Johannesburg — The JSE is now well down from its record high five months ago, a Stanlib report notes. This crash is the worst in 28 years -- worse than the 42% drop in 1998 or the 44% in 1987.

As a result, the JSE's price:earnings ratio of 8,4 is the lowest in 20 years.

And this at a time when dividends are flowing. The dividend yield of 4,8% is the highest in 20 years, and the earnings yield (earnings divided by the index) is more than 2% higher than the 10-year government bond yield for the first time in 25 years. Everything is screaming : "I'm cheap".

There is, however, always a "but". In this case the but is that our interest rates are now among the highest in the world. The other is that there are surprises out there.

One possibility is that stocks might be benefiting in the short term from a forced shift out of bonds because of a portfolio re-weighting exercise. The news is better, but we are not out of the woods yet.

The Bottom Line is edited by Edward West.