087&sid=a42KFUylZPog This may effect demand from miners such as BHP as Chinese companies may not have the funds to pursue big projects utilising steel, etc without funds on offer. Maybe that is just jawboning, but right up until June 2010, there's no guarantee of an improved outlook on profit for the year we are now in either. 

Maybe 2011/2012 will be good, but that's a long way to be looking out, and I'm sure in the price will dip at some point before then.. whether it's based on the profit of this year, or the uncertainty of next. 

We'll find out Wednesday though I guess the real numbers!


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## Sean K (8 August 2009)

Is gfresh Ducati's love child?



So many fundamental valuations on complex companies become unstuck it's hard to know where the spin starts and ends.

What chance does an internet avatar have?


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## skyQuake (12 August 2009)

Numbers worse than expected. SPI just got smashed on that... recovering though. 
lets see what happens in london tonite.

No buyback as well!


----------



## BSD (12 August 2009)

Numbers look stunning to me - take in the results preso. 

http://www.asx.com.au/asxpdf/20090812/pdf/31k1xr3z7klk1k.pdf

Who seriously cares where the numbers come compared to analyst consensus?

The future is what drives the stock and BHP is cum massive upgrades when the weak analysts step up and start chasing sport numbers with their wrong commodity price forecasts 

BHP just headlined US$1.92 EPS (about 16 times trailing) in a period of financial and economic chaos. 

Commodities are again going-up and BHP has 12% gearing and is probably due a stonking buy back

Go the Big Australian


----------



## Mofra (12 August 2009)

BSD said:


> Numbers look stunning to me - take in the results preso.
> 
> http://www.asx.com.au/asxpdf/20090812/pdf/31k1xr3z7klk1k.pdf
> 
> Who seriously cares where the numbers come compared to analyst consensus?



Surely that is above most expectations? Profit minus exceptionals down 30.2% is on the high side of information/expectations available on the world wide "inter-web".

Taking a rule of thumb AUD$1 = US83c EPS equates to 232c

At $37.99 ~ PE 16.4 which isn't hugely above sector ave of ~15 for a company with low debt and highly leveraged to any sort of recovery in commodity prices that have taken a battering over the past 18 months. 

Rewards outweigh the risks for in the LT for mine. Holding, not trading.


----------



## gfresh (12 August 2009)

I think it's pretty poor, while expected.. and actually lower than what I put above. It's no better or worse that many ASX200 companies, even our banks during a global financial crisis. A profit of -30% (-61% if you count these "exceptionals")  is still hard to take as being "good".



			
				mofra said:
			
		

> Rewards outweigh the risks for in the LT for mine. Holding, not trading.




Why not value it at $50, $60, $80, $100 ? Have to draw the line somewhere as to how far you want to look out and how much premium you want to give it for the future. 

I like the company, I just think there will be plenty of opportunities to buy at a fair bit lower than the current premium.


----------



## Miner (13 August 2009)

skyQuake said:


> Numbers worse than expected. SPI just got smashed on that... recovering though.
> lets see what happens in london tonite.
> 
> No buyback as well!




I do not hold but getting a hunch that the share price could go up actually after some initial drop

Why this guess : 

Because the profit has dived down so market will react

Then analysts will realise that underlying current is good, Rio BHPB JV will be pushed up, iron ore prices are going up, primary loss is due to Ravensthrope  write up - giving stainless steel a colossal loss,

If it was an ordinary company it would go for liquidation but BHP still has solid chunk of cash flow better than last year. That will be put back in large capital assets. 

I am no analyst and it is primarily looking into technical strength.


----------



## waz (13 August 2009)

0055 GMT [Dow Jones] BHP (BHP.AU), Rio (RIO.AU) expensive vs U.K. listings, says Southern Cross Equities Director Charlie Aitken. "BHP in Sydney now trades at a whopping 24% premium to Billiton in London, while Rio trades at an even larger 26% premium to its U.K. dual listing," says Aitken. "It concerns me that Australian investors, due to the larger index weights of BHP and RIO in domestic indices, are significantly overpaying for BHP and RIO in Sydney." Recommends investors switch to U.K-listed shares of both companies. BHP flat at A$37.61, Rio down 0.4% at A$57.67. (DWR)


I thought the above was interesting.


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## mfsperth (17 September 2009)

Clearly BHPB's corporate culture hasn't improved. It simply doesn't understand that what is good for Marius (a 50% wage rise announced yesterday) is good for any BHPB employee. Or in payouts for those who lost jobs in the nickel operations.


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## marketmania (22 September 2009)

*BHP Chart warning of reversal*

BHP Billiton Ltd (Australia) shows a cycle of 600 days cycle. It has come to kiss the trend line every 600 days since year 2000. So it has now, but this time from below the trend line. My guess is it will move down from here. 

"Do your own homework. I only give ideas"
Cheers


----------



## nunthewiser (7 October 2009)

*Re: Uranium companies on the ASX?*

in regards to BHP



> BHP's Olympic run stalledBARRY FITZGERALD
> October 7, 2009 - 12:55PM
> Production at Australia's biggest underground mine, BHP Billiton's Olympic Dam operation in outback South Australia, has been hit by a mechanical failure in the biggest of its two haulage shafts.
> 
> ...




thankyou have a niceday


----------



## Wysiwyg (8 November 2009)

Just contemplating the situation with one of the heavier traded stocks on the ASX. BHP have had a strong bounce off of a precision support level of $20. What is more noticeable is the declining volume accompanying the rising share price. To me BHP is in no-mans-land with continued uptrend lacking supporting volume. The 100 share buyers aren't making much impact. Volume is much less than the previous bull run. Rising price and falling volume. Just an observation as I familiarise myself with AB. $30 before $50 -- who knows.

Blurry so have to click on image twice.


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## voigtstr (26 November 2009)

bhp looks like its trading in a fairly constant channel.  To my eyes resistance would be at approx 38$ at the moment, but from day to day the bottom of that channel appears to be trending up. I sold out of paladin which has been trending down and bought into bhp today as it appear to be trending up. Have I read that chart right?


----------



## nomore4s (29 November 2009)

As mentioned on the XAO banter thread this is what I'm looking for from BHP as a short set up.

For the trade to set up to my liking and provide me with an entry I want to see an attempt to fill the gap but price to fail around $41 (but the set up will still be valid if the gap is closed but we need to see a very weak close on the bar that closes the gap).

1st target would be around $38 but we could fall to around $36.50 if this plays out because this stock can move quickly in either direction once it gets some momentum up.

2nd chart has some other examples of Island reversals in BHP over the last 6 months or so - some of them probably test the boundaries of a true island reversal but don't be a dick for a tick. They all have the same basic principle, a gap in the direction of the trend and then a gap in the opposite direction, some have had attempts at filling gaps but they all signal a reversal of sorts of the latest wave.  It also shows that when BHP has a break away gap it normally provides a decent movement in that direction.


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## bucket183 (3 December 2009)

Can anyone tell me where BHP is going?? I truely thought that it would have reversed by now. I didn't think it would break $42 resistance. Does that mean it will become a resupport?? What do people think?? Or will there be a major correction tomorrow??


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## Nero64 (3 December 2009)

> Can anyone tell me where BHP is going??




It's going to the moon my friend. If you're short then you better take some oxygen with you because you will need it


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## drillinto (5 December 2009)

New tool for daily or weekly analysis of any australian stock:

http://www.aussiebulls.com/StockPage.asp?CompanyTicker=BHP.AX&MarketTicker=Australian&TYP=S


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## nomore4s (12 December 2009)

nomore4s said:


> For the trade to set up to my liking and provide me with an entry I want to see an attempt to fill the gap but price to fail around $41 (but the set up will still be valid if the gap is closed but we need to see a very weak close on the bar that closes the gap).




As a bit of a follow up to this post.

A trade was never taken due to the set up never presenting the way I wanted. The gap was filled and while we did see a weakish close it wasn't weak enough for me to justify a short entry, so I stood aside.


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## brty (9 February 2010)

Nearly 2 months since a comment on the big Australian. Does anyone else see 3 peaks and a domed house over the last few months?? 

It possibly means a retracement to $36 or even $32.

brty


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## noirua (17 March 2010)

BHP Billiton's Falkland Island enterprising interests could be major, even for the big Aussie: http://www.fihplc.com/investmentinfogl/index.php?section=3



*I am a shareholder in Falkland Oil and Gas Limited.


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## noirua (19 March 2010)

noirua said:


> BHP Billiton's Falkland Island enterprising interests could be major, even for the big Aussie: http://www.fihplc.com/investmentinfogl/index.php?section=3
> 
> Another oil minnow is the first to drill off the Falkland Islands, Desire Petroleum [there are over 420 islands within the Falklands]. This link gives clues to the good and bad sides in this environment: http://www.desirepetroleumshares.co.uk


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## nunthewiser (19 March 2010)

> BHP Billiton has been forced to suspended production of nickel briquettes at its Kwinana refinery after running out of hydrogen.
> 
> With the onsite hydrogen plant broken and the usual back-up supplies from BP unavailable, BHP had no choice but to close down refinery operations on Monday.
> 
> It was not clear last night how long the refinery would remain shut and what impact it would have on this year's production targets for BHP's Nickel West unit.



http://au.news.yahoo.com/thewest/a/...o-suspend-kwinana-nickel-refinery-production/


Iam currently short BHP  on a technical basis for better or for worse .

nice low % loss on MY definative stopout point give or take a gap thats been known to happen ..............

position sizing


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## noirua (20 March 2010)

Rumours in the UK (UK FT, The Times and Daily Mail) expect BHP Billiton to bid for the gas company, BG Group: http://www.bg-group.com
http://www.ft.com
Rumours of this possible takeover have been long running and have been repeated again this week.

Following on with the BHP interest in the Falkland Islands. The following article gives a little more information; remembering BHP is interested is in Falkland Oil and Gas:  http://www.desirepetroleumshares.co...e-result-of-the-first-well-is-due-within-days

Disclaimer: I have interests in all companies mentioned above, including all the explorers in the Falkland Islands.


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## noirua (24 March 2010)

With the present expectations on iron ore prices and increasing bullishness in the UK (note article by UK Daily Telegraph tipping BHP (LSE:BLT) yesterday); BHP Billiton looks set to continue on its upward path.


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## shinobi346 (24 March 2010)

noirua said:


> Rumours in the UK (UK FT, The Times and Daily Mail) expect BHP Billiton to bid for the gas company, BG Group: http://www.bg-group.com
> http://www.ft.com
> Rumours of this possible takeover have been long running and have been repeated again this week.
> 
> ...




I hope they will. BG Group just signed a monster csg deal with china to sell our gas. I'd love to see qgc back into australian hands. My only disapointment is BHP didn't go straight for qgc.


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## noirua (6 May 2010)

noirua said:


> noirua said:
> 
> 
> > BHP Billiton's Falkland Island enterprising interests could be major, even for the big Aussie: http://www.fihplc.com/investmentinfogl/index.php?section=3
> ...


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## noirua (7 May 2010)

Well how things can change in a matter of minutes as BHP suddenly reverses to drop 5% from its days peak in London to finish just 0.7% down on the day.

Maybe there is no commercial oil in the areas covered by Falklands Oil and Gas Limited. On the other hand it could be a massive strike only beaten by Saudi Arabia.

Having been clobbered by the 'Great Lord' Henry it may be difficult for investors to look outside of Australia.


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## noirua (7 May 2010)

BHP shares have risen 3% on the LSE. The way for the big guy to avoid some of Henry's tax is to put more efforts into the Falkland venture reported to have around 3 billion barrels of oil around the Falkland Islands.
Avoiding new expensive ventures in Australia may be the name of the game if Henry wants most of the profits.


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## noirua (8 May 2010)

noirua said:


> BHP shares have risen 3% on the LSE. The way for the big guy to avoid some of Henry's tax is to put more efforts into the Falkland venture reported to have around 3 billion barrels of oil around the Falkland Islands.
> Avoiding new expensive ventures in Australia may be the name of the game if Henry wants most of the profits.




A link to one of the explorers off the Falkland Islands that augers well for BHP who have interests in the area and a tie-up with Falklands Oil & Gas: http://www.businessweek.com/news/20...od-quality-oil-in-falklands-islands-find.html

(disclaimer: I have an interest in BHP, Falklands Oil &  Gas, Desire Petroleum and Rockhopper Exploration)


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## McCoy Pauley (8 May 2010)

Marius Kloppers will be on Inside Business tomorrow, presumably talking about the Resource Super Profits Tax.


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## noirua (9 May 2010)

McCoy Pauley said:


> Marius Kloppers will be on Inside Business tomorrow, presumably talking about the Resource Super Profits Tax.





Interview with Marius Kloppers with Inside business on Sunday 9th May 2010: http://www.abc.net.au/insidebusiness/content/2010/s2894233.htm


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## noirua (11 May 2010)

No information in newspapers, though there are thoughts that BHP - who presently have a 50% interest in the areas covered by Falklands Oil and Gas Ltd (not Falklands Holdings Ltd) - may turn their interests to the South of the Falkland Islands where Rockhopper Exploration PLC has reported an oil strike.
http://www.rockhopperexploration.co.uk

Thought only: But BHP may think the Falklands a better bet than buying BG PLCs assets in Australia where 'Henry' wants to grab a bundle of the company's profits.


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## noirua (13 May 2010)

noirua said:


> No information in newspapers, though there are thoughts that BHP - who presently have a 50% interest in the areas covered by Falklands Oil and Gas Ltd (not Falklands Holdings Ltd) - may turn their interests to the South of the Falkland Islands where Rockhopper Exploration PLC has reported an oil strike.
> http://www.rockhopperexploration.co.uk
> 
> Thought only: But BHP may think the Falklands a better bet than buying BG PLCs assets in Australia where 'Henry' wants to grab a bundle of the company's profits.




The Ocean Guardian rig now moves on to BHP Billiton and Falkland Oil and Gas Limited's Toroa Prospect in the East Falklands Basin. Should oil be struck similar to that at Rockhopper Exploration's North Falklands prospect BHP Billiton may turn their eyes to the Falklands and away from Australia.
BHP Billiton have not made an announcement as yet about their Falkland Islands interests.


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## noirua (17 May 2010)

noirua said:


> The Ocean Guardian rig now moves on to BHP Billiton and Falkland Oil and Gas Limited's Toroa Prospect in the East Falklands Basin. Should oil be struck similar to that at Rockhopper Exploration's (LSE AIM:RKH) North Falklands prospect BHP Billiton may turn their eyes to the Falklands and away from Australia.
> BHP Billiton have not made an announcement as yet about their Falkland Islands interests.




Falkland Oil and Gas' (LSE AIM:FOGL) Ocean Guardian rig is expected to reach the Toroa prospect to start drilling on 25th May.
An announcement is expected before the London market opens concerning Rockhopper Exploration's oil strike north of The Falklands. BBC radio 4 is to cover the Rockhopper oil strike in 4 minutes time.
There remains no comment from BHP Billiton concerning their 50% interest in FOGL's drilling areas.


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## noirua (17 May 2010)

In March, Argentina's Ambassador Pedro Villagra had warned BHP about drilling in the Falkland Islands' waters. He also threatened BHP with withdrawal of mining rights in Argentina:  http://en.mercopress.com/2010/03/01/argentina-warns-bhp-billiton-about-drilling-in-falklands-waters


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## The_Snowman (23 May 2010)

brty said:


> Nearly 2 months since a comment on the big Australian. Does anyone else see 3 peaks and a domed house over the last few months??
> 
> It possibly means a retracement to $36 or even $32.
> 
> brty




Since this, all posts have been fundamental observations! 

You got your $36, although it went back to $44 first, now do I hear $32?


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## Boggo (25 May 2010)

Sold my BHP (BHPIMX) warrants this morning that I just bought last Friday.
A quick hit and run seems to be the way at the moment, anything long term is risky regardless of the fundamentals.


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## noirua (31 May 2010)

Just to show just how big it is likely to be for the Big Guy, here is a short video:  http://www.youtube.com/watch?v=CK092DFzNYE


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## noirua (3 June 2010)

BHP Billiton may be under a 'Great Henry Cloud' but not under a pile of iron ore. The Aussie$ is well down from its highs against the greenback and the US$ quoted commodity sector backs BHP as much as 'Henry' does not.

I feel matters are moving all square and opportunities, including the Falklands, are available near everywhere for the big guy.


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## noirua (4 June 2010)

Toroa well in East Falklands has been spudded as of 30th May and results of drilling expected as the well progresses:  http://www.advfn.com/p.php?pid=nmona&article=43044220


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## Tatts (4 June 2010)

JPMorgan sold a quarter of their stake in BHP and Rio



> ONE of the world's biggest resource fund managers has sold down a quarter of his BHP Billiton and Rio Tinto holdings because of Kevin Rudd's proposed 40 per cent tax on mining profits, which he described as a "wake up call".



http://www.theaustralian.com.au/business/jpmorgan-cuts-bhp-rio-stake-because-of-proposed-resource-super-profits-tax/story-e6frg8zx-1225875236516


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## noirua (4 June 2010)

All oil stocks drilling in the Falklands are suspended at the opening this morning in London following a favourable drilling technical data release by Rockhopper Exploration at their Sea Lion well. This was due to extremely volatile trading on Wednesday and Thursday.

Basics are 26.4 to 29.2 API, 242 million barrels recoverable, gross column 217m at 53m net pay.


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## noirua (4 June 2010)

Toroa well results in the East Falklands are expected from 18th June up until 1st July. Early results from 18th June can be expected due to mega-high speculation in the UK.
Apart from BHP all the shares in the Falklands rose significantly on enhanced results from Rockhoppers Sea Lion discovery.

BHP could hit vast reserves in the East Falklands and only second to those in Saudi Arabia. The share price still fails to take any account of the prospects.


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## noirua (6 June 2010)

Down around 9% overnight on the NYSE are BHP Billiton. Big problems on the Gulf of Mexico are likely to give the big 'O' to profits in that area for a while. 

Longer term who cares about the Gulf and it may be time, who knows, to back BHP in the Falklands where the Ocean Guardian Rig is at present drilling away at Toroa. Maybe, just maybe, this is going to be a major hit for BHP. If, and I say if, the price of BHP stock is getting close to 'mop it up time', too cheap to miss.

A bit of fun in this video which is before Rockhopper Exploration struck oil at its Sea Lion Well and the name of the drilling Rig 'Ocean Guardian' became number one to hit the big time in Falkland waters. http://iball.iii.co.uk/2010/04/21/rockhopper-amp-desire
Stock rose from 65c (37p) to its present $5.60 (£3.20) - on bulletin boards the cry is £20 ($35) and some dare say £100 ($175) - come thee again to Poseidon land.

*****Nb. A high risk venture, if you put your toe in the water and a piranha chews it off, don't blame me. *****

Companies quoted on stock markets in the Falklands,  BHP Billiton and partner Falklands Oil and Gas, Desire Petroleum, Borders and Southern, Falkland Holdings and Rockhopper Exploration.


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## nunthewiser (18 June 2010)

"South Hedland police are investigating the death of a man found next to a railway line in the Pilbara this morning.

Security guards for miner BHP Billiton found the man dead by the side of the company-owned railway line at Redmont, about 200km south of Hedland, shortly after 4am.

His car was parked nearby and it is believed he had been struck by a train.

The incident has forced the closure of the line and disrupted BHP Billiton's iron ore operations.

A police spokeswoman said officers were due to arrive at the scene to investigate and would prepare a report on the man's death on behalf of the State Coroner."


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## noirua (29 June 2010)

Shares of BHPs' partner in Falklands waters shot up Monday on rumours of an oil-strike at the Toroa Well. Results are due early next week. Rumours that Falklands Oil and Gas had ordered a pipeliner similar to that required on making an oil strike.
BHP shares rose mid-session but lost most of their gains later in the day.


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## GumbyLearner (1 July 2010)

Good news

http://www.theage.com.au/business/rail-breakthrough-in-pilbara-for-small-miners-20100630-zmqg.html


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## noirua (1 July 2010)

BHP Billiton stock has slumped further and no attention paid to the Toroa Well in The Falklands. This is the shallowest of 14 wells to be drilled in 600 metres of water. There is the Argentinian factor that weighs as a big problem in the future.
The well has been held up for a few days due to bad weather and maximum depth is to be reached on 5th - 6th July. An announcement had been expected today (Thursday, UK time).
If all goes well in the two year drilling programme then BHP may well be transformed to a major oil producer.


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## noirua (13 July 2010)

BHP is yet to report that their 51% owned well at Toroa in the Falkland Islands is a duster and is to be plugged and abandoned. Quite a blow after the expressions of confidence early on.


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## Adrian. (13 July 2010)

Apparently they're not going to.

"BHP said later it would not be making a stock exchange announcement on the well's failure but confirmed its fate."

http://www.smh.com.au/business/high-hopes-for-bhps-first-falklands-well-dashed-20100712-107zw.html


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## noirua (13 July 2010)

Toroa well off the Falkland Islands was a dry well and most disappointing. It seems inexcusable for BHP Billiton to fail to make an ASX announcement as some may have traded unknowingly.
The market cap is very high for BHP but Falkland waters may have 60 billion barrels of oil.
http://www.guardian.co.uk/business/2010/jul/12/falkland-oil-production-exploration


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## sammy84 (17 August 2010)

$40b hostile bid for Potash:

http://www.theaustralian.com.au/bus...ts-bhps-40bn-bid/story-e6frg8zx-1225906542491


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## prawn_86 (18 August 2010)

sammy84 said:


> $40b hostile bid for Potash:
> 
> http://www.theaustralian.com.au/bus...ts-bhps-40bn-bid/story-e6frg8zx-1225906542491




Been a quiet yr for M&A, this should keep the advisory firms happy. Obviously the Potash board have rejected the offer


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## Lucstar (18 August 2010)

BHP down 3.51% on the Potash takeover news. Don't you just love it when the market overreacts. All you short term traders out there, here's your chance to load up on some discount parcels. 

"Wealth is transferred from the ignorant to the well-informed". Thank god our markets are ignorant


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## UMike (18 August 2010)

Lucstar said:


> BHP down 3.51% on the Potash takeover news. Don't you just love it when the market overreacts. All you short term traders out there, here's your chance to load up on some discount parcels.
> 
> "Wealth is transferred from the ignorant to the well-informed". Thank god our markets are ignorant



Yep I got in today.

Dunno about short term traders???? (ref: me)

Hope to be rewarded medium to long term. Just a good entry point today imo.


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## skyQuake (18 August 2010)

Lucstar said:


> BHP down 3.51% on the Potash takeover news. Don't you just love it when the market overreacts. All you short term traders out there, here's your chance to load up on some discount parcels.
> 
> "Wealth is transferred from the ignorant to the well-informed". Thank god our markets are ignorant




Please explain to this un-informed fellow why today was an over-reaction?
Thanks


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## McCoy Pauley (18 August 2010)

I took the opportunity to add to my holding in BHP today.  As I'm looking to hold for a multi-year period, my personal view is that today's share price drop is only a very short blip on the horizon.

I suppose that Mr Market thinks that Marius might overpay for Potash Corp.


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## McCoy Pauley (18 August 2010)

BHP will put its bid directly to the Potash shareholders.

http://www.theage.com.au/business/bhp-puts-43b-potash-bid-to-shareholders-20100818-12evj.html


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## noirua (18 August 2010)

McCoy Pauley said:


> I took the opportunity to add to my holding in BHP today.  As I'm looking to hold for a multi-year period, my personal view is that today's share price drop is only a very short blip on the horizon.
> 
> I suppose that Mr Market thinks that Marius might overpay for Potash Corp.




I didn't buy BHP Billiton for them to buy loads of ... They are buying at a time of demand for beef when potash is badly needed. Might have been better to have bid in 2008 when markets were on there knees. Doesn't take a genius MD or CEO to buy a stock when it's booming and markets look great.


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## Garpal Gumnut (19 August 2010)

There has been some very nice support resistance at the $35-36 mark and I'd expect a retracement for some topping up at this level, once all the money has been spent taking over Potash, and we head into October.

Unable to post chart atm.

gg


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## noirua (22 August 2010)

Potash Corporation: http://www.potashcorp.com/about/overview

Present closing price 20/8/2010 is $149.67 - market cap US$44.4 billion.

Shares were floated at US$15.125 in 1987 and after allowing for a 2 - 1 split in 2004 and 3 - 1 split in 2007, the equivalent issue price is = US$2.52.

The present price of US$149.67 is equivalent to a rise in price of 26.58 times or 2,658%.

Are BHP Billiton buying at the peak of the market trend ?????????????????????


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## shyl (26 August 2010)

*Why BHP is down?*

I have been looking at BHP shares for few weeks now. I cannot see why they have gone down so much? is it only because of the Porashcorp? or is it something else?
Yesterday they announced record profit and still this morning the shares went down, even though most of other bluechip shares were up. including last nights lead from US was positive.


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## MACD (26 August 2010)

Shyl,

Welcome to trading.............  Trade what you see and not what you think!!


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## Tysonboss1 (26 August 2010)

*Re: Why BHP is down?*



shyl said:


> Yesterday they announced record profit and still this morning the shares went down, even though most of other bluechip shares were up. including last nights lead from US was positive.




Short term prices movements do not have anything to do with the performance of the underlying business.

Do your analysis and make an assessment on what you believe BHP is worth based on it's earnings and if the current price is less than what you believe it's true value is then buy it. 

A falling share price on a company you have done your home work on should be welcomed not feared.


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## shyl (27 August 2010)

*Re: Why BHP is down?*



Tysonboss1 said:


> A falling share price on a company you have done your home work on should be welcomed not feared.




Isnt it frustrating to see, all your study does not make sense when the market reacts differently? it makes me think if I am analysing the stock correctly or I am missing something.


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## Tysonboss1 (27 August 2010)

*Re: Why BHP is down?*



shyl said:


> Isnt it frustrating to see, all your study does not make sense when the market reacts differently? it makes me think if I am analysing the stock correctly or I am missing something.




It's frustrating till you just learn to accept it as a normal cycle.

The market is like a pendulum it will constantly swing between over the top optimism and out of control pessimissm. The true intrinsic value will be somewhere in between these highs and lows. The true "investor" will try to identify this value by making an assessment on a number of things and buy when the stock is below it's true value.


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## noirua (27 August 2010)

BHP Billiton is as much American and European these days as it is Aussie. Very much a way into a 'whole world' mining investment; though the foreign returns against a strong Aussie aren't helping at the moment. The AUD looks to have stopped its strong run-up and BHP currency returns should improve markedly in year ending 2011. 

BHP need world markets to decline if they want to pick-up Potash at US$130 a share.  Maybe they also see better returns if the A$ tracks back over the year.

Several news sheets have delivered a 'BUY' rating on the stock across the pond: 
Report from UK's Hargreaves Lansdowne to be added; trouble with link at present.


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## noirua (27 August 2010)

noirua said:


> Several news sheets have delivered a 'BUY' rating on the stock across the pond:
> Report from UK's Hargreaves Lansdowne:




Link to BHP Billiton by Hargreaves Lansdowne: 

http://www.h-l.co.uk/shares/shares-...liton--ordinary-us$0.50?tab=security_research

or go to: www.h-l.co.uk


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## shyl (27 August 2010)

noirua said:


> Link to BHP Billiton by Hargreaves Lansdowne:
> 
> 
> or go to:




Thanks. will have a look.

Thanks Tysonboss1.
btw, bought some shares today. lets see how it goes in couple of years.


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## Julia (27 August 2010)

*Re: Why BHP is down?*



shyl said:


> Isnt it frustrating to see, all your study does not make sense when the market reacts differently? it makes me think if I am analysing the stock correctly or I am missing something.




Your alternative is to change your approach from fundamental analysis to simply understanding the price action.  Markets move on sentiment.
You can have the greatest fundamentals in the world, but if market sentiment doesn't agree, the SP will not rise, and you simply will not make money.

Consider outlaying around $30 and buying "How to Profit in Bull and Bear Markets" by Stan Weinstein.  This is a very easy to understand introduction to understanding price action and trend following.
When I first read it, it was a light coming on after some time in the murky darkness of FA.


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## shyl (27 August 2010)

*Re: Why BHP is down?*



Julia said:


> Your alternative is to change your approach from fundamental analysis to simply understanding the price action.  Markets move on sentiment.
> You can have the greatest fundamentals in the world, but if market sentiment doesn't agree, the SP will not rise, and you simply will not make money.




Thats what i was thinking, my understanding was the sentiment will be positive after the big profit announced. but obviously i was wrong 



Julia said:


> Consider outlaying around $30 and buying "How to Profit in Bull and Bear Markets" by Stan Weinstein.  This is a very easy to understand introduction to understanding price action and trend following.
> When I first read it, it was a light coming on after some time in the murky darkness of FA.




thanks. will surely read it.


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## Garpal Gumnut (14 September 2010)

It is interesting that nobody in the "proper threads" has seen fit to comment on BHP for over 2 weeks.

It is looking a dangerous hold for those going long.

The volume has decreased dramatically since the 17th Aug and the price has risen with the RSI in what I call a "walking the tightrope, lets hope I don't fall pattern".

A chart.

gg


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## OK2 (14 September 2010)

Garpal Gumnut said:


> It is interesting that nobody in the "proper threads" has seen fit to comment on BHP for over 2 weeks.
> 
> It is looking a dangerous hold for those going long.
> 
> ...




BHP is still undervalued. They are actively pursuing acquisitions and diversifying at the same time. The BIG Australian will never fail!!!

I am still waiting for the stock market to collapse as you have been calling for the last few years. Keep crying Wolf GG.


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## noie (14 September 2010)

Garpal Gumnut said:


> It is interesting that nobody in the "proper threads" has seen fit to comment on BHP for over 2 weeks.
> 
> It is looking a dangerous hold for those going long.
> 
> ...




We all know there is uncertainty with BHP, but  95% of the company is slogging away producing profits.. Lots of them!

people seem to be worried that they are going to make a BAD purchase, maybe overspend, maybe go chasing something just cause they have the extra cash.


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## Tysonboss1 (14 September 2010)

OK2 said:


> BHP is still undervalued. They are actively pursuing acquisitions and diversifying at the same time. The BIG Australian will never fail!!!
> 
> I am still waiting for the stock market to collapse as you have been calling for the last few years. Keep crying Wolf GG.




BHP undervalued??? 

What method are you using in your calculations to value this company. I would think that BHP should be considered "fair" Value at best, and only if you allow a giant premium for being an A grade company.

It's current share price can not be considered cheap when compared to it's net assets or it's earnings, It is actually very much over valued and only holds it's current share price because it is a very good company and people are willing to over pay for it and inturn recieve a smaller return because of the lower risk of it going bust or having earnings disruptions.


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## OK2 (14 September 2010)

Tysonboss1 said:


> BHP undervalued???
> 
> What method are you using in your calculations to value this company. I would think that BHP should be considered "fair" Value at best, and only if you allow a giant premium for being an A grade company.
> 
> It's current share price can not be considered cheap when compared to it's net assets or it's earnings, It is actually very much over valued and only holds it's current share price because it is a very good company and people are willing to over pay for it and inturn recieve a smaller return because of the lower risk of it going bust or having earnings disruptions.




Good day Tysonboss, I have done reasonably well with my investmemts over time. This has been achieved by using common sense and not an Economics degree. There is no calculation to my valuing BHP other than what I feel a major Chinese miner would be prepared to pay for the Company. I hope that day never comes but in saying so BHP remains extremely cheap in my mind.


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## BSD (15 September 2010)

Tysonboss1 said:


> BHP undervalued???
> 
> It's current share price can not be considered cheap when compared to it's net assets or it's earnings, It is actually very much over valued and only holds it's current share price because it is a very good company and people are willing to over pay for it and inturn recieve a smaller return because of the lower risk of it going bust or having earnings disruptions.





Really? 

Setting aside the irrelevent "net asset" figure (don't think BHP is going to be wound-up any time soon) - the research I am looking at currently has BHP trading at 9 times forecast June 2011 EPS and 8.5 2012. 

Hard to see how this is expensive on earnings in lieu of having a downbeat perspective on medium term commodity prices. 

Further, it doesn't appear too dear to me considering a 3% yield growing at 10% pa and 30% return on equity with almost no gearing.


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## Tysonboss1 (15 September 2010)

BSD said:


> Really?
> 
> Setting aside the irrelevent "net asset" figure (don't think BHP is going to be wound-up any time soon) - the research I am looking at currently has BHP trading at 9 times forecast June 2011 EPS and 8.5 2012.
> 
> ...




It may be producing a 30% return on equity, but you are paying nearly $40 for $10 worth of that equity. So that brings the 30% return on equity figure down to about 7.5% return on your initial investment.

Look BHP is a fantastic company I hold some of it myself, But I am not kidding myself into thinking it is "undervalued". It is fair valued at best. And will only show solid share price growth if management can continue to alocate capital into new projects generateing 25% return on capital faster than their existing 100+ projects mature and decline and Investors continue to be willing to pay a premium for the stock.

I think they can do it, so I hold,


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## Tysonboss1 (15 September 2010)

OK2 said:


> Good day Tysonboss, I have done reasonably well with my investmemts over time. This has been achieved by using common sense and not an Economics degree.




Wouldn't "common sense" say that before you take an ownership interest in a company you should conduct some sort of analysis of the earning power of the companies assets so that you can justify the price you pay to buy them, Other wise you have no idea what you are paying or what your likly return will be over time.

Remember that every share represents an ownership interest in an actual company/business, and this company/business has an underlying value that does not depend on it's share price. 

If you develop the skills of valuing whole businesses/companies you can use this skill to work out what the actual intristic value of an individual share is and then you will know whether the current Market price is higher or lower than it's intrinsic value.


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## BSD (15 September 2010)

Tysonboss1 said:


> It may be producing a 30% return on equity, but you are paying nearly $40 for $10 worth of that equity. So that brings the 30% return on equity figure down to about 7.5% return on your initial investment.




But how appropriate/realistic/relevent are the valuations of assets used to calculate the $10 NAV?

Do you actually believe the NAV of BHP's balance sheet represents the actual prevailing market value of the assets like Escondida, GOM, Olympic Dam or the Pilbara if they were to come up for sale?

Show me a company at discount to NAV and I wil show you a NAV that is cum-downgrade...


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## noie (15 September 2010)

I am reading all your replies to each other and thought i would poke in

I believe you have different ideas of what "value" is, one of you is talking about balance sheet Graham value , the other market "happy to pay" value.

With Mega companies, i don't think you cant treat them like smaller-mid ones, You can't scan the balance sheet and plug info into an ROI formula. (IMHO) 

I own BHP shares , I believe people would be happy to pay over 40 for this company , i am worried about where they are thinking of placing their cash.


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## OK2 (15 September 2010)

Tysonboss1 said:


> Wouldn't "common sense" say that before you take an ownership interest in a company you should conduct some sort of analysis of the earning power of the companies assets so that you can justify the price you pay to buy them, Other wise you have no idea what you are paying or what your likly return will be over time.
> 
> Remember that every share represents an ownership interest in an actual company/business, and this company/business has an underlying value that does not depend on it's share price.
> 
> If you develop the skills of valuing whole businesses/companies you can use this skill to work out what the actual intristic value of an individual share is and then you will know whether the current Market price is higher or lower than it's intrinsic value.




It was not to long ago that BHP was in the high 20's and I called it cheap in this thread only to be ridiculed my many like yourself who rely on analysis. 

I have a few staff who are uneducated immigrants whose paper value is considerably more than that of people their age who have Diplomas and research or budget everything down to the last cent. My staff invest on instinct and long term. This has created issues for me in the past when my clients have become aware that the bottom of the food chain is worth considerably more than the upper end. The moral of the story is that the share market is fragile and it only takes a minor World event to make it dive, why over analyse, make your money get in and out as you see fit. It works for me.

BHP fair value $50.00au, will see you there Tysonboss and then you can explain it to me again.

Cheers


----------



## Tysonboss1 (15 September 2010)

BSD said:


> But how appropriate/realistic/relevent are the valuations of assets used to calculate the $10 NAV?




It is very appropriate/realistic/relevent to use those figures because that shows the nuts and bolts of the companies past capital allocation.

When the company throws around figures stating that they are earning 25% return on capital invested they are talking about a 25% return on a per share figure very much smaller than it shareprice.

Which leads to the fact that even though the assets BHP owns are generating 25% return, the investor investor purchasing the stock at $40 will not earn 25% on their $40 because for their $40 they are only buying true assets worth around $10.

Now paying an extra $30 is not nessarilly a bad thing because you might be happy with a 7.5% return and so it makes sense to buy it at that price, or you may think commodity prices will go through the roof and the assets currently producing 25% ROC will jump to 100% ROC and lead you to earn 25% based on your $40 investment, or you could believe BHP management will grow there current projects from 100 projects to 200projects and assets will grow to $20 and other investors will pay $80 per share.

A share's value is very subjective, But I would suggest that you have an idea of it's underlying value and know what the current premium is and beable to justify paying that much with a rational worldly outcome of how the company is going to generate earnings that will translate to a decent return on your investment over time.


----------



## BSD (15 September 2010)

Most would prefer to calculate the value of the company based on estimating present value of future cashflows - without refering to NAV at all 

The resulting premium to NAV this NPV represents is totally irrelevent, except in the case of potential wind-up. Further, the 'underlying value' of a company is seldom anywhere near NAV. It is what someone else is prepared to pay now, not at some time in the past. 

Off topic a bit - but how would you go about setting an 'appropriate' premium to NAV for a company like WTF or Carsales with very low NAV but very steady and rapidly growing cashflows?

Anyway, to say BHP is expensive because it trades at 4 times an accounting construct like NAV is bizzare and you would be in very limited company in using such an argument. 

The future is far more important.


----------



## Tysonboss1 (15 September 2010)

BSD said:


> Most would prefer to calculate the value of the company based on estimating present value of future cashflows - without refering to NAV at all
> 
> Anyway, to say BHP is expensive because it trades at 4 times an accounting construct like NAV is bizzare and you would be in very limited company in using such an argument.
> 
> The future is far more important.




Yes, I aggree a companies value is determined by making an assessment of it's likly earning power over time and to a lesser extent it's value of it's assets.

If you look at my orignal post, I simply asked the question of how a certain member came to the conclusion that BHP was under valued, I then made a statement saying that I did not believe it was under valued based on either cashflow or NAV.

I did not say that it is expensive based on the fact it is trading at 4 x NAV, I only made reference to it's NAV because some one said the fact that it produced a 30% return on equity made it good value. I was trying to point out that yes it is good that it earns 30% return on equity, but you have to relate it's earnings back to the price you pay.


----------



## Tysonboss1 (15 September 2010)

OK2 said:


> BHP is still undervalued. They are actively pursuing acquisitions and diversifying at the same time. The BIG Australian will never fail!!!
> 
> I am still waiting for the stock market to collapse as you have been calling for the last few years. Keep crying Wolf GG.






Tysonboss1 said:


> BHP undervalued???
> 
> What method are you using in your calculations to value this company. I would think that BHP should be considered "fair" Value at best, and only if you allow a giant premium for being an A grade company.
> 
> It's current share price can not be considered cheap when compared to it's net assets or it's earnings, It is actually very much over valued and only holds it's current share price because it is a very good company and people are willing to over pay for it and inturn recieve a smaller return because of the lower risk of it going bust or having earnings disruptions.




Here is the two posts that started this, I was simply asking OK2 what method he was using to come up with the answer that it is Undervalued.

He has since confirmed that his analysis method consists of mainly speculation and guesswork into what he think bigger fools will be willing to pay in the future.

I was simply putting my point accross that you should look a bit deeper into what you are buying if you want your long term returns to be better than mediocre.

But finally as a have already said there is nothing wrong with paying a premium price, you should just be aware that you are doing it and beable to justify it in a rational context based on likly worldly outcomes.

People should not make bold statemnets that a certain company it Undervalued if by their own admission they have not actually performed any sort of valuation on it in the first place.


----------



## OK2 (15 September 2010)

Tysonboss1 said:


> Here is the two posts that started this, I was simply asking OK2 what method he was using to come up with the answer that it is Undervalued.
> 
> He has since confirmed that his analysis method consists of mainly speculation and guesswork into what he think bigger fools will be willing to pay in the future.
> 
> ...




Tysonboss what makes your criteria of evaluation set the standard for acceptable comment? Perhaps other people may see your analysis as lacking in fundamentals also. I can only assume that you set the bar height.

When BHP was in the high 20's in the short term past was it also overvalued? Why did Potash Corp jump hugely in value on the takeover bid? It comes back to basics and not analysis, supply and demand.

Tysonboss are you a bean counter (accountant)???


----------



## Tysonboss1 (15 September 2010)

OK2 said:


> It was not to long ago that BHP was in the high 20's and I called it cheap in this thread only to be ridiculed my many like yourself who rely on analysis.
> 
> BHP fair value $50.00au, will see you there Tysonboss and then you can explain it to me again.
> 
> Cheers




I would like to ask you one question,

If you decided that you wished to buy one of the local small businesses in your community, and there were about 10 businesses that were for sale that were all being run by staff so they did not require your effort at all, How would you go about deciding which business to buy.

No doubt the first question you would ask is how much is each business making each year and how much they want you to pay for it.

You would realise that there is a big difference between buying a company for $500K that earns $100K/year and buying one for $1,000,000 that also earns $100K per year. 

Now if you would conduct this simple analysis on a small business before you invest why not conduct the same analysis on a company you wish to purchase shares in.


----------



## Julia (15 September 2010)

Just trying very hard not to say that, despite all the above pontifications, the 'value' of a stock is simply what someone is prepared to pay for it.

Sorry.


----------



## Tysonboss1 (15 September 2010)

Julia said:


> Just trying very hard not to say that, despite all the above pontifications, the 'value' of a stock is simply what someone is prepared to pay for it.
> 
> Sorry.




You can say that and it is true to a point.

I but I would say that there is a difference between what something "costs" and what some thing is "worth"

the "Market" value of a company changes almost daily, But it's intrinsic value does not.

For instance when BHP was trading at $50 then 12 months later it was $23 you could say that neither value represented it's true intrinsic value and that it's true value was some where in between. So it's market value can fluctuate but it's true long term or intrinsic value does not really change throughout the year.


----------



## noie (16 September 2010)

Tysonboss1 said:


> I would like to ask you one question,
> 
> If you decided that you wished to buy one of the local small businesses in your community, and there were about 10 businesses that were for sale that were all being run by staff so they did not require your effort at all, How would you go about deciding which business to buy.
> 
> ...




I don't believe this same question and answer system applies to mega companies.. its just not that simple.
BHP maybe has 1000 people tying to keep a track of all the costs, income, outgoings , resources, sales, assets...which are all massaged to make look as best as it possibly could.
then 4 times a year they pay a company to estimate the **** out of them and present it to he market.

my  the larger the company the less the value formula's work


----------



## Tysonboss1 (16 September 2010)

noie said:


> I don't believe this same question and answer system applies to mega companies.. its just not that simple.
> BHP maybe has 1000 people tying to keep a track of all the costs, income, outgoings , resources, sales, assets...which are all massaged to make look as best as it possibly could.
> then 4 times a year they pay a company to estimate the **** out of them and present it to he market.
> 
> my  the larger the company the less the value formula's work




So you believe that the price that you purchase that stock at will make no difference to your investment outcome 

At the end of the day you are purchasing a stock which represents a ownership in a certain percentage of that company. Now over the next 10 years that percentage of the company you own will produce a certain amount of return, and that return will determine the dividends you get paid over that time and also the trading range that the stock is trading 10 years from now.

The fact is if you take a value approach to investing you are much more likely to buy stocks at prices that will cause you to have a solid return on investment over that time.


----------



## OK2 (16 September 2010)

Tysonboss1 said:


> I would like to ask you one question,
> 
> If you decided that you wished to buy one of the local small businesses in your community, and there were about 10 businesses that were for sale that were all being run by staff so they did not require your effort at all, How would you go about deciding which business to buy.
> 
> ...




I would buy the business that I have had previous similar exposure to and pay a premium to use my existing network base to grow it. You failed to mention that the business at $1,000,000 might be operating at a 30% margin while the cheaper Company operates at a 7% margin, now which of the two is better value taking into consideration the higher cost ratio required to operate a business with a lower margin. Which business will see consolidated growth potential using this concept? BHP


----------



## Tysonboss1 (16 September 2010)

OK2 said:


> Tysonboss what makes your criteria of evaluation set the standard for acceptable comment? Perhaps other people may see your analysis as lacking in fundamentals also. I can only assume that you set the bar height.
> 
> When BHP was in the high 20's in the short term past was it also overvalued? Why did Potash Corp jump hugely in value on the takeover bid? It comes back to basics and not analysis, supply and demand.
> 
> Tysonboss are you a bean counter (accountant)???




No I am not a bean counter, Just an ex soldier that owns a succesfull manufacturing and retail operation, Saying that I am at the point where my investment activities are almost generating more than my businesses.

In answer to you question, no I did not think that BHP was over valued in the 20's.

Thirdly when you answered that you would by the small business that had the highest return on capital you are infact conducting an analysis, so you can't be totally against doing any form of analysis.

In regards to potash's price jumping it is most likly a result of gamblers/traders jumping in making a bet that BHP will raise their bid, If they did not conduct any analysis and have over paid and BHP drops the takeover bid they have a good chance of getting a poor result.

Or is could be that potash was really good value at that price and when bhp made the bid it drew alot of attention to it and caused more investors to move in, I have no idea whether potash is good value I have not looked at it.


----------



## OK2 (16 September 2010)

Tysonboss1 said:


> No I am not a bean counter, Just an ex soldier that owns a succesfull manufacturing and retail operation, Saying that I am at the point where my investment activities are almost generating more than my businesses.
> 
> In answer to you question, no I did not think that BHP was over valued in the 20's.
> 
> ...




Can a solicitor ever be an ex, it is like saying ex mum or ex dad. Save the defamation case it was just a joke.

I would be happy to take a few directed tips on what works for you.


----------



## Tysonboss1 (16 September 2010)

OK2 said:


> Can a solicitor ever be an ex, it is like saying ex mum or ex dad. Save the defamation case it was just a joke.





 I said I was a Soldier, not a Solicitor. So you are in the clear as far as the defamation case.


----------



## noie (16 September 2010)

Tysonboss1 said:


> So you believe that the price that you purchase that stock at will make no difference to your investment outcome
> 
> At the end of the day you are purchasing a stock which represents a ownership in a certain percentage of that company. Now over the next 10 years that percentage of the company you own will produce a certain amount of return, and that return will determine the dividends you get paid over that time and also the trading range that the stock is trading 10 years from now.
> 
> The fact is if you take a value approach to investing you are much more likely to buy stocks at prices that will cause you to have a solid return on investment over that time.




I believe there are multiple inputs into the current price of a stock.
people who rely on the one method often get confused, or lost in all the equations.

I am not adverse to paying a fair price, I do not only enter when I consider the intrinsic value to be great.

and some days i trade the momentum , or the news , or the analysts expectations.

and i do not believe Value is omnipotent, I wish it was but it is not.


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## Garpal Gumnut (16 September 2010)

OK2 said:


> BHP is still undervalued. They are actively pursuing acquisitions and diversifying at the same time. The BIG Australian will never fail!!!
> 
> I am still waiting for the stock market to collapse as you have been calling for the last few years. Keep crying Wolf GG.




Well we did have the GFC!!.

Its going to be nasty the second one.

Just look at the charts. Even the funnymentalists are running scared.

gg


----------



## Garpal Gumnut (18 September 2010)

As it would appear that ASF is being taken over by those more used to following penny stocks employing hobbits, I will persist in commenting , often alone , on one of our greatest, if not the greatest, Aussie miner, BHP.

This is a very intertesting weekly chart of BHP extending from yesterday evening back to mid 2005.

I have placed a fibonnaci retracement from the highs of 16th May 2008 to the low of 21st November 2008.

At the significant Fibonnaci level of 38.2%, and at the low,I have retraced support and resistance lines.

While there very well may be accumulation occurring at present,it is more likely distribution, looking at the volume and open and close of bars.

I may be wrong, but a break below $35 would be worrying, and below $31.25 quite alarming, heading in to October, a month in which I try and distribute as many gumnuts as possible to a selling populace.

The resistance and support about $31 in the past is very impressive.

Having said that, the medium term trend is up, and the optimists could argue that we are in for the mother of all Wave 3's.

Ain't life interesting.

gg


----------



## Garpal Gumnut (26 September 2010)

I must be the only poster interested in this tiddler.

Small miners are out on ASF atm.

We enter October.

A Chart which says it all.

gg


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## noirua (30 September 2010)

Garpal Gumnut said:


> I must be the only poster interested in this tiddler. gg




Certainly you are gg!  Anyway, BHP have pulled out of the second phase of drilling in the Falkland Islands. They surprised onlookers as the AIM:FOGL / BHP JV has drilling prospects in the same area of water as Rockhopper Exploration that found excellent oil reserves and have seen their shares rocket from 60c to $8.50. I suppose BHP prefer compost, sorry phosphate - a bit sad really, me thinks.

What do you prefer gg, Phosphate or oil prospects?


----------



## UMike (4 November 2010)

Well it'll be plan C for BHP since their Potash takeover attempt failed.

Wonder what It'll be?


----------



## bloomy88 (4 November 2010)

UMike said:


> Well it'll be plan C for BHP since their Potash takeover attempt failed.
> 
> Wonder what It'll be?




Yep Mr. Kloppers will not be happy, possibly a takeover of WPL next? It seems that BHP are running out of options and there were rumours of a takeover late last year...


----------



## shinobi346 (4 November 2010)

I'm happy they got denied by the Canadians. Hopefully Kloppers doesnt really mean it and will ditch the prospect of taking over Potash. 

I've said it before and my thought haven't changed, I hope they go for BG Group and grab back those massive gas reserves.


----------



## adds4 (13 January 2011)

Commodity prices are rising, especially oil, bodes well for BHP. Should be a massive profit once again for the 1/2 yr. What numbers are people expecting


----------



## starman45 (16 January 2011)

Last week there was an enormous rush of sellers, directed towards the support at 44.
This week there was an equally strong reaction of the buyers who have denied the previous red candle.
Therefore, buyers have regained control with the first target resistance at 47ish.




Chart weekly (courtesy of ProRealTime.com)


----------



## starman45 (22 January 2011)

On the weekly chart, we see that the price is entered in a block of consolidation.
We are still in unptrend, but very slowly.



Chart weekly (courtesy of ProRealTime.com)


----------



## starman45 (26 January 2011)

range again...



Chart weekly (courtesy of ProRealTime.com)


----------



## starman45 (3 February 2011)

Now, after rebounding from 44ish, the stock is trying to break the range.


----------



## starman45 (4 February 2011)

If he can harness the momentum, it could make the breakout.
Today, however, another step forward.


----------



## Tysonboss1 (4 February 2011)

starman45 said:


> If he can harness the momentum, it could make the breakout.
> Today, however, another step forward.
> 
> View attachment 41197




Who is he,


----------



## Greedy_Kev (4 February 2011)

Tysonboss1 said:


> Who is he,




i believe he is BHP, and the guy was quoting from somone


----------



## starman45 (5 February 2011)

Tysonboss1 said:


> Who is he,




he= BHP
... sorry for my bad english...


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## Crom (5 February 2011)

Thanks for your posts starman.

The resistance at $44 was spot on and I was able to get a solid trade in.

Dividend time now so yes, a run up then pull back as BHP goes ex div.  Always a great time for trading!

Cheers and I agree with GG's comment earlier re interest in this stock.


----------



## starman45 (8 February 2011)

Hit 47, however close belolw it.
Chart daily.


----------



## McCoy Pauley (9 February 2011)

It looks like $47.00 is a fairly stiff resistance level for BHP at the moment.  It's bounced right off that level this morning and is down a fair whack, especially when put up against RIO.

IIRC, BHP reports tomorrow or on Friday, so it will be interesting to see the market reaction, given the forecasts being flung around.


----------



## starman45 (9 February 2011)

Look what has made the price on the resistance .....
... bearish outside bar not yet dangerous.
Moreover, the yesterday daily close below it was doubtful ...

chart daily


----------



## iced earth (13 February 2011)

_*BHP - 12.02.11:*_


BHP is moving in a upward channel. in 47.20 it touches the ceiling. 




after breaking up of the red resistance line, price might move up to the middle line of the Andrews Pitch-Fork.


----------



## starman45 (14 February 2011)

and finally, first close above S/R 47ish


----------



## McCoy Pauley (16 February 2011)

From what I'm reading, it looks like BHP has broadly met market expectations with their interim report released this morning.  NPAT of US$10.7 billion (excluding abnormals) and an interim dividend of US$0.46/share (up from US$0.42/share).  Plus a US$10 billion capital management program announced.

I guess the comparison will be between what BHP is returning to shareholders against what RIO is returning to shareholders.  It's all a bit "ho-hum".


----------



## warakawa (17 February 2011)

*is there any point in buying BHP shares?*

each shares cost $46, dividend is only 45-48c twice a year, that's return of around 2.1%. what is the point that's lower than savings account.


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## enigmatic (18 February 2011)

I guess the main point of BHP is that the below figures are your base growth on your investment the 2.1% can be therefore used by use to allocated as you see fit. If you can find another stable company that can provide better return on your money. i would be pretty happy with 16% but hey thats me 

Total Shareholder Return (avg annual rate)
1yr	 16.1%
3yr	 8.2%
5yr	 16.4%
10yr   20.2%


----------



## Tysonboss1 (18 February 2011)

*Re: is there any point in buying BHP shares?*



warakawa said:


> each shares cost $46, dividend is only 45-48c twice a year, that's return of around 2.1%. what is the point that's lower than savings account.




Back to investing 101 for you .


----------



## tothemax6 (18 February 2011)

*Re: is there any point in buying BHP shares?*



warakawa said:


> each shares cost $46, dividend is only 45-48c twice a year, that's return of around 2.1%. what is the point that's lower than savings account.



Probably need to read up, yes Roger Montgomery is a good resource for learning about company valuations.

The short answer is "those shares will probably not cost $46 at the end of the year". So the chance of capital appreciation needs to be factored in, as well as the dividend. Also, that dividend, relative to the original share buy price, may not be the same at the end of the year.


----------



## shinobi346 (18 February 2011)

Dividend is franked too. You need to factor in the tax on the bank interest. and your principal in the bank doesn't really grow.


----------



## tinhat (18 February 2011)

*Re: is there any point in buying BHP shares?*



warakawa said:


> each shares cost $46, dividend is only 45-48c twice a year, that's return of around 2.1%. what is the point that's lower than savings account.




BHP has stated that it plans to invest $80 billion in organic expansion over the next five years (mainly in Iron Ore in Australia and Potash in Canada). That's almost twice the amount of money that the Australian federal government will spend on higher education during that period.

I also recommend Roger Montgomery's book for an explanation of how to analyse dividend payout rates vis-a-vis shareholder equity, return on equity, debt's affect or return on equity, and so on.


----------



## warakawa (18 February 2011)

Thank you for your recommendations. 

What is the difference between Montgomery's "Value Able" and university level investment books such as "investment concepts and applications" by Brailsford et al or "investments" by Bodie et al.  

