Others – Page 2

January 14, 2024

Inflation at a four-month high in December, industrial production at an eight-month low in November

Retail inflation rose marginally to a four-month high of 5.7% in December compared with 5.6% in the previous month, owing to food inflation inching closer to double digits, according to data released Friday.

On the other hand, industrial output expanding at its weakest pace since March 2023 rising 2.4% in November compared with 11.6% in October, pulled down by an unfavourable base and a decline in manufacturing activity during the festival month, according to another data released by the government.

Experts indicate that high inflation coupled with strong growth indicates that there may be a long pause in Reserve Bank of India’s policy stance.

“Rate cuts appear distant, and are unlikely to emerge before August 2024, with a stance change expected in the preceding policy meeting,” said Aditi Nayar, chief economist, Icra.

The Indian economy is likely to grow 7.3% in FY24, higher than previous year’s growth number of 7.2% and RBI’s forecast of 7% for FY24, according to first official estimate based on eight month data released last week.

“Strong economic growth and inflation averaging more than 5% in FY24 suggests a long pause in policy rates,” said Ind-Ra economists Sunil Kumar Sinha and Paras Jasrai.

The Reserve Bank of India held the policy rate at 6.5% for the fifth consecutive time at its meeting in December. The next monetary policy committee meeting is scheduled post the interim budget from February 6-8.

Food disturbs, core helps

The increase in retail inflation was led by food inflation, which came in at a four-month high of 9.5% in December compared with 8.7% in the previous month, but the core inflation falling below 4% for the first time in the post-pandemic period kept the effects contained.

“The upside was contained with the sustained deflation in the fuel and light category and a moderation in core inflation just below the RBI’s target of 4%,” said Rajani Sinha, chief economist of CareEdge.

Vegetable prices rose 27.6% in December owing to onion prices rising 74% in December, while tomato prices rose 33.5%.

Besides vegetables, fruits, pulses and spices all recorded double digit inflation in December.

“Despite marginal sequential moderation, food prices remained largely sticky, which drove up the year-over-year growth in December. The persistently high inflation in specific food categories, such as cereals, pulses, and spices, raises concerns about the potential broadening of price pressures,” Sinha added.

Cereal inflation, on the other hand, declined below 10% for the first time in 15 months, but concerns still remain.

“The outlook for the inflation for certain items like rice, wheat and pulses remains somewhat vulnerable, given the estimated fall in annual kharif production, as well as the YoY lag in the ongoing rabi sowing season amid El Nino conditions,” Nayar from Icra said.

Economists expect inflation pressures to ease in the coming months, given base effects and arrival of new crop.

“We expect inflation in January 2024 to decline to 5.3-5.5% range mainly due to base effect,” said Ind-Ra economists.

Output concerns

All three major sectors of industrial activity underperformed, with mining slowing down to 6.8% in November from 13.1% in the previous month, while electricity came down to 5.8%, a five-month low.

Manufacturing, which accounts for over three-fourth of the index, grew 1.2%, compared with 10.2% in October and 6.7% in November 2023.

“While an unfavourable base resulted in a broad-based growth moderation, month-on-month contraction seen in the electricity and manufacturing sectors further constrained the overall IIP growth,” said Sinha from CareEdge.

Both consumer durables and non-durables, which reflect consumption demand, showed a contraction in November of 5.4% and 3.6%, respectively. The contraction in consumer durables was much larger as the sector had expanded 15.9% in the previous month.

“Consumer goods should have picked up in the festive season but have not. This means that the scope for revival is limited. Don’t expect corporate results in this sector to do well on sales,” said Madan Sabnavis, chief economist, Bank of Baroda.

Economists contend that pre-election spending could likely aid in some revival. India is scheduled to hold general elections in the next quarter.

Besides consumption, capital goods also contracted in November.

“17 of 23 sectors showed negative growth with capital goods going down. All indicative of limited investment concentrated in metals cement and auto,” Sabnavis said.

Performance is expected to stay muted in the coming months. Ind-Ra expects the IIP growth to remain muted in the low single digits in December 2023.

Source- Economictimes

December 25, 2023

Retirement is NOT a one-time event

When it comes to retirement, we take inventory of our portfolio. But as important is taking an inventory of our lives.

Retirement is not only about getting that coveted sum of money. It can be an existential crisis.

What are you retiring from? What are you going into? When does a homemaker retire? When does one retire from being a parent? When does one retire from being the best person you can be? When does one retire from being a sibling? When does one retire from being a spouse?

