EQUITY WEDNESDAY Issue #7 Hello EveryFinions!
When we started publishing Equity Wednesday, we said that this was going to be an experiment. 7-weeks in, our experiment has been a grand success. The results from the survey we rolled out to you a few weeks back were overwhelmingly positive. Our readers love both of our newsletters ♥♥♥
Having said that, we have so many new things in development at EveryFin that those new projects are screaming for some extra love. Consequently, Equity Wednesday is going to take a short break after today so we can attend to those new projects. Don't worry though, it'll be back again in January when the Q3FY21 earnings report season starts. Our Sunday Weekly newsletters will come to you as usual.
IN TODAY'S EDITION
RESULTS UPDATE
We have been looking at the Q2 FY21 financial results and comparing it with how companies performed in the same quarter a year ago.
How to read this graph?
900+ companies are in our coverage list as of now. Some of them are off the chart, so you won't see them all. ![]() What we took away from the Q2FY21 Results
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Finally, on the state of the markets – The indices (SENSEX, NIFTY) are extremely overvalued and they are in levels not seen before in the last 20 years. Does it make us nervous? Yes, a little bit. But the key to surviving market consolidation or even a bear market is proper asset allocation and if you have that sorted out, you will be ok. THAT'S WHAT THEY SAID Soundbites from last week ![]()
TREND WATCHING (1/2) How to profit from the Electric Vehicle revolution ![]() The global mobility revolution just begun, but it is going to change the way people travel. The UK this week laid out plans to ban sale of new petrol and diesel cars from 2030. Norway is doing it from 2025! This transformation is a great opportunity for companies that are already in this space, spearheading the revolution or supporting it. That perhaps explains why Tesla’s stock price has gone up by 6 times since the beginning of this year.
As an astute equity investor, you are probably asking – “Where could we invest to benefit from this?” Here is our view.
Within India, the opportunities are a bit limited.
Looking outside India, there are so many different listed automotive companies. Chinese giants like NIO, BYD and Geely are at the forefront. One could invest in these companies. But bear in mind, automobile businesses are one of the worst to be in. Valuation guru Aswath Damodaran swears by it.
The other way, and perhaps our most preferred way to get exposure, is to invest in manufacturers of battery systems, suppliers of raw materials or in the commodities involved directly. Lithium and Cobalt are two key ingredients that go into the production of batteries. And companies that are involved in mining & processing them will see a major uptick in demand. Over a mile long copper wire is used in manufacturing a single electric car and that will mean that demand for the metal will also increase. For global investors Lithium and Battery tech ETF (LIT) traded in NYSE offers a simple and straight forward way to get exposure to this industry. TREND WATCHING (2/2) HIGHEST Dividend Paying Stocks ![]() Disclaimer: This is not investment advice. Please consult with your financial planner before investing in any of the stocks discussed in this post.
Holding stocks that pay high dividends can add a source of income to your stock portfolio. The key to shortlisting high dividend yield stocks is to make sure that they are good businesses, earning profits consistently without the need to invest a lot of money back into the business. This is what makes their dividends sustainable.
But always keep in mind, investing in these stocks is NOT the same as investing in fixed deposits. Stock market investments carry risks. Just because a particular stock pays high dividends, it does not automatically become a good business. And if it indeed is not a good business, paying dividends will become unsustainable for it. And sooner or later it will have to stop paying. Worse still, stock prices of such companies will come down eventually leading to loss of capital. The key message is, do your research before you pick one!
This list is intended to get you started in your search for high dividend-paying companies. ![]() CORPORATE ANNOUNCEMENTS THIS WEEK
THE SECRETS TO BUFFETT STYLE INVESTING - LETTER 3 Annual letter to limited partners – 1959 – Warren E. Buffett ![]() In the year 1959, the Dow-Jones industrial average (DJIA) was up 16.4%. With dividends factored in, the total return from the market in was about 20%. In spite of this, some of the largest fund houses like Tri-Continental Corp., and Massachusetts Investors Trust struggled to beat the gains recorded by DJIA. But not Warren Buffett. Take a look at the gains the Buffett partnerships recorded in 1959 and the two years before that.
1959 RETURNS ![]() What did he do differently? What ideas can we borrow from his exceptional performance that year? Read more to find out. From the writer in me, to the reader in you ♥
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Equity Wednesday Issue #7
