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Author: whatismyoption Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 21241  
Subject: Re: BHP Date: 12/3/2008 6:28 AM
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Hi KitKat
I live in Melbourne, so I'm definitely qualified to talk about BHP ;-) Plus I've consulted to at least two BHP divisions and Western Mining before BHP gobbled them up.

I've been waiting two years to short BHP and then at the crucial time I was distracted by an imploding market and simultaneously confused by a rising USD. Not to worry I feel another opportunity to short is afoot.

While this may simply be a blip in this super cycle and the long term future looks good for BHP, there is absolutely no way I'd consider going long BHP at this point. I just opened a CFD account so I can short BHP, as shorting stocks is currently not permitted on the Australian Stock Exchange.

Back in June I wrote the following:
"When, not if, this [mining] bubble bursts prices will collapse very quickly. I think the odds are high a global recession combined with newly developed resources coming online is the pin to prick the bubble."
That was in this post http://www.fusioninvesting.com/blog/2008/06/resource-boom-or... in response to talking to financial professionals about what they currently recommended. I almost choked on my horses hooves when both said mining. I'll let you know when they recommend selling, as that is sure to be the time to buy.

There are several quarters of worse results coming for BHP and investors will be so surprised they'll sell.

From your perspective an investment in BHP could work out OK. You'd be buying a slightly overpriced asset with ludicrously over priced money (USD).

There will be a time to go long BHP, so it is good to get familiar with the name, but seriously put it at the bottom of your long list.

Dean
Planning on shorting BHP via CFDs as both an investment and a hedge on total global collapse.
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