While its true to say that risk is found in any situation - even in Us Treasury Bonds - as regards default this is deflecting from the central issue. The question remains - what are you buying ? answer : a stream of future earnings about which you have views - at the one end optimistic - and the converse at the other end. So the price you pay should ( if you are not "I am feeling lucky today" ) contain a margin of risk safety ( see you can put those two words together ) as regards expectations on future earnings. Ergo: price is not as important as risk. You can pay next to nothing for a share and its still risky - ditto the reverse.. you can pay a lot for a share where there is still a good margin of risk - an example would be Capitec going forward - or Naspers =10 cent.... But while Anglo is cheap and the earnings risk is there -- its in a volatile market where prices of commodity shares are basically being hammered so wait till the dust clears - and there is a reasonable case to argue that it will then still be cheap..for all the wrong reasons. Oops! - hang on I think its time to make another cup of real tea - and see what the leaves are saying.. or maybe they won't say anything at all?
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