BHP - Astonishing result

[sharer]

My wallet started twitching recently, but hasn't unzipped itself yet.
I wonder how the BHP split plan for late next year(?) may affect valuations?

[Daytr]

I haven't read up on it to be honest. I assume BHP will hold a certain amount i.e. shareholders of BHP wont be giving something away as I have seen done sometimes. I still think BHP can go lower, but that's probably because I am pessimistic on world growth for 2015.
I really think most people think the likes of iron ore & oil are going to rebound in 2015.
Obviously they could, but I think they could easily go lower yet.
What would you price BHP if the current commodity prices were the average for 2015 for instance?

[Bobdn]

I haven't read up on it to be honest. I assume BHP will hold a certain amount i.e. shareholders of BHP wont be giving something away as I have seen done sometimes. I still think BHP can go lower, but that's probably because I am pessimistic on world growth for 2015.
I really think most people think the likes of iron ore & oil are going to rebound in 2015.
Obviously they could, but I think they could easily go lower yet.
What would you price BHP if the current commodity prices were the average for 2015 for instance?

I tried to buy $20,000 NZ of BHP a week or so ago at $27.70 AUS but, because I'm such a noob, i never realized that I had to first fill out a "chess" form first (or something) and lost my appetite - it was going to take a few days I understood. I see it has appreciated 5% since then. Could have just as easily gone the other way I suppose and still might. However, the fact that BHP had depreciated 20% over the last six months and our currency had appreciated 10% over about the same period made me want to buy. That was the extent of my financial analysis (all I'm capable of). I tend to hold shares for a long time so I'm hopeful that my rough and ready approach will work out ok in the end.

I bought 1200 ANZ instead for 32.50 NZ. I like the idea of owning a little bank like HNZ and a big bank like ANZ. It has a small amount of imputation credits, a DRP, and an ok but not great yield but the potential for bigger dividend payouts. A big thing for me was buying when our dollar touched 95 cents AUS.

I have no more money to invest now. I have now launched all my torpedoes and am prepared to wait a long time to see whether they hit my investing targets.

Merry Christmas all.

[sharer]

After writing a few days ago i did get a bit fidgety & had a wee nibble, throwing a loose div cheque in the pot for a few more bhp before i had some more sensible impulse.
As it turned out (so far) looks like i got lucky with timing. It was the exchange rate that prompted my sudden lurch, Bobdn, but like you i wouldn't be too surprised to see further declines in share price. Starting a little cash reserve now to get ready in case more rational analysis shows the declining guesswork comes to the fore again in the new year.
Either way, i'm happy to rest on historical gains & leave it to my successors to decide when to cash out.

[baller18]

Anyone back in BHP here?

[BlackPeter]

Anyone back in BHP here?

Sure .... and going strong. Oil and resources have in my view lots of upwards potential from here - and quite recently the market seems to agree with my humble opinion .

[Daytr]

What's the driver for the upward potential BlackPeter?

[BlackPeter]

What's the driver for the upward potential BlackPeter?

In one word: Demand.

O.k. - lets look at oil. Obviously nobody (well, at least not me) can predict what the oil price is next week (or next month), but it is now historically seen quite low. Lower oil price means increasing demand and at the same time lots of new drilling projects are shelved / delayed (quite low rig count these days), reducing at least mid term the supply side. Putting these two together, there is (mid and long-term) in my view only one way for the price of oil (if the market forces still work) - upwards (though not necessarily up to the lofty heights we have seen before)!

While the oil price is low, all sorts of economies will have more money in their pockets than previously. E.g. many Asian economies stopped recently subsidizing the price of petrol, money they can immediately reuse otherwise. All governments and companies will have lower fuel bills. This allows them to refocus e.g. on a in many parts of the world aging infrastructure - I am sure, you've seen as well lots of stories about road and e.g. electricity infrastructure not just in the US reaching the end of their useful life. Same true for Europe. Asia - I read recently somewhere that even the best equipped Chinese cities have only about 10 to20% of rails per sqkm, than Western towns like e.g. London. Lots of potential for more rails, pylons and bridges (needs all steel). Guess what impact this has on steel and metallurgical coal basis.

I guess we could spin this story for all of BHL's products, but just to pick one more: Recent reports I have seen suggest a steep increase in the use of aluminium for the car industry. didn't put much effort into re-googling, but here is e.g. one report predicting in 2 years a 71% rise of the use of aluminium in Asia (and a five folding in the US): http://www.stuff.co.nz/motoring/news...elded-to-steel
Higher demand, again.

O.K. - I might be an optimist, but I see at this stage a world economy boosted by lower oil prices, which over time (some years) will increase the price for resources (including oil). Not sure, how this story ends, but I propose we can worry about that in some years time. I am admittedly not a day trader, but an investor with a medium to long term focus - and looking forward to the ride.

[stevo1]

This article is about oil outlook worth reading http://brazilianbubble.com/bearish-o...be-everywhere/

[Daytr]

You can't have it both ways, lower oil stimulates demand when BHP is an oil producer so wants higher oil prices.
Overall I agree low energy costs will stimulate world growth, but in the short term world growth looks pretty weak.
China I think will start using less iron ore as they switch to a services based economy, meanwhile production is still rising,
When you say historically, you are referring to the last 10-12 years, prior to that these prices would be considered high.
Its going to be an interesting year I think, but I expect to see things get worse before they get better.