CAGRfunds – Blog

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

Index	07-Mar-24	01-Mar-24	Change
Nifty 50	22,485	22,339	0.65%
Nifty 500	20,430	20,350	0.39%
Nifty Midcap 50	13,931	13,898	0.24%
Nifty Smallcap 100	15,703	16,059	-2.21%

Chart Ki Baat

Gyaan Ki Baat

A leveraged buyout (LBO) is a financial transaction where a company is acquired using a significant amount of borrowed funds, typically with the target company’s assets serving as collateral. Private equity firms often employ LBOs to take over companies, aiming to improve their financial performance and ultimately sell them at a profit. The acquired company’s cash flow is used to repay the debt, with the expectation that operational improvements will enhance its value. 

Example – Acquisition of Cafe Coffee Day (CCD) by private equity firm KKR & Co. Inc. in 2019. KKR initiated an LBO to take CCD private, leveraging debt financing to acquire a controlling stake in the coffee chain. The transaction aimed to restructure CCD’s operations and improve its profitability amid challenging market conditions.

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

Personal Finance

• Exploring the Downside of Being Smart – Exploring the potential pitfalls of high intelligence, it can lead to self-deception, difficulty in accepting alternative perspectives, and resistance to change, posing challenges in evolving fields and hindering personal growth. Read here.
  
  
• Strategies for Informed Investing – Navigating through cognitive biases in investing requires recognizing, understanding, and implementing strategies to mitigate their impact for more informed decision-making and rational outcomes. Read here.
  
  
• A Tale of Innovation, Rivalry, and Hubris – The rise and fall of Adam Osborne and his groundbreaking Osborne 1 portable computer, highlighting his innovative approach to software bundling and aggressive marketing tactics, ultimately leading to rapid success followed by a dramatic downfall. Read here.

Investing

• Bond Index Inclusion – Bloomberg announces the inclusion of India Fully Accessible Route (FAR) bonds in the Bloomberg Emerging Market Local Currency Government Index, gradually phased in over a ten-month period starting January 31, 2025. Read here.
  
  
• Striking a Balance – Apple’s decision to end Project Titan reflects the importance for companies to balance innovation with pragmatism, knowing when to walk away from unsuccessful ventures. Read here.
  
  
• Finding Alpha in the Arena – The author identifies valuation-agnostic trading strategies, particularly pod shops, as the new enemy to be exploited in the market. Read here.
  
  
• Decoding Indus Valley – Delve into the 2023 Indus Valley Report for a comprehensive exploration of India’s startup ecosystem, revealing unique innovations, challenges, and the country’s emergence as a global economic player. Read here.
  
  
• A Strategic Victory Amidst Rating Agency Setbacks – India’s successful engagement with global bond and equity index agencies has boosted its market weight and protected FPI funds, despite ongoing challenges with sovereign credit ratings. Read here.
  
  
• Narratives Follow Prices – The power of dominant narratives in financial markets, drawing parallels with historical speculative manias and highlighting the transformative yet unpredictable nature of industries. Read here.
  
  
• Interpreting Market Conditions – Ray Dalio suggests that after assessing market conditions; recent readings suggest that while US equities, including the ‘Magnificent 7’, have rallied significantly, they do not appear to be in a full-on bubble. Read here.

Economy

• Understanding India’s Youth – Exploring the interplay between learning and career decisions among India’s youth reveals complex socio-economic influences. Addressing these factors could foster more inclusive, diverse, and financially sustainable career pathways for India’s next generation. Read here.
  
  
• India’s Allure: Fact, Fiction, or A Story for Redemption? – Foreign investors are increasingly focusing on promoting India’s growth story to compensate for difficulties raising funds for China amidst redemptions, despite concerns over valuation and slowing economic momentum. 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	23-Feb-24	16-Feb-24	Change
Nifty 50	22,213	22,041	0.78%
Nifty 500	20,314	20,165	0.74%
Nifty Midcap 50	14,062	14,035	0.19%
Nifty Smallcap 100	16,175	16,194	-0.12%

Chart Ki Baat

Gyaan Ki Baat

The riskometer is a standardized tool used by mutual funds to communicate the risk levels of individual funds. It employs a visual representation with a needle, similar to a compass, to indicate different risk levels. Categories range from “Low Risk” for minimal risk suitable for conservative investors to “Very High Risk” for aggressive investors targeting long-term wealth creation. Each category outlines the expected risk on the principal, providing guidance for investors based on their risk tolerance. Higher-risk categories may involve exposure to equity-oriented risks and volatile stocks, while lower-risk options are more conservative, emphasizing wealth preservation.

