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Uncle Festivus

Exhausted Lemmings?

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It's always interesting to watch the market in action on an intraminute timescale, especially when the Lemming crowd come out to play. You can pick a stock where the fundamentals have changed very little from the last announcement yet the share price takes on a life of it's own based on herd mentality, greed or rumour?. Even more so when it's pushing the all time high record into blue sky.

For example, watching JBH today. Some brave Lemmings came out to chase the price to about $13.33 before reality stepped in and a sharp sell off ensued, but as a true test of bullish sentiment regained some of the loss to finish strongly.

Someone has done their sums and seem to think that the forward P/E's seem to justify the current record high sp, even with a current P/E of around 35. This cycle looks close to topping, looking a bit parabolic, maybe a short coming up.

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  1. vishalt's Avatar
    How can you say the cycle looks close to topping? There are stocks with a P/E of 50, 75 and even over 100 that can't stop.

    CSL has a P/E of 35.6, WorleyParsons 38, yet they've been flogging upwards since it reported last season (and consolidated in the sub-prime debacle). Apple has a P/E of 45, Google 52, yet they're all surging through into blue skies.
  2. explod's Avatar
    Yep because most of these investors are in fairy land. Follow this crowd at your peril. Do your own research and survive. A p/e of of $100 means it will take 100 years to get your money back if you live that long.


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