Groww Digest

2023-06-06 18:30:19 Do they take out money during a recession? Many times, no. Many times they start investing even more during recession so they can make even higher returns.

All said and done, the thing to note is, the strategy can be different but fund managers take all decisions to maximise returns while keeping the risk within limits.

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That's it for now. See you tomorrow! Buka / Bagaimana

2023-06-06 18:30:19 Daily Groww Digest

6 June 2023

Sensex 62,792.88 ▲ 0.01%
Nifty 18,599.00 ▲ 0.03%
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Indian stock markets ended flat today.

Auto and realty stocks rose the most while IT and consumer durables stocks fell the most.

Japan and Taiwan markets ended in the green and US, China, and Hong Kong markets fell today.

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More...

+NSE has shifted Nifty Bank F&O expiry to Friday.

+RBI’s 3-day meeting has started. The central bank will announce its decision about interest rate hike on June 8.

+IKIO Lighting IPO was subscribed 1.55 times on day 1. Retail investors have subscribed to the IPO 1.64 times.

+Aditya Birla Group is reportedly planning to set up a jewellery brand 'Novel Jewels' with an investment of around Rs 5,000 cr.

+The government has raised Rs 4,185 cr through a 3% stake sale in Coal India.

+Bangalore based 2-wheeler EV startup River has raised $15 mn in its latest funding round.

+Go First airline has requested DGCA's approval to restart flights with 22 planes for the next five months.
---------------------


Stocks in the news
JK Cement: will acquire 100% stake in Toshali Cements for Rs 157 cr.

SBI: will consider fundraising on 9 June.

IndiGo: has set up a goal to carry 10 cr passengers in the year ending March 2024.

Indian Energy Exchange: total trade volume rose 8% year-on-year to 8,250 million units in May.

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Word of the Day

Unclaimed Deposits

Unclaimed deposits is the money that remain inactive (hasn't been withdrawn) for at least 10 years.

When people no longer use their bank accounts or fail to claim their funds, the money is transferred to a fund like the Depositor Education and Awareness (DEA) fund managed by the RBI.

Depositors can still reclaim their deposits and any interest, even after the transfer.

Reasons for unclaimed deposits include:

-non-closure of bank accounts,
-failure to withdraw balance money,
-deposits belonging to individuals who have died

Banks display unclaimed account details on their websites, and people can initiate the process by submitting a claim form and relevant documents.

To address this issue, the RBI has also launched initiatives such as the '100 Days 100 Pays' campaign and a centralised web portal for deposit searches.
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6 Day Course
Theme: forex

Day 2: Tuesday

A major point about foreign exchange is that there is no common place for exchange.

When you buy or sell stocks, you do so at common exchanges like the Bombay Stock Exchange (BSE) or National Stock Exchange (NSE).

Currencies are traded by wire between institutions like banks, hedge funds, large corporations, etc.

Because there is no central place where the foreign currencies are traded, there are no trading hours as such.

Currencies are traded when the markets open far east in Japan and end when the day ends far west in America.

Earlier, it was very difficult for small and retail investors to trade currencies.

With the coming of the internet, this has become easier as many institutions (banks, investment platforms, etc) allow their users to exchange currencies.
Missed last week's course? You can download the course PDF - click to download: https://bit.ly/3WOIS24

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Featured Question
"Do mutual fund manager's exit from a stock if it is going downhill.Or in a simple language do mf take your money out from market in recession and keep it safe for investing it at the right time."


Fund managers keep an eye on the stocks — and exit when they feel there is no hope for the stock.

There are many things to understand about this.

Many times, fund managers do not exit a falling stock because they expect it to rise up again.

Many times they exit a stock when it is falling because they think the stock will never recover again.

Many times they even exit stocks that are going up because they expect it to fall.

In all cases, fund managers can also make mistakes: sell when they shouldn’t have, hold on when they shouldn’t have, etc. Buka / Bagaimana

2023-06-05 17:01:00 Daily Groww Digest

5 June 2023

Sensex 62,787.47 ▲ 0.38%
Nifty 18,593.85 ▲ 0.32%
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Indian markets closed in the green today.