Personal Finance

• The Dopamine Cartel’s Grip on Society – The article discusses the rise of a post-entertainment culture dominated by addictive distractions fueled by tech platforms, leading to societal and psychological consequences. Read here.
  
  
• RBI FAQs Clarify Business Restrictions on Paytm Payments Bank Wallet – Confirms Post-March 15, 2024 Operations; Users Can Continue Transactions, Withdrawals, and Cashbacks, But No Top-ups or Transfers Allowed. Read here.
  
  
• 25 Investing Mistakes to Avoid for Financial Success – The author shares personal investing mistakes made over time, emphasizing the importance of learning from the experiences of others to avoid common pitfalls and achieve financial success. Read here.
  
  
• Separating Overrated Trends from Underrated Wisdom – The article discusses the overrated aspects of personal finance, such as early retirement, investment properties, and portfolio rebalancing, while highlighting the importance of financial education, diversification, and income growth. Read here.
  
  
• ECB Staff Members Criticize Bitcoin’s Approval as an Asset Amid Environmental and Social Concerns – European Central Bank staff members maintain that Bitcoin’s recent US approval as an asset for Exchange-Traded Funds doesn’t alter its lack of intrinsic value, emphasizing its risks to society, environment, and economic fundamentals. Read here.

Investing

• Japanese market hits all-time high – Nikkei 225 index surpasses all-time high after 34 years, driven by chip-related stocks, foreign investment, and domestic savings scheme. Read here.
  
  
• The Power of Investing in Market Leaders – Investing in market-leading companies offers substantial rewards, driven by economies of scale, market dominance, and strong management, but it requires careful vigilance and strategic insight to ensure sustained growth. Read here.
  
  
• Peter Lynch’s Investment Wisdom – He shares his Insights on Timeless Lessons of the Art of Successful Investing claiming relevance even after 25 years, elaborating them with real-life examples. Watch here.
  
  
• Challenges and Opportunities: Assessing India’s Equities – Investor demand for India rises as capital moves out of China ETFs, but concerns over earnings misses, high valuations, and rival market attractiveness dampen the prolonged rally in Indian equities. Read here.
  
  
• Key Takeaways from 5 Informative Charts – These charts provide insights into market dynamics, valuation metrics, investment strategies, and historical patterns related to equity markets and investing.Read here.
  
  
• Dealing with Catastrophic Risk in Business Valuation – The article discusses the impact of catastrophic risks on business valuation, the challenges of pricing such risks, and the psychological and financial implications of market reactions to existential threats. Read here.
  
  
• Zee Entertainment Faces Sebi Probe -India’s market regulator uncovers potential $241 million fund diversion at Zee Entertainment, complicating its post-merger revival efforts with Sony Group Corp. Read here.

Economy

• India’s Bond Market Aces Record Borrowing Despite Global Headwinds – Government’s gross borrowing programme for FY 2023-24 concluded without any devolvement, a first in over a decade, buoyed by strong demand for bonds despite record market borrowing. Read here.
  
  
• India’s Foreign Direct Investment in Decline – India’s FDI inflows have been declining structurally, with reinvested earnings accounting for a larger share, highlighting challenges in attracting new investments. Read here.
  
  
• Exploring India’s Economic Outlook – Key points from a lecture on India’s economic trajectory, including growth prospects, stock market valuation concerns, bubbles, policy shifts, and anecdotes about various sectors. Watch 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	16-Feb-24	09-Feb-24	Change
Nifty 50	22,041	21,783	1.19%
Nifty 500	20,165	19,962	1.02%
Nifty Midcap 50	14,035	13,841	1.41%
Nifty Smallcap 100	16,194	16,269	-0.46%

Chart Ki Baat

Gyaan Ki Baat

Mahila Samman Savings Certificate: a government scheme aimed at encouraging women and girls to save and invest for their future. This exclusive scheme is open for a limited time, from April 2023 to March 2025, and can only be availed by investing in the name of a girl child or woman.

