Turbulent Times

It seems that we are going through turbulent times in stock market. There is no clear indication of where the Sensex and the overall market is going. Value companies are still not doing well (container corporation, britannia, cipla, ITC, etc...). Their profits are also not growing very fast (10%,10%,10%,-4% respectively for this quarter). The situation in market seems pretty similar to what was present at the end of 1969 in US when all the value investors went to Ben Graham to ask him that we are not finding any good stocks in market. Buffet even liquidated his partnership which invested in stocks because he was not finding good investment options.

Let one year pass and we will come to know what happens to Sensex and Nifty. Sensex/Nifty are still at a P/E of 18 while the earnings growth is just 12%. Will these two converge?