These highs are not highs

To the equity investor who is dedicated to buying stocks at a good value, there is nothing so worrying as markets at or near all-time highs. Somewhat unexpectedly, the end of 2020 has turned out to be a period with a great concentration of all-time highs. Since November 9, the Sensex has recorded 19 all-time highs in 34 trading days. Thus, more than half the days have been all-time highs. If you look at the entire history of the Sensex, this is not all that unusual, although it has been so in the last 10-15 years or so. There are 52 previous occasions when a stretch of 34 trading days yielded 19 or more all-time highs. However, all the earlier instances are from the three steepest bull runs in the past, which are 1981, 1992 and 2006. This is the first occasion that such a thing has happened since May 2006.

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