Category: CAGR Insights – weekly newsletter curated by Kshitiz

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

Index	19-Jan-24	12-Jan-24	Change
Nifty 50	21,639	21,908	-1.23%
Nifty 500	19,615	19,752	-0.70%
Nifty Midcap 50	13,473	13,355	0.88%
Nifty Smallcap 100	15,482	15,539	-0.36%

Chart Ki Baat

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

Index	29-Dec-23	22-Dec-23	Change
Nifty 50	21,731	21,331	1.88%
Nifty 500	19,429	19,038	2.05%
Nifty Midcap 50	13,145	12,827	2.48%
Nifty Smallcap 100	15,144	14,827	2.14%

Chart Ki Baat

Gyaan Ki Baat

Predictions are exciting to know but futile to make any decisions. See this for yourself – 

Nifty predictions for 2023:

– ICICI Direct: 21,400

– CLSA: 20,185

– BofA Securities: 20,000 (bull target)

– Emkay Global Financial Services: 19,500

– Morgan Stanley: 20,600

– Jefferies: 17000-19500

– Nomura: 19,030

– BNP Paribas: 19,650

– Axis Securities: 20,400

– Kotak Securities: 18,717

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

Personal Finance

• Level Up Your Life – The article reflects on the symbolic nature of the New Year, drawing inspiration from Stoic philosophy, and proposes habits for self-improvement in 2024. Read here.

• Proposed changes in traditional life insurance – IRDA proposes changes to traditional life insurance surrender costs, suggesting a threshold premium to mitigate high surrender charges, eliciting industry pushback. Read here.

• A comprehensive year-end financial planning checklist – A checklist that helps assess and align assets and liabilities, optimize asset allocation, review retirement goals, execute tax planning, and refine estate planning for a disciplined financial strategy. Read here.

• Beyond wealth – The story reflects on the limitations of money, illustrating how it can influence aspects like health and freedom but cannot replace the intrinsic value of purpose and love in defining one’s self-worth. Read here.

Investing

• Barbell strategy and Drawdowns – Drawdowns, or portfolio losses from peak to trough, are intrinsic to investing, with a barbell approach balancing safe assets and riskier factor investments reduces the drawdown impact. Read here.

• Rethinking Market Classification – SEBI is urged to widen the definitions for large and mid-cap stocks due to market dynamics and increased mutual fund inflows to accommodate a larger number of stocks. Read here.

• Indian Equities:  FPI holdings – FPI holdings in Indian equities hit a 10-year low as of November 2023, raising expectations of a potential rally in large caps. Read here.

Economy

• The Fed’s Potential Rate Cuts – Insights on Global Economy and Investment Opportunities for 2024, Emphasizing Bull Markets in Emerging Markets, Commodities, and Japan. Read here.

• Diversification vs Diworsification Dilemma – The increasing reliance on non-core businesses for revenue in various industries, carries both success stories and cautionary tales, emphasizing the need for careful evaluation of diversification strategies. Read here.

• The Evolution and Challenges of Christmas Trees – The US Christmas tree industry faces challenges with shrinking supplies and rising popularity of artificial trees which pose environmental concerns and potential long-term impacts on the real tree market. Read here.

• Global Bond Index: India’s Inclusion – India’s inclusion in the JP Morgan GBI-EM index may bring positive inflows, but the impact on benchmark yields in 2024 is expected to be limited. Read here.

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Check out CAGRwealth smallcase portfolios here.

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

Index	15-Dec-23	08-Dec-23	Change
Nifty 50	21,457	20,969	2.32%
Nifty 500	19,145	18,704	2.36%
Nifty Midcap 50	13,029	12,624	3.21%
Nifty Smallcap 100	14,886	14,404	3.35%

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

Index	08-Dec-23	01-Dec-23	Change
Nifty 50	20,969	20,268	3.46%
Nifty 500	18,704	18,115	3.25%
Nifty Midcap 50	12,624	12,335	2.35%
Nifty Smallcap 100	14,404	14,239	1.16%

Chart Ki Baat
The Tale of US and Indian markets

Courtesy: DSP AMC

Gyaan Ki Baat

The Crown Jewel Defense is a takeover defense strategy where a target company seeks to prevent a hostile takeover by divesting itself of its most valuable assets, known as the “crown jewels.” The target company makes itself less attractive to the acquiring company.

This defensive manoeuvre is designed to protect shareholder value and retain control over critical elements that contribute significantly to the company’s financial strength and competitive advantage. The success of the Crown Jewel Defense depends upon the significance of the divested assets.

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

Personal Finance

• Interview with Prashant Jain – This interview discusses Prashant Jaini’s views on balancing conviction and rigidity, his evolution as a money manager and a small event that changed his life. .Read here.
  
  
• Interview with Mohnish Pabrai – This interview revolves around Monish Pabrai’s views on success, how he dealt with the Global Financial crisis and what role does money play in his idea of a successful human being. Read here.
  
  
• CRISIL’s monthly indicator of food plate cost – The average cost of preparing a thali at home is calculated based on input prices prevailing in north, south, east and west India.Read here.
  
  
• Case for a higher debt allocation over the next 12-18 months – Although bonds are typically thought of as an asset class that offers stability over a longer time horizon, debt has actually outperformed other asset classes throughout the era of extreme/long interest rate rises and tight financial conditions. Read here.

Investing

• The tale of two markets – In US, the stock market has become increasingly concentrated in the hands of the top 7 firms accounting for a substantial portion of the overall market capitalization. In India, the situation is opposite. The broader small and midcap stocks have outperformed the Large caps by a huge margin. Read here.
  
  
• Indian banks have emerged as a global beacon of stability and growth – A recent report from Moody’s has also highlighted the strength of the Indian Banks amid a negative outlook for the global banking sector in 2024. Read here.
  
  
• US examined Hindenburg allegations before giving loan to Adani – The US government extended Indian billionaire Gautam Adani’s company as much as $553 million for a container facility in Sri Lanka after concluding that short-seller Hindenburg Research’s accusations of corporate fraud against him were unfounded .Read here.
  
  
• Indian Central Bank keeps rate unchanged – The repo rate was kept unchanged at 6.5%, as widely expected. Read here.
  
  
• India Inc.’s corporate landscape in Q2-FY24 – India Inc. demonstrated increased profitability even as sales growth slowed. The main driving factor for this increase in margin was the decline in commodity prices. Read here.

Economy

• Bollywood’s Resurrection -The tremendous success of Paathan and Jaawan has revived considerable optimism for Bollywood films that has had a string of dismal years.. Read here.
  
  
• Story of Namma Yatri – For a single day, Uber and Ola were prohibited from operating in Bangalore while the courts worked to control their pricing strategies – this was the official launch of the Namma Yatri app. This article goes into depth of the journey for creating such an app. Read here.
  
  
• Trends in general government subsidies – Over the past ten years, there have been significant shifts in the pattern, with the phase-out of petroleum subsidies and the increased prominence of food and fertilizer subsidies. Read here.
  
  
• US public debt concerns – Downgrades of US credit ratings underscore another consequence of the sharp increase in interest rates: apprehension over the government’s capacity to sustain sustainable public finances over the long haul.Read here.
  
  
• Nigeria is taking a gamble on solar power – This video delves into the bet Nigeria is taking on solar power since the sudden end of its fuel subsidies. If it works in their favour, it will become the first example of a distributed off grid solar at a great scale level. Watch here.

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Check out CAGRwealth smallcase portfolios here.

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That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.