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CAGR Insights – 12 Apr 2024

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

Index12-Apr-2405-Apr-24Change
Nifty 5022,51622,526-0.04%
Nifty 50020,75120,7200.15%
Nifty Midcap 50 14,05213,9790.52%
Nifty Smallcap 10016,50916,3540.95%

Chart Ki Baat

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Chart credits: @QCompounding

Gyaan Ki Baat

Crowdfunding is a method of raising funds for a project, venture, or cause by pooling small amounts of money from a large number of people, typically via the internet. It bypasses traditional financing avenues like banks or venture capitalists, allowing individuals or organizations to solicit contributions or investments from a wide audience. Crowdfunding platforms facilitate this process, offering a space for creators to showcase their projects and for potential backers to pledge their support. Depending on the platform and the type of crowdfunding model used (such as donation-based, reward-based, equity-based, or debt-based), backers may receive perks, products, equity, or interest in return for their contributions. Crowdfunding has become increasingly popular for startups, creative projects, charitable causes, and even personal expenses.

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

Personal Finance

  • Understanding the 4% Rule in Retirement Planning – The 4% rule in retirement planning suggests withdrawing 4% of one’s savings annually, adjusted for inflation, but its efficacy varies due to market unpredictability and individual circumstances. Read here.

  • The Myth of Luck – Understanding the distinction between luck and what isn’t repeatable is crucial in learning from successful individuals and applying their strategies effectively in business and investing. Read here.

  • A Roadmap to Money Management Success – Establishing financial safety with an emergency fund and paying off high-interest debt precedes saving for retirement and fulfilling life goals, while aspirational goals like maxing out retirement accounts come in the endgame of financial planning. Read here.

Investing

  • AI Revolution Takes Flight at Microsoft AI Tour – The rise of AI, from statistical to cognitive engines, is transforming industries globally, driving productivity gains and innovation, with Microsoft’s Copilot as a notable example. Read here.

  • Exploring the Intersection of Longevity, Financial Wellbeing, and Life Stages – Insights from Dr. Thomas Mathar on Standard Deviations with Dr. Daniel Crosby. Listen here.

  • Embracing the Uncomfortable Truth – Navigating financial markets requires confronting uncomfortable truths, from the dominance of large corporates to the inevitability of changing interest rates, challenging investors’ established beliefs and strategies. Read here.

Economy

  • Delayed Rate Cut Forecasts Amidst RBI’s Steady Policy Stance – Indian overnight indexed swap (OIS) rates have risen post-RBI meeting, indicating expectations of a rate cut in early 2025 instead of late 2024, with market sentiment influenced by robust growth and inflation concerns. Read here.

  • India’s AI Evolution – Enterprise and government sectors in India are increasingly leveraging AI and technology, with focus on applications such as customer service enhancement, digital infrastructure development, and fostering innovation, poised to drive significant economic growth. Read here.

  • Geopolitical Tensions Drive Bullion Surge – Gold prices soar to record highs amidst global tensions, central bank purchases, and speculation on monetary policy changes. Read here.

  • The Yuan-Rupee Linkage – The Indian rupee’s recent movement appears to be more closely linked to the Chinese yuan than to the US dollar, potentially affecting India’s export competitiveness. 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 – 05 Apr 2024

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

Index05-Apr-2428-Mar-24Change
Nifty 5022,52622,3270.89%
Nifty 50020,72020,2552.29%
Nifty Midcap 50 13,97913,5273.34%
Nifty Smallcap 10016,35415,2707.09%

Chart Ki Baat

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Gyaan Ki Baat

A turnover ratio is the percentage of stocks and other assets in a mutual fund that have been replaced over the course of a year. This number can vary depending on the type of mutual fund, its investment goals, and the portfolio manager’s investing approach. Assessing mutual funds through this metric is valuable in determining which ones are suitable for inclusion in your investment portfolio.

The mutual fund turnover ratio can affect how much you spend on owning the fund. When the turnover ratio is high, you might end up paying more for things like brokerage fees and bid-ask spreads. You can locate the turnover ratio in the mutual fund company’s most recent financial statement. It usually falls somewhere between 0% and 100%, though for actively managed funds, it can be even higher. A turnover rate of 0% means that the fund’s investments haven’t changed at all over the past year.

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

Personal Finance

  • Embracing Conviction – Navigating the challenges of investment emotions, a reminder of long-term investor principles amidst short-term pressures and behavioral tendencies. Read here.

  • The Art of Reconnaissance in Investing – The importance of thorough due diligence in investing, emphasizing the necessity of on-the-ground research and personal interaction for uncovering deeper insights beyond surface-level analysis. Read here.

  • Selling the Story – The article explores how individuals often shape their narratives to emphasize struggles, particularly in the financial space, to sell stories and advice, highlighting the importance of scrutinizing advice based on its merit rather than the storyteller’s background. Read here.

Investing

  • Reality Check of Retail Investing in India – Retail investors from smaller towns are flocking to the Indian stock market, fueled by speculative trading and influenced by finfluencers, amid warnings of overvaluation and risks from regulators and seasoned investors. Read here.

