Unlike its peers, Commonwealth Bank of Australia (ASX: CBA) has managed to eke out a slight gain today with its shares now trading at $81.45 after falling to just $79.19 earlier in the week – its lowest price in more than seven months.
Although it has managed to regain some respectability over the last two trading sessions – having narrowly avoided falling into an official "bear market" (defined as a 20% drop from the peak) – it remains nearly 16% below its all-time high, recorded in March this year.
Commonwealth Bank of Australia was one of the key driving forces behind the market's incredible rally in recent years as the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) ascended to highs not experienced since before the Global Financial Crisis. Driven by low bad debt charges and growth in the demand for loans, Commonwealth Bank and each of its peers achieved record-breaking profits, generating enormous shareholder returns in the process.
But the market appears to have clued onto just how expensive the banks had become, and that their fully franked dividend yields were no longer generous enough to justify their lofty share prices. In my opinion, that is still the case today and each of the banks could experience further pain before their shares flatten out, making them stocks for long-term 'Foolish' investors to avoid.
Australia and New Zealand Banking Group (ASX: ANZ) is down 0.6% for the day, while National Australia Bank Ltd. (ASX: NAB) and Westpac Banking Corp (ASX: WBC) have both declined more than 1%, down 1.1% and 1.4% respectively.
