BHP-where to next?

From a broker report I get:

Themes for our market (this week) will include RIO's pending move on Alcan and the ramifications of that. BHP's update to analysts and the new CEO's bullish view on the China led resources cycle. Marius Kloppers sees a 20 year continuation ahead and BHP is well prepared for this. BHP's next acquisition will be a major tier 1 choice.
 
Yep - wouldnt be waiting around for a $25 entry price.

Bought my first holding back in 1992 for about a fiver!

Its my biggest holding and the get feeling its never gonna see the 20's again..

Regards
 
GreatPig said:
I think that depends on how good a trader you are. Daryl Guppy in his newsletter portfolio achieved a 106.7% return this last financial year, putting his eleven year average at 84.8% pa. The portfolio occasionally uses derivates, but no margin. STW by comparison increased about 20% over the same period.

GP
Click to expand...

It's all interesting isn't it?

My thoughts are that anyone making 106% return must be into the smaller speckies pretty well. What level off gearing would you use on them? Not much is my thoughts. The big blue chips may not rise as much [or fall either] but a higher level of gearing would bring the returns up to closer match the specky trading strategy.

This is all very much a generalisation of course.

A clever investor could have made 150% return by being in the mid size metal miners, and got great dividends as well. Minara, Zinefex, Jubillee, Portman, etc. Plenty of others.


Eleven year return, 84%...!!! Wow. I do find it hard to believe someone could make that over 11 years, and not be in the BRW top 200! But I'm not saying he didn't.
100 grand at 11 periods at 84% compound is nearly 90 million...!!!

edit. Hmm..TAX...Just thought about tax. That would blow the 90 million away. Nothing like that if you take tax out along the way.

See ya's.
 
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topcropper said:
My thoughts are that anyone making 106% return must be into the smaller speckies pretty well.
Click to expand...
Yes, many of his stock trades are smaller shares, although he also uses warrants and CFDs on the larger ones.

Looking at last financial year's results, the biggest gains were on TRS (119%), an MBL CFD (108.5%), PLT (84.6%), and a WPL warrant (69.2%). The biggest loss was an OST CFD (-34.1%). There were only a few other losses though, one at -17.2% and the rest all smaller than -5%.

Eleven year return, 84%...!!! Wow.
Click to expand...
Well I can only take his word that the figure is correct, but I have no reason to doubt it. The highest return during that period was 111.2% in 1999-2000 and the lowest 48.7% in 2003-2004.

I do find it hard to believe someone could make that over 11 years, and not be in the BRW top 200! But I'm not saying he didn't.
100 grand at 11 periods at 84% compound is nearly 90 million...!!!
Click to expand...
Probably a lot easier to make those returns on $100K than $90m though.

Cheers,
GP
 
GreatPig said:
Probably a lot easier to make those returns on $100K than $90m though.

Cheers,
GP
Click to expand...

There's a lot of smoke and mirrors with returns and investment styles.

The Buffett legend says that he became fabulously wealthy, starting with very little, with a conservative buy and hold of under-valued stocks. I don't buy it. One man's lifetime is just not long enough for that to work. He must have used some pretty fancy leveraging techniques. Don't get me wrong I have great admiration for he and Charlie Munger.

I also believe Guppy is good at what he does and could well achieve those results, but only if he is reseting a "sample" portfolio each year (for the reasons above) which is really the right thing to do. His readers don't want to know how to run a billion dollar hedge fund after all. They want tips on investing 100 grand!

These have been good years for a smart cookie and even a very average one like myself can get good results. I would have been more than 50% but for a few errors of judgement and a betrayal by the board of my biggest holding. OK maybe it was a case of the board being honest for the first time, I don't know but I had a 50k drawdown at one point.

Trouble is, the party could turn nasty if someone takes away the punch bowl but I don't think that will happen any time soon.
 
Wahoo, I am now the proud owner of 250 BHP shares. The dividends aren't huge so I evened it up with some 11.87% CIY shares. Gotta keep an eye on the cashflow. Capital growth and any franking credits are a bonus. I am trying to be a longterm B&H investor. :)
 
b&h is good to an extent but I think there is a middle ground of medium term b&h. When I look at the stocks I held in the early 90's a lot of them have gone broke, been taken over, delsited whatever. You still need to stay abreast of matters.
 
Ausprop said:
b&h is good to an extent but .......
Click to expand...

Dare I say it out loud but with property and share investors, one is from Mars, the other from Venus. But buy and hold doesn't really work with either, it's just that the X axis for one is X10 that of the other. OK for slow thinkers I guess.:D

Sorry, but that was a joke. Trust me!
 
Rio makes bid for Alcan,...

....."Rio Tinto offers to buy Alcan for $38 billion -- Mining giant Rio Tinto has agreed to buy Alcan in a deal valued at $38.1 billion, a move that would create the world's largest aluminum company and thwart Alcoa's hostile bid for the Canadian company.
Anglo-Australian-based Rio Tinto and Alcan (Charts) announced the deal Thursday, saying Rio Tinto would pay $101 a share in cash for Alcan.".....

Not much effect happening in London. RIO down a bit, BHP up a bit. Not sure what effect this will have on things tomorrow.

See ya's.
 
RIO have been known as the conservative mining company. They have traditionally sold assets in a boom and bought in down turns.

BHP have been known as the greater risk taker, and have probably taken bigger hits when things stuff up.

In London, BHP up over 4%, although this may just be the boom market, and RIO down by an even bigger amount. Looks like being a big day, although it was probably going to be big anyway, and not anything because of the RIO deal.

See ya's.
 
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I'm thinking of taking a bit off the table. I've already made a year's salary since Jul 1 (on paper). Just can't find anything I would like to part with. :)
 
Sunfish said:
I'm thinking of taking a bit off the table. I've already made a year's salary since Jul 1 (on paper). Just can't find anything I would like to part with. :)
Click to expand...


Yes, nice problem to have, isn't it. One of my miners is in a trading halt today - Fortescue - :mad: - great timing not! Lucky I am buying and holding atm. FMG had been rising very solidly over last couple of days, but hey, insider trading doesnt exist, does it!
 
Sunfish said:
I'm thinking of taking a bit off the table. I've already made a year's salary since Jul 1 (on paper). Just can't find anything I would like to part with. :)
Click to expand...

I can remember reading somewhere on the asx website than you can pull funds from shares you own by using installment warrants and pull some of your profits out tax free.

Don't know the specifics but might be worth doing a search and looking into it.


Edit" this is the strategy here - ok it increases your leverage and risk but still may be worth considering.

http://www.asx.com.au/investor/warrants/tools/library/cash_extraction.htm


OSS
 

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