Sancap

07/04/2024

https://www.youtube.com/watch?v=yc8m2DyHEPQ

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05/04/2024

Check out my latest post, shedding light on how to enhance your investing due diligence using "Index of Industrial Production" economic Indicator. Dive into the insights here-

https://www.wisbees.com/predicting-st/

Before we discuss today’s topic of predicting the movement of the Indian Stock Market using the "IIP" economic indicator, let me introduce you to a small theory of "Harry Markowitz" - the Nobel-winning pioneer of the "Modern Portfolio Theory".

16/02/2024

How did I become a profitable trader? Is it even possible?

😊 Yes, it's possible, but the journey is far from easy—only 2% of traders actually make money, and that's the harsh reality. When I joined a broking company and observed numerous accounts to check if any traders were profitable, it was the most motivating factor for me to continue learning. Seeing some successful retail traders using different strategies inspired me. I also realized that many YouTubers were fraudulent, making significant losses while profiting from courses and franchises. However, I understood that profitability was achievable with time and dedication. So, I committed myself to learning everything about the stock market, while also providing free training to develop the right mindset.

The Journey:

😔 It was one of the most painful journeys I've experienced, even more so than the pain of love and heartbreak.

💼 The initial year consisted of 14 to 16 hours of learning about the markets and enduring losses while gaining knowledge.

📉 The following year saw periods of profit alternating with losses, with no hope of consistent profitability or realizing it as a life skill.

📈 Gradually, I began to retain profits through proper discipline and risk management, learning to trust the process/system rather than focusing solely on profits.

💰 Another year passed, during which I became consistently profitable, gaining the confidence to consider it a passive income source.

💼 Now, trading serves as a passive income source, and I'm grateful to have developed a skill that can sustain me during uncertain times. Although trading isn't my primary focus for full-time employment, as money was never the driving force for me, it's the journey of learning about the market and finance that truly motivates me. Also, in reality, I even promote investing more than trading, as trading is not a cup of tea for everyone. Trading is not the only way to generate returns from the Market.

💻 Regarding the myth that multiple screens are necessary for profitability, I've found it to be untrue. To become profitable, all you need is a system for order placement and analysis before entry and exit. The more sophisticated your system, the greater the risk of overtrading and losses. Being a passive trader helps control urges, so the key is to trade less, learn more, lose less, earn more, and, most importantly, take your time.

😊

06/02/2024

Do you think India needs more subsidies or more infrastructure investment?

This new budget was an interim budget. The full budget will come after the new government is formed. In this video, we have discussed what is included in the budget and also heavily discussed the topic of "Infrastructure vs Subsidy.

Do you think India needs more subsidies or more infrastructure investment?This new budget was an interim budget. The full budget will come after the new gove...

01/02/2024

The only sector that appears to have received a reduced budget is Chemicals and Fertilisers. Overall, I observe a relatively unchanged budget, with not much difference compared to the previous year.

24/01/2024

In Chaotic 2021-2022, the market was abuzz with the USA banning China for using forced labor of the Uyghur community, terming it a genocide. Uyghurs, mostly Muslims with a different culture and language from the majority of Chinese people, have faced persecution by the Chinese government. This geopolitical maneuver, however, didn't just reverberate through diplomatic channels; it opened a gateway for new opportunities in the Indian market. This led to high demand shift to some Indian sectors like Chemicals, Papers, textiles, etc.

As an investor, it always comes to mind, which sector is going to grow for a long time? Which sectoral theme should we play in MF investing or in stock baskets? In this article, we will try to discuss some such sectors that have the future potential to generate alpha. However, recognizing that the potential for growth is one aspect, while acquiring them at reasonable valuations is another. Purchasing a company from an outperforming sector at high valuations may not yield returns when reality sets in. It is challenging to generate alpha from an industry or company that is widely popular and in everyone's focus. Therefore, focusing on under-researched companies may be crucial.

