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CAGR Insights – 26 May 2023

CAGR Insights is a weekly newsletter full of insights from around the world of web.

Index26-May-2319-May-23Change
Nifty 5018,49918,2031.63%
Nifty 50015,69615,4071.88%
Nifty Midcap 50 9,4289,1762.75%
Nifty Smallcap 10010,0109,8911.20%

Chart Ki Baat

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Here’s the list of curated readings for you this week:

Personal Finance 

  • If you can’t catch ’em, join their Signal groups first, feels Sebi – Market’s regulator Securities and Exchange Board of India (Sebi) is using the oldest trick in policing book to catch new-age crooks on encrypted messaging platforms, said two people with direct knowledge of the matter. Read here 
  • Expectation’s debt – What do you call the top-of-the-world status Amazon had in 2021? Was it a gift? A reward for hard work? The natural swings of capitalism? Read here. 
     
  • Shruti shares her experience with clients and their investment journey Read here 
     
  • Which MF categories will be affected by SEBI’s TER proposals – Fisdom Research put out a report on the Sebi expense ratio paper? Where will the axe fall? What will get cheaper? Read here 

Investing 

  • The Great Disconnect between how aspirants learn from the best in normal domains vs in stock markets. Read here 
  • Investors Should Sell All Midcaps in India – Investors should consider selling mid-cap stocks, as a lack of liquidity is unhealthy for the sector, according to JPMorgan’s Sanjay Mookim. Read here 
     
  • 4 Insights from Rajeev Thakkar – Chief Investment Officer of PPFAS Mutual Fund, shares his insights over Parag Parikh Flexi Cap on completing 10 years. Read here 
     
  • Rainbow Children’s Medicare Limited – Read about India’s leading paediatric and obstetrics hospital chain and have a peek at our investment thought process. Read here 

Economy 

  • Impact on liquidity due to RBI transfer – While RBI’s liquidity framework entails managing weighted average overnight rate, there appears to be an implicit element of ‘tough love’ at play. Read here 
  • Go First bankruptcy – a test of whether the country is ready to rebalance creditors’ rights and shareholders’ privilege. Read here 

  • Worsening expectations regarding a possible default would make significant disruptions in financial markets – If the debt ceiling binds, and the U.S. Treasury does not have the ability to pay its obligations, the negative economic effects would quickly mount and risk triggering a deep recession. Read here 

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Check out CAGRwealth smallcase portfolios here.  

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That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.

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CAGR Insights – 19 May 2023

CAGR Insights is a weekly newsletter full of insights from around the world of web.

Index19-May-2312-May-23Change
Nifty 5018,20318,314-0.61%
Nifty 50015,40715,477-0.45%
Nifty Midcap 50 9,1769,1490.30%
Nifty Smallcap 1009,8919,8070.86%

Chart Ki Baat

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Here’s the list of curated readings for you this week:

Personal Finance

  • How to decide if you should opt for EPFO’s higher pension scheme or not? It remains Sophie’s choice. We analyse the EPFO guidelines with the help of an illustration. Read here. EPFO has now also come out with a calculator. Download here.
  • Global Asset Management Industry is currently facing multiple headwinds, as per a BCG report – Market performance has been responsible for 90% of revenue growth for last 15yrs, so if the market struggles, the industry can struggle. Alternative assets remain the only bright spot. Read here.
  • “Oh I definitely need to talk to you. It is a priority. But I am traveling, I will get back”. Being busy is not about work but about priorities and your finances need to be your priority.Read here.
  • Sebi proposes overhaul of expenses charged to mutual fund investors – The Securities and Exchange Board of India (Sebi) in a 40-page consultation paper has proposed a slew of changes to the total expense ratio (TER) that is charged to mutual fund investors. Read here.
  • “Advisor sahi hai” campaign is the need of hour – Sebi introduced the regulations to address the problem of inappropriate recommendations from wealth management professionals. However, more awareness needs to be created to boost demand for fee-based advisers and attract more quality people to the profession. Read here.

