Category: CAGR Insights – weekly newsletter curated by Kshitiz

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

Index	02-Feb-24	25-Jan-24	Change
Nifty 50	21,854	21,378	2.22%
Nifty 500	19,911	19,410	2.58%
Nifty Midcap 50	13,658	13,250	3.07%
Nifty Smallcap 100	16,278	15,417	5.58%

Chart Ki Baat

Bazaar Ki Baat

In the 16th edition of “Bazaar ki baat”, we discuss 2 special topics
(i) Why do bond markets love this budget?
(ii) How to save taxes using presumptive taxation?
Watch here.

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

Personal Finance

• Learning Life and Investing Lessons – The article narrates the author’s experience with a mentor who was a full-time gambler and conviction investor. Despite their differences, the mentor’s teachings left a lasting impact on his life.  Read here.
  
  
• Zudio’s Winning Formula – Revolutionizing Fashion for the Masses Through Strategic Pricing, Franchise Model, and Word of Mouth Magic. Read here.
  
  
• Navigating the Nuances of Money – The intricate dynamics of spending money—whether as a tool for a better life or a yardstick for status reflects the complexity of individual aspirations, psychological wounds, and the challenge of navigating desires beyond basic needs.  Read here.

Investing

• Navigating the Performance Pressure Paradox – The article discusses the intense pressure on fund managers to chase high-flying stocks like NVIDIA, particularly in the context of benchmarking and emphasizing the potential risks of such behaviour. Read here.
  
  
• Unveiling the Strategies for Consistent Compound Growth – In the challenging landscape of retailing, successful companies like Trent leverage product relevance, high inventory turnover, and strategic reinvestment to achieve consistent compound growth. Read here.
  
  
• Positive Outlook for Bond Markets – The bond market anticipates an unaltered net market borrowing for FY25. Read here.
  
  
• Impact of RBI’s Restrictions on Paytm – RBI’s strict restrictions on Paytm Payments Bank pose potential risks for lenders using FinTech-led sourcing models, impacting incremental disbursements. Read here.
  
  
• Japan’s Increased Investor Interest towards India – India’s equity-focused investment trusts in Japan experienced an 11% growth in total assets in January, signaling investor interest in Indian stocks as a promising emerging market, outpacing inflows into Chinese. Read here.

Economy

• Small Finance Banks Triumph – SBFs in India have overcome numerous challenges, including the impact of COVID-19, to achieve remarkable growth, diversify their services, and emerge as strong contenders in the financial sector. Read here.
  
  
• Google’s Move to Phase Out Third-Party Cookies Raises Privacy Concerns – Google’s decision has advertisers seeking alternatives while awaiting approval from regulatory authorities, raising uncertainties about the future landscape of online advertising. Read here.
  
  
• India’s Strategies for Narrowing Trade Deficit – India’s efforts to reduce its trade deficit involve a focus on domestic manufacturing, supported by initiatives like PLI and PM Gati Shakti Mission, while the rise in services exports, particularly in the IT sector, contributes to the overall growth in exports. 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.

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

Index	25-Jan-24	19-Jan-24	Change
Nifty 50	21,378	21,639	-1.21%
Nifty 500	19,410	19,615	-1.04%
Nifty Midcap 50	13,250	13,473	-1.65%
Nifty Smallcap 100	15,417	15,482	-0.42%

Chart Ki Baat

Gyaan Ki Baat

Covered Call Strategy

Mutual funds employ this strategy to earn premiums by selling call options on stocks they already own, enhancing their overall returns. In addition, it provides a degree of downside protection, as the premium received helps offset potential losses in the stock’s value.  

For example, if an investor owns 100 shares of ABC stock trading at INR 100, they might sell one call option with a strike price of INR 105, receiving the premium. If the stock remains below INR 105 at expiration, the investor keeps the premium; if it rises above INR 105, they may have to sell the shares but still benefit from the premium.

Personal Finance

• Redefining Money Talks – Gen Z Embraces ‘Loud Budgeting’ Trend on Social Media, Opting for Financial Honesty and Frugality Over Flashy Displays. Read here.
  
  
• A Deep Dive into How David Perell Harnesses ChatGPT – David Perell leverages ChatGPT for deep textual analysis, decision-making, co-writing; showcasing the diverse applications of AI in his creative and educational pursuits. Read here.
  
  
• From Poverty to Prosperity – John Mackay’s journey from impoverished beginnings to becoming one of the world’s wealthiest men through perseverance, self-improvement, and a strategic move to the Comstock Lode during the Gold Rush Era. Read here.
  
  
• The Pitfalls of Shortcuts and the Value of Discipline – The article emphasizes the importance of avoiding shortcuts in business and personal finance, cautioning against the risks of neglecting crucial steps and the potential consequences, as highlighted through personal finance experiences. Read here.