Is retirement only about falling off the demographic cliff and being told not to come to work anymore? While that may be the conventional view, here’s what to remember.

Retirement is not a destination.

Retirement is not a one-time event.

Retirement is not a homogeneous phase.

We all plan for retirement. And it is crucial. How much must be the nest egg? How must the transition take place? Are you going to transition into it by going part time? Or are you going to pursue a hobby? Or are you going to make the switch to being a consultant? Or are you going to explore with a new career?

It is a new stage in one’s life, but a multi-phase journey.

Professor Robert Atchley described retirement as a transitional process over different phases.

Preretirement. I am so looking forward to retiring.
Honeymoon. The taste of freedom. Finally, I am free. I can relax, I can unwind.
Disappointment. Disenchantment. So this is it?
Reorientation. What am I doing? Who am I? What gives me meaning?
Stability. A new routine is established.
Adaptation. Lifestyle changes are made to adjust to old age and longevity.

These phases are not a sequence of events that everyone goes through. Nor are they connected with some chronological age. The duration of each phase and complexity depend on individual circumstances. But they are definitely thought provoking and serve as a useful model.

Retirement in your 60s will be quite different from retirement in your 80s. Not only will your level of activity and dependence differ, but also the financial outgo. In the initial year, travel may take predominance. Later on, the focus might be on healthcare. Each phase will have its own opportunities and challenges and moments – death of a spouse, deteriorating medical conditions, travel, marriage of children, birth of grandchildren, and so on.

Hence, while you plan for retirement, don’t forget to also plan through retirement. What sort of lifestyle do you plan to maintain? How do you plan to spend your time? What do you really plan to do once you quit the 9-to-5 routine?

You need to approach it from different perspectives: existential, financial, emotional. There is the psychological and behavioural distancing of oneself from the workforce. But there is also the reality of new social roles, expectations, challenges and responsibilities.

I reiterate what I wrote at the start: Have clarity on what you are retiring from, and what you are entering into.

Source- Morningstar

December 21, 2023

Only successor can claim shares or debentures, and not nominee, rules SC

The claim over financial instruments such as share and debenture certificates should be with the successor by law or by will of the original owner, and not with the nominee, the Supreme Court has ruled.

As per a judgment on December 14, even if a person is a nominee in a share/debenture certificate, he is not entitled to inherit it by default. The inheritance or the succession of these instruments will be determined by the contents of the deceased’s will or as per the succession laws. Succession in India is determined either by a will written by the owner or by laws such as the Hindu Succession Act or the Indian Succession Act.

The judgment was passed in a family dispute where the patriarch of the family gave the inheritance of shares and debentures to one of his two sons. The other son, who was the nominee in the instruments, objected to this. The nominee had claimed that he was the beneficial owner of the shares by virtue of being the nominee.

The issue reached the Bombay High Court where a division bench held that nominees are appointed to ensure that the instruments are protected, until the legal heirs or legal representatives of the deceased take appropriate steps to claim their rights over it. The HC concluded that the provisions relating to nomination do not have precedence over the law in relation to testamentary or intestate (succession without will).

The issue ultimately reached the Supreme Court in 2017, and a decision in the case was passed by a two-judge bench comprising Justice Hrishikesh Roy and Sanjay Karol.

It was contended in the court that none of the laws contemplate for a ‘third mode of succession’ wherein a person inherits financial instruments merely by being named as a successor. It was also contended that the provisions of the Companies Act, 1956 and 2013 the intention of having a nominee in the share/debenture certificate is to only aid the process of transfer of shares and not be made a successor.

The parties were represented by lawyer Rohit Anil Rathi and Rooh-e-hina Dua.

Source- Moneycontrol

August 16, 2023

How does the transfer of shares get taxed?

Recently, one of our readers asked us about transferring shares. They asked, “What are the tax implications if I transferred shares to my spouse’s name? Does the spouse need to pay tax if they do not sell the shares? If I have it for a long term, when will it be considered long term after transfer?”

Firstly, you can transfer shares to your spouse or anyone else in two ways. Either you can transfer shares through a will/inheritance, or you can gift it to them.

The transfer process is simple. All it needs is simple online documentation and the usual transfer fee which varies from broker to broker, plus 18 per cent GST.

However, the tax-related implications of such a transfer can be significant and nuanced. The taxability of transferred shares depends on three major factors.

