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

Timeframe is Important.

A recent quarterly chart of the S&P 500 index reveals an interesting pattern from the COVID bottom until now. The chart shows that, apart from three down quarters in 2021 and 2022, and a marginal dip in one quarter of 2023, most quarters have been positive. This longer timeframe reduces . . . .

Can you survive with buy and hold ?

The composition of India’s benchmark indices has undergone significant changes over time. Of the 38 companies that were part of the Sensex in 1986, only  . . . .

It is the liquidity, stupid!

The infographic given in this blog presents a fascinating analysis of global liquidity trends over the past 24 years. According to the data, there appears to be a recurring cycle of liquidity in the system, lasting approximately. . . . .

Are we near a global event ?

Central banks around the world have been aggressively cutting interest rates in an effort to stimulate economic growth. In recent months, 21 central banks have lowered their policy rates. This level of monetary easing is comparable to the measures taken during the . . . .

Apply BBC Principle always

This article explores a fascinating case study of Just Eat Takeaway.com (TKWY). Over the past five years, the company’s revenues have skyrocketed by a staggering 1500%. However, despite this impressive growth in revenue, the stock price has plummeted by . . . .

Never invest based on the present

Legendary investor Stanley Druckenmiller offers valuable insights into the art of investing. He emphasizes the importance of looking beyond current events and visualizing the future landscape. This forward-looking approach is crucial for making . . . .

This time is different from 2000 ?

The infographic attached in this blog presents a fascinating comparison between the current “Mag 7” tech giants and the top companies of the dot-com bubble in 2000. While both periods saw a concentration of market capitalization in a small group of tech stocks, the current concentration is . . . .

Where is Gold headed in the next 12 months ?

Gold prices have been on a steady upward trajectory in recent months. This trend is reflected in the forecasts of major financial institutions, including UBS. The bank’s latest report predicts that gold prices will . . . .

How do index changes happen ?

Several well-known companies have been excluded from the Nifty Next 50 index, including Berger Paints, Bharat Electronics, Colgate-Palmolive, Marico, SBI Card, SRF, and Trent. While some of these companies have performed well, they have not been able to . . . .

India is the Future

India stands out from other major economies due to its unique position on the chart. While the United States and China have large GDPs and market capitalizations, India is experiencing rapid growth in both areas. This suggests that India is on a . . . .

WeekendInvesting Specials !

Beware – GOLD is Surging Too !

Markets this week

First of all, a very happy Dussehra to you and your family. I hope this festive season brings you great joy, good health, and immense wealth.

This week, the markets were somewhat in a limbo, with no significant trends forming. Nifty remained largely flat, with some fluctuations throughout the week. The initial days saw a decline, followed by a rise, and then a dip again. It seems like the market is attempting to consolidate. The trend we witnessed in the previous week appears to be broken, but it’s uncertain whether we will see a continuation or if the market will stabilize and move upward. The 24,700 level, which was the bottom for this week, holds significance going forward.

When viewed on a weekly timeframe, the market (Nifty 50) remains in the same trend zone that has persisted since March 2023, marking nearly 18 months of upward movement from 17,000 to 25,000. The key levels to watch include the 24,000 bottom hit in August and the major bottom reached on the election outcome day. These levels will be pivotal for the market’s direction. If breached, the market may seek either the August low or the top of the election day, both of which are significant.

Benchmark Indices & WeekendInvesting Overview

Nifty declined by 0.2%, CNX 200 rose by 0.2%, and CNX 500 increased by 0.3%, indicating that large caps, mid caps, and larger small caps didn’t move much this week. However, Nifty Next 50 rose by 1%, the Smallcap 250 index by 1.1%, and the Mid and Smallcap index by 1.2%. Higher beta stocks performed better, and the financial year numbers for these indices look strong. Interestingly, the Nifty Next 50 continues to behave uniquely, with 24.3% gains in FY25 compared to Nifty’s 11.8%, despite it being composed of large caps.

This week, Mi NNF 10 had an outstanding performance, rising by 2.8%, and HNI Capital Compounder led with a 38.5% gain for FY25. Mi 20 was up 2%, Mi 30 up 1.9%, and Mi ATH 2 recorded a 0.4% gain. Mi India Top 10 also performed well, increasing by 0.9% and now showing a 16.8% gain in FY25 compared to Nifty’s 11.8%. However, Mi 25 experienced a slight decline of 0.7% this week.

Sectoral Overview

Looking at the sectoral overview, pharma and autos took the lead, with gains of 2.1% and 2%, respectively. On the other hand, FMCG, metals, PSU banks, and commodities were the laggards, showing losses. The market seemed divided across sectors without a clear trend. In the short term, pharma moved from the fifth to the top position, securing the leadership spot in sectoral momentum.

Sectors like pharma, autos, metals, and consumption are currently leading, making them good areas for discretionary trades. However, autos and consumption stocks are losing steam, while IT and media stocks are picking up momentum. Gold has also made a notable rise.

WeekendInvesting Strategy Spotlight

Mi MT Allcap – All Trades since Launch

In the WeekendInvesting Strategy Spotlight, the focus is on Mi MT Allcap. As it approaches its sixth anniversary, an analysis of its transactions since launch reveals a distribution typical of momentum strategies, with many small losers and a few big winners. While there are a significant number of trades with small losses, the real performance driver is the few large winners.

Outliers in the range of 40% to 481% gains have contributed to the strategy’s success. To benefit from this strategy, one must stay invested for several years to allow the winners to emerge. The key to momentum investing is having equal or fewer winners compared to losers but ensuring that the winners provide much larger gains than the losses incurred by the losers.

Since its inception, Mi MT Allcap has maintained a win rate of 54%, with average gains of 63% per winning trade, while the average loss per losing trade is just 11%. This “momentum casino math” may give the impression of frequent losses, but the larger wins more than make up for it. The strategy has delivered exceptional absolute returns, and even though there may be periods of underperformance, it requires a long-term outlook of five years or more.

The strategy focuses on companies with a market cap of over 1,000 crores, holding a maximum of 20 stocks. It is also designed to go to cash when necessary during downturns.

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.

Disclaimers & Disclosures

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