Okay so I see Lot of People here some are just blaming smallcaps and midcaps only because they missed it, and They were just invested in Largecaps and bunch of blue-chips on the other side some are supporting Smallcaps and Midcaps only Because they were Invested in Small and Midcaps which made them crazy Returns last Year.
But leaving This aside let’s look at some facts
The EPS of smallcaps which used to Be around 340rs has increased by more than 50% to be around 520rs in These Last Two Years.
And For Midcaps The EPS has Gone up by 65%+ From 390 Rs to 660 Rs.
So when Earnings Grow Why shouldn’t the stock move up??
The P/E of Small caps was around 26 which has risen to 28 which is not much to consider it as bubble valuation
And same with Midcaps as well P/E remains almost same.
So I personally beleive that this price growth Is real w.r.t earnings Growth and is not valuation Bubble and one should use This fall to increase Their allocation in High conviction stocks.
But I also understand The point That there are numerous companies Where Stock price Rised despite of Their bad earnings growth and definitely they will get butchered.
So I believe The conclusion is to Hunt for good Companies showing Growth With Their Numbers.
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