Friday, 9 September 2011

Market PE



From a valuation standpoint, the Rule of 20 continues to point to 1500 on current trailing earnings,  for a 15-20% upside potential to fair value. This remains a good target for this year. However, the risk of a technical correction towards the 200 day m.a. is not insignificant, skewing the risk/reward ratio and raising a yellow flag for the shorter term.

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