The mode of transfer
Holding period
Cost of acquisition

Let us look at each of them separately

Mode of transfer

Taxability of gifted shares depends on whether it’s a will/inheritance or a gift. Further, it also depends on who is the recipient of these shares. Let’s look at the three possible scenarios.

Transfer as a will or inheritance.
In this scenario, there is no tax liability, irrespective of whether or not the recipient is a relative.
Transfer as a gift to a non-relative.
In this case, if the aggregate value of such shares transferred in a year exceeds Rs 50,000, it becomes taxable for the recipient.
Transfer by way of gift to a relative.
There is no tax liability in this case, but the definition of ‘relative’ is quite elaborate and covers the following people:
- Your spouse
- Your siblings and their spouses
- Your spouse’s siblings and their spouses
- Your parents’ siblings and their spouses
- Your lineal ascendants and descendants, as well as their spouses
- Your spouse’s lineal ascendants and descendants, as well as their spouses

Holding period

Next, there is the consideration of the holding period.

Stocks held over the long term and short term are taxed differently. Also, if you transfer your stocks to a relative, they become taxable only when your relative eventually sells the shares.

The combined holding period is considered to decide whether the gains are long-term or short-term. It is the period for which you hold the shares before transferring them to your relative, combined with the period for which your relative holds them before they sell them.

For example, if you bought the stocks on January 1, 2022, and gifted them to your spouse on September 1, 2022 and the latter chooses to sell these shares before January 1, 2023, the combined holding period will be considered short-term (less than 12 months).

In this case, your relative has to pay a short-term capital gains tax of 15 per cent. But if your spouse chooses to sell it after January 1, 2023 – which is more than 12 months – she’d be taxed 10 per cent, provided the gains exceed Rs 1 lakh.

Cost of acquisition

Further, you need to consider the cost of acquisition.

If you transfer or gift your shares to a relative, then the cost of acquisition for your relative is the same as the cost at which you acquired the shares.
If you transfer the shares to a non-relative, and the transaction is non-taxable, then the cost of acquisition for them is the same as it was for you.
However, if you transfer the shares to a non-relative, and the transaction is taxable, then their cost of acquisition is the value of the gift, which is to be taxed.

Suppose you transfer shares worth Rs 49,999, their cost of acquisition remains the same as the cost on which you acquired the shares. However, if you transfer shares worth Rs 50,000 or more, their cost of acquisition changes to the value of the shares you gift them.

Grandfathering of gains

For those new to this term, a grandfather clause is a provision where an old rule continues to apply to some existing situations when a new rule is introduced. In all future cases, the new rule holds valid.

In this case, the grandfathering of gains applies only to equity shares and units of equity-oriented funds.

According to this clause, any long-term capital gains prior to February 1, 2018, become tax-free. However, any losses can be claimed only if they are absolute, which means if you sell your shares for lower than the buying price.

In short, grandfathering of gains boils down to what you can claim as your cost of acquisition.

Your cost of acquisition becomes the higher of
1. The actual cost of acquisition (whatever you paid to purchase the shares or units), and,
2. The lower of,

Fair market value as on January 31, 2018.
Sale consideration received.

Let’s look at three different examples that explain this phenomenon.

Case 1
Suppose you bought some shares on January 31, 2015, for Rs 10 each and sold them for Rs 100 each in 2023. You are now eligible for grandfathering of gains and do not have to pay any tax on your long-term gains up to January 31, 2018. The gains after January 31, 2018 are however taxable.

Case 2
Next, assume you bought these shares on January 31, 2015, for Rs 10 each. In 2018, their price increased to Rs 100 each, but in Jan 2023, their price dropped to Rs 20 each. In this case, while you will not have to pay any taxes, you cannot claim a loss either.

Case 3
However, if you bought these shares on January 31, 2015, for Rs 10 each. In 2018, their price increased to Rs 100 each, but in Jan 2023, their price went down to Rs five each; you could claim a loss and offset it.

You can look at your holdings and calculate how much gains are taxable.

Or better yet, head over to ‘My Investments’ and add your investments, and we will tell you what your gains are and how much tax liability you have.

Clubbing of income

Lastly, the clubbing of income provisions is applicable when income is generated from the asset transferred. In all the following circumstances, income from the asset is taxable for you instead of your relative.

