Any idea why the Dividend yield has changed drastically. It should not change whether earnings are consolidated or not.
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Can anyone scrape valuepickr data and see number of new posts / comments per week or month over the past few years?
It could be an alternative indicator to overvaluation / undervaluation 
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It is okay to calculate Nifty P/E on a consolidated basis, but for that a new series should be created, otherwise comparisons will be misleading. A new series can be created even for past dates They should publish two separate series so that those who want to use the standalone series for consistency sake can continue to do so.
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Famous Research analysts has come with EPS CAGR estimates of 10-24% which is a wide range and its all opinion. Even if nifty grows at 24% in FY22, Nifty EPS would be 525 (30PE for FY22) and if it grows for next 3 FY, then it would reach 750 (20 PE for FY24). And as we all know, mean regression will take EPS CAGR to slow down for next few years. On the whole, even assuming best case scenario, Nifty investment is not justifiable at this valuation. Market timers can have some fun but not investors who are poor in timing.
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A contra opinion.
Read somewhere - Bull markets are not killed by price, they are killed by participation. After the last round of bears throw their hands, there is no one left to buy. Anecdotally, we are some way to go before that happens. As long as that indicator does not start flashing, itâs better to enjoy the ride but wise to keep eyes and ears open.
Disclosure : My views are colored by my positions and are biased for sure.
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I agree. This need not be a contra opinion. âGreater fool theoryâ is as old as hills. I just meant few value investors are incapable of doing it.
But why there are no participants ? Because price is too high for the value offered by the asset class. Thats the only logical indicator.
There will be no participants because everyone was already a participant and all of them have withdrawn their positions for many reasons and if we categorize them into groups like bulls who know their time is up, bears who want to play a waiting game and want to see the bottom, traders who are new to the markets who I think can take some loss but not a big loss.
So when everyone has already been a participant and withdraws for different reasons, the only buyers left are the ones like ITC investors who can wait a real long time for the upward momentum to start.
My 2 cents.
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Just worked on consensus analyst estimates and target prices of Nifty 50 stocks. It throws interesting insights on where Nifty50 would be if the highest/average/lowest target prices are achieved by the constituent stocks
Source:Numbers don't lie..
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hello all,
this is my first ever post on valuepickr. I am a young professional who understood the value of finance a little early and trying to learn more and more about it. Didnât know where to write my first post so here it is, found this cool topic where you all are discussing on. I have recently started investing when I started my job.
I feel scared to invest in direct equity as I think what if I buy the stocks at higher price or what if I chose the wrong company. I want to understand the concept of analyzing overvalued and undervalued stocks. How to analyze whether the stock is trading at fair price or higher price.
Also, as we are discussing about Nifty PE, according to the nifty PE strategy, before covid, it was advisable to enter the market when PE is around 12-15 range as this time was considered as market is undervalued and 25-28 range of PE was the range to exit as market was considered to be overvalued. But now. in the post covid world, where nifty PE, is above 30, it is very difficult to analyze when to enter the market and when to exit, which stocks are undervalued and which are overvalued.
so I request to all to guide me on this topic and concern which i have so that people like me can analyze the stock properly and invest at right price for long term investing.
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Hi Devang,
Welcome to the forum. We have seen many different successful traders/investors here. Some do long term buy and hold. Some trade momentum, some trade mean reversion. Some do swing trading while some do intraday trading successfully. The only trading style that does not work is the plan to buy at bottom and sell at top.
Now that you plan to invest, at some point you have to take the plunge. At first you need to keep the position size low and as you gain competence and confidence, you can increase equity exposure. Equity buying is betting on the future and no one can do it perfectly every time. There will be errors and mistakes, but thatâs the price we have to pay to understand the market.
There are many veteran investors here like Hitesh sir etc, you can learn from them. But ultimately you have to develop your own style as per your understanding and risk tolerance.
Just a note from one novice investor to another.
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NIFTY PE is near 40, as per the Pre April, 2021 method. Post April, consolidated earnings approach is done and hence the PE dropped from 40 to 30. So like to like with earlier times consider current PE near 40.
Entry Exit basis NIFTY PE can be trickyâŚ
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So all historical Pre-PE 42 value are not consolidated right ?
If yes, then if 28.53 is consolidated then itâs useless to compare 28.53 to previous value.
Entire chart must be re-plotted to get a better picture.
Edit: Better to analyse Sensex PE
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Thanks a lot for your reply. I completely agree with you. We all just wait for the right time to buy a stock a lower price and we just keep on waiting and till then time passes by and ultimately we lose the opportunity to invest in that and also loses the opportunity earn profits which we could have earned by starting early. In investing world, its often said that one should not try to time the market and it not important either, whatâs most important is to start at the right time, as early as possible, to take the true advantage of compounding.
thanks for the advise and Iâll keep that in mind. 
