Adam, The re-rating of not only stocks but all assets is...

Adam,

The re-rating of not only stocks but all assets is something I spend alot of time thinking of. I consider a real asset something that must at least give you a return so that a true value can be given to it. Now that is a simple view that works for me because it rules out a majority of stocks, over priced property, gold and cash. It is also the reason I like to be fully invested in the market, the thought of sitting on cash watching its value slowly decline over time (1, 5, 10 years, who knows) while waiting for the bubble to burst doesnt appeal to me.

We seem to get more opportunities than ever to pick up quality stocks, the likes of Brexit, Greece, the Fed etc have provided such opportunities. When this bubble does burst it will put those events in the shade I suspect and we will get a wonderful opportunity to add to our positions. The rubbish will get cleaned out, the speculators will suffer, the feared shorters will even find it difficult as everyone rushs for the exits. The bubble bursting wont affect the quality of ARB, AMC, CSL, IVC, RHC, SEK etc etc.

I think we will see market average PE's of 15 or so, I think we will see the All Ords at 6800 again, I think when I pick up a copy of the Vanguard All Ords history chart in 20 years it will show that the All Ords has slowly but surely ground higher as it has since inception. For me over the last 32 years slowly but surely adding to quality when the market invariably over reacts is the way to go, sitting out and waiting for the big one doesn't.

Things could be worse, we could have everything riding on a company like, I dunno maybe MSB

Note: I have had my share of dogs over that 32 years.

Warrigals