Our market and foreigners

[WES]

When I listen to all our analysts, our market is already expensive, the one analyst said that NPN was "hellish" expensive at R 348....since then it went up to R 375. An nother analyst said that SHP was very expensive at R 82....it went up to R 104. I am a novice and listen to our analysts and what they say because I respect their opinion, but lately....I must say I think the foreigners know more about our market than our own analysts, who work full time on our markets...

[SimonPB]

an maybe the lesson is that the analysis are wrong ???

[MarkD]

Im a novice at this as well, but seriously, one analyst could say something completely different to another analyst. And usually they do. I would never make a decision based on what one analyst said about one stock.

[3JN2]

Basically what all the analysts say is that if a particular share or market segment does not go up, then it will go down. There is only one analyst that I know of who puts his own money where his mouth is - Garth MacKenzie on Summit TV Traders Corner. He does real trades so that you can laugh at him next week or wish you had done the same.

[koos2]

Maybe our guys are talking their book massaging our thinking? Right then!, back to the old tried and trusted : 1x monkey , 1x dartboard (plus dart) and 1x coin technique.

[geordie1]

analysts make comments as they are paid to-you need to undersrand why they put forward their theories eg is it based on high pe low div or future earnings or ?-once you understand then you can come to your own conclusions which may or may not be more accurate

[Rams]

All they said was that it was expensive based on some form of valuation(price to book?).But I doubt that they would have said that the market price will not go up in the short term.If earnings dont keep up with price then it is expensive. There is a lot of jargon out there and I have always said that we are not qualified enough for this....Can you do brain surgery after attendind an eight hour workshop?

[geordie1]

mabe a few analysyts are also not qualified to comment-if they knew 100% what was going on they would not be analyse they would invest.

[#9]

Foreigners appetite for risk is way different to a South African's. We work on PE's of 20 being expensive, but that is because our risk free rate (R157) usually sits around 7%-10%, so when you discount a stock relative to the risk free rate, in classic DCF models, you are going to want the earnings yield to sit within range of this rate. The higher the risk free rate, the lower the PE (please note this is just my theory, there is no impirical evidence to support this). now foreigners work on risk free rates of like 2% or 3% (and this is really falling), so they will have a much healthier appetite for higher PE's, especially if a stock's dividend yield is already greater that the rate at which they can borrow. Their only real risk is rand devaluation, but if they invest in South African stocks that benefit from a rand devaluation, then they will offest their risk. Naspers, Shoprite, Steinhoff, resources, SAB, Sasol - to name a few. now this is just my theory

[SimonPB]

Are we missing the value in Africa? http://ow.ly/2XEeH