But BHP and CSL who are number 2 and number 3 on the ASX have had a very different story. BHP is down -14% for the year and CSL up 7%. CBA is up 54%. The passive index theory isn't really credible as if it were true, the prices would move in unisom. In the past year there has been a complete realignment of the ASX with banks making up an even greater % of the index, CBA in particular. CBA had added 100 billion to its market cap in the past year, and BHP has lost around 30 billion. A massive swing from BHP to CBA. BHP used to be the biggest company on the ASX, now CBA is 33% bigger in market cap than BHP. Investors are going overweight CBA big time.
Why there is so much enthusiasm for CBA, who knows. I for one do not understand why there is this complete mania for our banking sector. When only a few weeks ago, CBA quarterly profit was 2.5. So on track to do 10 billion - that's still 26 times earnings. Although one theory is CBA is no longer a bank, but rather a tech company, and it will pioneer AI technology and usher in unprecedented earnings growth. Which to me, sounds absolutely ridiculous.
CBA Price at posting:
$159.03 Sentiment: Sell Disclosure: Not Held
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