Investing

• Exploring the Evaluation of Management in Companies – A Comprehensive Analysis of Promoter-Driven and Professionally-Managed Approaches. Read here.
  
  
• Zerodha Launches LIQUIDCASE India’s First ETF – The ETF, tracking the Nifty 1D Rate Index, provides returns similar to overnight mutual funds, surpassing savings account interest rates. Read here.
  
  
• Sebi’s FPI Guidelines: Clarity Emerges on Ownership Disclosures – Sebi’s FPI norms on additional disclosures see less immediate impact, with no urgent liquidation deadline for FPIs holding concentrated positions. Read here.

Economy

• Strong Performance and Optimistic Outlook for India’s Premium Hotel Industry – The Indian premium hotel industry is poised for strong performance in FY2024 with double-digit revenue growth, increased occupancy to 70-72%, driven by sustained demand from domestic traveland major events. Read here.
  
  
• Indian Insurers Introduce ‘Cashless Everywhere’ for Seamless Medical Claims Settlement – Allowing policyholders to access cashless medical facilities at any hospital, eliminating the need for reimbursement claims and enhancing the overall claims settlement process. Read here.
  
  
• Suez Canal Conflict Escalation – The escalation of the conflict in the Red Sea has led to a potential delays and higher freight costs, impacting sectors with import/export dependencies on these regions, such as chemicals, textiles, auto components, and pharmaceuticals. 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.

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

Index	19-Jan-24	12-Jan-24	Change
Nifty 50	21,639	21,908	-1.23%
Nifty 500	19,615	19,752	-0.70%
Nifty Midcap 50	13,473	13,355	0.88%
Nifty Smallcap 100	15,482	15,539	-0.36%

Chart Ki Baat

Gyaan Ki Baat

Alternative Investment Funds (AIFs) are investment vehicles in India that pool capital from investors to invest in various assets beyond traditional avenues. The Securities and Exchange Board of India (SEBI) categorizes AIFs into three categories:

1. **Category I AIFs: ** These include funds that invest in start-ups, early-stage ventures, social ventures, small and medium-sized enterprises, and other sectors with positive spill over effects on the economy. Venture capital funds, SME funds, and social venture funds fall under this category.

2. **Category II AIFs: ** These funds do not fit into Category I or III and can employ diverse strategies such as private equity, debt funds, or real estate funds. They face more regulatory oversight compared to Category III but have fewer restrictions than Category I.

3. **Category III AIFs: ** Primarily focused on trading and investing in listed or unlisted derivatives, Category III AIFs often use complex trading strategies. Hedge funds fall under this category. They have greater flexibility but also face higher risk, and consequently, stricter regulatory requirements.

Investors should carefully consider the specific objectives, risk profiles, and regulatory frameworks associated with each AIF category before making investment decisions.

Personal Finance

• Mastering Active Patience in Investing – A unique and focused investment approach, allowing investors to patiently wait for and seize rare, high-value opportunities while avoiding distractions and staying true to their principles. Read here.
  
  
• Navigating Market Challenges and Opportunities – The investor advises maintaining a disciplined approach of regular saving, appropriate asset allocation, and patience, while sharing market views and discussing the performance of managed portfolios. Read here.
  
  
• A Guide to Long-Term Investing Amidst Short-Term Frenzy – Emphasizing the importance of historical business trajectories, and the need to give benefit of doubt and time when facing short-term challenges. Read here.
  
  
• Holding Steady: A Wise Approach to Adverse Events in Portfolio Companies – Selling based on adverse events in a portfolio company is often imprudent for long-term value investors due to the resilience of good businesses. Read here.
  
  
• A Comprehensive Outlook on Financial Planning for the Rich – This session provides insights into covers topics like, succession planning, and the allure of alternative investments, emphasizing the need for a holistic approach to wealth management. Watch here
  
  
• ZebPay CEO Discusses Navigating Challenges in India’s Crypto Market – How the crypto exchange managed complexities in 2023, emphasizing the need for a clear regulatory framework and reduced capital gains tax to foster growth. Read here.

Investing

• The Rise of MANG – The article explores the evolving investment strategies of MANG (Microsoft, Amazon, Nvidia, Google) in data and AI, their impact on both the demand and supply sides of the market, and the considerations for entrepreneurs engaging with these tech giants as investors. Read here.
  
  
• Strategic Insights on Cochin Shipyard – Cochin Shipyard’s robust and non-cyclical business model, high returns on equity, strong order book, skilled management, and undervalued stock position it as an attractive investment opportunity in India’s shipbuilding industry. Read here.
  
  
• The Crucial Role of Rebalancing Frequency – Research on momentum factor strategies indicates that shorter rebalancing periods, efficiently capture the momentum effect, offering higher returns and better risk management. Read here.
  