Auto and media stocks rose the most while FMCG and PSU bank stocks fell the most.

All other Asian markets and the US market ended up as well.

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More...

+Service industry growth (PMI) stood at 61.2 in May vs 62 in April.

+Saudi Arabia will reduce oil supply by 1 million barrels per day starting July.

+India’s auto sales jumped 10% year-on-year in May: FADA.

+The Indian government has banned 14 fixed dose drug combinations (FDCs).

+Monsoon is expected to arrive in India in the next 2-3 days: IMD.
---------------------


Stocks in the news
Indian Oil: formed a joint venture with NTPC Green Energy to develop power projects.

IndiGo: is reportedly planning to buy 500 planes from Airbus.

Indraprastha Gas: planning to enter the EV charging market.

Wipro: record date for the buyback offer has been set as June 16.

Godrej Properties: increased its stake in Godrej Home Constructions from 74% to 100%.

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Word of the Day

P/E Ratio

The P/E ratio, or Price-to-Earnings ratio, is used by many to estimate if a stock is overvalued or undervalued.

It is calculated by dividing the current market price of a stock by its earnings per share (EPS).

A high P/E ratio may suggest that the stock is overvalued while a low P/E ratio may indicate that it is undervalued.

There is no fixed number above or below which a stock can be said to be overvalued or undervalued. It is a subjective number.

For example, if a company's stock is currently trading at Rs 50 per share and its earning per share is Rs 2, the P/E ratio would be 25 (50 divided by 2).

This means investors are paying 25 times the company's current earnings for each share.

The P/E ratio is commonly used in fundamental analysis to judge a company's profitability and compare it with other companies in the same industry.
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6 Day Course
Theme: forex

Day 1: Monday

Forex is made up of two words: foreign exchange.

Foreign exchange refers to the exchanging of currencies between two sides.

Let’s say an Indian man is going to Singapore. He will not be able to use the Indian Rupee in Singapore.

So he exchanges some Rupees to get Singapore Dollars in return. Now, he can buy anything in Singapore.

The rate of exchange between two currencies is not fixed — it moves up and down — similar to share prices.

This happens because of supply and demand for the currencies involved.

The exchange rate is written in pairs. For example, the USD-INR exchange rate in India today is around Rs 82.

This means, if you want $1, you have to pay Rs 82.
Missed last week's course? You can download the course PDF - click to download: https://bit.ly/3WOIS24

---------------------

Featured Question
"Why is it advised to keep mutual funds for long terms? What should be the minimum and maximum time limit for good returns?"


Mutual funds are of many kinds.

There are mutual funds that are good for short-term also.

When people suggest long term investing, they are usually referring to equity mutual funds.

Equity mutual funds invest in stocks.

Investing in stocks in the short-term can be very volatile — lots of ups and downs.

In the long run, so far, the performance has been more stable and chances of getting higher returns is more.

This is why many suggest investing for the longer term (in equity mutual funds).

In equity mutual funds, the minimum period investors should try to invest for is at least 3-4 years. Even that depends on the sub-category of mutual funds.

The ideal duration really depends on the investor — it is subjective.

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That's it for now. See you tomorrow! Buka / Bagaimana

2023-06-04 09:48:50 Even the experts are divided.

Facebook CEO Mark Zuckerberg is confident AI is good for humanity.

Tesla CEO Elon Musk keeps warning of the risks of AI.

OpenAI’s CEO Sam Altman (creator of ChatGPT) believes that AI will help humanity in the long run and create new opportunities.

But – he also warns of the potential risks of AI. He has asked for government intervention and regulation in the field of AI.

He compared AI to nuclear technology – immensely useful but can be just as harmful.

In the coming years, we will see AI become an active part of our daily lives – just like how the internet is an integral part of our lives.

They’ll help us.

But what happens when it gets much, much smarter?

Only time will tell.

6-Day-Course

Theme of the week: dividend

We’ve reached the end of this week’s course that started on Monday.

Here’s a test you should take. Get pen and paper!

