As we brace for 2018, let’s run through the arguments that suggest the market is overheated and due for a crash. Then, let’s go through the arguments that suggest the market is not overheated and capable of running up even further.
The argument for being bearish is simple. Valuations are much higher than the consensus earnings expectations warrant and also much too high in historical terms. The National Stock Exchange’s Nifty is at a current price to earnings (PE) of 26.7 (past four quarters earnings). The Nifty Next 50 is running at PE 37-plus. The Nifty Smallcap 250 is running
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