CAGR Insights – 20 Apr 2024

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

Index19-Apr-2412-Apr-24Change
Nifty 5022,15022,516-1.63%
Nifty 50020,38620,751-1.76%
Nifty Midcap 50 13,59314,052-3.27%
Nifty Smallcap 10016,26316,509-1.49%

Chart Ki Baat

Image

Chart courtesy – Goldman Sachs

Gyaan Ki Baat

Gross Domestic Product (GDP) per capita is a widely used measure of a country’s economic performance. It represents the average income generated per person in a nation within a specific time frame, typically a year. Calculated by dividing the total GDP of a country by its population, GDP per capita provides insights into the standard of living and economic well-being of individuals within a country. Higher GDP per capita generally indicates greater economic prosperity, access to goods and services, and overall quality of life. It serves as a key indicator for policymakers, economists, and analysts assessing a country’s economic development and growth trajectory.

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

Personal Finance

  • Household Financial Concerns and Savings Decline in India – Household debt in India has surged to 40% of GDP. Financial stability reports highlight declining savings and increasing liabilities, signaling long-term economic challenges. Read here

  • India’s Growth Story: A Conversation with Mr. Sunil Singhania, CFA – The CFA Society India podcast features an insightful discussion on India’s growth story and parallels with China, emphasizing the nation’s potential as a global investment destination and the role of government policies and reforms in driving economic development and manufacturing growth. Watch

Investing

  • The Indispensability of Risk: Lessons from Chess, Investing, and Life – The memo draws parallels between risk-taking in investing and strategic decision-making in chess, emphasizing the indispensability of risk for potential rewards, but also cautioning against excessive risk without careful consideration. Read here

  • Affordable Housing at All-Time Low as Luxury Home Sales Surge – The article highlights a concerning trend in the Indian real estate market, where the share of affordable housing has hit an all-time low in Q1 2024, while luxury home sales are on the rise, particularly in the Delhi-NCR region particularly in the Delhi-NCR region. Read here

  • GIFT City: Transforming India’s Financial Landscape – The Gujarat International Finance Tec-City (GIFT City) IFSC is emerging as a successful hub for offshore financial transactions, bolstering India’s vision of becoming a global financial and technology hub, with unified regulation and a focus on asset management, offering advantages like cost-effectiveness and a simplified registration process for funds and fund managers. Read here

  • Monetary Policy Review: RBI’s Stance and Market Perspectives – The Monetary Policy Review for April 2024 by the RBI highlighted global risks but emphasized India’s strong macroeconomic fundamentals, reassuring investors and focusing on liquidity provision and financial stability, while cautioning about reinvestment risk in fixed income markets. Read here

Economy                                                                                                              

  • Oil Prices Fluctuate as Iranian Media Downplays Israeli Strikes – Oil prices initially surged above $90 a barrel on concerns over potential conflict in the Middle East following Israeli strikes, but pared gains as Iranian media downplayed the impact, with traders wary of supply risks amid escalating tensions. Read here

  • Morgan Stanley: No Rate Cuts Expected in India Amid Strong Growth Trends – Morgan Stanley predicts no rate cuts in India due to strong domestic growth trends and a change in the U.S. Fed rate path, expecting the key policy rate to remain steady at 6.5%.Read here

  • Fed Rate Hikes: Spurring US Economic Boom? – Some on Wall Street are suggesting that recent interest rate hikes in the US might actually be boosting the economy by providing Americans with increased income from bond investments and savings, contrary to traditional economic beliefs. Read here

  • Exploring the Semiconductor Industry – Insights into the global semiconductor industry, its value chain, market share, and India’s emerging role in semiconductor manufacturing. Read here

  • India Implements Measures to Meet Rising Electricity Demand – India mandates operation of underutilized gas-based power plants and extends operations of imported coal-based plants to meet rising electricity demand during the hot summer months. Read here

****

CAGRwealth smallcase portfolios

Both our smallcase portfolios are ranking well in the smallcase universe in terms of 1 year returns.

  • CFF (launched in June 2022) – Ranked among Top 20 smallcase with medium volatility.
  • CVM (launched in May 2022)  – Ranked among Top 40 across the smallcase universe.

Do check it out here.

****
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 – 28 Mar 2024

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

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

Chart Ki Baat

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

Image

Gyaan Ki Baat

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

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

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

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

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

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

Personal Finance

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

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

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

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

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

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

Investing

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

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

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

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

Economy

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

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

****

Check out CAGRwealth smallcase portfolios here.

****
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 – 22 Mar 2024

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

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

Gyaan Ki Baat

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

Image

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

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

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

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

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

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

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

Personal Finance

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

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

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

Investing

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

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

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

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

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

Economy

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

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

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

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

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

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

****

Check out CAGRwealth smallcase portfolios here.

