Where Investors Should Park Their Money?
Even before the Coronavirus pandemic hit the world, the global economic output was on the downward trajectory with an expectation that the recession is just around the corner. Contrary to the macroeconomic factors, the equity markets across the globe were trading at extremely high valuations. The COVID-19 broke the momentum as markets crashed resulting in […]
NIFTY PE (Price Earnings Multiple) – FAIR VALUATION STUDY
With all this talk about Nifty PE ratio and what is most likely going to be a deteriorating earning season, I decided to have a look at how expensive/ cheap each stock on the Nifty really is. Of course, in absolute numbers, now at 9,266; historically speaking, Nifty is fairly valued at a P/E multiple of 21. […]
What’s causing the narrow stock market bull run?
When I don’t know how to get attention of people, I try this: Do you know that there are more people alive today than have ever died. Yes, you can fact check this. The number of people alive on this planet today outnumber (by far) the number of people who ever died on this planet. […]
Why Are the Indian Stock Markets So Expensive?
If you compare Indian stock markets to global markets both developed and developing, Indian stocks are trading at a much higher valuation. Consider this, the ‘MSCI India Index’ which had grown at par with the ‘MSCI emerging Markets Index’ from 2004 to 2014, is today trading at a 42% premium to the latter. Further, MSCI […]
Nifty PE and Past Returns
By now all of you would have looked at a gazillion charts and tables trying to relate Nifty’s 10-20 year average PE and comparing that to where we are today. Naturally, we have been in a very very expensive market for far too long. Markets have been running up with no earnings support whatsover. At […]
What’s Causing The Current Stock Market Volatility?
Fortunate are those who never studied the relation between stock prices and corporate earnings. Anybody who did would certainly have missed out on this year’s stock market rally. The purpose of writing this article is to analyse what led to the market rally followed by this week’s sell-off, and to present a stock market outlook for […]
Different Stock Valuation Methods – Reliance Industries
In this article, I will be discussing the various stock valuation methods used to arrive at a fair value or the target price for the company. To illustrate this, I will take Reliance Industries to explain the different stock valuation methods. [1] Stock Valuation Method – Peer Comparison In this valuation method, we compare a company’s […]
5 Large Cap Stocks Offering Multibagger Returns
Given the benefits of compounding, good quality large cap stocks are the best way for investors to get multibagger returns over a longer period of time. If an investor would just buy shares of established large cap stocks and hold them for a long period of time, the process of compounding that these stocks offer […]
Nifty 50 Earnings – Q2 FY 2019 – Analysis
On year-on-year basis (from Q2 FY 2018 to Q2 FY 2019), Nifty 50 earnings – Q2 FY 2019* showed a growth of 8.19%. In comparison, average stock prices went down by 2.49% during the same period**. *Based on 44 companies which have declared results **Based on stock prices as on 12th November for each year. Current PE Valuation of […]
Stock Market Outlook for Next 12 Months
Over the past few days I have heard much about not being out there with my recommendations and stock market outlook. This is true. I have been very passive over the last few weeks. This is in stark contrast to how I usually go about my affairs. Part of the reason why I have not […]