I appreciate your efforts. One more point to add: Starting April 2021, they switched to using consolidated earnings to calculate the NIFTY PE ratio. Therefore you see in the table below, a dip from 40.1 in March 2021 to 32.7 in April 2021. This means the NIFTY PE ratio now is not directly comparable to the PE ratio before April 2021

Wow!! Thankyou Sir for letting us know the another market timing parameter in detail

You deserve more than 1000 views. Keep it up.

20:02 Also, the earnings of the companies had come down because of Covid which was a temporary phenomenon.

Is there another parameter coming? The thumbnail said 99% probability. :)

Can you tell one single website or anywhere will get all this fed information amd other charts together?

Sir since April 2021 consolidated earnings are to be considered in place of standalone earnings for calculation, it will affect the comparison between current pe and historical pe ratio average. Like in Mar 21 PE was 40 and it suddenly dropped to 32 the next day due to change in calculation process.

@IndraanilGuha

2 ай бұрын

Absolutely right... I have done another dedicated video on timing the NIFTY using PE ratio (in Hindi), and it is available at: kzread.info/dash/bejne/nGhmp8OTppTMeqw.html You would notice in teh above video that I have only used PE ratio data up to Mar 2021 in the above video... the PE ratio data post Mar 2021 would have be normalised because of the change you mentioned in the way NIFTY has started calculating and reporting NIFTY's PE ratio. I will cover the details of the normalization required when I re-do the above video in English. But thanks for reiterating this important point!

Hi, alternate way to gauge market valuation on base of PE is taking sensex PE which is not been changed

@IndraanilGuha

2 ай бұрын

Do you know any data source where daily historical PE data of SENSEX is publicly available?

@manishgdave1474

2 ай бұрын

@@IndraanilGuha I am sure you would have checked BSE website for it And will check other sources and revert.

@IndraanilGuha

2 ай бұрын

NSE changed the methodology for calculating NIFTY's PE Ratio after 31 March 2021. Until 31 Mar 2021, NSE used to calculate NIFTY’s PE ratio based on “standalone” earnings of NIFTY companies. But after 31 Mar 2021, this methodology changed and NSE started calculating NIFTY’s PE ratio based on “consolidated” earnings of NIFTY companies. And since “consolidated” earnings of a company is usually higher than its “standalone” earning, PE ratio of the shares of such a company, when calculated based on “consolidated” earnings for the company would be lower than the PE ratio calculated based on “standalone” earnings. And that is why NIFTY’s PE Ratio, as reported by NSE on its website dropped from 40.43 to 33.20 on 31 Mar 2021 - the day when NSE changed its calculation methodology for calculating the PE ratio of NIFTY. However, this change in methodology has made things tricky for those who use this data for conducting various kinds of analysis… the data pre-31 Mar 2021 is NOT quite from the same data set as the data post-31 Mar 2021. And hence for conducting any meaningful analysis involving the historical PE ratio of the NIFTY, one should ideally source NIFTY’s PE Ratio data based on standalone earnings of NIFTY companies, even for the period post 31 Mar 2021. However, I have NOT been able to find any publicly available data source for this yet. In the absence of publicly available source of data for NIFTY’s historical PE Ratio based on standalone earnings of NIFTY companies for the period after 31 Mar 2021, I use a hack of sorts to estimate this… I will admit upfront that this hack is probably NOT the best solution, but should still serve as the next best possible option... NIFTY's PE Ratio, as I mentioned above, fell from about 40.43 to 33.20 on 31 Mar 2021. So the NIFTY's PE ratio based on consolidated earnings of NIFTY companies, as of 31 March 2021 had to be inflated by about 22% in order to get to NIFTY's PE Ratio based on stand-alone earnings of NIFTY companies on that day (i.e. 33.20 + 22% of 33.20 = 40.43). The hack that I use is to apply this same multiple (i.e. 22%) to the entire data set of NIFTY's PE ratio data published by NIFTY for the period post 31 Mar 2021 in order get to the "best-guess" estimate of NIFTY's PE ratio based on stand-alone earnings. I know this is NOT the best solution, but I don’t think I will be very very off either using this approach! Do share your thoughts if you have a better solution!

How do you explain the nifty growth from 16-19 during which fed liquidity growth rate is flat?

@IndraanilGuha

2 ай бұрын

Fed is one of the most import factors driving equity markets, but NOT the only factor. Fed was NOT a factor influencing equity markets too much after Jan 2015, which is when Fed ended its 6-year money printing cycle that started in 2009 in response to the global financial crisis of 2008. Post 2015, Fed's balance sheet size was flat all the way till Oct 2017, which is when Fed started its QT (Quantitative Tightening) program, and QT went on till Sept 2019. What was the market's reaction to these Fed moves? As I said, Fed did NOT have much of bearing on markets after the Fed stopped money printing in early 2016. However, markets started to rally once again post the election of Donald Trump in 2016 because of the massive cuts in income tax rates that he announced, and this rally continued till almost last quarter of 2017. And then in Oct 2017, as mentioned above, the Fed started to cut liquidity as part of its QT program. QT went on for next 2 years (till Sept 2019), and during this time, NIFTY (and almost every equity market) around the world) were very volatile. Check up the chart of how the NIFTY performed during this time (Oct 2017 to Sept 2019)... it was super volatile... NIFTY tried to break-out three times, but could NOT... on each of tehse three occasions, NIFTY made new highs, only to correct and give away all the gains! I have covered how the markets performed during this time in the video available at: kzread.info/dash/bejne/lKOVt86iZNKnm8o.html (watch from 15:10)

As per DSP research, last 10 years Average PE is 23.11, last 5 years PE 24.69, so should we consider parameter like 40% or 30% from last 5 years or 10 year average. Again PE is moving on the higher side as more and more high growth and quality stocks dominant as it's constituent. Where can I find Fed data for expansion or contraction every month?

