Author: Kshitiz Jain

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

Index	13-Jan-23	06-Jan-23	Change (%)
Nifty 50	17,594	17,465	-0.15
Nifty 500	14,774	14,630	-0.41
Nifty Midcap 50	8,623	8,476	0.10
Nifty Smallcap 100	9,337	9,221	-1.00

Bazaar Ki Baat

Markets in Feb, Q3 Earnings and Should you opt for Higher Pension or EPF? And a lot more in this month’s edition of “Bazaar ki baat”. Watch here

Gyaan Ki Baat

Importance of Health Insurance – Health Insurance is an important component of financial Planning, and it can be a lifesaver in case of unexpected medical emergencies. Health Insurance plans provide individuals with financial protection and help to manage the rising cost of healthcare.

Health insurance plans provide coverage for preventive care, such as annual check-ups and screenings which can help individuals maintain their health and prevent serious medical conditions.

Some of health insurance plans have deductibles and co-payments, which are the amounts individuals pay out-of- pockets before the insurance coverage kicks in. However, these costs are generally much lower than the actual cost of medical care, which can be expensive without insurance.

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

Personal Finance

• PMS vs MF –  We have a SPIVA report for mutual funds, but what about PMS? Using data from PMS Bazaar, Mint has done a similar study. In most categories, less than 50% of PMS strategies beat their corresponding mutual fund category. To that, add the unfavorable taxation(tax on booked profits). Read here.

• The Jadugar Trade at Axis MF – The Securities and Exchange Board of India (Sebi) took time to come out with is first set of actions in the Axis Mutual Fund front running matter that saw the fund house sack two of its employees last year in May and the capital market regulator, on Tuesday, barring as many as 21 entities from the stock markets with nearly Rs 30.56 crore of unlawful gains to be impounded. Read here.

• Saving something is better than saving nothing – Initial increases in your wealth savings rate lead to the biggest declines in the amount of time it takes to double your money. Read here.

• Arshad Warsi Banned from Stock Market – SEBI said that promoters of Sadhna Broadcast and Arshad Warsi, along with Youtuber Manish Mishra, recommended investors to buy the company shares, inflating its price, and later dumped it, thus undertaking stock manipulation. Read here.

Investing

• How companies fudge operating cash flow? – Read the twitter thread here.

• How does Paytm make money? – Just to summarise, payment services acts as a low-cost acquisition channel and the high frequency use case drives engagement, high retention rates and leads to powerful consumer stickiness. This builds Paytm’s powerful user base. Read here

• Airtel would be a complex saviour for Paytm – Indian tycoon Sunil Mittal, founder of telecoms company Bharti Airtel, is seeking a stake in Paytm by merging his financial services unit into the fintech giant’s payments bank, Bloomberg reported. Read here

• What’s wrong with Anil Agarwal’s Vedanta Group?– The mining giant Vedanta Group is grabbing the attention for all the wrong reasons, especially after the Adani Group fiasco has come to the fore. Read here

Economy

• India December quarter GDP growth stronger than data suggests – The apparent slowdown in India’s GDP growth in the October-December quarter has been driven to a large extent by revisions to past data. Read here

• Inflation vs. the economy: Recent reports defy expectations for both – Invesco MF – I don’t expect actual tightening to be dramatically higher than what was expected back in January. Ultimately, I expect inflation to moderate and the Fed to end its tightening cycle, creating an improved backdrop for risk assets. Read here

CAGR Speak

• There has been so much talk about the option of higher pension scheme of EPFO. Should you opt-in?. Read here.

• Low Equity Allocation in India as compared to US.  Read the LinkedIn post 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’d 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.

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

Index	17-Feb-23	10-Feb-23	Change (%)
Nifty 50	17,944	17,856	0.49
Nifty 500	15,003	15,015	-0.08
Nifty Midcap 50	8,658	8,771	-1.29
Nifty Smallcap 100	9,417	9,526	-1.14

Gyaan of the week

What are Arbitrage Funds?

Arbitrage funds are the funds where fund manager buy and sell securities in different markets. The main objective of the fund manager is to exploit the price differences and generate the profit. The investor here can expect the returns same as short term debt returns. The taxation in arbitrage funds is treated same as Equity mutual funds. In Volatile market conditions, arbitrage funds can be a good fit as they can generate good returns by taking less risk. The time horizon for an investing in arbitrage funds should be minimum 3 months.

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

Personal Finance

• Index Fund or ETF? –  In terms of cost (Expense Ratio), ETFs are cheaper than Index Funds (even after accounting for transaction costs that investors will have to bear if ETF units are bought on exchanges). However, an important point of distinction is the liquidity of ETFs on exchanges and thus, the resultant impact cost. Read here.

