AKG Weekly Charts - Issue #84
This newsletter is a weekly selection of 10 charts hand-picked across the internet which pertains to our investment strategy and bring an updated insight and perspective.
I participated in a twitter spaces session on Special Situation Investing with Accidental Investor last week, recording of which can be accessed here
I will be conducting a session on Special Situation Investing on ET market streams (follow here) on 17th Jan, 12 noon. A presentation will be followed by a Q&A session.
To invest in Special Situation Strategy by us, see here and here
[1] The easing of port traffic and the opening of other supply-chain bottlenecks have led to a collapse in freight rates from the ATHs reached during the pandemic. The cost of shipping a 40-foot container from China to America’s west coast is now $1,400, down 93% from its peak of $20,600 in September 2021, according to Freightos, an online freight marketplace. It is roughly equal to its value in February 2020, before the pandemic struck.
[2] A high incidence of single households is now a mark of a wealthy society. This is partly a consequence of avoiding or delaying marriage and childbirth, and of single housing becoming more affordable, but it has serious implications. [We have written about it before here. Needs an update!]
[3] Despite current higher investment costs due to elevated commodity prices, utility-scale solar PV is the least costly option for new electricity generation in a significant majority of countries worldwide. Distributed solar PV, such as rooftop solar on buildings, is also set for faster growth as a result of higher retail electricity prices and growing policy support to help consumers save money on their energy bills.
We have recommended a new stock in the new energy sector last month under FC Special Situation strategy with a ‘BUY’ recommendation. One can access them by being a paid subscriber and check all the details here
[4] A gradual recovery in domestic 2W volumes is expected in next 2yrs due to cooling off inflation, further increase in upfront cost and weak demand from rural segment. Further, increased sales in the EV segment will continue to weigh on ICE 2W segment volumes and profitability. While the worst may be over in terms of volumes for the export 2W segment, volumes are expected to grow moderately in the coming years despite touching a multi-year lows.
[5] FPIs are back to selling though sectors have changed. Selling in IT has lead to buying in financials and non-lending financials. We belive things are bottoming out in the later segment and a larger alpha can be generated in this.
We have launched a non-lending financials thematic strategy. Use code ‘FC2023’ to get 23% discount across all plans for a limited period of time. For investing in our smallcase, refer details here
[6] The gold bulls are certainly having a moment. In addition to seasonal tailwinds (Dec-Jan are best months for Gold prices appreciation); softer US CPI readings, heavy central bank buying in Russia, China & India; retracement in the US dollar index and expectations for a less-hawkish Fed has all contributed to gains. Watch out for an Inverted H&S weekly close above 1975$.
[7] As Germany grapples with an energy crisis threatening its future as an industrial leader, an acute shortage of workers is compounding problems for manufacturers already struggling to stay competitive. Almost all large manufactures have reported shortage of staff along with unqualified labour [see here]
[8] A little dated chart, but as Europe makes the transition towards green energy, the question of what to do with nuclear power is once more at the center of discussions. There are two camps on the topic: On the one hand, supporters argue that nuclear energy is carbon free and could help fill an imminent energy gap, while on the other, critics are concerned about the energy source’s radioactive byproduct being difficult to dispose of. [h/t Statista]
[9] Negative returns followed by positive returns have been discussed to death in the year-end outlooks over the last month in US. A zoom out version puts the period of negative returns to max 2.5 years post dot-com crisis. How quickly we can bounce this time around?
[10] Tesla radically cut prices by 6-20% on its EVs in bid to boost flagging demand. Once a posterboy of technology change, now it is down ~75% from its peak. Market finally realizing it is an auto company and needs saner valuations. Good thing is despite the mega-cap rout of these tech names, sector rotation has moved to other sectors like industrials, energy and FMCG names in US.
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Hope you enjoyed reading this edition!
Till the next time, have a great week ahead!
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Disclaimer:
This newsletter is for information purposes only. In this material, Amit Kumar Gupta (SEBI registered Research Analyst, INH100009327) has used information that is publicly available and is believed to be from reliable sources. While utmost care has been exercised, the author does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers, before acting on any information herein should make their own investigation & seek appropriate professional advice. Any sector(s)/ stock(s)/ issuer(s) mentioned do not constitute any recommendation and the RA may or may not have any future position in these. All opinions/ figures/ charts/ graphs are as on date of publishing (or as at mentioned date) and are subject to change without notice. Any logos used may be trademarks™ or registered® trademarks of their respective holders, our usage does not imply any affiliation with or endorsement by them. Past performance may or may not be sustained in the future and should not be used as a basis for comparison to infer any investment ideas.