still not that expensive....

To me Telstra looks expensive, but then I started to compare the alternatives and the figures were pretty interesting.

Investors are not buying this stock for growth or capital gains, they are buying for an income stream. Think retirees who are trying to live off dividends and interest. Also note, these investors like Telstra because of it's defensive nature.

Highest interest you can get in a savings account at the moment is 5.25% with a Bankwest Telenet Saver, it used to be RAMS with 5.75% but these accounts have now dropped back to 5.17%.

Highest term deposit is 5.00% ME Bank.

Now compare this to Telstra which has a gross yield of 9.59%, I guess it's no wonder the share price is moving up nicely as interest rates drop and more and more retirees are forced to look for yield in the stock market.

Now you can get better yields in companies like Fleetwood and Oroton but I think these investors will be more likely to buy Telstra as they are so risk averse.

Of course if interest rates on savings accounts were to go back up to around 8% like in 2008, I would say Telstra is pretty expensive, but I can't see that happening for a while, the market is expecting another cut in December.

Still a hold for me (if you are looking for income)