it’s a bubble and deserves to be shorted. But the issue is how many shares will actually be dumped in a panic sell down? The bank has over 50% retail holders by memory, a lot in the same situation as us, sub $10 cost bases. So they will not liquidate.
The large superfunds are more and more going passive simply because their active management can’t beat the index and it costs almost nothing to be passive at say 0.01-0.02%pa in fees vs say 0.20-0.50% being active and underperforming. The higher CBA goes, the more cashflows have to buy it. Ie every million dollars into the big funds, say 30% goes to Australian shares, of which 12-14% of that goes to CBA. However we’re talking $100s of millions a week of inflows for Australians superfunds. It’s a self made bubble due to a lack of free float and a lack of big new companies in the rust bucket known as Australia.
CBA Price at posting:
$181.10 Sentiment: Hold Disclosure: Held
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