where're the market fundas

Nifty ended at 7812 on 22 Sept 2015; It had a 52-week high of 9119.20 and a low of 7539.50. This is a broader market, and might appear to be a buying opportunity for those who feel that way. 

It is also trading at 21.65 times earnings and 3.15 times book value. The earnings multiple is higher than the long term average of 18.60; however, lower than the book value average of 3.56. Not a close call, though. 

I did mention in my previous post that the market at levels (7785.85) it was, did not interest me much. In fact, I found it to be expensive. How about now, after just a few days?

I will make it short. Value of an asset is a function of its cash flows, growth and risk in those cash flows. Stating the obvious, the higher the growth, the higher the value. It is not just the physical growth that drives value, but the excess returns from growth. Growth can achieved in two ways: through new investments and through efficiency in current investments. The former leads to higher reinvestment at current return on capital, and the latter leads to higher return on capital without additional capital. The current market fundamentals do not give a picture of better future: The growth rate of Nifty at the moment is less than 10%, which was never there in any of the last 15 years barring a few days in March-April 2003. The return on equity is less than 15%, which is also one of the lowest.

Considering the above, it is hard to conclude that the market is a bargain. This of course is the current view. If the corporates make an effort to increase earnings and return on capital in the coming years, the tag line of good years ahead can be apt; otherwise, we are going to have a period of wait.