Investing

• AIA Engineering – Stocks in Baat – Our investment thesis on the world’sSecond Largest Hi-Chrome casting producer. Read here

• Factor Investing primer –DSP MF – Factors are the building blocks of investing. They are persistent drivers of long term excess returns that research has proven to be time tested across geographies and asset classes. Understanding how factors work can help investors to make more informed decisionsRead here

• When ‘Loss Aversion’ Meets ‘Time Horizons’ in Equity Investing – A short-term (sub-3-years) horizon-focused investor tends to be perennially unhappy despite her portfolio generating very healthy returns over longer time periods. In contrast, with the same portfolio and with the same returns, an investor with a longer time horizon experiences happiness. This extraordinary paradox lies at the heart of why so few investors succeed in achieving satisfactory results from investing in equity markets.  Read here

Economy

• Have investors frozen in the headlights of rising inflation and interest rates? – We think that even as inflation falls, the new normal is more like 4 percent than 2 percent. Rates will not fall back to anywhere near zero. A new era will bring new winners and losers in the market. Here are five of the ways we see tight money changing the world in 2023.  Read here

• Can India become a Lithium Superpower?– We aren’t sure if it’s an economically viable source of deposit yet. The 5.9 million tonnes is just a preliminary estimate. Read here.

• Emerging Market Insights – Global currencies started outshining the US dollar toward the end of last year, giving a boost to international equities. With the tide likely turning for emerging markets in 2023, one should look at the future outlook for emerging economies and the emerging key trends & developments for 2023. Read here.

• India’s economy and emissions primed for big jumps in 2023 – India’s electricity output scaled record highs in 2022 even though manufacturing output in key sectors remained below highs. Although the concern remains for recession likely to hit in 2023, positive expectations for India across the financial community suggest growth in businesses across all sectors leading to increased energy consumption along with a commensurate rise in emissions. Read here

• The rise in CPI inflation and the data discrepancy – Overall inflation rose to a three-month high of 6.52%, above the central bank’s comfort band of 2%-6%, raising the prospects of further interest rate hikes. Part of the sharp rise in cereal inflation last month, say economists, was due to data discrepancies. Read here.

CAGR Speak

• The curious case of MCX struggle with its Tech vendor. Read the linkedin post here.

• Encouraging women to prioritize financial independence is my personal passion project.- Shruti. Read the linkedin post 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’d 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.

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

Index	10-Feb-23	3-Feb-23	Change (%)
Nifty 50	17,856	17,854	0.01
Nifty 500	15,015	14,962	0.35
Nifty Midcap 50	8,771	8,604	1.94
Nifty Smallcap 100	9,526	9,415	1.18

Gyaan of the week

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

Personal Finance

• 10 major changes for salaries person in Budget 2023– Read here.

• No proposal on raising overseas limit for MFs yet– “Mutual funds and some of the market players have approached the RBI, and we have examined their requests, and as of now, we have not taken any positive decision on it… if we take a decision then we will inform. But as of now, no proposal has been made to increase the overseas limit,” Das said while delivering the monetary policy statement. Read here.

• Where do millionaires keep their money?–  When it comes to how millionaires pick securities within an asset class, the answer is—diversification. If you look at the investment product choices that affluent households make, you will see that the vast majority use mutual funds (which tend to be diversified), with only one third of them owning any individual securities (i.e. individual stocks) Read here.

Investing

• First-principles approach to building Quant Framework in Indian Public Equities–This is a wonderful watch, so many ideas resonate here from our own experience of building a quant model. Watch here

• ITC — The Budget Stock – Duty hike for cigarettes not a big deal. While on average, people across the world smoke 800 cigarettes a year, India’s consumption of the legal variety is just 89 cigarettes. Most folks in India still prefer other tobacco products such as beedis and ghutkas. But if the tax regime remains more or less stable and as per capita incomes rise, we might see a gradual shift to cigarettes. It’s a long shot but it’s possible. Read here

• MSCI probes free float of Adani companies – India’s Adani Group faced fresh concerns on Thursday after financial index provider MSCI said it was reviewing the free float designation of some group company securities. Read here

• Time to go overweight duration– An interesting insight from DSP MF converse – when FX reserves dip, RBI hikes. And FX reserves have been on an uptrend. Read here

• Gilt market gets rate hike right, not rest of the policy– Some sections of the market had bet heavily on the RBI hitting the brakes on its rate hike cycle. Chatter before the outcome centred on a less severe monetary policy stance to ‘neutral’ from ‘withdrawal of accommodation’. Read here.

Economy

• Tepid growth in government’s revenue expenses may not spur demand– The budget does not provide any boost to the GDP growth through the government’s revenue expenditure. Its thrust is solely on the capital expenditure. Read here.

• Robust government capex may not crowd-in private investment-   In 2020-21, the last year for which such data is available, while central and state governments together accounted for about 16 per cent of total GFCF, public sector enterprises accounted for nearly 11 per cent and private enterprises accounted for 35 percent. The largest share is held by the household sector which includes several small enterprises. Read here.

CAGR Speak

• RBI gave the Indian bond market a boost.. Read the linkedin post here.

• Some people have recently reached out asking what should they be doing as investors in the context of the Adani fiasco. Read the linkedin post 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’d 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.