Investor can make a maximum deposit of ₹2 lakhs under this scheme with a single PAN. The scheme provides a  fixed interest rate of 7.5% p.a . . The maturity period of the Mahila Samman Savings Certificate account is two years. There is a partial withsrawal facility available where Investor can withdraw up to 40% of the balance. This investment can be done in some selected banks or a post office near you.

Suppose investing Rs.2,00,000 into this scheme that guarantees a yearly interest rate of 7.5%. In the first year alone, you will earn Rs.15,000 in interest on your initial investment. And in the second year, that amount increases to Rs.16,125. This means that after just two years, you will have a total of Rs.2,31,125.

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

Personal Finance

• 8.25% Interest Rate on EPF for FY 2023-24, Highest in 3 Years – The 235th CBT meeting of EPFO recommends an 8.25% interest rate on EPF deposits for FY 2023-24, aligning with PM Modi’s social security commitment, pending official approval. Read here.
  
  
• Managing Risks in Equity Investments Amidst Market Optimism – The article provides insights into potential risks including inflation spikes, delayed recession, election uncertainties, geopolitical tensions, and the challenge of a K-shaped economic recovery in India, emphasizing the importance of risk management and implementation in navigating these challenges. Read here.
  
  
• Unlocking Hidden Potential – Exploring how optionality in stock investments, akin to call options, offers potential for non-linear growth and hidden value, exemplified by ventures like Jio and strategic shifts in companies. Read here.
  
  
• Insights on Sector Investing in India’s Equity Market – The article analyzes sector exposures in India’s equity market, highlighting the outperformance of financials and limited exposure to state-owned enterprises, while also discussing the impact of sector valuations and correlations on investment decisions. Read here.

Investing

• Analyzing Wall Street’s Pivot – Wall Street’s recent shift from China to India as a prime investment destination sparks debate over its broader implications for global markets amidst contrasting economic trajectories. Read here.
  
  
• Why Diet Coke Failed in India – A Case Study of Market Misfit and Taste Preference, leading to Diet Coke’s discontinuation and the rise of zero sugar soft drinks. Read here.
  
  
• SEBI Considers Models to Regulate API-Based Algorithmic Trading – SEBI is considering two models with plans to require stock brokers to take responsibility for their algos’ cyber and data security, and clients to have complete knowledge of the strategies. Read here.
  
  
• The Imperative of Accountability – Anil Singhvi discusses the detrimental impact of poor corporate governance on companies like Byju’s and Paytm, emphasizing the need for accountability among independent directors and auditors to prevent future crises. Read here.

Economy

• Potential Inclusion of Indian Government Bonds – The Bloomberg Index Services advisory committee suggests adding Indian government bonds to the Emerging Market Local Currency Index, potentially attracting $5 billion from investors, pending formal approval. Read here.

• Ayodhya’s Economic Transformation – Ayodhya’s economy receives a substantial boost with a ₹41,600 crore investment by the Centre and state government to accommodate the anticipated influx of 2.88-3.6 crore visitors, marking a significant business expansion. Read here.

• BJP Spends $1.2 Million on YouTube Ads – YouTube has become a crucial platform for political campaigning in India, with parties increasingly relying on influencers and ads to reach voters. Read here.

• How Listerine Marketed a Medical Condition – Listerine capitalized on creating the concept of “halitosis” to market its mouthwash, exemplifying how marketers can fabricate medical conditions to boost sales.  Read here.

• EY’s $700 Million Borrowing to Deal with Consulting Spinoff Fallout – EY took on extra borrowing to cover costs related to its failed plan to spin off its consulting unit. Read here.

• Global Economic Landscape – China and India forecasted to lead the largest consumer markets by 2030, with significant increases in consumer numbers driving global economic shifts. 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.