BHP Billiton (BHP)

(A Top Pick Jan 23/13. Down 14.63%.) The story was primarily that China was going to take everything but that has changed. The big commodity plays have figured that out so they are obviously now developing the Indonesia’s, India’s, Brazil’s markets because those countries are going to need copper in order to develop their economies. An added benefit is that they have the energy assets. Their new CEO has energy and commodities. Good balance sheet. Likes it long-term. Just buy it and put it away and you’ll be fine.

Even without Canadian $ advantage this one should do well. It looks like it is coming off here. Hoped we would not have to own something as big and boring as this one.

Very diverse. Big in Iron ore, potash, copper. He is starting to warm up to a little more. It is more of a trade and a long term investment.

(Market Call Minute) Looking for Asia to do better next year.

(A Top Pick Dec 20/12. Down 11.29%.) Regards this one as the best-of-breed. Best of dividends and best balance sheet. This is the first one to move into different asset classes, so it has the potash and oil/gas assets. A diversified resource play. Expects volatility but longer-term it is a play on commodities. Likes this long-term.

The only mining stock he owns. Iron ore and oil. The only one he owns.

This is not a contrarian play. Believes the BV is about $25. Have over 2 billion shares outstanding. Pays a very nice dividend. He wonders that with the difficulties in the commodity sector if they might not have to cut the dividend.

Good operator. We are going to see a broadening out of emerging market demand for commodities. Indonesia and India are going to need iron ore and Brazil is going to require some. There will be more demand for copper and iron ore. Good balance sheet. Good hold for the long term. 3.6% dividend yield.

(Market Call Minute.) They are all trying to sell assets which they loaded up on at the height of the cycle.

Super cycle is over and this is a super cycle play. Iron ore prices are going to come down, which will hurt this company. Expects you are in for a slow period of growth for the next couple of years.

(Market call minute.) Good dividend yield. Trading very cheap at around 10X earnings. The key is the coal market but they’ve restructured and taken a lot of the costs out. Also, reduced CapX which is a good thing.

Only based metal stock they own, and this is a long term investment. Has the best balance sheet in the industry. Has a good yield. Main products are iron ore and copper. as well as shale assests. Have recently announced a cut in their capital expenditures, are building up cash waiting on other mining companies to be bought cheap.

Largest diversified resources company globally. Half iron ore as well as diversified mining material. The sector is quite challenged at the moment because of increasing costs and increasing supply along with a decreasing rate of demand growth globally. Very tough outlook for these businesses right now. If you wanted to own a mining company, this one would be a good way to go right now. He doesn’t have a single mining stock in his portfolio right now.

All the giant mining companies, and there are very few left, sort of got into a race to see who was going to be the biggest and were making acquisitions on a global basis, expanding their base. This one wanted to get into potash. Some of these acquisitions have not turned out so well. However, when you buy these companies, you are buying global giants with huge resources in the ground with huge capabilities of producing materials into the future. If you have a very long view, of at least 5 if not 10-15 years, it probably doesn’t matter what you pay for them as there is no substitute.

Longer-term, commodities tend to have a high correlation to inflation. Thinks longer-term there is a ton of inflation in the system. Strong balance sheet. Inexpensive by historical standards. Yield of 2.93%.