Why Market is not falling!

- Many experts are giving many reasons and there is merit in most of their rationale like GDP expansion/Infra/Rise in Corp Earnings etc.
- ⁠But important factor is domestic liquidity. India almost always has high saving rate but the savings were (1/5) mostly parked in RE/Gold/FD.
- ⁠That is the reason that India rarely witness big collapse or deep correction either in RE or Gold.
- ⁠Traditionally Indians used equity as a flippant lover. Investing when markets were rising and taking money out at the slightest of trouble(2/5)

Gamification of Indian Equities
(Euphemism for growing addiction of speculation )

-Derivates started as a hedge against risk and now become a tool to take risk (how ironic ). According to Sanatan dharma -what is bad. Everything in excess!

- Derivates accounts for 99.6% (1/8) of daily traded volume.

- Derivative trades are valued at $ 4.3 trillion per day. That is Rs. 34,80,00,00,00,00,000 /- per day. GDP of India is $ USD 3.5 trillion! Daily derivative trade volumes are higher than annual GDP of India.

- Derivative markets is now 400 times(2/8)

Yaar yeh market Samajh mein nahin aata hai!

Do you understand ur spouse? Do you judge your relationship on the basis of her / his mood of every day? Though you may feel like doing it , but it can be disastrous!

Equity market is just like your spouse. Do not judge with the(1/4) happenings of every day. Just love your spouse. That’s the best thing you can do. How do show your love. By staying and standing with her/ him through good and bad days but more important staying together for life. If you can do this then you will have kids, family, (2/4)

Total unique investors in MF us 3.6 crs.

Only 50 lacs have portfolio value above Rs 5 lacs. It’s portfolio value and not investment amount.

MF is a retail product. But retail investors in MFs are as prominent as Dilip Kumar in Sholay.

MF industry need retail revolution (1/4) but currently AMCs/ Distributors or regulators do not have either understanding/desire or will to do it. The next level of growth can only come from outsiders.

The MF industry is awaiting some magic moments. Unfortunately MF is not a ‘instant gratification’ product but (2/4)

This is one more reason why active started to outperform!

- One of the most important argument given is that passive outperformed in USA.

- But real reasons are not given. In USA , in most walk of life, few organisations dominate. Unlike India which is more diverse both(1/6) culturally as well economically!

- In india in last 20 years, out of BSE 500 , 156 companies (31% of total) delivered 20% CAGR.

- In USA only 35 (just 7%) companies delivered 20% CAGR in last 20 years.

- In China only 5 and in Japan only 2 companies delivered 20% CAGR(2/6)

Har Har Mahadev (Every one is Mahadev).

This phrase / slogan is used more as a metaphor. Can you be Mahadev of your life. Life is too big a subject to talk, so I will restrict myself to business of investing!

In the great churning (buy and sale) of ocean (markets ),(1/4) search for amrit (returns) was carried out both by sur and asur (buyers and sellers).

Bhagwan Vishnu (SEBI/ Govt) provided base in form of 🐢 to Mother Earth.

Mountain( Stock exchanges) was used as shaft for churning the ocean both by sur and asur. Both wanted Amrit / (2/4)

Choosing passive funds !
1. Nifty 50
2. Nifty next 50
3. Nifty 50 Equal Weight
4. Nifty 50 Value 20
5. Nifty 100
6. Nifty Low Volatility 30
7. Nifty 200 momentum 30
8. Nifty 200 quality
9. Nifty mid cap 50
10. Nifty mid cap 100
11. Nifty mid cap 150 (1/5) 12. Nifty mid cap 150 quality
13. Nifty Alpha 50
14. Nifty psu bank
15. Nifty MNC
16. Nifty infrastructure
17. Nifty fmcg
18. Nifty India consumption
19. Nifty auto
20. Nifty IT
21. Nifty healthcare
22. Nifty Pharma
23. Nifty bank (2/5)
24. Nifty Financial Services (3/5)

Where to invest in 2023!

Debt MF
- Credit Opportunity Fund
- Corporate Bond Fund

Equity
- PSU Equity Fund
- Infrastructure Equity Fund
- Banking & Financial Services Fund
- Healthcare Funds
- Auto
- Gold and Silver

Use Safety Valve Strategy

What is on watch list (1/4) - IT Funds
- Nasdaq Funds
Will communicate when either prize correction or time correction taken place.

Avoid
- Crypto
- Stocks which rose and now fallen. It can be a value trap.
- Direct stocks and IPOs
- Trading
- Any scheme for making quick money.
(2/4)

Circa 1962

The Warren Buffet owned and managed company Berkshire was at $ 8

Year 1972

The share moved up from $ 8 to $ 80 in 10 years.

You were not lucky enough to spot the opportunity in 1962 and missed out 10 bagger.

You invested in the share at $ 80 in 1972
(1/4) In 1975 the stock was trading at $ 38.

A massive 53% drop in 3 years against 14% drop in S&P.

By year 1976 it was at $ 94

By year 1982 it was at $ 774

Currently trading at $ 4,78,675!

A 20% plus CAGR over four decades. (2/2)

Is current bull market in India ending soon!!!

The below chart from Morgan Stanley implicitly believes it’s so!

Gap between forward PE of India and EM. It’s at the highest level and at 3 standard deviation!

What will happen to Indian markets ! Only time will tell but I (1/7) offer my two paise comments on this and similar other narratives/ data!

Our inability to differentiate between cause and effect!! Here we are just looking at effect but not the cause as well!

