Category: CAGR Insights – weekly newsletter curated by Kshitiz

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

Index	17-Feb-23	10-Feb-23	Change (%)
Nifty 50	17,944	17,856	0.49
Nifty 500	15,003	15,015	-0.08
Nifty Midcap 50	8,658	8,771	-1.29
Nifty Smallcap 100	9,417	9,526	-1.14

Gyaan of the week

What are Arbitrage Funds?

Arbitrage funds are the funds where fund manager buy and sell securities in different markets. The main objective of the fund manager is to exploit the price differences and generate the profit. The investor here can expect the returns same as short term debt returns. The taxation in arbitrage funds is treated same as Equity mutual funds. In Volatile market conditions, arbitrage funds can be a good fit as they can generate good returns by taking less risk. The time horizon for an investing in arbitrage funds should be minimum 3 months.

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

Personal Finance

• Index Fund or ETF? –  In terms of cost (Expense Ratio), ETFs are cheaper than Index Funds (even after accounting for transaction costs that investors will have to bear if ETF units are bought on exchanges). However, an important point of distinction is the liquidity of ETFs on exchanges and thus, the resultant impact cost. Read here.

Investing

• AIA Engineering – Stocks in Baat – Our investment thesis on the world’sSecond Largest Hi-Chrome casting producer. Read here

• Factor Investing primer –DSP MF – Factors are the building blocks of investing. They are persistent drivers of long term excess returns that research has proven to be time tested across geographies and asset classes. Understanding how factors work can help investors to make more informed decisionsRead here

• When ‘Loss Aversion’ Meets ‘Time Horizons’ in Equity Investing – A short-term (sub-3-years) horizon-focused investor tends to be perennially unhappy despite her portfolio generating very healthy returns over longer time periods. In contrast, with the same portfolio and with the same returns, an investor with a longer time horizon experiences happiness. This extraordinary paradox lies at the heart of why so few investors succeed in achieving satisfactory results from investing in equity markets.  Read here

Economy

• Have investors frozen in the headlights of rising inflation and interest rates? – We think that even as inflation falls, the new normal is more like 4 percent than 2 percent. Rates will not fall back to anywhere near zero. A new era will bring new winners and losers in the market. Here are five of the ways we see tight money changing the world in 2023.  Read here

• Can India become a Lithium Superpower?– We aren’t sure if it’s an economically viable source of deposit yet. The 5.9 million tonnes is just a preliminary estimate. Read here.

• Emerging Market Insights – Global currencies started outshining the US dollar toward the end of last year, giving a boost to international equities. With the tide likely turning for emerging markets in 2023, one should look at the future outlook for emerging economies and the emerging key trends & developments for 2023. Read here.

• India’s economy and emissions primed for big jumps in 2023 – India’s electricity output scaled record highs in 2022 even though manufacturing output in key sectors remained below highs. Although the concern remains for recession likely to hit in 2023, positive expectations for India across the financial community suggest growth in businesses across all sectors leading to increased energy consumption along with a commensurate rise in emissions. Read here

• The rise in CPI inflation and the data discrepancy – Overall inflation rose to a three-month high of 6.52%, above the central bank’s comfort band of 2%-6%, raising the prospects of further interest rate hikes. Part of the sharp rise in cereal inflation last month, say economists, was due to data discrepancies. Read here.

CAGR Speak

• The curious case of MCX struggle with its Tech vendor. Read the linkedin post here.

• Encouraging women to prioritize financial independence is my personal passion project.- Shruti. Read the linkedin post 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’d 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	10-Feb-23	3-Feb-23	Change (%)
Nifty 50	17,856	17,854	0.01
Nifty 500	15,015	14,962	0.35
Nifty Midcap 50	8,771	8,604	1.94
Nifty Smallcap 100	9,526	9,415	1.18

Gyaan of the week

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

Personal Finance

• 10 major changes for salaries person in Budget 2023– Read here.

• No proposal on raising overseas limit for MFs yet– “Mutual funds and some of the market players have approached the RBI, and we have examined their requests, and as of now, we have not taken any positive decision on it… if we take a decision then we will inform. But as of now, no proposal has been made to increase the overseas limit,” Das said while delivering the monetary policy statement. Read here.

• Where do millionaires keep their money?–  When it comes to how millionaires pick securities within an asset class, the answer is—diversification. If you look at the investment product choices that affluent households make, you will see that the vast majority use mutual funds (which tend to be diversified), with only one third of them owning any individual securities (i.e. individual stocks) Read here.

