Have you ever wondered why finance seems to have a forgiving nature?

From the sins of the past being easily forgotten to the belief in second chances, we'll explore the nuances of forgiveness in the financial realm.

We'll dissect the tactics some "for education purposes only" players use to enrich themselves at the expense of their students. It's a sobering reminder to always question the motives behind the message.

We uncover the darker side of startup culture, where founders blur the lines between innovation and exploitation. It’s a cautionary tale for aspiring entrepreneurs and investors alike.

Deepak & Shray, in their quintessential style, discuss nuances of investing and finance in this latest episode of Capitalmind Podcast.

Show Notes & References

Ever wondered why circuits are in place?

It all started on Black Monday in 1987, where a 25% market correction prompted the introduction of market-wide circuit breakers in the US. These limits aimed to ensure market maker solvency and prevent panic-induced trading.

Fast forward to 2001, and India also introduced circuits to handle intraday market volatility. From the Nifty's inception to the imposition of index-level circuit filters, the Indian market landscape has witnessed a steady evolution in its approach to market regulation.

In this episode, we delve deeper into the concept of circuits, with real life stories and understand how they help the market.

We also discuss, should circuits continue to exist in their current form? or is it time to explore alternatives that foster greater transparency and resilience?

Show Notes & References

00:00 Introduction and Disclaimer

01:24 Background on limits or circuit breakers.

06:38 When did India implement the circuit breaker?

09:20 What are the current rules for circuits in India?

15:58 Why are circuits interesting in the first place?

19:07 What would happen if circuits weren’t there?

24:38 Some interesting stories on circuits in the stock market

36:34 What is a better way to manage circuits?

40:47 Will circuits continue to exit?

In today's episode, we delve deep into the recent actions taken by the Reserve Bank of India (RBI) towards the end of 2023 and the ensuing ripple effects they've set off.

The RBI, often the silent architect of our financial landscape, has made strategic manoeuvres that reshape the terrain for banks, non-banking financial companies (NBFCs), and borrowers.

Discover how these regulatory shifts could impact financial decisions and the broader economic landscape. From the nuances of risk weights to the implications for personal loan growth, this episode promises to demystify the complex world of financial regulations in a digestible and engaging format.

Here is a quick overview of what we talk about:

• We unpack the RBI's directives regarding risk weights and the restrictions placed on simultaneous lending and investing activities by financial institutions.
• Dive into how startups offering digital lending products, like CRED and Paytm, are affected and the challenges they face under the new regulations.
• Explore why your credit card limits might be scrutinised and how conflict of interest rules reshape lending dynamics.
• Understand why the RBI's focus on Alternative Investment Funds (AIFs) matters and how it impacts investors' portfolios.
• Debate whether these measures reflect a proportionate response from the RBI and what they suggest about the current state of our economy.

00:00 Introduction and Disclaimer
01:34 Deepak demystifies the two new regulations by RBI on Banks and NBFC
05:37 What’s the impact of these new regulations? Why should we care?
16:05 Why is RBI more concerned about personal loans?
24:54 Why aren’t you positive about the RBI action here? What’s wrong with the slowing loan growth?
32:20 If Startups are ready to take the risk, why is RBI stopping them?
45:14 Even after this bull run, why isn’t there lending against securities?
52:11 RBI has a new rule prohibiting Banks and NBFCs from evergreening loans through AIFs.
01:03:51 Is this a warning, a sign that the economy is over-heating?

Join us on Capitalmind Podcast, where we demystify the world of finance without the jargon. In today’s episode, talk about the asset management industry in India and what’s in store for the future.

Now get this - Mutual Funds own only 8% of Indian companies, while retail investors own 9%.

Let’s rewind. In 2005, despite impressive returns, MFs didn’t gain much attention due to high fees and the lack of tax advantages. Fast forward to 2018, capital gains and dividend tax changes sparked a surge in MF investments, increasing their ownership to 8%.

Explore the shift in India’s financial landscape – changing disposable incomes and tax adjustments have made MFs more attractive. The “MF Sahi Hai” mantra and the success of Systematic Investment Plans (SIPs) further contribute to their rise.

Regulatory improvements play a role, but we also discuss other investment vehicles – MFs, Portfolio Management Services (PMS), Alternative Investment Funds (AIFs), and more. Understand the evolving dynamics and where your money might fit best.

We dive into comparing investment vehicles and their equivalents in the US. Spoiler alert: India’s investment culture is rising, embracing the expertise needed to manage money with relatively low costs and instant liquidity.

Is passive investing becoming the norm? Not quite yet. We need more institutional capital for that shift.

We end the episode trying to connect the dots and see what the future of this industry may look like.

