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Deepak Shenoy

15 May, 10 tweets, 2 min read

Do you have credit card debt that you don't pay back in full every month?

If you voted Yes for the above: Do you know right now, that every single purchase from day 1 of purchase, attracts interest at 3%+ per month?

Snapshot at 2:30pm: Appears that many people who "revolve" are not aware of this massive dirty behaviour by card companies. I will elaborate on this thread:

Let's say you have a credit bill of Rs. 20,100 due on May 1. And you paid Rs. 20,000. You're thinking "Oh, 3% a month but only on Rs. 100 no? I can pay"

You're in for a big surprise.

Your bill date was probably April 20. After that, you would have had some swiggy bills, some other purchases etc. on the cars. That's, say another Rs. 11,000.

You'll get charged 3% on the Rs. 100 you didn't, sure.

You'll also get charged 3% for the Rs. 11,000!

Once you have an outstanding amount left after the due date, even Rs. 1, you pay interest from the day you transacted. Even if that transaction was BEFORE the due date.

Also, any MORE transactions attract interest from day 1.

If you were unaware and bought some Rs. 9,000 worth items on May 10th. Now you have Rs. 20,100 outstanding. Each purchase is charged interest from the day you purchased it.

So on your next bill on May 20th, you'll see an interest charge of about 600 rupees.

They also add GST, so you pay nearly Rs. 800 extra. Your bill is now 21,000.

Just because you "revolved" Rs. 100.

If you can't pay on any month, please do not revolve your loans. Ask your bank - or just about any bank - for a personal loan, which will be far cheaper than this (and there's no GST on interest on a personal loan)

And get credit card balance to zero. ASAP.

Also there are startups offering loans at lower rates, and you should absolutely use these as opportunities to cut down your credit card outstanding to zero.

The purpose of a credit card "revolve" facility is to steal from you, so don't let them.

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Deepak Shenoy

@deepakshenoy

11 May

Groww buys Indiabulls MF - for a 100 cr. in cash+75 cr. in I-Don't-Know-What. This is getting really interesting!

This is likely to take time, because SEBI will go through similar process to approve a buyer as it will for a sponsor of a mutual fund. It's however a good thing. We need to get new faces. (Disclosure: Capitalmind has applied too)

Note: These figures quoted like 27% of AUM etc. are pure bullshit. Indiabulls is just about getting its money back. It has invested Rs. 170 cr. in the AMC.

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Deepak Shenoy

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5 May

The RBI policy was not much of a change today. They said banks can restructure MSME and individual loans. This just means evergreening, because banks are simply NOT reducing rates even for stressed borrowers.

If you're in trouble, banks can now say okay we'll stretch your loan for longer time. This also they don't do unless you actually default. Then, they don't cut the interest rate - even if their own borrowing costs are down.

You actually want more banks to come in now. Who don't have the legacy and who'll take over the market by offering lower rates, starting with good borrowers. So to fight, everyone will have to cut rates. You need the competition now, can't be a diktat.

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Deepak Shenoy

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4 May

Retail individual investors are the biggest player in our markets. Not FIIs, and not mutual funds. Look at the equity market (non derivative). (Thread)

45% of India's stock market volumes are from retail investors. Up from 33% in 2016.

FIIs went from 23% down to 11%. Domestic institutions at 7%.

And look at the index futures market:

Individuals do 39% of index futures. FIIs merely 15%.
Domestic institutions are 1% - Rest is mostly prop books of brokers.

In index options, prop books dominate at 39%, but retail's gone up from 22% to 32%. FIIs only 16%.

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Deepak Shenoy

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1 Feb

@capitalmind_in

The Big Massive Thread on #Budget2021 - our take at @capitalmind_in

From the economic survey: India's debt situation isn't that horrible. Total debt, which includes debt taken from abroad, is about 122% of GDP - where government debt is 70%. Remember this - because most other countries have hiher govt debt and much higher private debt.

If Covid has hit us badly - and it has, even if markets are like what is wrong with you Deepak - we will recover the fastest. It's just math, though - just getting back from a steeper fall is a higher rate.

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Deepak Shenoy

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10 Jan

Remember this?

It was made when the Dow Jones was here:

The market did correct a whopping 20%....more than a year later. The bottom point of that 20% correction was...uhm, no, let's see it:

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Deepak Shenoy

@deepakshenoy

15 Dec 20

Does Franklin get away clean after this episode? My thoughts have been with unit holders, but I think we need to speak of a SERIOUS fine for Franklin Mutual Fund for bringing this episode to this shameful end. (Thread)

First, SEBI needs to fine Franklin an entire two years of management fees on the shuttered funds. The money needs to be added back as cash to the funds immediately. This should be upwards of 300 cr. and a decent coverage for defaults if any.

Second, SEBI should appoint a different mutual fund - perhaps one that has much better debt experience, and I'm looking at you, IDFC MF, which should take over the closing down operation of all the shuttered funds immediately. Pay the appointed fund a fee from the Franklin fine.

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