Cheers Eshmun. I agree with a lot of what you said. TBR is a good business with healthy margins and excellent asset backing at current prices. Also their LOM just increased dramatically as you pointed out. When I look at the price chart history for TBR there are periods where it is ridiculously undervalued, for example it went as low as $1.04 in 2012, due to the lack of liquidity in my opinion. While it is currently undervalued substantially, I figure if history is any guide, there may come times in the future where it is more undervalued.
In the meantime I view bhp and wpl as pretty damn good bets over the next few years, and they pay dividends. I agree that wpl looks to be struggling to find growth opportunities, but I feel with their strong balance sheet and with the state of a lot of their competitors, there will be ample opportunities to buy growth at reasonable prices over the next couple of years. Also I'm of the view that oil will rise for the next few years, a view which I think you share.
Iron ore pricing I am less certain of, to be honest I've been surprised at the recent strength in the iron ore price. Currently bhp and rio are making excellent margins on their iron ore businesses. Over the longer term though being the lowest cost producers in the world for iron ore I think it is a good time to buy these businesses. So far they have been good to me, but I won't be concerned with further price weakness as I know they can ride it out, and I can buy more.
I kind of agree with you about the potential for some upcoming carnage this year, I've reined back the share purchasing the last couple of months to leave some powder dry. I think the financial sector is quite exposed in particular to a real estate downturn. A full financial meltdown could obviously see you make multiples from here with tbr with a big gold price spike, and best of luck.
TBR Price at posting:
$5.20 Sentiment: None Disclosure: Not Held