Is "value able" available in pdf or ehub format? What other books I should read?


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## starman45 (18 February 2011)

Buyers in control, despite the last three red candles.
Area, however, should win 47 with stability, otherwise the sellers may act with more decision.
Daily chart.


----------



## tinhat (19 February 2011)

warakawa said:


> Thank you for your recommendations.
> 
> What is the difference between Montgomery's "Value Able" and university level investment books such as "investment concepts and applications" by Brailsford et al or "investments" by Bodie et al.
> 
> Is "value able" available in pdf or ehub format? What other books I should read?




Personally, I have not read the book you mention. I'm new to stock investing. I'll check them out at some stage. I started managing a SMSF in November so it's all new to me. Currently I'm reading my way through Graham's 'The Intelligent Investor' and Fisher's 'Common Stock and Uncommon Profits'.

I think Value able is only available as paperback directly from www.rogermontgomery.com


----------



## starman45 (20 February 2011)

This week the stock makes a new high.
The last three days: only profit taking.
Daily chart.


----------



## McCoy Pauley (21 February 2011)

Alan Kohler interviewed Kloppers for about 12 minutes last week and it was broadcast on Inside Business yesterday.  Link here.


----------



## frankbaozhu (21 February 2011)

warakawa said:


> Thank you for your recommendations.
> 
> What is the difference between Montgomery's "Value Able" and university level investment books such as "investment concepts and applications" by Brailsford et al or "investments" by Bodie et al.
> 
> Is "value able" available in pdf or ehub format? What other books I should read?




If you want to profess value investing, the BEST starting point is to read Mr. Warren Buffett's annual letters. This year I read them the fourth time and I still learned a hell lot from those words. Those are just Bible for those who are serious about investing.
Plus, you do not have to pay anything for them.


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## McCoy Pauley (22 February 2011)

BHP Billiton Ltd will acquire 100% of Chesapeake Energy Corporation for US$4.75 billion (paid in cash).  BHP buys a company that holds 487,000 acres of leashold with existing net production of 415 million cubic feet of natural gas and midstream assets of 420 miles of pipeline.  Chesapeake will provide essential services to BHP for 12 months.  The deal closes in the first half of 2012.

BHP Billiton Ltd also announced an off-market buyback of A$5 billion.


----------



## voigtstr (24 February 2011)

The off-market buy back.... how is that likely to effect the stock price? Are the last few days trades simply the lead from wall street?

(ASIC disclosure: Yes I own bhp shares hence my interest in the way they trade)


----------



## Tysonboss1 (24 February 2011)

voigtstr said:


> The off-market buy back.... how is that likely to effect the stock price? Are the last few days trades simply the lead from wall street?
> 
> (ASIC disclosure: Yes I own bhp shares hence my interest in the way they trade)




A buy back does support the price because it is reducing the total number of shares on issue and there for increasing the piece of the pie the remaining share holders own.


----------



## BrightGreenGlow (25 February 2011)

Any idea when the buy back is on the cards? Sounds very hood for holders!


----------



## voigtstr (25 February 2011)

BrightGreenGlow said:


> Any idea when the buy back is on the cards? Sounds very hood for holders!




Out of their news release: 

Event - Date
Off-Market Buy-Back announcement - 22 February 2011
Cut-off date for franking credit entitlement under 45-day rule(4) - 24 February 2011
Shares quoted ex-entitlement to participate in the Off-Market Buy- Back on the ASX (shares acquired on the ASX on or after this date will not typically confer an entitlement to participate in the Off- Market Buy-Back) - 25 February 2011
Determination of eligible shareholders entitled to participate in the Off-Market Buy-Back (record date) - 3 March 2011
Completion of mail out of Off-Market Buy-Back documents to eligible shareholders - 16 March 2011
Off-Market Buy-Back tender period opens - 21 March 2011
Off-Market Buy-Back tender period closes – tenders must be received by 7.00pm (AEST) - 8 April 2011
Announcement of the final buy-back price and any scale back - 11 April 2011
Off-Market Buy-Back proceeds dispatched/credited to participating shareholders completed - No later than 18 April 2011


----------



## Tysonboss1 (25 February 2011)

BrightGreenGlow said:


> Any idea when the buy back is on the cards? Sounds very hood for holders!




BHP has been running an on market buy back for a while now, and are also conducting an off market buyback shortly.


----------



## qldfrog (25 February 2011)

Tysonboss1 said:


> BHP has been running an on market buy back for a while now, and are also conducting an off market buyback shortly.



am I naive or is it a not to be missed opportunity: the buy back has a huge franked component and a very small capital amount:
does it mean that for CGT : we have a huge loss: capital component only minus purchase price and a huge franked income?
This sounds too good to be true


----------



## Ferret (25 February 2011)

For some a great opportunity.  Depends on your tax bracket etc.

If you're in the 0 or 15% bracket you'll be in front with the franking credit.  Hence super funds will probably jump at it.  In the 30% bracket and you'll be even with the franking credit, but lose a little by paying extra medicare levy.

You will get a capital loss, and it will be big for many people.  But just how valuable that capital loss is will vary depending on your current/future capital gains tax liabilities and your tax bracket.

Don't forget to that the buyback is at a discounted price of between 10 and 14%.  If you want to re-purchase the shares you sold in the buyback, you'll probably have to pitch in about that much more than the proceeds you got from the sale.


----------



## Tysonboss1 (25 February 2011)

qldfrog said:


> am I naive or is it a not to be missed opportunity: the buy back has a huge franked component and a very small capital amount:
> does it mean that for CGT : we have a huge loss: capital component only minus purchase price and a huge franked income?
> This sounds too good to be true




I havn't seen any of the details on the break up off the offer, I don't actually hold BHP at the moment.


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## McCoy Pauley (26 February 2011)

For Eureka Report subscribers, there is a very good and clear article from Tony Rumble explaining how the buyback works.  If you hold BHP shares through a SMSF that is in pension mode or otherwise taxed at 0%, it's seems to be a great opportunity.  It's marginal if your tax rate is at 30%.  If your tax rate is higher than 30%, then it's not a good opportunity by itself.


----------



## tinhat (26 February 2011)

Dang, I only read the ASX announcement yesterday. I would have bought more BHP to take advantage of the off market share buy back. Too late now. I'm not sure what the franking rate will be? Fully franked? If so, that's going to be great for my family SMSF (most of the fund is in pension phase).


----------



## tinhat (26 February 2011)

Just thinking out aloud here... If I planned to take up the share buy back offer but still wanted to be exposed to this company in the long run, I would need to plan to double up my holding before the offer expiry date (assuming that in, all things being equal, the shares will be worth more after the buy back and therefore will trade higher). Then if I sell those shares that are eligible to participate in the buy-back (our current holding) I will still be left with the same exposure as we have now after the buy back.

If we elect to take the final discount price (the successful buy-back price established by the tender process) is it a guaranteed buy-back???

Depending on how deep the current pull back ends up going, this could be a real opportunity.


----------



## awg (27 February 2011)

The big question for me is how many will BHP buyback?

wonder how they will scale-back..ie clean up smaller holders, or by percentage

They had a buyback in 06-07, not sure of the details

I have 2000 in my SMSF pension

To remember that the franking credits will not be recieved for over 12mths in SMSF.

Intend to offer up all, not sure when I will buy back, but want to keep my exposure roughly similar to now.

With the buyback $5B and MC 155B, that is about 3.5%

my calcs for SMSF pension:

(Using current SP $45.95) - 14% (full discount)=  $39.52

returned as Capital $0.28         FF Div 39.24         Franking (39.24 x 3/7)= $16.82

Total for 0% taxpayer = $56.34  (about 23% premium)


Any thoughts?


----------



## voigtstr (27 February 2011)

is the buyback likely to push prices up? or just support the current level?


----------



## McCoy Pauley (27 February 2011)

BHP shares have gone ex-entitlement for the buyback.  I suspect we might see a drop in share price tomorrow on open.


----------



## iced earth (4 March 2011)

_*BHP - 03-03-11*_

Share is moving in a upward channel. the up line is its resistance and its lower is support line.





in a longer term view , it has passed up the blue resistance line but couldn't pass up the red resistance line. now the blue one could play as a support line.


----------



## BrightGreenGlow (11 March 2011)

I was thinking the share buy back would be a positive for the share price??


----------



## McCoy Pauley (11 March 2011)

iced earth said:


> _*BHP - 03-03-11*_
> 
> Share is moving in a upward channel. the up line is its resistance and its lower is support line.
> 
> ...




I would like to see some more charts, iced earth, if you have the time and inclination.  I have a gut feeling that BHP might be close to going through the blue line marking the bottom of the trading range on your first chart above.


----------



## Gareth (11 March 2011)

*Re: is there any point in buying BHP shares?*



warakawa said:


> each shares cost $46, dividend is only 45-48c twice a year, that's return of around 2.1%. what is the point that's lower than savings account.




Saw the following on the ASX website and thought it may help in the question above

"3.Typically, the resources sector pays a dividend yield below the broader market, because many such companies re-invest their earnings to fund projects and focus on providing shareholders with capital growth."

For the full article go to the following:

http://www.asx.com.au/resources/20110310_ten_top_dividend_stocks_for_2011.htm


----------



## drlog (15 March 2011)

*Re: is there any point in buying BHP shares?*



Gareth said:


> Saw the following on the ASX website and thought it may help in the question above
> 
> "3.Typically, the resources sector pays a dividend yield below the broader market, because many such companies re-invest their earnings to fund projects and focus on providing shareholders with capital growth."
> 
> ...




It's simple enough to understand - If you had bought BHP in 2000, you would have paid, say, $9 with a 26c unfranked dividend - that's about a 2.9% yield. If you had held BHP up to now, your yield would be about 7.1% bank equivalent (including franking). While that should be an ok yield, you would also have a whopping capital appreciation (380%).

By the company holding on to profits and reinvesting them, the shareholder is much much better off than if the company just paid out a larger dividend. This will always be the case with a company that is able to generate high returns on reinvested capital like BHP.

Now if the company is unable to generate high returns on additional capital, they should pay out higher dividends - JBH in a few years comes to mind?


----------



## iced earth (9 August 2011)

BHP-08 August 2011:

BHP could not passed up the $50.00 (which was the previous peak and resistance level) .now the upward channel has been broken down and the target is around $32.00. But from the Fibo levels, the first support line will be around $35.00 (Fibo 50%) and then around $32.00 (Fibo 32.8%) which is the target of the channel too




From the 20 days EMA , momentum and MACD the sell signal has been sent. Until buy signal not being seen, we cannot be sure about continuous bullish trend.




Also from this picture we could see the bullish Head & Shoulders with the target again around $32.00


----------



## robusta (9 August 2011)

Bought some BHP today @ $35.08, got to love a company that makes investments today to pay off in 20 years and was making those same sort of investments 20 years ago.


----------



## BrightGreenGlow (9 August 2011)

robusta said:


> Bought some BHP today @ $35.08, got to love a company that makes investments today to pay off in 20 years and was making those same sort of investments 20 years ago.




If I didn't buy a house a few weeks ago I would be all over these.... however thanks to AUT I had a massive deposit.  However, any awesome opportunity for any stock at the moment and BHP is no exception!


----------



## panikhide (10 August 2011)

robusta said:


> Bought some BHP today @ $35.08, got to love a company that makes investments today to pay off in 20 years and was making those same sort of investments 20 years ago.




Robusta: That sounds too good to be true. You must have picked and bought at the absolute bottom of yesterday's trading. Was this the only parcel of BHP shares you have bought during the downturn or did you also pick some up at $39, $38 and $37 as well?


----------



## Garpal Gumnut (10 August 2011)

While I admire those who bought BHP yesterday, it amazes me how sentiment can change in three to four days.

Looking longer term, I will buy BHP at $32 and $23, and still may make a loss initially on my long term buy of this great stock. 

There is little support for yesterday's price at present, whereas the above 2 prices have at least given support/resistance in the past.

It's swingin in the wind.

gg


----------



## robusta (10 August 2011)

panikhide said:


> Robusta: That sounds too good to be true. You must have picked and bought at the absolute bottom of yesterday's trading. Was this the only parcel of BHP shares you have bought during the downturn or did you also pick some up at $39, $38 and $37 as well?




It had to happen eventually, I have been buying all through the crash and with my last lot of capital I threw it at TGA and BHP. It is the first time I have bought BHP but I intend to hold this parcel for a long time. I think the price went to $34 something yesterday morning.



Garpal Gumnut said:


> While I admire those who bought BHP yesterday, it amazes me how sentiment can change in three to four days.




My sentiment has not changed I have been buying into the market all through the last   2 1/2 weeks.

https://www.aussiestockforums.com/forums/showthread.php?t=23106&highlight=robusta



Garpal Gumnut said:


> Looking longer term, I will buy BHP at $32 and $23, and still may make a loss initially on my long term buy of this great stock.
> 
> There is little support for yesterday's price at present, whereas the above 2 prices have at least given support/resistance in the past.
> 
> ...




I guess that is the difference I do not know anything about support/resistance I just think BHP is worth closer to $50.00 at the moment and more in the future. It could well drop to $32 or $23 but it will make no difference to me unless I have more capital available to buy some more.


----------



## RandR (24 August 2011)

the results just come in ... and it looks impressive, appears above analyst forecasts .. profit is 23 billion (us dollars) dividend up 22%. operating cash flow of 30 billion


----------



## Tysonboss1 (24 August 2011)

Garpal Gumnut said:


> , it amazes me how sentiment can change in three to four days.




Yeah it sure can, especially when dealing in a commodity producer such as BHP.

I mean Bhp ( as of last years annual report ) only had circa $10 / share in assets. However obviously people are prepared to pay $40 for those $10 of assets when they are generating a 40% return on those assets and reinvesting the bulk of the profits back into creating more assets that will generate 25% - 40%.

However, If a big stick did get caught in the spokes of the global economy and commodity prices halved, Bhp return on assets could drop to 15%, and not many people would want to pay $40 for $10 worth of assets that only earn 15%.

But, obviously no one knows the future, we just have opinions. So if the market starts pricing in very low commodity prices and the stick doesn't end up getting caught in the spokes then you may do very well indeed to buy this stock at current prices and just hold.

Disclaimer- I have purchased BHP recently, and would take another parcel if prices dropped. I may even sell a put or two if the premiums are attractive.


----------



## robusta (24 September 2011)

robusta said:


> Bought some BHP today @ $35.08, got to love a company that makes investments today to pay off in 20 years and was making those same sort of investments 20 years ago.






panikhide said:


> Robusta: That sounds too good to be true. You must have picked and bought at the absolute bottom of yesterday's trading. Was this the only parcel of BHP shares you have bought during the downturn or did you also pick some up at $39, $38 and $37 as well?




Wow what a difference a few weeks makes in this market. Friday close $35.55. IMO prices will be even cheaper on Monday, any takers?


----------



## skyQuake (24 September 2011)

robusta said:


> Wow what a difference a few weeks makes in this market. Friday close $35.55. IMO prices will be even cheaper on Monday, any takers?




Dearer imo. Even with copper coming off, closed 34.78 in the states. Much dearer hopefully


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## Tysonboss1 (10 October 2011)

the Olympic dam expansion has been approved by state government, that's pretty good news, more copper, uranium and gold for us


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## humblejunior (14 October 2011)

Tysonboss1 said:


> the Olympic dam expansion has been approved by state government, that's pretty good news, more copper, uranium and gold for us




Dear all
I am new to shares and this forum.My first Post in ASF.Having observed the stock market from the side lines,( busy buying my first home), I finally managed to take the plunge and bought some BHP shares( 500) @ 35.08AUD last week. My first temptation is to sell them when they reach 38 or so for a small profit.What do people think. I am sorry if I should not be asking these questions.It is going to be a steep learning curve for me as all technical stuff that i read in the forum is going over my head and I should probably start reading some basic threads  
The olympic dam expansion will take  a long time to yield results( profits)  won't it ?


----------



## drlog (14 October 2011)

humblejunior said:


> Dear all
> I am new to shares and this forum.My first Post in ASF.Having observed the stock market from the side lines,( busy buying my first home), I finally managed to take the plunge and bought some BHP shares( 500) @ 35.08AUD last week. My first temptation is to sell them when they reach 38 or so for a small profit.What do people think. I am sorry if I should not be asking these questions.It is going to be a steep learning curve for me as all technical stuff that i read in the forum is going over my head and I should probably start reading some basic threads
> The olympic dam expansion will take  a long time to yield results( profits)  won't it ?




Welcome humblejunior! I think you have made an excellent first purchase. If you are looking at investing then I would hold long (I do hold BHP long). IF you are looking at trading then you may want to take some quick profits if they do rally to 38 in the near future.

I value BHP above $50 with the current consensus forecasts but there is definite commodity price risk with BHP. However, they are diversified. As for the olympic dam's earnings increase, it will take some time for it to come online but the market is generally forward looking. BHP generally has many projects coming online at any time so this is nothing unusual. As someone from SA, I think this is more of a SA news story


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## Tysonboss1 (17 October 2011)

drlog said:


> As for the olympic dam's earnings increase, it will take some time for it to come online but the market is generally forward looking. BHP generally has many projects coming online at any time so this is nothing unusual.




Yes they do,

The project pipeline is always steadily expanding production through various new projects and expansions, However this Olympic Dam Expanision Dwarfs Almost all thier other projects, $30B is a very, very large investment, Telstra Is worth $38B. Any time a company can deploy $30B and have a decent chance of earning 25% return is a good time for those shareholders.


----------



## Tysonboss1 (17 October 2011)

humblejunior said:


> Dear all
> 1, I am new to shares and this forum.My first Post in ASF.Having observed the stock market from the side lines,( busy buying my first home),
> 
> 2, I finally managed to take the plunge and bought some BHP shares( 500) @ 35.08AUD last week. My first temptation is to sell them when they reach 38 or so for a small profit.
> ...




1, Hey Mate, Welcome to ASF.

2, Congratulations on taking the first step, BHP is certainly a very good company, and the price you paid is a good price compared to their earning potential. I guess you have to ask yourself whether you are an Investor or a Trader. If your an Investor and you know BHP is a excellent company, why sell at $38.

3, I think you should learn as much about investing and trading as you can, and decide which path you will go down, If you are an investor, focus on buying a basket of good companies at fair prices and hold them and you will do well over time.

4, Yes, But if you are a longterm investor what is important is their project pipeline as a whole, there will be projects coming on line this year that were started 2 years ago, What you want to know is that they are steadily investing retained $$$ into new projects that will earn high returns, Olympic dam expansion will be able to take about $30B of capital, thats a great project to have in the pipeline.


----------



## Tysonboss1 (17 October 2011)

Humble Junior,

I guess what I was trying to say was,

When you Bought your shares in BHP, you bought part ownership into a diversified portfolio of long life, low cost producing mines. Those mines produce alot of cash some of which BHP will will pay to you every 6 months and the rest they will try and invest for you back into more projects, when they have more cash than they can invest into projects for you they will buy back shares increasing you stake in the company.

Obviously as long as they continue to earn solid cash flow, and invest this cashflow into project earning high returns on equity, and return excess cashflow back to investors ( dividends and buybacks ) the longer to hold the more value gets built up in each share, So why would you want to sell for a quick profit.


----------



## humblejunior (18 October 2011)

drlog said:


> Welcome humblejunior! I think you have made an excellent first purchase. If you are looking at investing then I would hold long (I do hold BHP long). IF you are looking at trading then you may want to take some quick profits if they do rally to 38 in the near future.
> 
> I value BHP above $50 with the current consensus forecasts but there is definite commodity price risk with BHP. However, they are diversified. As for the olympic dam's earnings increase, it will take some time for it to come online but the market is generally forward looking. BHP generally has many projects coming online at any time so this is nothing unusual. As someone from SA, I think this is more of a SA news story




Dear Drlog
Thank you so much for the feedback.
It appears that there are definitely some good times to look forward to.
Meanwhile I will keep myself busy reading  ...
Thanks again.


----------



## humblejunior (18 October 2011)

Tysonboss1 said:


> Humble Junior,
> 
> I guess what I was trying to say was,
> 
> ...




Dear Tysonboss1
Thank you so much for the  replies and sharing your thoughts about BHP.
I am in the process of making up my mind whether to trade or to invest and  my initial thoughts are to invest.
I feel welcome at ASF thanks to such encouraging replies  from you and Drlog.
Now I am looking forward to some good reading.
Thanks once again...


----------



## Tysonboss1 (10 November 2011)




----------



## richard99 (1 March 2012)

A friend of mine was telling me to stay away from BHP because they will have to pay the carbon tax ?

What do you guys think ?


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## Fantasy09 (1 March 2012)

richard99 said:


> A friend of mine was telling me to stay away from BHP because they will have to pay the carbon tax ?
> 
> What do you guys think ?




Would FMG end up paying a similar bill?


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## notting (17 July 2012)

A good day for resource stocks.  
Whoops. 
BHP is down a fraction!!!!
There is either a great fundamental buy stairing you in the face.
Or you should be seriously selling this material rally.
:run:


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## Tannin (17 July 2012)

notting said:


> There is either a great fundamental buy stairing you in the face.
> Or you should be seriously selling this material rally.




^ Exactly! One can make an excellent case for either argument. I'm sitting here wondering wheather I'll look back and say what a fool I was for not buying in cheap, or lok back and say how wise I was not to waste good money on a cyclical stock headed firmly down. 

Can you lend me $1? 

(I need a coin to toss.)


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## McCoy Pauley (30 July 2012)

Last week there were a string of articles about Kloppers' tenure as chief executive officer of CEO and that funds managers were losing confidence in him due to the poor communications from BHP to the investment community.

Then Michael Pascoe writes the following article in BusinessDay online:

http://www.theage.com.au/business/bhp-billiton-in-a-dark-place-20120730-2392b.html

ETA - just seen Robert Gottliebsen's article on Business Spectator:

http://www.businessspectator.com.au...-prices-pd20120730-WNSYX?OpenDocument&src=sph

Reaching for my tinfoil hat, it looks like somebody has it in for Marius.


----------



## ROE (30 July 2012)

three strikes and you are out
1. Rio failed takeover
2. Potash failed take over
3. Petrol Hawk over generous price tag.


----------



## notting (30 July 2012)

3b. Failing to make a bid for WPL.  Petrohawk crap for a fortune!? - Idiots!


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## qldfrog (30 July 2012)

I worked with a BHP branch, I offloaded my BHP shares as soon as I saw the way this was leading;
Thanks god I did!
BHP is managed at the top by lunatics [at the best]. Headquarter dum and dummer everyday, permanent waste of $, resources and all competent forces leaving in drove;
The sooner this ego maniac is out, the better for BHP; 
He managed single handed to f.up the biggest material boom in memory: that is quite an achievement....


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## Tannin (31 July 2012)

McCoy Pauley said:


> Reaching for my tinfoil hat, it looks like somebody has it in for Marius.




The _Financial Review_ has been relentless in its push. Where is the push coming from? Are we going to see a change at the top, followed by big write-downs and a further substantial share price drop? I wouldn't mind some BHP but I'm holding off until this plays out and they take their write-downs and announce their intentions re Olympic Dam (a huge dud project digging up a mineral that has very poor short and medium term sales prospects - don't do it BHP!) and the outer harbour (probably still worth doing, but needs careful consideration). 

After all that, $25 BHP shares (wild guess!) could be an excellent buy.


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## qldfrog (31 July 2012)

Tannin said:


> The _Financial Review_ has been relentless in its push. Where is the push coming from? Are we going to see a change at the top, followed by big write-downs and a further substantial share price drop? I wouldn't mind some BHP but I'm holding off until this plays out and they take their write-downs and announce their intentions re Olympic Dam (a huge dud project digging up a mineral that has very poor short and medium term sales prospects - don't do it BHP!) and the outer harbour (probably still worth doing, but needs careful consideration).
> 
> After all that, $25 BHP shares (wild guess!) could be an excellent buy.



+1. 
Around 25-26$ and without the clown or one of its SA copy, would be a great buy


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## prawn_86 (22 August 2012)

35% drop in full year profit and and open pit plans for Olympic Dam expansion put on hold, pending looking at possible cheaper options.

Not too good for SA as a state, that expansion would have been very benefical


----------



## Sean K (22 August 2012)

prawn_86 said:


> Not too good for SA as a state, that expansion would have been very benefical



I think SA was counting on it in budget projections. Untidy. They'll have to cancel that new demountable at the Salisbury West Primary School. Weatherill got in on that infrastructure pledge.


----------



## matty77 (22 August 2012)

Time to buy some more BHP shares once people realise a $14 billion profit is still "ok"

OD on hold... that's fantastic it was potential white elephant  material anyway.

Time to sell you house in Pt Augusta.

Good Luck.


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## notting (13 December 2012)

Why is Olympic Damn postponenment continually quoted as a sign of the end of the mining boom?
It's a fricken Uranium mine. 
Uraniums been in the dog house for years.



> In its statement today, BHP stressed its focus was on key commodities like iron ore, coal, petroleum, potash and copper. In late morning trade BHP was up 0.9 per cent at $34.59 a share.




So what's new?


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## skc (13 December 2012)

notting said:


> Why is Olympic Damn postponenment continually quoted as a sign of the end of the mining boom?
> It's a fricken Uranium mine.
> Uraniums been in the dog house for years.




Are you sure? There's plenty of copper and gold at Olympic Dam. The uranium is probably just a by product!

http://www.mining-technology.com/projects/olympic-dam/


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## tinhat (13 December 2012)

skc said:


> Are you sure? There's plenty of copper and gold at Olympic Dam. The uranium is probably just a by product!
> 
> http://www.mining-technology.com/projects/olympic-dam/




Yeah -apparently its radioactive copper. I don't know much about the Olympic Dam expansion except that BHP's share price went up when they said they were going back to the drawing board and secondly, that removal of the overburden alone was going to be a six year opperation (if my memory serves me correctly). Every man with a dog is digging up iron ore these days, but what about copper supply? There doesn't seem to be any new piles of it lying around anywhere that can just be easily dug up (Oyu Tolgoi is the most recent major development?).

Anyway, time for materials to have a rally. Demand and prices recovering somewhat and now QE4 is here.


----------



## notting (13 December 2012)

skc said:


> Are you sure? There's plenty of copper and gold at Olympic Dam. The uranium is probably just a by product!




True but that is all that has been shelved, their still going in for the copper.
Not sure about the gold and silver bye products.


----------



## Garpal Gumnut (17 February 2013)

I am looking for an entry in to BHP, in one of my forays in to the market this year.

Such a mining titan gets scant comment on ASF.

The lack of volume on the increase in price over the last twelve months makes me wary about entering.

Support lines at $5 decrements are from $35 all the way down to $20.

I cannot see it advancing much further north atm, and should it do, it will hit resistance at $50.

Below is a 10 year monthly chart.







gg


----------



## qldfrog (17 February 2013)

GG,
in my opinion, and after experience working with/for them: as long that the current top managemnet is in place (or a successor in the same vein) this is a machine to burn money: the waste of $, energy and goodwill within BHP is absolutely abysmal when seen from inside.
Obviously this is not enough to prevent a rally at one stage based on feelings, etc but when figures will have to talk, reality will be back..
my 2c worth only.
Now fully out, even for short trade


----------



## Garpal Gumnut (17 February 2013)

qldfrog said:


> GG,
> in my opinion, and after experience working with/for them: as long that the current top managemnet is in place (or a successor in the same vein) this is a machine to burn money: the waste of $, energy and goodwill within BHP is absolutely abysmal when seen from inside.
> Obviously this is not enough to prevent a rally at one stage based on feelings, etc but when figures will have to talk, reality will be back..
> my 2c worth only.
> Now fully out, even for short trade




I agree frog.

The feedback I'm getting from within BHP at a local level, is that management needs to change.

It is being discussed from recent articles in the business press.

Meanwhile as I noted in the above chart, volume is lower in the last 12 months with a rise in the share price. My feeling is that there are not enough buyers, and sellers are holding in a hope of a change.

If the sellers come out on bad European or Chinese news, it may very well retreat quite quickly in price.

gg


----------



## Garpal Gumnut (20 February 2013)

Garpal Gumnut said:


> I agree frog.
> 
> The feedback I'm getting from within BHP at a local level, is that management needs to change.
> 
> ...




I resurrected the BHP thread on the weekend, as a contact indicated to me something was afoot with the CEO.

I was unable to confirm so did not post that exact information hoping some silly bastard would post clarification.

I returned to the BHP thread today.

A day on which the CEO of one of the most important Australian companies had a change of CEO.

Number of posts today. None.

Number of posts since the weekend. None.

There is money to be made from going long or short on major ASX companies.

I doubt if anyone on ASF will read this.

gg


----------



## nulla nulla (20 February 2013)

If it makes you feel any better GG, I read your post.


----------



## galumay (20 February 2013)

I suspect the departure of Kloppers will have about the same effect as the firing of Albanese at RIO, the rest of the boards remain intact and I dont expect to see any change. 

One thing I have learnt by working for these large multi national mining companies is that they make public servants and governments look efficient and competent. If it were not for the incredible profit involved in digging holes and loading them on ships they would go broke in a flash. 

I suspect there is some formula that could calculate organisational dysfunction and it would be proportional to the size of the company! 

Anyway despite their incompetence I suspect they will continue to make enough squillions to provide a satisfactory dividend to the shareholders.


----------



## Ves (20 February 2013)

nulla nulla said:


> If it makes you feel any better GG, I read your post.



+1 It's a pity I don't have anything remarkably interesting to say other than I find BHP impossible to value (as remarked in another thread).


----------



## Garpal Gumnut (20 February 2013)

Ves said:


> +1 It's a pity I don't have anything remarkably interesting to say other than I find BHP impossible to value (as remarked in another thread).





You are a dyte Ves.

I couldn't give a stuff about all that.

I'm only interested in making money out of the share price.

And BHP can be more volatile than..................whispers..................PE N.

gg


----------



## Garpal Gumnut (20 February 2013)

nulla nulla said:


> If it makes you feel any better GG, I read your post.




Thanks null.

It does.

gg


----------



## Ves (20 February 2013)

Garpal Gumnut said:


> You are a dyte Ves.



Not a problem.  I'm just not into PE expansion and / or technical analysis.  My ability to beat everyone who is in that game is very, very limited.

I don't know anything about PEN other than it is something I can write with.


----------



## Garpal Gumnut (20 February 2013)

Ves said:


> Not a problem.  I'm just not into PE expansion and / or technical analysis.  My ability to beat everyone who is in that game is very, very limited.
> 
> I don't know anything about PEN other than it is something I can write with.




lol

A wise knowledge on poor ole PEN.

BHP in my belief will fall.

Abysmal results on capital spent since 2006 as per Montgomery Investments, I heard on my Bose in the Arnage this afternoon via my ABC.

The chart as I posted above looks set for a retracement.

gg


----------



## brty (20 February 2013)

GG,



> I am looking for an entry in to BHP, in one of my forays in to the market this year.
> 
> Such a mining titan gets scant comment on ASF.
> 
> The lack of volume on the increase in price over the last twelve months makes me wary about entering.






> The chart as I posted above looks set for a retracement.




Have you changed your mind about this, or are you looking to buy on the retracement?, or are you thinking of shorting?

I made a little bit on the current rise from $33, sold way too early. I would be looking for another long entry at about that same level if reached in the July/August timeframe.

I certainly agree there is not enough discussion on the majors, most stock discussion seems to revolve around pennydreadfuls that if you invested more than 2 bob in would influence the price.


----------



## Garpal Gumnut (20 February 2013)

brty said:


> GG,
> 
> 
> 
> ...




Thanks brty,

I am thinking of buying.

But on a retracement.

I am riding the bull at present on other stocks.

I do not short. I am no good at it.

I am however prescient of May 2013, when as I have posted on other threads I reckon we will face another sharp fall to close to GFC levels. Just my gut.

I will watch and wait for the retracement levels on BHP, a blow off, and a recovery and then enter, $35, $30, $25, $20 etc whatever. 

If I am wrong after May, I would consider an entry north of $40.

gg


----------



## Julia (20 February 2013)

brty said:


> I made a little bit on the current rise from $33, sold way too early. I would be looking for another long entry at about that same level if reached in the July/August timeframe.



I've held BHP at various times but never made any really decent money out of it.  Probably entirely my fault but unless it does something more inspiring than of recent times, I won't be buying it again.

gg, of the whole forum, you - along with nulla nulla - probably do the most to promote discussion on the bigger stocks, so thank you to you both.  Nulla you put up some good charts with good comments.
I expect many do read these posts and incorporate the info offered into our thinking, but have difficulty in adding anything that's not already been pretty well covered.  eg today there has been the same level of coverage of Mr Kloppers' resignation across the ABC as was provided when Tom Albanese resigned.  So, not much more to say.



> I certainly agree there is not enough discussion on the majors, most stock discussion seems to revolve around pennydreadfuls that if you invested more than 2 bob in would influence the price.



+1.  Strongly agree.  However, I couldn't care less if people want to discuss these stocks.  I don't find it difficult to just ignore the threads and don't feel obliged to lambast people who do get something out of them.


----------



## McLovin (20 February 2013)

Ves said:


> Not a problem.  I'm just not into PE expansion and / or technical analysis.  My ability to beat everyone who is in that game is very, very limited.
> 
> I don't know anything about PEN other than it is something I can write with.




$120b (that's an eye watering amount!) invested in the business over the last 10 years. If margins head back to 10-12% then that's going to look like a lot of money wasted. BHP seems to have always been like this.


----------



## tinhat (21 February 2013)

McLovin said:


> $120b (that's an eye watering amount!) invested in the business over the last 10 years. If margins head back to 10-12% then that's going to look like a lot of money wasted. BHP seems to have always been like this.




That's the problem with commodity markets. Equilibrium is established only when price equals marginal cost. When demand shifts upwards, companies have to make large capital investments to reduce and flatten out their marginal cost curves at higher volumes because the only way to make a profit in a commodity market is to produce at a lower marginal cost than your competition.

Margins will revert to mean but earnings will reflect higher volumes. That's pretty much what Kloppers told investors to expect last year.

Some are saying that energy is the next main opportunity for BHP which might explain why they chose Mackenzie as the next boss - given his background in oil and petrochemicals.


----------



## McLovin (21 February 2013)

tinhat said:


> Margins will revert to mean but earnings will reflect higher volumes. That's pretty much what Kloppers told investors to expect last year.




Where do you think that will put them? If margins mean revert on the current volume then will they be earning about ~$10b/year, right?


----------



## tinhat (22 February 2013)

McLovin said:


> Where do you think that will put them? If margins mean revert on the current volume then will they be earning about ~$10b/year, right?




Hey Muhammad

I really haven't looked at the figures for BHP and I don't know what they are in terms of what returns they make. I should have said prices will mean revert - that is what I meant and that is what Kloppers said last year. That said, my belief still is that price will equal marginal cost - but that is the industry marginal cost at which demand is exhausted. So the only way to make a profit at all in a commodity market is to be lower on the cost curve than the person who is still able to break-even at the prevailing market price. Well, that's what I remember of my microeconomics lectures from twenty-five plus years ago.

That is the conundrum, as demand increases and pushes production levels up the short term cost curve, firms have to invest in new capacity to flatten and push out the cost curve but this leads to a rush of investment in capacity because the only way a firm can maintain profitability is to be lower on the cost curve than the highest cost producer that can still produce at a price the market is willing to pay for one more unit of the commodity (the marginal price).

I'm talking here about bulk commodities like iron ore and coal but I guess the same applies oil, gas and aluminium? Here is a relevant slide from the BHP presentation:





Which makes me think, the whole notion of a super profits tax is a bit flawed really for commodity markets. A super-profit price boom only seems to come along once in a generation. It's a temporary phenomenon that will occur when demand grows to the degree that marginal production costs are pushed high enough up the cost curve that a step-wise investment cycle in capacity and infrastructure is required. I suspect the river has moved on in terms of being able to extract extra tax from super-profits in iron ore and coal. The super-profit boom is over (as Martin Ferguson has been trying to explain to the unions).

If I were to follow my own logic then the there can only be one iron ore producer that is worth investing in and that is the one with the lowest and flattest marginal cost base, which, if I am not mistaken is Rio Tinto right?

For the time being I suspect the market will be looking to see what value BHP can extract from its US energy interests.

In the long term, the one metal that has the most constrained supply is copper. I suspect that at some stage there will be a business case for BHP to proceed with the Olympic Dam mega-project and that will require a whole new wave of capital investment.

Slide 35 from the BHP presentation is interesting. The only three areas currently experiencing very strong EBIT margins are iron ore, petroleum and base metals.

I do start to wonder, when I think about it, whether a bulk commodities miner is the sort of thing I want to invest in for the long term though. Slide 34 lays it out quite bare. A US$1/t change in the iron ore price impacts net profit after tax by US$110 million. So a US$10 change in the iron ore price translates into a US$1.1 billion change to net profit after tax. Hopefully the AUD is at the peak of its valuation cycle.

So, to answer your question, just to analyse the iron ore business and assuming that all other businesses perform as they did this first half. First half 2012 sales of iron ore were 91 million tonnes and the reported revenue was $9.166 billion, which works out to an average price per tonne of $100.73 Which leads to the overwhelming question of what price forecast to use for iron ore? What is the marginal cost of production at which demand will be exhausted. Some say it is what the Chinese producers marginal cost is which is said to be $150. I think for Fortescue it is somewhere around the $110 mark (but I don't really know).

So, if underlying profit before tax for the first half was $4.2 billion, assuming all other things remaining equal, then projecting the profitability of BHP based soley on iron ore price scenarios:

Iron Ore Price $/t, Net Profit ($billion)
100, 8.4 
110, 9.5
120, 10.6
130, 11.7
140, 12.8
150, 13.9

The figures above extrapolate the last half's iron ore sales to assume annual sales of 180 million tonnes. Assuming that iron ore production reaches the 220 mtpa forecast for 2015 and assuming a cost of production of $50 per tonne (using the current reported margin of approx 50% against the average price achieved in the last half of $100):

Iron Ore Price $/t, Net Profit ($billion)
100, 10.4
110, 11.9
120, 13.4
130, 14.9
140, 16.4
150, 17.9

But there are professional people who do this sort of thing for a living. I don't really know what I am doing in throwing all these numbers around! I am sure this analysis is wildly inadequate and inaccurate. Shoot me down or throw up some alternative analysis.


----------



## McLovin (22 February 2013)

Nice analysis tinny. 



			
				tinhat said:
			
		

> If I were to follow my own logic then the there can only be one iron ore producer that is worth investing in and that is the one with the lowest and flattest marginal cost base, which, if I am not mistaken is Rio Tinto right?




Yeah, I think that's right.



			
				tinhat said:
			
		

> Which leads to the overwhelming question of what price forecast to use for iron ore?




Ahh...This is the inherently dodgy part of any commodity business, IMO.


----------



## tinhat (22 February 2013)

I just had a quick look at FMG's results and, using the figures given, Their average price received over the half was $96/t with EBITA of US$1,134 million and 35.7 million tonnes, that represents a total cost of US$68 per tonne. Haha - I just realised they give that figure in slide 12 of their presentation.


----------



## Garpal Gumnut (22 February 2013)

BHP continues to fall.

$37.5 is a new resistance point, and I see nothing in the short term to indicate it will not continue lower, perhaps to $35 or $30

A ten day , 15 min chart shows the failure to progress to $40 and above, and the new resistance in the short term.






gg


----------



## hhvinhh (25 February 2013)

Hi all,

I just started investing last week, and the stock I picked is BHP at $39.

However recent price drops sharply.

What do you guys think after the departure of CEO?

Should I try hold for a while or just sell it to avoid further loss?


----------



## McLovin (25 February 2013)

hhvinhh said:


> Hi all,
> 
> I just started investing last week, and the stock I picked is BHP at $39.
> 
> ...




What was the reason you bought in the first place? If you can't answer that question then you should never have bought in. If you can answer it then consider whether that criteria has changed in the last week (unlikely!).

Kloppers was no genius, so his departure is much of a muchness, to me anyway.


----------



## hhvinhh (25 February 2013)

McLovin said:


> What was the reason you bought in the first place? If you can't answer that question then you should never have bought in. If you can answer it then consider whether that criteria has changed in the last week (unlikely!).
> 
> Kloppers was no genius, so his departure is much of a muchness, to me anyway.




Yes i admitted i just read a research report saying that intrinsic value should be  $50 and then made decision..

What kind of research did you do when deciding to invest?


----------



## burglar (25 February 2013)

hhvinhh said:


> Yes i admitted i just read a research report saying that intrinsic value should be  $50 and then made decision..
> 
> What kind of research did you do when deciding to invest?




Did this report have a disclaimer so big, you could drive a Mack truck through it?

Who remembers Ravensthorpe?

http://en.wikipedia.org/wiki/Ravensthorpe_Nickel_Mine


----------



## McLovin (25 February 2013)

hhvinhh said:


> What kind of research did you do when deciding to invest?




Depends. If I'm planning to hold it medium/long term then I want to understand the business, the industry it operates in, it's historic margins (and I'm talking at least 5 years and better if it's 10 years) the likelihood of any recurring revenue, the capital intensity of the business and so on and so forth. At the end of all that, I try and come up with a ballpark value based on free cash flow and then buy when it's well below that.

If you're buying on the say so of a broker report you read last week, then assuming the broker is right (and this is a big assumption), you cannot possibly expect it to run up to $50 in a couple of weeks. It might take 3 months, it might take 3 years. In the interim the price may fall to $20 or lower. It's much easier to hold through that price decline when you have your own opinion, rather than someone else's.


----------



## chops_a_must (5 March 2013)

Some great fundamental analysis on this page.

From a technical perspective, BHP needs to get a run from this point, as there is a fair bit of support around 35.

So I agree with GG.

However, I'm not sure there is much motivation for it to run, with the outlook.

I bought this stock as a bottom draw job some years ago.

But their outlook tells me that they're planning on bunkering down, and limiting losses, rather than increasing earnings.

So I can't see much growth potential here, and will cash out if support looks shaky or it meanders for too much longer.

I think there will be more opportunities down the road for this one. IMO.


----------



## Gringotts Bank (7 March 2013)

I reckon BHP and FMG look like buys if the close today is around 35.93 or higher (and 4.45 for FMG).  Very short term play - 1-2 days.


----------



## notting (7 March 2013)

There seemed to be some kind of sentiment shift at just after 11 yesterday. 
Many of the Iron ore stops reversed from their down moves and headed up quite aggresively.  
I assumed there was something said in the China meeting or something to be said.  
Ore was down the night before so it certainly wasn't the driver.
It would be great if it coincides with a shift from high yield to growth.
National Development and reform commission of China have accused the Iron Ore suppliers of convoluting a supply shortage to lift the prices.  What a load of crap.
China were the ones who turned off all their furnaces and down ramped the prices by destocking, then when they have a bit of a supply issue they accuse the big 3.
Their shocking.
BHP have responded by transparently showing the *FACTS* of their supply line over that time.  There is nothing manipulated about it!  
China manipulates what every it can as soon as it can.
When China's complaining about the price that's a bullish signal!
Hope the Ore price goes to $220


----------



## notting (18 March 2013)

The Chinese looked rather stupid trying to accuse BHP of price manipulation.
So they have now leaked information to Ausi Feds about BHP bribes.
The Chinese will not allow you to do business without bribes!!!
They then use that to gain leverage in times like these so they can arrest anyone or use them to infiltrate businesses by threatening them and their families if you do not co operate.



> The sales director for a supplier to Beijing Foton Daimler Automotive is close to despair. She has been selling parts for 20 years but now, she said, more people than ever needed to be bribed to guarantee orders.
> 
> "In the past, we would give a purchasing manager a red envelope. But now even assembly line workers will call me threatening that if we don't pay up they will find some problem with our product," she said, asking to remain anonymous for fear of the potential consequences. "The rot has reached the roots."


----------



## Gringotts Bank (20 March 2013)

Probably a low risk entry here, I'd posit.


----------



## Gringotts Bank (21 March 2013)

I don't like it today.  Just sold.

Maybe around the low 33 mark.


----------



## nulla nulla (19 April 2013)

In less than two (2) months BHP has fallen from the recent high of $39.00 through two (2) support levels and is now close to testing the low price of $30.18 of July 2022.

While the present Iron ore price is good, gold miners are getting belted following on from the recent gold price sell down by the big banks and others. Oddly enough the demand for physical gold is still high, you'd think the big miners with the lower production costs (and probably some hedging) would weather this sort of fluctuation better.




I don't know, which is why I am asking, is it a good time to buy BHP?


----------



## Paavfc (19 April 2013)

Time to wait and hold see which way bhp goes before entry.
Trend is down..


----------



## Gringotts Bank (1 May 2013)

A few of the bigger resource co's are forming inverted H&S.  If they don't break out to the upside within 2-3 weeks, it would be very bearish for the whole sector, imo.  Certainly not time to buy, just watch.


----------



## Gringotts Bank (6 May 2013)

Gringotts Bank said:


> A few of the bigger resource co's are forming inverted H&S.  If they don't break out to the upside within 2-3 weeks, it would be very bearish for the whole sector, imo.  Certainly not time to buy, just watch.




They all gapped over the neckline.  Now a retrace to neckline I guess.


----------



## rbgmauq (7 May 2013)

BHP has been showing support around 30.58 and resistance in the 34.609 price range. MACD, Stochastic Oscillator and RSI are increasing, positive signal.


----------



## tinhat (15 May 2013)

A couple of interesting things from Andrew Mackenzie's presentation slides that caught my attention:

Slide 7 quantifies BHPs resource base on a copper equivalent basis - equivalent to 1,200 million tonnes of copper based on 2012 prices. I found that a rather interesting way to express their resource base. Has anyone seen this done before? Is this some sort of accounting trickery or are we going to start receiving our dividends in copper?




Earlier in this thread we looked at how a change to the price of iron ore impacts on BHP's profit. Here is an interesting table of impacts to the bottom line. Note they estimate that a 1c move in the AUD impacts the bottom line by US$110 million, the same as a move of US$1/t in the iron ore price. 




Is my maths right here? Assuming all else being equal, if the AUD falls from 1.05/1 (USD/AUD) to 0.95/1 then BHPs profit increases by US$1.1b, which when converted into AUD is an increase of $1.1b * 1.1 = AU$1.21b


----------



## Garpal Gumnut (18 May 2013)

Thanks tinhat,

I try to stay away from fundamental stuff but agree.

I am bullish on BHP and probably entering early next week.

BHP are masters of Special Dividends.

gg


----------



## CanOz (4 June 2013)

Here's one for bears and pattern fans.....

Curious to see is if works out or not.

I think i might make a wager on it

CanOz


----------



## coolcup (4 June 2013)

CanOz said:


> Here's one for bears and pattern fans.....
> 
> Curious to see is if works out or not.
> 
> ...




Hi CanOz

I am a bit dense - would you mind explaining what you are signalling here? I assume you are signalling the trend is now positive and might break out to the upside?

Thanks!!


----------



## CanOz (4 June 2013)

coolcup said:


> Hi CanOz
> 
> I am a bit dense - would you mind explaining what you are signalling here? I assume you are signalling the trend is now positive and might break out to the upside?
> 
> Thanks!!




Its actually a bearish pattern, and the support is the line, so bearish below. These patterns don't always work, but the stats are there for you to check out...

CanOz


----------



## coolcup (4 June 2013)

CanOz said:


> Its actually a bearish pattern, and the support is the line, so bearish below. These patterns don't always work, but the stats are there for you to check out...
> 
> CanOz




*slaps forehead*

I didn't quite notice the head and shoulders there staring me in the face - I was a bit more focused on the gradually rising support line. I think it has to pull back below the start of the first shoulder before the formation is complete no?


----------



## CanOz (4 June 2013)

coolcup said:


> *slaps forehead*
> 
> I didn't quite notice the head and shoulders there staring me in the face - I was a bit more focused on the gradually rising support line. I think it has to pull back below the start of the first shoulder before the formation is complete no?




Seldom see them perfect and to be honest I've not traded them very often, they're a little rare. This pattern only shows on the ASX and not the ADR.

CanOz


----------



## CanOz (5 June 2013)

CanOz said:


> Here's one for bears and pattern fans.....
> 
> Curious to see is if works out or not.
> 
> ...




H&S short triggered. I didn't get on it as IB refused my order yesterday saying that "the exchange is closed"...nice

Maybe on the retest...

CanOz


----------



## CanOz (6 June 2013)

Well today presents the less aggressive entry for the BHP H&S pattern. Target has been updated as well.

Lets see how it plays out.

I'm not holding this.

CanOz


----------



## CanOz (10 June 2013)

BHP is dropping nicely...


----------



## skc (10 June 2013)

CanOz said:


> BHP is dropping nicely...




If the overseas market holds up tonight, BHP should give you a good retest of that recent break. Chance to re-capture the lost opportunity if you expect weakness to persist.


----------



## CanOz (10 June 2013)

skc said:


> If the overseas market holds up tonight, BHP should give you a good retest of that recent break. Chance to re-capture the lost opportunity if you expect weakness to persist.




Yeah, the DAX has built a value area higher in the face of the constitutional court hearings...

You think we'll get a pop up before another leg down in the US? Or is this correction over?


----------



## skc (11 June 2013)

CanOz said:


> Yeah, the DAX has built a value area higher in the face of the constitutional court hearings...
> 
> You think we'll get a pop up before another leg down in the US? Or is this correction over?




The pop comment was only in relation to BHP. It was only 2% from the recent break of support and with SPI futures point up 40 points at the time of my post, it was quite conceivable for BHP to re-touch that before falling off.

And my money is on falling off because of what the chart for RIO looks like... it's an imminent breakdown to new 12 month low.

As to the overall market - don't really have a strong view either way - it's all about the $AUD and my power to predict FX behaviour is probably zero (if not negative).


----------



## CanOz (11 June 2013)

skc said:


> The pop comment was only in relation to BHP. It was only 2% from the recent break of support and with SPI futures point up 40 points at the time of my post, it was quite conceivable for BHP to re-touch that before falling off.
> 
> And my money is on falling off because of what the chart for RIO looks like... it's an imminent breakdown to new 12 month low.
> 
> As to the overall market - don't really have a strong view either way - it's all about the $AUD and my power to predict FX behaviour is probably zero (if not negative).




Perhaps a short covering rally could propel BHP to the re test area again...


----------



## skc (11 June 2013)

CanOz said:


> Perhaps a short covering rally could propel BHP to the re test area again...




There's not much shorts on BHP. Only 0.4% of shares outstanding per ASIC.

It might still retest over the next few sessions but it won't be short covering.


----------



## CanOz (11 June 2013)

skc said:


> There's not much shorts on BHP. Only 0.4% of shares outstanding per ASIC.
> 
> It might still retest over the next few sessions but it won't be short covering.




Fair enough, that big volume spike this morning must be real buyers then...


----------



## coolcup (16 June 2013)

Looks like a long term descending triangle on both RIO and BHP. Looking to avoid them both until they can break out of this formation. Had a good go at it, but failed recently. Also surprised at just how correlated the two share prices are despite having very different exposures to iron ore. I was expecting BHP to have outperformed much more reflecting its higher weighting to energy.


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## Covalev (22 August 2013)

BHP Billiton - Maintain NEUTRAL

● The result was messy, but with NPAT of $11.8 bn a miss at the bottom line vs CS ($12.8 bn) and consensus ($12.6 bn). BHP noted that $700 mn of one-off items were taken above the line and that the tax rate was unusually high at 38% on MRRT and FX movements (each pp is ~$200 mn NPAT).

● Cost savings of $2.7 bn failed to impress as it was driven by exploration/evaluation and normalisation of production at Escondida and Aus coal. The full year dividend of $1.16/sh (up 4%) and capex of $21.7 bn were both in line.

● BHP is guiding to an 8% copper equivalent growth rate of over the next two years. This is down from the 10% BHP previously guided to and is primarily due to a lower petroleum production outlook (BP operated assets in the GoM).

● Despite plenty of new detail on production forecasts, cost cutting and capex there does not seem to be much that would change traders view. Traders will return with a fuller note once trader have had a chance to digest the new information better and have reviewed traders forecasts.


----------



## stevier95 (23 October 2013)

Quarterly Results:

BHP Billiton maintained strong momentum in the September 2013 quarter as production increased by 11% from the prior corresponding period.
BHP Billiton has upgraded its iron ore production guidance for the fiscal year from 207 to 212 million tonnes after beating forecasts during the September quarter.
The world's largest miner produced 54 million tonnes of iron ore out of its Western Australian Pilbara operations during the three months to the end of September.
Total petroleum production for the September quarter was a record 62.7 million barrels of oil equivalent.


Investors responded strongly to the news, pushing BHP shares ahead 85 ¢ or 2.5 per cent to close at $37.05 yesterday. 

Has today been upgraded to a moderate buy, with analysts expecting a break of $40 and a high if $43 sometime within the next 6-12 months. So far up 64c or 1.7% to $37.69 today.


----------



## ricee007 (30 October 2013)

Did my first dive into BHP in the last week.

It pretty much replaced MQG as a long-term hold in my portfolio.


----------



## McCoy Pauley (20 August 2014)

I'm a bit surprised nobody has commented about the demerger. I haven't read much of what BHP has had to say about the demerger (though I did skim the announcement yesterday) but I'm having trouble wrapping my head around the idea that BHP is spinning out second tier assets into a new vehicle and then expecting the market to support the venture.  I suppose that a lot of fund managers will support it because of their mandates but if I held BHP shares (I currently don't) why would I want to hold shares in the new company if BHP doesn't want to hold the assets internally?


----------



## So_Cynical (20 August 2014)

McCoy Pauley said:


> I'm a bit surprised nobody has commented about the demerger. I haven't read much of what BHP has had to say about the demerger (though I did skim the announcement yesterday) but I'm having trouble wrapping my head around the idea that BHP is spinning out second tier assets into a new vehicle and then expecting the market to support the venture.?




Sounds stupid to me, be like JBH spinning off their worst performing 200 stores and keeping the best 100 as core assets. :dunno: a mining company divesting its self of most of its mines.


----------



## Value Collector (20 August 2014)

So_Cynical said:


> Sounds stupid to me, be like JBH spinning off their worst performing 200 stores and keeping the best 100 as core assets. :dunno: a mining company divesting its self of most of its mines.




It's more like a retailer like Woolworths divesting Dicksmiths.

It's not a mining companies job to colour in every square on the periodic table, I think Iron ore, Copper, Coal (energy and metallurgical) and petroleum (with potash potentially) Is enough diversification for them.

And their assets in those commodities are huge, they will be mining those deposits for over 100years, I have had a look at the announcements and it seems like a good idea to me.

It should allow the Bhp management to focus on developing and extracting value from the very large long life assets, while the other smaller assets can have their own management who can focus on developing and improving them.

Also, Remember BHP spinning off their steel mills, Spinning off some of their aluminium assets is a similar thing.



> a mining company divesting its self of most of its mines. :confused




It's not even close to "most of it's mines"


----------



## Value Collector (20 August 2014)

McCoy Pauley said:


> why would I want to hold shares in the new company if BHP doesn't want to hold the assets internally?




