Its pushing 26 times earnings and the dividend yield is 3.2%. No more need be said. Its absurdly overpriced.
As for FOMO. What are people fearing missing out on? In the USA Nvidia is going off as no one wants to miss out on not owning one of the top AI companies in what may be an AI boom. Whats CBA's FOMO story? If the FOMO is simply fear of missing out on the share price appreciation, then you are willingly participating in a bubble.
The time will come when people realise owning a bank stock with limited earnings growth, paying a dividend yield less than the rate of inflation & trading a sensationally high price multiple relative to its history, is a bad deal. You can earn 4.5% in Vanguards money market fund with principal guaranteed. As opposed to CBA's grossed up yield of 4.7%, however a correction from 25 times earnings to 20 (which is still high) would see a loss of 20% of your capital. Its asinine the risks people are taking buying at these prices.
CBA Price at posting:
$143.43 Sentiment: Sell Disclosure: Not Held
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