Sectors with promising prospects…
Manufacturing Sector - Textile, Paper, Defence & Chemical:
Companies are relocating from China to India, with Apple shifting its manufacturing operations to cater to 50% of global demand. The Production Linked Incentive (PLI) scheme incentivizes manufacturers in key sectors, offering financial rewards based on incremental sales and investment.

India is progressing towards becoming a net defense exporter through indigenous development (Atmanirbhar Bharat). In 2022, defense exports surged tenfold to almost 16000 crores. Drones, hand grenades, high precision instruments, guns, and carbines have all experienced growth. Countries in the Middle East and South Asia are procuring missiles, radars, and simulators, and India is securing air defense contracts worldwide.

Solar Industries, initially an explosives company, has diversified into hand grenades and Pinaka rockets, excelling in these fields. Some defense companies derive more revenue from services than products. Solar Industries getting orders from Armenia, Nigeria and eyeing Indonesia.

In the paper industry, optimism stems from the boards and packaging sector's potential growth due to the burgeoning e-commerce industry & paper ban. Despite India's per capita paper usage being only 15 kg, significantly below the global average of 57 kg, the country has transformed into a net exporter from an importer.

The textile segment is witnessing growth, with India engaging in numerous Free Trade Agreements. The ban on Chinese imports by the USA positions India, the largest cotton producer, to capitalize on global demand. Government initiatives aim to boost the fabric segment through capital expenditure. .GokulDas, KPR Mill-like companies are doing good. Textile sector is the second-largest employer after agro, so the government can't ignore. In bed sheets, we have captured 55% market share in the world but not in the apparel segment.

Chemicals and Specialty Chemicals see a shifting trend as China's dominance wanes. Companies like Deepak Nitrite, Navin Fluorine, and Pi Industries are capitalizing on this evolving market.

Financial Sector in India:
Over the last decade, the financial sector has experienced significant inclusion, bringing over 50 crore people into the formal banking system through Jan Dhan Yojana. Private banks, historically boasting the lowest NPAs, contrast with undervalued PSU Banks. Despite this growth, Indian banks are far from the top 10 globally in terms of asset size.Investing in banks can be tricky, and we have to find the banks that do responsible lending, not aggressive lending.

The broking industry has witnessed a surge in demat accounts, with a doubling of account openings in 2021. Depositories and asset management companies, including CDSL, have generated robust returns.

Clean energy, Digital Infrastructure:
Technological and digital solutions characterize the clean energy and digital infrastructure sectors. Notably, Tata Power has gained prominence in EV charging. The tech-driven evolution in mobility is evident, with Tata Elxsi and KPIT developing software for cars and catering to aerospace companies like Boeing and Airbus. The software cost in cars in India has moved from 10% to 25% and is constantly increasing.

Food consumption & QSR sector:
Once there was a time tea and coffee used to be sold in unpackaged, and now one will not see any unpackaged tea and coffee.The unorganized nature of the food consumption market in India, evident in the sale of unpackaged dal, chawal, atta, is undergoing rapid transformation. With an unorganized market space of 1.8 lakh crore and organized space at only 10k crore, there is immense potential.

The eating behavior is also changing; people want to go out and eat or order online. Changing eating behaviors, increased online orders, and a rise in Quick Service Restaurants (QSR) indicate rising per capita consumption, offering opportunities for growth. While FMCG remains a defensive sector, long-term growth prospects make QSR a viable choice. Examples include Devyani International and Zomato.

Full article here:-

In Chaotic 2021-2022, the market was abuzz with the USA banning China for using forced labor of the Uyghur community, terming it a genocide.

21/01/2024

Nifty, Bank nifty - January Month end expiry analysis.

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Connect to Speakers on Linkedin :-Gouri Sankar Dash- https://www.linkedin.com/in/gourisankardash/Sritam Prusty- https://www.linkedin.com/in/sritam-prusty-b84...