Investing

• First-principles approach to building Quant Framework in Indian Public Equities–This is a wonderful watch, so many ideas resonate here from our own experience of building a quant model. Watch here

• ITC — The Budget Stock – Duty hike for cigarettes not a big deal. While on average, people across the world smoke 800 cigarettes a year, India’s consumption of the legal variety is just 89 cigarettes. Most folks in India still prefer other tobacco products such as beedis and ghutkas. But if the tax regime remains more or less stable and as per capita incomes rise, we might see a gradual shift to cigarettes. It’s a long shot but it’s possible. Read here

• MSCI probes free float of Adani companies – India’s Adani Group faced fresh concerns on Thursday after financial index provider MSCI said it was reviewing the free float designation of some group company securities. Read here

• Time to go overweight duration– An interesting insight from DSP MF converse – when FX reserves dip, RBI hikes. And FX reserves have been on an uptrend. Read here

• Gilt market gets rate hike right, not rest of the policy– Some sections of the market had bet heavily on the RBI hitting the brakes on its rate hike cycle. Chatter before the outcome centred on a less severe monetary policy stance to ‘neutral’ from ‘withdrawal of accommodation’. Read here.

Economy

• Tepid growth in government’s revenue expenses may not spur demand– The budget does not provide any boost to the GDP growth through the government’s revenue expenditure. Its thrust is solely on the capital expenditure. Read here.

• Robust government capex may not crowd-in private investment-   In 2020-21, the last year for which such data is available, while central and state governments together accounted for about 16 per cent of total GFCF, public sector enterprises accounted for nearly 11 per cent and private enterprises accounted for 35 percent. The largest share is held by the household sector which includes several small enterprises. Read here.

CAGR Speak

• RBI gave the Indian bond market a boost.. Read the linkedin post here.

• Some people have recently reached out asking what should they be doing as investors in the context of the Adani fiasco. Read the linkedin post 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’d 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	3-Feb-23	27-Jan-23	Change (%)
Nifty 50	17,854	17,604	1.42
Nifty 500	14,962	14,874	0.59
Nifty Midcap 50	8,604	8,463	1.67
Nifty Smallcap 100	9,415	9,242	1.87

Bazaar Ki Baat

In this month’s edition of “Bazaar ki baat”, our Founders discussed in brief about the various topics related to Market, Sectors, Budget impact on Sectors and Personal Finance and New Tax Regime vs Old Tax Regime. Watch here

Gyaan of the week

Equity-linked savings scheme

Equity-linked savings scheme (ELSS) is a kind of mutual fund that offers tax deduction of up to INR 1.5 lacs a year under Section 80C provision. It has a lock-in period of 3 years, which is the shortest among other tax saving instruments and there are no provisions to make a premature exit.

One can invest any amount in ELSS, there is no upper capping, while the minimum investable amount varies across different fund houses.

Investing in ELSS funds gives you dual benefits of tax deductions and wealth creation. The portfolio of an ELSS fund mostly consists of equities, while they have some exposure towards fixed-income securities as well.

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

Personal Finance

• Tax exemption removed in insurance policies with premium over Rs 5 lakh– The proposal intends to limit income tax exemption from proceeds of insurance policies with very high value Read here.

• What is Mahila Samman Savings Certificate – It’s a one-time small saving scheme for women, providing an assured return of 7.5 per cent annum. Read here.

• Capital gains cap at Rs 10 crore to hit luxury home sales – Up until now there was no such limit and typically, HNI will utilize this avenue to reduce capital gains tax liability Read here.

Investing

• MCX – Largest Commodity derivative exchange – The 4^th edition of our Stocks ki Baat series talks about India’s largest commodity derivatives exchange. The exchange has been gaining market share over the years despite some challenges. Read here

• Adani bonds hit distress levels, FPO withdrawn amid pressure over Hindenburg report– The aftermath of Adani-Hindenburg Saga continues Read here

• Hindenburg bet against India’s Adani puzzles rival U.S. short sellers– Some U.S. investors said they were intrigued about the actual mechanics of its trade, because Indian securities rules make it hard for foreigners to bet against companies there. Read here

• A shocker for the bond markets: Withholding tax to apply on listed bonds, without grandfathering – Budget changes hit the nascent corporate bond market Read here.

Economy

• India sticks to the fiscal deficit glidepath. – The government’s budget gap, which hit a high of 9.5% of GDP in 2020/21 as the spread of COVID-19 infections brought the economy to a halt, has narrowed since Read here.

• Railways get a highest ever outlay : After the push on highways for the last few years, the government is focussing on railways. Read here.

• Fed slows rate hikes even as Powell says There’s more work to do – “We think we’ve covered a lot of ground,” Powell told reporters after the meeting. “Even so, we have more work to do.” Read here.

• India defence budget disappoints –   The total Indian defence budget, estimated at about 2% of GDP, is still lower than China’s 1.45 trillion yuan ($230 billion) in allocations for 2022, which New Delhi sees as posing a threat to neighbours including India and Japan.. Read here.

