Newsletters

This month we will do our regular review of the quarterly results for the September 2024 quarter. To do an apples to apples comparison, we look first at the non-financials in the BSE500 and within that those companies that were listed 5-6 years ago and whose numbers are available. 364 out of the 430 non-financials […]

In October, India’s stock market saw a correction, with major indices falling significantly. High valuations persisted, though market breadth worsened, with many stocks trading over 20% below 52-week highs. Early quarterly results were weak. Cash remains high due to limited buying opportunities, though new prospects may emerge soon.

The US Federal Reserve cut rates by 50 basis points in September 2024 after inflation cooled but unemployment rose. Core PCE inflation fell to 2.7%, though still above the Fed’s 2% target. Historically, large initial cuts have led to recession. This rate cut may influence other central banks, including India’s RBI, to lower interest rates.

As we do periodically, we review the quarterly results for the BSE500 ex-financials. The aggregate year-on-year (yoy) growth numbers are a bit surprising. Revenue growth for the quarter ended 30 June 2024 is 5.7% yoy and the EBIT growth is -0.9% yoy. Aggregate revenue growth has been sluggish since June 2023. EBIT growth although weak […]

The Finance Minister presented the budget for the year on 23rd July, 2024 which had many interesting features like a promotion of skilling and prompting the top 500 companies to hire interns from their CSR obligations. However, we want to focus this newsletter on the changes in capital gains taxes which are important for our investors.

As markets both in India and the US stand close to lifetime highs, we thought we would devote this letter to the risks that may exist for investors. It is our duty to warn you about risks to your investments and also a regulatory directive. We know from history that there always prevails a boom-bust […]

As most companies have now reported results for the financial year 2024, we thought we would look at, as usual, our BSE500 universe ex of the financials, to get a gauge of general corporate profitability and would also do a longer-term analysis of the same. Of the 432 ex-financials constituents of the BSE500, we have […]

We thought we will discuss our investment process through the example of the asset management companies (AMCs) that we have held for over 5 years in our portfolio. Why did we buy the AMCs? First, they have a very high rate of profitability as represented by their core Return on Equity (ROE) adjusted for cash […]

In this newsletter, we discuss an indicator of market valuations which is the Market Cap to GDP ratio which is popularly referred to as the Buffett Indicator. In this ratio, we take the total market capitalization of all companies listed in India and divide it by the country’s GDP. “The ratio has certain limitations in […]

We want to talk about patience, an important aspect of the behaviour of investors which is critical to their long term returns from equities. Investing in equities is a volatile journey. When you put money into a bank fixed deposit, you are certain about the return you are going to make. It is a different […]