17/01/2024

A story of mine and many like me:

I remember a day in Delhi during my IES and Gate preparation time when I went to attend a job interview for a contractual post in a PSU company. The salary was around 18k/month as a stipend. When I arrived in the morning at Laxmi Nagar Metro station, I was shocked to see a long queue from the interview building to the Metro gate. The vacancies were only 21, and there were almost 4,000 students there for the interview. It looked like a gathering where PM Modi had come to give a speech.

At that moment, I knew it was absurd to wait for a turn because it was impossible for the panel to choose a right candidate among so much chaos. But I had told my parents, so I had to attend. The interview started at 9:00 a.m, and my turn came at 11:00 at night. I attended just for formality, as the interviewers were also conducting a formality interview of a maximum of 2 minutes.

That day, I realized, were those engineers not employable? No, that is not the reason. The reason is the scarcity of businesses that provide jobs.

Every year, India spends almost lakhs of crores on various pujas, temples, and celebrations. All this money is collected from a poor person to a rich person. To build a startup that already has a market-viable product can run with a seed capital of 1-2 crores. If we donate 5-10% of what we spend on these pujas and lightings, there will be light in lakhs and crores of families with their sons and daughters employed. This will build our nation, eradicate poverty, and make people financially stable.

This can be very much achieved through crowdfunding routes. In the USA, billions of dollars are being raised in crowdfunding to support startups. In this motive, my colleagues and I started a non-profitable charitable investment club, Dstreet Club, which aspires to incubate and provide seed funds to startups in their idea stage to at least enable them to convert into a product. We are positive that one day we will have a bigger impact on society through our small steps.

Keep supporting startups."

Follow D-street club- https://www.linkedin.com/company/99031816/admin/feed/posts/

17/01/2024

🚀 Equity Research S01E04 🚀

Are you, as an equity investor or analyst, comparing all banking companies based on PE ratios? Or perhaps evaluating consumer durables using PB ratios? Or, are you applying these financial ratios randomly wherever you see fit? Yes, you might be doing it incorrectly. Let's understand this today and identify which ratio fits where. 😊

Generally, there are two ways to find value: Relative value (P/E, P/B, EV/EBITDA, EV/Revenue, etc.) and Absolute Value (Dividend Discount Model, Discounted Cash Flow Model, Residual Income Models, and Asset-based Models, etc.). Today, we will focus on comparing the value of a company using relative valuation ratios only. 📈

Rakesh Jhunjhunwala made 40% of his wealth from Titan. How did he find such a multibagger business when others couldn't? A good investor is differentiated not only by understanding financial terminologies but also by comprehending the future potential of the business, which may require a special type of focus. 🌟

Valuing Consumer Goods:

Consumer goods have several segments like FMCGs (Marico, HULs), consumer durables (AC, refrigerators), light assets (bikes, cars), and food consumption (Devyani, Jubilants). 🛍️

The suitable ratio for these sectors is the PE Ratio, which is the price divided by EPS (Earnings per share). In simple words, this means how much you are paying for the earnings of the company. 💰

A high PE might indicate an overvalued company, and a low PE might suggest an undervalued one, but it all depends on how fast the company is growing. A faster-growing company will always have a higher PE. 📊

Valuing Banks and NBFCs:

Analyzing a bank is generally very different from other sectors. Here one looks at financial terminologies like CASA (Current Accounts and Saving accounts), NII (Net interest income), NIM (Net interest margins), NPA (Non-Performing assets), Book Value, etc. 💼

The valuation ratio suitable for the banking sector is the PB Ratio (Price to Book Value). Book Value is the difference between total assets and total liabilities, showing the net worth of the company. In general, a PB ratio from 2-3 for a private bank is considered good. 🏦

A PE ratio for a bank doesn't provide a clear picture because for a bank, asset quality is crucial. A company may lend at a very high rate, but the asset quality may be very risky. So, earnings alone will not show the real scenario (e.g., a high-growing company like Yes Bank with a poor balance sheet can collapse due to low asset quality). ⚖️

Similarly, to value an insurance company, a ratio used is (Price/Embedded Value). Embedded value (mentioned in annual reports) includes all the future premiums an insurance company is going to earn. 📈

To value a Capital goods company (airports, energy companies, hotels, L&T, Adani Group stocks), EV/EBITDA is a better ratio. These are very long gestation projects that take time to earn. With negative earnings, you cannot apply the PE ratio. ⏳

To analyze a conglomerate company (diversified businesses into multiple sectors) like Reliance Industries, which is into oils, telecom, export-import, e-commerce, the ratio used is "SOTP" (Sum of the Parts). ITC, Tata Group are also similar businesses.