Investing

  • How to time the market? – Even though it may not be possible to time the peaks and troughs exactly, investors can take tactical advantage to reduce their probability of getting the timing exactly wrong and improve their chances of generating superior returns. SageOne Investor Memo -May2023
  • India could be the next big market for Starbucks – In India, the average person consumes ~18 cups of coffee per year. The coffee culture, like China (~9 cups per year) is in its infantile years. In markets like Thailand, Saudi, and the Philippines, coffee consumption stretches up into the hundreds of cups per year; they are established java addicts. Read here

Economy

  • EMs are leading the fight against dollar – Something other than inflation is driving this shift to gold, and emerging world central bankers are the likely answer. Why now? One reason is long burning dissatisfaction with dollar dominance, another is that the United States and its allies have increasingly weaponized the dollar, in the form of financial sanctions. Read here
  • RBI Dividends to Modi’s Government May Double, Aiding Fiscal Gap – The Reserve Bank of India board may decide to nearly double its dividend to the government from official estimates due to revaluation gains and profits from selling dollars, which could help bridge the fiscal deficit. Read here.
  • India’s monsoon rains, the lifeblood of the country’s economy, are likely to be delayed in 2023 and are forecast to hit the Kerala coast in the southwest on June 4, the state-run weather office said on Tuesday. Read here.
  • Why El Nino is a concern for Indian monsoon rains? – India’s weather office has forecast normal monsoon rainfall in 2023. However, a 90% likelihood of an El Nino weather pattern developing during the June-September monsoon season raises the possibility of less than normal rain. Read here.

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Check out CAGRwealth smallcase portfolios here.

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That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.

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CAGR Insights – 12 May 2023

CAGR Insights is a weekly newsletter full of insights from around the world of web.

Index12-May-235-May-23Change
Nifty 5018,31418,0671.37%
Nifty 50015,47715,2771.31%
Nifty Midcap 50 9,1499,0351.26%
Nifty Smallcap 1009,8079,7330.76%

Chart Ki Baat

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Bazaar Ki Baat

A striking pattern – Buying right, but selling wrong.

In the 7th edition of the “Bazaar Ki Baat” series, we discuss a recent study that captures a striking pattern in the investment world – while Investors display clear skill in buying, their selling decisions underperform substantially.

We also talk about what led to the sharp rally in the Indian equity market in April.

Further, we show that even after the changes in debt tax rules, how debt funds score over FDs due to the deferment of taxes.

Do watch and follow our channel

Here’s the list of curated readings for you this week:

Personal Finance

  • How an obscure PPFAS morphed into India’s Berkshire Hathaway– ‘The way of the tortoise’ has seen the fund house grow 200 times its size and deliver a stunning 19% CAGR. Read here.
  • Finance is like fashion – Wait long enough and the same arguments come back in style. Read here.
  • Shruti shares her experience of interactions with millennials regarding their investment journey. Read here.
  • A vicious trap – Dig into any successful business and you’ll likely find two people: One who comes up with crazy ideas, and another who kills most of those ideas while giving the sensible ones a shot. Read here.

Investing

  • How investible is the Electrification theme?  – Close to 50% of the power being used by Industries across India is being served by captive power. Watch here
  • An investor’s edge – There are three competitive advantages as an investor: informational, analytical, and psychological. Of the three, only analytical and psychological are sustainable. Read here
  • Culture eats everything for breakfast – HDFC Bank CEO – The crux of our story is that we had a strategy which can be copied by anyone. We have a great set of people, which anyone can poach. We have technology, which people can buy, okay? But there is a certain culture which is unique to HDFC Bank. Culture which no one can replicate. That’s our execution capability. And that is what differentiates us from everyone else. Read here

Economy

  • Electric 2 wheelers leading the growth of EV in India, but infrastructure gap remains. – E2W sales grew by 188% in FY23 as compared to the previous year FY22.As of January 2023, India had 5,254 public electric vehicle (EV) charging stations, to cater to a total of 20.65 lakh EVs Read here.
  • Source says Credit Suisse India FX ops shut – Credit Suisse has shut foreign exchange operations in India, but other proprietary trading and client services have remained unaffected in the wake of its sale to UBS, an official familiar with the situation said. Read here.
  • Rs. 25 for a veg thali and Rs. 58 for a nonveg thali in India – An interesting indicator from CRISIL on the cost of Thali in India. Read here.

