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

Make money or Love stocks ?

Taking a closer look at the Nifty 50 stocks from the past year. Out of 50 stocks, 15 have underperformed compared to the Nifty index. The numbers might surprise you. For instance, Asian Paints underperformed by 36.13%, Hindustan Unilever by 32.94%, and Kotak Mahindra Bank by 32%. Other notable names like ITC, HDFC Bank, and Bajaj Finance also lagged behind. These stocks were expected to do well but fell short of expectations. Do you hold the underperformers ?

India vs US markets

Many people believe that the US market, specifically the top 500 stocks, performs much better than the Indian market. However, a comparison between the S&P 500 and the CNX 500 from 1999 to now shows a different story . . .

US Recession looming ?

An interesting study on Bloomberg highlights the contrasting performance of small cap stocks in the US and India. The Russell 2000 index, representing small cap stocks in the US, has been trailing large cap names. This is the opposite of what we see in India, where the small cap index . . .

FII are new support to the markets

Who owns India Inc.? Data shows that 52% of Indian companies are owned by . . . .

How to deal with bubble stocks

In the world of stocks, there are often dramatic rises and falls. A good example is Cisco, a major player during the dot-com bubble in 1999-2000. Cisco’s stock rose an astounding 14,000%, only to collapse and lose most of those gains. This cycle of boom and bust is not unique to Cisco but is a pattern seen in . . . .

Perceptions cloud our decisions

It’s fascinating to compare the stock performance of Domino’s Pizza and Google over the past 20 years. Both companies have achieved remarkable returns of over 7,000%. Most people might think that a tech giant like Google would outperform a pizza delivery business. However, the reality is that . . . .

Power of a concentrated winning stock portfolio

A fascinating chart highlights the market cap of the five largest companies in the US markets over the last 45 years. This chart shows the percentage of the total S&P market cap these five companies represent. In the 1980s, it was around 18-19%, which then dropped to . . . .

Pathetic Bond Real returns in India

Many investors compare their returns in US dollar terms with other markets. But it is more meaningful to consider returns in local currency terms and adjust for inflation. This way, we see gains in real terms, not just nominal terms. Comparing with other countries is . . . .

Gold allocation in your portfolio should go up

A significant trend in the financial world is the shift in central bank holdings of gold. In the 1970s, gold made up 65% to 75% of international reserves held by central banks. However, this percentage dropped during . . . .

Can smallcaps run further?

A very interesting chart recently came to light, showing the ratio of the CNX Small Cap Index to gold. This chart helps us understand how the value of small cap stocks compares to gold over time. From 2004 to 2008, this ratio went from . . . .

WeekendInvesting Specials !

Is a Major Market Correction Coming Soon ?

Is your portfolio Missing Today’s Top Performers ?

Markets this week

This week, Nifty experienced a strong upward movement, starting with a gap down at 23,350 on Monday and closing just above 24,000. This remarkable gain was mainly concentrated in large-cap stocks. The weekly candle shows significant strength, reflecting the impressive climb from around 19,000 in November or December 2023 to 24,000 in June 2024. This surge highlights the importance of staying invested and not trying to predict market boundaries by frequently entering and exiting the market.

Despite concerns about the market being expensive, this sentiment has persisted during its steady rise from 21,000 to 24,000. Historically, while the market may seem overvalued, it’s relatively cheap compared to global markets. For instance, US markets, once considered toppish at 15 to 20 times earnings, now trade at 30 times. If US markets can sustain such valuations, India could potentially follow suit. The market’s continued upward trend suggests that those labeling it as expensive and staying out are missing out on significant gains.

Benchmark Indices & WeekendInvesting Overview

This week, the Nifty gained the most at 2.2%, followed by CNX 200 and CNX 500, each up about 1.5%. Surprisingly, the Nifty Next 50, Mid & Smallcap 400, and Small Cap 250 only saw gains of around 0.5%. Despite leading significantly in FY 25 so far, these indices have taken a backseat this week.

In terms of weekend investing strategies, the HNI Capital Compounders was a standout, achieving 25.9% for the financial year. Mi ST ATH performed well this week with a 2.2% gain, followed by Mi Evergreen at 1.5%. Other strategies posted gains between 1% and 2%. However, Mi 25, HNI Wealth Builder, Mi ATH 2, and Mi 30 underperformed this week. For the year, Mi 20 leads with 27.6%, with Mi NNF 10 and Mi 35 also showing strong performance.

Sectoral Overview

In terms of sector performance, real estate and metals took a backseat this week despite their strong year-to-date performance. PSU banks and pharma have been muted, with PSU banks underperforming and pharma up only 3.9% for FY 25 and 1% this week. FMCG has been sluggish at 5% for the financial year and 1.4% this week. IT stocks gained 2.7% this week, bringing their quarterly gain to 3.6%. Energy stocks rose by 3.3%, infrastructure stocks by 2.8%, and commodities saw a 1.6% increase this week.

In the short term, real estate and autos have dipped, while commodities and infrastructure have performed well. Financial services have led the market, overtaking real estate and autos, which still rank second and third on average. IT stocks are making a comeback, showing improved rankings over the past month and two weeks. The Nifty index is also performing well compared to many sectors.

WeekendInvesting Strategy Spotlight

No Scope for Regret !

Trent Limited offers a fascinating case study in investor psychology and how regret works. About two decades ago, during the rally from 2003 to 2008, Trent’s share price soared from around Rs 20 to nearly Rs 88. This was a remarkable 350% gain in less than a year and a half. However, the stock then crashed from Rs 90 in January 2006 to Rs 20 by November 2008, a drop of 75% over almost three years.

It is common to experience regret. You might regret not buying a stock at its low price or selling it before it peaked. If you had bought Trent at Rs 20 and sold it at Rs 45, you might feel regret for not holding until Rs 88. But the real challenge is not the regret of selling; it’s the regret of not reentering when the opportunity arises.

After the fall, Trent Limited’s stock price rose from Rs 20 to Rs 5400 over the next 15 years. This consistent upward trend demonstrates that even after a significant drop, there are opportunities for growth. It is crucial to overcome the bias of not buying a stock again after a loss. Each new entry should be seen with fresh eyes, without past regrets influencing the decision.

Every stock position should be treated as a new opportunity. Whether you had a profit or loss in the past with a particular stock should not affect your current decision. If the stock shows momentum, you can enter at any point without regret. Many investors miss opportunities because they are emotionally attached to past experiences with the stock.

To avoid the cycle of regret, it is helpful to follow a structured strategy. This involves having a clear, emotion-free plan for when to buy and sell stocks. By doing so, you shift the responsibility of decision-making from yourself to the strategy. This reduces stress and helps you make better investment decisions.

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.

WeekendInvesting Telegram and YouTube Channel

We post daily content related to investing on our Weekendinvesting Telegram Channel and YouTube channel to help our community take stock of the performance of markets, sectors & our products and touch base upon a new topic every day. We look forward to having you all there! Several videos in this blog are from this series.

Introducing M Profit

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