China vision brings victory to the party
The Sunday Age
Sunday February 20, 2011
IN THIS week's exhilarating shares race, David Potts - winner of battle to end all battles last week - is again in front, with another healthy handful of resources and energy companies. He definitely believes the China story.What's that, you ask? It's the belief that a growing Chinese economy, combined with a more affluent middle class, will continue to sustain an unending demand for our resources and energy.It's a little different to the "bunga bunga" story, which has nothing to do with inappropriate activities, apparently, and everything to do with women dressing up in Santa suits, according to a publication owned by the man who held the parties, the Italian Prime Minister, Silvio Berlusconi.The sharemarket caught a bit of the "bunga bunga" mood this week and it all started on Valentine's Day. The ASX/S&P 200 got a little flirtatious with the 5000 mark again but didn't quite push through. Well, not during our week, which ended on Thursday because we had parties to get to on Friday, too.Although he likes resources, notably absent from Pottsy's portfolio was BHP. Richard Pritchard still likes it, as does actor Martin Crewes. But a record half-year profit of $US10.5 billion announced by Marius Kloppers last week didn't really do much for the share price - it slid following the announcement. Some of its mojo returned towards the end of the week and it ended slightly up. It appears you can have too much of a good thing (just ask Mr Berlusconi): if you don't give some of it back, in the form of dividends or a buyback in the case of BHP, then you might get into trouble.It wasn't just BHP that brought Crewes's portfolio down but QBE Insurance, Rio Tinto and Bathurst Resources didn't do him much good, either. But don't worry, Martin, just like the stage, a week is a long time in a shares race.
© 2011 The Sunday Age