A crisp update on all that’s happened at Capitalmind this week – Saturday Coffee with Capitalmind. ☕️
But first, let’s get a weekly overview of the markets –
RBI Swag: Buying bonds worth 1,000,000,000,000 to calm things down 😎
If you counted the zeroes and gave up – the above number is 1 lac crore (or a trillion). However, RBI continues to maintain interest rates where they are, because of a complicated argument involving inflation and rates and yields and what not.
Don’t worry, we’ll de-clutter this for you.
Read: RBIs Big Bond Buying Program and Why we aren’t changing the Fixed Income Portfolio
Stock Story: Spotted on our radar!
So here is a company –
- that has ~50% market share in its segment
- has been around for more than 60 years in India
- is debt free with decent operating margins
- sees a huge opportunity in the Electric Vehicles space
- with a growth-oriented CapEx plan that is worth 68% of its assets
All these above factors get us interested in analyzing a small-cap stock that has the potential to grow. But, is it worth investing in now?
[Premium Only] Read: Elantas Beck: India’s leading wire enamel manufacturer on cusp of a CAPEX cycle
This turbulence doesn’t seem to go away!
In November 2020, we wrote about the rising share prices of IndiGo and the downsides that were overlooked by investors. [What’s the Story with IndiGo Valuations Flying High?]
Since then, its shares have fallen by ~5% while the market has risen ~8%.
Now, we discuss the recent trends related to passenger traffic and ticket prices in the airline industry and their impact on IndiGo.
Read: Grounded In 2021: Airlines need more run-way
On some days – the trend is not your friend.
After an almost perpetually trending 2020, the month of March’21 hit us like a hail storm. Making us wonder if it’s even worth our time trading trend following strategies like Chase. Thankfully, we had accumulated enough returns from last year to account for this drawdown. So it hurts a little less.
Read: Whacked by whipsaws in Chase | Putting March’21 in context
Our 1500+ member community chips in to analyze a stock. Every Week.
In our “House view” series, we publish summaries of discussions on the Capitalmind slack forum. This one is about Kovai Medical Center and Hospital (KMCH), one of the efficiently run multi-specialty hospitals in the country.
Read: The house view on Kovai Medical
This time it’s different?
Lodha developers are looking to raise 2500 Cr from the secondary market & this isn’t the first time.
- In 2009, Lodha filed for an IPO to raise 2800 Cr. Later the plan was shelved because of the Global financial crisis.
- In 2018, it again filed DRHP to raise 5500 Cr. This time it was IL&FS.
Will it be the third time lucky? Read: Lodha Developers IPO: Should you invest?
Slaying it on slack
- There was an arbitrage opportunity spotted by a member on the Indiagrid InvIT rights issue which we lapped up. Here’s the discussion as it unfolds [Slack Link]
- Deepak Shenoy would often say that bubbles (or overvaluations, etc) are good for businesses because it helps them raise more money which can then be used for business growth. Something very similar is playing out in $GME [Slack Link]
- The REITs have seen crazy price moves recently and here’s a quick comment on how things may play out in the shorter term [Slack Link]
- We discuss the technical analysis and analyze to what extent it applies to currency trading [Slack Link]
Links we like
In this section, we bring you interesting links from across the internet
- Morgan Housel writes about The Big Lessons of the Last Year at the collaborative fund blog.
- Sanjoy Bhattacharya, a value investor, gives a very interesting talk at CFA society. Tune in: The rewards of good behavior.
- Discover music: Music of the Doors, Hendrix, Nirvana, and Amy Winehouse created by AI. Check out: Lost Tapes of the 27 Club
That’s all folks 🤘
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