Overall, the market appears to be hot today. As we have seen earlier, most of the investor’s returns in the market from 2013-16 was made through multiple expansion (~80-90% of the returns came from multiple expansion & balance came from Net income growth). With this point in mind, if we invest when the multiples are … More Indian Stock market – Worrisome situation?
The returns on a particular stock are driven primarily by three factors 1. Growth in earnings 2. Expansion of multiple 3. Dividend As illustrated by the following data, the majority of the returns during 2013-16 is driven by multiple-expansion which is a proxy of consumer sentiments. Now the question is whether the bull run in … More Understanding the Indian stock market returns during 2013-2016