CAGR Speak

• Two big tax loop-holes plugged in budget. Read the linkedin post 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’d 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	27-Jan-23	20-Jan-23	Change (%)
Nifty 50	17,604	18,027	-2.35
Nifty 500	14,874	15,347	-3.08
Nifty Midcap 50	8,463	8,755	-3.34
Nifty Smallcap 100	9,242	9,569	-3.42

Gyaan of the week

Most ETFs or Exchange traded funds track indices, meaning they aim to match the performance of a list of stocks or bonds such as the Nifty 50 Index or the Bharat Bond ETF. ETFs are similar to stocks which can be bought and sold at a price prevailing at the time of transaction. There are different types of ETFs like Index ETFs, Fixed Income ETFs, Commodity ETFs, Foreign market ETFs, etc.           

ETFs are cost- efficient as ETFs have a lower expense ratio compared to actively managed funds. ETFs are passively managed so they tend to reduce the managerial risk involved in active mutual funds.  Further, ETFs are only available on stock exchanges, so you need to have a demat account to trade them, while for index mutual funds you don’t need a demat account.

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

Personal Finance

• Nine out of 10 equity F&O traders lose money – Data for the study has been collated from the top 10 brokers in the country. The total number of traders in the sample witnessed a 500 percent increase between FY19 and FY22. In FY19, 7.1 lakh traders were included in the sample which ballooned to 45.2 lakhs in FY22.

• IFAs help investors to remain patient and disciplined – The data further reveals that 25% of regular AUM stayed invested for over 5 years, as against only 13% of direct AUM. Read here.

• FOMO: the worst financial trait – Afunny thing about money is that it’s a negative art. You often have a better chance of accumulating more of it by getting rid of bad traits vs. acquiring good ones Read here.

• Are we becoming Information Obese? – By limiting the amount of things that want their attention, they are able to conserve their precious attention to the few tasks that really matter. And once they decide what they wish to do, they are able to attend to the task with full force. All their eyes, mind, intellect and efforts are devoted to the task at hand. Read here.

• Have Yes Bank’s AT1 Bondholders Truly Won? The high court’s decision in the Yes Bank matter could very well be characterised as a success for a group of motley investors winning over a bank backed by the RBI. But will it matter? Read here.

Investing

• Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History – Today we reveal the findings of our 2-year investigation, presenting evidence that the INR 17.8 trillion (U.S. $218 billion) Indian conglomerate Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades. – Hindenburg Research Read here

• Adani Group provides a rebuttal – Adani Group responded to the 88-questions raised by Hindenburg Research in its Jan. 24 research report on Adani Group. Read here

• How Many Stocks Should You Own?  In order to avoid significant potential shortfalls in terminal wealth, long-term investors should hold at least 200 stocks in their portfolio to more reliably achieve the full potential of the stock market. Read the research paper here

• Why are investors now convinced that a tail event is unlikely despite the obvious headwinds? Because so far, it hasn’t happened. Recency bias also explains why tail protection was so expensive in the midst of the QE-fueled bull market.  Read here.

Economy

• Private Sector Capex growth unlikely – While the announcement of new projects by the private sector is rising, completion of projects by them is falling. Read here.

• Investors are allocating cash back to European equities and cutting exposure to Wall Street, where pricey tech stocks are getting hammered by rising rates. Read here.

• The impact of China reopening – From Oct. 31, 2022 (recent market trough), to Jan. 17, 2023, the MSCI China Index was up 51.7%. Read here.

CAGR Speak

• More than 10% of clients sourced through Social media influencers for a listed company. Says DHRP of a listed broking house. Read the linkedin post here.

• Why are people not thinking about financial planning. Read the linkedin post 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’d 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	13-Jan-23	06-Jan-23	Change (%)
Nifty 50	17,956	17,859	0.54
Nifty 500	15,346	15,272	0.48
Nifty Midcap 50	8,747	8,752	-0.06
Nifty Smallcap 100	9,675	9,656	0.20

Gyaan of the week

Multi-Asset Allocation Funds are hybrid funds that invest a minimum of 10% in at least 3 asset classes. These funds typically have a combination of equity, debt, and one more asset class like gold, real estate, etc.

The multi-asset allocation Mutual Funds are suitable for investors who have a low-risk appetite but want to enjoy steady returns on their investments. It helps to even out the risk that comes along with investing in just one type of asset class. It ensures a steady flow of income for the investors even at a time when some asset classes are underperforming than usual.

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

Personal Finance

• What Fund Managers Do With Their Money – Fortune India asked India’s top money managers how they handle their finances. Here are some investment lessons from the best of the best. Read here.

• Nitin Kamath on bonds for retail investors. – We’ve always believed that bonds and maybe not stocks are the right stepping stone for most Indians—better than FD returns but lower risk than stocks. Read twitter thread here.