****
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 – 01 Mar 2024

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

Index01-Mar-2423-Feb-24Change
Nifty 5022,33922,2130.57%
Nifty 50020,35020,3140.18%
Nifty Midcap 50 13,89814,062-1.17%
Nifty Smallcap 10016,05916,175-0.72%

Chart Ki Baat

Image

Note: NSE and BSE are conducting two special trading sessions tomorrow (02 Mar 2024).
Session 1: 9:15 AM to 10 AM
Session 2: 11:30 AM to 12:30 PM. (This is for FYI please)

Gyaan Ki Baat

“Legendary Warren Buffett’s Investing Rules”

Rule 1 : Never lose Money.
Rule 2 : Never forget rule no 1.
Rule 3 : Pick Businesses , Not Stocks : Looks for companies with strong history, dominant market position, and high profits. A good investment is one with growth potential and trading below its true value.
Rule 4 : A wonderful company at Fair Price vs a fair company at wonderful price : Buffett is a value investor who likes to buy quality stocks at reasonable if not rock bottom prices. His goal is to build a portfolio of stocks that will reward him with profits and capital appreciation in years to come.
Rule 5 : Our Favorite Holding Period Is Forever : Warren Buffet is the ultimate exponent of a buy-and-hold philosophy.
Rule 6 : Be Willing to Be Different : Don’t follow the pack. You want to follow popular opinion because you can’t know how or from where those opinions derive. They could often be without any real basis. Buffett has suggested following your own gut instincts if you’re going to trust any gut instincts at all.
Rule 7 : Avoid credit card debt : According to Warren-“The two biggest weak links because of which people fail are liquor and leverage – leverage being borrowed money.”
Rule 8 : Invest in What You Understand: Don’t place your money in an area where you’re “incompetent,” at least until you become competent.  Confine yourselves to businesses that you understand.

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

Personal Finance

  • History’s Whimsical Pace – Historical anecdotes offer intriguing perspectives on the passage of time and human achievement. Read here.

  • A Cautionary Tale in Fintech – The Paytm-RBI conflict sheds light on the delicate balance between innovation and regulatory oversight in the fintech sector. Read here.

  • The Key to Microcap Investing Success – Emphasizing the importance of patience and building relationships in microcap investing, advocating for thorough due diligence over rushed decisions. Read here.

Investing

  • Six-Point Checklist for Evaluating Index Funds – Unveiling the 6 Key Traits of Best-in-Class Index Funds for Smart Investment Decisions. Read here.

  • Navigating Uncertainty with the Margin of Safety – The Amgen case study highlights the importance of considering the margin of safety in investing decisions, as the company’s history of success was not entirely predictable, and minor assumptions can significantly impact future returns. Read here.

  • Charlie Munger: Berkshire’s Guiding Force – Warren Buffett reflects on Charlie Munger’s pivotal role in shaping Berkshire Hathaway and outlines the company’s modest yet steady aspirations for the future. Read here.

  • Unveiling the Power of Network Effects – Understanding the significance of network effects in driving exponential growth and profitability for companies across various sectors, while also acknowledging the associated risks and challenges. Read here.

  • Assessing the NASDAQ’s Reflexive Bubble – Examining the potential reflexivity of the NASDAQ index amidst the rise of passive investing and the concentration of technology stocks, questioning the sustainability of current valuations in light of evolving market dynamics. Read here.

  • Deciphering India’s Yield Curve Dynamics – Examining the implications of India’s evolving yield curve amid macro-economic transformation, emphasizing the importance of considering reinvestment risk and adjusting investment strategies accordingly. Read here.

  • Sebi Mandates Enhanced Investor Safeguards – Sebi directs mutual funds to implement investor protection measures for smallcap and midcap funds amid concerns of market froth and potential risks during downturns. Read here.

  • Ignoring Short-Term Noise for Long-Term Gains in the Stock Market – The S&P 500 has seen remarkable highs, but also significant lows, demonstrating the volatility and unpredictability of the stock market over time. Read here.

Economy

  • Fading Fear of Inflation Paves the Way for Rate Cuts – The market’s belief in upcoming rate cuts by the US Federal Reserve is evident through two charts, indicating a shift from inflation fears to expectations of falling rates. Read here.

  • India’s Tourism Potential – India’s tourism sector sees significant growth potential, boosted by government initiatives, technological advancements, and rising domestic and international interest, poised for further expansion in the coming years. Read here.

  • A $10 Trillion Market Cap by 2030 – Mahesh Nandurkar, Jefferies’ Head of Equity India Research, predicts India will be the third-largest economy by 2027, with a market cap of $10 trillion by 2030, driven by continued reforms and a GDP expected to surpass that of Japan and Germany. Read here.

****

Check out CAGRwealth smallcase portfolios here.

****
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.