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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: russwinter who wrote (13011)	5/1/2004 11:05:04 AM
From: gregor_us	Read Replies (2) of 110194

R.I.P. for the Reflation Trade? Seeing it Through BHP. Let's consider the reflation trade using BHP as solid, viable proxy. Here's a company that derives 33% of revs from oil, and the rest through a spread of metals and iron ore and coking coal--most of which China has inhaled through its giant electrolux over the past 24 months. This stock bottomed around 10/share in New York trade last Spring. It actually hit 8.92 for a brief moment but bounced around 10 for a while. I started trading it last April/May--and my first entry point was at 11.85. I was in and out of it all the way up past 19. I stopped playing in the BHP sandbox January of 2004. The best you could have done in this stock was a double, using its general bottom of 10, and its high of 20. My point here is that BHP is a poster boy for the Reflation Trade--among listed stocks--and the best it could do was double? Perhaps the Great Fed Reflation Trade, and the China Boom, will be seen in the future as having been much more "minor" than people see it today.

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