Investing

• Stocks Ki Baat – Maithan Alloys – In the 3rd edition of our “Stocks Ki Baat” series, we write about a Ferro Alloy company. The company is the largest manufacturer of manganese alloys in India.  Read here

• Interest rate rise does not impact equity returns – Most of the impact that declining interest rates had on asset prices (particularly U.S. stocks) occurred during the 1980s (and somewhat into the mid-1990s). After that, the impact of declining interest rates may not be as significant. Read here.

• 1979 Profile of Warren Buffet: The investor’s investor – He thinks of stocks only as a fractional interest in a business and always begins by asking himself “ How much would I pay for all of this company? And on that basis, what will I pay for 1% of it?”  Read twitter post here.

• Indian Exchanges – Rise of Option Turnover – The trading volumes in India’s capital markets have seen significant growth in recent years. NSE’s Cash Equity volumes have tripled and Futures volumes have more than doubled over the last seven years. Read here.

• Tata Neu is not working– Tata Group’s ambitious super app is expected to meet just half of the sales target in its debut year. Read here.

Economy

• CareEdge releases first edition of state’s ranking – Maharashtra tops the overall ranking of all states, with a favourable score in social, financial inclusion and fiscal categories. Gujarat ranks second and fares well in economic and fiscal categories, while Tamil Nadu ranks third with an edge in social and governance categories. Read here.

• States may borrow only around 65% of Jan-Mar calendar, sources say– States are flush with ample cash and spending remains sluggish, so they would not need to borrow the entire amount, the official said. In a note on Tuesday, IDFC FIRST Bank estimated state governments have a cash surplus of around 3 trln rupees in December. Read here.

CAGR Speak

• Fixed Deposit rates have increased. Should I now invest in fixed deposits? Well, for me, I am still not investing in Bank Fixed Deposits says Shruti. Then what? Read the linkedin post here.

• Zerodha’s annual profit are amazing. Read the linkedin post 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’d 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	06-Jan-23	30-Dec-22	Change (%)
Nifty 50	17,859	18,105	-1.36
Nifty 500	15,272	15,448	-1.14
Nifty Midcap 50	8,752	8,751	0.01
Nifty Smallcap 100	9,656	9,731	-0.77

Bazaar Ki Baat

In the December edition of “Bazaar Ki Baat”, our founders briefly discussed what moved the market in December, the Small Savings scheme interest rate formula, the return of debt funds, and many more interesting topics. Watch here.

Gyaan of the week

RBI Floating rate saving bond (RBI Bonds) is one of the safest investment options available for individual investors in India. The floating interest rate on these bonds is paid semi-annually and is linked to NSC. They have a fixed tenor of 7 years. The interest income is fully taxable at an individual slab rate. The current interest rate is 7.35%.

It can be an attractive investment option for Investors looking for safety and a higher interest rate than fixed deposits. Senior citizens, who have surplus funds beyond their liquidity needs, can also find these bonds attractive.

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

Personal Finance

• Only 16% Indian households plan to invest in 2023. As the consumer spending sentiment increases for the majority of Indian households, the investing sentiment remains low, with 78 percent of people saying that they won’t invest in 2023, according to the India Consumer Sentiment Index, a monthly analysis of consumer perception compiled by Axis My India. Read here.

• The Save-Invest Continuum.- The idea is that early on in life (or when you have fewer assets to your name) your savings have a bigger impact on your wealth and later on in life your investments have a bigger impact. Read here.

• Latest IRDA claim settlement ratios- Based on this, we can easily assume how customer-friendly they are in dealing with death claims. However, I warn you that this claim settlement ratio is raw data. It will not give you a clear picture of what types of products they settled. They may be Endowment plans, ULIPs, or Term Insurance Plans. Hence, this is not the sole criterion in judging the performance of a life insurance company. Read here.

• SEBI punishes DSP AMC, trustees for undercutting scheme expenses to woo investors. – The capital market regulator imposed a penalty of Rs 1 lakh each on the fund house and its trustee company for absorbing a chunk of its recently launched scheme’s- DSP Nifty 50 ETF- expenses on the AMC’s books, in violation of SEBI rules that state that all scheme-related expenses must be borne by the scheme. Read here.

Investing

• Why you should Invest in the stock market – Owning shares in the stock market gives you access to the profits, dividends, sales, growth, innovation and ingenuity of the biggest and best companies in the world. Read here.

• Indexing Evolution in Indian Market – 294 index-based products with aggregate assets of INR 6.46 lakh crore account for 16% of the total industry as of November 2022. Read here.

• Three Scenarios for Fed Policy, Inflation and Growth– We consider three scenarios and their impact on a diversified portfolio: sticky inflation, a soft landing and global recession. In the worst-case scenario of global recession, a composite portfolio could lose as much as 11%.Read here.