There is still some good assets in there, I'll probably hold any Newco shares I get issued. The assets are cashflow positive, and under a focused management could probably be improved, Also Newco while not being a MEGA miner like BHP, it will still be a decent sized mining operation itself, and there are lots of opportunities for a company of its size to explore that are too big for the juniors, but to small for the megas. 

So I see it as a Bag of producing assets, plus some development opportunities, with the abilitiy to expand into some new areas.


----------



## rimtas (11 September 2014)

I looked at the BHP big Picture and there apears that 2007 top was the Cycle wave III, since then the stock is moving in "threes" making a sugestion that a biger size Cycle Triangle as Wave IV is unfolding. 
 We are right now in a Primary wave C(circled) which should consists of 3 waves. As wave (A) and probably (B) is behind us, the upcoming colapse should carry price to 25-30 area in a coming multimonth decline. Then Primary Wave D(circled) advance should return to 60 or so. 

 So basicaly the whole sector is doomed if this giant is going to decline right now on a weekly scale.Buying Opportunity could be next year, 
 I'll monitor closely this stock as the ASX also has some kind if correlation when you compare both charts and with ASX in an Ending Diagonal this scenario seems highly probable for both.


----------



## pinkboy (23 September 2014)

Im no technical guru, but BHP has not bounced off its 12mths of support around the $35 mark, and fallen below its 12mth low.

I only had a look because a friend of mine bought in a couple days ago thinking it would be supported and bounce back up again.

I don't hold or intend to purchase.  I just like to look and learn and do so best by writing down.


pinkboy


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## dlineinvestor (1 December 2014)

The question is ..... will BHP in this precarious climate hold 30 bucks >> ??


----------



## pinkboy (1 December 2014)

dlineinvestor said:


> The question is ..... will BHP in this precarious climate hold 30 bucks >> ??




Was thinking exactly the same thing at exactly the same time!

pinkboy


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## pinkboy (1 December 2014)

Scratch that!

The seal is broken!  Now where will it go?


pinkboy


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## dlineinvestor (1 December 2014)

SOB !
Broke it


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## TheUnknown (1 December 2014)

LOL @ BHP and LOL @ BHP investors.

Enjoy $20 bucks.

Chasing pathetic dividends while capital is raped...sounds good.


----------



## Value Collector (1 December 2014)

TheUnknown said:


> LOL @ BHP and LOL @ BHP investors.
> 
> Enjoy $20 bucks.
> 
> Chasing pathetic dividends while capital is raped...sounds good.




:iamwithst


----------



## Joe Blow (1 December 2014)

TheUnknown said:


> LOL @ BHP and LOL @ BHP investors.
> 
> Enjoy $20 bucks.
> 
> Chasing pathetic dividends while capital is raped...sounds good.




Surely you have something more constructive to add to the discussion than this pointless and provocative remark?


----------



## sptrawler (12 December 2014)

BHP under $30, dividend getting close to 5% fully franked.

I know iron ore may go down to $10/ton.
But then there wouldn't be any iron ore miners.

Oil may go down to $20/ barrel, but we will run out of cheap oil.

Possible accumulation stock.IMO


----------



## TheUnknown (16 December 2014)

Will we see $15 for BHP? My other post must have got a few holders 'upset' so i got a warning by the 'site owner' can't discuss negativity of this stock. 

Long as dividends are paid doesn't matter about the capital invested.


----------



## Value Collector (16 December 2014)

TheUnknown said:


> Will we see $15 for BHP? My other post must have got a few holders 'upset' so i got a warning by the 'site owner' can't discuss negativity of this stock.
> 
> Long as dividends are paid doesn't matter about the capital invested.




offcourse you can discuss negativity, But all you did before was make a stupid comment. you didn't discuss anything.

No one would have a problem is you actually brought up a topic for discussion, of presented some facts.

But, making a stupid comment as you did,doesn't add anything of value to the thread, and it just makes you look silly.


----------



## TheUnknown (16 December 2014)

Value Collector said:


> offcourse you can discuss negativity, But all you did before was make a stupid comment. you didn't discuss anything.
> 
> No one would have a problem is you actually brought up a topic for discussion, of presented some facts.
> 
> But, making a stupid comment as you did,doesn't add anything of value to the thread, and it just makes you look silly.




The facts are china don't need it because it has slowed down, aus economy has slowed down despite what the BS figures are published, this was my reason and is still my reason why i think BHP will tumble even more. 

Mining stocks are a gamble at the highest level once prices tumble they seem to take a very long time to recover if they do recover.

Look at RIO the same thing will happen with BHP $15-$20 bucks at tops.

Edit - I remember many guru's many experts and general share holders saying '' iron or will never drop below $80 are you crazy! '' BHP has investments in OIL.......and Iorn Or....


----------



## notting (16 December 2014)

TheUnknown said:


> Look at RIO the same thing will happen with BHP $15-$20 bucks at tops.




So how much money have you put on as a short on these and at what price?
Man enough for that?


----------



## TheUnknown (16 December 2014)

notting said:


> So how much money have you put on as a short on these and at what price?
> Man enough for that?




I have shorted BHP from $31, i will leave the trade at $20 bucks or less.

BHP YTD Return

-25.84% and still going.


----------



## Craton (16 December 2014)

TheUnknown said:


> Will we see $15 for BHP? My other post must have got a few holders 'upset' so i got a warning by the 'site owner' can't discuss negativity of this stock.
> 
> Long as dividends are paid doesn't matter about the capital invested.




*For the record, I've not complained to anyone but feel I need to comment.*

I'm not sure about "upsetting" anyone per se but as Joe Blow says...



Joe Blow said:


> Surely you have something more constructive to add to the discussion than this pointless and provocative remark?




...and I agree that you've contributed nothing constructive.

Fair enough that you don't see anything positive with the stock so instead of lol-ing at BHP and its stock holders, why not offer up some logic or reasoning behind your aspersions?

Of course the stock is taking a tumble with the low iron and oil prices, China et al and is not the only stock being hammered of late, but surely a day trader would view the stock slightly differently to a trader with a longer term view.

Maybe you don't like the fact that South32 is being spun out but we wouldn't know because you've posted in such a way that can only be seen as shyte stirring at worst and frivolous at best. 

I fully support that Joe nurtures healthy discussion and not kiddie flame contests. To that end, please enlighten us as to why you think BHP is a laughing stock.


----------



## TheUnknown (16 December 2014)

Craton said:


> *For the record, I've not complained to anyone but feel I need to comment.*
> 
> I'm not sure about "upsetting" anyone per se but as Joe Blow says...
> 
> ...




Okay


----------



## Joe Blow (16 December 2014)

TheUnknown said:


> LOL @ BHP and LOL @ BHP investors.
> 
> Enjoy $20 bucks.
> 
> Chasing pathetic dividends while capital is raped...sounds good.






TheUnknown said:


> Will we see $15 for BHP? My other post must have got a few holders 'upset' so i got a warning by the 'site owner' can't discuss negativity of this stock.
> 
> Long as dividends are paid doesn't matter about the capital invested.




So the best you can offer is laughing at and mocking investors who have sustained capital losses? The purpose of your post wasn't to discuss the negativity of BHP, it was to try and deliberately bait and provoke other ASF members, and you know this. You were trolling.

Discuss the stock all you want, but drop the baiting and deliberate provocation.


----------



## notting (16 December 2014)

TheUnknown said:


> I have shorted BHP from $31, i will leave the trade at $20 bucks or less.
> Edit - I remember many guru's many experts and general share holders saying '' iron or will never drop below $80 are you crazy! '' BHP has investments in OIL.......and Iorn Or....




Makes sense to me.
I hope it gets there for you.
And at least BHP holders may be a little relieved you aren't that confident about $15
31 to 27.45 is around 13%?


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## TheUnknown (16 December 2014)

notting said:


> Makes sense to me.
> I hope it gets there for you.
> And at least BHP holders may be a little relieved you aren't that confident about $15
> 31 to 27.45 is around 13%?




Yup, i won't post in this thread anymore because it's trolling. Let's wait and see.


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## Value Collector (16 December 2014)

TheUnknown said:


> LOL @ BHP and LOL @ BHP investors.
> 
> Enjoy $20 bucks.
> 
> Chasing pathetic dividends while capital is raped...sounds good.




This is trolling, no decent discussion can come from it.



TheUnknown said:


> The facts are china don't need it because it has slowed down, aus economy has slowed down despite what the BS figures are published, this was my reason and is still my reason why i think BHP will tumble even more.
> 
> Mining stocks are a gamble at the highest level once prices tumble they seem to take a very long time to recover if they do recover.
> 
> ...




This is not trolling, because your actually bringing up a few points which could have started a discussion.

The bad thing about trolling is not only does it not assist in starting a rational dialogue where you can share your views, it also denies you the possibility of learning something yourself.

who knows if you had not been such an a$$ from the start, maybe you might have learned something.


----------



## TheUnknown (16 December 2014)

Value Collector said:


> This is trolling, no decent discussion can come from it.
> 
> 
> 
> ...




Yes, teach me something about this blue chip when i exit the short position @ $20. I will wait until that time.

Merry Christmas & Happy and prosperous new year!


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## Value Collector (16 December 2014)

TheUnknown said:


> Yes, teach me something about this blue chip when i exit the short position @ $20. I will wait until that time.
> 
> Merry Christmas & Happy and prosperous new year!




Ok, hold your shot positions until they are below $20 and we will see who's capital is destroyed longterm.


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## TheUnknown (16 December 2014)

Value Collector said:


> Ok, hold your shot positions until they are below $20 and we will see who's capital is destroyed longterm.




Long term? It's back below what it was 5+ years ago.....please tell me what benefit it was holding it for 5 years apart from dividends which are pathetic and if you compare what inflation is running at and take away all other holding costs/taxes... please tell me how much money one would have made if they held from 09 until now?

'before' i get labelled a troll again i will show you something about your long term.

11/01/2010 BHP SHARES - $43.65

16/12/2014 BHP SHARES - $27.42

If someone invested $100k back in 2010 you would have $70k now.

In 5 years you have collected dividends. 

But in 5 years your capital has grown 0%, in fact you have lost 30k of your capital.........''but'' ''but'' dividends?????? yeah.......what about inflation? what about holding costs.

if you plan to hold it for 20 years maybe you will get your money back and more.

BUT 

most are here for a good time not a long time waiting for a recovery.


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## TheUnknown (16 December 2014)

Anyone keen on BHP can buy it below what is was 5 years ago by 30%. In reality anyone keen on buying BHP should be buying it for $50+ not 27 bucks.


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## tech/a (16 December 2014)

I'm with the guy in the shorts.

*Click to expand*


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## TheUnknown (16 December 2014)

I used $4k of my capital on this short position since $31. If i fail i fail and lose less than someone who invested in this junk since 2010. If i do hit my target of $20 well.... i will be cashing in for a nice xmas gift and still be ahead if i purchased in 2010.

Hang on..........I'm a troll right............? 

It's all about ROI and in what time frame.......in 30 years BHP could be $500 or $5. 

In saying all of this.................................

* China has slowed down big time ( all financial releases are fake and fabricated )
* China is not going to buy iron or for $100+ a ton
* Oil has collapsed and will probably collapse down to $45.00 ( BHP will take a hit )

The smart ones would have exited this position sooner rather than later.


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## TheUnknown (16 December 2014)

Value Collector said:


> :iamwithst




Your with stupid hey.  did you top up more when you posted that???? do it mate its good value


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## sptrawler (16 December 2014)

TheUnknown said:


> I used $4k of my capital on this short position since $31. If i fail i fail and lose less than someone who invested in this junk since 2010. If i do hit my target of $20 well.... i will be cashing in for a nice xmas gift and still be ahead if i purchased in 2010.
> 
> Hang on..........I'm a troll right............?
> 
> ...




It is all a gamble, I know someone who bought 100,000 at $4, also bought 400,000 TLS at $3.50. Probably going to blow his feet off, but he is 80 now.lol


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## Muschu (16 December 2014)

TheUnknown said:


> I used $4k of my capital on this short position since $31. If i fail i fail and lose less than someone who invested in this junk since 2010. If i do hit my target of $20 well.... i will be cashing in for a nice xmas gift and still be ahead if i purchased in 2010.
> 
> Hang on..........I'm a troll right............?
> 
> ...




Well you certainly don't lack ego or confidence.  Maturity suspect however. Aka unconsciously incompetent. 

Posts of the kind you make add nothing.  Also very boring.


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## TheUnknown (16 December 2014)

sptrawler said:


> It is all a gamble, I know someone who bought 100,000 at $4, also bought 400,000 TLS at $3.50. Probably going to blow his feet off, but he is 80 now.lol




I agree with you 100% it is all a gamble.  I rather gamble in a shorter time frame because no one knows what will happen in the future no one knows 100% what will happen in the shorter time frame either but chances are greater in a short time frame, when i say short time frame it does not mean 1-2 days it can be up to 6 months.

Moral of the story and my forecast on BHP is bearish and it's a dud.


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## TheUnknown (16 December 2014)

Muschu said:


> Well you certainly don't lack ego or confidence.  Maturity suspect however. Aka unconsciously incompetent.
> 
> Posts of the kind you make add nothing.  Also very boring.




Yes it's boring, so why are you reading it and bothering to reply to it?

Sorry if you hold BHP, it *might* work out for you in the distant future.


PS - *Trend is your friend*


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## Joe Blow (16 December 2014)

Muschu said:


> Posts of the kind you make add nothing.  Also very boring.




Agreed. Any further posts that are designed to wind others up, or that are ramping or downramping in nature with no analysis or reasoning to support them will not be tolerated.

I'm all for both bearish and bullish perspectives. People are entitled to present either as long as they explain why, but mindless ramping or downramping serves no purpose and isn't welcome here.


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## Muschu (16 December 2014)

TheUnknown said:


> Yes it's boring, so why are you reading it and bothering to reply to it?
> 
> Sorry if you hold BHP, it *might* work out for you in the distant future.
> 
> ...




Joe I completely agree with your last post.

May I finish with this please?

Mr Unknown, and briefly:

No I do not hold BHP.  I did some years back but the volatility made me decide to sell.

Next:  I thought you stated several posts back that you would not contribute to this thread anymore.  

Finally:  Your posts actually devalue ASF.

Thanks Joe.  You may decide to go further with this but that is your call and your record, in my experience, has 
been very considered and respected.


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## Value Collector (17 December 2014)

TheUnknown said:


> Long term? It's back below what it was 5+ years ago.




Who's talking about 5 years ago?

you have made a specific claim, about BHP hitting $20.

Lets see you hold that short until it hits $20.

Please hold any cocky replies until your short position hits that target.


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## sptrawler (17 December 2014)

Value Collector said:


> Who's talking about 5 years ago?
> 
> you have made a specific claim, about BHP hitting $20.
> 
> ...




If BHP hit $20 I for one will be adding. 
Resources are required to build first world infrastructure.

Currently all the third world populace can afford, is mobile phones and t.v's, this unfortunately shows them what they are missing out on.

It is a massive motivator, the demand will ebb and flow, however the underlying demand and cost of non renewable's will increase, until we can replace them.


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## Value Collector (18 December 2014)

sptrawler said:


> If BHP hit $20 I for one will be adding.
> Resources are required to build first world infrastructure.
> 
> Currently all the third world populace can afford, is mobile phones and t.v's, this unfortunately shows them what they are missing out on.
> ...




me too, I would be happy to sell unknown some $20 put options if wanted.


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## financialreports (2 January 2015)

In the 2014 financial year, BHP had 85 billion USD net assets. Given the current exchange rate, that's a book value of about $19.5 a share. 

It certainly looks more attractive at $30 than at $39 last year, but there is still a large amount of uncertainty in the commodity prices.


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## financialreports (2 January 2015)

I think a growing concern for long term investors is whether resource companies can transition successfully as the economy adopts a more sustainable model in terms of growth and energy sources.


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## rimtas (6 January 2015)

Looks like big miners are the most hated stocks on ASX. With Iron Ore trading around 70  even government  reviewed it's budget balancing until 2018  in anticipation for ore to decline further, or staying where it is for prolonged period of time.   It could, of course, but I'll try to give a different shot here from technical perspective. 

In anticipation of Triangle (chart here  https://www.aussiestockforums.com/forums/showthread.php?t=1335&p=840445&viewfull=1#post840445 ), the waves can be counted as complete for Intermediate wave (C).

It is also important that BHP is trading now at the very important long term resistance trendline which is somewhere at ~28. (charts here: https://www.aussiestockforums.com/forums/showthread.php?t=15355&p=851959&viewfull=1#post851959  )   
 So over 40 years of trend, and will it hold is sending another message, that probably it will (trend is your friend, right?).







I also added iron ore charts with most likely counts for this situation, and no matter how you count there seems that one wave is still missing, just at different degree, declining to 60(in first) or lower in second chart scenario. I expect that BHP will hold around 27-28 while ore finds a bottom.





The consensus sentiment towards miners and commodities is pessimistic, to say at least, little people see the situation will improve in the near term.  
One analyst from IG markets told today ""There is a lot of running for the exit in a market where there is _no slowing down_ in the _bear market_ of oil and iron ore". Followed by todays further fall in oil, another from Goldman Sachs added that :   "he expects a “far lower” _new normal _for prices" and Barclays Plc said oil has “further downside risk.”  
 That's just a couple examples how declining market affects what people say and think, but none of them sees any green light nor short term, neither medium term, and most of them are pessimistic about long term also. This is another signal that can be added as a sentiment extreme to those two above.  

As far as I can see, there are plenty of reasons to short BHP these days, but they are quite different from those that where 3,5 years ago when Iron Ore was above $150 and BHP above $45, and when shorting miners seemed like crazy idea at the time. So market did it's job,  the question _how well_ will be answered in a first half of the year 2015.


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## notting (14 January 2015)

> Copper is really hitting the skids now, plunging the most in almost six years to below $US5400 a tonne as a cut in the World Bank’s global growth forecast further fuelled speculation demand for raw materials won’t be enough to eliminate a supply glut.




The rumors are true.
According to analysts it is the most well diversified resources company on the planet.

Inevitably, there are no pillars left. :bricks1:


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## Bill M (15 January 2015)

I was just having a look at BHP's chart, it first hit the $26 levels around 9 years ago and we are there again today. 9 years of stock growth wiped out in a few Months.

I don't hold but by crikey I'm looking at this decline and at some point BHP is going to be a buying opportunity. The big question is, when will be that point? Waiting patiently...


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## VSntchr (15 January 2015)

Bill M said:


> I don't hold but by crikey I'm looking at this decline and at some point BHP is going to be a buying opportunity. The big question is, when will be that point? Waiting patiently...




Probably the best time to buy is when your decision making comes to the thought process that mirrors something like "This is too cheap now, something isn't right. What does the market know that I don't". When those storm clouds are brewing the light might not be too far away.

For now taking into account all the variables at hand - it's still sunny here in Queensland, but that's just my opinion...


----------



## pinkboy (15 January 2015)

This is my post yesterday on Somersoft:

Today I purchased a small parcel of BHP @ $27.30.

My reasoning: 




> Quote:
> BHP Billiton has a progressive dividend policy. The aim of this policy is to steadily increase, or at least maintain our base dividend in US dollars terms at each half yearly payment. http://www.bhpbilliton.com/home/inve...Dividends.aspx





Most recent dividend was USD$0.62c. If we keep that base for 2015 (Interim and Final) and the AUD stays around the 80c mark, gives us a forward dividend of $1.55ish.

($1.55/$27.30) x 100 = 5.67% FF. 

Investors havent enjoyed a dividend yield like this in 15yrs.

I could be right, I could be completely wrong - but for now, thats my uneducated insight.


pinkboy


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## waterbottle (15 January 2015)

pinkboy said:


> This is my post yesterday on Somersoft:
> 
> Today I purchased a small parcel of BHP @ $27.30.
> 
> ...




Why would they keep paying the same dividend when their return on iron ore is dropping because of decreasing prices?


----------



## infamous (15 January 2015)

waterbottle said:


> Why would they keep paying the same dividend when their return on iron ore is dropping because of decreasing prices?



Because they're spending less money on expansion?


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## notting (15 January 2015)

I think they have mad a policy decision to gradually increase dividends rather than do a buy back.
RIO is possibly doing both


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## pinkboy (15 January 2015)

waterbottle said:


> Why would they keep paying the same dividend when their return on iron ore is dropping because of decreasing prices?




Because that's their policy - I linked it for you.  They have cash reserves to get them through the lean times.

What do you think will happen to SP if they _decreased_ their dividend?  There would be blood on the streets - that's what.  And I bet my last BHP share that wont happen.

pinkboy


----------



## skc (15 January 2015)

pinkboy said:


> Because that's their policy - I linked it for you.  They have cash reserves to get them through the lean times.
> 
> What do you think will happen to SP if they _decreased_ their dividend?  There would be blood on the streets - that's what.  And I bet my last BHP share that wont happen.
> 
> pinkboy




The dividend policy is just an intent, based on current conditions and forecasts as perceived by the Board. The Board can change that policy without consulting any shareholders... so not something I'd bank on.

And speaking of blood on the street for BHP share price... it's been bleeding pretty bad for 5 months.


----------



## waterbottle (15 January 2015)

skc said:


> The dividend policy is just an intent, based on current conditions and forecasts as perceived by the Board. The Board can change that policy without consulting any shareholders... so not something I'd bank on.
> 
> And speaking of blood on the street for BHP share price... it's been bleeding pretty bad for 5 months.




x2

Iron ore prices have crashed and may or may not continue declining. All depends on China IMO. Regardless, have a look at the chart for BHP - the price could crash through the GFC support. From then on it's anyone's guess where it will stop.

Do you really think BHP will keep paying the same dividends in that state?


----------



## pinkboy (15 January 2015)

Noted gents.

At least a small holding can be averaged down quite significantly should there be a bloodbath.

Thanks.

pinkboy


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## qldfrog (15 January 2015)

The new CEO is keen to change the heritage and stay clear of the the way marius kloppers wasted billions with his moronic management.
I firmly believe that dividends will remains : they were very small initially and I do not expect them to decrease so Ibank on good ROI at current BHP price


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## skc (15 January 2015)

waterbottle said:


> x2
> 
> Iron ore prices have crashed and may or may not continue declining. All depends on China IMO. Regardless, have a look at the chart for BHP - the price could crash through the GFC support. From then on it's anyone's guess where it will stop.
> 
> ...




The line chart doesn't quite show the true GFC bottom which was $20.




Are we going to get there? Anything is possible I guess, but we could just as easily retest $30 level (perhaps on it's report).


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## UMike (16 January 2015)

Just to curse all holders, I picked up a parcel on Wednesday and a double parcel Thursday.


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## superauditor (20 January 2015)

*BHP investment*

I have $15K invested in BHP at various different prices. Should I sink more money into BHP in the hope of it going up, or should I hold?


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## Bazmate (20 January 2015)

Yeah, me too Superauditor.... I think I'll just hold onto them and see what happens..


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## VSntchr (20 January 2015)

*Re: BHP investment*



superauditor said:


> I have $15K invested in BHP at various different prices. Should I sink more money into BHP in the hope of it going up, or should I hold?




Ask yourself why you bought in the first place. What was your thought process at the time? 
Now ask yourself if those reasons are still valid. 

This process should give you some insight into what the correct decision is for your individual circumstances.


----------



## Triathlete (20 January 2015)

I still think BHP has further to fall yet possibly $20 to $24 level at this stage. Have attach an analysis chart of BHP...any other T/A views?


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## shouldaindex (22 January 2015)

These are my extremely rough estimates of what commodity price (long term) it would take to get a 'fair value' at the support levels:

$28 = Oil and Iron Ore both @ $80
$24 = Oil and Iron ore both @ $70

With so many variables it's hard to say, but that's what I'm working with at the moment.  

But I'd also say any decline to $24 won't be based on commodity drop alone.  It would need another accompanying factor whether it be general market weakness, capital / dividend issues, substantial write downs, China panic etc...

On the upside for BHP to hold above $28, it would need Oil and Iron Ore to bottom out at no more than another -10%.  Again just my personal estimates.


----------



## Triathlete (23 January 2015)

shouldaindex said:


> These are my extremely rough estimates of what commodity price (long term) it would take to get a 'fair value' at the support levels:
> 
> $28 = Oil and Iron Ore both @ $80
> $24 = Oil and Iron ore both @ $70
> ...




Thanks for your input shouldaindex.I agree many variables at play.Should be an interesting 3 to 6 months I will be watching with interest as to what happens with BHP and where it will eventually find the bottom.


----------



## shouldaindex (26 January 2015)

http://www.hellenicshippingnews.com...w-scale-of-commodity-price-challenge-russell/

Interesting article.


----------



## Triathlete (29 January 2015)

shouldaindex said:


> http://www.hellenicshippingnews.com...w-scale-of-commodity-price-challenge-russell/
> 
> Interesting article.


----------



## shouldaindex (29 January 2015)

*So I'm looking at factors that could get BHP to test $24, but preserve fundamental value.*

1. Capital Distributions of about $5 are possible in the next 9 months, so if SP value doesn't appreciate in real terms in the next 9 months, it would be worth $24.
- Dividend (62c+62c USD) $1.50c, when fully franked is $2.10.
- South32 Spinoff $15B, equals distribution of $2.80.

2. EPS of approximately 150c for 2014 FY is a realistic possibility, I think there has been more focus on narrative than financials as there hasn't been a financial report or earnings forecast yet.

3. Iron Ore fundamentals suggest it's got further to go.

4. Doubts or changes to the progressive dividend due to lower cashflow, could take away the appeal of a 5 to 6% FF dividend range between $25 to $30.

5. General sharemarket weakness.  We're only 2% away from the post 2008 high.  You can always rely on some sort of weak period from about April/May.

*Reasons why the $27 floor will hold: *

1. Dividend Yield too good at over 5% and Total Distribution Yield including South32 of about 17%

2. 1st Half and FY EPS absorbs commodity prices above expectations

3. Commodity Turnaround 

4. Market happy to pay 16 to 20 PE in a low commodity price cycle 

5. South32 split benefits both and creates positive sentiment.


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## Value Collector (31 January 2015)

TheUnknown said:


> I used $4k of my capital on this short position since $31. If i fail i fail and lose less than someone who invested in this junk since 2010. If i do hit my target of $20 well.... i will be cashing in.




Out of interest, are you still holding this position waiting for $20, I think if you are you would have lost more of your capital than someone who has held since 2010.


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## Bill M (2 March 2015)

Bill M said:


> I was just having a look at BHP's chart, it first hit the $26 levels around 9 years ago and we are there again today. 9 years of stock growth wiped out in a few Months.
> 
> I don't hold but by crikey I'm looking at this decline and at some point BHP is going to be a buying opportunity. The big question is, when will be that point? Waiting patiently...






VSntchr said:


> Probably the best time to buy is when your decision making comes to the thought process that mirrors something like "This is too cheap now, something isn't right. What does the market know that I don't". When those storm clouds are brewing the light might not be too far away.
> 
> For now taking into account all the variables at hand - it's still sunny here in Queensland, but that's just my opinion...




GEEEZZZZ I knew my tummy rumblings were on the money and never a truer word said as yours VSntchr. I've been thinking about that golden opportunity ever since your post.

I didn't get set, I remember sitting it out for a few days. Then the swings higher just kept on coming in so I bought the only ETF in my portfolio that had BHP in it. Since then the ETF has done well but no where near as good as BHP on it's own. So much for it crashing $20, never thought it would. Just spent 2 weeks in Queensland and it was raining almost everyday, hmmmmmmmm.


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## notting (2 March 2015)

It's sitting up perfectly for a short.
China is a basket case.


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## pj2105 (16 March 2015)

Nothing on the horizon to think it will go up.  I wouldn't be surprised if the share price hits very low $20 mark.

This is what I think their long term plan is (or maybe should be), taking into account that the iron ore price won't rise for ages to come.

Demand is low, stock piles are massive and producers admit they are pulling more out of the ground this year than last...why would prices rise in the short or even medium time frame?

It has become a race to the bottom, and down there BHP is king.  The lower the price the greater the weight is born by the other iron ore makers.

- The rest of the iron ore makers can't stay open if prices get close to the $20 range.
- If iron ore producers are forced to close.  The costs just to re-open are a massive undertaking.  (let alone BHP's iron ore is a superior quality to theirs)
- No producer has better economies-of-scale than BHP or profit margins.
-  If iron ore producers close and frequently, then they will not be in a position to take advantage of any re-bound in prices.

Once prices rebound (let us take it for a fact that at some stage prices will rebound, but this might take years), BHP will be in the cat-bird seat with less competition than before.

So the lower the price the more the smaller competitors hit the wall, the less competitors the greater share of the pie to BHP.

Fortescue Metals is a prime example of this, I'm watching for any stress on them considering the massive amount of debt on their books.

I'll say again...this should be their long long term game.


----------



## rimtas (11 June 2015)

This is basically the last setup that can still trigger the rally to $40's.  Yesterday's bottom is a stone for this count to be correct.

It is interesting that Iron ore rally has little effect on stock  price, but maybe it will catch up later. Commodities are in a positive cycle that could take year or two, so ultimately Oil at $70 and Ore at $75 would start to make sound.


----------



## Toyota Lexcen (23 July 2015)

some interesting previous posts on BHP, action in the UK may not bear well for BHP today

whats really going on with the BHP, RIO, GlenCORE at the moment

BHP still wants to increase output, not looking good for shareholders over the next 2-3years imo


----------



## Toyota Lexcen (20 August 2015)

Pretty dire situation for shareholders at the moment, commodity index down to 2008 levels.


----------



## Triathlete (24 August 2015)

Triathlete said:


> I still think BHP has further to fall yet possibly $20 to $24 level at this stage.




Well it has taken 7 months to get here...where to now for BHP?????


----------



## Wysiwyg (6 November 2015)

BHP down a fair bit today.



> BHP Brazil mining JV Samarco says dam burst, media report 15 dead


----------



## notting (6 November 2015)

Wysiwyg said:


> BHP down a fair bit today.




They've been killing colored people again.


----------



## Trembling Hand (6 November 2015)

notting said:


> They've been killing colored people again.




Geezuz you are an _______


----------



## notting (6 November 2015)

Trembling Hand said:


> Geezuz you are an _______




My point is that their track record isn't that good on this score especially in 'other places.'


----------



## Wysiwyg (6 November 2015)

I reckon $21.61 will get passed before the year end with a continued weekly downtrend.


----------



## UMike (6 November 2015)

notting said:


> My point is that their track record isn't that good on this score especially in 'other places.'



Hmmm I bought in $22.2 before I knew what the incident was.
Great daily gain but long term????

BHP Billiton holds a 50% interest in the entity that caused the deaths . Samarco MineraÃ§Ã£o S.A is the operator.


----------



## Triathlete (10 November 2015)

Wysiwyg said:


> *I reckon $21.61 will get passed before the year end *with a continued weekly downtrend.




Done..!!

Next stop $20...??????


----------



## notting (11 November 2015)

> A Brazilian prosecutor who warned on problems with erosion and destabilisation at BHP Billiton-owned Samarco iron ore mine two years ago has claimed that negligence and human error caused the disastrous breach of two of the mines tailing dams.
> 
> BHP has said it is still too early to say what caused the tragedy and there has been speculation that there may have been some sort of seismic event. But Minas Gerais state environmental prosecutor Carlos Eduardo Pinto said on Tuesday that the bursting of the dams was "no accident".
> 
> "What happened was a mistake in the operation and negligence in the monitoring," Pinto told Brazil's top broadcaster, Globo TV.




Bidding for RIO just before the GFC at $150, Petrohawk massively overpriced ill timed purchase, wasting $450 million on failed Canadian potash take over. The list goes on as far back as you can remember too.

This thing is just a monstrous piece of **** run by clowns.


----------



## sptrawler (11 November 2015)

notting said:


> Bidding for RIO just before the GFC at $150, Petrohawk massively overpriced ill timed purchase, wasting $450 million on failed Canadian potash take over. The list goes on as far back as you can remember too.
> 
> This thing is just a monstrous piece of **** run by clowns.




Just lucky, they own a lot of the **** people have to buy.

I've put my toe in at $20.97, I did notice a private equity fund picked up 1,500,000 share.

It will be interesting to see what their plans are.

The whole Australia down the tube thing, is a bit overdone.IMO


----------



## kid hustlr (12 November 2015)

notting said:


> They've been killing colored people again.




Joe I assume this is worth a ban?


----------



## Joe Blow (12 November 2015)

kid hustlr said:


> Joe I assume this is worth a ban?




From what I can gather it was some kind of misguided political point, expressed in a way deliberately intended to offend and wind others up. An infraction accompanied by a very stern warning has been issued.


----------



## notting (12 November 2015)

To clarify - It wasn't intended to wind any one up.  Just a very brief point that is not contradicted by reality. Given it is listed on multiple exchanges it would be less meaningful to say foreigners.  The point is and I am more than happy to reiterate it that they have a record for being negligent in places where the they feel they can get away with it.  I could have written that but there didn't seem to be the time to capture the perception.

Further my first instincts prove time and again to be very reliable and this is no exception.  Sorry if they are too raw but that's how it roles and there is no intention to wind up offend or anything like that - 



notting said:


> Makes sense to me.
> I hope it gets there for you.
> And at least BHP holders may be a little relieved you aren't that confident about $15
> 31 to 27.45 is around 13%?




The 







notting said:


> Makes sense to me.



Was in support of the post suggestion it would hit $20 when it was around $28.  And here we are ~ some value


----------



## notting (12 November 2015)

sptrawler said:


> The whole Australia down the tube thing, is a bit overdone.IMO




I wouldn't say it's down the tube.
What I would say is that given what has happened in China over the last 40 years this thing should be in a similar position to Apple.  It should be sitting on massive cash piles and effortlessly buying things like Santos, Woodside, western Areas and what ever else has done all the work and struggling with debt due to the sentiment at present. 
But it isn't.  It's got bugger all to show for the biggest mining boom the world has ever and will ever see, due to terrible management decisions done at the worst times. 
It's a joke.
But it will not go broke.


----------



## skc (12 November 2015)

notting said:


> But it isn't.  *It's got bugger all to show for the biggest mining boom the world has ever and will ever see*, due to terrible management decisions done at the worst times.
> It's a joke.
> But it will not go broke.




That's not entirely true... after this boom we are left with:
- Abundance of capital equipment
- Huge capacity of future output
- Very high salary packages for the mining industry
- Lots of empty housing in Port Hedland.

Surely some of the above are going to be very beneficial when Men start to colonise and develop Mars.


----------



## notting (12 November 2015)

skc said:


> That's not entirely true... after this boom we are left with:
> - Abundance of capital equipment
> - Huge capacity of future output
> - Very high salary packages for the mining industry
> ...




Surely indeed true.  
But what was blatantly obvious about China for years!!!!! Was that commodities were heading into a major correction, so why buy into China leverage at the top?  Unbearable stupidity. Why not, do it now as illustrated. This is obvious to me it should have been so obvious to those being paid a fortune to manage and foresee such things.  That is their job! 
Global oil sentiment is heavily geared to China too.

Perhaps you can now understand why I was so motivated to be screaming about China from the rooftops to the goons who have a pretty big hand on our economy *when it counted*, not after the fact.  Oi


----------



## shouldaindex (12 November 2015)

BHP balance sheet in 2011 still looked very good, only about 15% net gearing. 

They then increased long term debt from $10B to $35B in the last 4 years.

I assume alot of that was buying Oil / Gas Assets.


----------



## Craton (12 November 2015)

notting said:


> They've been killing colored people again.




The way I saw this was, "Hello, notting's got the goss on something I don't know about."

It sure panned out that way as very soon we all heard about the Samarco tailings dam collapse.

From the SMH:

The fallout from the Brazilian mudslide disaster is deepening for BHP Billiton after the emergence of a two-year old report warning of design flaws in the tailings dam system at its iron ore joint venture that unleashed a deadly mudslide last week.

Read more: http://www.smh.com.au/business/mini...-in-brazil-20151111-gkwm86.html#ixzz3rFDVY8Mu
Follow us: @smh on Twitter | sydneymorningherald on Facebook

Further, I tend to agree with notting's analysis that the Big Australian, instead of having mountains of cash, has thrown good money after bad giving the appearance that the company is indeed run by "clowns".

Typical really of corporate greed (aka the influence of  "Wall Street") overruling plain old common sense. Maybe this is just another example of karma and just deserts I say. I'm sure that both Vale and BHP wished they'd spent the few odd mill to shore up or whatever needed doing to the tailings dam instead of having to deal with the current fallout.

Oh, and if it was a seismic event, surely they would've been able to model that into the design plans and been able to mitigate the extent of damage should such an event occur? 
Clowns to the left of me, jokers to the right...


----------



## chops_a_must (12 November 2015)

Ducati was right!!!!


----------



## So_Cynical (12 November 2015)

notting said:


> To clarify - It wasn't intended to wind any one up.  Just a very brief point that is not contradicted by reality. Given it is listed on multiple exchanges it would be less meaningful to say foreigners.  The point is and I am more than happy to reiterate it that *they have a record for being negligent in places where the they feel they can get away with it*.




Perhaps the young ones have never heard of Ok Tedi?

https://en.wikipedia.org/wiki/Ok_Tedi_Mine


----------



## shouldaindex (12 November 2015)

I wrote about my fair values a while ago, going to update them:

BHP @ $21 fair value when Oil and Iron Ore are $65.
BHP @ $16 fair value when Oil and Iron Ore are $60.
BHP @ $12 fair value when Oil and Iron Ore are $55.

- Few other variables involved but they are the main ones. 
- Using PE 13 x EPS.
- Ignoring Dividend Yield.

My personal view from looking at past commodity cycles is that it'll likely take until the 2020s before Oil and Iron Ore start to average $65 for a sustained period.   I think $55 is possible sooner, but then it correlates with my fair value estimate of $12 and the market won't do that due to dividend.


----------



## Craton (12 November 2015)

@So_Cynical. Yep, it just continues on from when it began way back in the early days of BHP: http://theconversation.com/lead-pol...and-scott-to-the-south-pole-by-20-years-29800


----------



## sptrawler (13 November 2015)

shouldaindex said:


> I wrote about my fair values a while ago, going to update them:
> 
> BHP @ $21 fair value when Oil and Iron Ore are $65.
> BHP @ $16 fair value when Oil and Iron Ore are $60.
> ...




I like your fair value idea, what information do you derive it from?


----------



## notting (13 November 2015)

BHP now flirting with levels it fell to at the worst of the GFC.
BHP is all about China as is oil and other commodities which are all pretty much there too.

So if the world is no longer in a crises then on those numbers there is clearly a problem somewhere.

*It's not a soft landing.*

Remember that up until now they have all been saying consumption would still increase all be it at a slower rate. It's shrinking.

At least RIO has been well managed enough over the last few years to be able to be doing a buy back.

However it is still looking vulnerable and needs to kick on up from here which is looking unlikely!


----------



## notting (13 November 2015)

So_Cynical said:


> Perhaps the young ones have never heard of Ok Tedi?
> 
> https://en.wikipedia.org/wiki/Ok_Tedi_Mine




Interestingly it was a vague muse about the Papua New Guineans that was moving the pen at the time!
Well picked


----------



## shouldaindex (15 November 2015)

My thoughts / predictions:

The BHP cheap narrative is going to get more popular as BHP gets into the $15-$19 range, because anyone can see it's a lot lower than before and have an opinion. But if you do the analysis, the numbers show the financials are still terrible and SP direction is justified.  

Oil fundamentals are primed to try target $32 in the coming months, might not but there's a lot of reasons why it won't die wondering!

Can't see Iron Ore doing anything anytime soon, so declining or steadying for the long term @ $50 and below.


----------



## sinner (16 November 2015)

shouldaindex said:


> My thoughts / predictions:
> 
> The BHP cheap narrative is going to get more popular as BHP gets into the $15-$19 range, because anyone can see it's a lot lower than before and have an opinion. But if you do the analysis, the numbers show the financials are still terrible and SP direction is justified.
> 
> ...




I do hold a little bit of BHP and thought I'd check to see what the Cyclically Adjusted P/E ratio was.

Came out at about 8.5, maybe a bit higher if I had calculated inflation more conservatively (just used December CPI reading for each year). FWIW.


----------



## shouldaindex (16 November 2015)

I think the past 10 years saw Iron Ore and Oil at about $100 each, which is key input in reaching the C, A, E in the 8.5 CAPE.

I know the purpose of CAPE is to neutralise those sorts of things, but think that'd be dangerous for commodities.


----------



## Triathlete (18 November 2015)

Wysiwyg said:


> I reckon $21.61 will get passed before the year end with a continued weekly downtrend.






Triathlete said:


> Done..!!
> 
> Next stop $20...??????




Done....

Where is BHP headed to now....??????


----------



## shouldaindex (19 November 2015)

AGM today.

My belief is that they'll use Brazil as a way out of their dividend (sooner or later).  That will solve 2 problems at once, pay the compensation and net save in cash from dividends.

Once that occurs $15.

Keep in mind current forecast EPS is 50c so even then there is premium you are paying for commodity price IE. require +$10 in Oil and Iron Ore to achieve an average PE.


----------



## PennD (21 November 2015)

Messing about with some Gartley patterns...


----------



## PennD (22 November 2015)

Zooming in to a daily. As far as I can tell this is almost a text book Butterfly pattern 




Anyone know a little more about these?

Cheers.


----------



## Craton (23 November 2015)

@PennD. Quick Google Fu about Harmonic patterns and Fibonacci ratios:

http://www.harmonictrader.com/price_patternsbfly.htm

http://www.moneyshow.com/articles.asp?aid=daytraders-19518

http://www.investopedia.com/articles/forex/11/harmonic-patterns-in-the-currency-markets.asp

Seems that a proper butterfly pattern must follow precise Fib ratios:


----------



## PennD (23 November 2015)

Yes but the CD leg can extend to 1.618 which has happened above.
The BC leg im not sure about. Says .886 which its not but it is a strong fib number of .78.
Also it fits within a larger abcd pattern..
Its worth noting i think, we sould know eithin a week if it holds.


----------



## Valued (23 November 2015)

To give an alternative view (which is actually I believe the mainstream view) is that the butterfly pattern doesn't work and can only fit after the fact. If it doesn't work people just say it wasn't a butterfly pattern because it didn't meet the complex and specific criteria and if it does people say "there ya go, it works!".

I think most people looking at that chart wouldn't say that's very bullish. You may get a secondary reaction if the market is oversold, but to call a bottom there at this point in time is a fool's dream.

Also, if we think about it logically, doesn't the business depend on commodity prices being up? If that's the case then don't you really need the bullish confirmation in the related markets?


----------



## PennD (23 November 2015)

Valued said:


> To give an alternative view (which is actually I believe the mainstream view) is that the butterfly pattern doesn't work and can only fit after the fact. If it doesn't work people just say it wasn't a butterfly pattern because it didn't meet the complex and specific criteria and if it does people say "there ya go, it works!".
> 
> I think most people looking at that chart wouldn't say that's very bullish. You may get a secondary reaction if the market is oversold, but to call a bottom there at this point in time is a fool's dream.
> 
> Also, if we think about it logically, doesn't the business depend on commodity prices being up? If that's the case then don't you really need the bullish confirmation in the related markets?





I tend to agree Valued...
Im only looking for a tradeable bounce... not a happy ever after... cheers


----------



## gartley (28 November 2015)

Valued said:


> To give an alternative view (which is actually I believe the mainstream view) is that the butterfly pattern doesn't work and can only fit after the fact. If it doesn't work people just say it wasn't a butterfly pattern because it didn't meet the complex and specific criteria and if it does people say "there ya go, it works!".




If every pattern worked all the time we would not be here posting ideas. In my view what sets these harmonic patterns  ( and other patterns too) from other methods such as  EW, is that there is no ambiguity. It will either work or it won't..... 
Because when we enter the market we are dealing with probabilities, all we can do is identify the potential pattern, predict the possible direction it resolves, making a decision and then act if it fit's into our risk profile.

As for BHP it does exhibit a large Gartley on the monthly chart which has not been invalidated yet. I thought it may have completed some weeks ago but it didn't happen because the selling pressure is so great.
Personally I think we are on a cusp of a rebound in commodities starting as early as next month. The unanimous conviction in the press that commodities are doomed, is so extreme that some sort of low must be nearly at hand. This is also supported by the cycles graphs which I have attached, which suggest price has reached an extreme to the downside and the probability of a reversion to nominal levels first is a good bet.

The COT chart attached shows  the deep pocketed commercial traders (banks) are building a massive short position in the dollar, probably in preparation for an inflationary rate hike from Janet Yellen, on December 16th.
Also from an EW perspective we appear to be in a wave 5 thrust out from a contracting triangle W4. A contracting triangle w4 is a penultimate pattern to the last wave up. At the very least when the thrust finishes prices should move back to the base of the triangle in the US Dollar Index.

Also raw materials represented by the famous CRB Index, are now trading at levels last seen in 2001 of 184 points. Furthermore, the price range between 175 to 185 is a major support zone dating all the way back to 1973. Based on history, commodities have a high probability to bounce from this important memory zone, which buyers have defended for generations.


----------



## Paavfc (28 November 2015)

Its different this time, Super Cycle, all the adjectives I have heard in commodities.
Pessimism is at its max must mean something....


----------



## gartley (28 November 2015)

Paavfc said:


> Its different this time




Funny, that's what posters where saying on this site in 2007 about commodities.  "This time it's different, China story is very compelling, blah, blah, blah........." Now it's the other way around.

Even back in late August this year posters here and the mainstream press where finding every reason as to why the market is headed lower. But the market found a low and will not surprise to head north into next year. That is not to say it's a new bull but there are opportunities available.

As for being in a super cycle, well nobody knows.... Just trade the opportunities when they come, get out early if you are wrong and wait for the next setup and keep a level head.


----------



## notting (28 November 2015)

gartley said:


> As for being in a super cycle, well nobody knows.... Just trade the opportunities when they come, get out early if you are wrong and wait for the next setup and keep a level head.




One should be alert to the moment.

One thing the commentators where saying a lot during the GFC was that the world was depending on China to pull up the commodity thing.  China was still under the old school utter corrupt and stimulate by building to oblivion model.

Few are under the illusion that China will pull up the commodity thing this time and Xi is not showing any signs of playing that old game.  
There is no broad based stimulus heavily weighted to property coming.  It's done to death.

Coal never got off it's knees and the others have fallen back on to theirs ever since Xi took the reigns and started pulling in the corruption.

That kind of massive over build was driving much of it, that's not just a slowing, it's more like reversing.

Their trying to say the demand could come from India.  Been saying that for 10 years.  Hasn't happened and nothing happens fast in India.

Meanwhile there is the 7.5Billion disaster to attend to.


----------



## So_Cynical (28 November 2015)

gartley said:


> As for being in a super cycle, well nobody knows....




I thinks it's appropriate to call it a super cycle...Australian resources share index, past 20 years.
~


----------



## gartley (29 November 2015)

So_Cynical said:


> I thinks it's appropriate to call it a super cycle
> ~




You only know it's a super cycle when it completes relative to earlier super cycles. Only problem is these are always expanding and contracting both in time and amplitude. Just when you think your onto something they even miss a beat and invert just to make you crazy.....

Personally I don't use them. I find delta a much better alternative, although it too exhibits inversions it's a more robust approach. For instance the 2 charts attached for super long term is 19.05 years for 1 cycle. Each coloured vertical line occurs 19.05 years relative to the preceding one of the some colour. Within this we have points in time that are highs and lows that occurred during each cycle.  The SP500 chart attached I have been working with for 15 years!!! It's alerted to the GFC before it even happened and used together with other tools was bang on. The pink arrows on that chart and comments where made in 2007. You can see cycle point 16 just to the left of the red vertical line occurred in in 1987 and then again 2007. Thus the 19.05 year cycle. These are not always spot on, in this instance it stretched to 20 years but it's a very good guide!!
More importantly cycle point number 6 is coming up in the new year. I need to drill down to lower timeframes to get more accuracy but it's looking like March/April. Thereafter does not necessarily mean a crash but expect at the least some major gyrations.

Also look at the chart of the AUDUSD.  It's been very consistent. You can see we are coming into a low at cycle point 9. Relative to the vertical yellow line and the last time cycle point 9 occurred in late  1995 it suggests we have either reached that low OR will should  do in the next 6 months. Granted a lot can happen in 6 months, but a major low will be in place taking this chart at face value.

If the AUDUSD puts in a major low being a commodity currency, then this might be a good opportunity for commodities.


----------



## fiftyeight (16 December 2015)

I have had a look on google but find what I am after. What percentage of BHP assets are oil and gas? Or would it better to ask what percentage of profits come from the oil and gas sector?


----------



## Ves (16 December 2015)

fiftyeight said:


> I have had a look on google but find what I am after. What percentage of BHP assets are oil and gas? Or would it better to ask what percentage of profits come from the oil and gas sector?



You can find out the historical figures from the Full-Year Reports.

For 2015 (and 2014 comparatives) try the Report released on 25 August 2015.   There's a pretty good summary on about page 14 and some sector discussions onwards from there.

Just be careful - the prices of commodities have probably moved significantly enough since then to complete change a lot of the inputs.


----------



## fiftyeight (16 December 2015)

Ves said:


> You can find out the historical figures from the Full-Year Reports.
> 
> For 2015 (and 2014 comparatives) try the Report released on 25 August 2015.   There's a pretty good summary on about page 14 and some sector discussions onwards from there.
> 
> Just be careful - the prices of commodities have probably moved significantly enough since then to complete change a lot of the inputs.




Awesome, cheers Ves


----------



## Tom32 (28 December 2015)

gartley said:


> You only know it's a super cycle when it completes relative to earlier super cycles. Only problem is these are always expanding and contracting both in time and amplitude. Just when you think your onto something they even miss a beat and invert just to make you crazy.....
> 
> Personally I don't use them. I find delta a much better alternative, although it too exhibits inversions it's a more robust approach. For instance the 2 charts attached for super long term is 19.05 years for 1 cycle. Each coloured vertical line occurs 19.05 years relative to the preceding one of the some colour. Within this we have points in time that are highs and lows that occurred during each cycle.




I reckon that 19years backs up iron ore supply side dynamics too.

Price spiked in 04, (at the time $40 was suddenly well above marginal producers costs of production.)

Capital was already flowing in in anticipation (wish I'd kept the North limited letter from 2000 cause it crystal balled the future nicely) but from 04 it was a torrent of new projects and upgrades when price exceeded costs by a large margin. 

A new iron ore mine takes around 5-8 years to complete with all the permits / land rights / build. 

With prices now below costs for many producers now production should by rights start retreating. It will take a decade though before this infrastructure after being mothballed (which not much has yet...) is really going to need major refurb making supply too elastic in the meantime to allow prices to rise much. In the interim every time price creeps up a bit existing production capacity will come on line and limit price potential.

So 2023-2026 may we'll be the next opportunity in iron ore. Going 19yeaes from 04.


----------



## PennD (12 January 2016)

Getting close to a tradeable bottom soon...


----------



## Muschu (12 January 2016)

PennD said:


> View attachment 65511
> 
> 
> Getting close to a tradeable bottom soon...




I'm no chartist but how is it possible to tell?  I don't hold BHP [other than through ARG and AFI].... It certainly looks cheap but I thought it did at $20 as well.  

Even if bought here how long will it be before reasonable growth occurs?  And what will happen to dividends in the meantime?

I don't mean to be a naysayer.......  Could the SP go to $10?


----------



## PennD (12 January 2016)

Just a W.A.G... How can you ever really "know"

I'm talking short term, not buy and hold... Copper and oil also coming to trendline resistance.


----------



## qldfrog (13 January 2016)

a bit cheeky but could be worse...


----------



## Triathlete (13 January 2016)

shouldaindex said:


> Once that occurs $15.




Looks like your price target was hit..........where to now for BHP?????


----------



## shouldaindex (13 January 2016)

Oil futures under $50 until 2019.
Iron Ore futures under $40 until 2024.

So on those numbers, BHP probably under $12 given EPS will be under 100c.

Not even interpreting much at all, just putting the numbers together.


----------



## PennD (13 January 2016)

Bought a small bucket full of call options this morning anyway. Looking to hold for a week or so... 
Just for the record


----------



## PennD (15 January 2016)

PennD said:


> Bought a small bucket full of call options this morning anyway. Looking to hold for a week or so...
> Just for the record




Sold this morning...


----------



## pixel (15 January 2016)

PennD said:


> Sold this morning...




good idea, PD 

This morning's announcement of substantial write-downs has the potential to push the sp much lower.
I reckon the initial rise, in spite of that write-down, was caused by panicking Short sellers who scrambled to cover in light of last night's recovery in the US. The associated rally of our S&P200 proved only short-lived.

XJO: 



BHP:


----------



## PennD (15 January 2016)

Just a little sneaky trade...
I was expecting a much better return on a 5 1/2% move...
Still 50% profit though... ☺
We going to lose the long trend line on xjo ya think?
I got the vibe 4500 is coming soon?


----------



## qldfrog (16 January 2016)

Monday will be interesting after UAD and wall street falling last night/friday in US


----------



## notting (23 February 2016)

The anticipated impairment charge seemed a little light!!!


----------



## Modest (23 February 2016)

First cut to dividends since 1988, first loss in yonks yet the market doesn't even flitch with BHP? 

Had the market already factored in the dividend announcement in the price today?


----------



## notting (23 February 2016)

Modest said:


> First cut to dividends since 1988, first loss in yonks yet the market doesn't even flitch with BHP?
> 
> Had the market already factored in the dividend announcement in the price today?




Market chatter boxes were expecting about half of what it paid last time. So it was light.
I think the strength in the market performance came due to the 5% jump in IO over night up over $50.
When that turns on the back of back to the reality of fearing on China's issues - big short!
What was more interesting was what FMG did leading up to the sudden jump in IO prices.  It seemed like an inside job.  Who is giving us the IO number, or manipulating it?  One guess........


----------



## Modest (23 February 2016)

notting said:


> Market chatter boxes were expecting about half of what it paid last time. So it was light.
> I think the strength in the market performance came due to the 5% jump in IO over night up over $50.
> When that turns on the back of back to the reality of fearing on China's issues - big short!
> What was more interesting was what FMG did leading up to the sudden jump in IO prices.  It seemed like an inside job.  Who is giving us the IO number, or manipulating it?  One guess........




Interesting... I am looking at BHP as a potential first dip into long term value investing hence finding me outside of the derivatives forum 

Interesting points, I feel less pain now after missing my opportunity to buy it at 15.00 for long term hold. 

Sorry for my arrogance but who is your guess re: IO numbers?


----------



## notting (23 February 2016)

Modest said:


> Interesting... I am looking at BHP as a potential first dip into long term value investing hence finding me outside of the derivatives forum
> 
> Interesting points, I feel less pain now after missing my opportunity to buy it at 15.00 for long term hold.
> 
> Sorry for my arrogance but who is your guess re: IO numbers?




china


----------



## skc (24 February 2016)

Modest said:


> Interesting... I am looking at BHP as a potential first dip into long term value investing hence finding me outside of the derivatives forum
> 
> Interesting points, I feel less pain now after missing my opportunity to buy it at 15.00 for long term hold.
> 
> Sorry for my arrogance but who is your guess re: IO numbers?