  • Transition in Banking Investment Portfolios – RBI’s new guidelines on investment classification and valuation aim to align Indian banking standards with IFRS, allowing for greater flexibility but requiring prudent management of securities portfolios. Read here.

  • Decoding the Small Cap Cycle – The article evaluates whether small caps are in a bubble using a comprehensive six-lens framework, indicating caution due to red signals in long cycle, valuations, flows, past performance, despite strong fundamentals. Read here.

  • New KYC Rules on Hold for existing investors – Mutual fund investors relieved as accounts won’t be blocked despite missing the KYC deadline, however the new KYC rules still apply for new investors. Read here.

Economy

  • The Evolution and Future of Securitisation in India – Securitisation in India has evolved from mortgage-backed securities to asset-backed securities, but further growth hinges on addressing gaps in regulation, expanding into new asset classes, and enhancing market transparency and participation. Read here.

  • RBI Keeps Interest Rates Steady Amid Robust Growth and Inflation Concerns – The Indian central bank kept its key interest rate unchanged at 6.5% for a seventh consecutive meeting, citing robust economic growth and persistent inflation above the 4% target. Read here.

  • India’s Fixed Income Market at an Inflexion Point – India’s fixed income market poised for growth amidst favorable demand-supply dynamics and global rate expectations, prompting strategic portfolio adjustments. Read here.

  • Unlocking India’s Potential – Professor Aswath Damodaran outlines India as a significant investment opportunity while addressing the obstacles it must overcome and the necessary reforms for realizing its economic strength. 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.

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CAGR Insights – 28 Mar 2024

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

Index28-Mar-2422-Mar-24Change
Nifty 5022,32722,0971.04%
Nifty 50020,25519,9951.30%
Nifty Midcap 50 13,52713,3301.47%
Nifty Smallcap 10015,27015,0571.42%

Chart Ki Baat

Israeli-born psychologist Prof. Daniel Kahneman passed away yesterday. He was honoured with the Nobel Prize for Economics in 2002, was recognized for his groundbreaking research integrating psychology into economic science. His work focused on understanding human judgment and decision-making in uncertain conditions.
RIP🌹

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Gyaan Ki Baat

The small and mid cap mutual funds recently were asked to publish their stress test results every 15 days.

The results indicate how much time will respective funds take to liquidate 25% and 50% of their portfolio respectively. The longer the time taken, the more liquidity risk the investor bears.

The idea behind requiring stress test was to evaluate the real risk of redemption pressure that might emerge in case of price correction. In an event of heavy redemption, mutual funds have to sell their holdings and if liquidity is low, selling becomes difficult, thereby resulting in money getting stuck.

A simple way to read this is that funds with lower “days to liquidate” are better. But that is not all. Some key observations we have had are as follows –

  • Funds with smaller AUMs are bound to have lower days to liquidate the portfolio. That does not necessarily make them better funds.
  • Normally, unless it is a black swan event, we do not see the need to liquidate 50% of the portfolio. This is an extreme case and the readings should be only indicative, not decisive.
  • As an investor, do not panic sell the funds which have come out with higher numbers. Evaluate them closely to see if these numbers improve. One can choose to divert additional flows to another fund.

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

Personal Finance

  • Renting vs. Buying a House – The article delves into the complex decision of renting versus buying a house, simplifying it to key factors such as rent, mortgage payments, and future inflation. It emphasizes the importance of considering both monetary and non-monetary aspects. Read here.

  • Sharpen Your Perspective – From optimistic outlooks on life to the pitfalls of uncontrolled passion, these quotes explore the complexities of life, work, and success, reminding us that self-awareness and adaptability are key. Read here.

  • Strategies for Mitigating Sequence of Returns Risk (SORR) – Dr. Jim Dahle presents four strategies to mitigate SORR in retirement, encompassing conservative spending, flexible withdrawal approaches, volatility reduction, and the use of buffer assets. Read here.

  • MF Investors’ Rush to Re-Do KYC – Mutual fund investors in India face a March 31 deadline to re-do their KYC, with implications for transaction abilities and document validity. Read here.

  • Disrupting India’s Streaming Landscape – Reliance-Disney merger in India’s streaming market threatens Netflix’s dominance with extensive content and potential pricing undercutting. Read here.

  • The Burger Singh Story – Burger Singh, India’s largest domestic Burger chain, led by founder Kabir J Singh, implements innovative strategies to dominate the QSR industry despite its brutal nature. Watch here.

Investing

  • Uncovering Deceptive Practices – JM Financial’s involvement in a debt offering revealed deceptive practices, including buying bonds at inflated prices and selling them at a loss through its NBFC arm, undermining investor trust. Despite the lack of clear losers, the incident highlights the intricate dynamics and risks within the financial sector. Read here.

  • Potential Reversal in India’s Government Bond Yields – Expectations of RBI rate cuts and increased demand from domestic and foreign investors may lead to a reversal in the upward trend of IGB. Read here.

