Which direction

Don’t often contribute to the site but here are my thoughts on PGC and why I recently sold. I started accumulating from 25c some time ago adding 20,000 each time it rose by 5c. I like the companies story and in particular their strategy in acquiring and integrating other businesses and believe they do have strong management. There PE of 12.9 is on the lower side of the market average and there ROE of 8.2 is acceptable when you consider there growth profile. So why sell?
In my humble opinion the market as a whole is expensive and the risk reward balance favors a correction. A fall in interest rates did give the market a boost but one needs to take into account that the .25% drop only happened as a result of a weaker economy. We are a country of importers including PGC and the continual decline in the dollar will begin to bite. Another interest rate cut along with an improving US economy should see the Aussie in the 60c range shortly. Chinas projected growth is a little like its currency in that its manipulated to achieve their short term goals rather than reflect the actual state of play. Another reason I feel the Aust economy will be facing stong head winds
During the past 12 months I have had a significant amount of money in geared funds both in Aust and US stocks but recently have begun winding these positions back. If anything would favor the US over Australia to invest at this stage.
Time will tell if I’m right or wrong however I’m happy to take a profit and watch from the sidelines for a while. I will certainly be following PGC with interest and will be back in at a lower price if it retreats with the market as I expect it will.
Good Luck