CAGR Insights is a weekly newsletter full of insights from around the world of web.
| Index | 15-Sep-23 | 8-Sep-23 | Change |
| Nifty 50 | 20,192 | 19,820 | 1.88% |
| Nifty 500 | 17,666 | 17,487 | 1.02% |
| Nifty Midcap 50 | 11,636 | 11,647 | -0.10% |
| Nifty Smallcap 100 | 12,794 | 12,812 | -0.14% |
Chart Ki Baat
Cost of veg and non-veg thalis up 24% and 13%, respectively, yoy in August.
Courtesy: CRISIL
Gyaan Ki Baat
What exactly are LiquidBees? LiquidBees represent an Exchange Traded Fund (ETF) exclusively dedicated to investments in the overnight money market. This offers a remarkably high level of safety but also ensures exceptional liquidity.
Each day, the LiquidBees ETF disburses a dividend based on the interest income it generates, with the specific goal of maintaining its Net Asset Value (NAV) at Rs. 1000. It’s essential to be aware that this dividend distribution is subject to the Dividend Distribution Tax and is automatically reinvested in the form of additional “units.”
This approach offers a convenient means to securely park your funds with your brokerage while also earning interest. Additionally, LiquidBees can be effectively used to support trading margins and is widely recognized as an equivalent to holding cash.
However, it’s worth noting that if your applicable taxable rate falls below 30%, you may find Liquid Mutual Funds to be a more favorable option compared to LiquidBees.
Here’s the list of curated readings for you this week:
Personal Finance
- Mistakes that compound in market – It’s generally wise investment behavior to ignore short-term performance since long-term returns are the only ones that matter. But at some point you have to benchmark your performance in some way. Read here
- Investors need to understand the difference in risk avoidance and risk control – In fact, not having any losers isn’t a useful goal. The only sure way to achieve that is by not taking any risk. But, as I said earlier, risk avoidance is likely to result in return avoidance. There’s such a thing as the risk of taking too little risk. Most people understand this intellectually, but human nature makes it hard for many to accept the idea that the willingness to live with some losses is an essential ingredient in investment success. Read here.
- Citadel’s three-decade run reflects the founder’s convictions about when to take risk – and how to manage it – We’d made a strategic decision that we would rather shrink the firm to a smaller base of longer-term capital – more stable capital – than be at risk of hot money flying out when markets really have a moment of turmoil. Opportunities arise in such moments Read here.
- The valuations of most major sectors are trading higher than their long-term average. – So, in the near term, investors should expect the equity returns to be subdued. But, the medium-term and long-term scenario for Indian equities remains positive, boosted by several factors i.e. strong macro fundamentals, strong corporate balance sheets, and peaking of the interest rate cycle. Read here
- We are at a dangerous point in the Behavioural Cycle for Small and Micro Caps – Small and Micro Caps have more pronounced cycles due to poor liquidity. Thin trading volumes result in stock prices highly influenced by demand supply mismatches on the way up, and even more brutally on the way down. Hence, Small Caps require very long-term horizons and a huge tolerance for volatility. Read here.
- The Explosive Ascent of Southern India – Per capita income for seven ‘southern’ states (Tamil Nadu, Telangana, Andhra, Kerala, Karnataka, Goa, and Maharashtra) has grown at an average 10% CAGR between FY14-22. These states, which account for 30% of India’s population and 45% of India’s GDP, now have an average per capita income of ~Rs 2.7 lakhs ($3,300), 50% higher than that of the Rest of India. This will have investment implications. Read here.
- Unfair to judge private capex because it’s still at very early stages of recovery: Morgan Stanley – If you see the private sector balance sheets of the corporate sector, corporate debt-to-GDP is at a 16-year low, so balance sheets are in pristine position. Similarly, for the financial sector, banks’ impaired loans are tracking at 11-to-12-year lows. Again, their ability to fund and willingness to lend, is high and those are very important cyclical factors which will help improve this capex trend. Read here.
- India’s industrial output grew by 5.7 per cent in July from 3.8 percent in June. – IIP exceeded pre-Covid levels by ~8% in July 2023 even as the consumer durables segment lagged Read here.
- Russia’s exclusion to give India more play in bond index – Odds are shortening that Indian sovereign debt will be included in JP Morgan’s emerging market bond index after this month’s scheduled rebalancing of the gauge seeks to fill the vacuum created by Russia’s exclusion, potentially lowering borrowing costs in the world’s fastest-expanding major economy. Read here.
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That’s it from our side. Have a great weekend ahead!
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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.