rally next week, page-8

Frankie without knowing what stocks Mr P is talking about how can you say they are under or over valued. I for one think the major Banks are now becoming undervalued. Their world just become a whole better with the Rudd Government's bank deposit guarantee. Profits from NAb and ANZ are down about 10% or 20% but their share price has been marked down by about 50%. The inflow of money from non-bank deposits to the Big 4 will improve liquidity and margins plus most of their competition will be gone in the next 6 to 12 months. GE Money ( the biggest non-bank financier in our country ) has now ceased doing car & home loans in Australia and many others will now follow. Also, with the cash rate set to decline i'm sure with some stability in the market the 8% yield ( or thereabouts ) on the Big 4 banks will start to become very attractive for investors.

The best thing to do now is pick the right industry and then pick the company's who could benefit the most from consolidation. The big and the strong will no doubt swallow up the weak's best assets and become a whole lot stronger.