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CAGR Insights – 19 Jan 2024

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

Index19-Jan-2412-Jan-24Change
Nifty 5021,63921,908-1.23%
Nifty 50019,61519,752-0.70%
Nifty Midcap 50 13,47313,3550.88%
Nifty Smallcap 10015,48215,539-0.36%

Chart Ki Baat

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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.

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CAGR Insights – 12 Jan 2024

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

Index12-Jan-2405-Jan-24Change
Nifty 5021,90821,7050.93%
Nifty 50019,75219,5850.85%
Nifty Midcap 50 13,35513,457-0.75%
Nifty Smallcap 10015,53915,4350.67%

Chart Ki Baat

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Source: Chartians

Gyaan Ki Baat

Social trading is a practice that integrates social media and online platforms into traditional trading processes, allowing investors to observe, follow, and even replicate the trading strategies of experienced and successful traders. This approach democratizes financial markets by providing access to insights, strategies, and real-time information that were once limited to professional traders.

Benefits of Social Trading:

Learning Opportunities: Novice traders can learn from experienced counterparts, gaining insights into successful trading strategies and market dynamics.

Diversification: Social trading allows for a diverse range of investment opportunities by providing access to various asset classes and markets globally.

Time Efficiency: Copy trading and real-time information dissemination save time for traders who may not have the resources to conduct extensive market research.

Inclusivity: Social trading promotes inclusivity by breaking down barriers and providing everyone with the tools to participate in financial markets.

Challenges and Risks:

Dependency on Others: Relying solely on the decisions of others without a comprehensive understanding of the markets poses risks.

Market Volatility: Financial markets are inherently volatile, and social trading does not eliminate the risk of market fluctuations.

Security Concerns: As with any online platform, security is a concern. Users must choose reputable social trading platforms to ensure the safety of their financial information.

However, it is crucial for users to approach social trading with a balanced understanding of its benefits and risks to make informed decisions in the dynamic landscape of financial markets.

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

Personal Finance

  • Retiring to Roots – A significant percentage of NRIs contemplating returning to India post-retirement, drawn by factors such as lower cost of living, quality healthcare, cultural ties, and attractive investment opportunities. Read here.
  • Timeless Investment Lessons from 2023 – Lessons including the unpredictability of market forecasts, the risks of chasing highly valued stocks, and the importance of discipline, diversification, and ignoring political influences. Read here.
  • PAYTM Founder Contemplations – Exploring the Entrepreneurial Odyssey of PAYTM Founder Vijay Shekhar Sharma and the Future Landscape of Fintech in India. Watch here.
  • An Author’s Wisdom on Writing – Tiago Forte, known for pioneering the concept of a Second Brain, imparts valuable lessons on writing, emphasizing the importance of note-taking, creation, and organization, ultimately aiming to improve ideas rather than merely save information. Read here.
  • SEC Approval of Bitcoin ETFs Sparks Optimism – Major investment firms, including BlackRock and Fidelity, is expected to bring renewed life to the cryptocurrency market, potentially attracting $100 billion in institutional investments. Read here.

Investing

  • Company MOATs that affect profitability – How various companies such as Coco Cola, FedEx have certain MOATs such as switching costs, intangible assets to improve their profitability. Read here.
  • India’s PLI Scheme Propels Self-Reliance – India’s Production Linked Incentive (PLI) Scheme emerges as a catalyst for self-reliance, driving significant investments across key sectors like solar, pharmaceuticals, electronics, automobiles, and steel. Read here.
  • Do active managers outperform indices? and How to save taxes using Section 54F? – In the 15th edition of “Bazaar ki baat”, apart from discussing the markets outlook, we discuss 2 special topics (i) Do active managers outperform indices (ii) How to save taxes using Section 54F of the Income Tax act. Watch here.
  • A Self-Taught Entrepreneur’s Journey from Manufacturing to Equity Markets – Shyam Sekhar shares insights on becoming an investor, emphasizing the importance of value investing, surviving market challenges, and staying disciplined during market booms. Watch here.
  • Cartoon Network’s Turmoil – Cartoon Network’s struggles, marked by a focus on reboots, late localization, and financial challenges, hinder its ability to explore, experiment, and adapt, raising questions about its future. Read here.