Economy

• Growth challenges in 2023 – what seems to be happening now is that the corporate sector is raising leverage without increasing investments appreciably. Read here.

• EPFO data show fall in employment– The good old EPFO Annual Report tabled in Parliament with a lag of about 9 months is still the best provider of this data. And, it suggests that employment fell during 2020-21 and stagnated in 2021-22.Read here.

CAGR Speak

• You probably won’t pick the best-performing stock in 2023. Read the linkedin post here.

• Small Savings scheme hiked. The hike in NSC (6.8% to 7%) will also lead to an increase in the yield of RBI Bonds, which is linked to the NSC interest rate. Read the linkedin post 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’d 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.

Wish you and your family a very happy and successful new year!

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

Index	30-Dec-22	23-Dec-22	Change (%)
Nifty 50	18105	17,806	1.68
Nifty 500	15448	15,046	2.67
Nifty Midcap 50	8751	8,400	4.18
Nifty Small cap 100	9731	9,182	5.98

Gyaan of the week

Hybrid mutual Funds are funds that invest in a combination of different asset class mainly debt and Equity. The objective of the fund is to diversify the portfolio with an aim to reduce the risk and also generate income.

Hybrid Funds are suitable for first-time investors and for investors looking for lower volatility than pure equity funds. Some of the popular Hybrid Funds are Aggressive Hybrid Funds, Conservative Hybrid Funds, Arbitrage Funds, etc.

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

Personal Finance

• The new Mutual Fund Challengers – India’s tightly regulated and highly competitive mutual funds market is dominated by large established players. But a bunch of new fund houses is looking to disrupt the space that is already riding high on technology, innovation and digitisation. Read here.

• To Parents with love – Must read. A compilation of essays on how parents can be prepared to support their children’s future aspirations! Read here.

• Massive decline in new MF investor registration due to change in KYC norms- AMFI data shows that the MF industry added 78,045 investors in November 2022, the lowest since April 2022. Between April and October, the industry added over 3.75 lakh new investors on a monthly basis. Read here.

• An underappreciation for how small things compound into extraordinary things – Howard Marks once talked about an investor whose annual results were never ranked in the top quartile, but over a 14-year period he was in the top 4% of all investors. If he keeps those mediocre returns up for another 10 years he may be in the top 1% of his peers – one of the greatest of his generation despite being unmentionable in any given year. Read here.

Investing

• Stocks ki Baat – Globus spirits– The 2nd edition of new “Stocks Ki Baat” series, talks about an Alcoholic beverage company. The company is the largest grain-based ENA manufacturer in India with a capacity of 250 Mio lts. Read here.

• MF CIOs see weak case for equity mkt next 1-2 years, recommend debt– “Our fund house applied three main criteria of corporate earnings, valuations and sentiments and while macro drivers were positive for corporate earnings, the other two factors did not portend well for the equity markets in the next couple of years,” said SBI MF’s Srinivasan. Read here.

• How to learn from others – A time comes when the teacher has to disappear and we need to be comfortable in the driving seat without any guidance. At this stage we need to be self-aware about our limitations and our style of processing ideas. Read here.

• Warren Buffet says “When I want to do something, I want to do it big” – In this video, Warren Buffett, the chairman and CEO of Berkshire Hathaway shares a wide-ranging interview with Charlie Rose about the Berkshire Hathaway he created, his friends, his values, and life at a young age of 91, compared to Charlie Munger. Watch here.

Economy

• Indians spent 11 bn minutes travelling in Uber cabs in 2022 –The year 2022 saw Indians start travelling big again, and cities swinging back open for business after the pandemic. Uber trips during the year covered as many as 4.5 billion kilometres, which is the distance from Earth all the way to Neptune. Read here.

• Central Bank watching is like an art form – Central bank actions and communications are as much as what is said as what is left unsaid. It is both reading the lines as well as reading between the lines. Read here.

CAGR Speak

• How does Inflation impact equities and various factor strategies? This can be a useful read to help us navigate the period of high inflation. Read the linkedin post here.

• Small advice firms vs large ones. Large is not necessarily credible. The reason we tend to prefer larger brands as consumers is because we feel they are more credible. In the space of personal finance, parameters which vouch for credibility can exist with smaller firms as well. Read the linkedin post 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’d 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 the web.

Index	23-Dec-22	09-Dec-22	Change (%)
Nifty 50	17,806	18,269	-2.53
Nifty 500	15,046	15,636	-3.77
Nifty Midcap 50	8,400	8,831	-4.88
Nifty Smallcap 100	9,182	10,017	-8.33

Gyaan of the week

Term Plans are Life Insurance Policies where the payout is made on the death of the insured. However, unlike hybrid Insurance – Investment products (Read: LICs, Endowment Plans, and so on), one does not get any payout if the insured survives the term of the plan.