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Check out CAGRwealth smallcase portfolios here.

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That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.

Posted on

CAGR Insights – 5 May 2023

CAGR Insights is a weekly newsletter full of insights from around the world of web.

Index5-May-2328-Apr-23Change
Nifty 5018,06718,0650.01%
Nifty 50015,27715,2190.38%
Nifty Midcap 50 9,0358,9620.81%
Nifty Smallcap 1009,7339,6720.63%

Chart Ki Baat

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Gyaan Ki Baat.

Diversification is a risk management strategy that involves holding your money across an array of different investments to reduce your risk exposure.

Investing the majority of your corpus in the same industry or asset class increases portfolio risk. Diversification doesn’t just mean holding a bunch of different stocks, it works best when positions in your portfolio are uncorrelated meaning that their correlation coefficient is close to zero. All this means that the stock prices need to move at least somewhat independently of one another.

Such diversification can be achieved by allocation of funds across asset classes and within classes, and also geographically by investing in both domestic and foreign markets. This way, even if a particular industry or sector underperforms, it has a controlled or limited effect on your portfolio. Whereas other investments with positive performance will likely offset these negative returns.

Here’s the list of curated readings for you this week:

Personal Finance

  • EPFO extends deadline to apply for higher pension till June 26 – Retirement fund body EPFO on Tuesday extended the deadline to apply for higher pension till June 26. Read here.
  • Who will bear the extra cost of Higher pensions by EPFO? – It has been decided to draw a 1.16 percent additional contribution from within the overall 12 percent of the contribution of the employers into the provident fundRead here.
  • Shruti shares her experience of a visit to the LIC office in Chembur, Mumbai. Two things happened when I went there. Read the 2 part series here.
  • The tragedy called SEBI’s RIA regulations- RIAs are concerned that their communication with existing clients might be hit because of the new regulation on advertisements. Apart from this, industry sources tell CNBC-TV18 that Sebi is also planning on formulating a centralised investment account for RIAs to collect money from investors. Read here.

Investing

  • 3 chart updates on the Markets – Sharp rally in Indian markets in April, as FIIs make a comeback. Read here.
  • How to analyze Steel Industry? – Valuepickr Forum  – Presentation covering commodities/steel cycle decision-making aspect. Read here
  • India’s High Corporate Tax Rate is Holding Back Corporate Capex – Not only does India’s high corporate tax disincentivize capex (as explained by steel case study outlined above), but it also puts India at a competitive disadvantage to China. Read here
  • Will forcing PSUs to pay dividends make them more valuable? – Stocks that have “Gujarat” in their name are hugely up the next day (April 26). Simply because oh, some news has come, and it sounds good.. Read here
  • How Interest Rates & Inflation Impact Stock Market Valuations – This trend makes sense intuitively. The higher the inflation rate, the lower the valuation averages. The relationship between interest rates and valuations is not quite as clearcut. Read here

Economy

  • Fed raises rates, opens door to pause in tightening cycle – The Federal Reserve moved its management of the post-pandemic economic recovery into a new phase on Wednesday with what may be the last in a historic series of interest rate hikes and heightened attention to credit and other economic risks. Read here
  • India state govt’s FY24 borrowings seen lower due to off-balance sheet debt – sources– Lower market borrowing by state governments was one factor that helped keep federal government bond yields in check in 2022-2023.Read more here.
  • JPM buys First Republic bank – The US banking behemoth said in a statement it will take $173 billion of loans and about $30 billion of securities of First Republic Bank including $92 billion of deposits. However, it will not assume the bank’s corporate debt or preferred stock.Read here

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Check out CAGRwealth smallcase portfolios here.

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That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.