Indigenous Investors Weekly Insights!
Top 3 well curated stories from the stable of Indigenous Investors incase you missed them. These can range from finance to sports, depends on what made the headlines. Stay tuned.
At Indigenous Investors, we pride ourselves on a simple but powerful habit: reading for 5 hours every single day. It’s something we’ve shamelessly borrowed from the Oracle of Omaha, Mr. Warren Buffet. To share the wealth of knowledge we uncover, we’re bringing you 3 top stories that you may have missed this week. If there’s a topic you want us to cover, drop us a line! We’re always excited to read more and refine our process.
Story #1: How India has failed its investors (click here)
There are commonalities between the scams that take place today through some Finfluencers vs how they happened 2 or 3 decades ago through brokers or agents.
There are uninformed (illiterate) investors who are gullible to get-rich-quick schemes.
There is a greedy scamster who is a brand and is in touch with such investors.
The scamster comes up with the schemes that lure investors to happily give away their money (I cannot call this ‘invest’) not based on any logic but only on trust.
The scamster through some loopholes earns returns for the first handful of investors who then become their mouthpiece, thereby luring more investors.
The scamster eventually scams and investors face losses that go beyond 100%.
Why beyond 100%? Because 100% is the loss of investment and the ‘beyond’ part is the loss in trust in the system, loss of confidence to invest at all, loss of face in front of people they recommended to invest and the loss of opportunity to do something better with the money than trusting on word of mouth or tips.
It is shocking to know that against the 3.7 crore new demat accounts opened, SEBI has only been able to cater about 28 lakh individuals through their Investment Awareness Programmes.
More than the failure of the system, it’s the failure of the infrastructure around the system that enables such scams. Financial education should be mandated from elementary levels in schools because irrespective of the career you choose, finance will always be in the centre.
Story #2: How is the Indian economy actually doing? MSMEs have the answer (click here)
When the GDP growth numbers reflected a performance of seven-quarters low of 5.40%, the MSMEs weren’t shocked as they were already bearing the brunt of the slowdown. The slowdown is evident particularly in the manufacturing sector.
India's MSME sector, initially boosted by post-COVID demand, is now experiencing a steep decline due to rising costs, weak demand, and limited access to affordable credit. In our article dated November 17, 2024, we had mentioned that due to persistent high rate of interest is ‘there was a 29.5% YoY decline in new investment announcements and a 53% YoY fall in project completions in H1FY25.’
Story #3: Zomato’s valuation surpasses likes of Kotak, HUL and HCL (click here)
If it wasn’t clear to you so far, this news should definitely clarify your concepts on how market works. I know it seems confusing how a firm that started just yesterday is commanding such high valuations against firms that have existed for generations? In fact, the net profit of Kotak, HUL and HCL is greater than the sales turnover of Zomato!
The only reason is because the market is always forward-looking.
The market sees better potential in the growth of Zomato against the other companies mentioned and hence, have given it a better valuation. Does that mean Zomato will definitely do better than others? We don’t know. Time will tell.
In such turbulent times, it has become extremely important to make sure your money is invested at the right places. You can read our article on Portfolio Reshuffling (click here) to get professional insights into managing your wealth.