When your look at the nominal value of a stock, it can climb steeply, as a 10% gain on $1 is 10c. Whereas a 10% gain on $100 in $10, so as the nominal price increases the chart can give off a mirage of a rapid increase.
The below chart is not that chart. The below chart is measured in percentage. If you bought CBA 20 years ago, you would be up just under 400%, 23 years to get to 200%, 1 year to make the other 200%.
The extreme valuation of a dividend yield that is now 2.99%, with an earnings ratio pushing 28, pooled with its manic rise, means CBA is an outstanding candidate for a very serious and violent correction.
The risks taken buying at these prices are astronomical. I imagine many are buying in for FOMO reasons, thinking the rally will be perpetual. CBA has been trending up for 12 months and has defied every sell call, therefore perhaps many believe we are in a post correction era? That bank stocks in Australia are now infallible? Oh man have I heard that before. The lesson is always never learnt. Wasn't long ago Lithium was going to the moon, until it wasn't.
CBA Price at posting:
$155.13 Sentiment: Sell Disclosure: Not Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)