Whilst it may be grossly overvalued on a relative basis to other developed banks, and on a historical basis when comparing CBA historical PE range to its current PE, there is something going on that has unleashed utter mania.
People say it the superfunds. But why are they buying it? Im fully invested in a global share fund through my super. There are a range of options for superfunds to buy. Why are they so fixated on buying up the banks?
I read the other day, that they are buying up the banks, because of the top companies in the ASX 200, they are the only ones whose earnings are stable and consistent. Miners are facing a grey future due to a maturing and slowing Chinese economy, while our tech stocks have PE ratios ranging from 150-300 (very high risk). In essence, there is little choice other than to sink money into financials no matter the valuations and low yielded returns. If that is true, it sounds disastrous and almost like a broken market. A proper stock market should have strength in multiple sectors.
CBA Price at posting:
$161.61 Sentiment: Sell Disclosure: Not Held
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