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I was puzzled by this headline in this internet article by livewiremarkets.com. How could BHP, the world's biggest miner, double the market capitalisation of CBA, Australia's biggest bank?
Then I realised that it was just an ambiguous, if not to say ambitious headline. Charlie Aitken had left out the word "be" which would have changed the headline to "BHP could be double CBA's market cap".
Crunching the numbers, this implies a $100 BHP share price. Here's how:
BHP's current share price is around $65, with some 5,081 million shares issued, giving it a market capitalisation of around $331 billion (never mind a few hundred million in rounding errors).
CBA's current share price is around 158, with some 1,673 million shares issued, giving it a market capitalisation of around $264 billion (same rounding errors).
If BHP were to achieve a market capitalisation twice that of CBA, that would divide $528 billion into 5,081 million shares, making its shares worth $104 each (again, ignoring the rounding errors).
WOW! And yet, walletinvestor.com has already pencilled in a 1-year "bull case" forecast of $95.39, albeit with a likelihood of only 25%.
How is this trend reflected in the immediate price? Well, after a huge jump in price to $65.75 on Thursday, it dropped to $65.16 on Friday, but overnight closing prices in London and New York suggest that BHP will resume trading in Sydney on Monday morning at well above $67.
Following Warren Buffett's advice to "only buy a stock if you'd be happy to own it if the market was closed for the next five years", I have been a rusted-on BHP investor for at least two long decades, and BHP's price movements have had a huge impact on the value of my portfolio. Yet it's just tiny dots on a flickering computer screen and a game that gets me out of bed in the morning and keeps my mind active. Come on, $104 !
After yesterday's excursion to Eden, I was looking forward to a quiet day at "Riverbend" planting a few more trees (which I should've done thirty years ago), but Padma wanted to buy some lip balm which is only available at a certain pharmacy in Moruya. Fifty kilometres there and fifty kilometres back for a tiny tube of lip balm costing six dollars!
If I hadn't agreed to go, my life wouldn't have been worth living, and so I thought I make the best of it and visit my favourite op-shop and have lunch at the bowling club as well. I think it must've been my sense of frustration that made me take a photo of the club's "WOMENS" amd "MENS" toilet signs even though I'd seen them many times before. If they had wanted to make them plural they would've been wrong; if they had wanted to make them possessives, they would've been even 'wronger'.
I noticed the lady at the cash register had been watching me. To keep her happy, I ordered a piece of cake for dessert. The cash register displayed, "DESERT $9.50". Oh no! I'd lived long enough in Namibia and Saudi Arabia not to want another piece of desert, let alone have it for dessert, but it turned out to be delicious and was artfully decorated.
"Europe today has little desire to reproduce itself, fight for itself or even take its own side in an argument."
The book beside the plate is Douglas Murray's book "The Strange Death of Europe - Immigration, Identity, Islam". It's happening in Europe; it's happening all over the Western world. Ignore it at your own peril!
Years ago, I found this book in my favourite op-shops for two dollars. It's the amazing story of a pack of killer whales who, for almost a hundred years, hunted around Eden on Twofold Bay, a small town just two hundred clicks south of Batemans Bay, and assisted local fishermen during the winter whaling season.
These killers would actually herd whales into the bay and then attract the land-based whalemen. As the boats put out from the shore, one killer would lead them to where the rest of the pack had surrounded the whale, working much as sheep dogs do for drovers. After the kill the pack claimed the dead whale's tongue and lips as reward, the fishermen removing the rest of the carcass a few days later.
I never quite finished reading this book but was reminded of it today when I visited the Eden Killer Whale Museum where the same book was on sale for $29. I had gone there with a new neighbour who is from that tiny, wealthy landlocked country in Western Europe surrounded entirely by Belgium, France, and Germany - anyone who can correctly name it wins a free twelve-month subscription to this blog - and recently settled in Nelligen just a few houses up from "Riverbend". He had always wanted to visit the museum and suggested I should join him on this trip, and so we set off early this morning to make a whole day of it.
By this time you will want to know more about this, so here we go:
But before we got to Eden, we stopped for lunch at the Robyn's Nest Lakeside Resort, which an old friend had bought some years ago to get rid of all the hard-earned money he had squirelled away in the past.
Listening to my friend's story reminded me of the story of the ageing booklover - not me! - who, having won the lottery, opened his long dreamt-of bookshop. Asked how long he would run the bookshop, he replied, "Until I run out of money". My friend's usual open-handed hospitality only made things worse, because even though he was still in town when we arrived, he had already instructed his staff to start serving us lunch and drinks and not to ask us for any money. (If I had known, I would've ordered a bottle of the most expensive wine on the list which, from memory, was over $5,800 !!! Could someone please email me a copy of that wine list, so I can double-check my memory, as I find it quite hard to believe that anyone would order that stuff. I suspect they only put it on the list to make people who order a wine in the more moderate $300 price range feel like they're getting a bargain.)
As you can't see who's clicking his heels, I let you guess which side I am on. Hint: I have started wearing braces as I no longer have a waist to speak of!
Not having seen him for six or seven years, I asked to have my photo taken with him, but having grown considerably older since then - I far more than he - I decided to publish the above 'headless' version only. (Actually, it was a lousy shot as the photographer had failed to call out "Say cheese!" while I was thinking of what my BHP shares were doing and my friend wondered if I had ordered that $5,800 bottle of wine.)
My friend's new home is truly spectacular, and Padma and I would love to go back and stay for a whole weekend, perhaps even for a whole week, but only if my far too generous friend allows us to pay full price.
