Episodes
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You've tuned in to another episode of The Capitalmind Podcast, where we tackle a question that's been on your mind: "There's a lumpsum in hand, what's your next move?"
In a world where SIPs are all the rage, we're steering the ship towards understanding how to strategically deploy a substantial lumpsum amount.
Deepak & Shray walk you through these aspects of managing, deploying and even spending that lumpsum gain. They discuss:
Deciphering tax implications: The financial realm is fraught with complexities, especially when it comes to taxes. We delve into the intricacies, figuring out how you can harness the power of tax efficiency to maximise returns. Debt management strategies: From housing loans to high-interest obligations, every debt carries a unique weight. We share insights that empower you to navigate this terrain with finesse and help you to make informed choices Securing education and retirement: As the custodian of your financial future, you'll need strategies to earmark funds for your children's education and seamlessly transition into a well-funded retirement. Planning is key, and Deepak has you covered. The art of consumption and experience: Beyond investments, the episode delves into the delicate balance between material consumption and meaningful experiences. The discussion prompts you to curate a life that blends financial prudence with personal fulfilment.Lastly, for those who've experienced an ESOP exit or find themselves grappling with a lump sum, our website capitalmindwealth.com offers tailored services designed to cater to portfolios exceeding 50 lakhs. For feedback and podcast ideas, write to us at [email protected].
References00:00 Introduction
01:30 ESOPs taxation and Whats the right way to allocate large lumpsum amount?
18:43 Which option is more preferable: Paying off housing loans sooner or investing in the market.
29:50 How to plan for your kids education?
34:57 Whats the simple rule of thumb for retirement planning?
40:21 If you have a large sum to invest should invest it via SIP or Lumpsum?
49:45 Don't fall for the products that assures you low risk and high returns.
59:36 Say no to angel investing
01:04:04 Consumption - all the things you wanted to do, make that list and do these
01:12:24 Types of windfalls: End year bonus vs exit from some ESOPs or synthetic ESOPs
01:20:43 Charity and Philanthropy
Liked the episode? Just tweet to us at @capitalmind_in and let us know. That's all we need to keep going!
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Our latest podcast episode is here, and it's all about exploring the different ways investors make money in the market.
From thrilling arbitrage strategies to the art of short-term trading, we'll cover it all in a language that even your neighbour's fish could understand (well, almost!).
But that's not all—our experts will take you on a journey through long-term fundamental investing and quantitative approaches too.
Expect some fascinating stories, like the infamous LTCM blow-up, and how best investors (& trades) made their fortunes. We'll also unravel the logic behind the elusive VC's hunt for 50x returns and how even "value stocks" need a dash of momentum.
So, whether you're an investing enthusiast or just curious about the market's mysterious ways, you won't want to miss this one.
References00:38 What do you think about the new all-time high? How do you view different types of investing strategies in the market and how to make money from these strategies?
24:27 The problem with peoples expectations: When I say stock markets do 12%, people expect this to be linear.
27:00 Concept of Expectancy
33:29 Problem in arbitrage is competition, so you need to lever yourself up
38:21 Option volatility trading - sell options expiring in 2 days and make the decay
46:32 When VC wins they need to win huge
49:50 Nifty monthly returns - how do quant strategies do?
56:52 We have just hit all time high. Based on the past data, how long can this good time potentially last? Which one is your favourite investing strategy?
Liked the episode?
Just tweet to us at @capitalmind_in and let us know. That's all we need to keep going!
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Missing episodes?
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Welcome back to another episode of our podcast, where we dive deep into the world of finance and investment. In today's episode, we will be exploring the fascinating realm of mutual fund costs and SEBI's recent proposals to bring them down.
As the saying goes, "The devil is in the details," and when it comes to investing, understanding the various expenses involved is crucial for making informed decisions.
In this captivating episode, we will dissect SEBI's latest discussion paper on Mutual Fund TER (Total Expense Ratio), which shed light on the inner workings of mutual fund costs and the need for change. We'll embark on a journey led by our expert hosts, Deepak & Shray, who will unravel the complexities of the system and explore the potential implications of SEBI's proposals.
Get ready to gain valuable insights and answers to burning questions.
What is the Total Expense Ratio (TER) of a mutual fund, and what does it include and exclude? Why does SEBI propose changes in TER, and how will it affect mutual fund investors? How do large distributors exploit the system, and what measures can be taken to address this issue? Can tweaking TERs alone make the mutual fund industry 10x bigger, or are there other critical factors to consider? What innovative avenues could mutual funds explore to earn higher TER while providing value to investors?Tell us on twitter @capitalmind_in on how did you like this episode. Your feedback means the world to us!
