[hothatchaway]

Originally Posted by vaibhav_a_a

I'm forced to bump this up as after a brief high in December, we are back in the doldrums again - down 11% now from the all-time highs of September last. What do you all feel? Will it go lower as the dollar index continues to track higher in the near future, say 6 months. Or is a sharp rebound possible after the earnings season...crystal ball gazing on a cold Friday morning here....

Markets are volatile not just in India currently but also in the US, where the Nasdaq has lost 1% in the past one month. TCS held out a positive outlook yesterday in their earnings call and the IT bellwether is up almost 5%. So track your favorite stocks and buy on dips.

Patience is the key. Keep your powder dry as its impossible to forecast any drastic change in direction.

[PatienceWins]

Originally Posted by vaibhav_a_a

I'm forced to bump this up as after a brief high in December, we are back in the doldrums again - down 11% now from the all-time highs of September last. What do you all feel? Will it go lower as the dollar index continues to track higher in the near future, say 6 months. Or is a sharp rebound possible after the earnings season...crystal ball gazing on a cold Friday morning here....

Seems the downward cycle has started. Found this interview useful.

https://youtu.be/9bZsMiOGMEE?si=ykCXchqq6Rj7Hz03

[Satkaj]

Many of the good scripts are available at 30 to 40% below their levels few months ago. I would say one should slowly start investing in scripts followed keeping minimum 3 to 5yrs horizon.

[volkman10]

India is now the second least favoured Asian stock market: BoFA ( Bank of America) Survey

Benchmark indices in India have been under pressure since the start of 2025 as an exodus of foreign investors and muted earnings growth have dragged the Nifty 50 to the lowest level in eight months.

The Nifty 50 is down 13% from its record high of 26,277, which it had hit on September 27 last year.

While Japan continues to hold the top spot, driven by a record-high economic and market outlook, Taiwan ranks as a distant second.
China is now the third-most favoured market in Asia, trailing only Japan and Taiwan.


Link:

[vaibhav_a_a]

Nice thread, wonder who started it.

Here's a look at P/E ratio for Nifty50 for the last many years, specifically looking at months/years when the market peaked and when it crashed or corrected. (data source primeinvestor)



Without doing any math (because I am bad at math, but I like gambling), a ratio less than 20 seems like a good time to buy and a ratio over 26 seems like a good time to sell - I say this because its impossible to predict the peak and its far more advantageous to quit while you are ahead.

Now, post-May 2014, when someone got elected here that resulted in many FIIs going overweight on our market, it has become hard to find monthly PE falling below that number.

- The index on the whole has dropped below 20 only 2 times. That's it.
- 9 times it was between 20 and 21, of which 5 times was in 2014 itself.

There were 3 peak crises - and the PE numbers for the index in those months show :
- Sep-Dec 2001 (post 911, but also the tailwinds of the dot com bust and the telecom meltdown) - it dropped below 14 but recovered in 3 months. It had been below 20 for 6 months prior to that however.
- Oct 08- March 09 (GFC triggered by Lehmann and later, in India Satyam)- below 14 for 6 months
- March-May 2020 (first wave of covid) - it didn't drop to even below 20

So where does that leave us - either this is an oversold market already or the nifty itself no longer accurately reflects the broad reality of our economy or something much worse is about to happen. Who knows.

[SmartCat]

Originally Posted by vaibhav_a_a

Without doing any math, a ratio less than 20 seems like a good time to buy

This works well for individual stocks too. If you want a good deal:

- PE ratio should be below 20 for largecaps
- PE ratio should be below 15 for midcaps
- PE ratio should be below 10 for smallcaps

Of course, PE Ratio should be the first filter. You have to do further research to see if a particular stock is worth buying.

[vaibhav_a_a]

What?! So all those micro caps at 100 PE that my finfluencer recommended on his secret telegram channel list are bogus, now you're telling me? Oh, I see that he is now selling trading course at 99/- per month . Oh well.

[ajmat]

Still cannot figure out why Jio Finance has an obscene P/E ratio

[SmartCat]

Originally Posted by ajmat

Still cannot figure out why Jio Finance has an obscene P/E ratio

It's like trying to look at PE ratio of a well-capitalized startup. Jio Payments, Jio Insurance, Jio Loans, Jio asset managegment etc have barely started operating.

But investments in these subsidiaries + cash on the books of Jio Financials is equal to Rs. 136,000 cr at book value. The marketcap of Jio Financials is Rs. 148,000 cr. So the stock is trading at price to book value or P/BV of 1.1



So till the subsidiary businesses mature and start generating revenues/profits, one needs to look at PBV ratio rather than PE ratio. Around PBV of 1.0 is indeed fair value for Jio Financials.

