CAGRfunds – Blog

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

Chart Ki Baat

Gyaan Ki Baat  

What is an Economic Moat?

An Economic Moat is a concept in business and investing that refers to a sustainable competitive advantage that allows a company to protect its market share and maintain healthy profitability for an extended period of time. Economic Moat and Competitive Advantage and High Entry Barriers are essentially identical.

Professor Michael Porter calls barriers to market entry that a business may have as ‘sustainable competitive advantage’. He says, “We have to have a business with come inherent characteristics that give it a durable competitive advantage”.

Warren Buffett and Charlie Munger call them ‘economic moat’. Buffett puts is as, “The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors”

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

Personal Finance

• Why Lifestyle Creep is Mostly a Myth: Lifestyle creep. Keeping up with the Joneses. Raising your spending after an increase in your income. No matter what you call it, lifestyle creep is one of the most talked about topics in personal finance. And you won’t find a shortage of financial gurus warning you against the dangers of it. But is lifestyle creep a real concern for most people? Read here

• Union Budget 2024: Here’s How It Affects Your Finances: The Union Budget 2024-25 outlines several measures impacting personal finances. The new tax regime introduces revised income tax rates, while other changes include new EPFO-linked schemes and the elimination of angel tax. Read here

• Which financial tool is most suitable for different types of emergencies? When unexpected costs pop up, are you ready to roll with the punches? Emergency funds, credit cards, and personal loans are your financial superheroes. Knowing your options empowers you to choose the right financial weapon for any battle.Read here

• Decoded: What Budget 2024 means for the middle-class, investors, and more:

India’s recent budget aims to stimulate economic growth and job creation. It includes tax changes affecting individuals and businesses, with a focus on the middle class. Investments in infrastructure and social programs are also highlighted. Read here

Investing

• A Top Pension Fund Wants to Bet Bigger on India. What’s Stopping It? APG, a huge company that handles people’s retirement savings, is interested in putting more money into India. India is growing fast, but APG is worried about some risks. They like the idea of investing in Indian businesses directly, rather than buying stocks. Other big investors are already putting lots of money into India. Read here

• Holding Period for REITs Reduced to 12 Months from 36 Months to Qualify as Long-Term Assets: The 2024-25 Union Budget revised the holding period for long-term capital gains. While previously, investments in listed financial assets like stocks and REITs required a three-year holding period, the new rules shorten this to one year. Read here

• What is margin of safety and why do you need it? Margin of safety is like buying something on sale, but for stocks. It means buying a stock at a price lower than what you think it’s truly worth. This extra cushion protects your money if the stock price drops. Read here

• Indian Households Embrace Equity, Funds: A New Era of Investing: Indian households are shifting investment habits. While bank deposits still dominate, there’s a sharp rise in equity, mutual funds, insurance, and pension investments. Total financial wealth has surged, boosted by both asset price gains and new savings. Importantly, increasing debt is balanced by growing assets, keeping the household leverage ratio stable. Read here

Economy

• India’s Changed — and Changing — Equity Markets: India’s equity market has emerged as a key indicator of global economic changes post-COVID-19. Its increasing weight in the MSCI Emerging Markets Index, reaching a record 20% in June 2024, has significantly benefited investors. This growth underscores India’s growing global influence. Read Here   

• Economic Survey 2024: Indian economy grows over 7% for a 3rd consecutive year; 10 key highlights: India’s real GDP grew by 8.2 per cent in FY24, posting growth of over 7 per cent for a third consecutive year, driven by stable consumption demand and steadily improving investment demand. Read Here

• Improving access to finance for MSMEs is key to a $5-trillion Indian economy: MSMEs are the backbone of India’s economy, powering growth, employment, and exports. These small businesses are crucial for reducing income disparities and industrializing rural areas. As key drivers of economic progress, MSMEs are instrumental in realizing India’s vision of a developed ‘Viksit Bharat’ by 2047. Read here

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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 among Top 20 smallcase with medium volatility.

• CVM (launched in May 2022) – Ranked among Top 40 across the 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.

Gyaan Ki Baat

On July 19, 2024, one of the world’s major global systems outages ever occurred caused disruptions to the functioning of airlines, stock markets, certain media broadcasts, and payment gateways across time zones.