SOTP Valuation (Sum of the Parts) adds the value of each individual business a conglomerate has. The individual valuation ratios are found and added up with their business weightage.

Follow me ( Gouri Sankar Dash) for more such posts. 🌐

13/01/2024

NIFTY, Bank Nifty -Broader Market Analysis for 15th Jan

and .

Watch the video here-
https://www.youtube.com/watch?v=4GsjaGmb6DI

Connect to Speakers on Linkedin :-Gouri Sankar Dash- https://www.linkedin.com/in/gourisankardash/Sritam Prusty- https://www.linkedin.com/in/sritam-prusty-b84...

11/01/2024

Do you want to park your idle money for some time, which can generate a good return, more than a savings account, while beating inflation at least? 🤔💰

Yes, now you can park your money in Zerodha Nifty 1Day Rate Liquid ETF, India’s first growth Liquid ETF. As this is an ETF, you can use your broking account to buy and sell it anytime you want. Liquid ETFs are actually a convenient avenue to park surplus funds in your account. You can pledge them anytime and take a trade immediately. No entry and exit load. 📈💹

Time to see how much it affects its competitor “Liquidbees” of Nippon India. 🤔📊

But what is a Nifty 1-D rate Liquid ETF? 🤷‍♂️

Liquid ETF or a Liquid Exchange Traded Fund (ETF) is designed to provide you a low-risk return and high liquidity. It trades on the exchanges (NSE and BSE) just like a stock. 📉💼

This will invest in overnight instruments like Tri-Party Repo on Government Securities or T-bills, Reverse repo, Cash & Cash equivalents, and G-Sec(s). 💵💼

This category of ETFs is considered to be one of the safest options to invest in among all Mutual funds/ETFs. The credit risk and interest risks are generally very low in these funds as they are invested in treasury bill instruments. In 1 Day, it matures and generates returns. This means you can think of it as a savings account and withdraw money whenever required. It's a very tax-efficient product. Growth NAV makes this ETF. Your returns are taxed only when your investments are redeemed, unlike daily dividends, which are taxed continuously. 🌐🏦

The index uses the overnight rate published on the “Triparty Repo Dealing System (TREPS)," a platform of CCIL, with government securities as underlying, for the computation of index values. 💹📈

Treps (Tri-Party Repo) are short-term financial agreements where one party sells securities (like government bonds) to another party with an agreement to buy them back at a slightly higher price after a short period, usually one day. These transactions are used by banks and financial institutions to manage their short-term liquidity needs. 💼💰

The overnight market in India is one of the most active components of the money market. 🇮🇳💹

How does a Liquid ETF work? 🤔

The way this instrument works is actually quite interesting. The price of the ETF stays constant at Rs 1000 and the returns you earn are daily dividends in the form of units which are again re-invested in the ETF. 💹🔄

Can I trade intraday in Liquid ETFs?

Yes, you can but you won’t earn anything and your broker will be very thankful to you. 😄💸

Recently, due to future possibilities of interest rate cuts, investors are withdrawing funds from the debt space and investing in equity funds. Also, the expectation of BJP coming back to power has acted as a positive catalyst. As per the latest AMFI data, the Asset under management of the Mutual fund industry rose to 50.81L Crore. 📈💼

01/01/2024

Happy New Year to all investors!

We appreciate your feedback and suggestions that help us improve our services and products.

We wish you a prosperous and joyful new year. May 2024 bring you more opportunities, wealth, and happiness.

Cheers to a new year!