  • Tale of Microcap Mastery – Peter Lynch’s 1994 article ‘Charlie Silk’s 150-Bagger’ illustrates the principles of successful stock investing through the story of finding and holding onto a remarkable microcap stock. Read here.

  • Exploring the investment potential of CMS Info Systems Ltd – A market leader in India’s cash management industry, highlighting its market dominance, industry structure, growth prospects, and strategic initiatives. Read here.

Economy

  • Assessing the Impact on Shareholder Value – Regulatory reforms in Japan have led to improved governance practices, but fundamental improvements in capital efficiency have lagged, posing concerns for investors. Read here.

  • South Korea and India Inclusion in Key Global Indexes Delayed – FTSE delays inclusion of both countries in key global bond and emerging-market indexes for at least another six months due to criteria unmet by both countries. 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 – 22 Mar 2024

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

Index22-Mar-2415-Mar-24Change
Nifty 5022,09722,0230.33%
Nifty 50019,99519,8250.85%
Nifty Midcap 50 13,33013,346-0.12%
Nifty Smallcap 10015,05714,8471.41%

Gyaan Ki Baat

In the latest FOMC meeting concluded on March 20th, the Federal reserve decided to keep the interest rate steady. You would also have read articles saying that the dot plot still indicates that 3 rate cuts are on the table for 2024.

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But, what is dot plot? And What is its implication?

It’s almost certainly the most closely scrutinized scatter chart in world financial markets.

The “dot plot” shows projections for the federal funds rate … a key short-term interest rate that can affect savings yields and consumer loan rates.

Each dot represents the view of a Fed policy maker for the rate’s target range at the end of each year shown. Markets generally focus on the median “dot” or projection.

The Federal Monetary Policy Committee meets eight times per year. In conjunction with four of those meetings—those held in March, June, September, and December—the committee releases its updated dot plot.

Think of the dot plot as a transparent window into the Fed’s individual guesses. You can use it to better understand what the Fed is currently thinking and what it might do in the next FOMC meeting. Read more.

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

Personal Finance

  • Insights on Investing, Optimism, and Intuition – Larry Siegel, CFA Institute Research Foundation director, discusses the importance of optimism, intuition, and education in investing during an interview with Morningstar. Read here.

  • Unraveling the Time Zones of Microcap Investing – Early investments in microcap turnarounds require patience, conviction, and a willingness to hold through initial skepticism for long-term growth potential. Read here.

  • Maximizing Efficiency – Navigating the complexities of task management and productivity strategies while emphasizing the importance of prioritization and maintaining operational capacity. Read here.

Investing

  • SBI’s Smallcap Scheme Defies Market Rout – Despite having the most illiquid portfolio, it experienced the least damage to Net Asset Value during the recent small-cap market downturn. Read here.

  • Mumbai’s Real Estate Outlook – The Mumbai real estate market faces challenges including excessive competition, inflated prices, and a shift towards branded players and payment plans amidst a slowdown in luxury sales and moderation in project acquisition. Read here.

  • Nvidia: Leading the Innovation Revolution – CEO Jensen Huang’s vision and persistence have positioned Nvidia at the forefront of AI development, with its GPUs and platforms driving breakthroughs in robotics and automotive technology. Read here.

  • Baskin Robbins’ Market Expansion Tactics – Expanding its presence in the Indian market by targeting premium hotels, diversifying its offerings, and leveraging synergy with Dunkin’ to enhance customer appeal and accessibility, contributing to its success. Read here.

  • India’s Capex Boom – The rising prominence of PLI and emerging sectors in capex, driven by EVs, semiconductors, and electronics, underscores the importance of incorporating these themes into investment strategies for disruption-proof portfolios. Read here.

Economy

  • From Lifelines to Vanishing Relics of History – Rapid urbanization and neglect led to the demise of Bengaluru’s once-thriving cascading lakes, which were essential for the city’s water needs and livelihoods. Read here.

  • Tracing the Paths of Growth and Struggle – India’s economy faces a dual challenge of sluggish growth and widening income disparities aggravated by structural issues and global economic uncertainties. Read here.

  • India’s Billionaire Boom – The wealth concentration among India’s top 1% has reached its highest level in six decades, surpassing even the income inequality of countries like Brazil and the United States. Read here.  

  • Japan Ends Era of Negative Rates – In an unprecedented move in 17 years, Japan’s central bank raised interest rates, reflecting shifting economic conditions. Japan’s central bank raises interest rates for the first time in 17 years amid rising wages and inflation concerns. Read here.

  • Reservoir Levels Hit Five-Year Low – India’s main reservoirs hit lowest March levels in five years, raising concerns over drinking water and power availability. Read here.

  • India’s Rise to Upper-Middle Income – India’s expected transition to an upper-middle-income country by fiscal 2031 could significantly boost demand for discretionary goods like automobiles, driven by rising incomes and a shift in consumption patterns towards non-essential items. 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.