Life Insurance like any other insurance should be taken only to protect against the risk of absence of income. If you have anything which is dependent on your earning capacity and your income, you need to protect the risk of going missing in case you pass away due to an untimely event. And hence, we find it very silly to buy 100-year term policies.

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

Personal Finance

• Needs, Wants and why We Always Feel Unfulfilled – 100+ years ago you would have been happy just to have abundant food, shelter and clothing. But our wants slowly turned into needs. Good healthcare and education were relatively rare for older generations, but today they’re necessities. And so the hamster wheel keeps spinning and we keep putting more and more needs on the wheel. Read here.

• It’s difficult to outperform the market– Just 17% of listed companies in India had market capitalization greater than 2500 Crores. Small companies, while attractive to investors for the chance to get onto the train before the long journey starts have a very high failure rate. The attraction towards these smallcaps though is massive like in a lottery, there will always be a few winners and stories of how someone made it rich keep others in the fray. Read here.

• Where Zerodha invests its cash – With our own funds, we invest in bank FDs, Government bonds, and have a long-term stock portfolio. We neither leverage (borrow to trade more) nor trade any leveraged products like F&O, which can lose more money than the capital at stake. This is to ensure there is no risk due to our treasury operations to the business. Our portfolio currently has exposure of 33 percent to bank FDs, 32% to stocks, 13% to Government Securities, 9% to tax-free bonds, and 13% to Gold bonds. Read here.

Investing

• Stocks ki Baat – Caplin Point Laboratories– In the 1st edition of Stocks Ki Baat, we talk about a Pharma company engaged in manufacturing and sourcing of APIs, finished formulations, R&D, and clinical research. The company has a unique business model, with above 80% of the sales being generated from LATAM countries. Read here.

• Analysis of Godfrey Phillips– Makes for an engaging read on the complexities of the Cigarette industry in India. Read here.

• How often is the market down in consecutive years– The last time the US stock market posted a string of bad years was in the 2000-2002 bear market when each year it fell more than the previous year. From an investor psychology standpoint, a prolonged bear market is probably more difficult to stomach than a severe crash that ends in short order. Read here.

Economy

• Grim situation of COVID in China- Dozens of hearses queued outside a Beijing crematorium on Wednesday, even as China reported no new COVID-19 deaths in its growing outbreak, sparking criticism of its virus accounting as the capital braces for a surge of cases. Read here.

• Bank of Japan shocks global markets with bond yield shift – The Bank of Japan caught markets off guard by tweaking its yield curve control policy to allow the yield on the 10-year Japanese government bond to move 50 basis points either side of its 0% target. Read here.

• Additional spending unlikely to strain fiscal math – In spite of the supplementary demands for grants, the government seems to be in a sound position on the fiscal deficit front in the current fiscal because of tax buoyancy. Read here.

• India cenbank cannot prematurely pause rate tightening cycle – MPC minutes – “A premature pause in monetary policy action would be a costly policy error at this juncture,” Governor Shaktikanta Das wrote in the minutes of the policy meeting released by the Reserve Bank of India on Wednesday. Read here

CAGR Speak

• Shruti shares her experience of being invited to judge a competition at her alma mater. Difference was, I was on the other side of the table this time. Judging 20 teams for an interesting simulation that they had been a part of. Read the linkedin post here.

• We talk about the benefits of Gold Bonds. We believe that SGB is a great way to take gold exposure. And gold can be an effective diversification tool in your portfolio. Read the linkedin post 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’d 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-Dec-22	09-Dec-22	Change (%)
Nifty 50	18,269	18,496	-1.22
Nifty 500	15,636	15,812	-1.13
Nifty Midcap 50	8,831	8,917	-0.96
Nifty Smallcap 100	10,017	9,969	0.48

Gyaan of the week

State Development Loans (SDLs) are debt securities issued by State Governments. Generally, SDLs are issued for 10-year maturity and offer higher returns than central government securities. SDLs have lesser risk than AAA corporate bonds as it is backed by Sovereign Guarantee. Please see our recommendation for SDLs if you are investing for more than 2 years.

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

Personal Finance

• When to bet big and when not to – In essence, you don’t have to be right a lot, you just have to be right about your big bets at the right time. Here, while the probabilities matter a lot, so do the consequences i.e., the amount of possible gain/loss. It is important to get that equation right. Read here.

• Moneycontrol Mutual Fund Summit. How will actively managed funds generate alpha – The entire panel said they were Overweight on financials at the moment, on the back of good earnings visibility and strong asset quality. Read here.

