I’m surprised you are calling the market fair value, if I recall correctly you thought the market may have been expensive before Christmas and skaffold seems to be indicating that the market is expensive. Is your current view a function of expected earnings increases?
I find it hard to believe that all the macro risks have suddenly evaporated, and the amount of junk mail I’m receiving from brokers stating “now is the time to buy” worries me, feels to me more like now is the time to sell! But I’ve been wrong plenty of times before…..
G’day Jason, We’re talking about the market for high quality companies. Valuations can rise and often change when they give guidance or report better than expected results. A stock can become cheap even though it is rising in price. This happens when the valuation rises further and faster than the price. Hope that helps.
Last week i saw an ad in the Australian newspaper about you and an article you were doing in the wend Australian. I bought the wend Australian to read it but i couldnt find your article?
Was it there? Do you always write in the wend Aust? If so ill start to buy it.
Many thanks Sam
Every second Saturday starting this weekend. They made an error Sam. Apologies on their behalf.
Not surprised by you and your teams findings, shall we call it market neutral, when a market is neither cheap or expensive. It appears we may be in a bit of a tug of war between people who think the economy is recovering and those that think the economy is going to get worse.
There already seems to be a shift in interest rate commentary from predicting how soon the next cut will be to asking whether there will be a cut at all this year.
Previously you have discussed a flow to equities from old cash investors giving up on the low yields on offer, the likely result being an increased equity market.
I think the market is taking the middle ground waiting for a catalyst either way. JB appeared to have put them in a good mood, if more companies come out with relatively positive half year results then we could see the start of another expensive market, however on the flip side, if on aggregate the results are on the negative side than we could get back down to cheap territory.
This is all speculation really as, like you, i cannot predict where markets would go, if i could i wouldn’t be here as i would keep it to myself whilst i watch from afar on a private island.
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