December 28, 2007


From Barron's:

We'd all like a good play on China, but the prices are just too high ... or are they?
Companhia Vale do Rio Doce (NYSE: RIO) is the largest producer of iron ore in the
world, and China is its largest customer. Vale, as it's called, is also a top producer of strategically impor-
tant nickel, as well as copper, other metals and minerals, and coal.
The stock is up 359% in the 30 months we've owned it (about 12% a month). Yet, astonishingly, the
shares still sell at a modest 15 times current earnings. The market still thinks of miners as cyclical stocks,
ignoring the huge long-term growth from billions of people still flooding into the free markets since the
fall of communism. Prices for iron are projected to raise 25% in 2008. Vale's earnings will be
sensational. Another 300% in three years looks doable. Buy Companhia Vale do Rio Doce up to $40.

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