Biggest bank in America. 13.42 times earnings, even with the expectation of increased financial deregulation and corporate tax cuts following Trumps win. Contrast to CBA valued at 27 times earnings. Literally a 100% premium applied to CBA over JP Morgan. Were talking JP morgan here, not some tin pot bank in Indonesia or Ireland.
I understand franking credits can create increased value above fundamentals for Australian banks. However a 100% premium on earnings over the biggest bank in the world's biggest and best economy?
This bank rally is blowing one of the biggest bubbles in Australian stock market history. The definition of a bubble is a rapid asset price increase not supported by any fundamental reason. This is complete mania and the ASX 200 is overvalued by about 15% because of it. In the year 2000 any tech stock was bought to the hilt. For some reason, we are in a phase were bank stocks are bought on a whim. Even Bendigo Bank has a higher earnings ratio than JP Morgan. The same Bendigo Bank that does well if it gets 8% ROE (JP Morgan did 17% ROE last year). Regional bank headquartered in country Victoria, more expensive than the biggest bank on Wall St. Don't tell me this is rational.
This entire bank rally is stupid.
CBA Price at posting:
$152.38 Sentiment: Sell Disclosure: Not Held
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