Author: Kshitiz Jain

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

Index	02-Dec-22	25-Nov-22	Change (%)
Nifty 50	18,696	18,513	0.98
Nifty 500	15,963	15,727	1.50
Nifty Midcap 50	8,994	8,758	2.69
Nifty Smallcap 100	10,079	9,849	2.33

Market commentary – Nov 2022

November was the month of consolidation in Indian stock market. All broad-based Indian equity indices continued their rally in November. Nifty 50 index registered gains of 4.1% during November and touched its lifetime highs.

Although the bullish sentiment was widespread, smaller companies continued to lag their larger peers. The US markets also had a positive month, on the back of easing inflation and optimism surrounding a potential slowing pace of U.S. rate hikes.

Gyaan of the week

Fixed Maturity Plans are close-ended debt mutual fund schemes with a pre-defined maturity. The money is invested in debt instruments maturing in line with the scheme tenure. The tenure of an FMP can vary between a few months to a few years. They primarily invest in fixed income instruments such as a certificate of deposits, commercial paper or bonds to lock-in the interest rates available. As the securities are held till maturity, it helps to eliminate interest rate fluctuation. FMPs work well for investors who have certain goals that they would like to execute over a specific period. The downside of FMPs is that the investor’s funds get locked-in till maturity.

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

Personal Finance

• Getting Wealthy vs. Staying Wealthy – Getting money requires taking risks, being optimistic, and putting yourself out there. But keeping money requires the opposite of taking risk. It requires humility, and fear that what you’ve made can be taken away from you just as fast. Read here.

• SEBI is going hi-tech– The regulator has developed a system based on artificial intelligence (AI) that scans various stock market shows and builds a database of recommendations made, said people with direct knowledge of the matter. Read here.

• Why index? Simply put, because indexing works- The growth of indexing has been driven by the inability of active managers, in aggregate, to outperform passive benchmarks. This is not a new development — it was first reported 90 years ago. The rise of passive management is the consequence of active performance shortfalls. Read here.

Investing

• The rise and rise of Adani group – The Adani Group’s current market cap is already higher than the GDP of countries like Ukraine and Sri Lanka. Only the rapid rise in market cap of new-age Amazon, Google and Facebook come close or, back home, giants like HDFC Bank and TCS. Read here.

• Samit Vartak of SageOne Investment Managers shares his success and failures – An individual investor has the option of sitting on cash or timing it and just moving all of his or her cash into those couple of sectors. It’s a wonderful bet to play. If I was an individual investor, maybe I would do that. As a fund manager, it is a different ball game.  Read here.

Economy

• India’s capex cycle remains elusive- Increase in new investment projects seen in CMIE’s CapEx database is offset by the lack of revival in completion of announced projects. And, while central government capex spending is up, state government capex spending which is of comparable magnitude is sluggish. Read here.

• India GDP growth halves in September quarter – India’s economic growth pace halved to 6.3 per cent in July-to-September, amid rising repo rates and contraction in manufacturing output. Read here.

• Perhaps, this is one of the best set of statistics to report. Employment by listed companies crossed the 10 million mark in 2021-22. – Listed companies are the best employers and therefore, this big increase in employment by them makes a significant difference to the quality of employment in India. Read here

CAGR Speak

• Not all bank bonds are as safe as they seem. Most retail investors just assume that the call option date in bank bonds to be the same as maturity date and believe that they are getting a higher yield for a lower tenor maturity.Read the linkedin post here.

• We make a living by what we get. We make a life by what we give said Winston Churchill. A few weeks back, we conducted a session on wealth building before the alumni of DAV Public School at Kota. It was a fulfilling experience. 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 enjoyed reading this issue, please consider following us here, here and here for the encouragement to keep writing this weekly newsletter.

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 set forth on 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 on this newsletter.

