G’day Geffa
Agree with the point that after irrational highs irrational lows are likely to occur and in many stocks.
I would suggest that this is happening at present when you consider the current level of interest rates as compared to previous cases.
The difference I think however is that irrational highs are created predominately by greed. Irrational lows are created by gross stupidity.
One example: Gold at below $250 oz USD based on current cost of production and demand worldwide why would you dig a hole!
There maybe some mines the would still be profitable at that price but not enough to met demand. IMHO of course.
P/E in the range of 5 to 8 suggests earning before interest and tax of 20% to 14% of the share price.
Very hard to buy a micro business with that sort of return with interest rates at their current setting let alone a very large one the size of Telstra, Banks etc.
Mind if you know of one, give me a call.
If interest rates were in the range of 12% to 15% I wouldn’t argue against your comment but there not and not likely to be anytime soon.
So P/E’s of 5 to 8 on anything other than pint sized companies appears idiotic to me.
Time will tell but it still looks cheap to me.
Regards
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Open | High | Low | Value | Volume |
$3.97 | $3.98 | $3.95 | $69.16M | 17.43M |
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No. | Vol. | Price($) |
---|---|---|
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Price($) | Vol. | No. |
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View Market Depth
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3 | 7616 | 4.160 |
2 | 22 | 4.080 |
3 | 9127 | 4.040 |
4 | 11976 | 4.030 |
Price($) | Vol. | No. |
---|---|---|
3.850 | 5296 | 6 |
3.860 | 108 | 2 |
3.910 | 8293 | 3 |
3.950 | 1388 | 1 |
3.960 | 18620 | 7 |
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