High Nifty PE : Should we buy?

On 27 May 2016, the Nifty PE ratio was 22.66. Is it too high for buying stocks? According to Prof. Sanjay Bakshi, the return will be significantly negative for subsequent 3 yrs when Nifty PE crosses 22.


(Copied from : https://craytheon.com/charts/nifty_pe_ratio_pb_value_dividend_yield_chart.php)

Now, I feel that when the Indian economy is turning around for the positives and the corporate results showing improvements, even PSU banks may turn profitable after 2-3 qts, we should buy good stocks with nearly 'sure' earning visibility, for 2-3 years. THe PE of Nifty will expand for good (in my view).

Prof. Bakshi is a renowned value investor.

What we should do now? I invite valuable comments/suggestions from the boarders here on this issue.

I am buying Lupin, Tata Motors DVR, Indusind Bk, Emmbi Industries, Pincon Spirits, Jyothy Lab (on dips).

Regards.

 

I dont think we can look at Nifty to decide under/ over valuation. We have to look at stocks and decide based on earnings/ growth prospects of Co. Nifty has lot of junk stock with no earning prospects. E.g. SBI has huge write off and bad results but stock price went up because of expectations of future this means that PE has become high. I think solution is to find Cos growing at strong pace because of expansion plans e.g. Vinati Organics, Meghmani Organixs, which have plans to expand capacity and buy such stocks on bad day when there is crises situation.