I am not a holder of AIO and do not live in Australia, but follow what goes on here closely.
I have been watching this company for a while. There seems to be little short term potential but longer term I feel that owning shares in the company could be rewarding.
1. The population in Australia is growing above previous expectations. Imports will increase and domestic demand will improve.
2. Implementation of the Carbon scheme will make rail transport a much more cost effective option.
3. Recently BHP have come out and said that over the next five years Australia will need to ship more commodities to China than over its combined history. Moving such commodities will increase significantly rail and port facilities demand.
What I also see is that there is some very interesting new Iron Ore developments in the Pilbara and the biggest obstacle seems to be availability of cost efefctive rail haulage options. That could be a very interesting investment potential for the likes of company's like AIO possibly in cooperation with Chinese investors.
I am still trying to convince myself whether to buy in now or wait a few more months. Any further price weakness to below 150p will probably make the decision for me.
I also take Buffet very serioulsy and he definitely sees long term potential in rail. With Australia - Chine commodity trade set to reach unprecedented highs as Chinese industrialization picks up speed, arguably the Australian transport related assets are a more convincing bet than the US.
BR
Max
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