the fundamentally life time high valuations were cautioned since many months.
on 8th jan, after touching the peak p/e mkts did make a big crash.
on 8th jan, after touching the peak p/e mkts did make a big crash.
anything above max p/e would have been a bubble i.e euphoric run. technically mkt should spend lot of time at lower side(consolidate) without breaking the low.
any possible upmove now above 6357 can be justfied in next financial year after couple of months, after factoring in next year earnings.
lets have a look at min(13 p/e) and max(28.50 p/e) valuations(historic).
fy07-08:
eps=225
nifty (min): 225*13(times)=2925.
nifty(max): 225*28.50(times)=6412.50.
fy08-09:
expected averaged earnings growth of nifty50 stocks=15%
projected eps=225*(1+15/100)=258.
nifty(min):258*13(times)=3354.
nifty(max):258*28.50(times)=7353.
these figures of nifty(min) and nifty(max) also agree strikingly with technical tgts in case of bear and bull mkts.
by abhay r somkuwar.
2 comments:
Hi Abhay,
Welcome Back !!!
Some minor corrections needed in your write-up.
You have mentioned that for fy07-08, p/e=225. Actually, it should have been EPS=225.
Similarly, for fy08-09, projected EPS=258 and not projected p/e=258.
Otherwise, an informative write-up, as usual :)
With Regards,
Praveen Shamain
hi praveen, thanks for pointing out the errors, its been corrected now.
regards,
abhay r somkuwar.
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