Category: Tax Planning

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

Chart Ki Baat

Source: Bloomberg

Gyaan Ki Baat 

Mind Over Money: How Behavioural Biases Shape Your Investments

Investing is not just about numbers and market trends—it’s also deeply influenced by psychology. Our emotions and inherent biases often shape the financial decisions we make. Understanding these behavioural biases can help investors make more informed, rational choices and avoid common pitfalls in their investment journey.

Here are some common behavioural biases that can impact financial behaviour:

Overconfidence: Investors often overestimate their abilities and knowledge, leading to riskier investments.

Loss aversion: People tend to feel more pain from a loss than pleasure from a gain, making them reluctant to sell losing investments.

Herding: Investors often follow the crowd, buying or selling assets based on popular trends rather than fundamental analysis.

Anchoring: Investors may anchor their decisions to irrelevant information, such as the initial purchase price of a stock.

Confirmation bias: Investors seek information confirming their beliefs while ignoring contradictory evidence.

Understanding these biases can help investors make more informed decisions and avoid costly mistakes. By recognizing and mitigating the effects of these biases, individuals can improve their financial outcomes. Here’s the list of curated readings for you this week:

Personal Finance

• Are you investing in Gold this Dhanteras? Finance Ke Funde is here! 💰✨Join Shruti and Vikash in our first episode as they explore the world of gold. We’ll talk about everything from its cultural significance to its investment prospects. Discover why gold prices fluctuate worldwide, how they compare to Indian markets, and much more! Watch here

• The Low Stability of High Income: Is your high salary a ticking time bomb? High-income earners, especially in volatile industries face the risk of sudden income loss. Discover how unchecked spending and job volatility could quickly derail your financial future—and what you can do to stay secure. Read here

• Soaring Markets Trigger Family Disputes: Family disputes in India’s business empires are escalating as market valuations soar. From the Oberoi family to the Kalyanis, legal battles are intensifying over competing wills. With family businesses contributing 75% of GDP, how will these conflicts shape the future? Read here

Investing

• The Run: Archie Karas went from rags to riches, turning $50 into $40 million, only to lose it all. His story mirrors the risky nature of stock picking, where discipline, conviction, and smart risk-taking are crucial to long-term success. Read here

• Measuring Performance – How to Choose the Right Benchmark: Benchmarking in investing shouldn’t focus on niche indices that may distort performance comparisons. True progress lies in absolute returns against major indices like the S&P 500, reflecting real investment alternatives. Choosing the right benchmark is crucial for long-term success. Read here

• How a Pune investor’s complaint blew the lid off ‘Rs 900-cr’ fraud linked to OctaFx forex trading platform: In a major crackdown, the Pune Police and ED unearthed a Rs 900 crore foreign exchange scam targeting over 500 hearing-impaired victims. Find out how this elaborate scheme was orchestrated and who’s now under investigation. Read here

• RBI governor says “Can’t risk another bout of inflation, need cautious approach”: India’s Monetary Policy Committee remains cautious on rate cuts, emphasizing the need to control inflation amid rising food prices. As demand wanes, a lone voice calls for cuts to boost private investment. Read here

Economy & Sectors

• The changing face of India’s rich: India’s wealth landscape is transforming, with new-age millionaires rising from startups, sports, and stocks. As wealth shifts from traditional assets to financial markets, learn how this fresh affluence is reshaping consumption and investment trends. Read here

• What the Coldplay event tells us about new India: India’s evolving consumer culture reveals a deep-rooted shift toward visible wealth and status, often fueled by credit and social pressure. As spending rises, so do questions: Are we finding true fulfilment, or just chasing validation? Read here

• Understanding EMS – The backbone of the global electronics market: India’s Electronics Manufacturing Services (EMS) market is projected to grow at a remarkable CAGR of 32.3% from 2021 to 2026, driven by domestic production initiatives and rising electronic consumption. Explore how this shift is reshaping the landscape of manufacturing. Read here

Check out CAGRwealth smallcase portfolios

Both our smallcase portfolios are ranking well in the smallcase universe in terms of 1-year returns.

