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Basic Valuations framework that I have been following since many years / decades and have seen good outcomes than bad in overall terms.

It's a foundation and I update it dynamically depending on multiple other parameters.

My basic valuations approach in Chemicals sector

~ If P/E < 8-10, Be greedy

~ If P/E > 10 & P/E < 20, Be watchful, research & track

~ If P/E > 20, Be cautious to be very sure of future growth and book profits regularly

Not applicable in case of MNC & leaders like GMM

My basic valuations approach in Food sector

~ If P/E < 15-20, Be greedy

~ If P/E > 20 & P/E < 40, Be watchful, research & track

~ If P/E > 40, Be cautious to be very sure of future growth and book profits regularly

Not applicable in case of MNC & leaders like Nestle

My basic valuations approach in Pharma sector

~ If P/E < 10-12, Be greedy

~ If P/E > 12 & P/E < 25, Be watchful, research & track

~ If P/E > 25, Be cautious to be very sure of future growth and book profits regularly

Not applicable in case of MNC & leaders like Abbott.

My basic valuations approach in Telecom sector

I try to apply more of common sense rather than any valuations parameter.

If company is delivering quality services and has mindset towards growth, it should keep delivering compounding returns.

My basic valuations approach in "MNCs & Leaders"

These companies have grown beyond challenging times & uncertain phases. They will keep growing while killing the competition from many small companies

Hence future business potential is what matters to expect compounding returns.

With time, I have observed that many fund managers & research reports have made the valuations methodology extremely complex.

I am very clear based on multiple observations that in the end, it's the price earnings multiple that rule and can keep you better positioned

Read again

Do know that valuations is the last parameter to be understood.

Before valuations, what matters is Business and Fundamentals