Australian (ASX) Stock Market Forum

Shares Overvalued and Index ETF

20 June 2010
I've been reading up on value investing recently, loooking to maybe add some good stocks to my portfolio - at the moment its mainly STW, which tracks the ASX200.

I'm reading that generally the sharemarket is overvalued, my concern is that when value catches up with the index, I could see quite a drop in price. However I can accept some volatility, and have bought reasonably low - my logic for buying in recently.

I'm thinking I'm discovering why some people are sitting out the market. I may end up selling some and giong to some well researched value stocks, or cash.. Any thoughts?
Noone can give out investment advice here ra ra ra, seek your own advisers as all people's financial situations are different.

If you're really focusing on value investing there are still several good investments and extremely cheap prices floating around the ASX if you look hard enough. One example of this is WBA or Webster (not a recommendation to buy, but have a look at their financials just as an example), it has over it's market cap in Tassal group shares, and on top of that it has some (very marginal it must be said) farming assets in walnuts and carrots. If management were to wind up the company tomorrow it would result in a number much higher price than the market is assigning it.

A wise man once said "It's very expensive for a cheery consensus". :2twocents