[17 Sep 22] Newsletter: IT Stocks Plunge, 5 Good Reads & Our Weekly Show!

🔆 Quick glance

• Market Overview: Sensex 30 PE trend, Macro markers & Market Movers
• Links we like: 5 good reads on markets & money
• Capitalmind Show: Kya Lagta Hai Bazaar on Youtube

Market Overview 🎯

IT stocks saw yet another week of weakness mirroring the fall in Nasdaq. A recession in the west is not good for the IT sector. IT stocks have been under selling pressure and the recent downgrade of the sector by Goldman Sachs just adds to the misery. Infosys and Tech Mahindra were the biggest losers losing as much as 9% within the week.

Banking stocks are seeing a lot of buying on the basis of newfound optimism in credit growth and stronger balance sheets. The leader of the pack was IndusInd Bank which gained close to 8% over the week.

Crude didn’t do much last week but Gold cracked by 3%. Gold is down 5% over the month and investors are questioning if gold can still be considered a hedge against inflation. Nifty was relatively having a good week until it cracked by ~2% on Friday and ended the week with a 1.6% drawdown.

The Sensex PE ratio is at 23.2 and here’s the comparison to the long-term range

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Links we like 📝

• Selecting an active fund is difficult. Here are three things you need to be clear about before investing in them. Read – Why is Active Fund Selection So Difficult?
• Despite the painful recession during the early ’80s, here’s how Paul Volcker vowed to restore the economy while continuing to hike interest rates. Read – The Fed’s “Time of Testing”: Is This Where the Trouble Will Stop?
• How is core inflation different from non-core? And, why a short-term pain from rising interest rates might be better than a full-fledged recession for the US. Read – August inflation update
• To make a breakthrough innovation, one must solve and overcome a contradiction. Read – An In-The-Box Method for Creative Problem Solving
• Evaluating a fund’s performance solely by its ‘alpha’ can be misleading. Here’s why judging a fund by its ‘risk-adjusted return’ makes better sense. Read – What’s Alpha?

Kya Lagta Hai Bazaar🎙

We do a weekly show with Deepak Shenoy where we talk about markets, finance, and investing. A candid conversation to wrap up the week and a chance to interact with you all. Join in, every Friday, at 4 PM on YouTube.

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