• CFF (launched in June 2022) – Ranked 1^st amongst smallcase with medium volatility.

• CVM (launched in May 2022) – Ranked among Top 20 across the Momentum smallcase universe.

Do check it out 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	26-May-23	19-May-23	Change
Nifty 50	18,499	18,203	1.63%
Nifty 500	15,696	15,407	1.88%
Nifty Midcap 50	9,428	9,176	2.75%
Nifty Smallcap 100	10,010	9,891	1.20%

Chart Ki Baat

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.

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

Index	5-May-23	28-Apr-23	Change
Nifty 50	18,067	18,065	0.01%
Nifty 500	15,277	15,219	0.38%
Nifty Midcap 50	9,035	8,962	0.81%
Nifty Smallcap 100	9,733	9,672	0.63%

Chart Ki Baat

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.

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

Index	20-Jan-23	13-Jan-23	Change (%)
Nifty 50	18,027	17,956	0.4
Nifty 500	15,347	15,346	0.0
Nifty Midcap 50	8,755	8,747	0.1
Nifty Smallcap 100	9,569	9,675	-1.1

Gyaan of the week

Thematic funds are classified as equity mutual funds which means 80% of asset allocation has to be in equities or equity-related instruments. These funds invest in a specific theme or sector which might have growth potential based on certain macroeconomic factors. For example, the fund invests in companies from specific sectors like technology, energy, etc.

These funds can be high-risk high-return funds if the fund manager is able to capitalize on the growth opportunities present in a particular sector which leads to outperformance. Traditionally, the idea of mutual funds is to diversify the portfolio but by investing in a thematic mutual fund the investor risk gets concentrated in a particular sector/theme. Therefore, it is recommended to have a long-time horizon so that the theme has a higher probability of being played out.

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

Personal Finance

• Zerodha founder talks about need to allow NRIs to open demat account online – Allowing NRIs to open demat accounts online is the low-hanging fruit to attract money to India. The process today is physical and cumbersome. Read here.

• How much Income do you need to be rich in USA? – If you’re interested in understanding how your income compares to others in the U.S. (and whether that makes you rich), then you’ve come to the right place. Read here.

• Pocket Guide for Kids on Personal Finance – Get here.

Investing

• Raamdeo Agrawal says “One should take interest in large unpopular sectors” – Markets reward consistent performers and punishes volatile stocks.  Watch here

• Indian IT companies are benefiting from vendor consolidation – “We are seeing an uptick in vendor consolidation,” TCS CEO Gopinathan told analysts in a conference. “We are continuing to gain market share as a result of deepening client relationships and higher win rates” Wipro’s CEO Thierry Delaporte said in a statement on January 1.  Read here.

• The GoMechanic Saga – The fine print isn’t out yet. But apparently, the folks at GoMechanic inflated their revenues. Amit Bhasin, the co-founder of GoMechanic, actually confessed to the crime on LinkedIn!!! Read here.

• India’s decade – India is the stand-out performer among emerging equity markets and is expected to outpace all major economies in terms of growth. Read here.

Economy

• Has RBI ever raised rates when Repo was above CPI inflation? – Historically (in the last two decades), there have been four episodes when repo in tightening cycle intersected CPI inflation on the way. Read here.

• Big capex push to continue in FY24, says Barclays’ Bajoria – As a proportion of the total spending, capital expenditure is likely to increase from the current 17% to about 20% in the coming financial year, Bajoria said. Read here.

• All loans to state governments are not safe – The Punjab government has defaulted on repayment of an instalment of Rs 600 crore against a loan that the previous Congress dispensation led by Capt Amarinder Singh had taken to roll out farm loan waiver. Read here.

CAGR Speak

• Indian Ultra HNIs definitely understand compounding. As per a recent study by Knight Frank, Indian ultra HNIs prefer equities and have more than 1/3rd of their investment in equities. Read the linkedin post here.

• In our survey, Retirement comes out to be the most important goal. 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.