Results for CY2023
We closed CY2023 on a good note. The results, like every year in the past, were better than the index. Quiver, our smallcase strategy, managed to perform the best. Again, that has been the norm in the last couple of years since we launched Quiver.
Note: The performance is taken from smallcase, a third-party independent system. Please note that past performance is NOT an indicator of future performance and it is best to assume that good performance is not likely to be repeated consistently.
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1.
Are professional fund managers skilled stock pickers?
The general consensus is no; they are not. On average, active equity funds fail to meet their benchmarks, which suggests that investors should avoid them in favor of low-cost index funds.
The top 10 stocks held by active equity mutual funds, as measured by portfolio weights relative to index weights, significantly exceed their benchmarks. As the relative weights decline, however, performance fades and at some point, probably around the 20th stock, falls below the benchmark.
So, professional managers are superior stock pickers — if they stick with their 10 to 20 best ideas. But most mutual fund portfolios hold many more bad ideas than best idea stocks.
2.
On spending money
Morgan Housel writes really well. In his latest article, he focuses on a topic not often discussed - spending. Here are some points which resonated with me.
How you spend money can be a reflection of what you’ve experienced in life.
some wealthy people struggle to spend money on things that would make them happy because “I’m a saver” becomes such an ingrained part of their identity.
There are cases when people’s desire to show off fancy stuff is because it’s their only way to gain respect and admiration.
There is no such thing as an objective level of wealth.
3.
Could Zepbound which helps lose up to 20% of body weight be the biggest drug ever?
Zepbound is the next frontier in weight-loss treatments. It’s what’s called a dual agonist, because it mimics the effects of two different hormones. The injection combines GLP-1 with another gut hormone, glucose-dependent insulinotropic polypeptide, or GIP, that helps lower blood sugar and may also increase metabolism. Together, experts say, they cause more weight loss with potentially fewer side effects. In separate studies, Zepbound helped people lose up to 20.9% of their body weight in 72 weeks, whereas Wegovy tapped out at 14.9% in 68 weeks. Goldman Sachs analysts say they view Zepbound as the “future market leader” based on its clinical profile, Lilly’s strong presence in the diabetes market and its trusted supply chain.
Development of these combination medicines is where Lilly has excelled—and it’s what’s driving the excitement around its pipeline. It has another injection in the works called retatrutide, which combines GLP-1 and GIP with glucagon, a hormone that increases the long-term rate at which calories are burned. Scientists call it “triple g.” In a midstage study, retatrutide helped patients lose almost a third of their body weight in 48 weeks. Lilly is also exploring GLP-1s that reduce nausea, preserve muscle mass and come in pill form.
Thought of the Week
If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people. But if you are willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that. Just by lengthening the time horizon, you can engage in endeavours that you could never otherwise pursue.
~ Jeff Bezos
Video of the Week
Intelsense Insights
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