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Rightly or wrongly, I'm sensing a whiff of concern on here at the moment...?
Cyber has referenced me in respect of .tracking historical PE values when in fact what I pay attention to, for a number of reasons, are PBVs going right back.
Wilson Bowden showed the way on this to me - they were a great builder who unfortunately were taken out of the market by Barratt who nearly died as a result, but never mind that...
From around 1993 to 1995, their PBV fluctuated wildly between about 2.3 and 1.1. Their share price halved, doubled, and halved again during that time to then recover again though not quite as sharply this time.
And all poor old Wilson Bowden did during that time was to carry on making money - albeit at a rate that was temporarily lower than their usual excellent average (which long term was around 20% ROE).
Bellway's long term average ROE has been around 16%, and their long term comfortable PBV range has been between 1.4 and 1.6.
If I could somehow put my graphs on here I'm sure you could all see that quite clearly.
As of close of play tonight, I have Bellway on exactly 1.5 PBV - i.e. bang in the middle of their market price comfort zone.
So, how is that controversial..?
And Bellway, for a number of reasons, is my benchmark share - so one thing is that I can judge others against it.
And, right now IMO, Crest is cheaper than Bellway to a double digit degree - which is why I'm holding a shed-load of Crest and no Bellway, even though I really like Bellway as a share to the extent that I've told family members (for whom I'm looking after their investments) that if anything untoward happens to me suddenly then just bung a big chunk into Bellway and leave it there...!
Of course, I'm hoping that won't happen and also I'm not trying to tell any of you lot where to invest - DYOR, and all that fine stuff...
I'm rambling a bit with this, but what I'm trying to say is that I have three personal rules for investment, and the third, and most important of these, is "Don't be flakey!"
Because, if you are, you're probably better off not being in this game in the first place.
And part of not being flakey is not letting that nutter, Mr Market, influence your investment decisions other than to take advantage of his manic behaviour.
As I recall, Warren Buffett reckons this is the most important lesson he learned from his mentor, Ben Graham, and, let's face it, it has stood him pretty well, hasn't it..?
So it's all sliding a bit right now, but so what?
Strictly