BHP - BHP Group

[treefrog]

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]

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]

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

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]

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]

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]

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]

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

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

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

 

[skyQuake]

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

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.

 

[ducati916]

BSD
September 16 2006



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.



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]



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..........



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



Some already have.



So falling commodity prices then?

jog on
d998

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

 

[noirua]

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%.

 

[Sean K]

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

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!

 

[ducati916]

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

 

[Mr_T]

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]

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

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]

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]

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

 

[Mr_T]

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]

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]

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]

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.