Target $90, page-9

I must admit the China reopening trade delivered significantly more than I could imagine. The performance of miners has been almost a once in a life time in terms of the speed of the recovery in the share prices. I haven’t trimmed any RIO however I sold a tiny portion of my significant BHP holding and switched to WOW. Rest of my shares are not for sale. I’m at about 6% RIO weighting and 20% BHP or slightly more for BHP across all structures. Normally 20% would make me uncomfortable however it’s already 11-12% of the index weight and it’s a quality future stock like RIO.

I still dream one day, our UK management team wants to move to sunny Australia to get away from that dank cloudy cold swamp known as London and unify the holding like BHP. The index weighting would put it around CBA or higher (ie number 2 or 3 in terms of size or circa 7-8% of the ASX), would be very supportive of the share price given we have such high institutional investing via our pension system and requirements to be near index weighting’s. You can see the positive effect it has with BHP. Would also make more sense for tax purposes too for the most part, albeit the once off restructure consequences.

At these levels RIO and BHP are simply fairly valued, whereas before the market was placing significant discounts to current commodity levels. Albeit I always thought was was wrong to do with the exception of maybe iron ore to trade around $80 as worst case.