Donald Trump: Making BHP Billiton shares great again

Who in their right mind would have thought it?

Donald Trump elected President and Wall Street hitting record highs?

What are the odds? 500-1?

As a reminder, on the night of Trump’s shock election victory, U.S. markets were projected to plunge 800 points!

Overnight, the Dow broke through 19,000 for the first time ever, with a Deutsche equity strategist quoted on Bloomberg as saying…

We’ve finally broken through to new records. We can move on to pricing in the improving outlook: there are strong signs that the U.S. economy is in good shape and that bodes well for corporate earnings.

Look out above, dear readers. Dow 20,000 is now firmly in sight. Prepare for take-off.

It has been some ride since the Dow fell below 6,500 during the depths of the GFC.

It just goes to show… no matter how much doom, how much gloom – and believe me the GFC was as bad as it can get, certainly in my investing lifetime – markets can and do recover.

Here in Australia, as U.S. markets go, so does the ASX. In morning trade, the S&P/ASX 200 Index has jumped another 30 points higher, now heading towards 5,500.

The ASX goes that little bit harder when mining stocks catch a draft.

According to a report on Bloomberg, the Bloomberg Commodity Index posted its biggest three-day advance since June, with Goldman Sachs saying investors should bet on higher prices in the next year as manufacturing picks up around the world.

Our three largest miners — BHP Billiton (ASX: BHP), Rio Tinto (ASX: RIO) and Fortescue Metals Group (ASX: FMG) – are on a tear, again.

All hail iron ore… and copper, oil, zinc, tin and aluminium.

Looks like I picked a horrible time to swear off mining stocks for life.

Oh well. I’ve never been any good at timing the market – picking the top and the bottom – and this is no exception. For me, it’s all about time in the market rather than timing of the market.

On a brighter note, at least I’ve hung onto my BHP Billiton shares long enough to enjoy this upswing.

And what a run it has been. From the depths of a near $14 share price back in January this year all the way up to today’s $25.60.

Regular readers will know I’ve named $25 as the price I’d be happy to sell my BHP Billiton shares.

Well, here we are… past $25, and decisively so.

So what now Mr Motley Fool?

I might just hang on a little longer, see if I can’t get a couple of extra bucks for my BHP Billiton shares. This bull market feels like it has got more legs, as does the run for mining stocks.

In the AFR

Faster growth should bolster demand for commodities, and help pave the way for higher corporate profits.

And this from the same publication…

“You’re seeing some strength across the board. That’s a healthy sign and indicates to me that we’re in a bull market.

Yes, I’m getting greedy with my BHP Billiton shares. And greed has its own way of biting you on the bum, just when you least expect it.

But sometimes you’ve just got to go with the flow. And the flow is Trump, making the stock market great again.

So great that a headline yesterday on Switzer said…

ASX 200 could reach 5900 by year’s end.”

What will the share price of BHP Billiton be if that were to pass? $30?

Bring it on, I say.

Big, Fat, Dividends

This company's dividend is almost the stuff of legends. Its reliable cash flows support a high payout ratio, and the company's stash of franking credits are the cherry on the top of the dividend cake. Based on the last 12-months of dividends, shares are offering a fully-franked 6.5% yield, which grosses up to a whopping 9.3%, when those franking credits are included.

Discover out the name of this blue chip share along with 2 others in our new FREE report "The Motley Fool's Top 3 Blue Chips Stocks For 2017."

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Of the companies mentioned above, Bruce Jackson has a holding in BHP Billiton.

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