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

Index	25-Nov-22	18-Nov-22	Change (%)
Nifty 50	18,513	18,307	1.11
Nifty 500	15,727	15,550	1.13
Nifty Midcap 50	8,758	8,539	2.50
Nifty Smallcap 100	9,849	9,613	2.40

Gyaan of the week

Target maturity funds are passive debt mutual fund schemes, tracking an underlying bond index. These funds invest in bonds having maturity close to the fund’s stated maturity. The bonds are held till maturity and the coupons paid by the bonds are re-invested in the fund. So, investors benefit from these funds as they provide visibility and stability of returns. Also, as they are mandated to investment in Govt. securities, PSUs or State Govt., the investments are safe.

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

Personal Finance

• What Really Matters? –  Howard Marks of Oaktree Capital Management says that What really matters is the performance of your holdings over the next five or ten years (or more) and how the value at the end of the period compares to the amount you invested and to your needs. Read the memo here.

• India has emerged as the second most coveted investment market – India has emerged as the second most coveted investment market after the United States for sovereign wealth funds and public pensions funds in 2022, according to a study by asset manager Invesco published on Monday. Read here.

• Crypto exchange saga just keeps getting better- Sam Bankman-Fried’s FTX, his parents and senior executives of the failed cryptocurrency exchange bought at least 19 properties worth nearly $121 million in the Bahamas over the past two years, official property records show Read here.

Investing

• India Q2 Earnings review – Amid a volatile global macro backdrop, India Inc. provided a decent Corporate earnings for 2QFY23, driven by continued strong performance of Financials and lesser-than-estimated losses in OMC’s.  Watch here.

• The Myth of the Tech God Is Crumbling – It’s the myth of extreme competence. Key to the power of this myth was that it wasn’t only techies who believed. Investors, both professionals and everyday Joes and Janes, bid up tech stocks to stratospheric valuations. In the past couple of weeks, however, it’s become clearer than ever that the myth of extreme competence is just that—a myth.  Read here.

Economy

• Increase in Bank credit to Industry may give boost to the economy – Indian lenders are expanding lending to local corporations at the fastest pace in more than eight years, a sign of a new private investment cycle starting in the world’s fifth-largest economy even as growth in large developed economies and China slows. Read here.

• China keeps shooting itself in the foot with Covid shut downs- The wave of infections is testing recent adjustments China has made to its zero-COVID policy, aimed at making authorities more targeted in clampdown measures and steering them away from blanket lockdowns and testing that have strangled the economy and frustrated residents nearly three years into the pandemic. Read here.

• The rise of Indian women and its implications. As India reaps the benefits of a decade long infra build and economic reform journey, Indian women – more than Indian men – are emerging as gamechangers. The rapid growth of a Service-oriented economy, the spread of affordable education, and the mushrooming of smartphones and social media have helped Indian women rise more rapidly over the past decade than Indian men. Read here

CAGR Speak

• Why do holding companies in India trade at a large discount? India has a large number of holding companies which are listed and trade at a discount to the value of their equity holdings in other companies. The discounts in some of the holding companies is as high as 60-70%. Read the linkedin post here.

• Why do it yourself may not be the best strategy when it comes to investing?  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 enjoyed reading this issue, please consider following us here, here and here for the encouragement to keep writing this weekly newsletter.

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 set forth on 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 on this newsletter.

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

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

Personal Finance

• The secrets of stealth wealth. Stealth Wealth is essentially all about having more control over your life and your finances and being able to do what you want when you want. Contrary to popular belief, stealth wealth is not just for millionaires. Anyone can live a stealth wealth lifestyle if they know how.Read here

• Why PPFAS Mutual Fund continues to hold Alphabet, Microsoft, Amazon and Meta stocks? – The chief investment officer at the fund house said investing in international stocks is to lower the country-specific volatility and to find opportunities to invest in companies that are otherwise not available in India; and not necessarily to maximize returns. See here.

• This would be a good step by SEBI for investor protection- The Securities and Exchange Board of India (Sebi) on Thursday said it is working on a set of guidelines for financial influencers, or finfluencers, giving unsolicited financial advice on social media platforms.Read here.

Investing

• Best investment strategy methods in the world – Quality investing is one of the best investment methods in the world. Since 2010, this investment strategy returned more than 18% (!) per year to shareholders. Read twitter thread here.

