I'm back. And you know what that means: CBA gonna fall again. Maybe not right now. But soon...
CBA operates like a doughnut. They have their operating income in a ring surrounding a giant hole of debt. So long as their % returns exceeds the % debt, they're laughing. But it's a very risky enterprise. Any dip in revenues will create leveraged losses necessitating drastic cuts in operating expenses and even the dilution of stock with cap raisings to cover that hole.
To date, LibLab have done everything they can to jawbone the property market higher in service of the landlord and bankster classes who are their masters on the back of insane immigration numbers1. Stories of desperate dozens sharing a single house don't move the Prime Property Minister Albo. Throw in another 450,000, he says.
That leaves 2 scenarios. Either it's all going to go on and on with houses rising 2-3-4 Million apiece or it's going to top out at some point and all that leverage and debt will quickly unwind into a disaster. Neither future is appealing but that's what happens when you over-crank the ratchet spring. The only question is when. I give it 6 months. That may seem ridiculous atm but think how the US stock market looked 6 months ago.
CBA Price at posting:
$161.89 Sentiment: Sell Disclosure: Not Held
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