BBUS, page-13573

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darrenrr

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11/07/22

11:23

Post #: 62472767
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Originally posted by swaggytrader: ↑

I took at a look at the numbers yesterday.
BBUS quotes a gearing ratio of 2.5 to 1 (meaning for every point the S&P500 drops the cash invested should go up by 2.5 times).

3/1/2022 S&P = 4820 points
20/6/2022 S&P = 3657 points
1163 point fall
= down 25%
25% x 2.5 geared = 62.5% projected return.

4/1/2022 BBUS low = $8.06
20/6/2022 BBUS high = $13.75
$5.69 rise in price
= up 70%
Plus 9% Div in share issue for holders.

BBUS has had a very good return on investment over the last 5 months, hitting a 52 week high.
I think the frustration lies with the recent chop we have had, on 11-5-2022 the high was $11.48, yesterdays close was $11.49, so (ignoring recent highs) the price has remained stagnate for 8 weeks.

My belief is we may still see dead cat rallies (I do not believe 300 or 400 points as stated by tinhat), but the overall trend will still be down because the FED has no choice but to fight inflation, if they let the market rally then all the work they have done will be for nothing.
And also take into account even though they say that the economy is booming, consumer credit card debt is at record highs, so the boom is being fuelled by debt.
The robin-hood investors are broke and the bitcoin investors are on the last of their capital, there is retail cash sitting on the sidelines, and when it goes in (thinking the fall is over or trying to pick a spike) it will get hammered on the next leg down.

The FED does not want a recession, but the reality is you can't have a booming stock market and bring inflation down at the same time.
Biden said it himself, "getting inflation under control is more important then a booming stock market".

The average American is like the average Australian, they don't give two hoots about the stock market, they care about the cost of living.
I think there is at least another 25% fall left in the S&P500, but it is wise not to bet the farm on it, as it could take another 6 months and there will be some wild swings in between.
We can't time the top or the bottom, but we can look at the market realisticly, and raising rates is design to slow spending, until the rate hikes stop the market will respond accordingly.
Will the FED be dovish on their next call, I don't think so, Inflation may fall and this may create a rally, but it will be a dead cat bounce rally because the same issues are still firmly in place IMHO.

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Back in 2015 bbus was approx $16 per share (equates to $160 per share after 1 to $10 change last year ), do you think the coming crash in equities could generate a $160 share price ?

Value at posting: 2,958.8
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