Sahil Kapoor Profile picture
Investor 🧘🏽‍♂️, Bookworm 📚, Gymrat 💪 Contemplative, Eclectic, Omnilegent. Disciple of Discipline. All views are personal, not endorsements.
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Apr 5 10 tweets 5 min read
Over the past few editions #DSPNetra has highlighted a number of indicators which depict an 'unsettling calm' in stock markets.

Here is a thread 🧵putting all the indicators together.
Read on: 1. Eight Years of Calm Rivals 1980s Low Volatility Era

BSE Sensex Index has now gone for almost 8 years without a bear market.

Defining a bear market:
One of the ways to define a bear markets is a decline of more than 20% and a time period of more than one year to regain previous highs. COVID decline was much deeper but the markets recovered in about 9 months to reclaim all time highs. This made sure that participants avoided the long-drawn periods of pain when stocks don’t deliver returns.

The previous period of such a stable and smooth market was way back in 1980s. Volatility moves in clusters and current cluster of low volatility would likely give way to higher volatility. We don’t know when or why, though. But history tends to rhyme more often.Image
Dec 27, 2023 8 tweets 9 min read
I read a bunch of books in 2023.
Here is a thread 🧵 on 'Book Bundles.

Book Bundles?
These collections, if read together, can help build a broader view on the topic.

This is my current understanding and there is a vast ocean that I would have definitely missed.

Take a read The workings of the brain

A few key lessons:
1. Your brain does not react—it predicts. Contrary to how we think about the brain as a reactive machine, it is actually a prediction machine. Our world view is because we make our own reality, literally, in our own brain.

2. It takes more than one human brain to create a human mind. Our brains are incomplete for a reason. Infants come with an incomplete brain and complete it by learning from the society. The age bracket of 5 to 8 years is the best time for brain plasticity ( debatable, but broaderly accepted).

3. Words can have a powerful effect on your body. Many species, including humans, regulate one other’s nervous systems. Ants, bees, and other insects do this using chemicals such as pheromones. Humans are unique in the animal kingdom, however, because we also regulate each other with words. A kind word may calm you, as when a friend gives you a compliment at the end of a hard day.

These books can help you learn a great deal about the 3 pound magic called the 'Brain'.

Book list

1. "Seven and a Half Lessons About the Brain" by Lisa Feldman Barrett.

2. SELF COMES TO MIND: Constructing the conscious Brain by Antonio Damasio

3. "Livewired: The Inside Story of the Ever-Changing Brain" by David Eagleman

4. "How Emotions Are Made: The Secret Life of the Brain" by Lisa Feldman Barrett.

Understanding Our Mind by Thich Nhat Hahn is another great read which I read years ago and presents a different angle.Image
Apr 26, 2023 9 tweets 3 min read
I have used the ICE BofAML Move Index across various publications. It has been one of the most important indicators, especailly in 2023.

Here is short thread 🧵on what it is: Image MOVE is widely used as a benchmark for measuring the level of risk in the US Treasury market. Higher MOVE readings generally indicate higher levels of market uncertainty or volatility, while lower readings indicate lower levels of market volatility.

How is it calculated? Read on
Mar 30, 2023 8 tweets 3 min read
"I believe that learning how to think about how to eat, learning to understand what makes us fat and diabetic, means implicitly learning what to cook, how to order in a restaurant, and how to shop at the supermarket."

"The Case for Keto" by Gary Taubes Image Image
Jan 20, 2023 5 tweets 2 min read
US Crude Oil inventory rebuild has begun. Stocks now well within the historical range. Image US Oil production also now at post COVID peak of 12.2mbpd. Sitll 900,00 bpd below the peak achieved in March 2020. Image
Nov 21, 2022 6 tweets 1 min read
5 'Health Hacks' I use

Lift weights for keeping your body fit and to age slower; eat high protein, high fat diet or the one that suits your lifestyle; run/cardio for endurance and longetivity

Try to sleep and wake up at the same time everyday. Identify your circadian rhythm and synch with it. Don't allow yourself a casual miss and extra '10 mins' of sleep. Find a day everyweek to sleep 10 hours at a stretch.

Nov 18, 2022 18 tweets 4 min read
India's trade deficit has clocked $24.8 Bn a month in FY23 so far. At this rate, the FY23 full year deficit can reach $298 Bn or ~8.5% of GDP.

FY13 recorded the highest trade deficit ($190Bn) ever at 10.4% of GDP. A crisis year.

What's ailing the foreign trade? A thread 🧵 This is how India's trade balance has moved over the years. See image
Nov 6, 2022 12 tweets 4 min read
Some of my favourite videos. Adding in this thread 🧵to watch them again when I have to.

1. The paradox of choice by Barry Schwartz
2. Toasmasters 2015 World Champion: 'The Power of Words' Mohammed Qahtani

Aug 22, 2022 9 tweets 2 min read
India's services exports. A thread 🧵

In FY22 India's Net services exports clocked a surplus of $107Bn. A record.

But India's IT, Telecom & Computer exports were $111Bn alone.

Learn what dragged this surplus and why is it set to change. Gross inflow of Services trade in FY22 were $254Bn.
This number has grown at 6% since FY12 when it clocked $140bn

On a Net basis (Exports - Imports) India's services trade is at +$107bn.

What constitutes India Services trade?
Aug 19, 2022 4 tweets 1 min read
Bad data and news from US, EU could lead to a correction in global stocks.

This can lead to a correction in Indian stocks. A dip could be another opportunity to add equity exposure in this multi year bull market in India.

