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.
The evidence is found under the bonnet of EVs and HEVs.
qed
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!
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.
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.
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
$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
So what were the real, or adjusted earnings?
Adjusted figures………………………………$1.894B
Not quite the headline grabbing BHP version.
Adjusted figures………………………………$1.894B
I'm wondering which part of BHP's 21% increase in revenue over last year ducati wants to parse next!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.
If both price and earnings are depressed, there is little change in pe!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]
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.
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.
This is the best time to purchase cyclical stocks, when the P/E is high due to losses.
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.
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.
KnobbyRegarding 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.
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.
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
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.
This is the first month-on-month slide this year.
In the first five months, steel product exports surged 110.9 percent year-on-year to 27.44 million tons. But the pace was down from 132 percent in the first four months.
Meanwhile, growth of China's steel billet exports decelerated to 75.1 percent from 92.2 percent.
Chen Xianwen, an official from the steel association in Beijing, told China Daily: 'The slowing exports indicate the government's curbing measures are beginning to show.'
China, the world's top steel producer since 1996, has taken a raft of measures since last year to tame skyrocketing exports and mitigate trade conflicts with other countries.
On June 1, the nation levied 5-10 percent export tariffs on 82 categories of steel products and upped duties on overseas shipment of another 19 categories to 15 percent from 10 percent.
The move came less than two months after China cut tax rebates on overseas shipment of 76 categories of steel products to 5 percent from 8-11 percent and eliminated tax rebates on another 83 categories.
Chen said these measures are making domestic steel mills 'more rational' in the foreign market. The export pace will slow down further in the second half of this year because of the government's curbs, he said.
'However, we should be vigilant as slowing exports will add to supply in the domestic market and bring down steel prices, which will possibly spur producers to raise exports again later this year.'
Dumping and subsidy accusations against domestic steelmakers are growing from other countries because of swelling imports of steel products from China.
Last week, six steel pipe makers and the United Steelworkers union in the US appealed to the US Commerce Department to impose anti-dumping charges of up to 88 percent and extra countervailing duties on steel pipes from China that they claimed are being sold at unfairly low and subsidized prices. But Chinese steel pipe companies have refuted the accusation.
Crude steel production in China climbed 19.97 percent year-on-year to 195.62 million tons from January to May. The growth slackened from 21.19 percent in the first four months.
The steel association predicted earlier this year that 2007 production will reach 462-475 million tons, up from 419 million tons last year.
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