Economy

  • India Expected to Lead Asia-Pacific in Salary Increments in 2024 – Indian employees are projected to receive the highest salary increments, with a median pay hike of 9.7%, highlighting the country’s economic resilience amid a global slowdown. Read here.
  • India’s Transformative Journey – India has transformed its master narrative, marked by economic reforms, improved security, and tech innovations, resulting in significant achievements and a shift towards a more confident and determined national identity. Read here.
  • India’s Capital Expenditure Surge – The Indian government’s sustained focus on capital expenditure has significantly boosted the rate of gross fixed capital formation, but questions arise about the sustainability of such levels and the impact of the impending Lok Sabha elections. Read here.
  • Index Inclusion of Indian bonds – Bloomberg Index Services proposes the inclusion of eligible Indian bonds in its emerging market local currency index from September 2024, potentially leading to billions of dollars in inflows into the country. Read here.
  • Indian Firms Boost Forex Risk in 2023 – Indian companies increase exposure to forex risk in 2023, relying on Reserve Bank of India’s stability measures amid a drop in forward hedging contracts for importers and exporters. 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.

Posted on

CAGR Insights – 05 Jan 2024

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

Index05-Jan-2429-Dec-23Change
Nifty 5021,70521,731-0.12%
Nifty 50019,58519,4290.80%
Nifty Midcap 50 13,45713,1452.37%
Nifty Smallcap 10015,43515,1441.92%

Chart Ki Baat

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Gyaan Ki Baat

Open interest is a frequently used term in the world of futures and options trading. In this market, the number of active contracts is in constant flux each day. Referring to the total number of open positions held by traders, open interest includes all outstanding options and futures contracts that are still active and have yet to be closed, expired, or exercised.

Instead of simply monitoring the overall number of trades, open interest plays a crucial role in keeping tabs on all active positions within a particular contract. This gives traders a more accurate understanding of the contract’s trading activity and level of interest, revealing whether there is a rise or decline in funds being invested in the contract.

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

Personal Finance

  • Unlocking Growth and Wisdom – The author argues that passive learning, characterized by broad exploration, curiosity-driven discovery, is often more valuable and conducive to personal and professional growth than rigid, active learning structures. Read here.

  • Charlie Munger: A Mentor in the Art of Thoughtful Decision-Making – This article addresses the importance of recognizing biases, leveraging opportunities, and understanding human nature in decision-making. Read here.

Investing

  • Special Trading Session on Jan. 20 – The national bourses will conduct two special live trading sessions on Jan. 20 as part of plans to switch over to a disaster recovery site. This decision aligns with the SEBI’s framework for a business continuity plan and disaster recovery site for stock exchanges. Read here.

  • Indian Stock Market Rally: Fuelled by Broad-Based Earnings Growth or PE Expansion? – The resurgence in India’s corporate profits is propelling the stock market rally, with large-cap gains driven by earnings growth and mid-cap gains relying on PE expansion, prompting caution amid elevated valuations. Read here.

  • Value chain of EV batteries – The video concentrates on the capex investment required for EV batteries and its components, it lists companies involved in the capex for developing the value chain. Watch here.

Economy

  • Record Direct Tax Collections Signal Strong Fiscal Health for India in FY2024 – Net Direct Tax Collections for FY2024 have surpassed 75% of budgeted estimates, driven by a surge in Personal Income Tax filings, rising corporate profits, and efficient fiscal management. Read here.

  • New Investment Announcements in India Remain Subdued – New investment announcements in India remain sluggish, with Q3 FY24 showing a slight uptick in power and service sector but still at low levels. Read here.

  • RBI’s draft rules on Bond Forward in Government Securities – The rules signal a positive move, addressing the demand from Life Insurance companies and mitigating regulatory concerns by bringing these trades under formal regulation. 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.

Posted on

CAGR Insights – 29 Dec 2023

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

Index29-Dec-2322-Dec-23Change
Nifty 5021,73121,3311.88%
Nifty 50019,42919,0382.05%
Nifty Midcap 50 13,14512,8272.48%
Nifty Smallcap 10015,14414,8272.14%

Chart Ki Baat

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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.