CSL has more downside...and chat, page-177

"Several listed stocks not near as good have a P/E much higher than CSL."

What is the possible relevance of that?
Who says one has to own either CSL or other stocks with even a higher P/E.


"The 'it's expensive' argument has always been made about CSL and it will continue as CSL grows wealth for investors each and every year since it was listed."

No, it hasn't; I've been a CSL shareholder since the before the Aventis Behring acquisition, so I've for almost two decades been monitoring how CSL is valued. (For context, it has been the largest investment for my family at some points in time.)

For most of its listed life, the stock traded at a 20% to 40% premium to the broader market.

I had always believed - and invested on the basis - that the company deserved a larger premium than that. I have always felt that a 100% premium was warranted (so 200% of the market multiple).

In the past two years, the stock commenced a spectacular re-rating, effectively doubling its premium multiple from, 140% of the overall market, to 290% today... a few standard deviations from historical levels.

What people - who are saying the stock is a buy at these levels - are effectively arguing, is that the tectonic shift in the stock's multiple over the past 12-18 months is structurally permanent. In other words, that this time it's different.

In my experience, the road is littered with the carcasses of the "this time its different" school of investment thinking.




(Note: This chart goes back only to 2011, because that's only when I started actively collating the relevant data. But I had been monitoring this relationship going back well before then, and it was not much different to the the 2011 to 2017 average.)

.