- 20 July 2021
am playing BHP as 'a safe haven ( liable to survive anything )Well a drop in AUD actually helps exports (not entirely, it still raises the costs of inputs to produce the export) but it's the demand side that's done for with iron ore.
If you've done your DD on BHP you'll know that they started very quietly rotating over into copper and precious metals (lithium, cobalt, nickel etc) mining a year or two back. They did this for a reason and it's the same reason why twiggy's been moving FMG over to energy and so on - iron ore's day is done.
I very seriously looked into a BHP play back then as I was thinking the exact same thing that the company's execs (thankfully) were - iron ore's done and they need to move over into supplying the inputs into whatever the next boom is going to be (namely, electric cars, meaning batteries and copper electric motors) and concluded that they were just way behind the curve.
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I think we'll be back in those sub-$40 troughs before long.
yes it is cyclical but even term deposits had a tough run for yield
i would rather be buying near $20 again , but am thinking some soon ( and claim some divs. waiting ) and add more later in the next big dip not my preferred move , but am seeing some crazy stuff in international banks
and BHP is always liable for another divestment ... maybe a coal arm next time ( having been the grateful recipient of S32 and WDS stock , i see this as a nice bonus )
my other favourite play like this is WES , but WES still seems over-priced to me , currently