Today’s newsletter references to performance highlights of three of our core model portfolios. It’s fascinating to see that the strategy that dominated everything else in 2020 has been lackluster while newer heroes have emerged in 2021. Yet another reminder about why it is imperative to diversify the portfolio across different strategies to navigate the markets that take its own course. All this and also some intriguing articles in the “Links we like” section at the end. Read on.
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Markets this week 🚦
IT stocks lead the pack on the back of the earnings season while Oil & Gas sector lag behind. And while we spent the week savoring the delicious Zomato IPO, the broader index inched up 1.3%.
Does buying expensive quality stocks work? 🤔
Our friend, Nifty PE, has seen a lot of market booms, busts, and stagnations. These are also extraordinary times when the Nifty PE ratio is at a high – thanks to the numerator that gets all the love from the markets and to the denominator that sulks with the economy. As a result, stocks are expensive. Maybe more expensive than they ever have been.
Here’s a timeless post from Capitalmind archives that provides some historical perspective, some more data crunching and a lot of food for thought.
Read: Does buying expensive quality stocks work?➕
Passive maybe the “in thing” but active stocking picking is still sexy! 🤙
June 2021 has been an interesting month where the benchmark indices were flat while few stocks continue to do well. The CM Focused portfolio hit a new lifetime high in June. The portfolio was up by 5.3% in June 2021 while Nifty returned 0.9%. The action however is in sectors like Paper, IT, Healthcare & Telecom.
The unlocking begins. Businesses are getting back on track while the fear of the third wave still exists. What’s in store and how are we positioned?
[Premium] Read: June – A month of slapshots for CM Focused & CM passive➕
The zing of the Zomato IPO! ⚡️
Finally, one of the most awaited initial public offerings of 2021 is here – Zomato Ltd. The company will be raising ₹ 9,375 crore, of which ₹ 9,000 crores will be a fresh issue, while the remaining an offer for sale from the oldest investor – Info Edge (India) Ltd.
The IPO would be the largest since March 2020, i.e., when SBI Cards raised close to ₹ 10,000 crore. Should you subscribe?
Read: Zomato IPO – Should You Place An Order To Buy Shares?➕
Woh Subah Kabhi To Aayegi 🌤
We had a green month after a three-month-long penance, the month of June saw a trend emerge on the indices on the upside, however, we are yet to scale mount 16k. The small and mid-caps are still leading the larger stocks, something we spoke about in last month’s update.
Let’s check out the performance of Chase’s strategy in the past month by starting up with a greek legend.
Read: Capitalmind Chase: June, green shoots, a greek legend and some trade execution tips➕
[Premium] The School of Slack 😎
We bring you the most insightful discussions from our slack community
- Subscriber data for Telecom companies are out and here’s Soumeet Sarkar sharing a quick update. [link]
- Watch out for daily chart threads on #trading-room for some great collaboration and analysis. [link]
- Wait, what! Pension funds in the US buying homes now? [link]
- Fun thread: ITC and the witty conversations it sparks. [link]
Links we Like✨
In this section, we bring you interesting links from across the internet
- Back to the 70’s can be a great retro theme for a cafe, fashion show, or a theme party but not when it comes to the way FED handled things back then. Read about how data points were conveniently overlooked to drive home a stubborn view eventually breaking the system. Something similar happening these days too? Read: The Ghost of Arthur Burns
- There’s no dearth of stories about Poker and Stock markets. And here’s one more. However, we think, this one is right at the top of the stack. Read all about – the edge, risks, having fun, and luck from The College Friends Who Bet Their Way to Billions (Tip: Do not try this at home)
- Ending this newsletter with a profound read from Morgan Housel which should not be missed going into the weekend. Read: Harder Than It Looks, Not As Fun as It Seems
Join, probably, the best investment community in India.
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