1. When you transfer your assets to your spouse without adequate consideration except when,

As part of the agreement to live apart
Before marriage
Income is received when the relationship no longer exists
Spouse acquired assets out of maintenance money

2. Transfer of assets to your son’s wife without adequate consideration.

3. Transfer of assets to someone else without adequate consideration for the immediate or deferred benefit of your spouse or son’s wife.

In short, if you wish to gift wealth to your loved ones in the form of shares, you should do it with due consideration to the various nuances of taxation.

Source- Valueresearchonline

August 12, 2023

High returns or Appropriate returns?

Morningstar’s vice president of research, John Rekenthaler, on Bill Bernstein’s newly released second edition of his 2002 classic, The Four Pillars of Investing.

The book covers a wide range of territory: investment theory and history, financial advisory practices, portfolio construction, and investor psychology.

When Bernstein wrote the first edition of Four Pillars, as a relative newcomer to the field, he was enthralled by the numbers. Investment research is bounded by science. In contrast with many of his quantitatively minded peers, though, he recognized from the start that investment math could also be a trap. History never repeats exactly—sometimes not even approximately.

For that reason, he addressed investor psychology.

Twenty years later, he has expanded on that message. The second edition opens by contrasting two investors:

1) Hedge fund Long-Term Capital Management, run by two Nobel Laureates

2) Sylvia Bloom, a legal secretary who died at the age of 98, holding $9.2 million in assets

The former belied its name by surviving only four years, while the latter persisted for 67 years, with great success. Writes Bernstein, “Unlike the geniuses at LTCM, [Bloom] wasn’t trying to get rich quick, but rather to get rich slow—a much safer bet.” That sentence neatly summarizes Bernstein’s counsel.

Speculators pursue high returns; investors seek appropriate returns.

Four Pillars spends little time on the obvious forms of speculation, such as buying meme stocks or trading options. No need to beat that horse; the book’s readers either already realize the futility of tail-chasing, or they bought the book because they are ready to absorb that lesson.

Four Pillars instead addresses the type of errors that educated investors might unknowingly make—and that Bloom did not. They include:

1) becoming seduced by investment narratives, as made by intriguing but ultimately mediocre theme funds

2) succumbing to recency bias

3) believing too strongly in one’s own abilities, thereby discounting the wisdom of the crowd (Is the marketplace crazy? Perhaps. But that occurs far less often than most investors believe.)

The most dangerous delusion comes not from how investors perceive the outside world, but instead from how they view themselves.

The first edition of Four Pillars included a risk-tolerance table, to help readers establish their equity allocation. For example, investing 80% of one’s assets in stocks might lead to a 35% portfolio decline, under unusually bad (although not the worst possible) circumstances, while owning 40% would cut the loss to 15%.

Writes Bernstein in the second edition:

I neglected to ask whether readers had actually lost 15%, 25%, or 35% of their portfolio. Simply looking at this table or running a portfolio simulation on a spreadsheet is not the same as facing real-world losses. The stock market only rarely falls for no good reason – bear markets are almost always the result of incipient financial system collapse, hyperinflation, or the prospect of nuclear annihilation. The fear of real geopolitical and economic catastrophe makes such times the most dangerous mountain passes on the highway of riches.

That is, it is not enough to have been in the right place at the right time, as wealthy Americans have been during the past 40 years. Investors must also know how to convert their paper opportunities into tangible dollars, by making sound decisions that withstand the test of time. Underinvesting is an obvious problem, as one can’t pocket stock market gains without stocks. But overinvesting can also be a costly error. Getting rich slowly means finding the appropriate personal level.

That conclusion may seem simple, but enacting it proves surprisingly difficult. Over the years, tens of millions of investors have crashed upon the asset-allocation rock. Such a fate, however, is unlikely to befall those who read Four Pillars. By the time the reader encounters Bernstein’s homily on risk perception, the book already established 200 pages of context, with another 100 yet to follow. The advice is therefore not hollow. It echoes.

Source- Morningstar

August 8, 2023

Retirement: a fast disaster or a slow one?

A few weeks back, while googling retirement systems in other countries, I saw this headline: 100-year-old Brazilian breaks record after 84 years at same company. Brazilian Walter Orthmann joined a company named Industrias Renaux on January 17, 1938, and 84 years later is still working there. I guess the greatest achievement here is that at the age of 100, he is still active and alert and still enjoys working. In the article I read, here’s the advice he gives, “I don’t do much planning, nor care much about tomorrow. All I care about is that tomorrow will be another day in which I will wake up, get up, exercise and go to work; you need to get busy with the present, not the past or the future. Here and now is what counts.”

