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Comparing SENSEX Double Top of 2008-2010 With 1992-1994


wealthymatters.comI found this interesting graph at http://hksecurities.blogspot.com/2011/10/comparing-double-top-2008-2010-with.html.

As the author Jiggs puts it…..‘history rhymes if not repeat’….Like most Analysts We do NOT think we will see repeat of 2008 wherein market crashed to 7700 in Oct 2008 from 21000 top in Jan 2008. We consider current market phase starting from Jan 2008 top of 21000 – similar to market phase after Apr 1992 top of 4600. – In both peaks – 1992 and 2008 we saw biggest euphoria for Indian equity. – We saw sharp decline in 1992 and 2008 after euphoria. – After decline we saw sensex making double top in 1994 and 2010. – Inspite of negative newsflow about Euro, Indian Politics etc in 2011 we are experiecing slow and steady decline in Sensex similar to 1995 NOT sharp crash like 2008.

If Some (like us) believe above 1992-2000 playing out in markets now one should focus on individual stocks than following major index Sensex/Nifty because Sensex may remain in range for next 2-3 years but individual stocks will give super returns than Sensex.

I think Jiggs has hit the nail on the head.Instead of waiting for the markets to slide further,it might be a good idea to pick up long term holdings for the portfolio.The SENSEX might itself not do much that is very exciting but good stocks are likely to be excellent vehicles to build wealth.

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About Keerthika Singaravel
Engineer,Investor,Businessperson

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