Show Notes & References02:00 Thoughts on the recent discussion paper by SEBI on Mutual Fund TERs
10:30 SEBI is saying "You are making too much money", reduce fees
19:25 Largest India equity scheme is charging the maximum fees possible
31:30 Limited Purpose Trading membership for AMCs to trade directly on the exchange
43:00 Why should a big fund house have the ability to charge more on a new scheme?
48:00 Performance based AUM through sandbox
53:00 How do you make the mutual fund industry 10X bigger?
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"If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck", goes the saying. Arbitrage mutual funds are actually taxed as equity funds but they actually behave as debt funds.
And this tax arbitrage of arbitrage funds is what the regulators may be looking to fix.
In light of this, we have our latest episode of the Capitalmind Podcast, where we dive into the intriguing world of arbitrage mutual funds, also known as arb funds.
In this shorter episode, our hosts, Deepak and Shray, explores the role these funds play in your investment portfolio and delves into the impact of recent changes in debt mutual fund taxation on arbitrage funds.
Here's a sneak peek of what you can expect from this episode
The Role of Arbitrage Funds: Discover the peculiar position these funds hold, being described as equity funds but offering debt-like returns. Taxation Changes and Their Effects: Explore how the recent changes in the income tax code could potentially affect arbitrage funds. Deepak shares his insights on the first and second-order effects of these tax changes and highlights the potential short-term buying opportunities that may arise. Risk-Free and Low-Risk Investment Options: Understand the investment landscape going forward in the likely new tax environment. Discover what alternative options exist for risk-free or low-risk investments in light of these changes.Here are five key questions that will be answered in this episode
What role do arbitrage funds play in your investment portfolio? How will recent changes in debt mutual fund taxation impact arbitrage funds? What are the first and second-order effects of tax changes on arb funds? What risk-free or low-risk investment options are available in the likely new tax environment? How significant is the presence of arbitrage funds in the stock market, and what does it mean for overall market volumes?Join us as we unravel the complexities of arbitrage mutual funds and gain a deeper understanding of their implications for your investment strategy.
Show Notes & References01:00 What do arbitrage funds (arb funds) do and where they fit in your investment portfolio?
08:30 Why didn’t arb funds become the FD replacement?
12:30 How big are arbitrage funds and what does that mean as a percentage of total volumes/positions on the stock market?
18:45 Arbitrage Funds are a huge part of our market and it's a problem. Why?
21:30 First and Second order effects of taxing arb funds like debt
34:00 What are the advice or takeaways?
If you have any feedback, ideas for future topics, or questions, we'd love to hear from you. Send us an email at podcast[at]capitalmind[dot]in.
For those seeking professional wealth management services for portfolios exceeding 50 lakh, visit Capitalmind Wealth.
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"Taxation is the price we pay for civilisation," as the saying goes. But what happens when the price tag keeps going up?
You may have thought you understood the friendly taxation system, until a new rule comes up that leaves you feeling like you've been sucker-punched. That's what recently happened when the government took away the tax efficiency of debt mutual funds and increased taxation. Suddenly, investors were left wondering how this would impact their investments and whether they needed to change their strategies.
In this episode of our podcast, Deepak and Shray delve into the conversation around the new taxation rules for debt funds. They ask the tough questions that many investors are likely asking themselves such as:
whether taxation should be a factor when investing in equities, what to do with existing debt funds, whether foreign investing is still exciting after all the taxes.But it's not all doom and gloom. They also explore other investment options such as MLDs, Gold, Real Estate, Startups, AIFs, and ETFs.
Taxes are indeed taxing. But who knows, maybe someday Pink Floyd will come up with a new hit single titled "We don't need no TAXES." Until then, tune in to our podcast to stay informed and keep your investing game strong.
Don't miss out on the show notes and references for this episode, where you'll find timestamps for each topic covered. So grab a drink, relax, and join us as we explore the fascinating and ever-changing world of investing and taxation.
Show Notes & ReferencesClick here for the Google Sheet
8:50 Now all debt instruments are taxed similarly, isn't it now a fair system?
18:45 What should I do with my existing debt funds?
27:00 Should taxation be a factor while investing in equities?
33:00 In stocks, should you sell underperforming stocks and move to other stocks?
36:00 What about MLDs, Gold & Real Estate.
53:00 How investments in startups are taxed?
56:00 What about AIFs and ETFs?
1:05:30 Is foreign investing still exciting after all the taxes?
