August 11, 2024   |   Read Online

Power / Energy as a theme that looks very attractive over the next few years

We suggest sticking to funds with such a theme with a max of 5% odd exposure to this sector theme for a very long-term play and for aggressive investors.

• Hindenburg in their own wisdom have released an apparently “big” piece of news that maligns the SEBI chairperson of unlawful conduct (we don’t feel anything amiss here and attached is a post by our founder on his views on this subject)

• We believe that the above will be a non-issue unless some further information is unearthed

• Markets have been rangebound as the RBI also maintained status quo last week

• As we get a bunch of queries we believe Gold ETF’s / funds to be the best ways to invest in Gold now, ahead of SGB’s due to
  a) Liquidity issues in SGB’s and
  b) Tax benefits only for long term investors. Our view on Gold is bullish in the short – medium term and hence we believe there could be opportunities to exit in the next 1-3 years where ETF’s could be the best best with just a 12.5% tax rate post a 12m holding period

• Mutual Fund inflows have reached 40k crores a month out of which 23k crore is the SIP book. Despite concerns from all quarters, liquidity eventually drives all asset classes and it seems the bubble will get bigger before it bursts

We are inundated by requests on how to invest at these levels and despite a bit of repetition from last week’s newsletter, we put forth our views on the strategy to adopt now

Markets were waiting for triggers and suddenly they have found multiple

Global

1) Yen carry trade unwinding
2) Warren Buffet selling Apple and high cash levels
3) Currencies crashing due to Yen
4) Major worries on geopolitical issues (Iran Israel and other immigrant related tensions in other European nations)

Domestic

1) Quarterly results a tad sub par
2) Monsoon uncertainty
3) High valuations

What to do

If you are fairly invested into equities:

1) I would recommend doing bottom fishing only below 23k levels of the Nifty
2) I would do some SIP's in Nasdaq considering the new tax benefit and I do believe that big tech is here to stay
3) Stay away from small caps especially for any moneys < 5 years

If you are not invested

1) Start deploying 10% at every 250-point fall in the Nifty

Again make sure you don’t go overboard - invest moneys of long term + ensure your equities don’t go beyond your asset allocation

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Hindenburg - Can Indians Really Be Fooled everytime

Imagine this: you've invested in ABC Mutual Fund, a reputable choice for many savvy investors. But suddenly, you're caught in a whirlwind of controversy simply because a notorious scamster happens to invest in the same fund. Now, SEBI pulls you up, implying guilt by association. This is the scenario Hindenburg seems to be painting for the SEBI Chairman. (Further in my view, labelling Adani as a scamster lacks solid evidence. Sure, they're aggressive and leveraged, but I don’t feel there is any factual evidence yet of wrongdoing)

Many of us know individuals with legitimate offshore funds, and despite popular belief, offshore investments aren't synonymous with scams.

Yet, Hindenburg’s tactics offer valuable marketing lessons on how they sensationalize a non-event

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