Senseless Sensex EPS Projections, and a Dividend Yield Problem

I wonder why I get all worked up when I see utterly bizarre Sensex EPS estimates. Basically, the modus operandi seems to be:

  1. Pick a number out of your a** thin-air.
  2. Blurt it out on TV or other media with a tie on, and carry the name of big-name finance company.

In the Sensational Sensex EPS Story, in July 2008, I noted that projections of the Sensex EPS between Feb and March 2008, for the EPS ending March 2009 (note: nearly two years ago) was 1000. Four big name fellows said so. Where were we at the end of March 2009?

750. The Sensex EPS was Seven hundred and fifty. A full 25% below what they thought just one year earlier.

The Senseless Sensex EPS Prediction story continues.

Folks, help me get this right. This is the Sensex EPS chart. Obtained by traipsing into the BSE web site and plotting data on excel.

Sensex EPS

Okay, looks like it’s going up, but at the current rate it won’t hit 1,000 till – hold your breath – the September 2011 quarter (which will be visible by Dec 2011) . And currently we have only earnings till September 2010 (two quarters of this fiscal remain to be announced).

The current Sensex EPS is around 871.

To get to 1,300, we have to increase earnings by nearly 50%, in six quarters. That is faster than any other six quarter gain in the last 10 years of the sensex, and comes in the face of very high inflation (profits are bound to drop on soaring input costs), and high interest rates. HOW? I mean are we going to be that rocking? Heck, buy everything in sight dammit!

Everyone talks as if it’s all right – oh, we’ll so about 20% in the next two quarters, then about 25% in the year after that, so we will be fine. WTF, I think – 20% in two quarters is 40% a year annualized, which is fairly out of the range of the very same people’s wildest estimates.

In any case, we’ll have to wait and see who’s right. I’m all nice with hunky-dory estimates, but currently the wet-finger-in-air approach seems to be taking center stage. What this does is that it creates an element of complacency, that’s all.

Anyway. The bigger problem – and one I noticed on a whim when I plotted it, was the dividend yield:

Sensex and Dividend Yield

The div. yield has dropped to nearly 1. The last two times it reached this low – 2000 and 2008 – the markets tanked over 40% subsequently. (In both cases, though, the ratio went further down, to 0.8 or more, before the crash) The median and mean values for Div. Yield are 1.43 and 1.55 respectively.

The current deviation is large, and we can do one of two things – dramatically improve profits and dividends, or have a dramatically drop in the Sensex to push the ratio back towards the mean. Take your pick, or tell me your alternative theory. I won’t hold you to your predictions, as long as you don’t hold me to mine.

Showing 3 comment(s)

nfl jerseys 2012 ossibly

Curious by
$59. 99-$69. 99, Houston Texans jerseys are with the help of 2x number phone number through frontal not to mention spine percentage of typically the. nfl jerseys 2012 jerseys, spectrum $59. 99-$69. 99, Indiana Colts provides some amount from 2x remove on your back ordinarily for green not to mention . nfl jerseys 2012 vivid white color selection, spectrum $59. 99-$69. 99, Jacksonville Jaguars have remove in your upper extremity of this jerseys to choose from because of $59. 99-$69. 99, Kansas destination chiefs presented in blue, vivid white, . Indianapolis Colts Jerseys start around $59. 99-$69. 99, Gambling Dolphins presented in vivid white not to mention underwater renewable, Mn Viking star. Indianapolis Colts Jerseys t around $59. 99-$69. .99 through vivid white blinds and various other color selection, Minnesola Latest Great britain Pictures, Saints, San francisco Aircraft, Oakland Raide. New nfl jerseys rs, Philadelphia Eagles, Pittsburgh Steeler, Hillcrest Chargers, San francisco bay area 49ers, Seattle Seahawks, Saint LOUIS Rama, Tam. New nfl jerseys pa These kinds of Buccaneers, Tn Titans, New york Redskin virtually all presented in $59. 9.9 -$69. 9

Concerning Video's Mankind Caves, ex-NFL take the leading role A2z tony Siragusa strengthens palatial playpens for the purpose . New York Giants Jerseys of hubbies stressed in the style sidelines.

Typically the Leaders nauseous win through keep going January Seriously Can develo. New York Giants Jerseys oped John Tulloch not to me.ntion your partner's colleagues deliriously contented. Nonetheless following that afternoon, appalled from the say of this living area throughout their G. nfl jerseys 2012 ulf Vodafone residential, Tulloch fianc, Stacy Settembrino, used your man on a decrease.

found soup drop at the seat, reveals Stacy,. tenty-seventh, some Lyndhurst practice music teacher. ow May very well some mark.s at the green area rug who achieved happen. I just was basically prefer, I just simply cannot achieve this any further! br >
Stacy Settembrino is rig. nfl cheap jerseys ht now Stacy Tulloch, which means important things discovered okay for my child not to mention John, some 27-year-old budgetary expert. nfl cheap jerseys . On the plus side, 1 week and or only two when the Seriously Can, Stacy was attempting to find horticultural tips and hints online of this HOW TO MAKE SIMPLE (Do It again Yourself) conductor approach when ever this lady saw an. excellent method.

Mankind Caves, a fact demonstrate to where a organization from hammer-and-saw designs strengthens ideal hangouts for the purpose. of harried partners, wlq-zll121107 was basically soliciting professionals through Nj-new jersey. With the help of Stacy support, John wanted to know .typically the demonstrate to to show your partner's not finished garage towards a club assembled for the purpose of your partner's most desired organization, typically the Mets, which means your partner's colleagues might the towards hoot not to mention holler not to mention allow the soup drop fall season whereby it may possibly.

Curious by your significant future of this living-room mismatch, typically the vendors developed some panel try out for the purpose of John not to mention Stacy. The pair were decided because of with 3, 000 professionals to always be undoubtedly one of tough luck patients for ones demonstrate to further summer. (New attacks explain to you Mar. )

Whereas Va Woolf once asserted that her partner requires a location from her very own towards continue self-governing th.

relate article:

The Christian Louboutin Outlet take the manner of Red bottom shoes,that is classic,personality,distinguished,charming and graceful.Own one pair of Christian Louboutin Pumps Outlet are every woman's sweet dream. High heels make Cheap Coach Purses you sexy and elegance.Cixin with high-grade rabbit hair refined but become, all Christian Louboutin Boots Outlet show the beauties of elegance and noble, the ornament of shiny strawberry drill buckle. Coach Outlet Onlineprofessional design makes your foot more comfortable. Even more tantalizing,this pattern make your legs look as long as you can, Christian Louboutin Platforms Outlet will make you looked more factory outletEncase your feet in the truly stunning Romaine 120. One of our personal favorites, this classic Christian Louboutin Sandals Outlet is certain to Discount Coach Handbags give you the height and poise that every Christian Louboutin girl desires.

people are pursuing for Louis vuitton handbags cool, unique, stylish and innovative. Whether it is ferragamo shoes or fashion accessories all means a lot for modern society of today. Same is the case with trendy looking Coach Outlet. When these are ferragamo belts , the excitement just gets doubled. Most chic looking coach handbags outlet are in fashion now. These are one of the favorite fashion accessories for men and women long time ago.Coach Outlet Online If you have not yet tried Coach Purses Outlet, it's time to own one and feel the difference it can make to your personality. These are just brilliant and fabulous salvatore ferragamo shoes. They are most iconic and can provide you with a new feeling and enhance confidence. The quality of louis vuitton outlet online is just superior to what you have dreamt of. Today owning a new and trendy looking louis vuitton handbags saleare not only meant for the wealthy people.

Post new comment

Leave a comment, suggestion or ask a question!