ValuePickr Forum

Nifty PE crosses 24|A statistically informed entry-exit model!

Hello @777

If I sound like I am trying to negate what you say, then allow me to emphasize, that is not the case. I read your views, especially, because they are different from mine. It is beneficial to know the other side. Thanks.

Could you please provide some content regarding Mcap to GDP indicator. But, speaking just off the bat, if the indicator had to increase then GDP has to fall, which, I believe, is underway. Secondly, the if the PE ratio could be outdated, or the thing of the past because now the markets are liquidity driven, then the same should apply to the MCAP/GDP indicator? Just speaking my mind here.

Besides just Nifty PE, I track the PE of individual good stocks. I find them reverting to their historic means as and when there are headwinds. One of my most favourite occurrences is when a darling of the market, a high PE stock, fails to meet the lofty expectation, and is brutally beaten on its way down. The sight is just magnificent. (Pardon me for being sadistic. I understand that a lot of people might be losing their shirts over it.)

Currently, Energy PSU, Auto and auto related, Pharma sectors are facing such headwinds. These sectors has some really (really) good stocks, which will not let you down.

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Do you have a source that this is used by Buffett?

More likely is that the GDP figures are false. GDP figures are out of sync with most other data, so I don’t really believe the GDP figures.

Bharti Airtel is posting negative EPS. Such is the business of Telecom. EPS has fallen from a high of 13.96 in 2016 to a low of 0.96 in 2019, That is disturbing. And now the TTM EPS is a negative 5.45.

For the company, the borrowings also has increased from 100,646 in 2016 to 125,428 in 2019. What’s more worrying is the interest coverage ratio has shriveled to 0.45

Bharti Airtel was an established player, and this the state of affairs. I am having a hard time accepting that Reliance JIO will be much different. As a retail investor I do not like to invest in businesses that need large capital, where they balanced sheet gets precariously leveraged. Nonetheless, each is entitled to his own view.

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For Mcap to GDP, we should not use Buffet indicator. India should have lower MCap to GDP compared to US.

  1. IT hardly is related to anything in India.
    2 95% of retail in not listed.
  2. Most of Consumer electronics including mobile devices in not in listed space.

We should subtract about 20 lakh crore(10 for IT and 10 for retail and electronics) from mCap to do a Mcap/GDP ratio.

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On the contrary when ever the Fed cut rates in US a recession has followed.

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WRT to Us Dollar Index…an inverse co-relation with S&P has always triggered recessionary sentiments…so if S&P is rising and Dollar Index is cooling…bad news for TRUMP.

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Guys , I have withdrawn all my post as I all of them were not about NIFTY PE as I don;t like general idea and I don;t believe using Nifty PE will give us sense for market valuation. Lets keep discussion going for Nifty PE.