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Are we no longer tracking the Dow Jones?

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Bigfish
Occasional Contributor
It seems to me that our market is no longer tracking the Dow since the last week or so. The Dow will go down and our top 40 still goes up. An article was published on moneyweb stating that significant foreign inflows have returned to emerging markets.Oh and don't forget about the other idiots who stare blindly at the returns of the last year and think it is still a good time to enter the market. If you consider the overall P/E ratio of our equities a significant correction is surely on the cards. A lot of people are going to burn bad!
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13 REPLIES 13
Not applicable
Theres no reason that we should always be correlated to the US.
Often there are times when emerging markets are flavour of the month and developed are out, then we go up they go down, other times vica versa happens, and then finally about 50% of the time we do follow the other.

I see with the earnings coming in this week though, yes PE ratios are back at ATH, weve only been this high 5 times in 70 years. (20 PE)
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the last 3 times we were this speculative on the market was 1987, 2000 and 2007
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coolwaters
Occasional Contributor
Where can I find the PE of the market?
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Creature_of_the
Super Contributor
yes where on the standard bank site?.
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SimonPB
Valued Contributor
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Not applicable
...whos talking US?
talking about ALSI.

I dont think theres a person in this world that can say ALSI is cheap on current earnings, theyre arguement however is that theres nowhere better to put your money as markets just go up and forward earnings will be better (Like those who bought twitter @ 100 PE saying its a growth company).
So if you believe earnings will go up next year then by all means please buy more, as there are two parts to the PE formulae.

If you looking at the US though, here are some other articles though on the US that have a different take on it:
http://blog.kimblechartingsolutions.com/2014/05/average-valuations-only-68-above-114-year-average/#s...

http://blog.kimblechartingsolutions.com/2014/05/judge-judys-opinions-on-valuations-and-the-buffet-in...

These articles arent punting a crash by that arguement, they are simply saying the in comparison even the US is in speculative territory.
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Not applicable
well, just look at the business case for a foreign investor - sure we have high PE's - but that is the norm on US markets. And they get the stocks at a discount thanks to rand weakness. And then the kicker - the real kicker - is that African markets are growing at rates of 5-8% GDP. The JSE is realistically the only exchange that can give you African market exposure. If I was a US investor, I would be more concerned about currency risk, but with the rand at uncharacteristic highs, seems you have a better chance of that working in your favour.
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Not applicable
in dollar terms the growth in ALSI has been negative,
so Im not too sure if foreign investors are happy with JSE.
I do agree with you though, SA is the best way into Africa...unless of course Nigeria overtakes us.
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koos2
Super Contributor
Cough, Africa's Busiest Container Ports.
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Preston
Super Contributor
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koos2
Super Contributor
How long does a honeymoon last 90-100 days?
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