@IndraanilGuha

2 ай бұрын

Agree, as interests have fallen and Fed has helped print tons of money and pump equity markets around the world in the process, average PE levels have inched up... but that's NOT to say, PE as a metric is irrelevant now! Especially during times when the Fed is NOT pumping markets with direct or indirect liquidity support, stocks will have to get to their fair value in line with what their long term PE ratios mandate. Fed balance sheet data is available at: fred.stlouisfed.org/series/WALCL

Wouldn't constant rebalancing lead to taxes on capital gain?

@IndraanilGuha

24 күн бұрын

You are right… frequent rebalancing of portfolio using mutual funds / ETFs / direct stocks can result in a lot of capital gains, and that too short term gains, which attract taxation at a rate higher than tax rates applicable in case of “long term capital gains”. Hence for our paying clients - and this is not solicitation - we do NOT use mutual funds and/or ETFs and/or direct stocks for executing our investment strategies. Instead we use a new breed of very low-cost ULIPs called “Zero-Allocation Charge ULIPs”, which have an expense ratio that is in fact lower than that of mutual funds for executing our proprietary investment strategies. These ULIPs have a lock-in for 5 years i.e. you will have to stay invested for at least 5 years, but in lieu of the lock-in, any churn/switch in the portfolio between equity and/or debt funds are NOT treated as taxable event for the investor… so they work out to be very very tax efficient!

What are reliable information sources where we can fetch nifty pe and fed balance sheet data. Tradingview has these as charts?

@IndraanilGuha

2 ай бұрын

Data on Fed Balance sheet size is available at: fred.stlouisfed.org/series/WALCL Data on NIFTY's PE ratio is published by NSE at: www.niftyindices.com/reports/historical-data However, please note that NIFTY changed the way it calculates NIFTY's PE from 1 Apr 2021 onwards... so some adjustment needs to be done in order to normalize the post-Apr'21 data, before it can be used alongside pre-Apr'21 data. I will discuss the details of this adjustment in a future video soon.

@kapildheer1

2 ай бұрын

@@IndraanilGuha even I remember the same...... But forgot the specifics. Great that you would tell how to tweak the data. Thanks

@manishgdave1474

2 ай бұрын

@@IndraanilGuha thanks

@IndraanilGuha

2 ай бұрын

Here's the details of the change in methodology for calculating NIFTY's PE Ratio that was implemented by NSE on 31 March 2021 - Until 31 Mar 2021, NSE used to calculate NIFTY’s PE ratio based on “standalone” earnings of NIFTY companies. But after 31 Mar 2021, this methodology changed and NSE started calculating NIFTY’s PE ratio based on “consolidated” earnings of NIFTY companies. And since “consolidated” earnings of a company is usually higher than its “standalone” earning, PE ratio of the shares of such a company, when calculated based on “consolidated” earnings for the company would be lower than the PE ratio calculated based on “standalone” earnings. And that is why NIFTY’s PE Ratio, as reported by NSE on its website dropped from 40.43 to 33.20 on 31 Mar 2021 - the day when NSE changed its calculation methodology for calculating the PE ratio of NIFTY. However, this change in methodology has made things tricky for those who use this data for conducting various kinds of analysis… the data pre-31 Mar 2021 is NOT quite from the same data set as the data post-31 Mar 2021. And hence for conducting any meaningful analysis involving the historical PE ratio of the NIFTY, one should ideally source NIFTY’s PE Ratio data based on standalone earnings of NIFTY companies, even for the period post 31 Mar 2021. However, I have NOT been able to find any publicly available data source for this yet…. will be greatly obliged if anyone in my audience has found and can point me to a source of data where I can find data on NIFTY’s PE Ratio based on standalone earnings of NIFTY companies for the period post 31 Mar 2021. In the absence of publicly available source of data for NIFTY’s historical PE Ratio based on standalone earnings of NIFTY companies for the period after 31 Mar 2021, I use a hack of sorts to estimate this… I will admit upfront that this hack is probably NOT the best solution, but should still serve as the next best possible option... NIFTY's PE Ratio, as I mentioned above, fell from about 40.43 to 33.20 on 31 Mar 2021. So the NIFTY's PE ratio based on consolidated earnings of NIFTY companies, as of 31 March 2021 had to be inflated by about 22% in order to get to NIFTY's PE Ratio based on stand-alone earnings of NIFTY companies on that day (i.e. 33.20 + 22% of 33.20 = 40.43). The hack that I use is to apply this same multiple (i.e. 22%) to the entire data set of NIFTY's PE ratio data published by NIFTY for the period post 31 Mar 2021 in order get to the "best-guess" estimate of NIFTY's PE ratio based on stand-alone earnings. I know this is NOT the best solution, but I don’t think I will be very very off either using this approach! Do share your thoughts if you have a better solution!