Question 1:
Who gets the dividend?

-All past and present shareholders
-All present shareholders
-Some past and some present shareholders

Question 2:
On which date is the stock’s price reduced?

-Ex-dividend date
-Record date
-Payment date

Question 3:
Which of the following companies is more likely to give dividends?

-Rapidly expanding company
-Company not expanding as rapidly

Question 4:
Which day comes before?

-Ex-dividend date
-Record date

Question 5:
Who pays tax on dividend income?

-Dividend paying company
-Investor


Answers:
Q1: All present shareholders
Q2: Ex-dividend date
Q3: Company not expanding as rapidly
Q4: Ex-dividend date
Q5: Investor
---------------------  

There's more:

-Quick takes from the week
-How Sensex, Nifty, gold, silver, Dow Jones, and Nasdaq changed over the week

And more!

Visit our Weekly Groww Digest page to read it all:

https://groww.in/digest Buka / Bagaimana

2023-06-04 09:48:50 Even more complicated.

So far, it is still easy for engineers to program into the lift.

But look at the variables already – we’re measuring the time of the day and day of the week.

Two numbers.

Let’s say you could measure more. What if you could measure the number of people on each floor at any point, live?

What if we could measure who the people in the building are? Are they maintenance staff who will visit every floor or employees who will mostly go to only their floor?

What if we could measure the weather? A rainy day would mean fewer people in the office.

There can be millions of things you can measure. But can a team of engineers write algorithms that are so complicated?

Immensely difficult.

AI is a program that does this – it takes in vast amounts of data and observes patterns in it. Pattern recognition machine.

That step where engineers write something new in the lift’s program – AI can do that step on its own to some extent.

This is where it becomes truly powerful – it can learn, just as we humans do.

Engineers can tune these patterns – keep what they want, and remove what they don’t want.

AI is a highly evolved and much more complicated version of this example.

It is capable of processing vast amounts of data and seeing patterns that we humans would take much longer to notice – or maybe never notice.

This is a short version.

Books can be written about the topic. Even those might not be enough to explain everything about AI.

AI is in this phase where it is both underhyped and overhyped.

The AI developed by some companies is just mediocre, to say the least. Some on the other hand are just mind-bending.

ChatGPT: the most viral chatbot app today that talks to you like an assistant.

Stable Diffusion: a tool that can make almost-real images of whatever you describe in plain English.

Soundraw: can make music based on the genre, mood, and instruments you tell it.

Deep Nostalgia: can take pictures of people who no longer exist and make it appear as though they’re smiling and blinking – like they were alive.

Murf: a tool that takes in written text and gives out audio. You can choose different types of voices too.

The list goes on.

The AI segment is developing so fast, it’s hard to keep track of the latest and greatest AI tools out there.

Impact on Society

The fear is, if machines get so smart, many people will be jobless and without an income – if it gets better than us humans.

Two things to note here.

First, machines are already better than us at many things.

Second, it doesn’t need to be smarter to kill jobs. It is already doing that.

Think about it.

Can you lift a 1,000 kg box? There are machines that can.

Can you calculate (984577456 x 34789745) + (485635879 - 2387634)?

The device you are reading this Digest on can – in fractions of a second.

Machines are already better than us – in many ways.

So what’s the hype about AI?

Well, AI can do even more of what we humans can. But better. Or faster. Or better and faster.

All sorts of machines have always been about that – being better and faster than humans.

Otherwise, what’s the point of having machines?

Imagine the amount of farming work tractors can do with just one person driving it.

That’s also what many argue.

New machines are always scary – everyone fears they’ll kill jobs.

The printing press scared people who copied text by hand for a living. The sewing machines scared textile workers. The computer scared the accountants and many others.

But in the longer run, machines have ended up helping people.

Increased productivity, increased output, cheaper cost.

Displaced people throughout history have found better and more meaningful jobs to work on.

This fact – machines have mostly helped us – this fact is given as an example by many AI experts. They believe that just like other machines from the past, AI too will help us.

But there are disagreements.

