WeekendInvesting launches – PortfolioMomentum Report

WeekendInvesting presents the Portfolio Momentum Report—your deep dive into two critical metrics to assess your portfolio’s potential:

Momentum Score: See what percentage of your portfolio is in high vs. low momentum stocks, giving you a snapshot of its performance and health.

Weightage Skew: Discover if certain stocks are dominating your portfolio, affecting its performance and risk balance.

Why it matters
Weak momentum stocks can limit your gains, while high momentum stocks improve capital allocation, enhancing your chances of superior performance.

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

Gold Stock to Flow dynamics

Over the past century, gold has shown a consistent growth pattern, while money supply has fluctuated dramatically. This comparison highlights why gold has played a . . . .

Money Debasement

Over the last 25 years, the S&P 500 has achieved remarkable success, as shown in a recent analysis of rolling returns. Despite concerns about economic challenges such as inflation, recessions, and global uncertainties, the equity market in the US has . . .

FPI holding

Ownership in the stock market is not just about buying and selling shares. It can also reflect how much of a company, sector, or country is held by investors. When too many investors hold shares in a particular company or sector, it is called over ownership. On the other hand, under ownership happens when . . .

Importance of Free float

The S&P 500 index in the US and the BSE 500 index in India are two major stock market indices, but they have significant differences, particularly in their free float market capitalization. Free float market cap refers to the portion of a company’s shares that are available for public trading. In the case of the S&P 500, the free float is more than . . .

Staying away from IPOs

In recent years, many investors have been excited about initial public offerings (IPOs). Big IPOs often attract a lot of attention, with the expectation of making quick profits. However, the actual performance of these IPOs can vary greatly. . .

The next decade forecast

Forecasting the market for the next decade is challenging, and while no one can predict with certainty, certain forecasts give us insights into future trends. One such prediction comes from Vanguard, a well-known and respected name in the world of index funds. According to their forecast, the upcoming 10 years could . . .

Gold Central Bank history

Over the past three decades, central banks have been driving a huge demand for gold worldwide. This trend is important for all gold investors to understand. Many people recall periods when gold didn’t perform well and think the same may happen again. However, it’s essential to consider the bigger . . .

Should you get out of the sector based on % drop?

As of the end of October, all sectors have seen a drop from their peak 52-week highs. Each sector has experienced some level of decline, showing how the market has shifted over the past year. The largest drop has been in the . . .

WeekendInvesting Specials !

How Awesome would it be to TIME YOUR SIPs ?

On Sundays, we do special episodes backed by a lot of data, and we try to find insights using that data. This and more will be available on the Weekend Investing app, which you can get on Google Play and the App Store.

Markets this week

It was quite a volatile week, primarily due to the news of a case filed against Adani in the US, which rattled the markets. Adani stocks were hit hard, and this negativity impacted the broader market as well. However, surprisingly, on the last day of the week, the market rebounded with a rally of over 500 points, shrugging off the earlier fears. This suggests that the markets may have found a bottom for now. Another major event this week is the state election results, due on Saturday, which is expected to influence the markets significantly next week.

The rally on the last day, especially in a shortened four-day trading week, was unexpected. I’ve been mentioning for a few weeks now that the June election day high is a critical support level for the market. If this level gets broken, it could signal a weakening market. However, the base around 23,300-23,400 seems to be holding, and the 500-point jump on a pre-election poll day gives some confidence. While a disaster could reverse these gains, this move upwards might indicate the start of a new leg in the rally. Looking at technical indicators like the RSI, the market appears oversold, and past patterns show that relief rallies have followed sharp declines. With the market closing at a two-day high, there’s a possibility that this upward momentum could continue.

Benchmark Indices & WeekendInvesting Overview

For the week, Nifty recorded a 1.6% gain, while other indices like Nifty 50 and Next 50 gained around 1.2%-1.3%, with Next 50 underperforming largely due to the Adani stocks. Smallcap 250 lagged behind, gaining only 0.7%.

In the WeekendInvesting strategies, Mi Evergreen performed well with a 3.9% gain, while NG 50-50 followed closely with a 3.4% gain. However, small-cap-focused strategies like Mi 25 saw losses, with Mi 25 down by 1.1%. Despite some underperformance, particularly in Mi India Top 10, past trends suggest that these strategies may recover during a market boom phase.

Sectoral Overview

Real estate stocks performed exceptionally well this week, gaining 6.3%, which is significant because these high-beta sectors typically get hit hard when markets are weak. IT and auto stocks also did well, indicating that the overall market wasn’t damaged too severely.

Financial services, banks, and IT stocks continue to lead in sectoral momentum, followed by real estate and pharma. These are the sectors to watch for trades, especially if you’re a discretionary trader.

WeekendInvesting Strategy Spotlight

Two Trades – Two Different Results

In the strategy spotlight, there were two contrasting trades involving BSE Ltd. In one trade, we bought and incurred a 37% loss, but in a subsequent trade, the same strategy gained 273%, and the stock is still being held at 3.7 times the entry price. This highlights a key behavioral issue in discretionary investing: many investors avoid stocks that have previously caused losses. However, when following a strategy without bias, the same stock can provide significant returns later. Even if a stock incurs multiple losses, one substantial return can make up for it.

It’s important not to develop biases against any particular stock, especially in non-discretionary investing. This approach removes all biases, simplifies investing, and ensures that you follow your algorithm’s signals without hesitation. Of course, there should be no red flags like regulatory issues or volume concerns, but past performance alone shouldn’t dictate future decisions.

Mi 20, a strategy based on the mid and small-cap index, has performed well since its launch in July 2021. It selects 20 stocks from a pool of 400 and rotates them weekly, depending on market conditions.

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