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Weekly Newsletter | by 2 | on 2021-06-27 03:43
“If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.” ― Peter Lynch
News you may use
AMCs launch 60 NFOs, mobilise Rs.27K cr in 6 months
Business uptick continues, Nomura Index rises to October levels
Consumer goods momentum rises during June 1-14 over may – Unlock 2.0 Sparks 15% Growth in FMCG Sales-Active
kirana count up 28%, uptick in rural areas; cos expect demand to sustain
Demand Rebound -Oil May Hit $100/Barrel Next Year, says BofA
Domestic air traffic expected to improve by 52% in FY22: Capa – Capa India expects 80 mn passengers to fly domestically and 16 mn to fly abroad in FY22
FDI in April rises 60% to $4.4bn: Govt
FPIs Fill Up on Oil & Gas Stocks as Rising Crude Boosts Margins-Allocation of ₹5,098 cr highest in a fortnight in over a year; local funds too hike exposure
FPIs Mount Bearish Bets on Fed Taper Talk-Overseas investors’ long-to-short ratio for Nifty futures falls to 65% from the year’s high of 88.87% on May 27
Formation of New Cos Soars in FY21, with a Covid Bent – Sectors that gained prominence during pandemic, such as health, agri, sanitation, drove the surge; ease of incorporation too a factor
Group health covers’ cost up 40%
Household savings fell, debt rose as 1st wave ebbed in Q3-Deposits Shrunk for 2nd Qtr in a row after pick-up in economy
In Covid year, banks see record profit of ₹1L crore
India receives $64 billion FDI in 2020, fifth largest recipient of inflows in world: UN
India’s Wealthiest 1% Saw Their Share Inch Back To Over 40% Of Country’s Wealth
Indications of revival in economic activity as states get into unlock mode: Survey
Mergers and acquisitions (M&A), especially in the technology space, made India the fifth largest foreign direct investment (FDI) recipient in 2020, despite a 19% fall in funds flowing into greenfield projects coming up in the country, latest data released by UNCTAD showed
Moody’s cuts India growth forecast for 2021 to 9.6 per cent
NBFCs’ Vehicle Loan and MFI Collections Hit Most by Covid 2.0-BUFFERS in place to meet 2-3 months of debt obligations even if collections are nil: Ind-Ra
Payment Modes Log Sharp Volume Uptick in Signs of Revival in June-UPI sees 12.3% growth, while debit, credit card payments clock 12.7% & 18.6% in first 21 days of June
Road construction zooms 60% -1,470 km constructed in April-May, against 847 km previous year
S&P lowers FY22 growth forecast to 9.5% from 11%
Sales in Top 7 cities up 93 % Y-o-Y but down 58% sequentially -Despite Second Wave Damage, Home Sales Stay Strong in Q1
Second wave impacted 58% of Indian companies: FICCI
Silver linings coming back from Covid-Businesses Back on Recovery Track-Macro Indicators encouraging in June -Activities across sectors including auto, consumer goods, e-commerce pick up
Value Investors Don’t Need to Avoid Growth Companies. In Fact, Doing So Can Hurt Returns. Traditional value investors pick stocks that are trading below their fundamentals based on a wide variety of measures. As a result, and by definition, many dismiss growth companies altogether. But one manager believes that ignoring growth stocks out of hand is “fundamentally flawed.”
Source: (https://www.institutionalinvestor.com/article/b1sd35l7s2321d/Value-Investors-Don-t-Need-to-Avoid-Growth-Companies-In-Fact-Doing-So-Can-Hurt-Returns )
Private Equity: Is There Anything Special There?
While some private equity firms are willing to acknowledge that industry returns on average fare no better than public equities, they point out that the best-performing buyout funds continue to outperform the S&P 500. Unfortunately, for most investors this argument is basically irrelevant, as only a few can invest in the best-performing funds. Most investors, certainly most individual investors, will earn average returns, which are not attractive considering the illiquidity of the asset class.
Source: (https://alphaarchitect.com/2021/06/22/private-equity-is-there-anything-special-there/ )
Life goes in streaks and like a hitter in baseball, sometimes a money manager is seeing the ball and sometimes they’re not. If you’re managing money, you must know whether you’re cold or hot, and in my opinion when you’re cold you should be trying for bunts. You shouldn’t be swinging for the fences. You got to get back in a rhythm […] If I was down, I had not earned the right to play big and the little bets you’re talking about were simply on to tell me had I re-established a rhythm and was I starting to make hits again.
Source: (https://ensofinance.blog/2021/06/21/luck/ )
The Population Problem
A recent life event got us thinking again about a problem facing humanity that few people consider or talk about. Most of us grew up being told that the planet had an overpopulation problem, and that we were going to run out of most food and other natural resources. The population issue resulted in China enacting its 1-child policy, and books like The Population Bomb created an atmosphere of doom and gloom in the 1970s/80s. The funny thing is that these “premonitions” weren’t entirely off, and “The Population Bomb” predicted the human population growing past 6 billion people by the year 2000. In fact, this came true, however as we know, the world did not collapse, as we found new ways to feed the population, create infrastructure, and innovation actually drove the inflation-adjusted prices of raw materials lower
Source: (https://www.farrerwealth.com/blog/the-population-problem )
Early in his career Andrew Carnegie took a train to deliver a bundle of payroll checks to his crew. Riding on an open deck, a bump caused the checks to fly out of his pocket, landing near a river. The train pushed on. The checks were lost.
Carnegie knew this was catastrophic. If unpaid crews quit, you’re finished. “There was no use in disguising the fact that such a failure would ruin me,” he wrote in his autobiography. At the final destination Carnegie convinced the engineer to drive the train in reverse back to the spot where his checks flew out. He wrote: I watched the line, and on the very banks of a large stream, within a few feet of the water, I saw that package lying. I could scarcely believe my eyes. I ran down and grasped it. It was all right. The engineer and fireman were the only persons who knew of my carelessness, and I had their assurance that it would not be told. To Carnegie, the lesson wasn’t tenacity or persuasion or anything like that. It was empathy. He wrote: I have never since believed in being too hard on a young man, even if he does commit a dreadful mistake or two; and I have always tried in judging such to remember the difference it would have made in my own career but for an accident which restored to me that lost package at the edge of the stream. Every successful person has a similar story and should heed a similar takeaway.
Source:( https://www.collaborativefund.com/blog/little/ )
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