Markets are described with numbers. It’s a linear world – prices can only go up, down or stay still. Because they are numeric and inclined to mathematical analysis, we can be fooled into thinking that markets are somehow logical, and that price analysis is scientific.
But market prices are not the product of a logical, mathematical or scientific process. They are a product of crowd behaviour. The current price of any stock, index or other tr...

The declining trend of ROCE at Chinasoft International does not inspire confidence. Despite the company's reinvestment in its business, returns are shrinking. The stock has returned only 16% to shareholders in the last five years, reflecting these lackluster trends.

Despite a recent earnings dip, Chinasoft International's high P/E ratio is justified by its promising earnings outlook. Shareholders remain optimistic about future earnings, showing reluctance to sell shares. The high P/E ratio suggests high market expectations for future growth.

Chinasoft International stock may be overpriced as future growth outlook has been fully factored in. A drop in price could present a more attractive opportunity to buy.