1:09:00 Final thoughts
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“A market without bears would be like a nation without a free press. There would be no one to criticize and restrain the false optimism that always leads to disaster”
- Bernard Baruch
Short selling is mostly misunderstood and often demonized. Quite understandable, it's difficult to put your head around a concept that involves selling something that you don’t already own. But, it’s not as sinister as it is made out to be. Markets have enough checks and balances to accommodate short sellers and maintain their balance.
Recently, we saw Adani group stocks come under attack by a US-based short seller which resulted in the marketcap of the group falling more than 50% within a month.
This sparked a discussion on the concept of short selling. We're not going to talk about the specifics of this short by Hindebug. Instead, in this episode, we will talk about the nuances of short selling, their impact on the market, and dive deeper into how the whole thing works.
Join, Deepak & Shray, as they talk about:
How does short selling work? Is short selling always to bring down a stock? The operational aspects of short selling in India and the US? Examples of different short trades & how they played out Which market players, except short sellers, also short stocks? Show Notes & References1:10 What is short selling
5:15 Why people would do short selling?
11:30 Are HFTs also market makers? Or speculators?
13:30 Paul Tudor Jones and the 80s crash
19:30 How do Indians short a stock?
23:00 How do US traders generally short a stock?
33:00 NSEL fiasco
42:00 Do arbitrage mutual funds also short sells stocks?
45:00 How does a foreign fund short an Indian stock?
47:00 Should short selling be illegal?
49:00 Can a PMS (like us) go short and benefit from such trades?
54:30 The thing called "short squeeze" and stories from far & recent past
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Things escalate and hit the fan very quickly in banking. It's fascinating to see how banks go belly-up for the same fundamental reasons but in an entirely unique way each time.
It's like being served the same romantic comedy story again and again with different actors, locations, and songs. But, these banking crisis stories are not as enjoyable and they hurt real people financially and emotionally.
In this episode, we discuss the crisis at Silicon Valley Bank.
How this seemingly robust, conservative, bank with $180 billion in deposits tumbled down in just a couple of days. All was good with the Silicon Valley Bank until, one day, it wasn't.
NO, there was no accounting scam. This isn't like Enron.
NO, there wasn't any irresponsible speculative betting. This isn't like Lehman.
This time it's a different story. But, with the same result.
Listen in as Deepak and Shray tell you everything you need to know about the Silicon Valley Bank crisis:
What actually happened? What could SVB have done differently starting a year ago? Understand how rising interest rates affect the business of banking What is going to happen next? Lessons for the futureIf you enjoy Capitalmind Podcast, tweet to us @capitalmind_in and let us know. It doesn't take more than 2 minutes and is the fuel that keeps us going.
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Anyone who thinks financial accounting is boring hasn't seen the creativity in some of the financial statements. Not just in India but across the world.
In this podcast, Deepak and Shray discuss the shenanigans of financial accounting while referencing various case studies from the business world. This discussion is important because "new age" businesses in India have started reporting "adjusted" accounting statements along with standard reports.
While we do understand the need for "adjusted" metrics to gauge the health of a business. Especially when the nature of business is unconventional and may not be represented well by the existing reporting system. But more often than not, such adjustments are used for misguiding investors.
Listen in to figure out:
Why do businesses need to report adjusted earnings? How cheques, affiliates, GMVs, and ESOPs are used for creative accounting? If such reporting is legal, why should investors care? How do you recognize whether adjustments are real or not?Show notes and time stamps
1:50 - What’s the big issue with showing adjusted revenues?
10:20 - Shenanigans of adjusting revenues go back to the days of AOL (1990s)
13:45 - Argument of using the contribution margin
23:00 - How do “adjusted” numbers mislead stakeholders?
27:30 - Examples of creatively using metrics to manipulate numbers?
52:40 - VCs & Investors want “adjusted” metrics to understand business performance
1:00:00 - How to recognize if adjustments are real or not?
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Stockbroking is a unique business enabling millions of people to trade billions of dollars of stocks with unknown counterparties. All trades, in this highly regulated ecosystem, are executed seamlessly, settled correctly, and recorded meticulously.
It’s fascinating to see how far India has come in making this ecosystem world-class and in some cases, the best in the world.
In this podcast, Deepak and Shray discuss the nuances of stock broking and how proposed regulations will impact the stock broking industry. They discuss, in detail, the role of stock brokers, regulators (SEBI), clearing corporations, exchanges, and investors.
As an investor, how brokers are regulated doesn’t impact you directly. Yet, it is important to figure out what happens to your money when you click that buy/sell button on your app.
