I was not fully involved during the 2007-08 bull market but have distinct impressions of the time.
Some of the telltale comparable signs are
Valuations take a backseat in justifying rise in share prices. e.g You brought to notice the valuations of pnbhf. People have now started justifying valuations based on market cap to loan book and any other convenient parameters. Plus a lot of companies want to join the bandwagon of the business of the market leader. We can clearly see everyone and their mother wanting to enter housing finance sector and making lofty projections. In 2007 period it was infrastructure companies where the biggest monitorable was balance sheet strength and nobody focussed on it and instead focussed on order book position to justify valuations.
IPOs are of late making a huge comeback and post listing there are similar huge gains as in the past.
There is a huge gush of liquidity in the markets as it was in the past. So most of the falls are bought into. This time the only thing different is the huge inflows of domestic money. I read in a newspaper a couple of days back that domestic investors pumped in 8000 crores during a month. Now thats a big jump from the routine 4-5000 crores in earlier months. Earlier in bull market preceding 2008, FIIs dictated markets which seems to have changed now.
And something which is worrying me is that a lot of fence sitters who earlier were very averse to investing in stock market are now getting into it quoting the TINA factor. There is no alternative. According to them, FDs dont give much returns (maybe 7%) and attract taxes on interest. Real estate rental yields are also not too enticing. Gold has not gone anywhere since past many years. So they feel equity is the only place to be. There seems to be an inevitability to their investing in equity.
The thing I find different this time is that in pre 2008 bull markets, majority of sectors were participating in the rally which I feel was more broad based. Currently it seems only a few sectors are attracting market attention. On this aspect I feel a lot of fellow investors would have a different take than mine and would also come up with data points and other arguments but I am putting forth my view based on a broad observation of the markets.
Putting in a technical observation I have frequently seen, whenever a stock or an index crosses its all time high there is usually a pop up of atleast 25-30%. In terms of nifty levels of 9000 was a perennial supply point for markets from the time PM Modi won the elections. Once that has been crossed convincingly we could be seeing levels of 11500-12000 (9000 + 30% of 9000 which is 2700). This though is not a statement etched in stone. Markets could reverse much before also.
The euphoria associated with pre 2008 bull market is still not evident in its full glory. I would keenly watch out for that.
And another thing which Lynch mentions about market psychology, lay people (in his anecdote about a fund manager at a party and the crowd behaviour around him and around the dentist at various market times ) have not yet started giving me tips on what to buy.
And a correction if it follows such a bull market may not always necessarily end in a 2008 kind of situation. It may or may not follow earlier pattern. The more the froth there is the deeper will be the correction.
My stance since past few months has been of cautious optimism. A bull who is scared but not shit scared.