Long term value investing and resources companies should never be in the same sentence. For the simple reason that you cannot predict commodity prices over the long term.

You can certainly trade a resource company, riding long term trends... Like the 10 years to 2014 would have been alright.


----------



## Modest (24 February 2016)

skc said:


> Long term value investing and resources companies should never be in the same sentence. For the simple reason that you cannot predict commodity prices over the long term.
> 
> You can certainly trade a resource company, riding long term trends... Like the 10 years to 2014 would have been alright.




Thanks skc I have written off the whole idea of buying BHP in the near future. Thanks mate.


----------



## shouldaindex (24 February 2016)

BHP Price pushing $18 after H1 result.

Iron Ore and Oil averaged realised price were both around $45 USD.

This lead to 11c EPS, and an annualised Forward PE of 80 and Dividend Yield of 3%.

Iron Ore Futures are priced at $35 and Oil Futures priced at $40 both for 2017 (both under the latest H1 averages).

Continue to join the (obvious) dots.


----------



## notting (20 April 2016)

These days production cuts lead to rally's 

Now if you think that through what is it saying about demand?


----------



## notting (16 August 2016)

notting said:


> The anticipated impairment charge seemed a little light!!!




Oh look a third impairment charge relating to the one impairment.  It's a staggering disclosure over three reporting seasons relating to one catastrophe. 

And even with the doubling of iron ore prices they still managed a 6 billion dollar loss.  6 Billion,  

Gotta have sympathy for the poor new CEO Andrew Mackenzie, got nothing to do with him.
Although he did say they are undervalued! 
Not sure how you figure that if IO prices decline again and oil does not get up over about $60


----------



## Ann (19 September 2016)

I am a little saddened as I post this. Back in the 50s when I was but a wee small thing, I heard about this magical company that was making people wealthy.  BHP was the very first company I ever heard about, it fired my interest in the stock market. Over the years the company grew and grew until it was finally dubbed 'The Big Australian'!

Sadly I am not here to praise BHP but to bury it with a swing trade calculation on my weekly 15 year chart.

My chart suggests it may get to $5 or $6 but I think it may well be bought up by Boasteel or another Chinese company before it reaches these levels.

In my opinion this is only a stock for short term traders with good stops in place.


----------



## Triathlete (27 October 2016)

gartley said:


> *If every pattern worked all the time we would not be here posting ideas.*
> 
> In my view what sets these harmonic patterns  ( and other patterns too) from other methods such as  EW, is that there is no ambiguity. *It will either work or it won't..... *
> 
> Because when we enter the market we are *dealing with probabilities*, all we can do is identify the potential pattern, predict the possible direction it resolves, making a decision and *then act if it fit's into our risk profile.*




Looking back through some past posts I thought this response from gartley is a good way at keeping the perspective of patterns ,probabilities and the intended risk of a trade.


----------



## BarneyChambers (6 December 2016)

BHP has nearly a 5% market weight in the ASX and has over 40,000 employees, that's just crazy. With the mining boom over, is there really much reason to jump on BHP bandwagon?

Information source here (interesting read): http://au.advfn.com/newsletter/barneyc/586/why-you-should-join-on-the-bhp-bandwagon


----------



## sptrawler (7 December 2016)

Ann said:


> I am a little saddened as I post this. Back in the 50s when I was but a wee small thing, I heard about this magical company that was making people wealthy.  BHP was the very first company I ever heard about, it fired my interest in the stock market. Over the years the company grew and grew until it was finally dubbed 'The Big Australian'!
> 
> Sadly I am not here to praise BHP but to bury it with a swing trade calculation on my weekly 15 year chart.
> 
> ...




Ann, is there a chance you could update your chart and revisit your analysis?
With regard Boasteel or a Chinese company buying them, I think the U.S assets could cause a speed hump. Just my opinion.


----------



## qldfrog (29 March 2017)

effect of Debbie on BHP;
Being Brisbane based and in the industry, what do other people thing of the effect of Debbie on BHP more especially Met Coal ; we have loading facilities stopped for a minimum of 4days probably 6 days of lost shipping or so by the time everything goes back to normal, actual equipement damage on sites;
existing stockpiles potentially affected with probably around USD 150 millions worth of coal stored on sites potentially damaged [ worst case scenario lost washed away due to heavy rain/wind] + lost production in mines/affected railing and it is still raining like mad on the mines.
BHP will release prod figures at the end of april (in a month).Do you think this will/should affect prices?
Any Mackay people aware ..and back on the forum??


----------



## pinkboy (29 March 2017)

qldfrog said:


> effect of Debbie on BHP;
> Being Brisbane based and in the industry, what do other people thing of the effect of Debbie on BHP more especially Met Coal ; we have loading facilities stopped for a minimum of 4days probably 6 days of lost shipping or so by the time everything goes back to normal, actual equipement damage on sites;
> existing stockpiles potentially affected with probably around USD 150 millions worth of coal stored on sites potentially damaged [ worst case scenario lost washed away due to heavy rain/wind] + lost production in mines/affected railing and it is still raining like mad on the mines.
> BHP will release prod figures at the end of april (in a month).Do you think this will/should affect prices?
> Any Mackay people aware ..and back on the forum??




I'm in Mackay and in the industry.  I am not aware of any hard details of anything yet.

Hay Point Port will be offline for several days (I don't work here, but the port next door - Dalrymple Bay) likely because its impossible to load a ship in this weather.  Damage will probably be unknown until at least tomorrow as I doubt anything but a skeleton crew would have been even able to access the site (roads under everywhere today).

BHP has several mines which will no doubt have several metres of water in their pits.  It has been reported in some areas west of Mackay that 1,000mm of rain fell in the last 24hr period - that's a hell of a lot of rain!  I'd vision similar scenes to those of the impact of Cyclone Yasi 6 years ago.

Just when the mining industry was just turning upwards from the bottom, we have this weather event which will put it behind the 8-ball again.

pinkboy


----------



## qldfrog (30 March 2017)

pinkboy said:


> I'm in Mackay and in the industry.  I am not aware of any hard details of anything yet.
> 
> Hay Point Port will be offline for several days (I don't work here, but the port next door - Dalrymple Bay) likely because its impossible to load a ship in this weather.  Damage will probably be unknown until at least tomorrow as I doubt anything but a skeleton crew would have been even able to access the site (roads under everywhere today).
> 
> ...



Thanks Pinkboy, worked with Hay Point and so the question between this and the lost production in Chile with the copper mine, I could easily see an impact on overall production of a few % .
Which should be leveraged in term of profit to around low 10% worst case scenario for coal and copper..
I short and will probably be wrong


----------



## qldfrog (3 April 2017)

qldfrog said:


> Thanks Pinkboy, worked with Hay Point and so the question between this and the lost production in Chile with the copper mine, I could easily see an impact on overall production of a few % .
> Which should be leveraged in term of profit to around low 10% worst case scenario for coal and copper..
> I short and will probably be wrong



and for those who care about BHP results (aka BMA and the met coal production collapse this year with matching hit on the qld gov revenue)
http://www.abc.net.au/news/2017-04-03/cyclone-debbie-closes-rail-disrupting-coal-exports/8411690
Potentially up to the 20 million tonnes prod lost in the 2011 flood..not me saying it
http://www.abc.net.au/news/2017-04-03/cyclone-debbie-closes-rail-disrupting-coal-exports/8411690

my option will lapse, and the week after everyone will wake up to this impact...


----------



## pinkboy (3 April 2017)

qldfrog said:


> and for those who care about BHP results (aka BMA and the met coal production collapse this year with matching hit on the qld gov revenue)
> http://www.abc.net.au/news/2017-04-03/cyclone-debbie-closes-rail-disrupting-coal-exports/8411690
> Potentially up to the 20 million tonnes prod lost in the 2011 flood..not me saying it
> http://www.abc.net.au/news/2017-04-03/cyclone-debbie-closes-rail-disrupting-coal-exports/8411690
> ...




This is excellent for me. I got a call today to have 4 blokes on site (Dalrymple Bay Coal Terminal) indefinitely for maintenance until coal can get railed in. DBCT had all green lights at Rail Receival at lunchtime today - so they won't be up for demurrage fees!

pinkboy


----------



## PZ99 (12 December 2017)

BHP is one of a list of companies worldwide to be blackmailed by investors if they don't cut their emissions... 



> Australian investors controlling billions of dollars will start pressuring the world's biggest polluters to do more on climate change as part of a new global initiative.
> 
> 
> Around the world, 225 investors controlling more than $US26.3 trillion ($A36.8 trillion) have joined forces in the Climate Action 100+ initiative, which launched on Tuesday during the French government's One Planet climate summit.
> ...




http://www.news.com.au/national/bre...e/news-story/f934094d9a8d329255c789b174d933be


----------



## sptrawler (12 December 2017)

PZ99 said:


> BHP is one of a list of companies worldwide to be blackmailed by investors if they don't cut their emissions...
> 
> 
> 
> http://www.news.com.au/national/bre...e/news-story/f934094d9a8d329255c789b174d933be




I think you should have posted that in the joke thread.


----------



## PZ99 (13 December 2017)

@Garpal Gumnut


sptrawler said:


> I think you should have posted that in the joke thread.



No way! This thread has more influence. LOL

I just don't want GG to win the yearly tipping comp that's all


----------



## gartley (3 May 2018)

Been looking at BHP chart and comparing to the price of crude oil here. They both seem to be in sync quite well for the best part of the last few years ( not price magnitude but pattern of trend).   COT chart suggests Crude ready to fall back here as commercials nett short 700,000 contracts and Price Action already starting to turn down and diverging with BHP price.


https://invst.ly/7ceeg


----------



## greggles (27 June 2018)

BHP has had a good run up from $22 over the last 12 months. The big question is, where is going next?

For most of the last couple of months it has been range trading between $32 and $34. Yesterday it opened down near $32 at the lower end of that range. Today it has opened higher at $33.15, so it looks to be in the middle of another swing up towards the upper end of that range.

At some point it will have to break above or below the current range, so I'm keeping an eye on any higher volume movements towards $32 or $34.


----------



## Trav. (1 November 2018)

Some good news for holders today, with buy back scheme and special divi in the new year


----------



## notting (1 November 2018)

On market would have been much better
There still baboons. Selling something they bought for twice the amount 7 years ago.
A tuck shop manager could have done a better job.


----------



## luutzu (1 November 2018)

Trav. said:


> Some good news for holders today, with buy back scheme and special divi in the new year
> View attachment 90093




Market cap [ASX] about $103B... UK and other listings another $100B??

Top line return of $10B alone that's about 5% yield... not bad.


----------



## sptrawler (1 November 2018)

What was the price in 2016? 
$15 jeez that was only two years ago, OMG, did the gen xyz and anyone else jump onboard?
But the baby boomers will still be told they had all the opportunities, lol


----------



## luutzu (1 November 2018)

sptrawler said:


> What was the price in 2016?
> $15 jeez that was only two years ago, OMG, did the gen xyz and anyone else jump onboard?
> But the baby boomers will still be told they had all the opportunities, lol




I hanged on to mine. Didn't load up though as already got stuck with it and over-exposed to the sector with other holdings. But yea, BHP's share price didn't do much for me at my entry years ago, but the dividends and spin offs aren't too bad. 

Santos was going for $2.55 to $3 for a while. Monadelphous for $5.50s to $6 around the same time... 

Seems the banks, retailers, REITs will present similar opportunities soon. Not all of course, some won't make it out alive.


----------



## sptrawler (2 November 2018)

luutzu said:


> I hanged on to mine. Didn't load up though as already got stuck with it and over-exposed to the sector with other holdings. But yea, BHP's share price didn't do much for me at my entry years ago, but the dividends and spin offs aren't too bad.
> 
> Santos was going for $2.55 to $3 for a while. Monadelphous for $5.50s to $6 around the same time...
> 
> Seems the banks, retailers, REITs will present similar opportunities soon. Not all of course, some won't make it out alive.




That is how it works, there is ups and downs, what annoys me is when people start saying one generation had it better.
They didn't, they lived through hard times and then good times, then harder times come back.
It is just a nasty cop out for the generation, that has grown up through a good time and now face a harder time.
I'm starting to rant, but I find it annoying, my appologies.


----------



## Trav. (5 November 2018)

This will take some cleaning up!

https://thewest.com.au/business/min...-travelled-92km-without-driver-ng-b881012020z

BHP deliberately derailed a runaway Pilbara iron train carrying 268 wagons early today after it travelled 92km across the Pilbara without a driver.

The Australian Transport Safety Bureau said about 4am the driver of a loaded ore train travelling from Newman to Port Hedland alighted to inspect a wagon.

The bureau said the train, consisting of four locomotives and 268 wagons, started to run away without the driver and with no one on board, travelling for 92km.



BHP then stopped the train by deliberately derailing it at a set of points about 120 km from Port Hedland.

A BHP spokeswoman said no one was injured and the Pilbara miner has suspended all train operations.

“We are working with the appropriate authorities to investigate the situation,” she said.

BHP declined to provide further details, saying the incident was under investigation.

The ATSB conducts technical investigations for the Office of the National Rail Safety Regulator.

A spokesman for the regulator said it had sent two investigators to the Pilbara to determine if there had been any breaches of the national rail safety laws.

The mining giant exported 69 million tonnes of iron ore from Port Hedland in the three months to September.

BHP’s Pilbara operations have had other derailments in recent years.

In February 2017 about 40 ore cars came off the rails about 130km south of Port Hedland.

BHP also had 25 cars derail on the Newman to Port Hedland line in December 2015, blocking both lines that run to the port.

The incident was caused a broken rail, probably with a defect that could have been detected but was not, according to bureau report released last month.

The line was shut down for three days before traffic resumed.

In that case, the ATSB report said BHP accelerated the re-railing of more than 800km of track and improved the detection of cracks in rails in response to the accident.


----------



## bigdog (6 November 2018)

https://www.afr.com/brand/chanticle...n-a-sign-of-resources-revival-20181101-h17e7n

*BHP's $14.7bn capital return a sign of resources revival*

BHP's plan to return $US10.4 billion ($14.7 billion) through a buyback and a special dividend is an emphatically positive signal that the resources sector is in a good place at the moment.

Sensible disposal strategies, strong commodity prices and an end to crazy expansion in projects that didn't make a return on investment are behind BHP's capital return largesse.

Its capital return plan was one of many positive developments in the resources sector this week.

Gina Rinehart's Hancock Prospecting lifted profit 28 per cent to $1.75 billion in the year to June and Glencore's Hunter Valley coal mining operations are firing on all cylinders judging from a briefing for analysts on Wednesday.


Rinehart, who is using the bulk of her profits to pay down debt, has been one of the beneficiaries of consistently strong demand from Asia for iron ore.

Glencore's upbeat disclosures about the performance of its Hail Creek thermal coal mine will be read by some as an indictment of Rio Tinto, which sold an 82 per cent interest in the Hail Creek joint venture for $1.55 billion in March this year.

It is a tribute to the mining skills of Glencore's global head of coal assets, Peter Freyberg, that following a redesign the Hail Creek mine will deliver cost savings of $110 million a year. It will operate with 427 fewer employees while increasing production levels.

Coal is now Australia's single largest export earner according to the latest analysis of the September trade data by Annette Beacher, chief Asia-Pacific macro strategist at TD Securities. She says the No.2 export earner after coal is tourism and third is iron ore, based on annualised quarterly data.

Beacher says the most notable aspect of the latest $3 billion trade surplus for September was the surge in LNG exports, which have tripled in the past three years to be approaching $50 billion. LNG will be the No.1 export by 2020.


Beacher says working out of an office in Singapore gives her a different perspective on the Australian economy to those economists in Australia. She can look through the noise about falling housing prices and the threat posed by the US-China trade wars.

She says the revival of the fortunes of Australia's commodity producers is unequivocally positive for the economy, which is heading towards GDP forecast upgrades on the back of higher export income.

"Infrastructure spending and accelerating LNG exports are supporting growth, such that the economy is less dependent on the fortunes of iron ore, house prices and consumer spending than it used to be," Beacher says.

"Having said that, an iron ore price above $US65 a tonne is positive for exports and budget revenues. As economic growth is increasingly broad-based, another bout of iron ore price weakness – for whatever reason – is unlikely to materially dent the outlook for Australia, nor concern the RBA."


She says Australia might well be in the fortunate position of having twin surpluses – a trade surplus and a fiscal surplus.

Beacher is less concerned about a slowing Chinese economy than other commentators. She says Chinese industrial production has slowed from 20 per cent per annum in 2009 to 6 per cent per annum now and yet China's imports of commodities remain high and are rising.

*Activist effect*
The $14.7 billion BHP capital management program is being funded by the sale of the company's onshore gas assets in the United States. This disposal can be partly sheeted home to the activist pressure brought to bear by activist investor Elliott.


That is not to say that Elliott is happy with the buyback and special dividend. It is still focused on forcing BHP to end its dual-listed company structure. It won't admit defeat even though BHP is not budging.

Elliott alleges the dual-listed structure destroys franking credits. It bases this claim on analysis by hired consultant FTI Consulting.

Most institutional shareholders interviewed by Chanticleer were happy with the capital management program.

That is not to say there was no criticism. John Abernethy, chief investment officer at Clime Asset Management, which has $900 million under management, says the buyback and special dividend should not have been approved by the Australian Taxation Office.


He says the ATO has rubber stamped a buyback scheme that allows high tax-paying shareholders to minimise capital gains tax through the use of the capital losses.

Analysis of the BHP off-market buyback by Evans and Partners suggests the after-tax proceeds for someone on zero tax will be $39 a share and $21.47 for someone on the highest marginal tax rate.

A super fund paying 15 per cent tax would have after-tax proceeds of $33.18 per share.

Geoff Wilson, chairman of Wilson Asset Management, says BHP is smart to get franking credits off its balance sheet and into the hands of shareholders ahead of the next election, which could see the Labor Party in power.

Labor plans to put an end to the payment of franking credits in cash to Australians on zero tax rates. Wilson would not be surprised if other companies moved quickly to get franking credits to shareholders.

Wilson says the opposition does not realise the extent of the impact of its planned changes to the franking credit system.


----------



## Trav. (6 November 2018)

Trav. said:


> BHP deliberately derailed a runaway Pilbara iron train carrying 268 wagons early today after it travelled 92km across the Pilbara without a driver.




Some footage of the aftermath. BHP announced today that it should take 1 week to reopen line and that stocks at Port Hedland should be suuficient...Maybe a bit optimistic on the cleanup but will be interestin


----------



## Garpal Gumnut (17 December 2018)

Where to from here comrades.

I've been buying BHP from $16 all the way up to June this year.

I went for the divi return option of today. $$$$

Will BHP retrace or go up n up. 

I realise it is quite an unimportant share in ASF Land, just thought I'd mention it. 

gg


----------



## System (18 December 2018)

On December 18th, 2018, BHP Billiton Limited changed its name to BHP Group Limited.


----------



## bigdog (10 January 2019)

ASX 19/12/2018 4:53:00 PM  Dividend/Distribution - BHP


*BHP shares trade ex-dividend today.*

The *BHP Group Ltd* share price is likely to drop today after trading ex-dividend this morning for its fully franked $1.43 per share special dividend. This special dividend is part of a capital return programme announced after the divestment of its U.S. shale assets and will be paid to eligible shareholders on January 30.


----------



## Garpal Gumnut (10 January 2019)

Thanks bigdog. 

re. BHP.

Minus Billiton.

Time to follow a share down waiting for that exquisite moment when it pauses and shoots up again.

gg


----------



## rederob (20 February 2019)

Garpal Gumnut said:


> Time to follow a share down waiting for that exquisite moment when it pauses and shoots up again.



You probably missed it .
My deficient chart readings suggest that a retrace below $33 is exceptionally unlikely in the near term, and improbable for years to come unless there is another GFC-like event.
I am of the view that we are on a new commodities rollercoaster where the peak is a long way off.  
BHP is one of the best exposed diversified metals miners.
I do not put oil in this mix, but do see OPEC now acting decisively to keep prices above $50/bbl.


----------



## rederob (21 February 2019)

Tuesday's doji star suggested a possible reversal of BHP's near term fortunes but, instead, it ushered in the rare white marubozu on BHP's chart on Wednesday - a massive 99 cent gain for the day.  Unsurprisingly there was a touch of profit taking today, which lopped off a measly 9 cents.
So far BHP is up over 15% since opening in January and there is nothing on the metals horizon that suggests it cannot climb higher still as the year progresses.  It's literal train wreck in the west has now been written off and costly lessons there are not likely to be repeated.
The next obvious dent to BHP's price will be when Vale gets its iron ore exports back on track, but that's not soon.


----------



## qldfrog (21 February 2019)

Yesterday morning i was commenting to a friend that after a disastrous report and https://www.aussiestockforums.com/posts/1015063
The market was so blind that bhp would probably rise.
Seems people are waking up this evening about the metcoal disaster hitting BMA. 2 full trading days behind.
incredible


----------



## Garpal Gumnut (6 March 2019)

rederob said:


> You probably missed it .
> My deficient chart readings suggest that a retrace below $33 is exceptionally unlikely in the near term, and improbable for years to come unless there is another GFC-like event.
> I am of the view that we are on a new commodities rollercoaster where the peak is a long way off.
> BHP is one of the best exposed diversified metals miners.
> I do not put oil in this mix, but do see OPEC now acting decisively to keep prices above $50/bbl.



Possibly. 

But probably not. 

I take your points though. 

gg


----------



## SuperGlue (6 March 2019)

Ex-Dividend tomorrow - 7/03/2019
Dividend -  0.7732 cents per share


----------



## bigdog (19 March 2019)

https://www.theage.com.au/business/...boosting-bhp-rio-and-fmg-20190318-p5154s.html

*Brazil's Vale ordered to stop another mine, boosting BHP, Rio and FMG*

*By Darren Gray*
March 19, 2019 

The global market for iron ore is facing more uncertainty and the prospect of tighter supply after a Brazilian court ordered the suspension of operations at another Vale mine on Friday.

The news helped ensure that Australia's three biggest iron ore producers, Rio Tinto, BHP and Fortescue Metals Group, all climbed higher on the Australian market on Monday. Fortescue rocketing up 5.4 per cent to $6.83, its highest closing price in more than two years, Rio was up 1.7 per cent to $93.17 and BHP up 1.4 per cent to $36.98.

The indefinite suspension of operations at the Timbopeba mine, which produces almost 13 million tonnes of iron ore a year, is the latest ripple to hit global iron ore supply in the wake of the horrifying dam disaster at another Vale operation in Brazil January.

The court move is on top of earlier decisions expected to cut Vale's production by tens of millions of tonnes a year.

The uncertainty has pushed up iron ore prices significantly, with a key benchmark price for the commodity closing on Friday at $US86.52, almost 15 per cent higher than its price the day before the Brumadinho tailings dam disaster.

Citi analysts, led by Paul McTaggart, director of Citi's pan Asia metals and mining research, reiterated their forecasts that the key industry benchmark price would average $US88 per tonne this year, and $US70 a tonne next year.

But added that in a "upside" case the iron ore price could average $US95 per tonne this year.

Citi has lifted its target prices on Rio, BHP and Fortescue to reflect better earnings in the wake of the disaster. It lifted its target price for Rio by almost 6 per cent to a hefty $108 a share, pushed up BHP's by almost 4 per cent to $40.50, and lifted Fortescue's by 10 cents to $6.50.

The Citi analysts also outlined a scenario under which Australia's biggest iron ore producer, Rio, could pay a whopping special dividend of $8.24 per share next year, provided the iron ore price averaged Citi's higher forecast of $US95 a tonne this year and $US80 a tonne next year.

The shockwaves from the Brazil disaster, which has killed more than 200 people and left more than 100 missing, have continued to spread around the world, adding about $36 billion to the market capitalisation of Australia's biggest three iron ore producers since the incident.

Higher iron ore prices are also translating into healthier revenue for the miners, and consequently, higher corporate tax receipts for federal Treasury coffers and a multibillion-dollar budget boost for the federal Coalition on the eve of a federal election.

"Against a backdrop of constrained demand,
we have the Brumadinho (dam) tragedy impacting iron ore supply through 2019 and into
2020. Whether supply impacts are longer lasting is unclear," Mr McTaggart said.

"We forecast benchmark iron ore prices of $US88 per tonne and $US70 per tonne in calendar year 2019 and calendar year 2020 and see risks to the upside."

Senior resources analyst with Morningstar, Mathew Hodge, said there was considerable uncertainty surrounding what would happen in Brazil, and this uncertainty was benefiting the Australian iron ore producers.

"Who knows exactly how it’s all going to play out in terms of the liability and licensing and all the rest of it. But the longer it drags on, it’s definitely positive for these big (Australian) miners,” Mr Hodge said.


----------



## rederob (30 March 2019)

BHP is only $4 shy of it's all time record high.
What's different this time?

A slower build into present highs in a subdued global economy - the rush in 2008 was instead frenetic.
BHP has a smaller shareholder base after $billion buybacks.
Its resource base has shed lesser value assets
It's operations are considerably leaner and using world-best technologies - a silly mistake caused the recent massive Pilbara derailment and no doubt it will cause more system fail-safe features to be programmed into autonomous operations.
It's yielding over 4% returns at present high, not including franking credits.
I cannot see too many obstacles to $45 being hit this year although its push to $50 is not yet obvious.


----------



## Garpal Gumnut (30 March 2019)

The only situation that may push BHP to $45 are
1. Another GFC to push the price down. 
2. Some time after a t/o bid from RIO.

I hold and will buy again after 1. occurs.

gg


----------



## sumit_jha (30 March 2019)

I am new to gann & trying to learn it, in the process i got some videos course by various authors. I thought it a good idea to share it with all, hence, I have created youtube channel "Learn to Trade". First 3 video have been uploaded from 7 part video series course by Myles Wilson Walker "power of hexagon". I have decided to Upload 6 Hours Training Video by "Michael Jenkins" & "Wd Gann Master Time Factor" by myles wilson walker once i reach 1000 subscribe.
pm me if having problem finding newly born channel on youtube.


----------



## Miner (30 March 2019)

sumit_jha said:


> I am new to gann & trying to learn it, in the process i got some videos course by various authors. I thought it a good idea to share it with all, hence, I have created youtube channel "Learn to Trade". First 3 video have been uploaded from 7 part video series course by Myles Wilson Walker "power of hexagon". I have decided to Upload 6 Hours Training Video by "Michael Jenkins" & "Wd Gann Master Time Factor" by myles wilson walker once i reach 1000 subscribe.
> pm me if having problem finding newly born channel on youtube.



Well done @sumit_jha and welcome to the forum with your third posting.
Please consider *putting a link of your YouTube Channel a*nd more importantly make sure you are posting those lessons within rights conferred and not breaching copyright provision.
Our ASF reported has burnt its finger on some copyrights issue and though YouTube is a different kind of beast with postings all kinds and all corners, I thought to bring your attention.
Good luck


----------



## Miner (30 March 2019)

Garpal Gumnut said:


> The only situation that may push BHP to $45 are
> 1. Another GFC to push the price down.
> 2. Some time after a t/o bid from RIO.
> 
> ...



Hey GG. That is a bit cruel mate to see GFC to come just to make you rich purchasing  BHP price down. Thankfully you have not wished a tailing dam to collapse like Vale .


----------



## Ann (6 April 2019)

*BHP Poised to Cut Jobs as Streamlining Plan Progresses*
_
BHP Group Ltd. will cut jobs in a continuing effort to reduce bureaucracy under a previously foreshadowed streamlining strategy, a person familiar with the matter said.

It is unclear how many jobs will be lost or when the reductions will begin, the person said, requesting anonymity because the move isn’t public. The changes come less than six weeks after the mining giant announced a major shake-up of its senior management, with the promotion of three women to key positions on its executive leadership board and the appointment of a chief transformation officer.


Earlier Saturday, The Australian newspaper reported that the mining giant would target more than 700 white-collar jobs which would be cut as soon as next week. More..._


----------



## rederob (6 April 2019)

Ann said:


> *BHP Poised to Cut Jobs as Streamlining Plan Progresses*
> _ More..._



Not necessarily having a go at you Ann, but why is it that so many here simply lift articles and offer no comment.
I am more interested in how others here, ie those who are invested, react to this news.
From my perspective it's a minimum $50m annual savings which chips into to a bigger dividend pool for we investors.


----------



## Ann (6 April 2019)

rederob said:


> Not necessarily having a go at you Ann, but why is it that so many here simply lift articles and offer no comment.
> I am more interested in how others here, ie those who are invested, react to this news.
> From my perspective it's a minimum $50m annual savings which chips into to a bigger dividend pool for we investors.




I thought about making a comment but I am trying to study a book of candlestick charting patterns as well as talk here and look for interesting articles elsewhere. I just found it and slapped it up, but seeing you ask....

What I was thinking about saying is they appear to be doing an Al Dunlap much like John King is doing over a MYR. It will be interesting to see how it goes. Well, is my thought.


----------



## Garpal Gumnut (6 April 2019)

Whether you use Technical or Fundamental Analysis you have to buy low or at least on a runup. 

This applies to all stocks. 

I’ve had my franked buyback from BHP which puts my Super Fund into doublydigit yearly gain but I’m not going to add until it falls. 

Just my opinion outwith of any tech performance, upper management brain farts or changes in government. 

gg


----------



## rederob (6 April 2019)

Garpal Gumnut said:


> Whether you use Technical or Fundamental Analysis you have to buy low or at least on a runup.
> This applies to all stocks.



True.
But you were hoping for another "buying" low back in January, and BHP is now over $6 higher.
Not being critical, just making the point about when the run was well underway, and the question about *when* to buy into it.


----------



## Garpal Gumnut (6 April 2019)

Six dollars is nothing in the variation of price in BHP over the last 2-3 years. 

I hear your point though. 

gg


----------



## Miner (6 April 2019)

Ann said:


> *BHP Poised to Cut Jobs as Streamlining Plan Progresses*
> _
> BHP Group Ltd. will cut jobs in a continuing effort to reduce bureaucracy under a previously foreshadowed streamlining strategy, a person familiar with the matter said.
> 
> ...



Reading Australian it looks like next week  there may be many more news coming to market . Ironically a share holdffect employees and


Garpal Gumnut said:


> Whether you use Technical or Fundamental Analysis you have to buy low or at least on a runup.
> 
> This applies to all stocks.
> 
> ...



Just watch Monday market and thereafter.


----------



## Garpal Gumnut (9 April 2019)

BHP is through $40.

I still hold a reasonable amount.

I'm just a bit reticent about adding when everyone is saying I should.

I suppose I'm a contrarian.

The chart over the last 6 mo. shows a nice BO,  and a 1,2,3,4,5 Elliot Wave pattern.

Is this part of a larger 1 and will a 1.2.3. occur for a larger 2. ?







Decisions.

gg


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## fiftyeight (17 April 2019)

> The shutdown of Vale's mines and the forced closure of Western Australian ports by Cyclone Veronica in March caused a global iron ore shortage, driving up prices and buoying Australian miners' shares.






> It came as BHP released softer than expected March quarter results. The miner decreased its iron ore guidance by between 6 million and 8 million tonnes after Cyclone Veronica hit its Western Australian port operations in March.




So Veronica was the driver of recent IO price rises, and Veronica also is partially to blame for today falls.......


----------



## Garpal Gumnut (17 April 2019)

Let us hope and pray that BHP falls to recent 5 year lows where I last bought them at $16.50 just over 3 years ago.

You only get one BHP in a lifetime, as Kerry Packer said. 

gg


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## MARKETWINNER (18 April 2019)

BHP is closely linked to the strength of China’s economy. Am I right? There is a high probability to make capital gain by buying companies like BHP in fire sales.China’s iron ore futures extended losses on Thursday after Brazil’s Vale SA said it was set to reopen an iron ore mine.
Analysts are expecting Jump in iron ore supply.


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## rederob (5 May 2019)

Garpal Gumnut said:


> Let us hope and pray that BHP falls to recent 5 year lows where I last bought them at $16.50 just over 3 years ago.
> You only get one BHP in a lifetime, as Kerry Packer said.
> gg



Commodity sentiment has waned and BHP is looking to dip under $36.50 in the coming week.  Anything near $35 is value by my reckoning.


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## Ann (8 May 2019)

It will be interesting to see how this turns out for them financially....
*BHP Billiton 'woefully negligent' over Brazil dam collapse*

_Mining giant BHP Billiton is facing a $5bn (£3.8bn) claim for damages over a dam collapse in Brazil in 2015.

Law firm SPG, which is representing than 200,000 Brazilian claimants, said the company "knew of the risks" at the Samarco mine in Minas Gerais state.

The claim, which was served at Liverpool's High Court on Tuesday, is the largest in UK legal history.

BHP, an Anglo-Australian firm listed in London, rejects all of the charges. 
_

_How do you clear tonnes of toxic sludge?_
_BHP faces new lawsuit over Brazil disaster_
_Tom Goodhead, partner at SPG, said: "The repeated warnings and recommendations of dam safety experts were acted upon too slowly, or sidestepped entirely.
_
_"Driven by concern for declining revenues amidst the falling market price of iron ore, the company took risks, increased production and turned a blind eye to dangers that ultimately claimed lives and destroyed communities." More..._


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## Garpal Gumnut (8 May 2019)

Ann said:


> It will be interesting to see how this turns out for them financially....
> *BHP Billiton 'woefully negligent' over Brazil dam collapse*
> 
> _Mining giant BHP Billiton is facing a $5bn (£3.8bn) claim for damages over a dam collapse in Brazil in 2015.
> ...



While I hope the victims of the Samarco dam wall collapse get their due compensation, bear traders on BHP should not be jumping for joy.

BHP has barely moved today on a down day on the ASX.

At one stage BHP was looking at a $55 million civil suit which was negotiated down.

Provisions have been made and a writedown done 2 years ago on the books.

Matters have been complicated since a further tailngs dam collapse just recently has concentrated the mind of the Brazilian government to save it's own skin.

Vale the majority partner with BHP in the minority, have more to fear from any civil action in relation to Samarco.

gg


----------



## Ann (9 May 2019)

*BHP hit with $7.2 billion claim for Brazil dam collapse*

_The world’s biggest miner, BHP (ASX: BHP), has been hit with the UK’s biggest damages claim of $7.2 billion for its part in the 2015 Fundao tailings dam failure in Brazil.


The failure of the dam killed 19 people and sent about 40 million cubic metres of toxic sludge through various communities on the Rio Doce river, before eventually spilling into the Atlantic Ocean 650km away and polluting beaches.


While the more recent January collapse of a Vale-operated tailings dam in the town of Brumadinho in Brazil killed an estimated 300 people, the Fundao dam collapse is still regarded as being the biggest environmental disaster in Brazil and has led to massive compensation and remediation work by BHP and its Samarco joint venture partner, Brazil’s Vale.


*Claim made on behalf of 235,000 people*

The claim was served on BHP by law firm SPG Law on behalf of 235,000 Brazilian individuals and organisations, including municipal governments, utility companies, indigenous tribes and the Catholic Church.


The claim argues that BHP was “woefully negligent” leading up to the 2015 Brazil dam failure, failing to act on repeated warnings from independent safety experts.


It also says that iron ore output was increased despite these safety concerns, placing the pursuit of profit over human and environmental risk.


Negligent BHP put profits ahead of people – claim More..._


----------



## Garpal Gumnut (10 May 2019)

Ann said:


> *BHP hit with $7.2 billion claim for Brazil dam collapse*
> 
> _The world’s biggest miner, BHP (ASX: BHP), has been hit with the UK’s biggest damages claim of $7.2 billion for its part in the 2015 Fundao tailings dam failure in Brazil.
> 
> ...




As you may know from previous posts above I am hoping BHP fall in price, as they are a very good value share.

Unfortunately the little guys, indigenous, poor and powerless usually don't do well out of litigation against the powerful such as BHP. 

BHP from the fundamental aspect seems to have taken the appropriate "hit" from this event and provisioned for a scenario where the litigants get some recompense. They were a minor partner with Vale.

The lawyers, politicians and head honchos in corrupt societies such as Brazil usually benefit. 

As I said above BHP has fallen over the last few days but more due to global events, such as Trump tying his incontinence nappy too tight and having a brainfart against the Chinese, rather than this court case. 

If I see BHP below $20 - $30 as it was just a few years ago, I'll be watching the charts daily and in like Flynn for a buying opportunity.

gg


----------



## Ann (10 May 2019)

Garpal Gumnut said:


> If I see BHP below $20 - $30 as it was just a few years ago, I'll be watching the charts daily and in like Flynn for a buying opportunity.



As long as no-one does a T/O as they are falling.


----------



## Garpal Gumnut (10 May 2019)

Ann said:


> As long as no-one does a T/O as they are falling.




Which will show up in the charts when the Chairman or the CEO's mum tells someone when she is on the sauce somewhere. 

That is why I prefer charts, even though I am a long term investor not a trader.

gg


----------



## rederob (15 June 2019)

rederob said:


> Commodity sentiment has waned and BHP is looking to dip under $36.50 in the coming week. Anything near $35 is value by my reckoning.



Got as slow as $36.15 and since then has risen to an 8 year high on Friday, having "gapped" 3 times during the week, closing at $40.30 on better than average volumes.
Although BHP has had a rocket rise since dipping to $13.48 on 29 January 2016, it's hard to see a reason for it to weaken much in the immediate term.  It's current shot in the arm is an exceptionally strong iron ore price, but it's portfolio across the board is running at strong margins within a reasonably subdued commodities market.  
I have it down for a "buy" should it drop to $30 as it's a long term hold at that price.  Right now I reckon BHP is more likely to hit $45 than $30, but markets can be fickle!


----------



## Boggo (17 June 2019)

rederob said:


> ...
> I have it down for a "buy" should it drop to $30 as it's a long term hold at that price.  Right now I reckon *BHP is more likely to hit $45* than $30, but markets can be fickle!




Agree rederob. I added a few more BHPIWM instalments today.

(click to expand)


----------



## bigdog (20 August 2019)

ASX announcement today
20/08/2019 8:18:57 AM    *BHP Results Presentation for the Year Ended 30 June 2019
*
BHP has delivered a record payout to shareholders but the global miner's underlying result has fallen short of expectations.

BHP more than doubled its full-year net profit to $US8.31 billion ($A12.27 billion) for the year to June 30 on the back of strong iron ore prices and easing costs associated with the 2015 Samarco dam disaster.

BHP's underlying profit from continuing operations fell by 2.0 per cent to $US9.46 billion following the divestment of US shale assets, short of consensus estimates of $US9.73 billion.

Including the shale assets, the company's underlying result was 2.0 per cent higher than last year's $US9.1 billion profit, but still under consensus expectations of $US9.4 billion.

The company declared a record final dividend of 78 US (about $A 1.13) cents per share, up from 63 US cents a year ago, for a record full-year dividend of $US2.35 per shar*e (*Payable September 25)
*

*
Share price today had a low of $35.64 but improved and finished at $36.30

*




*
228


----------



## Garpal Gumnut (20 August 2019)

bigdog said:


> ASX announcement today
> 20/08/2019 8:18:57 AM    *BHP Results Presentation for the Year Ended 30 June 2019
> *
> BHP has delivered a record payout to shareholders but the global miner's underlying result has fallen short of expectations.
> ...




Very interesting.

Where to from here?

gg


----------



## Boggo (20 August 2019)

Could be another case that I often see where the report appears on the chart and is priced in before it's released to the masses.
If that is the case then we should be near a bottom now.

From an EW/Fib view there could be a bit more downside, the (red) support line actually coincides with the min W.4 retracement of 38.2% with the 50% retracement being at $32.20. In theory the turnaround area is between those two. 

All just my  worth !

(click to expand)


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## Boggo (20 August 2019)

Interesting...
https://www.smh.com.au/business/com...7ZxGg9Y42if2QoAr-a0pVMNt_c#Echobox=1566278760


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## Garpal Gumnut (20 August 2019)

Boggo said:


> Could be another case that I often see where the report appears on the chart and is priced in before it's released to the masses.
> If that is the case then we should be near a bottom now.
> 
> From an EW/Fib view there could be a bit more downside, the (red) support line actually coincides with the min W.4 retracement of 38.2% with the 50% retracement being at $32.20. In theory the turnaround area is between those two.
> ...




I would agree Boggo.

I'm surprised BHP didn't bounce more today.

The instos are still selling into any strength which makes me wonder if they know something that hasn't appeared in the announcement.

The brokers will be pushing it strongly over the next few days, but a further small drop is more likely until it hits support.

gg


----------



## Boggo (30 August 2019)

Garpal Gumnut said:


> ...
> The brokers will be pushing it strongly over the next few days, but a further small drop is more likely until it hits support.
> 
> gg




One day is not really enough to get excited about but it is going well today after hitting the area of likely reversal (post #2593 above). Another week will tell the tale.

(click to expand)


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## barney (5 September 2019)

Boggo said:


> From an EW/Fib view there could be a bit more downside, the (red) support line actually coincides with the min W.4 retracement of 38.2% with the 50% retracement being at $32.20. In theory the turnaround area is between those two.
> All just my  worth !





Boggo said:


> it is going well today after hitting the area of likely reversal (post #2593 above). Another week will tell the tale.





Well called so far


----------



## Garpal Gumnut (11 September 2019)

Quite an interesting pattern on BHP's recent chart.

High volume today heading towards completion of an inverted head and shoulders movement moving over 200d moving average.

Onwards and upwards is my guess.

And it's ex-div 6 days ago.

gg


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## Value Collector (11 September 2019)

sptrawler said:


> did the gen xyz and anyone else jump onboard?




this one did, I was selling puts options like a demon.


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## Garpal Gumnut (12 September 2019)

*And now for the Recommendations from our Brokers who are paid for this drivel. *

Goldman Sachs
10 Sep 2019
*Buy*
Target Price *$41.90*
BHP Group (BHP.AX): Petroleum: Reinvest or divest? New discoveries could boost volumes 50%; upgrade to Buy
Was *Neutral* on 19 Feb 2019

MorningstarTM Premium
20 Aug 2019
*Reduce*
Fair value *$30.00*
Lowering our BHP Group FVE to AUD 30 on Higher Near-Term Costs.
Was *Reduce* on 16 Jul 2019

MorningstarTM Quantitative
10 Sep 2019
*Fairly Valued*
Fair value *$34.46* Liquidity *High*
3 out of 5 star(s) rating
Was *Overvalued* on 06 Sep 2019

Consensus
10 Sep 2019
*Hold*
1 Strong Buy, 2 Hold, 1 Moderate Sell
Was *Moderate Buy* on 13 Apr 2018 

gg


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## Garpal Gumnut (13 September 2019)

Upwards and onwards.

Up 0.43% today.

I reckon as I've said before that it may be in for a takeover at some stage.

One of the reasons it returned so much capital as ff to holders recently.

gg


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## qldfrog (15 September 2019)

In my opinion based on some insight, BHP is a very badly managed company which could do very well with a TO
They have fantastic assets due to historical reasons
With the right management and an in depth review of the workforce aka not only the headquarters,it could become the number one imho


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## rederob (15 September 2019)

qldfrog said:


> With the right management and an in depth review of the workforce aka not only the headquarters,it could become the number one imho



Given that BHP is third in global mining company earnings only to Glencore Plc at $219.75bn and ArcelorMittal at  $76.03bn, they are doing a lot of things very well.
Comsec has a price target of $41.10 on BHP and as of Friday rated them a *BUY*.
BHP has world class assets and operates them at a high margin, so investment returns from BHP have been excellent in recent years.  Unfranked yield is estimated at about 5% for the next year so that's a fair bit better than bank interest.
Reuters has an eps estimate for BHP in fy 2020 at $2.22 - about an increase of 20% over last fy.
BHP is well placed to take advantage of the EV transformation with excellent nickel and copper assets.  But until then, it will also do handsomely from its petroleum and gas assets, which are mooted for significant expansion.
BHP is a much leaner company than it was in the past, with less risky exposures.
On a business as usual basis BHP will imho run well over $40/share for much of the 2020s, stretching over $50 in the latter part of the decade as its EV materials supply chain cranks up to meet emergent demand.


----------



## Boggo (20 September 2019)

Follow up from post #2596 (and relevance to MCR and TLS threads).

Over $50 by the end of next year ??
My  again.

(click to expand)


----------



## qldfrog (23 October 2019)

Following my breaking News post on Chile
https://www.afr.com/companies/mining/bhp-and-rio-are-riding-chile-s-subway-to-chaos-20191022-p5334q
There is sovereign risk not only in third world countries and Australia


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## bigdog (23 December 2019)

ASX announcement today
23/12/2019 8:29:13 AM  *Andrew Mackenzie retirement date 31 March 2020* (uploaded)

The share price is lower today no doubt on today's announcement

BHP CEO since May 2013

Oversaw the demerger of South32 Ltd in 2015.

Biggest controversy that Mr Mackenzie has had to deal with was the 2015 Mariana dam collapse in Brazil, which saw the deaths of 19 people and billions of dollars’ worth of damage.






Summary of revised terms of retirement for Andrew Mackenzie is included in the uploaded announcement below:






587


----------



## rederob (26 February 2020)

Boggo said:


> Follow up from post #2596 (and relevance to MCR and TLS threads).
> 
> Over $50 by the end of next year ??
> My  again.
> ...



Thanks for the charts @Boggo.
Am putting in a BUY order tomorrow at $34.60 and will leave it a few days.
If BHP tumbles more than expected I might even ratchet it down another notch.
BHP in the $35 range is an excellent price imho, but its China exposure is not at all favourable.
I had BHP pegged for sustaining +$40 this year but I can't see this being realistic unless an antiviral for COVID-19 hits the markets soon.


----------



## rederob (28 February 2020)

I just got my trade confirmation:
*You've bought 877 units in BHP GROUP LIMITED (BHP) at a price of $33.51 per unit (not including brokerage), on trading account ****186 *
That took care of $30k in the trading account, so am off to the bank, literally, to withdraw more cash and  transfer it in to our trading account.
Would be far simpler if CBA had decent term deposit rates, or even if banks had simpler inter-bank electronic transfer arrangements: hard to believe they do not in this day and age.
I worked out the buy price based on last year's gap, and do not doubt that BHP is likely to dip further.
However, this picks up the dollar dividend and I am pretty sure that BHP will finish this year substantially higher than present.


----------



## Sharkman (28 February 2020)

rederob said:


> That took care of $30k in the trading account, so am off to the bank, literally, to withdraw more cash and  transfer it in to our trading account.
> Would be far simpler if CBA had decent term deposit rates, or even if banks had simpler inter-bank electronic transfer arrangements: hard to believe they do not in this day and age.




you might want to look at NABtrade. i've been using them for a few years for the long term investment component of my portfolio, and have found them to work quite well for my purposes.

the brokerage rates are comparable (if not slightly better) than the other big institutional CHESS brokers, and you can link your brokerage account to the NAB high interest account for instant transfers in either direction that can be done at the click of a button.

currently pays 1.25% so not as good as the best retail fixed interest offerings out there, but it's still above the benchmark rate and if you're looking for a place to merely park cash while waiting for the right time to buy stocks, as opposed to deliberately maintaining a cash weighting, it fits the bill quite nicely.


----------



## Trav. (27 May 2020)

BHP SP holding up well with China trying to through it's weight around, iron ore price still strong so happy to hold here. 

Weekly chart below


----------



## frugal.rock (27 May 2020)

I like the chart @Trav.  Blue balls, then green, then red then lellow.
More colours than someone else...me got 7 shades of shoite.

F.Rock


----------



## Trav. (27 May 2020)

@frugal.rock colours are just a distraction from people realising I have no idea.


----------



## frugal.rock (27 May 2020)

Correct, me NFI also.
(Needs funds immediately)


----------



## qldfrog (27 May 2020)

@Trav. , Why going now in a cyclical so subject to China mood?
Risky IMHO and still so far from the 45$ a share pre GFC, with much of the ore available 13y ago gone forever.always remember a miner is selling the silverware by definition and need to always add with exploration/ finds /purchase just to keep level assets
Discard all the above if trading and not investing


----------



## Trav. (27 May 2020)

@qldfrog BHP are currently building their South Flank mine and ore handling plant and have plenty of ore available in the region. Recent tonnes produced have been excellent even with the COVID restrictions in place. Also I am led to believe that other operators in south america have been impacted more by the COVID-19 which limits China options of finding replacement high grade ore.

Disclosure - I am employed by BHP and have the benefit of witnessing the operations at the work face.


----------



## Sharkman (27 May 2020)

not a technical expert by any means, but i also saw this chart (i was looking at daily candles though for short term option trading) and interpreted it as showing resistance turned support turned resistance at that $35 level. probably a rather simplistic interpretation though.

sold ATM covered calls last week struck at $35, expiring tomorrow for a 0.80 premium (IV ~40). 40 is well below the 80 or so the IV got to during the heights of the current crisis, but still some way above the historical average for this underlying, which normally floats around the mid 20s type of range.

fairly hefty fall in the underlying today, market currently showing 0.08/0.28 on the 35 calls as i type this, it's early in the session though and spreads are usually rubbish at this time. hopefully it'll give me a chance to buy them back for 0.16 (20% of original premium collected) as the day wears on, it'll be decaying almost by the minute with that tom expiry.


----------



## Sharkman (27 May 2020)

insta-filled at 0.15 into a 0.10/0.22 spread. that ended up working better than i expected. don't normally get fills like that this early into a session. thinking (guessing?) it won't break thru $35 resistance for another 2-3 months and will keep looking to do more ATM covered calls at that strike in the coming weeks, especially if IV remains hovering around that 40 level. if it gets called away, then it gets called away. might look at putting some of the proceeds from that last lot of covered calls into some 3 month OTM calls as well though, in case it does end up breaking thru.


----------



## Dona Ferentes (27 May 2020)

Trav. said:


> @qldfrog BHP are currently building their South Flank mine and ore handling plant and have plenty of ore available in the region. Recent tonnes produced have been excellent even with the COVID restrictions in place. Also I am led to believe that other operators in south america have been impacted more by the COVID-19 which limits China options of finding replacement high grade ore.



Para in Brazil, home of Carajas mine, has high Covid numbers.


----------



## Dona Ferentes (27 May 2020)

Found this from about a week ago. Since then the Covid-19 situation in Brazil has worsened







> Iron ore shipments from Brazil have fallen by almost a quarter in May because of the country’s coronavirus crisis, which is one of the worst in the world, said Macquarie analyst Serafino Capoferri. Brazil exported 15.27 million tonnes of iron ore in the first three weeks of May, he said. That is down from 19.4 million tonnes in the comparable period of 2019, when exports were already lower than normal following the fatal dam collapse at Vale’s mine in Brumadinho.
> 
> “The situation in Brazil is pretty much out of control,” said Mr Capoferri. He said the pandemic had caused difficulties at the country’s mines, which are more labour-intensive and require people to work closer together than mines in Australia.
> 
> Vale has said the coronavirus will reduce the amount of iron it is able to produce this year. The company said in late April it will mine between 345 million and 370 million tonnes of iron ore powder and pellets in 2020, around 40 million tonnes less that it previously expected. Brazil as a whole mined 480 million tonnes of iron ore in 2019, according to the US Geological Survey, a fifth of global production and second only to Australia.


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## Garpal Gumnut (27 May 2020)

May I offer a word of caution in all of this merriment and throwing money at the market. Particularly BHP, RIO and FMG. But particularly BHP.

We still are not through this pandemic. All the experts predict a 2nd wave. 

This will further disrupt production, delivery to, and need for products such as iron ore and oil by customers. 

And then there is the small matter of China. 

I never buy BHP for more than $30 and especially like it under $20. In the last 8-10 weeks it has crept up from about $25 to $36 and is now looking as if it may retreat.

gg


----------



## Dona Ferentes (22 June 2020)

BHP has increased its *nickel footprint* in Western Australia with the purchase of a tenement package from Russia's Norilsk Nickel. The deal gives BHP control of the Honeymoon Well project as well as the Albion Downs North and Jericho exploration projects where it previously had a 50 per cent stake alongside MPI Nickel Pty Ltd, a wholly owned subsidiary of Norilsk.

The tenement package is in WA's northern Goldfields and only about 50 kilometres from BHP Nickel West's Mt Keith nickel mine and 100 kilometres from its Leinster nickel concentrator.


> “*Nickel* continues to be an *essential input into new technologies* that will improve the battery storage needed for renewables and electric vehicle manufacturing," BHP Nickel West asset president Eddy Haegel said on Friday. "Consistent with our strategy to invest in future facing commodities, this transaction gives us access to explore and develop these prospective nickel sulphide tenements.”


----------



## Student of Gann (23 July 2020)

may look at taking a three month call option  ATM position on the 10th August -/+1 if price conforms to the timing model . As the primary trend should remain up till October I will be looking to buy on dips .


----------



## Student of Gann (24 July 2020)

Second scenario could indicate counter trend low into the  28th July followed by an intermediate top on the  10th August which is opposite to the original model . Either way a change of trend is indicated on the 28th July and if price drops into this point I may look at buying a two or three month ATM call option which will give me more time and flexibility . MainTrend should remain up till mid September


----------



## Student of Gann (24 July 2020)

so there is the option of just riding out the trend till that date and the three month option will be sufficient time for the forecast to play out or alternatively if price moves up into the 10th August by a good margin I may look to close the position on that date and then await a pullback and re enter if I am nimble enough and the options position is liquid enough to exit .


----------



## Student of Gann (25 July 2020)

Main Trend up to 20th October .


----------



## Trav. (6 August 2020)

Very nice day for BHP up 4.9% to close on the high @ $39.82

52wk high @ $41.47
Dividend due early September
Iron Ore $116 us/t

Holding


----------



## Student of Gann (9 August 2020)

10th August -/+1 Top 39.92 approx . Market Curve posted 24th July .


----------



## Student of Gann (11 August 2020)

bought some 15th October OTM Puts at 39.50 strike today .


----------



## Student of Gann (11 August 2020)

Main Cycle down to the 2nd September .


----------



## Student of Gann (13 August 2020)

40.52 should hold .


----------



## Student of Gann (17 August 2020)

28th August should be Minor Low  before resumption of uptrend into the 19 - 20th October where Major Top is indicated . If price moves down into the 28th I will exit and look to reverse the position with a call option . There are two points where Low is indicated 28th August and the 3rd September so Low could potentially occur on either one of these Dates which are five days apart . Once these Dates arrive market position and volume should give a clearer indication and weight as to which one will be Low


----------



## cutz (17 August 2020)

Hey Student of Gann..

Heads up on BHP !! Results out tomorrow with a large amount of open interest on the call $39 strikes expiring thursday.


----------



## Student of Gann (17 August 2020)

thanks . looks the anticipation is holding the price steady . if the 11th August High is breached I will exit the position .


----------



## Student of Gann (18 August 2020)

one thing I noticed on the Westpac platform is the delay between the option and share price opening . The shares will commence trading at 10.00am approx and the options will come on approx 10 - 15 minutes later . This morning the range was 19.33 to 19.73 on the open or approx 1% during which time the options were still set at 0 . is this situation unique to platforms like Westpac and CommBank and would a broker have access to immediate options data on or just after opening .