At my age, my back goes out more often than I do, but I'm now, tired and hungry, safely home again. It's been a long but wonderful day and, with the weekend coming up, I'll be looking through my library to find Tom Mead's "Killers of Eden" to finally finish reading this amazing story.
Someone named Aiden from an email address inside "a boutique investment research firm that harnesses the power of young, tech-savvy finance and media experts" located in Kolkata (formerly Calcutta) has just sent me the following email:
Since Aiden's email address is aritrag@flairtree.com, I went straight to flairtree.com to possibly negotiable this "beneficial bargain that comes with a relatively reduced price" to an even more beneficial bargain.
While I am still waiting for his reply, I thought it best to send you the above video clip as an advance copy of "all those lustful videos" that Aiden may show you if I can't strike an even more "beneficial bargain".
After all, Aiden seems to be such a nice chap - he even suggested that I "ensure all [my] passwords are replaced with new ones on a regular basis" so that I don't "get involved in similar kind of unpleasant events anymore"- that I'm sure he'd be willing to negotiate.
(If you received the same email, we could ask for a bulk discount!)
Totally by chance, I came across walletinvestor.com which predicts share prices generated by machine learning from years and years of historical price data. As it spruiks on its website:
"Markets are moved by countless forces - economic news, sentiment, world events, and the decisions of millions of traders. No model can see all of that, and nobody can predict the future with certainty. What a model can do is study how an asset has behaved over its entire recorded history and describe, statistically, the trajectory that history points toward.
That is exactly what WalletInvestor does. We take the long record of an asset’s prices, let a machine-learning model learn the trend and the rhythm of its movements, and project that forward - together with a range that widens as uncertainty grows. The result is a forecast you can read at a glance and weigh against your own research.
We collect the full record of an asset’s prices - daily values stretching back as far as the data goes - and keep it current with the latest market close.
A machine-learning model analyzes that history to capture the underlying trend and how much the price typically swings around it - the asset’s own statistical fingerprint.
The model extends the trend into the future and draws a band around it. The further out the forecast reaches, the wider that band - because uncertainty grows with time.
Every forecast is regenerated as new prices arrive, and each asset receives a model rating that summarizes its recent behavior at a glance."
So what does it say about BHP? In two words: Strong Buy
Then machine learning takes over, with an immediate high of $69.29 on 23 September, and a one-year prediction of $68.39. That'll do me!
These latest results confirm what the market has suspected for some time: this is no longer an iron ore story. BHP is now the world's biggest copper miner, and shareholders are reaping the benefits.
The headline number from this morning's results was unmissable: a monster dividend of US 99 cents per share, landing almost 19% above street estimates of 84 cents. Other line items also came in ahead of consensus, but they are a sideshow. The dividend was the main event.
There's a reason the payout matters. With the recent capital gains tax changes, Australian investors want more income from dividends, and Chief executive Brandon Craig has given it to them. But the funding of this pay-out is the real story. Both copper profit and copper revenue are now ahead of iron ore - a crossover that has been years in the making - and BHP is now the world's biggest copper producer. I'll drink to that!
P.S. BHP closed at $63.85, well below its intra-day high of $64.79, but there's always tomorrow, and tomorrow, and tomorrow (to quote from Shakespeare's famous soliloquy in his play "Macbeth", Act 5, Scene 5).
Ich wanderte im Jahre 1965 vom (k)alten Deutschland nach Australien aus. In Erinnerung an das alte Sprichwort "Gott hüte mich vor Sturm und Wind und Deutschen die im Ausland sind" wurde ich in 1971 im Dschungel von Neu-Guinea australischer Staatsbürger. Das kostete mich nur einen Umlaut und das zweite n im Nachnamen - von -mann auf -man.
Australien gab mir eine zweite Sprache und eine zweite Chance und es war auch der Anfang und das Ende: nach fünfzig Arbeiten in fünfzehn Ländern - "Die ganze Welt mein Arbeitsfeld" - lebe ich jetzt im Ruhestand in Australien an der schönen Südküste von Neusüdwales.
Ich verbringe meine Tage mit dem Lesen von Büchern, segle mein Boot den Fluss hinunter, beschäftige mich mit Holzarbeit, oder mache Pläne für eine neue Reise.
This blog is written in the version of English that is standard here. So recognise is spelled recognise and not recognize etc. I recognise that some North American readers may find this upsetting, and while I sympathise with them, I sympathise even more with my countrymen who taught me how to spell. However, as an apology, here are a bunch of Zs for you to put where needed.
Zzzzzz
Disclaimer
This blog has no particular axe to grind, apart from that of having no particular axe to grind. It is written by a bloke who was born in Germany at the end of the war (that is, for younger readers, the Second World War, the one the Americans think they won single-handedly). He left for Australia when most Germans had not yet visited any foreign countries, except to invade them. He lived and worked all over the world, and even managed a couple of visits back to the (c)old country whose inhabitants he found very efficient, especially when it came to totting up what he had consumed from the hotels' minibars. In retirement, he lives (again) in Australia, but is yet to grow up anywhere.
He reserves the right to revise his views at any time. He might even indulge in the freedom of contradicting himself. He has done so in the past and will most certainly do so in the future. He is not persuading you or anyone else to believe anything that is reported on or linked to from this site, but encourages you to use all available resources to form your own opinions about important things that affect all our lives and to express them in accordance with Article 19 of the Universal Declaration of Human Rights.
Everything on this website, including any material that third parties may consider to be their copyright, has been used on the basis of “fair dealing” for the purposes of research and study, and criticism and review. Any party who feels that their copyright has been infringed should contact me with details of the copyright material and proof of their ownership and I will remove it.
And finally, don't bother trying to read between the lines. There are no lines - only snapshots, most out of focus.
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