SEBI has recently revised its reporting format for Portfolio Management Services (PMS) to include more detailed information regarding their operations and performance. This is a good step towards furthering transparency in the asset management industry and is intended to help the investing public in their selection of the right product or service for their portfolio.

Shepherd’s Hill has completed 10 years of investing in the Indian equity markets. It is a significant milestone for any investment organisation. We would like to acknowledge the completion of the first decade by sincerely thanking all our clients, partners and teammates for making it possible to achieve our ongoing objective: to provide investors in the Indian equity markets with protection of capital and superior long-term returns.

The world economy is a huge and complex organism with many, many moving parts. Predicting macro-economic trends – growth, interest rates or currency fluctuations – is a hazardous profession.

The Bloomberg article linked below is a good description of how a change in one corner of the world may affect something seemingly unrelated in a completely different sector and country.

Continuing from last week’s discussion about the difference between volatility and risk, here are comments made by Warren Buffett on this topic at the 2007 Berkshire annual general meeting:

… Volatility is not a measure of risk.

… people who have written and taught about [risk] do not know how to measure risk.

For the long-term value investor, volatility is not risk. This is a very important concept in the investment business. Many people, from analysts to aggregators of performance, from traders to teachers of corporate finance, use volatility as a stand-in for risk. Numerous conventional measures, such as the beta of a stock and the Sharpe ratio of an asset, incorporate the volatility of returns into the analysis of risk and “risk-adjusted” returns.

The US Federal Reserve just released the minutes of its April joint meeting with the FOMC (Federal Open Market Committee), in which one sentence talks about reducing the pace of monthly asset purchases (up to $120 billion) that the Fed has been making since the Covid crisis began. The Fed’s asset purchases are used to ease liquidity conditions and boost the economy.

A recent report by Kotak Institutional Equities observes that almost 70% of the portfolio of mutual funds and more than 70% of portfolios of other financial institutions like banks and insurance companies is invested in just 40 listed companies.

In our previous post, we talked about portfolio churn and how it can be a good indicator of the quality of an investor’s process and portfolio. Similarly, the liquidity or churn in the shares of an individual company can also be an indicator of a different type of quality.

Portfolio churn is an important indicator to consider when assessing the quality of a fundamental long-term investor’s process.

Portfolio churn can be calculated as the value of sells (or buys) in a given year divided by the average value of the portfolio during the

The National Stock Exchange (NSE) Fifty index, better known as the NIFTY 50, or just the NIFTY, is India’s primary stock market index. It was launched 25 years ago yesterday, on April 22, 1996, at an opening value of 1,136. Yesterday, on April 22, 2021, it opened at a value of 14,219.

BloombergQuint has an interesting article out recently which cites a rise in Life Insurance Corporation’s (LIC) life insurance policy claims settled during the period April to December 2020.

The Supreme Court has disallowed the extension of the moratorium period on loans allowed by RBI due to Covid. It has also vacated its previous stay on the classification of bad loans.

For the past many years, commercial bankers have been saying that due to India’s high levels of non-performing assets (NPAs) in the corporate sector, they have been focusing more on the retail segment.

In the second half of this talk, many pitfalls and caution areas are covered for investors in the Indian equity markets. Why should we not invest in SBI even though it is a generally good company?

In the first part of this talk, recorded in December 2020, the focus is on the set up. What are the prerequisites and mindset required for investing in the equity market? Who should not be investing?

When fiscal and monetary policy is loose or expansionary, there is always the possibility of inflation creeping into the economy. There are some indications already that we may be headed towards inflationary conditions.

It is useful to think of investment opportunities in the publicly listed space in terms of market capitalisation. “Market-cap” is nothing but the number of outstanding equity shares of a company multiplied by its share price.

Many people find finance a dry subject. It is true that finance can be difficult to write about and describe. Finance doesn’t lend itself to dramatic scenes in the way that the medical or legal professions do.

SEBI has been publishing monthly information reports on Portfolio Managers since 2013. These monthly reports are available to the public at the following link: https://lnkd.in/da8e9ay.

A good feature in the recent Fiscal Year 2022 Indian budget presented by the Finance Minister was the minimal change in tax rates for the year. In the past, many budgets have too frequently raised or lowered taxes for various categories of income as well as for different products and services.