Many AI experts also believe that this technology is different; that technology might actually kill jobs and not create new ones.

What do experts think? Buka / Bagaimana

2023-06-04 09:48:50  Weekly Groww Digest  
  
4 June 2023

Sensex: 62,547.11 ▲ 0.07%
Nifty: 18,534.10 ▲ 0.19%

Jan 20 2023, around 5 pm.

Jennifer had just reached a dance studio.

While getting out of her car, she received a call from an unknown source.

Suspicious – but she picked up the call.

Jennifer heard the voice of a young girl screaming. The girl was saying she “messed up”.

Jennifer immediately recognized the voice. It was Brianna – her elder daughter.

Then she heard her daughter's voice in the background while a man’s voice came on the phone.

He told her that Brianna had been kidnapped. He threatened Jennifer with consequences. And he demanded $1 million in ransom.

Jennifer ran inside the dance studio shouting for help. The police were called. More calls were made.

For Jennifer, relief came fast – her daughter was absolutely fine – she hadn’t been kidnapped.

But then, whose voice was on the call?

Jennifer was sure the voice on the phone was her daughter, Brianna. Everything matched – the accent, tones, pronunciation – everything.

The era of Artificial Intelligence – AI, in short – is here.

The voice on the phone was fake. It was an AI mimicking Brianna’s voice.

A scammer was using AI voice to fool Jennifer into thinking her daughter had been kidnapped.

AI is taking us into an era of absurd possibilities.

This write-up is going to be a bit long.

On one hand, it has the potential to help us in ways we can’t even imagine. On the other hand, it can cause immense damage.

Both, the benefit and the damage, can be far greater than anything we’ve seen before.

There were AI-created images of Donald Trump being arrested. For a brief moment, it triggered outrage among his supporters.

Forget pictures, AI is even starting to do magic with videos.

AI has also proven more effective than many doctors in detecting cancer by looking at patients’ reports like scans and X-rays. One example of how AI can help us.

You must have seen videos of some cars – mostly Tesla – driving themselves. That’s AI.

AI is a tool. It doesn’t know what is right or wrong. Humans have to decide what’s right and what's not.

How does AI work?

It’s complicated. And we’re not experts.

All the software on computers you see works on algorithms. Algorithms written by human beings – engineers.

Everything is written by someone.

The algorithm tells the computer what to do. Something like: if this happens, do this. If not, then do that.

Obviously, it is a lot more complicated than that. But you get the gist of it.

Take this case: there is an office with 4 floors. There’s one lift in the office.

When not in use, the lift is on the ground floor. Whenever someone calls the lift, the lift goes to their floor from the ground floor.

This takes electricity – of course.

Someone noticed that the maximum number of people in the office is located on the 4th floor.

So the probability of the lift being called to the 4th floor was higher than on other floors.

The lift’s engineer programmed the lift to rest on the 4th floor at all times instead of the ground floor.

This way, some electricity could be saved.

Someone noticed a pattern again – after 6 pm, most people on the 4th floor had left the office. Now, most people were on the 2nd floor.

The lift’s engineer programmed the lift to rest on the 4th floor before 6 pm and on the 2nd floor after 6 pm.

You can observe, the lift’s algorithm became a bit more complicated. But it works better.

Someone noticed another pattern – that all floors are empty in the morning since nobody is in the offices. Everybody is coming to the offices.

The lift’s engineer programmed the lift to rest on the 4th floor before 6 pm and on the 2nd floor after 6 pm, and on the ground floor before 10 am.

The algorithm is now even more complicated as more variables are added.

Someone observed a different pattern – the office is empty on Saturdays and Sundays.

The lift’s engineer programmed the lift to rest on the 4th floor before 6 pm and on the 2nd floor after 6 pm, ground floor before 10 am, and ground floor on Saturdays and Sundays. Buka / Bagaimana

2023-06-02 17:23:59 Daily Groww Digest

2 June 2023

Sensex 62,547.11 ▲ 0.19%
Nifty 18,534.10 ▲ 0.25%
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Indian markets closed in the green today.

Realty and metal stocks rose the most while oil & gas and IT stocks fell the most.

