From Mr Peter Lynch’s book Beating the street page 234, he stated that buying a cyclical after several years of record earnings and when the P/E ratio has hit a low point is a proven method for losing half your money in a short period of time.
I took a look at the P/E ratio of property counters like Ho Bee, SC Global and Keppel Land and noted that the P/E ratio of all three stocks are at 3. Furthermore, they reported record earnings in their recent results. It is a no-buy for me now in property counters now.
If the property stocks will not do well, then related industries like electronics goods, furniture, cement, tiles will be affected.
The next 2-3 years will be good for stock pickers. Let us await our opportunities. Thank you god.
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