Just look at the fixed income commentary one year back. Most experts said that (2/7)

Prashant Jain, one of the most iconic fund manager in Indian mutual fund industry has his last day in HDFC MF today. If he was born in America , he would have been touted and compared with Warrent Buffett! His track records over last 29 years is far better than WB.(1/4) But in India , ghar ki murgi daal barabar!!!

His was the longest serving fund manager not only in India but in global markets as well! His HDFC Balanced Advantage Fund which he managed for 29 years has delivered 18% compounded returns ( thought it’s a hybrid fund)!
(2/4)

Certainty/profitability/guarantee!!

I got married in Dec 94. Close relative of my wife gifted her a FD of Rs. 5k. My wife n her relative kept renewing the FD for last 27 yrs. Finally we encashed the FD yesterday.

The FD of Rs.5k grew to be encashed for Rs.40k over 27 yrs(1/4). Luckily no TDS and taxes was paid by me in IT return!

Most debt funds would have outperformed this significantly but one of my favourite fund HDFC Flexicap got launched in Jan 95

The value in this fund would have been around Rs. 5 L against the value in FD of 40 k.(2/4)

Yaar yeh market Samajh mein nahin aata hai!

Do you understand ur spouse? Do you judge your relationship on the basis of her / his mood of every day?

Equity market is just like your spouse. Do not judge with the happenings of every day. Just love your spouse. That’s the (1/4) best thing you can do. How do show your love. By staying and standing with her/ him through good and bad days but more important staying together for life long. If you can do this than you will have kids,family, companionship with highs n lows of life. But most importantly (2/4)

Myth of index investing (episode 6)

- 80% of active funds underperformed benchmark.

Let’s see the data only for large cap (I will post about other categories in coming days)

As these two pictures shows

- 47% n 67% of LC fund outperformed index funds over last 1/3 years(1/4) Against TRI the numbers look different. But right comparison should be with index funds only.

- Large cap category returns has been superior over 10 year n plus period.

- huge gap exist between index funds themselves.

Now d question is why is that from 2015 onwards LC (2/4)

Myth of index investing (episode 4)

20 years data

20 year nifty 50 TRI. 15.85% CAGR

Average of index funds 14.94% CAGR

Avg underperformance 0.91% CAGR
(Compounded over 20 years)

Number of index fund underperformed 100% (1/4) Value of Rs 1 lac invested in TRI. 19 lacs

Value in index funds. 16 lacs

Underperformance on 1 lac. 3 lacs

Now active funds

No. of funds with 20 yr history. 40

Nifty 500 TRI. 17.32% CAGR

Nifty 50 TRi. 15.85% CAGR (2/4)

What is wrong with index funds and ETFs but no one talk!!!

Here are the numbers!!!

Fall from recent highs

Nifty ETFs

- one ETF down -13.3%
- other one down -19.9%

Nifty Index Funds

- One is down -14.1%
- other is down -22.4%
(1/4) Sensex ETFs

- One is down -13.9%
- other is down -22%

Sensex Index Fund

- one is down -14%
- other is down -22.3%

Healthcare ETFs

- One is down -14.11%
- other is down -16.8%

IT ETFs

- one is down -18.2%
- another is down -24.2%
(2/4)

*Let this sink in!*

Reliance Industry Ltd made profit of Rs.1.53 Cr in year 1973.

In quarter of Jan-Mar 2022, it made PAT of Rs.11,094 crs. This translates into hourly profit of Rs. 5 Cr every hour.

This is what can happens in once life time!!!

During last 50 years the(1/6) company’s leadership/ credentials/ business plans/ strategy/ business model/ financial abilities etc got questioned and got tested.

The founder of the company had paralytic attack/ died/ brothers took over / brother splitted. V P Singh ran a campaign along with Indian (2/6)

Performance of the schemes of Axis MF.

Scheme 1 year 3 yrs 5 yrs 10 yrs

Bluechip 4.56 12.94 13.49 14.96

Nifty. 11.45 12.25 12.05 12.41

LTEF. 1.31 12.56 11.90 17.42

Nifty500 13.15 14.05 11.53 13.30
(1/6) Flexi cap 7.42 14.15

Nifty 500. 13.15. 14.05

Axis focused 1.77 12.75 11.69

Nifty. 11.45 12.25 12.05

Mid cap 12.06 20.79 16.89 19.78

Mid 100 16.01 18.12 9.62 14.74

Except one year in all other time period the performance is (2/6)

In search of multi baggers!! Is 1000 times enough!!!

Many investors are searching for multi-bagger and they believe this is the surest way to create wealth and become super rich. This is like someone is searching for miraculous health. @AashishPS @NileshShah68 @amfiindia The most honest answer to such search is a very disciplined lifestyle. Nothing more and nothing less. But u will not get a fan following saying this. But instead if you talk about a fab 6 pack body in a few week/ alternate diet plans (which in long term does more harm than good)

Sensex at 53000 or at 80000 or much much higher!

Just see for the first time ever amazing data about Indian Equity Markets.

1. BSE completed 40 yrs
2. There were around 10,000 trading days in last 40 yrs
3. Observations on regular basis n positive n negative returns occurrences Frequency Positive Negative

Daily 53% time 47% time
Weekly 56% time 44% time
Monthly 61% time 39% time
Quarterly 64% time 36% time
Yearly 72% time 28% time

This is what few experts looked and have spoken around a year back!

Social media is filled with this kind of negativity. One of the most important thing I have learned is dat all (professionals/experts/participants/investors) get wrong n right about almost all the asset category How does than one become more successful at investing!

It’s not the question of being right or wrong which all will get in equal measures but how big you get when you get it right and how small you bet when you get it wrong. @_nirajshah @BloombergQuint @ActusDei @livemint