There are a lot of news stories about this man that you can Google and find out more about this man but it goes without saying that this kind of a ‘retirement solution’ is not on the cards for the salaried amongst us. Retirement is a scary thing. By the time salaried people reach that age, they’ve typically been working for close to 40 years. For most of them, their existence is pretty much defined by the routine of their jobs. More importantly, their finances are defined by getting that salary every month.

Some small fraction of people are lucky enough to have an inherently inflation-protected income – for example, rent or a government pension, or those who have generated enormous wealth during their working years – the spectre of post-retirement financial problems and impoverishment haunts most retirees. Nowadays, lifespans are long and most people have two or three decades of lives left at retirement.

During these long years, a lot can happen. For example, even though lifespans have become long, the rise of chronic diseases has meant that ‘healthspans’ have become short and many of us will face ruinous medical bills at some point in the latter part of our lives.

This fear of the unknown – the spectre of risk that comes with retirement makes it a natural instinct to be conservative with post-retirement investments. This is perfectly understandable. Once you stop earning, there is no plan B. If you make big losses in your investments, then that money is gone forever – you will not be able to earn more and make up for the losses. This makes people extremely conservative in their outlook. A considerable number will trust only bank deposits, sovereign schemes and perhaps LIC.

This feels safe but actually, it is not. The problem is that your savings can face a sudden, hard disaster, or they can face a long, gradual disaster. Like the proverbial frog in boiling water, the latter cannot be felt. Those who face this long, slow disaster do not even know that there was an alternative.

In fact, I’ve come to realise that some people choose this disaster knowingly. Why so? I’ve spent years explaining that after retirement, equity is a must in order to avoid this slow disaster. There are those who understand this very well and yet are so scared of the quick disaster that they willingly choose it. This is the worst of all worlds, and it comes entirely from a lack of confidence.

This confidence is hard to gain, and the only route to it is through knowledge and experience, coupled with real-life examples. That’s the part I try to play in this publication, along with resources you can find online, including a very comprehensive set on Value Research Online. However, I must point out that like all savings, fixing your post-retirement investment plan is something that needs to be done sooner rather than later. It may be a slow disaster, but the years roll by quickly and it does not take time for the slow one to arrive.

Source- Valueresearchonline

July 19, 2023

Direct plan platforms to charge a flat transaction fee either from AMCs or investors

Execution Only Platforms (EOPs) will become reality by September 1, 2023. In a circular, SEBI has introduced the concept of EOPs, which essentially says that digital platforms offering direct plans free of cost will now have to charge a flat transaction fee either from AMCs or directly from investors.

SEBI has introduced two set of norms of EOPs – category 1 EOPs can become agent of AMCs and charge transaction fee from them by obtaining license from AMFI and category 2 EOPs can become representative of investors and charge them directly by taking stock broking license.

SEBI has defined EOP as any digital or online platform, which facilitates transactions such as subscription, redemption and switch transactions in direct plans of the schemes of mutual funds.

All players who are into distribution of direct plan will have to obtain EOP license by December 01, 2023. Also, industry platforms like MF Central, MF Utilities, BSE Star MF and NSE NMF II will also have to obtain EOP license.

Further, the market regulator has clarified that platforms provided by SEBI RIAs and stock brokers to their advisory or broking clients are not covered under EOP framework.

Let us look at the other key details of the new regulation on this new distribution channel:

While Category 1 EOPs will have to obtain license from AMFI, category 2 EOPs will have to get stock broking license under SEBI (Stock Brokers) Regulations

Category 1 EOPs will act agent of AMCs whereas category 2 EOPs will act as agent of investor

EOPs will have to facilitate non-financial transaction like change of email id or phone number, bank account and so on

They cannot deal in regular plans of mutual funds

Category 1 EOPs can provide their services to other intermediaries

Category 1 EOPs will have to abide by AMFI norms to onboard clients. AMCs will be held responsible for carrying out KYC of investors coming through this channel

Category 2 EOPs will have to comply with KYC norms to onboard new clients. Further, they should have access to KYC data through KRAs

Both category 1 and 2 EOPs can charge transaction fee from AMCs and investors, respectively subject to upper limit capped by AMFI and stock exchange

AMCs cannot adjust such a fee with the scheme i.e. they cannot charge it to the scheme

Both EOPs will have to ensure comprehensive risk management, access control and prevent unauthorised access

EOPs will have to ensure all transaction are dealt in a fair and non-discriminatory manner

