The WeekendInvesting Newsletter

Another brand new initiative from our Research Desk is The WeekendInvesting Newsletter. This is a daily newsletter that summarizes all the stories we cover during the day(market nuggets), including the daily byte that we shoot every evening. This newsletter will be delivered to your email every evening on market days, providing you with a wealth of market-related information. The newsletter includes both summaries and long-form blogs for all the market nuggets covered. These blogs are also linked to the videos we shoot, so you can choose to watch or read the content according to your preference.

Check out our past newsletters.

From the Research Desk of WeekendInvesting

Japanese Blood Bath!

Recently, the Japanese market experienced a significant correction. The Nikkei 225 index, which bottomed at around 16,000 during the Covid-19 pandemic, surged to nearly 30,000 by 2021 and 2022. It then fluctuated between 28,000 and 30,000 before rapidly climbing to 42,000. However, this growth . . . .

Best times to enter the markets

A fascinating analysis on the rate of change in the CNX 500 index provides valuable insights for investors. The study shows that the best times to buy into the index are when . . . .

Market crashes and Investor behavior

When panic hits the market, it often spreads quickly. Japan is experiencing a significant market drop, similar to historical drops seen over the last 50 years. This time, the drop is nearing 25%, which is substantial. In comparison, India has not fallen to this extent. Typically, such large drops consolidate . . . .

Don’t lose sight of the long term path 

Despite the current gloom and doom in the market, it’s important to keep an eye on the long-term projections for our economy. A chart from Value Quest, presented by Deserve, shows some promising data. In just three years, it’s projected that India could . . . .

CEO forecasting is also no good !

There is an interesting correlation between business confidence and market performance. According to Brian Feroldi, the business confidence expectations for the next six months have been at their lowest points during significant market downturns. This has happened in . . . .

India stands tall

A recent chart from Vlad Bastion Research reveals the three-year returns on different countries’ markets from August 2021 to August 2023. This data gives us a clear view of how various countries have performed during this period. The best-performing countries are . . . .

USD ETF returns 2024

A recent chart from Charlie Billelo shows a remarkable performance by India in USD terms. Among various ETFs normalized in US dollar terms, India has climbed to the third position, showcasing a year-to-date return of 12.4% for 2024. This is a significant improvement, highlighting India’s strong . . . .

How Fed has reacted in past emergencies

Throughout history, the Federal Reserve has stepped in with emergency rate cuts during times of crisis. These emergency measures are often taken when the market is in a free fall to provide liquidity and stabilize the economy. For example, during the COVID-19 pandemic, the Fed made . . . .

VIX Spike History

The VIX, also known as the Volatility Index, measures market volatility and is often referred to as the “fear gauge” of the market. Recently, the VIX has seen a significant spike, with an 88% . . . .

No stopping INDIA markets

The journey of the Nifty Index from 1,000 to nearly 25,000 is a testament to the resilience of the market. Over the years, the market has faced numerous challenges, from the Asian Financial Crisis and the dot-com bubble to the Kargil War, global financial crisis, and more recent events like the COVID-19 pandemic. Despite these setbacks . . . .

WeekendInvesting Specials !

Best PSU Funds for you

Masterclass on Correction

Markets this week

This week was marked by volatility, fear, and a relatively strong performance by the Indian market compared to the rest of the world. The week started with turbulence, particularly from Japan, with the carry trade unwinding scare due to a potential increase in Japanese interest rates. With US interest rates pointing downward, the carry trade—where investors borrow in yen to invest overseas—became less profitable, forcing many to unwind their positions, which led to losses in hedging positions. Despite initial fears of a global collapse, JP Morgan indicated that 75% of carry trades have been unwound, and things are gradually returning to normalcy. By the end of the week, the damage was limited, although there was a steep fall midweek.

The market began the week with a slight decline on the first day, followed by a complete bloodbath on Tuesday. While the market hasn’t fully or even halfway recovered from this fall, the last three sessions of the week suggest increasing stability, especially Friday, which saw a very narrow trading range. To truly come out of this downturn, the market needs to cover the gaps from earlier in the week. However, as long as the market doesn’t break below the recent low, there is a good chance of consolidation going forward. The weekly candle closed green, which is a positive sign, along with the fact that it did not close below the two-week candle, and closed near the higher end of the candle. These indicators suggest that the market has a strong desire to move upward, though only time will tell if it succeeds.

Benchmark Indices & WeekendInvesting Overview

In terms of benchmarks, most indices were in the red this week. The Nifty 50 lost 1.4%, the CNX 200 lost 1.3%, and the Nifty Next 50 was the least affected, with a loss of 0.8%. The CNX 500 lost 1.4%, mid and small caps were down 1.7%, and the Small Cap 250 index suffered the most, losing 1.9%. However, the FY25 figures remain strong for the Nifty Next 50, mid and small caps, and Small Cap 250.

The performance of Weekend Investing strategies was a mixed bag, with most ending deep in the red. Mi 20 and Mi 35 both saw 3% and 3.7% cuts respectively, Mi MT Allcap was down 2.4%, Mi ATH 2 was down 2.3%, and Mi 25 was down 2%, with others losing between 0% and 2%. Mi ST ATH stood out this week, gaining 0.9%. For FY25, the HNI Capital Compounder strategy performed exceptionally well, up 35.4%, which is nearly three times the performance of the base index, and Mi 20 continued to perform well this year, as it did in the previous year.

Sectoral Overview

From a sectoral perspective, all sectors were down except for pharma and FMCG, which suggests a market shift towards defensives. Pharma was up 1.4%, and FMCG gained 0.7%. The hardest-hit sectors were metals, PSU banks, commodities, energy, and infrastructure, all down by more than 2%. Public sector enterprise stocks also lost ground, but on an FY25 basis, they are still ruling with a 24% gain in the current financial year. Overall, it was a down week for most sectors.

Pharma remained the top-performing sector in terms of momentum score, with media, energy, and public sector enterprises showing improvement in the short term. However, sectors like real estate, metals, PSU banks, and autos, which had been performing well until about six months ago, are gradually losing momentum and slipping to mid-level positions.

WeekendInvesting Strategy Spotlight

Mi India Top 10 celebrated its second anniversary this week, having performed well since its launch. It had a rough start, with the first six months marked by underperformance, but the following year and a half saw a significant recovery, demonstrating the strategy’s strength.

Initially, the strategy lagged, but after almost a full year of underperformance, it began to outperform from October onward. This highlights that while some strategies may take time to show results, they can come back stronger over time.

Mi India Top 10 is one of our most popular strategies due to its simplicity. It involves a monthly review and rebalance of ten equally-weighted stocks chosen from the Nifty universe. The goal is to stick with outperformers within the Nifty 50 to beat the index over time.

Rebalance Update

We give advance notice here on the upcoming changes in your smallcase for Monday. This advance notice can be used to ignore Monday’s update if there is no change. If there is a change indicated you can use the smallcase app or log in to weekendinvesting.smallcase.com to see the rebalance. A backup email is sent by mid-day Monday if you have not rebalanced by then and yet another one a

Note: We are not including LIQUIDBEES as an ADD or an EXIT count.

WeekendInvesting Strategies Performance

WeekendInvesting Products – LIVE Index Data

Many of you had asked us to make the index series of all WeekendInvesting Products available so that you could perform your own analysis and studies. You can find a link to the LIVE sheet here and also on the HUB under the support column in the content tab.

Check out M Profit

Disclaimers & Disclosures

That’s it for this week. See you in the next week’s edition !