UK 19:27 Friday, 23 October 2026
Breaking news and expert analysis on fast-moving AIM and LSE listed shares
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
In this podcast I start with the debate between Wilderides and miserable froggie Thierry on Shell & BG Group but move to the wider issue of overconfidence ater a seven year bull market. Companies covered include Tungsten, Coms, 4D Pharma,, LGO Energy, Cyan, Plethora and Vipera
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Comments
CHARTMAN
No, this is not the longest running bull market ever (that was the bull run leading up to the 2000 dotcom crash 1987 to 2000) – there have been a handful of bull markets with greater longevity than this current bull market.
What was/ is the FTSE average PE ratio’s been for last year/ this year?
- In the mid teens, that’s where – hardly seriously overvalued.
All stock market crashes have had stratospherically high PE’s at their peak, before crashing haven’t they?
PE averages will have to be a lot higher – over and up in to the 20’s as an average to be recognisably over valued and expensive and thus open to a crash.
Correct me if I’m wrong but if the market crashes whilst PE’s are ‘only’ in the mid teens – wouldn’t that be an historic world first?
A bit like that latest research out in the news that overweight people do not suffer from Alzheimer’s. (What about their higher risk of diabetes though?)
So yes as PE’s creep up there could be a serious fall – but INMO unlikely whilst PE ratio’s are in the mid teens. Over 20; yes – teens; unlikely.
Tom Winnifrith
Chartman
Id look at PE of ftse 100 ex banks ( normal measure) and that looks high teens. What is PE of ftse 250 – into 20s. that is too high for this stage of the economic cycle, ie when next move in base rates is up
T
MrMoto
Not just the UK should be looked at. If the US goes, so do we:
“Last month in The Leading Edge, I looked at a wide variety of overvaluation indicators, from margin debt (or speculation) to P/E ratios. 10 out of 12 are in extreme overvaluation territory”
http://www.marketoracle.co.uk/Article50174.html
DUCK AND DIVE
You seem to have forgotten that LGO has a “US$25 million pre-paid oil swap facility agreement with BNP Paribas to fully fund the planned 2015 development drilling program in the Company’s Goudron Field in Trinidad”. If it issues any more confetti now, there will be lynchings.
General election uncertainties apart, the markets will continue to rise until interest rates go up – and that will be 2016 at the earliest.
CHARTMAN
MRMOTO – That article is predicated on QE being the driving force for the next crash. The worldwide trillions and trillions running off the currency printing presses of all countries around the world are more than an extreme worry but (EU printing more trillions of Euros this summer aren’t they?) PE’s can not be included with the ‘extreme’ in the: “10 out of 12 are in extreme overvaluation territory”
S&P500 was 16/17/18 PE last year, I think. It’s crept up since to just pipping the wrong side of 20 currently.
That’s not good value but neither is it in the 40 of the average PE of say the dotcom crash era, where Tech stocks habitually wore PE’s well over 100.
PE’s as an average are not “extremely overvalued” just yet, but it’s also true to say, neither are they cheap as historic median averages.
Jimbo
You’ve also got to take account of the record number of companies – particularly in the United State – who have been issuing bonds at record low yields and using the proceeds for share buybacks. This is financial engineering, not investment for the future, but it certainly helps boost EPS…
wildrides
I remake my point made to Lad you gooey :-
People wont move their investment until there is something equally rewarding with lower risk . Low interest rates mean that option is CLOSED . When it opens again ie interest rates go substantially up for cash or Gold starts a bull run , then we will see a pull back in shares . But it will be sector driven . Resourses markets are on the floor already and some are already taking contrarian positions in these stocks judging that the blood on the carpet this last 5 months has been a bottom indicator . I just think talk of a 50% pull back in markets is nonsense . Where it to come to a pull back then I would say 20% down after the bounce back and a settle period would be about the size of it . The big pension funds and institutions cant just get in and out like an AIM PI . Massive charges accrue if they do . Of course AIM swing traders are used to such 20% moves daily and wonder what all the fuss is about . One thing is certain ……… AIM will get very busy if we do get a pull back since one can get in and out of a stock for a fiver each way . Try that for a decent sized FTSE 100 holding and you will remember the effect tax has .
I cant remember a time when stocks were high and interest rates so close to zero thus creating the “no where to go senario “ correct me if you know different . This means the current situation is totally unique . Charters and pundits and crystal ball gazers have no true reference point . This is new ground . Be careful what you wish for .