EOPs will have to formulate data protection policy, ensure data privacy and confidentiality and maintain all data

Entity will have to maintain arm’s length relationship with clients to avoid conflict of interest if performing multiple activities

If such an entity is into MF distribution at group level, they will have to ensure family level segregation between direct and regular business

Category 1 EOPs will have to route transaction directly through AMCs or respective RTAs whereas category 2 EOPs can route MF transaction through stock exchange platforms

Both EOPs cannot display advertisement of MF scheme or brand

Pooling of funds will not be allowed

EOP will have to disclose – name of MF scheme, name of fund manager, investment objective, scheme performance, scheme details, risk-o-meter among other things

EOP cannot list products based on ratings or rankings

Source- Cafemutual

June 5, 2023

Sensex at 100,000 does not look unimaginable, see it going beyond it: Nilesh Shah

“Well as most of you will agree, India is a rising story. When you are giving me a low volley, and I was resisting not to hit it, but now I do not have a choice. Just invest in Kotak Mutual Fund, and that is it,” says Nilesh Shah, MD, Kotak AMC.

Nikunj Dalmia:How to make money, that is what we all want to know. How to make money and how to invest for a bright future. Nilesh bhai has promised me that in this entire session, he will only use the word tip, not SIP. So, Nilesh bhai, how can one make money by not participating in SIP? Give us a tip.

Well as most of you will agree, India is a rising story. When you are giving me a low volley, and I was resisting not to hit it, but now I do not have a choice. Just invest in Kotak Mutual Fund, and that is it.

Nikunj Dalmia: Now, notice the word crazily undervalued and that is what I think we should focus on, that it is time to start doing treasure hunting in this kind of a market. So what we are at 18500 on the index, I think Nilesh bhai, is of the view that abhi toh party shuru hui hai. So, Nilesh bhai, party kyun shuru hui hai? Why do you think right now, the best is yet to come for the Indian markets? Because historically, we have seen economy and markets, they do not run together.

So let me give two answers, one lighter way, one serious. There is a small bank in Maharashtra called Shamrao Vithal Bank. There is a big, large bank called Silicon Valley Bank in the US. SVB is the 16th largest bank in America. A day has come when our Shamrao Vithal Bank has to say, when you talk about SVB going into bankruptcy that is that American bank, not the Indian bank. Aisa din aapne kabhi socha tha ki India mein aayega? So that is the lighter way in answer that is why you have to invest here. But on a serious note, the state from where I come, Maharashtra, today Maharashtra has a GDP equivalent to India’s GDP in 2005. In 17 years, Maharashtra has reached where India was yesterday. 2001, UP and Uttarakhand were combined. Today’s UP and Uttarakhand combined is where India was in 2001. And there are three other states, Tamil Nadu, Gujarat and Karnataka, they are today having that GDP which India had in 2000.

In about 20 years, these six states have reached where India was yesterday. Now, if all of us continue to work in similar fashion for next 20 years, these six states will create today’s five India. And then there are 20 other states which are also doing something. This is the journey of one India to five India in just six states. This is the journey of one India to multiple India in terms of GDP growth over next 20 years. This is the reason why you should invest.

Nikunj Dalmia: So I will ask a very basic question so that the audience can relate to it. Chris Wood on ET Now last week said that Sensex could be one lakh in next four to five years. Do you see that happening, Nilesh?
One thing I’ve learned. Don’t try and predict the market. More often than not, you will be wrong. But today, is one lakh Sensex looking unimaginable answer is no. And my request to this audience will be, just do not think about one lakh Sensex. Beyond that also, there is a much-much longer journey.

Nikunj Dalmia: Quick final answer, the most overrated sector and the most underrated sector.
The most underrated thing is management and governance.

Underrated sector.
Sir, if you get a good promoter in the sector, it becomes gold. If you did not get, so the most underrated thing is management and governance. People do not really give too much respect for it. They will go and dabble in all kinds of companies where neither they know the management nor they believe there is governance and end up losing money.

If people start respecting management and governance chances of losing money in the stock market is very-very limited. The most overrated thing is to believe that there is a moat in the business. We are living in the world of disruption.

We need people who are paranoid. We need management and companies which are always worried about the disruption coming. You have to invest in companies which are disrupting their own business model rather than waiting for their competitor to come and disrupt. Governance disruption, ye do cheez sambhal lo you will make money in stock market.

Source – Economictimes

Category: Others