yes sorry I forgot CBA is the only bank in Australia.
Its not a matter of being scared or CBA going broke which is just a ridiculous response - the fact is CBA will go down. When the Fed go a bit aggressive on US rate rises and aussie falls, international money will flow out of aussie markt in general - far better (even just on xchange rates) to invest in other markets. If I sitting in US my view is putting money into China and Asia in general not a bank in aust. Tho I not suggesting that alone would drive price down to 60
Cost of money going up and if RBA doesnt raise then margins will erode somewhat. When aussie starts to raise rates and there is positive gapping by CBA (ie reprice assets b4 liabs) then profits may go up but this has to be balanced against what could happen if property bubble bust and mortgage default rates / provisions etc etc.
One just cant assume that the div rate will be maintained. 7% is attractive if div rate held but they will cut.
PE could go to 10 / profit level may fall and you easily get to 60$ Having said all that if it gets to 60 or below I would buy on divs alone.
Volumes low everywhere but I still see falls to come based on both technical and fundamental factors but if you can get 8% div yield (100% franked) as a retiree and that can fund you retirement then yeah its not the worst strategy and a substantial overweight cld be justified - i mean not as bad as just a passive fund
CBA Price at posting:
$68.18 Sentiment: None Disclosure: Not Held
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