The Good Bad and Ugly weekly review : 03 Sep 2023

Markets this week !

The week ending on 29th Sep 2023 marked the end of the month, quarter, and the first half of the financial year 2024. Overall, the market has been range-bound after experiencing a sharp decline from the 20,200 mark last week. However, there was a significant downward movement on Thursday, which can be seen as a capitulation day for positions established earlier in the month. The market then saw a relief rally the following day, resulting in a relatively flat closing for the week. Despite the recent decline, the larger trend remains upward, and this correction can be seen as a temporary adjustment in sectoral momentum.

Sectoral Overview

Currently, Public Sector Undertaking (PSU) banks, real estate stocks, and infrastructure are the hot segments in the market. These sectors have been in the limelight for the short term as well as over a period of 20 days, one month, and three months. On the other hand, IT stocks have witnessed a decline, mainly due to weak overseas cues from the US tech sector. Forecasts suggest a potentially muted growth year for IT in 2024, affecting order inflow from the US.

Real estate sector has shown resilience despite the current interest rate cycle. Real estate stocks remain optimistic about the next one to two years, hinting at a near top to the interest rate cycle. Pharma has made a notable comeback, exhibiting a 2.4% increase this week.

PSU banks continue to perform well, experiencing a 2% (this week) increase while Infrastructure and Metals have shown positive momentum, following the trend of PSU banks.

Benchmark Indices Overview

Smallcap 250 & Mid-Small 400 indices continued on their solid run clocking above 1% this week while rest of the indices remained flat. This proves the relative strength in midcaps and smallcaps since the start of FY 24.

WeekendInvesting Overview

Mi ST ATH, which has experienced lagging performance recently, made a strong comeback with a 4.4% increase this week. Mi 20, Mi 25, and Mi All Cap & Mi ATH 2 all achieved more than 2% growth this week. Mi 20, with a remarkable 65% gain has proved to be one of the top performers this FY 24. Mi Evergreen, Mi 30, and Mi NNF 10 showed positive growth, with increases ranging from 1.1% to 1.9% this week.

Spotlight – 2x bagger on JBMA & Mi 20

A moment to cherish for Mi 20 which has clocked the coveted 2x milestone since going LIVE on 15 Jul 2021 (2x in 2 years). Within Mi 20, JBMA has also pocketed a 2 bagger having made an entry to the strategy around Mar 2023 at Rs 643 (currently holding).

Mi 20 has handsomely beaten its benchmark, the mid-small 400 index across all timeframes. The CAGR has been stunning at 37% since Jul 2021 compared to 17% on its benchmark.

When analyzing investment performance, it is crucial to focus on absolute returns rather than getting caught up in benchmark comparisons. Beating the benchmark by a significant margin is commendable and signifies the strength of a strategy. For instance, if the benchmark achieves a 24% return, achieving a 23% return is still considered excellent. It is essential to avoid unnecessary self-comparison and instead appreciate the strategy’s ability to outperform the benchmark consistently.

Rebalance Update

We give advance notice here on the upcoming changes in your smallcase for Monday. This advance notice can be used to ignore Monday’s update if there is no change. If there is a change indicated you can use the smallcase app or log in to weekendinvesting.smallcase.com to see the rebalance. A backup email is sent by mid-day Monday if you have not rebalanced by then and yet another one a day later.

Note: We are not including LIQUIDBEES as an ADD or an EXIT count.

WeekendInvesting Strategies Performance

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WEEKENDINVESTING ANALYTICS PRIVATE LIMITED is a SEBI registered (SEBI Registration No. INH100008717) Research Analyst