Listen in as we talk about:
How does stock broking work in its present form? What are the new regulations proposed? How will these regulations impact the stock brokers? How will it benefit the investors?Timestamps:
02:10 - How trades are settled by your broker and exchange? Earlier and Now?
14:15 - Moving from t+2 to t+1 in settling share transactions
16:20 - Now clearing corporation holds the transactions before settlement. Is it safe?
21:15 - The practice of commingling (shares & money) and regulations around it
40:00 - Drying up float income and the new role of a broker?
44:00 - How much does “no float income” hurt the broker?
52:30 - Will these regulations, meant to protect investors, actually lead to an increase in brokerage charges?
55:10 - Can these regulations prove to be counterproductive?
1:03:00 - Closing remarks
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Forecasting is a very difficult business, like selecting lottery tickets. No one could have predicted 2022 as a year in which there was geopolitical war, worldwide inflation, a massive hike in interest rates worldwide, and the US S&P 500 down about 20%, and yet, the Indian markets ended up 4%. If anyone got this spot on, they could still be terribly wrong for 2023.
That’s why we don’t predict, we react.
So, what’s going to happen in 2023?
We can almost hear this question, despite all the data that says prediction is a waste of time. But then, much about the markets is an entertainment business, which means it’s great to see people make crazy zany predictions, and maybe some of them will win. So we’ll participate mildly in what should purely be entertainment, even if at some point it appears to have deep investing insights.
Show Notes and References
1:55 Where should we invest in 2023 and some random predictions
3:00 Four ways this decade will be different from the last one
8:30 Return of Volatility in the markets
14:00 The peril of high interest rates
Podcast: Investing in a world with high interest rates
17:00 Return of inflation and higher yields
23:00 Putting Indian inflation in perspective
34:20 Geopolitical turmoil & the return of asset-heavy
39:40 ChatGPT, role of AI & Predicting how humans will react
47:00 Tactically where do I invest my money now?
51:00 Sectors that are positioned well for the current macroeconomic scenario
59:45 Will emerging markets outshine US markets?
How did you like the podcast? – Tweet to use at @capitalmind_in
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In this conversation with Shray, Deepak shares why he feels now is the time for India's concept of a Retirement Account - he calls it the MERA account. This account should help improve investment opportunities for retail customers, create a longer-term investment horizon and push people to save for their retirements.
Listen in as we discuss:
The concept of a retirement account Impact on the economy and people Imagining a retirement account scheme that works for India The operational aspect of such an account Who would oppose such a thing?Show notes and references
2:00 - Seven consecutive years of positive market returns for India
4:00 Seize the opportunity of India story with retirement accounts
Read: My Empowered Retirement Account (MERA)
8:30 Where do LIC and EPFO invest retirement money
"We're giving asset managers our retirement money and asking them to do great things for the next 20 - 30 years... But, they're not doing great things... They are conservative.. not letting me realize my larger risk appetite."
14:30 ELSS equity funds hold money for a longer period of time. Can't they act as retirement funds?
17:00 The peril of investing for retirement with post-tax money
25:00 Deepak introduces his idea of MERA - My Empowered Retirement Account (MERA)
33:00 Why does this matter so much at the national policy level?
41:20 Who are the people who would feel this is not a good idea?
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Of late, we have been discussing macro trends that affect the stock markets, the economy, and as an extension, the world. We have been zooming out to capture the big picture painted by investors, regulators, and the invisible hand of Mr. Market.
In this episode, Deepak & Shray break from the trend and do something different. Rather than zooming out, we zoom in. We discuss two companies that are going through fascinating developments and make for an interesting discussion.
LIC is a recently listed insurer that has a gigantic balance sheet and is a household name in our country of 1.4 billion. It operates in a market that is expanding wider as well as penetrating deeper. Yet, the company seems to be valued poorly by the markets. What’s happening here?
HDFC and HDFC Bank announced that they will merge at the start of this financial year. The merger is progressing rapidly, getting through from one regulatory approval to another, without much drama. But, this merger is causing drama at unrelated places that have nothing to do with the business or the merger (well, not directly at least). Will this merger make index funds do crazy rebalances?
Listen In.
Timestamps and highlights2:00 - LIC has fallen 30% from its IPO. What’s going on?
4:25 - Cultural shift to maximize shareholder value
5:00 - Participating and Non-Participating Policy
“.. This quarter, LIC said, you know what we have 15000 crores of profit.. which we didn’t know we can take.. it turns out that they can and they did.. ”
11:15 - 100% of the profit from the Non-Participating Pool should have come to shareholders
19:30 - What happens to LIC, due to its high equity holdings, what happens if markets don’t do anything for the next 10 years?
