Year

Open

High

Low

Close

P/E

P/BV

DY

2000 

5,209.54 

6,150.69 

3,491.55 

3,972.12 

24.48 

3.81 

1.14 

2001 

3,990.65 

4,462.11 

2,594.87 

3,262.33 

17.60 

2.51 

1.83 

2002 

3,262.01 

3,758.27 

2,828.48 

3,377.28 

15.22 

2.30 

2.14 

2003 

3,383.85 

5,920.76 

2,904.44 

5,838.96 

15.02 

2.49 

2.14 

2004 

5,872.48 

6,617.15 

4,227.50 

6,602.69 

17.26 

3.28 

2.01 

2005 

6,626.49 

9,442.98 

6,069.33 

9,397.93 

16.21 

3.94 

1.58 

2006 

9,422.49 

14,035.30 

8,799.01 

13,786.91 

20.18 

4.75 

1.35 

2007 

13,827.7 

20,498.11 

12,316.10 

20,286.99 

22.25 

5.32 

1.10 

2008 

20,325.2 

21,206.77 

7,697.39 

9,647.31 

18.22 

4.2 

1.29 

2009 

9,720.55

17,530.94

8,047.17 

17,464.81 

18.08

3.42

1.43 

2010 

17,473.45

21,108.64

15,651.99 

19,459.85 

21.58

3.67

1.12 

The Sensex has given a CAGR of 17.4% since inception in 1986 to the current level of 19460 as on November 24,2010, with the base of 100 set for 1978/79

Last five years it has moved as below

2005……Up 42%

2006……Up 47%

2007……Up 47%

2008……Down 52%

2009……Up 81%

2010 till November 24,2010….11.4%

If you observe the 2000/1 Crash,you’ll see the Sensex dropped to a low of 2595 in 2001 from a High of 615I in 2000…that’s a 58% decline

In October 2001,I had held a ‘turning point’ Workshop at the World Trade Centre in Mumbai urge Investors to Restructure,Repair,Reconstruct,Revitalise,Revive and Restore their Equity Portfolios…gave 46 Recommendations in various categories like Dividend Yeild Plays,Open Offer and Buy back Candidates,Valuation Bets,Multibaggers and Turnaround Scrips,Strong Sector Plays like Banking and Pharma etc

From the Low of 2595 in 2001 to the current 16496 as on Feb 3,2010 the Sensex CAGR for the 9 years has been a fabulous 23%….Message is clear…Never miss an Opportunity to Invest More in Equity at Sensex Lows….You got opportunities in 2002 and 2003 too and more recently in October 2008 and March 2009

Ah! when can you judge the Lows are Lows indeed !?….If Sherlock Holmes would have to detect the Sensex Lows he would have said ” It’s Elementary my dear Watson !…Macro Valuations ! Fall back on History !…..when Sensex Multiples fall to 10 and below !”….”and Highs?” …..”When Multiples race away past 22″