The Indian stock markets and commodities markets were closed today on account of Bakri Id.
Hence, there won’t be any updates on the Nifty 50, Sensex, Top Gainers, and Top Losers sections today.
Global markets: Most US markets rose. Most Asian markets fell. Most European markets fell (as of 6 pm IST).
News
India and South Korea are under discussions to upgrade their 2010 trade agreement (CEPA) after concluding the 12th round of negotiations in New Delhi.
Stocks Updates
LG: net profit fell 8.19% year-on-year to Rs 693 crore in the Jan-March quarter.
Sun Pharma: net profit rose 25.8% year-on-year to Rs 2,709.7 crore in the Jan-March quarter. Final dividend announced: Rs 5 per share.
Word of the Day
Working Capital Loan
It is a short-term loan taken by a business to manage its day-to-day operational expenses.
Companies use working capital loans to fund regular business needs such as salaries, rent, inventory purchases, raw materials, or supplier payments.
These loans help businesses maintain smooth operations during periods of temporary cash flow shortages.
Example: a company may take a working capital loan before the festive season to purchase additional inventory and meet higher demand.
6 Day Course
Theme: understanding alpha
Day 4: Thursday
Now, let’s understand the limits faced while trying to generate alpha.
Yesterday we spoke about how more “efficient” markets make it difficult to generate alpha.
This automatically means that as investors get “smarter” and more capable, alpha becomes harder to get.
They are better at accessing information early on and therefore buying opportunities last for shorter durations.
Another big challenge in making alpha is fees, charges, and taxes.
Many investors are able to generate alpha but fail to justify that alpha factoring their own internal costs + taxes.
Further, many great investments (that can let you make high returns) are small. Meaning, large amounts of money cannot be invested in them because there aren’t enough shares to buy.
This is a challenge that affects big investors (like large mutual funds, etc).
Most individual investors are not affected by this factor much.
Featured Question
Q. “When there is potential god company which has not given an IPO yet . ex:Tata electrical services , Tata is investing in chip manufacturing in india with tie up with ASML(semiconductor industry) . But as the IPO is not given , does investing in other domains of the same company (ex : TCS ) a sensible thing to do or not . As the investors cannot buy stocks of the company yet”
Unfortunately this is the case, yes.
Many good companies are not listed on the share markets. They are privately held companies.
In such cases, many investors try to invest via proxies.
They try to look at similar companies that are listed, or companies that might have some links to the unlisted company.
The answer to this is not simple. It depends on each case and the different relations between those companies.
For example, you might like one company and find out that it is a subsidiary of a listed company.
So you might think of buying that listed parent company’s shares.
But then the question that would arise is, is that parent company as good as its subsidiary?
If the subsidiary company does well, will it reflect well in the parent company’s shares price?
Many times the parent company might also own other companies along with the one you like.
The net effect might be that the company you like does well, but the parent company’s share price does not gain proportionately.
So you should try to explore links between the company you like (but is not on the share markets) and the ones that are listed on the share markets.
It is possible that there is no strong link. In that case, you will have to treat this as a missed opportunity.
One more potential method is you could explore if this company’s shares are available in the unlisted markets. This is a risky option and must be used only by knowledgable investors.
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Leave a feedback here!
Please advise how one get enrolled to attend the courses conducted, e.g., the 6 Day Course that is on the theme: "Understanding Alpha". What are the criteria if any, for attending such course and are these on-line or off-line fixed time conducted courses. Finally the fees if any, the mode of paying the fees. Thank you and good night. Subrata N Roy. email id: snroyin@yahoo.co.in