25:30 - Why isn’t the market not enthusiastic about LIC if this is such a fantastic opportunity to buy?
30:15 - HDFC merger and the opportunity with Index Constitution
41:30 - The worrying thing about Index funds
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As we slowly settle into the post-pandemic era, one of the hallmarks of this period has been higher inflation than we have seen in the recent past. In response to rising inflation, central banks across the world have responded with a fierce interest rate hiking excursion.
As a consequence, neither of the asset classes–stocks, or bonds, have performed well recently. It raises an essential question: how should we look at allocating our savings?
That’s precisely what Deepak and Shray are here to talk about, among intriguing followup questions one may have when it comes to Investing in a world with high interest rates, including which pockets to consider in financial and real assets. Listen in.
Timestamps and highlights01:30 — To an average investor, is debt coming back as a relevant asset class?
“If you have multiple periods of high and low interest rates, you might actually get very good returns on certain corporate, or even government bonds.”
“[…] It’s coming to a point where debt might actually start to become an interesting investment, simply because interest rates across the world have gone up. This is not the time to look backward, but to look forward and say going forward, returns might actually be quite good from here.”
09:40 — Looking forward, how should one look at asset allocation? And, when is the right time to look at the debt markets?
“You might actually want to position yourself at the outer end of the spectrum in government bonds when the RBI switches its stance. But, until then, I think it’s a waste of time because you may see interest rates go up substantially. And we don’t even know how long they’ll go up.”
“Debt is a very boring instrument. What happens in equity markets in ten days, happens in six months in the bond market. It happens slowly over time, it’s excruciatingly painful, and people rejoice over 1% returns. […] But, I think the value in looking at a bond market as an equity-esque investment, only happens when interest rates start to come down.”
25:09 — Will high interest rates emanate an opportunity in gold?
“It is not inflation that drives gold prices, it’s the fear of inflation that drives it.”
26:49 — What about opportunities in equity markets?
“If in a low interest rate environment, the biggest beneficiaries happen to be zero debt service companies, then from an intuitive perspective, the beneficiaries in a high interest rate environment are companies with very high levels of debt, but whose competitors need the same levels of debt, but can’t acquire it because they don’t have the same standing in debt markets.”
40:03 — Are there repercussions on the startup ecosystem?
“The unfortunate problem of startups is that they come from the concept of needing capital to burn.”
50:05 — How long do interest rate regimes last?
“We have had a very long period of very low rates. Can that mean that we will have a longer period of high rates? The answer will come from how much damage there will be to the economy before the central banks blink.”
52:10 — How would we know when there's a pivot?
“Interest rate cycles don’t change overnight, they take a long time. Watching an interest rate cycle change is like watching paint dry. Six to eight months, something will happen, and suddenly the cycle would have changed.”
57:30 — What makes Deepak optimistic about investing in the current landscape?
“If you don’t deploy in an uncertain world, when do you deploy?”
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RBI released a discussion paper that said: We’ve let you good people live all this time with “free” payment systems, so should we allow banks to start charging now? Specifically for UPI, which has reached volumes of 10 lakh crore rupees per month? And should we charge merchants?
Deepak's answer is a big NO. He firmly believes that the payments ecosystem (and the economy as a whole) will gain much more than any fees on UPI transactions will. As always, Deepak has a context to his argument and covers a wide range of nuances.
Listen to this podcast to understand his view on different aspects of the UPI payments system, its evolution, and the ways in which it can drive innovation. Also, this podcast covers many different aspects than Deepak's earlier post on the same topic.
Show Quotes & Time stamps
02:00 - Deepak and Shray trade fascinating stories about payment systems before UPI.
07:00 - The interoperability of UPI is a game changer
10:30 - How much do we pay for other payment systems?
“RBI spends 4,824 crores per year printing cash. None of that cost is borne by anybody except the government itself”
14:30 - The evolution of ATMs, Cheques, NEFT, RTGS, and the big role that RBI played in making these systems affordable for users.
21:30 - Has UPI always been free? Or has it also evolved over time to be free?
“The government went to parliament and passed a resolution to make UPI free… That’s the extent we went to keep this payment mechanism free”
“1,00,000 Crore is now available to banks to make money by parking it RBI and earning interest…. This is because people want to keep money with banks to make UPI payments”
31:00 - How much does it actually cost to run the UPI payments system?
