Tearaway ASX busts post-GFC high

Thar she blows:

Comments

      • Alternatively they could be using some of their ‘equity mate’ to get into the market.

        With the market at this level the RBA will need to work hard to justify another rate cut.

  1. Does anyone know where i can find market statistics such as the PE ratio of the ASX200 etc. so I can get a sense of whether the market as a whole is over/undervalued? Thanks

    • TD

      In an era of free money – PE ratios need to be adjusted to a free money norm – so don’t think of normalising PE ratios with historic data. The US has never seen access to credit at below inflation rates, this is an historic aberration.

      Central Banks have basically given a free call option on growth to any company with a sustainable product.

      • That makes sense. As interest rates are lowered corporate earnings become more valuable compared to other investment alternatives pushing the price of shares up. A pure PE ratio analysis would ignore this fact.

  2. Good to see your calls for lower interest rates are having the desired effects (combine this with house price inflation). $AU today?

  3. Rio has just posted $3 billion loss, how does that generate a return on your investment?

    Big for Banksters are +40% of ASX index, dependent on income from house prices which are down and lending for homes at record lows.

    Aust Treasury just advised next 2 years GPD below trend growth.

    Fundamentals are out the window, this can only end in tears!

    • Correct me if I’m wrong but Rio’s results were posted after the close. So maybe you should leave your whole 2% jump, 6 month term deposit mumbo jumbo until you see what happens to the stock tomorrow.

    • Rio’s operating profit was strong. Over $9 billion. The loss was just a write down on the value of their aluminium investment.

  4. Memories of Gerry Harvey’s nightly ABC TV comments “ASX has good support at these levels, I don’t believe it will go any lower”.