The sky is not falling was the message in September 2017. Our message was that the overall market did not show excessive valuations, which generally is a precursor to stock market corrections. However, our market outlook dimmed due to recent ‘risk-on’ rally, where most of the year’s return was delivered... Show More
Mining 101: a good mining company makes money at the low end of a steep cost-curve. This is BHP’s strategy and it is working wonders in iron ore. However, in 2011 BHP forgot this simple rule. Deal hungry and with cash flow burning a hole in the pocket after two... Show More
Macro outlook: China stimulus and US Fed backflip to support commodities in the next 6-12 months as declining global growth drives more central banks to keep easing bias and deliver more stimulus. Growing debt and deficit problems have forced governments to deliver a low risk and low growth agenda to... Show More
BHP Billiton (BHP) reported an underlying attributable profit of US$412 million for the half year ending December 2015. The result was below market expectations with the changes to its dividend policy also a shock to investors Show More
Production volumes are up massively. Revenues have doubled, despite the massive pullback since 2011. By almost any measure, BHP is a bigger company than it was in 2004. Show More
Aussie market had a big bounce from the fair value level (i.e. 5000) in line with global positive sentiment overnight. China got the IMF internal tick to join the global currency war…wait, they already have done that….sorry, they now are expected to join the global reserve currency status. Only a... Show More
Aussie market started very negative with global sentiment before bouncing back to recover half the day’s loss and then sliding slightly further negative as the optimism waned. History tells us that in recent terror threat have not delivered a prolonged negative sentiment. We expect the current event to follow the... Show More
Aussie market followed the global red paint outlook and started with a Friday the 13th special 2% drop before recovering slightly. The damage was all about US Fed’s move on rates higher looking even more certain in December. The stronger the USD gets, the weaker the AUD and commodities go.... Show More
A common investment theme running through each of our model portfolios has been a deliberate underweight position in the Australian major banks. This has supported our significant performance against the ASX 200 benchmark over the last twelve months, yet challenging headwinds continue to warrant a cautionary stance. A recent paper... Show More
Good morning, Show More
There were few surprises in the BHP result last night. BHP’s revenue declined 21.4% and normalized NPAT from continuing operations declined 70.5%. Basic earnings per share declined from $2.50 to $1.20, putting the shares of this cyclical business on a price to earnings multiple of close to 20x. We have... Show More
Good morning, Show More
Good Morning, Show More
Good Morning, Show More
Good morning, Show More
The battle for iron ore market share is likely to play out in the same way as similar fights in other industries. Squabbles over market share which create excess capacity and depress prices are not unusual. The airlines industry and soft drink and beer markets have had similar experiences. The... Show More