“NPCI spends just ~680 crores per year maintaining the UPI infrastructure. Compare that against the float income that banks make on the additional 1 lac crore float”
34:00 - The argument that UPI is a toll road so you should charge for this "public infra"
“Credit cards transact about 100k crore a month, debit cards 60k crore per month, ATM withdrawals are at 300k crore per month…. So even now, after all these years, credit + debit card transactions are not more than cash”
41:00 - If you don’t let players charge for UPI, who will fund innovation?
“Internet protocols were free and they disrupted the world through innovation”
“Interestingly, in the payments ecosystem, all innovation has come from the regulator and not private players”
43:40 - Counter arguments from Deepak’s Twitter on why UPI shouldn’t be free.
44:00 - Google and PhonePe did all the handwork to make UPI popular. Now you’re telling me I can’t make money on it?
“You’re building a road and they tell you... you can never charge a toll. But you still keep building that road… that’s the payment apps for you”
50:00 - Let’s say that the biggest private players leave because you won’t let them make a profit. The top 2 guys control ~75% of all transactions. What happens to the ecosystem now?
1:02:00 - Why regulators have enforced limits on incentives and fees?
“Financial regulation is not like tech where if you’re too big, rules change for you. Here, if you are too big, and you disturb the system, the regulator first makes you small and then beats you”
1:05:30 - Government responses to the UPI monetization paper were very harsh. Why so?
“Hoarding cash is ok. Spending that cash on the economy creates a whole new economic system that’s outside the view of the government. That’s not ok”
“From Jan 2020 to now, the total ATM withdrawals are flat. UPI has gone from 120k crore to 1000k crore. The fact that UPI transactions are free has reduced cash transactions”
1:09:30 - The number of UPI transactions has drastically increased. But, is that all? The UPI tech reached its full maturity? What do we have to look forward to wrt UPI?
1:14:00 - UPI as a credit check for lenders and a game-changer for quick small loans
There’s a lot more interesting stuff ahead with UPI. We’re just getting started!
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Recently, as of 7th September 2022, total Demat accounts in India touched the 10 crore mark. This is a staggering increase from 4 crore Demat accounts in Mach 2020. This alone is a testimony of increased participation and inclusion of individuals in Indian markets.
More and more Indians, especially youngsters, are taking to investing in equities enabled by their smartphones - digital broking, increased information access, and social media influence.
The whole securities (stock) market ecosystem has evolved immensely over the past decade and deserves a lot of credit for the recent growth in the participation of new investors. At the helm of the ecosystem sits our regulators who are responsible to enable, guide, protect and watch the market participants to ensure that we have a fair and thriving market.
In this episode, Deepak and Shray talk about the role SEBI can play in shaping the future of the markets. They talk about data warehousing, data accessibility, regulatory enhancements, bond markets, disclosures & reporting, and a lot more that would make our markets more accessible.
02:00 - As low as only 3% of household income is directed towards stock markets. Why are people so scared of investing in stocks?
04:00 - Game changers - Digital public goods in our financial system
09:00 - Data warehousing framework at RBI and its US counterpart
16:00 - Does an average investor even use the granular data that we’re expecting the regulators to build for?
24:00 - What company data should a centralized database ideally have?
32:00 - The way Indian companies play with stock tickers
34:30 - How will this organized information make things better for all participants?
39:30 - Better information access makes our markets more accessible to FIIs
43:00 - Crazy things that mutual funds & companies do with disclosures
48:00 - PMS & AIF returns should be cross-verified and shouldn’t be based on self disclosures
“The more developed you are, the more signages you see on the road”
55:00 - SEBI is a far better regulator than many western counterparts. What do you still wish they should improve
59:00 - Would information disclosures will be a hassle for smaller companies?
1:03:30 - AMFI - the Self Regulatory Organization (SRO) recognized by SEBI
1:11:00 - What can SEBI do less to make space for things you wish it should do?
1:15:00 - How much impact can SEBI have on increasing household participation in the markets?
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Markets are slaves of earnings and liquidity. Liquidity has taken prominence after the coronavirus outbreak. At first, central banks across the world increased liquidity by cutting rates and helping their populace to live through the pandemic. Then the after effects of increasing liquidity hit – increased inflation.
Now, the same banks are sucking out liquidity by increasing interest rates to counter inflation. The looming after effect of increasing rates is the “r” word that is too pious to speak loudly.
In this podcast, Deepak & Shray discuss the two central banks that impact us the most – RBI and Fed (Federal Reserve System, USA). What makes this podcast interesting is that we are looking at everything from the lens of who does better – Fed or RBI?
