Vale S.A. (VALE)

Is a direct drive into the Asian/emerging markets expansion. They sold some royalties a week or two ago. They are cleaning up the balance sheet. You are paid a good yield to wait. If it doesn’t go in the next couple of months you might question getting out.

Sold his holdings last year because 1) the government started interfering with the company and 2) the slowdown in China. A better alternative, which he recently added to his portfolio, is BHP Billiton (BHP-N), a best-of-breed operator, best balance sheet and best dividend growth. Also has energy assets. (See Top Picks.)

Used to own it but sold because China was slowing down and there was interference. BHP is a better asset.

An iron ore company with base metals and fertilizer along with it. Will benefit from the China growth story and have a good yield. World cup and Olympics coming up. Leaders in their field. Were double before the ’08 crash.

[Show did not air however top and past picks were posted to web site]

Iron ore prices are very weak and they’ll probably stay that way. Expects iron ore prices to stabilize at around $80 a ton so there is probably still some downside. This company will still make money at that level. Nickel side of the business is not as good. Believes the super cycle in China is over and now we are into a period where that slope has gone down significantly. We’ll still get growth in China so this company, at the right price, will do well.

Largest iron ore producer globally and this is the most important component of steel. Stock has fallen a lot over the last little while because China’s growth has slowed down considerably. If China has a soft landing, this is fine. Feels the company is doing a lot to cut its capital expenditure and costs. Would prefer a more diversified large mining company. Try to get it at $15-$16.

(Market Call Minute.) Right place to be, but the wrong time to be there.

Going down is because of iron ore prices. Steel is in overcapacity especially in China. Feels the dividend is safe. Commodities are not going to go up as much as they did in the previous 10 years. These companies are going to cut back on capital expenditures and clear out non-core assets. Starting to trade at a large discount from where they normally trade. At some point in time in the next little while it will be a good purchase.

Very good company. All big cap companies are down significantly. You want to buy it when there is blood in the street. Their market is poor and there is political interference in their markets. You need to wait until market hits bottom and these prices have not hit a floor.

Dividend of 6% should be safe. He is a little bit concerned with some of these resources and especially Iron Ore. We are in a new phase of growth in China.