...irrational market will eventually have investors seeing what they would then perceive as 'irrational moves' (down). If a stock wasn't meant to rise so much, it would have to retrace in bigger steps on the way down.
...too much unfounded love would eventually end with disappointment.
Per Intelligent Investor
There’s a big multiple bubble in high-quality Aussie businesses, led by Commonwealth Bank. The valuation of Australia's best bank is simply ridiculous. Its PER of 25 is higher than Visa or Alphabet, which have far superior growth prospects, and the price-to-book ratio is 3.3x despite the return on equity being below 14%.
As portfolio manager Nathan Bell said in his article downgrading the stock to Sell ($) on Wednesday, ‘this stock could fall 50% and still not be cheap.’