All other Asian markets ended up also.

---------------------

More...

+Domestic coal production increased 7.10% year-on-year to 76.26 million tonnes in May.

+Forex reserves fell $4.34 billion to $589.14 billion in the week that ended on May 26: RBI data.

+India’s power consumption rose by 1.04% to 136.56 billion units in May.

+Fly91 - a new regional Indian airline is planning to start operations this year.

+Rooftop solar capacity in India grew 6.35% year-on-year to 485 MW in the Jan-March quarter: Mercom.
---------------------


Stocks in the news
Hero Moto: sales rose 7% in May to 5.19 lakh units.

Bank of Baroda: plans to raise Rs 5,000 cr by March 31, 2024.

Adani Ports: cargo volume rose 19% year-on-year in May.

Bank of Maharashtra: launched Qualified Institutional Placement (QIP) offer at a floor price of Rs 29.98 per share.

Adani Enterprises: NSE and BSE have removed the stock from the short-term ASM framework.

Paras Defence: announced a joint venture agreement with Controp Precision Technologies.

---------------------

Word of the Day

Qualified Institutional Placement

Qualified Institutional Placement (QIP) is one of the ways through which listed companies (companies already on the stock markets) can raise money.

Only qualified institutional buyers are allowed to take part in this fundraise – banks, mutual fund companies, and financial institutions are some examples.

The company sells its stocks to these investors and gets money in return.
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6 Day Course
Theme: dividend

Day 5: Friday

Interim dividend: a company may declare a dividend in the middle of the financial year also.

Often this happens when they release their quarterly report.

Example: a company may pay a dividend at the end of Q1 (April-May-June), Q2, etc.

This dividend is called an interim dividend.

The dividend paid at the end of the financial year is called the final dividend. It is paid after the financial year ends which is when Q4 also ends.

Do note, dividend tax is your responsibility.

Earlier, this was handled by the company paying the dividend. This is no longer the case.

Investors earning dividends need to pay tax themselves.
Missed last week's course? You can download the course PDF - click to download: https://bit.ly/3pWW3ll

---------------------

Featured Question
"How MF decide NAV at the end of the day? Can they manipulate it to show good performance over a short period? Does there any control of SEBI over this?"


The NAV of a mutual fund is not a subjective number. It is a number that is calculated and the inputs are open for all to see.

NAV is basically a reflection of all the assets held by a mutual fund.

Take the value of all shares (or bonds, etc) held by a mutual fund, and add the mutual fund’s cash reserves to it.

This will give you the total assets of that mutual fund — also called Assets Under Management (AUM).

If you divide the AUM by the total number of units in the mutual fund, you will get the NAV value.

These numbers are all publicly visible and updated regularly. SEBI has strict rules about the numbers and their publishing frequency.

Non-compliance leads to action by SEBI.

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That's it for now. See you tomorrow! Buka / Bagaimana

2023-06-01 17:52:11 Mutual funds’ aim is to maximize returns for the investors while sticking to the mutual fund’s risk profile and investment philosophy.

The mutual fund company's fees and income is tied to the performance of the mutual funds they manage.

Investors should track the returns being given by the mutual fund. If a mutual fund isn’t performing well, the mutual fund isn’t good.

Do note, in the case of equity mutual funds, performance can go up and down in the short term — that is completely normal.

This is why more emphasis should be paid to long-term performance, not short-term.

Tracking returns will tell you if a mutual fund is performing.

Tracking if the level of risk being taken is appropriate or not is more difficult.

There are many rules and regulations in place that help with that — and they work. But again, it is not airtight — lapses do happen.

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That's it for now. See you tomorrow! Buka / Bagaimana

2023-06-01 17:52:11 Daily Groww Digest

1 June 2023

Sensex 62,428.54 ▼ 0.31%
Nifty 18,487.75 ▼ 0.25%
---------------------
Indian markets closed in the red today.

Bank and financial services stocks fell the most while realty and pharma stocks rose the most.

Other Asian markets – Hang Seng and Taiwan markets fell while China’s market ended flat.