• Crypto: Financial Hazard or Diversification Tool? – With all the negativity generated by the crypto market’s volatility and the FTX collapse, cryptocurrencies have a serious image problem, to put it mildly. But they might be worth a closer look, according to an Enterprising Investor blog post. Their conclusion: Crypto’s low positive correlation with mutual funds and ETFs and weak correlation with traditional assets might prove useful for certain investors. Read here.

• Bonds and Fixed Income: Where’s the Hedge? – Of course, bonds and other fixed-income assets are supposed to offer diversification benefits and provide something of a cushion for when the equity component of a portfolio runs into rough times. Clearly, they are not performing these functions especially well of late. Read here.

Investing

• How to do Business Analysis of Construction Companies– Dr. Vijay Malik writes about the factors that impact the business of construction companies and the characteristics that differentiate a fundamentally strong construction company from a weak one. Read here.

• Anant Goenka’s CEAT-Zensar balancing act– Interesting read on the two RPG group companies CEAT and Zensar. Read more here.

• The case for NASDAQ Index fund investment – Nasdaq 100 is one of the most recommended and preferred destinations for Indian equity investors because they offer geographical diversification. Read here.

Economy

• India Headline inflation falls sharply, but core inflation persists- Given that monetary policy primarily tackles core inflation, the latest data shows it may be premature to say that the rate hikes delivered by the RBI so far have started having an impact. Nor is it safe to rule out a resurgence of inflation if food prices were to rise again, as they typically do during summers. Read here.

• Big enterprises are better employers – Broadly, it is evident that the wage rate is directly proportionate to the size of the company. Apparently, it would thus be much better if India has many more large companies than small-sized companies. Read here.

• Fed’s Powell says inflation battle not won, more rate hikes coming. – The Federal Reserve will deliver more interest rate hikes next year even as the economy slips towards a possible recession, Fed Chair Jerome Powell said on Wednesday, arguing that a higher cost would be paid if the U.S. central bank does not get a firmer grip on inflation. Read here

CAGR Speak

• Shruti talks about sessions for the leap.club members last week. It was enlightening to see women take time out over a weekend to learn more about their own personal finance. Read the linkedin post 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’d 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	09-Dec-22	02-Dec-22	Change (%)
Nifty 50	18,496	18,696	-1.06
Nifty 500	15,812	15,963	-0.94
Nifty Midcap 50	8,917	8,994	-0.85
Nifty Smallcap 100	9,969	10,079	-1.09

Bazaar Ki Baat – Nov 2022

In this month’s edition of “Bazaar Ki Baat”, our founders discuss in brief about what moved the market in November, how the corporates fare in Q2, the case for Target Maturity funds, and many more such interesting topics. Watch here.

Gyaan of the week

A total return Index is an index created to track capital appreciation as well as dividends. The total return index reinvests all the dividends within the company as retained earnings. The total return Index is a way to include every part of the return and not just the price index. Total return indices help show an investor’s complete return by including dividends in an investor’s return. For example, if we buy 1 unit of total return index at Rs 100 and it offers Rs 8 as a dividend. The stock has increased by 20% to Rs 120. The nominal return is 20%. By reinvesting the dividend, assuming we gained an additional Rs 2 in value. The investment is worth Rs 130. The total return is 30%.

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

Personal Finance

• FinMin allows PSUs to invest surplus cash in debt schemes of private MFs – India’s finance ministry has liberalised investment norms governing the deployment of surplus cash at state-owned companies, expanding the universe of approved debt plans beyond the current bailiwick of fixed-income investment schemes run exclusively by public-sector mutual funds. Read here.

• What is ChatGPT? – Artificial Intelligence (AI) research company OpenAI on Wednesday announced ChatGPT, a prototype dialogue-based AI chatbot capable of understanding natural language and responding in natural language. It has since taken the internet by storm and already crossed more than a million users in less than a week. Read here.

• ESIC to invest up to 15% surplus funds in stock market via ETFs – Employees’ State Insurance Corporation (ESIC) accorded approval for investments of surplus funds in equity, however, restricted to Exchanged Traded Funds (ETFs).  Read here.

• Anyone who has become rich twice is dumb–Why would you risk what you need and have for what you don’t need? If you are already rich, there is no upside to taking on a lot more risk, but there is disgrace on the downside said Warren Buffet. Read here.

Investing

• Common Critiques of Bitcoin and rebuttals to each– Bitcoin faces plenty of criticism, some justified, some easily refuted. Here we catalogue common criticisms of bitcoin, and rebuttals to each. Read here.

• Investor Safir Anand says 2023 will be a better year than 2022 – Safir’s portfolio is almost in equities and I intend to keep it that way for now. Read more here.