What is Global Azure?

An international community-driven event centered around Microsoft Azure, the company’s cloud computing platform, is called Global Azure. Usually, it consists of a number of concurrently held conferences, workshops, and meetups in different parts of the world. The software giant announced that it was resolving a problem that was impeding users’ ability to access Microsoft 365 services and apps.

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

Personal Finance

• EPF update: Finance ministry approves EPF annual interest rate of 8.25% for FY2024-25; some members get their payments: The Union Finance Ministry on Thursday announced that it has approved the annual interest rate of 8.25% for provident fund deposits. In February this year, the Employees’ Provident Fund Organisation (EPFO) said the interest rate for the financial year 2023-24. The EPFO increased the interest rate to 8.25% for 2023-24 from the previous year’s rate of 8.15%. The rate revision decision impacts millions of EPF members across the country. Read here

• Difference between ITR-1 and ITR-2 forms? When filing your income tax return, you must use either ITR 1 or ITR 2, depending on your sources of income for the year. Filing with the wrong form can result in a notice from the tax department, asking you to correct it. It’s important to use the correct form to avoid this issue. Read Here

• Benefits of using Bharat Bill Payment System (BBPS): Bill payments just got easier in India! BBPS is a one-stop shop to pay all your bills anytime, anywhere. You can use it online, on apps, or even at stores. BBPS reminds you about due dates and keeps your financial info safe. Plus, you can choose how to pay with options like UPI or debit card. It’s fast, convenient, and secure! Read here

• Looking to send money abroad? Open foreign currency accounts in GIFT City: Indian residents can now open foreign currency accounts in International Financial Services Centres (IFSCs) like GIFT City which will allow you to hold foreign currency like US Dollars. Earlier, there were limitations on how Indian residents could use the Liberalised Remittance Scheme (LRS) for international transactions. Read here

Investing

• Base Rate Neglect & Absurd Valuations: We often get carried away by the hype around certain companies and end up paying too much for their stocks. The focus is on the few companies that become super successful and the fact that most companies don’t make it big is ignored. This is like betting on a long shot in a horse race without considering the odds. It’s important to be realistic and not get blinded by excitement when investing.Read here

• Contrarian Investing and First Principles: Insights from Rajeev Thakkar | PPFAS AMC: In this interview, Rajeev Thakkar, CIO of PPFAS AMC, credits his father and the 1992 market boom for sparking his interest in value investing. He emphasizes the importance of first-principles thinking, instilled by PPFAS founder Parag Parikh, which encourages questioning conventional wisdom and basing decisions on logic. Thakkar recommends books by Peter Lynch and Benjamin Graham for those wanting to delve deeper into value investing. Watch here

• Finding Ideas Before Others: The article compares finding stocks to Robert Ballard finding the Titanic. There are 3 main ways to find stocks: brute force (looking at everything), screens (narrowing down based on criteria), and research. Networking and relationships are also important to find good stocks. The key is to be persistent and develop an idea generation process. Read here

Economy

• India has potential to become world’s 2nd largest economy by 2031: RBI Dy Governor: Given the country’s innate strengths, it is possible to imagine India striking out into the next decade to become the second largest economy in the world not by 2048, but by 2031, and the largest economy of the world by 2060, RBI Deputy Governor Michael Debabrata Patra has said. Read Here

• The next decade belongs to Bharat | Insights by Neelkanth Mishra: Economist Neelkanth Neelkanth Mishra, an economic expert, spoke about India’s future at WMG Bharatnomics. He warned of a shrinking workforce due to falling birth rates and the challenges of rising inequality. Mishra emphasized the need for better city infrastructure, innovation, and affordable energy to achieve India’s ambitious growth goals. Watch here

• NBFC’s set for bigger play: NBFC’s are important to help India’s economy grow to $5 trillion. There were some problems for NBFCs in the past, but they are doing well again. The RBI makes sure the NBFCs follow the rules. NBFCs are also finding new ways to get money. In the future, some big NBFCs might even be able to become banks. Read here

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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 among Top 20 smallcase with medium volatility.

