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

Why Gold will always protect you

Data from Zafar of Invesys Capital shows how gold has performed against the Sensex during various market cycles. Gold often acts as a hedge when equity markets fall, providing stability to an investment portfolio. For example, from February 2006 to March 2008, when . . . .

Is Nvidia the new Cisco

Nvidia’s stock has been on an incredible run, skyrocketing by 3400% in the last four to five years. This meteoric rise is drawing comparisons to Cisco Systems during the dot-com boom from 1996 to 2000. Cisco experienced a . . . .

Drawdowns are good !

The S&P 500 has nearly 195 years of data, showing the annual returns and the maximum drawdowns. Drawdowns are the peak-to-bottom declines in each year. In this extensive data, there are very few . . . .

The roller coaster of Income tax

Back in 1945, the income tax rates were quite different from today. The rates were listed in old Indian currency terms, like pies and annas. For example, four annas equaled 25 percent. The top slab was at two annas, which translates to 12.5 percent. Despite the low rates . . . .

Nifty 100 shocker

Many people think that the Nifty 100 index is simply the combination of the Nifty 50 and Nifty Next 50 indices. However, this is not exactly true. While it is true that the Nifty 100 is made up of the first 50 stocks in the Nifty 50 and the next 50 stocks in the Nifty Next 50, the way these stocks are weighted . . . .

Trump Vs China

Recently, there was an article discussing how China is building secret commodity stockpiles. It seems that China is preparing for the post-Trump era. Trump has openly challenged the current . . . .

Day Trading or not !

A fascinating infographic from the University of Berkeley reveals the probability of winning at a casino. According to this information, 13 out of 100 gamblers leave the casino as . . . .

Are we near a bubble top ?

The S&P 500 index has different weightings for its stocks, with the largest companies holding more influence. In contrast, the S&P 500 Equal Weighted Index gives each stock an equal 0.2% weight. By comparing these two indices, we can understand . . . .

Inflation – A secret Tax

The recent budget changes have removed indexation benefits on real estate, highlighting a crucial point: we cannot ignore inflation when discussing taxation. Indexation is logically right because . . . .

Don’t fear All Time high 

There’s a fascinating chart that shows the S&P 500 index over the last 70-80 years. This chart highlights the days when the market reached all-time highs and how the market performed afterward. The common fear is that . . . .

WeekendInvesting Specials !

Are you hit by Weightage Skew ? (Mi India Top 10 Special Anniversary Webinar)

Don’t be Below Average ?

Markets this week

It was an important week where global markets began to unwind. The trigger was the FOMC meeting, where the Fed chairman indicated a likely rate cut in the next meeting in September. Although signs pointed to a possible cut immediately, the market yields, specifically the ten-year yield on US bonds, moved sharply down. Japanese markets also increased their interest rates by a quarter percent. This shift caused a significant impact on the carry trade, where investors borrow at lower costs in Japanese yen and invest in US yields for higher returns. With US yields falling and Japanese yields rising, many hedge funds and investors found themselves caught on both sides.

The unwinding of this trade led to a fast appreciation of the Japanese yen against the US dollar, moving from nearly 160 USD/JPY to about 145. This situation caused huge unwinding in many markets, with tech stocks taking a hard hit due to some earnings misses. Amazon opened 10%-11% lower, Intel opened 28% lower, and many other stocks experienced significant declines. The Japanese market lost close to 8%-9% in two sessions, and a 5% cut was expected on Monday. This could make Monday unnerving for the Indian market, presenting either an opportunity to accumulate stocks or the start of a longer correction.

Benchmark Indices & WeekendInvesting Overview

This week, four sessions saw mild gains, but on Friday, the market lost all the ground, closing the Nifty in the red for the week. However, the decline was minor and not alarming, indicating a continuation of the current trend. Nifty closed 0.5% lower, CNX 200 was down 0.2%, and CNX 500 was down 0.1%, reflecting a very slow and steady market.

Despite the overall sluggishness, some strategies were more volatile. Mi 20 gained 2.2% this week, Mi 35 was muted at 0.3%, and Mi India Top 10 gained 1.8% while Nifty lost 0.5%. For FY25, Nifty is up 10.7%, but Mi India Top 10 is up 16.9%. HNI Capital Compounder did exceptionally well, up 1.7% for the week and 36% for FY25, significantly outperforming the CNX 200, which is up 13% for FY25. Mi NNF 10 was up 1.6% for the week, while Nifty Next 50 was down 0.1%, with Mi NNF 10 up 29% for FY25 versus 21% on the index. Mi Evergreen also performed well, up 1.3% for the week and 26% versus 13% on CNX 200 for FY25. However, some strategies lagged: HNI Wealth Builder lost 0.4%, Mi MT Allcap was down 0.8%, Mi ATH 2 down 1.1%, Mi 30 down 1.1%, Mi 25 down 1.5%, and Mi ST ATH down 1.8%, all losing more than the market and performing in line or slightly lower for FY25.

Sectoral Overview

In the sectoral overview, energy stocks did well, up 2.5% this week, and pharma, a defensive play, was up 1.4%. Public sector enterprises lost ground towards the end but still managed a 1.1% gain for the week and a 26.4% gain for FY25. However, real estate, IT stocks, and autos lost ground. Auto’s were expecting some hybrid and EV policy, and FMCG was down, signaling a potential economic slowdown. Metals were down 1.2%, and PSU banks were down 1%. While some sectors were up and others down, autos and FMCG showed short-term volatility, with pharma maintaining top momentum across different periods.

WeekendInvesting Strategy Spotlight

In the Weekend Investing strategy spotlight, Mi India Top 10 celebrated its second anniversary. Launched in August 2022, it had a rough start with a disastrous first six months, underperforming the Nifty. However, in the subsequent year and a half, it rebounded strongly. Over the last year, it is up 68%, compared to Nifty 50’s 26.59%.

The strategy aims to select the ten strongest stocks from the Nifty 50, leading to an absolute return of 76% since its inception, versus Nifty’s 42% in the same period. The CAGR highlights the strategy’s success. Though it experienced a lag initially, the strategy gained momentum after April 2023 and showed significant returns by October-November 2023.

This strategy’s cyclicality means it may not outperform the index every month, but it aims for superior long-term performance. It’s a rotational strategy involving monthly stock selections, typically changing one or two stocks per month. The recommended holding period is three to five years to realize its full impact, making it ideal for new investors looking to start their market journey with a robust strategy focusing on Nifty stocks.

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