Economy

• India central bank says inflation battle not over, raises rates again- While there have been signs recently that price pressures may be moderating, Reserve Bank of India (RBI) Governor Shaktikanta Das said the main risk was that inflation could remain pervasive and elevated, reinforcing market views the central bank could hike rates again in coming months. Read here.

• Zerodha founder talks about UPI block money features impact on the broking industry – RBI’s announcement of allowing single block and multiple debits on UPI can potentially have some interesting outcomes for the broking industry.Read the Twitter thread here.

• RBI Governor explains the difference between UPI & CBDC. – Reserve Bank of India (RBI) governor Shaktikanta Das clarified the key differences between the Central Bank Digital Currency (CBDC) and Unified Payments Interface (UPI), saying e-rupee transactions will not have any intermediary, unlike UPI transactions. Watch here

CAGR Speak

• There is a fundamental difference between how a domestic investor views India equity returns and how a Foreign Investor looks at it. Read the linkedin post 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 enjoyed reading this issue, please consider following us here, here, and here for encouragement to keep writing this weekly newsletter.

If you have any feedback that you’d 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	02-Dec-22	25-Nov-22	Change (%)
Nifty 50	18,696	18,513	0.98
Nifty 500	15,963	15,727	1.50
Nifty Midcap 50	8,994	8,758	2.69
Nifty Smallcap 100	10,079	9,849	2.33

Market commentary – Nov 2022

November was the month of consolidation in Indian stock market. All broad-based Indian equity indices continued their rally in November. Nifty 50 index registered gains of 4.1% during November and touched its lifetime highs.

Although the bullish sentiment was widespread, smaller companies continued to lag their larger peers. The US markets also had a positive month, on the back of easing inflation and optimism surrounding a potential slowing pace of U.S. rate hikes.

Gyaan of the week

Fixed Maturity Plans are close-ended debt mutual fund schemes with a pre-defined maturity. The money is invested in debt instruments maturing in line with the scheme tenure. The tenure of an FMP can vary between a few months to a few years. They primarily invest in fixed income instruments such as a certificate of deposits, commercial paper or bonds to lock-in the interest rates available. As the securities are held till maturity, it helps to eliminate interest rate fluctuation. FMPs work well for investors who have certain goals that they would like to execute over a specific period. The downside of FMPs is that the investor’s funds get locked-in till maturity.

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

Personal Finance

• Getting Wealthy vs. Staying Wealthy – Getting money requires taking risks, being optimistic, and putting yourself out there. But keeping money requires the opposite of taking risk. It requires humility, and fear that what you’ve made can be taken away from you just as fast. Read here.

• SEBI is going hi-tech– The regulator has developed a system based on artificial intelligence (AI) that scans various stock market shows and builds a database of recommendations made, said people with direct knowledge of the matter. Read here.

• Why index? Simply put, because indexing works- The growth of indexing has been driven by the inability of active managers, in aggregate, to outperform passive benchmarks. This is not a new development — it was first reported 90 years ago. The rise of passive management is the consequence of active performance shortfalls. Read here.

Investing

• The rise and rise of Adani group – The Adani Group’s current market cap is already higher than the GDP of countries like Ukraine and Sri Lanka. Only the rapid rise in market cap of new-age Amazon, Google and Facebook come close or, back home, giants like HDFC Bank and TCS. Read here.

• Samit Vartak of SageOne Investment Managers shares his success and failures – An individual investor has the option of sitting on cash or timing it and just moving all of his or her cash into those couple of sectors. It’s a wonderful bet to play. If I was an individual investor, maybe I would do that. As a fund manager, it is a different ball game.  Read here.

Economy

• India’s capex cycle remains elusive- Increase in new investment projects seen in CMIE’s CapEx database is offset by the lack of revival in completion of announced projects. And, while central government capex spending is up, state government capex spending which is of comparable magnitude is sluggish. Read here.

• India GDP growth halves in September quarter – India’s economic growth pace halved to 6.3 per cent in July-to-September, amid rising repo rates and contraction in manufacturing output. Read here.

• Perhaps, this is one of the best set of statistics to report. Employment by listed companies crossed the 10 million mark in 2021-22. – Listed companies are the best employers and therefore, this big increase in employment by them makes a significant difference to the quality of employment in India. Read here

CAGR Speak

• Not all bank bonds are as safe as they seem. Most retail investors just assume that the call option date in bank bonds to be the same as maturity date and believe that they are getting a higher yield for a lower tenor maturity.Read the linkedin post here.

• We make a living by what we get. We make a life by what we give said Winston Churchill. A few weeks back, we conducted a session on wealth building before the alumni of DAV Public School at Kota. It was a fulfilling experience. 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 enjoyed reading this issue, please consider following us here, here and here for the encouragement to keep writing this weekly newsletter.

If you have any feedback that you’d 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 set forth on 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 on this newsletter.