  
• Understanding ROIC, ROE, and ROCE: Metrics for Evaluating Capital Allocation Efficiency in Management.  Read here.
  
  
• Anil Kumar Goel’s Unique Approach to Stock Market Success – Discusses his journey from the steel business to stock market success, emphasizing patient dividend investing, compounding, and the importance of relative valuation in his portfolio strategy. Watch here
  
  
• India Inc’s December Quarter – Revenue growth in the December quarter is projected to have increased 8-10% on a yearly basis but declined 100-150 basis points sequentially, impacted by declines in agri-linked sectors and other factors. Read here.

Economy

• Discussion on Bitcoin ETF, Inflation, and Monetary Policy – The SEC approves a Bitcoin ETF, inflation concerns persist, and the effectiveness of monetary policy is questioned in a market update. Read here.
  
  
• Atal Setu marks a significant milestone in India’s infrastructure development – The completion of Mumbai’s trans-harbour link, the largest bridge over water in India, reflects the challenges and triumphs of infrastructure development in the city. Watch here.
  
  
• India’s Shift Towards Manufacturing Hub – India’s efforts to become a manufacturing hub are gaining momentum, fuelled by a narrowed Current Account Deficit, increased government capex, and a shift in supply chains from China. Read here.
  
  
• Insights and Analysis: Navigating the Macro Landscape and Bond Market Updates – The macroeconomic outlook presents seven reasons to be bullish on India. Read here.
  
  
• RBI’s Draft Guidelines on Bond Forwards Face Scrutiny Over Hedging Rules and FPI Limits – Market participants are seeking changes, particularly in rules related to hedging exposure and FPI limits, citing concerns over flexibility for market makers and potential market distortions.  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.

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

Index	29-Dec-23	22-Dec-23	Change
Nifty 50	21,731	21,331	1.88%
Nifty 500	19,429	19,038	2.05%
Nifty Midcap 50	13,145	12,827	2.48%
Nifty Smallcap 100	15,144	14,827	2.14%

Chart Ki Baat

Gyaan Ki Baat

Predictions are exciting to know but futile to make any decisions. See this for yourself – 

Nifty predictions for 2023:

– ICICI Direct: 21,400

– CLSA: 20,185

– BofA Securities: 20,000 (bull target)

– Emkay Global Financial Services: 19,500

– Morgan Stanley: 20,600

– Jefferies: 17000-19500

– Nomura: 19,030

– BNP Paribas: 19,650

– Axis Securities: 20,400

– Kotak Securities: 18,717

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

Personal Finance

• Level Up Your Life – The article reflects on the symbolic nature of the New Year, drawing inspiration from Stoic philosophy, and proposes habits for self-improvement in 2024. Read here.

• Proposed changes in traditional life insurance – IRDA proposes changes to traditional life insurance surrender costs, suggesting a threshold premium to mitigate high surrender charges, eliciting industry pushback. Read here.

• A comprehensive year-end financial planning checklist – A checklist that helps assess and align assets and liabilities, optimize asset allocation, review retirement goals, execute tax planning, and refine estate planning for a disciplined financial strategy. Read here.

• Beyond wealth – The story reflects on the limitations of money, illustrating how it can influence aspects like health and freedom but cannot replace the intrinsic value of purpose and love in defining one’s self-worth. Read here.

Investing

• Barbell strategy and Drawdowns – Drawdowns, or portfolio losses from peak to trough, are intrinsic to investing, with a barbell approach balancing safe assets and riskier factor investments reduces the drawdown impact. Read here.

• Rethinking Market Classification – SEBI is urged to widen the definitions for large and mid-cap stocks due to market dynamics and increased mutual fund inflows to accommodate a larger number of stocks. Read here.

• Indian Equities:  FPI holdings – FPI holdings in Indian equities hit a 10-year low as of November 2023, raising expectations of a potential rally in large caps. Read here.

Economy

• The Fed’s Potential Rate Cuts – Insights on Global Economy and Investment Opportunities for 2024, Emphasizing Bull Markets in Emerging Markets, Commodities, and Japan. Read here.

• Diversification vs Diworsification Dilemma – The increasing reliance on non-core businesses for revenue in various industries, carries both success stories and cautionary tales, emphasizing the need for careful evaluation of diversification strategies. Read here.

• The Evolution and Challenges of Christmas Trees – The US Christmas tree industry faces challenges with shrinking supplies and rising popularity of artificial trees which pose environmental concerns and potential long-term impacts on the real tree market. Read here.

• Global Bond Index: India’s Inclusion – India’s inclusion in the JP Morgan GBI-EM index may bring positive inflows, but the impact on benchmark yields in 2024 is expected to be limited. Read here.

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Check out CAGRwealth smallcase portfolios here.