Acadian Asset Management’s Post

Imagine if our economic and political systems could be just a little fairer and just a tiny more interested in adding value to their people and taxpayers instead of their own personal interests? We have avenues of opportunities that rest ahead of us through more accountable elitary decison makers on one side and, on the other, a more decentralised infrastructure aimed at seperating money from state. The future is bright. Can only be a step up from the circus we see unfolding before us. Just keep your eyes open. Its coming. #dlt #blockchain #money #power #fraud

👉 In Dec 2022 when most of the World Economists & Stock Analysts were bearish on the Global Capital Markets, I took a Contra Bet by sharing my optimistic view for CY 2023. Below is the attached performance for CY 2023: #Nasdaq100 (01-01-2023) : 10939.76 ➡ (31-12-2023): 16825.93, Returns 💹 53.81% #S&p500 (01-01-2023): 3839.5 ➡ (31-12-2023): 4779.83, Returns 💹 24.2% #Niftymidcap150 (01-01-2023): 11970 ➡(31-12-2023): 17174, Returns 💹43.5% #NiftySmallCap250 (01-01-2023): 9552 ➡ (31-12-2023): 14129, Returns 💹 47.9% #NiftyMicroCap250 (01-01-2023): 11203 ➡ (31-12-2023): 18885, Returns 💹 68.57% 👉 However, in Jan' 24 when everyone on the Dalal Street was bullish, I shared my cautious view in my annual letter to all our Global Family Office investors. The performance since then is as follows at the index level, however, most of the small-cap and micro-cap stocks are down anywhere between 10% to 40%: #NiftyMicroCap250 (01-02-2024): 20422 CMP 18502, Returns: -9.4% 📉 #NiftySmallCap250 (01-02-2024): 15084 CMP 13922, Returns: -7.7% 📉 #NiftyMidCap150 (01-02-2024): 17782.2 CMP 17254.2, Returns: -2.97% 📉 Link: https://lnkd.in/dnT5Q2gG #stockmarket #investingstrategy

Aswath Damodaran with an INCREDIBLE video on valuing stocks This is a pure investing masterclass: https://lnkd.in/dTtTbyH5

"Alpha and the EMH: Is Outperformance Possible?" The Efficient Market Hypothesis (EMH) states that the current share price reflects all available information about the stock, making consistent alpha generation impossible. There are three forms of the Efficient Market Hypothesis: 👉 Strong Form: This states that the current share price reflects all publicly and non-publicly available information, meaning there is no new type of information that can provide an investor with an edge to create alpha. 👉 Semi-Strong Form: This asserts that the current share price reflects all publicly available information, and no form of technical or fundamental analysis will help an investor generate alpha. In this hypothesis, the only way to generate alpha is through access to non-publicly available information. 👉 Weak Form: This indicates that the current share price reflects past price data, suggesting that no technical analysis would be helpful. However, if an investor employs fundamental analysis, they may be able to generate alpha. Example: Suppose a stock is trading at INR 100, and there is an earnings call scheduled for later that week. However, the evening before the earnings call, news breaks that the company has suffered significant losses, causing the stock price to drop to INR 80 the next day. After the earnings call, the stock price rises to INR 120, as the company effectively implements cost-cutting measures. 🛑 In this scenario, the cost-cutting measures represent insider information, which is non-publicly available. If the stock price reflected all information—both public and non-public—it would indicate a strong market. However, since the stock price did not reflect the non-public information (the cost-cutting measures), the market is considered semi-strong. To know more about alpha, check this post: https://lnkd.in/dYz_f9EF  #EfficientMarketHypothesis  #Finance #Investing #StockMarket #AlphaGeneration #MarketEfficiency #InvestmentStrategies #FinancialLiteracy #EconomicTheory #MarketAnalysi

