Originally posted by master Rapid riser ji, figures are not for the last day of the year- they are adjusted for the year. For instance as on December 31, 2007, PE & PB were 27.67 & 6.71 respectively whereas for the whole month of December 2007 they were 26.94 and 6.54 respectively. What we have on the thread for 2007 is 22.25 and 5.32 so it's not the monthly or year end position. Even if we drill down to a 84-month position one would still miss out on intra-month volatility. So in any long range trend, it won't significantly matter. Coming to the moot point, the last 18 months are the ones which distort the valuation picture - the first 12 heating it & last 6 cooling little too much.     Basant ji has rightly pointed out it's the kind of companies coming in & exiting the index that influence the level. Take a look at the top 5 weights:   Reliance - 15.54% Infy - 8.47% ICICI- 7.80% L&T- 6.98% HDFC - 5.52%   None of them is a low PE or PSU kind of stock, so it's natural that it'll trade at relatively higher compared to historical levels of late 90s.

Yes Sir, but in times like these it is really difficult to keep up to that logic. We are all humans and the worst side of a human is his emotion.

couple of years???? 

Im not into technicals but the consensus amongst all the technical
guys on all the business channels last night was that 3600 is very very critical level for the Nifty, simply because if that breaks, next support level is 2600 - that means sensex in 4 digits!!

Disclaimer: Personally i have never understood the logic of how technicals
actually work. Ive always wondered if people buying at a particular level
causes a "support" level to be created, or just because a so called "support" level exists(again, how that was identified in the first place, i dont know) people start acting accordingly and start buying!!
Its like a catch 22 situation!


Edited by investor - 02/Jul/2008 at 12:08pm