2019 is sliding towards a close, it has been an interesting year in the markets. Interesting developments have taken place along the year – issues with debt mutual funds. Yes, you can lose money in debt funds as well, these are not risk free instruments. Developments at Yes Bank, promoter pledge at Zee, the bing bang corporate tax cut, the PMC bank scam and the latest issues with Karvy.
The year has been of the top 50 stocks. The YTD performance of some of the indices are as below
As can be seen from the above the Nifty 50 has returned 12.4%, the performance of the other indices has been well below the top 50 stocks.
We at Capitalmind have covered lot of these developments in detail. In addition we have started a few initiatives explaining financial concepts in a series of posts. We have covered a few interesting stocks in detail in our taking stock series as well. This post is a highlight of the analysis that we have done during the year.
Some of these are Premium-only – do consider joining, if you’re not a member, or take a 30 day trial. (Click here for details)
The “Funda” Series
We started with “the funda series” last year, where we walked through financial concepts in simple terms.
We started with the basics like Financial Ratios [premium unlocked], Self-Sustainable Growth Rate [premium unlocked], and Reevaluation Reserves [premium unlocked] and used real-world examples to make sense.
This year we expanded the theme to cover the wink-wink-nudge-nudge things promoters and management in India get up to and investors should watch out for in a 5-part Financial Shenanigans Series.
While the series was part of our Premium Subscription, for the year-end post, we have unlocked three of the series for free access.
Part 1: Manipulating Revenues [premium unlocked]
Part 2: Manipulating Expenses [premium unlocked]
Part 3: Manipulating CashFlows [premium unlocked]
Bonds
Fixed Income as an asset class tends to be ignored by Indian investors. We set out to demystify them by starting from the very basics and covering the kinds of bonds available to Indian investors.
The 4-Part Bond Baba Series. As promised last year, we started podcasts covering various topics. In addition we now have short videos explaining various financial concepts in simple terms.
Part 1: An Introduction to Bonds [post] [video]
Part 2: G-Secs, Tax-Free Bonds and 54 EC Bonds [video]
Part 3: Convertible, Callable, Puttable, Floating Rate, and ZCBs [video]
Part 4: Interest Rate Futures [video]
Stocks
We look at stocks in-depth in our “Taking stock” series.
How the underlying business functions, the levers that keep the business running, why a particular business is successful in having consistent ROEs and ROCEs. In the year gone by we covered 5 stocks, 2 of them were from the chemical space. All our taking stock articles can be read here.
We also analyzed DRHPs and IPOs this year. We looked at the DRHP of SBI Cards [premium unlocked] and covered the credit card business. We covered the IPO of Ujjivan Small Finance Bank and wrote about the Embassy REIT.
Our deep-dive ino the chemical industry was one of our most-read and referenced posts during the year.
We come across interesting stocks generated through our Capitalmind SNAP Outliers – tool to discover stocks with momentum. In the outlier series we touch upon the basic fundamentals of the stock. We covered 8 stocks in the outlier series.
The year has been for quality stocks, we had a very interesting piece on Does buying expensive quality stocks work. One of the methods to zero down on stocks is to first look at the sector and then buy companies in those sectors. Valuation of those sectors is the first step and provides important data points, we had a detailed post on the valuations of various sectors.
Investment Strategies
Buy low and Sell High? Or Buy High, and Sell Higher? That is sometimes existential question every investor has to deal with. Momentum Investing is the school of thought built on the latter. There is rigorous academic research on its persistence as an outperformance strategy.
We started with a deep-dive into whether such a strategy works in India. Does Momentum Investing work in India?
Our posts extensively analyzing various strategies are here.
Macros
Earlier in the year RBI had given back over 1.76 lakh Cr back to the government, there was lot of news around this development. Some people said that the government is raiding the RBI coffers. We believe that the move was positive and explain the reasons for the same.
The slowdown is imminent and we cannot deny it. How do we take advantage of this slowdown? We write about this in our two part series – Don’t waste a slowdown and Let’s cut gold imports.
Take a look at some of our other macro pieces, a lot of them are free to read.
Podcasts
We rejuvenated the Capitalmind Podcast in 2019. We had a lot to talk about this year as 2019 was quite eventful for the Indian markets! Apart from simplifying what was happening in the market (PMC bank debacle, Karvy fiasco, the great Indian slowdown), we also addressed the most important questions on the personal finance space- whether it makes sense to buy a house in the Uber economy, breaking down mutual funds for the aam junta, how to effectively manage your cash flows and much more!
Podcasts that you shouldn’t miss:
How to Master Your Cash Flows with Credit-Cards and Overdrafts
Explainer Videos
In pursuit of making our existing articles and tutorials more interactive, we took the initiative of explaining complex financial concepts and products through a series of short and crisp videos. We kicked off with the Bond Baba series where we explained the basics as well as nuances of the bond market through a series of videos.
We also reached out to our premium subscribers through our Slack channel and did an ‘Ask Me Anything’ session with them.
Checkout our Bond Baba series:
G-Secs, Tax Free Bonds and 54 EC Bonds
Other Content
There has been a lot of action in the year gone by. Some of the developments happening in the markets have been covered here at Capitalmind
We tracked developments at Yes Bank to conclude whether it was a worthy investment. We even wrote about whether deposits in Yes Bank are safe.
In our Abeyaar series where we explain financial concepts/developments in a conversational and casual tone, we covered the DHFL default and fall in debt mutual funds in this format.
Zee was in the news during the year. From promoter pledging, to a ceasefire agreement with mutual funds holding Zee stock to finally promoters offloading stake in the company. A lot has happened at Zee, all that we have written on Zee can be read here.
Vodafone Idea had come out with a rights issue, we looked at the arbitrage opportunity and the risks associated with it. In another post we look at impact of the supreme court ruling on AGR and its impact on Vodafone Idea, we also look at the impact on mutual funds holding the company’s paper.
Jet Airways defaulted late last year, we wrote about what it would take Jet to survive in such a situation. As we progressed it was getting more clear that it would be a herculean task for the airline to survive, what was astonishing was the stock was still trading at 100+/share, we wrote about why this paradox exists.
Recently Karvy was in the news for pledging client’s shares and deploying that in its other business. We wrote a detailed post on this episode. In addition we had a podcast with Nithin Kamath, founder of Zerodha speaking about the Karvy mess.
During the year we launched our new website. We have a faster version and made changes that will allow customers to have a seamless browsing experience.
What’s Coming?
Top-Quality Content. All things markets, in a simplified way. You will see a lot more analysis of stocks, fundas, economy, industries. We also now have podcasts and videos.
Subscribe to our free podcast here
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Chetan Chhabria: @chetanchhabria
Shray Chandra: @shraychandra
Anoop Vijaykumar: @CalmInvestor
NOTE: Please do not consider this article as a recommendation, It is purely for informative purpose only. Authors may have positions in the stocks mentioned, so consider our analysis biased. There is no commercial relationship between Capitalmind and the companies mentioned in this analysis.
At Capitalmind, we are not Journalists and hence our attempt is not to be first to report breaking news. Rather, we wish to critically analyze the issue at hand and provide a fair handed view that is easily understood by even those who aren’t in tune with the issue at heart. In other words, we try to simplify the complicated.