Be mindful of valuations, earnings and the trend. This phase could witness
-Falling stocks, commodities and USD
-A recovery in bonds, which means, lower long bond yields.

If this setup plays out, it could be one of the best bull market correction entries.
Aug 17, 2022 4 tweets 1 min read
India imported 27.5 Million Tons (MT)/ $21Bn of Petroleum crude & products (POL) in Jun'22. The average price of import was $105.

Exports of POL were 12 MT / $10.6Bn, a record high.

In July the Govt imposed export duty. This led to a decline of $4bn in POL export earnings.
India used to export less than 5 MT of POL prior to the Russia Ukraine war. The new O&G markets opened this window of POL exports.

This also means that India's Oil imports are slightly elevated at this time. This distorts import cover calculations as well.
Jul 14, 2022 6 tweets 2 min read
The Coming Collapse of Inflation and How To Benefit From It

@ankitapathak_ and I wrote a note on why red hot inflation is likely to cool.

Read this intro thread 🧵with the link to full report. What Are We Saying?

1. Biggest driver of inflation – commodity prices – are falling. US Housing, the core inflationary component is red hot. This is likely to cool off and mean revert.
Jun 12, 2022 13 tweets 4 min read
A 🧵
India Crude basket is now above $100.
For the first time since FY14, it has exceeded $100 mark YTD.

But here is a thread which tells you how India's Energy Worries are tapering over the years.

Few talk about long term boring changes.
Here is a take on one such change. Indian economic growth is becoming more broad based. It's now emerging as a dominant part of BRIC while others struggle.

Ex of China (because of poor investment returns), Indian economy is now as large as Brazil + Russia combined from being 1/3rd less than a decade ago.
May 12, 2022 11 tweets 2 min read
Bank Nifty (LTP 33,532) is headed higher, much higher.

Here are the reasons why Banks could be one of the best performers ahead. A quick thread 🧵 1. Credit growth in India is improving at a fast pace.
From the lows of under 6% yoy last year, banking credit growth is now at 11% yoy and is likely improving further.

In FY23, we might reach early teens for Credit growth nos.
Apr 26, 2022 16 tweets 3 min read
The best time to buy Indian stocks is when an external crisis roils the market.

In hindsight, US Recessions have been a good time to buy Indian stocks. But it's not easy to have the courage to do it.

What's the next best time?
Read this thread 🧵 to know. Spend sometime on the attached image. Note the following:

1. The US 10-2 yr Bond yield curve has been adjusted for crude oil prices. Oil spikes invert the curve faster and signals a slowdown.

2. For India (large oil importer) this is a better indicator of stress.
Apr 21, 2022 17 tweets 4 min read
A message from commodity futures market.
A thread🧵

Why commodity futures curves have begun to lose backwardation in spite of such a massive supply shock due?

What message is it sending? Read on... To understand this, it's important to know the term structure of the commodity futures market.

Commodities require storage. Buyer of any commodity has to pay storage cost (cost of carry) to hold the commodity in physical form. The futures market replicates this cost.
Apr 13, 2022 24 tweets 4 min read
India inflation touched 6.95% yesterday. Here is the inflation X-ray, a deeper look at the data.

A thread 🧵 The breakup of India's Consumer Price Index or Consumer Inflation:

Food and beverages 45.9%
Pan, Tobacco and Intoxicants 2.4%
Clothing and Footwear 6.5%
Fuels And Lighting 6.8%
Miscellaneous 28.3%

The above makes up the CPI basket.
Apr 6, 2022 18 tweets 5 min read
What does Fed rate hike, balance sheet run-off and yield curve inversion mean for markets?

A thread 🧵

This topic is likely to dominate the narrative for next few months. Read along and share your views. The US Federal Reserve raised the Fed funds rates by 25bps in March 2022 and is set to raise it further. It is using communication as a tool.

Fed governors are indicating bigger (50bps) hikes and that too many times over.

Why is Fed raising rates?

Read on
Mar 25, 2022 16 tweets 3 min read
Why there is a case of cyclical recovery in Indian economy? A thread🧵

The flow of financial resources to commercial sector & the economy is a very important indicator to gauge the health of economic growth.

Here is a what the data is saying. Read slowly. It's a complex topic In FY20 India's Nominal GDP (NGDP) (in INR) was Rs. 200 trillion (Lakh Crores).

Assume Rs. 200 trn as India's GDP. Each year Indian economy grows by some %.

Assume that in a year Indian NGDP has to grow by 10%. So Rs. 200 trn will become Rs. 220 trn.

An addition of Rs. 20trn
Mar 21, 2022 12 tweets 3 min read
Why and when the markets stopped caring about the Russia-Ukraine conflict? A short thread🧵

The news coming in from Ukraine remains concerning with huge losses and humanitarian crisis.

But for the last 10 days the markets seems to 'Not Care' and react to the news.

Read why Markets become very jittery if they can sense a large financial panic because of an external event.

One gauge to measure what the market is pricing-in is the funding stress indicator.

For instance, the FRA-OIS spread in US measures the funding stress in interbank markets.
Mar 14, 2022 18 tweets 3 min read
India’s Twin Deficits: Is there a case for a stronger Rupee?🧵

With Oil on boil and inflation running hot it's utopian to think that INR can strengthen. Or is it?

The short term is likely to be driven by the confluence of events.

But what's ahead, over a long period?

Read on Indian Rupee traded between 12 to 13 to the US Dollar between 1984 - 1987 before the cracks in the economy emerged.

Indian economy went through an economic crisis in 1991. The situation deteriorated so much that India had FX reserves of just three weeks' worth of imports.