can/will Iron Ore, Oil, BHP keep falling?, page-17

I've done quite a bit of longer term work, and for academic purposes at this stage, I'd be willing to pay $13.50 USD for a share in BHP (ATM about $16.20 AUD). Have used numbers from 2002 to 2014 (boom years). Obviously these have still been acceptably good years for BHP, compared with the period around the Soviet Union collapse. I'd be looking for an after tax average return of 20% pa (good margin of safety in that return) if I got them at that price. I see their adjusted ROE is about 15.5% - I adjust for capex, and depreciation debt levels, options/rights issuance etc. My model is very flawed in many ways, so I go for conservative outcomes - and a major flaw is that looking back 12 years is probably not enough with a co like BHP. Tempted to try to get reports back to the commodities price collapse of the 80s - but that is a long way back, and the financial information is nowhere near the detail that I need from back then (Wonder how analysts lived on so little detail in financial reports - lol). On the flipside, my model takes into account the ridiculous capex prices that have recently been paid - so this is providing a diminished ROE from the last 4 years of 3% pa, which is pulling the average down, from about 22% in the preceding 8 years on ave.

$13.50 seems a long way down - but I may well get this price - if the AUD falls to 65c, then this is $21 AUD. I can see a $21 SP as a possibility - not wanting to predict the future however. I'd like to think I'll be wise enough to wait for any downtrend to complete itself if my target price does get hit in the future, but I'll probably buy some straight away and average in.