# BHP theory?



## Ken (20 January 2008)

If you have access to cash I have a theory on BHP on a way to get involved.

Basically the next stop appears to be around $32.50, if we hit that a plan could be picking up 1000 shares. 

Then we have massive support at $24-$25 for BHP if the stock does continue to fall. Purchasing around $25 again, you could end up with an average price for BHP of $27- $28.

So the way I am looking at it, BHP at around $32.50 appears to be a good entry point for those who believe in China, and mining and have enough cash to average out a price if the market continues to fall.

Any thoughts whether BHP reaches $32.50 or even $25.00

This is on the of the key stocks that drives the direction of our markets.


So if you think the all ords have peaked for ever then you wouldnt be investing in BHP.


----------



## Nyden (20 January 2008)

All I can say is ouch. I should hope BHP doesn't go that low :
Heck, if they walk away from RIO I'm expecting a heavy rally.


----------



## chops_a_must (21 January 2008)

But what if it does a Citigroup?


----------



## mfp (21 January 2008)

Ken said:


> If you have access to cash I have a theory on BHP on a way to get involved.
> 
> Basically the next stop appears to be around $32.50, if we hit that a plan could be picking up 1000 shares.
> 
> ...




If BHP falls to the levels you suggest, it will be there for a reason. Why do you assume it will be great value at that level? If it can hit $25 then it could just as easily go to $20 or less. A return to $47.70 may be 10 years away. People thought ZFX was great value at $18, $17, $16, $15, $14, $13, $12, $11, $10 and will continue to think so when it hits $9 (which is not out of the question today).


----------



## Nyden (21 January 2008)

mfp said:


> If BHP falls to the levels you suggest, it will be there for a reason. Why do you assume it will be great value at that level? If it can hit $25 then it could just as easily go to $20 or less. A return to $47.70 may be 10 years away. People thought ZFX was great value at $18, $17, $16, $15, $14, $13, $12, $11, $10 and will continue to think so when it hits $9 (which is not out of the question today).




Because it's one of the largest miners in the world? Because it has a 150 billion dollar market cap?

Because their profits are sky high, they have oil / petroleum exposure (and are ever increasing in this), heck, they also have gold exposure.

There is reasoning behind ZFX's price decline, it is not great value at those prices. ZFX currently reflects a more fair price. It was overpriced, simple as that. Unfortunately, Zinc is looking terrible for years to come, the earnings forecast is set to decline over the next few years. The price of Zinc was halved this year. Stands to reason that the share price of a Zinc company would also be cut in half, & it has been.


So, if BHP falls to those levels; it will be based on psychology, and not fundamentals. As opposed to the fall in ZFX.


----------



## mfp (21 January 2008)

So BHP is being unjustifiably sold down because you own it, while ZFX isn't because you don't, is that correct?


----------



## Kauri (21 January 2008)

Ken said:


> If you have access to cash I have a theory on BHP on a way to get involved.
> 
> Basically the next stop appears to be around $32.50, if we hit that a plan could be picking up 1000 shares.
> 
> ...




 Why not wait for $25 then... 
Cheers
...........Kauri


----------



## cordelia (21 January 2008)

Kauri said:


> Why not wait for $25 then...
> Cheers
> ...........Kauri



I agree... why buy into a stock if you think it will go down further....I don't understand that reasoning. See if it breaks support at 32.50 first. If it doesn't buy in when it starts to go up.....I have been in and out of BHP plenty of times over the last year and I have only lost money this month because I hung on waiting for it to go back up again. I got out at $38 so I didn't loose too much. I will buy back in when I see it start to go up again...


----------



## tronic72 (21 January 2008)

How about you buy a $hitload of RIO stock and wait for BHP to take it over. Then you'll get lots of BHP shares!!!


What do you guys think?


----------



## noirua (21 January 2008)

If BHP go all the way and takeover RIO then that will do a lot for overall market confidence. If they pull-out it could do a lot of damage in many ways.


----------

