CAGR Insights – 02 Feb 2024

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

Index02-Feb-2425-Jan-24Change
Nifty 5021,85421,3782.22%
Nifty 50019,91119,4102.58%
Nifty Midcap 50 13,65813,2503.07%
Nifty Smallcap 10016,27815,4175.58%

Chart Ki Baat

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Bazaar Ki Baat

In the 16th edition of “Bazaar ki baat”, we discuss 2 special topics
(i) Why do bond markets love this budget?
(ii) How to save taxes using presumptive taxation?
Watch here.

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

Personal Finance

  • Learning Life and Investing Lessons – The article narrates the author’s experience with a mentor who was a full-time gambler and conviction investor. Despite their differences, the mentor’s teachings left a lasting impact on his life.  Read here.

  • Zudio’s Winning Formula – Revolutionizing Fashion for the Masses Through Strategic Pricing, Franchise Model, and Word of Mouth Magic. Read here.

  • Navigating the Nuances of Money – The intricate dynamics of spending money—whether as a tool for a better life or a yardstick for status reflects the complexity of individual aspirations, psychological wounds, and the challenge of navigating desires beyond basic needs.  Read here.

Investing

  • Navigating the Performance Pressure Paradox – The article discusses the intense pressure on fund managers to chase high-flying stocks like NVIDIA, particularly in the context of benchmarking and emphasizing the potential risks of such behaviour. Read here.

  • Unveiling the Strategies for Consistent Compound Growth – In the challenging landscape of retailing, successful companies like Trent leverage product relevance, high inventory turnover, and strategic reinvestment to achieve consistent compound growth. Read here.

  • Positive Outlook for Bond Markets – The bond market anticipates an unaltered net market borrowing for FY25. Read here.

  • Impact of RBI’s Restrictions on Paytm – RBI’s strict restrictions on Paytm Payments Bank pose potential risks for lenders using FinTech-led sourcing models, impacting incremental disbursements. Read here.

  • Japan’s Increased Investor Interest towards India – India’s equity-focused investment trusts in Japan experienced an 11% growth in total assets in January, signaling investor interest in Indian stocks as a promising emerging market, outpacing inflows into Chinese. Read here.

Economy

  • Small Finance Banks Triumph – SBFs in India have overcome numerous challenges, including the impact of COVID-19, to achieve remarkable growth, diversify their services, and emerge as strong contenders in the financial sector. Read here.

  • Google’s Move to Phase Out Third-Party Cookies Raises Privacy Concerns – Google’s decision has advertisers seeking alternatives while awaiting approval from regulatory authorities, raising uncertainties about the future landscape of online advertising. Read here.

  • India’s Strategies for Narrowing Trade Deficit – India’s efforts to reduce its trade deficit involve a focus on domestic manufacturing, supported by initiatives like PLI and PM Gati Shakti Mission, while the rise in services exports, particularly in the IT sector, contributes to the overall growth in exports. 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 – 25 Jan 2024

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

Index25-Jan-2419-Jan-24Change
Nifty 5021,37821,639-1.21%
Nifty 50019,41019,615-1.04%
Nifty Midcap 50 13,25013,473-1.65%
Nifty Smallcap 10015,41715,482-0.42%

Chart Ki Baat

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Gyaan Ki Baat

Covered Call Strategy

Mutual funds employ this strategy to earn premiums by selling call options on stocks they already own, enhancing their overall returns. In addition, it provides a degree of downside protection, as the premium received helps offset potential losses in the stock’s value.  

For example, if an investor owns 100 shares of ABC stock trading at INR 100, they might sell one call option with a strike price of INR 105, receiving the premium. If the stock remains below INR 105 at expiration, the investor keeps the premium; if it rises above INR 105, they may have to sell the shares but still benefit from the premium.

Personal Finance

  • Redefining Money Talks – Gen Z Embraces ‘Loud Budgeting’ Trend on Social Media, Opting for Financial Honesty and Frugality Over Flashy Displays. Read here.

  • A Deep Dive into How David Perell Harnesses ChatGPT – David Perell leverages ChatGPT for deep textual analysis, decision-making, co-writing; showcasing the diverse applications of AI in his creative and educational pursuits. Read here.

  • From Poverty to Prosperity – John Mackay’s journey from impoverished beginnings to becoming one of the world’s wealthiest men through perseverance, self-improvement, and a strategic move to the Comstock Lode during the Gold Rush Era. Read here.

  • The Pitfalls of Shortcuts and the Value of Discipline – The article emphasizes the importance of avoiding shortcuts in business and personal finance, cautioning against the risks of neglecting crucial steps and the potential consequences, as highlighted through personal finance experiences. Read here.

Investing

  • Exploring the Evaluation of Management in Companies – A Comprehensive Analysis of Promoter-Driven and Professionally-Managed Approaches. Read here.

  • Zerodha Launches LIQUIDCASE India’s First ETF – The ETF, tracking the Nifty 1D Rate Index, provides returns similar to overnight mutual funds, surpassing savings account interest rates. Read here.

  • Sebi’s FPI Guidelines: Clarity Emerges on Ownership Disclosures – Sebi’s FPI norms on additional disclosures see less immediate impact, with no urgent liquidation deadline for FPIs holding concentrated positions. Read here.

Economy

  • Strong Performance and Optimistic Outlook for India’s Premium Hotel Industry – The Indian premium hotel industry is poised for strong performance in FY2024 with double-digit revenue growth, increased occupancy to 70-72%, driven by sustained demand from domestic traveland major events. Read here.

  • Indian Insurers Introduce ‘Cashless Everywhere’ for Seamless Medical Claims Settlement – Allowing policyholders to access cashless medical facilities at any hospital, eliminating the need for reimbursement claims and enhancing the overall claims settlement process. Read here.

  • Suez Canal Conflict Escalation – The escalation of the conflict in the Red Sea has led to a potential delays and higher freight costs, impacting sectors with import/export dependencies on these regions, such as chemicals, textiles, auto components, and pharmaceuticals. 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 – 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.

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.