when the fed runs out of points to cut to keep the market afloat and they have weakened the $ to such an extend that its not worthwhile making new dollar investments, and the subprime and housing foreclosurers escalate,and job reports are weak and so on and so on. whether our banks are cheap or not i believe that if the US markets go down it will drag the jse by the hair kicking and screaming to let go and follow it down the same path. hey but thats just me thinking out loud , what the heck do i know.
DEP, the banks are very cheap, our banks are not exposed to the credit risks the American's face. Furthermore FSR have many other businesses, eg Insurance, does should in theory not be exposed to any sort of international subprime meltdown. Unfortunately, there people put there that think according to your fellow forumites responses to your question.
Consider this: we have been brainwashed into believing that a cheap stock price is less than 12 times earnings. This means that a company is worth 12 times earnings (net profit - which is also rather vague and subject to window dressing, a nice term for manipulation) as its share value! The company is actually worth its net asset value plus a premium for knowledge capital inside the company. Should that premium be worth 12 times? Obviously there are premia to be paid, but I feel that we are way out of the ball park at the moment. People move. The assets stay.
Think of it this way, If These prices are on such a great sale, why arn't supply of these cheap shares running out? obviously there is still plenty of this cheap banking stock lying around and until we see big opening gaps up, the sale is still on.
Overseas sell off. Investec PLC was +-85% owned by none south africans back down to 40% huge sell off. When it listed it was around 20%. Dont quote me on the exit %'s was in out of the conference during his speach.
banking and retail stocks (even property maybe) have to be top of the lists once the interest rates start to come down and U.S credit crisis becomes yesterdays news.Value in these sectors are cant be ignored then. I picture this as a 100m sprint race, everyone is just waiting for the gun to go off then the rest will follow.There may be a few false starts but that will be the sign that the race is about to start .OMO.