EVIDENCE OF ACCURACY

The Stock market sentiment indicator table available in this book describes the stock market as EXPLOSIVE when its PE ratio crosses 28 & the subsequent asset allocation table shows equity exposure as Zero in such phase. It also describes market to be most bearish (most cheap) when index PE ratio goes below 12 and the asset allocation table shows 90-100% exposure to equity at such level.

PE ratio for both NIFTY & SENSEX crossed 28 on 4th Jan 2008 & the market started crashing from 22nd Jan 2008. Further Index PE ratio also went below 12 in Oct. 2008 & was hovering around this level until Mid March 2009.

Find below the clippings of The Economic Times, Kolkata dated 5th Jan 2008,23rd Jan 2008 & 28th Oct. 2008 in evidence of PE ratios & Market crash.

5th January 2008:

23rd January 2008:

28th Oct. 2008