Understanding Current Market Valuations: A Closer LookIn the latest analysis, major indices have reached all-time highs, yet their valuations align with the five-year average. This suggests that the market is not overvalued, contrary to popular belief. Here's a breakdown of the key insights:Nifty Smallcap 100:Current PE: 30.235-year avg PE: 31.96Index Value: 169.98Nifty Midcap 100:Current PE: 42.795-year avg PE: 43.86Index Value: 158.39Nifty 500:Current PE: 26.825-year avg PE: 27.53Index Value: 138.81Nifty 50:Current PE: 23.255-year avg PE: 25.46Index Value: 125.67 The Price-to-Earnings (PE) ratio is a way to understand if a stock is priced fairly. It tells us how much investors are willing to pay for each dollar of a company's earnings. Here's a simple breakdown:Formula: PE Ratio = Price of the stock / Earnings per share (EPS)Example: If a company's stock is priced at $50 and its earnings per share (EPS) is $5, the PE ratio is 10. This means investors are willing to pay $10 for every $1 the company earns. High PE Ratio: The stock is expensive compared to its earnings. Investors expect high future growth.Low PE Ratio: The stock is cheap compared to its earnings. It might be undervalued or the company is not growing much. The PE ratios of these indices suggest room for growth, especially with expectations of robust growth from top companies.Analysts predict that large caps will drive the next upward move.Sectors like banking, finance, real estate, and PSUs are likely to perform well.The IT sector could see a revival if the US economy continues to improve.The current market dynamics present a balanced outlook, indicating potential for further growth without the risk of significant overvaluation.#StockMarket #Investment #MarketAnalysis #NiftyIndices #FinancialGrowth #Economy #StockMarketInsights #InvestmentStrategies #PEratio #MarketTrends #NSE

If you are reading this post; by the age of 30, stocks must be part of your financial holdings, even a Rs 1,000 worth of stocks! Mohamed H. Zakaria

Stocks are volatile investments. Stocks can and will be more volatile in the future. This is to remind you that the only way it matters to you is that the volatility is the price you pay for the returns you get: https://lnkd.in/g2UPHy4t

In this article, published on financial portal Good Returns, I discuss the rise of PSU stocks in last 10 years and their prospects going ahead. https://lnkd.in/gzckY-xi

Stocks for the Long Run? Setting the Record Straight Stocks are a good investment long-term, providing that you dial in your expectations, maintains Edward F. McQuarrie. His new historical findings provide a richer, more complete understanding of international returns. https://ow.ly/nSVw50S8rol

What you see here is the BSE mid-cap index monthly chart. As you all know, the small and mid-caps have rallied well these past two years. And now it's time for them to enter the consolidation phase. As you can see in the attached chart, the midcaps entered a two-year consolidation phase before going up. Although the steam in the small and mid-caps may still be there, we can expect it to run out pretty soon, and thus the mid and small caps will most likely enter the 1 to 2-year consolidation phase. And then, rally back up! So, you all have two choices: 1. Keep up with your small and mid-cap SIP. Keep the investment going throughout the market's ups and downs. Or, 2. Cut down your investments in small and midcaps, or maybe stop them entirely for a brief period of around 1 year, and then, once the index is out of the consolidation phase, begin them again. I'd suggest not stopping SIP. Keep it going, and in fact, increase the SIP investable amount more as the market falls. This way, you get more units for every additional rupee you invest (rupee cost averaging) Remember, we invest to make money. But if you are investing in small and mid-caps to make money, then you'll achieve your goal if and only if your holding period is over 5-7 years. P.S. The chart attached is of the BSE mid-cap index. But the pattern and trend are pretty much the same, even in the case of a small-cap index. So, same logic. Please note: Any words said, written, or spoken on any of my social media handles are an opinion of my own and not that of the company I represent. Anything said and shared is to be considered for educational purposes only. #WhatsApp: https://lnkd.in/d7URZb7K   #StockMarket #Investing #Stocks #Investment #Smallcaps #Midcaps