Replies to post #4979 on The Rising Influence of Rising Affluence

[DewDiligence]

BHP—Nasser said the tailwind is moderating—not that it is turning into a headwind. Moreover, as BHP cuts back on capital expenditures, it will have more cash available for share buybacks and dividends, which ought to help stabilize the stock price.

All told, it’s not a pretty picture, but I don’t see this as a sell signal or the undoing of the main premise for owning the stock.

[DewDiligence]

Slides from BHP’s presentation today at the BofA metals & mining conference in Miami:

http://www.sec.gov/Archives/edgar/data/811809/000119312512235581/d354039d6k.htm

These are well worth a look by anyone who might be inclined to overreact to the comments in #msg-75631369.

[DewDiligence]

BHP is currently down <1% on the NYSE, which is not too bad under the circumstances. [CEO] Marius Kloppers’ presentation at BofA this morning (#msg-75640299) may have helped stem the damage from [Chairman] Nasser’s comments reported in your post.

[DewDiligence]

Not everyone is convinced that commodity prices will flatline or continue dropping; from today’s WSJ:

http://online.wsj.com/article/SB10001424052702303610504577419880216993306.html

The mood for the moment among some leading players is still bullish. Ivan Glasenberg, Glencore International's chief executive, said this month that while he expects Chinese economic growth to slow, supply will still struggle to keep pace with demand growth. "We are going to struggle to feed China," he declared.

A biased view, of course, but not necessarily an incorrect one.

…BHP and Rio [despite plans to reduce cap-ex to some degree (#msg-75631369)] are still likely to approve about $50 billion worth of projects in the next nine months, Credit Suisse said. "While stock prices may not react positively when these projects are announced, we would see any resultant share price weakness as an opportunity" to buy Rio Tinto and BHP, Credit Suisse analysts wrote in research note.

Disclosure: I have a position in BHP, but not RIO.