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 will surprise in this decade

Over the past ten years, the U.S. stock market has seen a massive surge in its market capitalization. The Wilshire 5000, which represents the vast majority of major stocks in the U.S. market, has grown from $25 trillion to around $75 trillion. In comparison, the market cap of gold has only increased modestly from about $8 trillion to $12 trillion. This widening gap between the value of U.S. stocks and gold is . . . .

Be aware of movement across market segments

Understanding how stocks move across market cap categories is crucial for investors. Many people assume that a small-cap stock will naturally grow into a mid-cap and eventually into a large-cap company. While this can happen, the reality is . . . .

Home loans and compounding

Compounding is a concept that many people know about, but very few actually use it to its full potential. In today’s world, where information is easily accessible, more people are aware of how compounding works. However, despite this knowledge . . . .

Fall in Fed funds rate can be great for India

A recent analysis by Zafar Shaik of Invesys Capital highlighted the relationship between the Fed funds rate and key commodities like crude oil and copper. This relationship is crucial because it gives insights into how the commodities market might behave in response to . . . .

Outlook for next 4 months

A key analysis from Bank of America Research sheds light on the seasonality of the S&P 500 during U.S. presidential election years. This data spans 96 years, from 1928 to the present, and reveals interesting trends in the . . . .

Achieving True Wealth

Many people often think that wealth is all about accumulating money and possessions. However, true wealth goes beyond material riches. A fresh perspective suggests that real wealth comes from simplifying life, removing unnecessary burdens, and focusing on . . . .

The Truth is only the Price

It’s common to hear about big price targets from fund managers, but the reality often turns out differently. A recent example shows how even the most confident predictions can fall flat. A well-known fund manager placed a target on a popular video conferencing company . . . .

Many Active funds underperform and don’t survive

Investing in active funds has always been a popular choice for many investors. These funds are managed by professionals who try to outperform the market by picking the right stocks. However, new data spanning nearly 30 years from 1992 to September 2022 tells a different story about how these funds actually perform . . . .

Why to Buy Gold ?

central banks around the world are buying gold at an unprecedented pace. Looking at data from the past 50 years, this trend is particularly striking. In the years from 1970 to 1990, central banks were selling . . . .

Decades can happen in months sometimes

Imagine a stock that stays within a limited range for ten years. Investors who put their money into it might start to feel bored or frustrated. During this time, the stock doesn’t seem to perform, even when other stocks are rallying during a bull run. The stock’s performance remains flat, and it’s easy to lose hope. But suddenly . . . .

WeekendInvesting Specials !

0% Returns in next three years ?

Retire with 1 crore today ?

Markets this week

Another month has passed, and August 2024 has been quite a topsy-turvy period. We experienced a significant fall at the beginning of the month, primarily due to the yen carry trade fiasco. However, the recovery from that bottom has been quite spectacular. Overall, it has been a good month, ending on a positive note.

Looking at the Nifty this week, the chart shows a steady rise. Last week, we closed at 24,800, and now we’ve closed at 25,247, gaining over 400 points. This marks a strong week, especially considering that at the beginning of August, we were much lower, even below 24,000. The entire month has seen continuous upward movement, with four consecutive weeks of gains. Typically, after a sharp dip, you might expect continuous gains, as we’ve seen here. Although the recovery wasn’t as sharp as before, there have been multiple upward candles, suggesting the possibility of further gains before any consolidation. However, we are nearing the upper band of an imaginary trajectory, perhaps with a couple of hundred points more to go. Some consolidation in September might be due, as September and October are typically weaker months seasonally. If consolidation occurs, it could be a healthy development, though continued upward movement would also be welcome.

Benchmark Indices & WeekendInvesting Overview

Nifty 50 is up 1.7% this week, with CNX 200, CNX 500, Nifty Next 50, and Mid and Small Cap 400 all gaining between 1.2% to 1.4%. The Small Cap 250 is up only 0.9%.

Within the Weekend Investing strategies, Mi India Top 10 and Mi 30 both rose by 1.7% this week. The HNI Capital Compounder is the leading strategy for FY 25, having already crossed 40%, which is quite phenomenal. For this week, Mi Evergreen is up 1.2%, Mi MT Allcap gained 0.8%, and Mi 20 remained muted at 0.6%, though it’s still up 33% for FY 25. Mi 35 also gained 0.6%, while HNI Wealth Builder, Mi 25, Mi ATH 2, and Mi ST ATH were either flat or lost some ground. Mi NNF 10 is up 28.9% for FY 25, slightly ahead but not by much.

Sectoral Overview

In terms of sectors, real estate took a hit this week, down 2.9%, although there was some recovery on Friday. Metals led the way with a 3.3% gain, and PSU banks also made a comeback, rising 2.5% this week. Other sectors were up between 1% to 2%. For FY 25, Public Sector Enterprise stocks are still leading with a 24% gain, Autos are up 20%, and Pharma has done quite well, up 18.6%. Pharma, in particular, has performed strongly in FY 25, reaching nearly 18%.

Pharma & Consumption are doing well, which is why they are at the top, along with IT. Financial services, FMCG, and others are following. However, banks have been pushed down to the lower ranks, with Commodities, Energy, and Banks at the bottom in the very short term. Real estate has seen a pullback, but overall rankings remain low. Autos, which were leading six months ago, have now slipped to the 6th or 7th position. Despite this, the overall market index is at number four, indicating that the overall market is still performing well in terms of momentum ranking.

WeekendInvesting Strategy Spotlight

Mi EverGreen’s Price is going up !

The subscription fee for Mi Evergreen will increase starting from 10 September. The inaugural fee is being normalized, but this change does not impact existing Mi Evergreen users or anyone who subscribes by 10 September 2024. Current users will continue their renewals at the old rates, but it’s important to ensure that the auto-renew option is not discontinued. If it is, renewing the strategy later will be at the new price. For those interested in Mi Evergreen, it’s advisable to subscribe before 10 September to lock in the current rate.

The performance of Mi Evergreen has been quite strong since its launch. An investment of ₹100 would have grown to ₹236 by now, compared to ₹161 in the equity multi-cap index. As you may know, Evergreen has a 25% allocation to gold, which helps as a hedge when markets decline. Over the last year, the performance has been impressive, with an 81% gain compared to 38% in the underlying CNX 200 index. Absolute returns and CAGR have also been strong.

The strategy is rotational, investing in 20 equally-weighted stocks, with 25% allocated to gold ETFs. The strategy is reviewed and rebalanced monthly, with a few stock changes possible. The recommended capital is ₹5 to ₹30 lakhs, with a suggested investment horizon of four to five years.

The reason for recommending a four to five-year view is that market trends or rallies might not occur immediately. If you’re fortunate, you may catch an uptrend early on, but if not, you may have to wait a few years. The last four years have been unusual, especially since COVID-19, with many new investors thinking that quick gains are the norm. However, this is not sustainable in the long run. Natural market cycles usually have at least one large uptrend within an eight-year period, and the goal is to capture this when recommending a five-year investment window for this strategy.

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