The market has for a long time been overheated and it will now...

The market has for a long time been overheated and it will now rapidly retreat to what is the true value of stocks. The most basic of business fundamentals is profit. It has been raised before that NST do not have the earnings to support their current share price. The market right now has little, to no, interest in Beament's roadshow presentations filled with blue sky predictions.

These are my views only. The NST faithful will jump all over me and for your sake I hope you are right!

• NST is heading to $6 territory with a PE of ~20 (down from today's PE of 44). This is still high by industry standards.
• It will find some support at around $9 as this is where the institutions last entered, but once it breaks through there it will be a free fall.
• Beament has a salary of $1.4M and with performance rights expects to make $7M+ this year. We will be interested how he justifies this. Truth is if the bottom falls out of the share price BB should be handing back his outrageous performance rights and learning to live of his meagre $1.4M! BB can't just bleed the company on the up and have no pain on the down. But based on his insider selling over the last 3 years he may just be in the market taking some profit.

We can talk all day about coronavirus, Russian v Saudi oil prices etc but these really only have short term effects to increase the POG and devalue the AUD. When they settle the POG and AUD will likely trend in the reverse direction. This will have a major impact on NST's earnings which will significantly fall. My PE numbers are based on current earnings of ~$225M. If those earnings fall the PE ratios become much worse and a $6 share price based on a PE of 20 may be optimistic!

I'd expect the faithful to jump all over me and talk of forecasts for POGO and the Super Pit. They are just that - forecasts. The market is more interested in actuals. And in 2020 few financial forecasts will be achieved.

I find it amusing that NST can have a market cap of $10.5B when Qantas is at $6.1B (PE of 7.7). The latter for me is much more of a business with earnings of ~$900M (4 times that of NST).

We should all have part of our portfolio in gold as it is a safe haven in uncertain times, but look for stocks with a solid year-on-year earnings, and a low PE, to bank your investment money with. For me NST is not one of these stocks - it was, but it has had it's time in the sun.