----------



## cutz (18 August 2020)

Student of Gann said:


> one thing I noticed on the Westpac platform is the delay between the option and share price opening . The shares will commence trading at 10.00am approx and the options will come on approx 10 - 15 minutes later . This morning the range was 19.33 to 19.73 on the open or approx 1% during which time the options were still set at 0 . is this situation unique to platforms like Westpac and CommBank and would a broker have access to immediate options data on or just after opening .




Option market makers will not quote equity options for approx 20min after the open till prices stabilize give or take depending on volatility and strike in relation to underlying.

Getting out of a WBC short position this morning was and still is a bit of a waiting game, spreads have opened up a little, also still waiting on my BHP theory to materialize.


----------



## Student of Gann (18 August 2020)

thanks . good luck with everything .


----------



## cutz (19 August 2020)

Student of Gann said:


> thanks . good luck with everything .




Hey Buddy ;

Those 39.50 Puts are looking pretty good now !  Are you thinking about unloading or continue riding them ?


----------



## Student of Gann (19 August 2020)

Minor Low is indicated for 21st August with Main trend down to the 28th so  I might continue to ride the move down and look to reverse positions on either the 28th August or 3rd September  if price co ordinates line up . From recollection the 19th - 20th August should be Intermediate Top on the SP500 but will have to check my notes on this as I am now concentrating on entering CBA between the 20th - 21st August where Low is indicated . All the best .


----------



## cutz (19 August 2020)

Student of Gann said:


> Minor Low is indicated for 21st August with Main trend down to the 28th so  I might continue to ride the move down and look to reverse positions on either the 28th August or 3rd September  if price co ordinates line up . From recollection the 19th - 20th August should be Intermediate Top on the SP500 but will have to check my notes on this as I am now concentrating on entering CBA between the 20th - 21st August where Low is indicated . All the best .




Thanks mate, you too.

I reckon the BHP sell off will pick up again tomorrow !


----------



## Student of Gann (19 August 2020)

Past reactions are a good indication of what to expect . 7th April 32.29 - 22 April 28.76 a decline of 12 1/4% in twenty days . 10th June 38.09 - 22 June 34.70 a decline of 9 1/2% in twelve days . 21st July 38.84 - 31st July 36.59 a 6 1/4% drop in ten days . A close below 38.50 will put price below the first square .


----------



## Student of Gann (21 August 2020)

Minor Low indicated for 21st August . Position closed.
Entry 1.75 
Exit   2.44 
Duration 11 Days


----------



## cutz (21 August 2020)

Student of Gann said:


> Minor Low indicated for 21st August . Position closed.
> Entry 1.75
> Exit   2.44
> Duration 11 Days




Well done mate !


----------



## Student of Gann (21 August 2020)

Thankyou 
3rd - 4th September Main Low is indicated .


----------



## cutz (21 August 2020)

@Student of Gann

I'm still net short on the BHP delta but using different methods,  results a few days ago and ex divi next week is making me a little nervous although I have reduced my assignment risk.


----------



## Student of Gann (21 August 2020)

good luck with your position . I am out of the market till the 3rd September awaiting a clear signal on BHP .


----------



## cutz (21 August 2020)

Student of Gann said:


> good luck with your position . I am out of the market till the 3rd September awaiting a clear signal on BHP .




Thanks mate, the 3rd is ex div so there could be some action.


----------



## Student of Gann (21 August 2020)

Preliminary Analysis .


----------



## Student of Gann (24 August 2020)

ok thanks


----------



## cutz (5 September 2020)

Hey Student of Gann

Just an observation, that sketch you posted above is shaping up to be bang on.


----------



## Garpal Gumnut (6 September 2020)

I was at a Roundtable discussion at the Duke of Edinburgh Hotel in Walkerston QLD last night and coal is now not being washed out of the mines for transport by train to Hay Point. It’s being stockpiled ++ for when industry opens in China and price goes through roof. I’ll be buying in October. 

gg


----------



## cutz (6 September 2020)

Garpal Gumnut said:


> I was at a Roundtable discussion at the Duke of Edinburgh Hotel in Walkerston QLD last night and coal is now not being washed out of the mines for transport by train to Hay Point. It’s being stockpiled ++ for when industry opens in China and price goes through roof. I’ll be buying in October.
> 
> gg




Excellent mate,

What's your instrument of choice to catch the coal price ?


----------



## Garpal Gumnut (6 September 2020)

cutz said:


> Excellent mate,
> 
> What's your instrument of choice to catch the coal price ?



Fundamental : A dramatic fall in the price of houses in Toorak when the unwashed storm the gates. 

Charts : In reality a long bar down on high volume ending 1/3 up from the low on volume ascending during that week in October. 

gg


----------



## Student of Gann (7 September 2020)

Thanks  . 4th September should hold .  I have almost completed a Curve out to November . Regards Grant


----------



## over9k (7 September 2020)

Garpal Gumnut said:


> I was at a Roundtable discussion at the Duke of Edinburgh Hotel in Walkerston QLD last night and coal is now not being washed out of the mines for transport by train to Hay Point. It’s being stockpiled ++ for when industry opens in China and price goes through roof. I’ll be buying in October.
> 
> gg



Which mines? BHP's? When you say buy, do you mean BHP or something else?


----------



## Garpal Gumnut (7 September 2020)

over9k said:


> Which mines? BHP's? When you say buy, do you mean BHP or something else?



BHP is one of the main exporters of coal and employer in the mines west of Mackay. 

I expect March lows to occur in October and I’ll be buying BHP 

gg


----------



## over9k (7 September 2020)

Gotcha. Let me know when you pull the trigger. 

What's going on with adani?


----------



## Garpal Gumnut (7 September 2020)

over9k said:


> Gotcha. Let me know when you pull the trigger.
> 
> What's going on with adani?



Same old same old. I filled the Arnage in Bowen and I wouldn’t fancy being an activist if it came to the biff with some of the miners filling up their 4wd’s. Adani is not nice but everyone has picked a side. At least the crusties are leaving BHP to get on with what they are good at. 

gg


----------



## cutz (7 September 2020)

Garpal Gumnut said:


> BHP is one of the main exporters of coal and employer in the mines west of Mackay.
> 
> I expect March lows to occur in October and I’ll be buying BHP
> 
> gg




Agree,

BHP is forming a classic top formation, personally I've stepped up the short delta, also expecting a decent correction, March lows IMO opinion could be a tad optimistic .


----------



## Student of Gann (8 September 2020)

90° = 38.00
180° = 40.10 

4th September Low in place .
Forecast on the 21st August


----------



## Sharkman (10 September 2020)

i sold Sep $35 puts a few days ago. premium wasn't anything too flash (about 0.8% of the stock price) but it was decent mid-30s vol and quick decay. the depths of the crisis notwithstanding, $35 seems to have been a decent resistance turned support level looking back to mid 2018 or so. got called away at that level a few months ago after repeated covered call selling over the position i'd originally taken on to strip the mar dividend. wouldn't mind having them put back to me at $35.


----------



## Trav. (3 December 2020)

Iron ore up 
	

		
			
		

		
	







and BHP doing well, happy holder and closing in on 52wk high


----------



## Boggo (3 December 2020)

@Trav.
It didn't quite make the W.5 on the last run up.
The W.3 moved after this post...
https://www.aussiestockforums.com/threads/bhp-bhp-group.1335/page-131#post-1040747

Just wondering what you are seeing on the weekly with that new software in the action since last March 😉

(click to expand)


----------



## Trav. (3 December 2020)

Boggo said:


> The W.3 moved after this post...



@Boggo that is interesting that the W3 moved, I will have to have look at the bar replay to get a better idea.



Boggo said:


> Just wondering what you are seeing on the weekly with that new software in the action since last March 😉



Not much unfortunately as I have had to go to work and unable to have a play whilst onsite (I need to bite the bullet and get a second install). Hopefully by the end of the year I should be able to drive it but with my 'L' plates on.

Cheers

Trav


----------



## Boggo (3 December 2020)

Trav. said:


> Not much unfortunately as I have had to go to work and unable to have a play whilst onsite (I need to bite the bullet and get a second install). Hopefully by the end of the year I should be able to drive it but with my 'L' plates on.
> 
> Cheers
> Trav



All good.

BHP will be interesting to watch from here onwards.
It could be shaping up as a W.3 but I really would have liked to see the W.2 retrace more than it has so i'm cautious.

Cheers.


----------



## Boggo (5 January 2021)

Boggo said:


> BHP will be interesting to watch from here onwards.
> It could be shaping up as a W.3 but I really would have liked to see the W.2 retrace more than it has so i'm cautious.




@Trav. Thinking we may have a W.3 happening based on today's upward resumption after a few weeks of hesitation ?

(click to expand)


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## Trav. (5 January 2021)

@Boggo your post had some uncanny timing as I just received notification that I had purchased some more shares through the work share purchase plan and said to myself not good timing buying at the peak

The share prices obtained on 29 December 2020 were:
ASX: AUD *42.97* 

So let's hope that the W3 does eventuate


----------



## Trav. (5 January 2021)

@Boggo the one thing that I have doubts on when plotting such wave patterns is for example BHP has a ATH of $44.34 in 2008.

We are looking for a wave 3 to extend into this area +$48 area

My chart came up with a possible ABC with lower typical zones.

What are your thoughts on the different options?


----------



## Boggo (5 January 2021)

Trav. said:


> @Boggo the one thing that I have doubts on when plotting such wave patterns is for example BHP has a ATH of $44.34 in 2008.
> 
> We are looking for a wave 3 to extend into this area +$48 area
> 
> ...




Yes, been watching that hesitation in the min W.C area.
Just my own way of looking at it is because it hasn't pulled back from that min W.C area of hesitation and has now started to move (albeit just one day atm) I have shifted from W.C to a likely W.3 or at least a typical W.C.

Time will tell if I am on the right track, too easy to say so after the event so chart and predict it as it plays out


----------



## Trav. (5 January 2021)

@Boggo yes fair enough mate. Just another piece of the puzzle.

Does   
	

		
			
		

		
	





	

		
			
		

		
	
   use the DLB Oscillators as well ? If so any preferences. ?

I like to use the  DT oscillator but only found out the other day that I was interpreting the shading incorrectly. It pays to actually read the description instead of assuming the intent.  as we know what happens when we ASSume  






In this Example with BHP it appear that the lower indicator is a little closer to predicting the pivots.


----------



## Boggo (5 January 2021)

Trav. said:


> @Boggo yes fair enough mate. Just another piece of the puzzle.
> 
> Does
> 
> ...




I don't really use much in the way of indicators, just my MACD on the default chart in Amibroker.
I went berserk with indicators years ago in the Metastock days but now I tend to think that you have to adjust the parameters based on the past to match each individual stock.

The generic MACD in Ami tends to give me a trend guide. The parameters were optimised years ago to suit the weekly on the All Ords, I should review them.

(click to expand)


----------



## Dona Ferentes (7 January 2021)

and BHP put on 6% today. Hard to say if it is an all time high, as so many corporate actions (OneSteel, BlueScope, Magma, Billiton in, Billiton out, etc) but the 30 year chart looks good

Resources Boom 1.0  up to 2008 gave it firepower. And China from 2016 has saved it.


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## rederob (24 February 2021)

With oil prices returning to recent year averages, iron ore at near record highs, and base metals prices set to increase further on strong demand, it was inevitable that the big Australian would bust through $50 this year.





Here's BHP's chart over the past year - a few wobbles, but still within its trend channel, so more upside possible:


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## over9k (25 February 2021)

The big one is the resolution copper mine co-owned with RIO. 

Cars are about to have a massive copper component percentage on account of electric motors & wires  

I own both, FMG too.


----------



## rederob (25 February 2021)

over9k said:


> The big one is the resolution copper mine co-owned with RIO.
> 
> Cars are about to have a massive copper component percentage on account of electric motors & wires
> 
> I own both, FMG too.



Optimistically the Resolute project might have ore to the surface in 10 years time
Then, whenever it is finally ramped up, its massive scale will put a lid on copper price upside.
I am not sure I want to celebrate my 80 birthday next week!


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## over9k (25 February 2021)

I've bought as a dividend/long term play and I'm nearly 50 years younger than you so I'll be fine


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## Boggo (25 February 2021)

Follow up from here...
BHP EW Pattern

It's hit the first target level and looking like it will continue imo.

(click to expand)


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## Dona Ferentes (5 March 2021)

you could do one of those charts on BHP dividends, @Boggo 

And what a payer, this year. (2019 was year of the Billiton shedding and special divi with buyback)


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## finicky (12 March 2021)

*BHP predicts golden age of exploration discoveries*

I hadn't been aware of BHP's Cu/Au *Oak Dam* discovery in S.A *under 800 metres of cover*. Intercepts over a wide area including *58 metres* at 2.49 per cent copper and 1.2 grams per tonne of gold

The speaker is some gender diversity hire 👩‍🎤heading BHP's technical office and she seems to be saying that 400 metres below surface is now as transparent as surface to the best technology.

She makes very bullish remaks about Ni and also copper deficits ahead as the EV revolution takes hold. For me Cu will be taken as the safer play.


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## Humid (25 April 2021)

Hello
I did some work at South Flank a while back
Big expansion with no scrimping on $$$$
Be online soon do you think this puts more on the price
I do and went in deeper ...upgraded there output capacity from what Ive seen at Finacane ...I think
Ps good company to work for compared to some of the junior miners Ive worked for


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## rederob (6 May 2021)

Plus-$50 is back on the agenda, so with elevated metals prices offering BHP massive profit margins, and recent month oil prices at their highest in the past year, I won't be surprised if BHP hits @Boggo's "typical" target price in coming months.
That trend has a lot of support.


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## rederob (10 May 2021)

With copper and iron ore at all time record highs it was inevitable that BHP was going to bust through $50 today.
I cannot see the short-term trend as sustainable, but the longer term trend is likely to sustain through this commodity bull cycle.


----------



## cutz (10 May 2021)

Some heavy call option open interest around these levels forcing market makers to hedge some serious delta/gamma adding some fuel no doubt.


----------



## over9k (10 May 2021)

Gamestop 2.0 when?


----------



## cutz (10 May 2021)

over9k said:


> Gamestop 2.0 when?




Hmmm, not exactly a short squeeze, more like delta hedging, the unwinding will be interesting in the next couple of weeks, couple that with some global uncertainty and we should see some volatility spike up..


----------



## Student of Gann (20 May 2021)

2oth May 47.45 Low  should hold.
I will buy a three month ATM call on open tomorrow with a stop just under 47.45 .


----------



## cutz (21 May 2021)

Student of Gann said:


> 2oth May 47.45 Low  should hold.
> I will buy a three month ATM call on open tomorrow with a stop just under 47.45 .




Agree with low,

Now that the May Calls have  been unwound.


----------



## Boggo (21 May 2021)

Follow on from here - BHP EW Pattern

Area of usual hesitation.
There could be another $10 to go but that is just my 

(click to expand)


----------



## Student of Gann (3 July 2021)

7th July could be counter trend high for BHP . If price trades up into this date on weak volume we could see a decent selloff . May look at an ATM 3 or 6 month put option .


----------



## Gunnerguy (3 July 2021)

Student of Gann said:


> 7th July could be counter trend high for BHP . If price trades up into this date on weak volume we could see a decent selloff . May look at an ATM 3 or 6 month put option .



Sold two $52 August 19th covered Call contracts last week. PM of +0.47, Delta of 0.213. 
Since they’re covered, if assigned before August I get +9% in my purchase in June.
Yes they could be worth more with a good possible dividend.
Maybe a bit quick in selling the call, I’ll see.
Results on 17 August so it could be a bumpy ride. I could always but a $53 putt  for safety and reduce possible losses ....
Gunnerguy.


----------



## Student of Gann (4 July 2021)

The Cycle we are repeating indicates a possible 12 1/2% increase from the Low which could take price up to 77.27 which is 1/2 a square up from the low . 75.33 is the midpoint of the range so this level will also be important to monitor .  Previous counter trend reaction was 4.85 so price is overbalanced . At this point it is difficult to calculate an approximate price target so will refine calculations as we approach the target date . My timezone for the Top is between 11.45am to 12.15pm on the 7th July.


----------



## Student of Gann (4 July 2021)

Chart for the SP500 posted on twitter .


----------



## Student of Gann (8 July 2021)

Short SP500 at 4359 with an eight point stop . Forecast date was for the 6th July so one day off 😁


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## Gunnerguy (8 July 2021)

Student of Gann said:


> Short SP500 at 4359 with an eight point stop . Forecast date was for the 6th July so one day off 😁



Are you still suggesting a high of 75/77 ??
Gunnerguy


----------



## Student of Gann (8 July 2021)

Gunnerguy said:


> Are you still suggesting a high of 75/77 ??
> Gunnerguy



Hi Gunner . No , that figure was pretty unrealistic , was just comparing a previous cycle against current market . I am concentrating on the SP ATM . Regards Grant


----------



## Gunnerguy (9 July 2021)

Student of Gann said:


> Hi Gunner . No , that figure was pretty unrealistic , was just comparing a previous cycle against current market . I am concentrating on the SP ATM . Regards Grant



If it was so ‘unrealistic’ why did you not mention that ? Your phrasing was rather strong in your prediction !
I suggest a little bit of ‘ buyer beware’, ‘DYOR’ or ‘ this is just a mild unproven guess’
Gunnerguy.


----------



## Gunnerguy (13 July 2021)

I got a bit over active with BHP the last couple of days ......

Yesterday STO 48/46 Bull Credit Spread August.
PM = +0.315. Delta = 0.107. BE = 47.70.

Today STO 47/44 Bull Credit Spread Sept.
PM = +0.72. Delta = 0.152. BE = 46.29.

XD date on 1/2/3 September, I think. If dividend is $2-$3 the drop that may/will occur should still keep me safe on these 48 & 47 strike prices if BHP rises another $1-$2 in the next couple of weeks and traders/investors get all keen on the IO price and the results.

Gunnerguy.
(Still learning about options, scared, cautious, but thinks one could make some income from this stuff).


----------



## rederob (23 July 2021)

BHP's 5-year trend was interrupted by covid last year.
Otherwise its world class diversified resource base saw it quickly bounce back.
I expect BHP will be a major beneficiary of post covid infrastructure investment, so until there is a drop in iron ore prices its share price is likely to hold above $46.


----------



## Dona Ferentes (23 July 2021)

In a statement overnight Wednesday, Tesla and BHP revealed a relationship built around *nickel*.

_As a result, BHP will supply Tesla with nickel from its Nickel West assets in Western Australia in a collaboration which will aim to make the battery supply chain more sustainable.

The two companies will focus on establishing a supply chain that features end-to-end raw material traceability using blockchain – and there will not be any role for China.

The two will develop a technical exchange for battery raw materials production and promote the importance of sustainability in the resources sector, including identifying partners which are most aligned with their principles and battery value chains.

BHP will also work with Tesla on energy storage solutions to identify opportunities to lower carbon emissions in their respective operations through increased use of renewable energy paired with battery storage.

BHP chief commercial officer Vandita Pant said in the statement demand for nickel in batteries is estimated to grow by more than 500% over the next decade, in large part to support the world’s rising demand for electric vehicles._



> Last month, Tesla chair Robyn Denholm revealed the company planned to spend more than $1 billion on Australia’s minerals supply to cater for growing electric vehicle (EV) demand.


----------



## divs4ever (23 July 2021)

i hope BHP know what they are doing 

 just because Tesla is big doesn't mean it is efficient and reliable 

 ( i hold BHP )

 i also hold MCR  which is liable to ship it's nickel , to Nickel West for processing 

 one might wonder whether this is the way BHP offloads Nickel West ( many thought Nickel West would have been divested before the S32 spin-off )


----------



## Dona Ferentes (23 July 2021)

Why would BHP sell Nickel West?

It is true five years ago, they tried and couldn't find a buyer_. Nickel was old fashioned, a steel additive and not much else, it was a high cost, high priced commodity with few growth prospects – a bit like copper in fact.  __But after deciding to keep it, spend money tarting and polishing the business (in the enduring hope of finding a buyer) BHP moved forward.

Suddenly as climate change moved [the dial] – as well as a significant change among senior BHP directors and leadership – nickel and copper moved to become part of the company’s ‘green’ appeal._

The (possibly sad) reality is that investment decisions are increasingly being made on perceptions, of green credentials and sustainability.  There seems to be a complete disconnect between decarbonising, going green and the necessity of extracting resources to do so. Hence selling off thermal coal and divesting US shale gas, or the Blackrocks and Norwegian Sovereign Wealth funds of the world will pressure the board. Better these continue to hold than a Chinalco get a stake IMO.


----------



## divs4ever (23 July 2021)

from memory it was classed as an 'orphan' back in the days  of Kloppers  and there were considerations on whether to let it be sold or spun-off as a seperate entity  .. ala OST/ARI and BSL ( and S32 )

 BHP has a bit of history of internal restructuring  , something about the tendency to get over-sized and super-complex 

 am not sure  i like the way BHP is going  , it is pandering to large fund managers rather than filling the needs of the customers 

 and remember those fund managers are using other folks money as the cudgel  , 

 and if Norges was so righteous it would resist renting out holdings for short-selling and derivative trading .

 to claim the moral high ground one should have morals


----------



## Value Collector (23 July 2021)

divs4ever said:


> i hope BHP know what they are doing
> 
> just because Tesla is big doesn't mean it is efficient and reliable
> 
> ...




I own both Tesla and BHP, but a few months back when Tesla held their Battery day event, Elon spent a couple of minutes going into detail about the nickel mining and refining process, I think he had been learning a lot about it.

It turns out that the Type of nickel which almost all mines output is not ideal for making batteries, but the refineries have continued making that type of nickel chemistry mainly because of legacy and that just how it’s always been done.

So the process was very inefficient because the nickel had to be

1, mined
2, refined into an un-usable product
3, shipped to China for conversion into a usable product
4, shipped to Japan for processing
5, shipped to the battery factory.

At the battery day event Elon mentioned he was in discussions with nickel miners to refine the nickel straight into the type required for the battery, rather than the old legacy product, which would actual save the miner money, and save Tesla the step of sending the nickel to China for secondary processing.

I think this is the deal they have done with BHP.


----------



## sptrawler (23 July 2021)

Spot on VC, BHP has been building a new refining plant at its Kwinana refinery, the refinery was built in the 1960's, when Kambalda first opened, the new extension to produce battery grade 99.8% purity nickel has just been completed.
https://www.bhp.com/our-businesses/minerals-australia/nickel-west/









						BHP nears completion of Nickel West plant - Australian Mining
					

BHP has confirmed that it will open its Nickel West sulphate plant in Western Australia this financial year after the development was delayed.




					www.australianmining.com.au


----------



## Value Collector (23 July 2021)

sptrawler said:


> Spot on VC, BHP has been building a new refining plant at its Kwinana refinery, the refinery was built in the 1960's, when Kambalda first opened, the new extension to produce battery grade 99.8% purity nickel has just been completed.
> https://www.bhp.com/our-businesses/minerals-australia/nickel-west/
> 
> 
> ...



If anyone is interested here is the video from the battery day event.

At the 1hr 9 min mark they begin talking about nickel.

At the 1hr 12min mark Elon discusses the old process vs the new process.


----------



## rederob (23 July 2021)

Value Collector said:


> I own both Tesla and BHP, but a few months back when Tesla held their Battery day event, Elon spent a couple of minutes going into detail about the nickel mining and refining process, I think he had been learning a lot about it.
> 
> It turns out that the Type of nickel which almost all mines output is not ideal for making batteries, but the refineries have continued making that type of nickel chemistry mainly because of legacy and that just how it’s always been done.
> 
> ...



Just adding that its sulphide nickel which is preferred for use in batteries as it cuts out a refining step.
It's what they mine at Mt Keith, Cliffs and Leinster.
85% of BHP’s nickel is now sold to global battery material suppliers.
BHP's nickel sulphate plant is nearing completion (as per @sptrawler's post above as I was too slow) and in the final stages of commissioning at the Kwinana Nickel Refinery to produce nickel sulphate for lithium-ion batteries. 
I guess it was a no brainer for Musk to join forces and shore up his supply chain.


----------



## Dona Ferentes (27 July 2021)

Imagine where the BHP shareprice would be if it didn't have that bad attack of _Billitonitis _last resources boom


Now $53.50 . ... roll on dividend season


----------



## divs4ever (27 July 2021)

London judges agree to reopen $7 billion Brazil dam lawsuit against BHP

https://www.investing.com/news/econ...illion-brazil-dam-lawsuit-against-bhp-2569049

DYOR

i hold BHP


----------



## Gunnerguy (27 July 2021)

For those expert on ASF, do you have an idea of the possible size of dividend BHP are likely to announce next month ?
Yes, I know if your the CEO of BHP and reading this on ASF, you can't tell me, I understand, but to those not on the Board of BHP, are there any 'educated' guesses ?

Gunnerguy.


----------



## divs4ever (28 July 2021)

well i am absolutely no expert  ,   given the Brazil lawsuit twist ( see above ) i would not expect a larger dividend ( in $US ) than last time $1.31 Australian ,
 i see  one analyst predicts $4+  for the year 

 but i suspect BHP will be cautious regarding lawsuits and also be pondering  accelerating projects already under development ( say copper in South America  and the recent oil project in the Gulf of Mexico  while the potash arm seems to have no recent glory 

 since the divestment of S32 i am guessing BHP will only go after 'world-class projects ' so good luck picking what will be the next acquisition and when  , but suspect BHP will keep a few pennies in the war-chest  just in case something really special comes up  

 BHP seems to be tilting away from coal .. but what about oil gas and uranium 

 i hold BHP but would be surprised if they splurged on share-holders  and left the war-chest nearly empty 

 DYOR


----------



## qldfrog (28 July 2021)

Bhp $44 in 2008,might reach $54 in 2021 after 2 resource booms.
When you work for them, a yes minister style of higher mgt.
And now a champion of lgbt and climate change, what is next? Meme?crypto..actually they mention blockchain in the article...
 Digital mines virtual ore next?
Good luck..such a waste of $ and australian assets on an amazing scale along the last decades


----------



## Miner (28 July 2021)

How much reaction this news will bring into BHP stock in immediate to long term pain ?

London judges backtrack to revive $9.43-billion Brazil dam lawsuit against mining giant BHP








						British court reopens $9.4 billion lawsuit against BHP over deadly dam collapse in Brazil
					

The collapse in 2015 of the Fundao dam, owned by a joint venture between BHP and Brazilian mining giant Vale, killed 19 people and obliterated villages as a torrent of more than 40 million cubic metres of mining waste swept through.




					www.abc.net.au


----------



## Miner (28 July 2021)

Miner said:


> How much reaction this news will bring into BHP stock in immediate to long term pain ?
> 
> London judges backtrack to revive $9.43-billion Brazil dam lawsuit against mining giant BHP
> 
> ...











						Tesla (TSLA) Locks Future Nickel Supply on Deal With BHP
					

Tesla's (TSLA) deal with BHP marks the automaker's latest effort to shield itself from future supply crunch of metals needed in battery production.




					au.finance.yahoo.com
				



Hopefully effect of Tesla announcement earlier would be compensating the ripple from the resurface elongated court case commencing in 2022


----------



## divs4ever (28 July 2021)

Recommended all-cash offer for Noront Resources Limited

Today, BHP Lonsdale Investments Pty Ltd (BHP Lonsdale), a wholly-owned
subsidiary of BHP Group Limited, announced that BHP Western Mining Resources
International Pty Ltd (BHP WMR), a wholly-owned subsidiary of BHP Lonsdale, has
made a recommended all-cash offer to acquire all of the issued and outstanding
common shares of Noront Resources Limited (Noront) for C$0.55 per share in cash.
BHP Lonsdale, BHP WMR and Noront have entered into a definitive support
agreement, whereby Noront has agreed to, among other things, support the
takeover-bid by BHP WMR.
Noront is a Canadian based mining company, listed on the TSX Venture Exchange. It
is focused on the development of its high-grade Eagle’s Nest nickel, copper, platinum
and palladium deposit and chromite deposits including Blackbird, Black Thor, and Big
Daddy, all of which are located in the James Bay Lowlands of Ontario in an emerging
metals district known as the Ring of Fire.
Further information on the offer is in the attached document.
Further information on BHP can be found at: bhp.com

 courtesy of Bell Direct 
==================================================================

DYOR

i hold BHP

 i missed this ann. this morning 

 doesn't look like such a deal deal ( in the BHP universe )

 but will look closer later


----------



## divs4ever (28 July 2021)

qldfrog said:


> Bhp $44 in 2008,might reach $54 in 2021 after 2 resource booms.
> When you work for them, a yes minister style of higher mgt.
> And now a champion of lgbt and climate change, what is next? Meme?crypto..actually they mention blockchain in the article...
> Digital mines virtual ore next?
> Good luck..such a waste of $ and australian assets on an amazing scale along the last decades




 yes indeed  a danger in investing  'activist share-holders ' ( that are in fact  quite often fund managers NOT direct share-holders )


----------



## divs4ever (28 July 2021)

probably the reason i am NOT currently in a rush to add extra BHP ( not even via the DRP )


----------



## divs4ever (3 August 2021)

BHP expanding Nickel West operations​








						BHP expanding Nickel West operations
					

Global miner BHP has lifted its estimates for nickel demand over the next decade amid its rising usage as a battery mineral and also outlined plans to expand its processing facilities in Western Australia.The company now sees nickel demand rising faster than expected due to rapid growth in the...




					au.finance.yahoo.com
				




 i hold BHP

 this MIGHT also help MCR ( i hold MCR also )


----------



## Miner (3 August 2021)

divs4ever said:


> BHP expanding Nickel West operations​
> 
> 
> 
> ...



are you now going to use the DRP


----------



## divs4ever (3 August 2021)

NO  

 i have retired now ( 4 years back the answer would have been yes )



 i may as well use the BHP cash for assorted expenses ( i have several other shares fully DRPed and a few partially DRPed )

 too late , so sad ( for me )


----------



## Dona Ferentes (3 August 2021)

qldfrog said:


> Bhp $44 in 2008,might reach $54 in 2021 after 2 resource boom




Yes, don't mention the BHP buyback in 2018 when rump Billiton was excised

Dividends have been incrementally great (and *franked). And yes it's a resources company, at the mercy of commodity prices as well as operational issues

Starting at #357  (... that implies 356 prior dividends, since 1885)

#357 Aug 2008 ... 46.902169¢* (US 41¢)
#358 Feb 2009 ... 64.950495¢* (US 41¢)
#359 Aug 2009 ... 48.684914¢* (US 41¢)
#360  Feb 2010 ... 46.470715¢* (US 42¢)
#361 Aug 2010 ... 48.649438¢* (US 45¢)
#362 Feb 2011 ... 45.935919¢* (US 46¢)
#363 Aug 2011 ... 52.009456¢* (US 55¢)
#364  Feb 2012 ... 51.071717¢* (US 55¢)
#365 Aug 2012 ... 55.083427¢* (US 57¢)
#366  Feb 2013 ... 55.567037¢* (US 57¢)
#367 Aug 2013  ... 63.78853¢* (US 59¢)
#368 Feb 2014  ... 64.723570¢* (US 59¢)
#369 Aug 2014 ... 66.199356¢* (US 62¢)
#370 Feb 2015 ... 80.823882¢* (US 62¢)
#371 Aug 2015 ... 87.781396¢* (US 62¢)
#372 Feb 2016 ... 21.367521¢* (US 16¢)
#373 Aug 2016 ... 18.520968 ¢* (US 14¢)
#374 Feb 2017 ... 53.177346¢* (US 40¢)
#375 Aug 2017 ... 52.949144¢* (US 43¢)
#376 Feb 2018 ... 70.585216¢* (US 55¢)
#377 Aug  2018 ... 88.545327¢* (US 63c)
#378  Dec 2018 ... 141.274238¢* (US 102¢) <* _the big cleansing buyback_>
#379  Feb 2019 .... 78.080636¢* (US 55¢)
#380 Aug 2019 ... 113.702624¢* (US 78¢)
#381 Feb 2020 .... 99.403579¢* (US 65¢)

We await the Aug report with interest.


----------



## Dona Ferentes (3 August 2021)

qldfrog said:


> When you work for them, a yes minister style of higher mgt.



But I have got to agree with the challenges that management throw up. ... and bringing about change is so very very hard

_I remember in the early '80s when I worked as a geophysical logger (contractor) in coal and oil/ gas exploration, I encountered a curious circumstance. I enquired where the coal seams (plural) were so I could slow my pass down from 9m/ min to 2 m/min, in order to get better data. "Tight hole", I was told. <the geophysics could detemine to 2cm +/- after my run, and which I could see on the analog printout ... but somehow this was classified.>_


----------



## Miner (4 August 2021)

Dona Ferentes said:


> Yes, don't mention the BHP buyback in 2018 when rump Billiton was excised
> 
> Dividends have been incrementally great (and *franked). And yes it's a resources company, at the mercy of commodity prices as well as operational issues
> 
> ...



Good research


----------



## qldfrog (4 August 2021)

Miner said:


> Good research



So the question is buying bhp at 48 in 2008, Adding dividends
how much in your hand now, and compare with TD or gov bonds are you ahead?
We can use yesterday price if it helps.


----------



## Miner (4 August 2021)

Good morning friends
Hope we are wearing seat belts to see bhp and other iron miners in the market.


----------



## divs4ever (4 August 2021)

well BHP compared to TDs since 2011 ( when i became interested in the market  )  BHP should be an easy winner if you include the bonus  S32 

 now government bonds might be a poser , IF you had bought LONG-DATED  bonds  say 20 year bonds in 2008 to 2011 ( and probably at fixed rates  )    the BHP ( and bonus S32 ) would have you in Capital gains territory  ( but not by a jaw-dropping amount )  but income from each  might be rather competitive  and tax offsets ( franking  )might be the deciding factor here , not everyone can use franking credits 

 now if you had bought short duration bonds ( say 5 year ) and kept on rolling them over  that might not be such an attractive deal  for the bonds  especially since you returned capital has been eroded by inflation


----------



## divs4ever (4 August 2021)

Miner said:


> Good morning friends
> Hope we are wearing seat belts to see bhp and other iron miners in the market.



 would need hang-gliding kit to get me excited  in relation to iron-ore miners ( with the possible exception of MGX ) , currently 

 BUT anything is possible in an irrational market 

 good luck


----------



## qldfrog (4 August 2021)

Yes the s32 ..kind of forgot that..but bhp still beaten flat by even a standard xao etf..anywaY, i do not see bhp as a success story in any way, more a total failure considering its starting position 20y ago


----------



## divs4ever (4 August 2021)

i saw BHP as a survivor   in a world of confusion 

 my av. for BHP is $28.96 ( after  averaging down  pre-2016 ) ( and pre-S32 spin-off )

 too big to fail , so to speak 

 but gee not many ASX listed companies have survived 20 years as a listed entity 

 and compared to some other 'blue chips'  WBC , AMP ,  IPL , ORG  , ...... BHP hasn't been that dreadful


----------



## qldfrog (4 August 2021)

divs4ever said:


> i saw BHP as a survivor   in a world of confusion
> 
> my av. for BHP is $28.96 ( after  averaging down  pre-2016 ) ( and pre-S32 spin-off )
> 
> ...



But it had everything in its hands , best coking coal by far, safe locations, next to booming market etc etc, compare to rio which started from a much much weaker position,  and has know how to leverage technology, its people ..anyway.i am probably not objective as i worked for bhp...


----------



## divs4ever (4 August 2021)

well i worked for WOW in 1972 ( ish ) and NWS   in 2000 (ish )

 and BHP doesn't look so bad  , in comparison  ,  yea true ,  i wish Kloppers was still running the show  , but they haven't made a total mess of things 

 and don't be so sure Glencore  will not  have another CLOSE look at RIO ( especially if they keep closing aluminium smelters )


----------



## qldfrog (4 August 2021)

divs4ever said:


> well i worked for WOW in 1972 ( ish ) and NWS   in 2000 (ish )
> 
> and BHP doesn't look so bad  , in comparison  ,  yea true ,  i wish Kloppers was still running the show  , but they haven't made a total mess of things
> 
> and don't be so sure Glencore  will not  have another CLOSE look at RIO ( especially if they keep closing aluminium smelters )



Kloppers was a total dick and screwed the company for decades, he left a myriad of clones dicks in key positions there so his legacy and damages is still going on.


----------



## qldfrog (4 August 2021)

qldfrog said:


> Kloppers was a total dick and screwed the company for decades, he left a myriad of clones dicks in key positions there so his legacy and damages is still going on.



just wish you could wipe a decade of lost opportunity, lost technological advances just by sacking him, but has not been the case.
The only advanced part of BHP is the woke, purple hair and transgender PR side.definitively not a leader and it cost you and I as Australians dear with the lost forever resources due to that backwardness.Anyway, over.what's a few billion a year when a country can waste 5 billions a week on Covid lockdowns


----------



## divs4ever (4 August 2021)

i know he had plenty of enemies , but at least he wasn't running it like RIO ( or over-leveraged like Glencore )

 the woke part is coming from the institutional investors  ( pension funds and hedge funds mainly )  look at WOW and AGL rushing to go woke to mitigate  share-holder dissatisfaction elsewhere


----------



## divs4ever (6 August 2021)

BHP approves Shenzi North project and moves Trion project into the FEED
phase

BHP approves Shenzi North project and moves Trion project into the FEED phase The BHP Board has today approved US$544 million in capital expenditure to execute the Shenzi North oil project in the US Gulf of Mexico. The capital expenditure approved represents a 100 per cent share interest. The project offers very attractive returns at a nominal IRR of over 35 per cent, a breakeven of approximately US$25/bbl and a payback of less than 2 years2 . BHP is operator and holds a 72 per cent share in Shenzi North. Repsol holds the remaining 28 per cent working interest and is expected to make a Final Investment Decision later this calendar year. Shenzi North represents the first development phase of Greater Wildling, following exploration success in 2017, with the resource and development plan further refined through Ocean Bottom Node seismic data and analysis. The project will take advantage of existing infrastructure and production capacity in the nearby Shenzi production facility, with value further enhanced through the recent acquisition of an additional 28 per cent working interest taking BHP’s interest in the Shenzi field from 44 per cent to 72 per cent. The project adds two wells and subsea equipment to establish a new drill centre north of Shenzi with the capacity to produce up to approximately 30 mboe per day. Production is expected to begin in the 2024 financial year. In addition, the BHP Board has also approved US$258 million in capital expenditure to move the Trion oil project in Mexico into the Front End Engineering Design (FEED) phase. The focus of these studies will be on completion of the engineering, commercial arrangements and execution planning required to progress to a Final Investment Decision from mid-calendar year 2022. BHP holds a 60 per cent participating interest in and operatorship of blocks AE-0092 and AE-0093 containing the Trion discovery located in the deep-water Gulf of Mexico offshore Mexico. PEMEX Exploration & Production Mexico holds a 40 per cent interest in the blocks. Geraldine Slattery, BHP President Operations Petroleum, said “Both Shenzi North and Trion are strong growth assets for our business, providing attractive returns from relatively low carbon intensity resources. “Shenzi North is aligned with the petroleum strategy to unlock and deliver further growth options in this key Gulf of Mexico heartland. This Board decision also marks an important milestone in advancing the Trion development as we continue to work with our partner PEMEX towards a Final Investment Decision in calendar year 2022.

 DYOR

 i hold BHP

 probably won't move the needle


----------



## Dona Ferentes (16 August 2021)

BHP Group has confirmed it is in discussions with Woodside Petroleum over the sale of its petroleum assets.



> _BHP  confirms that we have initiated a strategic review of our Petroleum  business to reassess its position and long-term strategic fit in the BHP portfolio._





> _*A number of options are being  evaluated. *One option is a potential merger of the petroleum business  with Woodside Petroleum and a distribution of Woodside shares to BHP  shareholders._





> _We confirm that we have been in discussions with Woodside. While discussions between the parties are currently  progressing, no agreement has been reached on any such transaction. _


----------



## divs4ever (17 August 2021)

BHP Falls on Worry Woodside Deal Isn’t a Clean Break From Fossil Fuels

https://au.investing.com/news/stock...-isnt-a-clean-break-from-fossil-fuels-2409515

DYOR

i hold BHP and WPL

i would have rather BHP retained these assets

but maybe WPL will get some better staff/management included in the deal

i WON'T be looking to sell the extra WPL straight away , but will consider if i should stop nibbling on market , until WPL proves they can lift their game

 please note i am over 65  and it is likely i will be no longer before the world no longer needs coal and oil  , 

 now  a ( say ) 30 year old has plenty of time to wait for EVs to dominate the world of transport


----------



## divs4ever (17 August 2021)

BHP GOES GREEN: Is this the end of BHP’s oil and gas?

https://au.finance.yahoo.com/news/bhp-woodside-oil-gas-072507552.html

looks like BHP has found a way into the dust-bin of history as well

top up price reduced to $11

Potash is a tax write down , South American iron still a disaster , starting to look a lot like RIO ( an incredible shrinking company )

 how bad was Kloppers again , millions will be wasted in this extensive restructure to remove BHP PLC ( the very complex structure that stopped them from being a viable take-over target )


----------



## divs4ever (17 August 2021)

Woodside and BHP to create a global energy company
Woodside Petroleum Ltd (“Woodside”) and BHP Group (“BHP”) have entered into a merger
commitment deed to combine their respective oil and gas portfolios by an all-stock merger (the
“Transaction”) to create a global top 10 independent energy company by production.
On completion of the Transaction, BHP’s oil and gas business would merge with Woodside,
and Woodside would issue new shares to be distributed to BHP shareholders. The expanded
Woodside would be owned 52 per cent by existing Woodside shareholders and 48 per cent by
existing BHP shareholders. The Transaction is subject to confirmatory due diligence,
negotiation and execution of full form transaction documents, and satisfaction of conditions
precedent including shareholder, regulatory and other approvals.
With the combination of two high quality asset portfolios, the proposed merger would create
the largest energy company listed on the ASX, with a global top 10 position in the LNG industry
by production. The combined company will have a high margin oil portfolio, long life LNG
assets and the financial resilience to help supply the energy needed for global growth and
development over the energy transition.
Attractive strategic and financial rationale
The combination of Woodside and BHP’s oil and gas business is expected to deliver
substantial value creation for both sets of shareholders from across a range of areas, including:
• Greater scale and diversity of geographies, products and end markets through an attractive
and long-life conventional portfolio
• Resilient, high margin operating cash flows to fund shareholder returns and business
evolution to support the energy transition
• Strong growth profile with a plan to achieve targeted Scarborough FID in the 2021 calendar
year and capacity to phase the most competitive, high-return options within the portfolio
• Proven management and technical capability from both companies
• Shared values and focus on sustainable operations, carbon management and ESG
leadership
• Estimated synergies of more than US$400 million (100 per cent basis, pre-tax) per annum
from optimising corporate processes and systems, leveraging combined capabilities and
improving capital efficiency on future growth projects and exploration
• Greater financial resilience, relative to Woodside’s and BHP’s standalone petroleum
businesses.
2
Woodside CEO and Managing Director Meg O’Neill said, “Merging Woodside with BHP’s oil
and gas business delivers a stronger balance sheet, increased cash flow and enduring
financial strength to fund planned developments in the near term and new energy sources into
the future.
“The proven capabilities of both Woodside and BHP will deliver long-term value for
shareholders through our geographically diverse and balanced portfolio of tier 1 operating
assets and low-cost and low-carbon growth opportunities.
“The proposed transaction de-risks and supports Scarborough FID later this year and enables
more flexible capital allocation. We will continue reducing carbon emissions from the combined
portfolio towards Woodside’s ambition to be net zero by 2050.”
BHP CEO Mike Henry said, “The merger of our petroleum assets with Woodside will create an
organisation with the scale, capability and expertise to meet global demand for key oil and gas
resources the world will need over the energy transition.
“Bringing the BHP and Woodside assets together will provide choice for BHP shareholders,
unlock synergies in how these assets are managed and allow capital to be deployed to the
highest quality opportunities. The merger will also enable the skills, talent and technology of
both organisations to build a resilient future as the world’s needs evolve.”
Greater scale and diversity of geographies, products and end markets to create a longlife conventional portfolio
This Transaction delivers significant benefits for both Woodside and BHP shareholders by
creating a long-life conventional portfolio of scale and diversity of geography, product and end
markets.
On a proforma basis, the combined business will consist of:
• High quality conventional asset base producing around 200 MMboe (FY21 net production)
• Diversified production mix of 46% LNG, 29% oil and condensate and 25% domestic gas
and liquids (FY21 net production)
• Wide geographic reach with production from Western Australia, east coast Australia, US
Gulf of Mexico, and Trinidad and Tobago with approximately 94% of production (FY21 net
production) from OECD nations
• 2P reserves of over 2 billion boe comprising 59% gas, and 41% liquids.
Resilient operating cash flows to fund shareholder returns and business evolution to
support the energy transition
Significant operating cash flow will support continued strong returns to shareholders over time.
Woodside will maintain its focus on disciplined growth investment and continued dividends. It
is expected that Australian shareholders will benefit from the distribution of Woodside’s
significant franking credit balance.
Strong growth profile with a plan to achieve targeted Scarborough FID in 2021 and
capacity to phase high-return options
The Transaction will deliver expanded growth optionality for shareholders with the flexibility to
phase and selectively progress near and longer term high-return options.
3
Woodside and BHP have developed a plan to targeted final investment decision (FID) for
Scarborough (Australia) by the end of the 2021 calendar year, prior to the proposed completion
date for the merger.
As part of this plan, Woodside and BHP have agreed an option for BHP to sell its 26.5 per cent
interest in the Scarborough Joint Venture to Woodside and its 50 per cent interest in the Thebe
and Jupiter joint ventures to Woodside if the Scarborough Joint Venture takes a FID by 15
December 2021. The option is exercisable by BHP in the second half of the 2022 calendar
year and if exercised, consideration of US$1 billion is payable to BHP with adjustment from an
effective date of 1 July 2021. An additional US$100 million is payable contingent upon a future
FID for a Thebe development.
The Atlantis Phase 3 (US), Mad Dog Phase 2 (US), Shenzi North (US) and Sangomar Field
Development Phase 1 (Senegal) projects remain on budget and on track, and along with
significant brownfield expansion options, provide opportunity for near- and medium-term
growth.
Longer term embedded options include the Wildling (US), Trion (Mexico), Calypso (Trinidad
and Tobago) and Browse (Australia) projects. These options offer significant potential growth
coupled with multiple exploration opportunities and partnerships.
Proven management and technical capability from both companies
The combined business will benefit from the joint management and technical petroleum
expertise of both companies, led by Meg O’Neill as the CEO and Managing Director. Leading
HSE performance, LNG production and marketing, deepwater oil development and production,
exploration success, and international experience will come together to create a differentiated
set of capabilities. These capabilities are further supplemented through investments in
technology and low carbon solutions, and strong governance systems. In addition, it is
intended that the Woodside Board will appoint a current BHP director as a Woodside director
on completion.
Shared values and focus on sustainable operations, carbon management and ESG
leadership
The combined business will continue to have an unrelenting focus on safe, sustainable and
reliable operations, building on Woodside’s and BHP’s strong track records.
It will build on Woodside’s existing targets to reduce net emissions by 15 per cent and 30 per
cent by 2025 and 2030 respectively, on the pathway to its ambition of net zero by 2050,
applying these to the combined portfolio. Progress will be reported on both an operated and
non-operated equity emissions basis.
In support of the goals of the Paris Climate Agreement, and to contribute to the energy
transition, the combined business will focus on building and maintaining a high return and
carbon-resilient portfolio which includes natural gas and new energy technologies.
The combined business is expected to generate significant cash flow this decade to support
the development of new energy products and low carbon solutions including hydrogen,
ammonia and carbon capture and storage (CCS).
Synergies and benefits
This merger of highly complementary asset portfolios is expected to unlock material synergies.
Woodside and BHP have estimated annual synergies to be in excess of US$400 million per
annum (100 per cent basis, pre-tax).
4
These synergies are anticipated to come from:
• Optimising corporate processes and operating costs across the entire portfolio
• Leveraging the leading petroleum capabilities of both organisations including technology,
operating, sales and marketing, infrastructure and resource development expertise
• Optimising spend on exploration and future growth projects through the development of
combined and more capital efficient opportunities.
Greater financial resilience, relative to Woodside and BHP’s standalone petroleum
business
On completion of the Transaction, the combined business’ balance sheet will be strengthened
by the resilience the merged portfolio delivers through the cycle. On a proforma basis (12
months to 30 June 2021), the combined business will have:
• A large earnings base with revenue of more than US$8 billion and EBITDA of US$4.7 billion
• Operating cash flows of more than US$3 billion supported by resilient foundation assets
• A strong balance sheet reflected with low gearing of 12%.
Merger mechanics
Under the proposed transaction, Woodside, or a wholly owned subsidiary of Woodside, will
acquire 100 per cent of the issued share capital of BHP Petroleum International Pty Ltd in
exchange for shares in Woodside which will deliver 48 per cent to BHP shareholders on
completion. Woodside shares will be immediately distributed to BHP shareholders. Woodside
will remain listed on the ASX with listings on additional exchanges being considered.
Both the Woodside and BHP boards of directors confirm their support for the Transaction. The
merger is expected to be completed in the second quarter of the 2022 calendar year with an
effective date of 1 July 2021.
The Transaction is subject to confirmatory due diligence, negotiation and execution of full form
transaction documents which is targeted for October 2021, and satisfaction of conditions
precedent including shareholder, regulatory and other approvals. Under the merger
commitment deed, each party has agreed to pursue a merger transaction and agreed to certain
exclusivity arrangements and to each pay a reimbursement fee of approximately
US$160 million in certain circumstances.
Woodside’s financial advisers are Gresham Advisory Partners Limited and Morgan Stanley
Australia Limited, and its legal advisers are King & Wood Mallesons and Vinson & Elkins LLP.
BHP’s financial advisers are J.P. Morgan, Barclays and Goldman Sachs and its lead legal
adviser is Herbert Smith Freehills.


======================================================================================================

DYOR

i hold BHP and WPL


----------



## divs4ever (17 August 2021)

BHP reports best profit in nearly a decade, pays record dividend​








						BHP reshapes portfolio, set to quit London's FTSE
					

MELBOURNE (Reuters) -BHP Group reported its best annual profit in nearly a decade on soaring iron ore prices, as the world's biggest listed miner announced an exit from its $13 billion petroleum business in a portfolio shake-up that will see it leave London's FTSE100 index.  On a day of sweeping...




					au.finance.yahoo.com
				






BHP Plans to Scrap Dual Listing to Make Sydney Primary Venue​








						BHP Plans to Scrap Dual Listing to Make Sydney Primary Venue
					

(Bloomberg) -- BHP Group said it plans to unify its dual-listing structure and would have its primary listing in Sydney.The world’s biggest miner announced the change to its structure as part of its annual earnings results Tuesday, confirming an earlier Bloomberg News report. The proposal would...




					au.finance.yahoo.com
				




BHP 
	

	
	
		
		

		
			





 $51.33 -$0.74 (-1.4%) at the close of trade


----------



## Knobby22 (17 August 2021)

It all looks like good decisions in my view. Better for Woodside and BHP and the removal of the dual listing better for Australians.


----------



## divs4ever (17 August 2021)

i disagree , 

 that tangle of a dual-listing  made a take-over  very difficult  

 remember some  big corporations have access to unlimited credit ( Blackrock as just one example )

 relying on FIRB and ACCC  to protect Australian shareholders , has been a  very quirky tactic  in recent years 

 and my regular disappointment in WPL has been mentioned elsewhere here  , remember a big piece of the existing assets were swindled away from East Timor ( or Indonesia if we had not cynically liberated East Timor )

 time will tell if WPL picks some quality staff out of the BHP projects 

 a shrinking BHP and unlimited borrowing capacity ( for some )

 will tempt some 

 BHP might still be too large for Glencore  ( watch to see if they make a move on RIO )

 M&A activity still hotting up ( globally )


----------



## divs4ever (18 August 2021)

UK market set to lose major stock as BHP plans Australia shift​
https://www.investing.com/news/stoc...or-stock-as-bhp-plans-australia-shift-2592172

DYOR

i hold BHP


----------



## Dona Ferentes (18 August 2021)

This amused me:


> Shareholders in the Plc company listed in London will be taken onto the Australian register and their shares will be quoted here in Australian dollars. They will get Australian shares on a one for one basis.






> Many UK institutions won’t like that because of the currency changes – the London shares are quoted in sterling. London holders will whine in moan through the likes of the Financial Times, and other UK media.



_Good time to buy them out. At almost nil premium 🤫_


----------



## waterbottle (18 August 2021)

Asx no likey... Not sure why...


----------



## divs4ever (18 August 2021)

maybe we aren't so ESG addicted

 also all the recent investment in oil/gas MIGHT have been better used in South American copper  , are accelerating Olympic Dam

 wasn't so long back they increased the interest in Gulf of Mexico  assets


----------



## Value Collector (18 August 2021)

divs4ever said:


> maybe we aren't so ESG addicted
> 
> also all the recent investment in oil/gas MIGHT have been better used in South American copper  , are accelerating Olympic Dam
> 
> wasn't so long back they increased the interest in Gulf of Mexico  assets



Those investments aren't disappearing, you will still own them if you keep the WPL shares, or if you sell them its like getting those assets back in cash.


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## divs4ever (18 August 2021)

Value Collector said:


> Those investments aren't disappearing, you will still own them if you keep the WPL shares, or if you sell them its like getting those assets back in cash.



but some management teams  are better at cost-effective profits than others  , and lets face it WPL ( who is not known for repeated guidance beats ) will be doubling the assets they have to manage 

 Australia has some awesome management teams ( MIN and FMG to name just two ) but only a few can handle  a sudden doubling of the business effectively


----------



## divs4ever (18 August 2021)

BHP IS 'INCREDIBLY GOOD AT FORECASTING THE FUTURE': GREENWOOD​


 yes i noticed  the Vanguard  posturing ( with clients funds ) ( and their willingness to lend shares to short-sellers ) 

 so i am looking to off-load my holdings in VAS and VHY  ( held since 2011 ) , and do not hold a formal super fund 

 will i add more BHP in the future , that will depend on how much the share price falls


----------



## Value Collector (18 August 2021)

divs4ever said:


> but some management teams  are better at cost-effective profits than others  , and lets face it WPL ( who is not known for repeated guidance beats ) will be doubling the assets they have to manage
> 
> Australia has some awesome management teams ( MIN and FMG to name just two ) but only a few can handle  a sudden doubling of the business effectively



I don’t know much about WPL’s management, but I know BHP has some good Oil men, hopefully the BHP Oil men come across to WPL and continue in their jobs.


----------



## qldfrog (19 August 2021)

divs4ever said:


> BHP IS 'INCREDIBLY GOOD AT FORECASTING THE FUTURE': GREENWOOD​
> 
> 
> yes i noticed  the Vanguard  posturing ( with clients funds ) ( and their willingness to lend shares to short-sellers )
> ...




