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04-Feb: Budget 2023 overview, Nifty Surge & More

04-Feb: Budget 2023 overview, Nifty Surge & More
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🔆 Saturday Coffee Newsletter

  • Quote: Wisdom in a few words
  • Video: Decoding the Budget 2023
  • Market Overview: Top stocks & asset classes
  • Off the charts: NSE500 market cap-wise summary
  • Good Reads: 5 articles on investing & more

Quote ✍️

“Avoiding stupidity is easier than seeking brilliance” – Charlie Munger

Munger’s approach to life and business is all about steady progress and consistency, rather than constantly seeking out new and elaborate opportunities. By focusing on avoiding mistakes, one can set themselves up for long-term success and stability. This approach is reflected in Munger’s decades of success in the business world and his reputation as a wise and practical thinker.

Budget 2023

There are some incredibly good initiatives in the budget. Now, usually, the budget says all sorts of nice things that have no connection with what actually happens. We expected a bunch of changes but a few things stood out simply because they didn’t happen:

  • changes in Equity Capital Gains slabs or rates: Gains from stock market transactions in shares will not see any changes. That is, short-term gains are at 15% for less than a year of holding and long-term gains are at 10% for greater than a year. (Rs. 1 lakh is still tax-free for long-term gains)
  • No changes in mutual fund taxation: Mutual funds continue to be taxed the same – debt or equity. That’s equity level taxation for equity funds, and debt level taxation for others (3 years+ = 20% with indexation, less than 3 years is just added to income)
  • No increase in 80C limits: The limits on 80C exemptions are still restricted to Rs. 1.5 lakh per year
  • No increase in housing loan interest limits: Earlier home loan interest exemption limits (Rs 2 to 2.5 lakh per year) haven’t been changed

Listen to Deepak’s perspective on the Budget 2023 here:

What’s up with markets? 📉📈

ITC, Titan & Britannia had a standout week, with their earnings driving them to the top of the leaderboard. Adani Pack continues to struggle and falls further behind. Life insurance companies were affected by the recently announced tax changes applied to Non-ULIP policies.

[04-Feb]: Budget 2023 overview, Nifty Surge & More

The Nifty 50 index has risen by 1.3% this week, with the bullion market showing growth. Gold and silver have recorded increases of 1.6% and 2.2% respectively. The USD-INR rate has managed to stay below 82/- and has marginally increased, up 9% for the year.

[04-Feb]: Budget 2023 overview, Nifty Surge & More

NSE500: Marketcap-wise summary 📊

Looking wider to see how the NSE 500 Index (set of top 500 listed companies) has done over different time periods. This week, 58% of stocks rose while 42% declined as the broader index is up 0.3%. Over the last 1 year, the small-cap 250 index is down 8.5% while midcaps and large-caps have returned -1.3% & -2.8% respectively.

[04-Feb]: Budget 2023 overview, Nifty Surge & More

What we are reading? 📝

  • The most important things in the Budget 2023 are usually about taxation changes. And we’ll summarize what’s most important for you right here. Read: Budget 2023: The Changes that Matter, from Insurance to Taxes and MLDs
  • Here’s an article that provides a comprehensive look at the defence industry and some key points to consider when assessing defence companies. Read: Defense Industry Primer
  • Freeman-Shor studied over 1,800 investments made by fund managers under his leadership to see if there were similar habits that led to their success or failure. He shares the common habits found around losing and winning investments that improve and hurt returns. Read: The Art of Execution by Lee Freeman-Shor
  • Don’t let FOMO get the best of you when it comes to investments. It’s that one trait whose removal from your personality can do more to improve your financial situation than anything else. Read: FOMO: The Worst Financial Trait
  • Given that the price of gold has increased by 10% over the last six months, is it something that you should consider for your portfolio? Why or why not? Read: Why is Gold Valuable?

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04-Feb: Budget 2023 overview, Nifty Surge & More
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