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MM thoughts on BHP

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Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

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Question asked 01/07/2021

MM thoughts on BHP

I'm a (sort of) new subscriber and I like reading your daily comments very much. The whole approach (website, comments, presentation, historical links etc.) seems to be much better than the past approach (I use to be a MM subscriber around 5 years ago). Currently I'm very interested in your Flagship Growth Portfolio. I noticed that the biggest part of it is the BHP. My questions are (of course I'm not asking for the personal advice but rather your professional opinion.) - What level of prices would make the BHP a "good" buy in the current market? Would this price be good to allocated to BHP the same weight of the total portfolio (~9%) as the Flagship Portfolio? Or... are we "too high" and only addition to the existing holding would be reasonable approach? Thanks for your good work. Robert

Answer

Hi Robert,

Thanks for the thumbs up, much appreciated! MM likes BHP in the mid / high $40 region but we would only consider increasing our exposure around $43. Conversely in the $55-$60 area we will look at tweaking back our exposure. Overall we remain bullish the “reflation trade” of which BHP is a major part but after doubling since the 2020’s there’s obviously a fair amount of good news built into the share price hence we are “buyers of weakness and sellers of strength” with an emphasis on the former, sound familiar I’m sure.

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BHP Group (BHP)

LAST UPDATED 01/07/2021 16:16

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