Banking on gains? (19/11/2013)
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Kent Wong
:
Hi Roger
I do 100% agree with you that the curremt price for the banks is expensive especially when CBA approaches $80 mark. Actually I have taken some profits at the price of $79+.and the price has come down to around $76 today.
I will top it up again when it goes further down, ie. close to the instrinsic value.
Sorry for misunderstood what you meant in the video. I have watched all your videos and found most of them are valuable. Thanks
Cheers
Kent
Roger Montgomery
:
A pleasure Kent. Always happy to receive feedback.
Kent Wong
:
Hi Roger
I heard a lots from you that the banks, especially CBA, is trading well above its intrinsic value and hence it is very risky and is subject to a sell-off.
It may be true as seen from the previous experience. However don’t forget that if you take a long term view, say over a decade, the CBA share prices, increases from about $20 in 2003 to close to $80 2013 and the dividends increase a couple of times as well. The dividends and the franking credits itself is well above the interest earned from term deposits.
History tells that there were couple of times CBA share prices tumbled but history also tells that it will recover and prices keep rising in the long term.
My view is as long as the share is a good share with good business, even if you buy it a bit expensive now, it does not matter, it still worth it later. Time is very important for a good share to shine.
Roger Montgomery
:
You have to listen carefully Kent. We think it is expensive but that DOES NOT mean it will sell off. The risks are merely higher for those who are paying the current price. Thats all I have been saying.