[volkman10]

Nifty joins Thailand, Philippines indices among the worst-performing equity markets in 2025.

Indian equities, once among the best-performing global markets, have had their weakest start in recent years.

Nifty's drop so far in 2025 marks the third-largest fall among emerging markets, behind only the benchmark indices of Thailand and the Philippines.

While Thai stocks have plunged nearly 10%, the Philippines' PSEi Index has dropped 6.7% during the same period. Meanwhile, Indonesia’s Jakarta Composite has declined 5.7% since the beginning of the year.

While Japan continues to hold the top spot, driven by a record-high economic and market outlook, Taiwan ranks as a distant second.

Among Asian markets, Hong Kong's Hang Seng and South Korea’s Kospi have been the top performers so far this year. The Hang Seng Index has led the rally in Asia with a 16.4% gain, while the Kospi has surged 14% during the same period.

While the US Treasury yields hovering around 4.4%, the Indian rupee has depreciated by 3.2% over the last six months against the US dollar, adding to the concerns of foreign investors.

Link:

[Abbas]

Originally Posted by SmartCat

It's like trying to look at PE ratio of a well-capitalized startup. Jio Payments, Jio Insurance, Jio Loans, Jio asset managegment etc have barely started operating.

But investments in these subsidiaries + cash on the books of Jio Financials is equal to Rs. 136,000 cr at book value. The marketcap of Jio Financials is Rs. 148,000 cr. So the stock is trading at price to book value or P/BV of 1.1

Attachment 2729023

So till the subsidiary businesses mature and start generating revenues/profits, one needs to look at PBV ratio rather than PE ratio. Around PBV of 1.0 is indeed fair value for Jio Financials.

Similar High PE is of Delhivery (Logistics). Can`t understand why it is so high. The company is profitable from past 3 quaters and has good cash reserves. Still the fall is massive 50%

[thirugata]

Voted for SIP + lump sum, though I would say Lump strategically. And this is for MFs and not for stocks.

Now this strategy can be different for different people.
1) At every fixed % fall. (personally I don't like this as this is trying to catch a falling knife)
2) At good support areas where the probability of reversal is high (if one knows how to identify it)
3) Safer strategy is wait for correction to get over and add lump sum at every fixed rise in the market. This way you are buying during uptrend but buying much lower than the top.

I dont invest in MFs but if I did I would be following mix of method 2 and 3.

[SmartCat]

Originally Posted by Abbas

Similar High PE is of Delhivery (Logistics). Can`t understand why it is so high. The company is profitable from past 3 quaters and has good cash reserves. Still the fall is massive 50%

Delhivery is just turning into profit making company, after the initial high growth phase. So current PE ratio is not a good metric to evaluate the stock.



So arrive at fair value, we need to get creative with a spreadsheet and input some estimates.

- Eventually Delhivery will have a net profit margin of around 10%, going by typical profit margins of well-managed logistics companies.
- If current revenues are Rs. 8,000 cr, estimated net profit is actually Rs. 800 cr
- Now the current marketcap of Delhivery is Rs. 18,000 cr:



PE ratio will be approximately equal to marketcap divided by net profits

So Delhivery's "Creative PE Ratio" = 18000/800 = 22 PE.

Note that it might take a few years for Delhivery's net profit margins to touch 10%. But revenues too will grow from Rs. 8,000 cr in FY24 to significantly higher levels in the future.

[vaibhav_a_a]

Originally Posted by thirugata

3) Safer strategy is wait for correction to get over and add lump sum at every fixed rise in the market. This way you are buying during uptrend but buying much lower than the top.

And how do you decide when the correction is over? Per Peter Lynch, "More money is lost preparing for corrections than in the corrections themselves".

p.s. I was very tempted to bump this thread up this morning with a ''Wassup, how's everybody feelin' " but refrained.

[thirugata]

Originally Posted by vaibhav_a_a

And how do you decide when the correction is over? Per Peter Lynch, "More money is lost preparing for corrections than in the corrections themselves".

p.s. I was very tempted to bump this thread up this morning with a ''Wassup, how's everybody feelin' " but refrained.

More money is actually lost if we dont know what we are doing and that is true not just for market.
Now how do we know correction is over is just like how do we know uptrend is over. When market stops falling and starts to go up. Yes it can always go up a bit and reverse again, then stop lump sum and continue with SIP and wait for another reversal.
And as mentioned, it is just one of the 3 strategies I explained based on what little I know about the market, there can be many more.
Larger point is if one is using SIP + Lump sum there has to be a strategy to add that lump sum and that can be anything depending on what one thinks is the right strategy for their risk taking ability.