Market comment

Herd mentality drives stock market losses

The herd mentality is driving the market down. We say this because price-to-earnings (P/E) ratios of most shares are no more than 15 and price-to-book ratios (P/B) are no more than 2, which are reasonable.

People consider the market overheated compared to mid-February, but the fact is that share prices were too low at that time. Most stock prices are now near their real values.

Money seems to be flowing out of the stock market as the VN-Index fell Tuesday for a third straight day. The decrease means a correction will happen this week.

We suggest investors don’t buy shares with a P/E of more than 20.

Hoang Thach Lan,

Vice Director of SME Securities Corporation-Ho Chi Minh City branch

thanhnien

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