FY14 has been an amazing year for Indian stock market thanks to strong election verdict and turnaround hopes.
25,000 on BSE and 7,500 on NSE looks too high to someone waiting on the sidelines and looking to enter. Wish someone can forecast where are we heading !! I certainly can't.
But at least we can see where are we now & use that as a guide for decision making (as suggested by Howard Marks in his book The Most Important Thing).
So where are we right now?
1) PE- Nifty standalone PE is 20.4 (See Here) while Sensex standalone PE is 18.5 (See Here).
Consolidated will be somewhat lesser. This is little higher than long term average PE but lower than 2008 peak levels.
2) Mcap to GDP ratio- Market cap of BSE listed companies is 87.8 trillion INR which gives a Mcap to GDP ratio of 79.5%. At 2008 peak, this ratio went up to 103%. See news links here and here.
So, here is the good news- We are not into insane levels yet! However, we are above long term average on Valuation. Hence, don't expect huge up-moves in FY15 like we saw in FY14.
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Now a word of advise-
Ignore all of the above. Everything is just noise.
Just find a portfolio of stocks which can surprise the market by earnings growth or by dividend payout or by special situation (de-merger, de-listing, asset sale, or even stock split) and sit on it.
So where are we right now?
1) PE- Nifty standalone PE is 20.4 (See Here) while Sensex standalone PE is 18.5 (See Here).
Consolidated will be somewhat lesser. This is little higher than long term average PE but lower than 2008 peak levels.
2) Mcap to GDP ratio- Market cap of BSE listed companies is 87.8 trillion INR which gives a Mcap to GDP ratio of 79.5%. At 2008 peak, this ratio went up to 103%. See news links here and here.
So, here is the good news- We are not into insane levels yet! However, we are above long term average on Valuation. Hence, don't expect huge up-moves in FY15 like we saw in FY14.
*********************************************************************************
Now a word of advise-
Ignore all of the above. Everything is just noise.
Just find a portfolio of stocks which can surprise the market by earnings growth or by dividend payout or by special situation (de-merger, de-listing, asset sale, or even stock split) and sit on it.
