msg for asylum

[Wizard]

Banks! It's time!

[asylum]

Hi Wizard ja ive been in ASA for about 3 weeks now but it was derailed by the increase in interest rate, could have got out with a handsome profit just before the hike but i thought the hike was already priced in, so just have to hang in there, but yes ASA seems to be on the up but i dont think it will stay there, looking to get out at around R 118.00 if it gets there.

[Wizard]

The DOW is going to probably 0.618 13250. The Banks still have to catch up. Hopefully! After that ASA should come down to current levels very quickly!

[theyoungster]

wizard you say its a good time to buy into banks now?? which would be best? asa,fsr or sbk.. or all of them??

[#5]

none of them... INL the only on that is showing any bullish signs...

[SIMBA]

With the intervention again of the British goverment i would get into Old mutual asap

[#7]

i prefer the banks based on their pe ratios, some of the miners are trading at scary pe's

[DCTrader]

Those PE ratios are based on their prior earnings (or very optimistic future earnings!)... There's a big difference between a low PE and a negative one! Adjust their PE for the upcoming results and it'll paint a very different picture...

[Wizard]

Those PE's will get reduced or stay the same as prices fall and earnings also. Say company trades at 45 and EPS is 5, then the P/E is 9. Next year it trades at 20 and EPS is 2, then P/E is 10!!!! Opposite applies for miners

[Wizard]

lets have a bit of a rally for a change. :)

[DCTrader]

So you then contradicting yourself? You supporting the idea to buy cos the PE's are low... and then use the fact that their prices will fall further in your example. Their is a lag effect in using old earnings to calculate current PE's. Or are you with me on this one? It's too early on a Monday morning...

[Wizard]

Luckily I had my coffee already! As a trader you don't look at P/E's. This is a sucker rally and that is what I'm banking on. Long term I think this is only 1/4 of the recession that we have seen so far. I you are a long term investor, go on a holiday and come back end of next year to buy ASA at 50 and P/E at 8

[DCTrader]

Agreed... off to grab that coffee now.

[#14]

i would go with ASA, it has very good fundamentals (a number of them), and i think it is technically strong esp if you look at how undervalued it is compared to the TOPI over the past two years or so. I am aware of the interest rate hike insofar as future earnings are concerned but absa management is prepared for that (provision for unsecured debt is above adequate, and the expectation of bad debt is well within the industry average which isn't so bad)