20K conquered

29th october 2007 is a historic day in Indian Stock Market. The BSE Sensex crossed 20000 for the first time in its history - a phenominal performence considering that Sensex was just below 3000 in April 2003 when this Bull market started.In fact after touching a high of 6150 in March2000 during the I.T boom and then falling to a low of 2595, it took more than 4 years for Sensex to break 6150 again but has taken again just 4years to touch 20000, by no means a normal achievement.While many of the I.T shares have never seen their peak again and on the contratry still trading at huge losses after 7 years, this new bull rally is triggered by a lot of sectors like steel,cement,banking,real estate,contruction,infrastructure,power and so on. So the rally was certainly broad based and supported by large flows of foreign investment.
Though there were some pockets of speculation and over valuation, the market showed lot of resilience, particularly on the political front, and gain from strength to strength after every major correction.And like every bull market enough stories are said now to justify the valuations and infact suggesting even higer valuations because China is trading at higher PE, more foreign flows will come in because of the Indian growth story, the strengthening of Rupee and weakening of dollar and so on. Like many I was also on the camp that there will be a steep correction - time wise - and stayed with more than 50% in cash. But since nobody can time the market and I have seen more than twice these excesses getting evoparated quickly, I still prefer to see the opportunity loss rather than to invest fully and take actual loss and also not have money to buy when that correction actually happens.With Fed likely to cut rates again today, markets may rally once more to a new high before realising the seriousness of the trouble in U.S Economy at some point which will surely trigger a global sell off.