Is that a joke? 🥴


----------



## Dona Ferentes (19 August 2021)

waterbottle said:


> Asx no likey... Not sure why...



_The 7 per cent decline in the BHP share price on Wednesday was  *attributed to arbitrage traders *closing the gap between the discounted  London share price and the Australian share price, which trades at a  premium because of franking credits.

Putting to one side this  short term impact, there is a positive double whammy from the changes in  the index weightings contemplated by BHPs removal of its dual listing. *Index  funds and other passive strategies* will automatically buy more BHP  shares to match the increased index weighting in Australia, and *active  managers* will be forced to buy the stock because of the impact the index  changes will have on benchmarks_.


_new BHP could be 12% of ASX200, CBA at 9% and CSL getting up to 7%.  Top3 will be > 25% of the index... and new WPL will be about 2%._


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## Student of Gann (22 August 2021)

August 26th could turn out to be a significant date for BHP . If trend continues down into this date we could be looking at Major Low.
Market Curve issued below .
Regards Student of Gann at Twitter


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## divs4ever (22 August 2021)

qldfrog said:


> Is that a joke? 🥴




 given other trends  in the company  , the management  might easily be turning into a joke  

 ( remember i am the guy who liked Kloppers running the show )


----------



## Student of Gann (22 August 2021)

Bhp Price Notes
Regards Student of Gann
Twitter


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## Garpal Gumnut (24 August 2021)

This is a chart of BHP ADR's over the past 10 days to overnight on the NYSE.

I believe it has a way to fall, I could be wrong. 

Very weak volume after the recent fall. 






gg


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## qldfrog (25 August 2021)

"S&P warned that it might downgrade the credit rating of Australian energy/mining firm *BHP (NYSE:BHP)* after it sold its oil business to Woodside in a nil-premium merger. The potential downgrade to BBB+ would see BHP’s rating drop to its lowest level since it was first rated in 1995"


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## Boggo (25 August 2021)

Next target $55 to $57... just my 

(click to expand)


----------



## Garpal Gumnut (25 August 2021)

Boggo said:


> Next target $55 to $57... just my
> 
> (click to expand)
> View attachment 129431



No mate.

I'm looking closer to $40.

gg


----------



## Boggo (25 August 2021)

Garpal Gumnut said:


> No mate.
> 
> I'm looking closer to $40.
> 
> gg




You're probably right GG


----------



## divs4ever (25 August 2021)

i was HOPING for $40 (ish ) but we are still cum-div.  and BHP has been in the mid $50's recently ...

who knows maybe the activists see BHP as the new poster child 

 i have a top-up price target ( cum-div )

 am NOT desperate for extra WPL ( i hold BHP and WPL already ) so if i miss the target-price i will not be too upset good luck everyone


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## Gunnerguy (25 August 2021)

I plan to take the dividend, and the resulting drop, sell after XD date, take my capital losses (and use against my gains this year) and Ms. Gunnerguy buy at the price I sell, through the market.
No ‘realised’ losses between the two of us, I get the CGT tax losses to use, and Ms. Gunnerguy gets the next couple of dividends.
I plan to do the reverse for us with FMG.
Gunnerguy.


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## divs4ever (25 August 2021)

i hope it is a HUGE drop for you then  $30 ex-div. might very well tempt me to add a few extra BHP ( especially if i miss the cum-div target )

 sadly i don't have an 'other half' so i can't try your tactic  this year 

 good luck


----------



## peter2 (3 September 2021)

Radical idea from a chartist, bear with me. I'm thinking that *BHP *at $42 is worth buying for a longer term large cap portfolio. (More for the capital gains than divs. )

What do others think?  It'll take six months to sort the arrangement with Woodside. 

Iron ore, copper, they'll grab more nickel to process. I wonder if they're interested in buying a lithium or rare earth production facility?


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## Dona Ferentes (3 September 2021)

peter2 said:


> Iron ore, copper, they'll grab more nickel to process. I wonder if they're interested in buying a lithium or rare earth production facility?



+ Potash. The historical BHP model (after the Billiton nonsense) has been big Tier 1 assets in OECD countries. 

Interesting thesis... no doubt they have looked at some Li & REE projects. But are there any with scale?


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## divs4ever (3 September 2021)

peter2 said:


> Radical idea from a chartist, bear with me. I'm thinking that *BHP *at $42 is worth buying for a longer term large cap portfolio. (More for the capital gains than divs. )
> 
> What do others think?  It'll take six months to sort the arrangement with Woodside.
> 
> Iron ore, copper, they'll grab more nickel to process. I wonder if they're interested in buying a lithium or rare earth production facility?



the timetable for the WPL is to take MORE than six months  closer to a year if memory serves me correctly 
 potash seems to be the big money-trap for BHP , but are throwing extra cash at copper as well 

 i already hold a reasonable amount of BHP  at an average of less than $30 ( bought before the S32 spin-off )

 more above $40 seems too expensive to me  after recent policy reversals , on shale , oil and gas  assets , one might also wonder if BHP will divest the rest of the coal assets , due to 'share-holder activism ' it SEEMS that a tiny percent of the share-holders are holding the company to ransom .

 if BHP keeps shedding assets  , it will be BHP , Glencore will be targeting  not another try at RIO 

 because long term holders like me will ask  has BHP lost focus , if the iron price drops to $US 50  what will BHP be valued at  ,

 weak management doesn't inspire confidence regardless of the divs passed out ( if they don't look sustainable )

 don't be completely shocked if an ambitious FMG , start challenging for that ' BIG Australian title  , because BHP and RIO are melting under pressure


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## divs4ever (3 September 2021)

ALSO there  were those that considered the complex dual listing  of BHP ( BHP PLC and BHP Ltd ) , made it very difficult for a predator 
now that complexity is being unraveled  willingly by BHP that has to raise the chances of a takeover ( in a climate of very low interest rates )

 the apparently powerful 'activists ' already admit they MIGHT lend shares out to short-sellers 

 please be careful


----------



## sptrawler (3 September 2021)

Well I guess you have to look at it holistically, if you had bought in 2007 at $43, or 2008 at $44, or 2011 at $44 you would be feeling good ATM, you are in front.


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## divs4ever (3 September 2021)

i started nibbling BHP  July 2011  ( @ $41.60 ) and continued nibbling down opportunistically   to  January 2016 ( @ $14.80 ) using the cash rescued from MQG  for the last parcel  ( after the SYD divestment )

 the BHP av. SP  is roughly  $29 , not counting the bonus S32  ,  so happy dollar-wise , but increasingly alarmed at BHP policy reversals  , ( shale , Gulf of Mexico  acquisitions   etc. ) and the rush to trimming down the company  , surely it hadn't accumulated that much dead wood , and ill-advised projects 

 but investing to me is L-O-N-G-term  , and a BIG company like BHP would be normally  consolidating  and picking up little gems ( like FMG , MIN and IGO are , currently  ) preparing for the next growth phase 

 has BHP cracked the crystal ball  ??

 a well run-run company is more than large divs and share buy-backs


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## Garpal Gumnut (4 September 2021)

divs4ever said:


> i started nibbling BHP  July 2011  ( @ $41.60 ) and continued nibbling down opportunistically   to  January 2016 ( @ $14.80 ) using the cash rescued from MQG  for the last parcel  ( after the SYD divestment )
> 
> the BHP av. SP  is roughly  $29 , not counting the bonus S32  ,  so happy dollar-wise , but increasingly alarmed at BHP policy reversals  , ( shale , Gulf of Mexico  acquisitions   etc. ) and the rush to trimming down the company  , surely it hadn't accumulated that much dead wood , and ill-advised projects
> 
> ...



I mostly agree.

I got in around that time with BHP at $18 and sold out for all those delicious capital gain franked profits a few years ago. 

I'll buy in again at $24.

I'm not greedy.

gg


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## divs4ever (4 September 2021)

Garpal Gumnut said:


> I mostly agree.
> 
> I got in around that time with BHP at $18 and sold out for all those delicious capital gain franked profits a few years ago.
> 
> ...



 you might not be waiting for long either  if China raises the Bamboo Curtain  to Australia  , who knows what riches await in Afghanistan  , and Mongolia has been under-explored as well , Australia could have new rivals  ( and China it seems  has been stock-piling 'strategic reserves ' )

 there are already suggestions that China is not buying new US ( Federal or municipal ) debt  which is  mainly funded by their trade surplus 

 i reduced the BHP holding  by about 44% in 2016  and so far haven't regretted that 

 maybe some extra luck is coming to us both


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## Student of Gann (19 September 2021)

I have prepared some notes and diagrams for BHP outlining the important Minor and Major Cycles .

The first significant Date is the 24th September which is indicated as Main Low on the Curve . This is an important Date as it is 90 Deg in time from the 21st June Low and also 180 Deg out from the 22nd March Low marking this as important area where two intermediate Cycles converge . I will be watching this Date carefully and looking for a higher bar the following day . The next important date is the 4th October but at this point I am watching to see if the 24th September -/+ 1 holds and if it does not I will have a Time stop in place and exit the trade , anyway here are the notes .

We are also just past the 1 1/2 year long term Cycle out from the 13th March 2020 Low so we could be looking at a significant area with three differing Cycle lengths aligning on that Date .

Also of particular interest is The Square of the High calculation which Gann often used in his trading to determine Tops and Bottoms . The 3oth July Top came in at 54.55 and we have balanced that period in time running at approx 56 days into the anticipated Low . So far the time period down at 56 days has overbalanced all of the previous time periods and so has the price ( 15.32 ) is just a present range calculation and is not important . The next important price level to monitor is around 37.50 so if price holds above this level on the Cycle date it could also be a strong technical indication of Low around this time . If the 24th September does turn out to be Low the trend could run up till around the 29th October where Main Top is indicated and this is a significant point as it is just past the 90 Deg Cycle out from the 30th July Top which could mark the beginning of an important move .

In the second part of the Notes I have outlined some Minor Swings but it is important to recognise that the primary trend is indicated as up so these Minor swing points may or may not present themselves as a good opportunity but here they are anyway 1- 4th October Minor Top 14th October Minor Low and the 18th October could be Minor Top but the Main trend should be up till the 29th October. These Minor swing points could either turn out to be top or bottom so it would be prudent to only trade in the direction of the prevailing trend and if one of those dates sets up as a good counter trend low opportunity you may enter in the direction of the trend and if they come in as Minor Top they may present an opportunity to take some partial profits along the way . The Main trend could either run up 14% or 16% off September Lows . Make sure you have stops in place and allow the market some time to demonstrate that it is making Top or Bottom .

https://studentofgann.com

Attachments​


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## Dona Ferentes (21 September 2021)

This is the graph I like


Dividend being paid overnight  ... US$2.00 or A$2.71 a share


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## bk1 (20 October 2021)

BHP are not giving up the fight for Noront, fired back a counter offer within the five day grace period.
Taken with the rumour that they are talking/in discussions with Robert Friedland, is this the start of a pivot of sorts by the big lumbering miner?
New tactics for a new age.....sort of.


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## Tropico (21 October 2021)

Noront really must be considered a prize they don't want Wyloo (Twiggy Forrest) to win.
Was Nickel really up over 5% overnight to USD/T 21102 (@4:54am)?


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## Sean K (3 November 2021)

Has BHP been beaten up enough yet to make it look like long-term value? It's been ugly 3 months.


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## mullokintyre (23 November 2021)

Sold out this morning  after the announcements surrounding mergers with Woodside energy.
Like others, I  was looking at the possible buyback and franking dividends.
Now not so sure if that will happen anytime soon.
So on a day when I had a sea of red, I took the green bits on offer from BHP.
Mick


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## finicky (23 November 2021)

At least us holders get the WPL shares franked  and treated as a dividend. Not familiar with that but sounds ok. BHP is a permanent hold for me - too hard to work out the cost base after all its historical morphings.

From yesterday
"The new Woodside shares will be distributed to BHP shareholders as an in-specie fully franked 
dividend."


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## KevinBB (23 November 2021)

finicky said:


> "The new Woodside shares will be distributed to BHP shareholders as an in-specie fully franked
> dividend."




I can't seem to find any documents relating to the tax consequences of the demerger, apart from the above that appears in one of the news releases. Has anyone seen a draft tax document, of the kind when companies are considering demergers?

If the WPL shares are distributed to BHP shareholders as a fully franked dividend, meaning that the dividend will be taxable in FY 2022, does that mean that these WPL shares will have a tax cost base of zero, so when they are sold, the full amount of the sale price will be taxable as a capital gain (for an investor) or as trading income (for a trader)?

KH


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## Dona Ferentes (23 November 2021)

finicky said:


> At least us holders get the WPL shares franked  and treated as a dividend. Not familiar with that but sounds ok. BHP is a permanent hold for me - too hard to work out the cost base after all its historical morphing...



Yeah, I saw that and am confused, as well. I guess your approach is as sensible as any (and similar to mine).

I hold BHP directly in my own name and took part in the buyback last FY .... I was scratching my head hoe to do it. My SMSF accountant stepped up to the plate and took information and delivered an outcome where it looked schmick. I have owned BHP since before 1985 so some were CGT-free, then the Bonus issues, took up rights and also was in DRPs early on, plus of course there was BHP Gold, OneSteel, BlueScope, the Billiton adjustment, etc.  It was a mess. She did a great job. _"It's my job"_, she said. 🧑‍🎓

And I still own a whole bunch, she has the spreadsheet for later, and I will not get too fussed. Whether I will continue to hold the WPL exposure down the line remains to be seen.


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## finicky (23 November 2021)

The tax man is the only creditor who demands that *you* work out how much you owe him (over a span of utter furmoil) and can penalize you if you get it wrong. Just send me a bill.


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## Sharkman (23 November 2021)

finicky said:


> The tax man is the only creditor who demands that *you* work out how much you owe him (over a span of utter furmoil) and can penalize you if you get it wrong. Just send me a bill.




honestly i prefer it this way. even if they worked it out and sent me the bill, i would still do all the calculations myself anyway, just to check that they aren't pulling a sneaky one. i wouldn't trust them to get it right, this sort of thing can and does happen.

as someone who takes a cynical view of the tax office in general, if they calculated it for us i wouldn't be surprised if they "accidentally" get it wrong here and there (in their favour, naturally) just to see who's been paying attention to the rules and who hasn't.

you just can't trust the government to get this sort of thing right in my view. robodebt anyone?


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## Sharkman (23 November 2021)

KevinBB said:


> I can't seem to find any documents relating to the tax consequences of the demerger, apart from the above that appears in one of the news releases. Has anyone seen a draft tax document, of the kind when companies are considering demergers?
> 
> If the WPL shares are distributed to BHP shareholders as a fully franked dividend, meaning that the dividend will be taxable in FY 2022, does that mean that these WPL shares will have a tax cost base of zero, so when they are sold, the full amount of the sale price will be taxable as a capital gain (for an investor) or as trading income (for a trader)?
> 
> KH




i don't really know either, but it might end up being something similar to the recent WOW/EDV demerger, where they allocated a multiplier to the WOW component (85.81%) and the EDV component (14.19%), and each investor then works out their own cost bases accordingly.

eg. if the investor originally bought 1000 WOW at $10, they then end up with 1000 WOW at a cost base of $8.581 and 1000 EDV at a cost base of $1.419 post the demerger.

i don't think it makes a lot of sense for one entity to retain its full cost base whilst the other ends up with a cost base of zero, that could distort the market as there will likely be fewer sellers of the zero cost base entity - people will be hesitant to incur such a tax hit. but i could be wrong, i guess we have to wait until the class ruling is released.


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## KevinBB (23 November 2021)

Hi @Sharkman

I think the BHP one is different, in that the WOW / EDV situation was a straight demerger. The original WOW cost base was divided into two portions in the ratio you outlined.

From what I've read, the BHP cost base won't be re-allocated. Again, as always, I could be proven wrong on this, so we need to see documents. It appears that WPL will be issuing its own shares to BHP in consideration for the transfer of BHP Petroleum from BHP to WPL, and then BHP will be passing those same shares to BHP shareholders as a fully franked dividend, i.e. BHP will pay the dividend, but instead of receiving cash, the shareholder will receive WPL shares.

This also means, as @mullokintyre pointed out a few posts ago, it seems now that there won't be a BHP buy back this year, probably because of the drain this dividend will have on franking credits 

That's why I would love to look at the appropriate tax documents to find out exactly what will happen. In cases such as this the company will apply to the ATO for a draft ruling on how the transaction is to be treated tax wise for its shareholders. Its the same process WOW went through for its demerger.

Can't wait to see this document (I'm a tax nerd).

KH


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## DrBourse (28 November 2021)

Hi rabbithop,
There are 8 Resistance Lines above the current SP of $38.03, those levels are Gap Minor & Major Lines (pages 202 to 213) that are all pretty close to the traditional Sup & Res Lines, so any uptrend towards $50.00+ will be a slow process IMO.

There have been 53 Red Candles in the past 86 days since the last High of $54.55 on 30/7/21, that’s not a very good ratio.

ST Ind’s are falling to near their centrelines, and LT Ind’s are nearly all below their centrelines. And the Linear Regression is still in a pretty nasty Downtrend.

There are numerous ST Divergences (pages 45, 109 & 177) on BHP – my chart shows just 2 of them.

Even though BHP has found minor support @ $35.80, there are a lot of TA Negatives atm, So IMO the next stop will be down to the Support Level of $33.80, then maybe, closer to your call.







Cheers,
DrB


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## Ann (28 November 2021)

Just for fun, I am putting up a couple of charts, the first one is the current BHP chart which is displaying a very rare "three peaks and domed house" pattern.
I first saw this pattern back in 2006, sadly I lost those charts in a computer crash. The second chart is the chart for the DAX I put up here in Dec 2018 which I did a count as described by Bulkowski pattern site which also displays the "three peaks domed house". I am wondering if this pattern, given its rarity is really a harbinger of a major crash. I guess give it a few months to just over a year we may find out! 






...and the DAX from back in December 2018


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## Value Collector (28 November 2021)

Sharkman said:


> i don't really know either, but it might end up being something similar to the recent WOW/EDV demerger, where they allocated a multiplier to the WOW component (85.81%) and the EDV component (14.19%), and each investor then works out their own cost bases accordingly.
> 
> eg. if the investor originally bought 1000 WOW at $10, they then end up with 1000 WOW at a cost base of $8.581 and 1000 EDV at a cost base of $1.419 post the demerger.
> 
> i don't think it makes a lot of sense for one entity to retain its full cost base whilst the other ends up with a cost base of zero, that could distort the market as there will likely be fewer sellers of the zero cost base entity - people will be hesitant to incur such a tax hit. but i could be wrong, i guess we have to wait until the class ruling is released.




Do you know what date the shares are likely to be split? and hence when it will affect options pricing.

From what I can see I think it might be the 1st of July 2020, so shouldn't affect the June options contracts of BHP or woodside.

But if you are anyone else has seen anything hinting at the likely date of the actual split and share issue it would be great.


----------



## KevinBB (28 November 2021)

Value Collector said:


> Do you know what date the shares are likely to be split? and hence when it will affect options pricing.
> 
> From what I can see I think it might be the 1st of July 2020, so shouldn't affect the June options contracts of BHP or woodside.
> 
> But if you are anyone else has seen anything hinting at the likely date of the actual split and share issue it would be great.



umm.. I'm not sure that there will be a split of BHP shares. My reading is that BHP will pay quite a hefty dividend, and that payment may affect your options pricing.

The original news release by BHP on 22 November 2021 quotes some dates, including one date of 1 July 2021. However I don't know if this is correct because the same document also talks about conditions precedent for the BHP / Woodside merger being satisfied by 30 June 2022.

KH


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## Rabbithop (28 November 2021)

DrBourse said:


> Hi rabbithop,
> There are 8 Resistance Lines above the current SP of $38.03, those levels are Gap Minor & Major Lines (pages 202 to 213) that are all pretty close to the traditional Sup & Res Lines, so any uptrend towards $50.00+ will be a slow process IMO.
> 
> There have been 53 Red Candles in the past 86 days since the last High of $54.55 on 30/7/21, that’s not a very good ratio.
> ...



Thank u for the reply, just saw it now. Still trying to navigate around this Forum. Will bear in mind for the new week.


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## Value Collector (28 November 2021)

KevinBB said:


> umm.. I'm not sure that there will be a split of BHP shares. My reading is that BHP will pay quite a hefty dividend, and that payment may affect your options pricing.
> 
> The original news release by BHP on 22 November 2021 quotes some dates, including one date of 1 July 2021. However I don't know if this is correct because the same document also talks about conditions precedent for the BHP / Woodside merger being satisfied by 30 June 2022.
> 
> KH



What I mean is existing BHP share holders are going to be given shares in Woodside, This should in theory reduce the value of the exisiting BHP shares by the amount of the WPL shares received.

This will affect of options strike prices, because they get adjusted when big capital transfers happen, So I was just interested to know the date that this split will be happening.


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## Sharkman (29 November 2021)

Value Collector said:


> Do you know what date the shares are likely to be split? and hence when it will affect options pricing.
> 
> From what I can see I think it might be the 1st of July 2020, so shouldn't affect the June options contracts of BHP or woodside.
> 
> But if you are anyone else has seen anything hinting at the likely date of the actual split and share issue it would be great.




that was my understanding as well, that it would take effect on 1 Jul 2022 as per the public announcements made so far. presumably on that day the strikes of all active option chains will get adjusted. but i don't think the effective date is set in stone just yet.


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## mullokintyre (3 December 2021)

BHP has announced it will get rid of the stupid listing setup and have one listing on the ASX.
From The OZ 


> The BHP board has approved the collapse of the company’s dual structure, with the mining giant to become one entity listed on the ASX in 2022.
> The dual company structure — comprising BHP Group Limited and BHP Group Plc — was formed at the time of the mining outfit’s merger with Billiton in 2001.
> 
> The unification was first flagged in August after a significant reduction in the contribution to the group from the assets owned by the British entity, and because a single company structure would result in substantial savings.



The unwinding of another disastrous foray by the BHP board at the time.
Mick


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## divs4ever (3 December 2021)

from what i understand though  the winding down of the UK entity  will make BHP  less complicated for a take-over  bid  and for 'an incredible shrinking company ' ( has already spun-off S32 , the US onshore assets , now the oil and gas assets to WPL ) one might wonder is they a business/consortium with very deep pockets

 after the WPL divestment  one might expect the BHP share price to at least drop below $30 

 ( i hold BHP and WPL )


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## KevinBB (3 December 2021)

mullokintyre said:


> BHP has announced it will get rid of the stupid listing setup and have one listing on the ASX.
> From The OZ
> 
> The unwinding of another disastrous foray by the BHP board at the time.
> Mick



I'm just going from memory here, but the dual listing was adopted to appease shareholders, and also national governments, when BHP and Billiton merged many years ago.

Certainly, BHP's board have made some really bad decisions over time, but I don't think the merger with Billiton was one of them.

KH


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## Value Collector (3 December 2021)

KevinBB said:


> I'm just going from memory here, but the dual listing was adopted to appease shareholders, and also national governments, when BHP and Billiton merged many years ago.
> 
> Certainly, BHP's board have made some really bad decisions over time, but I don't think the merger with Billiton was one of them.
> 
> KH



Honest question here, but does bhp still own any of the assets we got in the Billiton merger? Didn’t most of them get spun out again when they created south32.

I remember when they had the competition to name the new company that became south32, a lot of commentators were saying they should just call it Billiton, because that was pretty much what it was.

if they ended up giving away the Billiton assets because they were Non-core/weaker, but were stuck with the expense dual listing, I can’t see how it wasn’t a mistake


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## divs4ever (3 December 2021)

KevinBB said:


> I'm just going from memory here, but the dual listing was adopted to appease shareholders, and also national governments, when BHP and Billiton merged many years ago.
> 
> Certainly, BHP's board have made some really bad decisions over time, but I don't think the merger with Billiton was one of them.
> 
> KH



 the Billiton merger was before i was interested in shares  ( but i did see the odd headline about it )

 i have heard both sides  of the dual company structure argument 

 basically it made take-over attempt ( of BHP ) difficult  , but at the same time kept administration costs  up ( but MQG/MBL seems to cope OK with a US listing as well )

 but i have to agree that BHP has had some misadventures along the way , including the JV with Vale ,


----------



## divs4ever (3 December 2021)

Value Collector said:


> Honest question here, but does bhp still own any of the assets we got in the Billiton merger? Didn’t most of them get spun out again when they created south32.
> 
> I remember when they had the competition to name the new company that became south32, a lot of commentators were saying they should just call it Billiton, because that was pretty much what it was.



 from my ( limited ) understanding S32  was more than the lion's share of Billiton assets , it added a few minor BHP assets  ,  and the UK BHP was the second largest  market cap. on the UK bourse  , now i don't remember Billiton having any oil/gas assets , but had coal assets at one stage .

 i can't answer your question but suspect BHP might still have some Billiton assets   , i keep thinking Billiton  was Africa-centric  but i suspect i am wrong there ( surely BHP would have bought more than that .... but after those US shale assets .... )


----------



## KevinBB (3 December 2021)

Value Collector said:


> Honest question here, but does bhp still own any of the assets we got in the Billiton merger? Didn’t most of them get spun out again when they created south32.



Maybe someone with a better knowledge of BHP than me has more detail, because I really don't know. It would be an interesting analysis to read.
KH


----------



## Rabbithop (3 December 2021)

KevinBB said:


> I'm just going from memory here, but the dual listing was adopted to appease shareholders, and also national governments, when BHP and Billiton merged many years ago.
> 
> Certainly, BHP's board have made some really bad decisions over time, but I don't think the merger with Billiton was one of them.
> 
> KH



I am just happy to off load the holding at 40.85. Didn't think I will see it hitting 40 but thanks to the talk on copper issue, price rise steadily this morning and hit the bull's eye.


----------



## divs4ever (3 December 2021)

a trader buddy with much more time in the market  says the Billiton assets  have been ( mostly ) divested  a while back 

 but to me that doesn't  make sense to keep the dual company structure  .. before the S32 merger  who would have been big enough ( and politically acceptable ) to acquire BHP/Billiton ( sure China could raise the dollars  but try to get that  past the foreign investment regulators  in various nations )

 has BHP any trading desks ( for commodities ) maybe  stuff like that and port facilities are still Billiton legacies 

 PS remember Glencore is still hungry  , especially for quality iron assets  ( so watch out on FMG , RIO and BHP from that angle  , i doubt they would buy out BHP's half of the Vale JV , but Glencore  makes some brave moves )


----------



## mullokintyre (3 December 2021)

KevinBB said:


> I'm just going from memory here, but the dual listing was adopted to appease shareholders, and also national governments, when BHP and Billiton merged many years ago.
> 
> Certainly, BHP's board have made some really bad decisions over time, but I don't think the merger with Billiton was one of them.
> 
> KH



The merger was one of their mistakes as far as I am concerned. 
The dual listing came about because of that mistake.
Mick


----------



## DrBourse (12 December 2021)

My Personal Observations on BHP’s current TA for anyone that’s interested.

BHP is at a Crossroads situation ATM.

For the last 8 days BHP has been stuck within the current 3/12/21 Gap Up Area (Pages 203 to 212) – and to add to the confusion poor ole’ BHP is in, there are several Indicator Sell Divergences (page 108 & 109), and for 4 of the past 6 days, BHPs Candlesticks suggest that Sellers are in control (page 5) – then to add to that confusion BHP’s ST Trend is UP, BUT their 4 mth Trend is still DOWN.

Also the BHP SP is still having trouble breaking above the Top Linear Regression Line.

There are a few other TA signals, like recent Candle Formations & Candle Construction that are, ‘of concern’ – Another worry is when Green Candle Days like 10/12/21, cause ST Indicators to DROP.

The only real +ive I an see ATM is the reasonably ‘ST solid base’ around the $35.80 line

IMO, ATM there are not enough TA signals that suggest a future ST or LT trend – so my advice to BHP Punters is “ BE CAREFUL”.

IMO any further drop in the SP could lead to to abt $35.80.

IMO, on the other hand any rise in the SP will strike trouble @ the next Gap Down Area $42.17 to $44.78.






Remenber to DYOR.
Cheers.
DrB


----------



## divs4ever (12 December 2021)

so with BHP set to disperse WPL shares  on a one for one basis  , do you  have any current  estimation of the WPL  current and also enlarged  valuations 

 if WPL is currently trading  above $20  and the deal is allegedly doubling the assets of WPL so lets call the underlying value of WPL circa $30 ( because you can bet there will be some problems  harvesting the synergies early  , and some fund managers will want to sell the WPL 'bonus shares ' )

 what is the leaner BHP worth as well  surely more than $10 a share ( but let's make a wild guess and say BHP will have some support at $20 )

 looks like a traders  should be preparing for some activity ( on BHP and WPL )


----------



## DrBourse (13 December 2021)

DrBourse said:


> My Personal Observations on BHP’s current TA for anyone that’s interested.
> 
> BHP is at a Crossroads situation ATM.
> 
> ...



As a follow-up to my last BHP Post, I feel I should mention, for the Beginners Benefit, that I purpously did not mention the BHP/WPL Merger.

Experienced TA types understand that Recent Events, Current Events, Announcements, etc are always reflected in Daily Chart Movements.
Punters tell us what they feel each Stocks Price should be when they Buy & Sell, Bad News usually results in a Red Candle, Good News usually results in a Green Candle, then you need to read each daily candle (pages3, 4 & 5)

Line Charts will give a Basic indication of what punters think,
The various forms of Bar Charts give a slightly better indication of what punters think,
and a Candlestick Chart gives the Best indication of what punters think.

The BHP Chart from 16th AUG 21 to Mid Oct 21, shows complete uncertainty, which the Shorts probably took advantage of - But from Mid to Late NOV 21 onwards the Sheep have begun to see the light.

I know the sceptics out there will challenge any TA Theory - I've given up trying to educate them.

The smarter punters, and hopefully all Beginners will at least investigate all aspects of FA & TA, one in no better than the other, but the 2 together can work wonders for your trading prowess.

Remember to DYOR.

If anyone wants a .pdf copy of the page numbers I often mention, you should Direct Message me.
However most pages are shown in the 3 x "DrBourse Help Forums" in the Beginners Lounge, it just might take some time to locate the page number that you are looking for.

Cheers.
DrB.


----------



## Sean K (12 January 2022)

I thought $44 was going to be a spot where BHP was going to consolidate a little, but looks like it's just running... Been an outstanding run.


----------



## dyna (12 January 2022)

All the more remarkable, in that BHP is sitting at no. 7 in the top ten most shorted stocks on the ASX, with 8.7% of its stock out on loan.


----------



## Garpal Gumnut (12 January 2022)

dyna said:


> All the more remarkable, in that BHP is sitting at no. 7 in the top ten most shorted stocks on the ASX, with 8.7% of its stock out on loan.



This is elephant stuff. 

It could go either way. 

BHP Oz holders will vote for amalgamation. Some are tipping a share price fall when that happens later this month. 

Shorts are full in, as are funds out to punish them. 

The Indices will change as well with enlarged BHP. 

I've decided to sit it out lest I be run over by an elephant. 

I didn't buy BHP at $36 as I was loaded up with RIO and saw FMG as a better prospect.  

Charts may give some indication as to what to do. I'm not in. 

gg


----------



## Dona Ferentes (13 January 2022)

The increased weighting of BHP from 6.2% to about 10% within ASX indices would compel many Australian investors to find spare cash to buy BHP shares to comply with their index-linked mandates. Index manager S&P Global told investors in December that “material” volatility in trading volumes would occur if the market were forced to absorb BHP’s unification in a single day.

S&P floated an idea with investors in recent weeks to stagger the impact of BHP’s unification over two trading sessions: 31 January and 21 March. But on Wednesday S&P said it had decided to implement the changes “all at once” before the 31 January trading session, if BHP shareholders approve unification on 20 January.

The vote, with 75% needed to succeed, will be interesting as some fund managers aim to vote against unification of BHP out of concern the arrangement would amount to a “substantial, permanent and unnecessary” transfer of value from holders of BHP’s Australian stock to those holding the miner’s London stock.

Short positions in Australian BHP stock have risen to 8.5 per cent of the register on January 4, from 3.7 per cent in August.


----------



## Rabbithop (13 January 2022)

Dona Ferentes said:


> The increased weighting of BHP from 6.2% to about 10% within ASX indices would compel many Australian investors to find spare cash to buy BHP shares to comply with their index-linked mandates. Index manager S&P Global told investors in December that “material” volatility in trading volumes would occur if the market were forced to absorb BHP’s unification in a single day.
> 
> S&P floated an idea with investors in recent weeks to stagger the impact of BHP’s unification over two trading sessions: 31 January and 21 March. But on Wednesday S&P said it had decided to implement the changes “all at once” before the 31 January trading session, if BHP shareholders approve unification on 20 January.
> 
> ...



Just out of curiosity..so what would be a good entry share price? 😉


----------



## Garpal Gumnut (13 January 2022)

Dona Ferentes said:


> The increased weighting of BHP from 6.2% to about 10% within ASX indices would compel many Australian investors to find spare cash to buy BHP shares to comply with their index-linked mandates. Index manager S&P Global told investors in December that “material” volatility in trading volumes would occur if the market were forced to absorb BHP’s unification in a single day.
> 
> S&P floated an idea with investors in recent weeks to stagger the impact of BHP’s unification over two trading sessions: 31 January and 21 March. But on Wednesday S&P said it had decided to implement the changes “all at once” before the 31 January trading session, if BHP shareholders approve unification on 20 January.
> 
> ...



The large funds I am told will vote for a single register.  

Game over imo with a retracement in price.

gg


----------



## Dona Ferentes (13 January 2022)

Garpal Gumnut said:


> The large funds I am told will vote for a single register.
> 
> Game over imo with a retracement in price.



Price: Small price to pay, and its only over the short term. 
Value: Ultimately the assets don't change, the books are easier.


----------



## divs4ever (13 January 2022)

Dona Ferentes said:


> The increased weighting of BHP from 6.2% to about 10% within ASX indices would compel many Australian investors to find spare cash to buy BHP shares to comply with their index-linked mandates. Index manager S&P Global told investors in December that “material” volatility in trading volumes would occur if the market were forced to absorb BHP’s unification in a single day.
> 
> S&P floated an idea with investors in recent weeks to stagger the impact of BHP’s unification over two trading sessions: 31 January and 21 March. But on Wednesday S&P said it had decided to implement the changes “all at once” before the 31 January trading session, if BHP shareholders approve unification on 20 January.
> 
> ...



 but after  divesting the WPL shares ???

 i am guessing WPL will stay above $15   all through this 

 HOWEVER  SOME funds will be obliged to avoid  on exit WPL positions  while others will be obliged to buy extra ( larger market cap. )

 am still indecisive  on which way to vote here ( i hold both BHP and WPL ) although since i hold less than 1000 shares in either , i will need a lot of companions if i vote to stop this  restructure 

 BTW i do NOT see  the restructured BHP  coming down to a tempting top up price  ( for me )


----------



## Garpal Gumnut (13 January 2022)

Sean K said:


> I thought $44 was going to be a spot where BHP was going to consolidate a little, but looks like it's just running... Been an outstanding run.
> 
> View attachment 135603



Thanks @Sean K . I keep on seeing your chart when I browse this thread and the recovery in price seems unbelievable from $40 up. Like you I am surprised there was no consolidation. 

BHP may have problems closing that gap from August 21 up to and beyond $47.66.

Then what do I know lol. The madness of crowds, if it sounds too good to be true etc. etc. 

gg


----------



## Dona Ferentes (14 January 2022)

_BHP shareholders will next week vote on a plan for the Australian side of BHP’s dual-listed company structure to acquire the British side through a one-for-one issue of shares in BHP’s Australian-listed company.

UniSuper and K2 Asset Management have indicated they plan to vote in *favour of unification*. AFI will likely also vote in favour, as will WAM.

Major proxy advisers such as ISS Governance and CGI Glass Lewis have encouraged clients to vote in favour of unification.

Fund managers including Pendal Group and Ausbil this week vowed to vote against unification on the grounds the one-for-one mechanism undervalued the premium that BHP’s Australian shares have traditionally enjoyed over BHP’s London shares, meaning the cost of the $US450 million process outweighed the benefits.

The vote is the first of two big transactions for BHP in 2022, with the company also hoping to demerge its petroleum division to Woodside. BHP has said the Woodside demerger can still go ahead if unification fails, but it will be structurally easier to execute if the company is unified first._


----------



## divs4ever (14 January 2022)

HMMmmm  and  only 25.1%  need to vote NO  , 

 interesting


----------



## Dona Ferentes (18 January 2022)

Ahead of this Thursday’s BHP unification meetings, major US-owned fund manager Vanguard Australia has revealed how it will rebalance the BHP holdings in its Shares Index, High Yield and Large Companies ETFs, warning that for a brief period of time holders in the three funds will be exposed to currency and market risks they are not normally exposed to.

Vanguard says to prepare for the proposed unification, “_[F]rom 17 January 2022 Vanguard Investments Australia will be able to acquire BHP Plc shares on the London Stock Exchange to support the investment strategies of the above-named Funds_.”



> “Under the BHP proposal, any shares in BHP Plc that VIA acquires will be exchanged for depository interests in BHP Limited, listed on the London Stock exchange.





> “If approved, the unification is scheduled to be complete on 31 January 2022 at which time Vanguard Investment Australia will commence the process to transition the depository interests into ASX listed BHP Limited shares,” the fund manager said on Monday.




Vanguard Investments Australia said it will also be able to use US E-mini Index Futures in the period leading up to, and on the date of BHP’s unification, “to *maintain fund liquidity, manage market exposure and cash flows, while supporting broader funding requirements.”*

This means Vanguard will see the Australian funds briefly directly exposed to the US and UK markets.


> “Acquisition of BHP Plc and US E-minis will result in direct exposure to the US and UK markets, which will introduce a small amount of currency risk. Currency risk is the chance that the value of a foreign investment, measured in Australian dollars, will decrease because of unfavourable changes in currency exchange rates.”




Vanguard says that these are “short-term changes (that) are consistent with the investment strategy and investment return objectives of the funds.”


> “[G]iven the significance of the anticipated impact of the proposed unification on the Australian equities market, (the changes) are being made in the best interest of investors.”




Vanguard warned investors in the Vanguard Australian Shares High Yield ETF tracks the FTSE Australia High Dividend Yield Index that ” This index applies a 10% maximum weighting to any one company when the index is rebalanced semi-annually.”



> “To maintain these diversification requirements, a 10% cap will be applied to BHP based on the closing price on 21 January 2022. On the effective date, Vanguard fund weightings in BHP may be over 10% due to market movements.”




Vanguard’s method of topping up its BHP holdings and the maximum weighting measure for a single stock will be familiar to holders of other funds. These updates will be common for many funds – both listed and unlisted and especially those based on index hugging strategies that hug the ASX 200 or major sub-indexes (such as materials).


----------



## JohnDe (24 January 2022)

Las night I put set up several low bids thinking that their would be a drop. Caught nothing, my bids were too low, though I did have one at $45 but pulled it this morning. Ow well.

Anyone else think that the SP will drop below $45 before climbing next month?



> BHP is one of the biggest dividend payers in the world – and just now it has about twice as many franked dividends on its balance sheet as a typical blue chip company would retain. In fact, there is about $US16bn ($22bn) worth of franked dividends sitting on the balance sheet looking for a home.
> 
> Very soon the big miner is going to get a chance to shower its Australian shareholders with these dividends as it reports in February and happens to be enjoying an exceptionally profitable phase of the commodities cycle.
> 
> ...


----------



## Sean K (24 January 2022)

JohnDe said:


> Las night I put set up several low bids thinking that their would be a drop. Caught nothing, my bids were too low, though I did have one at $45 but pulled it this morning. Ow well.
> 
> Anyone else think that the SP will drop below $45 before climbing next month?




At the mercy of the general market at the moment. A lot of people running for the door. On the way down, 42.50-44.00 ish should be some support, but when the heard is running, it's hard to stop. Might be an excellent opportunity coming up for those with spare $$.


----------



## Rabbithop (24 January 2022)

Sean K said:


> At the mercy of the general market at the moment. A lot of people running for the door. On the way down, 42.50-44.00 ish should be some support, but when the heard is running, it's hard to stop. Might be an excellent opportunity coming up for those with spare $$.



I put it at 41..still watching


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## Sean K (24 January 2022)

Rabbithop said:


> I put it at 41..still watching




Could go very deep if the general market has a proper correction - XAO to 7200 ish for eg.


----------



## JohnDe (24 January 2022)

Sean K said:


> At the mercy of the general market at the moment. A lot of people running for the door. On the way down, 42.50-44.00 ish should be some support, but when the heard is running, it's hard to stop. Might be an excellent opportunity coming up for those with spare $$.






Sean K said:


> Could go very deep if the general market has a proper correction - XAO to 7200 ish for eg.
> 
> View attachment 136437




Yeah, that's what I'm thinking. BHP's unification is another unknown; will that and the possible price drop cause an influx of buyers next month?

My bids are between 44-43, Rabbithop might be onto something


----------



## divs4ever (24 January 2022)

i won't say NEVER  but am unlikely to add more before they unload the WPL shares 

 the current holding is liable to leave me with an uncomfortable amount of WPL

 unless WPL literally plummets after the deal  i am unlikely to add more except via the DRP ( where i participate 100% )

 but it is a crazy market , anything could happen


----------



## frugal.rock (24 January 2022)

Apparently there's a BHP mine in the area... ?









						Outback highways flooded and driver swept 80 metres into creek
					

The weather bureau says parts of SA set new "all-time records" in terms of rainfall, while social media is awash with photos and videos of inundated highways.




					www.abc.net.au


----------



## Garpal Gumnut (24 January 2022)

As of this week XAO = BHP for all intents and purposes. 

A waiting time. 

gg


----------



## rederob (24 January 2022)

frugal.rock said:


> Apparently there's a BHP mine in the area... ?



Roxby Drowns?
Are floods  filling  their Olympic Dam?


----------



## Garpal Gumnut (24 January 2022)

rederob said:


> Roxby Drowns?
> Are floods  filling  their Olympic Dam?



I trust everyone is safe down there.









						Floodwaters cut only road into SA mining town
					

The mining town of Roxby Downs has been cut off after floodwaters washed away part of the only highway in and out of during wild weather in South Australia.




					thenewdaily.com.au
				




gg


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## Garpal Gumnut (25 January 2022)

It will be interesting to see whether BHP falls below $40 over the next few days or not.

The ADR's cut back most of their losses on the NYSE just on the close.

The Australia Day holiday is going to leave many who are highly geared and those holding options a bit out on a limb tomorrow.

gg


----------



## Dona Ferentes (27 January 2022)

The UK court has issued the court order sanctioning BHP’s unification, meaning the scheme will become effective at 9pm (GMT) on 28 January.

It follows last week’s news that BHP shareholders voted in favour of the unification.

Unification is expected to complete by 31 January 2022 (Melbourne time).


----------



## Rabbithop (27 January 2022)

Garpal Gumnut said:


> It will be interesting to see whether BHP falls below $40 over the next few days or not.
> 
> The ADR's cut back most of their losses on the NYSE just on the close.
> 
> ...



Only my opinion, it will. So should holders grab more or dump it🤫


----------



## divs4ever (27 January 2022)

i will probably watch 

 i really need it to be much lower  ( and would be gambling the enlarged WPL when the demerger happens will be a better run company )

 needs to shed at least another $10 for me 

 i would rather be stalking something like FMG currently  (  or EVN or NST )


----------



## Garpal Gumnut (27 January 2022)

Rabbithop said:


> Only my opinion, it will. So should holders grab more or dump it🤫



To BHP or not to BHP. That is the question. 
Shakespeare 

gg


----------



## Rabbithop (27 January 2022)

LOL


----------



## Sean K (27 January 2022)

Garpal Gumnut said:


> To BHP or not to BHP. That is the question.
> Shakespeare
> 
> gg




Amazing that it's currently up. My buy zone is a little lower, but the lemmings are running.


----------



## Garpal Gumnut (27 January 2022)

BHP

gg


----------



## Rabbithop (27 January 2022)

Garpal Gumnut said:


> To BHP or not to BHP. That is the question.
> Shakespeare
> 
> gg



I am still sitting n waiting for 41


----------



## JohnDe (27 January 2022)

Sean K said:


> Amazing that it's currently up. My buy zone is a little lower, but the lemmings are running.
> 
> View attachment 136621




Yes the markets have been a roller coaster this week, while BHP is green. Crazy times.


----------



## Dona Ferentes (27 January 2022)

It doesn't take the ghouls and clippers long to look for 'their' angle



> Morgan Stanley analysts ... _looked at 10 past stock unifications and found nearly half of them did buybacks, while 70 per cent of them did mergers and acquisitions in the six months on either side of the unification move.
> 
> In BHP’s case, the analysts reckon the company could raise $US17 billion ($23.8 billion) in net debt while still staying investment-grade credit and $US24 billion ($33.6 billion) in equity, without needing shareholder approval (assuming a 0 per cent discount to the 25 January  close)._




Of course, the WPL petroleum asset deal is already slated to go ahead.

for a *buyback*, and BHP using its entire US$16 billion franking balance, which MS reckons would cost it $US40 billion, and result in a $US3.36 per share special dividend.
Based on a simple market capitalisation filter in _future facing _commodities, the hypothetical extra capital would put IGO Limited, Nickel Mines Limited, Oz Minerals and Chalice Mining *within BHP’s M&A budget*.


----------



## Sean K (27 January 2022)

Dona Ferentes said:


> It doesn't take the ghouls and clippers long to look for 'their' angle
> 
> 
> 
> ...




AFR:


----------



## noirua (30 January 2022)

BHP to delist in London as it centralises in Australia | Argus Media
					

Australian resources firm BHP will unify into an Australia-based firm with its delisting from the London Stock Exchange (LSE) at the end of this month, as part of a plan to simplify its corporate structure.




					www.argusmedia.com


----------



## divs4ever (30 January 2022)

plenty of shares changed hands on Friday  , and BHP was right up there in the most actives  list 

 how much more to come tomorrow ??

 it might be something freaky ( like most  of the XJO down except for BHP , or the opposite , with short-sellers thinking it is over-bought )


----------



## divs4ever (2 February 2022)

BHP Riding Climate Change Shift, While Offering Growth And Monster Dividend

https://www.investing.com/analysis/...ffering-growth-and-monster-dividend-200616567

DYOR

i hold BHP

 i won't go as far to say  'i won't  ' (  buy before the spin-off )  but my first  instinct is to buy some cheap BHP AFTER the spin-off  ( and resist buying extra WPL , i already participate in the DRP ... so far )


----------



## qldfrog (2 February 2022)

It is very very hard for me fighting the very bad taste left after working for BHP for years.
On paper sector etc i would run to buy a significant share but it was by far the worst managed big corporate i ever worked for. A highlight of wasted opportunities,backward thinking and act, PR focus and woke pretend.maybe it has changed but how could i give my money to these clowns ?
They have the lease, some of the best assets but gosh ..
I had a much much better feeling on Rio ,FMG , or even the minor miners.
Any afr member currently working within or with BHP able to give me an anonymous update?


----------



## Rabbithop (2 February 2022)

qldfrog said:


> It is very very hard for me fighting the very bad taste left after working for BHP for years.
> On paper sector etc i would run to buy a significant share but it was by far the worst managed big corporate i ever worked for. A highlight of wasted opportunities,backward thinking and act, PR focus and woke pretend.maybe it has changed but how could i give my money to these clowns ?
> They have the lease, some of the best assets but gosh ..
> I had a much much better feeling on Rio ,FMG , or even the minor miners.
> Any afr member currently working within or with BHP able to give me an anonymous update?



Thank you for the inside info..it's valuable to the outsiders. I was in 2 minds to buy more.


----------



## qldfrog (2 February 2022)

Rabbithop said:


> Thank you for the inside info..it's valuable to the outsiders. I was in 2 minds to buy more.



For the sake of precision,i last worked for BHP 5y + ago so things might have changed


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## Rabbithop (2 February 2022)

qldfrog said:


> For the sake of precision,i last worked for BHP 5y + ago so things might have changed



Yep.


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## qldfrog (2 February 2022)

Rabbithop said:


> Yep.



arrrgg did it, bought 4.5k of the dreaded BHP


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## Rabbithop (2 February 2022)

qldfrog said:


> arrrgg did it, bought 4.5k of the dreaded BHP



Never mind, you win sometimes n other times, it goes the other way. I bought at 46 plus.


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## Shorting Hat (9 February 2022)

Blog post that I wrote summarising the unification arbitrage opportunity: BHP and the amalgamation arbitrage


----------



## Sean K (9 February 2022)

Shorting Hat said:


> Blog post that I wrote summarising the unification arbitrage opportunity: BHP and the amalgamation arbitrage




Can you share a snippet of it here?


----------



## Shorting Hat (9 February 2022)

Sean K said:


> Can you share a snippet of it here?



Yeah, sure. There are some images and graphs that go along with it but here is the start:

LIKE SO MANY Australians stranded in London, BHP has finally been able to return home. On 31 January 2022, BHP announced that the unification of its corporate structure had been sanctioned by a UK Court. This puts to an end a 20-year-old arrangement in which an Australian company and a British company gave the appearance of a single BHP. The arrangement had been put in place following BHP’s merger with Billiton in 2001.

As part of this arrangement, BHP shares had been listed on both the ASX (known as ‘Ltd shares’) and the London Stock Exchange (known as ‘Plc shares’). Under the unification agreement, all BHP shares will now be listed on the ASX. BHP Chairman Ken MacKenzie said the unification transaction would cost between US$350 million and US$450 million to complete. (And you thought your Qantas flight home was expensive.)

What makes this interesting is that the high likelihood that the dual listing would come to an end had the effect of making BHP the most shorted stock on the ASX, with close to 18% of its equity sold short. To understand why this was the case, it is first necessary to understand the differences between the Ltd shares and the Plc shares.









						BHP and the amalgamation arbitrage - Shorting Hat
					

BHP is the most shorted stock on the ASX, with close to 18% of its equity sold short.




					shortinghat.com


----------



## Dona Ferentes (11 February 2022)

Brokers reckon there were hundreds of different investors employing hundreds of trading strategies on January 28, and in the days before and after, which together created the big bang.

The strategies were mostly around one commonly used theme in M&A transactions; long the target, short the acquirer. In this case, it was to go long the Plc shares and short the ASX listed Ltd, to capture the available spread between the pair.

As January 28 neared, the spread narrowed but so too did the timeframe, promising pumped up returns for fast money funds.

The shorters (and indeed their prime brokers) could go extra hard, knowing that there was guaranteed to be huge liquidity aftermarket on January 28, as index funds and index huggers bolstered their BHP Ltd positions.

For once, they didn’t have to worry so much about a short squeeze or the days to cover ratio.


----------



## dyna (11 February 2022)

From the same AFR article : At $24 Billion, the biggest short in oz history .


----------



## divs4ever (15 February 2022)

Report for the half year ended 31 December 2021
This statement includes the consolidated results of BHP for the half year ended 31 December 2021 compared with the half year ended 31 December 2020.
This page and the following 76 pages comprise the half year end information given to the ASX under Listing Rule 4.2A and released to the market under UK Disclosure and Transparency Rule 4.2.2R and should be read in conjunction with the 2021 BHP Group annual financial report.
The results are prepared in accordance with IFRS and are presented in US dollars.
US$ Million Revenue from continuing operations up 27% to 30,527 Revenue from discontinued operations up 104% to 3,257
Total revenue up 32% to 33,784
Profit after taxation from continuing operations attributable to the members of the BHP Group up 108% to 8,471
Profit/(loss) after taxation from discontinued operations attributable to the members of the BHP Group up 606% to 972
Profit after taxation attributable to the members of the BHP Group up 144% to 9,443
Net Tangible Asset Backing: Net tangible assets1 per fully paid share were US$10.59 as at 31 December 2021, compared with US$10.26 as at 31 December 2020.
1 Net Tangible Assets includes right of use assets with a carrying value of US$2,754 million as at 31 December 2021.
Dividends per share: Interim dividend for current period (record date 25 February 2022; payment date 28 March 2022) US 150 cents fully franked Interim 
dividend for previous corresponding period US 101 cents fully franked Dividend 

Reinvestment Plan Any eligible shareholder who wishes to participate in the dividend reinvestment plan, or to vary a participation election, should do so by 28 February 2022 or, in the case of shareholdings on the South African branch register of BHP Group Limited, in accordance with the instructions of your CSDP or broker. Any former BHP Group Plc shareholder who previously made an election to participate in the BHP Group Plc dividend reinvestment plan will need to make a new election if they wish to participate in the dividend reinvestment plan. Full terms and conditions of the dividend reinvestment plan and details about how to participate can be found at: bhp.com

 the very short version

 DYOR

 i hold BHP ( but don't participate in the DRP )


----------



## Dona Ferentes (15 February 2022)

yep,  very handy


> Strong commodity prices lifted BHP to an improved $US9.7 billion half year profit and a third consecutive record ff interim dividend of A$2.10 per share .


----------



## Rabbithop (15 February 2022)

Dona Ferentes said:


> yep,  very handy



Brilliant, only one word to describe.


----------



## divs4ever (15 February 2022)

don't look at me  , i am biased  my average  SP is just over $28.96  ( and they gave me a fistful of S32  , say worth $2 a share )

 but the trick to it is taking a deep breath and buying some when the BHP drops  below  $20 ( $14.80  was my cheapest parcel )


----------



## Rabbithop (15 February 2022)

Would that low price happen again...more than 50% discount...😲🤷‍♂️😃


----------



## Value Collector (15 February 2022)

Rabbithop said:


> Never mind, you win sometimes n other times, it goes the other way. I bought at 46 plus.



That $46 is currently earning 13% pa when you factor in the franking credits, much better than having your cash in the bank in my opinion, We’ll done.


----------



## Rabbithop (16 February 2022)

Yes I am lucky in that sense. There is always a BUT. Previous to this $46 plus hold, I owned a parcel of $36+ n sold at $38+. 
Re entered again at $36+ n waited a bit longer to exit at $40+. The final reentry at $46+ n still holding it for the $2+ div, cld it reach $55 to exit or deflated to $20 mentioned by divs4ever? In hind sight, how sweet it would have been if I was still holding the $36+ parcel.
Well you win some n you loss some....money makes the world go round...


