Today, it was Merrill Lynch causing a run up in the price of BHP, the world’s largest mining company, by saying that the company broken into its parts, as a base and precious metals mining company, was worth 34% above the current market price.
Mining is a notoriously volatile business in both directions. Now with global demand for base and precious metals exploding, it is volatile to the upside, and will remain so for many years to come.
We believe strongly that precious and base metals should form a core holding in every long-term investor’s portfolio. I am not talking about day trading stock jockeys. I am talking about serious long-term investors.
Because we are known by other professional investors as global investors who have been involved in metals stocks and foreign stocks for a long time, we get calls from other professional investors asking us about the outlook for foreign stocks and mining companies. We tell them that we remain very bullish on non-U.S. dollar assets including precious metals, base metals and stocks in fast growing countries like China, India, Singapore and others.
It is our impression that more and more professional investors are starting to understand the message and are adding these categories to their portfolios. This can only be bullish for gold, base metals and foreign stocks and bearish for the U.S. dollar.