Thatâs correct, its trickier when you dont know the actual value of nifty PE in a bull run. In pre covid era, 25-30 was the range which was considered to be overvalued. But post covid, where we have seen a bull run, its difficult to know true value of nifty PE. This range of 25-30 can even be considered as overvalued and can even be taken as fair or undervalued. So, as you said, its trickier to decide entry/exit based on nifty PE
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The thing is that PE is applicable if the economy regime is nearly linear. Last decade showed much faster technology growth - PE is not a good indicator for such an exponential environment
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It is veery hard to predict the accurate value of a security but it is not so hard to predict if it is overvalued or undervalued. Currently stocks are way too overvalued unless you want to convince yourself that it is not.
If we compare current situation to the history are we at 1999 or 2009? You know the answer. Rest all is your way to convince it is not overvalued.
US is manipulating their stock market with infinite QE and zero interest rates. Shall the interest rate raise this asset bubble will crumble in real quick time.
The current situation is Japan 1985 (Minus QE) where Interest rates were kept low for extended periods. People and organizations borrowed money because of low interest rates which they couldnât repay once interest rates increased so the bubble was burst in 1990 and never recovered there after.
Is risk reward in your favor? absolutely not. If you invest now your long term returns may be 8-10% and if you have nerves of steel to navigate through bear market.
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While the underlying perception of bubble could be the same but we cannot compare today with what has happened in 1999 or 2009? If the context changes, the tool we use to gauge is no longer relevant.
This time is different has some some merit to it, as each decade is different. I am not arguing with the overvaluation part but we cannot look at it in isolation and forget the factors, reasons, the perception of the market.
I would argue that this time it may not be different, but this time there are some differences, some changes which could remain so for the foreseeable future.
Nothing is unlimited, what goes up must come down, but when is the question? Just like a plane that goes up will remain in the air for a few hours defying gravity, the asset prices which have gone up could remain there for longer periods owning to different factors right from the retail participation to the QE.
The collective wisdom of the market, and the participants who move the markets are to be taken seriously, as we are retail, both in times of exuberance and depression, it is not a rigged game in its entirety. And there will always be some pockets or some stocks which despite having earnings visibility are not favored much or ignored, one could always invest there.
The party, if we can call it that, could continue for longer periods, like Keynes said.
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Doesnât matter. what matters for you is what is your time frame, what kind of returns are you looking for and do you have stomach to tolerate your portfolio going down by 50-70% (most retail fail in this)
If you are looking for 8-10%, ok to stomach extreme downside and thatâs the reward your ok with for the risk you have taken then absolutely go ahead and invest.
If you are day trader or short term trader then also go ahead and gamble.
If you are a long term investor who looks for good reward (For me it is 15% CAGR) with limited downside risk then i am not willing put my money in this crazily manipulated market which are not backed by fundamentals so if they continue to manipulate for next 5 years ? so be it. There is a company behind the ticker if has to match price eventually.
Most of the billionaire investors are value investors for a reason because they followed process, They bought great companies at attractive prices and then held on to them to eternity.
If what goes up must come down then why to invest? why donât you wait it to come down? It doesnât work that way. Stock market is the oscillation between greed and fear and most often it swings between extremes but in long term specially for growing economy like India it is up and up. In March 2020, It was beaten down by 35% now up by 110% what has changed in the mean time ? except flood of cheap money?
This time it is different, High PE is justified because of XYZ is your way of justifying confirmation bias and FOMO.
This time it is not different and reversion to the mean is something we have seen time and again in the 8 centuries of history of stock market.
No one became rich by buying securities when they are expensive not me but Charlie Munger said this.
If you think something is undervalued then they are undervalued for a reason and my focus is to buy real high quality stocks at fair prices not some junk stocks.
I will take my 5% of FD returns and will not put my money out there just to be cannon fodder for FPIâs and DIIâs.
Shall the party continue forever , Thatâs alright. My fundamental philosophy remains same. I will buy high quality stocks at fair prices until then i just wait.
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Howard Marks latest memo, seems to be relevant to the discussion above and to the thread in general.
Howard Marks, Great value investor but isnât he the author of âMastering market cycles?â He knows where exactly we are now but he will not tell it publicly because if he says so all his clients will withdraw money. Same is the case with Rakesh J and Raamdev they are always bullish because they need your money. Why will you invest if they say market might fall and you may see loses for extended period. They show you rosy picture of someone earning 25% CAGR through equities etcâŚ
Ray Dalio, Legendary macro investor made billions based on macro predictions.
Look at this chart, do you think this will go up and up? Look in the same chart what really happened you will get the answer. Compare it with any chart in the history you will get the answer, It is really not that difficult
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