Refer to the show notes to see the wide range of things discussed and start listening.
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Show notes & references:
02:00 - Why RBI will buy dollars to keep the rupee from appreciating?!
Refer: What the Fed's Big Balance Sheet Unwind Means for Markets
05:00 - What happens when RBI sells dollars?
07:00 - How does it control the liquidity of the markets?
14:00 - How have banks run out of liquidity?
17:30 - If banks need money, why don’t they increase their FD rates?
“Government is now a better bank than all banks. It’s also safer”
19:30 - RBI has taken out liquidity, you want to protect the status quo now. How does RBI do it? What are the consequences?
“RBI owns 3X more of US government bonds than it holds Indian government bonds. But things are changing.”
25:00 - But is the Fed doing now?
26:30 - The interplay of treasury and Fed in the US government monetary environment
"RBI hates to buy government bonds because it knows the government is fiscally irresponsible. The US would buy their govt bonds knowing that their government is even more fiscally irresponsible."
28:30 - Mortgage backed securities and agency guaranteed debt.
“Fed reduced their balance sheet by ~0.5% while RBI has already reduced the balance sheet by almost 10% in the same period”
35:00 - How increasing interest rates will impact different sectors & industries?
37:00 - If US interest rates go to 4% it will impact India and the world
38:15 - What makes India be in a bright spot as compared to the west?
43:30 - UPI is 10X the size of credit cards in terms of transactions. It’s massive.
47:00 - We have screwed up much earlier and recovered. West is starting to experience the fruit of its irresponsible policies.
“We might just be the single largest self dependent economy that’s worth investing in right now. With a local market which we have mostly given away to foreign players.”
53:00 - Domestic investments in equities by Indian investors have absorbed the highest ever FII selling spree.
56:00 - Our neighboring nations are falling apart mostly due to foreign dept - isn’t that a concern for us to open foreign investment?
“If you don’t have the freedom to fire people, you won’t hire them at all. That’s how human psychology works”
01:02:30 - Summarising Where India is right now in the economic scene
“If we don’t screw up, we will do really well. Because the world seems to have screwed up.”
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Crytocurrencies were all the rage in past few years on account of rising asset prices and volatility. Now, they are going through a bear market that has witnessed some popular currencies going totally bust. This pehnomemnon of an "asset class" going from hot to untouchable is not new. We've seen this again and again in different forms and proportions.
The current bear market in cryptos certainly impacts the investors, start-ups, promoters, and VCs who are directly involved in the crypto business. But, this bear market has second-order effects that may impact you as well. Listen in, as Deepak and Shray discuss the nuances of how the crpto bear market inpacts you.
Show notes & references:
01:40 -How does the crypto bear market have an impact on stock markets & economy?
08:30 - The indirect knockdown effects of crypto bear markets
10:00 - Digging deeper which other segments of the economy will face a slowdown due to crypto?
15:30 - The trickling effect of hot money going away from crypto startups
16:30 - Misunderstanding of risk by crypto investors
20:30 - The debacle of fancy virtual assets - Luna & Terra
Refer: Terra's stablecoin UST collapses, LUNA falls 99%
24:50 - Learnings from Zee TV & Dish TV saga of taking loans from Mutual Funds via bonds
Refer - Capitalmind post on Zee FMP Saga
34:00 - New investors moving to crypto with leverage and family savings basis TV marketing
39:00 - Why VCs don’t let failed crypto companies die? - No, it's not for the right reasons.
48:00 - By Now Pay Later - bad small loans of small ticket size are a similar problem.
50:00 - Promotor fraud is now called Rug Pull.
Refer - What is a rug pull?
51:30 - The case for printing more money
54:30 - The commingling problem that stock exchanges have already solved. Crypto exchanges still fight that problem.
Refer: Deepak Shenoy tweets about these issues in Dec 2021
56:40 - Will Deepak one day invest in crypto someday in the future?
58:30 - One great thing that has come out of crypto markets
If you loved listening to Deepak talk about money and finance. You'll also find his book quite interesting - You can buy the book here – Money Wise.
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In this episode, Deepak and Shray unravel different aspects related to investing in gold.
Gold has been around as a store of value for a couple of millennia, probably longer, because of how little there is and how difficult it is to get out of the earth.
Now get this - all the Gold mined would fit in a crate with sides of 21 meters. That’s roughly the length of three and a half standard containers.
Yet, in the last decade, this scarce and loved asset class has done just enough to match inflation. This means, adjusted for inflation, gold has returned nothing!
