22nd
April 2013- The P/E of Sensex (i.e. BSE 30) is
16.92, means it is a calculation of Trail earnings.
Trail P/E= [Price of Sensex (Current)/ Earning of
Sensex (last 365 days)]
This shows an interesting outcome.
GDP (%) +Inflation (WPI %) + Corp....
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22nd
April 2013- The P/E of Sensex (i.e. BSE 30) is
16.92, means it is a calculation of Trail earnings.
Trail P/E= [Price of Sensex (Current)/ Earning of
Sensex (last 365 days)]
This shows an interesting outcome.
GDP (%) +Inflation (WPI %) + Corp. India Growth (%) in
last 365 Days were
(5+7+3) %=15%.
Sensex grew 16.92% or 17%.
So, even a simple Sensex investment in last 365 days
would give you returns from the northern side of the
SML (security market line).
Now last 365 days GOI 10 Year Yield has come down to
7.96% from a high of 8.4%.
That decodes the concept that Government can borrow
money at a cheaper rate now, as GOI Yield signifies
Government borrowing rate.
Similarly corporate borrowing rates are coming down
too.
Less borrowing cost means more Profit Margins
(indirectly).
So, coming 365 Days the earning from the Sensex will
generate even higher return than 17%,
provided no contingent situation (War or Tsunami)
breaks out.
If we assume Sensex EPS for FY
Less