----------



## divs4ever (16 February 2022)

Rabbithop said:


> Would that low price happen again...more than 50% discount...😲🤷‍♂️😃



 MAYBE  .. when you look back and see BHP is a much smaller company now ( asset-wise ) there is no reason to exclude the possibility  ( as small as it maybe )  political problems are possible in South America  impacting the copper and iron projects there  OR conversely doing business in that arena because easily  reducing the commodity prices  , or China may further slow it's own growth trimming demand at least until other manufacturing hubs grow  , for example what is iron ore really worth   say $US 60 or $US 70 a tonne  , coal will become less of a cash cow in time  , the so called phosphate arm  which may or may not become profitable 

 back then ( with the cheap share price ) you  had the shale projects , what became S32  , the oil/gas/petroleum arm 

 AND the unified company structure  while incurring less corporate costs ( allegedly ) makes the share price easily to manipulate


----------



## divs4ever (16 February 2022)

Rabbithop said:


> Yes I am lucky in that sense. There is always a BUT. Previous to this $46 plus hold, I owned a parcel of $36+ n sold at $38+.
> Re entered again at $36+ n waited a bit longer to exit at $40+. The final reentry at $46+ n still holding it for the $2+ div, cld it reach $55 to exit or deflated to $20 mentioned by divs4ever? In hind sight, how sweet it would have been if I was still holding the $36+ parcel.
> Well you win some n you loss some....money makes the world go round...




 i selected  BHP as a 'core holding ' thinking that if BHP failed   Australia would be in a VERY dark place  , but instead BHP through various means has become a much smaller company  and therefore  POSSIBLY getting into the realm of a leveraged take-over target  ( using BHP's future cash-flow against them )

 time will tell  , but lets see if those $US 1.50  ( per six months ) are sustainable  or international pressure  forces them to pay quarterly divs


----------



## divs4ever (18 March 2022)

Union at BHP's Escondida Chile copper mine threatens work stoppage

https://au.investing.com/news/stock...e-copper-mine-threatens-work-stoppage-2542229

DYOR

i hold BHP


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## Dona Ferentes (18 March 2022)

divs4ever said:


> Union at BHP's Escondida Chile copper mine threatens work stoppage



new leftist, almost 'woke' government, new Constitution in the pipeline, plus the Mapuche indians are getting restless.


----------



## divs4ever (18 March 2022)

will be interesting to see what 'union ' means in Chile

 unions are nothing like they claim to be in Australia


----------



## Rabbithop (18 March 2022)

You are right the Mapuche Indians getting restless. I just scan thru ABC  or was it iView and caught a bit of the documentary about the Indians. Will catch up on the weekend


----------



## bluebuck (25 March 2022)

BHP , PG1, AUR, what is the conection PLS ??


----------



## qldfrog (27 March 2022)

divs4ever said:


> will be interesting to see what 'union ' means in Chile
> 
> unions are nothing like they claim to be in Australia



In Australia, the far left communist bunch has had to rebrand itself as Greens
In Chile, due to the Pinochet period, and an old french/spanish style inteligencia..in "".. we have still some pretty Marxist bunches. Unions calling for revolution and victory of the proletariat.
Put these guys talking to local undereducated, exploited...(really..not lgbt style exploitation ) and dirt poor native Indian population..
And you got a Che Guevara / Venezuela scenario.
If copper and lithium are the new oil, Chile will be the next Venezuela.my bet
Pray for them


----------



## divs4ever (27 March 2022)

i know several dirt , poor uneducated folks that are as smart as a whip  , what are the chances  those natives  are being sold a Sydney bridge by some bureaucrats  and government officials ( so all the natives get is the pollution and taxes )

 surely BHP aren't foolish  enough to cause themselves extra complications


----------



## ajw01 (27 March 2022)

It's Snake Pliskin said:


> I was reading today about predicted price weakness for BHP in the next week. I don't hold any yet. Who might see any further price weakness as a good opportunity to buy? Generally I'm probably a bit negative on the resource stocks due to their well known booms and busts. I'm aware of the China story, but am realistic enough to know that it may not last beyond 2005.
> 
> The last round of price negotiations soured the relationship between BHP and China. Knowing the business style of the Chinese, I feel BHP may have done itself some damage long term.
> 
> Who sees RIO as a better alternative BHP long term?



If you hear anything please let me know.  All Market analysis are commenting that recourses are the place to be for the remainder of the year.


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## Dona Ferentes (21 April 2022)

BHP expects to deliver less copper and nickel than previously anticipated, in part due to workforce issues related to COVID-19, social unrest close to its mines and workforce shortages, the company said in the March quarter update released on Thursday.

Production for iron ore, metallurgical coal and energy coal remains on track remains on track to meet full-year forecasts. However, the company has clipped back its copper production guidance to between 1,570 and 1,620kt, down from 1,590 - 1,760kt.

Nickel production is set to come in between 80 and 85kt, down from 85 to 95kt under the prior guidance.

The pressures facing *copper *production relate to its Escondida mine in Chile, which has faced “_COVID-19 workforce impacts and public road *blockades as a result of social unrest*_*.*”
The issues facing its *nickel *production operations reflect “_temporary labour constraints due to COVID-19 related absenteeism and workforce shortages.”_


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## greggles (21 April 2022)

BHP is a big fish and it has been hungry for copper and nickel for some time now. It wouldn't surprise me if they try and increase reserves and production through acquisition of other smaller producers and advanced stage explorers. They certainly have the cash to do it.

I think we will see a lot of M&A in the resources sector in the next couple of years as the big fish try and shore up their reserves of certain metals in anticipation of increased demand. Copper and nickel are two of the most obvious candidates


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## Dona Ferentes (8 May 2022)

Conspicuously, the world’s biggest mining company has no plans to join the Lithium rush.

While lithium mining is “_definitely within our skill set_,” BHP prefers its projects to be large, long-life and scalable in commodities with differentiated cost curves, said the company’s Minerals Americas head.

The fact that low-cost lithium deposits tend to come from brine in places like Chile and Argentina is another deterrent for the Melbourne-based miner, which has committed to minimising the use of continental water in drought-hit Chile.


> “_We recognise that at the moment there’s short-term supply-demand conversations,” _Ragnar Udd said in an interview_. “How that plays out over the next 20 or 30 years, I don’t think it will last._”




- _Bloomberg_


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## JohnDe (8 May 2022)

Dona Ferentes said:


> Conspicuously, the world’s biggest mining company has no plans to join the Lithium rush.
> 
> While lithium mining is “_definitely within our skill set_,” BHP prefers its projects to be large, long-life and scalable in commodities with differentiated cost curves, said the company’s Minerals Americas head.
> 
> ...




When was this declared?

My info from 1/4/2022 -



> BHP, Capricorn back startup promising cleaner lithium mining​
> Capricorn Investment Group and BHP Group’s venture capital unit are backing a startup that says its processes make for cleaner and more efficient mining in lithium, the metal used in electric-vehicle batteries.
> 
> 
> ...












						BHP, Capricorn back startup promising cleaner lithium mining
					

The Calgary-based startup also plans to raise at least $100 million in series B funding by the end of this year or early next year.




					www.mining.com


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## Dona Ferentes (8 May 2022)

bit of a difference between BHP Group’s _*venture capital unit *_and the company going after large-scale lithium extraction (_BHP prefers its projects to be large, long-life and scalable_).

The article was from Bloomberg and appeared over the weekend


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## bk1 (8 May 2022)

Contains statement by Minerals Americas division chief. 









						BHP vows to stay out of lithium rush with shortages set to fade
					

The world’s biggest mining company has no plans to join the lithium rush.




					www.mining.com


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## bk1 (8 May 2022)

As @greggles said, big fish taking up positions...









						Vale scores multi-year nickel supply deal with Tesla
					

The Brazilian miner will provide Tesla with low-carbon class 1 nickel – part of Vale's strategy of increasing its exposure to the EV industry.




					www.mining.com


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## divs4ever (8 May 2022)

JohnDe said:


> When was this declared?
> 
> My info from 1/4/2022 -
> 
> ...



 well i missed  both mining.com articles 

 but then lithium is  not currently high my interest list , i suspect  a different technology  will grab the majority of the  mobile ( auto , and bike/scooter ) market  

 cheers


----------



## JohnDe (8 May 2022)

Dona Ferentes said:


> bit of a difference between BHP Group’s _*venture capital unit *_and the company going after large-scale lithium extraction (_BHP prefers its projects to be large, long-life and scalable_).
> 
> The article was from Bloomberg and appeared over the weekend




True, but the article you posted stated “the world’s biggest mining company has *no* plans to join the Lithium rush.” Whereas I’ve shown that BHP have interests in Lithium mining, even if not directly.


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## divs4ever (8 May 2022)

BHP SEEMS to be looking for new investment opportunities , but looking in areas where it doesn't look to have much expertise 

 the US shale adventure  hints to me , it is buying assets hoping to acquire the expertise as it goes 

 i wouldn't call any BHP move into an area where it hasn't a solid history  a wise investment ( after the last 5 years ) , more of a cash splash 

 one hand it is claiming  to slim , and right-size it's business  on the other  hand expanding into new areas ( like potash ) since it desires to go EV ( resources ) why not REE , nickel/cobalt , ( it is already trying to expand copper exposure ) or if all else fails  , just expand Olympic Dam  and bite the higher costs bullet


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## Dona Ferentes (25 May 2022)

BHP fell 9 per cent to $43.32 in early trading as shares traded ex-dividend. Analysts anticipate the miner to drop by more than $5 today based on Woodside Petroleum’s close yesterday of $28.99.

(Woodside’s ASX ticker code will change from WPL to WDS today to reflect the change of name to Woodside Energy Group.)


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## Dona Ferentes (25 May 2022)

So, how many challenges for the accountants, in the last 30 years (ignoring the Magma's and the tilt at RIO)

out ... BHP Gold
out ... OneSteel
out ... BlueScope Steel
in ....... Billiton
out .... Billiton
out .... BHP Petroleum


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## Garpal Gumnut (25 May 2022)

Dona Ferentes said:


> So, how many challenges for the accountants, in the last 30 years (ignoring the Magma's and the tilt at RIO)
> 
> out ... BHP Gold
> out ... OneSteel
> ...



It's interesting you mentioned RIO, as I was thinking of that tilt of BHP's just last week. 

Perhaps an upcoming challenge for the accountants.   

BHP Market Cap $245,667m

RIO Market Cap  $162,113m 

Although the gentry in London might object. 

gg


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## divs4ever (25 May 2022)

Dona Ferentes said:


> BHP fell 9 per cent to $43.32 in early trading as shares traded ex-dividend. Analysts anticipate the miner to drop by more than $5 today based on Woodside Petroleum’s close yesterday of $28.99.
> 
> (Woodside’s ASX ticker code will change from WPL to WDS today to reflect the change of name to Woodside Energy Group.)



 i wouldn't call myself an analyst('s bootlace ) but i was thinking a $5 to $6 drop today for BHP

 regarding RIO don't forget  Glencore hasn't given up on snatching RIO ,  despite a new CEO ( at Glencore  ) especcially as RIO has divested most of the bits the previous Glencore CEO found problematic


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## Dona Ferentes (25 May 2022)

divs4ever said:


> regarding RIO don't forget Glencore hasn't given up on snatching RIO ,  despite a new CEO ( at Glencore  )



RIO .... Aluminium, Copper, Minerals and Iron Ore .... Operating in 35 countries around the world (incl Mongolia, Guinea)

whilst BHP makes a virtue out of operating in_ rule of law _countries, expensive as that may be.

..................................
and for the pretender; why only yesterday, the headline 
_Glencore pleads guilty to decade of bribery and manipulation_​


> Glencore admitted to bribery and market manipulation and said it will pay about $US1.5 billion ($2.1 billion) to settle US, UK and Brazilian probes that have hung over the commodities giant for years.



"_Bribery was built in to the corporate culture_,” Manhattan US Attorney Damian Williams said at a news conference. “_The tone from the top was clear: whatever it takes_.”  Brasil, Venezuela, DR Congo, Nigeria.


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## Dona Ferentes (25 May 2022)

divs4ever said:


> .... but i was thinking a $5 to $6 drop today for BHP



ah, but it did. Don't forget the *franking credits *


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## divs4ever (25 May 2022)

still looks reputable compared to some pharmaceutical  companies 

 but apparently  the new CEO is known internally as 'mini Ivan' ( that should by more than enough warning for RIO )

 and such tactics used to be common in the oil and gas industry ( including fomenting civil wars and regime change in the O&G  industry )


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## eskys (25 May 2022)

*Most Popular Stocks* 

                Sells               Buys   CBA   BHP  
 
Bought some this morning


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## Rabbithop (25 May 2022)

If you buy BHP today, you are not going to get the specie div. Last day was yesterday.


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## Garpal Gumnut (25 May 2022)

divs4ever said:


> i wouldn't call myself an analyst('s bootlace ) but i was thinking a $5 to $6 drop today for BHP
> 
> regarding RIO don't forget  Glencore hasn't given up on snatching RIO ,  despite a new CEO ( at Glencore  ) especcially as RIO has divested most of the bits the previous Glencore CEO found problematic



Reading analysts' analysis over 40 years, mate, anyone can be an analyst.

Getting it correct is the nub of the matter. 

And very few get it correct all the time, most are just there because they can juggle the mugs. 

Or are fortunate enough to be called Hamish by their doting well-heeled parents.

gg


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## eskys (25 May 2022)

Rabbithop said:


> If you buy BHP today, you are not going to get the specie div. Last day was yesterday.



Hi Rabbithop, thank you for your post.

Yes, you are correct but I didn't buy it for the divs. It is a good stock in my opinion. Let's see where BHP will take us in the future, good luck


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## divs4ever (25 May 2022)

Garpal Gumnut said:


> Reading analysts' analysis over 40 years, mate, anyone can be an analyst.
> 
> Getting it correct is the nub of the matter.
> 
> ...



 well Hamish was never on the table  when i was being named  ,  so i am up against it there , ( and my parents were battlers to boot )

 being wrong isn't so bad  , as long as you take a hard long look  at what went wrong  ( and try not do the same thing , again )


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## Rabbithop (25 May 2022)

eskys said:


> Hi Rabbithop, thank you for your post.
> 
> Yes, you are correct but I didn't buy it for the divs. It is a good stock in my opinion. Let's see where BHP will take us in the future, good luck



You are right but I have doubts about this merger. Wld it be ok for BHP?
I am still waiting to pickup at 40 or in the 30s if it's possible.


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## eskys (25 May 2022)

Rabbithop said:


> You are right but I have doubts about this merger. Wld it be ok for BHP?
> I am still waiting to pickup at 40 or in the 30s if it's possible.



I have no idea where it's going, Rabbithop. Maybe it's time for me to head back to Dave's thread about fatal mistake traders make.


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## Telamelo (25 May 2022)

Rabbithop said:


> You are right but I have doubts about this merger. Wld it be ok for BHP?
> I am still waiting to pickup at 40 or in the 30s if it's possible.



I'm also looking to add more BHP - question now is at what price is it fair value/cheap ? How low do we think BHP can perhaps drop too ? I welcome any thoughts/discussions.. thanks


----------



## Garpal Gumnut (25 May 2022)

Telamelo said:


> I'm also looking to add more BHP - question now is at what price is it fair value/cheap ? How low do we think BHP can perhaps drop too ? I welcome any thoughts/discussions.. thanks



问习鹏

gg


----------



## divs4ever (25 May 2022)

around $20 for me ( the last lot i bought was $14.80  and that still had S32 and the petroleum arm in it )

 so am NOT rushing for more

  say the WDS spin-off   is worth  $4.50  per BHP share  and S32  is a little over $4.50 ( that was 1 for 1 )

 i reckon $29 for a 2016   BHP was a 'fair price ' ( not a brilliant $14.80 ) so yeah around  $20  for what remains


----------



## Telamelo (25 May 2022)

divs4ever said:


> around $20 for me ( the last lot i bought was $14.80  and that still had S32 and the petroleum arm in it )
> 
> so am NOT rushing for more
> 
> ...



I see your reasoning thanks though feel that $20 is really cheap - you did well getting some below $15 as a terrific buy at that price. Well done!

I was thinking of adding more in the low to mid $30's if I get lucky it falls that low...


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## divs4ever (25 May 2022)

i still haven't seen if the Vale JV is back in full operation , the potash projects don't seem to be producing , copper in South America  is under some extra political  risk  , the oil and gas has been given away  , and there will be pressure to give up coal , BHP chose not to expand Olympic Dam , it SEEMS that cost reductions  is the main short-term path forward  for BHP

 it will be interesting to see if BHP starts shedding directors


----------



## mullokintyre (25 May 2022)

divs4ever said:


> well Hamish was never on the table  when i was being named  ,  so i am up against it there , ( and my parents were battlers to boot )
> 
> being wrong isn't so bad  , as long as you take a hard long look  at what went wrong  ( and try not do the same thing , again )



Chanelling ALBO?


----------



## divs4ever (25 May 2022)

no i never studied at University  and my dad hung around till i was 14  and i lost faith in the unions by 17 

 i would have dumped the ALP decades ago if i was Albo ( they only like you if they think you can get THEM elected )


----------



## Rabbithop (25 May 2022)

divs4ever said:


> around $20 for me ( the last lot i bought was $14.80  and that still had S32 and the petroleum arm in it )
> 
> so am NOT rushing for more
> 
> ...



Oh Whoa! What a drop in price.


----------



## qldfrog (25 May 2022)

Rabbithop said:


> Oh Whoa! What a drop in price.



Look at the eay they sold most non iron coal via s32,even coal is mostly joint venture. A dinosaur too heavy on its dying end .
went shale gas at the top sold back at the bottom..
hardly made any SP progress during a generational commodity boom.
Offloading to Woodside probably in worst timing again.
Too big to win.
In my view a failure more interested in following the latest woke trend and release flashy PR and TV ads than doing proper business.
$20 a share would be right i think .and that's taking inflation on board


----------



## Telamelo (25 May 2022)

BHP may reap gain of $9.5 bln from petroleum merger with Woodside - brokerage
					

Global miner BHP Group could reap a gain of $9.5 billion this year from the sale of its petroleum arm to Woodside Energy Group , Australian brokerage Barrenjoey said.




					www.reuters.com


----------



## DrBourse (26 May 2022)

Rabbithop said:


> Oh Whoa! What a drop in price.



Hi divs4ever & Rabbit,
My input is prob not needed - BUT my style of TA suggests that the "Sheep within this Share Trading Industry" will push BHP down to it's  next support level @ abt $36.00 - However I would need to redo my TA if & when BHP gets to that $36.00 Level.
A Lower SP is then possible IMO







Cheers .


----------



## qldfrog (26 May 2022)

I think the parallel matching BHP is these old British estate owners selling their silverware, then a block of land here and there, until even their worn carpets can not hide the rotting floorboards of the collapsing castle.
Too harsh?


----------



## Rabbithop (26 May 2022)

qldfrog said:


> I think the parallel matching BHP is these old British estate owners selling their silverware, then a block of land here and there, until even their worn carpets can not hide the rotting floorboards of the collapsing castle.
> Too harsh?



Gotta laugh at those tricks. Have a Good Day


----------



## Rabbithop (26 May 2022)

DrBourse said:


> Hi divs4ever & Rabbit,
> My input is prob not needed - BUT my style of TA suggests that the "Sheep within this Share Trading Industry" will push BHP down to it's  next support level @ abt $36.00 - However I would need to redo my TA if & when BHP gets to that $36.00 Level.
> A Lower SP is then possible IMO
> 
> ...



Good morning Dr. Your contribution is most welcoming to me. My mind is going round n round like a Merry Go round or is it A Dizzy Confusing Round. If I sell off today, I will be on loosing streak..worse A Stark naked Runner...Holding it...Not going to make a Difference..
Buying More to dilute...may have a unsatisfying taste in my mouth n the whole body....so there you go...Either way...I am a Streaker in the field giving others a Good Laugh... what do you think my wise Doc and the other Wisemen looking at the Stars Direction leading to The Birth.


----------



## DrBourse (26 May 2022)

Rabbithop said:


> Good morning Dr. Your contribution is most welcoming to me. My mind is going round n round like a Merry Go round or is it A Dizzy Confusing Round. If I sell off today, I will be on loosing streak..worse A Stark naked Runner...Holding it...Not going to make a Difference..
> Buying More to dilute...may have a unsatisfying taste in my mouth n the whole body....so there you go...Either way...I am a Streaker in the field giving others a Good Laugh... what do you think my wise Doc and the other Wisemen looking at the Stars Direction leading to The Birth.



Not sure what you're drinking M8 - But Ya Gotta Stop it - you're giving everybody a headache.


----------



## Rabbithop (26 May 2022)

Telamelo said:


> I'm also looking to add more BHP - question now is at what price is it fair value/cheap ? How low do we think BHP can perhaps drop too ? I welcome any thoughts/discussions.. thanks



Hope you see Dr B's chart/ opinion.


----------



## Rabbithop (26 May 2022)

DrBourse said:


> Not sure what you're drinking M8 - But Ya Gotta Stop it - you're giving everybody a headache.



High on my 8am cough mixture, antibiotic n drown it with Remy Martin or was it Martell..🤯


----------



## Telamelo (26 May 2022)

Rabbithop said:


> Hope you see Dr B's chart/ opinion.



Yeah I did & duly noted - I'd be happy to see sp slide down to $36 hopefully even a bit lower...


----------



## divs4ever (26 May 2022)

Rabbithop said:


> Oh Whoa! What a drop in price.



 but if the global economy trips ....



 remember the climate change agenda is looking to cripple manufacturing  , so BHP would only have potash as an acceptable commodity ( and potash isn't a profit-maker , yet )

 and compared to 2015-2016  BHP is a much smaller company  ( but allegedly more cash-efficient ) ( and the BIGGER BHP was a $20 ( ish ) share  back then )

 and the Vale JV still isn't making money ( for BHP )


----------



## divs4ever (26 May 2022)

qldfrog said:


> I think the parallel matching BHP is these old British estate owners selling their silverware, then a block of land here and there, until even their worn carpets can not hide the rotting floorboards of the collapsing castle.
> Too harsh?



maybe  ( too harsh )

now the timing  of the cost-cutting is impeccable IF we are not in a 'super-cycle '

 but are we ??

 ( just because you can see the abyss , doesn't make it automatic you will fall into it )

 so we can see the abyss , we can see the 'super-cycle ' partly created by collapsing economies , which is the path to the future


----------



## rederob (26 May 2022)

Rabbithop said:


> If I sell off today, I will be on loosing streak..worse A Stark naked Runner...Holding it...Not going to make a Difference..



I am not sure what you are working off but based on Woodside’s share price of US$25.55 at 6 April 2022, the implied value of BHP Petroleum was US$23.4 billion. At that valuation, subject to change, the in specie dividend would have been US$4.62 with US$1.98 of franking credits being distributed per BHP share (US$10.0 billion of franking credits in total).
As Woodside's price subsequently declined, and I believe Woodside's valuation will be based on its closing price of 24 May, then I expect about 7% less than the above would be realised, or around AU$8.85.
I don't claim my maths are good, but I added more BHP beforehand to take advantage of the in specie dividend and, more importantly, BHP's
next one as it's still well ahead of inflation, interest, and most other company's offerings.
While that thinking was financially mercenary, I also realised that very few company's will be able to buy out the best miners with strong exposure to "green" minerals.  I also see BHP as taking ESG seriously, and therefore believe it will continue to be in greater favour with investment houses than some of its lesser industry peers.


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## Dona Ferentes (26 May 2022)

rederob said:


> I am not sure what you are working off but based on Woodside’s share price of US$25.55 at 6 April 2022, the implied value of BHP Petroleum was US$23.4 billion. At that valuation, subject to change, the in specie dividend would have been US$4.62 with US$1.98 of franking credits being distributed per BHP share (US$10.0 billion of franking credits in total).
> As Woodside's price subsequently declined, and I believe Woodside's valuation will be based on its closing price of 24 May, then I expect about 7% less than the above would be realised, or around AU$8.85.
> I don't claim my maths are good, but I added ,ore BHP beforehand to take advantage of the in specie dividend and, more importantly, BHP's
> next one as it's still well ahead of inflation, interest, and most other company's offerings.
> While that thinking was financially mercenary, I also realised that very few company's will be able to buy out the best miners with strong exposure to "green" minerals.  I also see BHP as taking ESG seriously, and therefore believe it will continue to be in greater favour with investment houses than some of its lesser industry peers.



Good back of the envelope stuff, @rederob. Return to basics. Some of the other chat has been wide of the mark.


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## divs4ever (26 May 2022)

rederob said:


> I am not sure what you are working off but based on Woodside’s share price of US$25.55 at 6 April 2022, the implied value of BHP Petroleum was US$23.4 billion. At that valuation, subject to change, the in specie dividend would have been US$4.62 with US$1.98 of franking credits being distributed per BHP share (US$10.0 billion of franking credits in total).
> As Woodside's price subsequently declined, and I believe Woodside's valuation will be based on its closing price of 24 May, then I expect about 7% less than the above would be realised, or around AU$8.85.
> I don't claim my maths are good, but I added more BHP beforehand to take advantage of the in specie dividend and, more importantly, BHP's
> next one as it's still well ahead of inflation, interest, and most other company's offerings.
> While that thinking was financially mercenary, I also realised that very few company's will be able to buy out the best miners with strong exposure to "green" minerals.  I also see BHP as taking ESG seriously, and therefore believe it will continue to be in greater favour with investment houses than some of its lesser industry peers.



 well i saw an estimate the completed merger  would  double the asset value of Woodside ( WDS ) now your BHP entitlement ( if you were holding at the time )   is  divided ,   every 5.5( something ) BHP  earns you one WDS share 

 so what is a WDS share worth  ( as compared to the current share price )

 i was ALMOST tempted to add more  BHP before the demerger  , but i am not WDS's biggest fan  ( by a long way ) now maybe WDS  picks up some quality BHP former staff  , and WDS  will get an energy boost to go with the asset boost  , and maybe not 

 however  my 'acceptable price' ( for the uncertainty  taken ) didn't appear   , and will now watch and wait , to see what happens with WDS ( will their share price slide 'enough ' )

 BTW ( IMO ) BHP's recent acquisitions  hasn't been a long glowing list of achievements  , and good luck trying to pick the winners  in ' the Green experiment ' ( apart from copper and maybe nickel )


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## Garpal Gumnut (26 May 2022)

Questions assuming no huge changes in XAO

1. What is BHP worth post event on paper. 

2. What is WDS worth …

3. How much does my SMSF get back in $AUD. 

gg


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## Dona Ferentes (26 May 2022)

(X + Y) + Z = X + (Y+ Z)

3. some Franking credits


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## Dona Ferentes (28 May 2022)

Even though it is now historical, the annual global dividend survey from fund managers Janus Henderson shows that 2021 was the best year ever for the world’s 1,200 biggest companies (by market value) and other listed groups and shareholders, large and small. The top 1,200 companies paid out $US1.306 trillion in 2021.

And sitting on top of the list of dividend payers was *BHP *which paid out _more to its shareholders in 2021 than any other group around the world._

BHP was joined in that top 10 payers in 2021 by Rio Tinto and Fortescue made it into the top 10 list – Rio at No 3 and Fortescue at No 10 – further emphasising the influence of iron ore sales to China in that year.

BHP made payments of $US12.5 billion; others in the Top 10 were Apple, Microsoft, Exxon Mobil, Samsung and China Construction Bank. The top 10 companies paid out $US149.9 billion in 2021.


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## Telamelo (2 June 2022)

BHP held up surprisingly well today closing only 0.04c lower @ $45.61


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## JohnDe (2 June 2022)

Telamelo said:


> BHP held up surprisingly well today closing only 0.04c lower @ $45.61




That’s because iron ore prices were up after the Chinese government has ordered banks to lend more money For infrastructure  -


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## sptrawler (2 June 2022)

Telamelo said:


> BHP may reap gain of $9.5 bln from petroleum merger with Woodside - brokerage
> 
> 
> Global miner BHP Group could reap a gain of $9.5 billion this year from the sale of its petroleum arm to Woodside Energy Group , Australian brokerage Barrenjoey said.
> ...




It does sound like everyone's a winner, interesting.


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## divs4ever (3 June 2022)

sptrawler said:


> It does sound like everyone's a winner, interesting.



time will tell , although  not a dud deal  i am using the BHP-S32 spin-off as a guide  here , i am thinking  this is too big a move for WDS to handle in it's stride 

 ( i will be comparing it to the rapid growth in BPT a few years back when  it merged with Drillsearch and then bought assets from ORG )


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## rederob (4 June 2022)

My maths was out by a dollar or so on the in specie value of the merger (as the April US dollar values were US$4.62 and US$1.98 respectively), as this explains exactly what has since transpired:
*The closing price of Woodside shares on ASX on 31 May 2022 was A$29.761:*​*The implied value of the in specie dividend was therefore A$27.2 billion (US$19.6 billion). At this valuation, the in specie dividend is approximately A$5.38 (US$3.86), with A$2.30 (US$1.66) of franking credits being distributed, per BHP share. *​
My BHP shareholding has given me 451 WDS shares as a result, adding $14365 in value to my account based on DWS Friday closing price.  
I think that was the easiest money I ever made to date!

​


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## JohnDe (4 June 2022)

divs4ever said:


> time will tell , although  not a dud deal  i am using the BHP-S32 spin-off as a guide  here , i am thinking  this is too big a move for WDS to handle in it's stride
> 
> ( i will be comparing it to the rapid growth in BPT a few years back when  it merged with Drillsearch and then bought assets from ORG )




Last night, before dinner and after a Stout, I checked my share portfolio and scratch my head when I saw that I had WDS. Shares. 

I had forgotten about what was happening, through me off for about half an hour 🤓


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## JohnDe (4 June 2022)

sptrawler said:


> It does sound like everyone's a winner, interesting.




I think so, but don't forget about the Tax obligations.


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## Ferret (4 June 2022)

So because it is an "in specie dividend", my 2021/22 tax return will need to include this $5.38 dividend from BHP for each share and the $2.30 franking credit?

The cost base of the WDS shares I received will be $29.761?

I'm sure all will be revealed in a tax statement issued to BHP holders, but curious to know as I get things in order for the end of the financial year.


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## JohnDe (4 June 2022)

Ferret said:


> So because it is an "in specie dividend", my 2021/22 tax return will need to include this $5.38 dividend from BHP for each share and the $2.30 franking credit?
> 
> The cost base of the WDS shares I received will be $29.761?
> 
> I'm sure all will be revealed in a tax statement issued to BHP holders, but curious to know as I get things in order for the end of the financial year.











						How to handle the BHP and Woodside merger | Sharesight Help
					

Follow our step by step instructions on how to enter the BHP (BHP:ASX) and Woodside (WDS:ASX) merger into your Sharesight portfolio




					help.sharesight.com


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## Ferret (4 June 2022)

Much obliged JohnDe!


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## Value Collector (4 June 2022)

divs4ever said:


> time will tell , although  not a dud deal  i am using the BHP-S32 spin-off as a guide  here , i am thinking  this is too big a move for WDS to handle in it's stride
> 
> ( i will be comparing it to the rapid growth in BPT a few years back when  it merged with Drillsearch and then bought assets from ORG )



I think this is different to south32,

South 32 was a rag bag group of different businesses involved in different commodities, limited in size with limited growth options.

The Oil and Gas assets BHP has moved into WDS are huge with growth potential, and the WPL assets are also huge, and high profit margin.

I think the combined business is a great group of assets, the only down side is the eventual decline in fossil fuel use, but as I have pointed out in other threads I believe Natural Gas is going to play a big part in the transition away from coal, so I am Bullish on WDS’s medium term future (10 years), and provided they eventually can move into renewable energy or some other big infrastructure business then I am confident long term too.


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## divs4ever (4 June 2022)

Value Collector said:


> I think this is different to south32,
> 
> South 32 was a rag bag group of different businesses involved in different commodities, limited in size with limited growth options.
> 
> ...



 yes  S32 is  a grab-bag  second-rate assets  , but that is part of the beauty  , it is also unrestrained  from the compulsion to buy tier 1 assets  ( at least something dressed up as tier 1 ) , it can grab the under-explored lease next door to an operating mine , the mining services company  struggling but currently already contracting to a subsidiary  . , S32 has room to grow  without needing to do so at a billion dollars at a time 

 PS by dollar value  my BHP holding is about 5 times larger than  the S32 holding  , but even investors need a little growth ( to help resist inflation )


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## Value Collector (4 June 2022)

divs4ever said:


> yes  S32 is  a grab-bag  second-rate assets  , but that is part of the beauty  , it is also unrestrained  from the compulsion to buy tier 1 assets  ( at least something dressed up as tier 1 ) , it can grab the under-explored lease next door to an operating mine , the mining services company  struggling but currently already contracting to a subsidiary  . , S32 has room to grow  without needing to do so at a billion dollars at a time
> 
> PS by dollar value  my BHP holding is about 5 times larger than  the S32 holding  , but even investors need a little growth ( to help resist inflation )



That may be all true, I am definitely not an expert on S32, I owned some for a while that were spun off from my BHP share holding, but wasn’t impressed with them at the time so sold about 6 months later.


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## divs4ever (4 June 2022)

i held mine ( S32 ) and even tipped a little extra cash into  them in August 2019 @ $2.63

 am still not decided if to be disappointed in them  , i was expecting a commodity down-turn , leaving S32 the opportunity to grab more distressed 'bolt-ons ' 

 arguably the more questionable decision was to sell down MQG to buy extra BHP before that demerger  between $21 and $14.80 ( for BHP )


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## Dona Ferentes (9 June 2022)

Garpal Gumnut said:


> Questions assuming no huge changes in XAO
> 
> 1. What is BHP worth post event on paper.
> 2. What is WDS worth …
> 3. How much does my SMSF get back in $AUD.



BHP will issue you with a dividend statement separately on *17 June *2022, confirming the details of the value of the _in specie _dividend. (incl. franking, for your FY22 tax return)


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## Telamelo (11 June 2022)

BHP share price tends to align/correlate with iron ore price in general imo  

Out of curiosity.. anyone know roughly how much Gold & Silver BHP is mining at the moment ? and say selling to Perth Mint as an example ?

I see elevated Gold, Silver & Copper prices ahead imo so would be interesting to know BHP's exposure to this going forward - thanks.


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## Telamelo (11 June 2022)

Telamelo said:


> BHP share price tends to align/correlate with iron ore price in general imo
> 
> Out of curiosity.. anyone know roughly how much Gold & Silver BHP is mining at the moment ? and say selling to Perth Mint as an example ?
> 
> I see elevated Gold, Silver & Copper prices ahead imo so would be interesting to know BHP's exposure to this going forward - thanks.




Gold and silver is a byproduct of copper production.

From recent quarterly report, gold is running at about 320,000oz per year, silver at 12 million oz and 1.4m tonnes of copper.

Also, recent 17th May AFR link below highlights huge Potash potential underway

https://www.copyright link/companies/mining/ukraine-war-spurs-bhp-to-crunch-the-gears-on-jansen-potash-project-20220517-p5am84


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## divs4ever (12 June 2022)

Telamelo said:


> Gold and silver is a byproduct of copper production.
> 
> From recent quarterly report, gold is running at about 320,000oz per year, silver at 12 million oz and 1.4m tonnes of copper.
> 
> ...



 if the potash from BHP  had any more potential  they wouldn't have time to talk about anything else  , quite a shame since  it is mining iron , copper   and coal  in profit ( unlike phosphate )

 and wondering if their potash dreams will end up like the shale oil adventure 

 for silver production  S32  produces a bit 

 the question NOT currently being asked  is , are they major producers over-using fertilizers to  force maximum output


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## qldfrog (12 June 2022)

divs4ever said:


> if the potash from BHP  had any more potential  they wouldn't have time to talk about anything else  , quite a shame since  it is mining iron , copper   and coal  in profit ( unlike phosphate )
> 
> and wondering if their potash dreams will end up like the shale oil adventure
> 
> ...



Potash and BHP: was already the booming story when i worked for them in 2008, that and Olympic dam..fast forward 15y..and same or backward.
What a pathetic management.
I just hope their "style" will not contaminate Woodside


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## divs4ever (12 June 2022)

qldfrog said:


> Potash and BHP: was already the booming story when i worked for them in 2008, that and Olympic dam..fast forward 15y..and same or backward.
> What a pathetic management.
> I just hope their "style" will not contaminate Woodside



was not aware they have been at potash that far back  , that doesn't improve my optimism at all , and was bemused when the Olympic Dam expansion was put on hold  and pushed forwards on South American copper


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## qldfrog (12 June 2022)

divs4ever said:


> was not aware they have been at potash that far back  , that doesn't improve my optimism at all , and was bemused when the Olympic Dam expansion was put on hold  and pushed forwards on South American copper



Canadian mine, colleague of mine went there.. then had to change job as nothing was moving then..long time ago so could be 2009 do not quote me on dates but definitively more than 10y pending/stalling as i remember


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## Telamelo (12 June 2022)

Hopefully BHP get their act together "quick smart" on potash projects (finger's crossed).

Like @divs4ever mentioned earlier at least BHP profitable with iron ore, coal & copper at the moment (thank god) lol.


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## Telamelo (18 June 2022)




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## divs4ever (18 June 2022)

maybe i am secretly  Warren Buffet's love child , but gee  i don't see value in BHP at current prices  , and more alarmingly  they got rid of that poison pill  making them likely  for a leveraged buy-out attempt  ( which is more likely to distract rather than succeed  )


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## Skate (19 June 2022)

divs4ever said:


> maybe i am secretly  Warren Buffet's love child , but gee * i don't see value in BHP at current prices*  , and more alarmingly  they got rid of that poison pill  making them likely  for a leveraged buy-out attempt  ( which is more likely to distract rather than succeed  )




@Telamelo, I appreciate you are very bullish on (BHP) & @divs4ever not so much. I purely wish to make a comment about one of our design flaws "confirmation bias". This bias rejects all information right in front of a trader's eyes because it is contrary to what they want to believe.

*For discretionary trading*
Confirmation bias (trading discretionary) is one of our worst enemies because we want to see "what we want to see" & convince ourselves that the decision we are going to make is the correct one. But you can take it from me, there is always self-doubt trading this way.

*Who do you believe?*
Simply Wall Street or Trading Central as they have a different value for (BHP). Why? because they use two different investment analytics, technical analysis, fundamental analysis, price momentum & sentiment values. Both companies use their own propriety artificial intelligence-driven analysis with sentimental analysis on thousands of credible news and social media sources every day to identify buzzing stocks and how they are perceived by the public.






*Disclaimer*
I hold (BHP)

Skate.


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## Telamelo (19 June 2022)

Skate said:


> @Telamelo, I appreciate you are very bullish on (BHP) & @divs4ever not so much. I purely wish to make a comment about one of our design flaws "confirmation bias". This bias rejects all information right in front of a trader's eyes because it is contrary to what they want to believe.
> 
> *For discretionary trading*
> Confirmation bias (trading discretionary) is one of our worst enemies because we want to see "what we want to see" & convince ourselves that the decision we are going to make is the correct one. But you can take it from me, there is always self-doubt trading this way.
> ...



Thanks @Skate for highlighting that useful information as I hold BHP longer term for it's dividend yield (regardless of whether am bullish or not). I just happen to have checked Simply Wall St & thought of sharing. There's also FT Market's that I've used in the past to get an idea of "fair valuation" and price target's of a particular stock. 

It's interesting seeing/noting the significant variation though from one analyst/broker compared to another. 

Cheers tela


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## divs4ever (19 June 2022)

Skate said:


> @Telamelo, I appreciate you are very bullish on (BHP) & @divs4ever not so much. I purely wish to make a comment about one of our design flaws "confirmation bias". This bias rejects all information right in front of a trader's eyes because it is contrary to what they want to believe.
> 
> *For discretionary trading*
> Confirmation bias (trading discretionary) is one of our worst enemies because we want to see "what we want to see" & convince ourselves that the decision we are going to make is the correct one. But you can take it from me, there is always self-doubt trading this way.
> ...



 i too hold  BHP  ( as a sad and lonely core-holding )   again  for the divs  , but not DRPed  and they introduced the DRP scheme too late  to fit my  plans , 2011 to 2015 i would have been all over a BHP DRP .

 now regarding BHP as a business  it is rapidly shrinking itself  , and while revenues  and earnings have grown   have they matched  REAL inflation over the last 3 years  ,   i haven't seen a mention of a restart of the Brazil JV    that allegedly was producing 3% of the world's iron pellets ( but  that has been a beautiful windfall for my GRR holding )    , it might be me but  BHP seems to be trapped in a consolidation  cycle , while the world is acting like a commodity super-cycle is in progress .

 the demerger of S32 was probably a good thing  , but BHP just keeps divesting assets  , and is slow bringing new projects on line ( not just the potash ) have they locked themselves into only developing ' super-size ' projects  and not  advancing  the  smaller , quicker projects , ( which would still be LARGE  for many miners )

 i will be watching BHP but i  won't be rushing to add   i grabbed a comfortable amount   before the S32  demerger 

 i bought my last BHP parcel in January 2016  (  still carrying the S32 and WDS assets ) @ $14.80   , so after the demergers  way under $10 worth  , now apart from cutting costs and liabilities   who would like to explain where the other  $30  of 'extra value ' is coming from , given earnings and revenue are expected to decline in the coming couple of years  , and yes i realize currently several commodities are trading at nose-bleed highs  , but they cannot last  in the current economic climate


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## divs4ever (19 June 2022)

Morningstar™ Consensus​Morningstar Consensus

CURRENT20222023EPS ($)4.006.205.32DPS ($)3.575.023.83Franking100.00----

Goldman Sachs​Goldman Sachs

06/2106/22E06/23E06/24EEPS ($)3.384.693.782.93DPS ($)3.013.502.762.04

 now my average  share price  ( because  i was averaging them  down for 5 years  )  is $28.96  , allowing for the S32 and WDS demergers  you could say BHP owes me something like $20 (  not counting normal div. payments )

  all i can say is good luck buying BHP above $40   in the current inflationary trend   and hoping to resist inflation  with the divs   ,

 i reckon  you should be looking for  a 10% yearly return ( plus franking  ) currently for any chance to keep level with official inflation  as it grows 

 ( and unless FMG stumbles badly  that would be a better place to start looking  )

( i started accumulating FMG in August 2021 )

 cheers


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## qldfrog (19 June 2022)

divs4ever said:


> Morningstar™ Consensus​Morningstar Consensus
> 
> CURRENT20222023EPS ($)4.006.205.32DPS ($)3.575.023.83Franking100.00----
> 
> ...



I have my own bias and find it very hard to shake after spending nearly a decade working within/with them.
SP was above 40$-2008 then and they made strategic mistakes ever since not to mention the internal  management and the shrinking... 
Mining is very different from other business.
your assets already disappear as you mine them and your costs increase for restoration of sites.
And bad mining can also mean you get the best assets first to show great quarter figures..and doing so destroy and waste the actual ressource destroying overall return.something i saw done far too often
Blue sky becomes darker ahead unless you grow these assets via purchase and juniors acquisition.
BHP a dying dinosaur remains my view and no amount of purple hair discriminatory hiring lgbtxxxxv and green washing can change that.
I tried again a parcel this year to shake that bias but was quickly thrown out by SL.and that was good
Their offloading the petrol side is IMHO the best indicator to go buy  Woodside.might try to time that last one.
Nearly wanted to go FMG but they then started their own green washing BS.


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## divs4ever (19 June 2022)

well can Twiggy do more than wash  , if done properly  hydrogen  and other moves can work ( at least in some areas )  so far the trend ( and cult of narrative ) say no , but MAYBE FMG will embarrass all and get it to work ( AND make a profit from it )

 from what i have seen in recent years  BHP will be pushed into the same agenda , and don't seem to have the talent to get it done ( properly ) .

 time will tell and maybe the Russia thing will wake up the whole mining and energy sector  , that the ESG agenda is flawed from the ( hypocritical ) top down   and the only way carbon will be cut is no mining  , no fossil  fuels , no manufacturing  and everybody will walk the fields and parks to find their daily fungus to eat ( and god forbid they use shovels to dig truffles .

 this 'green-washing' thing will have to fail spectacularly  to force to narrative abandonment  once the masses realize the current pain  was mostly planned carefully ( except the Russian  resistance to collapse )  the masses will force change ( at many levels )


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## Skate (19 June 2022)

qldfrog said:


> BHP a dying dinosaur remains my view and no amount of purple hair discriminatory hiring lgbtxxxxv and green washing can change that.




@qldfrog I hear what you say but AFAIC we will need steel well into the future.



divs4ever said:


> if done properly hydrogen and other moves can work - the masses will force change ( at many levels )




The acquisition of (WDS) that's another matter as the value of those shares has been converted to (FMG) for the reason @divs4ever stated.

Skate.


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## divs4ever (19 June 2022)

Skate said:


> @qldfrog I hear what you say but AFAIC we will need steel well into the future.




but will it be Australian smelted  steel , or even made from Australian iron ore  , we have this crazy idea of outsourcing stuff we can do ourselves ,

 we have this obsession for shooting ourselves in the knees


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## qldfrog (19 June 2022)

Skate said:


> @qldfrog I hear what you say but AFAIC we will need steel well into the future.
> 
> 
> 
> ...



True but i do not expect BHP to handle that they will be bought or split untill only a Singapore trading board remains.
FMG..let them split the green h2 and buy iron side or just go for a pure iron second tier.
We are the country i think with the most new renewable: solar/wind per head.. we can not even provide power to the grid this week.
Mass H2 is doable but we would be 100% dependent on China solar panels, think Russia and the cost..my god.. 
So yes gov subsidies etc but once Australia is broke.. let's talk about H2 in 1y.the good think with FMG..or Rio is that this green side is so far only talk.
So i have no issue with fmg/rio investment now.
I went in earlier but got out on trailing SL for both.will do it again


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## qldfrog (19 June 2022)

Sooner or later,most probably conveniently when the narrative collapses, the CO2 as cause will be dismissed as it should and real culprit..human activities aka our 8+billions population lifestyle will be the focus.nothing that a nice nuclear war can not fix..
We will still need steel, energy of some sort and some mining .but i do not see BHP present then .whereas i still see Rio and FMG


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## bk1 (19 June 2022)

divs4ever said:


> we have this crazy idea of outsourcing stuff we can do ourselves




We cannot do it ourselves. We will never be able to do it ourselves.
We cannot match price with any of our neighbours to MAKE ANYTHING.
Look at the auto companies lining up to invest in a certain country to our immediate north. Look at the auto companies lining up to build giga factories ANYWHERE  but here.
We cannot manufacture at scale and speed which is what is required of these industries.
The hydrogen produced by FMG will be very expensive and targeted initially, at local industry clusters. Unless any of these miners can scale up significantly to bring down price this is going to be a slow road.
If China enters Hydrogen production with intent what do think would happen to any nascent Australian industry?
Want to be a player?  it will need a combination of increased scale, automation and moving production to countries with *cheaper workers*.

Run that one past Albo' and Dr Forrest.


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## divs4ever (19 June 2022)

qldfrog said:


> True but i do not expect BHP to handle that they will be bought or split untill only a Singapore trading board remains.
> FMG..let them split the green h2 and buy iron side or just go for a pure iron second tier.
> We are the country i think with the most new renewable: solar/wind per head.. we can not even provide power to the grid this week.
> Mass H2 is doable but we would be 100% dependent on China solar panels, think Russia and the cost..my god..
> ...



 actually the 'renewable ' title probably goes to NZ  where the government half-owns most of the players  , and they already have wind , hydro and geothermal assets  , ( i would assume some solar as well )

 now there was an election promise to have NZ  100% renewable power , but have seen no real progress in that direction  ( i hold CEN , GNE , MCY and MEZ )  which is a bit disappointing since the government is the majority holder in GNE , MCY and MEZ  ( you could understand CEN shuffling it's feet  , but the others ? )


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## divs4ever (19 June 2022)

bk1 said:


> We cannot do it ourselves. We will never be able to do it ourselves.
> We cannot match price with any of our neighbours to MAKE ANYTHING.



 we CAN ( and have done , it ourselves )

 price doesn't matter if the offset is full employment and reduced imports  , as Russia currently showing us  , IF the money is circulating INSIDE your local economy  inflation is controllable  , it is when the money needs to go into the wider world inflation and exchange rates count 

 so we would end up with a basic car , a basic mobile phone  , a basic fridge  etc etc .  we have plenty of local resources including mothballed uranium mines  , and copper mines , we have land to grow wheat , beef and sheep  , so we won't win the space-race is that so bad ??


----------



## Value Collector (19 June 2022)

divs4ever said:


> was not aware they have been at potash that far back  , that doesn't improve my optimism at all , and was bemused when the Olympic Dam expansion was put on hold  and pushed forwards on South American copper



Potash has taken so long partly because it’s a huge project, and also partly because the potash market was in over supply for a period of time, so they weren’t in a rush to bring it into production.

But, it is a huge deposit of potash, I believe over 100 years worth of mining there, so once it begins production it should be a great asset to have in the portfolio.


----------



## divs4ever (19 June 2022)

there is a very high chance i will not  be alive  in 100 years  time 

 and the way BHP is going  it might not even turn a profit on that project  in my lifetime 

 but maybe that is an over-looked flaw  in BHP  , the fixation  on buying 'world-class projects '  rather than a mix of   'highly prospective  projects '  and top level  assets


----------



## Telamelo (19 June 2022)

BHP a good buy for the long term​








						Why I think the BHP share price is a good buy for the long term
					

I believe that the BHP Group Ltd (ASX: BHP) share price could be a solid option for the long term because of its future-focused portfolio.




					www.fool.com.au


----------



## Sean K (19 June 2022)

divs4ever said:


> there is a very high chance i will not  be alive  in 100 years  time
> 
> and the way BHP is going  it might not even turn a profit on that project  in my lifetime
> 
> but maybe that is an over-looked flaw  in BHP  , the fixation  on buying 'world-class projects '  rather than a mix of   'highly prospective  projects '  and top level  assets




I reckon I have 30 years left, so still time to invest in BHP I think. 

BHP have been pretty clear in their strategic plan on assets to foster. Long term, through the cycles, and now 'future' metals: Iron, Copper, Nickel, Potash. 

Shaving off medium projects to S32 and shunting O&G to WPG was strategically smart I think. Particularly with the potential forward ESG commitments. The amount of carbon credits those companies are going to have to buy will be astronomical to gain credit. 

I suspect that the pendulum will shift back at some point and they will develop quite a significant exploration portfolio because they'll need to spent all the free cash flow they're generating.


----------



## divs4ever (19 June 2022)

Sean K said:


> I reckon I have 30 years left, so still time to invest in BHP I think.
> 
> BHP have been pretty clear in their strategic plan on assets to foster. Long term, through the cycles, and now 'future' metals: Iron, Copper, Nickel, Potash.
> 
> ...



 well the GP  who wrote up the case for a disability  pension   reckons i have a 50/50 chance  of another 4 years  , but then  things got complicatedly  ( before that pesky virus )

 lucky for me i don't have a life insurance policy  ( usually mandatory on mortgages ) the premiums would be a killer 

 now folks assume that these bankers have got this ESG thing right  ( i don't ) 

 i think a banker preaching  ethics and social responsibility to ME  , makes my skin crawl ( or is that spider senses )   and yes i was working for Rupert  when he heavied Johnny Howard into swallowing this narrative 

now improving productivity and efficiency  is fine by me , but increasing paperwork , regulation  , and tax schemes  doesn't count as productivity in my book 

 OH and those following the saga of the house and solar array ( on it ) well they replaced the solar panels ( ALL of them ) and now it seems there is a second issue ( possibly over-loaded the inverter , in mid-winter  OR we are up for another rewiring   that would be number  five in seven years  .. good thing only tradesmen   handle electrical  stuff , isn't it )   but at least  only a one week gap  should cut  the 'phone negotiations '  a little 

 moral of the story , if you go solar  buy a violin you are liable to get plenty of practice  ( or better still sign up for a law degree  , so you can access the uni. libraries cheap  , you will be needing the research  'cos the solicitor won't put in that time )


----------



## Value Collector (19 June 2022)

divs4ever said:


> there is a very high chance i will not  be alive  in 100 years  time
> 
> and the way BHP is going  it might not even turn a profit on that project  in my lifetime
> 
> but maybe that is an over-looked flaw  in BHP  , the fixation  on buying 'world-class projects '  rather than a mix of   'highly prospective  projects '  and top level  assets



I have no doubt their potash ash business will be profitable, it’s of a very large scale so it’s cost will be low / tonne, and it sits right above the “bread basket” of America.

I delved deep in learning about the fertiliser business a few years ago, and came to the decision that it was to early to be in potash ash, but I think we are getting pretty close to perfect timing now.

Here is a video from Mosaic, they own a potash mine that neighbours BHP’s one, it’s explains what potash is, it’s a very good video of you are interested.

Over all potash will only be a small business for BHP, but it’s a welcome addition to their portfolio.



You will have to click the link to watch it on the YouTube website, they don’t allow embedded play back for some reason


----------



## Value Collector (19 June 2022)

Sean K said:


> I reckon I have 30 years left, so still time to invest in BHP I think.
> 
> BHP have been pretty clear in their strategic plan on assets to foster. Long term, through the cycles, and now 'future' metals: Iron, Copper, Nickel, Potash.
> 
> ...




The benefit of owning a mine with a very long of life of say 100 years, is that you get to collect dividends from that mine for a life time, with out depleting the capital value of that mine.

Eg, a 100 year mine life means you can benefit from the dividends produced for 30 years, and after that still have a valuable asset with a 70 year life remaining, which you can then sell for a lump sum.

Where as a mine with a 10 year life will pay you dividends for 10 years, but then it’s capital value will be reduced to $0, and you can’t sell it, so a large portion of your annual dividend was actually a capital return from depleting your asset,  not all profit to you.

So there is a lot of benefit to owning a mine with a long life, and you can benefit from that long mine life even if that mine life exceeds your own expected life.


----------



## divs4ever (20 June 2022)

Value Collector said:


> Over all potash will only be a small business for BHP, but it’s a welcome addition to their portfolio.



 i was hoping  it would contribute enough to replace  the oil/gas/petroleum arm , or at least  reverse the shale oil misadventure  , because eventually they will also be pressured to exit coal  , since activist share-holders seem to be making policies .

 yes a few years back i looked at a couple of ASX listed potash stocks and came to the same conclusion  , i will be looking for WES to snap up a small miner to  bolt on to their chemical/explosives/fertilizer arm


----------



## divs4ever (20 June 2022)

Value Collector said:


> The benefit of owning a mine with a very long of life of say 100 years, is that you get to collect dividends from that mine for a life time, with out depleting the capital value of that mine.
> 
> Eg, a 100 year mine life means you can benefit from the dividends produced for 30 years, and after that still have a valuable asset with a 70 year life remaining, which you can then sell for a lump sum.
> 
> ...



  but , but , i am over 65  and the life-expectancy isn't as long as it might be  , i would rather a mine with a 10 year life-span making a profit now  , and let the government mourn the lack of capital gains  , when they settle up  the estate  

 the other type of miner i like  is the guys  that start digging ( profitably ) and then use some of the profits to drill more test holes on the unexplored parts of the lease  , hoping to extend the project life  as grades drop at the initial dig


----------



## Value Collector (20 June 2022)

divs4ever said:


> i was hoping  it would contribute enough to replace  the oil/gas/petroleum arm , or at least  reverse the shale oil misadventure  , because eventually they will also be pressured to exit coal  , since activist share-holders seem to be making policies .
> 
> yes a few years back i looked at a couple of ASX listed potash stocks and came to the same conclusion  , i will be looking for WES to snap up a small miner to  bolt on to their chemical/explosives/fertilizer arm



Potash won’t come close to the size of the oil and gas business, but you can always just keep those WDS shares in the bottom draw and collect the dividends on them, and treat them as they are still part of the same over all portfolio.


