I got a 2nd wind and decided to type some more stuff.More...

I got a 2nd wind and decided to type some more stuff.

More bullish information on BHP that popped into my head:

- major miners have clawed back alot of price participation from copper refiners. Assuming copper prices of $3/pound this is worth about 30c per pound of copper extra profit for miners (according to Huntleys). Stick that in your model and smoke it.

- The above trend may spread to other smelting costs e.g. zinc (again according to Huntleys).

- consensus for next year's round of iron price negotiations is 0-10% price rise. And that has get to be a conservative estimate. Steel manufacturing margins have improved in China and elsewhere meaning they can definitely afford to pay more and will have to if they want the ore. Major supply from new mines (eg. FMG, MMX) is still a way off and demand is increasing at the same time.

- Freeport's bid for Phelps relies on copper prices staying at very high levels for the deal to make sense. You may hate Xstrata but they are not dumb...they are as much into trading and marketing commodities as they are into mining so they have a good idea of demand and supply levels....I take confidence from this bid.

- uranium will be huge...even at $30 a pound people were confident that the Olympic Dam expansion would be viable. Now its at $50 a pound isnt it? But noone is talking about Olympic Dam now....?

- volume expansions are inching closer for the major miners. Eventually these will play a major role alongside commodity prices as a driver for earnings growth. Yes there are delays, but precisely because its a boom and all other miners will be having the same problems...meaning competitive supply wont undermine prices for a long while yet.

- We are not in a wild bull market. Fear is still around. There is relatively little froth. Valuations are not excessive. We are climbing the traditional "wall of worry" of a healthy bull market. Private equity is making some big bids for companies, but it has been said that they would be stupid not to with debt being this cheap and economic growth being this good. (although that said there is no way I would have bought Qantas....was it Richard Branson that said "the best way to become a millionaire......is to first be a billionaire, and then buy an airline).

- business leaders and politicians are learning a very valuable lesson from the UK....that wage growth can be well contained through immigration from poorer countries. Despite economic health, massive bonuses in the city of London, booming financial markets, skyrocketing UK house prices etc. the wages of the average worker in the UK are being held down by an influx of hundreds of thousands of Poles and other eastern Europeans looking for better pay/working conditions. This has not gone unnoticed by politicians around the world especially in the US. Don't worry....they are looking at housing prices....they are looking at inflation....if they start to get really worried they will just let more people in. There is an unlimited supply.....they will be adjusting the immigration levers and buttona to provide new citizens who will buy new houses and cheap labour (and consume 20 times more than they did on their home country). Yes immigration can be politically unpopular, but they will just fudge the figures....anyway immigration is not nearly as unpopular as falling house prices.

- So, again, we are not going to have an inflation break out. Interest rates may rise a bit but wont have to go to stratospheric levels....this is exactly what the bond market is predicting with its record low long term rates.

- China is experting deflation to the globe. See point above - low inflation is good for growth. And when China's exports get expensive it will be India, or Vietnam, Laos, Indonesia.

- For the trifecta on the above.....the only thing that is going to cause an inflation break out is skyrocketing commodity prices - due to skyrocketing emerging market consumption. I would not to be worried about inflation if that was the cause (as long as I hold BHP anyway).

- there's still about 50 more reasons but I'm tired of typing again.

By the way this is all my opinion....I am not a professional, nor am I advising. Do your own research....I'm typing this stuff off the top of my head so check figures etc. as I am not vouching for correctness....this applies to my previous post as well.