Small cap stocks never cease to generate interest with retail investors. Recently we had published an article titled “How to approach risky, but rewarding Smallcaps” where Mr Balakrishnan gave some valuable tips on how to approach this space.
Today, everyone seems to be part of Whatsapp groups, Telegram channels etc which specialize in giving stock tips. As an individual, it is an extremely demanding ask to keep searching for new stocks, new ideas etc. There is a constant bombardment of ideas and stock tips from the media- television channels, internet business websites, free data providers, charts, tipsheets and more.
When it comes to building long-term portfolios with debt, many of you are confused about which funds to use. Should it be corporate bond funds or gilt funds or credit risk funds? To choose these or a combination of these, you need to first know the difference in the characteristics of these fund categories.
While we generally look at lenders by their book size (advances) and network, the market has a different take when it comes to valuation and that has a significant impact on shareholder returns. AHFCs have become the market darlings in recent times over their conventional, broad based home lending counterparts, as reflected in their market valuations. So, what makes AHFCs market favourites?
If you are interested in psychology or behavioural economics, you’d surely have come across the boiling frog syndrome. The theory goes that if you try to dunk a frog in a pot of boiling water, it will immediately jump out. But if you place it in cool water and slowly heat up the pot, the frog will ignore the small changes in temperature and simply boil to death.
We have recommended a buy on this stock in May 2021. The stock has since then moved up by over 109%. We are moving the stock to a Hold recommendation in Prime Stocks.
Funds investing internationally were the flavour of the season all of last year. That changed in February this year, when funds hit the ceiling set by the Reserve Bank on how much they could invest in overseas securities. When we first explained the scenario, expectations were that this cap would be increased in due course and international funds could open up again.
The price action in the Nifty 50 index, and the broader markets in particular, have been extremely bullish. The overbought scenario in the short-term breadth indicator was resolved by a sideways consolidation in price. This is a major sign of strength indicating that prices could power higher. In a downtrend or a weak market environment, the overbought breadth would typically lead to a sharp price correction, which will in turn lead to a cool off in the breadth indicator.
Deposits, bonds and debt funds are great ways to diversify one’s portfolio. But the taxation on these instruments can decide whether an option is attractive or unattractive on a post-tax basis. Taxation, though varies across instruments and can be quite complex. The fact that not all debt instruments are taxed in the same way compounds the decision making dilemma on which option to choose. This write-up will break down the taxation aspect of popular debt instruments for resident individuals.
When interest rates on bank deposits hit rock-bottom in the last few years, the fixed deposit (FD) programme from Tamil Nadu Power Finance and Infrastructure Corporation (TNPFIC) turned quite a hit. This NBFC owned by the Tamil Nadu Government offers high interest rates of 7-8% on FDs and has a friendly online interface, making it very popular with fixed income seekers and seniors. We have received a number of queries from many of you, about this deposit.
Consumer durables, a key consumer category, bore the brunt of Covid as companies lost two business seasons in FY21 and FY22 to lockdowns and supply disruptions. As demand took a hit, the sector lost its sheen, especially white goods and small appliances, leaving investors disappointed over the last 2 years amid a soaring market.
Small caps are always alluring to the investor. Everyone knows that it is difficult to make quick money in large well-known and well-researched stocks. We all want to find that small gem which turns a lakh of rupees into crores. The most money is made in such cases when we can spot a company that will turn out to be a market-leading name in five to ten years. Today, the investor population has increased dramatically. Besides, information is available to everyone. This makes small cap investing both interesting and risky.
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