Quote:
Originally Posted by pumping
Yes, there are opportunities during a stock market crash, but not for those that were heavily invested in it. The NSE today is behaving like the dot com era. At the end of the day reality overtakes fiction. I'm sure you will not buy a bottle of empty coke for N1,000. Well, that is what many folks are doing on the NSE today. Paying for something that is worthless and even fighting over it.
Now, majority of players on the NSE are just speculators looking for quick bucks. Who cares if the company has closed down or does not have a known address? I will sell to another 'mugu' once the stock price has risen by 50%.
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In my view the market is still high as there are very few companies with a PE ratio of less than 20. Infact when u look at the dividend yield u would be discouraged further. Most companies have a dividend yield of less than 2%. The market average is 1.72 based on FSDH report after adjusting for comapnies who have not paid a dividend in the last accounting year. There are therefore very few good buy opportunities despite the recent correction.
Frankly the only stock i will put my money on right now is UBA. I think it is fairly valued and the forward PE at current price is about 16.
The lesson to be learnt is invest only in companies with good fundmentals. They are the ones u can stick with through a bull or bear run.
I recall the market correction in the 4th quarter of 1997. The likes of Unilever fell from N27 to 9, and PZ from 40+ to 20+. PZ has never reached such highs.