• CVM (launched in May 2022) – Ranked among Top 40 across the 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.

Chart ki Baat

Source: Speedtest by Ookla

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

Personal Finance

• Centre May Guarantee 50% Of Last Drawn Salary As Pension Under NPS: Report: The Indian government is considering guaranteeing a pension equal to 50% of an employee’s final salary for central government workers enrolled in the National Pension System (NPS). This is meant to address concerns about lower pay-outs under NPS compared to the older pension scheme (OPS). A committee is evaluating the details of this proposal. Read Here

• Dramatic Increase in Fresh Fruit Consumption Among Poorest Rural Households in India: Good news for rural India! More people are eating fresh fruit. The poorest 10% of families in the countryside are now twice as likely to eat fresh fruit compared to a decade ago. Back in 2011, only 3 out of 10 families would have fresh fruit. Now, it’s closer to 7 out of 10! Read here

Investing

• Sebi reduces face value of debt securities to Rs 10,000 to boost retail participation: Market regulator Sebi has drastically cut the face value of debt securities to Rs 10,000 from Rs 1 lakh at present to boost participation of retail investors in the corporate bond market. Market participants are of the view that lower ticket size of debt securities may encourage more non-institutional investors to participate in the corporate bond market which in turn may also enhance liquidity. Read here

• MC Exclusive| F&O crackdown: Only one weekly options contract per exchange, min lot size Rs 20-30 lakh, derivatives panel suggests: SEBI’s working committee proposed raising minimum trade sizes and limiting options to curb speculation in futures & options market. This aims to reduce participation of small traders by making contracts expensive and limiting expiry options. Other suggestions include collecting option premiums upfront and stricter monitoring. Read here

• SEBI proposes introduction of hybrid passive funds, check details here: Securities and Exchange Board of India (SEBI) recently proposed the introduction of hybrid passive funds. These funds will replicate a hybrid index consisting of debt and equity index. SEBI stated that the inclusion of such a fund will allow investors to further diversify and provide greater flexibility. Read Here

• RBI Governor says it’s too early to talk on interest rate cut: The Reserve Bank of India’s (RBI) Governor Shaktikanta Das on July 11 said it is too early to talk on the interest rate cut due to uncertain economic environment and inflation remaining closed to five percent. Read here

Economy

• Renewables: A way to participate in the India growth story: India’s booming economy invests heavily in clean energy. They aim for 50% renewable energy by 2030 and are attracting investors with strong policies. Challenges like infrastructure exist, but India has plans to overcome them. Read Here

• How India Eats: Heat, unseasonal rains, virus infestation push veg thali prices higher in June: Adverse weather conditions like heatwaves and unseasonal rains have caused significant price hikes in vegetables like tomato, onion and potato. This led to a 10% increase in the average cost of a vegetarian thali in June. While non-vegetarian thalis became cheaper YoY due to lower broiler prices, they still rose slightly month-on-month. Read here

• India’s ongoing heatwave: India’s scorching heatwave, the longest ever, is easing in some areas thanks to the monsoon. But the north continues to suffer. This heat is boosting sales of summer essentials like FMCG and durables, with companies expecting double-digit growth. However, prices are creeping up despite production increases. The bigger concern is food inflation. Heat has hurt the production of vegetables like tomatoes, onions, and potatoes, leading to lower supplies and price spikes. This is likely to keep food inflation high soon. Read Here

• 5G Performance- Canada Leads, South Africa and Brazil Show Varied Results: Speedtest by Ookla found that 5G lived up to its promise of lower latency, delivering faster page load speeds than 4G on all services and in all surveyed countries. Canada had the fastest 5G page load speeds for all surveyed services, while South Africa had the slowest for Google and YouTube. In Brazil, 5G significantly outperformed 4G in Q1 2024, with page load speeds 20% faster for Google, 25% faster for YouTube, and 30% faster for Facebook. Read here

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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 among Top 20 smallcase with medium volatility.

• CVM (launched in May 2022) – Ranked among Top 40 across the 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.

Chart Ki Baat

Gyaan Ki Baat for this week:

What are Small Finance Banks?

Small finance banks are a special category banks in India which aim to promote financial inclusion by serving underserved segments like small businesses and low-income households.

