gindalbie metals the largest resources

2017? Buy now! Here are the tips for 10 years' time
Marcus Padley
June 16, 2007


BUFFETT reckons he wouldn't care if the sharemarket closed for 10 years. OK, done. As of next Friday they are going to close the sharemarket for 10 years. You have a week to get set. What are you going to buy? Here's my guess.

Resources ¡ª BHP, Rio, Fortescue, Gindalbie Metals, Woodside ¡ª let's go with the flow. In the next 10 years the main driver will be the industrialisation of China and the Chinese will become very active investors, globally.
Chinese money will soon smack into equity markets. They will initially invest in the companies causing them the most trouble ¡ª they are fed up with being bent over by Australians, Brazilians and Americans.
BHP and Rio? Gone (if they haven't already gone). At huge premiums that imply a $300 price for Fortescue. But Andrew Forrest will have delivered Fortescue to the Chinese already, for $150. It will be another MIM, sold too cheap.
But Andrew won't care. He'll be Australia's richest man.

Gindalbie Metals becomes the largest resources stock in the Australian market and, with its new-found friends in China, it won't last forever either. Add a splash of Woodside.

We'd like to buy a host of other resources stocks but we only have room for a few. Still, against a 22 per cent sector weighting, I reckon we might plunk 50 per cent of the fund into the sector.

Of course, a few other things will change in 10 years:

¡öDisappeared: The ability to write, personal tax rates, Japanese in primary schools.

¡öNew: Nuclear power, water futures, Google everything, Mandarin in primary schools.

¡öMultiplied tenfold: Everything uranium, petrol prices, bicycle manufacture, the super fund industry, the Future Fund, Andrew Forrest's Windsor knot, Perth.

Marcus Padley is a stockbroker and the author of the daily sharemarket newsletter Marcus Today. For a free trial of the newsletter, go to www.marcustoday.com.au