pre-market gap up the last 10 days...
now here comes the gap down starting tomorrow...
The thrust of my reply was that these shares respond to the ups and downs in the news regarding oil, commodities, China, A$, US$, whether relevant or not. Yes, the oil price increase has helped, the iron ore price a lot. Many smaller oil, gas, and miners have gone bankrupt or closed in production waiting for price recovery. Rig count is way down. BHP had a good quarter and even the reduced dividend looks attractive to new investors, considering upside potential when commodity prices fully recover.
Why is it that Yahoo allows the hundreds of spammers pushing their various scams, but if a real, long-term user posts something legitimate it gets bumped. If I mention Investor Village, this message will probably get dumped.
I was able to click on your ID and see what I think is the deleted post you reference. I didn't realize the subtle rise in iron ore price, nor did I notice the dollar weakness either. Guess I've been too busy to notice what's going on around me. I do understand these drivers. What about crude's recent bounce? BHP benefit from this increase too? What about the Aussie dollar? What is its impact? Thx for replying.
I gave a full answer, but Yahoo apparently deleted it because I gave a coded link to The Age Newspaper article among other things, stating that iron ore prices are up considerably on China hopes. You could google something like Age Melbourne Iron Ore China and see what you get. Don't have time to duplicate my longer answer.
From the Age article: "After three years of sliding prices, iron ore advanced in 2016 as China's steel output rose to a record, policy makers said they'd support growth and the property sector improved. BHP, the world's biggest miner, and Rio Tinto Group, the next largest, cut their output forecasts this week, adding to bullish signals. The greenback's slide to a 10-month low has also bolstered sentiment, as dollar-denominated c mmodities become less expensive in other currencies."
Iron ore price now US$62, break even price US $32.
I took a long position at 21, pre-div cut. Even with the cut, its still paying far more than most stocks. Throw in commodity price bounce for iron ore, gold, copper and hydrocarbons and quick settlement on the Brazil dam collapse, BHP is still fairly priced for the short term.
Risk, I've stood on the sidelines while the Divy has been cut and the SP has ran from mid $30s to$19 or so and back to $32 and change at the time of this post. I'm struggling trying to understand the primary drivers for this run up. I'm making an assumption that at least one exists. I know you follow this equity closely and would be interested in your thoughts.
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BHP down $2+ points today, after a nice recovery has started in recent days. My looking turned up a article and forecast by Goldman Sacs that "poured cold water on the red hot iron rally".
Personally, I have never profited from GS predictions. In contrast, they seem conflicted and are taking $$ out of this small investor's pockets. Seems to me like some shortie hedge funds are being protected!!!!
Get Bernie involved?
My broker buddy didn't talk me out of buying at $21, but he did laugh at my comment of catching a falling knife. I was buying for the long-term, not for a 60 day play. Amazing turn once they got the dividend cut out of the way.
I've been watching from the sidelines too. My view is that structurally nothing has changed with the commodities market except for crude rebounding some. Throw in the 75% div cut and I don't see this as a compelling buy with a 20 handle. If your time horizon is 5yrs, then risk/reward is better, but for intermediate/ short term I don't see it. For folks that bought at the 52 week low, they appear for now to have made a good call.