----------



## divs4ever (20 June 2022)

i already had some WPL   , i will be watching  to see if WDS  can lift their game  with the new staff injection  ( WPL   was already  on the list  of potential exits   before the deal  )


----------



## Skate (20 June 2022)

divs4ever said:


> i am over 65 and the life-expectancy isn't as long as it might be




@divs4ever being 69 myself I recently remarked to my doctor that "old age has nothing going for it". 

His reply was, "don't worry, it doesn't last long" 

Skate.


----------



## divs4ever (20 June 2022)

Skate said:


> @divs4ever being 69 myself I recently remarked to my doctor that "old age has nothing going for it".
> 
> His reply was, "don't worry, it doesn't last long"
> 
> Skate.



 no it is the heart issue  that  is the  problem and the complication  ( no shoulder reconstruction   , because they are worried about  the  heart )  ,   and the various doctors  seem to be happy despite the stats declining


----------



## Garpal Gumnut (20 June 2022)

Skate said:


> @divs4ever being 69 myself I recently remarked to my doctor that "old age has nothing going for it".
> 
> His reply was, "don't worry, it doesn't last long"
> 
> Skate.



Why are there so many old drunks and so few old doctors?

gg


----------



## divs4ever (20 June 2022)

Garpal Gumnut said:


> Why are there so many old drunks and so few old doctors?
> 
> gg



alcohol is a preservative


----------



## Skate (20 June 2022)

Garpal Gumnut said:


> Why are there so many old drunks and so few old doctors?
> 
> gg




@Garpal Gumnut, I know that's a rhetorical question but I believe drunks have taken the time & effort to "pickle" themselves. I'm talking about those who exhibit a large protruding belly having their fair share of healthy gut bacteria. This bacterium is one of many probiotics which are beneficial to their overall health.

Now you should know this from your experience at the "Ross Island Hotel". It's near impossible to get rid of a drunk & I believe old Nick doesn't want to have them at his party either. That's the reason why there are so many of them.

I should also mention that alcohol has a lot of vitamin "P" that makes them go to the toilet so frequently.

Skate.


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## Telamelo (20 June 2022)

Based on current BHP share price, it has a market capitalisation of $204.7 billion, with a trailing dividend yield of +11.86%.









						Own BHP shares? Here's why the miner could be set for a $1.85 billion boost
					

Shares in BHP Group Ltd (ASX: BHP) have tumbled 8% in the past week. But could the BHP share price receive a much-welcomed boost?




					www.fool.com.au


----------



## divs4ever (20 June 2022)

Telamelo said:


> Based on current BHP share price, it has a market capitalisation of $204.7 billion, with a trailing dividend yield of +11.86%.
> 
> 
> 
> ...



 yes but the minefield in front of us  is future ( div. ) earnings 

 now yes , my av. price  is sub $30 for BHP so all looks fine SO FAR , but i am expecting changes  .

 is this super-cycle  just getting started or is it peaking  ( with a deep recession on the horizon )


----------



## divs4ever (22 June 2022)

Brazil's Vale to spend $400 million in 2022 to remove tailings dams









						Brazil's Vale to spend $400 million in 2022 to remove tailings dams By Reuters
					

Brazil's Vale to spend $400 million in 2022 to remove tailings dams




					www.investing.com
				




DYOR

i hold BHP

 i didn't see BHP pulling the plug  on the JV here


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## Telamelo (28 June 2022)

Great rebound off recent $39-$40 support level's (yet again) as gained another +4.32% today!


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## Telamelo (12 July 2022)

The Motley Fool had an article today about BHP

According to consensus estimates, the market is expecting the BHP dividend to peak in FY 2022. 

But the good news is that this doesn’t necessarily mean that its future yields won’t be attractive. 

Consensus estimates are for dividends per share of:

US $3.46 in FY 2022
US $2.64 in FY 2023
US $2.02 in FY 2024
US $1.77 in FY 2025


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## divs4ever (12 July 2022)

my BHP owe me  around $28.96  ( ignoring the S32 spin-off )

 i guess at the worst i will have more opportunities to buy extra BHP cheaper in the future 

 i might not get a second bite at my cheapest  parcel  of $14.80  , but sub-$25  should be possible for the patient   , using the logic of rising prices ( inflation )  pressuring investors to seek better yields from their investments


----------



## Student of Gann (13 July 2022)

BHP​Updated: 20 minutes ago















The Diagram below breaks down the 2008 swing into its sections and compares it against the current swing . Notice the pitch of trend in 2008 is very similar to the current 2022 pitch of trend and the time counts also balance between both swings which is a strong indication we could be running up against this swing . From the 12th June 2008 we ran up 12 days into the 24th June which balances against the 13 day swing into the 8th June 2022 top and more importantly the 42 day swing down into the 5th Aug 2008 Low balances exactly against the projected 19th July 2022 swing low which I will outline in the notes below . The clues are in the detail but most people are to lazy to make a proper detailed examination of the price and time components across such a long period of time . Gann knew the masses were lazy which is why his work is veiled and coded and he knew the majority of people were not prepared to put in the work to reap the returns . You can have as many technical indicators as you like on a chart but if you cant read the basic market structure with just a bar chart and recognise what Cycle you are running against you have not properly mastered the basic foundation which is form and pattern reading so how can you expect to move onto the Square of Nine and the more complicated aspects of price Forecasting if you cant read basic market structure and conduct proper swing analysis . 



In the chart below I will present a price Curve which contains four important turning dates out till September . The first date to watch is the 19th July and if we continue to move down into this point we could be Low so that is the first important Cycle date I am looking at for the moment then if we make Low into this date we should be up till at least the 8th August for counter trend top around a 20 day projected up move . From there we could be down till the 25th Aug for Low which comes in as a strong Cycle date . and then the next date to watch is the 9th Sept which has two intermediate Cycles converging into this date but the present focus is on the 19th July setting up as Low and then up till the 8th August which is the first section of the swing I am concentrating on . If you look at the 2008 swing down into the 5th Aug it measures 22.10% so we are very close to figure at the moment with the current swing down sitting at 21.28% so keep an eye on price and see if we continue to move down into the 19th July for Low and balance against any of these figures .


----------



## Telamelo (19 July 2022)

Student of Gann said:


> BHP​Updated: 20 minutes ago
> 
> 
> 
> ...


----------



## sptrawler (23 July 2022)

Nickel West looks to be getting some long term contractual interest, locking in reliable suppliers will be a critical issue for auto makers.









						Ford secures supply of battery minerals from ASX-listed resources companies
					

Ford Motor Company announced this week it will push forward a number of deals to accelerate its electric vehicle (EV) manufacturing to keep up with global




					smallcaps.com.au
				



From the article:
The world’s largest mining company BHP (ASX: BHP) has also entered into a MoU with Ford. Ford will source nickel from BHP’s Nickel West operations in WA.

Nickel West is considered to produce some of the most sustainable and lowest carbon intensity nickel in the world.

The multi-year nickel supply agreement could start as early as 2025 and may involve additional commodities over time.


IDNH


----------



## divs4ever (23 July 2022)

sptrawler said:


> Nickel West looks to be getting some long term contractual interest, locking in reliable suppliers will be a critical issue for auto makers.
> 
> 
> 
> ...



 sounds like MCR ( i hold 'free-carried' ) has  a bit longer on the supply contracts


----------



## CityIndex (16 August 2022)

The ASX200 was already poised for a stronger open after gains on Wall Street overnight. Of course, all trading carries risk, but it will be interesting to see if the bumper BHP earnings help the index take out another key psychological level at 7100 today.


----------



## Dona Ferentes (16 August 2022)

The $US21.3 billion underlying profit from continuing operations, which does not include petroleum assets now sold to Woodside, and the $US3.25 per share of total dividends for the year were both better than analysts had expected.

Shareholders will receive *a $US1.75 a share final dividend *on 22 September.

Of course, all posting carries risk, of being seen as a shameless self-promoter


----------



## finicky (16 August 2022)

US$1.75
Thats about AU$2.50 ff currently but I don't know when the company sets the conversion.

Held


----------



## Rabbithop (16 August 2022)

CityIndex said:


> The ASX200 was already poised for a stronger open after gains on Wall Street overnight. Of course, all trading carries risk, but it will be interesting to see if the bumper BHP earnings help the index take out another key psychological level at 7100 today.



That would be nice for all Shareholders in this difficult time.


----------



## Sean K (16 August 2022)

I wonder how much of that profit Adam Bendt would like to skim off to provide free dental.


----------



## Skate (16 August 2022)

finicky said:


> US$1.75
> Thats about AU$2.50 ff currently but I don't know when the company sets the conversion.
> 
> Held










Skate.


----------



## divs4ever (16 August 2022)

Rabbithop said:


> That would be nice for all Shareholders in this difficult time.



 on the contrary   , i was hoping to cherry-pick disappointing stocks ( since many seem to be optimistic )

 and cheap share prices are a blessing for DRP participants as well


----------



## JohnDe (16 August 2022)

_"The company started the year with net debt of $US4.1bn but that was reduced to just $US333m and almost certainly the company’s recent cash flow means it now has no debt whatsoever."_



> *Behind the bumper dividend, a new BHP is emerging*
> 
> Behind the stunning 2021-22 BHP profit and dividend is the emergence of a new era in the life of “The Big Australian”.
> 
> ...


----------



## Telamelo (31 August 2022)

BHP sp hammered overnight
@ USD $55.40 closing down -4.25%


----------



## Sean K (31 August 2022)

Telamelo said:


> BHP sp hammered overnight
> @ USD $55.40 closing down -4.25%



$55.40 USD?


----------



## qldfrog (31 August 2022)

Sean K said:


> $55.40 USD?
> 
> View attachment 146152


----------



## qldfrog (31 August 2022)

I never played that but the overly optimistic Aussie view could open a trade between US and asx listed shares of BHP?


----------



## Sean K (31 August 2022)

qldfrog said:


> I never played that but the overly optimistic Aussie view could open a trade between US and asx listed shares of BHP?




Ah, I thought they were only duel listed on the AS and UK stock exchanges. My bad.


----------



## Telamelo (31 August 2022)

Anyone tempted to "top up" more today at a discount?  Not complaining prior to going ex-dividend tomorrow so thank you seller's


----------



## divs4ever (31 August 2022)

Telamelo said:


> Anyone tempted to "top up" more today at a discount?  Not complaining prior to going ex-dividend tomorrow so thank you seller's



 NOPE , am quite happy with the holding i have  ( so far ) if it dropped below $20 again , i might be strongly tempted  to reach for the calculator


----------



## Rabbithop (31 August 2022)

Telamelo said:


> Anyone tempted to "top up" more today at a discount?  Not complaining prior to going ex-dividend tomorrow so thank you seller's



Waiting for 35 to top up.🤭


----------



## Dona Ferentes (31 August 2022)

Telamelo said:


> Anyone tempted to "top up" more today at a discount?  Not complaining prior to going ex-dividend tomorrow



Happy to hold. Twice a year dividends... Yumm. I can take the cyclicality that resources throw up


----------



## Sharkman (31 August 2022)

Telamelo said:


> Anyone tempted to "top up" more today at a discount?  Not complaining prior to going ex-dividend tomorrow so thank you seller's




i did look at possibly selling sep/oct 35.67/36.12 puts today, happy to take delivery at that 36'ish level, seems to have found some good support there towards the end of last year + this july. IVs on offer (mid 30s for oct contracts, high 30s for sep) looked decent, but it was a bit too far OTM for my liking today. if it falls by more than the div tomorrow i might sell them then.


----------



## notting (31 August 2022)

BHP goes ex tomorrow.
Anyone with half a brain who has held onto this through the building insanity in China, will sell tomorrow after getting their franked dividend.
Should take and absolute spanking especially if US markets are week tonight.
US markets may be deceptively OK due to end of month overbalancing so next few days. BHP - bad!


----------



## Value Collector (1 September 2022)

Dona Ferentes said:


> Happy to hold. Twice a year dividends... Yumm. I can take the cyclicality that resources throw up



yep, a bumpy 10% return is better than a stable 5% IMO


----------



## Value Collector (1 September 2022)

notting said:


> BHP goes ex tomorrow.
> Anyone with half a brain who has held onto this through the building insanity in China, will sell tomorrow after getting their franked dividend.
> Should take and absolute spanking especially if US markets are week tonight.
> US markets may be deceptively OK due to end of month overbalancing so next few days. BHP - bad!




Maybe, But Iron ore prices are up over night.

If its down by less than its dividend plus franking I would take that as an up day.


----------



## Telamelo (1 September 2022)

Rabbithop said:


> Waiting for 35 to top up.🤭






Value Collector said:


> Maybe, But Iron ore prices are up over night.
> 
> If its down by less than its dividend plus franking I would take that as an up day.



To claim additional franking credit's - must hold BHP for at least 45 day's anyway.. so till at least 15th October '22

P.S. I'm happy to add more if BHP does happen to drop to $35 or lower as any company making $31B in profit & paying an 11%+ yield plus boosted by big franking credit's is a no brainer imo lol


----------



## qldfrog (1 September 2022)

Telamelo said:


> To claim additional franking credit's - must hold BHP for at least 45 day's anyway.. so till at least 15th October '22
> 
> P.S. I'm happy to add more if BHP does happen to drop to $35 or lower as any company making $31B in profit & paying an 11%+ yield plus boosted by big franking credit's is a no brainer imo lol



If you buy today, is it not ex div?
Not sure of date


----------



## Telamelo (1 September 2022)

qldfrog said:


> If you buy today, is it not ex div?
> Not sure of date



Yeah frog ex-dividend date is today 01st Sep & record date is tomorrow 02nd Sep (as divvy gets paid 22nd Sep)


----------



## Austwide (1 September 2022)

Telamelo said:


> Yeah frog ex-dividend date is today 01st Sep & record date is tomorrow 02nd Sep (as divvy gets paid 22nd Sep)




My understanding and a quick search, but check accuracy if it may apply to you.

When you are not entitled to claim a franking tax offset?


*If you have more than $5,000 in franking credits from a single parcel of shares.*


----------



## qldfrog (1 September 2022)

Telamelo said:


> Yeah frog ex-dividend date is today 01st Sep & record date is tomorrow 02nd Sep (as divvy gets paid 22nd Sep)



that is what I though so any buy today will miss the dividend on the 22 ..why bother..so the expected fall


----------



## divs4ever (1 September 2022)

qldfrog said:


> If you buy today, is it not ex div?
> Not sure of date



ex-div. according to Commsec


----------



## Value Collector (1 September 2022)

Telamelo said:


> To claim additional franking credit's - must hold BHP for at least 45 day's anyway.. so till at least 15th October '22
> 
> P.S. I'm happy to add more if BHP does happen to drop to $35 or lower as any company making $31B in profit & paying an 11%+ yield plus boosted by big franking credit's is a no brainer imo lol



yes you have to hold for 45 days, to get franking credits.

But if you were had already exceeded that 45 days, you would have been better off selling this morning rather than yesterday, or if your planning on buying and holding for 45 days you would have been better to buy yesterday.


----------



## Sean K (2 September 2022)

How bad would China's growth have to be hit for BHP to break down through these support levels?


----------



## Telamelo (2 September 2022)

Sean K said:


> How bad would China's growth have to be hit for BHP to break down through these support levels?
> 
> View attachment 146290



Thanks Sean for highlighting chart.

Compared to say the likes of FMG - BHP is diversified enough to withstand any "temporary bad news from China" imo


----------



## divs4ever (2 September 2022)

Sean K said:


> How bad would China's growth have to be hit for BHP to break down through these support levels?
> 
> View attachment 146290



 China or our ( trading ) relationship with China ??

 some of our defense alliance partners are getting more than a little crazy 

 and if we really mess things up  we might lose India as a potential replacement customer 

 BHP has broken $15 before and that was  still carrying what was to become S32 and the petroleum arm  , so you would have to be half-prepared to see $10 in the global economy went NASTY


----------



## notting (2 September 2022)

Telamelo said:


> Thanks Sean for highlighting chart.
> 
> Compared to say the likes of FMG - BHP is diversified enough to withstand any "temporary bad news from China" imo



You mean after they went woke and sold all their oil and gas assets when WTI was around $44 - They are utter morons.


----------



## divs4ever (2 September 2022)

Telamelo said:


> Thanks Sean for highlighting chart.
> 
> Compared to say the likes of FMG - BHP is diversified enough to withstand any "temporary bad news from China" imo



 but FMG has displayed single-minded focus in recent years  and a solid reputation , FMG might be able to pick up replacement clients  more easily . ( extra funding as well )


----------



## divs4ever (2 September 2022)

notting said:


> You mean after they went woke and sold all their oil and gas assets when WTI was around $44 - They are utter morons.



 harsh , but fair , for a business that needs long-term focus  BHP has been making a few U-turns in the last few years


----------



## notting (2 September 2022)

divs4ever said:


> harsh , but fair , for a business that needs long-term focus  BHP has been making a few U-turns in the last few years



The last few years?
This is a company that was trying to buy RIO and spent 450m in failing to do so in 2007 at $139.00 per share.  
In 2008 after their pathetic attempt failed due to government blocking it RIO was trading at $38 something. 
They really know there stuff!!


----------



## divs4ever (2 September 2022)

notting said:


> The last few years?
> This is a company that was trying to buy RIO and spent 450m in failing to do so in 2007 at $139.00 per share.
> In 2008 after their pathetic attempt failed due to government blocking it RIO was trading at $38 something.
> They really know there stuff!!



 2007  i was very pre-occupied  with other stuff 

 it wasn't until very late 2010  i took any notice of the stock market  , so 2011 and later  for me , everything before that was something i MIGHT have read about  ( i didn't even stop work to watch 9/11 on TV that night )


----------



## qldfrog (2 September 2022)

notting said:


> You mean after they went woke and sold all their oil and gas assets when WTI was around $44 - They are utter morons.



Read my posts at the time.
Moronic strategic move is the BHP trademark


----------



## notting (2 September 2022)

If BHP had any kind of competence in it's corporate culture it should be trading at $200 having paid  6 to 7% ff dividend for the last 25 years and still be paying it.
The missed opportunity is so huge it boggles the mind
FMG, believe it or not, put both RIO and BHP to shame with it's lower grade IO over that time in terms of price appreciation and relative div payouts. So has the mino GRR and MIN.
Australia has been the lucky country ever since it was no longer a convict colony. That's all that has carried both BHP and RIO for this time, luck.
Unbelievable when BHP made that offer, RIO under the behest of the dumbest person to ever knot a tie, *swallowed a 'poisoned pill*' by paying US$38bn for the Canadian aluminum producer Alcan! Even though anyone with a brain larger than a pea could see the BHP take over was NEVER going to be approved by the legislators.  Dick Evans, former CEO of Alcan, said in the WSJ that the decision to buy was "the worst decision ever and was the largest metals and mining transaction in the history of the world at the time and at the high point in the commodity cycle.” at a 65% premium.
But wait, there's more -
RIO then had to do a massively dilutional capital raising at the peak of the financial crises to get it's consequential debt under control at I think it was  29 per share and handed 1/3 of it to it's biggest customer - Chinese Communist Party!
Then RIO wrote down the value of Alcan to, I kid you not, $US10bn and sold it just before Aluminium prices rocketed through the roof.
Someone should make a comedy film out of it. Maybe call it 'Dumb and Dumber 3.
RIO would be trading at about AU$500 and still paying a10% ff div, if it were not for these imbeciles that they actually go out and head hunt from the US!!


----------



## qldfrog (2 September 2022)

notting said:


> If BHP had any kind of competence in it's corporate culture it should be trading at $200 having paid  6 to 7% ff dividend for the last 25 years and still be paying it.
> The missed opportunity is so huge it boggles the mind
> FMG, believe it or not, put both RIO and BHP to shame with it's lower grade IO over that time in terms of price appreciation and relative div payouts. So has the mino GRR and MIN.
> Australia has been the lucky country ever since it was no longer a convict colony. That's all that has carried both BHP and RIO for this time, luck.
> ...



They were gifted the best ore in the world, best coal, etc etc and slowly year after year, waste the benefits, rape the seams and waste resources we as Aussie own.
Worse, get sucked by any half a clue foreign opponent, even sold off the whole empire for a minor miner from SA:  Billiton letting alpha males with harder skin takeover the whole top and medium management, a slaighter for these aussies born in the lucky country facing war trained corporate warriors..
But now the woke ate back, female status more than competence, lgbt , woke agenda dropping s32, petroleum and coal soon.i worked there as a contractor when they were under SA takeover..and left in disgust


----------



## qldfrog (2 September 2022)

28 dollars or so and i would take a small parcel, but always careful


----------



## divs4ever (2 September 2022)

qldfrog said:


> 28 dollars or so and i would take a small parcel, but always careful



 my BHP owe me  just under $29 ( on average ) but they still included S32 and the petroleum arm  , and my last parcel  was bought in January 2016  ( so have gotten 5  plus years of divs out of them  so far )

yeah i will probably keep what i have ( and don't participate in the DRP ) but i don't see compelling value  at the moment 


notting said:


> FMG, believe it or not, put both RIO and BHP to shame with it's lower grade IO over that time in terms of price appreciation and relative div payouts. So has the mino GRR and MIN.



 yes i hold  MIN ( 'free-carried' ) and GRR   and had a nice run with TMM ( Tasman Mining ) but the top ten shareholders took it private in a 'friendly take-over ' )  , i am late to the party with FMG  .. i held RIO for a while  but don't plan on returning anytime soon 

 maybe BHP just dreams too big ( for it's own good )


----------



## qldfrog (3 September 2022)

divs4ever said:


> my BHP owe me  just under $29 ( on average ) but they still included S32 and the petroleum arm  , and my last parcel  was bought in January 2016  ( so have gotten 5  plus years of divs out of them  so far )
> 
> yeah i will probably keep what i have ( and don't participate in the DRP ) but i don't see compelling value  at the moment
> 
> ...



Or just incompetence?
Fmr scares me with its green washing sorry plan..rio better than bhp but also too heavy iron
Honestly, i favor s32 and wds plus a few coal play ifeally outside west.but i also need diversification


----------



## Rabbithop (3 September 2022)

qldfrog said:


> 28 dollars or so and i would take a small parcel, but always careful



Maybe as low as $25 but don't think it will be that low of $10 if Global economy tank.


----------



## qldfrog (3 September 2022)

Rabbithop said:


> Maybe as low as $25 but don't think it will be that low of $10 if Global economy tank.



and if global market tanks?
But for some minute fertiliser output and coal, none of BHP production is critical in a depression stage
I should put a remark here:
 maybe BHP could only go to 20 bucks and not lower but that $20 may not buy you a loaf of homebrand bread at woolies then......


----------



## Telamelo (3 September 2022)

qldfrog said:


> and if global market tanks?
> But for some minute fertiliser output and coal, none of BHP production is critical in a depression stage
> I should put a remark here:
> maybe BHP could only go to 20 bucks and not lower but that $20 may not buy you a loaf of homebrand bread at woolies then......



Lol think you guy's are dreaming saying stuff like BHP going down to $10 or $20 - no chance unless the global market's completely sh*t themselves with diarrhoea & we have a -50% crash from here

P.S. If somehow a "worst case scenario" eventuates.. then I hope BHP goes on a big value "shopping spree"


----------



## Rabbithop (3 September 2022)

Telamelo said:


> Lol think you guy's are dreaming saying stuff like BHP going down to $10 or $20 - no chance unless the global market's completely sh*t themselves with diarrhoea & we have a -50% crash from here
> 
> P.S. If somehow a "worst case scenario" eventuates.. then I hope BHP goes on a big value "shopping spree"



We can only hope Global markets won't be having the massive gastro attack, the pain will be enormous for all to bear. Whatever sp it spirals down, there will always a buyer who sees the price is right. 
Friday was one of those days for me, sold 1 with a pot of gold, bearing in mind of a global downturn, buy in WDS with the pot only to see I loss 8cts per share within the hour, it hurts but that was the price I was willing to buy in...ahh...such luck sucks.


----------



## divs4ever (3 September 2022)

Telamelo said:


> Lol think you guy's are dreaming saying stuff like BHP going down to $10 or $20 - no chance unless the global market's completely sh*t themselves with diarrhoea & we have a -50% crash from here
> 
> P.S. If somehow a "worst case scenario" eventuates.. then I hope BHP goes on a big value "shopping spree"



 for me  i am more likely  to grab some more rather than 'back up the truck '  unless BHP makes a major individual blunder  ( considering recent moves were NOT seen as admissions of  past blunders by the share-holders , apart from the Brazil tailings dams debacle  )

 i would see it as a major market meltdown  and BHP wouldn't be the only abandoned gem  for example $20 for either BHP or WES  would have me thinking deeply , each has their attractions .

could the markets drop another 50% ??  sure  , but let's see if there are many reasons for a market  to resist such a drop  ( say underlying values of assets  , are there growth headwinds or tailwinds  , are there new geopolitical risks ( or breakthroughs )


----------



## divs4ever (3 September 2022)

qldfrog said:


> Or just incompetence?
> Fmr scares me with its green washing sorry plan..rio better than bhp but also too heavy iron
> Honestly, i favor s32 and wds plus a few coal play ifeally outside west.but i also need diversification



 yes i see the 'green' sales pitch ' ( for both BHP and FMG ) and that is one reason i am NOT rushing to bulk up 

am not a big WDS fan  although the BHP spin-off handed me a few and i already held some  , i want to see how the integration goes  , maybe it is 'transformational ' in a good way 

 am still watching S32  ( even though i hold a few , partly from the BHP demerger and some purchased ) i was hoping for   ' a mining consolidation cycle ' about now  giving S32 some second tier  acquisition opportunities ( where the acquired staff might be seen as an asset not a liability )

 for diversity  how about CSR  .. makes a few bricks , has exposure to aluminum , exposure to property ( ownership and development , and building materials ) would benefit greatly if it could cut energy costs  ( i hold CSR 'free-carried' , partly inherited  partly purchased in 2012 @ $1.68 and $1.28 )   would probably need them to be sub $2 to be attractive ( i participate in the DRP )


----------



## sptrawler (3 September 2022)

Vale-BHP nearly double offer in mine disaster settlement
					

The collapse of a dam at the Samarco mine complex in 2015 killed 19 people and severely polluted the Doce River with mining waste.




					www.mining.com
				




Samarco and its owners, Vale SA and BHP Group, agreed to almost double their offer in compensation for a 2015 mine waste disaster in Brazil, according to people with knowledge of the matter who asked not to be named because the discussions are private.





The mining companies raised the proposal to more than 100 billion reais ($19 billion) after Brazilian authorities showed disappointment to the 52 billion reais ($10 billion) offered. The new value is closer to a 155 billion reais public civil action for reparation used by prosecutors as a benchmark.
​




Officials said last week the two sides were still far from a final settlement, and would undertake the necessary measures to obtain reparation if the companies did not bring to the negotiation table a “minimally worthy” offer to repair the collapse that killed as many as 19 people and contaminated waterways in two states.


----------



## divs4ever (3 September 2022)

sptrawler said:


> Vale-BHP nearly double offer in mine disaster settlement
> 
> 
> The collapse of a dam at the Samarco mine complex in 2015 killed 19 people and severely polluted the Doce River with mining waste.
> ...



 'doubled '  would seem to be  a drop in the ocean  given 7 years of inflation in Brazil 

i am very disappointed that this matter hadn't already been settled satisfactorily  it had immense PR value if they had done so  ( much more than the 'green-washing' crap )


----------



## Skate (5 September 2022)

Skate said:


> View attachment 145504
> 
> 
> Skate.




*Today's updated dividend*






Skate.


----------



## Telamelo (5 September 2022)

Skate said:


> *Today's updated dividend*
> 
> View attachment 146356
> 
> ...



Upon finalising currency exchange rate.. BHP this afternoon confirmed it's fully franked dividend equates to AUD $2.55183878 plus franking credit of AUD $1.0928 per share .. so all up a total return of AUD $3.64 per share


----------



## rcw1 (5 September 2022)

Good evening,
George Boubouras, K2 Asset Management has a fireside chat 3pm 05/09/22



			The biggest risk for BHP shareholders is 'overpaying for an asset,' says asset management firm
		


Kind regards
rcw1


----------



## Miner (5 September 2022)

rcw1 said:


> Good evening,
> George Boubouras, K2 Asset Management has a fireside chat 3pm 05/09/22
> 
> 
> ...



I will be keen to see what AFR says on this.


----------



## Telamelo (9 September 2022)

Miner said:


> I will be keen to see what AFR says on this.



Well BHP finished @ $38.09 +3.17% today


----------



## Telamelo (10 September 2022)

Another big overnight rally.. saw BHP close @ US $53.34 +5.85%!


----------



## qldfrog (10 September 2022)

Telamelo said:


> Another big overnight rally.. saw BHP close @ US $53.34 +5.85%!



Do you buy US BHP? I thought as aussie,we are better off with the asx BHP due to franking?


----------



## Telamelo (10 September 2022)

qldfrog said:


> Do you buy US BHP? I thought as aussie,we are better off with the asx BHP due to franking?



I trade US stocks (free brokerage)..  but use smsf for holding/claiming asx BHP franking credit's


----------



## Telamelo (13 September 2022)

Vanguard Investments became a substantial holder in BHP


----------



## qldfrog (14 September 2022)

Telamelo said:


> Vanguard Investments became a substantial holder in BHP



Timing....🙄
could it be just a passive etf consequences?


----------



## Telamelo (17 September 2022)

More Coal Required as Drought Threatens China’s Renewable Energy System​








						More Coal Required as Drought Threatens China’s Renewable Energy System – ShareCafe
					

More than 70 days of heatwaves and droughts have spread across half of China, threatening the country’s hydropower energy, damaging production output and crippling the economy.




					www.sharecafe.com.au


----------



## Dona Ferentes (17 September 2022)

BHP isn't that big in coal anymore, not like it was.


----------



## Belli (17 September 2022)

Dona Ferentes said:


> BHP isn't that big in coal anymore, not like it was.




Yes.  In this year alone it got rid of a joint venture in Colombia and a metallurgical coal operation in Queensland.  It is aiming to close a NSW operation by 2030.


----------



## Dona Ferentes (22 September 2022)

Notification of dividend arrived .... US$1.75 (equivalent to A$2.55183878) per share.

But with a public holiday, today, it won't go through till Fri and available Sat?


----------



## Belli (22 September 2022)

Dona Ferentes said:


> Notification of dividend arrived .... US$1.75 (equivalent to A$2.55183878) per share.
> 
> But with a public holiday, today, it won't go through till Fri and available Sat?




May depend on the payment system.  I've had dividends in the account and cleared late morning the day of payment.


----------



## Belli (22 September 2022)

Belli said:


> May depend on the payment system.  I've had dividends in the account and cleared late morning the day of payment.




Checked very old bank statements.  Macquarie was the one.  Although payment credited on the due date it did not appear available until the next day.  One reason why I dumped that bank.  It may have improved since then.  With the bank I'm now using, dividends/distributions are in and available on the day, usally by mid-morning.  As well, it is a member of Osko so BPay's appear in the receiving account that day and fund transfers, $1k max per day, also that day in the receiving account (even on a non-business day) if it is also a member of Osko.


----------



## Telamelo (22 September 2022)

Dona Ferentes said:


> Notification of dividend arrived .... US$1.75 (equivalent to A$2.55183878) per share.
> 
> But with a public holiday, today, it won't go through till Fri and available Sat?



Many holder's complaining that still awaiting dividend payment to hit their accounts & Victoria has another public holiday tomorrow for AFL Grand final so perhaps only next Monday night/Tuesday morning will those residing in Victoria receive their dividend - seems quite unfair if the case as am sure the billions withheld is earning them good coin/interest on money market's till then...


----------



## Belli (23 September 2022)

Telamelo said:


> Many holder's complaining that still awaiting dividend payment to hit their accounts & Victoria has another public holiday tomorrow for AFL Grand final so perhaps only next Monday night/Tuesday morning will those residing in Victoria receive their dividend - seems quite unfair if the case as am sure the billions withheld is earning them good coin/interest on money market's till then...




It is silly.  Computers don't know whether or not it's a non-business day.  Restricting payment of dividends/distributions to a business day is archaic really.  Crikey, it would mean you cannot use a card to pay for petrol or groceries after business hours if you apply the principle fully.


----------



## Telamelo (23 September 2022)

Belli said:


> It is silly.  Computers don't know whether or not it's a non-business day.  Restricting payment of dividends/distributions to a business day is archaic really.  Crikey, it would mean you cannot use a card to pay for petrol or groceries after business hours if you apply the principle fully.



Very well said @Belli as 100% agree with you. Ridiculous to have BHP holder's penalised in withholding dividend payment due to public holiday's. Someone making money/capitalising at our expense/inconvenience etc.

That is an aspect/feature I love about Crypto in that you have access to funds 24/7 no matter if a public holiday/long weekend etc. as makes no difference. Crypto transactions are instantaneous.


----------



## Garpal Gumnut (23 September 2022)

Telamelo said:


> Many holder's complaining that still awaiting dividend payment to hit their accounts & Victoria has another public holiday tomorrow for AFL Grand final so perhaps only next Monday night/Tuesday morning will those residing in Victoria receive their dividend - seems quite unfair if the case as am sure the billions withheld is earning them good coin/interest on money market's till then...





Dona Ferentes said:


> Notification of dividend arrived .... US$1.75 (equivalent to A$2.55183878) per share.
> 
> But with a public holiday, today, it won't go through till Fri and available Sat?






Telamelo said:


> Many holder's complaining that still awaiting dividend payment to hit their accounts & Victoria has another public holiday tomorrow for AFL Grand final so perhaps only next Monday night/Tuesday morning will those residing in Victoria receive their dividend - seems quite unfair if the case as am sure the billions withheld is earning them good coin/interest on money market's till then...






Belli said:


> It is silly.  Computers don't know whether or not it's a non-business day.  Restricting payment of dividends/distributions to a business day is archaic really.  Crikey, it would mean you cannot use a card to pay for petrol or groceries after business hours if you apply the principle fully.



I blame Government. 

BHP is and has been run better than any state or federal government in my lifetime.

If the silly bastards we elect declare a holiday (or holidays in Victoria's case), why should a mining company have to do cartwheels to pay out a divi so that it gets in to bank accounts. 

Banks are closed on holidays. Full stop. 

You vote for muppets then you get muppet service. 

gg


----------



## Dona Ferentes (23 September 2022)

I Should Never Have Commented On Any Delay inreceivingdividends


----------



## Telamelo (23 September 2022)

Dona Ferentes said:


> I Should Never Have Commented On Any Delay inreceivingdividends



Why not Dona !? lol Good news anyway computershare since confirmed dividend is being processed/paid today


----------



## Value Collector (23 September 2022)

Telamelo said:


> Why not Dona !? lol Good news anyway computershare since confirmed dividend is being processed/paid today



I was wondering why I hadn’t received it, was worried computershare messed up and were sending a physical cheque again.


----------



## Garpal Gumnut (23 September 2022)

Telamelo said:


> Why not Dona !? lol Good news anyway computershare since confirmed dividend is being processed/paid today



I might buy a Tesla then, before the weekend.

Just joking   

gg


----------



## Telamelo (24 September 2022)

Nice to see our Aussie dollar continue to fall another -1.75% overnight to 0.6526c as every 1c lower that our AUD is results in BHP increasing it's net profit margin by US$100 million!


----------



## Telamelo (24 September 2022)

Interesting development if rumour reported below is factual

On September 19, news publication _Bloomberg_ reported that BHP Group Ltd. (NYSE:BHP) was considering a bid of nearly $6.7 billion for the purchase of Australian mining firm OZ Minerals (OZL). The offer is more than $1 billion higher from the previously reported figure of $5.6 billion.

Meanwhile.. OZL gives green light to $1.7 Billion Copper project

https://finance.yahoo.com/news/oz-minerals-gives-green-light-230658322.html?.tsrc=rss


----------



## divs4ever (24 September 2022)

Telamelo said:


> Interesting development if rumour reported below is factual
> 
> On September 19, news publication _Bloomberg_ reported that BHP Group Ltd. (NYSE:BHP) was considering a bid of nearly $6.7 billion for the purchase of Australian mining firm OZ Minerals (OZL). The offer is more than $1 billion higher from the previously reported figure of $5.6 billion.
> 
> ...



 i would still rather hold OZL as a stand-alone share  , rather than share the profits with the BHP board  , first


----------



## Telamelo (28 September 2022)

There is a recent & current proposal by the Treasury and the Government to disallow franking credits associated with capital raisings by Australian companies. Worse still, they are considering making the legislation retrospective.

This means that investors will be hit by huge tax bills for capital raisings that have been carried out, in good faith, in the past. Investors in companies like BHP, CBA, WBC etc. will all be severely and negatively affected.

I therefore urge ALL investors to strongly oppose this measure, the details of which can be found in the link below. The link contains an email address which can be used to voice your concerns/disapproval
(prior to deadline 5th October 2022).

https://treasury.gov.au/consultation/c2022-314358


----------



## qldfrog (29 September 2022)

Telamelo said:


> There is a recent & current proposal by the Treasury and the Government to disallow franking credits associated with capital raisings by Australian companies. Worse still, they are considering making the legislation retrospective.
> 
> This means that investors will be hit by huge tax bills for capital raisings that have been carried out, in good faith, in the past. Investors in companies like BHP, CBA, WBC etc. will all be severely and negatively affected.
> 
> ...



Instead of sending an email which has as much effect as a cow belch on CC, i would encourage your entourage to think twice before voting left or far left..sorry green at the next elections.
Retrospective laws btw are the domain of banana republics, kindergardens and despots and somzthing this country is quite fond of it seems


----------



## Belli (29 September 2022)

Telamelo said:


> There is a recent & current proposal by the Treasury and the Government to disallow franking credits associated with capital raisings by Australian companies. Worse still, they are considering making the legislation retrospective.
> 
> This means that investors will be hit by huge tax bills for capital raisings that have been carried out, in good faith, in the past. Investors in companies like BHP, CBA, WBC etc. will all be severely and negatively affected.
> 
> ...




Do you mean the Tax Payer Alert (TA2015/2) on the subject matter and issued by the ATO in May 2015 wasn't sufficient warning to cause companies to exercise some caution about this matter?


----------



## The Triangle (29 September 2022)

Telamelo said:


> There is a recent & current proposal by the Treasury and the Government to disallow franking credits associated with capital raisings by Australian companies. Worse still, they are considering making the legislation retrospective.
> 
> This means that investors will be hit by huge tax bills for capital raisings that have been carried out, in good faith, in the past. Investors in companies like BHP, CBA, WBC etc. will all be severely and negatively affected.
> 
> ...



BHP is in a great position minting cash from their assets.  They've generated operating cash of $75 billion in the past 3 years, while only spending $22 billion of that on investments and most of the rest going to dividends.   I can't see BHP having a problem with this, but I could be mistaken.  

I don't have an issue with the government slamming corporations which pay special dividends out of capital raisings.  It's a crazy stupid corporate/legal/tax exercise.  Do it right - pay dividends out of your genuine profits.  

But just don't touch regular dividends.


----------



## qldfrog (29 September 2022)

Market rebounded last night so i expect BHP to do well today.
Not convinced yet it is the rebound.
While the BOE has capitulated and is in QE again, so running toward a pound collapse, i am of the view we have still a couple of months of pain before we run into hyper stagflation and cyrrency collapse.knowing that a war could solve it all....


----------



## Rabbithop (29 September 2022)

qldfrog said:


> Market rebounded last night so i expect BHP to do well today.
> Not convinced yet it is the rebound.
> While the BOE has capitulated and is in QE again, so running toward a pound collapse, i am of the view we have still a couple of months of pain before we run into hyper stagflation and cyrrency collapse.knowing that a war could solve it all....



I am with you qldfrog. More bumps on the journey to end of the year.


----------



## Rabbithop (29 September 2022)

Re Telamelo post about Special div or shares given, franking credits rulings coming to effect on 5/10.
 What happen if one had sold those shares or stocks before the deadline? Will the ex shareholders cough up tax to ATO?


----------



## Telamelo (4 October 2022)

Oct 3 (Reuters) - BHP Group Ltd (BHP) lifted its long-term demand forecast for steel as a global shift towards the decarbonisation of power generation will boost requirement of the commodity, the world's largest listed miner said on Monday.

The Melbourne, Australia-based miner raised its forecasts for steel consumption by 2%, or 42 million tonnes, for 2030 and by 4%, or 76 million tonnes, for 2050, based on surging demand for wind and solar farm equipment.

"Steel consumption in power will triple from today with demand from wind and solar 5 times bigger," BHP said in slides presented to analysts on a tour of its Western Australian iron ore operations.

The world's steel production grew 3.8% to 1.95 billion tonnes in 2021, according to the World Steel Association.

BHP Group is one of the biggest iron ore producers in the world. Iron ore, the most important raw material in steel manufacturing, brought in nearly half of the miner's fiscal 2022 revenue.

The forecast upgrade comes in the backdrop of a global push towards decarbonisation of power generation.

Renewable energy's cost efficiency and competitiveness have spurred massive investments as well as favourable policies across the global.

Clean energy investment is expected to exceed $1.4 trillion in 2022, accounting for almost three-quarters of the growth in overall energy investment, the International Energy Agency said in its World Energy Investment 2022 report released in June.

((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))


----------



## Telamelo (4 October 2022)

Macquarie has confirmed an "Outperform rating on BHP with target price of $45.00 retained".

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 261.05 cents and EPS of 347.79 cents . At the last closing share price the estimated dividend yield is 6.76%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.10. How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 518.4, implying annual growth of N/A. Current consensus DPS estimate is 363.4, implying a prospective dividend yield of 9.4%. Current consensus EPS estimate suggests the PER is 7.4

Forecast for FY24:

Macquarie forecasts a full year FY24 dividend of 307.37 cents and EPS of 409.12 cents . At the last closing share price the estimated dividend yield is 7.96%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.43. How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 425.3, implying annual growth of -18.0%. Current consensus DPS estimate is 309.2, implying a prospective dividend yield of 8.0%. Current consensus EPS estimate suggests the PER is 9.1.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.


----------



## Rabbithop (4 October 2022)

Telamelo said:


> Macquarie has confirmed an "Outperform rating on BHP with target price of $45.00 retained".
> 
> Forecast for FY23:
> 
> ...



Boo Hoo Hoo entered at 49.


----------



## Telamelo (16 October 2022)

Uranium price currently at 6 month high's with chart analysis below from 8:20 onwards.

P.S. Hope BHP team take note given their Olympic Dam has largest Uranium deposit in Oz


----------



## Telamelo (19 October 2022)

Oct 19 (Reuters) - BHP Group (BHP) today reported that Iron ore production rose +2% in the first quarter on the back of strong activity from its Western Australia mines amid lower COVID-19 related impacts & strong supply chain performance.

The world's largest miner said iron ore production from Western Australia was 72.1 million tonnes (mt) in the quarter ended September 30, compared with 70.6 million tonnes a year ago and a UBS estimate of 72 mt.


----------



## Telamelo (28 October 2022)

Weakness in iron ore price sees BHP sp down -5.02% today to $37.48

This guy's not keen about BHP going forward


----------



## divs4ever (28 October 2022)

i hold BHP  ( av. SP $28.96 ish )
 but i had bought BHP prior   to the S32 , and petroleum arm divestments 

 given those divestments  i cannot  see myself adding more BHP above $20  in the future


----------



## divs4ever (28 October 2022)

ALSO   mining seems to be in a super-cycle  ( whereas i was expecting  this to be in a consolidation  phase )  so how long does  this cycle last ??

 would war or  a global depression bring things to a screeching halt


----------



## Rabbithop (29 October 2022)

divs4ever said:


> ALSO   mining seems to be in a super-cycle  ( whereas i was expecting  this to be in a consolidation  phase )  so how long does  this cycle last ??
> 
> would war or  a global depression bring things to a screeching halt



Firstly, Thank you to Telamelo for posting that vid. Interesting to watch n learn. He isn't keen on Iron ore for the next few years, however what about copper n nickels in moving forward. A good company always plan the future ahead.
 My simple general comment about any good management company (not directing my opinion to BHP).
I would think war/global depression will put things to a halt, isn't it a normal assumption?


----------



## divs4ever (29 October 2022)

Rabbithop said:


> Firstly, Thank you to Telamelo for posting that vid. Interesting to watch n learn. He isn't keen on Iron ore for the next few years, however what about copper n nickels in moving forward. A good company always plan the future ahead.
> My simple general comment about any good management company (not directing my opinion to BHP).
> I would think war/global depression will put things to a halt, isn't it a normal assumption?



 war NORMALLY increases local consumption  of resources at the expense of exports ( especially if the people you are in conflict with is your largest customer  , one reason i was hoping we would be trading more with India by now )

 now depression you made think would certainly cap commodity prices ( and demand  , depending on government response )

 a sensible government ( remember them  ) would embark on 'nation-building  ' projects to soak up the excess labor, but what are our chances this time , have i completely misread Albo ??

 Rudd tried  but the plans were badly implemented  ( as much as i disliked Rudd  he gets points for trying the correct tactic in the GFC )

 BHP   since the S32 divestment has been making some intriguing decisions , and given they always seem  to take on long-term projects  i am not so confident the current crop are up to the task 

 maybe not halt  , but Australia has let it's manufacturing capacity wither  ( could the need to revive it be  a boost  )


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## JohnDe (29 October 2022)

divs4ever said:


> a sensible government ( remember them  ) would embark on 'nation-building  ' projects to soak up the excess labor, but what are our chances this time , have i completely misread Albo ??




What excess labour?


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## divs4ever (29 October 2022)

JohnDe said:


> What excess labour?



 all that excess labor coming from collapsing companies ( likely caused by credit-tightening  and rising costs  )

 i know it is counter-intuitive  , but in times of company stress  , the workers  face redundancy first

 of course we could always talk  about the python in the ceiling .. UNDER-employment  ( folks not employed to their full potential )


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## JohnDe (29 October 2022)

divs4ever said:


> all that excess labor coming from collapsing companies ( likely caused by credit-tightening  and rising costs  )
> 
> i know it is counter-intuitive  , but in times of company stress  , the workers  face redundancy first
> 
> of course we could always talk  about the python in the ceiling .. UNDER-employment  ( folks not employed to their full potential )




I am seeing desperation from employers to find staff; they've gone down the track of poaching with offers of higher wages and other incentives.

If the government goes down the track of creating more work which requires more labour (just in case there is high unemployment in the future), all they are doing is creating higher inflation. that higher inflation could be the domino that tips industry over the edge. 

At the moment the biggest stress that companies are feeling is labour & skill shortages. 



> *1 job for every person: Here’s where they are*
> 
> Australia’s unemployment rate is now sitting at 3.5 per cent - the lowest it has been since August 1974 - but there are still people struggling to find a job.
> 
> ...


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## divs4ever (29 October 2022)

JohnDe said:


> I am seeing desperation from employers to find staff; they've gone down the track of poaching with offers of higher wages and other incentives.
> 
> If the government goes down the track of creating more work which requires more labour (just in case there is high unemployment in the future), all they are doing is creating higher inflation. that higher inflation could be the domino that tips industry over the edge.
> 
> At the moment the biggest stress that companies are feeling is labour & skill shortages.



quality , SKILLED staff absolutely  , and that is an additional problem , such folk don't just fall out of trees ( universities/technical colleges ) at the end of every year 

 but that quality skilled staff  need minions in support ( and even those minions need some skills  and half a brain )

 the problem is likely to be plenty of jobs for specific skills ( say HEAVY transport ) and few able to fill the spot ( with a clean license )

 and not every one copes with menial labor well ( even something like office cleaner )

 now when i was young , the employers would hire likely lads ( and lasses ) watch them for 3 to 6 months  and often the adept ones  an apprenticeship ( or trainee-ship )   , how is that new system working ( compounded by an aging/shrinking population )

 so when the job cuts come  you have a large pool of workers   that are unskilled for the available vacancies , do you send them home to the game console , or try to deploy them productively


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## divs4ever (29 October 2022)

of course i could also talk about   the 'python in the corner   ( company loyalty/job security ) where companies are  always  trying the 'refresh  staff ' to reinvigorate  enthusiasm ( 10 years on the same job and you become a fixture [ wallflower ] no matter how pivotal the task )

 bring in new people and hope they can't be bribed by a better offer ( super prevalent in the transport industry )

 maybe it is a good thing i am here on a disability pension ( waiting for the aged pension ) some management can't handle even hints of the truth


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## rcw1 (7 November 2022)

Good afternoon
BHP looking at penetrating into the $41 today.  Nice.  Most kind of it should it succeed.
Numbers looking very good at the minute.
Not holding.  

Kind regards
rcw1


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## Rabbithop (7 November 2022)

rcw1 said:


> Good afternoon
> BHP looking at penetrating into the $41 today.  Nice.  Most kind of it should it succeed.
> Numbers looking very good at the minute.
> Not holding.
> ...



Row, row, row..hope it's looking good for $50+...enter at 49 boo hoo hoo.


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## Dona Ferentes (14 November 2022)

rcw1 said:


> BHP looking at penetrating into the $41 today.  Nice.
> Numbers looking very good at the minute.




onward and upward:
- Chinese easing Covid restrictions
- US elections settled and not alarming
- Fed and other Central banks "may" pivot
- Commodity prices turning back up ... Iron ore +4.7% to $US92.25 a tonne       

The June selldown is becoming just a memory


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## Rabbithop (14 November 2022)

Dona Ferentes said:


> onward and upward:
> - Chinese easing Covid restrictions
> - US elections settled and not alarming
> - Fed and other Central banks "may" pivot
> ...



Yeah, it's a good couple of days. Will it hit 55...A big ask but never say NEVER.


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## finicky (14 November 2022)

BHP is already at an historic high of $51 if you account for the petroleum distribution.
BHP shareholders got 0.18 of a WDS share per BHP share
Today's WDS price $39
So 0.18 x 39 = $7
BHP today $44
So notional value BHP = $51 to holders

Held


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## JohnDe (20 November 2022)

"No sane mining manager would consider trucking significant volumes of raw ore over that kind of distance and expect to keep costs down. You can talk about messing around with mine sequencing all you want, but handling ore multiple times drives up costs."

South Australia has 4 mines with copper, gold, silver & nickel, Whyalla is close by with a sea port and connect by rail to Iron Knob. Build more rail.



> *Is Oz Minerals a BHP ‘province play’ or a simple copper bet?*
> 
> Forget the hype about a South Australian copper province play, BHP’s $9.6bn bid for OZ Minerals is a simple bet on the copper price, and perhaps a way to try and get around its own capital allocation framework and finally beef up Olympic Dam.
> 
> ...


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## divs4ever (20 November 2022)

you are making it hard ( for me ) to see a good case for throwing more cash at BHP ( either on market or via a SPP )

 i see the logic , but don't feel it is compelling  even if they poach the better staff for other projects


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## Rabbithop (24 November 2022)

Do anyone have a wild guess..what will happen to BHP sp if OZL accepted the offer?


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## divs4ever (25 November 2022)

Rabbithop said:


> Do anyone have a wild guess..what will happen to BHP sp if OZL accepted the offer?



 no me !!

if the take-over completes   , i will be more tempted  to buy extra S32  than BHP or WDS with the pay-out cash 

 now one way to calculate   is add the market cap. of OZL to the market cap. of BHP  and calculate the market weight of the combined company  because many index funds will be obliged to weight the fund accordingly in their portfolios  .. so you should see some upward pressure on the share price  , but IMO not much


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## Rabbithop (25 November 2022)

divs4ever said:


> no me !!
> 
> if the take-over completes   , i will be more tempted  to buy extra S32  than BHP or WDS with the pay-out cash
> 
> now one way to calculate   is add the market cap. of OZL to the market cap. of BHP  and calculate the market weight of the combined company  because many index funds will be obliged to weight the fund accordingly in their portfolios  .. so you should see some upward pressure on the share price  , but IMO not much



Thks for the reply. I am thinking of exiting before the 'slow' holiday trading period. Hold cash n buy in again at low. Shares portfolio is my pocket play money not Investment. Done pretty well with properties investment. Retired n trying to tidy up loose ends.


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## Rabbithop (25 November 2022)

divs4ever, you r thinking of S32 cos of Steel n the sp price lower compare to BHP?
 I am thinking  of BHP materials diversification.


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## Dona Ferentes (25 November 2022)

_This seems to be ongoing:_

Workers at Chile’s Escondida mine, the largest copper deposit in the world, turned down an offer by BHP and could stop work on 28 and 30 November if the company does not meet their demands, a union source told Reuters on Thursday.

BHP announced earlier this week that it reached a deal with the union to avert a work stoppage, but the agreement had to be ratified by its members.


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## rcw1 (25 November 2022)

Good morning
What's impressing analysts?
BHP cut to Neutral: GS

Have a very nice day, today.

Kind regards
rcw1


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## divs4ever (25 November 2022)

Rabbithop said:


> divs4ever, you r thinking of S32 cos of Steel n the sp price lower compare to BHP?
> I am thinking  of BHP materials diversification.



S32 because of  it's greater diversity   and the willingness to take on Tier 2 and brownfield projects  ,

 it should also be under less pressure to follow the 'Green agenda '

 i would expect S32  to scoop up some smaller stressed neighbours  whereas  the BHP-OZL deal  is seen  as  a step down from the usual BHP acquisitions  ( of world class assets ) , and therefore see S32 as more nimble  and able to expand into new areas  of production  ( say a small move  into vanadium or tin , or rare-earth  elements )

 now i don't watch it regularly  , but am very surprised nobody has run the tape-measure over SVL  ( i don't hold SVL , it looks to be too far away from  div. paying  for me )


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## divs4ever (29 December 2022)

Why BHP is Worth Watching | BHP Stock Review​
https://odysee.com/@LAWDinvests:a/why-bhp-is-worth-watching-bhp-stock:0

DYOR

i hold BHP ( av. SP $28.96 Australian ) and bought before the S32 spin-off and the WDS spin-off

please note this is from a UK investor point of view


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## rnr (29 December 2022)

BHP could potentially be making an a-b-c correction!


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## Garpal Gumnut (2 January 2023)

I've backed BHP in the 2023 comp. 

A solid company.

It should be $100 by years end.

gg


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## Dona Ferentes (Yesterday at 10:31 AM)

Dona Ferentes said:


> onward and upward:
> 
> The June selldown is becoming just a memory.



And now Copper is doing its thang, BHP is pushing into the high $48s. Could $50 be far off?
.._..on an adjusted basis for spinouts and  demergers, this would be as high as it's ever been?

Will continue to hold my (pre CGT acquired) shares._


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## Garpal Gumnut (Yesterday at 2:30 PM)

Dona Ferentes said:


> And now Copper is doing its thang, BHP is pushing into the high $48s. Could $50 be far off?
> .._..on an adjusted basis for spinouts and  demergers, this would be as high as it's ever been?
> 
> Will continue to hold my (pre CGT acquired) shares._



“In troubled times always stay with the strength “
Garpal Gumnut 

gg


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