Rio Tinto Reaching $100 Means Nothing

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That Future Fund had better hurry and take advantage of these new market highs while it can. Yesterday Rio Tinto (ASX:RIO) became the first Australian stock to break the AU$100 barrier in several decades in intra-day trading. It couldn’t quite get over the line, though, and closed at AU$99.99.

There’s nothing especially significant about AU$100. Nominal share prices don’t necessarily tell you anything important about a stock. Things like its market capitalisation, earnings per share, and its valuation are a lot more important. But we are vain things, us human beings. And there’s some prestige attached to big round numbers.

One other note on Rio reaching AU$100. The other two likely candidates to reach the mark were Macquarie Bank (ASX:MBL) and CSL (ASX:CSL), the vaccine and plasma company. Not that it means anything…but it’s interesting to note a miner reached the mark before a financial stock or a growth stock. Is iron ore a fundamentally better-or more understandable asset-than an airport or blood? Maybe this means Rio should split to make its shares nominally cheaper. And then again, a strong share price is useful as currency in today’s buyout-driven boom.

Dan Denning
The Daily Reckoning Australia

Dan Denning
Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.
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