Morning Report Thursday 13 March 2014
BHP is the most inherited asset in Australia. For shareholders' sake, I hope I am wrong in believing that BHP will remain an under-performing investment in years to come.
A sobering thought for BHP shareholders is that since August 2007, BHP is unchanged whilst CBA is up 50%...and that doesn't even take into account the large dividends and franking credits afforded to CBA shareholders!
Fundamentally, my concern I surrounding BHP arises from the fact that it is a "price taker" rather than a price setter, and in particular missed the most recent iron ore bull market, where the price of the commodity tripled between 2009 and 2011. RIO, on the other hand, invested heavily in expanding it's iron ore division and thus reaped the benefits.
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