References

00:00 Introduction and Disclaimer
01:15 How is the money divided among different vehicles in the asset management industry?
06:36 Why do Mutual Funds have a lower ownership in Indian companies (8%) compared to retail investors who own 9%?
20:21 What are the downsides of investing in Gold and Real Estate?
27:40 Are we just one crash away from everyone turning away from equity?
34:38 Given that we have a savings culture, will investing grow faster in the future?
40:42 Which type of investment is good for whom?
44:53 Mutual Fund Vs Direct Stock Investing: How are things different in India and the US?
01:02:46 The future of the Asset Management industry in India.

Ever wondered about the whole money thing – how it's made, where it comes from? Well, in this podcast episode, we're breaking it all down, and without using any jargons.

We also promise that this podcast will not remind you about an economics class. Because, it's not a lecture on economic theories. Nope. It's more like your friend explaining things in a way that just clicks. You'll walk away with a bunch of useful insights to help understand the concept of money a little better.

Make sense of those tricky concepts you read about in newspapers or on business channels. You know, the stuff that usually leaves you feeling a bit puzzled.

Write to us at podcast@capitalmind.in if you have feedback or ideas. We read and reply to all emails.

References

If you are even a little active on social media, especially Twitter, you would have witnessed the exponential increase in tweets related to options trading. Today, we are are going to talk about that - Indian's going gaga over options trading.

Deepak & Shray, take a detailed look at this fascinating phenomenon and tell you all that you need to know - except telling you about an options strategy that always makes money no matter where the market goes.

In this episode, we delve into the history of options, the factors driving their growth, and the potential risks and rewards.

From the earlier days of Badla to the scaling of options trading post-2006, we witness a significant shift in the landscape. What was once a predominantly institutional activity has evolved into a market dominated by retail and proprietary investors.

Several factors contribute to the surge in options trading, including simplified Securities Transaction Tax (STT) structures, technological advancements, flat-rate brokerages, and increased retail participation. The introduction of weekly options has especially transformed the game, turning it into a more accessible yet speculative arena.

But, all this is not without risks of ruin. Deepak raises valid concerns about the potential downsides of increased options trading. He shares real stories and lessons, through real-life examples, about the impact of options trading on individuals.

We realise that this is the time when the fine line between responsible investing and excessive risk-taking becomes apparent, emphasising the need for education and awareness.

While options trading has its drawbacks, Deepak acknowledges its positive aspects, such as providing liquidity and offering potential returns for those well-versed in risk management. He emphasises the importance of using options wisely and understanding the odds.

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Timestamps

00:00 Introduction and Disclaimer

01:26 History and growth of Options trading in India

07:55 What has contributed to this massive growth in Options trading?

27:17 Is there a problem with increasing Options volume? Will the government come in and do what it did to all those gaming firms?

35:16 How do people lose money in options?

48:33 Isn’t SEBI systematically reducing leverage?

50:30 How to not get suckered while trading Options in India?

1:02:11 What are the good uses of Options?

1:14:15 Where do you think Options trading will go from here?

Welcome back to the Capitalmind Podcast – a place where we dissect the nuances of finance and investing, in a world that never stops changing. Your hosts, Deepak & Shray, are here to de-clutter yet another topic in their lucid and candid style.

In today's episode, we're zooming in on Portfolio Management Services (PMSes), a vehicle for your long-term wealth management. Here's a glimpse of what's on our financial canvas today:

1. PMS Demystified: We're going to peel back the layers on Portfolio Management Services – both the legalese and the real-world implications – to answer the quintessential question: "Does it make sense for you to invest?"
2. The Art of Timing: We'll delve into the art and science of choosing the right time horizon for your investments and why it's the secret sauce behind successful wealth building.
3. The 50 Lakh Question: At point of your investment journey should you consider investing in a PMS?
4. What's the PMS magic?: What can it do that traditional investment avenues can't? Specifically, does it offer any edge against Mutual Funds? (Spoiler alert: It does)
5. The Ideal PMS Investor: We'll introduce you to different archetypes of investors who stand to gain the most from embracing PMS offerings from our experience of managing 1200+ crores.

Time Stamps:

00:00 Introduction and Disclaimer

01:30 What is a Portfolio Management Service and what’s it good for or what’s the point?

05:05 Who should invest in a PMS? And what should be the tenure of your investment?

08:53 Where to invest for short term needs?

13:27 The issues with investing in a mutual fund.

27:53 What does a PMS offer? What are the benefits of a PMS?

36:23 Once you cross a 50 Lakh mark, should you move from MFs to PMS?

42:36 What can a PMS do differently?

46:51 What about the returns of PMS and is it worth it vs Nifty?

52:15 Who shouldn’t invest in a PMS?

58:27 Who should invest in a PMS?

If what you hear today intrigues you, head over to Capitalmind Wealth to explore how our PMS services might align seamlessly with your financial aspirations. Our fee structure, ranging from 0.25% to 1%, keeps it straightforward, with no hidden performance fees.

Schedule a call

Alternatively, shoot us an email at connect@capitalmindwealth.com, and we'll be more than happy to provide you with additional insights about our PMS offerings.