Replies to post #137611 on Biotech Values

[DewDiligence]

That would be a riskier trade than you might think insofar as BHP resides in a sphere dominated by the US dollar.

p.s. Did you ever buy CLB (as you said you were thinking of doing many months ago)? It hit another all-time high today and has been the biggest individual success in the institutional portfolio I manage.

[zipjet]

Ooops - point already made - sorry.

If I was a hedge fund that could use significant leverage, I think I would be quite happy shorting BHP and putting the money in Australian bonds of similar maturity.

That arb is also bet on the relative value of the Australian dollar versus the US dollar or perhaps a bet on the relative inflation/interest rates of the two countries. So you would also need to hedge out that risk or hope it goes the right way.

ij