As luck would have it, failure of some plum opportunities for BHP Billiton paved the way to Marius Kloppers' shale coup. Now the miner has the chance for an even bigger slice of the action.
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Comments PolicyThe success of all major projects is due to a mix of skill and luck. BHP management has been on both sides of these equations various times in recent decades (Kloppers' accidental recipe for riches, January 10). For all of the near misses quoted in the article there have been an even number of crashes (remember Magma Copper?). If I recall correctly the 'short-termism' underlying institutional criticism of the shale purchases was exceeded only by the hysterics of certain parts of the media. These hysterics reflected a lack of understanding of the drivers of this story and, well, lazy journalism. Indeed certain business writers have but recently reversed their opinion of the U.S. shale story following personal excursions to the U.S. The fact is this story is still being written. Current enthusiasm is welcome but premature. Much can still go wrong with this story and some luck is still required.
If BHP bought Woodside,which is currently a bargain,and given the obstacles to other bidders a simple deal, it would then become a massive force locally, and also, globally (Kloppers' accidental recipe for riches, January 10).
I remember when BHP bought Utah Coal off General Electric. The media know alls were shouting about how BHP was buying into a throwback industry and GE was investing in the future as we should be. At the time, GE was planning to invest more in their jet engine business and they did well with it but it was never right for BHP or Australia. The lesson - believe the man who's money is on the line, not the loudmouth with nothing to lose (Kloppers' accidental recipe for riches, January 10).
I hear similar inanities these days from The Greens as to how we should be investing in green technologies - treat them with the same contempt.
There is a place for accountants (Kloppers' accidental recipe for riches, January 10).
But there is also a place for clear-sighted, down-to-earth business professionals with a sharp sense of where economic value comes from, and how to deliver. And how to measure it.
Why would you own BHP shares with the current price being the same as in July 2007 and the current yield 2.82%-much better than it was in 2007! (Kloppers' accidental recipe for riches, January 10.)
Might be a great company for the CEO and the directors but not for the shareholders.
Nice to read of Kloppers luck but does anybody remember the Magma debacle to mention one.And if the shale deal was so good how come they wrote off $2+ billion in the first year?
Would somebody please explain how and why BHP and Rio are the pillars of any serious portfolio when the shareholders recieve so little?
Given the high cost of any Australian development and the government impediments, Kloppers has made the right decision in more ways than one (Kloppers' accidental recipe for riches, January 10). This suggests it is no accident. Postpone the outer harbour for Port Hedland and the Olympic Dam development. Well done. Sell out of Browse before the Government and their alliance compatriots destroy the project altogether, well done. Again ang yet again, the Government is driving investment offshore and voters are viewing this as "Market forces" or luck. You make you own luck. Business is like building a chook house. Make it strong, make it right and you will keep the foxes out, so the chooks will grow and lay plenty of eggs. There is no luck involved.
BHP has had a long and odd history but I stayed with BHP and in my old age it has paid off. A small investment in BHP at $10 per share in 1991 has delivered the goods. Yes they took some very bad bets but as Alan says "that's business" (Kloppers' accidental recipe for riches, January 10).
Wouldn't it make a lot of sense for Australia if we used our own cheap natural gas to generate all our electricity and made it economically atractive to convert most our cars to run on our own natural gas (Kloppers' accidental recipe for riches, January 10) .We could not worry about the daily rip offs in petrol prices and would reduce the carbon emissions as well.
If we ran all our cars/industry on gas, just imagine how much the gas price would increase. Don't worry how much better it would be for the environment but how much tax the govt cold miss out on. So it will not happen. (Kloppers' accidental recipe for riches, January 10).
Garry Scarf, Robert Peterson has gone some way to answer your question: "why (are) BHP and RIO ... pillars of any serious portfolio?
Robert's compound capital appreciation in BHP has been about 6.5% pa, plus he has received dividends, franking credits, capital return from the BHP Steel demerger, and of course the lucrative buyback of a couple of years ago. Not bad in my book.
And if he had bought BHP in 2001 for under $9 then the capital appreciation portion of his return would be double at about 13% pa.
That's what long term investing is all about, and (contrary to many spruikers in the industry) "timing the market" is at least as important as "time in the market".
Almost no-one gets rich quick via the share market, but many do okay by investing in a selection of sound companies over a period of time (Kloppers' accidental recipe for riches, January 11).