Today (17 Jan 2012) sees a new high on the JSE, with the all share index reaching 33490 points.
[As an aside, isn't it weird how the company which runs the JSE seems unable to get out a SENS notice to advise investors in it and/or in its listings of the breakdown in its continuity of execution!]
So with a new high, and much attention thereon, many comments suggest that is a time to sell or exit, that a new high by definition is somehow unsustainable.
Well it takes opinions to make a market, and in my opinion new highs on the investment capital markets are zero cause for alarm. After all, the cost of living seems to find new highs continually, with no surprise to anyone. And the big incumbent companies which make up the lion's share of our stock market are selling into that rapacious cost of living system every day.
And the fundamentals of the JSE are none to shabby - see the attached picture, a slide from my latest fundamentals course for Standard Online (SBG), which tells of the three-year averages for return on equity (ROE) and operating profit margin. At ROE of 29.6% and operating margins of 23.7%, why be afraid to own these companies?