Regulated by the RBI, they offer basic banking services, loans, and use technology for efficiency. Their mission is to provide accessible banking solutions, including savings accounts, fixed deposits, and remittance services, with a focus on rural and remote areas.

These banks must meet RBI’s capital requirements and operate under stringent regulatory frameworks, playing a vital role in economic development by extending financial services to marginalized communities.

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

Personal Finance

• How long you may live is one of retirement planning’s biggest unknowns. How experts say to get the best estimate: Retirement planning needs to consider not just your savings but also how long you might live. Financial advisors typically use 95 as the life expectancy for planning, but this might not be enough. Generally, the better your health, the longer you might live and the bigger your nest egg should be. Read here
  
  
• Finding the right international market for your investments: In India, few people use financial instruments like stocks and bonds for retirement savings, with only 3% investing in the stock market. Diversification across sectors and geographies is essential for reducing volatility and achieving long-term success. Investors compare international markets based on liquidity, efficiency, protection, and currency risks. Developed markets, particularly the US, are preferred for their stability and returns. Interest in European markets and residency-linked investments is growing, driven by desires for better opportunities and quality of life. Read here

• 72% of women making final decisions on their investments, survey reveals: Women are investing 37% more in mutual funds, showing strong dedication to wealth accumulation. This trend may be due to long-term financial planning or higher risk tolerance. The report indicates women prefer long-term investment strategies, aligning with mutual funds for retirement planning and wealth creation, benefiting from the compounding effect over time. Read here

• How Does Inflation Impact Retirement? This article explores the impact of inflation on retirees. It asks how inflation affects retirees, whether it’s better for high inflation to occur early or late in retirement, and what strategies retirees can use to manage rising prices. Read here

Investing

• FPI inflows poised to surge after a modest H1 2024; June sees strong recovery: In the first half of 2024, foreign portfolio investor (FPI) inflows into Indian equities were modest at ₹3,201 crore, following a strong 2023 with over ₹17,000 crore inflows. Despite market highs, FPIs were cautious due to election uncertainties, high valuations, and global factors. However, after election concerns settled, FPIs returned as buyers in June, purchasing ₹26,565 crore in Indian equities, the second-highest monthly inflow in 2024 after March’s ₹35,098 crore. Read here

• How Bull Markets Work: The stock market is currently in a bull market, which means prices are generally going up. This year has been a bit unusual for a bull market because there haven’t been many days with large price swings, either up or down. Historically, bull markets tend to be slow and steady, while bear markets (when prices are going down) are more volatile with big swings in both directions. This is because investors tend to overreact to good and bad news during bear markets. The article explains what a long-term investor should looking for in a market. Read here

• Finding the right international market for your investments: In India, few people use financial instruments like stocks and bonds for retirement savings, with only 3% investing in the stock market. Diversification across sectors and geographies is essential for reducing volatility and achieving long-term success. Investors compare international markets based on liquidity, efficiency, protection, and currency risks. Developed markets, particularly the US, are preferred for their stability and returns. Interest in European markets and residency-linked investments is growing, driven by desires for better opportunities and quality of life. Read here

Economy

• From “Bottle of Lies” to Global Leader: India’s Pharma Compliance Climbs: “Bottle of Lies” exposed quality issues in Indian generic drugs for a decade (2004-2014). Recent data shows significant improvement since then. India now has the most USFDA-approved facilities globally, surpassing the US. The percentage of inspections with warnings has dropped from 15-16% to 11%. While compliance improved, the author believes further progress is necessary for patient safety. Read Here

• Indian government bonds join JP Morgan EM Bond Index: The EMBI is a benchmark index for emerging market bonds, launched in the 1990s. It’s including Indian government bonds (IGBs) starting June 2024, which is expected to bring significant investment (estimated at $21 billion) to India by March 2025. This inclusion is likely to increase foreign investment in Indian bonds, particularly in longer-term maturities (6Y to 10Y). The short-term bond market might become more attractive in the future if interest rates behave a certain way (bull steepening). Read here

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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 among Top 20 smallcase with medium volatility.

• CVM (launched in May 2022) – Ranked among Top 40 across the 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.