Now, after putting returns of gold into perspective, we get on to the theme of our podcast - Does it make sense to invest in Gold?
We look at gold from different lenses while we determine -
If gold is a hedge against inflation? Can gold protect you in a crisis like war? Is gold investment to create long-term wealth? Is there an efficient way to invest in gold?Show notes and references:
01:30 - Is gold the safe heaven when everything else falters?
05:00 - Today all assets classes act alike and correlatedRefer - How Gold has performed over years?
08:00 - Gold hasn’t outperformed inflation in 2011!
12:30 - Times when gold did outperform the Nifty
15:30 - The second-order effects of gold smuggling
17:30 - Buying gold for emotional and goal-based reasons
20:00 - Should you buy gold to hedge against a crisis like war?
23:55 - Is buying digital better than physical gold?Refer - What is digital gold?
36:30 - Is gold as an ETF a good option?
Refer - What are Gold ETFs?
38:30 - Sovereign gold bonds as an avenue for investing in Gold?
Refer - What is the Sovereign Gold Bonds (SGB) scheme by Govt of India?
43:00 - What is the best way to buy gold?
If you loved listening to Deepak talk about money and finance. You'll also find his book quite interesting - You can buy the book here – Money Wise.
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Two engineers get together to discuss two life essentials - food and money!
Our food expert is Krish Ashok. Ashok is Global Head, Digital Workplace at TCS. He is a techie, a musician and an author. He talks about the science behind food, the history of food and offers a lot of food for thought for us to explore further. If you are interested, a good starting point is his famous book - Masala Lab.
Our money expert is Deepak Shenoy. Deepak talks about the importance of managing your finances, the myths about investing, the fallacies that investors should avoid, and his take on cryptocurrencies. It is quite a treat to listen when he shares food metaphors to explain financial concepts. So listen in!
Topics & References:
02:00 - Science of Indian food & cooking
Refer - The parable of turkey and how things are done
13:30 - Do modern food habits cause lifestyle diseases?
21:45 - Wait, it's the opposite? Butter is ok but the Naan is not?
25:30 - Basics of food everyone should follow
Refer: Michael Pollan: Three Simple Rules for Eating
37:00 - The play of sugar & salt
40:00 - People hate changing food habits
45:00 - Each of us processes the same flavor differently
49:00 - We don’t like something because its unfamiliar, not necessarily bad
52:00 - Misconceptions about Food
Refer: Why the Tomato Was Feared in Europe for More Than 200 Years
56:00 - The myths of Genetic Modification
Refer - The Story of Norman Borlaug, the American Scientist Who Helped Engineer India’s Green Revolution
01:01:00 - How do we make more people cook? (especially, the men)
Refer - Apple Cider Vinegar Rasam
01:07:00 - Does the online food delivery phenomenon change things for food and our food habits?
01:11:00 - Switching roles - Ashok Asks Deepak about Money
01:13:00 - Building a relationship with money
Refer: Book: The Lexus and the Olive Tree
01:17:30 - What money can do for you?
01:23:00 - How an adult should learn the basics of Finance?
Refer: Book: An Economist Gets Lunch
01:43:00 - How should salaried professionals think about Income Tax?
01:50:00 - Working as an employee Vs working as a businesses
01:54:00 - Understanding Inflation first before learning about investment returns
Refer: What you know about inflation might be wrong
02:01:00 - How do you make money work for you?
02:09:00 - How to allocate between Equity & Fixed Income?
02:11:00 - Ways for your money to make more money?
02:16:00 - Importance of diversification in Finance & Food
02:19:00 - How should one think about their own risk appetite?
Refer: Harry Markowitz and Modern Portfolio Theory
Refer: How Not to Be Wrong: The Power of Mathematical Thinking
02:28:00 - Is there a tool that helps track personal financial growth?
02:37:00 - Deepak’s thoughts on cryptocurrencies
Refer: Blockchains Are a Bad Idea (James Mickens)
Refer: Selling Shovels in the New Startup Gold RushYou can buy Krish Ashok's book on the science of Food - Masala lab.
You can buy Deepak Shenoy's book on investing - Money Wise.Check out our wealth management service - Capitalmind Wealth (PMS)
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Today's episode is a crossover with The Seen and the Unseen podcast, hosted by Amit Varma. Amit and Deepak discuss how their careers - as creators - have evolved with the digital age. And their journey of discovering their own authentic voices. They take a first hand look at the creator economy and how it's shaping the media today.
2:32:00 onwards, they discuss key lessons in Deepak's new book, Money Wise, along with some behind-the-book stories. - Show more
