Are Markets Overheated in the Small & Mid Cap Space ?

Are Markets Overheated ,especially in the Small Cap & Mid Cap Space?

Don’t take at face value all the bullishness you read online or in print  or see & hear on Stock Channels from Anchors & Experts

Bullish Headlines can provoke you to Buy impulsively especially if you get the feeling that you’re missing the Equity boat….remember there’s always another Boat you can catch

It’s your Money at Stake &  thus it’s wise to heed some indicators & be aware of  rising Valuation risks….exercise extra caution when going Top Down…Bottom Up of course always can be more rewarding,alpha too, if selections are fundamentally wise after assessing Value vs Price

NSE Indices levels currently are one quite strong Indicator of rising Valuation Risks even when considering that Corporate Earnings Growth in FY 17 is expected to be at least 15%

Take a Look  at some of these NSE Indices Closing Levels as on Friday,July 15,2016 & make your own judgement

Am not advocating Timing the Markets ~ just to be aware of rising price risks & headwinds & exercise some caution


Index Name Closing Index Value P/E P/B Div Yield
Nifty 50 8541.4 23.43 3.47 1.21
Nifty Next 50 21579.4 27.7 2.98 1.55
Nifty 100 8700.1 24.01 3.38 1.27
Nifty 200 4499.95 25.04 3.2 1.25
Nifty 500 7194.4 26.72 3.04 1.22
Nifty Midcap 50 3547.65 49.97 1.79 1.43
Nifty Free Float Midcap 100 14282.2 33.89 2.37 1.47
Nifty Alpha 50 8878.33 28.39 3.97 0.61
Nifty Quality 30 2177 28 7.17 1.46
Nifty Full Midcap 100 4347.53 41.08 2.13 1.11
Nifty Midcap 150 4688.28 36.28 2.52 1.05
Nifty Smallcap 50 3168.04 39.2 1.16 1.25
Nifty Full Smallcap 100 3062.72 32.76 1.35 1.1
Nifty Smallcap 250 4673.6 1530.54 1.56 0.99
Nifty MidSmallcap 400 4677 53.26 2.1 1.03

Pre Lunch Added Remarks on Monday ,July 18,2016

Just 15 minutes short of 1 pm & the Sensex & Nifty remain buoyant & are up 150+ & 35+ at near 28000 & 8580 levels respectively as Monsoon session of Parliament commences today….A Decent Monsoon after two years of drought appears to be priced in well for now….Its the hope of GST being passed in this session that clearly seems to be sustaining the buoyancy….If GST is passed in August the euphoria will elevate Index levels by at least another 5% ….Index Valuations are already high in anticipation & these should run up even more in August….Brexit panic’s come and gone for now….while it is acknowledged that GDP will indeed be favorably impacted with GST there clearly is the risk of Markets running even more ahead of fundamentals in the short term…On March 31,2015 last year I had appeared on ET Now Prime Time & warned on FY 16 & that Markets at the time were ahead of fundamentals with the Sensex having kissed 30000 on March 4 ,2015 & that a correction was imminent…Sensex rolled back sharply towards 23000 before the smart recovery again just now to 28000 levels….I sense a similar situation developing in August next month & short term caution would be wise…if you wish to make merry in any GST induced Rally from now to August,if it passed by all means do so…just leave the party before you’re forced to clean up….Oh! & there is a chance I could be wrong on this….so safer when in doubt to stay out in the short term …of course there’s also the risk in staying out in that scrips will not become cheaper as FPIs roll in more funds & cash as we all know is not productive 🙂 read more