• Boring is beautiful in investing – Successful investing should be boring. It should be long-term in nature. It requires patience and discipline and the ability to ignore the madness of the crowds. But you can’t brag about boring to your friends and co-workers.Read here.

Economy

• India’s retail inflation eases to 3-month low – India’s retail inflation eased sharply to 6.77 per cent on an annual basis in the month of October from 7.41 per cent in September, 2022. But core inflation remains sticky. Read here.

• Bank credit to grow ~15% in this and next fiscals- Bank credit is seen growing ~15% per annum in fiscals 2023 and 2024, riding on broad-based economic recovery and stronger, cleaner balance sheets that allow lenders to expand credit.Read here.

CAGR Speak

• Global wealth equity study finds that women attain just 74% of men’s wealth on retirement. The range across countries analyzed varied from 60% to 90%. Read here.

• An exciting development in the Indian Government bond market. 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 enjoyed reading this issue, please consider following us here, here and here for the encouragement to keep writing this weekly newsletter.

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 set forth on 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 on this newsletter.

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

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

Personal Finance

• Passive funds have been gaining popularity among investors. AMFI monthly data shows that passive funds have overtaken active funds in terms of net inflows. The data shows that passive funds have received monthly inflows of Rs.10,260 crore during October 2022 which was higher than that of active funds. Read here

• More wealth means more alternative investment? –  This divergence of capital away from traditional asset classes like stocks and bonds and towards alternatives (i.e. private equity, hedge funds, etc.) seems to be positively correlated with the amount of wealth that someone has. Read here

• Centre mulling changes to capital gains tax regime – Parity within asset classes will be a key consideration in the review that may even consider changes in the tax rate. See here.

• Rewriting is the key to improved thinking- Obviously, revising is hard work. It demands that you put yourself through the wringer, intellectually and emotionally, to squeeze out the best you can offer.Read here.

Investing

• State Guaranteed bonds are not all safe – What are the chances of a State Government guaranteed bond defaulting? There have been defaults of Madhya Pradesh, Uttar Pradesh, Bihar, Punjab and Orissa state PSU bonds defaulting early in this millennium (especially during 2000-2002). The bonds have been restructured and subsequently honored, but the chances of defaults occurring again should not be ignored, even if possibility of default is low. Read here.

• The most important skill in finance has nothing to do with math.- It’s no coincidence that most of the all-time great investors — Benjamin Graham, Warren Buffett, Howard Marks, Peter Lynch, etc. — had the innate ability to explain their investment process in a way that everyone could understand it. Read here.

• Sequoia marks down crypto exchange FTX investment to zero- We are reaching out to share an update on our investment in FTX. In recent days, a liquidity crunch has created solvency risk for FTX. The full nature and extent of this risk is not known at this time. Based on our current understanding, we are marking our investment down to $0  Read here.

Economy

• U.S. inflation turning the corner – U.S. consumer prices rose less than expected in October, pushing the annual increase below 8% for the first time in eight months, the strongest signs yet that inflation was slowing, which would allow the Federal Reserve to scale back its hefty interest rate hikes. Read here.

• How Bangladesh went from an economic miracle to needing IMF help – So the country’s economic health largely rests on those three things — exports, remittances and fuel prices — all of which have taken a hit in recent months. Read here.

• India may adopt 2013 formula to deal with Europe on clearing corporations – India’s financial market regulators — the RBI and SEBI in Mumbai and IFSC, which regulates GIFT City trades — don’t want the European Securities and Market Authority (ESMA) to have the power to monitor, supervise or audit Indian clearing corporations (CCs. Read here.

CAGR Speak

• So, why does everyone emphasize on starting to invest early? Read here.

• Interesting read – CFA society India insights – Sep 2022 covers the society’s comments on recent SEBI consultation paper. Our co-founder has worked on the papers as part of CFA’s Research and Advocacy committee.  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 enjoyed reading this issue, please consider following us here, here and here for the encouragement to keep writing this weekly newsletter.

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 set forth on 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 on this newsletter.