Forum Archive Index - January 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Dick,

Quite a challenge.  So you want to me find: 

1/ quality shares that have made very pleasing investments. What 
share do you own that you like the most?

2/ one we wouldn't like to part with, and one  we are always tempted 
to buy more of when the price looks right something we enjoy owning, 
an investment that has been satisfyingly successful.

My favourite share is somewhat amazingly , a share that I do not 
recall being discussed on sharechat before - ever!   It is a share 
that has a long track record of success- decades in fact.  It is a 
share that despite being in the commodity market, knows the 
importance of being a low cost producer.   It is a share that has a 
long term record of growth and a stable or an ever increasing 
dividend since its inception, even through 'tough times'.  For income 
investors I think that last fact is especially important.   It is 
even listed on the New Zealand sharemarket, (although is an 
Australian share by domicile).

The $A share price over the last 15 years at 31st of March has been:

1985  $5.94
1986  $6.28
1987 $11.10
1988  $7.60
1989  $7.60
1990  $9.66
1991 $11.10
1992 $13.42
1993 $14.68
1994 $16.48
1995 $17.36
1996 $18.25
1997 $17.00
1998 $15.44
1999 $13.55
2000 $17.84
2001 $19.60

For those who haven't figured out what I am talking about yet, the 
share is "BHP Billiton".

For those that look in the paper today and see that the share price 
has collapsed, not so!   There has effectively been a 1:1 bonus issue 
since 31st March.   Furthermore my figures do not include the 1:10 
bonus issues made on 19th May 1995 and 28th April 1989, so the bare 
share price numbers understate the capital appreciation by 20% or 
so, and we haven't even talked about the steady dividend stream!

In a nutshell the reason I like BHP is management's ability to do 
well in a difficult sector over long periods, and to keep the 
shareholder income up through cyclical downturns.

I have held BHP for many years before I became interested in 'Focus 
Investing'.   BHP doesn't qualify as a 'focus investment' company 
(nothing in the commodity business does).   But BHP has recently 
crossed some of the FIG hurdles (ROE now over 18% for instance) and 
it is now the second largest commodity producer in the minerals 
sector worldwide.

>From my viewpoint, BHP is a company that every "buy and hold" 
investor should have as a core part of their portfolio.  SNOOPY





---------------------------------
Message sent by Snoopy 
e-mail  tennyson@caverock.net.nz
on Pegasus Mail version 2.55
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"Sometimes to see the wood from the trees, 
you have to cut down all the trees."



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