AKG weekly charts - Issue #98
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.
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[1] Marc Anderson wrote a thought-provoking piece (see here) - Why AI won’t cause the unemployment?
The lines in blue are the sectors where technological innovation is allowed to push down prices while increasing quality. The lines in red are the sectors where technological innovation is not permitted to push down prices; Clearly latter is winning the price war!
[2] We have constantly maintained that Gold is a trading opportunity dressed up as Investment position (see here and here). Given it had rallied keeping up the seasonal trend and in the light of SVB crisis, most investors now find it Gold overvalued.
We agree that risk:reward of any fresh trade or investment from current levels is not very good and should be avoided.
[3] In US, The Small Business Optimism Index is a good indicator to judge how a number of small business owners are viewing the economy. It has now hit lowest since June 1980 and most SMEs concur that it is time to expand operations.
[4] The liquidity in India may continue to be tighter, while growth remains buoyant. Strong growth may lead to further widening of the deposit-credit gap, pressuring the deposit rate. The margins of banks may not expand from the current levels. In case of weaker franchises, margins may actually decline in the next 3-4quarters. We have moved from OW to UW on lending financials in the last quarter (Q1CY23) in our investment strategy (see our note here)
[5] Several Asian petrochemical producers plan to switch a portion of their feedstock from naphtha to cheaper liquefied petroleum gas (LPG) late in the second quarter as the price gap between the two fuels has widened.
[6] IMF has produced a database (see here) which summarizes key fiscal measures governments have announced or taken in selected economies in response to the COVID-19 pandemic as of September 27th, 2021. It includes COVID-19 related measures since January 2020 and covers measures for implementation in 2020, 2021, and beyond. The database categorizes different types of fiscal support (for example, above-the-line and below-the line measures, and contingent liabilities) that have different implications for public finances in the near term and beyond.
[7] Investors have never had major losses in money market funds in the United States, and this record is comforting. But it doesn’t mean that the funds are without risk. Ask SVB or Signature bank!
[8] Earth's average surface temperature in 2022 tied with 2015 as the fifth warmest on record. The past nine years have been the warmest years since modern recordkeeping began in 1880. This means Earth in 2022 was about 2 degrees Fahrenheit (or about 1.11 degrees Celsius) warmer than the late 19th century average. Governments across the world won’t budge till there are deaths!
[9] In the past, multiple times we have reiterated that CPI data should not be taken into account as a benchmark while planning the investment strategy for the majority of household investors
Every investor may have a different inflation number to deal with. The inflation affects rural and urban investors differently. The inflation also varies according to the State, an investor lives in and incurs most of the expenditure. The impact of inflation on investors’ wealth could be different depending on his consumption pattern and saving propensity.
[Listed to our AI-generated podcast on Spotify here]
[10] Boring markets lead to more mistakes because one is looking for momentum which is absent by its very nature. And stock returns need momentum in expected earnings over the next few years. Wait and watch!
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.