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Auto Sales: May 2023

Maruti Suzuki: sales rose 10.33% year-on-year to 1.78 lakh units.

Tata Motors: sold 1.62% fewer vehicles – 74,973 units.

M&M: recorded a 31% rise in sales to 61,415 units.

Ashok Leyland: sales fell 1% to 13,134 units.

VE Commercial Vehicles: sold 11.57% more vehicles at 6,289 units.

Eicher Motors: Royal Enfield sales increased 22% to 77,461 units.

TVS Motors: 9.12% rise in sales to 3.31 lakh units.

Bajaj Auto: 28% rise in sales to 3.55 lakh units.

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More...

+1.3 cr airline tickets were sold in May – India’s air traffic was higher compared to March and April.

+India’s manufacturing growth (PMI) rose to a 31-month high of 58.7 in May.

+India's gross GST revenue collection in May stood at Rs 1.57 lakh cr - growth of 12% year-on-year: Ministry of Finance.

+Commercial LPG cylinder price has been reduced by Rs 83.

+Electric scooter registrations in May 2023 rose 148% year-on-year and 57% month-on-month to 1.05 lakh units.

+The US government has finalized and cleared a deal to raise the debt ceiling (the amount of money their government can borrow).

+India’s non-fossil fuel-based power generation capacity is expected to be 68.4% of the total installed capacity in 2031-32 compared to 42.5% currently: National Electricity Plan (NEP).

+UPI transactions in May rose to Rs 14.3 lakh cr in terms of value — a 2% rise compared to April.

+Goa-Mumbai Vande Bharat train will be launched on Saturday.

+India has made it mandatory for OTT platforms (Netflix, Hotstar, etc) to display anti-tobacco warnings.

+DGCA has given the Design Organisation Approval (DOA) to Chennai-based ePlane Company for its electric 2-seater aircraft.
---------------------


Stocks in the news
HDFC: raised Rs 8,235 cr by issuing two-year bonds at a coupon rate of 7.80%.

UCO Bank: government has appointed Ashwani Kumar as Managing Director of the bank.

Patanjali Foods: promoters are planning to sell around a 6% stake in the company to meet SEBI’s minimum public shareholding rule.

TVS Motor: hiked prices of its EV scooter by Rs 17,000 - Rs 22,000.

---------------------

Word of the Day

Minimum Public Shareholding

Listed companies in India should have at least 25% public ownership – this rule is called the minimum public shareholding norm.

This means the general public (people other than the promoters of the company) should own at least a 25% stake in the company.

With a reduction in promoter stake, the public can have better control over the company’s decisions.

The public also gets a higher chance of acquiring stocks of the company – improving the stock’s liquidity.
---------------------

6 Day Course
Theme: dividend

Day 4: Thursday

Different kinds of dates.

Dividend declaration date: the date on which the dividend is announced. On this day, the dividend amount, ex-dividend date, record date, and payment date — all are announced.

Ex-dividend date: this is the cut-off date to determine who will get the dividend.

Record date: this is the date on which the company checks its records to see which investors are eligible for dividends. It is usually a day after the ex-dividend date.

Payment date: this is the date on which the dividend is sent to the eligible investors’ bank accounts.
Missed last week's course? You can download the course PDF - click to download: https://bit.ly/3pWW3ll

---------------------

Featured Question
"How do I understand my mutual fund is reinvesting my returns in order to get compounding benifit, are there any such characters to measure? Or in general all mutual funds works for compounding in long term?"

Returns — that’s all that matters anyway. Buka / Bagaimana

2023-05-31 17:40:40 -Case 1: stock price becomes Rs 1,100. Your investment becomes Rs 11,000.
-Case 1: stock price becomes Rs 110. Your investment becomes Rs 11,000.

In both cases, your profit is the same — Rs 1,000.

Do remember, when you buy more stocks, there is more diversification. Because of that, the risk may be reduced.

But there’s another side to that: when diversification is very high, the possibility of getting very high returns may come down.

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That's it for now. See you tomorrow! Buka / Bagaimana